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Economics vs. ETP

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

Economics vs. ETP

Unread postby Tanada » Mon 10 Oct 2016, 12:03:41

shortonoil wrote:Ten years ago it was generally held that oil would be something like $500/ barrel by now. How did that work out? That had to do with the assumption that supply/ demand would always rule. It also had to do with something analogous to attempting to determine ones height by weighting themselves. The difference is that the past zealotry was based on a hypothesis that was never tested, this one has been been very well tested. It is sort of comparing apples and oranges; which is also just following a long time Peak Oil tradition.


Generally held? I don't think that is an accurate assessment. Many of us pointed out that such a rapid rise in price to that level was neither likely nor sustainable. Nobody would be buying oil at those prices other than what was absolutely essential, which would cause a massive recession, destroy demand and lower prices to a more sustainable level.

The cadre of members who were advocates of that fast crash scenario of instant doom from unrestrained price rises were never a majority here. After oil peaked at $147/bbl in 2008 and then crashed along with demand through spring 2009 most of them either moderated their views or just dropped out of the website to pursue their disproven beliefs elsewhere.

As a point of fact I just did a search. You have been banging the drum of your thermodynamic misunderstanding of oil production since all the way back in 2007. Possibly longer. When the world civilization refused to collapse from the 2008 excursion to $147/bbl you went quiet for a while trying to come up with some way of explaining away the real world based on your thermodynamic beliefs.

Eventually you came up with ETP and started hyping that theory, with its shiny new bells and whistles. As it so happens you started hyping it right about the time the world oil supply was exceeding world oil demand for $90/bbl oil. To the casual observer it appeared you had predicted the price collapse because of your deeply flawed Thermodynamic theory of economics.

The only thing that has been driving oil prices is the same supply/demand dynamic that has always driven oil prices. Your obsession with your misunderstanding of thermodynamics aside only your hard core acolytes have any faith in your theory.

You have been told for years around here that economists, oil companies, geologists, banks and average people with common sense use the classic concept of supply and demand to make their decisions about investing in or consumption of petroleum. You have insisted that everyone who does not buy into your thermodynamic theory of 'real' oil production and consumption dynamics is ignorant, uneducated or just plain unable to understand. You usually throw in some childish insults about the intelligence of those who disagree with you along side your other disclaimers.

EROEI or ERoEI aka thermodynamics influence price because they influence the cost of production. When your EROEI is 250:1 vs 25:1 clearly your cost per unit of production is very different so you have some validity up to that point. Nobody, as has been pointed out to you endlessly, uses that EROEI to make decisions about producing the next well or building the next refinery. Thermodynamics says one thing about oil production, you have to invest energy to get energy back out of the system. It does not say that anyone's return of energy in the form of refined products consumers demand is dependent on the type of energy put into the process. You can quite easily take Methane from Natural Gas, run it through a modern Fischer–Tropsch chemical plant and produce Diesel Fuel, Kerosene, Gasoline and other longer chain hydrocarbons. People instantly proclaim this is EROEI negative because the process requires energy to run and from the thermodynamic viewpoint this is 100 percent correct.

It is also 100 percent irrelevant to the economic equation driving the decision to put methane through the Fischer–Tropsch process. The economic decision is based on the cost of the Fischer–Tropsch plant to build and maintain, the cost of the Methane raw material, and the value of the product stream that comes out of the process. By the same token a modern Petroleum refinery is not an EROEI positive process either. Crude oil goes into the refinery and frequently methane also goes in to supply hydrogen for the cracking unit of the refinery. Refined products come out the other end along with a lot of waste heat. Thermodynamically the equation balances, X calories of Petroleum and Natural Gas and often Electricity go into the refinery. X-(refining energy loss as waste heat) of refined products come out the other end of the process. Some of those refined products, like Asphalt for example, are converted from a burnable portion of crude oil into a road matrix binding material and are disbursed in such a way that their caloric value is irrelevant. The same is true of rubber and plastic products that ultimately end up in a landfill somewhere. In other words a very important percentage of the Energy in the Crude Petroleum when it enters the refinery is lost into products that are not used for energy purposes. The EROEI of a Crude oil refinery is terrible!

