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Is fast crash likely? Pt. 4

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

Is fast crash likely? Pt. 4

Unread postby donstewart » Fri 06 Oct 2017, 17:09:10

China and Oil

https://www.reuters.com/article/us-russ ... SKBN1CB1KE

and an article by Robert Rapier
http://www.zerohedge.com/news/2017-10-0 ... years-pace

The Rapier article, as I understand it, is total demand...not just imports. Note the rapid sales pace of SUVs.

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Re: Is fast crash likely? Pt. 3

Unread postby rockdoc123 » Fri 06 Oct 2017, 17:26:06

How is SA not broke if it must plow all its oil revenue back into oil production? No money left over for crowd control and wahabanist education. Gotta drape the Burka's.


It doesn't dimwit. Might help if you actually went somewhere outside of west coast hillbilly country and understood how the non-racist world works.

A breakdown of the budget for 2017 (largely unchanged from 2016 in terms of % spend)
Administrations 3%, Military 21%, Security and Regional Administration 12%, Municipal services 4%, Education 25%, Health and Social development 15%, Economic Resources 4%, Infrastructure and Transport 3.6%, Public Programs 11%.

add to this the fact that oil revenues only make up 62% of total revenues and non-oil revenues are increased year on year by 19%

you must have serious problems balancing your home budget if you think this way. :roll:
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Re: Is fast crash likely? Pt. 3

Unread postby pstarr » Fri 06 Oct 2017, 17:33:15

rockdoc123 wrote:
How is SA not broke if it must plow all its oil revenue back into oil production? No money left over for crowd control and wahabanist education. Gotta drape the Burka's.


It doesn't dimwit. Might help if you actually went somewhere outside of west coast hillbilly country and understood how the non-racist world works.

That's not very nice. Some mentor you are :x

rockdoc123 wrote:A breakdown of the budget for 2017 (largely unchanged from 2016 in terms of % spend)
Administrations 3%, Military 21%, Security and Regional Administration 12%, Municipal services 4%, Education 25%, Health and Social development 15%, Economic Resources 4%, Infrastructure and Transport 3.6%, Public Programs 11%.

Every cost center and oil expense supports the oil industry. Even the burka business.

rockdoc123 wrote:add to this the fact that oil revenues only make up 62% of total revenues and non-oil revenues are increased year on year by 19%

you must have serious problems balancing your home budget if you think this way. :roll:

Exactly. the other 38% of revenues must pay for running all the non-oil activities, the business and the energy. But it must also pay for the oil production overhead to get the oil those non-oil sectors. It's a basic tenet of ETP. There is not enough for both in this case.
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Re: Is fast crash likely? Pt. 3

Unread postby AdamB » Fri 06 Oct 2017, 17:39:16

dirtyharry wrote:WTI back below $ 50 . All those cheering when it was $ 51 ,please get some Viagra. :lol:


Cheering at $51? Screw that, I'm still cheering for it to get back to $28! Yeah, I know industry won't be happy, but so what? Fall road trips for everyone!!
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: Is fast crash likely? Pt. 3

Unread postby pstarr » Fri 06 Oct 2017, 17:42:56

AdamB wrote:
dirtyharry wrote:WTI back below $ 50 . All those cheering when it was $ 51 ,please get some Viagra. :lol:


Cheering at $51? Screw that, I'm still cheering for it to get back to $28! Yeah, I know industry won't be happy

The oil industry won't exist at $28. It cost more than that to promote it's clean-coal BS.
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Re: Is fast crash likely? Pt. 3

Unread postby asg70 » Fri 06 Oct 2017, 18:10:39



Is there a single zerohedge article that doesn't wind up being cited here? Enough already.
Hubbert's curve, meet S-curve: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: Is fast crash likely? Pt. 3

Unread postby onlooker » Fri 06 Oct 2017, 18:19:58

I do not think anybody knows what the real situation is concerning Saudi Arabia and its finances and its oil reserves. They are so opaque and the Reserve auditing is very suspect despite what Rockdoc says. What is clear is they are acting like their bread and butter ie. Oil is not going to last much longer.
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Re: Is fast crash likely? Pt. 3

Unread postby GHung » Fri 06 Oct 2017, 18:23:58

asg70 wrote:


Is there a single zerohedge article that doesn't wind up being cited here? Enough already.


