James Kunstler and Peak Oil

Kaligula

Woodpecker
questor70 said:
Cuba is going the way of China as its isolation dissolves. It doesn't need to face a "special period".

It really would be nice if this thread is going to continue that more people with different viewpoints weigh in because this is fast becoming a useless echo-chamber.

'Truth has no temperature.'
https://www.youtube.com/watch?v=QZLDWFywljo

Nor shade, I would add.
Nor it is useless.

This is not a composition exercise, questor70, and speaking as your emperor: Maybe you should be demoted to a military tribune...?! Many more composition exercises in that position. Soldiers need convincing to die for our empire. Soldiers need believing that they do not live in a useless echo-chamber. That we are a republic, as our name says, SPQR, Senate and the People of Rome, and not a private property of one, Julio-Claudian, dynasty. That they can choose two consuls every year, even though one of them, year after year, is always me, the emperor. But they will notice another name, so thoughtfully always put before mine, every year someone else, and so they will believe that something changes and we are not the useless echo-chamber. They need to believe that in order to live, to serve, and to die. Polybius said that Rome is the most perfect state, so stable is Roma Aeterna.
I see you need to believe in our glorious future, too. You are not capax imperii. You will not a stage a sucessful rebellion, just a motion at the People's Assembly. You believe in a glorious future, not a future of spoils. Go. Go and enjoy your hopium, even though hopium is worse than lions at the arena. I, Caligula, the God-Emperor of Rome, the Sacred Trinity of Mercury, Apollo and Venus in One, bless you on this way. In the name of Rome, questor70, go!


As for Cuba:
Why do you say China? Because everyone repeats 'China'? Because you like silk?
Cuba economy is actually build on European machinery, since USA cut them off from American trade. Cuba is a kind of European island in Americas. This is why they now seek a relationship with Russia much more than with China - their airplane fleet are Russian designs, for example. Their agricultural machinery comes from Poland. And so on.
 

Iconoclast007

Woodpecker
A more important metric than peak production is peak net Energy Returned on Energy Invested. We experienced peak net energy aproximately between 2005 and 2008. The lack of growing net energy creates an inability to service debt as the interest must be paid via growth. Growth is thermodynamicly impossible without expanding net energy to conduct work. Shale oil and fracking increased total production but the oil comes at a high cost which means a lower net to conduct work. The fact that most shale producers have never made a profit is a symptom of the peak net energy situation.

The oil industry cannot produce usable energy at a price that modern industrial civilization consumers can afford. Even with finance wizardry like NIRP, QE, Bailins etc the world economy is stalling.

The nexus of the grand solar minimum and peak net energy occurring at the same time presents quite a challenge to modern industrial civilization.

The concept of Energy Deflation is what we can expect to occurr over the next months. Oil prices will spike to a price that economies cannot afford, deflation will take root and reduce demand governments wil be forced to implement QE, NIRP. Oil prices will crash and the cycle will continue a race to the bottom. Currencies will fall like dominos. Venezuela, Argentina, Turkey are the first examplea, next will come India, EU and China etc. The USD will be the last domino. Russia will likely fair the best of all after the smoke clears

I am buying privacy coins like Monero, Dash, PIVX, ZCASH as I believe that as the fiat currencies experience sovereighn debt crisis due to energy deflation governments will implement capital controls to prevent flight of wealth. Cryptocurrency that provide anonymous transactions will fill the need nicely. My research indicates Monero to be the best option, but time will tell.

I am also buying 1 oz silver bullion coins. I think silver will be a way to transact in person. Also gold for larger sums. Russia is considering issuing silver coin pegged to a floating spot price.

I am training Jiu Jitsu, Krav Maga, lifting to be physically ready for a chaotic world..

I have a few 5 gallon buckets of rice and beans and salt stored as an insurance policy.

After the above i compartmentalize what I know and go about my life as if I am wrong. I am building a business that will likely fail if I am right.... But thats ok as my investments will hold me in good stead should I be right. I dont worry or stay awake at night worrying. What happens is outside of my control.
 

TheMost

Robin
I spoke to a friend yesterday. His family is high up in the oil industry. When I asked him a week ago about peak oil, he said that with all the smoke and mirrors it is hard to tell one way or the other. Yesterday he said he did some digging, and it is definitely peak oil now, even with frakking. Given his family status, this could be accurate... or it could be the narrative that the big families want pushed right now.
 

