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Tom Whipple: Peak Oil Review – 15 January 2018

General Ideas
Quote of the Week

“Just like Florida, our states are unique with vibrant coastal economies. Providing all of our states with the same exemption from dangerous offshore oil and gas drilling would ensure that vital industries from tourism to recreation to fishing are not needlessly placed in harm’s way.”

Letter from 22 Democratic US senators to Interior Secretary Ryan Zinke, after Florida was granted an exemption from the opening of 90% of US federal offshore areas for drilling

Graphic of the Week


1.  Oil and the Global Economy
2.  The Middle East & North Africa
3.  China
4.  Nigeria
5.  Venezuela
6.  The Briefs

1.  Oil and the Global Economy
New York oil futures closed up 4.7 percent last week despite a ten-rig increase in the number of active US oil rigs.  London and New York futures closed with biggest weekly gains since October. On Thursday Brent crude briefly traded above $70 a barrel for the first time since 2014, before closing out the week at $69.78. New York futures closed the week at $64.30, some $5.50 below London. As has been the case for several weeks, shrinking crude inventories, high rates of OPEC/Russian compliance with the production freeze and what is seen as strong demand continued to drive prices higher last week.

The brief crossing of the $70 price barrier has started a discussion as to whether prices will move substantially higher this year.  While bullish sentiments have been pushing oil prices steadily higher for the last four months, the EIA continues to say that US shale oil production will top 10.3 million b/d this year and will reach 11 million b/d by the end of 2019.  Asia is showing signs that it will be consuming less oil in the immediate future.  A Reuters survey of 7,000 energy market professionals says that these people expect oil prices to continue averaging around $60-70 a barrel through the end of the decade but widening to $60-80 by 2020.

In the last five years, we have seen oil prices fall from $110 a barrel to $26 and now back to $60; each of these movements triggers counterforces such as more or less drilling and more or less consumer demand. Some are suggesting that this sort of gyration may go through another cycle or two in the next five years. The wildcard in this rather neat hypothesis is the number of geopolitical upheavals, mostly in the Middle East, but also Korea and Venezuela that could remove anywhere from one to many millions of barrels of oil from the markets during the next five years.

The OPEC Production Cut: The future of the cut came in for much discussion last week. While the UAE oil minister continues to talk about the production deal extending beyond 2018, others including the Russian and Goldman Sachs see the recent price surge as leading to higher than expected US shale oil production and a return to more surpluses. These concerns assume that the US shale oil industry can find enough shale oil that can be extracted at market prices. The most interesting report was that Russian oil minister Novak said he would raise the issue of Moscow’s exit from the pact at the meeting in Oman this week. Should the Russians pull out, it could start a stampede to higher oil exports from those countries that are anxious to increase oil revenues. Most of OPEC’s spare export capacity, however, lies with the Gulf Arab states who are likely to follow the Saudi lead.

A new survey shows that OPEC production climbed by about 50,000 b/d to 32.4 million despite the problem of sinking production in Venezuela. A new report notes that the OPEC/Russian production freeze has caused considerable hardships for the supertanker industry that is finding itself in a severe case of overcapacity on the Middle East to Asia route.

US Shale Oil Production:  A story in “Rigzone” suggests why US shale oil production could surge in the next two years while utilizing less than half the number of drilling rigs that were active in the middle of 2014 before the crude market crashed. According to people in the business, it is a combination of faster horizontal drilling and more “intense” fracking that is enabling more production. It is these developments which explain why the simple “rig count” can no longer explain where the shale oil industry is going.

At 7,500 feet, the average shale oil well lateral’s length is 50 percent longer compared to three years ago, and a rig can drill 25 wells a year, compared to 15 just two years ago. The number of fracking stages in a shale oil well is expected to increase 14 percent this year to an average of 28.5, more than double the number in 2014. The total amount of sand crammed into wells this year is expected to grow 20 percent to more than 100 million tons. If the numbers that “Rigzone” researched are close to true, it could explain much of the reason why more wells can be drilled with fewer rigs. It does not, however, answer the question of costs as longer laterals, more fracking stages, and more sand will push up the cost of each well. It also does not answer the question of whether there is enough oil in “sweet spots” that will pay back the higher costs of longer wells.

The recent US cold snap is bound to slow shale production in the Bakken and possibly other oil fields. It will be another six weeks before there is enough information to assess just how fast the US has been able to grow its oil production this winter. Texas reports that it issued 885 oil and gas drilling permits in December which is down 12 percent from December 2016. In December, Texas had 11,000 more active wells than the same month in 2016, for a total of 317,864 wells, with 96 percent of the increase coming from wells producing less than ten b/d. The decline in drilling permits may be due to the drilling of longer wells with more fracking stages. It is going to be a while before we know whether the US can increase shale oil production by over a million b/d in the next year or two.

2.  The Middle East & North Africa

Iran:   The Trump administration extended sanctions relief under the 2015 Iran nuclear agreement, keeping the deal intact for at least another few months, but said it would issue no more such waivers as it tries to negotiate a new deal with European allies. The U.S. Treasury at the same time imposed new punitive actions meant to pressure Tehran over ongoing missile tests and a recent crackdown on Iranian protesters. Tehran reacted sharply to this move, saying there would be retaliation for the new sanctions and that it would never sign a new treaty imposing the limitations on Iran’s freedoms that the Trump administration is demanding.

