This page has been archived and commenting is disabled.
Guest Post: It's Not Just Gasoline Consumption That's Tanking, It's All Energy
Submitted by Charles Hugh Smith from Of Two Minds
It's Not Just Gasoline Consumption That's Tanking, It's All Energy
It's not just gasoline consumption that's declining--petroleum and electricity consumption are also dropping. Is that indicative of economic growth?
A number of readers kindly forwarded additional data sources to me as followup on last week's entry describing sharply lower deliveries of gasoline. (Why Is Gasoline Consumption Tanking? February 10, 2012)
The basic thesis here is that petroleum consumption is a key proxy of economic activity. In periods of economic expansion, energy consumption rises. In periods of contraction, consumption levels off or declines.
This common sense correlation calls into question the Status Quo's insistence that the U.S. economy has decoupled from the global ecoomy and is still growing. This growth will create more jobs, the story goes, and expand corporate profits which will power the stock market ever higher.
Courtesy of correspondents Bob C. and Mark W., here are links and charts of petroleum consumption, imports/exports, and electricity consumption. Let's start with a chart of total petroleum products, which includes all products derived from petroleum (distillates, fuels, etc.) provided by Bob C. The chart shows the U.S. consumed about 21 million barrels a day (MBD) at the recent peak of economic activity 2005-07; from that peak, "product supplied" has fallen to 18 MBD. The current decline is very steep and has not bottomed.
This recent drop mirrors the decline registered in 2009 as the wheels fell off the global debt-based bubble. Those arguing that the U.S. economy is growing smartly and sustainably have to explain why petroleum consumption looks like 2009 when the economy tipped into a sharp contraction.
A link of interest from Mark W.: Montly U.S. Product Supplied of Finished Motor Gasoline (Thousand Barrels per Day) showing gasoline "product supplied" from 1945 to 2011. This shows gasoline has declined about 700,000 barrels per day from 2007, from 9.2 MBD to 8.5 MBD in November 2011. This represents about a 13% decline.
A number of readers wondered if gasoline imports might account for lower domestic shipments. That is a good question, and Bob C. found the answer in other EIA (U.S. Energy Information Agency) charts.
Weekly U.S. Imports of Total Gasoline (Thousand Barrels per Day)
Weekly Imports & Exports of Petroleum and Other Liquids (Thousand Barrels per Day)
Exports of Petroleum and Other Liquids
Here we see that of 8.5 million barrels a day of gasoline supplied, roughly 500,000 barrels are imported. In other words, the percentage of imported gasoline is modest.
The U.S. imports and exports petroleum products, but the net result is imports of around 8 million barrels a day. The U.S. imports about 10.5 MBD and exports almost 3 MBD for a net import total of 7.5 MBD. The secular decline in net imports from the 2006 top is consistent with the view that consumption has declined as a reflection of economic activity.
I marked recent recessions on a long-term chart of electrical consumption to show that the deep recession of 1981-83 barely registered, while the recessions of 1990-91 and 2000-2002 are essentially noise.
That makes the secular decline from 2006 peaks all the more striking. (It is perhaps no coincidence that the housing bubble peaked in 2006-07 along with the extraction of home equity craze.)
Clearly, electrical consumption is in a downtrend with no recent historical precedent. Those claiming that U.S. growth is sustainable and the Dow is heading for 15,000 must square their rosy projections with sharply declining energy consumption. The two simply don't match up.
As a lagniappe, here is a link from correspondent Joel M. on downward revisions to shale oil estimates. This injects a note of realism in the recent euphoric depiction of the U.S. as having essentially boundless supplies of petroleum equivalents. Substantial, yes, virtually unlimited, no.
Shale gas estimates continue downward: Energy Bulletin.
- 26992 reads
- Printer-friendly version
- Send to friend
- advertisements -


Clearly this means that the experiment of offshoring manufacturing in favor of a service economy is a success. You jsut don't need the energy when you don't make anything. On the other hand it doesn't take a whole lot of enerygy to make a very profitable MBS, CDO, CDO^2, you know. Bravo America you are a resounding success.
yes, there's more to energy return than the raw thermodynamic joules.
there's energetic order. fuel powers the grid which power computers,
networks, and trading systems which produce much more than the
raw btus would imply.
funny reverse logic comment, quite witty. Reversing case and effect and de-dollarization of oil.
If energy consumption is tanking why are gas prices so damn high?
Great question.
I'd also like to ask how in the Hell the DOW continue to rise with BDI plummeting, record low market volume, global currency devaluation, etc....how does this market keep itself in the green with everything that's happening right now?
What the fuck am I missing....?
When you close refineries for "maintenance", the price of gasoline increases. This has been going on since 2008. The oil companies refuse to allow the price to go down too much.
RedPill If energy consumption is tanking
Good question. Asian consumption is growing remarkably fast. What's that bit about humans and exponential function comprehension ability?
You know some day this war's going to end.
"Someday this war's gonna end...
That would be just fine with the boys on the boat. They weren't looking for anything more than a way home.
Trouble is, I've been back there, and I knew that it just didn't exist anymore."
- Captain Willard
Such a great movie, on so many levels. The scene that made Redux- the French plantation- was fantastic commentary as well.
Agreed! Even better if you read "Heart of Darkness" prior to (or even after) seeing the movie. History, in spite of our intentions, repeats itself... over and over and over.
When "Redux" came out in the theaters, my friend and I were the only ones in the theater the night we went to see it. A telling sign about the dumbing down of American culture, IMHO.
Heating oil/natural gas usage has got to be way down because of the absence of winter this year.
