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Peak oil round up

Peak oil round up thumbnail

2015 Could Be The Year Of Peak Oil


I am now more convinced than ever that 2015 will see the peak in world crude oil production. I have very closely studied the charts of every producing nation and my prognosis is based on that study. I see many nations in steep decline and most every other nation peaking now, or in the last couple of years, or very near their peak today. These include the world’s three largest producers, Russia, Saudi Arabia and the USA.

Read more: Oil Price

(Image: D. Bacon/Shutterstock/Economist)
Oil Mountain (Image: D. Bacon/Shutterstock/Economist)

China Peak Oil: 2015 Is the Year

Domestic production looks set to peak, with some profound implications for the world market.

Intense focus on the North American shale boom, Saudi Arabia, and ISIS obscures an important emerging energy trend: China’s oil production is peaking. This has profound implications for the world oil market, because China is not just a massive importer of crude; it is also among the world’s five largest oil producers, trailing only the U.S., Russia, and Saudi Arabia, and virtually neck-in-neck with Canada.

China’s oil industry has delivered impressive oil and gas production growth over the past decade. Yet a range of data and historical analogies increasingly suggest that, at global oil prices between $50-to-$100 per barrel, China’s oil supply capability is plateauing and may peak as soon as this year. Lower or higher prices would accelerate or extend this timing.

Read more: The Diplomat

 

US Oil Production Nears Previous Peak

The EIA’s Monthly Energy Review came out a couple of days ago. The data is in thousand barrels per day and the last data point is July 2015.

US consumption of total liquids, or as the EIA calls it, petroleum products supplied, reached 20,000,000 barrels per day for the first time since February of 2008.

Something I never noticed before, consumption started to drop in January 2008, seven months before the price, along with world production, started to drop in August 2008. This had to be a price driven decline. Could the current June and July increase in consumption be price driven also?

Read more: Peak Oil Barrel

 

Crashing Oil Prices Aren’t Due to an Oil Glut But to Demand Destruction

As I began to mention at the end of the first part of this three-parter, I’ve only just recently come to the conclusion that oil prices aren’t going to have a tendency to rise due to the tightening of supply imposed by peak oil, but to depreciate. This of course flies in the face of the common logic of supply and demand, but when factoring in the method by which the majority of our money is created, a deflationary effect can be seen to come into play. This has taken me an absurdly long time to clue into, for although I’d steadfastly amassed a bunch of pieces (various information), I hadn’t realized they were actually all part of the same puzzle.

With peak oil and fractional-reserve banking being the first two pieces of this puzzle, the third piece that I needed to factor in (which oddly enough I’d already written about) is the fact that money is a proxy for energy.

Read more: From Filmers to Farmers

 

Will declines in U.S. and Canadian oil production lead to a global decline?

At the beginning of this year I noted that all of the growth in world oil production* since 2005 has come from two countries: the United States and Canada. And, I suggested that since the growth in production in those two countries came from high-cost deposits–tight oil in the United States and tar sands in Canada–that the precipitous drop in oil prices would lead to declines in production in both countries.

I concluded that unless another area of the world suddenly started growing its oil production significantly that those declines would probably result in a worldwide decline in oil production.

Well, declines in the both the United States and Canada have arrived. It will be several months before we can know with any certainty whether those declines will translate into a persistent global decline.

Read more: Resilience

 

Support For OPEC Production Cut Is Increasing


Now the shale producers won’t willingly reduce output, as shale production is made up of many different companies, and not a national company like most global oil producers; but due to the economics of the current oil price environment, many shale oil producers will face bankruptcy next year, and as a result, will go out of business.

The reason being is that in 2016, most oil hedges will expire. These hedges have allowed shale oil companies to stay afloat and achieve cash flow neutrality, despite the decline in oil prices. These hedges have also helped shale oil companies gain access to credit, so they can raise the capital needed to put their wells into production. When these hedges expire, companies will not generate the cash flow needed to meet their covenants, which will in turn bankrupt them, and production from U.S. shale oil wells, will start declining rapidly. This will also dry up the credit markets and prevent any type of quick rebound in shale oil production.

This is why the IEA even estimates that U.S. oil output will start collapsing next year.

Read more: Oil Price

 

US Shale Oil too Expensive, Peaks 1H 2015

According to EIA data, monthly US crude oil production peaked in April 2015 at 9.6 mb/d.

Read more: Resilience

 

This is When Bonds Go Kaboom!


