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Guest Post: Where Is Our Oil Price Collapse?
From Jim Quinn of The Burning Platform
Where Is Our Oil Price Collapse?
Make no mistake about it, without plentiful, cheap, and easy to access oil, the United States of America would descend into chaos and collapse. The fantasies painted by “green” energy dreamers only serve to divert the attention of the non critical thinking masses from the fact our sprawling suburban hyper technological society would come to a grinding halt in a matter of days without the 18 to 19 million barrels per day needed to run this ridiculous reality show. Delusional Americans think the steaks, hot dogs and pomegranates in their grocery stores magically appear on the shelves, the thirty electronic gadgets that rule their lives are created out of thin air by elves and the gasoline they pump into their mammoth SUVs is their God given right. The situation was already critical in 2005 when the Hirsch Report concluded:
“The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking.”
In the six years since this report there has been unprecedented oil price volatility as the world has reached the undulating plateau of peak cheap oil. The viable mitigation options on the demand and supply side were not pursued. The head in the sand hope for the best option was chosen. The government mandated options, ethanol and solar, have been absolute and utter disasters as billions of taxpayer dollars have been squandered and company after company goes bankrupt. The added benefit has been sky high corn prices, dwindling supplies and revolutions around the world due to soaring food prices. The last time the country went into recession in 2008, the price of oil plunged from $140 a barrel to $30 a barrel in the space of six months. I’d classify that as volatility. We’ve clearly entered a second recession in the last six months. So we should be getting the benefit of collapsing oil prices.
But, a funny thing happened on the way to another oil price collapse. It didn’t happen. WTI Crude is trading for $87 a barrel, up 23% since January 1. Unleaded gas prices are up 54% in the last year and 43% since January 1. Worldwide oil pricing is not based on WTI crude but Brent crude, selling for $113 per barrel, only down 10% from its April high of $125. The U.S. and Europe consume 40% of all the oil in the world on a daily basis. Multiple European countries have been in recession for the last nine months. The U.S. economy has been in free fall for six months.
Some short term factors will continue to support higher oil prices. The Chinese continue to fill their strategic petroleum reserve, Japan is still relying on diesel generators for electricity post-tsunami, and the Middle East is developing a love affair with the air conditioner. But, it’s the long term factors that will lead to much higher oil prices for myopic oblivious Americans.
John Hussman describes the situation on the ground today based upon six economic conditions presently in effect:
There are certainly a great number of opinions about the prospect of recession, but the evidence we observe at present has 100% sensitivity (these conditions have always been observed during or just prior to each U.S. recession) and 100% specificity (the only time we observe the full set of these conditions is during or just prior to U.S. recessions).
With 40% of the world in or near recession, how come oil prices are still so high and much higher than last year, when the economies in Europe and the U.S. were expanding? The number of vehicle miles driven in the U.S. is still below the level reached 43 months ago and at the same level as early 2005. The price of a barrel of oil in early 2005 was $42. The U.S. is using the same amount of oil, but the price is up 112%. It seems the U.S. isn’t calling the shots when it comes to the worldwide supply/demand equation.
It would probably be a surprise to most people that U.S. oil consumption today is at the same level it was in 1997 and is 10% lower than the peak reached in 2005. This is not a reflection of increased efficiency or Americans gravitating towards smaller vehicles with better mileage. Americans are still addicted to their SUVs and gas guzzling luxury automobiles. It’s a reflection of a U.S. economy that has been in a downward spiral since 2005.
| 1996 | 18,476.15 | 3.89 % |
| 1997 | 18,774.07 | 1.61 % |
| 1998 | 18,946.01 | 0.92 % |
| 1999 | 19,603.83 | 3.47 % |
| 2000 | 19,717.92 | 0.58 % |
| 2001 | 19,772.60 | 0.28 % |
| 2002 | 19,834.31 | 0.31 % |
| 2003 | 20,144.82 | 1.57 % |
| 2004 | 20,833.01 | 3.42 % |
| 2005 | 20,924.36 | 0.44 % |
| 2006 | 20,803.93 | -0.58 % |
| 2007 | 20,818.37 | 0.07 % |
| 2008 | 19,563.33 | -6.03 % |
| 2009 | 18,810.01 | -3.85 % |
If the U.S. isn’t driving oil demand in the world, then why are prices going up? There are three main factors:
- Dramatic increase in demand from China and other developing countries.
- A plunging U.S. Dollar
- Peak oil has arrived
Surging Developing World Demand
The Energy Information Administration issued their latest forecast and it does not bode well for lower prices:
Despite continued concerns over the pace of the global economic recovery, particularly in developed countries, the US Energy Information Administration expects worldwide oil consumption to increase this year and next spurred by demand in developing countries. US oil consumption, however, is forecast to contract from a year ago. Worldwide oil demand, led by China, will increase by 1.4 million b/d in 2011 to average 88.19 million b/d and by 1.6 million b/d in 2012, outpacing average global demand growth of 1.3 million b/d from 1998-2007, before the onset of the global economic downturn.
China is now consuming over 9 million barrels per day. This is up from an average of 7 million barrels per day in 2006. Platts, a global energy analyst, put China’s 2010 figures at 8.5 million barrels per day, up 11.43% from the previous year. The forecast for China’s crude throughput in 2011 is an average of 9.24 million barrels per day up 8.5% from 2010. In the first seven months of this year, total crude throughput stood at average of 8.95 million barrels per day.
Standard Chartered Bank predicts that, by the year 2020, China will overtake all of Europe as the second largest consumer of oil in the world, and should catch up to the U.S. by the year 2030 as China’s demand continues to rise while U.S. demand is expected to be flat. Chinese crude imports grew 17.5% in 2010 to 4.79 million barrels per day. China is importing 55% of its oil today versus 40% in 2004.
