Art Berman: Like It Or Not, The Future Remains All About Oil

Authored by Adam Taggart via PeakProsperity.com,

Art Berman, 40-year veteran in the petroleum production industry and respected geological consultant, returns to the podcast this week to talk about oil.

 

https://www.zerohedge.com/sites/default/files/inline-images/20180123_oil.jpg

After the price of oil fell from its previous $100+/bbl highs to under $30/bbl in 2015, many declared dead the concerns raised by peak oil theorists. Headlines selling the "shale miracle" have sought to convince us that the US will one day eclipse Saudi Arabia in oil production. In short: cheap, plentiful oil is here to stay.

How likely is this?

Not at all, warns Berman. World demand for oil shows no signs of abating while the outlook for future production looks increasingly scant. And the competition among nations for this "master resource" will be much more intense in future decades than we've been used to:

Since the 1980s, we simply have not been replacing reserves with new discoveries. So how does that work? Well, obviously, we've got a lot of oil on production and in reserves, so we're essentially drawing down our savings account if you want to think about it that way. You can do that for a long time if you've got a whole lot of money in your savings account, and we as a planet do. But you can't do it forever.

Eventually, you either have to stop spending as much so you don’t draw down your savings, or you need to put some money back in the account. And it doesn't seem like we're doing much of either, and haven't been doing much of either for a long time. So the concern is tremendous, at least, in my estimation(...)

We have to go back to FDR to understand that the centerpiece of U.S. foreign policy ever since World War II has been to maintain supply of oil. And, of course, back in FDR's time, the U.S was 100% oil self-sufficient. I think we produced something like 52% of the world's supply.

So here's a guy who, without any immediate supply issues even on the horizon, said "We've got to look after our own oil security" and made a deal with Saudi Arabi to provide that.

But now we've had the Obama and the Trump administration saying, "We don't need your stinking oil any more. We're the big guys on the block." China's saying, "Whoa. Here's an opportunity for us."

What does that mean to us other than political gamesmanship? Well, whatever else people might believe, the United States still imports 7+ million barrels a day of crude oil. Even if you work to net out our exports, we still import, pretty nearly on average, 6 million barrels a day. That's a huge volume. We get an awful lot of it from the Middle East. Well, if the Middle East is diverting their supply to countries like China, guess what? It's not available to us, or it's not available at the price that we want it. Not to mention that fact that Saudi Arabia's population is exploding. They're using more and more of their oil output for domestic consumption, so there's increasingly less to export.

These should be primary concerns to anyone who even remotely thinks about the future. Certainly to anyone who connects the supply and usage of petroleum to economic wellbeing.

Click the play button below to listen to Chris' interview with Art Berman (59m:44s).

Comments

Ms No waterwitch Tue, 01/23/2018 - 23:24 Permalink

Pretty much.  I think he is trying to dumb things down and put things in very plain language so that the neocon oil fan-base that gets all of their info from the industry has a chance to understand a reality that seems to always be out of their grasp and ability to comprehend.   

In reply to by waterwitch

directaction Tue, 01/23/2018 - 19:49 Permalink

When world oil production begins to decline unimaginable chaos will break out.

The decline in oil production will utterly destroy civilization.

The destruction will be historically unprecedented and horrifying beyond imagination. 

Code Duello directaction Tue, 01/23/2018 - 21:55 Permalink

You write as if the "decline in oil production" will occur literally overnight.  You write as if producers and consumers of not only oil but other forms of energy will not adjust their production and consumption behaviors to changes in the underlying products.  Maybe you should enroll in a non-Keynesian/non-monetarist course of economics at a nearby university.

In reply to by directaction

Sudden Debt Tue, 01/23/2018 - 19:59 Permalink

Well, if you want to go long oil, you take BP who's got the front seat for Iran oil prodution if the regime would ever fall.

It's a lot of buts, but if the deepstate would win, it can make you rich.

Arrow4Truth GUS100CORRINA Tue, 01/23/2018 - 21:47 Permalink

Close GUS but we're sorry you didn't win the prize. Society has nothing to do with the end game. Yes, keeping the natives happy is necessary to prolong the game where the nations draw cards and build their hands, but the reason for petroleum concerns is for the military. If they don't have fuel, their war games cannot continue. Same as the highway system. It was not built in order for you to travel, it was built to move products... interstate commerce. It's all about the money. Period.

