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Page added on December 16, 2017
Chris Martenson: The Great Oil Swindle
When it comes to the story we’re being told about America’s rosy oil prospects, we’re being swindled.
At its core, the swindle is this: The shale industry’s oil production forecasts are vastly overstated.
Swindle: Noun – A fraudulent scheme or action.
And the swindle is not just affecting the US. It’s badly distorted everything from current geopolitics to future oil forecasts.
The false conclusions the world is drawing as a result of the self-deception and outright lies we’re being told is putting our future prosperity in major jeopardy. Policy makers and ordinary citizens alike have been misled, and everyone — everyone — is unprepared for the inevitable and massive coming oil price shock.
An Oil Price Spike Would Burst The ‘Everything Bubble’
Our thesis at Peak Prosperity is that the world’s equity and bond markets are enormous financial bubbles in search of a pin. Sadly, history shows there’s nothing quite as sharp and terminal to these sorts of bubbles as a rapid spike in the price of oil.
And we see a huge price spike on the way.
As a reminder, bubbles exist when asset prices rise beyond what incomes can sustain. Greece is a prime recent example. In 2008 when the price of oil spiked to $147/bbl, Greece could no longer afford imported oil. But oil is a necessity so it was bought anyway, their national balances of payments were stressed to the point that they were exposed as insolvent and then their debt bubble promptly and predictably popped. The rest is history. Greece is now a nation of ruins and their economy might as well be displayed alongside the Acropolis.
What happened to Greece will happen to any and every financially marginal oil-importing nation. As a reminder, the US still remains a net oil importer (more on that below).
Well, if you thought that world debt levels were dizzyingly high back at the beginning of the Great Recession in 2008, then you might want a fainting couch nearby before looking at this next chart:
(Source)
Global debt is a full $68 trillion higher in 2017 than it was in 2007(!). In terms of global GDP that represents a whopping increase of ~50% (from 276% to 327%).
At approximately 96 million barrels per day of oil consumption, each $10 rise in the price of oil per barrel means that oil consumers have to redirect an additional $960 million dollars each day(!) away from such things as profits, discretionary spending, and debt payments. Instead, that money is sent to the oil producers.
So a future price shock that tacks on an addition $50/bbl to the current price (bringing the total price of oil back over $100/bbl) would translate into $4,800 million ($4.8 billion) per day. That’s some $1.7 trillion per year of “redirected spending” that used to go to some other purposes but will now go to oil producers and oil producing nations.
Without belaboring the details, at the margin plenty of economically viable companies, countries and individuals would suddenly become ‘unviable’ and go bankrupt. Their debt and equity holders, employees, and communities that service these companies, will be wiped out.
This is why I love quoting Jim Puplava’s observation that the price of oil is the new Fed Funds rate. It has more ability to determine the future of the economy than interest rates.
For example, if you want to bring credit growth into a screeching halt, just jack up the price of oil. That’s exactly what happened in 2008.
And it can — and very predictably will — happen again.
For reasons I’ll explain shortly (in Part 2), I project the next major upwards-surprise oil price spike to arrive somewhere between the second half of 2018 and 2020.
The Middle East Is Now A Lot More Volatile
Now, if there’s a war in the Middle East that accelerates my timetable. Higher prices would arrive within weeks of the outbreak of hostilities, especially if they impact shipping traffic through the all-critical Strait of Hormuz.
As a quick reminder, roughly one third of all exported oil in the world passes through the Strait of Hormuz:
It’s a critical bottleneck. Even one missile flying towards one oil tanker will halt all oil shipments for quite some time.
Maritime insurers do not cover acts of war (see Rule 58) and the ship owners themselves will quickly stop shipments if it worried about taking massive losses on sunk tankers.
All of which means that the very first missile lobbed towards a vessel there will quickly result in no ships at all transiting the Strait.
(Source)
I raise this risk again here, as I did in my report on the recent concerning developments in Saudi Arabia, to remind everyone that an outbreak of war in the Middle East will prick the world’s global set of financial bubbles (stocks, bonds, real estate, fine art, etc) via a very sharp oil price spike.
Oil Economics
To get to the heart of the swindle being perpetrated, we only need understand a very simply equation describing the oil business. Money is spent drilling a hole in the ground, and then money is earned based on how much oil comes up out of that hole.
Money in, money out.
(Of course, there’s a lot of complexity involved in oil drilling and I don’t mean to diminish the incredible talents of the many gifted people who coax our energy out of the ground. But the high-level financial math isn’t that hard to grasp.)
We can understand the oil industry’s financial math using just three variables: C, P and O.
- C – the cost of drilling the well and then producing the oil.
- P – the price of oil when we sell it
- A – the amount of oil that comes out of the well.
The formula for profits is simply the (price of oil) times (the amount) minus (costs). (P * A) – C = profits
For example, let’s say that we spent $10 million drilling a well when oil commands a market price of $100 a barrel the entire time we’re selling it. The ‘break-even’ for that well — i.e., when the money we spent was finally returned in full — would be when C = (P * A).
