Guest Post: Energy Independence - The Big Lie

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Mon, 11/14/2011 - 22:10 | 1877886 Bicycle Repairman
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Since the baby boomers are also armed, I suspect it would be a 50/50 proposition that this would be your last day on earth.

Mon, 11/14/2011 - 16:58 | 1876934 Abitdodgie
Abitdodgie's picture

I have a Searl effect gen running at my house ,so who gives a fuck about oil for energy, it was so last century, free energy is the new oil

Mon, 11/14/2011 - 18:03 | 1877166 Oh regional Indian
Oh regional Indian's picture

Awesome. Make it yourself? From plans? Bought?


Mon, 11/14/2011 - 19:06 | 1877313 JoBob
JoBob's picture

You really don't seem to know what is going on.....

Mon, 11/14/2011 - 14:27 | 1876190 r101958
r101958's picture

Judging by the score at the green and red arrows we can tell how many out there are still fully invested in maintaining the status quo delusion.

Mon, 11/14/2011 - 14:30 | 1876197 Carlyle Groupie
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It's not always about the cost of drilling. Extraction costs can vary dramatically given various factors including, oil grade, well pressure, total amount of extractable oil.

Sometimes it's cheaper to go deeper.

Mon, 11/14/2011 - 14:42 | 1876242 tmosley
tmosley's picture

Actually, they would.  NIMBY is a bitch.  The Gulf Oil Disaster was caused by local regulatory agencies forbidding drilling in shallower waters.

Hard to do much of anything when the government has a gun pointed at your head.

Mon, 11/14/2011 - 15:13 | 1876367 MachoMan
MachoMan's picture

I don't think that's very fair...  the gulf disaster was caused by the desire to risk the well for expected profits...  shallow or deep drilling won't fix that.

At the very best, it would have happened later rather than sooner...

Mon, 11/14/2011 - 15:20 | 1876396 Flakmeister
Flakmeister's picture

Bullshit... it was caused by the lack of significant plays in shallow water that interest a company the size of the majors.... BP, Exxon et al don't care for new fields that produce less than ~25000 bpd....

They drill in deep water because that is where the remaining big fields exist.... 

Mon, 11/14/2011 - 16:09 | 1876657 tmosley
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I see.  So denial of application for drilling in shallow water==no oil in shallow water.  

I guess one might call this Peak Oil Logic.

Mon, 11/14/2011 - 16:35 | 1876824 Flakmeister
Flakmeister's picture

TM, you can do better than that...

Please refer to

After all, it is only a comprehensive review of the GOM....


Mon, 11/14/2011 - 17:23 | 1877035 trav7777
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are you looking for yet ANOTHER asskicking?

Mon, 11/14/2011 - 17:36 | 1877082 Flakmeister
Flakmeister's picture

He's like the trolls that pester the gold-bugs... Always getting the crap kicked out of them and coming back for more....

Mon, 11/14/2011 - 18:17 | 1877222 fuu
fuu's picture

I think I will have to make you a theme song when I have some more free time.

Mon, 11/14/2011 - 18:09 | 1877185 tmosley
tmosley's picture

Says the guy who compares humans to bacteria, knowing nothing of the growth profiles of either.

If by "asskicking" you mean another round of empty ad-hominem and inept personal attacks, then sure, I'm game.

Mon, 11/14/2011 - 14:19 | 1876159 Nothing To See Here
Nothing To See Here's picture

True that peak oil is a sham and that new oil is being discovered every day. But you need a big wake-up with your views about alternative energies. They DO need subsidies to be cost effective, exactly because oil and coal are still the most effective.

PS : Oil is subsidized but also heavily taxed...

Mon, 11/14/2011 - 15:22 | 1876411 Flakmeister
Flakmeister's picture

We have not found more oil in a given year than we have extracted since ~1980....

I only wish that all my investments were taxed the way the US royalty trusts are....

Quit blowing smoke, there are people here that know a fuck of lot more than you do about energy and oil....

