Peak Oil: Reality Checks From The Desert

18 Comments on "Peak Oil: Reality Checks From The Desert"

Nony on Fri, 25th Jul 2014 10:17 pm 



Someone (Rock?) said refiners weren’t investing in the shale boom.

Interesting that today storis come out that Exxon is considering adding 400,000 of fresh refining capacity (new distillation train, not a debottleneck) to Beumont. Upgraded refinery will be 750,000 bpd capacity and largest in the country.

Also, a small refinery going in in ND and several small shuttered plants in the Rocky Mountains are being reopened.

Pipeline prjects are going in all over the country too. Peope with $$ showing they believe.

dolanbaker on Sat, 26th Jul 2014 5:26 am 



That video is about three years old!

Nony on Sat, 26th Jul 2014 6:05 am 



Lot of old stuff. Peak oil is a dying meme.

Davy on Sat, 26th Jul 2014 6:48 am 



Noo, Noo, PO is alive and well and you know why Noo becuase the Cornucopians are struggling to disprove a complex and ever expanding phenomenon. If it was so easy to disprove why the media blitz? We see constant geologic issues. Then the above ground geopolitical messes which there is an ever increasing list. Capex compression and the financial repression suffering diminishing returns is certain to cap production expansion. Then of course the Short meme here on this forum that basically questions the thermodynamic economic viability of current unconventional production. Finally the CC aspect of carbon reduction calling into question supply increases through regulation. Noo how do you expect production to grow with those predicaments?

Nony on Sat, 26th Jul 2014 7:42 am 



Those are all good points. I think we are sort of in a plateau. The cornies were wrong, the peakers were wrong. Squishy centrists like the Rock were right.

On the demand side, emerging markets growth probably still very powerful (the World is urbanizing) and more significant than First World enviro restrictions.

On the supply side, shale oil will keep us at 100 (which I agree SUCKS, but at least it’s better than 150-200.

The whole PO thing really is a dying meme though. The chart showing how Google searches peaked and died (while fracking took off). TOD traffic dying and then TOD shutting down.

And then this site…it’s fun and I even give the moderators kudos for not banning me. But this site really is running a lot of reruns and ignoring meaty content like the RBN daily energy blog posts.

JuanP on Sat, 26th Jul 2014 8:06 am 



Nony, I agree that we are kind of in a plateau, and that my PO doomer proyections of 10 years ago turned out to be as pessimistic as my CC ones optimistic, and almost as bad as the cornies, as you call them. I like cornies, I’m going to borrow that word
As far as Peak Oil being dead, I disagree. How much longer can shale oil production keep making up for yearly global oil production declines from producing fields? I don’t think this will last another 5 years, but I’ll eat my words with pleasure if time proves me wrong, cause I want to be wrong.

Nony on Sat, 26th Jul 2014 8:23 am 



“peak oil” is not dead. “Peak Oil” is.

Depletion of resource remains an issue. The “we are smarter than the sheeple” Internet Community is in the rear view mirror.

Davy on Sat, 26th Jul 2014 8:27 am 



Cornies!!!Love it Juan!

dolanbaker on Sat, 26th Jul 2014 9:36 am 



[“peak oil” is not dead. “Peak Oil” is. ]
Only to those who mixed up “maximum production possible” with “running out, we’re doomed”.

The slowdown in production along with the higher prices have already killed off the previous “infinite growth” economic model, now growth will be at the expense of wasteful consumption.

This trend can be seen all over the developed world, just look at the reduction in miles travelled and the trend to smaller cars for starters.

rockman on Sat, 26th Jul 2014 9:57 am 



Juan – “…and that my PO doomer proyections of 10 years ago turned out to be as pessimistic…”. So do I take that to mean you view the price of oil increasing 300% as an optimistic development? That the world’s wealth transfer for oil increasing from around $1.2 TRILLION per year to over $3 TRILLION per year an optimistic projection?

