Peak Oil 101

[K-Dog]

Inflation will make the price higher than 70 $ a barrel. 

The addict pays what he/she has to pay.

Oil price models should factor in the price of oil in a feedback look.  I suspect they do not.

But I am too busy creating the Dynamo project to find out.  My so far, private intellectual dark web.  Go to the page and click on the 'book' to see where I have been busy.  The irony is this is the exact kind of problem to use Dynamo for.  Adding the original Manual makes the project useful.  Not by itself, but it gives the background and history.  The point is a short learning curve and the manual helps.

[RE]

Inflation will make the price higher than 70 $ a barrel. 

Eventually perhaps, but in this cycle if inflation was going to drive it above the $80-84 range it's been trading at for the last year, it would have already done so.  In fact globally speaking we're moving into a deflationary cycle already.  China is already battling deflation:

In China, Deflation Tightens Its Grip

https://thehill.com/opinion/finance/4786075-china-economic-crisis-third-plenum/

https://asiatimes.com/2024/07/china-cuts-key-rate-amid-worst-deflation-since-99/

Today, Oil dropped below the $80 benchmark again, dropping to $77/bl.  This is before the real meat of recession hits here, which looks like around Nov to me when they'll actually cop to it, and things will get seriously worse as the bubble of CRE refi's come due in 2025-26.  So, IMHO, a price target in the $65 range next year has high confidence on my part.  If I was still into  the game, I'd short with that target price.

We are of course addicted, but we're also addicted to debt to pay for it and the creditors are insolvent, so credit is getting tighter.  There will be bankruptcies, biznesses and factries will close, unemployment will rise.  UE people buy less gas and everything else.  Falling demand causes falling prices.Addicts who are broke either steal or go into withdrawal.  It's hard to steal gas, so I suspect withdrawal to be the general outcome.

RE

[K-Dog]

The US shale revolution is on track to produce twenty-one million barrels a day.  This is one-fifth of the worlds production.

The speaker is all about expanding hydrocarbon consumption and increasing return for investors.  He affects an interest in nuclear to make the exploitation of everyone else and profit for he and his tribe more palatable.

He warns that environmental concerns are a serious concern to a stable revenue stream for investors but with ENOUGH TORT they can be overcome.

1:01:42 The word 'tort' was changed in the closed caption to 'talk' so if a transcript is generated there will not be an issue.  There was no way the software could have mistaken 'tort' for 'talk'.

It was a fix.

Motherfucker gave himself away.

* I listened to all of it.  If you take the speaker at his word he understands that capitalism will price oil $1.00 above the price that would cause a recession.  Priced at this level oil produces the most profit.  I hesitate to go down this path as I want less oil used.  I advocate for Carbon Fee and Dividend.  But by the speakers own words, capitalism will not price oil at a socially correct level.  And I'll say, if the speaker is really concerned about long term stability to develop the complex infrastructure needed to get to the new supplies he claims.  Nationalization of the resource is the way to go.  Worldwide.

If feel like playing the ACP commercial again but I'll spare you.  I'll just watch it myself this time.  After watching all of this video I need to.

[RE]

If you take the speaker at his word he understands that capitalism will price oil $1.00 above the price that would cause a recession.  Priced at this level oil produces the most profit.

Higher oil prices cause recessions, they reduce profit margins and increase costs to the end consumer.  Oil sellers respond to recessions by lowering their prices as much as they can and still make a profit in the attempt tp keep selling the oil.  If their production costs are above what the oil is selling for, they have to shut down production.

This is in fact exactly what is happening now, as I predicted.  Oil has been dropping from the $80 target price since the beginning of July, and dropped to a fresh low of $72 today.  If they get down to the $60s, the expensive tight oil plays aren't profitable.  As a result, they are already shutting down production.

U.S. Oil and Gas Drilling Activity Slows Amidst Price Plunge

The recession signs are all flashing RED now and we''ll almost certainly be in full blown recession by the end of the year.  Main question is whether they can keep it papered over until after the election.