So break-even would be 100,000 barrels in this example. 100,000 bbls * $100/bbl = $10 million.
If instead our well ultimately produced 200,000 barrels, we’d have a lot of profits. And of course, if we drilled a well that only produced 50,000 barrels, we’d lose money.
Now here’s where the swindle happens:
The cost to drill and operate the well (C)? That’s known with fine precision.
The amount of oil that will come out of that well, or A? That, too, is calculable and known.
But the price of oil (P) a driller receives for the oil it produces? That’s much harder to obtain information for. And the drillers are using all sorts of trickery to make it look much bigger than it truly is.
How Much Oil Do Shale Wells Really Produce?
If you’ve been following the US shale industry over the past few years, you’re likely quite perplexed.
On one hand, the shale oil producers sport negative free cash flows in every year of operation. They are cash burning machines.
But on the other hand, their reported break-even prices have been falling dramatically, and are often reported to be well below the current retail price of oil. Meaning they should be nicely profitable.
Which is it?
How is it possible to both produce above you break-even price point and be losing money hand over fist?
Well, one way is if the reported break-even prices aren’t correct. Let’s recall our simple formula for the break-even: C = (P * A).
When break-even prices are being reported in the media, what the companies are really doing is answering to this question: At what average price of oil will this well, once fully exhausted, have fully paid itself back?
It works like this. Suppose we knew a well costs $7 million to drill and operate over its lifetime, and we wanted to know what the breakeven price was. Well, that all depends on something called the EUR.
The total amount of oil that’s projected to come out of a well over its lifetime (Total O in our equation) is called the Estimated Ultimate Recovery, or EUR.
The following table shows that the reported break-even might be anywhere from $9 to $70 if the EUR varied from a lifetime output of 800,000 barrels or 100,000 barrels:
So, clearly the EUR is a very important number. And not just for reported break-even costs to investors. Those EUR estimates form the basis for our expectations of how much oil is going to be produced from not only a given well, but from an entire shale basin.
Now let’s use that knowledge to read a recent article I came across in a prominent oil and gas journal. The entire article is centered on the Bakken play in North Dakota. In both tone and conclusions, it’s exactly similar to articles we might read about the other large shale plays like the Eagleford and Permian basins.
The average well cost for drilling and completing a well in 2016 is estimated at around US$6.8 million, with the potential for additional reductions by year-end.
Based on the current well cost estimates, the average wellhead breakeven price is expected to average US$40 per bbl for 2016, about a 20% reduction from the 2015 level.
This is a big achievement for shale companies operating in the Bakken; operators have managed to increase the average well performance while reducing well costs.
(Source)
Before we move onto the supporting charts from the article, let’s just note what we’ve read. The average break even is now just $40 per barrel, a whopping 20% reduction from 2016 (which also saw a huge reported reduction from 2015).
If you stopped reading there you’d probably think, “Cool! We’re figuring out better and faster ways to drill and unlock tons more oil. I guess all of those projections of a US shale production bonanza for many decades to come are confirmed by this news.”
The first chart offered in this article supports that contention very nicely. In it, we see that the break-even price has plummeted every year since 2013; going down from $70 to just $40. That’s amazing!
(The above goes with the bull case images)
But a sharp eye would notice that the drilling costs have not fallen nearly so much. They’ve only fallen around 17% per well while the break-even cost has collapsed by 42%.
What accounts for the difference? You already know, don’t you…it’s the EUR, the total amount of oil expected to come out of each well.
Here’s the supporting chart from the article:
Holey smokes! The EUR has climbed from 400,000 barrels to 700,000 barrels. That’s an increase of 75%!!
That one feature alone accounts for nearly all of the reported drop in the break-even case. Again, the casual reader would be forgiving for thinking, Cool! That confirms what I’ve been reading about all the amazing technological breakthroughs in horizontal drilling and fracking. We’ve got this!
Which brings us to…
The Great Oil Swindle
Our commitment at Peak Prosperity is to find the data and let that tell us the story.
Fortunately, huge amounts of publicly available data exist on the production profiles of oil wells, right down to the monthly production values of each well. Gigantic data sets exist containing the results for thousands and thousands of wells, carefully sorted by vintage (year started) and precise location.
Even more fortunately, there are a few analysts out there that carefully download that data and then present it to the world so we can form our own conclusions.
But much of that data is ignored or removed to make shale producers look healthier than they actually are. Here’s a chart from the above article which has rather unhelpfully cherry picked the production data it used to make its point, But even with that attempt of duplicty, the chart still reveals the fraud:
The chart shows cumulative production over time. It paints a story saying that for each vintage year more oil seems to be flowing out of the ground. 2013 is the lowest, 2014 is better, and finally 2016 seems to be on track for the best year ever.
Why is this data unhelpfully presented? Because it stops at 18 months for each vintage even though we have many more years of data. These wells are principally depleted in 36 months, so why not show each vintage for 26 months, where possible? Would that undermine the impression being managed, possibly?
