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Peak Oil and Collapse in the United States

General discussions of the systemic, societal and civilisational effects of depletion.

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Re: Peak Oil and Collapse in the United States

Unread postby AdamB » Mon 20 Feb 2017, 12:23:48

rockdoc123 wrote:
The current supply glut is also a demand dearth. a consequence of precipitous economic decline and destruction. Countries around the world can no longer afford $55 oil.


Why do you keep making this stuff up after you have been shown time and again the data that shows this not to be the case.


Quite the question that one.
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Re: Peak Oil and Collapse in the United States

Unread postby ROCKMAN » Mon 20 Feb 2017, 12:26:25

I suppose it's like the old joke: just how pregnant is she? IOW just how critical is our financial crisis due to the POD? Consider just the US trade imbalance:

"The United States has recently run historically large trade deficits. Between 2000 and 2012, the cumulative total of U.S. spending on imports of goods and services exceeded U.S. export earnings by $7.1 trillion dollars. This development has raised doubts in many quarters about the United States' ability to play its leading role in the global financial system and concerns about the burdens of U.S. international indebtedness for future generations.

And specifically oil: "Deficits in U.S. petroleum trade have been equal to a large fraction of the imbalance between U.S. imports and exports. Between 2000 and 2012, the cumulative total of U.S. trade deficits in crude oil and refined petroleum products amounted to $2.87 trillion, 40.5 percent of the cumulative deficits in all goods and services over the period. And oil's role has increased in importance over the time: in 2012, for example, the trade deficit in oil was equal to 55 percent of the overall trade deficit in goods and services."

Of course thanks to increased domestic production and lower oil prices the situation has improved. But why? Because of increased production encouraged by high oil prices that surged our fossil fuel import trade deficit. And none of the above "crisis component" includes the $TRILLIONS of US tax $'s spent on military operations in oil exporting regions. And let's not even try to put a monetary value to the US lives sacrificed. And, of course, another component difficult to put a price tag on: the current and future cost of agitating others against the US as a result of US political involvement in the ME which is often focused on energy matters.

So given all the negative aspects the US has suffered directly/indirectly over the long term prospect of diminishing energy resources perhaps we've been in the midst of an energy/PO related "crisis" for sometime. Perhaps as far back as the 70's. With respect to an energy related financial crisis: 4 decades ago we were just "a little pregnant" compared to recently.
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Re: Peak Oil and Collapse in the United States

Unread postby pstarr » Mon 20 Feb 2017, 12:27:42

rockdoc123 wrote:
The current supply glut is also a demand dearth. a consequence of precipitous economic decline and destruction. Countries around the world can no longer afford $55 oil.


Why do you keep making this stuff up after you have been shown time and again the data that shows this not to be the case. Here is yet another graph that demonstrates the only time that there was negative growth in global oil consumption and global GDP was following the market crash in 2008. Within a year both oil consumption and GDP continued to grow and they have been in positive growth ever since. It is clear from this that not only could consumers deal with $55 oil they could also deal with $100 oil for a period of 4 years prior to the large build up in supply. I guess you can continue to imagine some parallel universe where your scenario has developed, it just isn’t happening in our universe.

Image

rockdoc, did the Greek economy collapse because of $147 petroleum, or was it a result of the bad mortgages in Cincinatti, USA? I'll bet you will try to explain how it was the Socialists in the Greek Parliament? Norway and Holland have socialists also. But those countries have have their own magic water also. Why has Spain, Italy and 100 other world economies (without their own significant supplies of oil/NG) remain mired in Depression?

Simple answer: historically high oil prices and previous demand destruction.
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Re: Peak Oil and Collapse in the United States

Unread postby KaiserJeep » Mon 20 Feb 2017, 12:31:44

One more point to add to rockdoc123's comments above. If the oil stays in the ground a few more years before being pumped and burned, it doesn't really matter, sooner or later we will burn every accessible barrel. Meanwhile, most of us are of the opinion that the oil peak is in the past and we are ever so slowly falling into the abyss of expensive everything as we slide down the backside of the curve.

