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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 Yoshua » Sat 09 Jun 2018, 03:49:23

Dennis had the honor of hosting the fine professor at peakoilbarrel and accepted his authority. He was fooled by the professor. He even showcased the professors abracadabra with the entropy equation.

Later on Dennis came over to Peakoil and said that the Etp Model is correct...but with one reservation...if petroleum is used as the only energy source to produce petroleum.

Shortonoil got angry with me too when I got stuck with linear thinking. Not until you see the petroleum production industry as a petroleum production universe were every Btu that enters it in any form of energy/matter must be counted for and subtracted from the Btu's that leaves that universe...only then can you calculate the net energy from petroleum production.

Does the net energy from petroleum production even matter? Petroleum counts for /3 of the global energy production, when the net energy drops to zero, it will turn into a massive black hole and suck everything into it.

Anyway...it's a beautiful summer outdoors...I think I will buy some vine and watch those fluffy clouds pass by.
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby onlooker » Sat 09 Jun 2018, 08:13:18

I think sometimes we forget how crucial oil is to the world"s energy supply

It's easy to understand why oil is so important in our lives. Your parents couldn't drive their car unless it was filled with gasoline or petrol. The school bus couldn't make it to school without gasoline.

Gasoline is made from crude oil. Lubricating oil is also used to keep our automobile engines from getting too hot and to ensure that all moving parts of the machinery are kept in good working order.

In fact, our world would almost grind to a halt without oil. Factories would stop running. So would cars. Airplanes would be grounded. Tractors on the farm would sputter to a standstill and rust. And people's homes and offices, if heated by oil,
would
freeze in winter. Oil is used in many products. Here are just a few examples: farm fertilizers, plastic toys and other plastic goods, cosmetics, detergents, and nylon clothing. Even waxes for chewing gum are made from oil.

Oil is the world’s most important fuel and underpins our high standard of living. It provides modern convenience and freedom of movement and is crucial to transport systems.

By-products from oil refining are also valuable. They are used in the production of plastics and chemicals, as well as many lubricants, waxes, tars and asphalts.

Nearly all pesticides and many fertilisers are made from oil or oil byproducts.

https://www.csmonitor.com/1983/0131/013137.html
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby kublikhan » Sat 09 Jun 2018, 13:12:31

Yoshua wrote:Dennis had the honor of hosting the fine professor at peakoilbarrel and accepted his authority. He was fooled by the professor. He even showcased the professors abracadabra with the entropy equation.

Later on Dennis came over to Peakoil and said that the Etp Model is correct...but with one reservation...if petroleum is used as the only energy source to produce petroleum.
Are you referring to his posts in the Economics vs. ETP thread? I just skimmed over a few of his posts there. He does not say that the ETP model is correct. Quite the opposite infact. I believe you are misconstruing his posts. Infact he brings up many of the same arguments as ETP skeptics such as AdamB, myself, etc.

