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Guest Post: Selling The Oil Illusion, American Style

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Submitted by Chris Martenson guest writer Gregor Macdonald

Selling The Oil Illusion, American Style

"The task of the real intellectual consists of analyzing illusions in order to discover their causes." ~ Arthur Miller

US production of crude oil peaked in 1970 at 9.637 mbpd (million barrels per day) and has been in a downtrend for 40 years. Recently, however, there's been a tremendous amount of excitement at the prospect of a "new era" in domestic oil production. The narratives currently being offered come in the following three forms: 1) the US has more oil than Saudi Arabia; 2) the US need only to remove regulatory barriers to significantly increase production; and 3) the US can once again become self-sufficient in oil production, dropping all imported oil to zero.

Let's first take a look at over 70 years of US oil production.

The US is currently enjoying its second stabilization phase since the peak in 1970. (Daily oil production has rebounded from a deep hole in 2008, from below 5 mbpd to above 5.5 mbpd). The first stabilization period lasted for more than 7 years, from 1977 to 1985. While it did not reverse the overall decline trend, which had resumed by 1990, this was certainly good news, just as our current production increases are good news. But the production history laid out graphically here is instructive and gives a clear warning: It would be unwise to herald the recent uptick in domestic production with a "new era" headline. Deepwater drilling, Gulf of Mexico, and Alaska were all "new era" events in their day as well. Or so they seemed.

Now, three respectable publications have recently cast the advent of new oil extraction in America as a kind of miracle. And indeed, technologically, the refinement of hydraulic fracturing techniques -- first used to extract natural gas, and now used to extract oil -- is miraculous. But a technique such as this, although replicable and repeatable, will not change the fact that newer, unconventional resources are developed and produce oil at a much slower rate. One year after the Black Giant of East Texas was discovered in the early 1930s, it was producing just 1 mbpd. The US no longer has resources such as this to exploit. The history of US oil production over the past 40 years should make this clear.

However, this did not stop the Telegraph of London from making triumphant assertions in their October 23 piece:

World power swings back to America

The American phoenix is slowly rising again. Within five years or so, the US will be well on its way to self-sufficiency in fuel and energy.

The US was the single largest contributor to global oil supply growth last year, with a net 395,000 barrels per day (b/d)," said Francisco Blanch from Bank of America, comparing the Dakota fields to a new North Sea. Total US shale output is "set to expand dramatically" as fresh sources come on stream, possibly reaching 5.5m b/d by mid-decade. This is a tenfold rise since 2009. The US already meets 72pc of its own oil needs, up from around 50pc a decade ago. "The implications of this shift are very large for geopolitics, energy security, historical military alliances and economic activity.

(Source)

The claims made here (or should I say the conjectures here), are completely over-reaching -- but worse, the data is completely wrong. This matters because the article was widely distributed and sustained a very popular position for several days on Twitter and in other media outlets. I have written extensively on the problematic nature of energy data that’s produced by the Energy Information Administration (EIA) in Washington and International Energy Agency (IEA) in Paris. So it’s not really surprising that the public, the average reader, cannot fact-check these numbers easily.

In Secrecy by Complexity: Obfuscation in Energy Data and the Primacy of Crude Oil, I explained how difficult it can be -- even for journalists -- to obtain a time series of commodity production and flows that is continuous, let alone understandable. For example, if one includes biofuels (which, of course, are not oil in any sense and do not contain the dense btu content of oil), perhaps one could claim that 2010 oil production in the US outpaced the rest of the world. But according to the EIA in Washington, 2010 saw China make the largest new contribution to world oil supplies at 277 kbpd (thousand barrels per day), followed by Russia at 199 kbpd, and then Canada at 153 kbpd. The United States? US oil production grew by an average 114 kbpd.

So in a world of global crude oil production currently running around 74 mbpd, we are asked to believe a new era has dawned for the United States on the back of an additional 114 kbpd? That would be funny, if it were not so ridiculous. Let’s also include the 2011 additions to US oil production, at 141 kbpd. Are you feeling excited yet? These are the volumes that will allow the US to re-conquer the world with new oil production, and wean itself off global oil imports? The New York Times is quite enthused about these “major developments,” as evidenced by this October piece:

New Technologies Redraw the World’s Energy Picture

This striking shift in energy started in the 1990s with the first deepwater wells in the Gulf of Mexico and Brazil, but it has taken off in the last decade as a result of declining conventional fields, climbing energy prices and swift technological change. The United States may now have the means to reduce its half century of dependence on the Middle East.

(Source)

Sigh. The New York Times has been selling that dream for several years now. Indeed, if you are old enough to have followed the presidential election cycle since the 1970’s, you’ll know that “energy independence” has been a standard, vague promise trotted out since the Carter Administration.

But let’s say the US did indeed want to become less dependent on foreign oil. How would the country achieve such a shift, if not through a huge increase in production? After all, the recent “rise” or stability in US crude oil production is made partially on the back of a steeper four-year production decline that carried into 2008, when the rate fell to below 5 mbpd. So far in 2011, US production of crude oil just about matches the rate last seen in 2003-2004, around 5.5 mbpd. Despite the hype, the supply side of this equation has not changed enough. Could we do something about the demand side?

So, now you know. The longest and deepest recession (actually a financial crisis and a depression) in the post-war period reduced oil consumption by 12.8%. The “miracle,” if you can call it that, of US oil independence lies not in the illusion that 5.5 mbpd of oil production can be lifted to wipe out 11.5 mbpd of oil imports. Instead, it lies in a further de-industrialization of the US economy, a huge reduction in miles driven on the nation’s roads and highways, and no doubt some energy efficiency.

Perhaps some of these are good things. Even very good things. But they are not unequivocally good things. To the extent that portions of the US economy that can shift to the power grid have done so in the past three years, for example, much of that new grid demand has been met by coal. But more broadly, it is not so much that the US is wisely and strategically conducting energy transition as a matter of policy. No, a whole tranche of the US economy has been literally kicked off oil, mainly due to the financial crisis and high unemployment, but also partly due to the inelasticity of demand in emerging markets. I would remind readers that 100% of the new demand for global oil since 2005, mostly coming from the non-OECD, has not been met by new supply. Instead, in a world of flat oil production, the resources for the developing world have come solely from a reduction of demand in the developed nations. Global oil supply is now a zero-sum game. Let’s stop litigating this fact.

Of course, no tour through the world of badly mangled energy data or energy optimism would be complete without noting the opinion of Dan Yergin. Interestingly, Yergin’s research group CERA has produced one of the best indexes of rampant cost inflation in the global oil and gas industry over the past decade. This is a key point that often eludes even the educated reader not familiar with the complexities of resource economics, and which was a ghosted irony in the New York Times article cited previously: The unconventional resources on which we now depend are complex and costly. Most important of all, they are slow. The tar sands are slow. Ultra-deepwater off the coast of Brazil is slow. However, this does not stop Mr. Yergin, who has been given free range once again to make vague, grand forecasts about future supply. In an October 31 piece in the Financial Times, he is quoted:

Pendulum swings on American oil independence

“Over the past couple of years, there has been a great U-turn in US oil supply,” says Daniel Yergin of IHS Cera, the research group. “Until recently, the question was whether oil imports would flatten out. Now we are seeing a major rebalancing of supplies.”

(Source)

It no longer amazes me to hear Yergin make such claims. U-Turn in US oil supply? A major rebalancing? Yeah, sure; whatever. This pabulum is, of course, not taken seriously by energy investors as a whole, and certainly not by some of the more notable hedge fund managers, who took it upon themselves to get out in front of oil depletion early last decade. Mr. Yergin is useful to a political complex that wishes to avoid the career risk of actually having to do something about our increasingly uneconomic transportation systems and the developed world’s dependence on oil. This is as true here in the States as it is in Europe. Indeed, why take the political risk of telling Americans they should choose to transition away from automobiles, when price will start to do some of that work regardless?

Department of Transportation: VMT - Vehicle Miles Travelled, 12 Month Moving Average on All Highways, (in Billion Miles):

Continuing with our theme, the Telegraph of London was completely wrong when it claimed that the US now meets 72% of its own oil needs, up from 50% a decade ago. Worrying to the cause of mathematical accuracy in journalism, that 72% figure nearly describes the amount of crude oil the US must import -- which is currently running at 68% of US consumption. Moreover, given the peak and decline in VMT (vehicle miles driven), we once again confront the myth that the US economy is recovering and has new oil supply to do so. This is a nasty combination of normalcy bias, which plugs in to the wish for resurrection and the plain old fallacy of composition. A very small amount of new oil production has been blown up beyond all scale and proportion. To the Arthur Miller quote in the header of this essay, the question is: Why has the media presented this illusion now, to the American audience?

We need to examine even more closely, however, the actual prospects for lifting US oil production, were we to imagine a kind of War on Oil Depletion in the United States. (No, we're never going to extract the kerogen deposits of the Green River Formation, despite the investment-opportunity (!!) spam in your email). Environmentalists probably believe for example, especially in the wake of their victory this week on the XL Pipeline, that the US is unlikely to ever adopt a full-on, drill, drill, drill policy for oil. I think that's a mistake, and I would point to a country like Australia, which, despite a new tax on carbon, has increasingly become a single, vast territory of resource extraction.

