Guest Post: Selling The Oil Illusion, American Style

Tyler Durden's picture

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ratso's picture

Good grief Charlie Brown - another Peak Oil fanatic.  Zzzzzzzzzzzz

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.

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?

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?

Arkadaba's picture

The decision to postpone was entirlely politicallly based:

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.


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.

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.

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.

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.


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.


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").


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.

jeff montanye's picture

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

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.

jaffa's picture

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

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.

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.







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

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.

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:

BigJim's picture

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

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

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.

jaffa's picture

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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."

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.

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.

CPL's picture

Peak Coal is the new black evening dress!!


Peak oil was so four years ago.

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.

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.

TuesdayBen's picture

Frack you and your Warmer ilk

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.

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.

Lower Class Elite's picture

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

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.

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.

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.

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.

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.....!

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...

tmosley's picture

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

trav7777's picture

IONIC LIQUIDS!!!!!111111

any more technobullshit to say to piss into this hurricane?

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.

Iriestx's picture

Ionic Liquids = The New Cold Fusion.

Lower Class Elite's picture

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

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.