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Oil Prices Will Never Recover Pt. 3

General discussions of the systemic, societal and civilisational effects of depletion.
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Re: Oil Prices Will Never Recover Pt. 3

Unread postby radon1 » Sat 10 Sep 2016, 17:23:04

$this->bbcode_second_pass_quote('BahamasEd', '
')How much energy does it take to build a Very Large Crude Carrier? Or the other millions of items that the oil systems buy every year?

How much energy does it take to keep Saudi Arabia at peace so they can keep pumping oil?

How much energy does Rockman use in a year? Every other worker who has anything to do with finding/producing/refining and getting the end product to someone that's not involved in oil?


How many years, months or millennia will it take for the Etp clowns to try to answer these questions themselves, and maybe finally realise, as a result, that the so-called "EROI" is always fluctuating around 1?

How many years will it take for them to finally decide, whether a Very Large Crude Carrier is a part of "the economy", or "PPS" as they call it, or is outside of it; and if it is a part of "the economy", then the energy to produce Very Large Crude Carrier is irrelevant to the "EROI calculation" by definition; and if it is outside of "the economy", then their "Control Volumes" scheme is completely rubbish as they appear to be totally screwed about the boundaries and boundary conditions? When will they finally begin thinking about the boundaries, which should be the first step in that kind of modelling?

How many weeks before Etp clowns realise that the cost of keeping Saudi Arabia happy is invariable as far as energy balances is concerned (i.e. independent of physical depletion dynamics), and as such has no direct impact on the "EROI computation"? (Along with the cost of building a Very Large Crude Carrier btw).

And how many centuries before Etp clowns realise that this is not that other people are dumb, but to the contrary - that the Etps clowns are themselves are obvious shills or impenetrably stupid?
Last edited by radon1 on Sat 10 Sep 2016, 17:25:28, edited 1 time in total.
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Re: Oil Prices Will Never Recover Pt. 3

Unread postby rockdoc123 » Sat 10 Sep 2016, 17:24:39

$this->bbcode_second_pass_quote('', 'E')nergy is not free. Everyone along the chain is not really making money. Massive debt is what is keeping the game going at the moment.


before the price drop (due to over supply and nothing else no matter what you want to imagine happened) everyone was making money or they were out of business in short order.
The current situation only instructs to what is happening at this minute due to low prices it says nothing about how the industry was doing previously. Your whole argument has to do with what caused the price drop so the current situation that is a direct effect of lower price is irrelevant, it is the situation as it existed in early 2014 that is relevant.

But apparently in your world businesses just exist and are happy not to make any money. So obviously the mining industry was always selling iron ore at a loss to steel refineries and the steel refineries were always selling tubulars at a loss to the oil companies and service companies were always providing services to oil companies at a loss and oil companies were always producing at a loss as well. Irrespective of the fact that the vast majority of them showed exceptional EBITDA, large market cap growth and the GDP of producing countries was rising.

So my view is since you don't seem to understand anything about the oil and gas business why should we listen to you about what oil prices might or might not do?
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Re: Oil Prices Will Never Recover Pt. 3

Unread postby SumYunGai » Sat 10 Sep 2016, 17:38:45

$this->bbcode_second_pass_quote('rockdoc123', 'b')efore the price drop (due to over supply and nothing else no matter what you want to imagine happened) everyone was making money or they were out of business in short order.
The current situation only instructs to what is happening at this minute due to low prices it says nothing about how the industry was doing previously.

What the hell are you talking about? The current situation instructs that the oil industry was previously very profitable and now it isn't.

$this->bbcode_second_pass_quote('rockdoc123', 'Y')our whole argument has to do with what caused the price drop so the current situation that is a direct effect of lower price is irrelevant, it is the situation as it existed in early 2014 that is relevant.

Huh?

$this->bbcode_second_pass_quote('rockdoc123', 'B')ut apparently in your world businesses just exist and are happy not to make any money.

I have never suggested such a thing. Who are you arguing with?

$this->bbcode_second_pass_quote('rockdoc123', 'S')o obviously the mining industry was always selling iron ore at a loss to steel refineries and the steel refineries were always selling tubulars at a loss to the oil companies and service companies were always providing services to oil companies at a loss and oil companies were always producing at a loss as well.

Why are you resorting to this straw man bullsh*t?

$this->bbcode_second_pass_quote('rockdoc123', 'I')rrespective of the fact that the vast majority of them showed exceptional EBITDA, large market cap growth and the GDP of producing countries was rising.