So why do we refine oil and lose all that energy? It is entirely possible to build diesel engines tuned to burn crude oil, that would let us get the most energy out of the petroleum possible. So why do we waste all that energy refining crude oil? Economics. Economically, the value to the consumer of the refinery products is much higher than the value of the crude oil burned directly in a diesel engine. That difference in value allows the refining companies to buy crude oil and methane and electricity, operate and maintain their refinery as well as paying hundreds or thousands of employees, and still return a profit to their shareholders.

(The ETP model,Total Production Energy) The model is derived from the fundamental physical properties of petroleum, First and Second Law statements, and the cumulative production history of petroleum.


This concept is flawed because you can not know the actual values of the variables you model is based upon. Petroleum is not one physical product with one set of properties, it is thousands of different molecular weight hydrocarbons. Those hydrocarbons are arranged in chains, rings, helixes and every variation on those themes you can imagine. Those varied organic compounds are contaminated with different co-produced non organic compounds ranging from but not limited to sulfur, iodine, vanadium, selenium, cobalt, manganese, iron oxides, and a great many more. Not only are no two fields chemically identical, often a well is not identical to the one nearby in the same field.

You also have a problem understanding the laws of Thermodynamics.
The first law, also known as Law of Conservation of Energy, states that energy cannot be created or destroyed in an isolated system. Energy can not be created or destroyed in an isolated system. To put it as plainly as possible, the energy in an atom of matter stays exactly the same unless some outside source adds to or subtracts energy from it. For an atom of any material to cool it has to lose energy through radiation or conduction. For an atom of any material to gain energy it has to be impinged upon by radiant energy from outside, or have energy added through conduction i.e. physical contact.

Entropy, commonly called the second law. I presume the model uses the weakly defined version of Entropy meaning the remaining energy in the system is no longer available to do "useful work".
By that definition all the waste heat that comes out of your refinery in my earlier example is "entropy". The problem with using this definition is pretty simple, it assumes that because the energy is being rejected as waste heat its potential has been tapped to the greatest extent possible. This is clearly not the case due to the physics involved. What I mean is, it is entirely feasible to design and install a heat exchanger to the refinery to collect and concentrate that waste heat, use it to create a pressure differential in some fluid and spin a turbine to produce mechanical work or generate electricity. So why don't they do that? There are millions of watts of thermal energy being just dumped into the environment instead of being put to useful work! Economics. Oh rats that ugly word again? Yes, it is cheaper for the refinery to expel all that waste heat than it is to convert it into useful work because they have access to outside sources of electricity. It is even cheaper in most places to just vent it instead of using it for district heating systems like they use in Scandinavia to make use of otherwise 'waste' heat energy. IOW the 'entropy' of the refinery in this example is not a lack of useful potential, it is simply a matter of convenience for the refiner. It is easier and cheaper to hook up to an outside electricity supplier and only use that connection as a supply input than it would be to build an on site heat exchanger and generator that would feed excess power into the grid for sale to the utility companies. This is not 'real' entropy, this is just wasteful use of energy. IOW this is not the inability to retrieve useful work, it is unwillingness due to economics.