I would suggest that the oil business can only continue to produce until the high price and demand destruction puts most of them out of business. It is then that we need turn our attention to more pertinent stats such as the number of operable refineries and distribution networks. Picking the winners there is gonna be harder than picking those companies that can consistently find new oil.

Some oil companies have diversified and are now in "green energy" and other related fields. Not sure if that will help, when most of their income is still from oil.

Interesting times, indeed.
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Re: Peak Oil and Collapse in the United States

Unread postby Plantagenet » Mon 20 Feb 2017, 12:47:08

pstarr wrote:The current supply glut is also a demand dearth. a consequence of precipitous economic decline and destruction. Countries around the world can no longer afford $55 oil.


Lets look at the numbers.

Global GDP is predicted to grow by 2.7% next year.

2.7% growth is not the same as precipitous decline and destruction. :lol:

Cheers!
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Re: Peak Oil and Collapse in the United States

Unread postby ROCKMAN » Mon 20 Feb 2017, 13:30:19

KJ - Exactly. As I just pointed out elsewhere folks predicting the future death of ExxonMobil seem to forget "oil companies" do more the just drill for new reserves. Big Oil (the vertically integrated majors) began shifting from exploration to refining/marketing more the 30 years. Just another component of the POD. One reason the world's largest oil IMPORTER is also the world's largest oil product EXPORTER. The future of each of the Big Oil's will not be solely dependent on how much they drill for oil or even how much they directly own. It will be how much oil their refineries have access to. Today ExxonMobil is the world's biggest tied with Conoco Philips for the amount of oil it refines and the products market. And those divisions generate a significant portion of its revenue.

And yet each company only cracks about 5% of global oil productions. Which is much less then either produces. Imagine XOM future revenue stream if it cracks just 20% of the world's...even if global oil production falls say just 30% of the current rate. BTW within a 20 mile radius of where the Rockman is typing Big Oil is spending $35+ BILLION expanding refining capacity.

And towards the goal of having access to future oil:


Feb 20 (Reuters) - Abu Dhabi awarded a 4 percent stake in its giant onshore oil concession to CEFC China Energy Co for a fee of $900 million, state-owned Abu Dhabi National Oil Co (ADNOC) said on Monday. The stake is the last to be awarded in the concession after international energy companies including Total, BP and China's CNPC secured stakes. ADNOC owns 60 percent of the concession. The onshore fields, operated by Abu Dhabi Company for Onshore Petroleum Operations (ADCO, have total resources estimated at between 20 billion and 30 billion barrels of oil equivalent over the term of the concession.

On Sunday, CNPC secured an 8 percent stake in ADCO for about $1.8 billion. For little-known, privately run CEFC the deal, which has a term of 40 years and is backdated to the start of 2015, marks one of its largest oil investments outside China. Chinese oil executives said last week that both CNPC and CEFC were set to sign the concession deals with ADNOC after having obtained state regulatory clearance for the investments.

France's Total was the first major oil company to renew its involvement in the concession, securing a 10 percent stake in January 2015 and putting its rivals under pressure to improve terms after ADNOC said Total made the best offer. In December, BP struck a similar pact with ADNOC for a 10 percent stake. Other Asian energy companies were granted smaller stakes.‎ INPEX Corp of Japan and GS Energy of South Korea received 5 percent and 3 percent stakes respectively.
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Re: Peak Oil and Collapse in the United States

Unread postby ROCKMAN » Mon 20 Feb 2017, 14:34:08

And speaking of the consolidation dynamic as energy resources deplete there are other energy companies that don't drill for, produce or market fossil products:

Feb 16 (Reuters) - Canada's Enbridge Inc and Spectra Energy Corp have won U.S. antitrust approval for a $28 billion merger that will create the largest North American energy infrastructure company. The Federal Trade Commission said on Thursday that it would approve the deal. The merger was announced in September 2016. Enbridge's pipelines mainly send Canadian crude from oil sands to refiners on the U.S. Gulf Coast, while Spectra's network ships natural gas to the U.S. East Coast.
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Re: Peak Oil and Collapse in the United States