Proving global warming is real.
Fair, right? I mean when we have a cold winter somwhere it's alway accompanied with gleeful shrieks of "SEE! SEE!"
A pox on both your houses.
Update your phrasing, it's global climate change, not necessarily warming everywhere.
*sigh*And in the mid '70s it was global cooling.All with the same dire predictions of death and disaster.Some of the same predictors of cooling death are in the warming death camp today.
I remember that "coming ice age" stuff when I was a schoolboy.
But we do have "Global Climate Change." They're called "seasons," I think.
Update your phrasing, it's global climate change, not necessarily warming everywhere.
Global Warming means warming, on a global scale. That means that the average temperature over the area of the entire planet, is increasing.
Regional climates may be warmer or cooler, or warmer in winter and cooler in summer, wetter, dryer, or simply have heavier rains and longer dry periods. All that matters is whether the average temperature over the surface of the entire planet as a whole is changing or not.
If you have an audited source of data showing that the average temperature globally is not increasing, please provide it.
Whether or not this warming is caused by humans at all, or if so, to what degree, is a seperate issue.
if you really want to "update your phrasing" - take into consideration the global aerosoling of skies, and the stated objective to "own the weather" - oh, and the Rothschild purchase of weather central
connect the snowflakes?
here's an interesting interview with Lord Rothschild re: his interest in China, including their "weather":
http://www.abeldanger.net/2011/08/rothschild-in-china-investing-in-china...
Best indicator for Global warming is to measure the arctic ice cap, followed by the large northern latitude glacial ice fields over a period of decades. There has been a global warming going on for well over 100 years.
You could reverse global warming by increasing the hole in the ozone.
Not saying that it's a good idea to do so, but you can decrease the global temperature a few degrees if you destroy the atmosphere which makes life here possible.
I've been doing my small part, I burn every piece of plastic I can.
"Paper or plastic?"
- "Plastic, please. It burns much better."
Oh the looks I get at the check-out counter.
I don't follow, how do you propose that allowing more radiation from the sun to reach the planet's surface, would make the planet cooler?
"There has been a global warming going on for well over 100 years."
You mean 10,000 years, since the end of the last Ice Age.
There has been a global warming going on for well over 100 years.
Off by 10 my friend.....since the last ice age.....10,000 years ago.
Sure there is global warming but there have been much more severe warm (and cold) periods in the past. This is perfectly normal.
And then it's supposed to be *man-made* also? BULLSHIT! The human arrogance is pathetic. Look at what a volcano can do. Now were talking and still nothing severe happens.
The elite is trying to indoctrinate the sheeple so they can tax them. That's the real reason. They have already been exposed. HELLO?! WAKE THE FUCK UP!
The absence of some winters
You should check out eastern europe. Record cold and snow fall.
The article is clearly about the US-look at the charts.
Caused by "climate change", no doubt!
There is no business volume because of devaluation (inflation). Once prices drop volume and business will increase in the real (physical) economy. The virtual economy not so good.
https://en.wikipedia.org/wiki/Jevons_paradox
Jevons paradoxIn economics, the Jevons paradox (sometimes Jevons effect) is the proposition that technological progress that increases the efficiency with which a resource is used, tends to increase (rather than decrease) the rate of consumption of that resource.[1] In 1865, the English economist William Stanley Jevons observed that technological improvements that increased the efficiency of coal-use led to the increased consumption of coal in a wide range of industries. He argued that, contrary to common intuition, technological improvements could not be relied upon to reduce fuel consumption.[2]
The issue has more recently been reexamined by modern economists studying consumption rebound effects from improved energy efficiency. In addition to reducing the amount needed for a given use, improved efficiency lowers the relative cost of using a resource, which increases the quantity demanded of the resource, potentially counteracting any savings from increased efficiency. Additionally, increased efficiency accelerates economic growth, further increasing the demand for resources. The Jevons paradox occurs when the effect from increased demand predominates, causing an increase in overall resource use.
The Jevons paradox has been used to argue that energy conservation is futile, as increased efficiency may actually increase fuel use. Nevertheless, increased efficiency can improve material living standards. Further, fuel use declines if increased efficiency is coupled with a green tax that keeps the cost of use the same (or higher).[3] As the Jevons paradox applies only to technological improvements that increase fuel efficiency, policies that impose conservation standards and increase costs do not display the Jevons paradox.
c'mon man, you're pissing on parades here....IONIC LIQUIDS!!!!!11 are going to save us all, ok? Just 'cuz
Yeah, stupid ionic liquids increasing EROEI!
you have obviously done the science to support that assertion, right?
Oh wait, forgot who I was talking to...OF COURSE YOU HAVEN'T. It's another bold assertion from straight outta your ass
How many times do I have to post this?
http://www.matse.psu.edu/news/ionicliquids
The bitumen comes off with not much more than a little agitation.
"But that's just one lab group." was your last reply. It is such a stupid assertion, I don't even know how to address it. Tar sand in, oil and clean sand out. Reduces or eliminates the need to add heat, which is a major cost associated with production in oil sand fields now.
But hey, there is no such thing as technological advance. Who you gonna beleive? Trav or your lying eyes?
I'll add "EROI" analysis to the littany of things about which you are totally incompetent.
Do you REALLY BELIEVE that "a little agitation" is the SUM of all EROI that goes into this process? Of course you do, because you're an idiot.
Your original statement about EROI is unsupported by any science you have cited. That is a fact. You pulled it straight out of your ass.