Unfortunately, our oil transition effort has only just begun. It's still taking place only in very minor fashion, at the margin. The balance of this decade must be tackled first, and it will be felt as an ongoing battle between oil prices bumping up against a ceiling as economies repeatedly fail to recover.

In Part II: How To Postion for the Next Great Oil Squeeze, I also show the specific data on US Imports of crude oil, and why Canada, with its very slow-flowing tar sands, is hardly going to save the US, XL pipeline or not. Most importantly, I will explain how oil depletion will likely mean quite a profitable future for America's independent oil and gas companies and address the key questions: how can the average investor position themselves for the next great oil demand shock? and when will it happen? All within the context of overall, energy-induced economic decline in the OECD, as resource depletion of oil -- which remains the master commodity and the primary energy input to the global economy -- means that a higher level of economic volatility will be the new normal until energy transition unfolds more fully.

Click here to access Part II of this report (free executive summary; enrollment required for full access).

 

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Mon, 11/14/2011 - 20:02 | 1877483 mynhair
mynhair's picture

Chris, EPA.

Mon, 11/14/2011 - 20:25 | 1877576 ratso
ratso's picture

Good grief Charlie Brown - another Peak Oil fanatic.  Zzzzzzzzzzzz

Mon, 11/14/2011 - 20:44 | 1877645 kaiserhoff
kaiserhoff's picture

All this hype and arm waving about nothing, the day after Pubama puts off a decision on the keystone pipeline until AFTER the election.  Thus selling out his union buddies for the sake of his tree hugger buddies.  Leadership no one believes in.

Mon, 11/14/2011 - 21:43 | 1877822 trav7777
trav7777's picture

lol, the media cannot even be expected to get the numbers even vaguely RIGHT.

Consumption in the US is below levels seen 15+ years ago.  This isn't optional.

Our "U turn" in production is due to shit we consumed oil to produce, aka corn ethanol and other shit like that which is a net energy loser but some moron congressman will say "makes good sense."

Yes, we should burn 1.1 barrels of oil imported so we can get 1 gal of corn ethanol to market here.  Fuckin brilliant.  And idiots like this abound along with peak oil denier fools. 

Due to export land model,major importers like the USA face a reality where we have to invade to prevent people in other countries from consuming their own oil so that we can consume it.

Fuckin AGW people want to shut down the coal plants; they are living in a fantasy world where electricity can come from magic because so many liars and idiots and crooks and con artists have convinced them that their delusions are sane.  Where the fuck is the power gonna come from to charge all the iShit out there?

Mon, 11/14/2011 - 23:23 | 1878051 walküre
walküre's picture

My sentiments exactly.

Closing down Keystone XL now was a bad strategic move. Nobody understands the decision to postpone this until 2013.

Why is everything pushed into the future and past 2012?

Keystone XL, ZIRP...

Makes me nervous to think what 2012 could have in store for us. Almost like a self fullfilled prophecy?

Mon, 11/14/2011 - 23:51 | 1878112 Arkadaba
Arkadaba's picture

The decision to postpone was entirlely politicallly based:

http://www.theglobeandmail.com/globe-investor/keystone-decision-a-setbac...

I'm not sure this was the right decesion but Canada is in the market. I actually don't support Harper but he will push forward for any deal that benefits Canada.

Ark

Tue, 11/15/2011 - 01:25 | 1878313 Ted K
Ted K's picture

Nevermind there have already been NUMEROUS leaks in the Keystone pipeline which wastes the oil this right wing hack says we will be short on (About 5am tomorrow if you were to go by his melodramatic rhetoric).  But then if you are a Chris Martenson lackey who is long oil, you probably don't mind how many thousands of barrels of oil are spewed out of the Keystone pipeline or IF it leaks in any national parks.

This of course is ignoring the fact that the Keystone pipeline enriches the Koch brothers. http://www.reuters.com/article/2011/02/10/idUS292515702420110210

Of course this wouldn't bother Chris Martenson or Martenson's toe jam lickers, as he probably thinks the Koch Brothers are true American capitalists now, after he read they sold weapons to Iran.

http://www.bloomberg.com/news/2011-10-02/koch-brothers-flout-law-getting...

Wave the American flag with your Koch brothers from another mother Martenson, maybe at the next Koch Brothers party they'll give you a complimentary dildo with Republican elephant emblem stuck on the tip.

Tue, 11/15/2011 - 03:02 | 1878397 Arkadaba
Arkadaba's picture

I will check out your links -thanks!

But why is the one deal getting vilified? There may be good reasons but Canada has been sending Crude to the US for years. Including dirty oil.

 

Tue, 11/15/2011 - 03:02 | 1878398 Arkadaba
Arkadaba's picture

I will check out your links -thanks!

But why is the one deal getting vilified? There may be good reasons but Canada has been sending Crude to the US for years. Including dirty oil.

 

Tue, 11/15/2011 - 06:31 | 1878478 Seer
Seer's picture

"Closing down Keystone XL now was a bad strategic move."

(as IF closing it down after it was in full operation would happen)

But, a bad strategic move based on what metrics?

People, you're basing your reasoning on a paradigm that will NOT continue.  Consider:

1) EVERY finite resource will, at some point, cease to be readily exploitable;

2) Energy is meaningless if you don't have the materials with which to apply it toward (talking about use in "production," not for such basic things like heating/cooling a home or cooking);

3) China is likely investing more USD in Canada that the US is- read "Canada is rising in influence in Canada while the US's economic influence is in decline;

4) If we're talking "free trade" and "open markets," then the cost of this oil will be subject to market forces, with the US's declining economy being less and less able to afford the (relative) higher costs;

5) Economies of scale in reverse.

It's point #5 that I will, from this point on, continue to belabor.  Eventually, at some point, the demand WON'T be there.  The existing scale of things demands equally high scales of demand (PLUS- always "growth," which is actually the thing that supports current output [attraction of future gains]).  We're in a contraction, and this contraction may not stop before it blows through the floor of  lower prices generated from economies of scale.  The "upside" has limits in the exponential, the "downside" has the limit of ZERO.

I was just talking to my wife about Boeing's recent news of its sale of 50 777s to the UAE.  I explained that a contract doesn't always = resultant product; it's not uncommon for cancellations (which had been occurring quite often with those on 787 orders).  So, back to the economies of scale in reverse issue... If people are increasingly losing jobs (higher-paying jobs), who is going to be flying?  Less people with money = less oil purchased, which means greater production costs, which = less profits to the UAE.  All of this adds up to an increase in idle capacity (factory as well as airplane).  And for Boeing?  Reduced sales in the future; and, what reduced R&D for future aircraft.

Slinky down the staircase.  "Bad strategy" would be to INCREASE something whose DEMAND is in (near) perpetual DECLINE.  Yes, I understand that this supply would be needed to help offset declines in production of conventional, but, clearly, the trend is set (according to the reversal of "economies of scale").

 

Mon, 11/14/2011 - 22:07 | 1877878 donsluck
donsluck's picture

I think you have it backwards. He will approve the pipeline and he is waiting until after the elections, hoping to get the environmental vote. The old bait and switch. At least with Bush we knew what we were getting.

Mon, 11/14/2011 - 23:28 | 1878060 jeff montanye
jeff montanye's picture

if you don't know what you're getting with obama by now, you have let your mind wander badly.

Tue, 11/15/2011 - 08:00 | 1878543 Tramp Stamper
Tramp Stamper's picture

Why does the pipeline have to go from canada to houston?  Would it not be smarter just to build a refinery at the US Canadian border.

Sat, 03/31/2012 - 05:12 | 2305951 jaffa
jaffa's picture

Preregistration causes gaps to appear between overlapping colors. By creating a trap, you prevent this gap from appearing. Thanks a lot.
Regards,
landscape forum

Mon, 11/14/2011 - 22:16 | 1877892 defencev
defencev's picture

That is exactly right. The problem with this piece is the assumption that there is no substitute for oil. It is simply not true.

The right sibstitute for oil is liquified natural gas. No matter whar various m...fuckers are telling you here, the truth is that new fracking technology produced a revolution in available gas supply in US. It is not accidental that e.g. the price of natural gas I am using in my house for heating went down dramatically during last several years. And it is absolutely real no matter what various jerks are telling you. Now, it will take time to produce infra structure for liquified gas (e.g. as a fuel for vehicles) but it is doable,

cannot be outsourced and a source of well paid meaningful jobs in US (unlike Solindra-type fraud). The same is true for pipe line

mentioned in the post which Obummer just killed to transport oil from Canadian tar sands to US refineries. The same is true for new, cleaner technologies for coal which Obummer is trying to kill. The same is true for nuclear energy which ignorant green idiots are trying to kill refering to Fukushima (which is a non-event from global viewpoint).

 People, you are being  brainwashed quite delibiretaly with a simple goal:we all need to return to stone age just for the sake of few idiots hoarding the GOLD. It is just a bullshit! Absolute, f...cking bullshit!

Mon, 11/14/2011 - 23:34 | 1878068 jeff montanye
jeff montanye's picture

fukushima a global non event? really? well, at least not bullish for nuclear power, perhaps we can go that far.

p.s. better spelling and less cursing might also help your persuasiveness.

