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The Etp Model, Q & A Pt. 8

Discuss research and forecasts regarding hydrocarbon depletion.

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Re: The Etp Model, Q & A Pt. 8

Unread postby creedoninmo » Fri 17 Feb 2017, 11:51:48

It probably wont last as all it would take is a change in the weather or a change in consumer confidence and activity to move demand up or down and upset the apple cart. And of course turmoil in oil producing regions could cut production at any time.
I think that about 2 more years should provide the proof of whether the ETP model is accurate or not. When oil reached too high a price in 2008 the house building industry failed. Currently Venezuela and Syria have failed. What dominoes fall in the future. Maybe the dollar as world reserve currency within five years. Yes I'm a doomer.
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Re: The Etp Model, Q & A Pt. 8

Unread postby donstewart » Fri 17 Feb 2017, 12:08:26

Short Diversion from ETP
Here is a very short video which explains, in a nutshell, how one can go about getting MORE complexity from the biology, while man-made complexity is crashing around our ears.

https://www.farmingsecrets.com/essentia ... 92e3d279f2

Of course, the devil is in the details. And for that, you need some education and some experience. Best to get started now.

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Re: The Etp Model, Q & A Pt. 8

Unread postby farmlad » Fri 17 Feb 2017, 13:36:37

Don Now that I have spent a number of years learning from and imitating Gabe brown and others with similar mindset, I say the most important concept that we need to impliment is to maximize photosynthesis. The rest is details and almost self organizing.

If the energy is not there, nothing else matters. Just like we learn from the ETP Model, Focus on the energy, stupid.

So anything we can do to maintain more green leaves per acre will support more life and balance in the soil and in turn grow plants loaded with a full spectrum of nutrients to feed us animals above ground.
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Re: The Etp Model, Q & A Pt. 8

Unread postby donstewart » Fri 17 Feb 2017, 13:59:06

China and ETP
Those of us in Europe or North America almost by default relate to the ETP predictions based on our daily experience. But, it turns out, that China alone has accounted for twice as much increase in energy use as all of the rest of the world combined, including India and Africa.

https://econimica.blogspot.gr/2017/02/g ... y-all.html

I don't know exactly how to correct for my blindspot, but it is well to be reminded of it.

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Re: The Etp Model, Q & A Pt. 8

Unread postby vtsnowedin » Fri 17 Feb 2017, 14:02:06

creedoninmo wrote:It probably wont last as all it would take is a change in the weather or a change in consumer confidence and activity to move demand up or down and upset the apple cart. And of course turmoil in oil producing regions could cut production at any time.
I think that about 2 more years should provide the proof of whether the ETP model is accurate or not. When oil reached too high a price in 2008 the house building industry failed. Currently Venezuela and Syria have failed. What dominoes fall in the future. Maybe the dollar as world reserve currency within five years. Yes I'm a doomer.

Aren't we all at times? Two years won't prove anything to the adherents, they will just move the goal posts.
While the housing crash and high oil prices coincided in time, one did not necessarily cause the other. Liar loans of adjustable rate mortgages guaranteed by a quasi government agency propelled by the "Community reinvestment act" would have failed eventually of their own weight even with ten dollar oil.
While some economies have and will continue to collapse as oil and other forms of energy get harder to come by I don't think they all will. The USA with enough domestic production to meet real needs should be one of the winners if we play our cards right.
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Re: The Etp Model, Q & A Pt. 8

Unread postby godq3 » Fri 17 Feb 2017, 14:54:53

vtsnowedin wrote: While some economies have and will continue to collapse as oil and other forms of energy get harder to come by I don't think they all will. The USA with enough domestic production to meet real needs should be one of the winners if we play our cards right.

World energy consumption rate must increase every year. It doesn't matter which specific countries do it. If world's energy consumption rate drops for longer than couple months, it's all over.

My city. Click, or ignore:
http://i.imgur.com/jAkccrS.jpg
http://i.imgur.com/CAmNckZ.jpg
Last edited by godq3 on Fri 17 Feb 2017, 16:13:56, edited 1 time in total.
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Re: The Etp Model, Q & A Pt. 8

Unread postby vtsnowedin » Fri 17 Feb 2017, 15:42:52

godq3 wrote:
vtsnowedin wrote: While some economies have and will continue to collapse as oil and other forms of energy get harder to come by I don't think they all will. The USA with enough domestic production to meet real needs should be one of the winners if we play our cards right.