In reply to by GUS100CORRINA

bshirley1968 Tue, 01/23/2018 - 20:05 Permalink

18-19 mbpd being used by the US is unsustainable. It is THE reason we are sticking our noses into the world's business on every continent.

Price of oil in dollars could be the catalyst that sinks this bloated pig of a debt ridden whore of a corrupt country. You let gas go to $5, 6, 7 at the pump and it would be pure pandemonium in hours. I am not sure we could take $4 dollars a gallon without major economic ramifications. This country's way of life hangs by a slender thread.....and millions don't have a clue.....they will be most of the first to die.

Baron von Bud Gulfcoastcommentary Tue, 01/23/2018 - 20:19 Permalink

You fail to grasp the financial side, Gulf. Virtually the entire US shale industry has been losing money for years. They borrow vast sums to continue operating. The US fracks oil to increase market supply so global prices don't explode. It's unprofitable oil so why do the bankers lend? It's almost as if the bankers were told the debt was guaranteed.

In reply to by Gulfcoastcommentary

MrNoItAll Baron von Bud Tue, 01/23/2018 - 22:08 Permalink

Why do the bankers lend (to shale companies)? Because, when the wheels of the oil/energy production industry stop turning or slow down, it will drag the entire global economy down with it. The create astronomical debt and pump soon-to-be vaporized billion$ into shale oil production because if they didn't, the wheels of the oil/energy production industry would grind to a creaking crawl. Mass unemployment and unrest. Global recognition that we are going down hard. Epic panic. All the bad things you can imagine. So, to keep it all going, they keep pumping newly created digi-bucks into the money burning machine, complimented by intense propaganda aimed at keeping people "believing" in American energy independence, and keeping those investment bucks flowing from the little people who will soon lose it all. It is of course a short term patch. The military and intelligence agencies and no doubt most if not all high level government people know the reality. But they're keeping the reality hidden, for now.

In reply to by Baron von Bud

Ms No MrNoItAll Tue, 01/23/2018 - 23:52 Permalink

It also has to do with globalism targeting Russia.  Russia says they have 30 years of oil.  Russia was doing pretty well in general and the globalists are threatened by that.  When they ramped up the oil bubble and collapsed it they were definitely planning on damaging Russia economically.  SA, the shale "miracle" and many others were on board.  SA suffered for it dearly really. 

That worked in the past.  Remember they did this in the 80s too and it helped to put the Soviet Union on it's knees.  What they referred to as the 80s oil glut that came from whatever they contrived in the 70s is very similar to this (it seems that engineering violently extreme booms and busts is the most effective weapon.  Hmmm... that is everywhere).  This time it didn't work because they know this game and they were ready (somewhat shocking that they are trying to exact same tactic, maybe they have no other way).  They also drew them out into Afghanistan last time, etc.  This time Russia was more careful.  They sat back and watched us do our dirty deeds in multiple countries before they got involved and they tried to be as minimalist and conservative as possible when they did get involved.

https://www.rt.com/business/335967-russia-oil-reserves-depletion-2044/

https://www.rt.com/business/russia-oil-gas-reserves-putin-015/

In reply to by MrNoItAll

bshirley1968 Gulfcoastcommentary Tue, 01/23/2018 - 21:31 Permalink

You need to document those numbers.

Shale oil has been a banker's wet dream. Not ONE shale oil company has made ONE penny of profits in 12 years. Yet their debt levels have tripled and quadrupled. Again, unsustainable.

Riddle me this, O thankful one. Why in the hell would we export what we need in the first place? We are using 18-19 mbpd. We are pumping 9-11 mbpd. That leaves us short by 45-50%. And we export because.......?

Got to keep the standard of living high. Keep printing that fiat money and buying that oil with free worthless paper. Again, unsustainable.

In reply to by Gulfcoastcommentary

guardyernuts bshirley1968 Tue, 01/23/2018 - 21:54 Permalink

We export because not all crude oil is created equal. Oil from fracked shale is light, low-viscosity oil. It is easy to refine into light products like gasoline if all you have are simple, low-complexity refineries, and it is valued in many parts of the world because of that. Most of the refineries in the US, though, are high complexity - built to handle dirty, viscous, heavy oil. Heavy oil is more available than light oil, at least historically, and it's cheaper too. But those complex refineries can't use much light oil. So we export the light oil that we can't use ourselves, for a good price, and import the cheap heavy oil that is compatible with our refining assets.