Mon, 11/14/2011 - 23:38 | 1878080 TheMerryPrankster
TheMerryPrankster's picture

Read up on Petroleum.

natural gas does not have the same energy density as oil. It has much less energy, therefore it would take significantly more natural gas to replace existing oil supplies. Natural gas also cannot produce the same chemical spectrum that oil distillation does, so other sources will still need to be found for these chemical stocks.

Fracking uses very large amounts of freshwater, a single well can use as much as 600,000 gallons of fresh water just for the initial drilling. Over its lifetime an average well will require an additional 5 million gallons of water for the initial fracking operation and restimulation frac jobs

Thats a single well, think how many wells would be needed to replace our dwindling oil supplies.Where do we get all this freshwater from and what happens to our freshwater when there are so many wells drilled? If it comes down to freshwater or natural gas, which one can you live without?

Its not bullshit and its not brainwashing its science. read and learn, all the magic is gone.

fracking:

http://en.wikipedia.org/wiki/Hydraulic_fracturing

oil

http://www.theoildrum.com/

 

 

 

 

Mon, 11/14/2011 - 23:59 | 1878142 trav7777
trav7777's picture

c'mon man, we have "100s of years" of gas left and we'll "just figure out a way."

Yes, WE will.  Not "scientists," most of whom say effing bullshit because they understand thermo, but "we."  WE will do it.  I love how morons and laypeople always speak in terms of we when they have no fucking clue about anything.

Nevermind how the 100s of years figures come from current consumption rates.  When those rates double and triple due to substitution for oil, well, just suffice it to say shit's not so rosy.  Nevermind the apocalyptic decline curves of NG wells

Tue, 11/15/2011 - 01:54 | 1878347 geekgrrl
geekgrrl's picture

Thanks MerryPrankster.

To add to what you said, earlier this year a study published in the Proceedings of the National Academy of Sciences (PNAS) said: "“Our results show evidence for methane contamination of shallow drinking water systems in at least three areas of the region [aquifers overlying the Marcellus and Utica shale formations of northeastern Pennsylvania and upstate New York] and suggest important environmental risks accompanying shale gas exploration worldwide."

From "Methane contamination of drinking water accompanying gas-well drilling and hydraulic fracturing." Abstract and full-text available directly from PNAS. http://www.pnas.org/content/early/2011/05/02/1100682108

It's all a joke to these deniers until it's their drinking water that becomes flammable and they, their kids, and their animals get sick. Then, not so much. See for yourselves: http://gaslandthemovie.com/trailer/

Tue, 11/15/2011 - 08:59 | 1878679 BigJim
BigJim's picture

Well, they can just purify their water with an excellent new Koch water purifier - now powered with cheap, clean, natural gas!

Sat, 11/19/2011 - 00:38 | 1893527 geekgrrl
geekgrrl's picture

LOL! Exactly!

Mon, 11/14/2011 - 23:44 | 1878082 delacroix
delacroix's picture

older big rig  diesel trucks  using 70% cng 30% diesel, meet all new emission standards.  conversion cost is around $5,000  for equipment,  including tank

Tue, 11/15/2011 - 06:38 | 1878482 Seer
Seer's picture

Simple research on energy density will inform you that NG cannot "replace" oil.

Further, people need to discount ANY statement or "argument" that fails to include projections on growth.  Claims that some given substance will meet all mankind's needs is meaningless w/o identifying future rates of growth.  If you increase the rate at which you drink your beverage you WILL consume it FASTER (duh)!

None of this has ANYTHING to do with politics.  And the use of emotions is a poor mechanism for decision-making.

Thu, 03/29/2012 - 02:26 | 2299771 jaffa
jaffa's picture

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Regards,
air charter plane

Mon, 11/14/2011 - 23:12 | 1878022 rosex229
rosex229's picture

For me a historical chart of U.S. oil production is a prescient example of why the cornucopian "technology will save us all" prognosticators are emperically wrong. 

 

Its not just that U.S. oil production has been on a steady (long term) decline for 40 years, but the fact that Marion King Hubbert predicted in 1956 that U.S. oil pdouction would peak in 1971. This indicates that 40 years of declining U.S. oil production was not mere coincidence, but was predictable 15 years ahead of time.

 

U.S. oil discoveries peaked 40 years before U.S. oil production peaked. Global oil discoveries peaked in 1964 (47 years ago), and global oil production on an EROEI basis has been stagnant since 2005. 

 

Human beings just 100 years ago dreamt of flying above the clouds, now we complain about the experience, 100 years from now the average person will dream of flight.

 

As the Saudi saying goes, "My grandfather rode a camel, my father rode a car, I ride in a jet plane, my son will ride a camel."

Tue, 11/15/2011 - 00:03 | 1878160 trav7777
trav7777's picture

lol, yep.  But don't say that because the environuts are preventing us from making that curve continue to go up up up exponentially.  It's all their faults.

Also, all the technology has done is NOT extend lifespan, but enable us to increase production.  AKA, we got bigger straws and sucked oil out FASTER with all the hightech.  We did not magically make huge producers produce for longer.  Technology kept our moving up the exponential curve for longer, but the downside is that the backside of the depletion curves are uglier.

The fields are essentially going fucking dry overnight like Cantarell or Prudhoe.  They fall off an effing cliff to nothingness.  Cantarell was the 2nd largest producing field in the world, then it hit peak.  That ONE field alone lost 2mbpd.  That's 1/40th of world supply GONE in just a few years.  It lost capacity faster than anybody could hope we could bring new production online.

And the magic deepwater Brazilian fields, lol...they're going to produce maybe 500kbpd out of a 10Gbbl resource, nothing AT ALL like surface fields produced from similar sized reserves.  The N Slope was around that size in URR and produced at a rate 3-4x that.

Tue, 11/15/2011 - 06:44 | 1878485 Seer
Seer's picture

I think that it's important to educate people to the fact that technology is a PROCESS, it cannot CREATE anything, it can only be used to TRANSFORM.  If you don't have something/the necessary thing to transform then technology is no more than a good book of fiction.

Energy and resources are EVERYTHING.  It's why wars are fought.

Mon, 11/14/2011 - 20:04 | 1877489 CPL
CPL's picture

Peak Coal is the new black evening dress!!

 

Peak oil was so four years ago.

Mon, 11/14/2011 - 20:13 | 1877523 CPL
Mon, 11/14/2011 - 21:45 | 1877826 trav7777
trav7777's picture

lol, don't start, because we have "hundreds of years" of coal remaining.  Same with NG.  We just DO, ok?  There CAN'T be a problem.  If we ignore it strenuously enough, it will go away and won't be "our reality."

Yes, I've had people tell me that in THEIR reality, these things aren't an issue.

Mon, 11/14/2011 - 22:11 | 1877889 donsluck
donsluck's picture

The issue is that we really can't attempt to burn all the available fossil fuels AND have successful agriculture. Global climate change will make farming more and more difficult.

Mon, 11/14/2011 - 22:16 | 1877903 TuesdayBen
TuesdayBen's picture

Frack you and your Warmer ilk

Mon, 11/14/2011 - 22:31 | 1877930 Lower Class Elite
Lower Class Elite's picture

Your Koch-approved magical thinking talking points mean shit against thermodynamics.  Reality will make you its prison bitch.  Deniers will be prosecuted.

Mon, 11/14/2011 - 22:38 | 1877945 BandGap
BandGap's picture

WTF thermodynamics are you talking about?  Do you even know what that means?

Let's keep it simple, the hockey stick model voodoo math is all we need to understand. Lies, big lies.

Mon, 11/14/2011 - 23:12 | 1878023 Lower Class Elite
Lower Class Elite's picture

Why yes, yes I do know what thermodynamics means.  Do you know what shitting in your own nest means? 

Tue, 11/15/2011 - 01:45 | 1878339 FeralSerf
Tue, 11/15/2011 - 06:50 | 1878487 Seer
Seer's picture

Ben, buddy, no hamburger for YOU!

BTW - the poster didn't mention "warmer."  Amazing at how programmed people are to knee-jerk.  There WILL be a next glacial period; sadly, those who warn of such things won't be able to say "I told you so" because pert-near everyone will perish (and for those who are left communication of what happened will be pretty meaningless).  NOTE: we can only affect the frequency, we cannot control the outcome; but, to claim that we don't have an affect on the planet doesn't understand the Observation Effect.

Mon, 11/14/2011 - 23:16 | 1878034 rosex229
rosex229's picture

Yet the same people that believe energy is a non-issue tend to think that our current economic woes are purely the fault of politicians... Suddenly, since oil production peaked every single politician the world over began implementing economically destructive policies. Quite a coincidence right?

 

It could never be the laws of thermodynamics because human beings are so clever that the laws of nature need not apply.

Mon, 11/14/2011 - 23:45 | 1878093 TheMerryPrankster
TheMerryPrankster's picture

it goes back to the fantasy that we exist outside nature, and have conquered nature. Its one biosphere and we all participate and if we fuck it up, we are all gone. We actually do depend on each other.Plants, animals, bacteria, humans we are all bound to each other for survival.

All the economic growth of the last century has been a result of cheap oil. Cheap oil is disappearing, where does future growth come from? Oil is the economy, graph it and watch the convergence.

Tue, 11/15/2011 - 00:05 | 1878164 trav7777
trav7777's picture

take a look at a graph of global population versus time and look at the rocket launch at the onset of the hydrocarbon age.