Okay. If you say so.

$this->bbcode_second_pass_quote('rockdoc123', 'S')o my view is since you don't seem to understand anything about the oil and gas business why should we listen to you about what oil prices might or might not do?

Understanding the oil and gas business gives you no special insight into our thermodynamic dilemma. You should listen to me because I am basing my predictions on oil price movements on a physics model that has been accurately forecasting the oil price decline for well over two years. I recently made two very excellent short term oil price top predictions based on the Etp model:

post1325749.html#p1325749

post1321389.html#p1321389

$this->bbcode_second_pass_quote('rockdoc123', 'I')n fact the pace and amount of recovery is almost exactly the same as we saw in 2009. In 2009 price recovered from its low to 50% of its high in 6 months time, had a 15% correction and then moved back to the 50% level and then higher. This time around it took 6 months time for price to recover to 50% of its high before the crash and was followed by a short term 20% correction and then rose back to that 50% level as of late. The similarity is actually striking...
Really? I don't think so.

Let's look at a side by side comparison, shall we?

Image Image

Your description of the current price drop is very misleading and inaccurate. It did take about 6 months for the price to recover to 50% of it's former high. But after that, the "short term correction" you describe lasted 8 months! And the fall from the 50% level ($61) down to $26 was hardly a 20% correction. It was more than 42%! You go on to claim that the price then rose back to the 50% level as of late. But that would be $61 and the current price is only $45.69! LOL.
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Re: Oil Prices Will Never Recover Pt. 3

Unread postby radon1 » Sat 10 Sep 2016, 17:53:35

$this->bbcode_second_pass_quote('pstarr', '')$this->bbcode_second_pass_quote('', '
')How many years, months or millennia will it take for the Etp clowns to try to answer these questions themselves, and maybe finally realise, as a result, that the so-called "EROI" is always fluctuating around 1?

Meaningless distraction. The current discussion, the one relevant to the thread topic, is whether Energy Returned on Energy Invested has meaning, and therefor consequence. Energy Returned on Investment is meaningless. It could be 100 or a thousand. You picked 1 out of your asshole


Yours is meaningless distraction:

EROI=Energy returned on invested=EROEI=Energy returned on energy invested. EROI is the same as EROEI. They are equivalents.

This is pretty obvious from the context, otherwise why talk about it at all? What a clown.

$this->bbcode_second_pass_quote('', 'I')t's easy. If any container/pipe moving a hydrocarbon feedstock (crude) to a refinery/processing point then it is part of the net-energy equation. Simple. If the container/pipe moves a value-added finished product (gasoline, distillate etc.), it is part of the economy.


You have zero understanding of physics. Nil. Better don't touch the subject and don't drag your Etp brotherhood further into absurdity.
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Re: Oil Prices Will Never Recover Pt. 3

Unread postby radon1 » Sat 10 Sep 2016, 18:11:10

$this->bbcode_second_pass_quote('pstarr', '
')Meaningless distraction. The current discussion, the one relevant to the thread topic, is whether Energy Returned on Energy Invested has meaning, and therefor consequence. Energy Returned on Investment is meaningless. It could be 100 or a thousand. You picked 1 out of your asshole


By the way, even though Energy Returned on Investment is a pretty meaningless metrics and is not used by anyone in the visible vicinity, nevertheless your silly comment contains an inadvertent piece of deep wisdom: you have just debunked the "Etp model" yourself, and in this sense your logic is perfectly correct.

Read your comment carefully. It is perfectly logical in its debunking of the "Etp" scam.
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Re: Oil Prices Will Never Recover Pt. 3

Unread postby onlooker » Sat 10 Sep 2016, 19:56:54

You Radon and your ilk are the ones who have no relevance by negativing basic physics, by not acknowledging the full gamut of the process from beginning to end, its costs and energy intensity. Your charts have been refuted, your logic is baseless and your arguments reek of desperation. The Oil industry is between a rock and a hard place. Losing tons of money, facing the prospect of more difficult to produce oil and an Economy and consumers unable to bear the burden of higher oil prices.
"We are mortal beings doomed to die
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Re: Oil Prices Will Never Recover Pt. 3

Unread postby rockdoc123 » Sat 10 Sep 2016, 20:02:24

Your description of the current price drop is very misleading and inaccurate. It did take about 6 months for the price to recover to 50% of it's former high. But after that, the "short term correction" you describe lasted 8 months! And the fall from the 50% level ($61) down to $26 was hardly a 20% correction. It was more than 42%! You go on to claim that the price then rose back to the 50% level as of late. But that would be $61 and the current price is only $45.88! LOL.


complete and utter horseshit.

