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Guest Post: Energy Independence - The Big Lie

Tyler Durden's picture


Submitted by Jim Quinn of The Burning Platform

Energy Independence: The Big Lie


 PRICE OF A BARREL OF OIL 1978 – $14.00

“We are the generation that will win the war on the energy problem and in that process, rebuild the unity and confidence of America.” - President Jimmy Carter, 1979

“We have it in our power to act right here, right now. I propose $6 billion in tax cuts and research and developments to encourage innovation, renewable energy, fuel-efficient cars, and energy-efficient homes.” - President Bill Clinton, 1998

“I think that in ten years, we can reduce our dependence so that we no longer have to import oil from the Middle East or Venezuela. I think that’s about a realistic time frame…That’s why I’ve focused on putting resources into solar, wind, biodiesel, geothermal. These have been priorities of mine since I got to the Senate, and it is absolutely critical that we develop a high fuel efficient car that’s built not in Japan and not in South Korea, but built here in the United States of America.” - President Barack Obama, 2008

“We don’t have to wait on OPEC anymore. We don’t have to let them hold us hostage. America’s got the energy. Let’s have American energy independence.”- Rick Perry, CNN Debate, October 18

“We must become independent from foreign sources of oil. This will mean a combination of efforts related to conservation and efficiency measures, developing alternative sources of energy like biodiesel, ethanol, nuclear, and coal gasification, and finding more domestic sources of oil such as in ANWR or the Outer Continental Shelf (OCS).”Mitt Romney  


It is too bad that our 255 million cars can’t run on hot air. American presidents have propagated the Big Lie of energy independence for the last three decades. The Democrats have lied about green energy solutions and the Republicans have lied about domestic sources saving the day. These deceitful politicians put the country at risk as they misinform and mislead the non-thinking American public. They have been declaring our energy independence for 30 years, but we import three times as much oil today as we did in the early 1980’s. The CPI has gone up 350% since 1978, but the price of a barrel of oil has risen 800% over the same time frame. Today, I hear the same mindless fabrications from politicians and pundits about our ability to become energy independent. Any critical thinking analysis of the hard facts reveals that the United States will grow increasingly dependent upon other countries to supply our energy needs from a dwindling and harder to access supply of oil and natural gas. The fantasy world of plug in cars, corn driven vehicles and solar energy running our manufacturing plants is a castle in the sky flight of imagination. The linear thinking academic crowd believes a technological miracle will save us, when it is evident technology fails without infinite quantities of cheap oil.

I know the chart below requires some time to grasp, but I’m sure the average American can take five minutes away from watching Jersey Shore, Dancing with the Stars, or the latest update of the Kardashian saga to understand why the propaganda about energy independence is nothing but falsehoods. You have U.S. energy demand by sector on the right and the energy source by fuel on the left. Total U.S. energy use is nearly 100 quadrillion Btu. In physical energy terms, 1 quad represents 172 million barrels of oil (8 to 9 days of U.S. oil use), 50 million tons of coal (enough to generate about 2% of annual U.S. electricity use), or 1 trillion cubic feet of natural gas (about 4% of annual U.S. natural gas use).  

Please note that 37% of our energy source is petroleum, which supplies 95% of the energy for our transportation sector. That means your car and the millions of 18 wheelers that deliver your food to your grocery stores and electronic gadgets to your Best Buy. You can’t fill up your SUV with coal, natural gas, nuclear energy or sunshine. Without the 7 billion barrels of oil we use every year, our just in time mall centric suburban sprawl society would come to a grinding halt. There is no substitute for cheap plentiful oil anywhere in sight. The government sponsored ethanol boondoggle has already driven food prices higher, while requiring more energy to produce than it generates. Only a government “solution” could raise food prices, reduce gas mileage, and bankrupt hundreds of companies in an effort to reduce our dependence on oil. Natural gas as a transportation fuel supplies 2% of our needs. The cost to retro-fit 160,000 service stations across the country to supply natural gas as a fuel for the non-existent natural gas automobiles would be a fool’s errand and take at least a decade to implement.   


The green energy Nazis despise coal and nuclear power, which account for 31% of our energy supply. They want to phase coal out. They aren’t too fond of fracking either, so there goes another 23% of our supply. You might be able to make out that itsy bitsy green circle with the 7% of our supply from renewable energy. And more than half of that energy is supplied by hydro power. Less than 2% of our energy needs are met by solar and wind. For some perspective, we need to use the equivalent of 17 billion barrels of oil per year to run our society and solar and wind supplies the equivalent energy of about 300 million barrels of that total. I think our green energy dreams will come up just a smidgen short of meeting our demands. Nothing can replace oil as the lifeblood of our culture and there is no domestic supply source which will eliminate or even reduce our dependence upon the 10 million barrels per day we import from foreign countries. There are some hard truths that are purposefully ignored by those who want to mislead the public about the grim consequences of peak cheap oil:

  • The earth is finite. The amount of oil within the crust of the earth is finite. As we drain 32 billion barrels of oil from the earth every year, there is less remaining within the earth. We have drained the cheapest and easiest to reach 1.4 trillion barrels from the earth since the mid 1800s. The remaining recoverable 1.4 trillion barrels will be expensive and hard to reach.
  • The United States has about 2% of the world’s proven oil and gas reserves, but consumes 22% of the world’s oil production and 27% of the world’s natural gas production.
  • Demand for oil will continue to rise no matter what the United States does, as the developing world consumption far outstrips U.S. consumption. Oil is fungible and will be sold to the highest bidder.
  • The concept of energy returned on energy invested (EROEI) is beyond the grasp of politicians and drill, drill, drill pundits. EROEI is the ratio of the amount of usable energy acquired from a particular energy resource to the amount of energy expended to obtain that energy resource. When the EROEI of a resource is less than or equal to one, that energy source becomes an “energy sink”, and can no longer be used as a primary source of energy. Once it requires 1.1 barrels of oil to obtain a barrel of oil, the gig is up.
  • There is a negative feedback loop that revolves around oil supply, oil price and economic growth. As demand continues to rise and supply is more difficult to access, prices will rise. Since oil is an essential ingredient in every aspect of our lives, once the price reaches $120 to $150 a barrel economic growth goes into reverse. Demand crashes and investment in new sources of energy dries up. Rinse and repeat.

Finite World

World oil production peaked in 2005 has been flat since then, despite a continuous stream of promises from Saudi Arabia that they are on the verge of increasing production. The chart below from the U.S. Energy Information Administration propagates the standard fabrications about energy supplies. Even though worldwide oil production has clearly peaked, the oil industry PR whores and government agencies continue to project substantial production growth in the future. The mainstream media trots out Daniel Yergin whenever it wants to calm the masses, despite his track record of being 100% wrong 100% of the time. The brilliance of his July, 2005 Op-Ed shines through:

“Prices around $60 a barrel, driven by high demand growth, are fueling the fear of imminent shortage — that the world is going to begin running out of oil in five or 10 years. This shortage, it is argued, will be amplified by the substantial and growing demand from two giants: China and India. There will be a large, unprecedented buildup of oil supply in the next few years. Between 2004 and 2010, capacity to produce oil (not actual production) could grow by 16 million barrels a day — from 85 million barrels per day to 101 million barrels a day — a 20 percent increase. Such growth over the next few years would relieve the current pressure on supply and demand.”

Oil production capacity has not grown by one barrel since Yergin wrote this propaganda piece. This is despite the fact that prices have almost doubled, which should have spurred production. The current energy independence false storyline – the Bakken Formation – has gone from production of 10,000 barrels per day in 2003 to 400,000 barrels per day now, while the hundreds of millions invested in developing the Canadian tar sands have increased production by 50% since 2005. Despite these substantial increases in output, worldwide production has remained flat as existing wells deplete at the same rate that new production is brought online.


The facts are there is approximately 1.4 trillion barrels of recoverable oil left in the crust of the earth. We currently suck 32 billion barrels per year out of the earth. This means we have 44 years of oil left, at current consumption levels. But we know demand is growing from the developing world. Taking this fact into consideration, we have between 35 and 40 years worth of recoverable oil left on the planet. That is not a long time. Additionally, the last 1.4 trillion barrels will much more difficult and costly to extract than the first 1.4 trillion barrels. The remaining oil is miles under the ocean floor, trapped in shale and tar sands, and in the arctic. Despite these hard facts, governmental agencies and politicians continue to paint a rosy picture about our energy future. I watched in stunned amazement last week as five bozos on the McLaughlin Group news program unanimously proclaimed the U.S. would become a net exporter of oil in the coming decade. Do these supposedly intelligent people not understand the basic economics of supply, demand and price?  

It seems the governmental organizations always paint the future in the most optimistic terms, despite all facts pointing to a contrary outcome. The EIA predicts with a straight face that oil production will rise to 110 million barrels per day, while the price of a barrel of oil remains in the current $100 to $125 per barrel range. Non-OPEC production has been in decline since 2004, but the EIA miraculously predicts a 15% increase in production over the next 25 years. OPEC production has been flat since 2005, but the EIA is confident their 50 year old oil fields will ramp up production by 25% in the next 25 years. Does the EIA consider whether OPEC even wants to increase production? It would appear that constrained supply and higher prices would be quite beneficial to the OPEC countries. And then of course there is the unconventional oil that is supposed to increase from 4 million barrels per day to 13 million barrels per day, a mere 325% increase with no upward impact on prices. These guys would make a BLS government drone blush with the utter ridiculousness of their predictions.


The picture below is an excellent representation of how the easy to access oil and gas of the earth have been tapped. They were close to the surface. The remaining oil and gas is deeper and trapped within shale and sand. The new technology for extracting gas from shale has concerns regarding whether fracking and disposal of waste water can be done safely, especially near highly populated areas. The relationship between fracking and earthquakes could also prove to be problematic. The wells also have rapid decline rates. Add a mile of ocean to the picture below and you have some really expensive to access oil and potential for disaster, as witnessed with the Deep Water Horizon.