In the energy sector, the bond devastation is even worse.

California Resources – Occidental Petroleum’s spinoff of its oil-and-gas assets in California, a masterpiece of Wall Street engineering – has done nothing but burn investors in its 10 months as an independent company. When I last wrote about it ten days ago, its $2.25 billion of 6% notes due 2024, issued at par to QE-drunk investors in September last year, had plunged to 66 cents on the dollar. Now they’re at 59.5 cents on the dollar.

Chesapeake Energy, the second largest natural gas driller in the US, is also facing the music. Two of its brethren, Quicksilver Resources and Samson Resources, have already filed for bankruptcy. When I last wrote about Chesapeake a month ago, its $1.1 billion of 5.75% notes due 2023 – that in June 2014 had been at 112 cents on the dollar – had plummeted to 70. Now they’re at 67.

Read more: Wolf Street

And from last year:

Collapse is Inevitable

There has been considerable discussion lately as to whether or not total collapse of the world’t economies will happen in the relatively near future. I think that is the wrong question. Let me explain.

Ecological collapse of the world’s ecosystem is a lead pipe cinch. It is already well underway and instead of slowing down, it is gaining momentum fast.

Read more: Peak Oil Barrel

fuel included



76 Comments on "Peak oil round up"

  1. Boat on Sun, 11th Oct 2015 11:06 pm 

    Quality of life,

    In Houston you can now get lasix surgery for $250 per eye. Just a decade this procedure was over $2,000. Technology that will put mostly put eye ware out of business.

  2. apneaman on Sun, 11th Oct 2015 11:14 pm 

    Boat, awesome. Now Houston area parents won’t need their eye glasses to find their kids puffer when they are having a life threatening asthma attack. Hooray for progress!

    Houston ranked among areas with dirtiest air

    “According to a press release about the Lung Association’s 15th annual report card, nearly half of all Americans live in counties where ozone or particle pollution levels make the air unhealthy to breathe.”

    http://www.chron.com/news/houston-texas/houston/article/Houston-ranked-among-areas-with-dirtiest-air-5441988.php

  3. apneaman on Sun, 11th Oct 2015 11:28 pm 

    Boat, how’s that Houston drinking water? Did they ever do anything about it or is that not considered a quality of life issue?

    10 American Cities With the Worst Drinking Water

    6. Houston (City of Houston Public Works)

    Houston is the fourth-largest U.S. city. It gets its water from sources such as the Trinity River, the San Jacinto Rivers and Lake Houston. Texas conducted 22,083 water quality tests between 2004 and 2007 on Houston’s water supply, and found 18 chemicals that exceeded federal and state health guidelines, compared to the national average of four. Three chemicals exceeded EPA legal health standards, against the national average of 0.5 chemicals. A total of 46 pollutants were detected, compared to the national average of eight. The city water has contained illegal levels of alpha particles, a form of radiation. Similarly, haloacetic acids, from various disinfection byproducts, have been detected.

    http://www.dailyfinance.com/2011/01/31/ten-american-cities-with-worst-drinking-water/

  4. GregT on Sun, 11th Oct 2015 11:34 pm 

    @John Orr,

    “What date, not peak, are you putting on it then smart ass?”

    The fact that you are even asking that question, is the very reason for my response above. You have obviously not done your homework.

    “GT your even more stupid than I thought”

    I really could care less what you ‘thought’ about me John. You have never met me, and you don’t know the first thing about me.

    Come back when you get yourself up to speed, and actually have something meaningful to contribute to the conversation.

  5. apneaman on Sun, 11th Oct 2015 11:41 pm 

    More Quality of life,
    In Houston

    These Are The 10 Most Dangerous Places In Texas

    Here are the Lone Star State’s real danger zones, according to the FBI.

    7. Houston

    Population: 2,180,606
    Violent crime ranking: 6
    Property crime ranking: 21

    The rivalry between Dallas and Houston is turned up a notch here, as Houston is the seventh-most dangerous place in the state of Texas. Dallas, on the other hand, is 28th, while Fort Worth ranks 36th.

    The population of Houston might make these statistics stand out like a sore thumb, but in 2013, more than 21,000 people were either killed, attacked or raped in Houston. Wow.

    http://www.roadsnacks.net/most-dangerous-places-in-texas/

    No worries Boat, if a criminal tries to break in your house, just throw a glass of tap water on him or try and get him to take a few deep breaths. That should fuck him up for a minute so you can escape.

