[dissident]

Not to derail the discussion, but where is this looming oil flood? I can't see it welling up anywhere. The 7% drop in US oil production in the last year is rather significant. The US was the only oil producer globally that prevented a global production decline over the last few years.

[rockdoc123]

Not to derail the discussion, but where is this looming oil flood? I can't see it welling up anywhere. The 7% drop in US oil production in the last year is rather significant. The US was the only oil producer globally that prevented a global production decline over the last few years.

The US shale liquids over supply story that developed from about 2009 - 2014 is what drove prices down along with the Saudi decision in 2014 to defend market share at the expense of price and the Russian decision to increase production to also attempt to regain market share. From 2014 onwards global supply has outpaced global demand which is still increasing but not at a high enough rate to consume extra supply. The drop in price meant a decrease in drilling for US light tight oil and the most expensive unconventional and conventional oil elsewhere. Because of the production profile of unconventional tight reservoired oil continued drilling is required in order to keep production at it's high. Because that drilling has not occurred the production has been dropping in various parts of the US.

Most recent predictions were for a supply/demand rebalancing in late 2017 although if OPEC actually sticks to their recent proclamations that may happen earlier in 2017. At that point prices will rise and once they reach a level that is high enough for a long enough period the shale producers will return to drilling. That oil did not dissappear it just takes a certain price for it to be extracted economically. I've made the point before that it will take sometime for the industry to ramp back up and although a lot of new oil will appear it may not have a production peak as high as before due to the fact banks will likely not be willing lendors for sometime.

[ennui2]

At that point prices will rise and once they reach a level that is high enough for a long enough period the shale producers will return to drilling. That oil did not dissappear

Agreed. However, there are those (like one with a tendency to call it eau de bakken) who equate drilling rigs going idle with geological depletion and who deny that there's enough left in the ground to supply a 2nd wind.

Those such as myself waving the banner of gluts and Fracking 2.0 are not saying oil is endless, just that we've kicked the can down some years. The timeframe for all this bickering here is all relatively narrow. Within the next few years we should see the fog of uncertainty lift.

The thing is, once you push the day of reckoning for oil supply far enough ahead, the world is going to be a different place, due to EVs and self-driving cars. A world in an oil-crisis in 2005 (when TOD said it would) and 2025 with a lithium economy and tons of affordable 200+ mile EVs and inexpensive ridesharing to get around is a different ballgame.

[rockdoc123]

The thing is, once you push the day of reckoning for oil supply far enough ahead, the world is going to be a different place, due to EVs and self-driving cars. A world in an oil-crisis in 2005 (when TOD said it would) and 2025 with a lithium economy and tons of affordable 200+ mile EVs and inexpensive ridesharing to get around is a different ballgame

I am largely in agreement with you. I think if the government and every other asswipe who wants to be "no oil only renewables" could get their act together and figure out that the shale phenomena has given an opportunity to stage in the renewables appropriately. They need to do this without the BS pork barrel stuff Obama pulled with the solar companies he gave money to, his friends but clearly idiots. It should not be either or...it should be how to we make a combination of solar, wind, hydro, nuclear work to offset declines in hydrocarbon resources. It's not rocket science, the problem is no one wants to accept this is the only way forward.

[StarvingLion]

.it should be how to we make a combination of solar, wind, hydro, nuclear work to offset declines in hydrocarbon resources. It's not rocket science, the problem is no one wants to accept this is the only way forward.

It is rocket science because the price of electricity has to go down with no loss in quality in order to keep the Ponzi Financial system from blowing up.

Solar and wind are CRAP that lead to much higher electricity price and requires a storage solution that does not exist.

Nuclear requires a heavy manufacturing industry and no declines in hydrocarbon resources.

Dude, you and the Rock Puppet are just handwaving with this energy portfolio bullshit.

[StarvingLion]

inexpensive ridesharing

The pseudo means 'absolutely free'. The point of self-driving cars is so the consumer (aka bankrupt retard) can gawk at the ads flashing on the screen.

Its another revenue less business model courtesy of Haavaad to go along with the pre-packaged bankruptcies of solar panel manufacturers enabling free charging of the batteries from the roof-top solar panels that someone else payed for.

[StarvingLion]

the Lithium Economy

Hahahahaha...yeah no doubt there is going to be a Lithium Economy alright. When replacing those shitty Shale Gas wells with WindTurdines, divide your salary by 10. That'll get the lithium prescriptions going exponential in no time at all...oh you mean the Battery Fantasy Land right?

Lithium is used to treat and prevent episodes of mania (frenzied, abnormally excited mood) in people with bipolar disorder (manic-depressive disorder; a disease that causes episodes of depression, episodes of mania, and other abnormal moods).

[spike]

Some interesting comments. Pstarr, few were predicting shale oil would matter that far back. You don't seem very informed.
The coming oil flood? If you look carefully, shale oil is starting to stabilize and I think will begin to recover soon. But there's lots of other oil out there that will be hitting the market, as my book explains. Aside from presalt, there's Mexico, Iran, Iraq and probably Libya to add substantial volumes in the next few years. (North Sea is up a little but don't expect too much there.) Russia just set a new record, despite years of peak oilers saying production was unsustainable and it looks like much-delayed Kashagan will come online soon. ML

[ROCKMAN]

Just contemplating the use of the term "flood". Typically used to describe local and relatively short lived events. And sometimes causing the worst catastrophes in areas with little of the flood commodity. Long ago I did geologic field work in the very arid region of northern Mexico. Given the nature of the landscape the effects of previous flash floods were quit evident. Yet there was meager agricultural benefit. In fact would often disrupt drilling efforts...sorry, meant planting efforts. So even when a situation was inundated with a huge volume of oil...sorry, meant water...it was quickly absorbed and had little to no long term positive effect. Except, of course, for the explosion of wildflower blooms. Which gladdened the heart for a brief period before the relentless depletion...sorry, meant sun, burnt the sh*t out of them and the joy vanished. And while many oil companies...sorry, meant homes...are destroyed by the flood it isn't long after those waters recede new companies...sorry, meant homes...are built on top of the destruction. Just like $17/bbl oil in 1998...sorry, meant the Katrina flood waters just a few years ago. New homes that will be devasted when flooded again as is often the case in Hurricane Alley.