The EIA projects natural gas supply to grow by 10% between now and 2035 due to a 300% increase in shale gas supply. It seems the EIA believes the fantasy of 8 Saudi Arabia’s in the Bakken formation of North Dakota and decades of gas within the Marcellus Shale. These fantasies have been peddled by the natural gas industry in order to get support for their fracking efforts. This false storyline is damaging to the long-term planning that should be taking place now to alleviate the energy scarcity that is our future. In 2006 the EIA reported the possibility of 500 billion barrels of oil in the Bakken formation, based on guesswork. The U.S. Geological Survey has since scaled this back ever so slightly to 3.65 billion barrels, which is six months of U.S. consumption. The deceptions peddled regarding Marcellus shale are also colliding with reality. The U.S. Geological Survey recently produced an estimate of Marcellus Shale resources, which will cause the EIA to reduce its estimate of shale gas reserves for the Marcellus Shale by 80%. The price of natural gas is currently $3.54 MMBtu, down from $13 a few years ago. Extracting natural gas from shale has high capital costs of land, drilling and completion. It is not economically feasible below $6 MMBtu.


Based on the known facts and a realistic view of the future, there will be less supply of oil and natural gas as time goes on. We can already see the impact of these facts today. Even though Europe and the U.S. are in recession, the price of oil continues to rise. The developing world continues to demand more oil and the supply is stagnant. Stunts like withdrawing oil from the Strategic Reserve are foolish and politically motivated. Is the world then running out of oil then? No, but any increase in future global oil production will be modestly incremental and production could be thrown off course by any number of possible events, from an Israeli attack on Iran to (another, but successful this time) al Qaida attack on Saudi Arabia’s Abqaiq oil refinery. Any forecast regarding future oil production and prices isn’t worth the paper it is written on unless consideration to wars, revolutions and terrorism are factored into the equation.

We Don’t Matter

Americans like to think we are the center of the universe. Those who propagate the misinformation about U.S. energy independence are clearly math challenged. The total proven oil reserves in the world total 1.4 trillion barrels and the United States has 22 billion barrels of that total, or 1.6% of the world’s oil. The U.S. burns 7 billion barrels per year, so we have enough oil to survive for three whole years. The U.S. consumes 22% of the world’s oil despite having 4.5% of the world’s population and less than 2% of the world’s oil. Do these facts lead you to the conclusion the United States will be exporting oil in the near future?


When you hear the pundits breathtakingly describe our vast natural gas resources you would think we are the dominant player in this market. Not quite. The United States has 4% of the world’s natural gas reserves. Predictably we consume 22% of the world’s natural gas. Russia controls 25% of the world’s natural gas reserves, with the Middle East countries controlling 40% of the world’s reserves. The pundits can hype our “vast” supplies of natural gas, but the facts clearly reveal it is nothing but hype.


The U.S. is consuming less oil than it was in 2005. U.S. consumption is not the crucial factor in determining the price of oil today and our consumption will matter even less in the future. Emerging market countries, led by China and India, will be the driving force in oil demand in the coming decades. According to the IEA, “Non-OECD [emerging markets] account for 90% of population growth, 70% of the increase in economic output and 90% of energy demand growth over the period from 2010 to 2035.”


This demand is being driven by the growth in vehicles in emerging markets. The U.S. market has reached a saturation point, but China, India and the rest of the world are just beginning their love affairs with the automobile. The accumulation of facts regarding both supply and demand should even convince the most brainless CNBC talking head that the price of oil will continue to rise. The 2008 peak price of $145 per barrel will not hold. The tried and true American method of ignoring problems until they reach crisis proportions will bite us in the ass once again.


Slippery Road Ahead

The concept of EROI is incomprehensible to the peak oil deniers. When Larry Kudlow or one of the other drill, drill, drill morons proclaims the vast amount of oil in North Dakota shale and in Alberta, Canada tar sands, they completely ignore the concept of EROI. Some estimates conclude there are 5 trillion barrels of oil left in the earth. But, only 1.4 trillion barrels are considered recoverable. This is because the other 3.6 trillion barrels would require the expenditure of more energy to retrieve than they can deliver. Therefore, it is not practical to extract. When oil was originally discovered, it took on average one barrel of oil to find, extract, and process about 100 barrels of oil. That ratio has declined steadily over the last century to about three barrels gained for one barrel used up in the U.S. and about ten for one in Saudi Arabia.

The chart below clearly shows the sources of energy which have the highest energy return for energy invested. I don’t think I’ve heard Obama or the Republican candidates calling for a national investment in hydro-power even though it is hugely efficient. The dreams of the green energy crowd are shattered by the fact that biodiesel, ethanol and solar require as much energy to create as they produce. Tar sands and shale oil aren’t much more energy efficient. It’s too bad Obama and his minions hate dirty coal, because has the best return on energy invested among all the practical sources.   

 File:EROI - Ratio of Energy Returned on Energy Invested - USA.svg

Worse than the peak oil deniers are those who pretend that oil isn’t really that important to our society. They declare that technology will save the day, when in reality technology can’t function without oil. Without plentiful cheap oil our technologically driven civilization crashes. We are addicted to oil. Americans consume petroleum products at a rate of three-and-a-half gallons of oil and more than 250 cubic feet of natural gas per day each.  You might be interested in a partial list of products that require petroleum to be produced.

Solvents Diesel fuel Motor Oil Bearing Grease
Ink Floor Wax Ballpoint Pens Football Cleats
Upholstery Sweaters Boats Insecticides
Bicycle Tires Sports Car Bodies Nail Polish Fishing lures
Dresses Tires Golf Bags Perfumes
Cassettes Dishwasher parts Tool Boxes Shoe Polish
Motorcycle Helmet Caulking Petroleum Jelly Transparent Tape
CD Player Faucet Washers Antiseptics Clothesline
Curtains Food Preservatives Basketballs Soap
Vitamin Capsules Antihistamines Purses Shoes
Dashboards Cortisone Deodorant Footballs
Putty Dyes Panty Hose Refrigerant
Percolators Life Jackets Rubbing Alcohol Linings
Skis TV Cabinets Shag Rugs Electrician’s Tape
Tool Racks Car Battery Cases Epoxy Paint
Mops Slacks Insect Repellent Oil Filters
Umbrellas Yarn Fertilizers Hair Coloring
Roofing Toilet Seats Fishing Rods Lipstick
Denture Adhesive Linoleum Ice Cube Trays Synthetic Rubber
Speakers Plastic Wood Electric Blankets Glycerin
Tennis Rackets Rubber Cement Fishing Boots Dice
Nylon Rope Candles Trash Bags House Paint
Water Pipes Hand Lotion Roller Skates Surf Boards
Shampoo Wheels Paint Rollers Shower Curtains
Guitar Strings Luggage Aspirin Safety Glasses
Antifreeze Football Helmets Awnings Eyeglasses
Clothes Toothbrushes Ice Chests Footballs
Combs CD’s & DVD’s Paint Brushes Detergents
Vaporizers Balloons Sun Glasses Tents
Heart Valves Crayons Parachutes Telephones
Enamel Pillows Dishes Cameras
Anesthetics Artificial Turf Artificial limbs Bandages
Dentures Model Cars Folding Doors Hair Curlers
Cold cream Movie film Soft Contact lenses Drinking Cups
Fan Belts Car Enamel Shaving Cream Ammonia
Refrigerators Golf Balls Toothpaste Gasoline


The propaganda blared at the impressionable willfully ignorant American public has worked wonders. The vast majority of Americans have no clue they have entered a world of energy scarcity, a world where the average person is poorer and barely able to afford the basic necessities of life. This is borne out in the vehicles sales statistics reported every month. There have been 10.5 million passenger vehicles sold through the first 10 months of 2011. In addition to the fact they are “purchased” using 95% debt and financed over seven years, the vast majority are low mileage vehicles getting less than 20 mpg. Only 1.8 small energy efficient vehicles have been sold versus 6.1 million SUVs, pickup trucks and large luxury automobiles. Americans have the freedom to buy any vehicle they choose. They also have the freedom to not think and ignore the facts about the certainty of higher prices at the pump. By choosing a 20 mpg vehicle over a 40 mpg vehicle, they’ve sealed their fate. How could the average soccer mom get by without a Yukon or Excursion to shuttle Biff and Buffy to their games? Have you ever tried to navigate a soccer field parking lot in a hybrid? The horror!

The American public has been lulled back into a sense of security as gas prices have receded from $4.00 a gallon back to $3.40 a gallon. This lull will be short lived. Oil prices have surged by 15% in the last two months, even as the world economy heads into recession. The link between high oil prices and economic growth are undeniable, even though the deceitful pundits on CNBC will tell you otherwise. Ten out of eleven recessions since World War II were associated with oil price spikes. Gail Tverberg sums up the dilemma of energy scarcity for the average American:

“High-priced oil tends to choke economies because high oil prices are associated with high food prices (because oil products are used in food growing and transport), and people’s salaries do not rise to offset this rise in food and oil prices. People have to eat and to commute to their jobs, so they cut back on other expenditures. This leads to recession. Recession leads to lower oil consumption, since people without jobs can’t buy very much of anything, oil products included. In some sense, the reduction in oil extraction is due to reduced demand, because citizens cannot afford the high-priced oil that is available.”

But don’t worry. The rising oil and food prices will only impact the 99% in the U.S. and the poorest dregs across the globe that spend 70% of their income on food. The 1% will be just fine as they will bet on higher oil prices, therefore further enriching themselves while the peasants starve. The market for caviar, champagne, NYC penthouses, and summer mansions in the Hamptons will remain robust.

There is no escape from the ravages of higher priced oil. There is plenty of oil left in the ground. But, the remaining oil is difficult, slow and expensive to extract. Oil prices will rise because they have to. Without higher prices, who would make the huge capital investment required to extract the remaining oil? Once oil prices reach the $120 to $150 per barrel range our economy chokes and heads into recession. We are trapped in an endless feedback loop of doom. The false storyline of renewable energy saving the day is put to rest by Gail Tverberg:

“Renewables such as wind, solar PV, cellulosic ethanol, and biogas could more accurately be called “fossil fuel extenders” because they cannot exist apart from fossil fuels. Fossil fuels are required to make wind turbines and other devices, to transport the equipment, to make needed repairs, and to maintain the transport and electrical systems used by these fuels (such as maintaining transmission lines, running-back up power plants, and paving roads). If we lose fossil fuels, we can expect to lose the use of renewables, with a few exceptions, such as trees cut down locally, and burned for heat, and solar thermal used to heat hot water in containers on roofs.”

