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Page added on September 27, 2015

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If you measure in barrels, we’re doing OK


The good ship USA, as measured by the Barrel Standard, is doing nicely, thank you very much. You may not feel that way if you have any money invested in the stock market, but it is. Apple shares have been knocked back to their level of about a year ago. So has the S&P 500. XLE, the energy sector ETF, has been knocked back to its value in late 2010. Trillions in market value have been lost.

But plummeting stock prices notwithstanding, we’re doing rather well.

How can I say this? Easy. Just change the measure from dollars to barrels. This benchmark measures the value of America, or its stock market, in something many believe has more value than mere paper money. It measures the value of America by its industrial lifeblood — barrels of oil.

When the price of oil shrinks, as it has been doing, the value of America rises. So while the stock market has been sinking miserably when measured in dollars, it has been doing quite nicely in the stuff we all really need, barrels of oil.

Here is an example. In 1970 — well before the first OPEC oil embargo — the price of oil was $3.18 a barrel and the S&P 500 index was 92.15. If you had 1,000 barrels of oil, you could buy 34.51 units of the index. Now fast-forward to 1975. That’s when the price of oil had more than doubled to $7.67 a barrel, while the S&P index dropped to 90.19. So the same 1,000 barrels would buy 85.04 units of the S&P 500 index.

That was great for Saudi Arabia. Not so good for America.

Since then we’ve had a lot of ups and downs. But even now, with the S&P 500 index down and oil recently at $40 a barrel, the same 1,000 barrels of oil would buy only about 20 units of the S&P 500. Our productive enterprises trade well against oil.

Now, let’s take it to another level. Let’s measure the value of America — of the collective net worth of all American households — in barrels of oil. In 1970 the net worth of all households, according to Federal Reserve figures, was $3,418.5 billion. So with oil at $3.18 a barrel, you could have bought the whole country for about 1,075 billion barrels.

Ten years of inflation and economic misery later, the situation was worse. By then oil was $21.59 a barrel and the net worth of all households was $9,468.6 billion. So 438.6 billion barrels would have bought our country, lock, stock and …

But now, Federal Reserve figures for the first quarter of this year indicate household net worth at $84,924.6 billion. So with oil recently around $40 a barrel, it would take 2,123.1 billion barrels to buy our country. When measured in oil, our country is worth two times what it was worth in 1970 and nearly five times what it was worth in 1980. Measured in another way, American households have a net worth that is about twice as large as the proven reserves of OPEC.

The message here is that whatever buffets us from one moment to the next, we have reason to believe that things are getting better, not worse. The collective value of Western civilization continues to rise. Better still, several worries are now much diminished. Here are two big ones:

• Hubbert’s Peak, the notion that global oil production would inevitably peak and decline, has been dismissed. At worst, the peak has been deferred into a much more distant future. Better still, in a remarkably short time our country has moved from serious energy dependence to an active debate about allowing exports of our surplus oil and gas.

• The Middle East is still the largest pool of oil reserves in the world. But we in the United States, at least, are less dependent on it. That is a profoundly good thing. For all the worry about Iran, it is very likely that ISIS will be more of a worry in the future. That concern could easily reach the oil fields of Saudi Arabia, Kuwait and Africa, as well as Iraq.

• Scott Burns is a principal of the Plano, Texas-based investment firm AssetBuilder Inc., a registered investment adviser.

Daily Herald

55 Comments on "If you measure in barrels, we’re doing OK"

  1. farmlad on Sun, 27th Sep 2015 7:26 am 

    Oil by the Barrel is like farmland by the acre, if no distinction is made whether it be in Iowa, Mongolia, or the Sahara.

  2. makati1 on Sun, 27th Sep 2015 8:42 am 

    farmlad, you got it in one. Barrels of what? High grade petroleum? Corn squeezings? Rubbing alcohol? Jack Daniels? Numbers mean nothing today. Especially in the oil and gas business.