Before we show that’s indeed the case, just use your eyeballs and mentally carry those curves out. The EUR and the cumulative production become the same at the end of a well’s life. Can you mentally project any of those (asymptotic) curves ever reaching to 400,000? How about 500,000? Could they make it to 700,000?
To my eye, those puppies are flattening out. Even if I give them a generously long time, I can see them getting to maybe 300,000 to 350,000 — tops.
Fortunately, we have more data to definitively the situation.
The first comes to us from Art Berman, who shows that when you allow the data from each vintage to run, you’ll notice something quite obvious and very serious: faster initial rates of production cause faster rates of decline later on:
(Source)
While this chart is showing monthly production rather than cumulative production (stay with me on this…I know it takes some mental effort) it’s not hard to appreciate that a faster initial rate of production will add to the amount of oil coming out of a well while a steeper decline rate later will substract from that value.
In other words, all of the fancy new technology and drilling techniques seems to only have accelerated the initial rate at which oil comes out of the ground, not the total amount!
Next, let’s again look at the cumulative production values, this time by vintage, or year. This data come from the excellent website ShaleProfile.com run by Enno Peters who has done all that heavy lifting of the data and then gone the extra mile to make it easily graphed. Kudos Enno!
Shale wells deplete non-linearly. There’s some complexity there but it’s not too inaccurate for the layman to think that they deplete exponentially. Close enough to get you there.
Accordingly, when those wells are plotted on a log chart, their decline “curves’ become straight lines. To figure out how much oil is going to come out of those wells it is not too terribly inaccurate to simply draw the straight line as plotted towards zero.
Here’s what we get for every well for every year between 2010 and 2015, broken into vintage of a quarter of a year. That is, every well brought into production within a three-month window is lumped together and given a different color line:
(Source)
First, the blue dotted line suggests that the most stellar vintage is on track to produce an EUR of roughly 300,000 barrels, give or take. The worst vintage might be producing 120,000 barrels.
To get to even 400,000 barrels (far less than the claimed 700,000 in the above article!) a very pronounced shift in the line would have to magically take place. No such ‘line shift’ has ever been seen in any of this data by myself and I’ve looked through a lot of it.
Remember, this is what is currently being widely reported for the Bakken right now:
There’s an enormous discrepancy between the above char and the data we’ve got in hand and I’ve no good explanation for the difference except that they must come from different sources. My preferred data comes from the well head, but other’s take theirs from company presentations.
Why does any of this matter at all?
Because the inputs to a great many energy reports and if the actual data is correct, then every assumption about the future prospects of the US as an oil producer are wildly, dangerously wrong.
For example, if the EURs are half what is being assumed, which seems likely, then every future oriented analysis depending on them will be overstating things by 100%. A 2x error seems pretty significant to me.
For those who like their data, you could also read Art Berman who has done a similar (and far more sophisticated) analysis of the Permian basin and come to precisely the same conclusions (also deriving EURs roughly half of what’s being claimed).
Or this analysis of the Eagleford basin which derived an EUR of 250,000:
This study derives typical production curves of tight oil wells based on monthly production data from multiple horizontal Eagle Ford shale oil wells. Well properties initial production (IP) rate and production decline rate were documented, and estimated ultimate recovery (EUR) was calculated using two empirical production decline curve models, the hyperbolic and the stretched exponential function.
IP = 500 bbl/day, D = 0.3 and b = 1 resulting in an EUR of 250 kbbl with a 30-year well lifetime, however, with the recognition that this extrapolation is uncertain.
(Source)
Each of these analyses are pointing to EUR’s that are in the range of 250,000 to 350,000 barrels and across every shale basin.
The Danger Of This Deceit
The summary is we have lots and lots of actual data and supporting studies all pointing to the idea that the amount of oil that will come out of these shale wells is half or less what’s being popularly reported.
In Part 2: The Massive Coming Oil Shock, we connect the remaining dots that show an oil price spike caused by an oil supply shortage is inevitable at this point, likely within the next 2 years. Thought $5 a gallon gas was bad back in 2008? You’re really going to hate gas $10 a gallon (yes, it could get that ugly).
An oil price of this magnitude will smash many a budget. Families on the edge will not be able to afford the gas to get to their jobs, nor the commensurate rise in price of all the other goods and services they depend on to live (as oil is an input cost in nearly everything). Millions of households will be financially wrecked many communities will become largely unlivable as they lose their anchor employers.
Add the popping of the financial markets on top of things, and we’ve got a true crisis greater than anything we’ve lived through so far.
69 Comments on "Chris Martenson: The Great Oil Swindle"
baha on Sat, 16th Dec 2017 8:13 am
That makes sense to me…and 2 years is about the time EVs will be ready to tempt the car buyer. We’ve been saying all along shale was a temporary fix.
RM – is there something missing in his analysis?
