[ennui2]

Ennui, you keep disqualifying sites that I reference, you are leaving me without sites.

Trust me. When doom happens, it will be covered in the MSM. They aren't as good at predicting, of course:



But when it happens, they cover it.

[ennui2]

Gas shales on the other side of the coin are so massive and extensive we have barely scratched the surface when it comes to using up the potential drilling locations. Thus the decline in both is currently from low prices taking away the incentive to drill, but when prices go back up the oil shale potential will be very limited because the viable area they cover are much smaller geographically.

When shale fracking was first talked about, it was strictly about gas, not oil. Now most people talk about it from the vantagepoint of oil, but the gas is really the main product, which, as we all know, can also be burned in ICE vehicles.

An economy with people overall ready, willing, and able to burn plenty of oil and other fossil fuels at, again, compared to the 2010 to 2014 period where the global economy continued to grow, oil prices that are DIRT CHEAP.

What a word salad...are you Sarah Palin?

Failed to follow your point.

Your rhetorical skills are not as consistent as they used to be Monte. It's not flattering. Please, less Pstarr-like snark and more on-point rebuttals.

What OS is saying is that people are consuming just as much oil as they want and are not suffering to the extent implied by the loaded term "demand destruction". I'm surprised you can't even grasp the thesis.

[MonteQuest]

What OS is saying is that people are consuming just as much oil as they want and are not suffering to the extent implied by the loaded term "demand destruction". I'm surprised you can't even grasp the thesis.

The thesis is flawed. It doesn't account for the ever increasing debt, the rise in non-OECD consumption due to more bang for the buck, and the drop in consumption due to high prices and the 2008 crash. It is a very limited view of the forces at play.

[dolanbaker]

so isn't that in effect like giving people money to take out loans. How desperate can you get?

Or forcing depositors to invest their savings in other things with a ROI. I think that is their game.

I think that it's simpler than that, they want the money to "get out and move stuff!".

Isn't that what I just said? Or do you mean spend it into the economy?

Or, with negative rates, banks are essentially paying to park their money, so negative rates will push banks to lend more to companies, which would then spend and hire. At any rate, money moves into the economy.

I mean "spend it into the economy", which would have an indirect affect on ROI but not to those spending.

[ennui2]

The thesis is flawed. It doesn't account for the ever increasing debt

Neither did Gail's prediction from 2013 that I just bashed in the other thread. You didn't mind linking to it, though.

You first burst back into peakoil.com with a healthy dose of humility, that you didn't expect us to get to this point, and to pivot over to warning us about debt-bombs. And you know what? You have a valid point, Monte. You do. But what you proceeded to do is backslide to Pstarr's position which is that people's quality of life is impaired in a significant way due to peak-oil, and that is the argument that doesn't wash. If this is what peak-oil doom looks like, it's as mild as a fluffy cloud. How things feel is worth more than comparing an aggregate statistic of US consumption this year vs. 1997.

So as long as you are waving a warning about debt-bombs you've got at least as much legitimacy as Peter Schiff who has been waving it for many years now. But stick to that rather than trying to prove to us that people are being forced out of buying as much oil as they want at the present time. If they aren't buying, it's because they don't feel like it for one reason or another.

[MonteQuest]

I mean "spend it into the economy", which would have an indirect affect on ROI but not to those spending.

Seems the Central banks are out of bullets. In the US, the EU and Japan, the savings rate has gone up even in the face of ZIRP. Now, with NIRP, they may do the same. Seems a deleveraging cycle is afoot.

[onlooker]

Ennui, can you find anything legitimate to counter Monte's argument that real consumption did not keep up with projected consumption in the last few years? If not why besmirch the conclusion that demand destruction has occurred.

[onlooker]

I mean "spend it into the economy", which would have an indirect affect on ROI but not to those spending.

Seems the Central banks are out of bullets. In the US, the EU and Japan, the savings rate has gone up even in the face of ZIRP. Now, with NIRP, they may do the same. Seems a deleveraging cycle is afoot.

So maybe people are worried about the future and want to have some money on hand for emergency or worse times.

[MonteQuest]

You do.[/b] But what you proceeded to do is backslide to Pstarr's position which is that people's quality of life is impaired in a significant way due to peak-oil, and that is the argument that doesn't wash.

I haven't been arguing that. I have been arguing that debt is masking reality and has been since the early 1970's.

[MonteQuest]

But stick to that rather than trying to prove to us that people are being forced out of buying as much oil as they want at the present time.

That hasn't been my argument. The simplest economic reason for this willingness to finance their lifestyle is that the cost of financing has continued to fall. Cheap money is fueling the consumption. But even ZIRP isn't enough. Now Japan is trying NIRP.

My argument has been that, between the the oil price run-up in 2004 and the market crash of 2008, OECD oil consumption has dropped so far below the trend line 20%, that had it not, supply would not be meeting demand today.

I've yet to see anyone post a rebuttal to those facts.

[MonteQuest]

So maybe people are worried about the future and want to have some money on hand for emergency or worse times.

Yes, but that is a death knell for the economy today. It's the last bullet in the gun, save helicopter money. Usually, a high savings rate is a good thing.

