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Making Sense Of The US Oil Story
Submitted by Gail Tverberg via Our Finite World blog,
We frequently see stories telling us how well the United States is doing at oil extraction. The fact that there are stories in the press about the US wanting to export crude oil adds to the hype. How much of these stories are really true?
If we believe the stories, the US is now the largest producer of oil liquids in the world. In fact, it has been the largest producer since the fourth quarter of 2012.
Figure 1. US Total Liquids production, including crude and condensate, natural gas plant liquids, “other liquids,” and refinery expansion.
Oil “Extenders”
One of the issues is that a few years ago, the US created a new oil-related grouping, combining valuable products with much less valuable (lower energy content, less dense) products. Using this new grouping, the US was able to show much improved growth in total “oil” supply. The US EIA now calls the grouping “Total Oil Supply.” I refer to it as “Total Liquids,” a name I find more descriptive. Besides “crude and condensate,” the mixture includes “other liquids,” “natural gas plant liquids,” and “refinery expansion.”
“Crude and condensate” is the original grouping. Often, it is just referred to as “crude oil.”
“Other liquids” is primarily ethanol from corn. If we produced coal-to-liquids, it would be in this category as well.
Natural gas plant liquids (NGPL) are the liquids that condense out of natural gas when they are chilled and compressed in the natural gas processing plant.
Refinery expansion occurs when a refinery breaks long chain hydrocarbons into shorter ones. The resulting products take up more volume, but don’t really have more energy content. In some ways, the process is like making whipped cream out of whipping cream–more volume, but not really more product. The new products tend to be more valuable–say, diesel and lubricating oil made from something close to asphalt.
The process of breaking (cracking) long hydrocarbon chains is a valuable service to those producing heavy oils, because it makes valuable products from crude that otherwise would not have been useful for most purposes. The cracking process uses natural gas. Because natural gas in the US is inexpensive relative to its price in most other countries, the US can perform this process more cheaply than other countries. Because of this, it makes financial sense for the US to import heavy crude oil and process it in this way, whether or not US citizens can afford to buy the finished products. (Cracking is not useful on very light oil, such as Bakken oil, since it has primarily short chains to begin with.) If US citizens can’t afford the finished products, they are exported to others.
Whether or not the US should be credited with this expansion of volume is somewhat “iffy,” since the process doesn’t add energy content. Quite a bit of the oil processed in this way uses imported oil, such as oil from the Canadian oil sands.
If we look at the base figure reported by the US Energy Administration, that is, “Crude and Condensate”(Figure 2), the US does not come out as well in original comparison (Figure 1).
The United States makes much greater use of extenders than do Russia and Saudi Arabia. If we calculate the ratio of extenders to the base (crude and condensate), the ratios are as follows:
Figure 3. Extenders as a percentage of crude oil production, based on EIA data.
Both Russia and Saudi Arabia have much lower ratios of extenders. For both of these countries, the extenders are Natural Gas Plant Liquids.
Natural Gas Plant Liquids (NGPL), have varied in price. For a while, the price was up with the price of crude, but as supply increased, the US price dropped during 2011 (Figure 4).
Figure 4. Price Comparison per Million Btu for Oil (West Texas Intermediate), Natural gas plant liquids, and natural gas, based on EIA data.
This drop in NGPL price occurred because the US market for at least some components of this grouping became saturated. With too much supply for demand, prices dropped. Excess ethane, for example, could be sold to be burned as natural gas, putting a floor under its price. As a result, recent prices seem to be influenced by changes in natural gas prices.
With the drop in NGPL prices, we hear more talk about the need for exports. We don’t really have use for all of the low value products that are being produced, other than to burn them as part of natural gas. Perhaps someone else does. If someone else does, it might get the price back up.
What is the Real US Trend in Production/ Consumption?
The US EIA makes fuel comparisons based on Btu energy content. This approach makes it easy to see how much of our fuel is US produced, and how much is imported (Figure 5).
Figure 5. Comparison of US production and consumption of oil plus NGPLs, based on EIA data.
Production is indeed rising, but it is still far below consumption–about 55% of consumption in 2013. Many articles make this situation confusing.
The emphasis in most news reports is the drop in imports–that is the difference between the blue line and the red line in Figure 5. If we look at the chart, though, we see that a big reason for the drop in imports is a drop in consumption, with the big step down coming in 2007 and 2008. Oil use is associated with jobs. It takes oil to make and transport goods. Also, workers with good jobs can afford cars and the oil to operate their cars. If they remain students forever, they can’t afford cars.
A person can better see the drop in consumption by looking at consumption on a per capita basis.
Figure 6. US per capita oil and Natural Gas Plant Liquids production and consumption, based on EIA data.