China’s oil consumption per capita has increased over 350% since the early 1980s to an estimated 2.7 barrels per year in 2011. Consumption per capita has risen nearly 100% in just the past decade. Oil consumption per capita in the U.S. currently ranks among the top industrialized nations in the world at 25 barrels per year. However, today’s consumption levels are approximately 20% lower than they were in 1979. The chart below paints a picture of woe for the United States and the world. China overtook the United States in auto sales in 2009. They now sell approximately 15 million new vehicles per year. India sells approximately 2 million new vehicles per year. The U.S. sells just over 12 million new vehicles per year. In China and India there are approximately 6 car owners per 100 people. In the U.S. there are 85 car owners per 100 people.
They call China, India and the rest of the developing world - Developing – because they will be rapidly expanding their consumption of goods, services and food. There will certainly be bumps along the way, as China is experiencing now, but the consumption of oil by the developing world will plow relentlessly higher. China isn’t the only emerging country to show big increases in per capita consumption. The growth in consumption for several other countries far outpaces China. Consumption per capita in Malaysia has nearly quadrupled since the mid-1960s. Consumption in Thailand and Brazil has more than doubled to roughly 5.7 barrels and 4.8 barrels per year, respectively.
Developed countries, especially those in Western Europe, have experienced substantial declines in oil consumption. Today’s per capita consumption in Sweden is roughly 12 barrels per year, down from 25 barrels per year in the mid-1970s. France, Japan, Norway and U.K. all use less oil on a per capita basis than they did in the 1970s. These countries have been able to drive down the consumption of oil by taxing gasoline at an excessive level.
Americans pay 43 cents in taxes out of the $3.70 they pay at the pump for a gallon of gasoline. A driver in the UK is paying $4 per gallon in taxes out of the $9 per gallon cost. Gasoline costs between $8 and $9 per gallon across Europe today. The extreme level of gas taxes certainly reduces car sizes, consumption and traffic. Too bad the mad socialists across Europe spent the taxes on expanding their welfare states and promising even more to their populations. Maybe a $6 per gallon tax will do the trick. Forcing Americans to drive less by doubling the gas tax is a quaint idea, but it is too late in the game. Europe is still made up of small towns and cities with the populations still fairly consolidated. Biking, walking and small rail travel is easy and feasible. The sprawling suburban enclaves that proliferate across the American countryside, dotted by thousands of malls and McMansion communities, accessible only by automobiles, make it impossible to implement a rational energy efficient model for moving forward. We cannot reverse 60 years of irrationality. Even without higher gas taxes, the price of gasoline will move relentlessly higher due to the stealth tax of currency debasement.
A Plunging US Dollar
The US dollar has fallen 15% versus a basket of worldwide currencies (DXY) since February 2009. This is amazing considering that 57% of the index weighting is the Euro. If you haven’t noticed, Europe is a basket case on the verge of economic disintegration. The US imports a net 9.4 million barrels of oil per day, or 49% of our daily consumption. Our largest suppliers are:
- Canada – 2.6 million barrels per day
- Mexico – 1.3 million barrels per day
- Saudi Arabia – 1.1 million barrels per day
- Nigeria – 1.0 million barrels per day
- Venezuela – 1.0 million barrels per day
- Russia – 600,000 barrels per day
- Algeria – 500,000 barrels per day
- Iraq – 400,000 barrels per day
These eight countries account for over 70% of our daily oil imports. You hear the “experts” on CNBC declare that our oil supply situation is secure because close to 60% of our daily usage is sourced from North America. The presumption is that Canada and Mexico are somehow under our control. There is one problem with this storyline. US oil production peaked in 1971 and relentlessly declines as M. King Hubbert predicted it would. Mexico will cease to be a supplier to the U.S. by 2015 as their Cantarell oil field is in collapse. Most of the oil supplied from Canada is from their tar sands. Expansion of these fields is difficult as it takes tremendous amounts of natural gas and water to extract the oil.
The rest of the countries on the list dislike us, hate us, or are in constant danger of implosion. When the Neo-Cons on Fox News try to convince you that Iraq has been a huge success and certainly worth the $3 trillion of national wealth expended, along with 4,500 dead and 32,000 wounded soldiers, you might want to keep in mind that Iraq was exporting 795,000 barrels of oil per day to the U.S. in 2001 when the evil dictator was in charge. Today, we are getting 415,000 barrels per day. Dick Cheney was never good at long term strategic planning.
We better plant more corn, as our supply situation is far from stable. Maybe we can install solar panels from Obama’s Solyndra factory on the roofs of the 65 Chevy Volts that were sold in the U.S. this year, to alleviate our oil supply problem. The reliability and stability of our oil supply takes second place to the price increases caused by Ben Bernanke and his printing press. The average American housewife driving her 1.5 children in her enormous two and a half ton Chevy Tahoe or gigantic Toyota Sequoia two miles to baseball practice doesn’t comprehend why it is costing her $100 to fill the 26 gallon tank. If she listens to the brain dead mainstream media pundits, she’ll conclude that Big Oil is to blame. The real reason is Big Finance in conspiracy with Big Government.
Ben Bernanke is responsible for Americans paying $4 a gallon for gasoline. Zero interest rates, printing money out of thin air to buy $2 trillion of mortgage and Treasury bonds, and propping up insolvent criminal banks across the globe have one purpose – to deflate the value of the U.S. dollar. The rulers of the American Empire realize they can never repay the debts they have accumulated. They have chosen to default through debasement. It’s an insidious and immoral method of defaulting on your obligations. Let’s look at from the perspective of our two biggest oil suppliers.
A barrel of oil cost $40 a barrel in early 2009. The U.S. dollar has declined 30% versus the Canadian dollar since early 2009. The U.S. dollar has shockingly declined 20% versus the Mexican Peso since early 2009. How could the mighty USD decline 20% against the currency of a 3rd world country on the verge of being a failed state? Ask Ben Bernanke. Our lenders can’t do much about the continuing debasement of our currency, but our oil suppliers can. They will raise the price of oil in proportion to our currency devaluation. Since Bernanke’s only solution is continuous debasement, the price of oil will relentlessly rise.
