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Growth in Global Total Debt sustained a High Oil Price and delayed the Bakken “Red Queen”

Growth in Global Total Debt sustained a High Oil Price and delayed the Bakken “Red Queen” thumbnail

The saying is that hindsight (always) provides 20/20 vision.

In this post I present a retrospective look at my prediction from 2012 published on The Oil Drum (The “Red Queen” series) where I predicted that Light Tight Oil (LTO) extraction from Bakken in North Dakota would not move much above 0.7 Mb/d.

  • Profitable drilling in Bakken for LTO extraction has been, is and will continue to be dependent on an oil price above a certain threshold, now about $68/Bbl at the wellhead (or around $80/Bbl [WTI]) on a point forward basis.
    (The profitability threshold depends on the individual well’s productivity and companies’ return requirements.)
  • Complete analysis of developments to LTO extraction should encompass the resilience of the oil companies’ balance sheets and their return requirements.

Figure 01: The chart above shows development in Light Tight Oil (LTO) extraction from January 2009 and as of August 2014 in Bakken North Dakota [green area, right hand scale]. The top black line is the price of Western Texas Intermediate (WTI), red middle line the Bakken LTO price (sweet) as published by the Director for NDIC and bottom orange line the spread between WTI and Bakken LTO wellhead all left hand scale. The spread between WTI and Bakken wellhead has widened in the recent months.

What makes extraction from source rock in Bakken attractive (as in profitable) is/was the high oil price and cheap debt (low interest rates). The Bakken formation has been known for decades and fracking is not a new technology, though it has seen and is likely to see lots of improvements.

LTO extraction in Bakken (and in other plays like Eagle Ford) happened due to a higher oil price as it involves the deployment of expensive technologies which again is at the mercy of:

  • Consumers affordability, that is their ability to continue to pay for more expensive oil
  • Changes in global total debt levels (credit expansion), like the recent years rapid credit expansion in emerging economies, primarily China.
  • Central banks’ policies, like the recent years’ expansions of their balance sheets and low interest rate policies
    • Credit/debt is a vehicle for consumers to pay (create demand) for a product/service
    • Credit/debt is also used by companies to generate supplies to meet changes to demand
    • What companies in reality do is to use expectations of future cash flows (from consumers’ abilities to take on more debt) as collateral to themselves go deeper into debt.
    • Credit/debt, thus works both sides of the supply/demand equation
  • How OPEC shapes their policies as responses to declines in the oil price
    Will OPEC establish and defend a price floor for the oil price?

I have recently and repeatedly pointed out;

  • Any forecasts of oil (and gas) demand/supplies and oil price trajectories are NOT very helpful if they do not incorporate forecasts for changes to total global credit/debt, interest rates and developments to consumers’/societies’ affordability.

Oil is a global commodity which price is determined in the global marketplace.

Added liquidity and low interest rates provided by the world’s dominant central bank, the Fed, has also played some role in the developments in LTO extraction from the Bakken formation in North America.

As numerous people repeatedly have said; “Never bet against the Fed!” to which I will add “…and China’s determination to expand credit”.

Let me be clear, I do not believe that the Fed’s policies have been aimed at supporting developments in Bakken (or other petroleum developments) this is in my opinion unintended consequences.

In Bakken two factors helped grow and sustain a high number of well additions (well manufacturing);

  • A high(er) oil price
  • Growing use of cheap external funding (primarily debt)

In the summer of 2012 I found it hard to comprehend what would sustain the oil price above $80/Bbl (WTI).

The mechanisms that supported the high oil price was well understood, what lacked was documentation from authoritative sources about the scale of the continued accommodative policies from major central banks’ (balance sheet expansions [QE] and low interest rate policies) and as important; global total credit expansion, which in recent years was driven by China and other emerging economies.

I have described more about this in my post World Crude Oil Production and the Oil Price.

 

Figure 02: The chart above with the stacked areas shows developments in all oil extraction in North Dakota as of January 2007 and of August 2014 split on the 4 counties with the highest extraction and the rest of North Dakota. Growth in oil extraction in North Dakota is now primarily from McKenzie and Mountrail counties.

Summer of 2012

With oil prices at the wellhead in Bakken at $70/Bbl in the summer of 2012, the companies netted back around $45/Bbl.

In the summer of 2012 monthly LTO extraction was on its way towards 19 million barrels (Mb).

The total monthly net cash flow from the LTO extraction generated thus about $850M ($45/Bbl X 19 Mb) which could fund monthly additions of 85 – 95 wells (if the companies’ cash flows unabridged was used for well manufacturing).

This level of well manufacturing was estimated to sustain an LTO extraction level of 0.7 Mb/d in Bakken(ND).

The companies had, by then and based on a low end estimate, added a total of $14 Billion in external funding, primarily debt, refer also figure 03.

Summer of 2014

Figure 03: The chart above shows an estimate of cumulative net cash flows post CAPEX in manufacturing of LTO wells in Bakken (ND) as of January 2009 and as of August 2014 (red area and rh scale) and estimated monthly net cash flows post CAPEX (black columns and lh scale). The assumptions for the chart are WTI oil price (realized price which is netted back to the wellhead), average well costs starting at $8 Million in January 2009 and growing to $10 Million as of January 2011 and $9 Million as of January 2013. All costs assumed to incur as the wells were reported starting to flow (this creates some backlog for cumulative costs as these are incurred continuously during the manufacturing of the wells) and the estimates do not include costs for non- flowing and dry wells, water disposal wells, exploration wells, seismic surveys, acreage acquisitions etc. Economic assumptions; royalties of 16%, production tax of 5%, an extraction tax of 6.5%, OPEX at $4/Bbl, transport (from wellhead to refinery) $12/Bbl and interest of 5% on debt (before any corporate tax effects). Estimates do not include the effects of hedging, dividend payouts, retained earnings and income from natural gas/NGPL sales (which now and on average grosses around $3/Bbl). Estimates do not include investments in processing/transport facilities and externalities like road upkeep, etc. The purpose with the estimates presented in the chart is to present an approximation of net cash flows and development of total use of primarily debt for manufacturing of LTO wells. The chart serves as an indicator of the cash flow for the aggregate of oil companies in Bakken.

Since the fall of 2012 and until the summer of 2014 oil prices at the wellhead in Bakken oscillated around $90/Bbl (ref also figures 01 and 04) which netted back around $60/Bbl to the companies.

This makes a material difference to the companies’ net cash flows from LTO extraction and they also added an estimated $2 Billion (low end estimate) in debt since the summer of 2012. The companies had thus considerably improved their abilities to fund growth for and sustain a high level of (monthly) well additions which provided for growth in LTO extraction.

In the summer of 2014 monthly LTO extraction was on its way towards 32 Mb.

The total monthly net cash flow from the LTO extraction generated thus about $1,900M ($60/Bbl X 32 Mb) which unabridged could fund monthly additions of 190 – 210 wells (no dividends paid out and/or down payments of debt). This is close to the number of monthly well additions reported by NDIC since the harsh winter loosened its grip.

Note in figures 03 and 04 how the (low end) estimates for total debt has more or less remained flat since last winter.

Now (fall 2014)

Figure 04: The chart above follows the same methodology as presented in figure 03 for estimates of changes to total debt (dark green area and right hand scale) with the difference that the wellhead price published by NDIC in their monthly reports has been applied. In the chart is also shown the developments in the oil price WTI (black line), at the wellhead (dark red line) and the spread between WTI and the wellhead price (light green line), all left hand scale.