World energy consumption rate must increase every year. It doesn't matter which specific countries do it. If world's energy consumption rate drops for longer than couple months, it's all over.

The world and its economy are much more complicated then that. If by It you mean Business As Usual that will take a hit especially in the countries experiencing the greatest declines. But there is nothing magical about BAU is is just the way things are and it ill serves a lot of people already. If BAU goes away it will immediately be replaced by The Way Things are Now.
World energy consumption rate must increase every year.

Much too simplistic to be valid. The use and efficiency of the energy used and the quality of the end product would have to be accounted for. After all a gallon of fuel burned to grow the food on your table has more worth then a gallon used to light city streets at four A.M. when there is no one awake to need the light.
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Re: The Etp Model, Q & A Pt. 8

Unread postby shortonoil » Fri 17 Feb 2017, 17:38:35

In recent graphs we have shown how refinery yields have declined; at least since the EIA began publishing data on refinery inputs and outputs. From 2005 to 2015 they fell 32%. NOTE: Refinery yield is not the same as crack spread, they are entirely different measurements. One can not be used for the other Because 85% of a refinery's cost is the cost of the crude that they use a decline in yield must show up as an increase in their production cost. Also, because the industry is very competitive their profit margin on gross sales is very thin. These increases could not have been coming out of their profits. As demonstrated in the graph below those extra costs have been passed on to the consumer. In 1994 the cost of gasoline was 29% of the cost of the crude. Over the years that rose to a maximum of 73% in 2010 and fell to 46% in 2015 after the 2014 price crash. The consumer has been paying for the cost of declining refinery yields.

Beginning in October of 2016 US gasoline consumption began to decline. As our Maximum Affordability function indicates crude has reached the maximum price that the economy can afford to pay for it. That is also showing up in gasoline sales. Even though the gasoline/ WTI ratio has declined there is very little room for upward momentum in gasoline prices.

This is a very important point for anyone trading gasoline futures, ETFs, ETNs, or options on any of the these. There is very little room for upward movement, and a lot for downward. Trade carefully, and hedge your bets:

http://www.thehillsgroup.org/depletion2_022.htm

http://www.thehillsgroup.org/

https://www.eia.gov/dnav/pet/hist/LeafH ... us_dpg&f=a
https://www.eia.gov/petroleum/supply/we ... endixa.pdf

Please note that in the graph below 1900 is year zero. The year 2000 would be 100 (1900 +100). 2020 would be 120 etc.
click to enlarge
.
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Re: The Etp Model, Q & A Pt. 8

Unread postby Babydoomer » Fri 17 Feb 2017, 17:40:45

farmlad wrote:Short Back to the subject of rejenerating soils I recommend listening to these experts https://vimeo.com/search?q=kcsaac My experience in rejenerating soils on my small farm in southern Michigan as well as in Paraguay has been based on their consepts. To speed up the process with more inputs like compost watch https://www.youtube.com/watch?v=zAn5YxL1PbM
.

Just came across this whilst trying to track back through the discussion about refining. Still don't get that, but thanks for this great resource farmland! It may be 'off-topic' but I tell you what, watching those videos is a great antidote to a) the powerless feelings associated with what's heading our way energy-wise and b) the endless name calling and playground bickering on this otherwise fascinating thread.
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Re: The Etp Model, Q & A Pt. 8

Unread postby donstewart » Fri 17 Feb 2017, 18:36:10

@babydoomer
Thanks for this great compilation. I haven't watched all of them again, but I notice that some feature Colin Seis. There is a great segment where he calculates all the money he has saved by not purchasing synthetic fertilizers. Then he asks, 'where did all that money go? Why aren't I rich?'. Then he looks at the beer in his hand and wonders if he drank it all. A priceless moment

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Re: The Etp Model, Q & A Pt. 8

Unread postby kublikhan » Fri 17 Feb 2017, 19:24:47

vtsnowedin wrote:Two years won't prove anything to the adherents, they will just move the goal posts.
Exactly. We saw the same thing with adherents of the ecat. Every time a goal post was missed Rossi just moved the goal post. And the hardcore swallowed it hook, line, and sinker. In the years ahead when oil prices fail to fall to the level of the "Maximum Affordability Price" short will just spin some BS, make a new graph, and continue to peddle his model. Wash, rinse, repeat.
The oil barrel is half-full.
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Re: The Etp Model, Q & A Pt. 8

Unread postby shortonoil » Fri 17 Feb 2017, 21:39:12

Dear Members of the Etp accumulation of assorted people, and things:

We are changing our email mass service, and so we dumped a whole lot of addresses that we may not be sure from where they came. You will get a notice that says if you shouldn't be here, don't want to be here, or just don't care hit this link. We'll take you off the list.