Peak Oil Has Arrived
“By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD. At present, investment in oil production is only beginning to pick up, with the result that production could reach a prolonged plateau. By 2030, the world will require production of 118 MBD, but energy producers may only be producing 100 MBD unless there are major changes in current investment and drilling capacity.” - 2010 Joint Operating Environment Report
We’ve arrived at the point where demand has begun to outpace supply and even the onset of another worldwide recession will not assuage this fact. World oil supply has peaked just below 89 million barrels per day. Supply has since fallen to 87.5 million barrels per day, as Libyan supply was completely removed from world markets. The International Energy Agency is already forecasting worldwide demand to reach 90 million barrels per day in the second half of 2011 and reach 92 million barrels per day in 2012. The IEA warns that “just at the time when demand is expected to recover, physical limits on production capacity could lead to another wave of price increases, in a cyclical pattern that is not new to the world oil market.”
The world is trapped in an inescapable conundrum. As supply dwindles, prices increase, causing global economies to contract, and temporarily causing a drop in prices, except the lows are higher each time. The drill, drill, drill ideologues do nothing but confuse and mislead the easily led masses. We have 2% of the world’s oil reserves and consume more than 20% of the daily output. We consume 7 billion barrels of oil per year.
Drilling for oil in the Arctic National Wildlife Refuge in Alaska and areas formerly off limits in the Outer Continental Shelf will not close the supply gap. The amount of recoverable oil in the Arctic coastal plain is estimated to be between 5.7 billion and 16 billion barrels. This could supply as little as a year’s worth of oil. And it will take 10 years to produce any oil from this supply. The OCS has only slightly more recoverable oil at an estimated 18 billion barrels and the BP Gulf Oil disaster showed how easy this oil is to access safely. The new over hyped energy savior is shale gas. The cheerleaders in the natural gas industry claim that we have four Saudi Arabias worth of natural gas in the U.S. This is nothing but PR talking points to convince the masses that we can easily adapt. The amount of shale gas that can be economically produced is far less than the amounts being touted by the industry. The wells deplete rapidly and the environmental damage has been well documented. And last but certainly not least, we have the abiotic oil believers that convince themselves the wells will refill despite the fact that there is not one instance of an oil well refilling once it is depleted.
I wrote an article called Peak Denial About Peak Oil exactly one year ago when gas was selling for $2.60 a gallon. I railed at the short sightedness of politicians and citizens alike for ignoring a calamitous crisis that was directly before their eyes. Just like our accumulation of $4 billion per day in debt, peak oil is simply a matter of math. We cannot take on ever increasing amounts of debt in order to live above our means without collapsing our economic system. We cannot expect to run our energy intensive world with a depleting energy source. There is no amount of spin and PR that can change the math. Un-payable levels of debt and dwindling supplies of oil will merge into a perfect storm over the next ten years to permanently change our world. The change will be traumatic, horrible, bloody and a complete surprise to the non-critical thinking public.
“In the longer run, unless we take serious steps to prepare for the day that we can no longer increase production of conventional oil, we are faced with the possibility of a major economic shock—and the political unrest that would ensue.” – Dr. James Schlesinger – former US Energy Secretary, 16th November 2005
We were warned. We failed to heed the warnings. If we had begun making the dramatic changes to our society 5 to 10 years ago, we may have been able to partially alleviate the pain and suffering ahead. Instead we spent our national treasure fighting Wars on Terror and bailing out criminal bankers. Converting truck and bus fleets to natural gas; expanding the use of safe nuclear power; utilizing wind, geothermal, and solar where economically feasible; buying more fuel efficient vehicles; and creating more localized communities supported by light rail with easy access to bike and walking options, would have allowed a more gradual shift to a less energy intensive society.
We’ve done nothing to prepare for the onset of peak oil. Until this foreseeable crisis hits with its full force like a Category 5 hurricane, Americans will continue to fill up their M1 tank sized, leased SUVs, tweet about Lady Gaga’s latest stunt, and tune in to this week’s episode of Jersey Shore. Meanwhile, economic stagnation, catastrophe and wars for oil are darkening the skies on our horizon.
“Dependence on imported oil, particularly from the Middle East, has become the elephant in the foreign policy living room, an overriding strategic consideration composed of a multitude of issues. …. Taken in whole, the National Energy Policy does not offer a compelling solution to the growing danger of foreign oil dependence. … Future military efforts to secure the oil supply pose tremendous challenges due to the number of potential crisis areas. ….. Economic stagnation or catastrophe lurk close at hand, to be triggered by another embargo, collapse of the Saudi monarchy, or civil disorder in any of a dozen nations.”- America’s Strategic Imperative A “Manhattan Project” for Energy
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Creationist per chance?
sarc on sarc off, sark on ! sark off??
Your "60 years of irrationality" is my "60 years of human freedom." I'll take freedom over "government expert planning" any day of the week.
We'll do just fine in the long run. The cost of a gallon of gas today, as percent of income, is among the lowest in history.
The solution is galley tankers, like in Waterworld!
Hire the banksters. They will be glad to (s)crew the biggest yacht.
Perks:
Free sardine
Fresh air
Great leadership
i-pod hook-up on the benches
Other suggestions welcome
The nice thing about Quinnbo's posts is they're always so completely hopeless and lacking any idea or constructive suggestion.
Ya know what yer gonna get!
I guess your getting your one hour of computer time at the home for mentally disabled. That might be your most coherent post ever. You're an inspiration for all mental defectives.
That should be "you're getting..."
Even your effort at personal abuse needs work. Jeez, man. Happy to help.
Honestly, I think it's worth noting this stuff, but you might lighten up on the conclusions a bit, because they're really sorry bullshit.
It's all true that we've squandered the past 50 years. That our society is too heavily dependent on a resource which is likely to steadily increase in price as our economy continues to cannibalize itself. That our standard of living is unsustainable. That applying punitive taxes to gasoline TODAY would be too little too late.
But even acknowledging all this--the idea that this leads automatically to "chaos" is just silly.
What is far more likely is that the US population's standard of living declines gradually over the next few decades, and we reach a relative equalization with the rest of the world. Sure, there'll be wars and some disjunction, some civil unrest and increased crime rate, etc etc. It's not going to be a lot of fun for folks who don't know any better. But Mad Max? The picture in the article?