JuanP on Sat, 16th Dec 2017 8:15 am
This article needs editing. I have only read about 1/4 of it so far and have already seen mistakes regarding the letters used in the equation, the dates referred to, and the amounts of oil in one of the graphics. If I had written this I would pull it out for proofreading and editing. It is not up to Chris’ standards. I hope you read this and fix it, Chris.
MASTERMIND on Sat, 16th Dec 2017 8:46 am
Baha
How are EV’S going to take over when only around 86 million people have garages for around 250 million vehicles? And Rockman is an idiot who sites the Daily caller as a credible source..And EV’S don’t save you any money because you have a to buy an expensive 5k 1200 lb battery ever 5-8 years..So there resale is shit..
Jef on Sat, 16th Dec 2017 9:07 am
Forget the oil centric understanding and try to understand the concept and consequences of “…popping the everything bubble”. Game over!
dissident on Sat, 16th Dec 2017 9:19 am
EVs will save the day!? Breathtaking delusion. Where are all the hybrid choices on the market? We were supposed to be living in a hybrid utopia by 2010. Apparently the car industry had other plans and hybrid choices are limited and their volume of sales are token. Yet in a couple of years we are going to see universal EV adoption? Get a grip.
In two years we will have more of the same as we have today.
onlooker on Sat, 16th Dec 2017 9:28 am
They knew about Shale for decades. Only recently have they tried to fully exploit Desperate times are calling for desperate measures
Sissyfuss on Sat, 16th Dec 2017 9:50 am
Ponzi on, growth capitalists!
joe on Sat, 16th Dec 2017 9:57 am
The dow is trading at around 20 times earnings, thats almost the same a last year when it was much lower. So the real story is the Trump tax cut that is supposed to make America great again. With the expected cut in taxes for companies its a certainty that profits will explode next year so the dow is having these gains priced in. This process was already in motion even before trump got elected so this tax cut was already planned, and Democrats hands are clean and they will claim it was nothing to do with them. Trump will claim this was his idea yet it wasn’t it was planned since the Great Recession. Thats why Bernie Sanders candidacy was ruthlessly shot down by the DNC cause they knew that either Hillary would get it done as a single term president or the GOP would do it with venom. The Dems won’t be queuing up to offer uncle Sam the gains that Trump is going to give to the wealthy Dems. If the Dems feel so bad about the trump tax cuts let them overpay their taxes next year and give it to the poor and needy as a gesture of seriousness, they wont.
You can’t run out of fiat currency, so the debt is not a problem, the problem is inflation which the writer correctly points out will destroy many lives.
MASTERMIND on Sat, 16th Dec 2017 12:09 pm
The thing is if EV’s knock off some of the demand for oil the price will drop based on supply and demand. Then people who use oil will buy more of it. Raising consumption and the price once again…its the jevon’s paradox. and you don’t save any money with an ev because it raises you electricity bills and you have to buy an expensive new battery ever 5-8 years. and Tesla is spending over a billion dollars a quarter. the same amount as GM does and they produce one percent of the total volume of GM..So they are headed for bankruptcy soon.
twocats on Sat, 16th Dec 2017 2:08 pm
Just taking the US. If you were never in the game – poor whites, almost all blacks, most latinos – you are scrapping to get by like you’ve always done – and you more or less have accepted that there’s no way out. Social mobility is dead. If you’ve fallen out of the game – which is a large section of lower middle class – you are in a state of shock and that’s probably why you voted for trump. Hopefully you owned frack land and are living off the royalties. If you are the twilighting middle or upper middle class you are spinning the roulette wheel on the few remaining pipe dreams left. Couple 100k on your child’s education (at least for anything useful). AirBnB rentals. Bitcoin. Uber on the weekends. Lululemon stock. FANG. Doomsday prep. It’s all a dream and we are waking up to the nightmare of the end of civilization. But still – the gas stations are full. Have never once in my lifetime experienced an empty gas station. That’s an accomplishment.
dave thompson on Sat, 16th Dec 2017 2:24 pm
Hey twocats I remember the lines and the “no gas” signs back in the seventy’s and there was true panic in the air for a while. We do need to face the music the world of no growth economy that is here and being masked by phony wall street numbers.
What is next was explained in the club of roam limits to growth back in the days when the gas lines hit. Ironic?
print baby print on Sat, 16th Dec 2017 2:28 pm
Good article , but this is not of any importance because we have unlimited supplies of $ so it doesn’t matter how much oil you get , the money is free anyway . The question is how is still this possible but anyway its good because we will be in stone age when the print baby print scheme burst
twocats on Sat, 16th Dec 2017 2:40 pm
I hear you dave. though i don’t know if we’ll see “no gas” signs ever again. despite all the anarchy of asset bubbles there is still a logic to the demodernization of countries like Greece, the slow burn genocides in places like yemen and burma, and the decapitalization of the average american. that’s a lot of fuel that might otherwise have been used. i see these as conscious or subconscious attempts to avoid the next price-spike and subsequent step down.
dave thompson on Sat, 16th Dec 2017 3:27 pm
I for what it is worth, see the biggest problem humans face, is food production. Abrupt climate change and wanton destruction of the biosphere aka natural world is so severe that no fix can be implemented.