Unread postby rockdoc123 » Mon 20 Feb 2017, 14:47:33

rockdoc, did the Greek economy collapse because of $147 petroleum, or was it a result of the bad mortgages in Cincinatti, USA? I'll bet you will try to explain how it was the Socialists in the Greek Parliament? Norway and Holland have socialists also. But those countries have have their own magic water also. Why has Spain, Italy and 100 other world economies (without their own significant supplies of oil/NG) remain mired in Depression? 


Well first off there are not 100 other economies who remain mired in in Depression. When you make a statement like that then you need to back it up with data. I’ve had a long look at the World Bank data and the only countries that have not recovered from the 2008 global financial crisis are Greece, Italy, Spain, Hungary, Croatia and the Czech Republic. A simple look at the economy of those countries explains the situation and it isn’t related to oil prices.

Greece’s economic problems have very little to do with energy prices, they began in the ‘80s when Greece’s fiscal policies resulted in soaring inflation, trade deficits and a number of exchange rate crises. Greece gained acceptance to the EU but did so with deficit and debt that wasn’t anywhere near what was required by the Maastricht Treaty guidelines. Because of entry into the EU Greece was able to borrow at a much cheaper rate than previously…. akin to giving a drunk free booze. Greece was spending well beyond their means with very little in the way of any new revenues. Tax invasion was rampant in Greece with the wealthy class self-employed under reporting income and over reporting debt payments. As a consequence, Greece’s revenue stream continued to flounder. This is all background to what happened in 2008 with the global financial crisis. The recession further weakened Greece’s revenue stream and their deficit worsened. In 2010 Greek bonds were ranked as junk grade and with capital drying up Greece faced a liquidity crisis and bailouts. These bailouts further increased Greece’s plight…no revenues and increasing calls by IMF and European creditors to fulfill financial obligations.

So where other countries were able to build their way out after the financial crisis of 2008 Greece’s situation worsened, it didn’t get better when prices dropped in 2008 to $40 Brent and it hasn’t gotten any better when prices again dropped to $40 Brent in 2016. In fact Greece’s GDP was much higher from 2004 through 2008 when oil prices where higher than the low of 2016. It’s problems are independent of oil price.


Italy’s GDP had steady growth from 2000 through 2008 until the financial crisis after which it has steadily declined. Italy has a huge amount of bad loans in their banks ¾ of which are to Italian companies and there hasn’t been enough capital to clean these loans off their balance sheets. The also suffer from the lowest productivity in the whole Eurozone with the myriad of small businesses unable to achieve any scale of growth. Corruption and weak rule of law have also stymied new businesses. Add to that the fact that about 15% of Italy’s economy is hidden in the shadows (no taxes). The picture of oil consumption in Italy has no direct relationship given it has steadily decreased since the late nineties while GDP continued to increase up to the global financial crisis.

In Spain the economic failure was set up by entry into the EU with the access to very low interest rates. Spain’s banks, property developers and normal home buyers borrowed and fueled a huge property bubble. From 1996 to 2007 Spanish property prices had tripled. With the onset of the global crisis that bubble popped and Spaniards have been fighting to pay off their debts ever since. Spain internal spending also got out of control with regards to Labor prices, rising to some of the highest in Europe which meant their exports were expensive and uncompetitive. But because they are in the Euro Spain doesn’t have the luxury of devaluation, they are stuck. Spain’s economy continues to overspend the GDP to date. Oil consumption is a miniscule porton of that spending.
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Re: Peak Oil and Collapse in the United States