Bullshit.
Don't confuse him with your crazy 2 + 2 = 4 theories.
It would be too tramatic for him. He is stuck on 2 + 2 = chaos.
Moe
Isn't it time for you to go fuck Curly?
The troll shit is getting really deep in here.
You need more schooling. 2 + 2 = You're too dimwitted to even understand the article
You're gonna get the peak oil meme repeated endlessly with the same lame refuted arguments. Who pays him for this?
I think you've achieved Peak Stupidity.
Blow me, Jimbo. And all your other identities as well.
Peak Oil… !!!
Peak Oil does this…
Peak Oil will do that…
Get your nose out of Peak Oil's ass SmokeyQuinn ! You won’t find what you need to learn there.
Find the time to learn macro social/political history and leave all your smoke and mirrors economic voodoo bullshit behind. Have you learned nothing reading at ZH over the past two years? It seems all you want to do is publish your weak and regurgitated pop culture pabulum to generate traffic to your blog @ www.TheBeasilityPlatform.com.
9/11Morons have blindly accepted, without any proof, the Fascist government and controlled media's tale that nineteen magical Arabs, who lacked basic piloting skills, were responsible for the coordinated precision aerial attacks and subsequent explosive carnage and total destruction of 9/11. On the other hand, the Zionist controlled ameriKlan government and lapdog MSM media have shown absolutely no interest in probing the overwhelming evidence or looking into the thousands of unanswered questions surrounding the false flag attacks.
There can only be one logical explanation for the persistent avoidance of the evidence by the corrupt institutions and international mafia dons who refuse to lead a new investigation. It is because all the evidence does not fit and totally contradicts the fictitious tale they have presented to the public. The number of people who realize that the government and media have lied about 9/11 is significant and continues to grow all the time. The pack of lies surrounding the attacks has been thoroughly exposed and can no longer be supported. Unable to defend their fictional tale against the evidence presented by honest scientists and writers, the defenders of the lie, (Accessories after the fact) , use disinformation, defamation, and slander to try and contain the truth and prevent it from spreading like wildfire.
Although 9/11 is disguised and interpreted by the government and media as an act of terrorism carried out by Islamic fanatics, the overwhelming evidence indicates that it was a carefully planned false-flag attack carried out by the Israeli military after years of planning and preparation.
Solving 9-11:
The Deception That Changed the World
Christopher Bollyn
http://www.bollyn.com/public/Solving_9-11_-_The_Deception_That_Changed_The_World.pdf
Completely ignore the post at hand and turn it to your personal 911 hobby horse huh? Peak oil is real asshole, and it's here now. Social and political history has FUCK ALL to do with geology. Pull thy own head out of thine ass before accusing others!
DP comes sauntering out of the barn to make his guest appearance.
You sure aren't a broken record.
You must have a real hard on this week DP. Your favorite holiday - 9/11 is coming up. Are you going to sit in the barn and jerk off while watching the planes fly into the towers?
Tell us all about Bush being behind the attacks. I love that one.
Please explain Building 7. I never tire of that ditty.
Go back into your barn and blow a sheep you traitorous nutjob.
Maybe I'll let you back on my site on 9/11 so we can laugh at you, you pathetic joke of a human being.
SmokeyQuinn likes to lecture on what he knows best... beastility...to put it bluntly...having sex with an animals.
ZH regulars will notice that SmokeyQuinn is obsessed with the obscene practice of sex between humans and animals and has a preference for sheep and fixation on such practices. People who practice zoophilia are known as zoophiles.
He is well known as a "zoosexual" or simply a "zoo".
Your blog www.TheBeastilityPlatform.com is the biggest joke on the web. That's where you post comments under your various aliases to stir up your stable of weak-minded 9/11MORONs and Racists to improve your pathetic hit counts. Hell... you make Karl Douchingger look like a fucking genius concerning the scientific facts of 9/11.
You are the traitorous fool and an...
ACCESSORY AFTER THE FACTWhoever, knowing that an offense has been committed, receives, relieves, comforts or assists the offender in order to hinder or prevent his apprehension, trial or punishment, is an accessory after the fact; one who knowing a felony to have been committed by another, receives, relieves, comforts, or assists the felon in order to hinder the felon's apprehension, trial, or punishment.
Your Fat and Woolly Ewe, you so lovingly named Avalon, cries out for your attention out in the sheep paddock. Best you attend to her under the covers tonight.
............................................................................
edit
SmokeyQuinn is now posting to himself over at his sheep paddock...
Smokey
Check out this article on Zero Hedge. I’ve been fighting a foul mouthed running battle all day long.
They are appalled that the author would use such language.
My reponse to David Pierre may be one of my best ever.
SmokeyQuinn thinks it perfectly okay to be a "foul mouthed" 9/11Moron that posts under various aliases on his own blog.
ROTFLMAO !!!
Very few certainties in life.
One is death.
Another is taxes.
Another is that whenever Jim Quinn posts an article on Zero Hedge, the psychotic nutjob David Pierre will stop by to shit on Quinn's article with his deranged 9/11 conspiracy fix.
Fuck you Pierre.
A chicken shit traitor who fled to Canada so he wouldn't have to fight.
Go fuck some more sheep, you coward deserter.
Thanks for the confirmation...
You are not even capable of a small change of voice when you post under various handles on ZH.
SmokeyQuinn you are as phony as a $3 bill and everytime you post you just prove it more and more.
Was it your former webmaster, Jason Rines @ ragingdebate.com , that outed you for your many lies, and then dumped your sorry self?
Gee... I remember documenting all this on ZH many moons ago.
Maybe Jason, who is a ZH member, would like to jump in here and confirm all this.
All the confirming links have been archived ... ancient history here on ZH ?
Tough shit, Pierre.
Quinn left ragingdebate voluntarily.
Quinn's website, TBP, gets millions of hits a year.
Jason's site is a ghost town.