You ASSUME based upon a tiny edge-case anecdote that it should be lower EROI...and hell, it MIGHT BE. But you have established no persuasive evidence to support this assertion.
I know the notion of even having a cogent argument, much less compelling evidence, is alien to you. Why? It's because you're stupid.
NEVER MIND the issues of scaling this process and whether or not it is reproduced elsewhere or any of the technical issues inherent in it. This is why smart people call you an idiot, cliff.
Right, so reducing the amount of energy it takes to process the oil sands into usable materials has no impact on the amount of energy it takes to process the oil sands into usable materials.
That is EXACTLY what you are saying. Own that shit, or change your fucking tune, douchebag.
Also, good job on YOUR ASSUMPTION that it hasn't been reproduced anywhere, which is among the dumbest fucking crocks of shit you have laid out on this forum and called them caviar.
http://scholar.google.com/scholar?q=ionic+liquids+tar+sand&hl=en&btnG=Se...
It's not like it takes a bunch of work here, doofus.
did you...um...click on any of those links, Mr. Argumentum ad Googlum?
You might want to do perhaps a smidgeon of DD before you post 50,000 links to the same paper from Penn State, along with a bunch of links totally irrelevant to tarsands. Did you really think you could get away with typing "ionic liquids" into google and pass that bullshit off as a rebuttal? HAHAHAHAHAHAHA.
But, way to open with ANOTHER strawman, dude...you're like batting 1.000 on that shit.
I never at any point made the claim that you attribute to me, which was a fucking tautology.
I said merely that you have marshalled NO EVIDENCE as to YOUR claim of reduced EROI NOR the technical feasibility of adopting this lab process to the real world.
These statements stand. They will remain true no matter how many strawmen you throw up, how many times you lie, weasel, and dissemble, and how many times you post google searches as "evidence" of something.
Are you sure you're not Hal from RMA? Because GFD you remind me of that idiot.
Uh-huh. Nevermind that this is one of thousadns of technologies, used PURELY as an example of technological advance.
You really need so many words to say that you hate me? You really are a soulless, witless bastard, aren't you?
hate you? Dude, I couldn't give a shit if you live or die; you mean absolutely nothing to me
However, your concession on this point too is noted
What concession? It is a REAL technology. One which you deny exists. So fucking what if it is in its infancy? I never said it wasn't!
And yes, you do hate me, personally. Your tone changes when you reply to me. You become more aggressive. You CAPITALIZE more WORDS. You call me names more than you do others.
Not that it matters. I stopped reacting to your BS a long time ago when I realized how pathetic and alone you are. If you would stop with the lies and the death worship, I would let you be. But you won't, because you have a personality disorder. So I will keep fighting your lies until you cross the line and get yourself banned.
So watch that line, bitch.
you and Trav sure bring out the best and the worst of each other; can't you two just get this over with by hooking up after dinner and a movie?
Great link btw.
shouldn't some moonbeam absolutist be tatooing 'collectivist statist' on your forehead right about now?
Note that this paradox was found in an era of increasing population, not one of stead/decreasing population such as the one we are preparing to enter. A levelling off in population caused by economic SUCCESS. Imagine that.
The population trend follows available energy? Amazing....
no shit, it's almost so simple a caveman could understand it. Which is why mosely-claven consistently falls short
Right, so birthrates HAVEN'T declined in all western societies, and aren't negative in many.
You LOVE throwing out evidence that goes against your thesis. As suspected, you are a death worshiping zealot. Too bad. I thought you might have some sense buried somewhere deep between your ears.
wake me up when population rates go negative...moron
And the idiocy of you to claim that lowered birthrate (when population still increases) is salvation when ENERGY CONSUMPTION PER CAPITA is what matters and it went BALLISTIC.
The people in western countries with no kids consume more oil than entire GENERATIONS of the non-western societies.
It's because the west is filled with morons like YOU
WELL, wake up then. Germany and Japan now have neg population growth rates. All of Western Europe has negative (below replacement) birth rates. For that matter, so does the native born US population.
Wakey wakey, dumbass.
http://en.wikipedia.org/wiki/Population_decline
People consume more because of artificially low interest rates. Ever think of that, doofus?
HOLY SHITZEZ batman!!!! .02 % decline rates since 2009!!!!!!! WTFZEZ
Did you, um...look at the MAP on your link? No, of course not. Do you even fuckin READ this shit you cite or do you enjoy giving other people the ammo to make you fall on your face yet again?
People consume more because of interest rates?!?!?! WTF...idiot....have you ever bothered to research consumption per capita versus time? In the days BEFORE ZIRP?
What, you think dramatically falling populations are a sign of a helathy economy? No. This is a part of the process of urbanization. Nothing more, nothing less. The more urbanized a society becomes, the less they breed, until they reach a stable population level. This is the same in all colony forming species, whether they are human, bacterial, or insectoid.
So you are saying that artificially low interest rates DON'T encourage more spending, and thus consumption? Are you REALLY saying that, while trying to hide behind an appeal for me to go do more research? You are such a coward.
That's an interesting concept, about population rates versus urbanization.
However, there are several glaring examples of deviation from this concept.
United States and Saudi Arabia both have 82 percent urbanization rates, while they have pop growth of 0.97 and 2.24. Norway is 77 percent urban, with pop growth at 0.62, while Guam is 93 percent urban with 1.3 pecent population growth.