  6. GregT on Sun, 11th Oct 2015 11:45 pm 

    @Boat,

    “Technology that will put mostly put eye ware out of business.”

    It would appear that you don’t understand optometry either. Something that you can proudly add to your list of things that you simply do not get.

  7. Boat on Sun, 11th Oct 2015 11:59 pm 

    In 2013 the Houston metro area was home to 6.3 million people, of whom 1.4 million were foreign born—an increase of nearly 60 percent from 2000.

    I see the effects of immigration. Now you may see why immigration is a hot topic in TX. However you can have your yard taken care of for $40 per visit. They do a great job in that 107 degree heat index.

  8. GregT on Mon, 12th Oct 2015 12:36 am 

    Just read up on Houston Texas. Ya’ll got some serious problems brewing down there Boat.

    If I were you, I’d be getting my rear out of there double time. An extremely bad place to be when things go south.

  9. apneaman on Mon, 12th Oct 2015 1:22 am 

    Boat, the Mexican landscapers are trying to keep everything in tip top shape for when Mexico retakes their stolen lands. Maybe, if you’re nice they will give you a probationary green card instead of kicking you out with the rest of the white foreign devils. Comes around goes around.

  10. theedrich on Mon, 12th Oct 2015 4:41 am 

    One (but only one) of our problems is the ordinary man’s (and woman’s) lust for ignorance.  Rockman, BC and others have often pointed out the inverse relationship between price and demand, and the complexities involved.  But few in the populace at large are even interested in finding out the most elementary of facts about such things.  The same plebeians who say they “do not follow politics” are the very ones who scream maniacally for their “home team” in sports and vote on the basis of MSM (usually neocon-leftist) sound bites.  Look at the rags displayed at eye level at your local supermarket checkout line for a good idea of general IQ levels.

    The IQ average of American Whites is (by definition) 100, much too low to maintain current Western civilization much longer.  American Blacks (with about 15% White genes) average 85, many Black African countries 75-80 or even lower.  At least two states, Colorado and Washington, have approved of IQ-lowering marijuana to sedate the masses and garner Democratic votes.  Northeastern Orientals (Chinese, Koreans, Japanese) center around 105 (but pay for that with higher neurosis levels).  Ashkenazi Jews (but not Sephardim or Oriental Jews), with high levels of glucosylceramide, average 112-115, with their bell curve producing a considerably higher-than-average percentage of 140+ types, as a result of the medieval Catholic Church’s inadvertent breeding of Jewish moneylenders, since it would not allow Christians to engage in the practice of “usury.”  (Cf. the Journal of Biosocial Science’s Natural History of Ashkenazi Intelligence by Gregory Cochran, Jason Hardy and Henry Harpending on the latter topic.)

    The majority of the Arabs are probably 90-95, and their influx into Western civilization will contribute dramatically to further degradation of intelligence, especially since they breed like flies while Whitey has decided to commit genosuicide.  According to Richard Lynn, Dysgenics:  Genetic Deterioration in Modern Populations, global IQ is deteriorating at about the rate of 1.22 points every 25 years, or 4.88/century.  Others estimate 6.08/century.  By 2050, world IQ will probably be around 86.5, and declining.  Given another century or so of this downslide, and there will be never again be any chance of civilizational recovery at all.  Never mind a millennium, when our chimpanzee cousins might expect to exceed our levels of intelligence.

    The current fascination with simplistic solutions such as “renewable growth” is only aggravating the problem.  The underlying problem is, thus, actually much worse than a mere matter of supply and demand.  It is not just that there are few to no “solutions” to the developing crisis;  it is that in our ongoing stupidification we do not want to deal with the issue at all.  After all, it is “self-evident” that all men are created equal.

  11. Davy on Mon, 12th Oct 2015 5:13 am 

    Thee, it is IQ that has brought us to the point of collectively “mouthing a gun” It is the large IQ without the associated spirituality of collective control and harmony to our ecosystem that has resulted in us right here right now discussing our collective demise. I might add many of us with high IQ. Maybe that is all high IQ is good for and that is discussing how shitty high IQ is.

    I am not going to acknowledge high IQ as “better” The range of talents and abilities are broad. I know people who are extremely good at certain tasks but not high IQ. I know people who are in touch with a higher level of spirituality without high IQ. A great Taoist quote is “the clever will be deceived”. It is our cleverness that is leading us to our collective end.