Predictably, the politicians and intellectual elite do the exact opposite of what needs to be done. We need to prepare our society to become more local. Without cheap plentiful oil our transportation system breaks down. Our 3.9 million miles of road networks will become a monument to stupidity as Obama and Congress want to spend hundreds of billions on road infrastructure that will slowly become obsolete. The crumbling infrastructure is already the result of government failure, as the money that should have been spent maintaining our roads, bridges and water systems was spent on train museums, turtle crossings, teaching South African men how to wash their genitalia, studies on the mating habits of ferrets, and thousands of other worthless Keynesian pork programs. If our society acted in a far sighted manner, we would be creating communities that could sustain themselves with local produce, local merchants, bike paths, walkable destinations, local light rail commuting, and local energy sources. The most logical energy source for the U.S. in an oil scarce scenario is electricity, since we have a substantial supply of coal and natural gas for the foreseeable future and the ability to build small nuclear power plants. The Fukushima disaster is likely to kill nuclear as an option until it is too late. The electrical grid should be the number one priority of our leaders, as it would be our only hope in an oil scarce world. Instead, our leaders will plow borrowed money into ethanol, solar, and shale oil drilling, guaranteeing a disastrous scenario for our country.

The United States is a country built upon the four C’s: Crude, Cars, Credit, and Consumption. They are intertwined and can’t exist without crude as the crucial ingredient. As the amount of crude available declines and the price rises, the other three C’s will breakdown. Our warped consumer driven economy collapses without the input of cheap plentiful oil. Those at the top levels of government realize this fact. It is not a coincidence that the War on Terror is the current cover story to keep our troops in the Middle East. It is not a coincidence the uncooperative rulers (Hussein, Gaddafi) of the countries with the 5th and 9th largest oil reserves on the planet have been dispatched. It is not a coincidence the saber rattling grows louder regarding the Iranian regime, as they sit atop 155 billion barrels of oil, the 4th largest reserves in the world. It should also be noted the troops leaving Iraq immediately began occupying Kuwait, owner of the 6th largest oil reserves on the planet. Oil under the South China Sea and in the arctic is being hotly pursued by the major world players. China and Russia are supporting Iran in their showdown with Israel and the U.S. As the world depletes the remaining oil, conflict and war are inevitable. The term Energy Independence will carry a different meaning than the one spouted by mindless politicians as the oil runs low.

And as things fell apart
Nobody paid much attention

Nothing but Flowers – The Talking Heads


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Mon, 11/14/2011 - 16:21 | 1876733 Flakmeister
Flakmeister's picture

Why not google Cushing Stocks from the EIA and educate yourself... This took me less time to find the following that it took you to type your misinformed missive


Mon, 11/14/2011 - 16:25 | 1876757 hannah
hannah's picture

the charts prove my point you mouth breather.....

Mon, 11/14/2011 - 16:42 | 1876858 Flakmeister
Flakmeister's picture

And pray tell, what point is that?

I'd say that stocks being down 10 million barrels or 25% since the Feb 2011 is hardly filled to capacity....


Mon, 11/14/2011 - 17:55 | 1877138 tmosley
tmosley's picture

You're so mad you can't tell who is with you and who is against you.

That is not the type of person you want to be around.

Mon, 11/14/2011 - 18:10 | 1877192 Flakmeister
Flakmeister's picture

Don't you have some gold trolls to deal with? I think I saw Mathman or William the Bastard in another thread...

I don't see you having much patience with the asshats that disagree with you on matters of Ag and Au, so why don't you go play elsewhere...

Mon, 11/14/2011 - 18:42 | 1877275 tmosley
tmosley's picture

All the gold trolls are dead.  I killed them.  Working on Trav the death troll now.

Actually, you do see me having a lot of patience with anti-PM trolls, you just don't remember it.  I take a great deal of time to carefully dismantle their arguments.  Not because I respect them so much, but because I don't want lurkers or new members reading that tripe and losing their life savings by investing in paper via MF Global and Co.  Not sure what your purpose is here, aside from ego stroking (not that I don't do that--everyone does).  Your argument seems to be "Peak Oil, we all gon die", with no alternatives presented, no survival strategies, nothing of any use to anyone.

Yet you tell me to go elsewhere, as if this were your personal playground.

Take this as constructive criticism.  Don't get caught in the ego trap.  Try to help people.  Your blood pressure will wind up a lot lower than Trav's, whose sole purpose here seems to be to misinform people to their death so that he gets a bigger share of the remaining oil.

Mon, 11/14/2011 - 19:52 | 1877456 Flakmeister
Flakmeister's picture

Again you miss the gist of what I say or deliberately chose to misconstrue it.... where have I said, "we all gonna die because the oil is gone"? Feel free to take that up with CiO or LoP....The only thing I am guilty of is saying that there will be violence associated with Peak Oil, a pretty even statement...

I am more than willing to help people, but the people I spar with here don't want any help, their minds are set.

Mon, 11/14/2011 - 20:49 | 1877668 tmosley
tmosley's picture

You forget that the people responding aren't the only ones here, just like Fight Club is filled with people in the shadows.  Help THEM.

Your problem is that you have a thesis that is not actionable.  You refuse to even consider that the future will be anything but violence unto death (amen unto Ba'al).  All you do is babble, and no-one benefits.  NOT ONE PERSON.  Not even you.  

Mon, 11/14/2011 - 23:43 | 1878083 Flakmeister
Flakmeister's picture

That is truly rich coming from you....

This place has changed a lot since I first started lurking and then posting.... Nobody whose opinion is not already formed shows up at the Hedge to be "educated", don't flatter yourself or read too much into the "goals" of this site. 

My thesis is backed by the data and its rational examination.... Your thesis is one of denial based on some kind of hope...  Care to discuss why the Export Land Model is wrong? You cannot refute the basis of EROEI either, you either don't get or choose not to get it.

You may recall before I instructed you in the difference between C+C, NGL, Refinery gains and their relative energy densities you were clueless about what was called "oil" but somehow you knew oil was not peaking... Yah, sure, ok...

Go tout the virtures of PMs, maybe you can "save somebody" there...  

Tue, 11/15/2011 - 00:25 | 1878210 tmosley
tmosley's picture

I see, so you are here purely for masturbation, and you get off from using big words in an attempt to construct an appeal to your own authority on the subject, while you simultaneously fail to see the forest for the trees.

You are a fool, and a waste of time.  

Tue, 11/15/2011 - 09:18 | 1878709 Flakmeister
Flakmeister's picture

Can't get over the fact that when it comes to energy,  you have no idea what you are talking about...

You have been pwned anytime you open your mouth about technical details, but you claim they don;t matter. You better stick to pimping Silver...

TM Energy policy: Hope and Change! Hope and Change!

Tue, 11/15/2011 - 04:52 | 1878448 buyingsterling
buyingsterling's picture

FM - piss off.

Tue, 11/15/2011 - 09:19 | 1878711 Flakmeister
Flakmeister's picture

Why don't you go off into the corner and quietly fist yourself....

Mon, 11/14/2011 - 14:35 | 1876212 defencev
defencev's picture

This article is a total bullshit. First of it does not mention tar sands as a source of oil in Noth America. Secondly, it downplays huge natural gas reserves in US. Yes, it is true it will take some time to build necessary infra structure but it can and should be done.

It is total shame that this website publish such a nonsense. Obviously, there is a clear agenda here: inevitable demise of US. Bullshit and bunch of cheap lies...

Mon, 11/14/2011 - 14:41 | 1876235 johny2
johny2's picture

it is not inevitablity of US demise that is the question, but the timing of it.

Mon, 11/14/2011 - 17:44 | 1877110 defencev
defencev's picture

Allow me a general comment. This website is presumably about making predictions useful for investment purposes. I usually take a very pragmatic view and keep the track record. Let me tell you something: major conributors here like Tyler Darden are almost invariably wrong. Of course, it is not like 100 percent like Simon Black but pretty close. It is not that they are all idiots (otherwise, how to explain that their record is worse than proverbial monkey) but they have certain preconception and they try to reduce the reality to their apocaliptic views. Well, it is simply not working. Smart people should allow objective analysis and it is not happening over here.

Mon, 11/14/2011 - 19:55 | 1877461 Flakmeister
Flakmeister's picture

You have come to wrong place then if you think "objective" analysis will be a dominant theme...

Go the or for investment info in the energy patch, caveat emptor, natch....

Sun, 11/20/2011 - 16:59 | 1896377 johny2
johny2's picture

I don't think ZH has been proven wrong at all so far, unless you have seen the future and know that everything is going to be just fine. The main conception here is that the present scheme of ever increasing growrth is not sustainable, and unless we make some great innovations, I also find it hard to believe. The investment advice is a tricky thing, and I find that ZH only gives you all the news, and is funny with it. I really think that you are welcome in ZH, even though you don't think so much of the site, apparently. 

Mon, 11/14/2011 - 15:41 | 1876503 American Sucker
American Sucker's picture

The tar sands will ramp up to ~5m barrels per day.  They're currently about 1.5m.

Since 2005, global exports have dropped about 5m barrels per day.  Even when the tar sands ramp up fully, they will not replace the oil that's already gone from the world market.  (3.5m more < 5m lost).

Tue, 11/15/2011 - 15:09 | 1879846 buyingsterling
buyingsterling's picture

Another example of expanding reserves, no? Ten or twenty years ago that 5m pd wasn't part of the equation. Similarly Brazil's find, new finds in Venezuela (now more proven reserves than Saudis) and the arctic, slant drilling, and fracking (1037 earthquakes in my dear OK last year, normally we get about 50). It's even profitable to drill in deep water: just wait until all reality becomes crystal clear and we start drilling the oceans for real. The wars in the middle east probably are about securing easy access points, but are also about pushing the idea of scarcity (look! they'll kill tens of thousands of Arabs for oil! It must be scarce!)