If prices don’t fall, consumers don’t feel the effect of more production. What they do feel the effect of is falling consumption-the top line. Young people especially have been finding it hard to get good paying jobs. With all of their student loans, it is hard to be able to afford to get married and buy a house. This holds down demand for new homes, and all of the things that go into new homes.
If we look at total per capita energy production and consumption in the US, we see even more of this trend. While production per capita is rising, an even bigger issue is falling consumption.
Figure 7. Total per capita energy production and consumption for the US, based on EIA data.
US per capita energy consumption has been dropping since 2000. 2000 is the year of peak US employment, as a percentage of the total population.
Figure 8. US Number Employed / Population, where US Number Employed is Total Non_Farm Workers from Current Employment Statistics of the Bureau of Labor Statistics and Population is US Resident Population from the US Census. 2012 is partial year estimate. (Sorry, not updated.)
With a smaller percentage of the US population employed (and lagging salaries for those employed), US consumers cannot afford to buy as large a quantity of energy products. Rising US oil production is not really helping US consumers, because at its high price, we cannot really afford it.
Rising oil production has not brought down oil price, making it more affordable. In fact, the situation is the reverse–high prices are needed for today’s oil production. It is questionable whether today’s prices are even high enough. Oil companies have to keep adding debt, to keep extracting oil. The EIA recently wrote an article about the situation called, As cash flow flattens, major energy companies increase debt, sell assets. Steven Kopits shows this chart of cash flows for Independent Oil Companies in a recent post.
Figure 9. Image by Steven Kopits showing Free Cash Flow of US independent oil and gas producers, from Platts Guest Blog.
With negative cash flows, companies have to keep increasing their debt levels–something that eventually becomes impossible.
When those producing the oil see that US oil prices are at times not as high as world oil price (Brent), they hope that selling their crude to world export markets, they will be able to get higher prices for their crude. If they are successful, there will be less crude available sold to US producers, perhaps raising the price of this crude sold in this country as well. The net impact may be higher prices for US consumers, making the US consumers even less able to afford the oil products.
Energy Growth is Needed for Economic Growth
There is a close tie between energy consumption and economic growth. Perhaps my statement “Energy growth is needed for economic growth,” in the header is a little too strong. Perhaps if energy consumption is flat, with the benefit of technological progress and efficiency changes, there can still be economic growth. There is definitely a connection, though. Energy of the right type is needed for every process we can think of–getting to work, shipping goods, operating our computers, heating metals when they are refined.
The problem comes when what we are facing in shrinkage of energy consumption, over and above what can be accommodated by technological progress and efficiency. Figure 7 hints that this is already happening. Then we have danger of a collapsing financial system, as the low energy consumption growth pushes the economy toward contraction. The economy has been held together since 2008 with quantitative easing and zero interest rates. The plan has been to allow consumers more income to spend, by keeping interest rates artificially low. I heard an excellent presentation on this subject recently called Global Financial System on Life Support by Roger Boyd.
Conclusion
I wrote a post recently called The Absurdity of US Natural Gas Exports. The situation with exports of crude oil is not quite as absurd. The issue is that current oil refineries are not configured for the influx of very light oil. Many of them are busy “cracking” long hydrocarbon chains, often using imported oil as their energy source. If US oil producers have the option of selling their crude oil abroad, perhaps they can get a higher price for it. If US oil producers can get higher prices for their oil, this may very well filter through to higher oil prices for US consumers, and less oil consumption by US consumers, but this is not the concern of oil companies.
A major concern with falling per-capita energy consumption it that the financial system may soon reach limits where it is stretched beyond what it can stand. The economy needs energy growth to grow, but the economy is not getting it.
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They may lose money on every barrel sold but they'll make it up in volume.
BTW, Mrs K just had the MSM (I don't know which one, CBS or NBC) on and they're yakin' hard and heavy about gotta go into Iran and save Baghdad, the 50,000 American state dept employees and Military advisers working with the illustrious Iraqi army, save the Christians (When, fucking tell me has this administration done anything but piss on Christians?) etc., etc., etc......
They're jammin' really hard for some more armed conflict with that military Obie is cutting down.
Seeeeeehit. Won't have any troops left for the home front...
Er excuse me that's the billion bullet guys....
You mean. "Iraq".
I mix them up all the time too, must have caught the dreaded Ebonehead virus.
Why would a net oil importer country export oil?
Money.
Gail, oh Gail, your words speak to me like dripping sweet crude. You are the Linda Lovelace of peak oil doomer porn!
A Special Update On The BP Gulf Oil Spill
Contrary to popular belief, America's motto isn't E pluribus unum, it's War = $
Fracking Facts Too Significant To Ignore
fracing will fade in 5-10 years and we will be screwed.