Iconoclast007

Woodpecker
Peak Oil is happenjng now or very soon.

Peak, Net Energy EROEI happenned in 2005.

When the reset or collapse starts there will be trillions of barrells of oil in the ground that will be to expensive to recover.
 

Kaligula

Woodpecker
TheMost said:
I spoke to a friend yesterday. His family is high up in the oil industry. When I asked him a week ago about peak oil, he said that with all the smoke and mirrors it is hard to tell one way or the other. Yesterday he said he did some digging, and it is definitely peak oil now, even with frakking. Given his family status, this could be accurate... or it could be the narrative that the big families want pushed right now.

Peak oil narration is not being pushed now, in fact, a cover narration of 'peak demand' has been set up.
Peak demand can have different reasons, currently electric autos are pushed ( positive, namely, progressive, spin), but an economic collapse is also a 'peak demand' if needed.
Truth will not be made official.
 

Kaligula

Woodpecker
Iconoclast007 said:
Peak Oil is happenjng now or very soon.

Peak, Net Energy EROEI happenned in 2005.

When the reset or collapse starts there will be trillions of barrells of oil in the ground that will be to expensive to recover.

For this reason I think the Reset will happen when drilling, especially for shale oil, will stop.
The oil we will be left with will be the oil still coming out of the already drilled wells. And that in two years max.
OPEC does not have 3-6 millions barrels of spare capacity.

https://oilprice.com/Energy/Crude-Oil/US-Oil-Production-Is-Headed-For-A-Quick-Decline.html

A February 24 Wall Street Journal article by Bradley Olson and Rebecca Elliott should warn everyone of the impending slowdown. A key graph presented there shows that debt and equity issued by US shale producers declined to $22 billion in 2018, which is less than half the amount raised in 2016 and one-third the amount raised in 2012.

When one compares the total debt and equity issuance to Lower-48 onshore production lagged two years, one finds a close relationship. Lower-48 onshore output rose from three million barrels per day to 8.5 million barrels per day in 2018. However, the drop in the issuance of equity and borrowing suggests this production could fall by a third to six million barrels per day by the end of 2020 if the relationship holds.
 

Kaligula

Woodpecker
I only wonder what are designs for Venezuela. Taking it offline now in order to save its oil for USA in the post-shale time?

Such a plan would already mean that there is an expectation of future international chaos which would make the oil import from the Middle East uncertain at least.
 

Iconoclast007

Woodpecker
US wants Venezuela and Iran offline to prop oil price to support shale efforts.

When US shale declines soon, the associated debt will implode. US shale and fracking is a ponzi scheme.

The collapse will likely be triggered by higher energy price spike followed by price crash as it did in 2014. Energy deflation.
 

Kaligula

Woodpecker
For anyone who does not yet believe in peak oil, think about this:

As never before, Saudis are now obsessed with oil price being too low, insisting on cuts, cuts in OPEC production. It may seem a reasonable strategy on their part, but remember that there are essentially two ways of earning more: either higher margin per barrel (Saudis preferred way now), or simply selling more barrels. That the latter is not being taken into account at all raises a suspicion that raising production is not possible any more.

Anyway, it is fun to have such a cartel: you never say, 'production fell', just 'production cut'.
 

Kaligula

Woodpecker
Iconoclast007 said:
US wants Venezuela and Iran offline to prop oil price to support shale efforts.

When US shale declines soon, the associated debt will implode. US shale and fracking is a ponzi scheme.

The collapse will likely be triggered by higher energy price spike followed by price crash as it did in 2014. Energy deflation.

Don't know. Venezuela market is extra heavy oil, which is very different than light oil which comes out of shale. Shale oil and heavy oil are two different markets.

Also, it is USA itself which suffers the most, as it is the biggest importer of Venezuela crude and has specially adapated rafineries to process it.

The shale market in USA is already too small - this is why USA exports shale oil AND still imports conventional oil at the same time. There was an attempt to make conventional oil by mixing heavy oil from Canadian tar sands and shale oil, but without much success.

I think that maybe denying Venezuela's oil to China may play a role, so it may be a kind of Monroe doctrine enforcement. Especially as USA is now in a trade war with China.
 

Iconoclast007

Woodpecker
Denying the enemy energy and bolstering price through chaos while forcibg venezuelans to use dollars for currency.when the soveriegn debt crisis caused currency devaluation.

Its a cookie cutter deal. Irag,Iran, Libya, Syria, venezuela... All the same.
 