No conspiracy here, just economics.

In reply to by bshirley1968

chestergimli bshirley1968 Wed, 01/24/2018 - 09:28 Permalink

Is this why the government is encouraging the production and sale of electronic cars and trucks?  Or is it to just to get us into debt trying to purchase them.  I believe that big wigs already know how to produce electricity cheaply-very cheaply.  But the big daddy oil companies have a lot invested in this oil production and they don’t want a cheap electrical industry rising to deprive them of their lucre.

In reply to by bshirley1968

TRM Tue, 01/23/2018 - 20:37 Permalink

Maybe that was the plan all along. Shut down off shore drilling in the Arctic and lots of other places and wait until everyone has used up theirs and then open ANWR drilling. We shall see if Lindsey Williams was correct soon enough. 

The only flaw in the plan was that Russia found a lot of it in their land and waters. Oh well we'll share the wealth because we are nice people  :)

Or was Russia in on it all along? Hmmm. 

MrNoItAll TRM Tue, 01/23/2018 - 21:49 Permalink

The only flaw in that plan is that it takes more energy to get oil out of the arctic than the oil extracted will provide. It would be a net energy loss on an epic scale. They haven't even figured out a way to "guarantee" that there won't be major oil spill events, especially with all those broken up chunks of ice the size of mountains floating around. All the smart people KNOW this as fact. But the common, little people need to believe in fairy tales. So, when Joe Sixpack reads somewhere that the world is running out of oil fast, but there is still a lot of oil to be had in the Arctic, then Joe Sixpack can crack another cold one and relax for another night. That's ALL it is. Besides, have you read how much verified oil there is in the Arctic? Not even enough to power the world for one year -- much less. Don't fall for the hype and fairy tales.

In reply to by TRM

MrNoItAll TedFarr Tue, 01/23/2018 - 21:39 Permalink

Here's some advice. Determine how much oil the world is consuming every day -- about 35 billion barrels a year. Next, find out how much oil reserves have been discovered in the last four years -- far less than 35 billion. Next, consider that it takes about 10 years to get any major discovery online and in the distribution channels. Also consider that globally, CONVENTIONAL oil peaked a long time ago, and it has only been American "fracking" that has resulted in increased global oil production. Then consider what it says in this article about tight oil production in America -- it is a huge cash burner, kept alive by suckers and huge amounts of newly printed "money". Do some research on OPEC's legacy oil fields, especially in SA, where the giant fields that have been in service for more than 50 years are just about all pumped out. When they go, we all go. If you logically consider all of the available information, then you too will come to the conclusion that modern high tech financialized civilization is going to hit a brick wall, sooner rather than later. We'll never totally run out of oil/gas, but there just won't be enough to keep industry churning and happy shoppers shopping -- not even close. Being aware of what's coming will give you time to prepare, in whatever way you determine is best for you and your loved ones.

In reply to by TedFarr

Ms No MrNoItAll Tue, 01/23/2018 - 23:36 Permalink

Sometimes I wonder if that wouldn't be okay.  The technological tyranny is pretty scary and dependent on fuel to enforce itself.  Maybe it would bring back localism and full employment.  A huge percentage of us would have to be farming the old fashioned way.  We wouldn't have to compete with slave labor or goods shipped from 8,000 miles away.  Localism comes back on an incredible scale.  Of course there would be lots of terrible things and a large decrease in population also but if it was properly expected and planned for those things could be lessened to some degree.  All I know is that this current tyranny getting stronger is the worst possible outcome that I can think of.  Humanity deserves better.  Maybe the old fashioned hard life was better in some ways.

In reply to by MrNoItAll

Cloud9.5 TedFarr Tue, 01/23/2018 - 21:53 Permalink

Look at legacy fields like the North Sea and note the decline rates. http://euanmearns.com/uk-north-sea-oil-production-decline/

All of us have a vested interest in perpetuating the status quo for as long as possible.  The only problem is that oil is finite.  Every well ever drilled declines.  We might have three more years before the Permian decline shifts the narrative back to doom and gloom.  Hedge accordingly.