The article was sourced from oilprice.com.

http://oilprice.com/Energy/Energy-Gener ... -Pace.html
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Re: Is fast crash likely? Pt. 3

Unread postby rockdoc123 » Fri 06 Oct 2017, 18:28:48

Exactly. the other 38% of revenues must pay for running all the non-oil activities, the business and the energy. But it must also pay for the oil production overhead to get the oil those non-oil sectors. It's a basic tenet of ETP. There is not enough for both in this case.


Add up the budget.....see it shortfalling 100%? No.
See any item in there called ETP expenditures? No.
Oil revenues have already taken account of Capex and Opex....they are net revenues, not gross revenues. Those revenues along with non-oil net revenues are used for the items I just mentioned. The oil and gas requirements have already been accounted for.
And as I pointed out previously Capex and Opex are $9.90/bbl which leaves around $36/bbl of net profit before royalty and tax.
The Saudis publish their previous year budget versus actuals along with next year budget on an annual basis....not sure what you think the mystery is.
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Re: Is fast crash likely? Pt. 3

Unread postby kublikhan » Fri 06 Oct 2017, 21:06:45

Outcast_Searcher wrote:I just saw an article today where Musk is talking about wanting to have Tesla rebuild Puerto Rico's electric grid. (Presumably with Tesla equipment, though that was implied but not stated).

https://www.cnbc.com/2017/10/06/elon-mu ... maria.html

Now think about that. Puerto Rico had a moribund economy with $70+ billion in debt they'd defaulted on and were showing NO sign of wanting to repay BEFORE the hurricane wrecked their grid.

So how or why does Musk presume he's going to be paid? By the US via a guarantee? Or has he even thought about this? Or is he just grand-standing?

(Hint: no sane person who wants a strong chance of being repaid would lend Puerto Rico a CENT, based on their reputation and their economic status. The huge fall-off in their long term bond prices since the hurricane reflect the bond market's lack of confidence in their debt).

The left continues to shrilly blame the lenders instead of the debtors for the Greece debt fiasco. By implication, they want the US to fix Puerto Rico's entire infrastructure for free, even though they aren't a US state, and never have paid a dime in US income tax -- which funds both rescue operations and any government supplied infrastructure rebuilding. Oh, and of course the $70+ billion they have stiffed mostly US citizens.
Puerto Rico has some of the highest electricity costs in the nation. This, combined with the devastation to the former grid from hurricane Maria, makes Solar PV an interesting option for Puerto Rico. The majority of the cost could be born by the rate payers themselves. Combine that with some disaster relief funding from the federal government and some economy of scale discounts from Musk and it might be doable.

Energy
The average monthly cost of “energy” in Puerto Rico, which includes electricity and natural gas, among other energy sources, is $438.21, compared to $169.49 in the US – a staggering figure, mostly because of the high price of electricity. It’s a major reason the island’s electric utility, PREPA, is at the forefront of the debt crisis. While the US’s Energy Information Administration has said this is mostly due to the “cost of imported petroleum”, Mario Marazzi of the Puerto Rico Institute of Statistics says that it is also because the island’s geographical location makes it more difficult to take advantage of economies of scale.
Puerto Rico's soaring cost of living, from giant electric bills to $5 cornflakes

Electricity fuel surcharges have decreased with world crude oil prices, but, in mid-2017, Puerto Rico's retail consumers still paid more for their power than consumers in any state except Hawaii.
Puerto Rico Territory Energy Profile
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Re: Is fast crash likely? Pt. 3

Unread postby dirtyharry » Sat 07 Oct 2017, 04:48:30

onlooker wrote:
dirtyharry wrote:WTI back below $ 50 . All those cheering when it was $ 51 ,please get some Viagra. :lol:

Yes, what truly counts is at the end of the year what the average from over the entire year has been for the WTI relative to the Etp MAP


I know that and that is what I have been always saying ^what matters is the average price as on 31/12/2017 and not a temporary spike ^ . The problem is that AdamB and co : went on a victory lap when it spiked above $ 50 for a few days .That is why my sarcastic comment .
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Re: Is fast crash likely? Pt. 3