  3. makati1 on Sun, 27th Sep 2015 9:12 am 

    For your Sunday reading pleasure:

    “Halliburton to cut layers of U.S. management and North Dakota jobs”
    “US Coal Mines Continue To Dwindle As Weak Demand Takes A Toll”
    “The Shale Party’s Over: “Closed” Bond Market Means “Restructuring Is Inevitable”
    “Herbicide scrutiny mounts as resistant weeds spread in U.S.”
    “The Cost Of Cancer Drugs: Patients Vastly Overpaying For Treatments, Study Finds”
    “NASA: Oceans’ phytoplankton numbers are trending downwards”
    “How The US Subsidizes Cheap Drugs For Europe: Is Europe Freeloading Off Pricey Medicine In US?”
    “The Oligarch Recovery – 30 Million Americans Have Tapped Retirement Savings Early in Last 12 Months”
    “New Study Reveals Americans Throw Out Twice as Much Trash as Predicted”
    “California School District Rolls Out Iris Scanner Pilot Program on School Buses”
    “3rd Quarter GDP Now Forecast Ticks Down to 1.4%”
    and, finally…

    ” Jeb Bush Proudly Promises To Axe Net Neutrality If Elected”
    “Donald Trump Doesn’t Believe In Climate Change, Says It’s Just Weather As Pope Warns Of Warming Effect”


  4. penury on Sun, 27th Sep 2015 9:24 am 

    It always amazes me how some people can conjure up such mindless inanities to prove that whatever is a fact. I think that the barrels he is talking about are barrels of horse manure which he proposes to sell to investors.

  5. rockman on Sun, 27th Sep 2015 9:30 am 

    One of the funniest pieces of BS I’ve seen in a while. For instance how clever of them to talk of gross value of the country instead of net. IOW how would their stat work if they subtracted the “bbls” of debt the coutry has racked up over thos decades. A very different. talley, eh? And “surplus” of oil and NG in the USA…too funny for words. It’s as if they thought only 10 yo kids would read this crap. And not very clever 10 yo’s. LOL

  6. marmico on Sun, 27th Sep 2015 9:59 am 

    IOW how would their stat work if they subtracted the “bbls” of debt the coutry has racked up over thos decades

    Burns has bonehead.

    That’s the household asset point of view.

    Viewing it from the income point of view, in 1970, all primary household energy expenditures were 5.5% of disposable personal income. A reasonable estimate for 2015 is ~4%. 2005 will be the fourth lowest expenditure ratio since 1970, the exceptions being 1998, 1999 and 2002.

    The conclusion of the article: “Things are getting better, not worse” stands.

  7. penury on Sun, 27th Sep 2015 10:10 am 

    Marmico, I am certainly happy for you that things are getting better. You are truly blessed. Unless you are a member of the 1 per cent you are strictly speaking an oddity. Read the true facts about the economy of the U.S. China, E.U. and the E.M. and let me know where the bright spots are located. We seem to have about 49 million people who would love to hae things improving. Been by a food bank recently?

  8. JuanP on Sun, 27th Sep 2015 10:16 am 

    This piece of crap was already posted here a couple of days ago. I’ll give the same advice now I gave then. Skip this crap, reading shit like this is bad for your brain!

  9. Nony on Sun, 27th Sep 2015 10:23 am 

    I don’t understand the article.

  10. onlooker on Sun, 27th Sep 2015 10:25 am 

    I will believe Rockman who is in the industry rather than this pitiful inane article.

  11. shortonoil on Sun, 27th Sep 2015 10:38 am 

    A barrel of oil delivers 53% as much energy to the general economy today as it did in 1970. Wells have gotten deeper, and water cut has increased.

    Apparently the author thinks that people use it as a salad dressing!

  12. Boat on Sun, 27th Sep 2015 10:52 am 


    A barrel of oil delivers 53% as much energy to the general economy today as it did in 1970. Wells have gotten deeper, and water cut has increased.

    Show me a link.

  13. onlooker on Sun, 27th Sep 2015 10:56 am 

    Also how about the fact of the GDP or debt ration and how bad it is now days. Oh and what about the incursion of consistent & constant inflation to the value of currency around the world over time. By the way I do not consider myself a doomer. I believe in a life after this one and I am at peace. I just like others here like to live in reality not some fabricated delusion.

  14. onlooker on Sun, 27th Sep 2015 10:57 am 

    Sorry GDP to debt ratio.