No, we're just warming up. It's like 4 a.m. at a bar. There's still a lot of fracking available, but it's just get's more difficult and a lot uglier.
We're the United States - we'll never run out of places to frack until we run out of politicians to oil-up (a/k/a grease).
But who is number 1 with ethanol? What other country with starving citizens deliberately turns food into a gasoline additive that destroys engines and creates more pollution due to lower energy content?
USSA! USSA! USSA!
What other country with starving citizens...?
Wal-Mart much?
The techs at the refinerys and tank farms hate ethenol. It causes nothing but problems. Even the gas stations have problem with ethonal turning to water in the tanks. Remember that the next time you fill up. Get your gas at a place that sells a lot of gas.
Shale oil is projected to peak around 2021 or 2022. That's without external shocks to the industry. If the oil companies are operating on debt, I would refer you to the articles on HY credit that the Tylers posted today. The decline will be faster than the Hubbert curve would suggest without a viable replacement for oil coming online and doing so very soon.
Hubbert was talking about Conventional Oil. The kind in the movie Giant. Jed Clampett Oil.
And yes you right Gas production's graph has a sharp depletion curve.
50-75% decrease the 2nd year on. Think of opening a soda,
I've often wondered if Lindsay Williams is right about all the capped wells in Alaska...
http://forum.prisonplanet.com/index.php?topic=211120.5;wap2
Here's some brief info on Lindsay Williams. I knew nothing about him, so this is what a 10 second search yielded. It is pretty interesting. Gull Island - “We have just drilled into the largest pool of oil in North America—[and] in the world!” It was said that there was enough natural gas to supply America for 200 years. But to this day, “not one drop” of that oil has been released to American refineries, Williams said.
That's actually one devious US strategy that I agree with. Use up the world's oil and keep ours without anyone knowing about it...
Guys,
1) When you say Lindsey Williams, do you mean, Pastor Lindsey Williams? Or, are you kidding?
2) Hubbert curve cannot be used for shale. Oil 101 for beginners.
3) Shale oil is projected to peak around 2021 or 2022? Says whom?
Then, I read that Flakmeister is not commenting. Can you blame him?
Haven't seen Flakmeister in weeks.
:(
Camp 17
Fuk!
I guess the resin on Flaks "hockey stick" melted?
The USA has used higher priced oil to achieve energy/political goals in the past. When the Saudis and OPEC were raising prices in the 70 the US could have increased production but instead let the Middle East continue to produce and wells in OK and TX were capped. In a way they were saving oil on US land for the future. I have to suspect this has been a primary goal that underlies many US political decisions. We will sacrifice the dollar and preserve oil for the future.
Well...you also have technology improvements...plus changes in Public Policy (speed limit is fifty five.). Gas mileage on vehicles was far better in the 80's than today. That's why Tesla is so important...basically an energy company. What does my car in fact power anyways? Only transportation...which seems pretty wasteful if you think of it. Why can't i plug my car into my house and power everything?
This is why in my view fuel cells are dangerous competition to Tesla..."park it in your basement and heat your house."
This author needs to read up on Ye Olde Conservation of Energy as a simple glass of (fresh) water contains enough energy in it to power the world "with ease." Not only that but water is VERY dense (heavy). "If it simply does what it always does" (flows downhill) then again...more energy than you know what to do with.
They prefer to outsource and claim peak oil. The margins are higher.
If a source of cheap, clean, abundant energy was ever discovered/invented you can be assured it would never see the light of day. Cheap energy is what fueled the US middle class in the 20th century. They'll never make the mistake of letting that happen again.
You mean like the clean, cheap, abundant natural gas that they just burn off all over the Bakken?
Nuclear is the be all and end all.
that's what they say in tokyo.
NoDebt,
I respectfully take almost the exact opposite position. If there were such a thing as "cheap, clean, abundant energy" springing up from an inexhaustible source, I'm guessing it would make the oppression of society far worse than anything we can imagine; for whoever were to gain a slight advantage in the access to or utilization of that energy would hold in his hands the key to endless wealth and power, and could therefore exercise an unchecked, unlimited tyranny. Thereafter the order and stability of human society would be subject to the whims of a demigod-like energy Tsar with an almost infinite power to compel and destroy.
Environmentally, too, CCA energy would be a disaster, even though this very thing is often a dream of environmentalists; for then man's ability to engulf the natural world would also be unlimited. What happens when the tree harvesters, strip mining machines, and fishing trawlers are no longer bounded by the cost or supply of energy?
For Western man and his technics-dependent society, abundant energy is always a Faustian bargain with Mephistopheles; and the machine, the perpetuum mobile, is the vehicle of our hubris.
correct, you just have the tense wrong,and nothing is inexhaustible, we have almost killed the oceans, we have filled the atmosphere, we are melting the ice, not much left to rape and pillage now....
