[AdamB]

@shortonoil
'The blended crude has the correct API for the refinery to operate, but it does not have the molecules needed to produce fuels without reconstruction.'

Thanks. That's what I thought, but I am not an oil expert.

Neither is short. So don't sweat it.

And the word that short isn't using, because he doesn't know any more about refineries than he does hydrocarbon resources or reserves, is assay.

[Observerbrb]

Thanks for your explanation, shortonoil.

From what you said, I assume that crude inventories will go up, whereas gasoline inventories will go down. Am I right?

[shortonoil]

"Whipping olive oil and vinegar gives you a useful emulsion, but it doesn't change the molecules."

That's a good analogy. When you get into heavier molecules like ashaltenes with MW's over 5000 it takes an incredible amount of energy to break them apart. When you mix condensate, with an API of 90, with them you get a sludge that is not good for much of anything. You can get an API of 33 to run it through a refinery, and all you get is a little petroleum choke. A lot of the very deep off shore wells have ashaltenes concentrations of up to 5%. Along with clogging up all the plumbing you get very little in finished product out of the refinery.

The ultra lights are the other side of the coin. Condensate (mostly pentane, API 93) can be reformed into gasoline with a splitter (a cheap refinery only costing a mere $200 million). What you get is about 30% gasoline and 70% pentane. Plus you get to burn up more than half of the input processing it. There was a lot of talk about start ups along the Gulf Coast after Shale hit the market (about 30% of it is condensate) but they all died when someone sat down and ran the numbers. You can't make silk purses out of a cows ear.

Adam, why don't you write everything you know about oil on the back of a postage stamp and mail it to yourself. You can then tell your friends (if you have any) that you are spending your days reading "technical papers". That should impress them!

[SRSroccoReport]

Short... Fer pete sakes, that was flipping hilarious....

"Can't make a silk purse out of cows ear."

I need to remember that Tar Sands-Shale oil analogy.

SRSrocco Report

[AdamB]

Adam, why don't you write everything you know about oil on the back of a postage stamp and mail it to yourself.

Cute!! My models use the newest global resource estimates for the world, now some 5 years old. Do yours? And I can do one better than that. I actually use the full distributions they provide, assessment unit by assessment unit, after all, only some amateur would ever think to convert the distribution into a point estimate because...wait for it....they don't know how to use the full distribution in their model!

You can then tell your friends (if you have any) that you are spending your days reading "technical papers". That should impress them!

Reading technical papers! Good one! Of course I read technical papers. Who doesn't? Might impress your friends (you do sound like you might be projecting a little bit here), but mine are far more discerning.

[vtsnowedin]

The expression is "You can't make a silk purse out of a sow's ear" not cow's ear.

[donstewart]

Begging your indulgence
Mr. Hill talks about '6 billion hungry and desperate people' above. Related to that is today's post by Albert Bates:
http://peaksurfer.blogspot.com/2017/04/ ... lapse.html

Albert takes as givens the collapse of the fossil fuel industry, and the continuing damage done by climate change. What he adds to the picture is financialization and complexity. Neither perspective is unique to Albert, of course, but I find that he pulls things together in a way that is cogent and persuasive to me.

If Albert is missing some ingredient, I suspect it is the assumption that the internet requires all the bandwidth that it is currently using. Actually, the internet is mostly used by marketing companies to datamine and target market consumers. As fossil fuel depletion continues, financialization makes ever less sense, complexity collapses under its own weight, and life gets harder in general, there is some chance that an internet which is much leaner will evolve.

Ecovillages, a favorite of Albert, are very much more popular IF they have internet. A localized economy with global connection may be possible.

Don Stewart

[donstewart]

on the other hand
Some pundit who studies the stresses in the US retail sector says that the 'hard goods' sector is suffering as people switch to 'experience' consumption. The pundit points to the big rise in restaurant sales. The pundit goes on to say that people now seem to be motivated by having a beautifully decorated plate of fabulous food put in front of them, so that they can snap a picture and put it on Instagram to show all their 'friends' what a fabulous life they are leading. Those of you who have been around for a while will recognize this as 'conspicuous consumption' from the economist Thorstein Veblen early in the 20th century.

If things go as Albert and Mr. Hill expect, then I expect that 'conspicuous consumption' will take some heavy hits. Never disappear, but become very much less important.