We don't know where it comes from, but there's one thing for certain: No dinosaurs were living hundreds of feet below the ocean floors. It aint dead dinos. And what is happening to all of the space vacated by drilling? It's not inconsequential. Giant caverns that will some day fill in? (quick math: 3.6 trillion litres consumed/year = 1,440,000 olympic (50x25 metres) swimming pools. That's equivalent to a shaft of that size extending down 1718 miles deep into the earth, each year. It's all emptied out near the crust, but apparently it doesn't affect anything.)

Tue, 11/15/2011 - 15:59 | 1879995 Flakmeister
Flakmeister's picture

Somewhat pointless number play....

The decline in Mexico and Venezuela overwhelm any increase from the Canadian tar sands

Why do you guys have hang ups about dead dinosaurs.....and we know damn well where oil comes from. Just because you don't know, doesn't mean the ROW is ignorant....

Peak oil occurs when you can increase the flow rate no matter what "stimulus" you choose...

Two trillion dollars invested in new production and we have been spinning our wheels for 6 years....

Existing fields are decling at a rate of ~5%, this means that you have to bring online 3.5 million barrels a day in new production to stand stilll....

Net exports are down close to 10% since up on the Export Land Model...

An even handed analysis of the composition of the "All Liquids" production that is called oil by the EIA, IEA reveals that the energy content has been flat since 2005.... NGL is not cride, ethanol is not crude.... Refinery gains is not new net energy....


Wed, 11/16/2011 - 06:03 | 1881922 buyingsterling
buyingsterling's picture

Venezuela just this year had huge new finds to push it past the saudis. Declining production there is probably thanks to Chavez.

The peak oil assumption is that if we can't produce as much or more oil as we do now, things will break down. In reality, people will prioritize. How much of America's consumption is essential to the economy functioning, and how much is people travelling unnecessarily? It may be slowly drying up, but it's not going to happen overnight. We'll have time to do what we do well, adapt. Assuming control freaks don't hold us down.

Wed, 11/16/2011 - 09:56 | 1882259 Flakmeister
Flakmeister's picture

Please elaborate on the new finds.... the Orinoco is old news

I don't argue that Chavez has helped things, but 1 mmpbd ain't gonna save us.

Mon, 11/14/2011 - 14:36 | 1876217 hannah
hannah's picture

that canadian pipeline was to bring oil sands oil to the refineries and then on to china. the usa would never get the oil. the chinese have already bought it. the pipeline was going to be paid for with usa gov tax the canadians and chinese will have to pay for their own pipeline to the west coast.

Mon, 11/14/2011 - 14:44 | 1876249 c'mon man
c&#039;mon man's picture

ROI(Return on Investment) is a formula economists use to determine the worthwhileness of an investment. ROI must exceed one or the investment losses money.?

ROI = Investment / Return -1

EROEI(Energy Return on Energy Invested) is a formula an engineer might use to determine the worthwhileness of an energy investment. EROEI must exceed one or the energy investment losses energy.

EROEI = Energy Invested / Energy Returned -1

ROI means the accounting is done in dollars. EROEI means the accounting is done in energy. Distinguishing between ROI and EROEI changes the way you look at fossil fuels. It takes energy to make the steel used to make an oil well or an oil pipe line. It takes energy to drill for oil and to transport it. If it takes too much energy the EROEI will be less than one.

An EROEI of 200 was achieved with some oil wells 50 years ago. Oil production in deep water currently achieves an EROEI of less than 5.?

The production of Canadian syncrude continues though the EROEI is less than one. Yet it continues because the energy cost of natural gas required to make syncrude is ignored. The natural gas is "stranded" meaning that it is too far from markets to be useful in any other way.?You might say that syncrude production is a way to export natural gas.

Corn ethanol production continues though the EROEI is near one. That is because of tax breaks and other hidden subsidies.

Producing oil to get energy becomes pointless if the EROEI goes below one. A small oil field under a deep ocean in the Arctic would be an example. Oil shale is probably another example. Oil produced from these sources may continue to provide feedstock for plastics or fertilizer, but not for energy.?

Mon, 11/14/2011 - 14:58 | 1876291 hannah
hannah's picture

let me correct your equation:


EROEI = (.0000000001)(Energy Invested / Energy Returned -1) + (1,000,000,000,0000)(usa tax payer money)


that is return on money.

Mon, 11/14/2011 - 18:52 | 1877290 That Peak Oil Guy
That Peak Oil Guy's picture

Actually, EROEI must be significantly above 1:1 to make sense, otherwise you are just spinning wheels burning fuel to get the same amount of fuel.  For instance, with an EROEI of 1:3 you are only netting 2 units of energy.  Since the environmental costs are not included in EROEI calculations even 1:3 at a large scale is probably too dangerous for the planet to make sense in the long term.

Mon, 11/14/2011 - 20:27 | 1877584 blu
blu's picture

Very true.

However you want to know something? Nobody in the actual oil industry gives a shit about that. They are all about pumping oil, or just pretending to pump oil. Period. And they'll do just that even when it is a 150% losing proposition. Because without tankers moving crude around the world there will be room for someone to make a credible case that -- there is no more oil.

Five minutes later, cue the fucking riots that end the fucking world fucking 4 real.

Here's how it will go down. They will someday pump the last barrel of oil out of the sands of SA. And they will do it with $20 million of extraction effort for that single barrel, and it will take a week to get it. $20 million. For one lousy barrel. But it will be worth it. The nightly news will say that they are still getting oil out of SA so go shopping. And then they'll pump the crap out of the dry well with government subsidies (or the government will just take over) so everyone can pretend for another couple weeks or months. All over the world rocker pumps will be laboring mightily at dry bores pretending to pump oil so that everyone else can pretend they aren't about to die.

Never mind that sea levels will have also risen by 5 feet and counting and half of Florida is building tide walls and ringing cities with 40 foot levies against the incoming sea of pain. Fuck that, nobody will be taking about that either. It's all shovel-ready bitches.

Drill baby drill! That's how it's going to be until they ring the doom bell. Anybody not drilling thinking they will ride out the storm with their private reserve -- you know for rainy day and all -- no sorry now you've got a US carrier task force sitting off-shore, and you better not bitch about it.

The oil giants won. Well ain't that nice, everyone is now absolutely helpless to save themselves. My only real consolation is that their heirs and investors are going to die crying in a ditch along with the rest of us, wondering what the hell went wrong. Too greedy to live is what went wrong. Born to screw everything up, yeah that's us.

Tue, 11/15/2011 - 01:41 | 1878336 hannah
hannah's picture

ROI doesnt mean sh^t when all the investment money comes free from the tx payer. ROI...jesus it is 100% profit for the speculators when we foot the bill.

Mon, 11/14/2011 - 14:40 | 1876230 Majere
Majere's picture

Michael C Ruppoert talks about peak oil and has a few websites and a movie called collapse.

Mon, 11/14/2011 - 15:25 | 1876427 Carlyle Groupie
Carlyle Groupie's picture

That guy's a cry baby. I'm sick to death of all the tears.

Enough of the feminization already!

Mon, 11/14/2011 - 14:41 | 1876237 Thorny Xi
Thorny Xi's picture

The denial in the comments section is surprising here.  You kids really should do a little reading if this article surprises you, since the reality of finite oil has been known since 1956.  

Mon, 11/14/2011 - 14:49 | 1876266 jcaz
jcaz's picture

LOL- yes it has- and since 1956, that number has changed every year.

News Flash- EVERYTHING is "finite"

Mon, 11/14/2011 - 20:49 | 1877663 Flakmeister
Flakmeister's picture

What number has changed every year? Do you know what the significance of 1956?

Mon, 11/14/2011 - 14:41 | 1876240 Stuck on Zero
Stuck on Zero's picture

Isn't it amazing how bad the numbers always look in the future?  The assumption made by the author is that mankind does nothing but sit around and consume an ever diminishing resource.  The author is a fool delivering the same message a thousand pundits deliver and are always wrong in the future.  There are a hundred promising new technologies for delivering clean abundant energy.  U.S politics is doing little to advance these but the Chinese and Indians will.  For example, cheap conversion of natural gas to liquid fuels for transportation is in the works.  Thorium power plants driven by by neutron generators promise a thousand years of energy with almost no waste.  Solar power will continue developing until 60% efficiency panels reach fruition. 

Mon, 11/14/2011 - 14:47 | 1876256 jcaz
jcaz's picture

LOL- "Only 44 more years of oil left...."

Typical hysterical shriek of someone trying to make his point without any basis in fact.


Mon, 11/14/2011 - 15:26 | 1876434 ian807
ian807's picture

No, that number is as correct as can be estimated. For a numerate description of the quantities of oil involved, I suggest you purchase the book referred to on this website:

Mon, 11/14/2011 - 15:29 | 1876451 Jim Quinn
Jim Quinn's picture

I wouldn't expect a moron like yourself to know how to divide.

1.4 trillion barrels of proven reserves/ 32 billion barrels consumed per year = 44 years

The ignorance of the common man is shocking.


Mon, 11/14/2011 - 16:00 | 1876603 jcaz
jcaz's picture

It's a worthless number, actually- for one thing, it's naive to believe that anyone today can estimate the actual amount of oil available on Earth, just as it was pointless to believe that anyone could estimate that number in 1956;  Technology has a funny way of making tree-huggers look like flat-earthers.....

Second, there is a basic fact of economics: As the cost to extract oil rises, there comes a point where extraction will end as the cost to do so becomes prohibitive, thus the Earth will NEVER run out of oil;

But hey, don't let facts get in the way of the tree-hugger rant-  hasn't bothered them up till now, why change?

Mon, 11/14/2011 - 20:55 | 1877689 Flakmeister
Flakmeister's picture

Yes, it is a worthless number, R/P is illustrative, nothing else. It is useless to predict future production...

Mon, 11/14/2011 - 17:47 | 1876835 DavidPierre
DavidPierre's picture



I wouldn't expect a 9/11Moron like yourself to know how to read and understand that you have no idea or comprehension of physical science or real world history.

The conspiracy of Nazi armaments maker General Motors and Nazi fuel supplier Standard Oil with Mack Truck, Phillips Petroleum and Firestone Tires to increase car, bus, fuel and tire sales in the U.S. by destroying streetcar and urban light rail systems did not go quite as quickly as the Fascist conspirators might have hoped; too many public utilities were refusing to sell out their popular and very fuel efficent transportation systems.

