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The ETP model was wrong - But is there a top for oil prices?

Discuss research and forecasts regarding hydrocarbon depletion.

Re: The ETP model was wrong - But is there a top for oil pri

Unread postby pstarr » Fri 11 May 2018, 16:23:28

Onlooker, it really is hopeless.

“It is difficult to get a man to understand something, when his salary depends on his not understanding it"
. . . Upton Sinclair

No amount of reasoning and arm flailing will ever convince the cornies that their own sweet life is coming to an end. After all . . . they are wealthy white Americans, so we must accept that no harm can come to the Godly.

Really. :x :razz: :lol:
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby Yoshua » Sat 12 May 2018, 01:47:45

One has to look holistically at energy/economy and understand that everything is interconnected.

Shortonoil claimed that EROI below 2:1 would be a drag on the economy and lead to a fall in demand of oil...which would lead to an oil glut. He never claimed that the supply/demand function would be put out of order...only that a falling EROI would effect the supply/demand function.

The global economy could not clear the glut by consuming the oil...it took a supply cut by OPEC and Russia to clear the glut.

The oil was there ready to be consumed to increase global GDP...but the global economy couldn't use the oil because it had turned into a drag on the economy due to a fall in EROI below 2:1 in the global petroleum production.
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby vtsnowedin » Sat 12 May 2018, 06:30:29

Yoshua wrote:One has to look holistically at energy/economy and understand that everything is interconnected.

Shortonoil claimed that EROI below 2:1 would be a drag on the economy and lead to a fall in demand of oil...which would lead to an oil glut. He never claimed that the supply/demand function would be put out of order...only that a falling EROI would effect the supply/demand function.

The global economy could not clear the glut by consuming the oil...it took a supply cut by OPEC and Russia to clear the glut.

The oil was there ready to be consumed to increase global GDP...but the global economy couldn't use the oil because it had turned into a drag on the economy due to a fall in EROI below 2:1 in the global petroleum production.

The falsity in all that is that the EROEI has not dropped to below 2:1 or anywhere near it. If one makes predictions based on totally false data it is to be expected that the predictions will also be wrong.
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby Yoshua » Sat 12 May 2018, 08:35:57

The Etp Model is based on the entropy equation and it predicted that the EROI would fall below 2:1 after 2012.

Shortonoil is a human being and he/they predicted that this would lead to an oil glut. Humans make mistakes. Shortonoil was correct about the glut...but I believe that he was incorrect by not expecting a response from the oil industry to cut supply to clear the glut.

The Etp Model is based also on a business as usual model. But after the Energy Half Way Point (EROI 2:1) is reached business as usual is no longer possible.

The oil industry is no longer in business of E&D of new oil fields. The oil industry is no longer increasing CapEx...instead they are now cutting CapEx. The oil industry is now only in the process of extracting oil from existing oil fields. This will have short time benefits and even increase the EROI temporarily...but it's not a long time solution since it will ultimately lead to depletion and a supply crunch.

Shortonoil saw the depletion being the end game...although he might have made some mistakes about human behavior after EROI 2:1 is reached.

The Etp Model is still the coolest model out there...but after the Energy Half Way Point things turn really weird and super cool. At least we get to look at the world through the lens of a cool model before we crash and burn.
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby dissident » Sat 12 May 2018, 08:48:24

Outcast_Searcher wrote:
onlooker wrote:
You can't waffle back and forth between supporting traditional supply & demand one moment and net-energy (aka ETP) the next.]

Who or what says I can't .

You can. This is America with free speech and all. Just don't expect to be taken seriously by rational adults who have a decent knowledge of economics.


Put a sock in it, blowhard. Economics is pure voodoo religion and not science. Any rational and adult attempt to properly describe economics determines it to be a heat engine running on external energy sources and driving entropy production. You act as if the clownish economics theories derived during the 1800s are some God given truth. They are a retarded joke. Upstanding economists make ludicrous claims that we will manufacture any element we run out of as if that is some trivial process that some garage entrepreneur can do today. They think that they are spouting wisdom when they are spouting nonsense. You just parrot this "wisdom".
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby onlooker » Sat 12 May 2018, 09:05:30

Absolutely, correct what Dissident just stated. In fact it gets ludicrous to the point of an acolyte of this Economic philosophy Julian Simon stating and I paraphrase;
That humans or more specifically human ingenuity is the ultimate resource and thus we don't need to worry about overpopulation or over resource use. Now is that insane or what.
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby dissident » Sat 12 May 2018, 09:11:27

onlooker wrote:Absolutely, correct what Dissident just stated. In fact it gets ludicrous to the point of an acolyte of this Economic philosophy Julian Simon stating and I paraphrase;
That humans or more specifically human ingenuity is the ultimate resource and thus we don't need to worry about overpopulation or over resource use. Now is that insane or what.