I suspect Age of Consent and views on Birth Control are major factors for deviation from this, from cultural influences.
http://en.wikipedia.org/wiki/Urbanization_by_country
and
http://en.wikipedia.org/wiki/List_of_countries_by_population_growth_rate
As for interest rates versus consumption, I suspect availability of credit is more important than interest rates. As long as people can cover the cost to service the debt, I expect someone with a $50,000 line of credit at 7 percent interest to consume more than someone with $500 credit at 0 percent. Of course, more credit combined with low interest should cause the most consumption.
it's been shown repeatedly over time that educating a nationstate's females out of sexual slave class status decreases "population growth" - seems to be the case that the reverse, lower education overall, coupled with porn culture, brings on the births again, though certainly not so much in the more educated.
if you catch my drift.
Nice legwork. You could probably make up the difference by controlling for the source of the wealth that caused the urbanization. If it is from industrialism, it decreases birth rates. If it is from government spending or exploitation of natural resources, it probably doesn't. That is an informed guess on my part.
Interest rates and credit availability are supposed to be correlated, as low interest rates imply that there are a lot of people competing to give out loans. Of course, with this centrally planned economy of ours, things often fail to make sense.
However, if the rate of consumption of a resource is at the most it can ever be, increasing efficiency CANNOT increase consumption further.
Besides, increased productivity per unit of energy in itself is a worthy goal, even if conservation is unattainable.
+1MM. Have you read _The Bottomless Well_ (Huber, Mills) ?
http://www.manhattan-institute.org/bottomlesswell/
Not my fault - I've been off the grid for 3 decades. Heat with wood, mostly. Cook with a teeny amount of propane (one grill tank lasts 10 months). Drive a Volt.
No mention of coal??? All energy??? Puleese - while that doesn't lose the point (that things like oil use correlate to economic activity) - how about my off grid energy? I use more, not less these days. I'm right now installing another 4kw worth of solar panels...
All my neigbors are doing their best to conserve, that might have some effect. LED bulbs selling off the shelves and that's 6-7 watts vs the 60 watt incandescent or 20 watt ccfl they're replacing. Thermostats down for certain - wear a sweater under your coat when you go visiting someone "on the grid" for heat - we woodburners are still plenty toasty. They are driving less, and getting rid of their gas guzzlers as they can afford to - and doing a lot of tuning on their vehicles. Many are taking tips from my solar system re removing "vampire loads" - like every appliance that draws power even when "off" now goes onto a power strip, and believe me, that adds up quick for all those clocks in microwaves, DVRs, cable modems, TVs and so forth. Add up a bunch of 10 to 40w parasitic loads, used to be on 24/7, now on 4-5/5 - work it out. A drip can fill the ocean (or empty your wallet).
Sure, that's just apocryphal, but perhaps worthwhile as a data point. I've long had the habit of looking at parking lots, the truck traffic on the local superhighway, asking the local retailers to get a fix on how things are doing, and it seems to give me decent leading indicators, which right now are pointing to "muddle' - nothing special either way, lots better than 2010 though. Some things have crept back to "not the end of the world, but not great" in other words - kind of like maintenance mode.
Good for You Sir,
You are doing things as they should have been done. FYI: look into 'rocket stoves'. I think it's a concept that has long legs. I have been researching the thermodynamics and physics and think the concept itself is subtantial and worth developing by DIY'ers. I have a few ideas as to make it a mass marketable product, we shall see.
everyone should just put up solar panels and burn wood. Nothing wrong with this theory...if it works for ONE GUY, we can use "induction" to scale it to infinity
Everyone who lives so nuts-to-butts to reap the benefits of "civilization" such that they can't do this even if they want to should look in a mirror.
Your self destruction would make it nicer for those of us smart enough to have left that rat race long ago. Oh, wait - you're doing it anyway, without my help or encouragment, and willingly! Isn't that what this whole site constantly whines about, or, alternatly, glories in with the doom porn?
Go! I win. And the seats fold down nicely so it can carry my .50 cal...
Yeah, one guy - about one household per 10 sq miles here where I live, because there's a lot of us fiecely into our own independence. One thing you cannot deny - it's an existence-proof - it works and has done for 3 decades for this guy. The rest of the bullshit talked about in this field is mostly pure dreaming - and an excuse for you guys to continue kicking your own can down the road and never doing anything for yourselves until its too late. I can't wait to hear your whining then.
Not.
Only an idiot would want to scale anything to infinity - or even a Chris Martensen limit. We just don't want to admit that the problem is too many idiots.
LOL
Where do your fuckin solar panels and your effing volt and all that shit you have come from, dude?
I marvel at the idiocy of people like you, I really do. Those who cannot fathom that the REASON you are able to do what you do is because you can sit at the TOP of a gigantic consumptive pyramid REQUIRING a whole TON of people in positions where they NECESSARILY cannot live on a fuckin 10 acre spread and "off the grid."
You wouldn't have a GODDAMNED THING THERE if it weren't for the on-grid society. The fucking factory that produced your panels in China is ON the motherfucking grid, genius. So is chevrolet. There's not a goddamned thing you have there that you brag about that you actually built yourself. Not your car, not your panels, not your inverters...nothing.
You call yourself fucking INDEPENDENT when you are using solar panels sourced from 8000 miles away? Built on decades of technology somewhere ELSE? Or did you etch the silicon using a stick in the woods out back?
And I thought you claimed to be a scientist....you live in a silly self-indulgent world standing on the shoulders of people who are necessary for your very existence and you spit at it all with some smug superiority complex?
If everyone leaves the ratrace, fool, you starve too.
But what happens when solar technology advances to the point that cheap, abundant materials can be used with low energy processes?