RE

[K-Dog]

If you take the speaker at his word he understands that capitalism will price oil $1.00 above the price that would cause a recession.  Priced at this level oil produces the most profit.

U.S. Oil and Gas Drilling Activity Slows Amidst Price Plunge

The recession signs are all flashing RED now and we''ll almost certainly be in full blown recession by the end of the year.  Main question is whether they can keep it papered over until after the election.

RE

Sharp slowdown in US job growth boosts unemployment rate to 4.3%  =>  Nonfarm payrolls increased by 114,000 jobs last month,  well below the 215,000 jobs per month added over the last 12 months, and the at least 200,000 that economists say are needed to keep up with growth in the population, accounting for the recent surge in immigration.

At the end of June, U.S. Citizenship and Immigration Services (USCIS) notified Temporary Protected Status (TPS) beneficiaries from El Salvador, Honduras, Nepal, Nicaragua, and Sudan that the validity period for their work permits (employment authorization documents, or EADs) would be automatically extended through March 9, 2025. USCIS also extended through August 3, 2025, the validity period of EADs issued to Haitian TPS beneficiaries. These automatic extensions follow the extension by U.S. Department of Homeland Security (DHS) of the re-registration periods of the TPS designations for these same countries from 60 days to the full 18-month designation period at the end of 2023.

Beneficiaries are normally required to re-register for TPS status for the most recent designation extension for each designated country. The Immigration and Nationality Act (INA), however, only permits the Secretary of Homeland Security to designate a country for TPS for a period no longer than 18 months.

USCIS officials revealed at a recent stakeholder engagement that DHS extended the validity of their documents in part because of a low rate of re-registrations from these countries. Almost 50 percent of the eligible El Salvador, Honduras, Nepal, Nicaragua, and Sudan TPS beneficiaries have failed to re-register for TPS for their current respective designation periods.

Eligible applicants may see no reason to pay the fees associated with re-registration given the current administration's nearly non-existent interior enforcement policies.

Welcome to the Wild Wild West.

• In March 2021, President Joe Biden tasked Vice President Kamala Harris with working alongside officials in Guatemala, El Salvador and Honduras to address the issues driving people to leave those countries and come to the United States.
• The Biden-Harris administration said it would focus on five key issues: economic insecurity, corruption, human rights, criminal gang violence and gender-based violence.
• Border security and management is the Homeland Security secretary's responsibility.

* I put only the most ridiculous in bold.  If you immigrate illegally to become part of the American reserve army of labor make sure there is no gender based violence in your caravan.  Armed robbers should also shoot men and women in equal numbers.

Unemployment is up by two tenths of a percent last month.  The border is wide open and you can put the two words 'incompetent' and 'fascist' together any way you wish to describe all our election choices.  Collapse is in the wind.

It is time to walk away from Omelas and find a better way.

Keep it papered over until after the election.

I doubt it, but the snow job has been effective so far so we shall see.

* Recent headlines: 

Two Jordanian nationals in ICE custody over breach at Quantico Marine base: Possible 'ISIS dry run'

Multiple sources saying the truck's occupants had recently crossed the southern border into the US and one occupant was on the US government's terrorist watch list.  Another source I found says one of this dynamic duo was on an expired student visa, and the other came in using Mr. Toads wild ride across the Mexican Border.

Chinese national detained after breaking onto Marine base in California

And who are we to know?  When 'it' happens it could be another false flag.

https://cis.org/National-Security-Vetting-Failures-Database

[TDoS]

Stochastic modeling.  Only people firmly grounded in a materialist perspective should play with such sharp objects.  They know a model is only a rhyme. 

Indeed. Began this type of modeling in the last century. Quantifying uncertainty in complex systems is a handy skillset in my professional life.

[TDoS]

The US shale revolution is on track to produce twenty-one million barrels a day.  This is one-fifth of the worlds production.

No it isn't. The 21 million barrel nonsense.