Everyoneone on TBP knows that me and Quinn are two different people.
Go fuck some more sheep.
Sorry they will nationIze all oil co's and use their reserves to maintain price control. Bound to happen
Actually gasoline is quite inexpensive right now. While $3.70/gal. seems expensive; remember you're paying with greatly inflated dollars.
Example:
In 1964 (long before the oil shocks of the 70's) gasoline was $0.30 per gallon: that's one silver quarter and a nickel.
Today, the silver in that quarter alone is worth $7.82. Add another $1.54 for that nickel's equivalent, and gasoline should be $9.38/gallon.
So, either gas is currently cheap, or silver is currently expensive. Take your pick....
What was the average wage in 1964? The average commute length? Can you think of any costs that you, as a taxpayer, contribute to in order to keep that price at a "cheap" $3.70?
An Army private made $78 a month in 1964. A new private today makes $1,467.60.
Milk cost $0.95 a gallon in 1964. Milk costs about $3.00 a gallon today.
Gas cost $0.30 a gallon in 1964. Gas costs $3.70 a gallon today.
Do the math - is gasoline expensive or cheap?
I started paying for gasoline in 1971, it was $0.36 a gallon, I thought it was expensive. I still do.
Energy is a (if not the) critical issue in the medium term. Short term, other issues have first dibs on biting our collective ass.
The problem is that to address energy, we need to grok the meta issue just above it: what are the forces at work behind the scenes?
Is it ignorant politicians, an ignorant public, wrong economic incentives, vested profit interests, or purposeful control at some organized, hidden level?
Without knowing the answer to the above, we end up spinning our wheels. Many of us have worked hard on this and other societal issues only to be stymied by very diffuse and hard to identify forces. Is it just that our society has been too rich to care? Shortages and suffering will cure that.
Unfortunately, there is a growing sense of doom in the air. We seem to be careering towards a convergence of bad news with energy shortages as only one component of a disastrous mix. Many are struggling to eat and keep a roof over their heads, while those in power spew increasingly meaningless nonsense bearing no apparent connection with reality.
It is very difficult to come up with a strategy, let alone confidence for success, when there are so few rational players in power (at least not rationally working for the public good).
What's the Meta?
People resist change.
The way society is currently structured is TERRIFIC for a tiny percentage of the population. They have a very real interest in ensuring that no meaningful social change can occur--you can call this some kind of hidden vested interest, but it's not hidden--it's just unconscious.
The majority of folks, who really could benefit tremendously from changes to the way we organize ourselves and distribute our resources, are primarily focused on side-issues and abstract arguments because they don't really want things to change. We maintain the belief (with generous assistance from the media, the government, our pundits, etc) that our current society "works just fine" and that it's just a small group of people or small set of issues which "causes all the trouble."
In simple fact--it's just that this social model can't work anymore. We've maxed out our debt-load and haven't maintained sufficient efficiency of production to keep our population fed/sheltered/busy given the current societal design.
Things ARE going to change, it's just a question of whether we're going to meet the changes intelligently or screaming like petulant children.
"Things ARE going to change, it's just a question of whether we're going to meet the changes intelligently or screaming like petulant children."
Didn't Winston Smith have to sign a statement to that effect just before they took him into Room 101?
When I go there I'm pretty sure I'm going to be screaming.
Hrm...not that I recall. But the Buddha did make the same assertion about 2,600 years ago.
"Unfortunately, there is a growing sense of doom in the air."
Yes, that's because, to put it plainly, there is doom in the air. Anyone who doesn't realize BY NOW that there is something very very wrong with the system, e.g., resource extraction policy, financial system, overpopulation, etc., etc., just hasn't been paying attention. That's being polite.
"Is it just that our society has been too rich to care?"
I'll go with what Jack Alpert, former GM engineer and inventor of the seat belt said, "We are probably too stupid to survive."
"The problem is that to address energy, we need to grok the meta issue just above it:"
This would be comical if I didn't think you were serious. You ARE serious aren't you? There is no Meta above energy. You can Yin-Yang chant Nam Myoho Renge Kyo all day...Ain't nothing trumps energy or thermodynamics. So sayeth the universe. Negative entropy bitchez.
Don't worry, Inull, i know my thermo. I was referring to the meta level of society in dealing with problems. Watching world leaders is so surreal as to be unspeakable. Discussing problems on ZH is practically meaningless beyond our own personal interests. What moves the society? Maybe native stupidity is the problem, maybe mass hypnosis. My point was that one would have to identify and clear away the blockage to dealing with real issues before the rest makes any sense.
I see what you're getting at. Reading through some of these posts it is clear some of these people are just outright delusional. Some are completely crazy. Facts posted "as facts" that have no protrusion into profane reality whatsoever. You are right. There is no possible way to fight against such stupidity. And as society starts to deteriorate people will lash out irrationally at whatever they feel is the cause of their problems. Tilting at phantom NWO windmills has become very fashionable. There is NO ELITE. There is no NWO. There are just stupid greedy people in power who got elected by masses of other stupid greedy people. That's it. We get the leaders we deserve. And our leaders "don't know what buttons to push" to quote a line from WS Burroughs. That scares me less than a nation of 150 million gun owners with half a million guns who will take to the streets "Fight Club" style blowing away anyone that doesn't share their hateful, paranoid schizophrenic, conspiracy theories. That actually scares the hell out of me. Because with hysteric talk show hosts like AJ whipping up hysteria and anger and fear on a daily basis, that's what I see coming. Mad Max but without the empathy.
that is a quite possible scenario iNull for sure...but not the only one, especially if the Powers That Make Believe aren't quite so coordinated as you surmise.
Heads up, tip. Sometimes TPTB just pretend to be TPTMB just to see who's paying too much attention to them.
How do you "invent" the seat belt? As if there was no such thing until that idiot came along. Even Jethro Bodine had a rope he strapped himself to the seat of the family truck with.
He's not officially listed as they inventor actually. But he did a great deal to promote its use.
And Brittany promoted flashing the shaved cunny too, but she sure isn't credited with inventing it. I seem to remember something about shaving beavers from before she was born.