It is clear that Tehran will never negotiate over the demands that Washington is making. The current move may move the crisis a few months down the road, but it is still there.

Iraq: Oil Minister al-Luaibi said on Saturday that Baghdad’s oil production is close to 5 million b/d, but the country will remain in compliance with its output target under OPEC pact to cut supplies.

After Iraq’s federal forces recaptured the oil fields in Kirkuk in October, the Iraqi Parliament voted on to ban Kurdish engineering company Kar Group from operating Kirkuk’s oil fields. The Oil Ministry is downplaying the non-binding Parliament directive that seeks to bar the Iraqi government from working with the Kurdish company KAR Group.  This suggests the order will not have an immediate impact on government policy.

Iraq will start exporting oil from the northern Kirkuk fields to Iran before the end of January. About 30,000 b/d of crude will be trucked to Iran’s Kermanshah refinery. Trucking crude to Iran comes under a swap agreement announced last month by the two countries to allow a resumption of oil exports from Kirkuk. The two countries have agreed to swap up to 60,000 barrels per day of crude produced from Kirkuk for Iranian oil to be delivered to southern Iraq.

Royal Dutch Shell has sold its 20-percent stake in Iraq’s West Qurna-1 oil field to Japan’s Itochu Corporation, and Iraq has approved the transaction. Shell also said that it wants out of the Majnoon oil field in Iraq and has agreed to exit the venture and transfer its operation to the Basra Oil Company by the end of June 2018. Currently, Shell is the operator and holder of 45 percent at Majnoon, with Malaysia’s Petronas owning 30 percent, and Iraq’s Missan Oil Company holding the remaining 25 percent.

Saudi Arabia: Saudi Arabia has shortlisted New York, London, and Hong Kong for the initial public offering of Saudi Aramco, with the three exchanges considered either singly or a combination of two or even three of them.  The government still plans to have Aramco listed in late 2018, according to Reuters’ sources. The final decision will be made by Saudi Crown Prince Mohammad bin Salman, who is in charge of supervising Saudi Arabia’s oil and economic policies.

US investment banks Goldman Sachs and Citi are lined up to lead the initial public offering. The IPO would be one of the largest share offerings ever if Aramco’s target valuation of $2 trillion is achieved. The appointment of advisors would mark an important step before the float after Aramco officials were forced to reiterate their plans for a 2018 listing at the end of last year.

3.  China

China imported 12 percent less crude oil in December than in November, when oil imports had hit a record high. This development is sparking concern about demand from one of the world’s top consumers. While some say the slump is due to Beijing’s aggressive stance on fighting pollution, others say it is merely a seasonal decline. The record-high November oil shipments to China were stockpiled, and used by refiners during December, suggesting that the latter explanation is likely and that China’s stockpiles are quite hefty. Despite the December lull, for full-2017, crude oil import figures show a 10.1-percent increase from 2016, at 8.43 million b/d. This is largely due to a decline in China’s domestic production in the last few years.

The pace of Beijing’s strategic petroleum reserves growth slowed over mid-2016 to mid-2017, compared to the previous two years. The country did not bring any new SPR storage site on stream in that period. But the country’s implied crude stocks growth over the same period hit a record high, suggesting more crude barrels went into commercial storage. Some analysts expected China to need more crude to build its SPR in H2 2017, and also in 2018, because of more SPR storage sites coming online.

Natural gas imports into China reached an all-time high in December as the country fought a cold spell amid efforts to reduce its dependence on coal and replace it with gas. At 7.89 million tons —including pipeline flows and LNG shipments—the December figure beat the previous record, booked in November, by 20 percent. This record-high import rate marks the end to a year that saw natural gas imports into the country soar by 27 percent annually to 68.57 million tons. Beijing’s drive to reduce coal consumption and increase gas consumption was a bit hurried: winter hit northern China hard and led to gas shortages in certain regions, sending domestic LNG prices to a three-year high despite the global glut.

China’s steel production growth is expected to slow sharply in 2018 as state-mandated factory closures and policies to protect the environment begin to bite.  Steel is often viewed as a barometer of economic activity because it is used for automobiles, construction, and manufacturing, which means a significant price move could have repercussions for the broader economy.  The Chinese slowdown could have positive effects, however. A modest increase in production from China, which accounts for about half the 1.7 billion tons produced worldwide, could restore balance to a global market that was badly hurt two years ago by a collapse of prices due to oversupply.

4. Nigeria

An explosion ruptured a major Nigerian gas pipeline on Thursday, days after the same line was repaired following damage from a fire that shut it down earlier this month. The Escarvos-Lagos Pipeline was hit by an explosion in the Warri region of Delta state. The Nigerian National Petroleum Corporation did not say whether gas distribution had already been hit but added that supplies from other sources would be increased to offset any shortfalls as repair works commence. The pipeline supplies gas to plants producing about one-sixth of Nigeria’s power, as well as the West Africa Gas Pipeline System.

Barely a week after the fuel scarcity across Nigeria subsided in major cities, long queues of motorists have resurfaced at filling stations in Abuja, Lagos and other parts of the country. Although things appeared to return to normal in Lagos and Abuja after the Christmas celebrations, motorists in many other states have been forced to buy petrol at prices far above the official N145 per liter. Last Thursday, the Nigerian National Petroleum Corporation made frantic efforts to assure Nigerians all was well.