Mon, 11/14/2011 - 16:16 | 1876697 Augustus
Augustus's picture


You are simply incorrect.  World oil reserves have incresed for the last 20 years.


Mon, 11/14/2011 - 16:39 | 1876842 Flakmeister
Flakmeister's picture

Please provide evidence of this... and don't play games that employ the SEC definition of a proven resource....

FWIW, you do know that peak oil is not about reserves, it is about flow rates. Do you?

Mon, 11/14/2011 - 18:11 | 1877193 tmosley
tmosley's picture

If it is about flow rate, then why are you commenting about discovery rates?

More and more holes in the peak oil argument.

I bet you can't debase yourself more than Trav will in this thread.

Mon, 11/14/2011 - 19:39 | 1877402 Flakmeister
Flakmeister's picture

Good god, quit being intellectually bankrupt....

Care to refute the following? Its called the Energy Trap, it could also be called "EROEI for Dummies and Deniers" which is why I thought it would be good for you...

Mon, 11/14/2011 - 20:21 | 1877551 tmosley
tmosley's picture

Doublethink on your part is intellectual bankruptcy on mine?

Interesting peak oil logic you have there.

Mon, 11/14/2011 - 20:44 | 1877643 Flakmeister
Flakmeister's picture

Well, since you want to play "Defender of the Faith",  could you please explain why we don't have to worry about declining net energy in world liquid fuel supplies, the decrease in global Net exports and declining EROEI?

I am all ears.... 

Tue, 11/15/2011 - 00:19 | 1878199 tmosley
tmosley's picture

Because there are legion other sources of energy, and liquid fuel can be generated artificially from any of them through known processes.  Further, other technologies exist which are of similar energy density to liquid hydrocarbons which don't require such setups (zinc-air batteries), which can easily be used for transportation (where rather than fuel ups, you trade batteries).

Just because the current top source of energy runs out doesn't mean there aren't any more to take its place.  All we need is for the government to get out of the way.

Tue, 11/15/2011 - 11:02 | 1878698 Flakmeister
Flakmeister's picture

I dub thee "The Energy Obama"...

Hope and Change! Hope and Change!

Sat, 11/19/2011 - 23:22 | 1890101 Lower Class Elite
Lower Class Elite's picture

"Because there are legion other sources of energy, and liquid fuel can be generated artificially from any of them through known processes. "

Legion?  Solar panels?  Windmills?  Oooh, I know, hydroelectric dams.  And of course the ever-popular thorium reactor!  Now how do you suppose those panels get made?  Or those super-trick carbon fiber blades?  How does all that concrete get made and poured?  How do the trucks that ship the panels and turbines and concrete get made?  How do they move all that shit around?  Have you ever heard of a perpetual motion engine?  Cause that's what it sounds like you are advocating.  "I made a solar panel and I used it to make another solar panel that also produced electricity to process algae and french fry oil into a gasoline-type substance."  ENERGY RETURN ON ENERGY INVESTED.  Look that shit up.  Also brush up on your Laws of Thermodynamics, especially #2.

Mon, 11/14/2011 - 14:25 | 1876182 American Sucker
American Sucker's picture

Billions are being discovered every year.  Of course, billions are being burned.  If you burn more than you find, you lose.  Humanity has burned more than it has found almost every year since 1980 or so.  Google "oil discoveries versus oil production".  There are some sobering charts you should see.

Mon, 11/14/2011 - 15:16 | 1876382 MrPalladium
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"Peak Oil" refers to production, not discoveries or reserve additions. In other words, production volumes have been flat for 6 years despite dramatically higher prices. At bottom, the question is how high prices must go to call forth that addtional production. The biggest problem by far is the huge population increases in mid-east exporting countries driving increases in domestic consumption which in turn drive export volumes down.

"Alternative energy does not need subsidies to be cost effective. It just needs the government to stop heavily subsidizing the oil industry."

If the U.S. government were subsidizing the oil industry, then what do you suppose will happen to oil production and prices when it stops subsidizing the oil industry? Your argument makes no sense.

