[sjn]

Funny how agreed upon definitions are unimportant unless they support your argument. pstarr is talking about a shortage at a given price/demand level, absolute shortages are neither necessary, or indeed possible with a functional market, but local market failure can occur. I think that's all implicitly obvious. Historically, and empirically, the dynamic of supply side constraints appears to have an economic effect of triggering recession.

[ennui2]

$this->bbcode_second_pass_quote('AdamB', 't')he idea that the US recession of July 1990 to march 1991 was caused by the price of oil changing from $24.53 for the year 1990 to $21.54 in 1991 is wildly funny. EIA annual data if you have any interest in the actual information, rather than just repeating something that isn't true.

[AdamB]

$this->bbcode_second_pass_quote('sjn', 'F')unny how agreed upon definitions are unimportant unless they support your argument. pstarr is talking about a shortage at a given price/demand level, absolute shortages are neither necessary, or indeed possible with a functional market, but local market failure can occur. I think that's all implicitly obvious. Historically, and empirically, the dynamic of supply side constraints appears to have an economic effect of triggering recession.

[ennui2]

Pstarr doesn't come up with theories as much as he parrots the party line as established elsewhere. So I don't think he's going to be able to defend these theories very well, being one or two steps removed from those who established them. It always comes across as sort of boiler-plate copy-and-paste with him and the moment you start poking holes in it he falls back to ad homming and sarcasm to cover up for a lack of deep understanding.

[dissident]

Since many people think there is no global recession, this whole debate is nonsensical. The world economy does not consist primarily of the USA. We are seeing the effects of a fall in global demand and not a ramp up in global production on the oil price. The word "glut" has no applicability in this context and is designed to obfuscate.

If Saudi Arabia was pumping 12 million barrels per day, if Iraq were pumping 10 million barrels per day, etc., then the word "glut" would have relevance.

pstarr is right, the non-conventional secondary peak is over and the slide down in world production is going to accelerate. Soon the production will fall low enough that even the reduced demand will exceed it. Of course the demand will fall further together with the global GDP, but super depression is what we are headed for. Wall street speculation does not make the global economy function, it is cheap energy in an easily usable form that powers it.

[ennui2]

Sorry, that's just the "hey, I spotted people starving in Africa! Demand destruction! argument."

Population goes up, Chindia keeps industrializing, oil should cost more under current conditions even despite the global economic situation. Maybe not $150, but at least half that. The fact that it isn't reflects a SUPPLY BASED glut.

[onlooker]

Yes and I think once again that the term "glut" is describing a short term phase and what is important is the trend and dynamics involved. Would we have so strongly pursued the LTO - Unconventional sources if peak in conventional had not occurred? I think not. Would not this glut have been quickly used up in a vibrant and dynamic world wide economy? I think yes. So, we are looking at a world wide economy with systemic problems of debt overload, a lack of consumer purchasing power and an economic system which is that is being sustained but only with diminishing returns. Under these circumstances, the so called glut is irrelevant and itself is creating a negative outcome in terms of oil companies going under and out of business. An oil price high enough to facilitate and justify their continued operations would conversely also weaken the economy. So the negative trends and processes underway completely overwhelms the implication of the word "glut" as though to portray our situation currently and into the future as positive.

[ennui2]

$this->bbcode_second_pass_quote('onlooker', '
')Yes and I think once again that the term "glut" is describing a short term phase...

[ROCKMAN]

All right...now we have a rock solid definition of a "glut" from ennie: it has nothing to do with the supply/demand dynamic. Now I understand we had a huge glut of oil for about 90 of the last 150 years since the inflation adjusted price of oil was at or below the current price. IOW for the vast majority of the petroleum age the normal condition was a "glut".

And p: as sjn points out nearly all that oil going into storage was bought from producers like ExxonMobil and the Rockman. And neither if us give a rat f*ck if our oil is going into a refinery or storage: our checks cash the same either way. LOL.