[RE]

The company argues a rapid decline in production, especially from unconventional sources like shale, could lead to severe energy shortages and price hikes.

As predicted, the low prices are making the fracked oil uneconomic, so the oil companies are trying to jawbone up more investment.  Sadly, it's Econ 101 here, and if the price goes up, you get recession and demand drops off.

f course it's true that electric vehicles aren't really cutting into demand for FFs, and as long as oil is cheap enough, people will buy it. But you can't bleed money from stone, and globally the Konsumers are tapped our and in debt.

At some point in the not too distant future, Rock will meet Hard Place.  Stay Tuned.

Exxon Joins OPEC in Warning of Looming Oil Supply Crisis

https://oilprice.com/Energy/Energy-General/Exxon-Joins-OPEC-in-Warning-of-Looming-Oil-Supply-Crisis.html

RE

[K-Dog]

The company argues a rapid decline in production, especially from unconventional sources like shale, could lead to severe energy shortages and price hikes.

As predicted, the low prices are making the fracked oil uneconomic, so the oil companies are trying to jawbone up more investment.  Sadly, it's Econ 101 here, and if the price goes up, you get recession and demand drops off.

f course it's true that electric vehicles aren't really cutting into demand for FFs, and as long as oil is cheap enough, people will buy it. But you can't bleed money from stone, and globally the Konsumers are tapped our and in debt.

At some point in the not too distant future, Rock will meet Hard Place.  Stay Tuned.

Exxon Joins OPEC in Warning of Looming Oil Supply Crisis

https://oilprice.com/Energy/Energy-General/Exxon-Joins-OPEC-in-Warning-of-Looming-Oil-Supply-Crisis.html

RE

According to the supermajor, global oil production is facing a natural decline at a rate of some 15% annually over the next 25 years. For context, the IEA sees the rate of natural decline at 8% annually. Exxon points out, however, that the faster decline rate is a result of the shift towards shale and other unconventional oil production, where depletion happens faster than it does in conventional formations.

Our troll will likely say Exxon does not know anything about oil.  How many times has he ignored my demands that he acknowledge that light sweet crude is not the same product as fracked oil.  More times than I can count.  His reason is the same as other deniers who refuse to acknowledge that peak oil happened.  By claiming all oil products are the same they can fudge numbers.

At 15% a year, the only vehicles who will still have gas in a decade are the vans that pick up bodies.  In a decade oil production will be one fifth of the current rate if 15% is true.

For Americans 15% a year is game over.

[TDoS]

The company argues a rapid decline in production, especially from unconventional sources like shale, could lead to severe energy shortages and price hikes.

As predicted, the low prices are making the fracked oil uneconomic, so the oil companies are trying to jawbone up more investment.

LTO exploded in the US starting in 2010 or so... at $75/bbl wti through $100/bbl in 2014. Then prices collapsed. And then the 2nd wave of LTO kicked off in the Permian in particular post 2015 and that was all an explosion at <$70/bbl.

So...as $50/bbl doesn't make LTO uneconomic, and some of the only available research on the topic sure seems to indicate that while with more price there is more oil, there is no sharp break in activity at one price or another, matter of fact it is a typical economic scale...less price certainly should generate less supply, as higher price generates more.

There is no on/off switch, it is a graduated scale of more, or less, economic.

At some point in the not too distant future, Rock will meet Hard Place.  Stay Tuned.

Been tuned in since alt.newsgroups and ROE...."not too distant" has been going on for decades now...we can all continue to hope and pray that "not too distant" isn't another 20 years or all us old farts might miss the excitement!

[TDoS]

Our troll will likely say Exxon does not know anything about oil. 

Why would anyone who knows Ken Hood and paid close attentin to everything he wrote say that?

He is a geo genius. We did a Hedberg conference in Vail 2005 and had similar methods on how to figure out shales, although at the time I was more interested in geostats. He asked for a team of mine to review his newest geomethods he was teaching his geologists on shale resources a couple years later, in a Canadian CSPG meeting he already was finishing up this paper and mentioned it, it was sheer brilliance and a decade ahead ahead of the method the EIA created AFTER collecting a bunch of data and doing it the eays way.

