[shortonoil]

Convince your handlers to show up and present Mr. Salesman. Would be a great help to your sales efforts don't you think? Increase your commissions even!

Chances are they are not going to be around long enough to collect many commissions, nor will be the sites that were set up to sponsor them. The third leg of the oil production process (extraction, processing and distribution) is about to fold. Extraction was finished when reserves could no longer be replaced, and the price fell 50%. Processing was finished when refinery yields fell to below the point where raw material cost could be recovered. Distribution will fold because of its unique structure as compared to extraction, and processing.

Extraction and processing can be, and has been temporarily subsidized because it can be isolated to only a very few nodes. Production can be subsidized at the point of a few brokers like All Plains American, and processing is confined to a few hundred refineries. Distribution is spread out throughout millions of locations from huge companies like Hess to the local Get&Zip. Once petroleum's distribution cash flow goes negative, as it must, thousands of small Mom and Pop distributors will begin to disappear. The industries ability to function will disappear with them.

The only way to circumvent this enviable conclusion would be to circumvent the depletion process itself; that is not likely to happen until humans have achieved their grand aspiration for attaining god hood. About the same number of fools, as there has always been, think that we are almost there!


http://www.thehillsgroup.org/

[vtsnowedin]

Extraction was finished when reserves could no longer be replaced, and the price fell 50%. Processing was finished when refinery yields fell to below the point where raw material cost could be recovered. Distribution will fold because of its unique structure as compared to extraction, and processing.

I count that as three lies so you are down to 996 left to go.

[ROCKMAN]

vt - Lies? That rather harsh, buddy. A lie is when someone intentionally represents something as a FACT that isn't true. Those were just OPINIONS. And OPINIONS presented without supporting DOCUMENTED proof are always true...as just representing someone's OPINION. OTOH if false data is offered (as noted by the lack of DOCUMENTED support) as fact that would be a lie.

A conclusion based on erroneous projections, assumptions, misinterpretation of facts and personal prejudices isn't a lie. It's just an incorrect conclusion.

[vtsnowedin]

vt - Lies? That rather harsh, buddy. A lie is when someone intentionally represents something as a FACT that isn't true. Those were just OPINIONS. And OPINIONS presented without supporting DOCUMENTED proof are always true...as just representing someone's OPINION. OTOH if false data is offered (as noted by the lack of DOCUMENTED support) as fact that would be a lie.

A conclusion based on erroneous projections, assumptions, misinterpretation of facts and personal prejudices isn't a lie. It's just an incorrect conclusion.

No he has repeatedly presented those lies as facts often with phony documentation to back them up. That he didn't repeat the whole lie here is just him trying to get fools to accept his lies as established facts.
There isn't any way I could be too harsh about his deliberate misstating of the facts.

[Cog]

I think the Hills Brothers should branch out into perpetual motion and zero point energy scams. Why limit themselves to the ETP model?

[Midnight Oil]

Maybe some posters think by posting a bit of the truth it represents the WHOLE of THEIR TRUTH as they see it.
Modern folks have a tendency in that mode in order to function.

[ROCKMAN]

MO - Sadly it works since many folks don't ready beyond the headline. And even sadder is how many folks don't do that and just believe what they are told by those headline readers. We actually see a bit of that here from time to time.

[AdamB]

ETP'ers are well aware that if their model can't even pass the modest scrutiny that it is given here, they have no chance with professionals.

We know.

So they continue to hock their wares to the uninformed. I give them the same credence as the Anti-Vaxxers, Birthers, Moon landing deniers, and 911 Truthers.

I'm not sure they have that much credibility. But as you mentioned, those who do this professionally might have more natural disdain for people who can't even be bothered to try and do better, once they have assembled their speculation, piled it on top of a baseless conclusion, and then add on some general ignorance of the science and reality of the industry, and want to SELL the thing no less.