  15. BobInget on Sun, 27th Sep 2015 10:59 am 

    To really understand oil’s value, push a SUV for just one hundred meters on a hard level surface.

    By scythe, cut a single acre of grass.
    Now, rake that grass into rows, (by hand)
    In two or three days gather up that grass into stacks, carefully slopping tops and sides to shed rain.

    One half gallon of diesel could do what you did if only you had a old tractor, rake and bailer.

    If you need to feed a small family: one person
    working half time could without oil, grow enough food for two adults and two children
    in a moderate climate.
    With oil and machines that same acre could feed hundreds of city folks as well.

  16. JuanP on Sun, 27th Sep 2015 11:21 am 

    BobInget “With oil and machines that same acre could feed hundreds of city folks as well.” Please tell me where I can buy that miraculous acre of land that feeds hundreds of human beings. I definitely want to buy some of that land. Do you even realize how incredibly ridiculous that claim is? Have you ever grown even a frigging tomato in your life?

  17. Boat on Sun, 27th Sep 2015 11:59 am 

    The IMF says different.

    That 3% growth needed? You cannot find these web sites?

  18. Boat on Sun, 27th Sep 2015 12:03 pm 

    Read about the Netherlands. Highly densely populated smaller country and the second largest agricultural exporter. And they do a lot of it on reclaimed land. They can teach you a thing or two.

  19. ghung on Sun, 27th Sep 2015 12:06 pm 

    Then again, I could easily put 15 large high tunnels on an acre of land, apply the model I’m using of very limited fossil fuel inputs (mainly plastic covering from natural gas), solar electric tilling for raised beds, solar-powered irrigation (also needing some plastics) intensive organic production, year ’round crop rotation, and feed a lot of folks from that acre burning little to no oil. I could harvest and bail about 10 acres of hay with my small tractor using less than 30 gallons of biodiesel per year; winter feed for goats or sheep.

    Point being, a lot of food can be grown for many people with much lower inputs, and a reasonable number of labourers.

    I’m currently harvesting an average of five pounds of fine french filet beans per day, growing vertically in a 15 foot double row. The rest of the bed is filled with 18 vine type (indeterminate) tomatoes beginning to produce vigorously. Another 35 foot bed has 90 young cabbages and 120 onions, the adjacent bed is packed with beets, carrots, leeks and a few broccoli plants, all doing nicely. A forth 30 foot bed has various herbs, corbichon cucumbers and bush beans all doing/producing well. This is late September and I didn’t even plant any of this stuff until July 27, and only 40% of this greenhouse is currently planted.

    I’m planning another two beds this fall, packed with cool weather greens of all kinds. I’ll also use the vacated beds currently growing tomatoes and beans for winter greens. Room for two more beds to be prepped for late winter/early spring.

    In short, with good management, this one high tunnel will produce a shitload of food using virtually no ongoing oil inputs. Imagine if I had 15 of these, and a little help.

  20. JuanP on Sun, 27th Sep 2015 12:10 pm 

    Boat, I am still waiting for the location of that acre of land that can grow food to feed hundreds of people. I want a peer reviewed scientific article and GPS coordinates, not some completely unrelated BS about the Netherlands, moron. Have you ever grown a potato or spent a day in a farm in your life? You have no idea what you are talking about and you are completely full of SHIT, retard!

  21. BobInget on Sun, 27th Sep 2015 12:17 pm 

    Juan, respectfully.
    Did you try the link? Feeding ‘hundreds’
    is clearly dependent on ‘moderate’ weather and a vegetarian, even vegan diet.

    Yes, I’m a grower, since you asked. My wife and I ‘retired’ from a life in large cities and years running a deep sea tug-boat. My plan was to raise black sheep for wool. Well, as you can imagine, that idea came up against nice soft non itchy made from oil, so called ‘fleece’.

    As we had 11 acres irrigated, I decided to grow blueberries. We also grow Asian pears, many varieties of apples and raspberries that keeps us busy for 35 years. At 80 I still do farm work a few hours every day then take off to swim at a local YMCA.

    As for my on-line statements. My actual name
    is Bob Inget. I live and farm in Southern Oregon. My former screen name, Berry+Bob.
    I’ve been shootin mouth off on line since 1988 mostly on financial blab sites.