The state oil company has issued a tender to buy up to 1.55 million tons of gasoline from January to April in its latest effort to stave off shortages. The tender, issued last week, is seeking 42 cargoes of gasoline, each of 37,000 tons, on top of the volumes NNPC is taking via ongoing crude-for-product swap contracts.

5. Venezuela

Oil production fell in December to one of its lowest points in three decades, further depriving the country of its only major source of revenue and adding to the suffering of its people. Venezuela produced 1.7 million barrels of oil a day, according to S&P Global Platts, which polled industry officials, traders and analysts, and reviewed proprietary shipping data. That’s the lowest since 2002, when a failed coup temporarily took control of the state oil company, PDVSA. Other than that, oil production is the lowest in 28 years.

Venezuela’s crude oil sales to the United States fell for the second month in a row in December, knocking the year’s average to 593,047 b/d, the lowest annual level since 1991, according to Thomson Reuters trade flows data.  Financial sanctions on Venezuela imposed last year by the Trump administration have affected PDVSA’s oil flows to and from the US as the company and its customers struggle to get commercial credit for transactions.

The International Energy Agency and several analysis firms expect Venezuela’s crude output to lose another 500,000 b/d this year due to lack of investment, mounting debts, sanctions, a brain drain caused by low salaries and new management with no experience in the oil industry.

The government has forced more than 200 establishments to lower prices in the middle of a hyperinflationary spiral. Venezuela’s opposition-controlled legislature said Monday that inflation in the economically struggling nation reached a staggering 2,600 percent last year. The figures underline the problems besetting Venezuela, where food, medicines and other basic goods are in extremely short supply.

6.  The Briefs (date of article in Peak Oil News is in parentheses)

Which source of oil demand will account for the largest source of growth over the next two decades? Most people might assume transportation, with hundreds of millions of people in the developing world acquiring cars for the first time. However, according to the International Energy Agency, the petrochemical industry will represent the largest demand for additional oil consumption through 2040. (1/8)

In Scotland, the shale division of British business group INEOS said it was petitioning for a judicial review of a Scottish decision to sideline onshore oil and gas work. Scotland has one of the more robust low-carbon programs in the world and its government in 2015 ruled that natural gas derived from underground coal deposits would have no place in a greening economy. (1/11)

From Russia, with love? The potential first delivery of Russian LNG to US shores is ruffling some feathers, due to sanctions in place on Novatek, one of the partners in the Yamal LNG terminal – the apparent origin of the LNG heading to the Everett LNG terminal in Boston. While sanctions may still be in place with certain Russian entities, the US is a regular recipient of Russian oil and products. (1/13)

China’s launch of domestic oil futures trading is looming.  Graticule’s Adam Levinson calls it a “wake up call” for the West that seems to happily be ignoring this potential bombshell. Levison warns Washington that besides serving as a hedging tool for Chinese companies, the contract will aid a broader Chinese government agenda of increasing the use of the yuan in trade settlement… and thus the acceleration of de-dollarization and the rise of the Petro-Yuan. (1/8)

The East African Crude Oil Pipeline is nearly complete. The export pipeline will serve the East African Community (EAC) states. The 1445km long and 24-inch diameter pipeline is set to be the world’s longest heated crude oil pipeline, which will effectively serve the region’s waxy oil. (1/10)

Kenya has decided to allocate 20 percent of future oil revenues to the communities where crude oil has been discovered, cutting the share from an initial proposal to give local counties and communities 30 percent of future oil income. (1/13)

In Nigeria, 4,501 trucks filled with petroleum are reported “missing”—another sign of the corruption and theft that have plagued the country for years.  (1/9)

For offshore Brazil, a consortium of Japanese energy companies said Tuesday they agreed to invest in a long-term agreement involving floating production options for the Sepia area. By the end of August, Brazil had already produced an average of 3.3 million barrels per day in oil and other petroleum liquids. The Libra field alone holds between 8 billion and 12 billion barrels of recoverable reserves. (1/10)

In Canada, energy firms almost doubled the oil rig count last week to the highest level in 10 months as producers returned seasonally en masse and crude prices remain around three-year highs. Drillers added 87 oil rigs during the week ended Jan. 12 bringing the total count up to 185, the highest level since March 2017. (1/13)

Canada is increasingly convinced that President Donald Trump will soon announce the United States intends to pull out of the North American Free Trade Agreement, sending the Canadian and Mexican currencies lower and hurting stocks. The comments cast further doubt on prospects for talks to modernize NAFTA. (1/11)

The US oil rig count increased by ten last week and now stands at 752, according to Baker Hughes data.  Ten was the largest increase since June. The number of gas rigs in the US now stands at 187, up 136 over a year ago.  Total US rigs hit 939, up 280 year over year. (1/13)

Pipeline push? US Chamber of Commerce Pres. Thomas J. Donohue said oil and gas pipelines and electricity transmission systems must be included as he listed US infrastructure improvements as a top priority in 2018 in his annual State of American Business address on Jan. 10.  Donohue’s observation came a day after American Petroleum Institute Pres. Jack Gerard made similar points during his keynote address at API’s State of American Energy event. (1/12)

Offshore pushback: 22 Democratic US senators from 12 states on Thursday joined the chorus of local representatives seeking exemptions from Interior Secretary Ryan Zinke’s newly proposed offshore drilling plan, after his surprise move on Tuesday to shield Florida. Only the governors of Alaska and Maine support the expanded drilling declaration. (1/12)

