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Sprott says 8% decline... that's a 9-year halving time

General discussions of the systemic, societal and civilisational effects of depletion.
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Unread postby 0mar » Fri 01 Jul 2005, 02:44:46

$this->bbcode_second_pass_quote('Permanently_Baffled', '')$this->bbcode_second_pass_quote('Aaron', 'L')ower US 48 oil producing states - Conventional extraction

Current major fields - MRE

See North Sea depletion rate \ Ybel depletion rate etc...


how come the US doesn't use MRE? I would of thought those evil, greedy american producers would be first up to maximise production :razz: :twisted:

PB


The US peaked in the '70s, just as MRE was becoming popular. The older fields in the US never saw those technologies. We are probably applying MRE techniques right now, but during the 30s, 40s, 50s, 60s oil was so damn plentiful and cheap that it didn't even warrent the research to recover more oil.
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"It is enough that the people know there was an election. The people who cast the votes decide nothing. The people who count the votes decide everything. "
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Unread postby JBinKC » Sun 03 Jul 2005, 04:45:08

I have been a big fan of Sprott since the crash of 2000 where he has been the best performing money manager since the internet bubble. I believe his fund groups had the best return in 2001. I know he made a fortune with PetroKazakhstan buying it under $1 among other stocks. I know I spend big time checking out what he is doing on the Canadian SEC equivalent Sedar.


Regarding this latest piece on oil I am not sure that his figures are accurate but he has been uncanningly accurate on the timing of many of his investments. Its hard to dispute him when he has been right so many times. I know he also has written a piece also on our real estate bubble and mortgage debt and that was also a scary scenario.
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Unread postby Quizzle » Mon 04 Jul 2005, 10:24:41

$this->bbcode_second_pass_quote('', 'I')n fact, the U.S. may essentially be bankrupt in a few years because of its war on terrorism and its debt-ridden economic system.


The United States has already fallen into a defict.
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Unread postby trespam » Mon 04 Jul 2005, 12:55:38

Speculation about depletion rates must take into account consumption. Long before 8% annual depletion rates are a proven fact the world economy will produce an extraordinary amount of demand destruction that will push the decline out by many years--and put many people out of work.

Answer these questions:

How many of your purchases are necessary? How many of the automobile purchases are necessary? How many vacations are necessary? How many vacations to far off places on jet planes are necessary?

Needs versus wants. Wants will decline to meet needs. I don't think 8% declines will happen. Demand will drop to produce period gluts of oil.
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Unread postby khebab » Mon 04 Jul 2005, 13:39:08

$this->bbcode_second_pass_quote('trespam', 'S')peculation about depletion rates must take into account consumption. Long before 8% annual depletion rates are a proven fact the world economy will produce an extraordinary amount of demand destruction that will push the decline out by many years--and put many people out of work.

Answer these questions:

How many of your purchases are necessary? How many of the automobile purchases are necessary? How many vacations are necessary? How many vacations to far off places on jet planes are necessary?

Needs versus wants. Wants will decline to meet needs. I don't think 8% declines will happen. Demand will drop to produce period gluts of oil.

I'm not convinced of that, I think people will keep buying the black stuff at any price! crude oil prices have almost tripled in three years but the economy is still going strong, US GDP will be probably grow +4% this year, consumer confidence is very high despite higher gas prices. Inflation seems under control. Historically, it does not seem that oil demand is influenced much by prices.

The situation may changed but so far world economies are getting used to higher oil price (at least for rich countries). Demand destruction could happen faster in poor countries.

However, the last BP energy report shows that new discoverie numbers are going flat since 2003 so depletion could show its ugly face sooner than we think.
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Unread postby trespam » Mon 04 Jul 2005, 14:03:09

$this->bbcode_second_pass_quote('khebab', '')$this->bbcode_second_pass_quote('trespam', 'S')peculation about depletion rates must take into account consumption. Long before 8% annual depletion rates are a proven fact the world economy will produce an extraordinary amount of demand destruction that will push the decline out by many years--and put many people out of work.

Answer these questions:

How many of your purchases are necessary? How many of the automobile purchases are necessary? How many vacations are necessary? How many vacations to far off places on jet planes are necessary?

Needs versus wants. Wants will decline to meet needs. I don't think 8% declines will happen. Demand will drop to produce period gluts of oil.

I'm not convinced of that, I think people will keep buying the black stuff at any price! crude oil prices have almost tripled in three years but the economy is still going strong, US GDP will be probably grow +4% this year, consumer confidence is very high despite higher gas prices. Inflation seems under control. Historically, it does not seem that oil demand is influenced much by prices.

The situation may changed but so far world economies are getting used to higher oil price (at least for rich countries). Demand destruction could happen faster in poor countries.

However, the last BP energy report shows that new discoverie numbers are going flat since 2003 so depletion could show its ugly face sooner than we think.


We've not hit depletion yet. There have been no shortages. There have been no gas lines. True depletion, once we hit it, changes the game. The end of economic growth (on a global, time averaged basis). Imbalances will unwind.

Speculation? Of course. But my gut tells me that once we hit true depletion, once world production drops by a few percentage points, recession starts, imbalances unwind, etc.

What's happened so far is not depletion, just speculation about upcoming depletion.
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Unread postby MagnoliaFan » Wed 06 Jul 2005, 00:14:05

$this->bbcode_second_pass_quote('RdSnt', 'W')hat you are missing in this discussion is the economic impact of any type of supply shortage. I would suggest that the US economy, in particular, is extremely sensitive to even one or two years of shortened supply. We aren't going to need to wait for supply to be halved before very bad things happen to the world's economies.
Also keep in mind the reaction of the power elite and the citizenry. Both are likely to panic in one form or another and that will compound the purely technical problems exponentially.


What he said.
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