    If I’m ever in Uruguay, I’ll ask anyone if they know Juan? Perhaps we can ‘do lunch’.

  22. BobInget on Sun, 27th Sep 2015 12:22 pm 

    Juan, since your last comment overlapped mine, I retract my lunch offer.

    Your secret friend, Bob Inget

  23. BobInget on Sun, 27th Sep 2015 12:26 pm 

    Anyone on line can Google “greenhouse productivity”

  24. JuanP on Sun, 27th Sep 2015 12:26 pm 

    OK, Bob, that sounds truthful, but still claiming that you can feed hundreds more from one acre with oil than you can feed from that acre without oil sounds like a little bit too much for me.

  25. JuanP on Sun, 27th Sep 2015 12:29 pm 

    Bob, that was addressed to Boat, not to you. Please go back and check. I have no interest in ever meeting you anyway, I am extremely selective in the company I keep and you don’t qualify. Are you signing in using different aliases and getting confused?

  26. JuanP on Sun, 27th Sep 2015 12:41 pm 

    Bob, I apologize if I was too rude with you. Sometimes I loose my patience. My fight was with Boat, not you. Your comments are usually courteous. It’s just that these last few days Boat and Hello have been pushing my buttons. I’ll watch myself when talking to you in the future. You haven’t earned my rage. I disagree with you, but I don’t dislike you and I value your input on the forum because you have an original perspective. Again, my apologies.

  27. BobInget on Sun, 27th Sep 2015 12:42 pm

  28. DMyers on Sun, 27th Sep 2015 1:08 pm 

    Re: Marmico v. rockman

    It appears as though Marm has scored a punch. But rockman was making a short entry and was merely suggesting that (to put it in my own words) “these fockin numbers are all jacked up.”

    Rockman is absolutely correct, and Marm proves it with his linked chart. Although rockman only mentioned debt as likely a huge offset to the alleged wealth, a related factor is that of understated inflation over a course of years. In other words the numbers all contain an unspecified margin of pure inflation, of no value whatsoever.

    By showing us the source of the net wealth value, Marm has proven that these numbers are bogus, and, with respect to the message of the article and the article itself, they are fraudulent. Note that the argument here is specifically related to household wealth. The source doc that Marm linked is entitled: Balance Sheet of Households and Nonprofit Organizations.

    The footnotes indicate that this includes “hedge funds, private equity funds, and personal trusts.” These latter deal in larger sums of money than “households”, so they skew the numbers upward. The footnotes also indicate that the values given are “marked to market”, so to speak, and everyone knows things aren’t really done that way anymore (i.e., the values more likely indicate an appraised value marked in better times).

    The price of oil has been so far askew of fundamental economic behavior, that it is a poor index for determining anything in even a semi-conventional manner. For example, a common observation about the recent oil price decline has been that it is not commensurate with what one would expect given supply demand conditions. The magnitude of the glut, contrived or real, does not justify the degree of the downward adjustment.

    These data would also serve to support the Shortonoil Theory of Oil Prices (STOP). A STOP analysis explains and predicts that the barrel falls in value due to its declining net energy content. The reason it takes more barrels to obtain dollar equivalence is that the oil itself has lower value to the economy. The conclusion from this analysis is that we are not any better off at all, because the barrel value to wealth relationship is changing only as a function of the oil value side of the comparison.

    Proper conclusion: we don’t have more, but oil is worth less QED

  29. shortonoil on Sun, 27th Sep 2015 3:22 pm 

    “Show me a link.”

    If anyone had the slightest amount of knowledge about the petroleum industry they would not make such an incredibly stupid request. Here is a good place to begin an education that would provide you with enough information, and knowledge so that you don’t make a complete total ass of yourself when you open your mouth:

    fundementals of reservoir engineering
    L.P. Dake
    Elisevier Science B.V.
    Shell International Petroleum Maatschappij B.V.
    ISBN 0-444-41830-X

    When you have finished with this 450 page text I’ll explain to you how reservoir engineers calculate OOIP, water cut, breakthrough time and volume. and estimate URR. You first have to know something about Bo (oil volume formation factor) and a 100,000 other particulars; of which you obviously know nothing at this point. With two, or three years of hard study you may know enough to ask an intelligent question. In the meantime you would be better off sticking with the “Little Miss Piggy” comments.