The large fish and sea mammals are all but a thing of the past. Not to mention ocean acidification and the destructive loss of phytoplankton the base of the food chain. Yet we continue the dumping of chemicals on to the landscape that wash all the dead microbes and soil into the oceans forming dead zones world wide.
Plastics? Do I need to go into that? Or the crazy consumerism that shows no sign of slowing?
So easy for us to forget that humans are at the top of the food chain. Humans that are destroying the base of the food chain, what could possibly go wrong?
GregT on Sat, 16th Dec 2017 4:04 pm
“I for what it is worth, see the biggest problem humans face, is food production.”
Biggest most immediate problem for sure. Other longer term problems will be the availability of water, and oxygen.
Source of Half Earth’s Oxygen Gets Little Credit
“Half of the world’s oxygen is produced via phytoplankton photosynthesis. The other half is produced via photosynthesis on land by trees, shrubs, grasses, and other plants.”
https://news.nationalgeographic.com/news/2004/06/0607_040607_phytoplankton.html
GregT on Sat, 16th Dec 2017 4:26 pm
We are completely destroying our one and only ever planet, with our technologies, and our insatiable addiction to energy.
Yet we believe that we can solve everything, with even more technologies, and by generating even more energy.
Insanity.
Makati1 on Sat, 16th Dec 2017 4:27 pm
The race is on to see what well kill off the rest of humanity and the ecosystem it depends on. I personally think that it will be disease, not starvation or heat. Every plague that ever hit humans is still in the wings waiting to emerge again. And, likely many new ones. With millions flying around the world everyday, the possibility of one of them spreading across the globe in 24 hours is very high.
If you doubt the number. Take a look at this:
https://www.flightradar24.com/2017-12-10/14:31/12x/11.29,-159.43/2
Zoom out and see the flights in the air at any moment all over the world.
GregT on Sat, 16th Dec 2017 4:46 pm
The four horsemen Makati.
War, Famine, Pestilence, and Death
onlooker on Sat, 16th Dec 2017 5:01 pm
Yep, the double whammy of a big fall in agricultural productivity for various reasons, an Earth denuded of food sources leaving a malnourished famine stricken humanity ripe for a pandemic seems to be where we are inexorably headed. Unless we chose to annihilate ourselves in an all out nuclear war. Stay tuned to see if the world ends in a bang or whimper
Cloggie on Sat, 16th Dec 2017 5:08 pm
Chris is a nice guy but he doesn’t know when to stop. He is still stuck in 2008, the year of Peak Chris. We are now 10 years down the road and nothing of what he predicted then materialized. We are using more energy then ever. Peak Oil didn’t happen. Prices of renewable energy plummeted and renewable energy has now the largest share in new energy production installations world-wide.
Good night, Chris.
Makati1 on Sat, 16th Dec 2017 5:23 pm
Yep, and the race is on. Death is the sure winner, but what will cause it?
I don’t think it will take a famine for plague to kill us off. Most humans are already unhealthy. One only has to look at obesity and drug use to see that. Nuclear war is closer than it has been since the Cuban Missile Crisis. Insanity seems to have taken over the Western leaders with Nutnyahoo and Trumpet leading the pack. Will there be a 2100 New Years Celebration by humanity? Time will tell, but none of us will be here to see it if there is. My money says: No.
dave thompson on Sat, 16th Dec 2017 5:33 pm
“We are using more energy then ever. Peak Oil didn’t happen.” I agree cloggie.
However since economic growth has ended, about a decade ago, the larger volume of oil being produced and burned gives less and less net energy. Hence the red queen affect. All the kings horses and all the kings men, cannot get net end user energy back again, even with the advent of spinning oversized egg beaters producing electricity.
onlooker on Sat, 16th Dec 2017 6:03 pm
How is this for a huge swindle
$21 trillion of unauthorized spending by US govt discovered by economics professor—-
And for those who don’t think it possible
Exhibit A= The Magical printing press or in this case digital press, digits created out of nothing. Just add a few zeroes at the end of a numbhttps://www.rt.com/usa/413411-trillions-dollars-missing-research/er. Modern day alchemy
onlooker on Sat, 16th Dec 2017 6:04 pm
sorry https://www.rt.com/usa/413411-trillions-dollars-missing-research/\
GregT on Sat, 16th Dec 2017 6:50 pm
“Peak Oil didn’t happen.”
We should all be thankful that it didn’t. That could have triggered a worldwide financial crisis, civil unrest and wars, much higher costs of living, and even a refugee crisis is some areas of the world. Nope, instead everything is humming along quite nicely, just like it was when oil was in the $20/bbl range.
bobinget on Sat, 16th Dec 2017 6:50 pm
Yesterday, I read “ForSale” sign details of a sweet looking BMW parked on the street near a supermarket. It read: “New timing belt and water-pump” followed by contact info and price.