We’ve chatted a bit and I think you do clearly understand the dynamics involved. But it seems you’ve gotten drawn into the classic cornie propaganda approach of focusing on the numbers of bbls coming out of the ground. You and 99.8% of the world’s population don’t care about the production stats whatever they might be: y’all care about the cost of energy. You might have projected pessimistically about how many bbls would be coming out of the ground today. But any pessimism you might have had about the economic conditions in the future as a result of the POD has proven to be rather correct IMHO.

Davy on Sat, 26th Jul 2014 10:09 am 



Rock, don’t forget to take credit for POD! Great term both juan and I use regularly.

JuanP on Sat, 26th Jul 2014 10:28 am 



Rock, No, I failed to foresee how higher prices would bring shale oil production to where it is today, so I thought by now we would have less production, higher prices, and a deeper recession.

JuanP on Sat, 26th Jul 2014 11:04 am 



Higher prices and a deeper recession being possible at the same time because of limits to supply raising prices to squish increasing or stable demand.

JuanP on Sat, 26th Jul 2014 11:15 am 



And, being the economic system so dependent on growth for its survival, a stable economy implies a financial system crash as a consequence, in time. So, I expected the global financial system to be undergoing a major reset through these years with very bad consequences for most of us. I fear the financial system is the weak link in the chain. This fear could be a consequence of my ignorace of economic science, a subject I discriminated against until 2006-7, when I realized something was terribly wrong with the Real Estate market in Miami, and I started learning macroeconomics.

Northwest Resident on Sat, 26th Jul 2014 11:49 am 



JuanP — I think the economy is every bit as bad or even worse than you might have projected. What you didn’t project, and couldn’t have projected, was the extent to which TPTB would subvert and pervert all the financial and economic norms to create the illusion of a still-healthy (more or less) economy. These days, it is all about image and illusion. On the surface our economy looks to be holding together fairly well, but peel back that thin veneer and what we see is a rotten interior with worms and bugs and vermin of all type chewing and gnawing and crawling around. That’s a pretty good analogy I think for the economy and the financial “markets” these days. Rotten to the core, totally detached from what used to be fairly solid fundamentals. Everybody is surprised at how “they” managed to keep this economy going, but they didn’t do it by sticking with the fundamentals, they did it with cheap and dirty and fraudulent tricks that we could never have imagined until we saw it with our own eyes. None of it is intended to last long term — it is all short term mitigation meant to buy a little more time, and it will implode upon itself at some point in time not too far out. It just can’t possibly hold together, or even be corrected. Our global economy is doomed, the end is certain, just give it a little while to eat itself up.

JuanP on Sat, 26th Jul 2014 12:44 pm 



NWR, You are correct. I didn’t foresee the reaction by TPTB. I think it was a mistake to bail out the TBTF financial institutions, they should have never been allowed to become what they were and are to begin with. Merging deposits and loans with investments was a mistake, IMO.
I am still blown away when I think of what is going on regarding QE, ZIRP, the bailouts, derivatives, the stock market, the deficits, the debts, etc.
At some point, something has to give.

JuanP on Sat, 26th Jul 2014 12:53 pm 



And I left out Fannie Mae and Freddie Mac buying around 90% of conventional mortgages in the secondary market. The way I see it is the US government is financing more than half of all home purchases right now, adjusted for real inflation, home prices have nowhere to go but down in most large urban areas of the USA, IMO. Don’t remember the exact numbers.

Northwest Resident on Sat, 26th Jul 2014 1:10 pm 



JuanP — I hear what you’re saying. My guess is that the financial and industrial world built up a head of steam and got a point where it was all party all the time. Then, one day, they realized OOPS!, we don’t have enough fuel to keep this party train going and we have to take drastic measure right now — or else. Everything I’ve seen since 2008 at least on the part of TPTB is, from my point of view, TPTB in major “OOPS MODE”, desperately trying to keep BAU from falling apart while they make their preparations. Well, that’s how I see it anyway.