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Page added on May 14, 2018

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Many signs of peak oil and decline

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[ I think the huge debt of major and minor oil and gas companies, falling cash flow, and dimming prospects are a huge waving banner of “Danger Ahead!”  It was expected by those of us following the energy crisis that unconventional oil will not be able to fill in the gap of the decline of conventional oil.  So far fracking has delayed that inevitable outcome, though it perplexes me that it “counts” when fracking companies are nearly $400 billion in debt and didn’t make money even when oil was $100 a barrel — does fracking really count when it’s an accounting trick of looting middle class 401Ks and IRAs?

At least 90% of remaining global oil is in government hands, especially Saudi Arabia and other countries in the middle east that vulnerable to war, drought, and political instability.

Alice Friedemann   www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report ]

Williams, A. March 31, 2017. Down 10%, Mexico Oil Reserves Gone in 9 Years Without New Finds. Bloomberg.

Mexico’s existing oil reserves are dwindling so fast the country could go dry within nine years without new discoveries according to the National Hydrocarbons Commission, which said reserves fell 10.6% to 9.16 billion barrels in 2016, from 10.24 billion barrels a year earlier. Once the world’s third largest crude producer, Mexico’s proven reserves have declined 34% since 2013.

The decline in proven reserves is driven by record-low drilling activity the last three years. State-owned producer Petroleos Mexicanos drilled 21 wells last year, a record low, after averaging 31 per year since 2010.

Kaufman, A. C. 2016-10-26. Exxon Mobil could be on the brink of irreversible decline. Huffington Post.

Exxon Mobil Corp. may be facing “irreversible decline” as the oil giant fails to cope with low oil prices and mounting debt, a report released Wednesday found.The Texas-based company has suffered a 45% drop in revenue over the past 5 years as it bet big on drilling in oil sands, the Arctic and deep-sea sites ― decisions that proved expensive, environmentally risky and politically controversial.

Combined with a two-year plunge in oil prices, ballooning long-term debt to cover dividend payments to shareholders and an evaporating pool of cash, Exxon Mobil’s finances show “signs of significant deterioration,” according to new research from the Institute for Energy Economics and Financial Analysis, a nonprofit based in Cleveland.

“Investors right now are getting less cash from Exxon than they have historically, and are likely to get less cash in the future,” Tom Sanzillo, director of finance at the IEEFA, told The Huffington Post on Wednesday. “This is going to be a much smaller company in the future, and the oil industry is going to be much smaller in the future.”

In April, Exxon Mobil was stripped of Standard & Poor’s top credit rating for the first time since the 1930s. The rating agency said it worried Exxon took on billions in debt to fund new drilling projects at a time when oil prices were high. Now, with the price of crude below $50 per barrel, that debt looks risky. Despite S&P specifically citing such payments in its downgrade, Exxon Mobil actually increased its dividend by 2 cents the next day.

Usually, dividends go up as a company’s stock price thrives. But shares of Exxon have trailed the S&P 500 for 10 quarters in a row, the report noted, and that’s before factoring in the risks of climate change.

Exxon Mobil is embroiled in a bevy of legal fights, notably with a handful of state attorneys general who are investigating the company for spending decades covering up the role of burning fossil fuels in global warming. The firm has repeatedly insisted such probes are politically motivated, and claimed that subpoenas seeking internal documents on climate change violate its constitutional rights.

energyskeptic



17 Comments on "Many signs of peak oil and decline"

  1. Jef on Mon, 14th May 2018 7:55 am 

    Many of us laid it out over 10 years ago over at oil drum.

    The powers that be saw the FACTS of limits to growth playing out and understand the implications of a future of LESS. Where it primarily plays out is in the economy, i.e. the future is about everything becoming more and more expensive

    So THEY started to cut loose constraints of banking/finance, the only limits to growth that they have some control over. After a few walls being hit they were then able to bail out banking/finance globally and cut loose most of the remaining constraints.

    This has had the effect of masking peak oil and much of the other limits but is certainly no solution as all of the benefits go only to the top 10% or so. This is not seen as a negative to tptb as they are the top 1% and it is certainly better than the real solution where we all stop doing 75% of the wasteful bullshit we call “modern industrial civilization, claw back all of the trillions, and help everyone through what is coming.

    Not going to happen though. Its all pay to play from here on out. No Money = You DIE!

  2. Revi on Mon, 14th May 2018 8:03 am 

    We’re definitely in the end game now. The top 1% will be fine for a while. They just got a nice tax cut. and they are going to be okay. I hop they take some vacations or want to buy something from us peasants. We all will be figuring out ways of pandering to the idle rich.