It struck me once again. EV popularity is the most disruptive technology to come along since sewing machines.
My eGolf has 17 moving parts.That BMW 1,700.
GregT on Sat, 16th Dec 2017 7:03 pm
And I sure wish this stupid Oil Glut™ would end soon. I’m tired of paying $1.35 for a litre of gas, when it used to be 60 cents.
The next thing they’ll be telling us, will be some story about demand destruction due to electric vehicle sales, causing the price of gasoline to go up even more.
dave thompson on Sat, 16th Dec 2017 7:09 pm
Lets assume that EV transportation takes over 90% of the private auto industry. What happens to all that gasoline that comes out of the refining process? Industrial civ will still need all the other products that come with the crude oil processing.
GregT on Sat, 16th Dec 2017 8:14 pm
“EV popularity is the most disruptive technology to come along since sewing machines.”
Yah, I actually even saw an EV a few weeks back. First time ever around these parts, and we have some of the lowest electricity prices globally, generated entirely from hydro. As renewable as it gets, but still not renewable without fossil fuel inputs.
Cloggie on Sat, 16th Dec 2017 9:48 pm
I’m not going to bite.
MASTERMIND on Sat, 16th Dec 2017 9:59 pm
Cloggie
Peak oil didn’t happen? Wrong… It did back in 2006 just as Hubbert predicted it would. You dumb dutch faggot….And we got a second hubbert peak now thanks to shale and tar sands. But once conventional oil goes into permanent decline it will drag down shale and tar sands and that will be global peak oil. And that will be the ball game. And according to the IEA WEO nov report that time is now.That is why so many energy experts like the IEA and Saudi’s are warning about massive worldwide oil shortages coming in a few years. Its possible as soon as next year.
http://imgur.com/a/uCz7V
http://www.nature.com/nature/journal/v481/n7382/full/481433a.html
http://www.sciencedirect.com/science/article/pii/S0360544213009420
https://www.scientificamerican.com/article/has-peak-oil-already-happened/
MASTERMIND on Sat, 16th Dec 2017 10:02 pm
bobinget
Good luck reselling your EV..Nobody is going to want a used EV..With an old warn out battery. Just like nobody wants an old cell phone..
Cloggie on Sat, 16th Dec 2017 10:11 pm
Millimind has great trouble discerning between peak oil and peak conventional oil. Both are irrelevant, what matters is peak fossil (supply). That is not going to happen in this century or ever. Peak fossil demand will happen in a couple of decades at the latest as fossil price increases as well as Paris Accords will cause a rush into renewables.
dave thompson on Sat, 16th Dec 2017 10:16 pm
Cloggie you have problem understanding peak net end user energy.
onlooker on Sat, 16th Dec 2017 10:20 pm
And he has a problem understanding the importance of FF in any mass transition and also how time is running out on the feasibility of any transition due primarily to your point Dave about Net energy
Cloggie on Sat, 16th Dec 2017 10:23 pm
Oh my, all the problems I have.
dave thompson on Sat, 16th Dec 2017 10:29 pm
We all live in the same world Cloggie, these problems belong to us all and the future generations as well.
dave thompson on Sat, 16th Dec 2017 10:30 pm
OOPs I meant “these predicaments”.
MASTERMIND on Sat, 16th Dec 2017 10:48 pm
Cloggie
New Oil Discoveries by Scientists have been declining since 1965 and last year was the lowest in history
https://imgur.com/a/DVSNt
We have been draining our oil reserves by consuming more oil than we discover since the 1980’s
https://imgur.com/a/5hpQu
HSBC Global Bank warns 80% of the worlds conventional fields are declining and world oil shortages ahead
https://www.research.hsbc.com/R/24/vzchQwb
Chevron CEO warns US shale oil alone cannot meet the world’s growing demand for crude
https://www.cnbc.com/2017/05/01/us-shale-cannot-meet-the-worlds-growing-oil-demand-chevron-ceo-warns.html
Saudi Arabian oil reserves are overstated by 40% – Wikileaks
https://www.theguardian.com/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaks
BP 1.7 Trillion barrels proven oil reserves NOT so proven
http://crudeoilpeak.info/oil-reserves-and-resources-as-function-of-oil-price
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 Arabia’s Energy Minister Warns of World Oil Shortages Ahead
https://www.wsj.com/articles/saudi-minister-sees-end-of-oil-price-slump-1476870790
Saudi Aramco CEO believes oil shortage coming despite U.S. shale boom
http://www.foxbusiness.com/markets/2017/07/10/saudi-aramco-ceo-believes-oil-shortage-coming-despite-u-s-shale-boom.html
The world’s largest oil trader Vitol says US oil production will peak in 2018
https://www.reuters.com/article/us-commodities-summit-vitol/u-s-oil-output-may-be-set-for-last-spike-in-2018-vitol-idUSKBN1CF1MZ?rpc=401&
The End of Peak Oil? Why this topic is still relevant despite recent denials (Chapman, 2014)