GooseShtepping Moron
+ 100
Interesting comment, I have never read that take before.
Gail Tverberg has written many previous articles outlining paradoxes such as the Jevons Paradox.
http://en.wikipedia.org/wiki/Jevons_paradox
There are a host of similar paradoxes throughout everything our civilization does, which are all pretty well deliberately ignored by the vast majority of people. People like to think in simplistic dualities, not think about hyper-complicated feedback systems. In my opinion, most people are proud to be stupid in that way, which is based on deliberately ignoring nonlinear feedback loops as much as possible, since if one does not do that, then everything one does based on false fundamental dichotomies, and their related impossible ideals, can be demonstrated to end up having the opposite effects in the real world.
Anyway, I too agreed with the insight that GooseShtepping Moron provided in his comment, except, as always, I think that the reality is way worse than what he or Tverberg indicates. For instance, there is a special case of Occam's Razor which is called Hanlon's Razor.
http://en.wikipedia.org/wiki/Hanlons_razor
Hanlon's razor:
Never attribute to malice that which is adequately explained by stupidity.
Hanlon's razor, like Occam's razor, are good principles, up until the point where one starts to ignore overwhelming evidence and arguments to the contrary. I did not start off with my views as a preconceived prejudice. Rather, I was forced to come to those opinions as unavoidable conclusions that I WISH that I did not believe. In my opinion what Gail Tverberg is talking about is a gentler version of the basic ways that our civilization was dominated by enforced frauds, which surrounded oil more than anything else.
She prefers to believe that the results of building an entire civilization on the foundation of enforced frauds can be better explained by stupidity, rather than attributed to malice. However, the more I have learned, the worse it has always gotten. Therefore, I no longer believe that we are headed towards Peak Oil in any other possible ways than that provoking Peak Insanities at similar times when there is Peak Everything Else.
The social situation that surrounds oil is merely the single greatest particular way that our society was controlled by enforced frauds. The triumphant domination of our civilization by systems of legalized lies, backed by legalized violence, was, of course, most intense in the area of oil, as the most important of our energy and material sources. While I believe that there are plenty of creative alternatives, there appears practically nothing which could provide the kinds of series of prodigious political miracles that would be required to cope with the foundation of civilization being enforced frauds, causing itself to collapse into crazy chaos.
We are talking about hyper-complicated feedback loops of entangled tunnels of deceits, NOT simple linear systems! Over and over again, one will find similar comments by me to those made by GooseShtepping Moron that "abundant energy is always a Faustian bargain with Mephistopheles" in these two Forum threads: Alternative Energies & Society Adapted to Them? and Overshoot in a nutshell ...
There MUST be some sort of human, industrial and natural ecologies, in which their death controls MUST be the central features. However, the ways that the human and industrial ecologies developed were through the history of deceits backed by destruction, or through enforced frauds. That was how and why it MUST be the case that "abundant energy is always a Faustian bargain with Mephistopheles." The most important, primary application of any science and technology has always been to make weapons. There are perfectly good reasons for that. Militarism is the supreme ideology, because it deserves to be.
However, from how it was stated in the first book on The Art of War onwards, for thousands of years, success in war was based on deceit, and therefore, spies were the most important soldiers. That was the real basis upon which civilization was built: deceits backed by destruction. Furthermore, that was the real basis upon which the political economy was built, namely enforced frauds.
Warfare and economics are similar social sciences, whose successes were paradoxically based upon deceits and frauds. Furthermore, that was NOT due to stupidity, but rather due to malice. Moreover, that malice is necessarily built into the nature of life, as a result of the chronic political problems which are inherent in the nature of life, which come as a package deal, since having life necessarily means having death.
The economics of oil was always wrapped up in that history, with its energy and matter feeding the human systems of organized lies, operating robberies. Since the fundamental nature of our civilization is control by enforced frauds, running into the limits to cheap oil, that everything was previously based upon, is also running into the more ubiquitous limits which are BASIC, NAMELY THAT CONTROLLING SOCIETY THROUGH LIES BACKED BY VIOLENCE DRIVES THAT SOCIETY TO BECOME MORE AND MORE CRIMINALLY INSANE, SINCE THE TRIUMPHS OF ENFORCING FRAUDS REQUIRE RUNAWAY ATTITUDES OF EVIL DELIBERATE IGNORANCE.
Gail Tverberg rather optimistically presents the paradoxical problems that our economic systems will encounter due to the end of cheap oil. However, she deliberately tends to NOT embrace the ways that "abundant energy is always a Faustian bargain with Mephistopheles!" Meanwhile, one of the main themes that I have been harping upon are that all of the possible creative alternatives demand more than anything else creative alternatives in the death control systems. However, that appears practically impossible due to the degree that the actually existing death control systems were developed through thousands of years success through deceits. (Which also enabled the debt controls backed by those death controls to become based on the maximum possible enforced frauds.)