  3. Davy on Mon, 14th May 2018 9:15 am 

    “Many of us laid it out over 10 years ago over at oil drum.”
    Yea, and we were partially wrong about the near term. Let’s be honest about this so we can continue the argument.

    “The powers that be saw the FACTS of limits to growth playing out and understand the implications of a future of LESS. Where it primarily plays out is in the economy, i.e. the future is about everything becoming more and more expensive”
    Yes and no. The powers to be have a variety of views. Many are under the sway of cornucopian techno optimist who see a future of substitution and innovation. Other see the predicaments science is describing. Others are only concerned with themselves with power and wealth.

    “So THEY started to cut loose constraints of banking/finance, the only limits to growth that they have some control over. After a few walls being hit they were then able to bail out banking/finance globally and cut loose most of the remaining constraints.”
    How long is the question? When you have a Ponzi arrangement it is all about liquidity which is confidence, wealth transfer which is parasitic, and finally a productive economy to supply the scheme. Confidence is human nature so it is anyone’s guess how long that will last. The wealth transfer is another open ended question. How long can the rich and connected transfer wealth from other classes and sectors? Finally the economy. False confidence with its distorted price discovery along with parasitic wealth transfer will both damage the economy by malinvestment and corruption. When the rule of law starts to be disregarded and generally accepted accounting principles fudged then you allow dysfunction into the system. How long can that play out and in parallel how long can limits and diminishing returns play out before boundaries are crossed and phase change occurs? Ponzi schemes always end. Linear systems are always made circular on a finite planet. Always

    “This has had the effect of masking peak oil and much of the other limits but is certainly no solution as all of the benefits go only to the top 10% or so.”
    “All” is a tall word

    “real solution where we all stop doing 75% of the wasteful bullshit we call “modern industrial civilization, claw back all of the trillions, and help everyone through what is coming.”
    I think that it is too late to stop doing the 75% of the wasteful shit because that is part of the basis of the economy. We can end some of it that is for sure but likely not enough to be a solution. Economies of scale and multiple uses of technology conspire to make affordability and efficiency very important in allowing high productivity and innovation. Combine this with comparative advantage and global flows of wealth and you have what we have today and that is globalism. To leave globalism now with a global population clearly in overshoot is very dangerous if this global arrangement is tampered with. Many people may die because a realistic carrying capacity with less economic wealth is ½ or less of what we have today. Many people are going to die anyway if we keep extending the boundaries of a stable global system. It then becomes a choice at some levels. Awareness of both choices is lacking. With most people it is either or. Both doors lead to pain and suffering. The key is mixing the two and extending out the pain and suffering through mitigation and adaptation policies but even this is wishful thinking because of competitive cooperation prevents tough decisions and pushes quick profits and greed. The other issue is the self-organization of the human system where billions of decisions are made at once. There are no easy way out of this situation.

  4. dave thompson on Mon, 14th May 2018 10:06 am 

    Our capitalistic econ 101 system is based on endless growth. No growth, no system, game over.

  5. MASTERMIND on Mon, 14th May 2018 10:20 am 

    Peak oil is now. That is why the IEA, Saudis and many others are warming about oil shortages coming by 2020. It takes a few years after peak for oil shortages to occur. Once they hit and the price spikes sky high its game over for globalism. And then its human extinction..ie starvation, conflict, radiation poisoning…

    https://imgur.com/a/pYxKa

  6. GregT on Mon, 14th May 2018 11:51 am 

    “Once they hit and the price spikes sky high its game over for globalism. And then its human extinction..ie starvation, conflict, radiation poisoning…”

    Mankind survived for hundreds of thousands of years without globalism, and it would be modern industrialism, and globalism, fuelled by the burning of fossil fuels, that is driving a global mass extinction event.

    You’re more than just a little bit mixed up MM.

  7. MASTERMIND on Mon, 14th May 2018 12:26 pm 

    Greg

    The world survived with globalism with about 90 percent less humans. And we don’t have the skills, or knowledge to survive that way anymore. And evolution doesn’t go backwards. the world isn’t going to end because of climate change you stupid tree huger.

  8. MASTERMIND on Mon, 14th May 2018 12:33 pm 

    Dave

    That is true. Without growth the system collapses. And without oil (energy) you can’t have growth.

  9. MASTERMIND on Mon, 14th May 2018 12:34 pm 

    We live in frightening times. It’s my belief that “you personally” will most likely die of starvation or conflict between 2020 to 2050.