Unread postby donstewart » Sat 07 Oct 2017, 05:39:17

China; New EROEI study; ETP; Britain

This study may have been posted here before, but it may bear repeated reading as we try to read the tea leaves in China and other places. (Note to asg70: I searched for a Zero Hedge reprint, but could not find one. So you have no brain dead muscle twitch reason to reject it.)

https://medium.com/insurge-intelligence ... 7344fab6be

The overall conclusions are consistent with the ETP model, they just aren’t quite so doomerish in the short term. However, the conclusions make the connection between declining EROEI and finance…’the overall costs of fossil fuel energy production will increase, even while the market value of fossil fuel energy remains low. The total net energy yield available to fuel continued economic growth will inexorably decline. This will, in turn, squeeze the extent to which the economy can afford to buy fossil fuel energy that is increasingly expensive to produce.’ That, in a nutshell, is the same conclusion that the ETP model arrives at. ETP just adds more near term crisis.

The benefits that a certain society obtains from its own investments in complexity “do not increase indefinitely”, he writes. “Once a certain threshold has been reached (T0), the social organisation as a whole will enter a phase of declining marginal returns, that is to say, a critical phase, which, if ignored, may lead to the collapse of the whole system.”

Bonauiti thus concludes that “advanced capitalist societies (the US, Europe and Japan) have entered a phase of declining marginal returns or involuntary degrowth in many key sectors, with possible major detrimental effects on the system’s capacity to maintain its present institutional framework.”


If these projections come to pass, this means that over the next few decades, the overall costs of fossil fuel energy production will increase, even while the market value of fossil fuel energy remains low. The total net energy yield available to fuel continued economic growth will inexorably decline. This will, in turn, squeeze the extent to which the economy can afford to buy fossil fuel energy that is increasingly expensive to produce.

We cannot be sure what this unprecedented state of affairs will herald for the market prices of oil, gas and coal, which are unlikely to follow the conventional supply and demand dynamics we were used to in the 20th century.


It is no coincidence, then, that debt-to-GDP ratios have continued to grow worldwide. As EROI is in decline, an unsustainable debt-bubble premised on exploitation of working and middle classes is the primary method to keep growth growing — an endeavour that at some point will inevitably come undone under its own weight.

According to MIT and Harvard trained economist Dr. June Sekera — who leads the Public Economy Project at Tufts University’s Global Development And Environment Institute (GDAE) — net energy decline proves that neoclassical economic theory is simply not fit for purpose.

So what do we make, if anything, of the combination of the Reuter's story on Russia reducing oil deliveries to Europe and increasing them to China, and Robert Rapier's story on the booming demand for oil in China, the big year-over-year increases in the sales of SUVs in China, the upcoming Communist party congress, the fact that China is the world's largest market for purely electric automobiles, the scholarly article--and ETP--predictions of 'involuntary degrowth', the widely perceived fragility of our monetary system coupled with an unwillingness to 'fight the Fed''????

Does the fate of Britain have anything to do with its declining EROEI? How about all the food exporting nations pissing on their Brexit plans (Britain currently cannot survive without food imports)? Do you remember when the British Minister of Agriculture proudly proclaimed that he didn't care if Britain produced any food whatsoever...the free market would take care of everything? Should the British be paying more attention to the few remaining farmers and their calculations about 'the new peasant economy''? Can the Chinese just continue to leverage up and buy more Russian oil?

Tune in next week for the thrilling conclusion: gun fights; desperate struggles in the frozen north; heroic rescues by square-jawed heroes of winsome heroines wearing scanty clothing.

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Re: Is fast crash likely? Pt. 3

Unread postby Yoshua » Sat 07 Oct 2017, 06:39:59

The 200 week moving average WTI price peaks in late 2014 and then falls of a cliff to follow the Etp Model's Maximum Affordability Curve. We have gone over the cliff and are about to crash and burn when we hit the rocks.

Image[/img]
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Re: Is fast crash likely? Pt. 3

Unread postby asg70 » Sat 07 Oct 2017, 07:02:41

Yoshua wrote:We have gone over the cliff and are about to crash and burn when we hit the rocks.