I didn't junk you btw.
That's cool. It was a mildly entertaining post.
Very well said.
Given what the future has in store for us, maybe we are too stupid not to survive?
True, America's sprawling highway and suburbarn and exurban lifestyle will get hit the hardest as oil prices continue to rise. And what will Obama propose this week Thursday in his big jobs speech: "Let's build even more roads and infrastructure" (only to ensure the U.S. is even more screwed as the price of oil rises)
It looks bad for America, however, I have followed the peak oil debate for about a decade now (even interviewed Dr. Hirsch just last year), and the graph the peak oil theorists show about the impending collapse keeps getting moved forward out into the future. Hubbert's original prediction for the collapse of society was the late 1990's, which is over a DOZEN years ago. Then his followers predicted collapse in 2005, then in 2008, then 2010, now it is getting fungible. The oil/economy connection is dynamic and self-limiting. It is highly unlikely that there will ever be a total crash, ala Mad Max, unless there is some sort-of world nuclear war or some natural black swan event.
One thing Peak Oilers seem to be in denial about is the increasing use of natural gas and alternative energy, and the prevalence of coal and oilsands. To be sure, these are not all as cheap and easy to get as light sweet crude in the 1970s and 1980s, but they ensure there will not be a collapse of epic proportions.
Obama will announce the building of a monorail from San Diego to NYC. In a compromise with Congress the monorail will run through all 57 states.
An exponential increase in the number of wells, over the last ten years, has kept production flat. That should send a chill up everybody's spine. When ghawar goes cantarell, reality will set in. No amount of ng, ae, coal, tar sands, (which require ng to process) tesla coils or wishfull thinking will make up for the loss of production. This is simple math, which is impossible for an innumerate population. Planning for this should have begun 40 years ago. The DOE has failed at its mandate and should be shut down
yeah, but tesla coils are mad cool ;~)
They are at that. But everytime I turn mine on, I notice that my electrical bill goes up, not down!
one of the coolest things mine eyes have ever seen right here:
http://www.youtube.com/watch?v=Aae2S2NxBLw
later on that week, same location, they pulled this stunt:
http://www.youtube.com/watch?v=Nj3mWMdv978
Burning Man is Dead, long live the playa
Remember, I am not saying that America will be all fine-and-dandy. The U.S. will get hit hardest by supply crunches. There will be much wailing and knashing of teeth as the price of oil continues to rise. All I am saying is that there will not be a crash of epic proportions as predicted by Peak Oil theorists (for many years now). The world already gets 20% of its energy needs from alternative sources (although I don't consider ethanol one of them, so feel free to nitpick that percentage, as I do) and we get more GDP per btu every year. Technological trends are currently in our favor as well.
KICK THIS CAN DOWN THE PATH, GUYS.
The recession we first saw in 2008, which had been simmering since the beginning of the decade...
Was Intentionally Created by the USG to Surpress World Wide Demand for Crude Oil as a True Accounting of the Proven Reserves of Oil Producing Nations Will Cause Projectile Vomiting by the Hardiest Commenters at ZH.
That's how close to the bottom of the barrel we are, so to speak.
TPTB will do anything to continue to be those 4 Capital Letters.
Great comment, esp. the projectile vomiting. I often feel that way after reading some of these articles.
Wow
You are dense.
His comment was that things are far worse than anyone on ZH can imagine.
How could things not be terrible? If we are depleting our supply of oil and we haven't invented a credible substitute, what else can be in store for us?
The segue from oil to no oil is going to be a painful transition. But if this neverending 'recession', which may have been intentionally imposed on us, suppresses demand, and the right side of the graph of peak oil IS NOT the same as the right side of a bell curve and the time line is longer with peak oil and the slope not as steep, then the transition will take longer and that ought to be some relief.
The only ones responsible for the straits we are in are the early 20th century capitalists who foisted the internal combustion engine on the world. Unintended consequences to the Nth degree.
Otoh, I can't imagine anyone here wantedto drive a Stanley Steamer to high school.
I could nor afford or imagine paying $8-$9 a gallon. I feel bad for the Euro drivers in that sense. Eventually I believe here in the U.S and globally, due to a non-infinite supply, will all pay in the $10 a gallon range. The global fiat debasement ism't exactly helping.
I made the mistake a few years back of buying an F150 as my primary vehicle. My kid and I ride dirt bikes, snowboad....having a truck made those enjoyments easier for us.
Today, my travel has been greatly restricted at $4 a gallaon here in Connecticut. Paying for fuel never factored before until recently, when the $140 a barrel ramp run spiked gas to $4.50 in my area. Luckily I have a two mile commute to work but recently purchased a 50cc (actually 49cc to skirt registration law) and have been using it to commute. On a monthly basis I'm saving $300 riding that scootter. Wish I could ride in 12 months a year but in my neck of the woods it's not possible.
Us Americans are in for some real pain in the future. We've been asleep far too long. I've been preparing as best I can every month, a little at a time. It's all you can do some times trying to raise a kid. Hopefully we'll be alright.
But other than the things mentioned in the article....Things are great :)
Exactly. We could be looking at an SUV nose deep in the desert by some old rusty pumps while herding chickens. It could be worse.
price oil in gold and you will see that prices are not high at all.
I like to think of the value of things relative to their scarcity.
At the Deepwater Horizon well, they went 43 miles out to sea; then down through 5000 feet of ocean; then through another 10,000 feet of rock before they found their precious black stuff. Doesn't sound like something that is abundant to me. And the world needs 86 million barrels of this stuff per day just to keep the lights on (and food on the table)?
On the other hand, there are little green pieces of paper that are getting more and more abundant every day: FRNs
It was plenty abundant. When they finally struck oil they got more than they knew what to do with. In fact, more than anybody knew what to do with.
The latest in a long list of lies and bullshit that you have posted here today. The DH well put out according to upper estimates about 50,000 BBLD. The U.S. uses ~20M BBLD (about 25% of world consumption). And we import over 50% of our oil (or ~12M BBLD in 2010). More than we know what to do with? Where do you get this shit? You just pull these facts out of your ass like they ARE facts and expect people to believe them?