Since last summer world oil prices have come significantly down and I hold it likely they will remain low or decline some more if not OPEC curtails its supplies. As of writing the wellhead price in Bakken is $63/Bbl (sweet and as of Oct. 30th) and the “average” point forward breakeven is estimated at $68/Bbl (at a 7% discount rate and at the wellhead).

The effect of the low oil price causes a noticeable reduction in companies’ total netted cash flows which now is estimated below $1,400M/month.

This ($63/Bbl at the wellhead) cash flow could unabridged fund 140 – 155 wells/month.

However the world does not work as straight forward as this.

Companies in Bakken had levered up (used debt) likely under the expectations that oil prices would remain high(er). It was the expectations of sustained high cash flows that (primarily) was/is used as collateral to assume more debt. Various covenants may dictate the companies to continue to manufacture wells. A higher leverage (from declining cash flows) results in relative higher debt carrying costs.

A lower oil price shrinks the debt potential on their balance sheets and some will deleverage (reduce their total debt) as a response to the lower oil price.

Their sources of income to reduce their debt; a portion of their cash flows from their operations and/or sales of assets.

The dividend policies vary amongst public companies and oil companies have been facing mounting pressures from impatient investors who looks for yield.

For public companies, there has been an additional powerful factor at play after the Fed started QEing, key phrase: Companies’ Market Capitalisation, refer also figure 10.

Investors in companies involved in LTO extraction had no reason to complain as there was growth in LTO extraction and QE “buoyed everything” with little relation to the actual underlying fundamentals.

My model (also presented in the “Red Queen” series at The Oil Drum) estimates it now takes around 130 net well additions/month in Bakken (ND) to sustain present LTO extraction levels. This could be funded with a wellhead price around $60/Bbl, if the companies’ net cash flows unabridged were spent towards well manufacturing.

However the financial capacities of the companies becomes impaired from a sustained lower oil price and these will start deleveraging, thus reducing their capital expenditures which, and with a time lag, entail a down scaling of their well manufacturing.

This change in strategy is often presented under the euphuism of “targeting financial performance”.

If monthly net well additions drop below the “Red Queen” number (now estimated at 130 – 135 wells/month), Bakken(ND) LTO extraction is likely to decline.

A sustained lower oil price, thus:

  • Impairs the companies’ abilities for well manufacturing (reduces funding from cash flows)
  • Drives the need for deleveraging (which reduces the funds which otherwise could be allocated towards well manufacturing)
  • May give priorities to complete wells that are drilled, but not completed as there exists a big inventory of wells drilled and not completed and funding for the completions comes from the cash flows. These wells represent “cheap” flow additions.

The LTO Break Even Price

Another parameter which is important to keep an eye on is the development to the break even price that meets the companies’ return expectations. The wells come with individual designs (costs), flow rates and EURs and the break even price is subject to a range of return requirements [my presented numbers are discounted at 7%].

I have used actual well data from North Dakota Industrial Commission (NDIC) to make estimates of what I will continue to refer to as the “reference/average well”, refer also figure 07.

Since I started following the Bakken LTO developments this “reference/average well”, and notably since 2013, has experienced some improvements to its total first 12 months cumulative LTO extraction (refer also figure 07) and the judges are still out there if the deployment of improved (and likely more expensive) technologies allows for some faster extraction and/or increased total extraction (higher EURs).

Changes in the oil price are the dominant source for changes to the financial returns of the wells.

Those who does not worry about returns (that is a discount rate at 0% of full life cycle costs) would now achieve this with around $50/Bbl at the wellhead.

Who are willing to put their money at risk for a 0% return? (Putting the money in the mattress gives the same return.)

A sustained oil price below $70/Bbl (at the wellhead) is, with a time lag, likely to slow drilling activities as this is the profitability threshold for the “average” well. Should the oil price (at the wellhead) remain below $70/Bbl the oil companies will focus on drilling those wells expected to meet their return requirements. If wells meet their expectations is not known before after it has flowed for several months.

One early indicator for changes in activity levels is to follow the development of the number of rigs drilling.

Well productivity Developments

Longer laterals, more use of proppants, more fracking stages, has with time lead to documented improvements in well productivity (here defined as total LTO extracted during the first 12 months of flow) for the “average” well in the Bakken formation in North Dakota, refer also figure 07.

More advanced wells may, however, mask the possibility of extraction growth from areas with poorer geology.

Developments as of Aug 2014

Three of the charts below have expertly been produced and provided by Enno Peters, who agreed to let me use them in this post.

Figure 05: The stacked areas in the chart above show developments in LTO extraction of the population of wells by vintage.  Chart by Enno Peters.

The strong growth in LTO extraction happened while the wellhead price in Bakken was above $70/Bbl, refer also figure 01.

Figure 06: The chart above, based upon the NDIC data for figure 05, shows how LTO extraction in Bakken declines by vintage [end of year].

If no wells were added the total LTO extraction from Bakken would decline somewhere between 30 –  40% after 12 months. On August 2014 LTO extraction was approaching 1.1 Mb/d, which would result in a decline of 0.3 – 0.4 Mb/d after 12 months if no more wells were added.

This illustrates that LTO as a source of sustained oil supplies requires to stay on the drilling treadmill. The LTO extraction level is sensitive to the oil price, the companies’ return requirements and the strength of their balance sheets.

Figure 07: The chart above shows how cumulative LTO extraction for the “average” well by vintage [calendar year] develops with time.  Chart by Enno Peters.

Total LTO flow during the first months in 2013 and so far in 2014 has been higher than in the years 2010 – 2012. What remains to be seen is if this over some time results in increased total recovered oil or if the most recent and advanced wells extracts the oil faster. Note how the cumulative for the early wells from 2013 now converges towards those of the previous years.

Total Extracted Liquids from Bakken Wells has grown with time, led by Produced Water

Figure 08: The chart above shows development in the water to oil ratio for the “average” wells by vintage [calendar year] in Bakken. Produced water (brine) is separated and transported to dedicated disposal sites. Chart by Enno Peters.

A noticeable trend from the chart above is that produced water to oil ratio has increased with time (total liquids [oil + produced water]).

Some Supplementary Information

To me what we are now witnessing is the most telegraphed correction in history. The end of Fed’s QE and higher Fed’s fund rates in the near future.

I will briefly present two macroeconomic sizes that helped sustain a high oil price.

Figure 09: The chart above shows the developments in the oil price [Brent spot; black line and WTI; red line] and the time of the Fed’s announcements/deployments of available tools to support the global financial markets which the economy heavily relies upon. The financial system is virtual and thus highly responsive. The chart suggests causation between Fed policies and movements to the oil price.

Some of the money from QE found their way as loans to emerging economies to fund economic growth and thus also supported oil demand and the oil price.

Figure 10: The chart above shows the developments in the stock index, S&P 500, and the time of the Fed’s  announcements/deployments of available tools to support the global financial markets which the economy heavily relies upon. The chart suggests causation between Fed policies and movements in the stock index.

Several of the listed companies active in LTO extraction are included in the S&P 500 index, thus these were given an uplift from the general bull market and investors in LTO saw their share prices rise.

The common features of figures 09 and 10 are that they show possible causations from Fed’s policies. Added liquidity and low interest rates also supported the oil price and the stock market.