Tue, 11/15/2011 - 06:55 | 1878493 Seer
Mon, 11/14/2011 - 20:09 | 1877508 hannah
hannah's picture

if we keep bailing out 'big oil' we will never have any development of the hover cars we have been promised for 60 years. kill off big oil and we will be able to have flying cars.....!

Mon, 11/14/2011 - 20:13 | 1877522 Freewheelin Franklin
Freewheelin Franklin's picture

Autogyros, bitchez

 

http://www.autogyrousa.com/

Tue, 11/15/2011 - 07:01 | 1878496 Seer
Seer's picture

If you want to make your head scramble think about the battle that would occur between the oil and insurance sectors!

People can't drive in TWO dimensions, let alone in THREE! (for shits sake, people can't THINK in more than two dimensions to start with, let along drive!)

Sleep would be a bitch.  Drones colliding with little old ladies in flying automobiles...

Mon, 11/14/2011 - 20:10 | 1877511 tmosley
tmosley's picture

Really pushing the peak oil today, aren't we?

Mon, 11/14/2011 - 21:45 | 1877829 trav7777
trav7777's picture

IONIC LIQUIDS!!!!!111111

any more technobullshit to say to piss into this hurricane?

Mon, 11/14/2011 - 22:06 | 1877876 tmosley
tmosley's picture

So, Trav, are you saying that ionic liquids can't separate bitumen from sand with very little in the way of energy input?

Or are you planning on denying some more reality today?

Of course, I think we all already know the answer to that question.

Mon, 11/14/2011 - 22:26 | 1877916 Iriestx
Iriestx's picture

Ionic Liquids = The New Cold Fusion.

Mon, 11/14/2011 - 22:33 | 1877934 Lower Class Elite
Lower Class Elite's picture

Ionic liquids are produced by Skittle-shitting unicorns.  And they taste delicious!

Mon, 11/14/2011 - 22:40 | 1877949 BandGap
BandGap's picture

We produce an ionic liquid used to recombine low molecular weight hydrocarbons into long chained molecules.  Not cold fusion but useful stuff, very useful in many applications.

Mon, 11/14/2011 - 23:49 | 1878109 tmosley
tmosley's picture

You might want to actually know what you are talking about before you start claiming that existent technology is equivilent to non-existent technology associated with flimflam men.

http://www.matse.psu.edu/news/ionicliquids

Mon, 11/14/2011 - 22:41 | 1877952 BandGap
BandGap's picture

Reference? I'll understand the big words.

Mon, 11/14/2011 - 23:50 | 1878110 tmosley
tmosley's picture

No need for big words when you have video: http://www.matse.psu.edu/news/ionicliquids

Tue, 11/15/2011 - 00:06 | 1878170 trav7777
trav7777's picture

I would say they ONLY HAVE in one university's lab and anyone who represents them as a practical solution at this point to the rearview mirror peak oil is an idiot.

Yes, that means I am calling you an idiot...again.

Tue, 11/15/2011 - 00:28 | 1878213 tmosley
tmosley's picture

Yes, Newton's theory of gravity was insignifican because it was only developed in one lab.

Jesus Christ, can you debase yourself any further?  You see a vidoe of something happening before your own eyes, and you shut it out like a child shutting his eyes and covering his ears and screaming.

You are empty.

Tue, 11/15/2011 - 12:31 | 1879390 BigJim
BigJim's picture

<--- I wish Trav and TM would just kiss and make up (like they just know they want to)

<--- I want to see Trav and TM go at it mano-a-mano, in a big barrel of (preferably peak) oil

Tue, 11/15/2011 - 07:08 | 1878500 Seer
Seer's picture

And, with endless energy, then what?  Seems we'd already experienced that.  Been pretty good about churning through other natural resources.

So, will ye be wanting money from me for this adventure?

Mon, 11/14/2011 - 23:20 | 1878045 rosex229
rosex229's picture

Well I did hear abou this perpetual motion machine the other day... and there was this guy (he sounded so way smart, so he HAD to know what he was talking about) who said he revamped his car to run off of water.

 

He didn't discuss the fact that the mass of a water molecule is slightly less than that of its individual components (E=mc2 explains how this is possible). He conveniently ignored the fact that to break apart water requires an input of energy (its not an exergenic process). Of course, even a 5 year old knows this intuitively since you can burn coal, natural gas, and oil, but cannot burn water.

Mon, 11/14/2011 - 23:50 | 1878111 Lower Class Elite
Lower Class Elite's picture

But... but... but he said it really worked!  And if I believe him that means I get to keep driving my car!  And I'm pretty sure that me being able to drive my car is in guaranteed in the Constitution or the Magna Carta or some shit.  So it just HAS to be true!  Don't you see?  It's what I WANT.  Physics shmysics.

Tue, 11/15/2011 - 00:01 | 1878155 Arkadaba
Arkadaba's picture

Kind of works though. Moving around everyday - should be something that could capture that eneergy - no?

Tue, 11/15/2011 - 07:14 | 1878509 Seer
Seer's picture

Fucking environmentalists and physics, it's all a conspiracy!

E=MC^2 was just a set up to aid in the spread socialism!  Einstein was a socialist don't you know!

Mon, 11/14/2011 - 23:50 | 1878113 TheMerryPrankster
TheMerryPrankster's picture

You can to burn water:

http://www.youtube.com/watch?v=dZe1AeH0Qz8

 

Tue, 11/15/2011 - 00:10 | 1878181 trav7777
trav7777's picture

I love that burning tapwater.

FRACKING and IONIC LIQUIDS will save us all!!!!!!!!1111

Mon, 11/14/2011 - 23:54 | 1878127 tmosley
tmosley's picture

A person who doesn't know the difference between fusion and perpetual motion is stupid.

You don't want to be stupid forever, do you?

Would a stupid person understand the orders of magnitude of difference between the energy held in chemical bonds and the energy consumed or liberated in nuclear changes?  Probably not.  But an average person might not either.  Try not to be mediocre, if possible.

Skeptical, yes, stupid and mediocre, no.

Tue, 11/15/2011 - 00:05 | 1878162 rosex229
rosex229's picture

Ideally fusion will (would) be the solution to our energy problems. Personally, had we invested more heavily in scientific research over the last 30 years we'd have workable fusion by now. 

 

I suppose the flip side is that peak oil (or peak liquid fuels I should say) is merely an example of Lieberg's Law of the Minimum. Solve our energy issues, and then another few decades down the road its phosphorous, fresh water, soil erosion, climate change, or another limiting factor that exponential growth bumps against.

 

Although, being that energy is the master resource you could solve water issues by desalinating water (requires huge sums of energy, but if you've got fusion...), you could fertilize eroding soil (we're certainly not running out of H or N, just NH3), even phosphorous could be recycled given enough dedicated energy (afterall P is an element still in existance it would just need to be regathered and turned into phosphate). With infinite amounts of fusion energy you could even reverse climate change by scrubbing CO2 out of the air in massive amounts (again assuming infinite and cheap energy availability to create massive CO2 filters).

Tue, 11/15/2011 - 02:21 | 1878371 geekgrrl
geekgrrl's picture

"it would just need to be regathered"

Are you kidding me? Isn't that what entropy is all about? You're going to need a lot more energy than anything we have around here to be "gathering up" elements. Even Maxwell's demon couldn't do that.

Tue, 11/15/2011 - 07:22 | 1878514 Seer
Seer's picture

Excellent reply- thank you!

Endless energy would also meet the limitations of physical landmass.  For an understanding of this one need only look at the battles between land for farming and land for housing.  Taken to the extreme (the trajectory of growth) even houses would compete with humans for space (as humans multiplied); and, it would seem pretty clear that all that great machinery for re-gathering stuff would eventually be impeded by the growing mass of humanity, and that parts of that mass would then have to be "reduced."  Sounds like THE way forward.  Yeah, let's GO FOR IT!  America, fuck yeah!

Tue, 11/15/2011 - 08:25 | 1878586 fnord88
fnord88's picture

If you extrapolate current human population growth rates, then in 22,000 years the mass of humans would outweigh the entire universe. That is not a very long time.

Tue, 11/15/2011 - 12:14 | 1879350 FeralSerf
FeralSerf's picture

After they get autos and washing machines, they spend more time supporting them and less time breeding.  The population growth rate then declines.  It is less than replacement in most of Western Europe now which is causing severe budget problems.

Tue, 11/15/2011 - 01:38 | 1878333 Urban Roman
Urban Roman's picture

Hydrinos.

Zero Point Energy.

Cold Fusion, or lukewarm fusion, or whatever they are calling it.

If there was anything to any of these claims, you'd see a cheap car based on it coming out of India or China.

There isn't, and you don't.

Tue, 11/15/2011 - 01:53 | 1878345 FeralSerf
FeralSerf's picture

Patience grasshopper -- all things come to she who waits.

Tue, 11/15/2011 - 12:39 | 1879407 BigJim
BigJim's picture

If that new-fangled 'black gold' stuff is so good for lighting our lamps, why did God put it deep in the ground instead of in the heads of readily-accessable whales, of which there is an infinite supply?

Logic, my dear, logic! What do they teach in schools these days?

Mon, 11/14/2011 - 22:10 | 1877887 Errol
Errol's picture

As it happened, someone posted a link to this article in a thread earlier today; apparently one of the Durdens thought it deserved our attention.