In New Jersey, some Republican state leaders have joined Democrats in expressing frustration with an offshore drilling program proposed last week by the US Interior Dept. Coming after the watering-down of safety measures enacted after the Deepwater Horizon oil spill in 2010, the lease proposal drew fire when it put waters from Florida to Maine on the table after President Barack Obama called for a ban on drilling in some territorial waters in one of his last executive actions. The proposal was criticized further when Interior Secretary Ryan Zinke pulled Florida from consideration after a brief meeting with Florida Gov. Rick Scott. (1/13)

The Trump administration has opened up considerable new lands in Alaska and the shallow offshore for drilling. This is good policy for a lot of reasons, but the least obvious is that it will help the environment. Despite howls from the green lobby, the truth is that it’s less hazardous to drill for oil on land and in shallow waters using conventional rigs. BP’s Deepwater Horizon was drilling in about 5,000 feet of water when it exploded in 2010. If the accident had occurred on land or in shallow seas, the spill could have been contained in three days. (1/11)

NYC suing Big Oil: On Wednesday, New York City announced that it would sue the five oil majors—ExxonMobil, Chevron, ConocoPhillips, Royal Dutch Shell and BP—over their role in fueling climate change. Also, NYC Mayor Bill de Blasio said that the city’s $189 billion pension fund intends to divest itself of fossil fuels stocks. (1/12)

Gasoline prices to rise: GasBuddy predicts that the US motorists will pay more to tank up for the second consecutive year. In its 2018 Fuel Price Outlook, the crowdsourced smartphone app forecast a yearly national average gasoline price of $2.57 per gallon – a 19-cent increase from last year and the highest price since 2014. (1/12)

Coal-nuke proposal nixed: The Federal Energy Regulatory Commission (FERC), which regulates the US electricity market, shot down a proposal from the Department of Energy that would have essentially subsidized aging coal and nuclear power plants. The effort, pushed by Secretary of Energy Rick Perry, was billed as move to shore up the electric grid and improve “resilience” by rewarding power plants that held a 90-day supply of fuel on site. Only coal and nuclear met that definition. FERC unanimously rejected the proposal, despite President Trump having appointed four of the five members on the commission. However, the FERC also said it had embarked on a new plan to determine whether the power grid is reliable. (1/11, 1/9)

Coal complains: Robert Murray, the chief executive one of America’s largest coal mining companies, criticized US regulators on Tuesday for rejecting the Trump administration’s proposed subsidies for aging coal and nuclear power plants – saying the decision could lead to higher electricity costs for consumers. (1/10)

While coal crept closer to natural gas in total US electricity generation share in 2017, gas will widen the gap between the fuels this year and though 2019 on expected lower prices and new capacity, the US EIA said Tuesday. The EIA predicts gas’ generation share will increase to 33.1% this year, up from 31.7% in 2017, and rise again to 34.3% in 2019. At the same time, coal’s generation share will fall to 29.6% this year, down from 31.7% in 2017, and dip further to 28.1% in 2019. (1/10)

Renewables costs dropping: In Colorado, power company Xcel Energy issued a request last fall for proposals for wind, solar, natural gas, and storage. Wind alone was bid at an astonishingly low median price of $18.10/MWh, smashing previous records. The big surprise, however, was the very low bid for wind and solar plus storage.  Wind and solar plus battery storage had seven bids for a total of 4,048 MWh at a median bid of $30.60. The energy storage projects ranged from 4 to 10 hours in duration. (1/12)

Renewables gaining: Of the 25 gigawatts of new utility-scale power added to the grid during 2017, about half came from renewables and most of that was in the fourth quarter, the government said. (1/11)

Batteries beachhead: The US electric power industry has installed about 700 megawatts (MW) of utility-scale batteries on its electric grid. As of October 2017, these batteries made up about 0.06% of US utility-scale generating capacity. Batteries, like other energy storage technologies, can serve as both energy suppliers and consumers at different times, creating an unusual combination of cost and revenue streams and making direct comparisons to other generation technologies challenging. (1/9)

Tesla began manufacturing its solar-powered shingles for mass market release, according to CEO Elon Musk. Hugh Bromley, with Bloomberg New Energy Finance, said that opting for the Tesla roof is more expensive than using traditional materials, but not by an overwhelming margin. In Australia, Bromley estimates that a 2,000-square foot home would require $57,000 worth of Tesla tiles, whereas a terra cotta roof with solar panel add-ons would cost $41,000. Plain asphalt roof panels for a similarly sized home would cost roughly $22,000. The solar roof and the energy storage Powerwall will combine with Tesla’s electric vehicles to create what Musk argues is a complete package for everyone to shift to clean energy. (1/10)

Foreign cars winning: In the first quarter, foreign automakers will produce 1.4 million cars and trucks in the U.S., roughly equal to domestic output, projects Toyota Motor Corp.’s choice of Alabama as the new home for a shared factory with Mazda Motor Corp. marks a major shift in US vehicle manufacturing, with foreign automakers soon set to build more cars and trucks in America than the Detroit giants. (1/11)

EV edge: A study at the University of Michigan’s Transportation Research Institute found the average annual cost to drive a gasoline-powered vehicle last year was $1,117. The average annual cost to drive a typical battery-electric vehicle, by contrast, was $485 last year. (1/12)

