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Here Comes The Meltdown Pt. 9.2-Double Dip-

Discussions about the economic and financial ramifications of PEAK OIL

Re: Here Comes The Meltdown Pt. 9.2-Double Dip-

Unread postby Strummer » Fri 17 Jan 2014, 14:17:32

$this->bbcode_second_pass_quote('Plantagenet', 'u')nlocked


Newspeak at its finest.
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Re: Here Comes The Meltdown Pt. 9.2-Double Dip-

Unread postby Plantagenet » Fri 17 Jan 2014, 14:20:26

$this->bbcode_second_pass_quote('Strummer', '')$this->bbcode_second_pass_quote('Plantagenet', 'u')nlocked


Newspeak at its finest.


????

"unlocked" is a perfectly clear and conventional word in the English language. It means to release. There is nothing of "newspeak" about the word "unlocked".
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Re: Here Comes The Meltdown Pt. 9.2-Double Dip-

Unread postby Plantagenet » Fri 17 Jan 2014, 14:44:41

$this->bbcode_second_pass_quote('pstarr', 'I')s it any wonder a creationist free-market ideologue doesn't understand the "Red Queen" effect?


Is that your deal?---I was wondering why you don't understand this concept.

OK--let me explain it then. The Red Queen concept doesn't say there aren't huge oil reserves remaining in the US, as you claim....the Red Queen concept says you can't produce the billions of barrels of oil in these shales at a high level without constant new drilling.

And so thats just what I expect----ongoing high levels of drilling in the Bakken, Eagle Ford etc. to continually drill new wells and replace the oil in rapidly depleting old oil wells. Production in the Bakken is probably near its peak now, and to maintain it theres going to be a heck of lot of new drilling in the years to come as existing wells rapidly deplete. At roughly a million barrels a day, it will take almost 20 years to deplete the ca. 7 billion barrels of oil in the Bakken, for instance.

Get it now? :)
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Re: Here Comes The Meltdown Pt. 9.2-Double Dip-

Unread postby TheAntiDoomer » Fri 17 Jan 2014, 15:03:32

Except oil productin per well in the bakken is increasing.

Image

Roughneckers are squashing the red queen like a bug.
Last edited by TheAntiDoomer on Fri 17 Jan 2014, 15:13:00, edited 1 time in total.
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Re: Here Comes The Meltdown Pt. 9.2-Double Dip-

Unread postby dolanbaker » Fri 17 Jan 2014, 15:05:46

$this->bbcode_second_pass_quote('TheAntiDoomer', 'E')xcept oil productin per well in the bakken is increasing.

$this->bbcode_second_pass_quote('', 'h')ttp://www.eia.gov/todayinenergy/images/2013.11.15/efficiency.png


Roughneckers are squashing the red queen like a bug.

But can they continue to offset the decline in the larger fields that provide over 70% of the world's oil relatively cheap.
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Re: Here Comes The Meltdown Pt. 9.2-Double Dip-

Unread postby Plantagenet » Fri 17 Jan 2014, 15:22:15

$this->bbcode_second_pass_quote('TheAntiDoomer', 'E')xcept oil productin per well in the bakken is increasing.....
Roughneckers are squashing the red queen like a bug.


Not really. The horizontal components are getting longer and longer so each new well initially produces more, but it doesn't change the fundamental character of shale oil production. The wells still deplete much more rapidly then wells in "conventional" oil fields.

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Re: Here Comes The Meltdown Pt. 9.2-Double Dip-

Unread postby Plantagenet » Fri 17 Jan 2014, 15:27:06

$this->bbcode_second_pass_quote('pstarr', 'T')hose technical 7 billion barrels are on paper, a function of market demand that disappears (along with said "reserves") above the $100 price ceiling.


EVERY oil field, including conventional oil fields, has reserves that "disappear" if the price of oil falls below the production price. Thats nothing new.

Its Economics 101 that things won't be produced if the cost of production is greater than the price that demand will allow. Even cars, computers and cells phones wouldn't be produced if market demand fell below the cost of production.