When you can not know the exact conditions of each well in each field you can not calculate the 'useful work' you can get from the oil produced by that field or well. Even worse there is no scientific definition of 'useful' work to fall back upon. The closest you can come is the law of diminishing returns, the closer you get to 100 percent efficiency the harder it is to make a useful increase in efficiency. In the 1976 a common natural gas burning furnace for a home was about 60 percent efficient. That is to say 60 percent of the total energy in the fuel before burning was turned into 'useful' heat in the home the furnace was warming. Today home Natural Gas furnaces are all at least 80 percent efficient and most new furnaces are 90 percent efficient or more. The cost difference to go from a 1956 furnace that was 50 percent efficient to a 1976 furnace that was 60 percent efficient was a trivial cost. To go from 60 percent in 1976 to the 80 percent standard of 1986 was a little more expensive to build and maintain, but the fuel savings paid back the cost fairly rapidly. Going to the modern 90 percent efficiency was a bigger cost, and only worthwhile when natural gas costs were high. You can go all the way to certified 98.5 percent efficient furnaces today if you so desire, but the increased cost and complexity is substantial and the maintenance costs are significant.

This is the law of diminishing returns and it applies to everything including oil wells. The example that is commonly used is, the higher the water cut the less total energy return from the well for the energy put in pumping. This is true so far as it goes, but does that make a difference in if the well is produced or not? Not directly. Say your well has a 50 percent water cut. That means you are using energy in to produce 2 barrels of mixed liquid, one of water and one of oil. Depending on what country you are in and the environmental laws you have to do something with that produced water and it can range from dumping it in the local drainage ditch to paying someone a fairly significant sum to haul it away and inject it into another well. This range of options makes it impossible to know how much additional energy is required besides the simple pumping to get the mixed fluid to the surface. The higher the water cut the more energy used on the Energy In side of the equation. But does the oil producer care? No, what the oil producer cares about is the cost to produce the oil, along with the ancillary expenses like disposal of produced water, and the price they get for the produced oil at time of sale. Even worse wells are not all produced by the same method. Some have natural drive that forces the fluids up the well pipe. Some use internal combustion engine powered pumps burning natural gas or crude oil produced by the well to pump the well. Some have artificial drive where water or CO2 or Nitrogen are pumped into the field not too far away from the extraction well. Some use electric motors supplied by generators or off site utility hook ups. There are probably other options beyond those five I am not overly familiar with.

It boils down to this, if the producer can sell the oil and make a profit they will, if the well or field is losing money they evaluate the prospects of future profits and either shut in or cap the wells they do not see a future profit coming from.

Understanding is easy, if the Producer can earn a living pulling oil out of a well they will. If they lose too much money pulling oil out of their wells they will go bankrupt and stop doing so. If the energy to produce that oil is cheap electricity or cheap natural gas they will be able to produce that oil even if the sale price is much lower than they want it to be. If they need to use 2 calories of cheap methane for every 1 calorie of crude oil they sell but the methane is cheap and the oil is highly priced then they will do so, despite the fact that the well has a negative energy return on energy invested. Producers go into the oil production business to make money. If they can make money with solar powered well pumps or wind powered pumps like farmers used in the 1920's despite the fact that they have to invest 2, or 4 or 8 times as much energy into the barrel of oil they produce than the consumer gets out of it then they will smile and count their profits.
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Re: Economics vs. ETP

Unread postby Outcast_Searcher » Mon 10 Oct 2016, 12:33:15

Tanada wrote:
shortonoil wrote:Ten years ago it was generally held that oil would be something like $500/ barrel by now. How did that work out? That had to do with the assumption that supply/ demand would always rule. It also had to do with something analogous to attempting to determine ones height by weighting themselves. The difference is that the past zealotry was based on a hypothesis that was never tested, this one has been been very well tested. It is sort of comparing apples and oranges; which is also just following a long time Peak Oil tradition.


Generally held? I don't think that is an accurate assessment. Many of us pointed out that such a rapid rise in price to that level was neither likely nor sustainable. Nobody would be buying oil at those prices other than what was absolutely essential, which would cause a massive recession, destroy demand and lower prices to a more sustainable level.

The cadre of members who were advocates of that fast crash scenario of instant doom from unrestrained price rises were never a majority here. After oil peaked at $147/bbl in 2008 and then crashed along with demand through spring 2009 most of them either moderated their views or just dropped out of the website to pursue their disproven beliefs elsewhere.