Oh wait, dat cant hapin. Ders no such ting as teknologikal advance.
fuck solar, unicorn piss FTW
and if you disagree, THEN YOU JUST WORSHIP BALE
Chevy Volt - Building A Better Tomorrow - Spoof
But seriously, $13 Billion is a drop in the bucket.
Watch transports, too.
I guess cash for clunkers getting crappy old gashog cars off the road for good doesn't expain all of that.
repeat after everyone here: gov'ment programes don't help nothin
They help those that are most connected to the government. And, after all, isn't that what these jackals see as being the true purpose of government? Patronage is alive and well.
the wheels are starting to wobble on our "global" economy...
"I guess cash for clunkers getting crappy old gashog cars off the road for good doesn't expain all of that."
The difference in fuel economy is negligible unless the cars were made before 1985, which very few of them were.
Replacing a 30 MPG car with a 32 MPG car probably doesn't make a big difference. Government stimulus programs; a less cost-effective system of welfare.
Note to the global Ponzi.
Oh what a slippery slope we ski when we regularly try to deceive.
Can the obfuscation last until the election? Energy consumption, tax receipts, credit contraction, all point to a Wile E. Coyote moment.
They've kept it going for 3 years. What is 9 more months? All we need are $3.8 trillion federal budgets and it should be good.
I'll second that motion.
Cartoon physics, gotta love it !!!
At least our leaders have analyzed their approach
http://www.youtube.com/watch?v=QXvYRY0uIkc
That's hillarious!
I don't think my GF will understand it...
Do you have a Sponge Bob equivalent? I only understand contemporary cartoons.
I prefer contempt cartoons
Whew. I get it, now.
I don't like what is implied when it's suggested that they may be waiting until after the election... as if the party of the presidency matters. It matters in that there are things a Democrat can do that Republican can't do... for example, NAFTA or GATT doesn't pass under a Republican administration... the opposition from trade unions is far too great. You need a D to do that... it neuters the natural opposition.
As our country grew tired of never-ending wars, we needed an "anti-war" democrat to be elected. Quiet the anti-war crowd and continue our petrodollar war machine. It could be about the election, but not as a D vs R thing to get the president reelected, IMO. Politics is a distraction, IMO.
Good post sir.
Yep. Bush threw that election. He is quite the Master Mason, sacrificing some glory just to get NAFTA through. The Bushes are fuckin' savvy. That is why I hate them most of all.
and that sh-t wasn't easy. They needed a 3rd party candidate to siphon off some votes... they almost overshot on that bit and had to have Ross Perot temporarily drop out of the race to insure that he wouldn't actually win. Then comes the extra special made for TV moment of yawning and looking at his watch during the debate (appropriately blown out of proportion by the media to insure that the lemmings who vote understood this to mean that he was aloof and disconnected). The election of 1912 followed a very similar script with almost identical results.
yes, nice post. They're all a bunch of criminal bastards or more accurately, pawns for the bigger criminal bastards
The only way they matter is to determine who gets the blame. I'm betting the history books will point towards Obama, and it has not been by accident either. From the very beginning he has seemed to be the perfect fall guy. Obviously, everyone here knows the President has very little control over the economy of his presidency too.
Dream on. Homey is out to collapse the financial system and economy.
He's one puppet of many, and the script was written for him.
Then you don't understand how the financial system works. There is nothing he can do to stop the collapse of the financial system... that's baked in. Once you get your arms around that, politics as some version of Kabuki theater makes more sense. History is written by the winners... time will tell who will be blamed, but the blame will be misplaced whoever gets it.
I understand how it works, and that Obama has done nothing to stop the collpase or even ameliorate it, but everything to accelerate it. If YOU can't see that you are a fool.
It also matters in the utility of the distraction. American politics is like a sport... or a circus (of bread and circus notoriety). And it really has become the ultimate distraction. The polarization of our society is absolutely by design. The differences between the parties are so small and cosmetic in reality, but the rhetoric couldn't be more extreme. It is loosely scripted, well cast reality TV. I mean look at the last primary season... A former first lady vs. an African American with a muslim sounding name... it doesn't matter who comes out on top as long as the distraction is compelling. Look at the list of candidates for the R's... pure idiocracy with a headline flameout on a near weekly schedule. And I don't think that one is over by a long shot. I still maintain that the drama to come will be a brokered convention with the ultimate nomination being given to someone who more closely resembles the no-nonsense fascist who will be our next leader. My money is on Mitch Daniels.
gloomy economy = ecoomy
"The U.S. imports and exports petroleum products, but the net result is imports of around 8 million barrels a day."
how to define your foreign policy in one sentence
Won't help that public transportation is going up.
But fuck it, corporations will expect us to WALK to work! Who cares if its 10 miles away and you are a 50 year old with a bad wheel! Its good for your health (and environment)!
#noose
corporations cannot print oil.
You people need to wrap your heads around what's happening and accept the truth.
Stop trying to strenuously wish your way out of this; it won't work. The big brains have CONSISTENTLY been telling everyone that real oil has peaked. What do you suppose a decline in availability of this commodity would lead to? A lot less of moving things around.
Give it a rest kunstler.
Time for you to wake up j0nx, the writing is on the wall...
...and your country's over the Rubicon
The shark. Jumped the shark.
The Rubicon is sooo 1st century.
"Jumping the shark" is a phrase to indicate grand standing, showing off, etc, right?
"Crossing the Rubicon" is about commiting to a plan and taking the first step in such a way that you cannot turn back or change course. Very different phrases.
Read a book, j0nx.
Hmmm. Then what's "driving" the increase in gas prices?