But then, as though by magic, everything changes... just like on 9/11.

Congress enacts the Public Utility Holding Company Act of 1935 which has the effect of stripping transit lines away from their public utilities and forcing them onto the monopoly game market where they are snapped up and destroyed by General Motors, Standard Oil et al.

The ignorance of the SmokeyQuinn is shocking. 

This is just another rehashed article ... more smoke up the ass... as you "Aid and Abet" and continue as a accomplice to the real home grown terrorists as they continue their treasonous and genocidal activities and wars in the ameriKlan fatherland and world wide.

Mon, 11/14/2011 - 14:47 | 1876257 Crawdaddy
Crawdaddy's picture

70 percent of all the oil wells drilled in the history of the oil industry have been drilled in the US. What are the odds there are more reserves yet undiscovered than there are reserves currently considered proven?

Mon, 11/14/2011 - 15:30 | 1876454 Flakmeister
Flakmeister's picture

What are the odds that you have a clue about what you spewing?

Mon, 11/14/2011 - 17:23 | 1877036 tmosley
tmosley's picture


He is saying it is unlikely there are more reserves, because there have been a lot of holes drilled already, implying that we know a lot more about the geology of the US than most other places.

I am not commenting on the veracity of the argument, but only that he seems to agree with your assertions.

Mon, 11/14/2011 - 17:50 | 1877128 Flakmeister
Flakmeister's picture

I took what he said to be that since the US is so well drilled compared to the rest of the world, there must be all kinds of unfound oil elsewhere....

In any event, it is not a clear statement and is open to a number of interpretations....

Mon, 11/14/2011 - 18:44 | 1877278 tmosley
tmosley's picture

It surely could be.  Why is that not the case?

You only insulted him, while doing nothing to tear down his argument.  It might make one suspect that you don't have a counterargument, and that his argument is valid.

Mon, 11/14/2011 - 15:32 | 1876461 ian807
ian807's picture

Pretty poor, actually. There's a lot of money out there looking for cheap oil and has been since we have been able to analyze seismic data.

Instead, we're drilling deepwater oil in the Gulf of Mexico and the coast of Brazil, and considering Antarctica. Discovering oil is relatively cheap. Production drilling is expensive by any measure. Neither Brazil nor the Gulf are easy or cheap. If there was easier and cheaper oil to be found, believe me, we'd have found it by now.

Mon, 11/14/2011 - 14:50 | 1876264 sbenard
sbenard's picture

I keep wondering how the greenies would have us run all that farm machinery to grow our food. Would they approve of SAILS?

Mon, 11/14/2011 - 18:56 | 1877296 That Peak Oil Guy
That Peak Oil Guy's picture

You mean the modern equivalent, wind turbines?

No, a recent study estimated that if we try to harvest much more than 1 TW of wind energy from the atmosphere we could alter the wind patterns of the planet to the point where we cause negative weather effect and rapidly decreasing returns.

Mon, 11/14/2011 - 14:49 | 1876265 tempo
tempo's picture

Oil is the reason the US dollar remains the world's reserve currency. For 80 years, the US has guaranteed Saudi security and in turn the Saudis price oil ( the worlds's largest commodity) in dollars. If oil is not priced in $ and $ is not reserve currency, the US can't finance its trillion $ deficits and the game is over.

Mon, 11/14/2011 - 14:53 | 1876275 Captchured
Captchured's picture

The section on natural gas is outdated (perhaps like the cassettes and shag rugs...shag rugs? Really?). The chart says "Proved Natural Gas Reserves". The trick with the Middle East (to lump all of the geology together, ugh) is that their shale kind of sucks for natural gas production (ductile instead of brittle). Their natural gas is conventional and thus we pretty much know exactly how much there is and ever will be. Whereas the bulk of the natural gas in North America is tied up in shale. And, it turns out that a lot of that shale is brittle and can be fractured (fraced or frac'ed...please, no more "fracked" or "fracking"). On top of that, we haven't even begun to get close to classifying all of our shale resources as "proved" reserves (a very specific, technical term in the oil and gas world). We likely have more natural gas than anybody except Iran. Of course, only time will tell.

I agree with a lot of the article. Renewable energy isn't going to do it. Oil is king. The world is finite. Indefinite growth won't continue. Etc. Even if the US had 90% of all the world's energy resources the story would remain exactly the same; energy is fungible and there is a finite amount of it and therefore some things will have to change. It shouldn't be centered on the US. Remember, energy is fungible. As the supply of energy decreases the "price" goes up for everybody, not just citizens of the United States.

Can't people just write without having to be all hysterical?

Mon, 11/14/2011 - 14:55 | 1876282 CrashisOptimistic
CrashisOptimistic's picture

Pretty good article, Tyler.  Thumbs up to the writer.

I would offer up only peripheral adjustments (that have a huge effect).  

1) All such projections of downward spiral underestimate the "no volunteers" effect.  No one will volunteer to be first over the cliff.  The wars will make it all far worse.

2) Transport is not just people and food.  It's also spare parts.  All kinds of things break down.  Natural gas still having adequate flow to heat houses . . . won't.  Some part will break and the replacement is made 2000 miles away.  So you freeze, even though there's enough nat gas flow.

Mon, 11/14/2011 - 14:59 | 1876294 the grateful un...
the grateful unemployed's picture

it's probable that as we speak America is already energy independent. the Natural Gas boom has done most of the heavy lifting, Canadian shale and tar sands, contribute more. Alternative energy helps, and reduced demand.

why are we pretending we aren't energy dependent? to keep the price of oil high, yes HIGH, so that oil companies can make a profit, and to prop up the asset bubble in general, because so many derivative products will lose value if crude is priced according to the real market.

this is why Obama throws money at electric cars and solar panel companies (knowing well enough that the Chinese are dumping their oversupply on the market) he knows these are inefficient and wasteful projects which are fully supported by big oil.

this is also the reason we continue our bipartisan policy of US hegemony in Central Asia. oil is the red herring, the thing which distracts you from the truth about fighting the new Communism.

the short and the long answer is obama is selling us out to corporate greed, neocon policies of world domination, and one great big planet crawling with third world worker bees who obey any authority

Mon, 11/14/2011 - 15:35 | 1876476 ian807
ian807's picture

The USA uses about 8 to 9 billion barrels a year depending on what sort of year we're having. (Just google it please). No, we're not energy independent, and won't be until we use less than what we can produce every year. This will happen eventually, but don't expect to do much driving.

Mon, 11/14/2011 - 15:47 | 1876538 American Sucker
American Sucker's picture

How can America be energy-independent when it currently imports 9 million barrels of oil every single day?  That just doesn't make sense.

Mon, 11/14/2011 - 15:05 | 1876317 michael_engineer
michael_engineer's picture


I would like to see the discussion presented at the below website listed as a guest post on ZH to see what the commentary looks like in response to widespread exposure to the readers here.  That article discusses insights into how resource depletions such as peak oil affect the economy.

Can we get a green arrow red arrow opinion about doing that?



Mon, 11/14/2011 - 15:10 | 1876351 catch edge ghost
catch edge ghost's picture

When reached for comment, the Universe re-issued its ususal statement, "We've been taking care of this sort of thing for a long time.  Our methods should come as no surprise to the market."

Mon, 11/14/2011 - 15:18 | 1876392 c'mon man
c&#039;mon man's picture

Ever wonder why that fuel efficient advertised Honda you purchased claiming 24/32 only delivers about a 17mpg?? You can thank that Ethanol Mix:

Mon, 11/14/2011 - 15:32 | 1876460 earleflorida
earleflorida's picture


my jaw kept dropping as each segment put more emphasis on the last, until i was dumbfounded with reality - it's about time someone puts reality into perspective.

nicely done!


PS. i hope this article somehow goes viral      thanks

Mon, 11/14/2011 - 15:37 | 1876487 rosethorn
rosethorn's picture

The US has no intention of seeking energy independence due to the influence of oil companies.

Bergius process - Wikipedia, the free encyclopedia

"During WWII the United States conducted secret research in converting coal to gasoline at a facility in Louisiana, Missouri. Located along the Mississippi river, this plant was producing gasoline in commercial quantities by 1948. The Louisiana process method produced automobile gasoline comparable in price with petroleum based gasoline[6] but of a higher quality.The facility was shut down in 1953 by the Eisenhower administration after intense lobbying by the oil industry.[7] Declassified documents detailing the experiments and the production process were systematically destroyed."

The dead hand of John D. Rockefeller has a long reach.

Mon, 11/14/2011 - 15:43 | 1876517 Flakmeister
Flakmeister's picture

Its called the FT process... suggest you research it a bit before jumping to any conclusions.

Mon, 11/14/2011 - 15:52 | 1876564 rosethorn
rosethorn's picture

Actually, Bergius and FT are two different processes; yes, both convert coal to liquids, but the actual details are slightly different.  Oil extraction and refining are capital intensive as well. 

Mon, 11/14/2011 - 15:59 | 1876599 Flakmeister
Flakmeister's picture

I checked it out... I do stand corrected about the details... I won't be holding my breath waiting for this to save us...

A bonus question for anyone out there: Where does the requisite hydrogen come from?

Mon, 11/14/2011 - 15:52 | 1876566 rosethorn
rosethorn's picture

Actually, Bergius and FT are two different processes; yes, both convert coal to liquids, but the actual details are slightly different.  Oil extraction and refining are capital intensive as well. 

Mon, 11/14/2011 - 15:55 | 1876560 earleflorida
earleflorida's picture

another treasonous event perpetrated by  the trumped-up architecture of free  market capitalism

ps. octane to infinity needing only metallurgical advancements  

Mon, 11/14/2011 - 17:26 | 1877047 tmosley
tmosley's picture

How is being shut down by the government a feature of a free market economy?

Or did you mean "mixed market fascism"?

Mon, 11/14/2011 - 15:54 | 1876572 Threeggg
Threeggg's picture

How can you have cheap abundant oil if the currency (Petrodollar) that it's priced in is being debased everyday ? How will the Dollar keep it's (strength) "Reserve Currency Status" if oil is not priced in Dollars.

Who would need Dollars ?

wink, wink !