As a demonstration, I should add that this article is part of a model, and the upstream understanding that went into it was sold for 8 figures even before the authors turned it into its proper probabilistic configuration.

http://www.arrowheadeconomics.com/solut ... ification/

[AdamB]

The third leg of the oil production process (extraction, processing and distribution) is about to fold.

Yes, we all know, endlessly repeating the peak oil mantra will work someday, so just keep playing kick the can, with luck you'll live to see peak demand cause peak oil, and you can declare victory and move on to misrepresenting some other industry.

[AdamB]

I think the Hills Brothers should branch out into perpetual motion and zero point energy scams. Why limit themselves to the ETP model?

Because they would be forced to misrepresent some other industry or process, and can only keep one sales scheme going at a time?

[vtsnowedin]

The third leg of the oil production process (extraction, processing and distribution) is about to fold.

Yes, we all know, endlessly repeating the peak oil mantra will work someday, so just keep playing kick the can, with luck you'll live to see peak demand cause peak oil, and you can declare victory and move on to misrepresenting some other industry.

AdamB :
I think there is a world of difference between peak oil theories and the ETP prediction of total collapse next August. Peak oil will eventually happen. Time and date uncertain and the results uncertain depending on human reaction once they are faced with it. But the ETP scenario with oil at cheap prices below the "maximum affordable price" at the same time the industry collapses is just a fantasy.

[BahamasEd]

But the ETP scenario with oil at cheap prices below the "maximum affordable price" at the same time the industry collapses is just a fantasy.

Yes, I would agree, but

Fact #1
But the price of WTI rose to within 75% of the MAP back in the first week of December 2016, the first time since back in 2014, and has been trading close to between 75% & 85% of the MAP since.

Fact #2
Now the prices used for the MAP where published back in 2014 here at peakoil.com and haven't changed over that time. The chart still there.

Now the ETP model doesn't control the price of oil it's just a math problem.

I do get tired of the name calling, can someone give me some FACTS that disprove the ETP MAP?

[ROCKMAN]

Ed - "...can someone give me some FACTS that disprove the ETP MAP?" Why do you need that? IOW on what basis do you believe a forward projection of oiol prices based upon an obvious cherry picked short period? There have been numerous periods in the last 100 years that project a future lower price which proved correct...for a while. Such as a p spectacular and very similar plot from late 70's-early 80's. But one can cherry pick other short period and those projections predicted INCREASED prices which proved correct...for a time.

As I've pointed out numerous times it's a waste of time to argue about the model. Currently there are numerous and WELL DOCUMENTED different trends moving in a direction opposite to what would support the rather short term model prediction. Of course you'll hear repeated deniles but notice little to no their party documentation.

So I'll ask you the same question: what FACTS do you have that support the model?

[Midnight Oil]

Make Money or Lose Money, I get RICH!
What's not to like?

When Ultra Petroleum Corp. emerges from bankruptcy protection in the coming weeks, as expected, the natural gas producer’s chief executive is on track to be rewarded with roughly $35 million worth of its stock, more than 10 times his annual compensation in recent years.

Most Lucrative Energy Job? Some Say It’s CEO of a Bankrupt Company
I think Mr Shortonoil is selling the wrong type of "paper"

[ROCKMAN]

Ed - Let me give you an example. I just pulled this up. Assume it's true: "From then on, it says, the price of oil can only be pulled down along the descending Maximum Consumer Price curve, which it says is curtailed at $11.76/ barrel in 2020.".

So back to the question I just tossed out. Oil has been floating between $46 to $54 per bbl for a while. But for the model to come close to fulfilling the projection oil needs to decline about 75% in the next 31 months. So is oil going stay around $50/bbl until Dec 2019 and the drop to $12/bbl on New Year's day? Or maybe hold until Dec 2018 and the drop to $12/bbl and hold there for the next year? Or will the decline begin in June 2017 and then decline continuously until 1Jan 2020?

The obvious point: if oil is going to decline 75% in the next 2.7 years at what point when are you not seeing such a sharp and sustained decrease in the price do you consider the model to be wrong?