Mon, 11/14/2011 - 16:21 | 1876730 aerojet
aerojet's picture

Every problem boils down to the size of the population.

Mon, 11/14/2011 - 20:08 | 1877504 TheFourthStooge-ing
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MrPalladium thoughtfully remarked:

"Peak Oil" refers to production, not discoveries or reserve additions. In other words, production volumes have been flat for 6 years despite dramatically higher prices. At bottom, the question is how high prices must go to call forth that addtional production.

Production volumes may have already transcended their former relationship with price points. Economists and politicians will wail, gnash their teeth, and practice every form of self-delusion to deny it, but flow rates will be determined by geology, not pricing or "markets".


Mon, 11/14/2011 - 16:28 | 1876769 SRSrocco
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The whole "peak oil" argument is a sham. Billions of barrels of oil are still being discovered every year

While it is true that billions of barrels are being discovered...its mostly TAR SANDS, SHALE OIL, DEEP SEA, and HEAVY OIL.  These are all of an EROI of 8/1 or less.  TAR SANDS is 2-4/1.  The US ECONOMY needs an EROI of 20-25/1+ to survive.

Sticking a hole in the ground and having LIGHT SWEET CRUDE shoot up 100 feet in the air under pressure is different that shoveling millions of tons of TAR SAND, BOILING IT, REFINING IT and making subpar oil.


Tue, 11/15/2011 - 17:01 | 1880218 DaveyJones
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very simply put and very true. Not sure why it is so hard to get for some.

Mon, 11/14/2011 - 14:03 | 1876114 GeneMarchbanks
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Clicking on one of your charts took me here:

Although it's funny it hasn't anything to do with energy independence...

Just sayin'


Mon, 11/14/2011 - 14:10 | 1876132 blu
blu's picture


Mon, 11/14/2011 - 14:20 | 1876164 GeneMarchbanks
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In the middle of serious content and all of a sudden I'm chuckling quietly to myself, never read a funnier "peak oil" article...

Mon, 11/14/2011 - 14:26 | 1876185 blu
blu's picture

It's a vastly depressing subject. Gotta inject some levity where you can.

I guess.

Mon, 11/14/2011 - 14:02 | 1876115 PAPA ROACH
PAPA ROACH's picture

I still don't understand why the entire workforce has to drive in bumper-to-bumper traffic to and fro every day, to sit in a cubical with very little human contact other than lunch and water cooler time and have meetings via computer cam conferences. This is why we use (waste) so much energy, not to mention the healthcare costs associated with long commutes/traffic. Well over 50% of jobs could be done more efficiently from home. We will never wake up to this, it will only happen when it is forced upon us because nobody can afford to drive anymore.

Mon, 11/14/2011 - 14:24 | 1876181 Cugel
Cugel's picture

Exactly. There is so much waste in the system that if we just make the most blindingly obvious adaptations, decreasing consumption will actually raise our standard of living.

Mon, 11/14/2011 - 14:34 | 1876214 Carlyle Groupie
Carlyle Groupie's picture

You two don't understand the whole GDP thing yet. Let's get some articles up on the necessity of ever increasing GDP and how it defines western human lifestyle.

Mon, 11/14/2011 - 14:38 | 1876224 Cugel
Cugel's picture

Ever-increasing GDP is only "necessary" if you borrow to consume. Borrowing to consume is not necessary, therefore neither is ever-increasing GDP.

Mon, 11/14/2011 - 14:41 | 1876241 Carlyle Groupie
Carlyle Groupie's picture

Like totally clueless or maybe too idealistic. Don't know. Wake up please.

Mon, 11/14/2011 - 14:45 | 1876250 pods
pods's picture

Your argument holds on an individual basis. But on the aggregate, as long as there is interest charged on lending, we gotta grow.


Mon, 11/14/2011 - 14:56 | 1876285 Cugel
Cugel's picture

Meh. If you borrow to produce, you can pay back into the sum total of wealth through the value of your produced goods. The wealth of society is increased by your productive output. The price of money and the money price of the goods don't change the underlying equation.