I hate to break it to you, but we are "post-peak" in terms of conventional oil production. The price of oil isn't ever going to fall below the cost of frakking new oil for very long, if at all. 8)
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Re: Here Comes The Meltdown Pt. 9.2-Double Dip-

Unread postby Plantagenet » Fri 17 Jan 2014, 15:34:24

Just imagine how I feel ---- Peter and I agree----this is a catastrophe!
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Re: Here Comes The Meltdown Pt. 9.2-Double Dip-

Unread postby Loki » Fri 17 Jan 2014, 15:48:50

$this->bbcode_second_pass_quote('copious.abundance', '
')Now that I've established beyond any reasonable doubt that the US's manufacturing is more "natural" than even Germany's due to our higher interest rates, let's see if certain doomers come by and tell us, "Gee, this is good news, I'm glad to see this happening and thank you for posting the article." :lol:

Industrial Production in U.S. Rose for Fifth Month in December
$this->bbcode_second_pass_quote('', '[')b]Industrial production rose for a fifth month in December, capping the strongest quarter since 2010 and indicating manufacturing is helping propel the U.S. economy.

The Great Recovery has now almost achieved 1940s levels of manufacturing employment:

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Re: Here Comes The Meltdown Pt. 9.2-Double Dip-

Unread postby copious.abundance » Fri 17 Jan 2014, 15:51:22

Silly doomers. :roll: I already posted something like this not long ago.

U.S. gas, oil Infrastructure spending jumps 60 percent in four years
$this->bbcode_second_pass_quote('', 'W')ASHINGTON, January 16, 2014 – Recent cold weather spells have helped to underscore the importance of America’s natural gas supply lines and ongoing infrastructure investments, API Chief Economist John Felmy told reporters on a conference call today:

“Reliable, affordable energy requires a 21st century system of transmission lines, pipelines, and energy infrastructure,” said Felmy. “The recent cold snap provided a chilling reminder of what happens when demand approaches the limit of our current ability to bring abundant U.S. supplies to the regions that need it most.

“A new study released last week by IHS shows that capital spending on oil and gas infrastructure increased by 60 percent between 2010 and 2013, thanks to America’s shale energy revolution. With the right policy choices, these investments will accelerate, providing a major boost to the economy, creating jobs, and strengthening the supply chain to consumers.

“In total, IHS anticipates up to $1.15 trillion in oil and gas infrastructure investments over the next 12 years, contributing as much as $120.58 billion to U.S. GDP; supporting as many as 1.15 million jobs; and providing an additional $27.45 billion in government revenues on average, annually between 2014 and 2025. These are private dollars – not public funds – ready to put shovels in the ground.

[...]
Stuff for doomers to contemplate:
http://peakoil.com/forums/post1190117.html#p1190117
http://peakoil.com/forums/post1193930.html#p1193930
http://peakoil.com/forums/post1206767.html#p1206767
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Re: Here Comes The Meltdown Pt. 9.2-Double Dip-

Unread postby dolanbaker » Fri 17 Jan 2014, 15:55:06

$this->bbcode_second_pass_quote('', 'U').S. gas, oil Infrastructure spending jumps 60 percent in four years

and you think that this is good news! :?
all it means at the end of the day is that the finished product will be more expensive as production hasn't increased by 60% to provide a good return on the investment.
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Re: Here Comes The Meltdown Pt. 9.2-Double Dip-

Unread postby copious.abundance » Fri 17 Jan 2014, 15:57:40

$this->bbcode_second_pass_quote('Loki', 'T')he Great Recovery has now almost achieved 1940s levels of manufacturing employment

Do we really need to re-hash this again? :roll: Or are you just repeating points you know are irrelevant because your cows are sleeping and you've got time to kill?

Let's put it this way: Do you want to work in a factory, Loki? Please answer yes or no. Thank you.

Meanwhile, here's another aspect of today's industrial production figures that my other article neglected to mention.

US INDUSTRIAL PRODUCTION RISES TO ALL-TIME HIGH
$this->bbcode_second_pass_quote('', 'D')ecember U.S. industrial production data are out.

Industrial output rose 0.3% to an all-time high in December, right in line with consensus estimates. November's advance was revised down to 1.0% from 1.1%.

Capacity utilization rose to 79.2% from November's upward-revised 79.1% reading, above consensus estimates.

Manufacturing production growth slowed to 0.4% in December from 0.6% in November, but economists predicted a slightly larger slowdown to a 0.3% growth rate.

[...]
Stuff for doomers to contemplate:
http://peakoil.com/forums/post1190117.html#p1190117
http://peakoil.com/forums/post1193930.html#p1193930
http://peakoil.com/forums/post1206767.html#p1206767
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Re: Here Comes The Meltdown Pt. 9.2-Double Dip-

Unread postby copious.abundance » Fri 17 Jan 2014, 16:01:45

$this->bbcode_second_pass_quote('dolanbaker', '')$this->bbcode_second_pass_quote('', 'U').S. gas, oil Infrastructure spending jumps 60 percent in four years

and you think that this is good news! :?
all it means at the end of the day is that the finished product will be more expensive as production hasn't increased by 60% to provide a good return on the investment.