Please...he as the head of some of their best geoscience work knows what he is doing.

As for the business types? Who knows.

How many times has he ignored my demands that he acknowledge that light sweet crude is not the same product as fracked oil.

How many times have I pointed out that light sweet crude comes from wells that are fracked, and those that aren't? Any geoscience lab that does this work can confirm it in minutes.

Remember, personal experience is really valuable here, you said so yourself. You tell me how many oil samples you've tested over the years, fracked wells, other kinds of completed wells, in-situ from coring runs, provided by refineries or pipeline drips, and if I haven't done or supervised 5 orders of magnitude more, I promise not to use my decades of personal experience, lab experience, production experience, drilling experience or industry knowledge against your lack of any ever again.

[RE]

Looks like the traders are siding with the EIA and betting against the House of Saud predicting an Oil Glut and low. low prices for gas every day at your neighborhood convenience store.  Perhaps they'll escalate  the wars to boost prices.

https://oilprice.com/Latest-Energy-News/World-News/Oil-Net-Short-For-First-Time-in-History.html

Oil Net Short For First Time in History

RE

[TDoS]

Looks like the traders are siding with the EIA and betting against the House of Saud predicting an Oil Glut and low. low prices for gas every day at your neighborhood convenience store.  Perhaps they'll escalate  the wars to boost prices.

https://oilprice.com/Latest-Energy-News/World-News/Oil-Net-Short-For-First-Time-in-History.html

Oil Net Short For First Time in History

RE

So finally peak oil 6 years ago FINALLY has generated some good, if counter-intuitive results? Doomers should be cheering on the burning of fossil fuels at yet higher volumes and lower prices because it will accelerate the climate change which might finally cause doomer wet dreams! Climate wet dreams though, as opposed to political, oil or societal based dieoff though, climate change not being particularly sexy in the  sometime between now and the end of the current century.

[RE]

So finally peak oil 6 years ago FINALLY has generated some good

At least you acknowledge we hit Peak Oil 6 years ago. 

RE

[TDoS]

At least you acknowledge we hit Peak Oil 6 years ago. 
RE

Absolutely. There is no disputing that 2018 is the most recent global peak oil. #6 of this century, claimed or occurred. Only the rest of the price/demand relationship can dictate if it holds though.

Currently a lack of increasing demand seems to have brought this particular boogey man to heel for 6 years. Quite a surprise to some of those claimed industry experts if they are still alive I imagine.

The scenario I foresee is that market-based panic will, within a few days, drive prices up skyward. And as supplies can no longer slake daily world demand of over 80 million barrels a day, the market will become paralyzed at prices too high for the wheels of commerce and even daily living in "advanced" societies. There may be an event that appears to trigger this final energy crash, but the overall cause will be the huge consumption on a finite planet.

EIA link:
https://www.eia.gov/international/data/world/petroleum-and-other-liquids/annual-petroleum-and-other-liquids-production?pd=5&p=0000000000000000000000000000000000vg&u=0&f=A&v=mapbubble&a=-&i=none&vo=value&&t=C&g=00000000000000000000000000000000000000000000000001&l=249-ruvvvvvfvtvnvv1vrvvvvfvvvvvvfvvvou20evvvvvvvvvvnvvvs0008&s=94694400000&e=1704067200000

An interesting aside is that, some 19 years later, the world is still making about  81 mmbbl/d (according to the 2023 annual number from the EIA). So if you wanted to discuss a peak, the one in 2018 (about 82.9 mmbbl/d) in the context of the 2005 vintage hysteria, it seems like you could call it all 20 years of plateau, +/-, if someone wanted to.

In either case, its a good thing that the world hasn't been needing much oil because the environment will only be a better place as we continue to grow population, and obvious now need much less oil per person!