[onlooker]

Yes Monte, the productive economy is being hampered in diverse ways and yes P, all this is occurring contrary to what our friend Ennui claims or the useless mainstream media. One surprising simple method of noting this downturn is the rise in people on the govt. handout bandwagon as well as the number of people simply leaving the formal workforce. These symptoms are certainly not indicative of a healthy economy.

[MonteQuest]

Monte, we have been talking about demand destruction here for a decades, social/infrastructure adaptation to unusual oil prices.

Yes, and as I have posted, I never thought demand destruction from high prices would ever outpace demand, and it didn't in the non-OECD countries, it increased 40%. But in the OECD countries, the crash of 2008 cut demand low enough for the world to slide under the waiting maw of peak oil. For now.

That is quite simple to grasp and the data supports it 100%. I guess ennui just suffers from "motivating reasoning" just like the climate deniers. They question the data, and when they can't dispute it, they resort to questioning the source and shooting the messenger.

Notice how he goes after zerohedge and Gail Tverberg? Even though their data is from the EIA and other solid sources.

[ennui2]

I haven't been arguing that. I have been arguing that debt is masking reality and has been since the early 1970's.

Fine. I apologize. I agree with you on the above point. But debt != doom. Not yet at least.

And the thing about attacking Gail is...it's not just the data. It's the conclusions she forms from the data and the predictions she generates off of them. Accurate data is a good foundation, but it can still be interpreted in many different ways. This obsession with chart-watching is exactly what discredited The Oil Drum after they "called" peak oil in 2005 and the sky did not fall. She has not learned from that mistake.

Check out just one of her conclusions, this about Bakken from 2007.

http://www.theoildrum.com/node/3868

The Bakken potential resource, while large by US onshore field standards, will have only a minor effect on US production or imports.
...
Per-well Bakken production peaked in August 2005 at 116 barrels a day, and was down to 79 barrels a day in October 2007. If the Bakken production history in the 1990s can be used as a guide, the peaking of per-well production may portend a peak in total Bakken production.

Her articles sound pretty truthy but in the end she's just throwing darts.

[MonteQuest]

But debt != doom. Not yet at least.

That isn't my argument. The debt masks the "doom". It's facade. An illusion that all is well. It is just expanding that bubble's incessant search for a pin.

And the thing about attacking Gail is...it's not just the data. It's the conclusions she forms. Check out just one of her conclusions, this about Bakken from 2007.

"The Bakken potential resource, while large by US onshore field standards, will have only a minor effect on US production or imports."

That is true. Much like the blip we see on the US oil chart from the Alaska oil in the mid eighties.

Per-well Bakken production peaked in August 2005 at 116 barrels a day, and was down to 79 barrels a day in October 2007. If the Bakken production history in the 1990s can be used as a guide, the peaking of per-well production may portend a peak in total Bakken production.

She was right. Bakken per well production is 109 bpd as of Nov 16, 2015. Peak was Oct 2008.



Full image here link

Looks like she was off about a year with regard to the peak. You were saying?

[dohboi]

I'm afraid, much as I generally like the cut of ennui's jib, that I'm with MQ on this one. I haven't been very impressed with many of Gail the Actuary's predictions or her general set of prejudices and influences. (Often a bit too...'oily'...)

[Tanada]

Here's the thing, at today's prices the companies still drilling in the Bakken are doing their very utmost to get the sweet spots because the average and sour spots just lose money fast and faster at $30/bbl. So look at that graph again and realize, when you are aiming at just the sweet spots and doing your very best to drill around the average spots and avoid the sour spots with every bit of skill, technology and luck at your disposal, what should the average production per well be doing?

Productivity per well should be going up right now, not grinding its way slowly downward. Look again at the graph,
http://peakoilbarrel.com/wp-content/upl ... BPF-LT.jpg


Now I must point out that from what ROCKMAN has told us about oil companies some of that drilling will be mandatory to keep lease options current under the lease agreements, and it is also possible that some of the highest flow wells are being deliberately choked back to preserve some of their output for the time when prices have recovered somewhat instead of max production into the low price market. However choking back production can only be done by companies with excellent lines of credit or large bank accounts, the ones operating on junk bonds have to have cash flow or file bankruptcy. As the saying goes, if I owe the bank $100,000.00 they got me where it hurts, but if I owe them $100,000,000.00 they can't afford to let me go bankrupt and eat all that loss if it can be avoided by any set of tricks they can come up with. even if that means the bank negotiates to accept interest only payments for a year or three on the debt they hold.

[ennui2]

Gail's implication in 2007 was that the peak is followed not by an extended plateau but a valley, hence Hubbert's curve. (It's that underlying cloud of doom that provides bloggers like Gail with regular internet eyeballs. It's the slogan/rhetorical question of "How will you ride the slide?") That hasn't been the case. Bakken has been on a plateau since 2008, which is really quite impressive.

Her summation was that bakken (which is kind of more of a short-hand for fracking in general) would not significantly change the post-peak dynamic. She was wrong. You can point to the semantics of whether bakken peaks or not, but the contribution of fracking DID significantly impact the supply/demand dynamic, regardless of whether it was juiced by easy credit or not.