  30. GregT on Sun, 27th Sep 2015 3:25 pm 


    The IMF says different.

    You should read the report Boat. Instead of cherry picking quotes that meet your agenda. The report is in agreement with what most of us have been trying to get through to your thick skull.

    Here’s the summary, because I know that you won’t bother to read the report. Too much bad news for you to handle.

    Summary Findings and Policy Implications

    From the early 2000s to 2007 (the year before the onset of the global financial crisis), potential output was accelerating strongly in emerging market econo- mies but decelerating in advanced economies.

    The crisis was associated with a reduction in potential growth for both groups of economies. The findings of this chapter suggest that potential growth declined in advanced and emerging market economies by 1⁄2 and 2 percentage points, respectively, following the crisis.

    The chapter’s analysis also suggests that in advanced economies, potential growth is likely to increase only slightly from current rates, but to remain below pre- crisis rates in the medium term. In particular, employment growth has declined and is likely to decline further because of demographic factors, and capital growth is likely to remain below precrisis rates even as output and investment recover from the crisis.

    In emerging market economies, potential growth is likely to decline further, as potential employment growth is expected to slow. Because of less favorable external financing conditions and structural constraints, capital accumulation growth is likely to remain below precrisis rates in these economies, especially in China, where it may decline further as growth shifts toward consumption. And without policy changes, the growth of total factor productivity is not likely to return to its high precrisis rates in emerging market economies, given the expected further movement of these economies toward the technological frontier.

    Reduced prospects for potential growth in the medium term have important implications for policy. In advanced economies, lower potential growth makes it more difficult to reduce still-high public and private debt. It is also likely to be associated with low equilibrium real interest rates, meaning that monetary policy in advanced economies may again be confronted with the problem of the zero lower bound if adverse growth shocks materialize. In emerging market economies, lower potential growth makes it more challenging to rebuild fiscal buffers. For all economies, a total factor productivity growth rate that remains below precrisis rates will slow the rise in living standards relative to the precrisis years.

  31. Boat on Sun, 27th Sep 2015 3:29 pm 

    Start with one explanation. You claimed all this fracked oil has a lower BTU. Middle East oil has a higher BTU. Fracked oil is being replaced by Middle East oil. So net the world supply of oil with a higher BTU is being sold now. Is this true?

  32. Boat on Sun, 27th Sep 2015 3:46 pm 

    If oil at a refinery is heated with nat gas because it is cheaper and more net oil comes out of a barrel is that factored in your BTU calculation.
    Because CHP tech captures the heat and has less power loss because it is distributed energy and operates at 90+ efficiency are those BTU savings compared to 1970 oil. How about the cost to society from pollution. The BTU saved from less death and health issues.
    Regulations all designed to help protect people and the environment have added cost since 1970. This probably has more to do with the cost of oil production and the energy it takes to burn it than the lack of BTU. In the 70’s they were not even required to wear hard hats. The human cost was not a concern. How many BTU does that cost.

  33. Boat on Sun, 27th Sep 2015 3:57 pm 


    Global growth in 2014 was a modest 3.4 percent, reflecting a pickup in growth in advanced economies relative to the previous year and a slowdown in emerging market and developing economies. Complex forces that affected global activity in 2014 are still shaping the outlook: medium- and long-term trends, global shocks, and many country- or region-specific factors. Growth is projected to be stronger in 2015 relative to 2014 in advanced economies, but weaker in emerging markets, reflecting more subdued prospects for some large emerging market economies and oil exporters. The chapter discusses recent developments in and prospects for the world economy, explores potential risks (both downside and upside), and makes policy recommendations. A special feature looks at developments in commodity markets, focusing specifically on investment in an era of low oil prices.
    Chapter 2. Country and Regional Perspectives
    Global growth is forecast at 3.5 percent in 2015 and 3.8 percent in 2016, with uneven prospects across the main countries and regions of the world. The distribution of risks to near-term global growth has become more balanced relative to the October World Economic Outlook but is still tilted to the downside. The decline in oil prices could boost activity more than expected. Geopolitical tensions continue to pose threats, and risks of disruptive shifts in asset prices remain relevant. In some advanced economies, protracted low inflation or deflation also pose risks to activity. The chapter takes a region-by-region look at the recent development in the world economy and the outlook for 2015, with particular attention to notable development in countries within each region.