Figure 11: The chart above shows [left panel] how advanced economies’ central banks in concerted efforts lowered their interest rates following the Global Financial Crisis (GFC) in 2008. The middle panel shows the relative growth (expansion) of the balance sheets (assets) for US Federal Reserve (Fed), European Central Bank (ECB), Bank of England (BoE) and Bank of Japan (BoJ) post the GFC. Note the growth of the Fed’s balance sheet since 2012 (middle panel). The right hand panel shows the development in long and short term interest rates together with the twenty year average. Chart from p 24 in BIS 84th Annual Report, 29 June 2014.

The middle panel in figure 11 which has been lifted from BIS 84th Annual Report.

So what about China?

Oil is a global commodity. China has in recent years had strong economic growth, which has been facilitated by a rapid credit expansion. This has allowed China to steadily grow its oil imports and consumption (refer also figure 14), which thus supported growth in global oil demand and a higher oil price.

Figure 12: Chart above shows Chinese leverage, changes in total debt to GDP. Note the growth of this metric since 2011.

Figure 12 has been lifted from p 70 of the Geneva 16th report “Deleveraging? What Deleveraging?” made public 29 September 2014.

Note the rapid growth in Chinese debt post 2008 in figure 12 and note the growth in Chinese petroleum consumption and imports since 2008 in figure 14. China continued good economic growth post the GFC by aggressive credit expansion.

According to data from the Bank for International Settlements (BIS in Basel, Switzerland) China saw its annual growth rate in private, non financial sector debt accelerating from around 10 Trillion Yuan as of Q4 2010 to 18 Trillion Yuan (about US$3 Trillion) as of Q1 2014. (100 Yuan approximates USD 16)

The Shift in Oil Consumption

Figure 13: Chart above (areas are not stacked) shows developments in OECD total petroleum consumption (grey area), production (green area) and net imports (red area) since 1965 and as of 2013 [rh scale] together with the oil price [Brent, black dots and lh scale].

The chart shows that the higher oil price stimulated for more supplies within OECD (dominated by LTO extraction), and at the same time the high oil price and the effects of total debt loads reduced consumption.

  • The oil price has in recent weeks significantly weakened and if a higher demand/consumption within OECD fails to materialize from this weakness, this strongly suggests influences from other structural forces.

Figure 14: The chart above (areas are not stacked) shows developments in China’s total petroleum consumption (grey area), production (green area), net exports (blue area) and net imports (red area) since 1965 and as of 2013 [rh scale] together with the oil price [Brent, black dots and lh scale].

Post the GFC it was primarily credit expansion in China (refer also figure 12) that saw to it that global oil demand continued to grow in the face of a higher price. China is also filling their strategic petroleum reserve.

Summary

The spectacular growth in LTO extraction in Bakken in the recent years happened because of a sustained high(er) oil price and the use of more cheap debt for funding. Now it appears this development nears a crossroads.

LTO developments are flexible and allow for rapid adaptation to changes in the oil price and each well represents limited capital requirements, as opposed to large capital intensive oil developments that takes years to bring on line.

It normally takes 4 to 6 months from a LTO well is spudded until it starts to flow.

The prices at the wellhead in North Dakota is now around $63/Bbl (sweet) and should oil prices remain low (or go lower), the future developments of LTO extraction in Bakken will move into the twilight zones between profitability (return requirements), reduced capital expenditures (from declines in cash flows which shrinks the companies’ debt capacities), deleveraging, dividend policies and OPEC policies.

It is from this twilight zone the Bakken “Red Queen”, for some time outrun by the high oil price, cheap debt funding, growth in global total debt and low interest rates will emerge and catch up.

From here it will be most interesting to follow the continued race between Bakken LTO extraction and its “Red Queen”.

Fractional Flow



63 Comments on "Growth in Global Total Debt sustained a High Oil Price and delayed the Bakken “Red Queen”"

  1. Plantagenet on Fri, 31st Oct 2014 12:24 pm 

    Correlation is not causation. Yes, higher oil prices occurred at the same time that debt ramped much higher in the US. But US debt is mainly debt from the FED QE program and the Obama administration’s huge deficit spending, not from the oil biz.

    We’ve stil got the huge federal debt and FED debt overhang, but but oil prices are plunging—see—there’s no relationship.

  2. penury on Fri, 31st Oct 2014 3:10 pm 

    Plant wrote “correlation” is not causation. This is true, however, causation is called “causation” for a reason. While people can make an argument that high oil prices are not the cause of higher debt, one could also argue that higher prices reduce sales which lead to higher costs to service debt which will lead to higher prices which will lead to lower sales which will lead to less ability to service debt. Correlation of the data does not illustrate causation however, it does illustrate correlation which might be difficult to understand. Basically selling product for less than the production cost or the cost of obtaining the product will eventually cause a lack of the product on the market. However, correlation will not prove causation.

  3. Nony on Fri, 31st Oct 2014 6:19 pm 

    Pretty begrudging post given how massively off was Rune’s prediction. In fact, it kind of makes me doubt that Rune’s prediction was ever unbiased.

    Oh…and after a bunch of handwaving on investment, he doesn’t describe how massively far off his comments were about new well output dropping with time.

    What a joke.

    Oh…and his original prediction was 600-700K. We are way, way, way past that. I think there is a reason Rune is writing posts on the Internet rather than getting paying work…

  4. Norm on Fri, 31st Oct 2014 6:55 pm 

    Suppose it takes 30 barrels of oil, to drill a lousy well and get 25 barrels from it. Your real problem is dreaded EROEI is crummy.

    However, in the short term, debt will sustain that mess, before EROEI restores a sane point of view.

  5. Nony on Fri, 31st Oct 2014 7:11 pm 

    You people are a bunch of sandal wearing nutters. Enough with the finance conspiracy theories. People invest in those wells because they think they will make more money then they spend. Just ask the great Rockman. sheesh.

  6. coffeeguyzz on Fri, 31st Oct 2014 7:41 pm 

    Why is so hard for this guy to simply say “I was wrong?”

  7. coffeeguyzz on Fri, 31st Oct 2014 7:42 pm 

    Why is it so hard for this guy to simply say “I was wrong?”

  8. Northwest Resident on Fri, 31st Oct 2014 8:07 pm 

    Nony — No sandals here, and definitely not a nutter. Finance conspiracy theories? Ha! Only in your dream world. Read this and get back to me — let me know what part of this report comes from a sandle-wearing nutter:

    http://shalebubble.org/wp-content/uploads/2013/02/SWS-report-FINAL.pdf

  9. MonteQuest on Sat, 1st Nov 2014 9:11 am 

    “But US debt is mainly debt from the FED QE program and the Obama administration’s huge deficit spending, not from the oil biz.”
    When the FED buys bonds from banks, it raises the price and lowers the interest rate, but no new money i.e. debt went into circulation. “New” deficit spending “by” Obama is at the lowest level in 50 years.

  10. Davy on Sat, 1st Nov 2014 9:27 am 

    Mont, your mention has huge issue with the inflation side of the story and deflation side of the equation. It has huge issues with the economic theories TPTB have and promote. I read about these things every day and I still can’t figure it out except around the edges.

    What I can do is see the things that don’t add up. Increasingly we are seeing the basic doomer stance of limits of growth and diminishing returns and the resulting systematic dangers. The current central bank financial repression is definitely loosing traction and causing severe imbalances.