Thanks
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Re: The Etp Model, Q & A Pt. 8

Unread postby shortonoil » Fri 17 Feb 2017, 21:52:56

"Exactly. We saw the same thing with adherents of the ecat."

We make money with our consulting, with our research reports, and by trading. Our clients also make money by following our advice. How are your clients doing?

AND, like I said above be very cautious of long trades on petroleum and its products, the odds are not in your favor with that kind of position.
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Re: The Etp Model, Q & A Pt. 8

Unread postby Cog » Fri 17 Feb 2017, 22:49:35

shortonoil wrote:"Exactly. We saw the same thing with adherents of the ecat."

We make money with our consulting, with our research reports, and by trading. Our clients also make money by following our advice. How are your clients doing?

AND, like I said above be very cautious of long trades on petroleum and its products, the odds are not in your favor with that kind of position.


Are you aware of the Code of Conduct here?

3.1.7 Unsolicited advertisements: This includes offering goods, services, employment (except within the Jobs forum), or soliciting donations. This also includes advertising for a website. If you have something to sell, please contact an administrator and buy a banner.
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Re: The Etp Model, Q & A Pt. 8

Unread postby vtsnowedin » Fri 17 Feb 2017, 22:56:26

shortonoil wrote:In recent graphs we have shown how refinery yields have declined; at least since the EIA began publishing data on refinery inputs and outputs. From 2005 to 2015 they fell 32%. NOTE: Refinery yield is not the same as crack spread, they are entirely different measurements. One can not be used for the other Because 85% of a refinery's cost is the cost of the crude that they use a decline in yield must show up as an increase in their production cost. Also, because the industry is very competitive their profit margin on gross sales is very thin. These increases could not have been coming out of their profits. As demonstrated in the graph below those extra costs have been passed on to the consumer. In 1994 the cost of gasoline was 29% of the cost of the crude. Over the years that rose to a maximum of 73% in 2010 and fell to 46% in 2015 after the 2014 price crash. The consumer has been paying for the cost of declining refinery yields.

Beginning in October of 2016 US gasoline consumption began to decline. As our Maximum Affordability function indicates crude has reached the maximum price that the economy can afford to pay for it. That is also showing up in gasoline sales. Even though the gasoline/ WTI ratio has declined there is very little room for upward momentum in gasoline prices.

This is a very important point for anyone trading gasoline futures, ETFs, ETNs, or options on any of the these. There is very little room for upward movement, and a lot for downward. Trade carefully, and hedge your bets:

http://www.thehillsgroup.org/depletion2_022.htm

http://www.thehillsgroup.org/

https://www.eia.gov/dnav/pet/hist/LeafH ... us_dpg&f=a
https://www.eia.gov/petroleum/supply/we ... endixa.pdf

Please note that in the graph below 1900 is year zero. The year 2000 would be 100 (1900 +100). 2020 would be 120 etc.
click to enlarge
.

I am trying to make some sense out of your graph but it is a puzzle. As labeled it is trying to say that in 2010 refiners got 0.7 gallons of gas from each gallon of standard West Texas intermediate crude. That is physically impossible considering the makeup of WTI and the state of the refining art. But rereading your text you are discussing profits and margins so perhaps it is just poorly labeled and should read dollars of gasoline sold per dollar of WTI bought. That would certainly give you a different graph but checking the high point through EIA the cost of WTI in 2010 averaged 79.48/bl or 1.89 per gallon and wholesale gas in NY harbor was 2.095 a gallon.
Would you care to clarify?
https://www.eia.gov/dnav/pet/pet_pri_spt_s1_a.htm
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Re: The Etp Model, Q & A Pt. 8

Unread postby marmico » Sat 18 Feb 2017, 05:03:25

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Re: The Etp Model, Q & A Pt. 8

Unread postby shortonoil » Sat 18 Feb 2017, 08:55:19

The trolls are the Judas Goats; they are there to distract as the sheep are led to slaughter. The industry is now losing $2.7 trillion per year on their full life cycle production costs. If like the FED, the economy is leveraged out 50 to 1 we should be seeing the fireworks going off fairly soon. Expect to see sometime in the near future like what has already happened in Europe; bail-ins - where they simply go in, and take the money out of your account. That was just a dress rehearsal of what is to come. As a safety precaution it would be a good idea to have a month or two of income in cash, your digestive system is likely to thank you.