EV boom coming? Last year was big on announcements from automakers, and suppliers, and tech giants regarding electric vehicles, robotaxis, and autonomous vehicles. We also heard from countries like China, India, France, Great Britain, and Norway—all pledging to ban the sale of fossil fuels to power vehicles on their roads. How will this affect auto sales, gasoline, diesel…? Morgan Stanley has long sounded the warning bell to the auto industry. A study last year forecasted that electric vehicles would make up 90 percent off all vehicle sales globally by 2050. (1/9)

GMC’s CEO Mary Barra has made a bold promise to investors that the Detroit automaker will make money selling electric cars by 2021. What Barra has not explained in detail is how GM intends to do what, so far, no major automaker has done. The answer is a big bet on combining proprietary battery technology, a low-cost, flexible vehicle design and high-volume production mainly in China. (1/9)

In the UAE, a water crisis is looming for the nation and its neighbors in the Persian Gulf region, one of the most water-stressed in the world. So far, Gulf Arabs have relied on fossil fuel-burning desalination plants to produce most of the water their swelling populations and expanding industries consume. Now they’re adopting cleaner technologies and starting to harness their abundant sunshine to make drinkable water from the sea. (1/8)

Netherlands H2 buses? AkzoNobel Specialty Chemicals and Gasunie New Energy are partnering to investigate the possible large-scale conversion of wind and solar electricity into green hydrogen via the electrolysis of water. Intended for Delfzijl in the Netherlands, the installation would use a 20-megawatt water electrolysis unit, the largest in Europe, to convert sustainably produced electricity into 3,000 tons of green hydrogen a year—enough to fuel 300 hydrogen buses. A final decision on the project is expected in 2019. (1/10)


46 Comments on "Tom Whipple: Peak Oil Review – 15 January 2018"

  1. JuanP on Mon, 15th Jan 2018 8:57 am 

    The big question is how long will the US shale boom last. The US economy is very likely to have a very hard crash after the shale boom ends.
    I like the idea of solar shingles and I may try them out in the future. One of the biggest problems with PV panels is their visibility; these tiles basically look like a normal roof and are harder to notice. As a prepper I would prefer tiles over panels if they were equally reliable.
    China is importing 8.4 mbpd; that is a lot. They are going to be in a lot of trouble once exports begin contracting significantly.

  2. MASTERMIND on Mon, 15th Jan 2018 9:23 am 


    The US economy is already in a depression..How much worse can it get? Oh yea it could collapse! Which it will!

  3. MASTERMIND on Mon, 15th Jan 2018 9:25 am 


    Global economic growth has peaked, says World Bank

    That’s it! THIS IS NOT A DRILL! Without growth the system will collapse!

  4. Ghung on Mon, 15th Jan 2018 9:30 am 

    “One of the biggest problems with PV panels is their visibility…”

    Yeah. We wouldn’t want to let our energy sources mess with aesthetics, eh? As long as we let form trump function, we’ll be paying a premium over just getting it done.
    Silly fuckin’ humans.

    … and I found this rationalization pretty funny;

    “The Trump administration has opened up considerable new lands in Alaska and the shallow offshore for drilling. This is good policy for a lot of reasons, but the least obvious is that it will help the environment.”

    The idea that solar installations must be ‘invisible’, and that opening places like ANWR is good for the environment pretty much says it all about those who hold these ideas, though they probably think they are looking at things pragmatically.

  5. MASTERMIND on Mon, 15th Jan 2018 10:44 am 

    Our collapse is nothing more than history repeating itself!

  6. Outcast_Searcher on Mon, 15th Jan 2018 11:02 am 

    So Mastermind defines solid growth as a “depression”. And then he wonders why anyone not incorrectly forecasting doom constantly considers him without credibility.

    What would it take not to be a “depression”? 10% growth? LOL

    Do you know how to use a dictionary or this thing called the internet to look things up?

    Ever hear of media outside of random doomer blogs?

  7. Outcast_Searcher on Mon, 15th Jan 2018 11:06 am 

    JuanP, I agree with you on liking the idea of solar tiles. I want to wait until we get some real world results from Tesla installations for awhile.

    I want to know if the tiles are REALLY physically very durable, and the roofs are truly reliable.

    I just hate the idea of standard roof solar where you put on a modern 30 to 50 year roof, and then straight away DESTROY THE WARRANTY by having a bunch of holes punched in the roof — if you install solar PV panels as recommended.

    I don’t really care that much about the appearance, so I’d also like to see the price come down for the non-solar part of the roof as the concept catches on and competition gets going.

    Having another reliable power source seems like a great thing for security, and as BEV’s and PHEV’s become more of a common thing, I like being able to mostly power one from the sun.

  8. Pat on Mon, 15th Jan 2018 11:11 am 

    the talk of huge shale oil is just myth nd its nothing but the retire party. the fact is world has already exhausted easily, abuntantly available low cost, low hanging decades ago. whats left is hard to get, expensive, low quality and low eroei. the oil demand is increasing at exponential rate as global growth picking up, rising incomes, prosperity, easy money, cheap credits, huge money printing etc. what few years ago world used to consume 87.5 to 90 mbpd but now it reach 100mbpd and rising rapidly and with no new discoveries added to oil supplies and the current major producers only can up supply to what currently producing with not much scope for upside only but surely world heading to huge oil shortages. I predict the oil shortages can happen much before 2020, by end of 2018. Prepare……….