    It is very difficult to know what is real and what is mirrors. Part of the financial repression is forward guidance IOW jawboning propaganda. What is really going on with the “real” TPTB? There is probably much behind the scenes we will never know.

  11. Nony on Sat, 1st Nov 2014 10:40 am 

    Rune got his ass kiiiiiicked by the Bakken. The final admission is completely lacking any grace or learning. He just shows himself as a dishonest peaker. Unable to modify his beliefs based on experience.

    How’s that downspacing looking now, Rune? How’s that “running out of sweet spot”? New well production has maintained and even slightly INCREASED. Oh…and wells drilled per rig has gone up measurably!

  12. Northwest Resident on Sat, 1st Nov 2014 11:10 am 

    Nony — Come on, we all make failed predictions from time to time. You have to look at the big picture and realize that even though Rune’s prediction may not have been exactly correct, it was definitely pointing in the right direction. What about your prediction that USA will become a net LNG exporter — how’s that working out? I made a failed prediction too when I predicted that you would eventually come to see the error of your way in being a shale cheerleader. Despite mountains of evidence presented to you on this site that LTO/unconventional has been a debt accumulating Ponzi scheme that contributes almost no net energy (if any) to the global economy, you’re still doing the shale/fracking cheerleading routine and show no sign of learning from your past mistakes. Hey!! Here’s an idea. “And why beholdest thou the mote that is in thy brother’s eye, but considerest not the beam that is in thine own eye”.

  13. Northwest Resident on Sat, 1st Nov 2014 11:19 am 

    Oh, Nony, one more thing. What do you think? Is it possible that Rune (like everybody else) failed to consider that the TPTB would put the global economy many trillion$ in debt to prevent his prediction(s) from coming true?

  14. Dredd on Sat, 1st Nov 2014 3:16 pm 

    The thrill of arguing the cheapest way to destroy the planet escapes me.

    Neither the cost of half of the animals gone nor the coming of the pathogenic viruses and microbes is figured into the psychotic numerology either (The Real Dangers With Microbes & Viruses).

    Dain brammage for sure.

  15. toms2 on Sat, 1st Nov 2014 4:38 pm 

    coffeeguyz:

    “Why is so hard for this guy to simply say “I was wrong?'”

    Isn’t that the entire peak oil movement? The peak oil movement has issued prediction after prediction, and each one fails. Year after year, decade after decade, the predictions all fail. Does anyone even remember the Olduvai Gorge? Overshoot and dieoff? Matt Savinar? The natural gas cliff? “Twilight in the desert”? The Simmons-Tierney bet? I could go on for a very long time with this stuff.

    The peak oil movement has nearly a 100% failure rate of prediction for more than 15 years now.

    -Tom S

  16. toms2 on Sat, 1st Nov 2014 5:11 pm 

    NR:

    “Oh, Nony, one more thing. What do you think? Is it possible that Rune (like everybody else) failed to consider that the TPTB would put the global economy many trillion$ in debt to prevent his prediction(s) from coming true?”

    I’ve been following doomsday/collapse groups of various kinds for years now. Whenever the predictions fail, the members almost always generate some explanation after the fact for why their ideas are correct despite constantly failed predictions. It’s called UNFALSIFIABILITY, and it’s a defining feature of crackpot/unscientific movements like this one.

    In one case, there was a Christian apocalypse group here in California that predicted the world would end on a certain day in 2010. When the day came and passed, they claimed that the world HAD ACTUALLY ENDED on that day, and we were all living in an illusion now. Thus, their ideas were essentially correct despite what seemed to be a massive failure of prediction.

    Another group believed that a UFO would destroy the Earth with a laser around 2007. When the day came and went, the group claimed that their efforts had prevented it. They said that the planet would have been destroyed but for them. Thus, their ideas were essentially correct despite what seemed to be a massive failure of prediction.

    Of all the unfalsifiable post-hoc explanations I’ve seen, yours is the silliest. The peak oil/energy decline movement always said these things were matters of HARD PHYSICAL LIMITS. They always claimed that nothing could be done to alter the peak. They always claimed that these things were straightforward applications of the laws of physics, energy laws, declining ERoEI, thermodynamics, reservoir geology, “biophysical” economics, and so on. If so, how could Ben Bernanke possibly affect it? Do you mean the Fed is able to suspend the laws of thermodynamics (and other physical laws) by printing money? If so, why won’t the Fed come to the rescue again, and just print more money and thereby delay oil declines and collapse for another 15 years when it’s required?

    Also, if you guys knew that the Fed was capable of suspending laws of nature, why DIDN’T you think the Fed would come to the rescue?

    How many other federal agencies are able to suspend the laws of nature? Does the mint also have that capability? The treasury secretary? FEMA? Bear in mind that you guys identified a federal agency capable of suspending the laws of physics only after the fact. When the next doomsday comes and goes, why don’t you say “it would have happened except the Treasury Secretary pulled out all the stops to prevent it?”

    The predictions of peak oilers have all failed massively, and your explanation after the fact isn’t even coherent. It’s classic unfalsifiable thinking from a crackpot group. If what you guys were saying were true, regarding reservoir geology, Hubbert curves, declining ERoEI, natural gas cliffs, collapse, and so on, then the Fed couldn’t alter it even one iota.

    -Tom S

  17. Northwest Resident on Sat, 1st Nov 2014 5:37 pm 

    toms2 — Actually, your failure to see the connection between global debt and peak oil is “the silliest”. Your trying to compare UFO and Christian apocalypse predictions with hard-fact scientifically based peak oil predictions is an indication of how utterly clueless you are.

  18. toms2 on Sat, 1st Nov 2014 6:17 pm 

    NR:

    “Actually, your failure to see the connection between global debt and peak oil is “the silliest”. Your trying to compare UFO and Christian apocalypse predictions with hard-fact scientifically based peak oil predictions is an indication of how utterly clueless you are.”

    NR, you appear to have absolutely no critical thinking ability whatsoever. Zero. None. That’s rare even among doomsday/collapse group members.

    Almost all crackpot doomsday groups claim their group consists of “hard-fact real science”. One UFO group even claims it’s an “academy of science”.

    Frankly, I’ve never encountered a doomsday/collapse movement with anything near as bad a track record as the peak oil collapse movement. Peak oilers just issue prediction after prediction, each of which fails totally, year after year.

    This stuff has NOTHING in common with real science, and that’s obvious to anyone with even a minimal understanding of what science is.

    Real science does not consist of inventing fanciful post-hoc explanations like “the Fed did it” when there has been a 100% failure rate of prediction over many years. That’s OBVIOUS pseudoscience.

    -Tom S

  19. GregT on Sat, 1st Nov 2014 7:36 pm 

    toms2

    You might consider watching the evening news from time to time, or perhaps pick up a newspaper. The collapse is already well underway.

    Ignore at your own peril.

  20. Davy on Sat, 1st Nov 2014 8:19 pm 

    Tommy, you are the typical denialist that becomes hot headed about doomers. We doomers are a diverse group and our ideas may or may not involve PO. I guess you think the finance system is peachy? Tommy, I bet you see little problem with ecosystem degradation or high quality resource depletion of all kinds. OH, Tommy, what about over population.

    Overshoot is plain to see and your cornucopian tools of technology, knowledge, markets, and substitution will not save the day. Sorry, we are topping the hill and looking down. We have a descent ahead of us. It will involve liquid fuels and the financial system most likely. Both are critical to maintaining complexity necessary to support a huge global population and consumption.