Some people here just get up each day and think "gee, how can I come up with another colorful way to say...THE END IS NIGH"

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Re: Is fast crash likely? Pt. 3

Unread postby marmico » Sat 07 Oct 2017, 07:36:14

I have been always saying ^what matters is the average price as on 31/12/2017 and not a temporary spike ^ .


The ETP Bozo charts have always referred to maximum price not average price. When the ETP MAP broke in July 2017 and has been broke continuously since, the ETP Bozo moved the goal posts. The maximum price on November 1, 2017 is $43.34.

Image

You only need to back track to October 4, 2017 when the ETP Bozo referred to the Maximum Affordability Curve.

is-fast-crash-likely-pt-3-t73579-420.html#p1375262
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Re: Is fast crash likely? Pt. 3

Unread postby Yoshua » Sat 07 Oct 2017, 08:53:55

Nothing to see here. Everything is just fine.

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Re: Is fast crash likely? Pt. 3

Unread postby onlooker » Sat 07 Oct 2017, 09:09:41

Another sign that the Shale irrational exuberance to coin a phrase from Mr. Alan Greenspan is showing signs of waning. Even investors have limits to how dumb they can be.
https://www.wsj.com/articles/u-s-shale- ... 1507195802
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Re: Is fast crash likely? Pt. 3

Unread postby marmico » Sat 07 Oct 2017, 09:37:01

Everything is fine.

Did your house appreciate 6% since last year?

https://www.spice-indices.com/idpfiles/ ... nload=true

Did your investment account (at least the equity component of it) appreciate 21% since last year?

http://www.marketwatch.com/investing/in ... trycode=xx

Well if you had a buck of assets equally divided between a house and an S&P500 Total Return Index Fund last year you now have $1.13 of assets this year and you didn't even get a raise at work gutting sturgeon for caviar to ship it to the ETP Bozo so he can put something else on the menu at his momma's crab shack. :)

It's a drag paying more for a tank of gasoline this year compared to last year.

Oh, what is the original exact ETP MAP number for January 1, 2019, so I can start the linear interpolation on February 1, 2018? Thanks in advance.
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Re: Is fast crash likely? Pt. 3

Unread postby pstarr » Sat 07 Oct 2017, 10:11:44

onlooker wrote:Another sign that the Shale irrational exuberance to coin a phrase from Mr. Alan Greenspan is showing signs of waning. Even investors have limits to how dumb they can be.
https://www.wsj.com/articles/u-s-shale- ... 1507195802

What a stupid headline: "Forecasts that abundant American oil can permanently meet global needs may be ‘myth,’ company leaders warn"

No one with a brain made that prediction (other than perhaps another stupid headline writer) and of course, anybody with a brain understood all along it was indeed a myth. There is no if, ands, buts or 'may be's'. The stupid headline writer is probaby talking about himself. He bought the crap, but now is trying to blame 'company leaders' BLAME YOURSELF cornies.

And who are 'company leaders'? Name one. Just one, please. The NYT and WSJ are always appealing to unseen unknown authority. Why? Because Americans are no longer trained to think logically and skeptically. They think with their emotions and chosen team. Take the use of 'doomer' for instance; children who are scared of the dark must name their fears. Bogyman, doomer, blah blah blah.

I am not scared of peak oil. I embrace it. I am sick of what smug arrogant selfish wealthy Americans have wrought in the world. We take everything from everywhere turn it into plastic crap and crow about our brilliance. Screw that. More plastic bumpers for more plastic teslas. Screw that. Get off your treadmills and go for a real walk!
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Re: Is fast crash likely? Pt. 3

Unread postby Yoshua » Sat 07 Oct 2017, 10:56:16

"Oh, what is the original exact ETP MAP number for January 1, 2019, so I can start the linear interpolation on February 1, 2018? Thanks in advance."

Those numbers fall under the category of unknowns. The magic is revealed on 31 Dec 2018 & 31 Dec 2019 when the average WTI price is calculated for the respective year.

The average Etp MAP for 2018 is 45 USD.
The average Etp MAP for 2019 is 30 USD.
(If memory serves me right)

You like to draw lines through dots? I will send you a fun book to play with.
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