  9. MASTERMIND on Mon, 15th Jan 2018 11:20 am 


    The Great Depression 1929-1940 US Economic Growth GDP (1%)

    The Great Recession 2006-2017 US Economic Growth GDP (1.5%)

    The Great Recession 2006-2017 US Economic Growth GDP Per Capita (0.4%)

    OCED Economic Growth GDP Per Capita 1970-2015 (0.5%)

    Global Economic Growth GDP Per Capita (1.3%)

    World Governments Gross Debt to GDP (330%)

    Global economic growth has peaked, says World Bank

    Non Partisan CBO Office Forecast Less Than 2% US Economic Growth GDP Through 2027

    *Note: 20% GDP Includes (FIRE) finance, insurance and real estate

    And notice the Nazi’s are back just like they were during the original depression. History repeats!

  10. MASTERMIND on Mon, 15th Jan 2018 11:47 am 


    Three years until Anarchy!

    That light at the end of the tunnel is actually an oncoming train!

  11. GregT on Mon, 15th Jan 2018 11:50 am 

    “I predict the oil shortages can happen much before 2020, by end of 2018. Prepare……….”

    Move away from densely populated areas, get out of debt, get involved at the small local community level, and learn how to provide your own food.

  12. JuanP on Mon, 15th Jan 2018 11:54 am 

    Ghung, I probably didn’t express myself clearly because you misunderstood my meaning. I don’t mind the aesthetics of PV panels, as a matter of fact I like them. My concern is that they will draw unwanted attention in a post collapse WROL world. But, since you brought up the problem some people have with the way PV panels look, I will point out that since people are stupid and superficial I welcome PV shingles because they will increase the pool of buyers for solar energy. I have already had one person tell me that they are waiting on the PV shingles. His wife wouldn’t let him put up panels because “They just look awful”. My mom hates them, too. You know that, unfortunately, we can’t fix stupid people or get rid of them!

  13. GregT on Mon, 15th Jan 2018 11:54 am 

    “Three years until Anarchy!”

    From page 58 of your linked report MM:

    “Nevertheless, for illustration purposes here is an outline of some theoretically plausible consequences:”

    “Loss of confidence in currencies. Belief in the value-preserving function of money would dwindle. This would initially result in hyperinflation and black markets, followed by a barter economy at the local level.”

  14. MASTERMIND on Mon, 15th Jan 2018 12:08 pm 

    Global economic growth has peaked, says World Bank

    A contraction in economic activity over an indefinite period of time represents a highly
    unstable state that will cause the system to collapse.

    Barter economy LOL

    Sorry evolution doesn’t go backwards!

  15. MASTERMIND on Mon, 15th Jan 2018 12:12 pm 


    You are such a clown and pussy…Grow your own food, move away from the cities. Its not about how prepared you are its about how unprepared everyone else is. Those who store mass amounts of food or have gardens or farms. Will be easy targets for all those who didn’t prepare..And just think how out numbered you are by the un prepared! They have you beat by a billion to one!

  16. MASTERMIND on Mon, 15th Jan 2018 12:15 pm 


    Ed Morse at Citigroup thinks an oil shortage is coming this year too..And he is nobody to scoff at on wall street…And member of the CFR.

    Is an Economic Oil Crash Around the Corner?

  17. Davy on Mon, 15th Jan 2018 1:02 pm 

    “JuanP, I agree with you on liking the idea of solar tiles.”

    I just put up 6 Hanwah 300watt panels on a solar pole mount and I think it looks really cool. This way I did not affect the integrity of my roof.

  18. GregT on Mon, 15th Jan 2018 1:38 pm 

    “Sorry evolution doesn’t go backwards!”

    I’m hopeful that the human race will someday evolve, and come to the realization that a healthy natural environment is the most important thing for survival.

    I would consider modern industrialism as going backwards, the very reason why the human race faces collapse, and a mass die-off.

  19. GregT on Mon, 15th Jan 2018 1:51 pm 

    “Barter economy LOL”

    Your link, not mine.

  20. deadly on Mon, 15th Jan 2018 2:28 pm 

    I am happy Mastermind reminds us all that oil will peak and civilization will collapse.

    Been wondering what’s been going on lately, the past few years or so.

    Now I know, thanks to Mastermind.

  21. GregT on Mon, 15th Jan 2018 2:30 pm 

    “Is an Economic Oil Crash Around the Corner?”

    Summary from that link MM:

    “The old, industrial era rules for the dying age of energy and technological super-abundance must be re-written for a new era beyond fossil fuels, beyond endless growth at any environmental cost, beyond debt-driven finance.”

    “This year, we can prepare for the post-2018 resurgence of crisis convergence by planting seeds — however small — for that future in our own lives, and with those around us, from our families, to our communities and wider societies.”

    Sounds familiar.

  22. GregT on Mon, 15th Jan 2018 2:35 pm 

    “Global economic growth has peaked, says World Bank”

    Good one MM.

    This Connection is Not Private.

    “This website may be impersonating “” to steal your personal or financial information. You should close this page.”

  23. GregT on Mon, 15th Jan 2018 2:38 pm 

    “Ed Morse at Citigroup thinks an oil shortage is coming this year too..And he is nobody to scoff at on wall street…And member of the CFR.”

    That article is aimed at investors in the oil sector MM.
    The take away? Now’s a good time to invest in oil.

  24. rockman on Mon, 15th Jan 2018 3:32 pm 

    Juan – “The US economy is very likely to have a very hard crash after the shale boom ends.” What’s your expectation based on? IOW before the shale boom began do you feel the US economy had crashed? Of course without the shales US oil production would have continued declining.

