Revi wrote:I have been talking with people over at the ETP thread, and they seem to say that by 2022 oil ceases to be a net energy gain for the economy, so something has to happen before then. Here are their predictions for the price of oil:
Next year the max will be around $54.18 per barrel, 2018 - $46.16, 2019 - $26.88 and then around $23 as the industry cannibalizes itself. They say it might stay around $23 for a while.
What this means is that the industry won't be able to get the stuff at a profit any more. We have all seen industries that continue on long after they stop making money, like dairy farming, but this one is much larger and more important.
Maybe there will be artisanal oil producers making some oil happen some places, but most of it is going to be in big trouble and soon!
There's your backside of the Seneca Cliff!
Yes, they are very vocal in their belief.
That doesn't make their belief any more reliable than your religion, or lack thereof.
ROCKMAN and a few other genuine industry experts have pointed out that after a well is completed the cost of producing the oil is trivial. That is why all those Fracked wells that were drilled before November 2014 are still pumping today if they have reliable output. They cost say $70/bbl to drill and complete along with all the associated expenses and have been producing oil at a sale price of as low as $20/bbl on particularly bad occasions for the individual owners over the last 24 months. Why? because if you ignore the costs of acquiring the lease, exploring, drilling and completing the actual production costs are only a few dollars a barrel.
That is how all those owners of stripper wells that produce 15/bbl/d or less make a profit. They buy the old wells from other people when they no longer want to produce them because the low volume is not worth it to their large corporation.
If drilling new wells were made illegal later this afternoon every currently producing well and all those awaiting completion would still be produced until their own production was no longer profitable for the owners of those wells. The ETP mumbo-jumbo completely ignores this reality and tries to muddle things by claiming 'thermodynamics' makes it unprofitable for the owners no matter what the economy is doing.
This is also the fundamental problem with the Seneca Cliff theory. Look at any country that had a sharp reduction in their oil production. So far as i can tell from my searching in EVERY case it was the result of war, either invasion or civil. In every case so far once things settled down, often with a new Strong Man authoritarian in power, the oil production resumed.
Nothing short of a World War III event that totally crashes our civilization is in any way likely to alter that fact. Despite all the evidence of this the Seneca Cliff theory is a very popular doom fantasy because it creates the fast crash doom some people seem to greatly desire.