    You act like you corns are not making predictions that are not holding. Look at your financial predications that turned out to be duds. Why are the central banks practicing financial repression? Please Tommy defend your cornucopian successes instead of criticizing the doomers and PO’ers. I want to hear all that good news and optimism. I love it.

  21. Northwest Resident on Sat, 1st Nov 2014 9:27 pm 

    toms2 — The ones in the deepest denial are always the ones to puff up and spout nonsense accusations as you are doing. Anger and accusations are the last defense that those in deep denial have against encroaching realities. I pity you toms2, because you’re going to have to face some very inconvenient facts in the near future. Scanning back through the ages and nitpicking peak oil predictions that didn’t come true is NOT going to save you from peak oil, no matter how much you wish it were so.

    The fact that the global economy is many trillion$ in debt, that oil producers have been forced to resort to fracking to temporarily boost production, and that we’re paying $80 (down from $100) per barrel of oil is all the proof you need that we have hit peak oil.

    Alcoholics and many others live their lives in denial, making excuses, attacking others who threaten to penetrate the thick walls of denial they have built up. If I were you, toms2, I would try to find the courage to deal with reality instead of continuing on in that little bubble of denial that you live in.

  22. rockman on Sat, 1st Nov 2014 10:00 pm 

    Tom – “This stuff has NOTHING in common with real science, and that’s obvious to anyone with even a minimal understanding of what science is.” Actually on some level I agree with. Much is written here tends to fall more into opinions based on interpreting various “facts”. And such opinions often drive predictions. Not that I don’t offer some opinions from time to time but I try to always note them as “IMHO”.

    But I can honestly say I’ve never made an incorrect prediction about future flow rates, oil/NG, economic conditions, etc. And for good reason: I’m so f*cking smart I know what I don’t know. LOL. And I have advanced degrees in geology and 40 years experience in the oilatch. I try to post facts that are as well documented as possible. Of course that still leads folks to make various interpretations of what those facts indicate.

    But what I’ve noticed is how many of the optimists like to avoid facts that don’t tend to support their expectations. For instance even if every negative forecast about future energy dynamics has been wrong it doesn’t change the facts about the situation. Which is a common attack used by optimists. And if that’s the strongest defense they can manage it indicates just how weak they themselves consider their positions IMHO. Thus when such facts are tossed at them there a common tendency to attack the messenger or go off on unrelated tangents.

    But again all OPINIONS should be welcomed here. And thus no need to attack folks for those OPINIONS regardless of the FACTS not supporting them. But that’s just my f*cking opinion. LOL.

  23. toms2 on Sat, 1st Nov 2014 11:27 pm 

    Hi rockman,

    “But I can honestly say I’ve never made an incorrect prediction about future flow rates, oil/NG, economic conditions, etc.”

    In the entire time I’ve been involved with this stuff, I’ve made only two predictions: 1) civilization was not collapsing for energy-related reasons; and 2) world ocean-going trade would not be curtailed by much, even if the price of oil increased by a lot. So far, civilization has not collapsed (it’s been more than ten years) and ocean-going trade has increased by leaps and bounds (the Panama canal is being expanded now).

    Of course, that’s not terribly impressive because it’s only two predictions, and one of them (civilization not collapsing) isn’t exactly going out on a limb.

    I know more about ship propulsion, the physics of ships, calculation of ship routes, supply networks, and the economy, than any of the people commenting upon it within the peak oil community, which isn’t saying a lot because they know practically nothing about those topics. In my opinion the peak oilers were just all wrong, and world trade was not collapsing.

    “Thus when such facts are tossed at them there a common tendency to attack the messenger or go off on unrelated tangents.”

    Which facts are being tossed at me here? I quickly looked back at the responses to my posts, and I honestly can’t point to anything that resembles a fact.

    For example, I pointed out that the calculations of ERoEI from peak oilers were incorrect because they count waste heat losses as “energy returns”, that ammonia can be made without natural gas and this was already common before 1970, that ships do not require oil for their propulsion, that trucks and trains can operate using overhead lines and this is already common in many parts of the world, that there are obvious substitutes for all these usages of oil, that the economy is always gradually converting from one source of energy to another, and various other things. Yet I just don’t see any factual reply.

    “But what I’ve noticed is how many of the optimists like to avoid facts that don’t tend to support their expectations.”

    Am I an optimist? Just for saying “civilization hasn’t collapsed”? I think the term “optimist” might be relative and might be used differently within this group.

    Just so you know, I thought that the original Hubbert-curve type stuff was a valid scientific theory. I thought everything else (declining ERoEI, collapsing world trade, no substitutes for oil, overshoot and dieoff, imminent collapse of civilization, etc) was crackpot and wrong, but the Hubbert curve stuff seemed to have something to it.

    Originally I thought it was quite possible that oil would peak around 2005 and start declining very gradually, and this would cause difficulties like recession and some curtailment of personal travel. Personally, I was surprised when even the Hubbert curve stuff was wrong.

    “And thus no need to attack folks for those OPINIONS regardless of the FACTS not supporting them.”

    Am I the one attacking people here? On occasion I respond in kind when someone gets aggressive. However I was talking about failed predictions (not people) when others decided to get nasty. The aggressive tone was set here long before I ever showed up.

    Granted, I point out the long string of badly failed predictions. If you count that as an “attack”, then I’m not sure what I can do. There’s just no other way of putting it without watering it down.

    -Tom S

  24. Nony on Sat, 1st Nov 2014 11:48 pm 

    I just come back to how the guy could not make a simple unphlegmatic appraisal of his failed prediction, how it took him so long, how he failed to address the failures in his estimates of geological constraints or technical improvements.

    How he has a confused handwaving argument about finances driving the expansion. It doesn’t even occur to him to ask WHY all that soft money headed to the Bakken versus ten million other money losing ventures it could go to.

    Rune is an old confused duffer.

  25. GregT on Sun, 2nd Nov 2014 1:30 am 

    “Just so you know, I thought that the original Hubbert-curve type stuff was a valid scientific theory.”

    There is nothing theoretical, or scientific, about a finite resource being used up. This should be better categorized as common sense. I say ‘should be’, because obviously common sense isn’t very common.

    “I thought everything else (declining ERoEI, collapsing world trade, no substitutes for oil, overshoot and dieoff, imminent collapse of civilization, etc) was crackpot and wrong”

    You can ‘think’ whatever you like to believe, but policy makers around the globe are very aware of these issues, as are many within our scientific communities. The world’s economies are already in decline, there is no substitute for fossil fuels, our species is in mass overshoot, and societal complexity requires vast amounts of excess energy. We cannot afford to even burn the fossil fuels that we already have in ‘reserve’, if we hope to sustain a natural biosphere capable of supporting life as we know it.

    “Originally I thought it was quite possible that oil would peak around 2005 and start declining very gradually, and this would cause difficulties like recession and some curtailment of personal travel.”

    As I mentioned above, watch the news, read a newspaper, pay attention to what is happening around the planet on which you live. Just because everything appears to be right in your world, does not mean that recession isn’t running rampant globally, and it most certainly does not mean that personal travel has not been curtailed. The bandaid measures that the central banks have been using since 08, are nothing more than a facade. Propping up the markets with tax payers future debt., has ended free market capitalism. We are living on time, and labour, borrowed from the future.