http://www.sciencedirect.com/science/article/pii/S030142151300342X
Projection of World Fossil Fuels by Country (Mohr, 2015)
http://www.sciencedirect.com/science/article/pii/S0016236114010254
UC Davis Study: It Will Take 131 Years to Replace Oil with Alternatives (Malyshkina, 2010)
http://pubs.acs.org/doi/abs/10.1021/es100730q
University of Chicago Study: predicts world economy unlikely to stop relying on fossil fuels (Covert, 2016)
https://www.aeaweb.org/articles?id=10.1257/jep.30.1.117
What were you saying about peak demand and renewables you dumb dutch faggot..Now go put on your wooden shoes..You tulip fairy! Looks like I just socked you in the grill with sources like your boy Richard Spencer got knocked the fuck out! LOL
MASTERMIND on Sat, 16th Dec 2017 10:50 pm
Cloggie
UC Davis Study: It Will Take 131 Years to Replace Oil with Alternatives (Malyshkina, 2010)
http://pubs.acs.org/doi/abs/10.1021/es100730q
University of Chicago Study: predicts world economy unlikely to stop relying on fossil fuels (Covert, 2016)
https://www.aeaweb.org/articles?id=10.1257/jep.30.1.117
World Oil Shortages To Lead To Oil Price Spike By 2020s, warns Goldman Sachs
http://oilprice.com/Latest-Energy-News/World-News/Supply-Crunch-To-Lead-To-Oil-Price-Spike-By-2020s-Expert-Says.html
German Military (leaked) Peak Oil study concludes: oil is used directly or indirectly in the production of 90% of all manufactured products, so a shortage of oil would collapse the world economy & world governments
https://www.permaculture.org.au/files/Peak%20Oil_Study%20EN.pdf
You just got socked in the Jaw Clogg. Like your boy Richard Spencer! LOL
MASTERMIND on Sat, 16th Dec 2017 10:53 pm
Clogg
People are almost completely ignoring a looming crisis for oil
http://www.businessinsider.com/the-future-of-oil-supply-and-demand-2016-9
Chevron CEO warns US shale oil alone cannot meet the world’s growing demand for crude
https://www.cnbc.com/2017/05/01/us-shale-cannot-meet-the-worlds-growing-oil-demand-chevron-ceo-warns.html
The End of Peak Oil? Why this topic is still relevant despite recent denials (Chapman, 2014)
http://www.sciencedirect.com/science/article/pii/S030142151300342X
Projection of World Fossil Fuels by Country (Mohr, 2015)
http://www.sciencedirect.com/science/article/pii/S0016236114010254
Saudi Arabia’s Energy Minister Warns of World Oil Shortages Ahead
https://www.wsj.com/articles/saudi-minister-sees-end-of-oil-price-slump-1476870790
And you don’t want to bet against a Saudi Oil Minister! Now back to your tulip fields you flower sniffing faggot! LOL
MASTERMIND on Sat, 16th Dec 2017 10:56 pm
The last law of nature says: that any creature that despoils and outbreeds its natural habitat will be culled to bring its numbers under control and restore a stable environment.
Cloggie you will be culled first because your a cuck beta male..lol
Cloggie on Sat, 16th Dec 2017 10:57 pm
“UC Davis Study: It Will Take 131 Years to Replace Oil with Alternatives (Malyshkina, 2010)”
I’m glad that UC Davis agrees with me that the transition is possible in the first place. I think they are a little too pessimistic about the timing.
Cloggie on Sat, 16th Dec 2017 11:06 pm
“Cloggie you will be culled first because your a cuck beta male..lol“
https://en.wikipedia.org/wiki/Fall_of_Saigon#/media/File:Saigon-hubert-van-es.jpg
You do realize, millimind, that that empire of yours is about to collapse and that the entire world will dance on your grave and that we in Europe (and China) only have to pick up the pieces we like after CW2?
You don’t?
https://documents1940.files.wordpress.com/2017/09/worldmap-multipolar-world.jpg
MASTERMIND on Sat, 16th Dec 2017 11:14 pm
Cloggie
Nice map real professional. Did your little cuck child draw that? Do you really think the US is going to collapse and europe won’t? And china is in junk status already because of their debts. And nobody believes they are really growing at 7 percent. More like 3 IMO..You are so delusional the US will be the last to collapse. And when it does that is ball game for everyone. We make up 24 percent of world GDP…Sorry I had to destroy your nonsesne about renewables. How dumb are you? Solar and wind made up less than one percent of total energy last year. They simply dont work because there is not enough constant wind and sunshine..Its that simple..Notice in the past we upgraded every-time we switched energy sources. From whale oil to coal, to oil and then to gas..Switching to solar and wind would be less effective and going backwards. BP tried to switch to all renewable s about a decade ago and they changed their name to Beyond Petroleum. And their CEO was knighted by the Royal family. And after one year they dropped all renewable s and went right back to oil and gas. If a major oil company like BP couldn’t make them work then perhaps you should change your mind. And just do a google search for “Solar power bankruptcy or wind power bankruptcy” …Its a total joke.