FWIW, I appreciated reading it.

Mon, 11/14/2011 - 23:24 | 1878053 rosex229
rosex229's picture

This article was posted on oilprice.com before it was on zerohedge. If your interested in non-bias discussion about energy issues oilprice.com and theoildrum.com are superb websites. chrismartenson.com is also excellent although it holds no reservations on the fact that economic growth is dependent upon growth in energy supplies.

Mon, 11/14/2011 - 23:56 | 1878131 tmosley
tmosley's picture

Nonbiased==biased in the direction of the speaker.

Only a fool claims any peice of writing is non-biased, much less an entire community of human beings.

Tue, 11/15/2011 - 00:13 | 1878188 rosex229
rosex229's picture

If something is truly scientific (that is it relies not on opinion, but emperical, objective evidence), then it is fundamentally non-bias.

 

A creationist would say a "believer" in evolution is bias, but the reality is that evolution is the result of 150 years of findings. That being said every speaker may have a bias, but if data that demonstrates a physical reality is being presented the bias is unveiled for being the naked emperor it is.

 

Outside of human existence (the universe is much older than humanity) is an ultimate reality that has no care for human prejudice or opinion. The structure of scientific investigation works to discover that truth regardless of human preference for what reality "should be"

Tue, 11/15/2011 - 03:31 | 1878410 geekgrrl
geekgrrl's picture

No, science most definitely has its own biases. The places where you can really see this is where theories are excluded from the domain of scientific inquiry, versus the theories that receive corporate funding. That is to say, where the great eye is pointed has a bias. Then there is the bias of scientific rationality itself, which says that only those outcomes that can be determined to a given degree of certainty, and more importantly, can be quantified, shall be accepted as the provisional truth. That leaves an awful lot of stuff off the table, wouldn't you say?

Tue, 11/15/2011 - 07:30 | 1878522 Seer
Seer's picture

Ack!  You're now back to zero...

Science is a METHOD/PROCESS.  Science and scientific community/scientist aren't the same.  I agree, there are some scientists who are sub-par or are "influenced" by things outside the scope of science (politics/corporations) and, therefore, are incorrectly applying scientific methods, but this isn't the same as saying that "science" has a bias.

Tue, 11/15/2011 - 12:41 | 1879421 BigJim
BigJim's picture

All y'all get a +1 from me.

Tue, 11/15/2011 - 00:46 | 1878167 earleflorida
earleflorida's picture

fwiw dept:

#1 - ever check that fuel charge on your  electric bill that's equal or higher than  the  actual statement [oil, lng, coal?] -  

#2 - keystone could equate to 1ml +/+  bpd -

#3 - synthetic fuels; eg. bergius  process, or fisher-tropsch process, via  coal,...  - china is a huge importer of  our natural resource, 'iron-ore coal',  along with its insatiable appetite for  its neighbor india's 'iron-ore coal' -

#4 - thorium nuclear reactors [no melt-down] and, 'built-in-module-size-specifics' to fit the application -

#5 - fracking works, period!

#6 - Natural Gas [lng] finds in Iran are 2nd largest in world [no fracking  shit?] - ref: iran-pakistan-india (? china?),... [*IPI*] ---- or  turkmenistan-afghanistan-pakistan-india [??china??]  ,...[**TAPI**] ,... 300 years of natural gas reserves? -

conclusion: yes, america has a long way to go to be energy independent, but don't you think we all should get our heads out of our ass,... when in 2003/04 cheney went to the supreme court and had the files sealed as to who was present at the bush#43 'wh' concerning our countries energy program - just the timing should set off alarm bells!!   

jmo   thankyou tyler

Tue, 11/15/2011 - 07:39 | 1878528 Seer
Seer's picture

"yes, america has a long way to go to be energy independent"

You CANNOT talk independence without specifying consumption requirements and growth rates in consumption.

The US could be TOTALLY independent NOW.  The issue is, however, that per-capita consumption would have to be drastically reduced (to about 1/4 of current), AND, there could be NO increase in demand (no growth rate).  Even then, this "independence" would only last as long as the current rates of consumption would allow.

One could say that a heroin addict is "free" from heroin, until he/she plunges the next needle.  It's an issue of duration.

Tue, 11/15/2011 - 00:38 | 1878230 rosex229
rosex229's picture

Some of us feel obliged. Just as many people here on ZH find the sheeples complacency with our imperiled economic system frustrating those of us who see peak oil as the driver of global events feel the same way.

 

You push hard when conviction is strong, and compatriats are few and far between.

Tue, 11/15/2011 - 07:43 | 1878529 Seer
Seer's picture

Ah, but here's the rub...

There's little money to be had in "peak oil" (except a few, can only have so many writers and hedge funds).  The money force is always where it always is- FORCE.  War is the driver: if not existing, the threat of it, and then, finally, the execution of it.

Tue, 11/15/2011 - 08:45 | 1878641 DosZap
DosZap's picture

I am by NO means a Green Wienie, but, I do know FRACKING in current form, must stop.

ASAP.It's use of chemicals is poisoning our drinking water, and getting ito our underground aquifers.

This MUST not be allowed to go further.New chemicals/methods must be found.

 MORE Oil makes no sense if you do not have clean water.

Mon, 11/14/2011 - 20:10 | 1877513 TheSilverJournal
TheSilverJournal's picture

Why do work and pump oil when the US can do no work and pump dollars out of the printing press.

Mon, 11/14/2011 - 20:43 | 1877642 LongBallsShortBrains
LongBallsShortBrains's picture

Solar powered printers?

Mon, 11/14/2011 - 22:56 | 1877985 Zero Govt
Zero Govt's picture

because Bennys printing cannot produce 2,000 job vacancies ..in fact Bens manic printing causes 2,000 job redundencies because no sane businessman wants to invest in an enviroment where the currency is a fuking joke played with by clowns at the Fed and the jokers in the US Govt

Here's new oil creating jobs in boom town America (remember that before CONgress killed the US economy?)

http://money.cnn.com/2011/10/24/pf/America_boomtown_locals/index.htm

..and there's Billions of barrels under your feet all restricted by the US CONgress who throttle it for Big Oils control over the energy sector ...you have been stiffed (monopolised)

 

 

 

Tue, 11/15/2011 - 07:56 | 1878540 Seer
Seer's picture

It's NOT about govt, it's about FINITE RESOURCES!

BIG = FAIL!  That goes for BIG Corporations as well (unless, that is, you favor consolidated power).

Unleash the hounds of resource depletion.  Let's get this stage of the play over with already!

Mon, 11/14/2011 - 20:12 | 1877515 Freewheelin Franklin
Freewheelin Franklin's picture

Do we really need to care about domestic production as it pertains to "oil independence"? Sure, it will create real jobs, but I always thought comparative advantage was a net positive for a country.

Tue, 11/15/2011 - 08:12 | 1878565 Seer
Seer's picture

So, by consuming rather than selling things would turn out well?

We don't have enough to produce to meet existing, let alone future needs.  That is, for any extended period of time.

Increasing production means increasing energy consumption.  And with this precious energy we're going to produce what, exactly?  We're NOT going to revamp or create any new infrastructure, not when we've got massive debt loads: that would be like going to the bank, many months in arrears in your mortgage payments and asking for a loan to remodel/refurnish your home!

So, it's like this... we extract and consume valuable resources so that we can create stuff that the ROW can produce more cheaply?

Any increase in production would be subject to the global marketplace, and with the USD dropping and US debt increasing I'm just not thinking that internal consumption is likely going to be possible.  And as those resources decline, then what?  Before you argue that increased supply would drive down market prices you'll need to identify HOW MUCH of an increase you're talking about in relation to world output: I'm guessing that it'll be basically impossible to increase extraction (let's call it what it is) at rates that would reduce prices to any significant degree.

And if you are proposing use only within the US then you're effectively nationalizing oil, something that most have given black marks to (even started wars) for others doing that.  And once this happens you're now opening things up to protectionist trade wars; good luck selling your ramped up production abroad!

Do people think that folks like the Forbes' are stupid?  Back in the 70s one of them (can't recall which one) said that the US would be best off using EVERYONE ELSE'S oil FIRST.  I cannot say whether this has been an observed policy or not, but seems to me that there's a lot to be said for the reasoning (as is all too clear now days).

Mon, 11/14/2011 - 20:13 | 1877521 jmcadg
jmcadg's picture

Kurtosis

Mon, 11/14/2011 - 20:14 | 1877528 YearZero Institute
YearZero Institute's picture

The world consumes 74mn b/d? Christ, you idiot.

Possibly the stupidest `article` on energy I've read in years.

 

Mon, 11/14/2011 - 20:26 | 1877573 CrashisOptimistic
CrashisOptimistic's picture

You may have missed a point.

All liquids (Propane, Butane, Ethane) are being lumped into "Oil", and they cannot push a car around.  They are not crude.  They are not oil.  They are NGLs.

But they are added to the total for quoted prodution.  It's bogus. 

The number quoted is an attempt to extract those, so that what is left actually defines civilization's base need (production (tractors) and transport of food).  Not production of plastic bottles.

Mon, 11/14/2011 - 20:47 | 1877658 alex_g
alex_g's picture

NGL's are added to the refining process to add distilates to our use.  They ARE used in transportation fuel.

