State Of The Oil Market

Summary US production decline is accelerating and not as resilient as initially purported. The global oil market is now undersupplied. Based on current US rig count, the global oil market will be significantly more undersupplied by 3Q17 than it was oversupplied in 2Q15 (2.2 MMbopd) when OPEC flooded the market. Production from “tight” source rock […]

So Much For Peak Oil Demand

No matter how often it happens, I never cease to be amazed when someone casually cites weak or falling demand for oil as a reason to avoid the oil and gas sector. Just last week I engaged with someone who wrote “the face of flat to lower demand…has a profound long term spoiler effect for fossil […]

Faulty Data? Why The Oil Glut Could Be Much Smaller Than Believed

The oil price rally came to a quick end in June, topping $50 per barrel but quickly falling back again. Optimism stemming from the four-month rally has vanished, and since June prices have retreated back to $45 per barrel. The main reason for the renewed sense of pessimism comes down to the glut of oil […]

Oil Heads Back To $30, And Probably Lower

Summary Financial players are now bailing out of their bullish positions in oil markets. The US dollar’s recovery means they have no need for a “store of value”. They are leaving behind mounting chaos. Prices will probably need to go well below $30/bbl to enable the market to rebalance. There was never any fundamental reason […]

Electric Cars: Massive Hype, Limited Value

Highlights Electric cars are generating an enormous amount of hype which attracts a lot of direct and subsidized investment But an optimistic estimate of the potential value of broadly deployed electric cars is less than $400/car/year This is about one third of the cost disadvantage of a future electric car with an 80 kWh battery pack costing $100/kWh […]

Gail Tverberg: Overly Simple Energy-Economy Models Give Misleading Answers

Does it make a difference if our models of energy and the economy are overly simple? I would argue that it depends on what we plan to use the models for. If all we want to do is determine approximately how many years in the future energy supplies will turn down, then a simple model […]

Peak Oil ‘Demand’ & The Duelling Narratives Of Energy Inventories

Crude oil inventories in the U.S. have fallen 23.9 million barrels since the end of April, but, as Bloomberg notes, oil bulls counting on further declines are fighting history. Over the past five years refiners’ crude demand has fallen an average of 1.2 million barrels a day from the peak in July to the low […]

Why we’re on a collision-course with crisis

Life is full of examples where folks make bad choices for noble reasons. Not every decision is a winner: sometimes you make the right call, sometimes you don’t. In 1962, Decca Records passed on signing a young new band because it thought that guitar-based groups were falling out of favor. That band was The Beatles. […]

How Much Should Food Cost?

Nothing illustrates the weirdness, injustice, and unpleasantness of the present economy more clearly than the misdirected attempts of government to reduce the price of food. All seem to accept that to reduce food prices is good and necessary, and that it represents ‘progress’. Certainly it is necessary to ensure that everyone can afford good food, […]

Michael Klare, Fossil Fuels Forever

Think of them as omens of our age.  While global temperatures have been soaring lately — May was the 13th month in a row to break all-time heat records — the National Oceanic and Atmospheric Administration just reported, more parochially, that this was the hottest June on record for the lower 48 states. (USA! USA!)  […]

EIA reports on changing US energy mix

Primary energy consumption fell slightly in 2015, as a decline in coal use exceeded increases in natural gas, petroleum and renewables use. In most cases, changes between 2014 and 2015 reflect longer-term trends in energy use. In 2015, natural gas consumption increased more than any other energy source, accounting for 29% of total primary energy […]

The Hard Truths of Globalization

Free trade is under assault—but it’s more important than ever. It’s easy to feel that ­globalization—one of the most vital business trends of the past half-century—is in retreat. Millions of ­voters in the U.S. and Britain blame it for stealing their jobs, and it was a major reason for the international civic convulsion known as […]

Drones Are Revolutionizing Agriculture

Unmanned aerial vehicles (UAVs)—better known as drones—have been used commercially since the early 1980s. Today, however, practical applications for drones are expanding faster than ever in a variety of industries, thanks to robust investments and the relaxing of some regulations governing their use. Responding to the rapidly evolving technology, companies are creating new business and […]

Those Who Want to Boost the Global Economy Should Have More Kids

The Brexit will almost surely hurt economic growth across the world, but the sharp pain of the U.K.’s decision to leave the European Union is small compared with the economic cancer of slowing productivity growth. But that isn’t even the biggest challenge the global economy faces. There is an even bigger problem that will hurt economic […]

The Shopping Mall Death Spiral

Did the people who built this think it would fail in less than a generation? The answer might surprise you. The shopping mall is the epitome of America’s Suburban Experiment. From a local government standpoint, it was the golden chalice of development, a winner-take-all prize in our race to the bottom. Whoever got the mall […]