Davy on Sun, 17th Dec 2017 2:30 am
“You do realize, millimind, that that empire of yours is about to collapse and that the entire world will dance on your grave and that we in Europe (and China) only have to pick up the pieces we like after CW2?”
Dream on dutchy, you are likely going down sooner than the US. Your exposure to dangers of the third world and depletion is worse than the US. China and Europe have much worse overpopulation issues. The US could be the last man standing near of the end of modernism. Yea, I said that because you hate those words. If we are not the last man standing it will not be long after we go that you go. Your whole obsession with renewables is centered on your Paris Berlin Moscow Empire golden age nonsense. You are one warped goofy old man. Mad kat and you take the prize for board wacko’s.
Cloggie on Sun, 17th Dec 2017 5:04 am
According to presidential candidate Pat Buchanan, the US will likely no longer exist after 2025:
https://www.amazon.com/Suicide-Superpower-Will-America-Survive-ebook/dp/B004YD36HS/ref=sr_1_1
Nobody says that about Europe, that has far better demographics than third world USA and is on the verge of a right-wing reaction. The hated Merkel will prove to be the last of the US deep state water carriers in Europe. On top of that Europe has far more identitarian reserves, based on many centuries old nations than cosmopolitan “non-nations of immigrants” USA/Canada/Australia/NZ.
Unless you are a total blind fool, the drama round the Trump presidency has clearly shown that European America is a demographic with the back against the wall and is on the verge of revolt once the last president of European-America will have been dealt with by the (((deep state))).
https://www.youtube.com/watch?v=GySM7j00dB4
https://www.youtube.com/watch?v=GySM7j00dB4
Put it in your agenda: the downfall of Trump, regular or irregular, will initiate the revolt.
Now THAT’s a collapse worth preparing for, not that silly peak oil superstition.
The entire world wants to live in white lands, if they get the chance. The big news is that now even white Americans want that too. White Americans can be a little slow at times, but with the proper guidance from their older, more experienced, less naive brothers from Europe, everything will work out fine eventually.
Especially for us in Europe.
Cloggie on Sun, 17th Dec 2017 5:14 am
https://www.youtube.com/watch?v=vVFhC4kuYDU
These Americans call themselves Europeans and we in Europe will not reject them as such, from a well calculated self-interest, namely preventing that the (((deep state))) will push America in a last-minute American-Chinese alliance…
https://deepresource.wordpress.com/2015/04/17/wallerstein-on-european-american-relations/
… and recreate similar conditions of 1933, with Paris-Berlin-Moscow encircled by the US and China.
Flyover deplorable country is up for grabs and we in Europe should pick it up and park it in a global European commonwealth. End good, all good and the future of the European race is guaranteed.
Makati1 on Sun, 17th Dec 2017 5:49 am
Cloggie, I agree that the US as it currently exists will not exist after 2025. Possibly sooner. It will be a fractured dictatorship/police state, worse than that of Nazi Germany. Nazi Germany did not have the ability to watch all of their people all of the time like the US does. Nor did it have over 600,000 laws (federal, state and local) that can be broken (and are) daily by every American in the US.
“At the reference desk, we are frequently asked to estimate the number of federal laws in force. However, trying to tally this number is nearly impossible.”
https://blogs.loc.gov/law/2013/03/frequent-reference-question-how-many-federal-laws-are-there/
“I don’t know if I can put my finger on exactly when we’re going to go over the edge, but if I was going to guess I would think the real catalyst is going to be the next 9/11-type event. And I don’t doubt it’s going to happen.”
http://www.internationalman.com//articles/doug-casey-on-what-happens-after-the-next-9-11
“Due to the events of the past year in particular, many Americans have become convinced that there now exists something like a secret police operating in the United States that is a fusion of some political deal-makers with certain politicized elements in the intelligence and security services.”
https://www.theburningplatform.com/2017/12/16/why-americas-law-enforcement-empire-resembles-secret-police-in-a-dictatorship/#more-165933
“America’s law enforcement empire has all the characteristics of secret police in a dictatorship. It is not transparent in its actions, has a history of bending the rules to obtain convictions, and its officers are rarely held accountable. It has also been politicized.”
Your papers please! LMAO
Davy on Sun, 17th Dec 2017 6:04 am
“According to presidential candidate Pat Buchanan, the US will likely no longer exist after 2025”
He is a politician and you want to believe a politician? The reason you believe him is you operate like a politician. Politicians are notorious about talking out their asses like you do. They are notorious about fantasy futures and history revisions just like you dutchy.
“Nobody says that about Europe”
BS, I have posted multiple references of people talking about the end of the EU.
“proper guidance from their older, more experienced, less naive brothers from Europe, everything will work out fine eventually.”
WTF, remember WWI and WWII. That was great guidance. What a lunatic.