[MonteQuest]

$this->bbcode_second_pass_quote('Pops', 'T')he only thing sure about the period before peak is that on average production will not be declining, mostly. Demand might be big or small, rising or falling; price might be high or low, rising or falling; surplus might be large or small, rising or falling; production itself could be going in any or no particular direction... until it does.

[Pops]

And that uncertainty and volatility creates enormous economic instability. Oil doesn't have to peak to bring down the house of cards, it just has to threaten to.[/quote]
I read a few economic headlines just for fun, I've seen none that say oil volatility is the cause of anything except oil biz volatility.

The current headline seems to be that China's huge, managed, opaque, artificial expansion is more an implosion than a deflation. A PO story for sure, Asian demand has been a driver of price since what, the 90's? China ran with the ball as long as it could and is now learning the joys of capitalistic overinvestment.

[MonteQuest]

$this->bbcode_second_pass_quote('Pops', 'I') read a few economic headlines just for fun, I've seen none that say oil volatility is the cause of anything except oil biz volatility.

[ennui2]

$this->bbcode_second_pass_quote('MonteQuest', 'A')s long as you have a monetary system based upon infinite growth in a finite world, the volatility of the energy supply that drives that growth impedes that growth.

[MonteQuest]

$this->bbcode_second_pass_quote('ennui2', 'B')ubbles don't need limits-to-growth factors to pop.

[Pops]

Have to agree with ennui, the trite old chestnuts are less convincing than they once were...
ACK!
ennui sets in!

LOL
Back in the day we had very little actual factual stuff to point to aside from whatever Campbell or Simmons chose to include in whatever prediction. The bromide-bumper-stickers were more important. We still don't have real transparency but we do have available a whole lot more actual factual information to point to in all aspects.

So to get back to the OP lets look at some of the things we thought would be affected by high oil prices. I looked for pictures post recession because you'd expect them to be rising, if they don't rise you might think it was oil price...








To my surprise those few seem to show little effect of the highest average oil prices ever
.

[MonteQuest]

$this->bbcode_second_pass_quote('Pops', 'H')ave to agree with ennui, the trite old chestnuts are less convincing than they once were...

[MonteQuest]

$this->bbcode_second_pass_quote('Pops', 'T')o my surprise those few seem to show little effect of the highest average oil prices ever
.

[Pops]

$this->bbcode_second_pass_quote('MonteQuest', '')$this->bbcode_second_pass_quote('Pops', 'H')ave to agree with ennui, the trite old chestnuts are less convincing than they once were...

[MonteQuest]

$this->bbcode_second_pass_quote('Pops', 'P')retty sure you aren't calling me a denier.

[Pops]

$this->bbcode_second_pass_quote('MonteQuest', '')$this->bbcode_second_pass_quote('Pops', 'T')o my surprise those few seem to show little effect of the highest average oil prices ever
.

[MonteQuest]

$this->bbcode_second_pass_quote('Pops', 'E')ven so, GDP accelerated...Of course debt grew as well, but that makes my point: shoehorning headlines into simplistic bumper sticker slogans describes neither current or future conditions.

[ralfy]

Probably connected to oil production per capita:

http://cassandralegacy.blogspot.com/201 ... k-oil.html

[ennui2]

$this->bbcode_second_pass_quote('MonteQuest', '
')And that uncertainty and volatility creates enormous economic instability. Oil doesn't have to peak to bring down the house of cards, it just has to threaten to.

[onlooker]

The problem Ennui, is you want their to be some kind of epiphany that this is the moment of Doom. Their is no one moment. What their is an ongoing process. You say their that BAU is continuing like before. That is simply wrong. We have never lent this amount of money in the throughput of the world economy. We have deviated into LTO- unconventional fossil fuels because we have peaked in terms of the easy to get oil. Oil prices has dropped considerably, QE and little or no interest rates have been the norm for awhile now and yet the economy has not measurably improved. You do not want to see signs and yet they are all around of a strained sputtering economy. Mcdonalds doing poorly, consumers maxed out, Caterpillar Co. doing also poorly - this company is a canary in the coal mine as they are involved in the heavy machinery for mining and building. China also feeling tremors in their economy. Again, their is no moment. Their is a downward spiral and you have failed to see it or you do not want to see it.

[MonteQuest]

$this->bbcode_second_pass_quote('ennui2', 'H')ere's the thing. Step back and actually re-read what you just typed. Now disregard that it's 2015. Now go back to the fall of 2008. People were making the same exact house-of-cards argument then. Same deal with the dot-com crash. Instability is just instability. It's not doom and BAU just rights itself and continues onward after a while. Only in a place like this do people try to portray downward trends as the start of TEOTWAWKI.

[ennui2]

I'd say if we were to have a crash, it would be precipitated by the bubble bursting in tech. It's really the tech sector that is making most of the money these days, and much of the valuation is just as phantom as it was back in the dot com boom. The difference is that tech companies are avoiding IPOs. It's mostly private VC money funding these unicorns. This will limit the collateral damage if they collapse.

People have been arguing about federal deficit Armageddon for ages and nobody really knows what the endgame is on that, and as long as other countries like Greece are defaulting, the US looks like a pretty safe bet.

As for fracking, there's more than enough evidence to suggest that there's enough recoverable oil left to fuel a 2nd wave of fracking after the frackers get wiped out and prices creep back to where it's more profitable to drill again.

[MonteQuest]

I read back through my posts in this thread and found this one statement:

"But this volatility just tells me PO is here, now. Now, the existing peak may well be breached many times yet to come, but the economic effects of PO are here now, today, not some date in the future."

That's hardly saying this is the "big one." The "big one" will come when we see PO in the rear view mirror and we have a terminal decline of oil. But, PO will, and is, having it's effect on everything right now.

[MonteQuest]

$this->bbcode_second_pass_quote('ennui2', ' ')As for fracking, there's more than enough evidence to suggest that there's enough recoverable oil left to fuel a 2nd wave of fracking after the frackers get wiped out and prices creep back to where it's more profitable to drill again.

[sparky]

.
I do believe things are going to get even more interesting
certainly no Zombies hordes or Argentinian scenario ( banks closing their doors and pulling the plug on the ATMs )
the existing system is , on the whole , pretty resilient .
but please consider , at ~30 bucks a barrel there is no exploration or development
while natural depletion is running at , what , 4% ? 5% ?
it is well known in the industry that the old super-giants are slow to deplete while every new resources is depleting faster
in fact , the newest , the fastest !!???
meanwhile development of those new resources is costing more , and more and then some more !
so with not much exploration and development which stretch the financial bottom line , what is to be done ?

Easy , industrial cannibalism !
as Rockman pointed out (among others) the only smart thing to do is to buy out distressed companies with some existing production or reserves .
It certainly will not put more oil on the market but that's not what oil companies are about ,
they are not charities , their whole purpose is to make a buck to their shareholders

So , to resume , depletion of the old cheap fields will be compounded by the depletion of the rest
the newest the fastest , one could conceive it could all come together in what could be humorously called
" Peak Depletion " or the greatest decrease in the smallest time !
of course there is still Iran and Irak , to compensate .

I don't know how that would pan out but it is interesting to note that Washington is getting all soft and cuddly toward Tehran while being pretty lavish in its support toward Baghdad .
but then again maybe I'm dreaming ?