Because oil behaves like no other commodity. It is DNA of society and the economy...and its breaking down
if oil were abundant, people wouldn't pay $100/bbl for it right now, all over the planet.
The sinister hidden hand of MOTHER NATURE is on this one.
If you're an Elliot Waver, you had to know that at some point, a retracement of the entire industrial revolution would eventually happen as a matter of your basic theories.
WRONG..
USA imports are 10 YEARS LOW..
remember how much did oil cost back then? and adjust for growth in population..
Natural GAS is multi year low.
OIL COST 100$ CAUSE for last 4 years USA FED GOV printed +1.5$ trln per year $ to finance wars all around the world and/or save bankers all around the world.
alx
Alex ftw. Peak oil has exactly DICK to do with where we are right now. Debasement has everything to do with it. Trav out spamming the forums with his peak oil nonsense. Yes we all know oil is a deplenishing resource but deplenishment is not what's driving this trend in the here and now.
http://www.alternet.org/visions/154056/why_going_%27back_to_normal%27_is... From : Economic Growth in the New Millennium Data compiled by The Economist a year or so ago showed that an astounding 55% of all the economic output generated since Jesus played QB for Jerusalem came in the last century of the last millennium. Why was this? How could one century account for more growth than the previous 19 centuries combined? Well, partly it was because there was nobody around before then to do much of anything anyway. Big trends require big drivers…and there simply weren’t enough people alive to take the wheel. The global population-o-meter didn’t click over from millions to billions until 1811…smack bang in the middle of the Industrial Revolution…but still 70 years before Colonel Drake would really steepen the curve of production by sinking the first commercially viable oil well in Pennsylvania. Mankind had, somewhere around that time, reached a critical mass of sorts, one accelerated by the splendor of cheap, abundant energy and the many luxuries and advancements derived from it. By the time Tim Tebow got around to taking his cues from the late, great J.C.’s playbook, the world was standing on top of a single decade that had produced nearly one quarter of the total economic growth of the past two millennia.
The Oil Drum | Advice To President Obama: Yes We Can, But Will We?
Dear President Obama, Let me start by explaining where I am coming from. Until a few years ago, I worked as a Wall Street trader and hedge fund manager. I am now finishing a PhD. in Natural Resources from the University of Vermont with a specialization in Ecological Economics. I am neither capitalist nor communist nor Republican nor Democrat, but just a concerned citizen of this country and this planet. I have recently come to see that there is a great deal hidden from view both about our energy resources and our energy consumption. In this letter, I would like to explain what some of these things are. In addition to this overview, there are over 3,000 essays and analyses in theoildrum.com archives, written by a staff of extremely bright civically minded volunteers, outlining the myriad energy challenges and opportunities we face.
1) It is energy, not money, that powers our economies. Money is only a marker for real capital and the divergence is large and growing at an accelerating pace.
2) All energy is not equal- each energy investment entails different input costs, and has different output quality, often not recognized by the market system, nor by many environmentalists. We are at peak oil globally and are likely approaching the net energy cliff for the USA
3) We can likely deal with energy decline, but our current economic system of claims and wealth distribution cannot. It is likely that collective policy responses to resource depletion (more debt) will create another form of bottleneck in the form of currency dislocations or social reactions to jubiliee.
4) The highest odds for arriving at a better energy future lie in exploration of, understanding of, and ultimate jettisoning of our cultural addiction/habituation to conspicuous consumption. Ends and then means.
"though the manifestation may be in currencies and debt, the origins are in energy / natural resources."
With new investments being unaffordable and/or unfinanceable, the global oil production rate will increasingly align with it's natural decline rate - approaching 7-8% and rising as small/offshore fields replace giant/onshore ones. This suggests even with current deflationary forces due to credit unwind, we likely have a few short years before depletion again overtakes even reduced demand, and this time, there will be no new peak in supply when prices rise.
Without increases in energy we cannot grow (unless we conserve or become more efficient), without growth we cannot repay debt, without debt we won't finance future energy development. And every additional debt dollar is already adding less and less to GDP. The sooner we educate policymakers about this constraint the better choices we will make - Energy and scarce resources are what we have to spend – money is just who has the energy (for now).
At some minimum aggregate threshold (red line in graph), the entire surplus is spent on maintenance, repair, etc. and there can no longer be growth - I believe we are past this point.
raising the possibility we are in the midst of a stealth energy cliff -since most energy infrastructure was built and paid for when oil/natural gas prices were low, we are still 'spending' the cheap marginal flow rates from earlier days, even though we can't afford their replacements!
In a sentence, we have lots of energy, but not enough cheap energy to continue a social democracy 300 million strong pursuing growth and possessing the claims and aspirations they believe are theirs.
Modern society has been built and developed not only on a large annual energy surplus, but also become dependent on specific energy properties. Light sweet crude oil is incredibly energy dense, transportable at room temperature, and can be procured from a very small land footprint -drilling under the earths surface. Energy quality, such as differences in power density, gravimetric and volumetric density, conversion efficiencies, intermittency, storability, environmental externalities, spatial distribution, transportability, etc. is not equal - even (and especially) because an energy alternative is labeled as 'green'.