    But that brings us back to the basic idea of how high an oil price any economy can handle effectively. US oil production had been decreasing since the early 70’s and becoming increasingly reliant on imports. But the US economy had handled that dynamic successfully to some degree for last 4 decades. And let’s not forget why the shales boomed: high oil prices. Not a positive factor for any economy especial one like the oil greedy US. And let’s also remember we have relatively high oil prices today: nearly 2X what we had for decades prior to the shale boom.

    So the question: why will the economy suddenly “crash” (a rather meaningless term IMO since it’s not quantified) if we lose the shale production we didn’t have before 2006? Which, obviously, doesn’t preclude a future US recession since those have been rather cyclical for a very long time.

  25. rockman on Mon, 15th Jan 2018 3:37 pm 

    “Providing all of our states with the same exemption from dangerous offshore oil and gas drilling…” So those D senators are recommending we immediately propose shutting in all oil/NG off the Texas and Louisiana coasts? I suspect they haven’t thought their words thru completely. LOL.

  26. MASTERMIND on Mon, 15th Jan 2018 3:37 pm 


    The link to the world bank article is from the financial times. Its the wall street journal of the UK. You are such a paranoid dude! And I know greg Ed Morse and bloomberg are just spreading propaganda because you say so and you would know because you are prepper with a wife who has a PhD….LOL Personally I would bet the oil shortage wont hit till around 2020. But I wouldn’t also be surprised if it came earlier.

  27. MASTERMIND on Mon, 15th Jan 2018 3:39 pm 

    Greg here is that FT article.

    Global growth appears to have peaked, with demographics, a lack of investment, a slowing in productivity gains and tightening monetary policy placing limits on economic expansion, the World Bank said.

    The world’s economic output grew 3 per cent last year as more than half of economies accelerated, thanks to a rebound in investment, manufacturing activity and trade, bank economists said. The global economy is expected to maintain that rough growth level through 2020.

    But that may be as good as it gets, according to the bank’s annual report on the state of the global economy. The problem facing the world is that after years of recovery from the 2008 financial crisis, most advanced and developing economies have closed the output gap between actual and potential economic growth.

    Moreover, it is hard to see that changing unless governments embrace the sort of reforms and investment drives that the bank and other institutions have been demanding for years.

    “If you step out of the [current] snapshot [of strong growth] and look at . . . the historical progression . . . what you actually observe is that, while the growth is real and welcome, the potential growth of the global economy is going to be somewhat limited in the future,” Shantayanan Devarajan, the bank’s senior director for development economics, said on Tuesday.
    As a group, advanced economies are expected to slow in the coming years as they run up against full employment and as central bankers raise rates to contain inflation, according to the World Bank. Already, the bank said, it expected growth in advanced economies to slow from 2.3 per cent last year to 2.2 per cent this year and 1.7 per cent by 2020.

    But emerging and developing economies, which grew by 4.3 per cent as a group last year, are also likely to hit ceilings and contribute less to global growth.

    In many of the major emerging economies that have for years fuelled global expansion the underlying potential growth has fallen considerably over the past decade. It is likely to continue doing so over the next 10 years, the bank said.

    The weaponisation of the language of trade Has Donald Trump’s trade war with China already begun? A protectionist advance is far from inevitable That reality, the bank’s economists say, is the result mainly of long-term demographic changes. Countries such as China are seeing their labour forces shrink as populations age. That has coincided with slowing productivity growth.

    Either could be addressed with investment and innovation and the case for encouraging both was now “absolutely critical”, Mr Devarajan said.

    The concerns over the long-term future of the global economy also coincide with fears in the short term.

    Ayhan Kose, one of the authors of the new report, said “downside risks continue to dominate” for the global economy this year.
    Among those risks is a sudden rise in the now-low borrowing costs that have helped fuel much of the recovery in recent years, either from quicker than anticipated rate rises from the US Federal Reserve and other central banks, or because of growing concerns about soaring capital markets.

    Protectionism and a resulting slowdown in global trade also remained a risk, especially as the 4.3 per cent increase in the volume of goods and services traded last year had been so important as an engine for broader growth.
    Moreover, Mr Kose said the slowdown in the world’s potential growth had also made it more vulnerable to future shocks.

    Short of an unexpected surge in productivity gains, the world economy looked as if it faced a “mediocre future”, he said. “This is the time to undertake responsible forward-looking policies.”

  28. MASTERMIND on Mon, 15th Jan 2018 3:44 pm 


    “This year, we can prepare for the post-2018 resurgence of crisis convergence by planting seeds — however small — for that future in our own lives, and with those around us, from our families, to our communities and wider societies.”

    That is just dumb spin to give the article a positive ending! You are grasping at straws!

  29. GregT on Mon, 15th Jan 2018 3:51 pm 

    Nothing in that article that isn’t glaringly obvious MM, for anyone has has been paying attention.

    “This is the time to undertake responsible forward-looking policies.”

    Completely agree. If you are expecting somebody else to do this for you, (they’ll think of something) you would be in for a rather rude awakening.

  30. Anonymous on Mon, 15th Jan 2018 3:54 pm 

    Whipple actually tries to play it very straight down the middle and usually does an excellent job. The featured quote was a small deviation from that towards picking a side. (And I say that agreeing with the hypocrisy and even poor tactics of making a strong stand and then immediately weakening it.)