Learn to read, dipshit!
<<More than we know what to do with?>>
I said "they", not we. "They" are BP and their contractors.
? Did you read your own post ?
Food for thought:
http://en.wikipedia.org/wiki/Abiogenic_petroleum_origin
I am as 'Green' as they come. *wink, wink*
####
a few facts (not theories) about oil production:
In 2003 the Cantarell field in Mexico was producing 2,000,000 b/d, today it is producing less than 500,000.
In 2005 The United Kingdom was exporting 1,000,000 b/d from the North Sea, today
they are importing 1,000,000 b/d mostly from the middle east.
In 2003 Norway was producing 3,600,000 b/d from the North Sea, today that's down below 2,000,000
In 1973 the USA was producing 16,000,000 b/d, today that's down below 6,000,000
Nigerian oil production has been cut in half in the last 6 years
and Iraq production has declined since before we invaded them.
Libyan production of 1,600,000 b/d has stopped completely.
Saudi Arabia keeps sending out press releases that they will make up the difference.
Unfortunately, refineries cannot turn press releases into gasoline. So far,
their actual exports have been slowly but steadily declining.
Things change. I don't get your point. Libya has a war going on that ended production.
Iraq had infrastructure problems before the war, and sanctions that meant it made no sense for Saddam to even try to get more oil out of the ground.
The USA has done everything possible since the 1980's to find and cap reserves, making things like that BP oil possible because they won't let them get the easy stuff. It's called hording in case you don't get it - use up everybody else's oil first.
You don't think that there are problems in Nigeria that might have an effect on oil production?
The doom and gloom shit is getting deep.
Back in the mid 1800's whale oil was used for indoor lighting. Whales got so scarce the oil was like gold. It wasn't the end of indoor lighting when the whale oil reached peak and beyond. We found a substitute. Nobody went MadMax.
Even if we had to go to solar etc, life will go on. Most likely it will be a better life in the long run.
You clearly win the dumbass clueless poster of the day in an overwhelming landslide.
Bike boy is very disappointed.
Damn, dude - you are seriously fucked up.
You get your articles posted here, then troll the comments for somebody (ANYbody) that express a different opinion, then you jump up and down with all your insults and foul language.
When I lived in the city I'd hear dogs barking. Some of them barked for an hour or more. I used to ask myself "why the fuck would a live animal invest so much time into something as ridiculous as barking ??"
After being treated to your bullshit here, I actually appreciate the dog a little more. At least he duzn't try to make his barking look like independent thought.
So ... pretty please - with sugar on top: shut the fuck up already.
.
.
.
Oh, yeah ... and don't let anybody go around MANUFACTURING YOUR OPINION !!
Why don't you debate his figures and conclusions...
This is Fight Club, you can have a nice little debate or you can sling mud. You fight according to the rules defined by the person that attacks your position. In this regard, Quinn is dead on. Deal with it.
Having taken two hours to drive through central London, I could only laugh at the comment that high oil prices thins traffic. Sorry, lads, but convenience is still worth a few quid.
You are bursting the PEAK OIL bubble! Hahahaha.
Global oil production is going to go straight to zero 'til 2100? How so, because we invent Mr. Fusion in 2060??
Ridiculous graph.
Typical American thinking "we can't live without our SUVs, we'll DIE!".
We're such a fat society, it's easy to move to cheaper transportation.
Me personally I ride a 100 MPG moped. That's less than $1 per 10 miles with gas at $9. Cheaper than the bus now!
It's doable, maybe health care will improve as well.
If the "drivers" in the USA would stop driving "EGO-mobiles" with macho sounding names like "Renegade", "Mammoth", "Cro-mag" etc, perhaps their might be a little more oil to go around. It is not your God given right to own a 14' bassboat with a freakin 275HP engine, nor an ATV with a car engine in it. OR a freakin 1.5LITER HarleyDavidson, again this could power a car. A hobby or outdoor activity does not HAVE to center around an internal combustion engine. Well I guess it does if you weigh 375lbs and need to get your ass into the great outdoors for some "excercise". The only problem I have with Quinn's article is that he says corn is sky high now. A bushel of corn costs what? I'm guessing 15$. I could feed my family for a month on one freaking bag.
JCB77 wrote- "I could nor afford or imagine paying $8-$9 a gallon. I feel bad for the Euro drivers in that sense. Eventually I believe here in the U.S and globally, due to a non-infinite supply, will all pay in the $10 a gallon range. The global fiat debasement ism't exactly helping.
I made the mistake a few years back of buying an F150 as my primary vehicle. My kid and I ride dirt bikes, snowboad....having a truck made those enjoyments easier for us.
Today, my travel has been greatly restricted at $4 a gallaon here in Connecticut. Paying for fuel never factored before until recently, when the $140 a barrel ramp run spiked gas to $4.50 in my area. Luckily I have a two mile commute to work but recently purchased a 50cc (actually 49cc to skirt registration law) and have been using it to commute. On a monthly basis I'm saving $300 riding that scootter. Wish I could ride in 12 months a year but in my neck of the woods it's not possible.
Us Americans are in for some real pain in the future. We've been asleep far too long. I've been preparing as best I can every month, a little at a time. It's all you can do some times trying to raise a kid. Hopefully we'll be alright."
I hear you, when the price goes way up I crack out the 49CC and survive. When it get's cold I'm forced to drive too or heaven forbid, take the train, talk about time travel. Everytime I use the 49CC I save 5$. Yes it can be inconvenient sometimes. This is however not "MACHO", and I am derided by "REAL" men in their EGOmachines.
I live in the most uppity "eco conscious" area but nobody talks about allowing small stores in neighborhoods. This alone would save millions of barrels of oil. Everyone drives miles to the local mega store to get their food, over and over and over again. The stinker zoning bureaucrats won't allow anything else. All over the world people live fine in communities where you walk or bike to the store, and get to know your neighbors. US culture is you always stay in your house, or you get into your car and drive somewhere.