dcoyne78 wrote:A major shortcoming of the ETP analysis is that it looks at only a single energy source- oil.
...
It is far from clear that oil output will fall off a cliff, it is more likely that when resources become scarce, prices will increase and the decline in output will be gradual. Oil is mostly used for transportation and can easily be used more efficiently with hybrids, plugin hybrids, EVs, increased light rail and buses on overhead wires, as well as rail and electrified rail. These are not problems without solutions, higher oil prices (where price is determined by supply and demand rather than exergy) are likely to make it happen.
...
As the price of crude increases it will become a smaller part of the overall energy mix as we use it more efficiently and find substitutes. The main point is that other sources of energy with higher EROEI can provide the net energy needed to run the economy. Petroleum production will not continue at today's level it will eventually peak and decline and we will use other sources of energy. Eventually all fossil fuels will peak and decline as they deplete and their prices will rise making them less competitive, over time they will be replaced by wind, solar, hydro, geothermal, and nuclear(fission) energy. Starting sooner would make the transition easier, but eventually it will be done out of necessity with many bumps in the road with bigger bumps the longer we wait to act.
....
Hi Shortonoil, The World economy was doing fine when oil prices were over $100/b for 2011-2014, oil prices fell simply because there was an oversupply of oil. Your sinusoid is interesting, but without any theory for why there should be a 12-13 year cycle, it means very little. For the World as a whole (rather than just the US) there has not been any study that has shown with statistical significance that economic output will correlate well with the percentage of income spent on crude oil. When we consider World GDP annual growth rate vs % of World GDP spent on oil from 1961 to 2015 there is little correlation, R squared is 0.0025. I would also note your sinusoid chart leaves off several data points where the % of GDP spent on crude was about 5% to 8% from 1979 to 1983. That does not really match your sine curve very well, where the maximum on the chart is about 4%.
....
Often in these EROEI analyses the exercise is done in terms of energy rather than work. In any case the EROEI for any single energy source determines very little, it is the EROEI for the economy as a whole for all energy sources used that matters. An example of energy that is produced with EROEI of less than one is electric power. Ignoring line losses etc. For the average power plant about 40% electrical energy is produced per unit of fuel burned in energy terms, so EROEI is 0.4/1=or 0.4. We produce the electrical energy anyway using fuels with EROEI of 10 or more because the electricity is a very useful form of energy for doing work with electric motors and many other things as well. Oil is also very useful to provide transportation using ICE vehicles, it will continue to be extracted regardless of EROEI as long as people are willing to pay a price that will allow it to be extracted profitably.The EROEI can fall to less than one, just like electricity, because it is a convenient fuel for transportation (high energy content per unit volume and per unit mass).
....
Yes I understand that. One needs to look at all energy sources, not just oil. The money and trading is just a useful method for allocating scarce resources, a high price is a signal to producers (make more of that thing) and the incentive to produce is higher profits at higher prices. What happens as a resource becomes scarce is the price goes up and people use that resource more efficiently and they are willing to try substitutes. Entrepreneurs see an opportunity to provide those substitutes and they do so and as the production increases in scale costs go down which increases the demand for the substitute. When it really comes down to it, it is simply a matter that you think this cannot happen and I think you are wrong. Its a simple story resource gets scarce, price goes up, people use less and find substitutes for the scarce resource. For oil it's a matter of hybrids, plugin hybrids, EVs, arail, light rail, and other types of public transportation along with ride sharing, working from home, etc. Oil output is not going to disappear overnight, the process will be a gradual one over 2 to 3 decades as output gradually declines in line with declining demand as people move away from oil (due to high prices relative to alternatives).
....
The extended EROEI is quite difficult to calculate accurately. I don't think a paper from 2009 captures the progress made in the Wind and Solar industry in the past 8 years. I think it is significantly better today than it was in 2009 and there are other analyses that give very different results. High prices for energy will be the signal to consumers that they should become more efficient in their use of energy. There is a ton of fat in the system. Eliminating fossil fuels cuts energy needs in many cases by 60% because we are no longer wasting 60% of the energy in the conversion of heat to work.
....
Hi AdamB, The paper was critiqued at the link below
http://peakoilbarrel.com/on-the-thermod ... lls-group/
I agree there are problems with the paper.
Economics vs. ETP

Yoshua wrote:Shortonoil got angry with me too when I got stuck with linear thinking. Not until you see the petroleum production industry as a petroleum production universe were every Btu that enters it in any form of energy/matter must be counted for and subtracted from the Btu's that leaves that universe...only then can you calculate the net energy from petroleum production.
Shortonoil gets angry at anyone who doesn't drink his Kool-Aid. Yet his model has serious fundamental flaws in it. Not just the thermodynamics. It has basic errors in economics, inflation, the refining industry, he even mixes up oil volumes with oil prices. Yet anyone who points this out gets their head chewed off by him.

Yoshua wrote:Anyway...it's a beautiful summer outdoors...I think I will buy some vine and watch those fluffy clouds pass by.
I think this is a much healthier attitude than your previous statement.
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 Yoshua » Sat 09 Jun 2018, 15:41:45

My liver might disagree with you, but what the hell, this time I will listen to your advice.

I will try to answer to your critique tomorrow.
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby Yoshua » Sun 10 Jun 2018, 05:38:29

The Etp Model is analyzing only one energy source - petroleum. Petroleum is a central piece of the energy mix. It provides valuable information on its own.