  31. Antius on Mon, 15th Jan 2018 4:07 pm 

    “So the question: why will the economy suddenly “crash” (a rather meaningless term IMO since it’s not quantified) if we lose the shale production we didn’t have before 2006?”

    Shale production is most likely to decline due to a rise in interest rates. This would increase the cost of borrowing, servicing existing debts and would put a downward pressure on oil prices.

    Then again, interest rates can’t go up very much more without making the interest on the federal government’s $20 trillion of debt unservicable. Ironically, I think the rise in oil prices themselves could be the undoing of shale. If they start to drive up inflation forcing a rate rise it will be very difficult for many companies to service their debts.

  32. MASTERMIND on Mon, 15th Jan 2018 4:44 pm 


    He should have finished that article by saying. Wait till the economy collapses and then jump off a bridge! Take the easy way out!

  33. MASTERMIND on Mon, 15th Jan 2018 4:56 pm 

    Hope you are ready for this!

  34. Mad Kat on Mon, 15th Jan 2018 5:41 pm 

    Back and forth the debate continues. What matters is what is happening in YOUR life. When your neighbor loses his home, it’s sad. When you lose yours it is a crisis. If you have not or are not preparing for the future, you are not very intelligent or resourceful.

    Someone poo pooed barter/trade as a means of future exchange. Tell me what the exchange of money for goods is if it is not barter? What is the difference between offering a $50 bill for a pair of shoes and offering a smoked ham for the same shoes? None that I can see except that a capitalist system demands profit. If the shoe maker wants to eat, he barters/sells his produce for that of another, not fiat paper. Regression? Nope! Survival. Normal trade for thousands of years.

  35. onlooker on Mon, 15th Jan 2018 5:51 pm 

    Someone poo pooed barter/trade as a means of future exchange. — Makati, whomever did that is a total fool. Money will come to be totally worthless . YOU can bank on that, pardon the pun

  36. MASTERMIND on Mon, 15th Jan 2018 5:52 pm 


    You can’t see the Forrest from the tree..It doesn’t matter how much you prepare. it matters how many others didnt prepare..And they have you out numbered 1k to one! Good luck! A much better strategy is to live large now and dont worry about the future. And when the collapse hits, take the easy way out!

  37. Mad Kat on Mon, 15th Jan 2018 6:10 pm 

    MM, but, if your neighbor’s lifestyle will not be much affected by the collapse, it doesn’t matter does it? When you neighbor doesn’t have electric, phone, internet, car or even running water, how will they know there was a collapse? The little town nearby doesn’t even have a grocery store. It has a wet market similar to the farmer’s markets of my youth. It has one bank branch and a few ATMs but few of the people have bank accounts unless they have a business. And the first fast food joint just opened and may not last long if they have no customers.

    You live in a totally different culture and system from the Ps. You have to be here and live in the new one to appreciate how much Americans are not prepared for the future and how much the Filipinos are. That goes for much of the world’s population where hardship and survival are already the daily experience. They will take it in stride and move on. As will I.

    Among my preps are a lot of trade/barter items of real value and they are not gold coins or fiat paper. I am prepared for the future and expect many exciting and enjoyable years. Obviously you do not. Too bad!

  38. Mad Kat on Mon, 15th Jan 2018 6:19 pm 

    Onlooker, you are correct. The natural means of exchange of goods is the actual exchange of goods. no intermediary of fiat paper required or even wanted.

  39. MASTERMIND on Mon, 15th Jan 2018 6:20 pm 


    I am prepared for the future and expect many exciting and enjoyable years.

    You think a global economic collapse which includes your county and government..Will usher in exciting and enjoyable years! You are lying to yourself! Nothing could be further from the truth! And you have no REASON to believe Asia will survive. And several reasons to believe the opposite. You just ignore all the reasons because you are close minded and unreasonable..

  40. MASTERMIND on Mon, 15th Jan 2018 6:22 pm 

    There will be no barter economy in a world of anarchy! It will be every man for themselves. there will be no bartering, only stealing and murdering and raping for what you want! You’ll see!

  41. GregT on Mon, 15th Jan 2018 6:55 pm 

    “Someone poo pooed barter/trade as a means of future exchange.”

    People around these parts already prefer barter as a means of exchange. That would be how I got the firewood to heat my home this winter.

    Most that I’ve talked with are fed up with the federal government squandering their tax dollars.

  42. Mad Kat on Mon, 15th Jan 2018 7:03 pm 

    Greg, I am no longer an American tax payer, and that is one of the most freeing events in my long life. I have no debt. Another chain gone. I personally own no vehicles or property, and that too is freeing in many ways. I look forward to continuing my move down the ladder. I recommend it to anyone with the strength and means to do so.

  43. MASTERMIND on Mon, 15th Jan 2018 7:38 pm 


    You and your friends sound like a bunch of ignorant old fools..Like those old timers you see sitting in the morning having coffee for hours bitching about the guberment! You and your friends are just a bunch of misanthropes! And just because you and your friends barter doesnt mean our entire society is going to turn into a barter system..You are comparing apples to rocks! Again…

  44. MASTERMIND on Mon, 15th Jan 2018 7:40 pm 

    Shale gas is one of the least sustainable ways to produce electricity, research finds

  45. MASTERMIND on Mon, 15th Jan 2018 8:10 pm 


    I know you paid your taxes and worked hard your whole life..You are such a do gooder! Too bad you couldn’t do good in marriage! LOL

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