Moreover, not only were the established systems based on the history of successful warfare based on deceits, and successful finance based on frauds, but also, all of the publicly significant opposition groups were controlled to stay within the same frame of reference of bullshit about those issues. Therefore, the supreme paradoxes continue to be that human beings have been better and better understanding general energy systems, such as through thermodynamics and information theory (in which the most important heat engines were fueled with oil, which were then able to subsidize everything else that was able to be done), HOWEVER, when it comes to understanding humans as manifesting general energy systems, the obvious scientific facts are in head-on collisions with the bullshit about the established systems, presented by both those running those established systems, as well as also by their controlled opposition groups.
What people like Gail Tverberg deliberately do not do is embrace the profound malice in the militarism that controlled the monetary system, through which the industrial revolution developed the potential of oil resources. Therefore, people like her also do not embrace the deeper nature of the problems that our society is controlled by enforced frauds, on a tragic trajectory towards Peak Insanities, being precipitated by Peak Oil, as well as peak almost everything else done because "money" made out of nothing as debts was used to "pay" for strip-mining the planet's natural resources.
From a theoretical point of view, the death controls were central to how everything else was controlled. Furthermore, it is plainly obvious that MUST continue to be the case. The end of cheap oil requires different death controls. However, since the established systems, and their controlled opposition, operate themselves through the maximum possible deceits and deliberate ignorance regarding the social facts, which hamstrings them from being more scientific about human energy systems, there are no practical political ways to prevent civilization from being headed towards psychotic breakdowns, in the form of Peak Insanities, as Peak Oil problems cause the breakdowns of the previously functioning enforced frauds.
Peak Oil means that the peak debts become debt insanities, which threaten to provoke death insanities, because the absolutely crucial controls to everything must necessarily be the death controls. Given the degree to which our society is almost totally dominated by enforced frauds, operated by professional liars and immaculate hypocrites, there is practically zero chance of us making a better deal with the devil. On the contrary, the oil resource has subsidized building global systems of electronic frauds, backed by the threat of force of atomic bombs.
Despite there being plenty of lower level creative alternatives, none of those those could be integrated into better systems without better death controls being central to that. However, precisely the degree to which that is practically impossible to achieve, since every possible social taboo topic is thereby breached, throughout everything that the established systems and their controlled opposition groups promote their bullshit about, we are rushing by default to run into the limits to strip-mining the planet NOT in ways which develop better human, industrial and natural ecologies in order to cope with those limits, but rather, in ways where the control of civilization through enforced frauds drives debt insanities to provoke death insanities.
As always, the GRAND CANYON PARADOX is that human beings have been understanding all kinds of general energy systems better and better, EXCEPT for human civilization energy systems, because those necessarily operated according to the principles and methods of organized crime, which facts the biggest bullies' bullshit social stories were able to deeply bury, including with the help of the controlled opposition groups that were adapted to become co-opted into that frame of reference, where social successes were based on deceits and frauds.
"Abundant energy is always a Faustian bargain with Mephistopheles," because life always comes with the package deal of death. It is impossible to exaggerate the degree to which social successes based on backing up deceits with destruction, and enforced frauds, has resulted in human civilizations based on evil deliberate ignorance to degenerate from criminal negligence to criminal insanity. Although it is theoretically possible to understand human civilizations as manifestations of general energy systems, doing that continues to be in head-on collisions with the biggest bullies' bullshit about everything, from the philosophy of science to the politics of the money and murder systems, and therefore, in head-on collisions with the world views presented in the public schools and by the mass media, etc. ...
The paradoxes of social successes being based on organized lies operating robberies are being brought into focus by the limits of the environmental resources available to continue to be strip-mined. Of course, in that context, I continue to recommend that we should go through a series of profound paradigm shifts, as an intellectual scientific revolution that would apply to politics. However, doing that necessarily requires accepting how and why governments were the biggest form of organized crime, controlled by the best organized gangs of criminals, while any superior solutions to our problems necessarily require developing better systems of organized lies operating robberies, because it MUST be the case that "abundant energy is always a Faustian bargain with Mephistopheles."
Human beings are possibly approaching better systems of artificial selection, to more adequately replace and substitute for natural selection. Indeed, intelligence was the result of the internalization of natural selection, however, so far, that has actually been done through deceits backed by destruction, or enforced frauds, while apparently resisted by bogus bullshit that rested upon asserting that the facts regarding natural selection ought not exist, or ought not apply to human beings.