As a point of fact I just did a search. You have been banging the drum of your thermodynamic misunderstanding of oil production since all the way back in 2007. Possibly longer. When the world civilization refused to collapse from the 2008 excursion to $147/bbl you went quiet for a while trying to come up with some way of explaining away the real world based on your thermodynamic beliefs.

Eventually you came up with ETP and started hyping that theory, with its shiny new bells and whistles. As it so happens you started hyping it right about the time the world oil supply was exceeding world oil demand for $90/bbl oil. To the casual observer it appeared you had predicted the price collapse because of your deeply flawed Thermodynamic theory of economics.

The only thing that has been driving oil prices is the same supply/demand dynamic that has always driven oil prices. Your obsession with your misunderstanding of thermodynamics aside only your hard core acolytes have any faith in your theory.

You have been told for years around here that economists, oil companies, geologists, banks and average people with common sense use the classic concept of supply and demand to make their decisions about investing in or consumption of petroleum. You have insisted that everyone who does not buy into your thermodynamic theory of 'real' oil production and consumption dynamics is ignorant, uneducated or just plain unable to understand. You usually throw in some childish insults about the intelligence of those who disagree with you along side your other disclaimers.

...

Excellent post Tanada. Well presented.

I would add that energy wise, the earth is not a closed system. There's this huge yellow thing in the neighborhood pouring a huge amount of energy into the earth's atmosphere and onto the earth's surface every second.

And we're learning to make more use of that energy, directly and indirectly, over time.

Also, economics drives efficiency. As long as it does, the vast majority of major economies will continue to get more done with the same unit of energy. (Examples: fleet mileage, hours of computer time, heating and cooling, etc. )

...

Given the predicted cost curve of the ETP theory, it will be so obvious within a decade how badly that prediction worked out that its proponents will have to go back and do some new curve fitting to come up with a new model of doom.

Meanwhile, as Tanada points out, ugly and chaotic and unpredictable (as to specifics like future prices) as it is, the basic economic principles of supply and demand via the markets will continue to do their work, as they have through recorded history.
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Re: Economics vs. ETP

Unread postby onlooker » Mon 10 Oct 2016, 14:18:58

As one who is has tried and is trying to digest all this info on the Oil and Economic fronts, I first like to say Tanada's post is very informative and persuasive. I feel I still do not know enough to side with one side or another on the ETP question. I will say that I strongly am in the camp of what Rockman says that peak oil is a dynamic that works in tandem with the general Economy. In that sense the ETP maybe is missing certain elements of what and how things will unfold. An interesting aspect of all this is a relatively old theory called the ---The Olduvai Theory is defined as the ratio of world energy production and population. It states that average energy production per capita will decline to its 1930 level by 2030. Collapse will be strongly correlated with an “epidemic” of blackouts around the globe. This warning has come from scientists for more than a century, but it is still disallowed in Washington, D.C. " I am wondering what posters specifically think about this theory.
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Re: Economics vs. ETP

Unread postby Tanada » Mon 10 Oct 2016, 14:30:50

onlooker wrote:As one who is has tried and is trying to digest all this info on the Oil and Economic fronts, I first like to say Tanada's post is very informative and persuasive. I feel I still do not know enough to side with one side or another on the ETP question. I will say that I strongly am in the camp of what Rockman says that peak oil is a dynamic that works in tandem with the general Economy. In that sense the ETP maybe is missing certain elements of what and how things will unfold.

An interesting aspect of all this is a relatively old theory called the ---The Olduvai Theory is defined as the ratio of world energy production and population. It states that average energy production per capita will decline to its 1930 level by 2030. Collapse will be strongly correlated with an “epidemic” of blackouts around the globe. This warning has come from scientists for more than a century, but it is still disallowed in Washington, D.C. " I am wondering what posters specifically think about this theory.