If you have Barbra singing "The Way We Were" put it on and watch this:
www.youtube.com/watch?v=gWVde1pWl24
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We have allowed oil to become vital to virtually everything we do. Ninety per cent of all our transportation, whether by land, air or sea, is fuelled by oil. Ninety-five per cent of all goods in shops involve the use of oil. Ninety-five per cent of all our food products require oil use. Just to farm a single cow and deliver it to market requires six barrels of oil, enough to drive a car from New York to Los Angeles.
Jeremy Leggett
Peak oil is at hand with low availability growth for the next 5 to 10 years. Once worldwide petroleum production peaks, geopolitics and market economics will result in even more significant price increases and security risks. To guess where this is all going to take us is would be too speculative. Oil wars are certainly not out of the question.
US Army Corps of Engineers, September 2005
“Surveying the available alternative energy sources for criteria such as energy density, environmental impacts, reliance on depleting raw materials, intermittency versus constancy of supply, and the percentage of energy returned on the energy invested in energy production, none currently appears capable of perpetuating this kind of society.”
— Richard Heinberg
“Where the United States is in regard to oil: most of the untapped reserves we have left are smaller, deeper, farther offshore, less permeable, increasingly sour, and generally more expensive to bring to market. And the more we drill, the more this will be the case…The faster we use up the little oil we have left, the quicker OPEC will be the only one at the table with any chips left. Strategically, this is a loser’s strategy.”
— Timothy Kailing
“OPEC, over the last 20 years, has not managed to add any additional capacity. So we’re in a world today where we’re going to need a vast amount of additional energy, and we’re utterly dependent on countries that in the past generation have added absolutely no additional capacity.”
— Steven Lee, oil analyst
“Technology is great, but it can’t find what’s not there. In the last five years, we consumed 27 billion barrels of oil a year, but the oil industry discovered only three billion barrels a year. So only one barrel was replaced for every nine we used!”
— L.B. Magoon report for U.S. Geological Survey
“The idea that we industrialized humans are immune to the natural laws that have restrained growth in other species—and humans in past social regimes—is to me so self-servingly blind as to be morally reprehensible.”
— Richard Heinberg,
“We are not good at recognizing distant threats even if their probability is 100%. Society ignoring [peak oil] is like the people of Pompeii ignoring the rumblings below Vesuvius.”
— James Schlesinger, former US Energy Secretary
“We can evade reality, but we cannot evade the consequences of evading reality.”
— Ayn Rand
Quick fact assessment:
The US slaughters about 34 million cows per year http://www.ers.usda.gov/news/BSECoverage.htm
The US consumes about 19 million barrels of oil per day http://www.eia.gov/dnav/pet/pet_cons_psup_dc_nus_mbblpd_a.htm
You claim raising and bringing to market of a single cow takes 6 barrels of oil.
34mio * 6 barrels / ( 19mio barrels/day ) = 10.73 days
So only cows induce usage of 2.94% of America's overall annual oil consumption???
That sounds ridiculous to me.
Yep.....sounds about right
Gotta Fertilize it, plow it, harvest it so you can feed em and finally you gotta to move them little doggies...
Agriculture and food transport accounts for ~15-20% of oil usage...
"We have allowed oil to become vital to virtually everything we do."
Do you think we had any choice in allowing this or not? If Hubbert hadn't gotten on the case, today we'd be running low on oil and wouldn't even know it.
"Make no mistake about it, without plentiful, cheap, and easy to access oil, the United States of America would descend into chaos and collapse. The fantasies painted by “green” energy dreamers only serve to divert the attention of the non critical thinking masses from the fact our sprawling suburban hyper technological society would come to a grinding halt in a matter of days without the 18 to 19 million barrels per day needed to run this ridiculous reality show. Delusional Americans think the steaks, hot dogs and pomegranates in their grocery stores magically appear on the shelves, the thirty electronic gadgets that rule their lives are created out of thin air by elves and the gasoline they pump into their mammoth SUVs is their God given right. The situation was already critical in 2005 when the Hirsch Report concluded:
“'The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking.'”
Score another one for the Peak Oil movement. -- MCR
http://goo.gl/XltL7
Another academic report bought and paid for.
NEXT.
Why don't you read the Hirsch Report....
For precisely the reason I stated. It is bought and paid for academic pablum. You've wasted your life reading such drivel. One life is enough.
Sure, whatever... I am familiar with the drivel you rely on for information about the energy complex...
Still can't answer basic questions I ask of you, eh?
Take pity, Flakmeister (Quinn, too).
Remember Manila Bay.
'"Don't cheer, boys, the poor devils are dying," shouts Capt. John Woodward Philip, 58, of the U.S. battleship Texas.'
These Peak Oil Deniers are dying, too. Do you want to rub it in? They can't conceive of life without the 70 mph parking lots that the 405 and the Long Island Expressway become at rush hour.
How is the missus supposed to get to the mall? And if she doesn't get to the mall how is the Gap going to stay in business?
But we who believe in Peak Oil are made of sterner stuff. We can accept what life is destined to become. We can even like Big Brother if he doesn't cull us out of today's 7 billion.
Everything you believe and studied is based on a lie. It is a house of cards. Your questions are meaningless. Go play peak oil trivial pursuit with someone else.
You're wrong about Dick Cheney. Your incorrect assumption is that Dick wanted what's best for Amerika. Not even close. It was all about the rebuilding contracts, the stock prices of military goods makers, military bases in Iraq, kick-backs, etc.
This is nuts. Not everything oil is fuel, that's barely just the surface. Tires, plastic, whiteboards, computer monitors, baby-bottles, recyclable Wal-Mart bags, EVERYTHING is touched in some way shape or form by the stuff.
If this really is the 'beginning of the end' for our oil dependence, we have MUCH bigger problems than $10-per-gallon gas.
@jevon7777 thanks for the 'heads up' on Jevons Paradox. I had no idea, glad I looked it up and glad you mentioned it. Kudos.