In fact, all of the paradoxes combined tended to result in the most total opposite case to what Hanlon's Razor presumes. Human civilizations have made the most deceitful deals with the devil that they possible could. From a metaphorical point of view, after attempts to synthesize post-modernizing science with ancient mysticism, then Energy is Spirit, while entropy is the devil. Not by coincidence, the philosophy of science has been dominated by the biggest bullies' bullshit world view, so that our understanding of entropy was inverted, when an arbitrary minus sign was inserted into the entropy equations of thermodynamics and information theory. Therefore, it is correct to say that our civilization understands energy systems, especially its own energy systems, in as totally as backwards a way as possible.
That is how and why we ended up going through developing the industrial revolution in ways whereby "abundant energy is always a Faustian bargain with Mephistopheles." We have made the worst possible deal with the devil that we could have made, which was based on attitudes of the maximum possible deliberate ignorance regarding the nature of that deal, due to the paradoxical ways that social successes were based on deceits and frauds. Unraveling that skein of entangled tunnels of deceits and frauds, is like coping with a Gordian Knot of hyper-complexities, that the vast majority of people continue to want to deliberately ignore. That is why running into the limits of diminishing returns from oil resources raises some of the most acutely threatening situations in the foreseeable future!
I'm always impressed by your thoughtful comments. The rejection of force and fraud are fundamental to the Objectivist philosophy that many here share.
At the end of the day, however, people have to accept the truth, though it takes much longer than it should since so few think for themselves. Do you envision, at the end of days, a more cooperative society? Or one still based on competition, but restricted to competition based on merit?
tvdog, I think we are going to be forced to go through the paradoxical ways that the short-term successes of the competition between different organized crime gangs endeavouringto control the world backfire badly. IF we survive, then, eventually, I expect that the wild coaster ride of human history will redevelop some new systems of dynamic equilibria between the systems of organized lies operating robberies, that are being powered up to run amok now. IF we survive through the probable future roller coaster rides of history, or enough of us manage to live through the severe social storms, and psychotic breakdowns of the current extremely unbalanced systems, then I believe that would look like more cooperation, and saner competition within that context. However, I would basically regard more cooperation, with saner competitions within that context, as the result of achieving better dynamic equilibria between systems of lies backed by violence.
I do not believe it would ever be able to stop human realities being based on organized lies, operating robberies. However, I do believe that we could eventually have the emergence of superior dynamic equilibria between the competing systems, so that they could end up cooperating better. However, for the foreseeable future I can not believe in anything else than the established runaway fascist plutocracy juggernaut of triumphantly enforced frauds will not continue to power through towards its own mad self-destruction. Only AFTER that has happened, i.e., after the potential energy for social storms has blown through, and there have been significant psychotic breakdowns of the current systems based on runaway enforced frauds, MIGHT there be able to emerge better systems, which have learned from surviving through that ... I envision the possibilities of extremely different futures, in which human and industrial ecologies develop, through wild roller coaster rides.
However, that presumes a lot of things which I could never be certain about! Of course, any future predictions presumes that nature will not throw us some massive curve balls first, instead, which overwhelm the human agendas that we currently take for granted. Anything from a mega solar flare, to a super volcano eruption, etc., could suddenly change everything, to make what we worry about now become practically irrelevant to the situations after something like that happened!
Radical Marijuana - You deserve a +100, but hit what ZH readers come to know as the TL,DR Paradox.
I am a life-long student of economics (inclusive of a college dual major in economics/political science). Both paradoxes about which you wrote are new to me and were great to learn.
Jevon's Paradox is eerily similar to the effect of widening a highway to reduce traffic. It always works, for a very short time. Then, users who had chosen other roads realize the newly widened highway is a faster route. So, massive numbers of new users stream onto that highway, causing a new source of traffic and eliminating the benefit of the widened road. It also causes additional bottlenecks downstream as the areas that haven't been widened or made ready for the new traffic get overwhelmed.
Radical Marijuana:
Good Stuff.
But the fatal flaw in Occams Razer is to accept that stupidity and malice are mutually exclusive.
And that which appears right in the short term will continue to be right in the long term.
You are right, Kayman!
It's kinda like the UNABOMBER's thesis. It sounds crazy, but he was pretty accurate.
The economy needs energy growth to grow...
I disagree with the above statement.
You might disagree with the statement, but I'd think you'd admit it couldn't hurt.
I read that a lot on the internet but call bullshit. It is the system which is at fault. A monetary system which encourages an ever growing population as if that causes economic growth is bogus. What "they" want is cheap competitive labor.
A monetary system which encourages waste and mindless debt fueled consumption in the name of economic prosperity is equally bogus. A monetary system which villifies increased efficiency and conservation as detrimental to economic growth is absurd.