Unread postby sparky » Mon 20 Feb 2017, 15:55:32

.
Debating if a country economic collapse is linked with high crude oil price is a fruitless endeavor.
some importing countries suffer other do quite well
what one must understand is that what matter is not the price in absolute term but the change in price

exporting countries buy stuff from importing countries
importing countries buy crude from exporting countries

when all is stable the circular flow of money is even

if there is a sudden change in price , there is a glut of money somewhere .
the petrodollar re-cycling is thrown out of whack , there is a crisis
either the importers buy less or the exporters are broke

Greece has no crude and no export ,
with the Euro credit card their government went on a crazy spending spree

The US problems are way older and deeper , remember the "Nixon shock" ,
that's what I thought , no idea , just check it .
That was the end of the US dollar as a hard currency , the US couldn't afford it anymore
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Re: Peak Oil and Collapse in the United States

Unread postby AdamB » Mon 20 Feb 2017, 23:24:08

pstarr wrote:rockdoc, did the Greek economy collapse because of $147 petroleum, or was it a result of the bad mortgages in Cincinatti, USA?


The Greek economy collapsed because they went crazy borrowing when they joined the EU, similar to what Americans did causing the 2008 recession, but they did it to themselves, and it had nothing to do with oil.

Facts matter.

https://en.wikipedia.org/wiki/Greek_gov ... ebt_crisis



pstarr wrote:Simple answer: historically high oil prices and previous demand destruction.


Simple answer in your reality, but not the one the rest of us live in.
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Re: Peak Oil and Collapse in the United States

Unread postby vtsnowedin » Tue 21 Feb 2017, 08:49:58

From the wiki link:
Causes
In January 2010, the Greek Ministry of Finance published Stability and Growth Program 2010.[16] The report listed five main causes, poor GDP growth, government debt and deficits, budget compliance and data compatibility. Causes found by others included excess government spending, current account deficits and tax avoidance.

A classic example of the mob voting themselves bread and circuses. Some things never change.
A major cause was the ill structured and underfunded pension system. A problem we should take note of and take care to not follow lest we join them in the bread line.
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Re: Peak Oil and Collapse in the United States

Unread postby pstarr » Thu 23 Feb 2017, 11:21:15

Plantagenet wrote:
pstarr wrote:The current supply glut is also a demand dearth. a consequence of precipitous economic decline and destruction. Countries around the world can no longer afford $55 oil.


Lets look at the numbers.

Global GDP is predicted to grow by 2.7% next year.

2.7% growth is not the same as precipitous decline and destruction. :lol:

Cheers!

Cheers, my tookus 8O :P

The IMF Is Worried About the World's $152 Trillion Debt Pile - Bloomberg
Oct 6, 2016 - Global debt balloons to all-time high of $152 trillion, IMF warns. The world is awash with $152 trillion dollars of debt, according to the IMF, an all-time high which sits at more than double the balance at the start of this century.
Can't feed the kids on virtual food. Virtual debt is virtual oil.

Kicking the can down the road. How far? The next turn? You repubs were all in a tizzy re: unsustainable debt. wa' happened lol Doesn't anyone remember the debt and GDP balloon before the last crash. Guys, you need to get out of facebook . . . NOW! It'll kill you.
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Re: Peak Oil and Collapse in the United States

Unread postby DesuMaiden » Fri 14 Apr 2017, 14:41:10

The signs of societal collapse are already there. It just happens that very few people have recognized it yet because most people are frighteningly ignorant of science and how the world works.
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Re: Peak Oil and Collapse in the United States

Unread postby pstarr » Fri 14 Apr 2017, 15:50:18

I am one of the few serious peakers who doesn't believe the United States will collapse, certainly not in the sense that we define collapse in places like Syria, Haiti, or Somalia. We are a very wealthy country. In spite of our huge, lazy, wealthy, and stupid population and its efforts to turn everything into crap . . . we are still endowed with great mineral, agricultural and timber wealth. We have have a complete modern built-out infrastructure, plenty of recyclable building materials including steel, aluminum and wood. We are one of the worlds great petroleum producers. We are winners! Yay