Don Stewart

[shortonoil]

"From what you said, I assume that crude inventories will go up, whereas gasoline inventories will go down. Am I right?"

That is not an easy question! Crude inventories are definitely heading up, but what will happen to finished products is another kettle of fish. Like I said previously declining yields mean that either crude prices have to come down, or finished product prices have to go up; or both. If crude prices fall fast enough, finished product prices won't have to go up very much, and demand won't be hit very hard. So inventories of finished products might decline; especially if refineries cut utilization. If on the other hand the hedge funds who are now holding 1 billion barrels of futures contracts keep buying to support the price crude prices may stay elevated for some time. In that event finished product prices are going up quit a bit. That will cut into demand which is likely to leave elevated inventories of finished products.

Of course, finished products have limited self lives so at some point the refineries will have to cut back on production to turn over aging inventories. That may not happen until next year. Evenutally finished product inventories will fall. The timing of that decline depends on several unknown factors.

"Albert takes as givens the collapse of the fossil fuel industry, and the continuing damage done by climate change.'

Bates should also take a look at heavy metal toxicity. There are several studies that have been done that show that by 2100 mercury toxicity will make the planet uninhabitable for higher live forms. Here in Eastern Virginia mercury contamination is already affecting bird populations. Contamination In Europe from the use of the crucible technique which uses mercury to process silver still shows up 400 years later. What has happened in the Northern Pacific from contamination of radio-nucleotides will never be remedied as long as humans are on earth. The heavy metals once in the environment never go away. We are literally poisoning the planet to death.

[AdamB]

If things go as Albert and Mr. Hill expect, then I expect that 'conspicuous consumption' will take some heavy hits. Never disappear, but become very much less important.

Don Stewart

Well, that is quite a reasonable conditional. And as with any spurious relationship, we all know what it takes for that conditional to be true.

[donstewart]

@Adam B and likeminded people
The best response I can make is to refer you to Kurt Cobb's post today. As Jesus said, 'Let those with ears hear, and those with eyes see.'....Don Stewart
http://resourceinsights.blogspot.com/20 ... -some.html

[shortonoil]

@Adam B and likeminded people

"It is a religious belief and not one based on sound thinking. What they do not take into account is the risk of systemic discontinuities, systemic ruin, that could come from climate change, resource extraction and new, untried technologies."

To believe that somehow preventing people from talking, and thinking about these subjects will prevent them from happening is a form of religious belief as old as humanity. It is a form of ignorance spun by fools as old as our species.

[AdamB]

@Adam B and likeminded people
The best response I can make is to refer you to Kurt Cobb's post today.

You mean, yet another blogger? And do you know that he is a paid agent for PCI? Is PAID to pimp their work? Said so himself on his blog a year or so back when some advocacy/lobbyist report or another came out.

Kurt appears to think that science is quite important, and I agree with him. Unfortunately, this is coming from someone who ignored said science when he and another organization he fronts (USA ASPO) were pimping energy crisis and decline...in the middle of the fastest growing oil production in the history of the country. Another peak oiler who got it very wrong because he refused to examine the science.

Choose your references carefully, lest your ideas be tainted by those who speak with forked tongue.

As Jesus said, 'Let those with ears hear, and those with eyes see.'....Don Stewart
http://resourceinsights.blogspot.com/20 ... -some.html

Jesus didn't know any more about oil and gas than Kurt does. But religious belief...now THAT is directly applicable to peak oil.

[shortonoil]

@Adam B and likeminded people

"Another peak oiler who got it very wrong because he refused to examine the science."

That is why the price has fallen 50%, and never recovered. That is why not one single producer on the planet is replacing the reserves they are extracting. That is why all the Majors have seen their revenue fall through the floor for the last 3 years. That is why the Saudis are trying desperately to sell off their fields to raise money, and why Venezuela, the largest holder of resource on the planet, is eating its cats and dogs. And, they got it "very wrong"?

Welcome to planet earth, we hope you didn't have to walk very far after your space ship crashed. Try an earth doctor; maybe they can rearrange your brain so it works in your new environment.

In the mean time to all other earthlings, this creature is non functional. Space wasn't the only thing that got warped on his journey.

http://www.thehillsgroup.org/

[shortonoil]

Question! Did the aliens ship you out to get rid to you, or on you on the run from the Galactic Police?