No one knows what the EROI of the global energy mix is, since no one knows how to calculate it. We are walking in the dark.

The critique against the Etp Model for only looking at one energy source is tough but still valid.

For example: Petroleum production needs steel and copper...coal and nat gas...if the energy cost to produce these commodities rises, then the energy cost of petroleum production rises as well. But if the price of the energy source used to produce these commodities fall, then the price of petroleum production falls as well.

Who is going to try to analyze the energy cost, price and value of every item in the world? The markets are trying to do this every day. Sometimes the markets get it very wrong.

Dennis seems to think that the future scarcity of petroleum will lead to higher oil prices. Shortonoil claims that the value of petroleum for the economy will fall as the net energy of petroleum production falls, and as the net energy and value falls, the price of petroleum will fall as well.

I agree with Shortonoil. The global economy is now in deflationary phase.
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby marmico » Sun 10 Jun 2018, 08:04:29

I agree with Shortonoil. The global economy is now in deflationary phase.
.

More nonsense from the ETP Bozo and adherents.

https://www.yardeni.com/pub/infltrglb_bb.pdf
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby Yoshua » Sun 10 Jun 2018, 09:11:24

It's only logic. The petroleum production universe is turning into a black hole. The process has already started. It's extremely deflationary.

The central banks have printed $21T to fight the deflation. Without money printing and government deficit spending we would be in a deep depression.
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby marmico » Sun 10 Jun 2018, 12:33:38

The central banks have printed $21T to fight the deflation.


The FED printed $2.8T at the peak of QE, which should have been inflationary not deflationary, of which zero entered the economy as the bankers held QE deposits as excess reserves to collect interest. Where did the other $18.2T come from?

Image

Go back and relearn your high school pop lessons from Gail Turdburger. The ETP Bozo is completely useless when it comes to economics and finance.
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby asg70 » Sun 10 Jun 2018, 13:02:15

Yoshua wrote:Dennis seems to think that the future scarcity of petroleum will lead to higher oil prices. Shortonoil claims that the value of petroleum for the economy will fall as the net energy of petroleum production falls, and as the net energy and value falls, the price of petroleum will fall as well. I agree with Shortonoil. The global economy is now in deflationary phase.


Simply saying "I agree with X" and making a categorical statement like "The global economy is now in deflationary phase." is useless.

It's like saying "I'm a Christian and I believe in the end of days".

OK, fine. That's your belief system. There's no discussion to be had at that point since it's merely a declaration of faith.

The ETP chart is now proven bogus but in the end you sort of shove it aside and just plant your feet on the ground and your eyes glaze over and you proclaim: "I believe it!!!"

I mean, you're entitled to your opinion but you aren't going to shift anyone else's views unless you can actually mount a convincing argument.
“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"
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby onlooker » Sun 10 Jun 2018, 13:14:53

Okay,I am willing to admit that oil price has me baffled and this persistent high price is seriously calling into question the soundness of the ETP Model.On the other hand, I do believe that the economic fundamentals are bad and will get worse despite what the more sanguine posters here assert and what the MSM propaganda also tell us
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby Yoshua » Sun 10 Jun 2018, 13:15:39

Thx marmy, I needed the laugh
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby Yoshua » Sun 10 Jun 2018, 13:41:25

The oil price will soon collapse again?

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

Unread postby marmico » Sun 10 Jun 2018, 14:36:53

Thx marmy, I needed the laugh


Thx, Joshua. I needed the prepubescent female laugh that is Artie ASPO Berman. What a giggler; he has been on the US shale oil/gas retirement lecture circuit for 6+ years now. Nothing like just for laughs with Artie and the ETP Bozo.

https://www.resilience.org/stories/2012 ... and-price/
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby Outcast_Searcher » Sun 10 Jun 2018, 15:06:04

onlooker wrote:Okay,I am willing to admit that oil price has me baffled and this persistent high price is seriously calling into question the soundness of the ETP Model.On the other hand, I do believe that the economic fundamentals are bad and will get worse despite what the more sanguine posters here assert and what the MSM propaganda also tell us

So the constantly wrong Cassandra blogs are more correct than the factual data the MSM posts?

Since when is reporting on factual data, such as a broad range of economic reports "propaganda"?