    Global growth in 2014 was a modest 3.4 percent
    Global growth is forecast at 3.5 percent in 2015 and 3.8 percent in 2016

    How do you leave out the facts. Everything else is just a ramble on how they come to the numbers. Key part of reading is look for the meat and potatoes then read the salad if interested. All years were or projected to be over 3%. Some number Davy picked out as a sustainable economy. Me?, I don’t care as long as we keep chugging along and improving tech and hoping the world comes to their senses and solves overpopulation.

  34. GregT on Sun, 27th Sep 2015 4:10 pm 

    The only reason why growth continues Boat is because of central banks’ and government policies. The US alone has increased federal debt load by 8.5 trillion dollars. Global government debt has risen by 53 trillion dollars since the start of the global financial crisis in 2008. The crisis has not ended Boat. Zero interest rate policies have also not resulted in recovery. We are in recession Boat, with no way out.

    “It is also likely to be associated with low equilibrium real interest rates, meaning that monetary policy in advanced economies may again be confronted with the problem of the zero lower bound if adverse growth shocks materialize.”

  35. GregT on Sun, 27th Sep 2015 4:30 pm 

    You are also being mislead by GDP. GDP is not a true measurement of economic growth or economic wellbeing. The numbers have been fudged Boat. And even if real growth was 3.5%, that would mean that the throughput of the global economy would double every 20 years. We are already using renewable natural resources at a rate of ~1.6 times of their natural replacement rate. Not only is a 3.5% sustained growth rate not realistic, it is physically and mathematically impossible.

  36. onlooker on Sun, 27th Sep 2015 4:42 pm 

    It is like cornies and denialists have to be constantly reminded that we are on an extremely unsustainable path on many fronts and that soon the building is going to begin to collapse under the weight of this non sustainability and that news and information to the contrary is just deceptive propaganda or is just foolish dribble.

  37. Boat on Sun, 27th Sep 2015 5:31 pm 

    If anyone has a conversation you have to have certain rules. You can talk about what influences the economy or if a policy is bad or good but you have to have measurement. Otherwise comment is useless. BTU for example indicates the quality of the feed source but that is determined by testing at a refinery and they get paid accordingly. The refinery charges to fill a barrel of refined product and the better the quality, the better the price. But a barrel is a barrel. This is why tar sands gets $24 per barrel while a higher quality gets more.
    As far as GDP goes I wish it was a lot smaller, I wish there were a lot less humans but if wishes and hopes were candy and nuts we would have a Merry Christmas. Do yourself a favor and don’t lie or misuse information. The problem with declining resources and climate change are a big enough problem on their own merit without embellishing the facts or twisting the measurements.

  38. Ted Wilson on Sun, 27th Sep 2015 6:09 pm 

    Yes the barrel is just by volume and not by energy.

    It takes lot more energy to drill a deeper well and even more energy to drill a horizontal shale well.

    Also today’s winter gas has 10% butane which has slightly lesser energy and both summer and winter gas has 10% ethanol which also has 2.5% lesser energy than E0.

    But our vehicles have gotten lot more fuel efficient and that’s why we may not feel much pain.

    Out of 95 million b/d of oil pumped, actually some 2.3 million b/d are bio-fuels. Also lot of NGL (Natural Gas Liquids like Ethane, Propane, Butane) are clubbed into Oil along with the Coal to Liquids.

    So the actual wonderful is getting mixed with other fuels.

    Soon the Arabs are going to extract oil using heat/steam from solar thermal power. But media will hide the usage of solar energy and instead show that the Oil production is increasing forever.

    Enjoy the Oil production boosted by other fuels.

  39. GregT on Sun, 27th Sep 2015 6:22 pm 

    Boat, a bit of reading for you. Try it, you might actually learn something.