In reply to by TedFarr

MEFOBILLS Tue, 01/23/2018 - 22:55 Permalink

There might be oil everywhere.

https://journal-neo.org/2017/01/29/rex-tillerson-and-the-myths-lies-and…

 

Also, Titan (moon of saturn) has hydrocarbon "seas" of methane.  Methane in turn is  precursor needed to make oil, not dinosaurs.  In other words, methane from primordial earth is available in earth's interior, beneath the crystalline basement.

_________________

 

What Krayushkin presented to the disbelieving audience of American geologists and geo-scientists went against their entire oil genesis training. Krayushkin argued that the oil and gas discoveries in the Ukraine basin came from what geologists called ‘crystalline basement,’ deep rocks where Western geological theory claimed oil and gas (which they termed ‘fossil fuels,’) could not be found. No dinosaur fossils nor tree remains could have been buried so deep, the Western theory went.

Yet the Russians had found oil and gas there, something tantamount to Galileo Galilei telling the Holy Inquisition that the Sun — and not the Earth — was the center of our system. According to one participant, the audience was not at all amused by the implications of Russian geophysics.

The speaker from Kiev went on to tell the scientists at Santa Fe, New Mexico that the Ukrainian team’s efforts to look for oil where conventional theory insisted no oil could be found had, in fact, yielded a bonanza in commercial oil and gas fields.

He described in detail the scientific tests they had conducted on the discovered petroleum to evaluate their theory that oil and gas originated not near the surface – as conventional fossil fuel theory assumes – but rather at great depth in the Earth, some two hundred kilometers deep. The tests confirmed that the oil and gas had indeed originated from great depth.

The speaker clearly explained that the Russian and Ukrainian scientists’ understanding of the origin of oil and gas was as different from what the Western geologists had been taught as was day from night.

More shocking to the audience was Krayushkin’s report that during the first five years of exploration of the northern part of the Dneiper-Donets Basin in the early 1990’s, a total of 61 wells had been drilled, of which 37 were commercially productive, a success rate of more than 60%. For an oil industry where a 30% success rate was typical, 60% was an impressive result. He described, well-by-well, the depths, oil flows and other details.

Several of the wells were at a depth of more than four kilometers, a depth of roughly 13,000 feet into the Earth and some produced as much as 2600 barrels of crude oil a day, worth almost $3 million per day at 2011 oil prices.
https://journal-neo.org/2017/01/29/rex-tillerson-and-the-myths-lies-and-oil-wars-to-come/

MK ULTRA Alpha MEFOBILLS Wed, 01/24/2018 - 01:43 Permalink

I have followed this and read many Russian geo-scientist for years, and after the Russian data and theory was released to the West, in the USA, OIL WELLS SHUT IN FOR YEARS THOUGHT TO NO LONGER PRODUCE OIL WERE REWORKED AND HAD MORE VOLUME THAN BEFORE. And it wasn't just a few wells, it was thousands. Fracking was used to frack these old wells, fracking had always been used in the Petroleum industry, now fracking is the industry standard.

Art Berman is another crazy inbred Jew selling snake oil in the face of oil finds all over the world. The Doom and Gloom Jew syndrome is a constant reminder of why one must check the pedigree of a snake oil salesman.

The doom and gloomers always led by inbred Jews, with the internal machine of doing in the Americans, so naturally, they project doom on a constant basis, around the clock projections from the Jews inner soul.

Jews project doom and gloom on America, because it's their agenda to put us in lock down, weaken us morally and politically, and divide us by using any and all ways to divide us to maintain control. No person who calls themselves a Jew can be trusted after what the US has gone through with these inbred.

The Peak Oil story has been going on for the last 40 years, it is a cottage industry and this Jew is making money from it. The US government prompted by doom and gloomers has a long history of giving false data for an agenda that oil is running out, it's the same recycled shit year after year and is one reason SPECULATOR Jews can keep the price of oil artificially higher than the supply and demand of a real market economy.

 

In reply to by MEFOBILLS

Ms No Tue, 01/23/2018 - 23:30 Permalink

With our cosmic rays increasing and geological turmoil rising I am curious to see if we find any changes in oil fields.  I am not expecting any miracles but it would be interesting if some stores did start growing either from being squeezed or some alternative natural oil process increasing.  Recently they found some new things underground in Egypt when they were able to detect cosmic rays bouncing off of the inside of the rock structure.  Cosmic rays activate things, including evolutionary changes in us.  We just don't know to what extent and how fast it happens.  We are about to though.