911

Peacock
Gold Member
Iconoclast007 said:
A more important metric than peak production is peak net Energy Returned on Energy Invested. We experienced peak net energy aproximately between 2005 and 2008. The lack of growing net energy creates an inability to service debt as the interest must be paid via growth. Growth is thermodynamicly impossible without expanding net energy to conduct work. Shale oil and fracking increased total production but the oil comes at a high cost which means a lower net to conduct work. The fact that most shale producers have never made a profit is a symptom of the peak net energy situation.

The oil industry cannot produce usable energy at a price that modern industrial civilization consumers can afford. Even with finance wizardry like NIRP, QE, Bailins etc the world economy is stalling.

The nexus of the grand solar minimum and peak net energy occurring at the same time presents quite a challenge to modern industrial civilization.

The concept of Energy Deflation is what we can expect to occurr over the next months. Oil prices will spike to a price that economies cannot afford, deflation will take root and reduce demand governments wil be forced to implement QE, NIRP. Oil prices will crash and the cycle will continue a race to the bottom...

...(prepper prose)

So many really bad assumptions there. The notion of peak net energy is dumb, because it ignores this central aspect of the shale oil boom:

[img=600x400]http://fingfx.thomsonreuters.com/gfx/rngs/OPEC-MEETING/010030SC1P5/USA-SHALE-OPEC-B.jpg[/img]

Another bad assumption is oil prices shooting up. If they do spike up, they won't stay up in the long run because production will rise accordingly. The US alone has spare capacity that is greater than the entire current Saudi production. While it's true that shale hasn't been all that profitable earlier this decade, investments in technology and experience have slashed extraction costs -see chart above-. In the $60-$70 range shale oil is quite profitable, and at $100 you will see an incredible boom acriss the Bakken and other oil basins.

Your other bad assumption is peak oil, which is a prepper notion that has been trotted around for several decades now, to no avail. Oil reserves have been going up substantially, despite production going up; there is enough today for several centuries worth, and that doesn't even include future discoveries:

[img=600x800]https://c1.staticflickr.com/9/8083/8330919336_74b5db78f3_b.jpg[/img]


I'd suggest you start eating your rice and bean reserves, rice in particular will go bad. If there is a single bug egg in your container, it will definitely spoil after a couple of years.
 

Iconoclast007

Woodpecker
Much of what uninformed folks say about shale oil and its technology is based on false assumptions braught forth by the EIA.

To meet EIA projections More than 1 MILLION shale gas and tight oil wells would need to be drilled in the top plays, at a cost of $5.7 TRILLION, and require 100% of proven reserves plus 60-73% of unproven resources. (Proven reserves have been demonstrated by drilling to be technically and economically recoverable; unproven resources are thought to be technically recoverable but have not been demonstrated to be economically viable – as such they are much less certain than proven reserves.)

One can only assume that the EIA’s optimism is based on technological improvements made over recent years. Technological advances have included longer horizontal laterals, a tripling of water and proppant injection per well, and more fracking stages. But as the data show, these improvements have only led to a faster depletion of oil and gas reserves, not a growth in the total amount of oil and gas that can be produced. Ultimately, technology can’t overcome core characteristics of shale — steep decline rates (wells decline between 70-90% in the first three years, and field declines without new drilling typically range from 20-40% per year) and variable reservoir quality, with “sweet spots” or “core areas” containing the highest quality reservoir rock typically comprising 20% or less of overall play area.

Tight oil and shale gas producers have focused their efforts and technological improvements on targeting these “sweet spots” and in many plays we are already witnessing the point of diminishing returns. But the EIA is counting on — and asking the American people to bank on — technological miracles overcoming physical limits.

A sound energy policy, however, should be based on reality.
 

Iconoclast007

Woodpecker
Peak, Net oil has allready occurred. EROEI is the most important metric to modern industrial civilization.the reason global growth is stalling is because net energy available to do work is declining. Although the financial priests are casting spells to keep things going, they cannot stop the laws of thermodynamics.

Peak total oil production is a less important metric as it doesnt take into account energy inputs.

Modern industrial civilization requires conventional oil with high thermodynmic rewards, not shale.
 

Iconoclast007

Woodpecker
This is an important chart when discussing oil price. Oil producers cannot make a profit at a price that consumers can afford. And conversely consumers cannot afford oil at a price that producers make any profit.

This is a HUGE PROBLEM and a symptom of peak, net oil.
 

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