You can read or post in the old Olduvai thread, I am sure the other new folks around here would also benefit from glancing through it.

the-olduvai-thread-merged-t2817.html
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Re: Economics vs. ETP

Unread postby jesus_of_suburbia » Mon 10 Oct 2016, 21:27:17

I like the conspiratorial tone the supporters take when they are convinced someone is trying to shut down their message. It's not at all totally weird that new members show up on occasion whose sole objective seems to dick ride the author, and never want talk about anything else unless it involves dick riding the author. Not to mention the fact that they act like overly aggressive assholes to the point of getting banned, only to show up under new usernames.
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Re: Economics vs. ETP

Unread postby Quinny » Tue 11 Oct 2016, 01:13:25

Your previous post (have only skimmed it so far) seems to be the first serious attempt I've seen to 'debunk' the ETP theory without descending into simplistic tautological or childish arguments! As such it warrants serious consideration and I will when I get time, but pretty busy harvesting ATM.

Think it would have been even better without personal jibes towards the author, who I found initially polite, until he had to continually defend against personal attacks?

Tanada wrote:
onlooker wrote:As one who is has tried and is trying to digest all this info on the Oil and Economic fronts, I first like to say Tanada's post is very informative and persuasive. I feel I still do not know enough to side with one side or another on the ETP question. I will say that I strongly am in the camp of what Rockman says that peak oil is a dynamic that works in tandem with the general Economy. In that sense the ETP maybe is missing certain elements of what and how things will unfold.

An interesting aspect of all this is a relatively old theory called the ---The Olduvai Theory is defined as the ratio of world energy production and population. It states that average energy production per capita will decline to its 1930 level by 2030. Collapse will be strongly correlated with an “epidemic” of blackouts around the globe. This warning has come from scientists for more than a century, but it is still disallowed in Washington, D.C. " I am wondering what posters specifically think about this theory.


You can read or post in the old Olduvai thread, I am sure the other new folks around here would also benefit from glancing through it.

the-olduvai-thread-merged-t2817.html
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Re: Economics vs. ETP

Unread postby regardingpo » Tue 11 Oct 2016, 11:48:38

jesus_of_suburbia wrote:I like the conspiratorial tone the supporters take when they are convinced someone is trying to shut down their message. It's not at all totally weird that new members show up on occasion whose sole objective seems to dick ride the author, and never want talk about anything else unless it involves dick riding the author. Not to mention the fact that they act like overly aggressive assholes to the point of getting banned, only to show up under new usernames.


They're starting to sound like Guy McPherson's cult. Both groups are broadly correct (McPherson about climate change really happening, ETP guy about peak oil really happening) but they take their views to absolute extremes and refuse to budge even an inch. McPherson is actually predicting total human extinction by 2030 (no joke), the ETP guy is predicting a complete collapse in production of oil by 2030 or something like that.
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Re: Economics vs. ETP

Unread postby Yukon fisher » Tue 11 Oct 2016, 11:55:25

When I first encountered the ETP model, I was immediately interested as it looked as if it could shed new light on the future viability of our global energy system. It also seemed to provide a way to answer a question many of us have asked: "At what price will people stop buying fossil fuel products? At what time will the steadily increasing cost of producing fossil fuels rise above this price?"
Viewed simply, when these trends intersect, the bottom will drop out of the fossil fuel industry.
Two problems: the first point is very hard to find and may only be visible in retrospect. The second point is the rising cost of extracting fossil fuels - it does not always rise. In addition, the ETP model ignores social imperatives such as concern over climate change and imposed prices through carbon taxes etc.
BUT, the biggest problem that the ETP model has is that it is so difficult to "grok". What I mean by that is that whenever I encounter something that feels like I have to twist my head around to accept, invariably it is flawed at best and usually bullshit. I resisted accepting this for years, but I think Tanada has drawn the veil of bullshit away from the ETP model, for which I thank you!
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Re: Economics vs. ETP

Unread postby ROCKMAN » Tue 11 Oct 2016, 12:34:40

onlooker - "I feel I still do not know enough to side with one side or another on the ETP question. I will say that I strongly am in the camp of what Rockman says that peak oil is a dynamic that works in tandem with the general Economy."