DEBT
Debt serves as a spatial and temporal re-allocator of goods and services from the future and periphery to the present and center. In every single year I've been alive, our country has increased its debt more than we grew our output. The amount of debt, depending on assumptions is north of $60 trillion, and over $100 trillion if we include unfunded social security and medicare benefits. Austerity measures and new social goals are what are called for, yet the growth treadmill demands constant new debt issuance to service the aggregate of prior claims or the whole house of cards implodes. Remember that money is created by the will of our bankers - a loan and deposit are both simultaneously willed into existence and our 'money as debt' balance sheet increases both ledgers - however the loan is issued with terms 'plus interest' so over time debt at time T requires higher output at time T+1 otherwise a deflationary cycle begins absent new aggregate credit creation. New debt that is injected into the economy, as long as it is spent somewhere on something (anything), will create GDP that wouldn’t otherwise exist. You will face this Keynesian carrot early on as a seeming answer to our problems. It is not. Keynesianism dies in the face of resource depletion and net energy decline. New (net) debt at the end of a paradigm will feed hungry mouths but at a cost of destroying our currency. I should point out you are not alone in facing this problem. Essentially the whole developed world creates leveraged credit without tether.
We are trained to believe that "money" is to the economy what "energy" is to the physical world. Your current advisers extrapolate what is "economically" possible to be "physically" possible too - but this is patently untrue. If energy is what we have to spend, we are even running more of a deficit that commonly known.
The Oil Drum | Herman Daly: The Disconnection Between Financial Assets and Real Asssets
The current financial debacle is really not a “liquidity” crisis as it is often euphemistically called. It is a crisis of overgrowth of financial assets relative to growth of real wealth—pretty much the opposite of too little liquidity. Financial assets have grown by a large multiple of the real economy—paper exchanging for paper is now 20 times greater than exchanges of paper for real commodities. It should be no surprise that the relative value of the vastly more abundant financial assets has fallen in terms of real assets. Real wealth is concrete; financial assets are abstractions—existing real wealth carries a lien on it in the amount of future debt. The value of present real wealth is no longer sufficient to serve as a lien to guarantee the exploding debt. Consequently the debt is being devalued in terms of existing wealth. No one any longer is eager to trade real present wealth for debt even at high interest rates. This is because the debt is worth much less, not because there is not enough money or credit, or because “banks are not lending to each other” as commentators often say.
+1MM. the next challenge is going to be a figure out a way to price energetic order.
What requires these two things to be mutually exclusive? Here is the thing I know... I know that a monetary system built on debt money and fractional reserve banking will eventually implode. This system REQUIRES that aggregate debt be in a state of continual expansion and that eventually this will require the currency to collapse... or as an option... the debasement of a currency to delay the collapse, but collapse just the same. So I know that this is happening... and that's enough. What I know less well, but have come to believe... Peak "Cheap" oil... which is all that "peak oil" really means, seems both rational and real. The discoveries of oil that is inexpensive to get out of the ground and to process peaked long ago. The production of that oil seems to have peaked a few years ago. To me... and again... I'm at the mercy of what I read on peak oil, but to me this just seems to be the perfect storm clusterfock of the (multiple) centuries.
exactly. Modern debt based economy is exactly that, a modern experiment, built on the fiction of indefinite expansion and its ultimate building block is the most powerfull condensed energy source mankind ever discovered. It aint just in energy, it builds just about everything else.
there is no such goddamned thing as "peak cheap oil."
Do you mean the END of cheap oil? Then say so. The PEAK is not the END of a curve.
I suggest that "Peak Cheap Oil" refers to maximum production of oil at EROEI >=15:1. Since that oil is maxed out or in decline, an increasing portion of oil being produced is at lower and lower EROEI.
Simultaneously, this does mean "the end of cheap oil" if by cheap you mean <$40 per barrel oil.
It just depends on if you mean EROEI or $ when using the term "cheap".
Peak oil has everything to do with it. The economy started contracting when the housing market topped. The housing market topped when oil production platued. The platue of oil production was the kill shot of the global economy. From here on out you will see recession after recession, or for the more economically inclined a contious depression.
of course, our "leaders" have and will continue to explode the problem by ignoring what needs to be invested, by serving the old masters and old systems, by ever burdening the disappearing middle class and small business, and, in desperation, panic, and ignorance, growing ever more corrupt. (Not that I'm angry).
you can feel free to keep whistling past the graveyard
NG is not oil, dipshit
Right, and you certainly can't convert between the two!
That would imply the existance of TECHNOLOGY.
GFD you are dumb. You are just totally impervious to any kind of intelligence or reason.
SO WHAT if you can convert between the two? You will replace one peaking, depleting resource with another.
how about just fucking burn your furniture while you are up, you fuckin moron?
Uh-huh. What else can be converted into oil, doofus?
I know this one: Unicorn piss.
And luckily unicorn piss has an EROEI higher than NG, especially considering the energy it takes to change NG into a liquid.
Why would you want to turn NG into a liquid?
Fuel, because liquid fuels are energy dense. IE it doesn't even matter if they have a negative EROEI. What really matters is electricity. Electricity must have positive EROEI.
I don't know why I bother. I also don't know why you bother. If I was you or others like you, I'd have put a bullet in it a long time ago.
I hope you can someday soon.
BUT THEN I JUST WORSHIP BALE.
Thermodynamics is another thing I'm fond of.
Anything that contains hydrocarbons that burns well can be converted into gasoline or diesel, at about 50 percent efficiency. The 0.5 EROEI on conversion to th finished product is not important; what matters is the total EROEI from harvesting the initial resource, through to the finished product.
It seems to me that Poplar trees further north and sugar cane down south would be a far better use than corn, as far as fuel sources go.
The important thing is the need to convert from a system that relies on endless growth, to one that can exist with a flat level of energy production, at lower EROEI. I suspect the level of energy production will be somewhat lower than current.