Mon, 11/14/2011 - 15:58 | 1876587 earleflorida
earleflorida's picture

kinda like gold keeping up with inflation,... eh ?  

Mon, 11/14/2011 - 15:57 | 1876582 Hanging By A Thread
Hanging By A Thread's picture

I've been a student of "peak oil" for over ten years and this is an exceptionally well written piece.

Mon, 11/14/2011 - 16:36 | 1876830 Captchured
Captchured's picture

I junked you because it is not well written. The author makes some good points, but there is a whole lot of anger flowing through the article and a number of inaccuracies. The ability to string together a bunch of charts without an intimate understanding of the information that went into creating those charts does not make very good reading.

Mon, 11/14/2011 - 15:57 | 1876583 prodigious_idea
prodigious_idea's picture

Sleeping With The Devil by Robert Baer

Mon, 11/14/2011 - 15:58 | 1876590 Hanging By A Thread
Hanging By A Thread's picture

I've been a student of "peak oil" for over ten years and this is an exceptionally well written piece.

Mon, 11/14/2011 - 16:01 | 1876613 TheLionhearted
TheLionhearted's picture

it is such a strategic issue.  As an exe Petroleum Geophysicist most of your comments are lost.  Excellent post, if we really wanted to solve this issue put it the American people's hands.  Enact a massive imported oil tax per barrel, say the equivalent of $1.00 gallon gasoline that increase $.25 a year every year America continues to import more oil than some abritray significant figure say 15% of our needs.  Then American consumer and automobile mfgs could plan assuredly for higher prices, not some fall back to $1.3 a gallon in an economic collapse and it would a decidely significant floor under the high mileage vehicle market.  SO in 15 years Americans meet the objective and are paying $9.00 a gallon for gasoline or more and upon annually meeting the objective the imported oil tax declines by 33% and if we continue and only import 15% of our use the next year it declines by 33% again of the 66% the next year also and it remains a permanaent fixture of American economy and we import more than 15% and increases again by $.25 a year.  Simply having a delightful $700B in America would be a wonderful multiplier effect.  Along with the tax I would encourage a small producers tax of say the first 10000 of domestic production that is 20% tax free that disappears on the next 50000 bbls of domestic oil production. 

 Along with this all the proceeds from the tax are managed by a civilian board that not one penny can be used  by the Federales and must only be applied to SS Trust funds but they can not be spent for a decade either, the tax proceeds would be entirely administered by a 21 member randomly elected civilan tax board. Portfolio distribution would be determined by the Congress - well maybe not. This tax done with some of my additional proposals like increasing retirement age by one month a year over the next century, closing the corrupt Federal Reserve and printing one big ass coin like a trillion dollar platinum piece and presenting it to the Fed for the debt the US government owes them.  They have destroyed our currency taking a buck now worth $.02 cents a century later, if will say we have a trillion dollar coin and we give it to them for all payments - they've done it to us and we're done with them. Then lets get the US Treasury back in the dollar printing business again with Greenbacks and The Power of Oz.  Maybe even incorporate mandatory state run banks where the money is recycled locallly not sent to NYC, Paris, Hong Kong or London. Take the power back from the TPTB. Sorry it was only a dream. 

I want to end the crony capitalism and have the people take back there economic power no more windmills, ethanol, solar subs or mass transit subs unless it is really economic and the people demand it. Stop the subsidies and I'd stop the small oil producer subsidy also upon achievement of the goal for 3 straight years. 

Vehicles can get 75 -150 mpg now with minor technology adaptations like regenerative braking, shutting down half the cylinders for the open road, beefing up battery packs for 30-50 miles of local driving and incorporating solar cells into the roof, hood and trunk spaces of vehicles or adding small gasoline generators to charge battery packs if necessary for longer trips.  All these addition technologies will set off a myriad of new employment opportunities for Americans.   It would be economic for a change. Put the power in the American people's hand and be amazed how quickly the problem resolves itself. Challenge them with abating a significnat increasing tax and it shall happen.  



Mon, 11/14/2011 - 16:05 | 1876632 bill1102inf
bill1102inf's picture

SS has no trust fund, its simply a tax and will not continue to be paid forever, as its mathematically impossible.  You didnt pay into a savings account, you paid in, they paid out, the money is gone, and is not coming back, ESPECIALLY not through some gasoline tax nonsense. HA, muahaahahhahahaaa

Tue, 11/15/2011 - 09:57 | 1878819 Bicycle Repairman
Bicycle Repairman's picture

You're thinking outside of the box and trying to solve problems.  Is that legal?

Mon, 11/14/2011 - 16:02 | 1876621 bill1102inf
bill1102inf's picture

LFTR's will free us of external energy requirements while at the same time providing 5-50x the energy, 100% safe, 100% green, for 1000 years at a fraction of current cost. Its just that CHINA is going to implement it first.  Stupid Americans.

Tue, 11/15/2011 - 10:00 | 1878825 Bicycle Repairman
Bicycle Repairman's picture

LFTR's cannot be used to make bombs and have no military application.  Why do you hate the troops?

Mon, 11/14/2011 - 16:09 | 1876649 malek
malek's picture

A Solar collector has a lot less EROI than Photovoltaic? Are you f'ing kidding me?? A Solar collector is designed to provide heat (not electricity), and in such it has a fantastic EROI for heating your home or water.

And also if Yergin's 2005 prediction was completely wrong and oil supply has been essentially flat since, why hasn't anything blown up in the last 6 years already?

Mon, 11/14/2011 - 16:56 | 1876919 Citxmech
Citxmech's picture

". . . why hasn't anything blown up in the last 6 years already?"

er. . . Do you actually read ZH?

Mon, 11/14/2011 - 20:36 | 1877617 malek
malek's picture

You can't make a thing fool proof - fools are too inventive.
You can't write down a statement so it can't be deliberately misinterpreted either, obviously...

Mon, 11/14/2011 - 16:08 | 1876650 bill1102inf
bill1102inf's picture

Hitler wasnt all bad. His scientists invented the FT process of making liquid fuel from coal.  I wish we all spoke German, we wouldn't have ANY of the problem we do now. No JEW banks, no terrorists from Muzzy land, no baby factory housing projects, no gold bubble, no Obama, no healthcare worries whatsoever.

Mon, 11/14/2011 - 17:29 | 1877057 tmosley
tmosley's picture

You do realize that what we have now is the exact same as the Corporatism envisioned by Mussolini , right?

If you love the results of fascism so much, perhaps you should move to Detroit?  The housing is cheap there, so I hear.

Tue, 11/15/2011 - 10:03 | 1878841 Bicycle Repairman
Bicycle Repairman's picture

Germany's scientific and technological prowess pre-dates and post-dates Hitler.  It has nothing to do with Hitler.

Mon, 11/14/2011 - 16:18 | 1876705 JamesB
JamesB's picture

It probably doesn't matter much in the big picture, but the author makes two mistakes that are woth mentioning.

The oil imports graph at the top of the article is pretty deceiving.  The important number for US imports is imports of oil minus exports of refined product.  The graph also ends at 2007, the peak of US consumption and the bottom of US production.  Correcting for the error and extending the graph to today would show net US imports of falling about 30% from the peak.

Total oil reserves in the world is a misleading figure.  The author gives 1.4 billion barrels.  The tar sands of alberta hold 1.2 billion barrels.  Of course, they are not "proven" reserves in that they are not economic to recover at the moment.  If technology improves to make them economic, then proven world reserves grow.  Thas is true for unconventional and heavy oil all over the world. 

If you want to assume farytale technology improvements in oil extraction, total reserves are probably closer to 5 trillion barrels - much more if you include methane hydrates.  That is a leap, but it is no more unfair than assuming current proven reserves are all that is left.

Mon, 11/14/2011 - 16:26 | 1876766 Flakmeister
Flakmeister's picture

It took 10 seconds to get this

Don't be lazy....

And you do realize that peak oil is not about reserves, it is about flow rate....


Mon, 11/14/2011 - 19:31 | 1877373 Dr. Acula
Mon, 11/14/2011 - 20:09 | 1877507 Flakmeister
Flakmeister's picture

If you click on the rightmost column you get a picture.... go ahead, try it....

Tue, 11/15/2011 - 16:09 | 1880028 j.darkness
j.darkness's picture

Flak, you are funny, and I share your opinions, aside from the slander, for the most part.  I also think that tmosley is intelligent and accurate, for the most part.  Where you disagree is that tmosley bases his arguments on the premise that the people that are calling the shots are reasonable people and that since solutions abound, they will inevitably be implemented.  Tragically, I have concluded that the people calling the shots here are psychopaths, and worse than that, they know not how psychotic they are.  So if the world were managed by reasonable, decent human beings, aquaponics, thorium reactors and technomarvels may come to fruition.  Since the world is instead managed either by design or accident, by fraudulent psychopaths, we will have war.  the technology that could save us will not be implemented because those that have the means do not want it to occur.  This is not about conspiracy or family clans so much as it is about the nature of the corporations that are transforming the planets' resources in one way or another.  The corporation has a fiduciary responsibility to its shareholder to preserve value and generate a profit.  The profit motive is the objective of the resource players and they take the path of least resistance.  People, employed by these corporations, are trained to meet the objective of the corporation and in fact are handsomely rewarded for this behavior.  However, a corporation has no conscience; it will persist as its employee’s cycle through positions.  AS the employee is shuffled into a responsibility they must mold themselves to meet this responsibility, thus in effect, they must diminish their conscience in order to do their job.  Those individuals that are most successful at this are the most rewarded and promoted and we end up with soulless psychopaths controlling these massive corporate structures currently on a path to self destruct.  Without complete internal revolution of conscious spirit throughout humanity, we will see little change.  The corporate machines have taken over the human soul and ruined us.  Solutions abound and they will be ignored.  Surely there is a Greek tragi/comedy that addresses this issue?

Tue, 11/15/2011 - 18:09 | 1880469 Flakmeister
Flakmeister's picture

Thanks for a well written post....

I agree will what you say re: corps. and the powers that be...

Mosley is not a dummy, but he is not as smart as he tries to portray himself... Many of his "solutions" can be discarded out of hand because of poor EROEI or scalability issues.