I have great news for you! Unless you are involved in long term strategy decisions in the energy sector (or your personal investment choices) it doesn't make any f*cking difference if you accept the model or not, does it? LOL. A question I've brought up before that I haven't yet seen a good answer: what is the UTILITY of the model? Which is a very different question then if if's correct or not.

IOW who is actually using the model and for what goal? And that DOES NOT INCLUDE arguing about it on peak oil.com or any other site. So far all I can tell is that its ultimate value will eventually be is to dertermine if the model builder knew what the f*ck he was doing. Which is of little importance to the Rockman.

But don't let that discourage anyone from pissing away their time debating the issue. LOL. And when done with it you can debate the model of how the world would look if commercial nuclear fusion became a reality next month. Oh, wait, I think the discussion may have already begun.
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Re: Economics vs. ETP

Unread postby Observerbrb » Tue 11 Oct 2016, 12:41:19

To be honest, BW Hill's final model appears after Steve's Ludlum proposal. I know that the Hillsgroup had to modify its original model and bring up the affordability curve. Then, it was fitted to the original model.

The main idea behind the original model was that Oil prices will rise faster than the consumer ability to pay for them, bankrupting oil producers and the economies at the same time. The modified version explains that Oil prices will go downwards as the consumer cannot afford to pay the whole life-cycle of Petroleum. As the consumer/economy gets less energy (more and more energy is diverted into the oil business, I don't think anyone here can say that this is wrong), the ability to pay for Oil goes down.

In your original statement, Tanada, you have not considered debt levels. If you leave them out, your analysis is flawed:

We cannot get rid of (some of) the debt without getting rid of (all of) the wealth. We cannot get rid of the debt because we would need to take on even more ruinous debts immediately afterward to keep vital services operating such as water supply. If we get rid of the debts the prices will fall leaving debt-tending establishments without investment funds. Our debts cannot be rationalized, the absence of debts cannot be tolerated. The debt system is rule-bound. Debts that were increased because of favorable rules face annihilation because of the same rules, changing the rules threatens debt elsewhere. Nowhere are there real returns to service the debts much less retire them. Nothing remains but the arm-waving of central bankers. As the banks create more debt (against their own accounts), their efforts are felt at the gasoline pump (The oil price goes down) which adversely affects debt service.

http://www.economic-undertow.com/2015/0 ... swan-dive/

Debt levels have been continuously going up, and only after the great recession, some efforts have been made to diminish the relative pace of its growth. However, we cannot stop adding debt or the system collapses (the Oil price will plunge dramatically, killing the Oil producers in the process)... but we cannot continue adding debt, as the newly brought debt unit will create less economic growth than the previous. The system is so saturated in debt, that we cannot create inflation to fend off this new debt.

I think you should review Economic's undertow and Steve from Virginia proposal before you get into full-attack mode against the much more detailed ETP model.

Steve Ludlum posted this graph in 2012, and you have not been able to discredit him. He was completely right, and he proposed (before anyone else) that oil prices were not going to recover anytime, and that this downward oil spiral was going to bankrupt the consumers (They could afford to pay less and less over time, the same that BW Hill now says... and also the oil producers.)

(See the image in the following link, as the forum configuration doesn't let me to post it here)

http://foro-crashoil.2321837.n4.nabble. ... ofDoom.png

Best Regards,

PS. For the ones who say that ETP-model advocates use a "conspiratorial tone" and are "dick-riding" the author, I just demonstrated that I'm fully aware of the facts surrounding this model and I still think - I will never say that I'm 100% right, though - that is legit. Your behaviour is the reason of the derogatory responses that the author of the model and some supporters throw at your faces. I have never engaged in such behaviour before, but I have to say that enough is enough.
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Re: Economics vs. ETP

Unread postby radon1 » Tue 11 Oct 2016, 12:50:00

ROCKMAN wrote: A question I've brought up before that I haven't yet seen a good answer: what is the UTILITY of the model?