So as the world collapse around us, we may be fine and intact in our geolographic isolation. The zombie hordes from afar will be kept at bay. The miserable depressed confused Americans will be served three meal a day . . . gruel in the AM, slop in the PM and an extra serving of candy at bedtime . . . before they retire to their comfy bunkbeds in their repurposed Walmart Mass Incarceration Facility (a MIF for biff!)
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Re: Peak Oil and Collapse in the United States

Unread postby Subjectivist » Fri 14 Apr 2017, 18:10:51

DesuMaiden wrote:The signs of societal collapse are already there. It just happens that very few people have recognized it yet because most people are frighteningly ignorant of science and how the world works.



I can't make myself argue that most people are smart, but I don't see signs of collapse, just conflict between radically different world views.
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Re: Peak Oil and Collapse in the United States

Unread postby pstarr » Fri 14 Apr 2017, 22:38:45

Subjectivist wrote:
DesuMaiden wrote:The signs of societal collapse are already there. It just happens that very few people have recognized it yet because most people are frighteningly ignorant of science and how the world works.



I can't make myself argue that most people are smart, but I don't see signs of collapse, just conflict between radically different world views.

Desu, he doesn't see collapse in his own backyard or at his local shopping center. I would suggest to the guy that he get out more, maybe read National Geographic or something?

Perhaps Sub will some day come to understand that the US will be that last nation standing . . . but that it is no consolation in a world of hurt and hatred. We need them out there.

Note to Sub: we are not and will never be energy independent. And we can not bomb the entire world into our liking.
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Re: Peak Oil and Collapse in the United States

Unread postby AdamB » Sat 15 Apr 2017, 10:26:39

DesuMaiden wrote:The signs of societal collapse are already there. It just happens that very few people have recognized it yet because most people are frighteningly ignorant of science and how the world works.


That was the same line being sold for collapse more than a decade ago. And it had nothing to do with ignorance of science, then, or the same recycled claims for now.
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Re: Peak Oil and Collapse in the United States

Unread postby AdamB » Sat 15 Apr 2017, 10:29:52

pstarr wrote:I am one of the few serious peakers who doesn't believe the United States will collapse, certainly not in the sense that we define collapse in places like Syria, Haiti, or Somalia.


Oxymoron much?

pstarr wrote:So as the world collapse around us, we may be fine and intact in our geolographic isolation. The zombie hordes from afar will be kept at bay. The miserable depressed confused Americans will be served three meal a day . . . gruel in the AM, slop in the PM and an extra serving of candy at bedtime . . . before they retire to their comfy bunkbeds in their repurposed Walmart Mass Incarceration Facility (a MIF for biff!)


So...we can discount the "serious" then I guess?
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Re: Peak Oil and Collapse in the United States

Unread postby Squilliam » Mon 17 Apr 2017, 00:25:43

I doubt that at this point peak oil will be a disaster. Given recent trends anything less than a sudden fall in production can be worn by the global economy. A major volcanic eruption such as the year without a summer would be more of a significant problem, but as that would be a black swan who can predict when/if it will happen within a relevant timeframe. Alts can just about replace any fall in net energy from fossil fuels at this point, so I am not particularly worried about that aspect.
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Re: Peak Oil and Collapse in the United States

Unread postby ralfy » Mon 17 Apr 2017, 01:23:44

Squilliam wrote:I doubt that at this point peak oil will be a disaster. Given recent trends anything less than a sudden fall in production can be worn by the global economy. A major volcanic eruption such as the year without a summer would be more of a significant problem, but as that would be a black swan who can predict when/if it will happen within a relevant timeframe. Alts can just about replace any fall in net energy from fossil fuels at this point, so I am not particularly worried about that aspect.


Alternatives generally have low energy quality and quality, oil is needed even for components used in them (as seen in heavy machinery in mining, manufacturing, mechanized agriculture, and shipping), there is a lag time for implementation, and various corporations and governments worldwide are geared towards the assumption that there will be no long-term fall in production.
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