Oil Prices Might Not Rebound Until 2019

It’s a safe bet that investors are getting increasingly tired of all the conflicting forecasts about oil and gas prices. Some argue that oil is heading back to $20 thanks to the continuing excess supply. Others claim that the excess is overestimated and crude is well on its way to reach $80 or more by […]

Prepare for Primitive

  It is time to become organized, prepared, focused and self-sufficient. You can do it. If you don’t take control of your future now, there are dark and powerful forces that are prepared to shape that future for you. Indeed, there isn’t a whole lot that most of us can do individually to stop what […]

Goldman Sachs sees ‘hidden demand’ for oil in China

China’s continued economic expansion, recent stimulus measures and still-growing consumption for some oil products appears to have upped its oil demand, Goldman Sachs said on Monday. “Conventional demand measure understates consumption as it misses processing gains and trade data such as LPG and mixed aromatics,” Goldman Sachs analysts said in a note to clients. The […]

Is Oil Going Back Under $40?

In recent weeks the oil market has seen negative sentiment drive prices lower based on expectations of heightened output (some of which have been realized) from recent problem areas including Canada, Nigeria and Libya while refining margins have collapsed and Brexit has added to macro/demand concerns. Over the last two months speculators have trimmed net […]

The Fuel That May Halt The Electric Car Revolution

Electric cars are often touted as the nail in the coffin for gasoline-powered vehicles. However, there’s another fuel revolution in the developing world, which is changing the economics of electric cars. Whether it’s CNG, LNG, autogas, or propane, gaseous-hydrocarbon fuels turn conventional cars into dual-fuel vehicles, and limit the uptake of electric cars in these […]

Oil Prices Lower Forever? Hard Times In A Failing Global Economy

Two years into the global oil-price collapse, it seems unlikely that prices will return to sustained levels above $70 per barrel any time soon or perhaps, ever. That is because the global economy is exhausted. The current oil-price rally is over, as I predicted several months ago, and prices are heading toward $40 per barrel. Oil has been re-valued to affordable levels based […]

The Rise of the Supermarkets

The origins of the supermarket are steeped in social purpose. They emerged initially as co-operative societies formed among the working classes as a means of securing a supply of good quality food for their members. With obvious connections to, and sharing similarities with the ‘seditious’ benefit clubs of the eighteen century, the first co-operatives date […]

Is peak oil demand in sight?

Our latest research suggests lower long-term growth in demand for oil than previously forecast. This warrants a fresh, critical look at energy investments. Energy outlook: Key insights Our business-as-usual case integrates the latest McKinsey view on economic-growth fundamentals and granular sector and regional insights. Six key points have emerged: Growth in global energy demand will […]

Some Reflections On The Twilight Of The Oil Age

This three-part post was inspired by Ugo Bardi’s recent post concerning “Will Renewables Ever ReplaceFossils?” and recent discussions within Ugo’s discussion group on how is it that “Economists still don’t get it”?  It integrates also numerous discussion and exchanges I have had with colleagues and business partners over the last three years. Introduction Since at […]

Half of all US food produce is thrown away

Americans throw away almost as much food as they eat because of a “cult of perfection”, deepening hunger and poverty, and inflicting a heavy toll on the environment. Vast quantities of fresh produce grown in the US are left in the field to rot, fed to livestock or hauled directly from the field to landfill, […]

China to Hit Peak Energy Consumption by 2035

China is expected to reach its highest point of energy consumption by 2035, while its reliance on fossil fuels is expected to drop, according to a report cited by the state media on Tuesday. The study by the report by the Economics & Technology Research Institute of China National Petroleum Corporation (CNPC) found that the […]

Oil “Death Spiral” Emerges

One week ago, we looked at an epic build up of gasoline inventories on the East Coast, also known as PADD1, which had slammed the crack spread to record lows for this time of the year, and asked if “This What Finally Drags Crude Oil Lower.” We were referring to the collapsing Crack Spreads, which […]

Food After Fossil Fuels

Event agenda The transition to 100% renewable energy raises some profound questions for the future of our food system. While its slice of the overall energy pie may seem relatively low, the modern American food system is figuratively awash in fossil fuels. On average, roughly 12 calories of (mostly fossil fuel) energy go into producing […]

Is the Era of Globalization Over?

Globalization has propelled the global economy since World War II. In that time, countries prospered and millions were lifted out of poverty. But income inequality has grown and the world is in its worst period of economic stagnation since the Great Depression. Bloomberg TV Canada’s Rudyard Griffiths speaks to economist, author and CIGI senior fellow […]

Forget peak oil – now its peak energy

United States is leading a decline in energy use amongst advanced economies – with use down 2% last year despite GDP growth. The previous year (2013-2014) EU countries saw a 10% drop in energy use – partly due to economic chaos in Greece, Spain and Italy. Th uneexpected fall is due to greater efficiency, new […]

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