Pretty simple. A "non-basement-based guru" tells you that he is able to see the future out of his "non-basement-based headquarters" and share with you the exact values of the future option strike prices, obviously out of sheer generosity, just for a "technical" subscription fee. Also, he draws a picture of doom in order to add dramatism and capture wider demographics. No responsibility, no disclaimer, no consequences, no nothing. What can have a better utility?
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Re: Economics vs. ETP

Unread postby regardingpo » Tue 11 Oct 2016, 12:56:26

ROCKMAN wrote: A question I've brought up before that I haven't yet seen a good answer: what is the UTILITY of the model? Which is a very different question then if if's correct or not.

I've seen you ask that question many times before, so let me have a crack at it, here's my answer for you:

The model allows you to predict the date of the collapse of the industrial civilization. According to the model (almost) all oil production will stop around 2030. Since that's only 14 years away, a successful transition to an oil-less world is impossible, therefore we will have a fast crash/doomsday scenario.

Are you satisfied with my answer? Do I get a cigar? Or you one of those posters who expect to croak by 2030 so you don't find this useful?


Observerbrb wrote:PS. For the ones who say that ETP-model advocates use a "conspiratorial tone"...


No need for scare quotes. Conspiratorial tone is 100% accurate assesment of attitudes of some ETP cheerleaders. They are literally accusing the owners/moderators of this site of supressing their message because they're paid by big oil.
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Re: Economics vs. ETP

Unread postby Observerbrb » Tue 11 Oct 2016, 13:11:53

radon1 wrote:
ROCKMAN wrote: A question I've brought up before that I haven't yet seen a good answer: what is the UTILITY of the model?


Pretty simple. A "non-basement-based guru" tells you that he is able to see the future out of his "non-basement-based headquarters" and share with you the exact values of the future option strike prices, obviously out of sheer generosity, just for a "technical" subscription fee. Also, he draws a picture of doom in order to add dramatism and capture wider demographics. No responsibility, no disclaimer, no consequences, no nothing. What can have a better utility?


Here you have another so-called guru that predicted the following outcome in 2012:

http://foro-crashoil.2321837.n4.nabble. ... ofDoom.png

He doesn't want you to pay him anything. Now, would you make the effort to discredit that the following is not true:

- Oil prices slumped at the very moment he predicted
- Oil prices have not recovered since then
- Managers are attempting to push prices higher, with war threats, embargoes and price manipulation in future markets
- The cost of bringing petroleum to market is going up
- Consumers can pay less and less money ("aggregate demand") for oil products as time goes by.
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Re: Economics vs. ETP

Unread postby radon1 » Tue 11 Oct 2016, 13:16:15

Observerbrb wrote:
In your original statement, Tanada, you have not considered debt levels. If you leave them out, your analysis is flawed


Where, specifically? Would you please provide a specific citation, that is in your opinion "flawed because of debt levels being not considered", and explain why it is flawed, in line with this website's discussion standards, instead of making a blank dismissal? Otherwise please spare us from further shilling spam.
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Re: Economics vs. ETP

Unread postby ROCKMAN » Tue 11 Oct 2016, 13:24:50

YF - "At what time will the steadily increasing cost of producing fossil fuels rise above this price?" And this brings me back to my perpetual bitching: what exactly do you mean by "cost of producing"? The cost to drill NEW oil wells that will produce SOME of the future oil production or the cost to produce the wells that are currently delivering about 94 million bopd to consumers?