  12. dougt on Mon, 12th Oct 2015 10:32 am 

    you can even watch the documentary! http://www.imdb.com/title/tt0387808/?ref_=nm_flmg_act_28

  13. ghung on Mon, 12th Oct 2015 11:18 am 

    John Orr posted; “GT your even more stupid than I thought…been reading this site for a while now and the site before it…. which closed because no date was able to be set there either the web man give up and did some other brain calming promotion…..there is no one can put “a date” on anything especially you!”

    Funny. A guy who doesn’t know the difference between “your” and “you’re”, and can’t even use basic grammar, is calling others stupid. Did someone mention declining IQs?

  14. Boat on Mon, 12th Oct 2015 11:38 am 

    guhng,
    Grammar is just something humans came up with and most of it doesn’t even match phonics. How stupid is that.

  15. ghung on Mon, 12th Oct 2015 12:03 pm 

    Boat,
    Math is just something humans came up with and most of it doesn’t even match reality any more. How stupid is that?

  16. rockman on Mon, 12th Oct 2015 1:46 pm 

    ghung – Yur sew write.

  17. GregT on Mon, 12th Oct 2015 2:13 pm 

    How stoopid is sosiatie cumming up with a standurd of communeakasion and expect thit peepul fowlo it?

  18. GregT on Mon, 12th Oct 2015 2:19 pm 

    Thits jest dumm.

  19. Baptised on Mon, 12th Oct 2015 2:34 pm 

    theedrich @ 4:41AM Your statement on the IQ’s of races & ethnic groups. Which group do you belong to? I am sure you don’t mind telling, after the statements you made.

  20. theedrich on Tue, 13th Oct 2015 4:18 am 

    @ Baptised,

    Since you believe in all of the myths, lies and distortions of the Bible, it wouldn’t make any difference to you what I believed, since I do not share your sicko religion.  I do my own research and my own thinking, based on science and fact, not propaganda from some pulpit.  Your belief system is one of the main reasons we are driving ourselves into extinction.  Its so-called “values” are little more than holdovers from the antique carrot-and-stick ideologies and mumbo-jumbo of long-dead civilizations.

    Your type always assumes that I must be part of some “group” that you assign to the Outer Darkness where there is weeping and gnashing of teeth.  Rarely does your ilk have any understanding of the vast stretches of spacetime and the transcendent complexity of life that has led to our existence.  You are joined in your self-hatred by people like Davy, who like to think that I view IQ as the only feature of human superiority over other animals, when I implied at the beginning of my statement that desire for stupidity was only one of our problems.  Expansion to the point over overriding available resources is an instinct in ALL life forms, from bacteria in a petrie dish to man.  It is not specific to homo sapiens.  Intelligence is the only possible tool for overcoming this general drive.  But no amount of intelligence is going to be able to overcome the intransigent stupidity baked into your religiosity.

    And by the way, elsewhere in this forum I have set forth a few of the points which modern researchers in archæology, ancient Near Eastern languages, biblical history and allied fields have uncovered.  They all come to the same conclusion:  the “Abrahamic” religions are utterly false and deceptive, no matter how many gullible types like you they capture.

  21. Baptised on Tue, 13th Oct 2015 11:05 am 

    Hey chill theedrich. I just ask a very simple question. Do you not want to answer?

  22. GregT on Tue, 13th Oct 2015 12:02 pm 

    “I do my own research and my own thinking, based on science and fact”

    Then you are vastly limiting your research and your thinking theedrich. Science does not have all of the answers, and much of those so called facts will in time turn out to be falsehoods, as they almost always have. You are entitled to your faith, or lack thereof, just as everyone else is entitled to theirs. No one has the answers theedrich, as a matter of fact, I would suggest that we aren’t even asking the right questions.

    The questions, and the answers, will never be understood by anybody that keeps a closed mind. Yours appears to be not only closed, but locked tight.

  23. theedrich on Wed, 14th Oct 2015 2:40 am 

    The underlying assumptions of the “believers” and libs and snivelers on this site are all derived from the same mythology that is driving us over the cliff.  Whatever limitations modern physics, astrophysics, biology, palæontology and archæology might have, they are tools of knowledge vastly better than the faith-based idiocies and TV-hypnosis which grip the minds of the lemmings here who keep looking for unicorns to solve their mental problems.