If everyone were sick and needed expensive drugs all the time that would cause economic growth by "their" reckoning. How fucked up is that? The majority of energy usage in the usa is wasted, and that is what the maggots want, but don't be duped by their crony crapitalist drivel. That road leads to desolation, exploitation, and ruin, not prosperity.
the world's population will peak no later than 2055 and probably sooner at less than 9 billion.
http://www.google.com/search?q=when%20will%20the%20world's%20population%20peak&ie=utf-8&oe=utf-8
The world population peaked today.
The problems are breaking out all over. Overcrowding, resource depletion, drought, disease, war, species depletion, pollution of air, water, ground... Are you deaf, dumb and blind?
The economy needs MOAR funny fiat to grow.....
-Jello Yelloin
If Tropicana came out and started saying the were using 1 million gallons a day of oranges in their orange juice that is 20% water, people would properly call it bullshit BLSing to hide inflation. Because the chemistry with oil refining is slightly more advanced, there is silence from the peanut gallery.
Fucking Obama and Clinton are the luckiest crooks in the world...Clinton Internet Bubble, and Obama the frack bubble. Without these things would be beyond ugly. Obama's total failure as president has only been rescued by the fracking...which liberal HATE. Oh the Irony.
It wasn't luck with Clinton...
http://www.dailykos.com/story/2014/05/09/1298074/-Did-Bill-Clinton-Cause...
http://www.usnews.com/opinion/blogs/economic-intelligence/2012/08/27/rep...
http://rasica.files.wordpress.com/2012/07/clinton_signs_glass_steagall_r...
Always good stuff from Gail Tverberg – sure do miss the Oil Drum.
Not me.
Professor Goose and leanan were two of the most intolerant, closed minded hypocrits ever spawned by the progressive joke called academia.
They were a total contradiction and insult to the community that supported TOD.
I will admit to(ahem) having somewhat of a crush on Gail.
"I will admit to(ahem) having somewhat of a crush on Gail."
Gail is great. Her and Chris Martenson are very good at painting the BIG PICTURE.
I've been ripping through the CL charts for (3) days. This trade is highly manipulated. I'm putting together some charts as I post!
The energy complex has been winding down storage, if you look at the "macro" over the last (2) weeks.
https://www.youtube.com/watch?v=srw3RdiIlrQ
Thanks for the 3 second blip jack... You're a "paragon of virtue" ;-)
@Yen
Some charts and commentary about a month old re crude oil price outlook:
http://eideticresearch.com/uploads/2/8/3/4/2834543/wti_testing_the_triangle_jly_12_2014.pdf
OT: Every time I come on to this site , I have to fight Bank of Montreal (BMO) ads . I close down the first Piece of Shit ad , then another
one pops up covering an article I'm reading . I have never belonged to this fourth rate piece o shit bank and never will. Their the one's
that run with sissors as far as I'm concerned and would never get my hard earned money. BMO-----------Fuck off
Get an ad blocker, they work fairly well.
l.
Use Firefox with AdBlock plus
Was having a couplr of beers at the American Legion in Heber Springs AR and a drilling rig superintendent was telling me that in his 35 years he has not seen the kind of cheating out of mineral rights that is happening right now.
I'm really good at oil extraction too! I stick my .38 in the pump jockey's face and say "Fill 'er up!" - Steve-O, Proud American
Here's the story. As most of you are in denial, I'll be brief.
In 1956 M. King Hubbert devised the 'peak oil theory' and predicted the US would reach PO in the early 70's. It did and Hubbert became a name in oil production. (If you read his theory, he always allowed for advances in well recovery and drilling in more difficult locations, which would add more years before PO.)
Hubbert predicted that global 'peak oil' would arrive in the early 2000's. It was called in 2006.
Now, the US always had vasts deposits of oil shale. 1000s of square miles of shale, the size of pea gravel, in which was 'locked' petroleum.
But from the moment it was discovered, it was thought that it was impossible to 'unlock' the oil from the shale.
Then two things occurred this century: drilling technology improved and energy producers went drilling for the easy-to-get shale gas.
They soon found that there were instances when shale oil over the ages released itself from from the shale and gathered in pools deep in the ground.
As there was too much shale gas being produced and, therefore, lowering the price of the gas, so the drillers went after the pools of shale oil.
That's when the big hype of the US soon to be the largest producer of oil circulated.
Alas, these wells of pooled shale oil only last a few years before they run dry.
Finally, on May 21, 2014 the Government announced that the Monterey Shale Oil deposits had been overestimate by 96%!!.
http://www.latimes.com/business/la-fi-oil-20140521-story.html
The contretemps the US had and has with Iraq, Iran, Venezuela, South Sudan, South China Sea, Arctic Sea, etc etc.
It all adds up for me.
Yeah.