The problem is a liquid fuel peak; liquids upon which our transportation grid is reliant. The thorium fuel cycle is interesting but our transportation infrastructure is not base on electricity. The reactor design is not a slam dunk as many take it to be....

The first step in any solution is the realization that the path we are currently on is suicidal, the growth paradigm is flawed.... but that is a story for another time....

Mon, 11/14/2011 - 16:19 | 1876717 JamesB
JamesB's picture

It probably doesn't matter much in the big picture, but the author makes two mistakes that are woth mentioning.

The oil imports graph at the top of the article is pretty deceiving.  The important number for US imports is imports of oil minus exports of refined product.  The graph also ends at 2007, the peak of US consumption and the bottom of US production.  Correcting for the error and extending the graph to today would show net US imports of falling about 30% from the peak.

Total oil reserves in the world is a misleading figure.  The author gives 1.4 billion barrels.  The tar sands of alberta hold 1.2 billion barrels.  Of course, they are not "proven" reserves in that they are not economic to recover at the moment.  If technology improves to make them economic, then proven world reserves grow.  Thas is true for unconventional and heavy oil all over the world. 

If you want to assume farytale technology improvements in oil extraction, total reserves are probably closer to 5 trillion barrels - much more if you include methane hydrates.  That is a leap, but it is no more unfair than assuming current proven reserves are all that is left.

Mon, 11/14/2011 - 16:39 | 1876846 Augustus
Augustus's picture

And I thought the nutty ideas of Matt Simmons were buried with him.

Obviously this writer hallucinates just a severely as Simmons.

Mon, 11/14/2011 - 16:45 | 1876871 Flakmeister
Flakmeister's picture

Yep... that's why Global net exports are down ~10% over the past 5 years  and the Net energy of the all liquids produced is flat.... 

Do you know the difference between NGL and C+C? What is your view on Refinery Gains?

Mon, 11/14/2011 - 16:55 | 1876913 blu
blu's picture

It's days like this when I come face to face with the true cost to the world of corporate propaganda..

We. Are. So. Screwed.

Mon, 11/14/2011 - 17:08 | 1876982 Uncle Keith
Uncle Keith's picture

Fuel Cells (probably) can run be fueled by gasoline (Altair Nano/MIT Co-development deal. Scrapped). 

Vapor Injection engines (probably) can get 200 MPG.

Thorium IS a viable alternative to Uranium for boiling water; driving turbines; etc.

Allowing the demonization of alternative fuels/energy by MSM acting as agents for Coal/Gas/Oil is tolerating Economic Treason.

Mon, 11/14/2011 - 18:45 | 1877280 Dr. Acula
Dr. Acula's picture

I'd like to see fair competition.

That includes no government subsidies for alternative energy, especially absurd forms like corn ethanol that cause environmental problems or fiascos like Solyndra. The right time for newer technologies to appear is the moment when entrepeneurs can use it to accrue financial gains rather than financial losses - no sooner and no later.


Mon, 11/14/2011 - 17:09 | 1876984 mind_imminst
mind_imminst's picture

Kind-of contradictory, many statements in this article. "The U.S. uses less oil now" & "Oil consumption will increase everywhere". If oil is already at a price where the U.S. is using less (too expensive), then I am unsure how emerging economies are going to ever afford to build out a complete auto infrastructure like the U.S. did when the price per barrel was well under $50. It just doesn't make sense. I have followed the Peak Oil scenarios for years now and every year someone comes out and says "the end is nigh". It is as predictable as the IEA's always rosy predictions of future production. The market is dynamic and self-limiting. Here is a long discussion of the topic where the failed predictions of Peak Oil are obvious. There will certainly be troubles with fossil fuel energy in the future (some major price and supply shocks), but we are not heading back to the stone age, like Peak Oil folks predicted in 1998, 20032005, 2008, 2011........

Mon, 11/14/2011 - 17:15 | 1877013 Flakmeister
Flakmeister's picture

Not quite sure what your point is....

You can a have rip roaring debate about how Peak oil plays out and there are no shortage of bad predictions, but the issue is the peaking of oil. That is very different. Standard denier argument is to conflate the two of them.....

Mon, 11/14/2011 - 17:24 | 1877039 mind_imminst
mind_imminst's picture

Sorry forgot the link in the last post:


The point is that this article is making a bunch of bad predictions once again (like emerging markets will be able to replicate the U.S. addiction to autos, EVEN though the price of oil is high and going nowhere but higher). Of course, oil production is peaking, duh! But the world will never run out of oil, and certainly not run out of fossil fuels in general. The market (supply/demand/price dynamics) will make sure of that. I just wanted to point out, and I am happy you agree, that the Peak Oil crowd (most of the crowd) keeps predicting the complete collapse of society (over ten years in a row by my count), yet it never happens. If it is fair to pick on the IEA for bad predictions, then it is fair to highlight the Peak Oil theorists "greatest hits".


The author is correct about "energy independence" though. Spot on. The U.S. will import "energy" for many years to some.

Mon, 11/14/2011 - 17:37 | 1877083 ian807
ian807's picture

"The market" does not create hydrocarbons. Energetically and economically positive hydrocarbons on earth are finite.

You must be a GenX or newer. FYI, there is no such thing as magic. There is no Santa Claus. There are no white-night techno-capitalists who will swoop in and save the day with magic new technologies that don't face the laws of diminishing returns on technology. Reality isn't like video games. Sorry about that.

There are interesting power generating technologies out there (e.g. thorium reactors). Let's hope the industrial supply chain lasts enough to deploy a significant number of these.

And you are correct. Societies don't collapse. To the survivors, it'll look a bit different though. I wouldn't count on any plane trips to Europe in retirement if I were you.

Tue, 11/15/2011 - 10:11 | 1878865 Bicycle Repairman
Bicycle Repairman's picture

Well then I guess man will never implement controlled fusion.  Hey, all you physicists!  Clear out!  You're fired!!  No, seriously. ian807 says it over.  Get the f*ck out!!

Tue, 11/15/2011 - 18:27 | 1880570 Flakmeister
Flakmeister's picture

If we cannot get fission right, there is no damn way in hell that we will ever get fusion right...

Mon, 11/14/2011 - 17:16 | 1877016 Uber Vandal
Uber Vandal's picture

I wonder how much less fuel would have been consumed if short sighted management and politics did not help put an end to the passenger train and interurban trolley?

At one time, literally anyplace could have been reached by a rail line in the United States. 

Some of the lines were powered with electricity, such as 656 miles of the Milwaukee Road (part of todays CP) across parts of Montana, Idaho, and Washington State (gone and torn up). In fact, an old advertisement of that railroad was "Running trains with Running water" for some of the electricity used to operate the locomotives came from hydroelectric plants which it constructed.

I know people complain about Amtrak, how it does not turn a profit, etc. However in 2001, the government gave more money to the airlines in one year than Amtrak was given up to that point in its entire history. Also, passenger trains were able to turn a profit so long as the US mail was carried on them. Once the mail contracts ended in 1967, so did most passenger service.

Then when unprofitable rail lines are pulled out, the right of way is not preserved, and if a line needs to be reopened, it will most likely not happen, not to mention the NIMBYS, and the "green" movement.

From my observation, our nation rose with the railroad, and the decline of the railroad almost seems to coincide with the USA as well.




Mon, 11/14/2011 - 18:19 | 1877227 hannah
hannah's picture

why would i want to take public transportation when i have a porsche.....? you take a trolley and i'll drive my sports car...LOL.

Mon, 11/14/2011 - 20:34 | 1877598 Uber Vandal
Uber Vandal's picture

I will save you a seat on the Trolley for the days of fun cars like that will come to an end, much like in 1973.

By 1975, most of the fun cars like Cudas, Challengers, Chargers, Camaros, Chevelles, Novas, Corvettes, Firebirds, GTO's, Trans Ams, Torino's, Olds 442s, Buick GS, AMC Javelins and Mustangs were no longer being produced, or were neutered disco poser caricatures of their former selves.

My dad told me of how he used to see Yenko Camaros, Chevelles and Novas at a long defunct Chevrolet dealership, and seeing how the Dodge Challenger, Dodge Charger / Super Bee, Shelby GT500, GT350 & Boss Mustang, Z28 and ZL1 Camaro, ZR1 and Z06 Corvettes are back or soon to be back, I think the party will be over again soon.


Tue, 11/15/2011 - 01:38 | 1878335 hannah
hannah's picture

i had 2 mustangs, a torino, and a super bee back in the 1970's.....looks like all the kids have the same cars today. i dont see what has changed...when did the world come to an end....? you will be riding the trolley your whole life.

Tue, 11/15/2011 - 10:19 | 1878925 Bicycle Repairman
Bicycle Repairman's picture

By the mid 1970s the fastest production car was .......... the Chevrolet El Camino topping out at 95 mph.  Also no convertibles were produced.  The People's Central Committee for Transportation decreed that.  They saw that we were running out of oil and made the tough, yet wise, decisions for all of us.  Comrades, it brings a tear to my eyes.

Tue, 11/15/2011 - 10:15 | 1878910 Bicycle Repairman
Bicycle Repairman's picture

See "Internal Combustion" by Edwin Black.  It discusses the history of American politics vis a vis transportation and energy.

It is politics, not geology, that rules the energy world.  The "engineers" here cannot see the forest.

Mon, 11/14/2011 - 17:16 | 1877017 Gold Man-Sacks
Gold Man-Sacks's picture

What a crock.  Oil isn't more expensive today than in the past.  It's just that dollars are worth less than they used to be.  Just price oil in terms of silver to see this at work.  Even with all the silver price suppression, oil is cheaper today (in real money terms) than it was in 1960.

Mon, 11/14/2011 - 17:27 | 1877049 ian807
ian807's picture

Which effects the remaining quantity of energetically and economically profitable oil not at all.

Mon, 11/14/2011 - 18:28 | 1877248 CPL
CPL's picture

Actually it's not cheaper, you are just subsidizing it through your taxes directly.


The cost of energy remains as it always has been, you just didn't notice the taxman's hand slipping into your wallet to "help" you.  Who the fuck do you think built all that infrastructure?