Mon, 11/14/2011 - 21:47 | 1877833 trav7777
trav7777's picture

a fair portion of the NGLs don't have BOE of 1 either.  The numbers coming out have been intentionally misrepresented.  C&C made a CLEAR peak in '05.  That's indisputable at this point.

However, some NGLs can be used as a fuel and NG is an important feedstock for petrochemical fertilizers and whatnot.

Tue, 11/15/2011 - 08:16 | 1878574 Seer
Seer's picture

I'm not getting it as to why the junks.

To say that NG is an important feedstock for petrochemical fertilizers is, however, a big understatement.  Our food system is going to be convulsed.

Mon, 11/14/2011 - 22:44 | 1877962 BandGap
BandGap's picture

Good Lord that's stupid.  Lower molecular weight hydrocarbons can be recombined into higher molecular weight compounds.  Refineries have been doing this for decades to capture these.

Mon, 11/14/2011 - 23:29 | 1878061 rosex229
rosex229's picture

Not to mention that many of these fuels are actually counted twice in the "total liquid fuels" calculation. Afterall, to make ethanol requires tremendous amounts of oil (petrochemicals, fertilizers, diesel, transportation).

 

Its also equally unfair to suggest a barrel of ethanol is equivalent to a barrel of oil since it contains significantly less energy. Why would the IEA and EIA pretend that energy resources are better estimated by volume than energy content? Well if you count them by energy content the reality is down right ugly... we can't have that. 

Tue, 11/15/2011 - 08:26 | 1878590 Seer
Seer's picture

Addressing all as joules or watts would really help.

Some fun numbers:

http://en.wikipedia.org/wiki/Orders_of_magnitude_%28energy%29

Tue, 11/15/2011 - 10:32 | 1878982 YearZero Institute
YearZero Institute's picture

Bollocks you idiot. The world is producing around 87mn b/d of oil, right now. NGLs you dimwit you've got no idea what you're talking about.

I thought this site was supposed to be clued up, it's just moron city...jesus...

 

Tue, 11/15/2011 - 10:39 | 1879010 Flakmeister
Flakmeister's picture

You might want to reconsider your statement....

C+C production is only about 73 mmbpd, the rest is NGL, bio-fuels, Refinery gains  etc...

The 88 mmbpd refers to "All Liquids" and has a lot of double counting....

Mon, 11/14/2011 - 20:28 | 1877585 Mentaliusanything
Mentaliusanything's picture

Ah Yes .... The World has way to many consumers.

How do you reduce your relience on consumers and still turn a Bankers bonus um Profit.

A- You steal it

B- You take it

C - C A/B

Mon, 11/14/2011 - 20:35 | 1877613 ValidName
ValidName's picture

Cough cough,, sputter... fart.... is truly an enlightening reply.

 

"Global oil demand is revised down by 50 kb/d for 2011 and by 210 kb/d for 2012 with lower?than?expected 3Q11 readings in the non? OECD and a downward adjustment to global GDP growth assumptions. Global GDP growth is now seen at 3.8% in 2011 and 3.9% in 2012 with significant downside risks. Demand estimates stand at 89.2 mb/d in 2011 (+1.0 mb/d y?o?y) and 90.5 mb/d in 2012 (+1.3 mb/d)."

From the IEA world supply report.

Mon, 11/14/2011 - 21:08 | 1877729 Grinder74
Grinder74's picture

I'm confused. Who's the idiot, Chris or Christ?

Mon, 11/14/2011 - 20:17 | 1877535 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Just like any industry, they are talking their game. They also have the NYT on their side.

Mon, 11/14/2011 - 20:20 | 1877546 Payne
Payne's picture

We started exporting Fiat currency in 1970 and we have not developed any new energy source in the US since then, now the world doesn't want our worthless paper anymore and we will begin to newly discover all the energy resources we already had.

Mon, 11/14/2011 - 20:21 | 1877552 Rollerball
Rollerball's picture

"The task of the real intellectual consists of analyzing illusions in order to discover their causes." ~ Arthur Miller

It's all an illusion.  Collages of mirages entrained and sustained to entertain. 

Welcome to the Truman Show.

Fuck oil.  Burn water.  Go E-Cat!

Mon, 11/14/2011 - 20:33 | 1877600 B9K9
B9K9's picture

Actually, you can reduce this further:

"The task of the real investor consists of analyzing inflation in order to discover its causes".

The Ponzi must, at all costs, expand, otherwise it dies. If it dies, it takes the entire PTB structure down with it. So, the trick is to understand what sector the PTB have targeted for credit expansion. Right now, it's healthcare & education; however, it is immaterial what specific segment is being inflated, as long as overall credit increases.

Mon, 11/14/2011 - 22:34 | 1877923 Rollerball
Rollerball's picture

The Ponzi has reached critical mass. 

So it's Brazilian waxes for those body parts (treading/trending) above water.  The good news is hair is not living tissue (nor significantly buoyant); thus, not productive capital (except for Spiderman's "tingly sense").  

The nadir is that Nair-ing of that hair oft married to skin in the game (save those wise old cue balls) will undoubtedly leave a few burns.

Your premise that there will remain fractionally credit worthy resource capital (collateral) implies hyper-inflation to satiate the algos.

The most high eye doesn't need the pyramid.  Eyes (are) ubiquitous and ethereal.

The real question is:  "How low can you/we go (and still be supportive)?"  

Ashes make great fertilizer.

Tue, 11/15/2011 - 08:37 | 1878619 Seer
Seer's picture

"Ashes make great fertilizer."

Aye (if raising pH is needed).  But ye forgets that this is a "consumer" economy.  Ahes don't "consume"'...

The growth equation (that's been long-running):

P < P + I

P = Principle

I = Interest = Growth (ransom of future slave [if turned into ashes then what?])

Mon, 11/14/2011 - 20:23 | 1877564 topcallingtroll
topcallingtroll's picture

Damn the earthquakes.

Full speed ahead

Mon, 11/14/2011 - 21:50 | 1877840 trav7777
trav7777's picture

fracking is only causing really *little* earthquakes so far.  Lots and lots of them.

So when the enviros get ahold of this and shut down gas production completely, then we turn to..........?

The deniers went to nukeyaler, then Fukushima happened, coal is an AGW enemy, and gas fracking causes quakes and pollution.  That leaves us with....?

Anyone?  Mosely-claven?  Anyone got any technomiracle bullshit to sell?

Mon, 11/14/2011 - 22:09 | 1877884 tmosley
tmosley's picture

It has always been my opinion that any energy crisis would be the creation of an interventionist government or governments.  Funny that you support my thesis 100%, even as you deride me for being "wrong".

Technology can only save us if we allow it to.  Markets can only save us if we allow them to work.  

The problem isn't "peak oil" it's government meddling in every aspect of the economy.

Mon, 11/14/2011 - 22:17 | 1877905 donsluck
donsluck's picture

So true. Oil has a strong price support structure in the tax code via depletion etc. which solar and wind do not. Remove all the artificial incentives to use oil, let the price reflect the true cost of extraction (along with environmental remediations required by spills, earthquakes etc.) and then see where the energy developement takes us. My guess, conservation.

Mon, 11/14/2011 - 23:56 | 1878132 TheMerryPrankster
TheMerryPrankster's picture

Because obviously oil is infinite, the entire globe is composed of petroleum with a thin crust floating on top of it that we all live on.

Tue, 11/15/2011 - 00:31 | 1878219 tmosley
tmosley's picture

Whale oil wasn't infinite, yet we continue to light our homes.  Charcoal wasn't infinite, yet we continue to forge steel.

The point isn't that oil production will rise forever.  The point is that it doesn't have to.

Tue, 11/15/2011 - 01:12 | 1878297 TheMerryPrankster
TheMerryPrankster's picture

charcoil is infinite as long as we don't burn it all at once and keep growing new trees to replace the ones made into charcoal.

The real point is all energy sources are not equal, though you can replace whale oil with petroleum oil, you lose whale bones, and whale meat. When you swap oil for nuclear you lose the chemicals derived from oil, like the plastics and tars, you lose the asphalt, you lose the lubricants, you lose the solvents.

Because energy sources are interchangeable does not mean they are equal.

Tue, 11/15/2011 - 02:01 | 1878350 green888
green888's picture

research into terra preta ongoing, carbon capture, bitches

Tue, 11/15/2011 - 00:53 | 1878253 trav7777
trav7777's picture

oil would peak with or without government.

Every single well, field, nation, planet eventually hits this point of maximum extraction rate.

Just get over it already

Tue, 11/15/2011 - 01:08 | 1878290 tmosley
tmosley's picture

Everyone dies.  That doesn't mean the human race goes extinct when the youngest person alive today dies.

There are other technologies, which you refuse to acknowledge. I think you are the one who needs to "get over it".  If you want to murder large amounts of people, I'm afraid you are going to need to get into politics, not just lie to them over the internet.

Tue, 11/15/2011 - 08:47 | 1878644 Seer
Seer's picture

"Technology can only save us if we allow it to."

Technology is a PROCESS!

And what is it going to save us FROM?  And, for how long?  And, to what (population) scale?  Or, are you really talking about it saving YOU? (fuck the rest of humanity)

Neither govt or "business" can create!  It's only an issue of rearranging matter, and the real issue is how much matter we require for our activities, now and in to the future.