Any facts to share or just "data I don't want to hear is bad" type stuff? Because speaking of propaganda, that isn't at ALL credible.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby onlooker » Sun 10 Jun 2018, 19:11:09

So Outcast, the rosy MSM picture is the be all end all eh?
"Is the Global Economy Just a Giant Debt Scam? Here's What the Financial Elite Doesn’t Want You to Know"

https://www.alternet.org/global-economy ... =hootsuite
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby kublikhan » Sun 10 Jun 2018, 19:54:22

onlooker wrote:So Outcast, the rosy MSM picture is the be all end all eh?
"Is the Global Economy Just a Giant Debt Scam? Here's What the Financial Elite Doesn’t Want You to Know"
://www.alternet.org/global-economy ... =hootsuite
For more than a year, global debt as a percent of GDP has been falling. That is because GDP is growing faster than debt is:

Apr 11, 2018 - The ratio of global debt-to gross domestic product fell for the fifth consecutive quarter as the world’s economic growth accelerated.
Global debt jumped to $237 trillion last year

The IIF also points out that, despite hitting a new high in nominal terms, the share of global debt to global GDP has been falling for four consecutive quarters. This is because global GDP has been picking up fairly robustly. The fact that incomes are now rising faster than debts should make the borrowing burdens easier to service, even if interest rates do creep up.

So nothing to worry about then?
It may be unwise to draw conclusions from aggregate global debt figures, and more useful to focus on particular pockets of indebtedness around the world. Many economists are particularly concerned about the situation in China, where corporate bank-borrowing has exploded since the global financial crisis. Many suspect that much of that Chinese corporate borrowing has been wasted, risking a destabilising financial crisis or long-term sclerosis for the world’s second-largest economy. The Bank of England is also keeping a close eye on UK credit card debt and car loans, for fear that many families could be making themselves vulnerable in the event of a new downturn.
Global debt: Why has it hit an all-time high? And how worried should we be about it?

And just because a source is MSM, doesn't meant they report everything is rosy onlooker. The above is a MSM source yet they caution that there are worrying debt signs coming from China.
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby vtsnowedin » Sun 10 Jun 2018, 20:06:32

Yoshua wrote:No one knows what the EROI of the global energy mix is, since no one knows how to calculate it. We are walking in the dark.


No one knows the exact figure but there is clear evidence that to this date it has been strongly positive. The profits from exploiting energy sources both renewable and fossil based are what provided the food, clothing, and shelter, for seven billion people and all the infrastructure that goes with it. Think of all the physical things we have built from hydro dams to MRI machines and all the profit and utility we have gained from the energy we applied to build them.
If the EROEI were not strongly positive we would have a population of less then one billion living in medieval squalor.
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby Yoshua » Mon 11 Jun 2018, 03:22:36

Snow, yes the EROI of the global energy mix must be positive...and perhaps even quite high.

I wonder if there is a way to get an estimate of what the EROI of the global energy mix is? Could one for example look at how large the global energy sector is in monetary terms to the global GDP? If the ratio is 1:10 then the EROI could be estimated to be 10:1?
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby radon1 » Mon 11 Jun 2018, 05:04:28

Now that it is clear that etp is bereft of any substance, the etpists resorted to repeating incessantly that "depleting resources are subject to depletion". They are claiming that this truism is their ingenious discovery, and that this "discovery" is in fact what etp is, and therefore that etp is true or dare you argue against it.

I have made a discovery that sunrise happens in the morning. I call this discovery IMG (I Am Genius) theory. I do not expect any negative peer reviews of this theory of mine. On this basis, it is proven that I am definitely genius.
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Re: The ETP model was wrong - But is there a top for oil pri

Unread postby Revi » Mon 11 Jun 2018, 08:06:46

The ETP people may end up having a point if the value of the US Dollar goes down. It was at 103 and change at the beginning of last year. Now it's at 93 and change. That explains at least the 10% it's gone up over the past year and a half. Gas was at around $2.50 and now it's at $2.85. That's about a 35 cent increase, which is not much above the 25 cent increase that the 10% drop implies. It might have nothing to do with etp. It might be just inflation, caused by the dollar's drop.
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