Tue, 11/15/2011 - 10:23 | 1878941 Bicycle Repairman
Bicycle Repairman's picture

How does building roads and bridges make gasoline cheaper? 

And Gasoline is taxed, not subsidized.  Those taxes paid for the infrastructure and more.

Tue, 11/15/2011 - 10:55 | 1879087 Flakmeister
Flakmeister's picture

You realize that it is really bad form to give yourself an up arrow....are you that insecure?


How much do you think gas would be if the indirect costs of the US military presence in the Gulf was factored in?

Tue, 11/15/2011 - 13:18 | 1879534 Bicycle Repairman
Bicycle Repairman's picture

What are you talking about now?  Aren't there people to bother @ the Oil Drum?

Tue, 11/15/2011 - 13:24 | 1879545 Flakmeister
Flakmeister's picture

Still giving yourself a gratuitous uptick... you are pathetic....

It is clear that there is lot that goes on here that is way over your head....


Mon, 11/14/2011 - 18:12 | 1877203 dumbfounded
dumbfounded's picture

So if the Government is BSing everyone on Energy, and I agree that it is, what is the Energy equivalent of buying PMs? What can the individual do to protect himself and maybe even improve the overall situation?

Also, excellent article in highlighting the ignorance wrt. the writing on the wall, but i don't agree with the dismissive attitude towards renewables (except for hydro). Renewables are hard to do and averything that in principle has a EROEI<1 should go right out the window. However, the way things stand today, the only two energy sources that theoretically offer indefinitely sustainable solutions are renewables and fusion. As such, even if the EROEI is only 2, it is the only reasonable thing to push for long-run solutions based on these two. If you have to cover Arizona or Nevada or both with robust long-life (high EROEI) solar thermal plants, then so be it. During the transitions, of course use coal, gas, nuclear, and whatever you believe in make your economy more local and energy-effiecient.

I would not claim that 100% renewables or fusion are guaranteed to be possible. But i would argue that we must accept the challenge and attempt it. Not to do so automatically means acceptance of enevitable and likely painful return to a pre-industrial society. In this scenario only the timeframe, level of pain, and who will be the last man standing are debatable.

Mon, 11/14/2011 - 18:59 | 1877293 Dr. Acula
Dr. Acula's picture

>As such, even if the EROEI is only 2, it is the only reasonable thing to push for long-run solutions based on these two.

That's nonsense.

If you run out of gas on the highway and call AAA they can deliver a small amount of fuel to you at great expense. This process has an extremely low EROEI, yet it is still rational and advantageous for both parties.

The point is that the rational allocation of resources by human beings cannot be made without knowledge of human (i.e. subjective) value and urgency. For an entrepeneur investing in energy, the bottom-line is measured in dollars, not in Joules. The entrepeneur expands or liquidates his winery on the basis of dollars, not on the basis of TROTI (taste returned on taste invested). He does not seek out foul-tasting grapes to help boost his TROTI ratio.

EROEI is an absurd amalgam of concepts from two disparate sciences - the causal science of physics and the teleological science of economics. It has no valid role in either science. It may be a play-thing of socialist planners, but it cannot facilitate rational decision-making.

Mon, 11/14/2011 - 20:01 | 1877478 Flakmeister
Flakmeister's picture

I think you might enjoy the following

Please explain why it is absurd....

Mon, 11/14/2011 - 20:33 | 1877603 dumbfounded
dumbfounded's picture

Thanks for the link. Unfortunatley i find no flaw in the argument ... It's time to get cracking.

Mon, 11/14/2011 - 20:10 | 1877509 dumbfounded
dumbfounded's picture

Fair enought, but the AAA will not come if you call them for a gallon of gas everytime you want to go out for a drive, which is the equivalent of trying to operate your economy on EROEI<1. They also won't come if their on their last drop themselves.

I fully agree with you that human perception of value must play an important part in debating desirable outcomes and may justify energy negative propositions in many cases. You still can't escape the fact that to live, overall, you must extract more energy from your environment than you use and that you must do this as long as you want to stay alive as an individual and a society. Therefore only the eventual prospect of inexhaustable energy sources will provide the theoretical basis for indefinite existance of human civilisation. The only two virtually inexhaustible sources i know of are solar and fusion (maybe ad geothermal if you like as close).

Mon, 11/14/2011 - 18:21 | 1877233 CPL
CPL's picture

You guys are kicking around a known idea of decline in oil production.


Try coal.  Peaked a decade ago, once it runs out I'm pretty sure none of you will give a shit about cars after that.

Mon, 11/14/2011 - 19:01 | 1877301 6_7_42
6_7_42's picture

So in real terms the price has gone down by > 33%? How did that happen? According to SGS $114 2011 is $9.54 in 1978? So this stuff is getting cheaper as it runs out. Wow, the market is so totally rigged.

Mon, 11/14/2011 - 19:09 | 1877320 Dr. Acula
Dr. Acula's picture

The problem is that the price of oil should be much higher.

But the speculators risking their own fortunes aren't smart enough to realize it. Clearly they aren't deserving of their wealth. As a psychic with a crystal ball, I can see the impending doom that they can't see. That's why their millions should be handed over to me.


Mon, 11/14/2011 - 20:41 | 1877632 6_7_42
6_7_42's picture

lol ++1

Mon, 11/14/2011 - 19:28 | 1877360 thurstjo63
thurstjo63's picture

Jim, what a sadly nieve article you write. I especially enjoyed the line, "Nothing can replace oil as the lifeblood of our culture and there is no domestic supply source....". I also enjoyed your line, "the earth is finite". Yes that may be true, but, I'm assuming you have little to no grasp of science nor economics, you might not be aware that: 1. Due to a lack of free market in the energy sector, we are still using the same basic technologies for energy that were used more than 120 years ago!!! 2. There have been the development of technologies that have proven viable means of accessing all different forms of energy - because energy is infinite (i.e. radiant, zero point, water, implosion, electro-magnetic, etc) that has been suppressed for more than 100 years!!! And guess what? THEY ARE ALL GREEN!!! If you need any guidance look up T Henry Moray, Nikolas Tesla, Howard Johnson, Edward Grey, John Bedini. There are many others.

It is just another sad example of the damage done to the economy by government working in conjunction with large corporations for their mutual self-benefit at the expense of the public. Think of where the world would be if unlimited sources of energy is tapped at ridiculously low prices! What we need is to have a free market in energy. Prices will be driven down, quality and quantity will be increased as in the few industries left where we still have semblance of real competition like IT and mobile communications markets. Without fail, wherever there is a lack of competition, you can always find big zombie corporations and their lackey politicians!

Mon, 11/14/2011 - 19:59 | 1877470 Flakmeister
Flakmeister's picture

I am sorry but when you said energy was infinite, you lost all credibility...

Mon, 11/14/2011 - 20:24 | 1877547 Dr. Acula
Dr. Acula's picture

It's probably not infinite.

White dwarfs will be depleted in 1 trillion years.

Black holes will evaporate in about 10^100 years. 

Mon, 11/14/2011 - 20:42 | 1877637 blu
blu's picture

You sort of live in a different world than the rest of us. It seems like a strange place though.

Oh, I think you're suppose to eat the other side of the mushroom at some point. Or there is a bottle that says "Drink Me". Or something. And then it was all just a strange dream.

Good luck.

Mon, 11/14/2011 - 20:54 | 1877684 tmosley
tmosley's picture

SInce E=MC^2, I think we can in fact claim that energy is, in fact, infinite.

It's harvesting that is the problem.

Tue, 11/15/2011 - 14:09 | 1879639 earleflorida
earleflorida's picture

e = mc^2 is defunct {the speed of light is no longer a constant}, thus e = m?^2, which opens up many dimensional  variants of thought,...

welcome to our world 

Tue, 11/15/2011 - 16:35 | 1880111 j.darkness
j.darkness's picture

i thought all that was proven is that neutrinos travelled faster than the speed of light, does that also lead to the conclusion that C is not constant?

Tue, 11/15/2011 - 18:30 | 1880583 Flakmeister
Flakmeister's picture

Not proven... the results are interesting and have to be confirmed. The measurements are not straightforward. 

Mon, 11/14/2011 - 23:01 | 1877996 morrison_s54
morrison_s54's picture

TSTC - the Most Dangerous Chinese Reverse Merger

Morrison Security Research has initiated coverage on Telestone
Technologies (Nasdaq: TSTC) with a strong sell rating and an estimated value of <$1.00.

Among all Chinese reverse mergers, Telestone probably is the darkest and most dangerour one. We have been shocked by its bold operations uncovered by our due diligence. We believe that a halt of the stock listing by the SEC is inevitable due to many disturbing red flags in the company:

Announced A Large Contract That Does Not Exist

A Possible Another Secondary Offering Is Coming

Outright Lie About Its Astonishingly Long Days of Sales Outstanding (DSO) In A SEC Filling

Uses Shareholder’s Money To Fund A US Business Entity Solely Owned By The CEO

VP of Finance, Mr. Richard Wu, Resigned After Just 3 Months On The Job Following Resignations Of Three CFO's In The Last Three Years

The full report is at:

Tue, 11/15/2011 - 00:00 | 1878150 Bicycle Repairman
Bicycle Repairman's picture

Yay!  It's Peak Oil day on ZH.  Someone ping the Oil Drum, so the nutcases can flood the place!!!!!!!!!!!

Tue, 11/15/2011 - 14:14 | 1879657 Flakmeister
Flakmeister's picture

Isn't Billy Graham trying to find you?

Tue, 11/15/2011 - 01:07 | 1878286 Mr. White
Mr. White's picture

Just sell the solar panels at a loss and make it up on volume.


Tue, 11/15/2011 - 01:22 | 1878309 Bansters-in-my-...
Bansters-in-my- feces's picture

Hey,heres cC #5.


Tue, 11/15/2011 - 10:31 | 1878968 Bicycle Repairman
Bicycle Repairman's picture

Bad news, solar power fans.  The sun is going to wink out in 12,345,678 years.  The sun's power is finite.  We're all going to die.  OK.  Our children 456 generations from now will have to use candles to get a sun tan.  All because you wanted to fill up your cars.  Bastards!  We need to double the gas tax and save the polar bears.  Now.

Do NOT follow this link or you will be banned from the site!