This BS is what people start to take seriously when their beloved theories are detached from reality. Standard economics does not account for thermodynamics whatsoever. The theory structure attempts to mimic thermodynamics but uses physically meaningless variables. Modern economics also totally ignores any environmental costs and assumes that energy and resources are infinite (hence cheap commodities and not limiters). Modern economics is basically a political tool to justify BAU. Anyone pushing this tripe should be laughed out of the room. State propaganda ain't cool.
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby kublikhan » Sat 12 May 2018, 10:32:57

Yoshua wrote:The oil industry is no longer in business of E&D of new oil fields. The oil industry is now only in the process of extracting oil from existing oil fields.
Exploration budgets were cut back sharply, but it never fell to zero. It made perfect sense to do this. Why risk big bucks looking for oil when there is already a glut and oil prices fell through the floor? However even in the low oil prices of 2016 exploration wells were still being drilled. Today's higher oil prices result in somewhat higher exploration activity. And if oil prices continue to go up, you can expect the purse strings for exploration to loosen up as well.

“The curtailment of oil and gas exploration was one of the most dramatic effects of the steep drop in oil prices in late 2014. Producer strategies shifted from long-term resource growth to short-term survival as they slashed capital budgets and shifted focus to cash-flow producing assets.”

Worldwide oil and natural gas exploration is moving up, rising by 23% year/year in 2017. Major targets of new well activity likely will be led by South/Central America, the North Sea/Europe and Africa. More than half of majors’ exploration wells are expected to target South/Central America, followed by North America, primarily the U.S. Gulf of Mexico (GOM). Among the high-impact wells is ExxonMobil’s Pacora-1 well offshore Guyana, which was spud in late January and is the company’s seventh oil discovery in the region. Regionally, the most rapid recovery in exploratory well activity is seen in South/Central America, where the well count nearly doubled. The gains were driven by “ExxonMobil’s dream run in Guyana and renewed development offshore Brazil.”
Global Oil, Gas Exploration Gaining Momentum

Yoshua wrote:The oil industry is no longer increasing CapEx...instead they are now cutting CapEx.
Old news. With the gain in oil prices, CapEx is increasing:

Capital expenditure (CAPEX) among the world's largest oil and gas companies is due to increase 11.5 percent year-on-year (y-o-y) in 2018 to just under $500 billion. “Our previous analysis, from September 2017, had expected a 4.3 percent rise in spending in 2018.” BMI said the near $44 billion upward revision to its outlook has largely been driven by national oil companies, particularly in Asia, but also in the Middle East and Latin America. “In general, more confidence behind the health of the oil market and better oil prices have supported spending plans across companies globally. With oil prices having held above $60 per barrel for much of Q4 17 and Q1 18, companies have received more revenue and will have more projects on their books within a viable investment level.” The number of final investment decisions taken in the first four months of 2018 was already substantially higher than 2017 and 2016.
CAPEX Among World's Largest O&G Firms to Rise to Just Under $500B in 2018
The oil barrel is half-full.
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby ROCKMAN » Sat 12 May 2018, 10:50:08

"The Etp Model is still the coolest model out there..." And even after admittig the model was not correct it's still "the coolest". Interesting perspective. Might want to check out the hundreds of CORRECT scientific models in many fields and see if there are even "cooler" models to worship. LOL.
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby Outcast_Searcher » Sat 12 May 2018, 12:27:09

ROCKMAN wrote:"The Etp Model is still the coolest model out there..." And even after admittig the model was not correct it's still "the coolest". Interesting perspective. Might want to check out the hundreds of CORRECT scientific models in many fields and see if there are even "cooler" models to worship. LOL.

With fast crash doomers, I think "coolest" for the ETP translates to "what I want to hear". Economic doom in the short term is RIGHT in their wheelhouse.

(To be fair, we ALL like to hear things that match our beliefs. Some of us are more willing to test those beliefs against real world data, trends, science, math, economics, etc. than others. Some will even alter their beliefs when the evidence warrants doing so).
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby Being Frank » Sat 12 May 2018, 12:38:08

Seems to me that the world is comprised of indivduals, 7.8 billion of them. So I feel I should let you all know that my economy will work fine with Brent at $1,000 or even $10,000. On the other hand the wider British economy will collapse within a few years with oil at $70, $50, or even $30 due simply to the vast and growing expectations of the general public for much more stuff, much more health-care/social-care (for us baby-boomers), better pension provision etc. etc. In other words more bread and circuses. Brexit of course won't help and neither will the relentless decline of N. Sea production combined with our budget deficit and monthly balance of payments problems.

Folks say we live in interesting times but I find that if you are interested, well, it is always interesting :-D
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby Outcast_Searcher » Sat 12 May 2018, 13:12:24

Being Frank wrote:Seems to me that the world is comprised of indivduals, 7.8 billion of them. So I feel I should let you all know that my economy will work fine with Brent at $1,000 or even $10,000. On the other hand the wider British economy will collapse within a few years with oil at $70, $50, or even $30 due simply to the vast and growing expectations of the general public for much more stuff, much more health-care/social-care (for us baby-boomers), better pension provision etc. etc. In other words more bread and circuses. Brexit of course won't help and neither will the relentless decline of N. Sea production combined with our budget deficit and monthly balance of payments problems.