Are people really trading oil for physical delivery at $100/bbl ? I wonder how much of this cargo is actualy at sea or on a futures screen as opposed to being refined
"if oil were abundant, people wouldn't pay $100/bbl for it right now, all over the planet."
Nope, that is not how oil is priced. It SHOULD be priced like that. In reality, oil prices are set in a wild and wicked game of speculation with one barrel of oil being traded often 30X en route from an oil producter to consumer.
Then of course, you have the whacky world where there are more barrels of oil being traded and speculated on than there exist in the world.
The reason given for this stupid and expensive game on oil is the Squid's answer for everything: liquidity.
There shouldn't be any margin buying of oil. In fact, last I read, oil can be leveraged at 30:1. If I were president, I would cut that to 1:1 my first day in office.
As for why oil went to $147 in 2008, you can read why here, http://www.forbes.com/forbes/2009/0413/096-sachs-semgroup-goldman-goose-...
It is technical but it comes down to one simple question: do you think Goldman would want to make 5% loaning money to Semgroup or make 500% by fucking them and going massively long oil futures?
If you don't understand what the Squid did in 2008 to get oil up, you don't get the market today. The oil market completely lacks transparency, and that is the way the oil traders at the Squid like it.
there is no contortion you idiots won't go through to deny reality, is there?
Goldman knew more than you and were on the right side of the trade.
EVERYTHING to you people is some kind of sinister conspiracy to kill the economy that made the conspirators rich
lol, sure, the debasement of the dollar has nothing at all to do with the price increase.
The white and Jewish central bankers are "big brained", and therefore not to be questioned.
do you have something to say besides another strawman? If so, then I will respond with something other than derision of your idiocy
How is it a strawman to point out another cause in the rise in prices?
You need to learn how to debate honestly.
oh, gotcha. Yeah, slight problem.
THIS ISN'T a debate, cliff. I'm not INTERESTED in hearing your asinine opinions on things, because you are stupid and WRONG.
This is more of ME telling people like YOU wtf is up like a parent tells a child. I don't give a fuck what you think because you're not QUALIFIED to think. You are in no way, shape, nor form, even remotely close to capable of debating me on this or any other topic and it also hurts that the effing FACTS are out there as far as oil production trends and whatnot. I merely state them.
Are we clear here?
Yes, you are an arrogant idiot.
You can TELL people all you want, but when you continuously tell lies and half truths, no-one is going to beleive you. You might as well keep your big mouth shut. Maybe go castrate some gibbons to save us from teh peek ail.
Oil should be fifty dollahs a barrel. Every penny above that is manipulation.
Interesting. Assuming that you didn't just pull that number out from under your skirt, using the same function what should its price be in gold?
I have no opinion on that. My statement was in current dollar$.
Actually, it should be four dollars a barrel, given that a dollar of US junk silver is worth $25 at current prices. That is the silver standard price.
Or, if you prefer the gold standard, it would be $1.2 a barrel.
But no-one ever wants to look at fiatsco inflation when talking about this, because they want to pretend like energy is expensive so they can continue their jerk-off death fantasies.
Interesting, priced in gold, oil is less expensive than in the 1980s and 1990s. Does that mean it is under-valued? http://www.incrediblecharts.com/economy/gold_oil_ratio.php
Gresham's Law in action.
Oil is becoming the real "money".
Bingo - more fungible than gold.
dp.
Or, is the value of FRNs going down faster than the decline in demand?
This data is awesome.
Does anyone know where to get data on steel production by country, as a time series?
http://chartporn.org/
The decline in gasoline usage is interesting. At this time I still do not drive at all so I don't exactly have my finger on the pulse. It has been at least a month since I passed a gas station.
One thing to consider is the attitude of younger people. When we were in high school, and had nothing to do, we would ride around town. That was our way to get some enjoyment out of the night. Is that what today's teenagers are doing? Or are they getting on to Facebook and other social media and sitting at home? How many times have you seen four young people sitting at a table and all four are furiously typing away on their phone, or tablet PC? They seem to enjoy each other's friendship as long as the friend is not sitting directly in front of them.
Perhaps the advent of all of the digital technology, and a lack of opportunity for the teenagers (whose jobs are now done by illegals) has added greatly to the decline in gasoline. I don't think kids see cars as their freedom machines. They see their handheld toys as their way to get around. Maybe I'm way off but that is partly how I see it. How much less gas are kids using due to such considerations?
All the anti cruising ordinance signs which littered the main drags in my home town when I was a kid are now gone.
edit: What a horrible sentence I did write there.
Kennewick Ave...
OMG
And Court Street, and Clearwater...
My relative's kids are all pessimistic about the future and are mostly unemployed so they don't have the money to go joy riding. Almost none of them see a future involving car ownership at all. Most plan to live near cities and take mass-transportation to work or the welfare office. Half of them envy our car-centric past and half of them hate us for burning up all the fun in our street rods a la "American Graffitti".
Most ridiculed car when seen is the Corvette followed by the Hummers. The concept and sound of a big block American V8 is totally lost on this generation unless they work on a farm and really need that kind of power. Progress?
many people comment on how today's teenage boys seem not to care about getting their DLs in any hurry. Mine for instance. Half his friends. Why? Dunno, really. Maybe because the car isn't sexy anymore? It doesn't seem to keep the girls at bay. yes, they text and facebook (a verb?), but that doesn't replace going out and about. they just go via public transit or with the one guy who has a car or in the girlfriends car. But I really doubt the 1 % or so of the population we're discussing causes any major shift in anything. especially since someone is still driving. maybe not crusing, but still.