Those two costs aren't anywhere close to each other. Nor does it matter if a shale well that is currently producing 200 bopd will never recover 100% of the cost to drill it. If it costs only $19/bbl (the LOE...Lease Operating Expense) to keep producing the well it will keep supplying the consumers even if the price of oil drops to $20/bbl.

And what's the average LOE of each of those 94 mm bbls produced every day? I have no f*cking idea. LOL. OTOH don't need to know it: if you owned a well making 200 bopd and your LOE to produce it were $60/bbl how long would keep producing it if you were getting $50/bbl? I serious doubt you (or any other company) would PAY for the previledge of producing oil, would you? So suffice it to say that the vast majority of those 94 million bbls being consumed every day cost less then the current price of oil.

So how low would oil prices have to drop for the oil patch to "die"? A good bit lower then the current price. The Rockman has a well in La that makes 260 bopd he would keep producing if oil drops to $6/bbl: his LOE is less then $5/bbl.

As long as folks don't specifically define what the cost to "produce" a means then it won't be clear what they are talking about.
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Re: Economics vs. ETP

Unread postby Observerbrb » Tue 11 Oct 2016, 13:25:13

radon1 wrote:
Observerbrb wrote:
In your original statement, Tanada, you have not considered debt levels. If you leave them out, your analysis is flawed


Where, specifically? Would you please provide a specific citation, that is in your opinion "flawed because of debt levels being not considered", and explain why it is flawed, in line with this website's discussion standards, instead of making a blank dismissal? Otherwise please spare us from further shilling spam.


Do you know the meaning of "not considering" in English? If he doesn't consider this specific point, you will not be able to find anything about debt levels in his argument.

If we were to follow this website's discussion standards, you should have been banned a while ago, as you never provide anything of value to counter the facts and do everything in your hand to derail the thread.

I asked you a question before after introducing a very specific prediction made by "some guy" two years ago, why did you choose to ignore it? Please, spare us from further shilling spam and focus on the real discussion.
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Re: Economics vs. ETP

Unread postby ROCKMAN » Tue 11 Oct 2016, 13:31:18

Observer - Mucho thanks. And now who is Ludlum and what exact utility has he used the model for? Assuming it was more then posting his own graphs and views. Thanks in advance.
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Re: Economics vs. ETP

Unread postby radon1 » Tue 11 Oct 2016, 13:41:38

I asked you a question before after introducing a very specific prediction made by "some guy" two years ago


Do more trolling baits, just like those of your other shilling clones.

Observerbrb wrote:Do you know the meaning of "not considering" in English? If he doesn't consider this specific point, you will not be able to find anything about debt levels in his argument.


So, the Second Law of Thermodynamics does not consider debt levels. This, according to you, makes this law flawed. Enough said.

This makes any further discussion pointless with you.
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Re: Economics vs. ETP

Unread postby ROCKMAN » Tue 11 Oct 2016, 13:52:08

r - "The model allows you to predict the date of the collapse of the industrial civilization." Great but the f*cking question wasn't what the model predicts. So tell me: who is using the knowledge of that date to take specific ACTIONS? IOW in my world UTILITY means actually using such knowledge in a physical manner. A car sitting in a garage is still a car...one cannot not argue with you that it isn't a car. You are a 100% correct in your "car model". But as long as it remains in that garage it has little or no utility. Any model, regardless of how correct it might be, has no utility if it isn't ACTIONABLE.

So I'll ask one more time: who is using your "date of the collapse of the industrial civilization" and what are they doing? Personally I haven't seen one action being actually done with that prediction. I mean other then wasting a lot of space here at peakoil.com. Like this post. LOL.
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Re: Economics vs. ETP

Unread postby jesus_of_suburbia » Tue 11 Oct 2016, 14:09:08

Rock,

Very simple. They are useful to the people who develop them. When you get the price of oil right once every 5 years, you get more page views. Maybe you get to be on Chris Martesons or Kunstler's podcast, as well.
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