I'm not trying to pick on you but also understand that 2X as much US oil moves into and out of storage every week as is being held in Cushing. Also understand that 80% of all the oil for in US storage IS NOT AT CUSHING. At that the current level of US storage is still 15 million bbls LESS THEN WE HAD IN STORAGE about 2 years ago. And no one expressing concern about running out of storage then. In fact back to Cushing: today it's at 77% compared to 91% about 5 years ago. Do you recall any headlines about Cushing running out of space in 2011? And why so much going into storage back then: oil had crashed to $55/bbl in 2009 and was still trying to recover by 2011. So with prices so low and expectation of future price increases storage filled...just like today. And guess what happened to that 91% fill in 2011 when prices pushed towards $100/bbl a few years later: the fill plunged to about half the 2011 volume. IOW storage at Cushing has little to do with consumer demand and much to do with price expectations of the speculating oil investors.

[AdamB]

$this->bbcode_second_pass_quote('ennui2', '
')$this->bbcode_second_pass_quote('AdamB', 's')ome people are terribly disappointed in the world not ending. PO as misguided misanthropy perhaps?

[C8]

one area of concern is that the higher production levels of fossil fuels produce a greater world population- which, unfortunately seems to be relying on fossil fuels and not transitional energy sources (for the most part).

Thus we may be growing a future Peak crisis. It would be neat if all the new people were living off of solar or nuclear but they're not.

Maybe enough nations will transfer to nukes to keep the power on and ship the declining oil to whoever can't make the transition.

Maybe I'm on drugs and don't know it.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('C8', 'o')ne area of concern is that the higher production levels of fossil fuels produce a greater world population- which, unfortunately seems to be relying on fossil fuels and not transitional energy sources (for the most part).

[fleance]

The danger is still there, IMO. Although, there is over supply of oil that is happening now. However, if OPEC is serious in there word that they will cut oil production then oil prices will soar again.

[sjn]

$this->bbcode_second_pass_quote('Outcast_Searcher', '
')Absolutely right. If it turns out that the global boost we get to FF production via better tech. like LTO fracking is a BIG boost (as I believe it is), then it buys us time. Perhaps considerable time -- at least for the one problem of the global economy being crushed by the major decline in fossil fuel availability.

[tita]

$this->bbcode_second_pass_quote('ennui2', 'T')hat's conjecture on your part. BAU survived $100 oil and jumpstarted the shale boom in the midst of a recession. Even if a lot of companies go under, if there's more shale to drill, and oil rebounds, then they will drill once more.

[onlooker]

In the oil sector like in the entire world economy and society we have put off the tough choices for the future. Well the future is getting closer. I am not one to predict timelines only fools do that. One thing is clear the Shale-Tar boom is a temporary measure that will soon not pay dividends. I think what Tita states can be referred to as greater instability in the oil sector as it appears no oil price comes without some drawback thus the price has wild swings. This is because we are stuck between now tough and expensive to get at oil and a sluggish and unstable world economy that cannot afford oil above a certain price. The market is trying to find a happy medium but their may be none.

[ennui2]

$this->bbcode_second_pass_quote('tita', '
')We can't just dissociate the 100$ period from the 30$ period as two different dynamics. It's the very same that is at work here. And IMHO BAU is not really working in both periods. I may be wrong of course, but future will tell us.

[tita]

$this->bbcode_second_pass_quote('ennui2', '
')Right now the general public have been shielded from these issues.

[ennui2]

No, it's not that bad, and the issues you cite could just as easily be ascribed to non-peak-oil causes. I mean, it's not like the rich getting richer and the poor poorer and the middle-class hollowing out hasn't happened before. It seems to be the standard trajectory of unfettered capitalism in general.

Peak oil is supposed to cause Mad Max-like conditions. Really mild and highly indirect consequences where the dots are hard to connect don't really measure on anybody's radar.

[tita]

For what I know, peak oil is supposed to slow the global growth, before stopping it and enter a regression phase (which yeah, could lead to a mad max condition, wĥo knows?). It's straightforward, no return to growth after stopping, unlike usual crisis. It's the specific problem of peak oil. There is no big sign showing "peak oil" on the road when it comes, but we are doing our best to postpone it. The more money we spend for oil, the less grow we have, the nearer we get to it.