Mon, 11/14/2011 - 15:08 | 1876335 pods
pods's picture

The underlying equation is that if the growth in the economy (your productive growth scenario) is less than the interest on the borrowed money, someone, somewhere defaults.

That is why we need growth.  Not agreeing with it, it is just how it is.  If the growth in the economy is less than the money extracted through interest, someone is going to default.

Bankers don't care about the wealth of society when the bill is due.  That is why so many have warned about banking.  It extracts interest for its own gain.  

If production is not greater than the extraction, game over.  


Mon, 11/14/2011 - 15:15 | 1876379 PAPA ROACH
PAPA ROACH's picture

Funny how hard people fight to be slaves, perpetuating the game. Game over only means those who lent money as investment, the slave masters, lose to which I say, who the fuck cares. I am not some OWS guy, but I find we are playing a game that is way outdated, and only benefits a few. I am all for opening pandoras box to see what happens when the cogs stop rotating............

Mon, 11/14/2011 - 15:25 | 1876426 Cugel
Cugel's picture

But what you are saying is trivial. Of course if people value the inputs more than the outputs, production should stop. That is why default and bankruptcy are good -- they put a halt to wealth-destroying processes. The fact that "someone, somewhere defaults" just changes what hands the money is in. It is not the creation or destruction of wealth. Wealth is stuff, not money. An economy can be deflationary while its participants become wealthier. This is my point.

Mon, 11/14/2011 - 15:53 | 1876568 pods
pods's picture

Not when things in that economy are measured in that which is increasing in value due to shrinking supply (fiat money in a deflation).

Why is it we always must grow?  

What I am saying is trivial?

What I am saying is of the utmost importance.  Watch what happens when the removes the 10-14% of GDP addition through deficit spending.  See how much wealthie people become when the USD implodes on itself.

It a fiat system where the money for P is loaned into existance, future P is today's P+I.  

Not sure what world you are living in (sounds like a theoretical one to me), but in this world when expansion stops, we go kaboom.  It will be a Roman Waterfall event and it WILL trigger a hyperinflation.  But the problem will be one of deflation, not of inflation.  Deflation is a self reinforcing effect in our system.  If we had a hard money standard, with no fractional reserve credit money allowed, sure deflation would be good.  But that is far from where we are now.

BTW, when someone defaults, the money does not change hands, it goes poof.  



Mon, 11/14/2011 - 16:07 | 1876644 Cugel
Cugel's picture

Again, you are confusing money with wealth. When the financial system implodes, it will still leave behind the knowledge and capacity for produciton. The fact that Americans will not have their accustomed share of those outputs is their own fault for borrowing to consume, as I mentioned earlier. The current state of the economy does not contradict, but reflects the points I have been making.

BTW, when someone defaults, the underlying wealth only goes "poof" to the extent that it has been consumed.

Mon, 11/14/2011 - 16:19 | 1876714 pods
pods's picture

I understand the difference between money (technically currency) and wealth.  When the system implodes, there will be nothing to value production.  Try a 50% reduction in the money (again, currency) supply. 

When someone defaults, the debt goes poof.  The holder of that debt holds it as an asset.  Where does it go?  It can only be recovered by repossessing the collateral, if there is any. Of course, the value of this collateral will plummet as it always does in a deflation, leading to a realized loss.  By nature anything that is financed through debt will have inflated in perceived value.  This also works on the contraction side.

I fully understand the points you are trying to make.  But your points are not reality based.  Of course the underlying knowledge is there, but there will be no market for goods as the money (currency) supply will have shrunk to the point to where commerce stops. 


Mon, 11/14/2011 - 16:31 | 1876794 Cugel
Cugel's picture

Then everything just gets repriced. Do you really think we'll revert to the stone age with factories and power plants and engineers all lying around? Or will people cobble something together and start trading with one another? Which scenario is "reality based"?


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