  24. GregT on Wed, 14th Oct 2015 5:24 am 

    If we had of stuck with the myths thee, and not explored the sciences, we wouldn’t be heading over the cliff, now would we. We’d still be living in the countryside growing vegetables and raising sheep. All of our biggest dilemmas are a direct result of scientific knowledge, not religion.

  25. Davy on Wed, 14th Oct 2015 6:33 am 

    Greg and Thee bring up a profound topic for doomers. Science and spirituality are two pole of man’s being. The likely end of modern man as we know is appearing possible so what is next. This end in itself is an important topic.

    Cornucopians look to the future as one of a manifest destiny of human development and increase in knowledge. This increase in knowledge and development leads to new and more powerful technology and systems. This is the status quo and the social narrative for the most part for the past 200 years of the industrial revolution.

    The new alternative narrative is one of descent and decay. This is being preached by the doomers. It is science based mainly yet it draws on the early traditions of many cultures historically to express an understanding for civilizations ebb and flow. Science and history currently are pointing to conditions that end civilizations. If we chose to acknowledge this undeniable situation we should ask ourselves what is next?

    If our civilization ends we will lose significant amounts of knowledge. Along with that we will lose the infrastructure of our complexity. This is both hard and soft assets. Our science and accumulated knowledge is extremely fragile. We have the biological aspects of this with learning and manifested in experience in the population. We have the hard copies of it in our vast libraries both digital and hard. This will decay rapidly and are in danger of being lost.

    I would argue that in a relatively short time much of our accumulated knowledge may be lost forever never to be recovered. It will sink into the strata’s of the earth’s geology and disappear when the brain synapses quit firing.

    We really only have the spiritual that can be saved and transferred orally. Many indigenous civilizations maintained their culture and spirituality this way. Their knowledge and technology were likewise transferred by oral traditions. This is where the older generation found its value to the tribe. They were the store of knowledge, culture, and technology. They had elaborate mental structures and highly respected elders that maintained this knowledge in myth and stories. The old women maintained the skills of the home and food. We need to be aware of this if the descent comes as seems likely.

    We will not be able to save the vast accumulations of knowledge without energy intensity and the corresponding complexity. Our only option for advancement going into descent is spiritual and cultural. The energy and complexity required for these advancements are low. We can spiritually grow with collapse. We can learn from our tragic growth. We can learn from our destructive culture of disregard for nature and the biosphere. All we may have left is an education from a horrible act of destruction of all that was good in the name of human centric growth, advancement, and knowledge.

    We will likely lose most of our accumulated knowledge. Much of the stuff that we base our human value on will decay back into the earth. Yet, we can advance spiritually and culturally as older humans did. Science will one day mean nothing to us. One day the vast cities will be nothing more than eroding geographic spaces little different than a mountain range. We are at the cusp of that transition from something horrible and too the unknown.

    This will likely be a time of salvage, a hybrid of new and old, and adaptation to less of what has been modern. It will be a time of decay, dysfunction, and irrational. We will likely only be able to find growth and development in our spirituality.

    This spirituality should revolve around a reconnection to our humanity and this humanity in a proper place in nature. This is our only hope. We may go extinct. Does that really matter? What matters is the eternal here and now.

    Modern science and knowledge are dead in a sense that their decay has begun and it will likely end in dust. They can serve us in the transition but they have no future if this doom is correct. All we have is ourselves and each other. That is where we can develop and grow as our ancestors did and as our offspring might.

  26. theedrich on Thu, 15th Oct 2015 5:19 am 

    @GregT:

    Ah yes, if we had just stuck with prehistorical ignorance and mythologies, we would be so much better off.  Actually, that is exactly what the Commies thought and still think:  an Edenic paradise without clothing or work of any kind.  Unicorns on every side.

    The reality is that it is precisely these prehistorical religious beliefs, modes of thought and primitive behavior which are preventing us from using science and knowledge (“scientia”) rationally.  Our highly developed neocortices are used mainly to fulfill the animalistic urges and impulses of the reptilian brain deep within us.  The fantasy that we can return to being lower apes and commune blissfully with nature is a methamphetamine hallucination entertained by modern liberals and spiritualist frauds.

    The laws of nature are inflexible, regardless of what preachers and politicians say.  And the only way out of the dilemma of modern overload is both extremely rational and unsympathetic.  But then, the tear-jerkers and Angela Merkels of the world — and the power elites behind them — would not allow that.  So the exhaustion of nature will take care of the problem once and for all.

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