Rubbish. Whining voters doesn't equal "collapse". Making such a claim has zero credibility, but of course the doomer porn crowd will be fans. If you're going to make this claim for "even $30", why not make it for ZERO dollars while you're at it? It would be just as sensible, given how long it's been since oil was below $30 for years, adjusted for inflation. (Looks like about 20 years to me, eyeballing a chart).

https://inflationdata.com/articles/char ... ces-chart/

Was the British economy even CLOSE to "crushed" by inflation adjusted oil prices of about $100 on average for four years in a row in the last decade? Not even remotely close.

(Click on the 10Y button below the chart. See how stable the 2010 to 2018 growth has been -- almost like the oil price hardly matters at ALL?)

https://tradingeconomics.com/united-kingdom/gdp-growth

Is the British economy fundamentally different than it was less than 10 years ago? Not even close, even post Brexit.

Hint: Don't confuse "somewhat inconvenient" with "collapse" if you want to be taken seriously.
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby Yoshua » Sat 12 May 2018, 15:11:11

Rockman and OS say something if you want to be taken seriously.

I will say something: The Etp Model isn't just the coolest model out there...but it's also the coolest new economic theory out there today.

But then again...what is the point of me saying it since you will never understand even the basics of the Etp Model.
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby onlooker » Sat 12 May 2018, 15:24:59

Yoshua wrote:Rockman and OS say something if you want to be taken seriously.

I will say something: The Etp Model isn't just the coolest model out there...but it's also the coolest new economic theory out there today.

But then again...what is the point of me saying it since you will never understand even the basics of the Etp Model.

What is more they don"t want to understand it since they think economic models suffice and are the coolest :razz:
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby pstarr » Sat 12 May 2018, 15:33:21

Yoshua wrote:Rockman and OS say something if you want to be taken seriously.

I will say something: The Etp Model isn't just the coolest model out there...but it's also the coolest new economic theory out there today.

But then again...what is the point of me saying it since you will never understand even the basics of the Etp Model.

I questioned RM as per the model's assumption, methods and conclusions? RM made it quite clear he had/has no understanding of any of it.

OS . . . not even worth discussing.
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby asg70 » Sat 12 May 2018, 15:34:30

onlooker wrote:
Yoshua wrote:Rockman and OS say something if you want to be taken seriously.

I will say something: The Etp Model isn't just the coolest model out there...but it's also the coolest new economic theory out there today.

But then again...what is the point of me saying it since you will never understand even the basics of the Etp Model.

What is more they don"t want to understand it since they think economic models suffice and are the coolest :razz:


Yes, onlooker. Chide us that we just don't "get" ETP. I knew your ETP zealotry wasn't quite over yet.

See my sig.

Image
“If and when the oil price skewers for 6 months or more substantially above the MAP, then I will concede the Etp is inherently flawed"
--Onlooker, 1/1/2018
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby onlooker » Sat 12 May 2018, 15:40:09

Asg, it is still not 6 months. And if the ETP is wrong that doesn"t mean the energy picture is rosy.
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby pstarr » Sat 12 May 2018, 15:59:45

onlooker wrote:Asg, it is still not 6 months. And if the ETP is wrong that doesn"t mean the energy picture is rosy.

They are all the same. They have no idea what ETP is really about, only their own willful misinterpretation. Like a child arguing who got the bigger christmas gift or who gets to sit in the front seat of the car. Nothing really to do with the grave danger peak oil, resource depletion and the overpopulation of our fragile earth we see around us.

I should be hugged/kissed by mum/dad first when we get home. :-x :lol:
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby Observerbrb » Sat 12 May 2018, 17:14:30

Well, I can tell you that a lot of European countries will enter a current account deficit if oil costs 90-100$.

Spain's GDP was expected to grow around 3.0% at 60$ Brent, now they are saying it could grow at 1.5% next year if oil costs around 80$, and grow can even stop at 100$...so yes, there is a limit, but I think other countries can withstand an higher oil price (India or China grew when oil was at 110-120$ per barrel, I don't know if it could still be a valid number), so that's the reason I was asking. We can always conclude that rising oil prices led to the implosion of the housing bubble by taking away disposable income that led to wide household bankruptcies.

BTW, I think Trump's attitude is seriously hurting Europe and China. European media and leaders are becoming increasingly fed up with US unilateral moves - Iran's deal withdrawal was the straw that broke the camel's back. European economy is still trying to recover from the last financial crisis and now the growth momentum has been severely weakened.
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby onlooker » Sat 12 May 2018, 17:24:01

[quote] We can always conclude that rising oil prices led to the implosion of the housing bubble by taking away disposable income that led to wide household bankruptcies./quote]
Yes that is what we have been trying to point out to the deniers. That real estate and the sub-prime mortgage debacle did not occur in a vacuum. That is was exacerbated and triggered by the very high oil price. It is well documented how since WWII a high oil price almost invariably led to recessions
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