Yes, it HAS increased by 60%. In fact, it has increased by almost exactly 60% over the past 4 years, from 5 million bpd to over 8 million bpd.

Image
LINK
Stuff for doomers to contemplate:
http://peakoil.com/forums/post1190117.html#p1190117
http://peakoil.com/forums/post1193930.html#p1193930
http://peakoil.com/forums/post1206767.html#p1206767
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Re: Here Comes The Meltdown Pt. 9.2-Double Dip-

Unread postby kublikhan » Fri 17 Jan 2014, 17:00:32

$this->bbcode_second_pass_quote('', 'U').S. gas, oil Infrastructure spending jumps 60 percent in four years
That's only infrastructure spending. IE. Pipelines, transmission lines, etc. If you look at upstream investments, larger amounts of money are being poured in for smaller gains:

$this->bbcode_second_pass_quote('', 'R')ising costs are being met only by ever smaller increases in supply. The most interesting message in this year’s World Energy Outlook from the International Energy Agency is also its most disturbing.
Over the past decade, the oil and gas industry’s upstream investments have registered an astronomical increase, but these ever higher levels of capital expenditure have yielded ever smaller increases in the global oil supply. Even these have only been made possible by record high oil prices. This should be a reality check for those now hyping a new age of global oil abundance.

the sheer scale of the increase is staggering: upstream outlays have risen more than threefold in real terms over the past 12 years, reaching nearly $700bn in 2012 compared with only $250bn in 2000 (both figures in constant 2012 dollars). All of which means the 2013 WEO has the oil industry’s upstream capex rising by nearly 180 per cent since 2000, but the global oil supply (adjusted for energy content) by only 14 per cent. The most straightforward interpretation of this data is that the economics of oil have become completely dislocated from historic norms since 2000 (and especially since 2005), with the industry investing at exponentially higher rates for increasingly small incremental yields of energy.

Looking only at the period since 2005, capital outlays have risen faster than prices (90 per cent and 75 per cent respectively), while in the past two years capex has risen by a further 20 per cent.

Without a significant technological breakthrough reversing the geological forces that have driven the unprecedented increase in upstream investment over the past decade, prices will have to rise further in real terms from here or else capex – and with it future oil production – will fall.
Toil for oil means industry sums do not add up

Capex is currently rising faster than oil prices. This cannot continue indefinitely. Either oil investments/drilling is going to have to be curtailed(and with it, oil production increases), or oil prices are going to have to rise faster. I'm guessing more of the former, at least in the short term. We are already seeing signs of Shell cutting back and various companies pulling out of risky bets in Venezuela.
The oil barrel is half-full.
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Re: Here Comes The Meltdown Pt. 9.2-Double Dip-

Unread postby copious.abundance » Fri 17 Jan 2014, 17:11:22

This thread was supposed to be about the US economy, so I thought you were referring to US oil and gas spending.

$this->bbcode_second_pass_quote('', 'T')hat's only infrastructure spending. IE. Pipelines, transmission lines, etc. If you look at upstream investments, larger amounts of money are being poured in for smaller gains:

This is not true:

Energy sector spending to shift from upstream to midstream, forecasts predict
$this->bbcode_second_pass_quote('', 'F')ollowing a 46 percent increase in exploration and production spending from 2009 to 2013, energy companies are expected to rein in upstream costs as spending increases in the midstream sector, according to recent reports.

So, we got a 60% increase in US oil production from a 46% increase in capex spending. That makes my point even better.
Stuff for doomers to contemplate:
http://peakoil.com/forums/post1190117.html#p1190117
http://peakoil.com/forums/post1193930.html#p1193930
http://peakoil.com/forums/post1206767.html#p1206767
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Re: Here Comes The Meltdown Pt. 9.2-Double Dip-

Unread postby kublikhan » Fri 17 Jan 2014, 17:51:14

$this->bbcode_second_pass_quote('copious.abundance', 'T')his is not true.
It is true. I specified I was talking about global numbers. And a 3 fold increase in spending for a 14 percent increase in supply is hardly encouraging. Even if you want to limit the data to the US it's not very encouraging. Look at the huge spike up in upstream spending since 2000:

Movement in prices and US upstream spending

and compare that to the increase in us oil production since 2000:

United States Crude Oil Production by Year
The oil barrel is half-full.
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