    GDP: A Flawed Measure of Progress

    GDP Not Real Indicator of Economic Growth

    GDP: An Imperfect Measure of Progress

    Why GDP (Gross Domestic Product) is a Poor Measure of Wealth and Prosperity

  40. apneaman on Sun, 27th Sep 2015 6:42 pm 

    Boat the leaps and connections you make when lost in your motivated reasoning are truly fascinating.

    U.S. refiners turn to tanker trucks to avoid ‘dumbbell’ crudes

  41. Boat on Sun, 27th Sep 2015 6:51 pm 

    I bookmarked those sites to read.

  42. Boat on Sun, 27th Sep 2015 6:56 pm 

    Thanks for the link. Interesting problem.

  43. green_achers on Sun, 27th Sep 2015 7:33 pm 

    Ted Wilson:

    “But our vehicles have gotten lot more fuel efficient and that’s why we may not feel much pain.”

    Yeah, I hear that Volkswagen diesel is awesome… 😉

  44. makati1 on Sun, 27th Sep 2015 7:50 pm 

    The discussion has deteriorated into a match between the informed and the deniers, as usual.

    All over a piece of bullshit article with no real use except to keep the uneducated masses sedated. Opium for the unthinking mind.

  45. augjohnson on Sun, 27th Sep 2015 8:24 pm 


    “The discussion has deteriorated into a match between the informed and the deniers”

    As John Michael Greer has often pointed out, as things get worse and we get deeper into the hole, the yelling that “everything is fine” gets louder and more strident.

  46. onlooker on Sun, 27th Sep 2015 8:44 pm 

    Awesome quote Makati, this is what peak oil has become a test of wills between the informed and the deniers. I myself try and stay out of the fray. I have always thought nobody is more blind then when they do not wish to see.

  47. apneaman on Sun, 27th Sep 2015 8:45 pm 

    Projection of world fossil fuels by country

    ABSTRACT Detailed projections of world fossil fuel production including unconventional sources were created by country and fuel type to estimate possible future fossil fuel production. Four critical countries (China, USA, Canada and Australia) were examined in detail with projections made on the state/province level. Ultimately Recoverable Resources (URR) for fossil fuels were estimated for three scenarios: Low = 48.4 ZJ, Best Guess (BG) = 75.7 ZJ, High = 121.5 ZJ. The scenarios were developed using Geologic Resources Supply-Demand Model (GeRS-DeMo). The Low and Best Guess (BG) scenarios suggest that world fossil fuel production may peak before 2025 and decline rapidly thereafter. The High scenario indicates that fossil fuels may have a strong growth till 2025 followed by a plateau lasting approximately 50 years before declining. All three scenarios suggest that world coal production may peak before 2025 due to peaking Chinese production and that only natural gas could have strong growth in the future. In addition, by converting the fossil fuel projections to greenhouse gas emissions, the projections were compared to IPCC scenarios which indicated that based on current estimates of URR there are insufficient fossil fuels to deliver the higher emission IPCC scenarios A1Fl and RCP8.5.

    Projection of world fossil fuels by country – ResearchGate. Available from: [accessed Sep 27, 2015].

  48. Truth Has A Liberal Bias on Sun, 27th Sep 2015 10:50 pm 

    The Retarded States of America.

  49. idontknowmyself on Sun, 27th Sep 2015 10:58 pm 

    U.S. refiners turn to tanker trucks to avoid ‘dumbbell’ crudes

    From the link above

    Many executives say that the crude oil blends being created in Cushing are often substandard approximations of West Texas Intermediate (WTI), the longstanding U.S. benchmark familiar to, and favored by, many refiners in the region.

    Typical light-sweet WTI crude has an API gravity of about 38 to 40. Condensate, or super-light crude that is abundant in most U.S. shale patches, ranges from 45 to 60 or higher. Western Canadian Select, itself a blend, is about 20.

    While the blends of these crudes may technically meet the API gravity ceiling of 42 at Cushing, industry players say the mixes can be inconsistent in makeup and generate less income because the most desirable stuff is often missing.

    This is exactly what I have been saying. The oil glut is caused by low inconsistent oil quality that refiners wants to avoid at all cost. So refiners prefers to connect themselves directly to oil well in the shale patches to have better constant chemical composition. The oil glut is caused by low oil quality that refiners are avoiding. Expect to glut to growth until oil sand get shut down

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