IOW floods happen northern Mexico. But it's still a f*cking desert. LOL.

[AdamB]

POD isn't too complex to discuss. It's just erroneous.

And is generally referred to as "economics" anyway, and doesn't really need a new name for something that has been around for longer than Rockman has.

[AdamB]

Some interesting comments. Pstarr, few were predicting shale oil would matter that far back. You don't seem very informed.

Took you but Pete opening his mouth to figure that one out. No surprise there. Wait until you hear some of his really bad ideas...a good one from way back being that peak oil, circa 2005, would stop all the ongoing renewable power generation infrastructure from being built, and of course there wouldn't be any electricity powered transport to use it if they did. And then of course everything in Kansas along I70 was built immediately thereafter, and those of us driving around in EVs (fueling up for free at the local solar panel parks no less) are sort of likes Trumps "deplorables", how dare we accomplish the impossible!

Was in the crowd for your 2016 EIA presentation Mike, where you pitched the book...just a WEE little.

The coming oil flood? If you look carefully, shale oil is starting to stabilize and I think will begin to recover soon. But there's lots of other oil out there that will be hitting the market, as my book explains. Aside from presalt, there's Mexico, Iran, Iraq and probably Libya to add substantial volumes in the next few years. (North Sea is up a little but don't expect too much there.) Russia just set a new record, despite years of peak oilers saying production was unsustainable and it looks like much-delayed Kashagan will come online soon. ML

How dare you know stuff!!

When at the conference, did you get a chance to talk to any of the EIA upstream folks about their upcoming global hydrocarbon supply model is coming along? I bumped into one or two of that gang and they are putting numbers on the resources available in the countries you just mentioned. As expected, oil resources available for future consumption will undoubtedly crush the hopes of the peaker legions into the future for quite some time yet.

[ROCKMAN]

Adam - "And is generally referred to as "economics" anyway, and doesn't really need a new name for something that has been around for longer than Rockman has."

So when we discuss the energy situation here you feel we should include tax laws, home construction costs, the affordability of our space program, high cost of college education, etc, etc. IOW you want us to focus on our total economic system, the PED...Peak Economic Dynamic? Well, I'll leave that to you and I'll just stay focused on the primary subject of this web site...the POD.

[ROCKMAN]

pstarr - рабочий: a blue collar worker. Closest thing they probably have to roustabout. Except they may have some nasty terms a pissed of drilling superintendent might use. LOL. We have those also: a "worm" for instance. And one notch below that: "weevel". Oil patch evolution: a weevel (known in Vietnam as a FNG) - a worm - a hand - a damn good hand - a f*cking great hand.

And those terms were really meant so much as insults but as warnings as to how much to trust/look out for a new member of the crew.

[spike]

Rockdoc, expectations that the market will come into balance next year (and they've been pushed back several times) are heavily dependent on political developments in Libya, Nigeria and Venezuela, as well as relatively pessimistic view of US shale. It seems to me that the date of 'balance' will be pushed back further without an OPEC cut.
Adam, I have been talking to DOE people off and on. A chapter in my book describes the equations in a supply model. However, the big uncertainty is access. How do you predict fiscal terms and acreage availability for countries from Argentina to Yemen for 20 years?

[radon1]

POD is about depletion, and it is much more focused than an "economics" talk. In addition, it incorporates geology etc., i.e. the things outside the realm of "economics". "Economics" are a only slightly better than etp anyway.

[AdamB]

Adam, I have been talking to DOE people off and on. A chapter in my book describes the equations in a supply model. However, the big uncertainty is access. How do you predict fiscal terms and acreage availability for countries from Argentina to Yemen for 20 years?

You cannot. Therefore you guess. Estimate. Assume. Create conditionals. Play the odds, or utilize macroeconomics to determine what exogenous pressure on a country will create what range of fiscal terms, and model it all scholastically, hoping to at least learn where the sensitivity lies within a particular fiscal term, or countries terms.

Access issues fail right over into security of supply issues. What price, caused by restricted access limiting supply, will create the knock on reaction willing to pay even more for security of necessary supply, withing a given countries control? The average consumer will do the obvious (gimme my EV!!) but businesses...they can afford to invest to make themselves less dependent on a thing, increasing the ratio of their economic output per unit of commodity utilized along the way. Sort of like the US as a whole during the 1970's energy crisis? That one put the recent peak oil craze to shame, Jimmy was willing to venture that an actual running out was about to happen!

Liked your article by the way. When I read the title I first thought it was one of the residual talking heads from the Oil Drum.

http://www.forbes.com/sites/michaellync ... 6081735509

[ennui2]

POD is about depletion, and it is much more focused than an "economics" talk. In addition, it incorporates geology etc., i.e. the things outside the realm of "economics". "Economics" are a only slightly better than etp anyway.

Wrong. POD is just Chris Martenson's Crash Course with another name on it. In other words, ascribing everything negative that happens in the world as somehow a byproduct of peak-oil-doom if you can just follow the butterfly-effect far enough back. It's an attractive concept during a glut because you can point to all sorts of non-oil issues and say "SEE! Look! Peak oil *!"

* demand