    You will experience a collapse of human civilization, a die-off of humans, a destruction of the ecosystem, a loss of access to mined and drilled resources, and a dark age from which your descendent’s will not reemerge.

    https://imgur.com/a/pYxKa

  10. Anonymous on Mon, 14th May 2018 3:35 pm 

    The Oil Drum is shut down. So is ASPO. The less crazy (but still wrong) types like Hamilton, Rapier, Staniford, are all looking to distance themselves from the mid 2000s peak oil silliness.

    Face it, peeps. Yergin won. He had researched the peak oil fads of previous years (1970s, post WW2, post WW1, even in the 1800s). He knew that there is this moth-flame fascination to smaller minds of the peak oil fad. He said, we would find more. We did.

  11. MASTERMIND on Mon, 14th May 2018 4:28 pm 

    Anonymous

    As M. King Hubbert (1956) shows, peak oil is about discovering less oil, and eventually producing less oil due to lack of discovery.

    Oil discoveries in 2017 hit all-time low –Houston Chronicle
    https://www.chron.com/business/energy/article/Oil-discoveries-in-2017-hit-all-time-low-12447212.php

    Sleepwalking Into The Next Oil Crisis
    https://www.forbes.com/sites/rrapier/2018/03/23/is-the-world-sleepwalking-into-an-oil-crisis/#509edc8b44cf

    Peak oil vindicated by the IEA, Saudi’s, HSBC, and former head of EIA..

  12. MASTERMIND on Mon, 14th May 2018 4:29 pm 

    Anonymous

    The End of the Oil Age is Imminent!

    Recently, the HSBC oil report stated that 80% of conventional oil fields were declining at a rate of 5-7% per year. This means that there will be an oil shortage of ~30 million barrels per day by 2030 and ~40 million barrels per day by 2040.
    http://www.scribd.com/document/367688629/HSBC-Peak-Oil-Report-2017

    What is mentioned far less often is that annual oil discoveries have lagged annual production since the 1980s.
    https://imgur.com/a/6dEDt

    Now, this problem has nothing to do with the recent decline in the oil price, which started in 2014. This has been an on-going problem for the past 30 years. Now, the IEA is predicting oil shortages by ~2020 due to declining exploration.
    https://www.wsj.com/articles/iea-says-global-oil-discoveries-at-record-low-in-2016-1493244000

    Here, the IEA blames this problem on the low oil price. But, this problem started in the 1980s. The problem is geological: we are running out of conventional cheap oil. Shale and tar sands are not the answer, either. Those resources are far too expensive, compared to conventional oil, because the global economy is based on cheap conventional oil. Expensive oil is not a replacement for cheap oil.

    Based upon the HSBC report and the IEA, the End of Oil Age will start around ~2020: there will be a dramatic economic depression due to exhaustion of cheap oil. This will cause a global economic collapse.

  13. MASTERMIND on Mon, 14th May 2018 4:31 pm 

    Anyoumouse

    He said, we would find more. We did.

    Oil discoveries in 2017 hit all-time low –Houston Chronicle
    https://www.chron.com/business/energy/article/Oil-discoveries-in-2017-hit-all-time-low-12447212.php

    Price is right (Fail Horn)

  14. MASTERMIND on Mon, 14th May 2018 4:51 pm 

    If humans have a future its underground….

  15. Anonymous on Mon, 14th May 2018 9:16 pm 

    Mastermind:

    Cornies won. TOD is dead, dead, deadity dead dead.

    https://www.youtube.com/watch?v=VIXOOwthtaE

  16. MASTERMIND on Mon, 14th May 2018 9:36 pm 

    Annoymouse

    Whether the oil drum is online or off. It doesn’t disprove peak oil. But I guess when you have no new discoveries and nearly every energy expert is warning about peak oil now. You have to grasp at straws.

    Oil discoveries in 2017 hit all-time low –Houston Chronicle
    https://www.chron.com/business/energy/article/Oil-discoveries-in-2017-hit-all-time-low-12447212.php

    Price is right (Fail Horn)

  17. MASTERMIND on Mon, 14th May 2018 9:38 pm 

    Annoymouse

    As M. King Hubbert (1956) shows, peak oil is about discovering less oil, and eventually producing less oil due to lack of discovery.
    https://imgur.com/a/6dEDt

    IEA Chief warns of world oil shortages by 2020 as discoveries fall to record lows
    https://www.wsj.com/articles/iea-says-global-oil-discoveries-at-record-low-in-2016-1493244000

    Saudi Aramco CEO sees oil shortage coming as investments, oil discoveries drop
    https://www.reuters.com/article/us-aramco-oil/aramco-ceo-sees-oil-supply-shortage-as-investments-discoveries-drop-idUSKBN19V0KR

    Peak Oil Vindicated by the IEA and Saudi Arabia..The worlds top energy authorities!

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