People are only deluding themselves if they think that we won't have additional (and even greater) Fukushima moments*.  ALL systems fail, and BIG system fail in BIG ways.

* There's the earthquake affect (not to be confused with the fracking debate).

Human hubris.  Silly humans are NOT! gods (beyond nature)...

Mon, 11/14/2011 - 23:39 | 1878079 rosex229
rosex229's picture

I've tried explaining in detail what peak oil is and what it means for the american standard of living to my brother. He maintains that "people predicted this in the 1970s" (he doesn't realize that the Limits to Growth didn't predict imminent disaster just as Thomas Malthus didn't predict it; the point was the inevitability of the consequences of infinite growth in a finite system).

 

Anyway, my point is that I had a unique opportunity to talk at length with a captive audience who fundamentally disagreed with me. He is intensely environmentalist, and sees more danger in fracking, deep sea drilling, oil sands, etc. due to his legitimate worries about environmental damage. However, these concerns blind him to the fact that the suffering created by limiting advanced extraction techniques far exceeds the short-term environmental costs.

 

My personal opinion is that not only will the use of fossil fuels (principally oil) be a blip in geological history, but will mandate that industrial civilization is an equally quaint blip. Not only will industrial civilization collapse in a step wise process, but humans will burn every last gram of oil, gas, and coal available leading to an even more severe reduction in the long term carrying capacity of the planet due to environmental damage and climate change. This mostly will unfold of centuries, but this moment in history is and will be particularily interesting.

Tue, 11/15/2011 - 00:35 | 1878225 Arkadaba
Arkadaba's picture

so were fucked? http://vimeo.com/15739754

Tue, 11/15/2011 - 08:57 | 1878675 Seer
Seer's picture

Anyone in your family succumb to cancer?  If so, tell your brother that he needn't worry, since if he doesn't have it NOW he'll NEVER have it (just like those who succumbed).

NOTE: This is a bit of an exaggeration, as everyone has cancer, the issue is whether your body can fight it from taking over.

Could be worse.  My brother (much more "educated" and hangs out in higher-up circles, w/people that understood that home prices would never drop) agreed* with me, but his stance is that he doesn't think that it's going to happen in HIS lifetime!  Meanwhile he continues to maintain two homes (winter and summer) and golfs year-round in his "retirement."

* I no longer speak with him.  I will not spend time with those that aren't ignorant and DON'T act.  Food that I produce will go to someone else, evolution requires this.

Party on, Garth!

 

Mon, 11/14/2011 - 23:51 | 1878114 FeralSerf
FeralSerf's picture

It will be claimed  that numerous small earthquakes are a good thing, a reason to drill the wells.  Better a thousand small ones than the big one.

I'm not suggesting that their claims will depict reality (or not).

Tue, 11/15/2011 - 00:01 | 1878153 TheMerryPrankster
TheMerryPrankster's picture

2 schools of thought.

1 says small earthquakes releive stress on faults, decreasing large earthquakes

other says small earthquakes increase stress on faults increasing large earthquakes and can actually trigger large earthquakes,

Some people say a small quake can't trigger a large earthquake, some say it can. If we keep fracking, I'm sure we will discover who is correct, though the cost of learning the answer maybe more than we would have liked to have paid.

 

Tue, 11/15/2011 - 02:00 | 1878351 FeralSerf
FeralSerf's picture

Ah, but there may be a negative cost (i.e. a profit) instead.  We could be pleasantly surprised.  There's one way to find out.

Mon, 11/14/2011 - 20:24 | 1877574 Taint Boil
Taint Boil's picture

 

 

 

Chris Martenson does a good job with peak oil. And The Oil Drum should be checked at least once a week, well after Zero Hedge of course.

Mon, 11/14/2011 - 20:34 | 1877607 John Law Lives
John Law Lives's picture

ZH should be checked out hourly.  The Oil Drum doesn't need to be promoted here.

Mon, 11/14/2011 - 20:54 | 1877685 blu
blu's picture

tOD is good, and it's on topic. So the problem is ... what?

Mon, 11/14/2011 - 20:56 | 1877690 tmosley
tmosley's picture

Check your assumptions.

Mon, 11/14/2011 - 21:01 | 1877708 John Law Lives
John Law Lives's picture

ZH does not exist to promote that website.  Let TOD do its own promotions. 

 

Mon, 11/14/2011 - 21:33 | 1877800 Bicycle Repairman
Bicycle Repairman's picture

TOD is a cult whose beliefs are a syllogism.

Mon, 11/14/2011 - 21:38 | 1877813 blu
blu's picture

Beliefs?

Something strange is going on here.

Oh I get it. It's the old "everyone can have a theory" crowd at work.

Mon, 11/14/2011 - 21:47 | 1877834 Bicycle Repairman
Bicycle Repairman's picture

If you start your belief system with "oil is dinosaur goo", then you going to be put in the same box as the cargo cult.

Mon, 11/14/2011 - 21:51 | 1877845 trav7777
trav7777's picture

LOL...yeah neverfuckinmind the DATA, eh?

We'll just all have our own personal reality.

Historians will marvel at the mass delusions of our time.

Mon, 11/14/2011 - 22:14 | 1877898 AmericaRacket
AmericaRacket's picture

All the decent data says that oil is abiotic and abundant.

 

By 1951, what has been called the Modern Russian-Ukrainian Theory of Deep, Abiotic Petroleum Origins was born. A healthy amount of scientific debate followed for the next couple of decades, during which time the theory, initially formulated by geologists, based on observational data, was validated through the rigorous quantitative work of chemists, physicists and thermodynamicists. For the last couple of decades, the theory has been accepted as established fact by virtually the entire scientific community of the (former) Soviet Union. It is backed up by literally thousands of published studies in prestigious, peer-reviewed scientific journals.

For over fifty years, Russian and Ukrainian scientists have added to this body of research and refined the Russian-Ukrainian theories. And for over fifty years, not a word of it has been published in the English language (except for a fairly recent, bastardized version published by astronomer Thomas Gold, who somehow forgot to credit the hundreds of scientists whose research he stole and then misrepresented).

This is not, by the way, just a theoretical model that the Russians and Ukrainians have established; the theories were put to practical use, resulting in the transformation of the Soviet Union - once regarded as having limited prospects, at best, for successful petroleum exploration - into a world-class petroleum producing, and exporting, nation.

J.F. Kenney spent some 15 years studying under some of the Russian and Ukrainian scientists who were key contributors to the modern petroleum theory. When Kenney speaks about petroleum origins, he is not speaking as some renegade scientist with a radical new theory; he is speaking to give voice to an entire community of scientists whose work has never been acknowledged in the West. Kenney writes passionately about that neglected body of research: The modern Russian-Ukrainian theory of deep, abiotic petroleum origins is not new or recent. This theory was first enunciated by Professor Nikolai Kudryavtsev in 1951, almost a half century ago, (Kudryavtsev 1951) and has undergone extensive development, refinement, and application since its introduction. There have been more than four thousand articles published in the Soviet scientific journals, and many books, dealing with the modern theory. This writer is presently co-authoring a book upon the subject of the development and applications of the modern theory of petroleum for which the bibliography requires more than thirty pages. The modern Russian-Ukrainian theory of deep, abiotic petroleum origins is not the work of any one single man -- nor of a few men. The modern theory was developed by hundreds of scientists in the (now former) U.S.S.R., including many of the finest geologists, geochemists, geophysicists, and thermodynamicists of that country. There have now been more than two generations of geologists, geophysicists, chemists, and other scientists in the U.S.S.R. who have worked upon and contributed to the development of the modern theory. (Kropotkin 1956; Anisimov, Vasilyev et al. 1959; Kudryavtsev 1959; Porfir'yev 1959; Kudryavtsev 1963; Raznitsyn 1963; Krayushkin 1965; Markevich 1966; Dolenko 1968; Dolenko 1971; Linetskii 1974; Letnikov, Karpov et al. 1977; Porfir'yev and Klochko 1981; Krayushkin 1984)

The modern Russian-Ukrainian theory of deep, abiotic petroleum origins is not untested or speculative. On the contrary, the modern theory was severely challenged by many traditionally-minded geologists at the time of its introduction; and during the first decade thenafter, the modern theory was thoroughly examined, extensively reviewed, powerfully debated, and rigorously tested. Every year following 1951, there were important scientific conferences organized in the U.S.S.R. to debate and evaluate the modern theory, its development, and its predictions. The All-Union conferences in petroleum and petroleum geology in the years 1952-1964/5 dealt particularly with this subject. (During the period when the modern theory was being subjected to extensive critical challenge and testing, a number of the men pointed out that there had never been any similar critical review or testing of the traditional hypothesis that petroleum might somehow have evolved spontaneously from biological detritus.) The modern Russian-Ukrainian theory of deep, abiotic petroleum origins is not a vague, qualitative hypothesis, but stands as a rigorous analytic theory within the mainstream of the modern physical sciences. In this respect, the modern theory differs fundamentally not only from the previous hypothesis of a biological origin of petroleum but also from all traditional geological hypotheses. Since the nineteenth century, knowledgeable physicists, chemists, thermodynamicists, and chemical engineers have regarded with grave reservations (if not outright disdain) the suggestion that highly reduced hydrocarbon molecules of high free enthalpy (the constituents of crude oil) might somehow evolve spontaneously from highly oxidized biogenic molecules of low free enthalpy.