The oil industry is failing all around the world; just imagine what will happen when crude falls to $25:

http://www.zerohedge.com/news/2017-02-1 ... t-deficits

We are watching as the Titans pull each other to pieces, it is happening all across Europe and the US. There will be much, much more of this as the oil age comes to its conclusion. The battle for the remaining wealth and power will be enormous, and the best side to choose will be your own. Unfortunately, we are now living in "interesting times".
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Re: The Etp Model, Q & A Pt. 8

Unread postby vtsnowedin » Sat 18 Feb 2017, 09:05:29

shortonoil wrote:The trolls are the Judas Goats; they are there to distract as the sheep are led to slaughter. The industry is now losing $2.7 trillion per year on their full life cycle production costs. If like the FED, the economy is leveraged out 50 to 1 we should be seeing the fireworks going off fairly soon. Expect to see sometime in the near future like what has already happened in Europe; bail-ins - where they simply go in, and take the money out of your account. That was just a dress rehearsal of what is to come. As a safety precaution it would be a good idea to have a month or two of income in cash, your digestive system is likely to thank you.

The oil industry is failing all around the world; just imagine what will happen when crude falls to $25:

http://www.zerohedge.com/news/2017-02-1 ... t-deficits

We are watching as the Titans pull each other to pieces, it is happening all across Europe and the US. There will be much, much more of this as the oil age comes to its conclusion. The battle for the remaining wealth and power will be enormous, and the best side to choose will be your own. Unfortunately, we are now living in "interesting times".

So your answer to serious questions about your latest graph is to hurl insults and change the subject with outrageously fictitious figures.
Sadly I expected nothing more.
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Re: The Etp Model, Q & A Pt. 8

Unread postby donstewart » Sat 18 Feb 2017, 10:01:32

@shortonoil
I don't have the expertise to wade through the EIA tables...I would just make laughable mistakes.

However, if I can speak from a conceptual standpoint.
*Crude oil is valuable because it is a dense source of liquid energy which can be burned in a heat engine to produce work...especially movement across the landscape.
*Therefore, the first question we need to ask is 'how much crude oil products which can be burned in heat engines in vehicles are coming out of the refinery for every barrel of crude oil input?
*But quite a bit of the crude oil (and other hydrocarbons) coming into the refinery are never turned into liquid fuels for sale to the consumer.
*Instead, some of them are burned to provide energy inside the refinery.
*And some of them are transformed into products which become things like plastics which have embedded energy, but are no longer sources of energy if they are burned. They CAN frequently be burned in incinerators, but there is no net energy release from the incinerator. The transportation fuels can still produce net energy when they are burned.
*However, the value to society of burning the transportation fuels is dependent on a very large infrastructure which enables the heat engines to do useful work, such as moving a human down a highway or moving a load of gravel from the gravel pit to the construction site. If we want to look at the 'end to end' entropy production process, we have to look at much more than reservoir to refinery output.

Therefore, it is obvious that the more of the hydrocarbon inputs are diverted into products such as plastics or are burned to produce heat for the refinery, the less the ratio of transportation fuels coming out to crude oil going in.

This does not mean that the refinery can't be very profitable making plastics, nor that burning some light naphthas to generate heat is not the most economical way to generate the needed heat. What it does mean is that the refinery is generating less useful transportation fuels over time per unit of crude oil input. We also need to be careful about counting as a 'transportation fuel' things like ethanol, which is really not producing much if any net energy.

Is this a correct way to think about the graphs?

Thanks...Don Stewart
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Re: The Etp Model, Q & A Pt. 8

Unread postby donstewart » Sat 18 Feb 2017, 11:03:21

Diesel and electricity
Alice Friedemann today discusses trains (which run on diesel to make electricity) deliver coal to power plants, which make electricity for public consumption:

http://energyskeptic.com/2017/interdepe ... p-running/
'
'Sixty percent of the price paid for coal is transportation cost,'

Since the trains are running on diesel, I assume that diesel is actually a very significant part of the cost of electricity. We just might not be aware of it since it is hidden in the transportation. Alice says that fracked gas is about to begin declining, which will make us more dependent again on coal...and therefore diesel.

I only quote this to emphasize that a 'light economy' which appears to run on electricity is really a diesel economy. Which emphasizes the question of what the refinery statistics mean to us.

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