[AdamB]

The third leg of the oil production process (extraction, processing and distribution) is about to fold.

Yes, we all know, endlessly repeating the peak oil mantra will work someday, so just keep playing kick the can, with luck you'll live to see peak demand cause peak oil, and you can declare victory and move on to misrepresenting some other industry.

AdamB :
I think there is a world of difference between peak oil theories and the ETP prediction of total collapse next August.

Absolutely.

Peak oil will eventually happen.

Absolutely. The axiomatic perspective of peak oil has never been in doubt. And is the primary source of peak oil assembled strawmen, interestingly.

Time and date uncertain and the results uncertain depending on human reaction once they are faced with it.

Human behavior matters, yes. And ultimately, peak oil now is more likely to be caused by peak demand, as it is any scarcity of supply...as has been so ably demonstrated just during the past decade.

But the ETP scenario with oil at cheap prices below the "maximum affordable price" at the same time the industry collapses is just a fantasy.

Oh, fantasy is just where it starts.

[AdamB]

I do get tired of the name calling, can someone give me some FACTS that disprove the ETP MAP?

And you expect people to go about proving a negative...how? Prove it isn't a spurious relationship...just like this one first...

[tita]

What is the point of this tita? You start with a double negative, so . . . "There was no sharp decline because the activity didn't stop..." This is true. There was a sharp decline because activity did stop, or at least slow down.

There was no sharp decline as we could imagine. Activity went through a slow down, but wasn't killed. Most of the companies pursued what they were doing, even when they filed for bankruptcy. 60% of actual LTO production come from wells drilled and fracked during the "bust"... The financial and operating structures behind LTO just kept steady. Now, don't blind yourself, they are rising again.

Strong return? How strong? Is the return in activity enough compensate for lower quality non-sweet spots.

Current new production is higher than the decline of legacy production. Drilling activity is back to the april 2015 levels. Money is pouring again on them.

Well, this only works when growth is there. Even at the lowest point of prices, activity maintained with investors lending money, because there was still money to invest. It seems that the profit is not part of the equation.

So no profit, no business, no new oil

You don't necessarily need profits to get money from the banks. You just need to convince them that you're gonna make profit. A well produce for years before being plugged. As long as you generate enough cash to pay interests, and have places to drill and contract new loans, you don't really have to worry.

What I'm not really sure is how the finance work behind LTO. I assume operators contract bonds, which have a maturity date and an interest payment. When I try to estimate the gross product of an average well, considering it produce ultimately 200k bbls on average, you end up with $8 millions per well (considering a price of $40 per barrel). When I try to figure out what the costs are (drilling and fracking costs, interest of the bonds, lifting costs), I don't see fat profits here.

But they probably know what they do. I'm just not really sure.

[ROCKMAN]

tita - "You don't necessarily need profits to get money from the banks." Of course not. A great example is the update on Chesapeake I posted the other day. What company represents the shale bust better the CHK? Last year it had a negative net income of $4.4 million. And last year was an improvement. LOL. But what did the bankers (not private investors such as bond holders) do in 2015 and 2016?

From Oct 2015: "Under a new financing agreement the embattled oil and gas producer’s unsecured $4 billion revolver will be converted into a secured credit line, according to a company statement. Chesapeake also will be able to raise as much as $2 billion in junior-lien debt, pushing its unsecured creditors further down the pecking order in extracting recoveries during a default."

The banks loan money on the basis of asset value. CHK may have been losing money but their reserves and other assets were still worth many terns of $billions at low oil prices.

The term is collateral. From 1 year ago:

"Chesapeake Energy Corp. pledged almost all of its natural gas fields, real estate and derivatives contracts to maintain access to a $4 billion line of credit as the shale gas producer grapples with falling energy prices."

BTW since that article CHK stock value has INCREASED about 50%.

[Cog]

I turned a fair profit by buying CHK on $1 dips and selling right after it went up. Moved on to less risky ventures.