Beginning in 1964, Soviet scientists carried out extensive theoretical statistical thermodynamic analysis which established explicitly that the hypothesis of evolution of hydrocarbon molecules (except methane) from biogenic ones in the temperature and pressure regime of the Earth's near-surface crust was glaringly in violation of the second law of thermodynamics. They also determined that the evolution of reduced hydrocarbon molecules requires pressures of magnitudes encountered at depths equal to such of the mantle of the Earth. During the second phase of its development, the modern theory of petroleum was entirely recast from a qualitative argument based upon a synthesis of many qualitative facts into a quantitative argument based upon the analytical arguments of quantum statistical mechanics and thermodynamic stability theory. (Chekaliuk 1967; Boiko 1968; Chekaliuk 1971; Chekaliuk and Kenney 1991; Kenney 1995) With the transformation of the modern theory from a synthetic geology theory arguing by persuasion into an analytical physical theory arguing by compulsion, petroleum geology entered the mainstream of modern science. The modern Russian-Ukrainian theory of deep, abiotic petroleum origins is not controversial nor presently a matter of academic debate. The period of debate about this extensive body of knowledge has been over for approximately two decades (Simakov 1986). The modern theory is presently applied extensively throughout the former U.S.S.R. as the guiding perspective for petroleum exploration and development projects.

There are presently more than 80 oil and gas fields in the Caspian district alone which were explored and developed by applying the perspective of the modern theory and which produce from the crystalline basement rock. (Krayushkin, Chebanenko et al. 1994) Similarly, such exploration in the western Siberia cratonic-rift sedimentary basin has developed 90 petroleum fields of which 80 produce either partly or entirely from the crystalline basement. The exploration and discoveries of the 11 major and 1 giant fields on the northern flank of the Dneiper-Donets basin have already been noted. There are presently deep drilling exploration projects under way in Azerbaijan, Tatarstan, and Asian Siberia directed to testing potential oil and gas reservoirs in the crystalline basement. (http://www.gasresources.net/index.htm) It appears that, unbeknownst to Westerners, there have actually been, for quite some time now, two competing theories concerning the origins of petroleum. One theory claims that oil is an organic 'fossil fuel' deposited in finite quantities near the planet's surface. The other theory claims that oil is continuously generated by natural processes in the Earth's magma. One theory is backed by a massive body of research representing fifty years of intense scientific inquiry. The other theory is an unproven relic of the eighteenth century. One theory anticipates deep oil reserves, refillable oil fields, migratory oil systems, deep sources of generation, and the spontaneous venting of gas and oil. The other theory has a difficult time explaining any such documented phenomena.

So which theory have we in the West, in our infinite wisdom, chosen to embrace? Why, the fundamentally absurd 'Fossil Fuel' theory, of course -- the same theory that the 'Peak Oil' doomsday warnings are based on.

I am sorry to report here, by the way, that in doing my homework, I never did come across any of that "hard science" documenting 'Peak Oil' that Mr. Strahl referred to. All the 'Peak Oil' literature that I found, on Ruppert's site and elsewhere, took for granted that petroleum is a non-renewable 'fossil fuel.' That theory is never questioned, nor is any effort made to validate it. It is simply taken to be an established scientific fact, which it quite obviously is not.

Mon, 11/14/2011 - 22:21 | 1877910 donsluck
donsluck's picture

Huh? None of what you wrote suggests oil is renewable. Regardless of the source, vegetative, animal or ancient mineral-type deposits, it is still not being "produced" anywhere.

Mon, 11/14/2011 - 22:58 | 1877982 Bicycle Repairman
Bicycle Repairman's picture

It's being produced deep in the earth.  Deeper than where any dinosaurs or plant life ever existed.  Same place the magma and earthquakes come from.  A very energetic place.

Mon, 11/14/2011 - 23:08 | 1878009 hedgeless_horseman
hedgeless_horseman's picture

...down where you have your head buried?

Mon, 11/14/2011 - 23:12 | 1878024 Bicycle Repairman
Bicycle Repairman's picture

Hah, good one.  You really nailed me.

Mon, 11/14/2011 - 23:26 | 1878059 Flakmeister
Flakmeister's picture

Ah, do we have to this again?

Please explain the production mechanism, i.e. what is the chemistry? Now apply that chemistry and compute the volume over which the processes can occur. Compute the rates and diffuse the oil to the surface taking into account that the oil will cook down to NG.

It is not done because the calculation comes out producing a negligible amount of oil... even with a couple billion years to do it. Don't even get into the issue that oil comes with biological markers, like fingerprints that allow a good engineer to even tell what field an unknown sample came from....

Do something to refute what I just wrote.... Sorry but you and the abiotic types can't....

Mon, 11/14/2011 - 23:31 | 1878063 Bicycle Repairman
Bicycle Repairman's picture

"Ah, do we have to this again?"

No we don't.  I already own your ass.

Mon, 11/14/2011 - 23:44 | 1878088 Lower Class Elite
Lower Class Elite's picture

If by owning his ass you mean "I keep parrotting the same ridiculous bullshit even while repeatedly getting smacked down by actual science", then yes, you certainly do own his ass.

Mon, 11/14/2011 - 23:53 | 1878124 Bicycle Repairman
Bicycle Repairman's picture

No that isn't what I mean.  Why don't you go find our previous discussion and read it.

Tue, 11/15/2011 - 00:02 | 1878158 PierreLegrand
PierreLegrand's picture

Here try this on for size Peak Oil fanatic....

Obviously there wasn’t an unlimited supply of those poor little zooplankton…and so we must sooner or later run out of oil. Now for the longest time folks have been pointing out that we can find methane in other places around the solar system…the peak oil lobby simply claimed that yea yea sure we can find simple hydrocarbons in space but we arent’ ever gonna find complex hydrocarbons…cause for those we need Dino the dinosaur or Pauline Protozoa. Well apparently Dino and Pauline get around a bit more than expected…

In today’s issue of the journal Nature, astronomers report that organic compounds of unexpected complexity exist throughout the Universe. The results suggest that complex organic compounds are not the sole domain of life but can be made naturally by stars.

Prof. Sun Kwok and Dr. Yong Zhang of the University of Hong Kong show that an organic substance commonly found throughout the Universe contains a mixture of aromatic (ring-like) and aliphatic (chain-like) components. The compounds are so complex that their chemical structures resemble those of coal and petroleum. Since coal and oil are remnants of ancient life, this type of organic matter was thought to arise only from living organisms. The team’s discovery suggests that complex organic compounds can be synthesized in space even when no life forms are present.

The researchers investigated an unsolved phenomenon: a set of infrared emissions detected in stars, interstellar space, and galaxies. These spectral signatures are known as “Unidentified Infrared Emission features”. For over two decades, the most commonly accepted theory on the origin of these signatures has been that they come from simple organic molecules made of carbon and hydrogen atoms, called polycyclic aromatic hydrocarbon (PAH) molecules. From observations taken by the Infrared Space Observatory and the Spitzer Space Telescope, Kwok and Zhang showed that the astronomical spectra have features that cannot be explained by PAH molecules. Instead, the team proposes that the substances generating these infrared emissions have chemical structures that are much more complex. By analyzing spectra of star dust formed in exploding stars called novae, they show that stars are making these complex organic compounds on extremely short time scales of weeks.

Not only are stars producing this complex organic matter, they are also ejecting it into the general interstellar space, the region between stars. The work supports an earlier idea proposed by Kwok that old stars are molecular factories capable of manufacturing organic compounds. “Our work has shown that stars have no problem making complex organic compounds under near-vacuum conditions,” says Kwok. “Theoretically, this is impossible, but observationally we can see it happening.”

Most interestingly, this organic star dust is similar in structure to complex organic compounds found in meteorites. Since meteorites are remnants of the early Solar System, the findings raise the possibility that stars enriched the early Solar System with organic compounds. The early Earth was subjected to severe bombardments by comets and asteroids, which potentially could have carried organic star dust. Whether these delivered organic compounds played any role in the development of life on Earth remains an open question.

Tue, 11/15/2011 - 00:22 | 1878206 rosex229
rosex229's picture

It been known that organic compounds "amino acids, RNA, aromatic compounds, etc.) are produced by natural processes in space (don't forget life itself came about by natural processes). The issue concerning abiotic hydrocarbons is the amount that would be produced by said abiotic processes. Abiotic hydrocardons undoubtedly exist, but they are not what we burn in our cars on a daily basis. We extract biotic hydrocarbons, which is evidenced by the very specific geologic structures they are found in.

 

For a hint, ALL produced oil is harvested from sedimentary rock NOT igneous rock. If you don't know what that means then...

 

Even better! If you do know what that means, then you know the abiotic theory even though technically true is of no consequence to a civilization that uses 30 billion barrels of oil a year.

Tue, 11/15/2011 - 00:58 | 1878263 PierreLegrand
PierreLegrand's picture

Ok so you are saying that Petroleum is produced both by protozoa being squished deep in the earth and by deep earth processes...ok.

So we just ignore the fact that scientists believe they are observing petroleum and coal being produced by stars?

Tue, 11/15/2011 - 02:11 | 1878362 FeralSerf
FeralSerf's picture

Not true according to the Russians.

www.bcise.com/CurrentIssuePapers/Abiotic-oil-2.pdf

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