But given all the publicity about the overestimation you'd thing the monterrey deposit was supposed to be a big one.
It isn't, and never was more than a tiny deposit.
It only got press because it was in California in the center of EnviroNazi land.
The real shale deposit on planet Earth is the GreenRiver deposit.
It is about the size of Spain, covering significant portions of four western States.
There you can literally pick the 'black rocks' up off the ground and use them instead of wood in a campfire. We used to do that when I was a kid.
Buddy, didn't you see the following blurb in the LA Times link I gave you?
"The Monterey Shale formation contains about two-thirds of the nation's shale oil reserves"
Two-thirds of the nation's shale oil reserves is quite a bit And what's 96% of two-thirds? You any good at algebra?
Will Federal energy authorities cut the estimates on the remaining one-third?
finally, Green River's tighter rock formations and costs of extraction are high. Higher than Monterey.
The problems that beset fracking the shale oil in Monterey formation PROBABLY troubles fracking shale oil EVERYWHERE.
Some day the world will regret burning up all these hydocarbons. There are better uses.
"There are better uses."
Which would... only mean depletion. No matter how you slice it, as long as consumption is always ramping up, no matter if "for a good cause" or not, a finite resource WILL eventually be depleted.
Some day the world will regret burning up all these hydocarbons. There are better uses.
Ha! We we can live off of sunshine and sunshine only!
http://www.breatharian.com/breatharians.html
That FCF chart is fucking retarded. Where's CLR, KOG, AXAS, OAS, WLL, TPLM, SSN, CHK,LINE, SFY and the countless other E&Ps that should be on there? Why is FST on there twice?
Additionally, the article seems to completely miss the fact that the vast majority of the increase in crude production is due to increased production from the Bakken and Eagle Ford, which is, in fact, light sweet crude. From the EIA:
And this: Increases in U.S. crude oil production come from light, sweet crude from tight formations
Sooo-basically the same beaurocrats who are paid to screw with the CPI and unemployment numbers on behalf of Congress, are now paid to screw with the DOE data? Who knew?!!!
"The problem comes when what we are facing in shrinkage of energy consumption, over and above what can be accommodated by technological progress and efficiency... Then we have danger of a collapsing financial system, as the low energy consumption growth pushes the economy toward contraction."
The above conclusion is logically flawed. He has confused cause and effect.
Contraction in the use of energy will not cause economic contraction because we are not a net exporter. I mean there is no excess export money entering the economy from energy sales to decline when exports decline.
The reverse is true, contraction in the economy will cause contraction of the use of energy - because you don't need to burn energy running businesses and factories that don't exist.
And the greatest irony of all is that many technologies that would dramatically improve efficienceis are already here. Because of regulation, cartelism, and corporate-government enabled fiefdoms you just can't make use of them.
For instance, take the electric grid. The electric grid exists because electric production is centralized, thus requiring a grid for distribution. But the very most efficient steam turbines at those central generation facilities (nuclear, coal, whatever) are `40% thremally efficient. 60% of the energy is LOST converting heat energy to electric energy. But then the grid consumes a portion of that remaining percentage. The grid is anywhere from 85% to about 95% efficient. So there you've lost another 5-15%. But if you then include all of the infrastructure, and the energy consumed to maintain that infrastructure, then that efficiency declines still more.
But what if you could generate electricity at your home at, say, 35% efficiency? Then your total net efficiency is 35%. You have no additional losses for transport or infrastructure maintenance - and you have a vastly more disaster-tolerant infrastructure.
There are small-scale racine-cycle steam engines that have been formally tested at 35% thermal efficiency.
Those same engines could be used in cars, trucks, lawnmowers, yard equipment, you name it. Here the total efficiency difference is MORE dramatic than the electric grid example. A gasoline Internal Combusion Engine (ICE) is between 10% and 25% thermally efficient. 10-15% for carburated engines, higher numbers for the more exotic fuel injection schemes. A diesel engine pretty much tops out near 35% efficiency, with use of turbos, etc. However, these engines only produce optimum efficiency in a very narrow RPM range. They require complex transmissions to allow the engine to stay in that range. The transmissions consume a portion of the remaining energy. They are also dirty, requiring significant emissions controls. Emissions controls consume still more of the remaining energy.
The small-scale racine-cycle steam engines doesn't really need a complex transmission. In most small engine instances no transmission is needed - because unlike an ICE torque and HP don't vary much over the RPM range in a steam engine. For vehicles, you'd need a reverse gear and (maybe) two forward gears. No emissions or other additional transmission equipment needed.
And you don't need engine oil at all.
Without all the barriers to production you would already have this. Instead, it grows slowly, and is mostly a curiosity for the foreign and domestic scientific market.
www.cyclonepower.com