    Some “badly failed predictions” may have been premature, that does not make them obsolete. Be patient, the predictions are coming true soon enough. Use this added time to get your ‘house in order’, or not. That is your choice. Choose wisely.

  26. Davy on Sun, 2nd Nov 2014 8:01 am 

    Tommy, look, you are right to criticize PO and doomers. PO’s & doomers are full of crackpots. I consider myself a doomer lite. I may opine “doomer extreme” but I am cautious in following my doomer disposition because I lived failed predictions.

    In 2007 I lost a fair amount of money by dumping a bar/restaurant I owned because I thought the big one was coming. This was just before the “great” recession and during that period that the markets were frothy with no worries. I also spent money on things for immediate survival that would turn out to be redundant and wasted purchases when 2009 rolled around.

    It turned out the TPTB pulled a rabbit out of their hat and saved the day but just barely. I succeeded in seeing the dangerous situation that occurred in 2008 but I failed by putting all my money in on a wager that society would crash in 2007.

    I am a doomer lite now that is advocating cautious risk management of potential systematic risks. I explore as much doomer feeds as I can and sift through the crack pot material. I am finding more legitimate doomer feeds involving common sense then “ANY” of the cornucopian feeds. Look at the cornucopian predictions of growth and financial health that have failed. Tommy I don’t need to list them because we are living them now. Look around and tell me we have a healthy world like we were promised by the TPTB. There is no crash sure but where is the optimism and economic health?

    PO is scientific in nature but the predictions and forecast may or may not be. Look over http://www.thehillsgroup.org/ they have one of the best scientific approaches. Read Korowics on the systematic side:
    “Tipping Point Near-Term Systemic Implications of a Peak in Global Oil Production” David Korowicz
    Put these two together and try to tell me we are not looking at a predicament in the making

    I live one of those blessed lives following my spirituality as a gentleman farmer. I left the 1%er world for a world of simplicity and modesty in relation to what I had. I have at my disposal the assets of a 1%er family if I choose. This makes me a pussy in a sense because I took a step down with a parachute if needed. Yet, eventually I believe there will be very few golden parachutes available when SHTF.

    I have chosen to be a profit of doom “lite” for spiritual reasons and common sense. Spiritually I feel sick with how nature is being destroyed by our species. My common sense says we live on a finite planet and this FF driven global growth has limits. This global growth system appears to be unable to lower its complexity without failing. If you put these two ideas together you get the basic of limits of growth and diminishing returns. This appears to be a predicament with no solution so time is on my doomer’s side. It is the cornucopians that are swimming against the current.

  27. marmico on Sun, 2nd Nov 2014 8:34 am 

    Swimming against the current. ROTFLMAO.

    Way back in the time machine when Kennedy was elected POTUS, the U.S. mean per capita consumer budget was allocated 19% to food at home and 8% to clothing and footwear. Fast forward 55 years to 2015. Food and clothing are now 7% and 3%, respectively.

    Da interactive chart.

    Yo, Davy-boy, why don’t you do a chart of housing so we can get the basic necessities aligned; food, shelter, clothing. 🙂 We already know that gasoline is a nothingburger, i.e. affordable.

    Americans are Spitz and Phelps personified.

  28. JuanP on Sun, 2nd Nov 2014 8:42 am 

    Toms, You must be really dumb not to recognize NWR’s obvious critical thinking ability, NR is one of the best critical thinkers I have come across in my 45 years on this planet.
    I am a hardcore Peak Oil doomer. Here in Miami, I am surrounded by denialists and people like you. This is after all the yachting capital of the world. If you are into boats, ships, and their engines this is the place to be. I am a lifelong swimmer, freediver, sailor, paddler, surfer, and rower, I profoundly dislike IC engines, particularly on the water.
    I will be short. Ship engines need energy to operate, most shipping is done using oil as a source for that energy. Oil, as well as gas and coal, is a FINITE resource. We will run out of usable oil at some point in the future and all shipping will go back to sailing. You know, the wind will still be around. And then, humanity will become extinct.
    It’s a matter of when, not if, Tom, and your beliefs and mine won’t make any difference. I am a nobody and so are you. We lack any real power to make a difference in the world. Grow a pair and face the truth, or at least be polite in disagreeing with others who have made this effort. Nobody cares what a bullish ignorant fool thinks, but if you stop bullying, I promise to read your foolish thoughts. 😉

  29. JuanP on Sun, 2nd Nov 2014 8:54 am 

    Davy, I don’t know anyone who foresaw the government’s reaction to the crisis. I never imagined for a second that QE and ZIRP would manage to keep BAU alive for years.
    The choice you made in 2007 was the smart choice to make, even if it ended up costing you money. It is hard to choose and make such important decisions under so much stress nd without support. Better safe than sorry. You have the farm and you used these years to learn and prepare. With any luck, you and yours will be the 1%ers of the future. 😉

  30. GregT on Sun, 2nd Nov 2014 9:23 am 

    Marmico,

    The number of women in the workforce has close to tripled in the last 60 years. Offshore labour has dramatically decreased clothing manufacturing costs, and large agribusiness has replaced smaller family run farms. All are a result of increases in fossil fuel production, and use.

    Again, the charts that you keep referencing are ‘averages’. Income inequality is growing in the US at an exponential rate. One in five Americans cannot even afford to buy food anymore. If you buy into the demand destruction argument for the recent retreat in oil prices, gasoline was not only unaffordable, high prices are responsible for economic contraction, recession, depression, and wars.

    Historically low interest rates, and speculation, have blown the real estate bubble up into epic proportions. At some point the central banks will have no choice but to raise interest rates. When they do the bubble will burst, and the fallout will be devastating systemically.

    ROTFLYAO is a fools errand. Ignorance, I have heard, is bliss.

  31. Davy on Sun, 2nd Nov 2014 9:31 am 

    Marm, I love when you slap me upside the head. I hope you are right friend but I am afraid you are lost in your graphs and numbers like so many other cornucopians. Maybe you should leave your gated community and go out in the real world and see the harsh reality of a world unravelling.

    It would be wonderful if you are right. I would like to think all those millions I stand to inherent will come to fruition. I can picture a huge cattle farm I could amass with such a fortune. I would construct a reproduction of the barns and farm houses of old. These buildings will be made of local limestone in the traditional German farmhouse and barn design. I would have a vineyard, horses, and award winning cattle. Keep talking Marm I love it when you tickle me.

  32. Davy on Sun, 2nd Nov 2014 9:33 am 

    Juan, I truly consider you and NR to be best of friends. I know we are internet buddies but that does not diminish any the enrichment you all add to my life. I have learned allot for you and others. I have friends here locally but only one who embraces our doom and prep lifestyle.

    This fact is a warning in some ways. It shows how few are engaged in prepping. It shows just how dangerously exposed society is to a collapse. Maybe a crisis will hit and we will be those who have created the plan B’s that will be embraced by our neighbors. We will be the ones who make a difference. We may well be the heroes in some small way. I guess that is more wishful and grandiose thinking. I hope that I can make a difference for others in the end.

  33. Davy on Sun, 2nd Nov 2014 9:37 am 

    Greg you too are a great friend I wish I could have you guys as neighbors. Although if you guys were local we would be sitting around all day long and opining doom and prep and not get anything done!