[AdamB]

@Adam B and likeminded people

"Another peak oiler who got it very wrong because he refused to examine the science."

That is why the price has fallen 50%, and never recovered.

The price has fallen more than 50% since peaks were being declared in 2008, and whether or not price recovers will, as it has before, be based on the intersection of supply and demand.

That is why not one single producer on the planet is replacing the reserves they are extracting.

Please reference any of the commercial information services that I can check this claim with. Over a multi year period, of COURSE "producers" (including NOCs) have replaced their reserves. Canada and Venezuela spring to mind without even needing to check IHS or Rystad, but I can't say I've checked all individual producers on the planet. But you must have to make this claim, so just point me at the information service you use and if I don't have it, I know others who can check it for me.

That is why all the Majors have seen their revenue fall through the floor for the last 3 years. That is why the Saudis are trying desperately to sell off their fields to raise money, and why Venezuela, the largest holder of resource on the planet, is eating its cats and dogs. And, they got it "very wrong"?

You aren't using examples of resource to reserve conversion rates.

http://www.thehillsgroup.org/

Can we stop pimping and hawking reports that aren't worth the time to read them please? Find the Viagra and Amway advertising section, and put the claptrap there.

[shortonoil]

"Can we stop pimping and hawking reports that aren't worth the time to read them please? Find the Viagra and Amway advertising section, and put the claptrap there."

Can we stop with your pathetic, and child like whining, and attempts to escape reality. The coming end of the oil age needs to be addressed by mature functioning adults, and not reality avoiding, adolescent acting, goal seeking Snowflakes. Sorry, but your world is on the verge of crashing and burning.

TheHillsInfo

The present situation is a battle between extraction and processing. The price has fallen as low as the extraction portion of the industry can tolerate without shutting in production, and the price is higher than the processing side can afford. The processing portion is now selling finished product for $1.72/ gallon that cost them $2.08 in raw crude to produce.

If the price of crude goes down the extraction portion of the industry will be crushed; if it doesn't the processing side will fail. The only immediate action available appears to be by the refiners. With a large and growing inventory of finished product they have the option of reducing their losses, and maintaining supply to the end user by cutting production runs. This, of course, will only be a temporary reprieve, surplus finished product inventories will be eliminated in a few months at best.

We expect this decline in production runs to appear as declining utilization which can be followed at this EIA page:

http://www.eia.gov/dnav/pet/pet_sum_sndw_dcus_nus_w.htm

We will be doing a time series analysis of refinery utilization this week in hopes of pinpointing exactly when the expected decline in production runs by the refiners has begun. If this occurs, as we expect, it should be observable as a decline in finished product inventories in a very short time span. After finished product inventories have been reduced to their minimum operating levels there will be no other option than to have crude prices fall substantially. That will be the trigger for a crisis that will hit the industry.

With 38% of the world's economy in contraction mode from petroleum's duress, the economic impact to the remainder of the economy will most likely be rapid. Expect crises to appear in one sector of the economy after another soon afterward. The monetary intervention that has been used to paper over the situation to date will have become almost entirely useless after that point has been reached. The world will then be involved in a desperate and futile attempt to prop up a dying industry. Most likely it will bankrupt itself in the process, and leave a swath of economic ruin and wreckage across the planet.

We are likely only a few months away from facing the worse economic disaster the world has seen since the fall of the Western Roman Empire. Let's hope that some unseen mitigating factor appears on the horizon. Let's plan like it won't!

http://www.thehillsgroup.org/

[vtsnowedin]

TheHillsInfo

The present situation is a battle between extraction and processing. The price has fallen as low as the extraction portion of the industry can tolerate without shutting in production, and the price is higher than the processing side can afford. The processing portion is now selling finished product for $1.72/ gallon that cost them $2.08 in raw crude to produce.

How many times this week have you posted this same flat out lie?

[Midnight Oil]

Probably as many times Trump asserts Global Warming is just a hoax.

[onlooker]

TheHillsInfo

The present situation is a battle between extraction and processing. The price has fallen as low as the extraction portion of the industry can tolerate without shutting in production, and the price is higher than the processing side can afford. The processing portion is now selling finished product for $1.72/ gallon that cost them $2.08 in raw crude to produce.

How many times this week have you posted this same flat out lie?

Why don't you give us a link V that directly refutes what Short just posted here if not your comment is just innuendo