  34. Northwest Resident on Sun, 2nd Nov 2014 9:42 am 

    toms — Forget about all those “failed” predictions. If Peak Oil predicting was a dart board game, you’d see all the darts sticking in the two or three circles closest to the bullseye, but no direct hits. It doesn’t mean that those predictions weren’t really, really close to the actual reality.

    The U.S. Military certainly believes in Peak Oil and the dire consequences that come with Peak Oil. Maybe you would like to accuse the United States Joint Forces Command of lacking “critical thinking”???

    “To meet even the conservative growth rates posited in the economics section, global energy production would need to rise by 1.3% per year. By the 2030s, demand is estimated to be nearly 50% reater than today. To meet that demand, even assuming more effective conservation measures, the world would need to add roughly the equivalent of Saudi Arabia’s current energy production every seven years.”

    toms — Where’s the next SA-equivalent oil production coming from — name just one, please.

    Does the U.S. Military “critical thinkers” totally dismiss Peak Oil? No, they don’t:

    “Peak Oil — As the figure at right shows, petroleum must continue to satisfy most of the demand for energy out to 2030. Assuming the most optimistic scenario for improved petroleum production through enhanced recovery means, the development of non-conventional oils (such as oil shales or tar sands) and new discoveries, petroleum production will be hard pressed to meet the expected future demand of 118 million barrels per day.”

    But hey, if the world doesn’t keep producing significantly more and more oil, NO BIG DEAL, right toms?

    The implications for future conflict are ominous, if energy supplies cannot keep up with demand and should states see the need to militarily secure dwindling energy resources.

    Come on toms, snap out of it. The realities are grim, letting go of the emotional attachments to the future you WISH lay ahead and accepting the future that actually does lie ahead is a tough and in many ways heartbreaking thing to do. But if you’re like me, you’d rather know the score up front rather than be bamboozled and coddled with fairy tails of “all is well”.

    ht tp://fas.org/man/eprint/joe2010.pdf

  35. Northwest Resident on Sun, 2nd Nov 2014 9:51 am 

    Davy, JuanP, GregT, rockman and all the rest — Here’s raising my early Sunday morning cup of coffee to you all in a toast to truth and reality, however bitter that truth and reality may be. Just add another spoonful of sugar, and chug it down!

  36. Boat on Sun, 2nd Nov 2014 10:10 am 

    Rock, Davey, etc because a few of us from time to time point out facts and trends that point out the efforts to make money from the high price of energy by making products more available like oil and nat gas or efficiency doesn’t make us necessarily a cornucopian or denialest or any other such word you like to label us. Maybe we just think there is enough fossile fuels to last till solar, wind, electric cars etc become the new fuel sources and transportation alternatives. Maybe a crash is something to keep an ever watchful eye on but not eminent as every year that goes by proves it’s forecast wrong.
    O know ya’ll know how to google and most of you are well read. To blow off all the positive changes in the energy, transportation, home efficiency, etc that are happening are puzzling to me. And Juan, stop bullying others that interpret the landscape different than you.

  37. JuanP on Sun, 2nd Nov 2014 10:39 am 

    Boat, You are OK in my book. All points of view are welcome, but there’s no need to get personal. Sometimes I get angry at some insults because I am not right in the head, and respond in kind. I don’t like abuse.

    I welcome all points of view. I know I am a doomer, and I want educated optimistic positive people on this forum, too. I want balance. More women, minorities, and young people would offer different perspectives, too, and I would welcome that.

    Please believe me when I say that I want you to be proven right in your optimistic perspective. I would hate to end up being right about the future I envision for humans in the next decades and centuries. I hope with all my heart that I am wrong. My visions are medieval and apocalyptic. I fear the worst possible outcome seems to be the chosen one.

  38. JuanP on Sun, 2nd Nov 2014 10:54 am 

    Boat “And Juan, stop bullying others that interpret the landscape different than you.”
    I had missed that. I know I act as a bully some times. I usually do it on purpose. I normally abuse abusers. I have found it useful in life to dish out in kind as an educational tool in dealing with disrespectful and abusive people. I am not a turn the cheek kind of person, except with people that can’t take it. Bullies don’t like being bullied. If I push it is with good intentions, but I admit I am too agressive at times. I like pushing people out of their comfort zone and challenging them.
    I am a BRUTALLY honest person, and also a depressive PTSDd introverted antisocial misanthrope with sociopathic and psychopathic tendencies. I will not stop. I can’t be stopped.

  39. Davy on Sun, 2nd Nov 2014 10:57 am 

    Juan, I echo your post.

    Boat I am careless with my labels. You need to understand like Juan I am not quite right. Often since I have gone through the stages of doom I am here with dry, sarcastic, and goofy humor. Many here on the other hand are here for serious reasons. They are rightly concerned with something they do not fully understand or maybe want to understand.

    What I have learned is you can’t dwell in the deadly serious world of doom too long. You have to lighten up or there is nothing left to do but grab the 45 and pop a cap off in the mouth or side of the head. Right now my Italian girl friend is on the phone with someone in Italy rambling on in Italian the way Italians do. It is a happy and fun language. I am lucky to have her she accepts my doom but refuses to dwell in doom. She lightens me up. Boat in addition I appreciate you and other more optimistic types. We need optimism. We need optimists to offer balance. If this PO board was totally pessimists I would not enjoy it like I do.

  40. GregT on Sun, 2nd Nov 2014 11:01 am 

    Boat,

    Solar, wind, electric cars etc., are not fuel sources or transportation alternatives. They are all products of fossil fuels, and are completely dependant on fossil fuel inputs.

    Modern agriculture, medicine, construction, transportation, communication, technology, science, manufacturing, education, and population numbers, are ALL totally dependant on fossil fuels. This is not ‘cornucopian’, or ‘denialist’, this is a fact. Remove fossil fuels from the equation, and we as a species return back to pre-industrial civilization.

    We have reached the point where we are driving towards our own extinction. We need to completely rethink our relationship with our host planet. Human transportation, and short term disposable human manufactured stuff, is not only completely unnecessary, the short term gain is not worth the the long term consequences.

  41. JuanP on Sun, 2nd Nov 2014 11:14 am 

    Boat, I ignored all of Tom’s insults until he said NR was not a critical thinker. That sent me ballistic because it is an insulting LIE. I am not coming in NR’s defense, he is a grown up and he can take care of that by himself.
    I WAS DEFENDING THE TRUTH. That is another thing I am BRUTAL about. I am not here to make friends, I am here seeking the truth. I will be more gentle with you in the future, but I will always fight for the truth regardless of the costs.

  42. JuanP on Sun, 2nd Nov 2014 11:20 am 

    Davy, I know you referred to the 10:39 post.
    I love the way Italian sounds. It is a fun, happy, romantic, melodious language. I think it is the most beautiful spoken language in the world.

  43. toms2 on Sun, 2nd Nov 2014 1:55 pm 

    Hi NR,

    It’s apparent that I really offended you by saying that you lack “critical thinking”. I take it back and apologize. You obviously have critical thinking skills.

    I responded in that way only because of the horrendously abusive tone which prevails on this site, which is done mostly by the doomer faction, and which began long before I started posting here. For example, a young man (desumaiden) joined a few weeks ago, and has already been told that he’s so mechanical that he must be a bot, that he should be booted, that he is no smarter than a doorknob, and so on, and that’s toward someone who agrees with you guys on every essential point. Some of you guys are worse than that when there is the tiniest hint of disagreement. Also the doomer faction responded in a nasty way right away to my initial posts, even though my posts had no personal remarks whatsoever. Also you said I was “utterly clueless” etc so I was responding in kind and getting accustomed to this kind of thing.

    However, when I look back briefly at my short history of posts here, it appears that MonteQuest and pstarr were the ones who primarily initiate inappropriate remarks, not you.

    I should not have said you lacked critical thinking. You obviously have sufficient critical thinking skills. I was adjusting to the extremely abusive tone which prevails here generally, and responding in kind with the typical tone here.

    -Tom S

  44. Davy on Sun, 2nd Nov 2014 2:14 pm 

    Tommy, I have no problems with you. I welcome the challenge you present to me. Native American often based their greatness on their advisories strength. I feel similar with my mental worth here on this board.

    Serious mental challenges and criticism stimulate me. I am searching for the truth not popularity. I have never been very popular except with close friends and family. How popular can a doomer be? Not very much in today’s cornucopian world. I appreciate your input and please continue to raise hell with us doomers at least as far as I am concerned.

  45. toms2 on Sun, 2nd Nov 2014 2:28 pm 

    Hi guys,

    JuanP said:
    “Ship engines need energy to operate, most shipping is done using oil as a source for that energy. Oil, as well as gas and coal, is a FINITE resource. We will run out of usable oil at some point in the future and all shipping will go back to sailing.”

    We’ll run out of usable oil at some point, but shipping will not go back to sailing. There are many, many alternatives to oil. Steam turbines can also run off coal, or WOOD. In fact, ship engines already used those fuels in the 19th and early 20th centuries, until the shipping industry gradually transitioned to oil. The industry can also transition back in the other direction, away from oil and back to coal, or towards some other fuel.

    GregT said:
    “Modern agriculture, medicine, construction, transportation, communication, technology, science, manufacturing, education, and population numbers, are ALL totally dependant on fossil fuels.”

    They are dependent upon fossil fuels RIGHT NOW, however they are not ultimately dependent upon fossil fuels. There are suitable substitutes for EVERY usage of fossil fuels, and more than enough time to transition to them. The economy transitions automatically, always, and is doing so right now.

    I realize we can go back and forth with this stuff forever. I’ll just make my essential point here.

    There are alternatives to oil. In fact, there are obvious, readily-available alternatives for every single usage of fossil fuels. Furthermore, our economy has more than 150 years to transition to them until fossil fuels are exhausted. That is more than enough time, because the industrial economy is replaced every 40 years or so anyway because of wear.

    The economy automatically transitions between sources of energy, has done so repeatedly in the past, and is doing so right now. The economy is transitioning to renewable sources of energy, right now. Renewable sources of energy ultimately do not rely upon fossil fuels because they could easily be built using prior renewable sources of energy, once those are constructed.

    Civilization is not collapsing, or at least not for those reasons.

    -Tom S

  46. JuanP on Sun, 2nd Nov 2014 3:06 pm 

    Tom, I agree on wood powered steam engines. I think they will be around for a very long time. Firewood powered ships and locomotives will last a long time. Coal is like oil, though, it will become too hard to get at some point. I have imagined steam trains and ships powered by wood in the future, and trees planted all along the tracks and shores.

  47. GregT on Sun, 2nd Nov 2014 3:08 pm 

    tom,

    It should be very apparent that all is not well in the world. Economies are stagnating and going into decline, central banks are creating debt at an exponential rate, the environment is in decay and is headed in a downward spiral, resources are becoming harder to find and extract, and human population growth continues to rise at a rate of some 200,000 people per day.

    Many people are incapable of thinking, or simply do not want to think outside of their comfort zones. They like to believe that everything is OK. Nothing could be further from reality. We are in deep trouble here on this planet, and we continue to foolishly dig our hole even deeper.

    I have found individuals here to be the most thoughtful, well informed, concise, and most critically thinking people that I have ever had the pleasure to have ‘met’. This is not a doomsday cult, a fanatical religious doomsayer cult, or a UFO conspiracy cult. This is a group of people that are very concerned with the direction that our species is headed in. Most are very considerate, forward thinking and capable of complex systemic rational thought. All of us have different stories on how we have come to the realizations that we have. Most of us share a common goal. Most here seek the truth. Nothing more, nothing less.

    Posting here, and labelling people as ‘doomers’, could be considered to be offensive in of itself, although I am sure that most simply find that amusing, to some extent.

    Just because ‘some’ have reportedly been abusive to desumaiden does not give you the right to label us all with the same brush. “You guys” is a term that I have heard used all to often, and amounts to nothing more than discrimination. We are all individuals here, we do not agree on everything, and most are open to differing points of view, but when you come here with an argument that makes little sense or that has been hashed out a thousand times before, do not expect people to simply follow along for amusement.

    A couple of facts to hold you over.

    1) Civilizations have collapsed before, and they will collapse again.

    2) Infinite exponential growth in a finite environment is a mathematical and physical impossibility.

    3) Oil is a finite resource.

  48. JuanP on Sun, 2nd Nov 2014 3:17 pm 

    Tom, I like people that can apologize and admit a mistake. I apologize for calling you names, I misbehaved.

    I can understand hitting back on the wrong person. I do that, too. I hit back on Boat a while back one day I was pissed about something else.

    I’m sorry, guys, I get carried away. I will try to be less of a bully in the future.

  49. ghung on Sun, 2nd Nov 2014 3:23 pm 

    toms2 – I think you have a problem acknowledging the shear scale of our dependence on fossil fuels. Sure there are substitutes for most of the products and processes that fossil fuels provide, but when you look at any of them, they virtually all have petroleum embodied in their production. If you think we are going to run ships on biomass at anywhere near the scale we run them on fuel oil/bunker fuel, I would submit that you are mathematically/factually challenged.

    A metric tonne of oil contains 42-45 GigaJoules. A metric tonne of solid, ‘bone dry’ hardwood has 18-22 GigaJoules, and occupies several times the space. The world’s 90,000 commercial vessels burn approx 380 million tons of fuel per year. Assuming similar efficiency (a big assumption), 777 million tonnes of firewood is a lot of dead trees, and try harvesting and processing that without a shitload of fossil fuels. Try building and maintaining those ships without fossil fuels. And this is less than 2% of world’s oil consumption.

    Try producing and bringing the products they carry to market without fossil fuels.

    I could go on, but it seems pointless. We don’t have as much of a problem with fossil fuels as we have with human perception and unrealistic expectations.

  50. toms2 on Sun, 2nd Nov 2014 3:42 pm 

    Hi GregT,

    ““You guys” is a term that I have heard used all to often, and amounts to nothing more than discrimination. We are all individuals here”

    I used the term “you guys” because I’m debating a group of people here. I didn’t mean anything more than that by it.

    “1) Civilizations have collapsed before, and they will collapse again.
    2) Infinite exponential growth in a finite environment is a mathematical and physical impossibility.
    3) Oil is a finite resource.”

    Those things may be true, but they don’t contradict what I was saying. Even if infinite exponential growth is impossible, there are other possibilities than imminent collapse. For example, the growth rate could simply slow down and asymptotically approach zero over centuries. Or, further growth could become impossible and the economy would simply stop growing, but without collapsing.

    Oil may be a finite resource, but there are readily-available substitutes for all usages of it.

    -Tom S

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