Once again we are looking at the recovery from the bottom. Bottom was in mid December 2008 and it rose to 50% of the previous high ($71 versus $145) by June (i.e. 6 months) and then it dropped to $60 which is exactly a 15% correction (measured from where it was at) and then it recovered back to ~$71 by early September. In the most recent case it bottomed in mid-January of 2016 at ~$29 and then rose by June to ~50% or its high ($48 from $96)but then corrected to ~$40 (approximately a 17% correction from where it was) and then rebounded by early September back to $48. The timing and percentage recovery and correction are almost the same. So you are talking about something entirely different. Here are the graphs. What you should be looking at is the recovery from bottom and that is all.

Image

Image

$this->bbcode_second_pass_quote('', 'U')nderstanding the oil and gas business gives you no special insight into our thermodynamic dilemma. You should listen to me because I am basing my predictions on oil price movements on a physics model that has been accurately forecasting the oil price decline for well over two years. I recently made two very excellent short term oil price top predictions based on the Etp model:

First off one doesn't need special insight to the thermodynamics to understand oil price movements, the industry has been doing quite well for decades without it. As to your forecasting ability it has been said numerous times .....broken clock right twice a day.....right for the wrong reasons, correlation not causation...etc. It is absolutely clear that demand never decreased, yet for your ETP model to work it had to because as you and Shortonoil and everyone have said.....consumer can no longer afford oil at the high price. IF they couldn't afford oil at that price then it would have shown up in a drop in consumption which is the means by which demand is measured. What do you think....someone from oil companies does a phone survey of all the consumers and asks them how much they are willing to pay for refined product? It is simply a measure of consumption. What happened as pretty much everyone with half a brain who bothers to read the news knows is supply outpaced growing demand. If that isn't the case then the EIA, OPEC and each and every investment bank in the world must be wrong. :roll:

$this->bbcode_second_pass_quote('', 'a')n Economy and consumers unable to bear the burden of higher oil prices.


please show us the data that backs up your statement. The rest of us have shown data several times that illustrate demand was never impacted by $100 oil and that the global economy has continued to grow.
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Re: Oil Prices Will Never Recover Pt. 3

Unread postby BahamasEd » Sat 10 Sep 2016, 20:37:50

$this->bbcode_second_pass_quote('', 'B')ahamasEd, I think you are forgetting that we had oil at $100 for years and yet demand not only did not fall, it rose.


Yes, because we, the world, could afford it then, the key word being 'then'.

In 2000 the ETP Maximum oil price curve was about $140 dollars and the price of oil was about $30 dollars, for a different of about $110 per barrel.

Today the ETP MOPC is around $70 so with oil selling at $45 we only have about $25 per barrel left over for the end user not involved with the oil industry.
The total energy cost of producing and delivering a gallon of gasoline to the end consumer must be less than the energy in a gallon of gasoline for it to be commercially viable.
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Re: Oil Prices Will Never Recover Pt. 3

Unread postby ennui2 » Sat 10 Sep 2016, 20:46:40

Meanwhile, in the real world, this is a photo from when I filled up today.

Image

Peak oil doom...DELAYED.
"If the oil price crosses above the Etp maximum oil price curve within the next month, I will leave the forum." --SumYunGai (9/21/2016)
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Re: Oil Prices Will Never Recover Pt. 3

Unread postby ROCKMAN » Sat 10 Sep 2016, 20:47:06

"...if any container/pipe moving a hydrocarbon feedstock (crude) to a refinery/processing point then it is part of the net-energy equation. Simple. If the container/pipe moves a value-added finished product (gasoline, distillate etc.), it is part of the economy."

Well, if one wants to include all the components of the system that's OK. But if you use the Btu's each section consumed the EROEI will have to use the amortized energy. IOW if it's just used hundreds of million (if not billions) of Btu's to build then all the Btu's contained in all the oil that has passed thru that portion of the system should be used to calculate the EROEI of that portion of the infrastructure. For example all the pipelines used to import the Canadian oil sands took X Btu's to build and operate and the oil represents quadrillions of Btu's.

And the entire hydrocarbon systems: millions of quadrillions of Btu's consumed to build and operate the infrastructure should be amortized over the billions of quadrillions of Btu's that have passed thru the system. That would be a lot of work to come up with a number that has never and will never be used to make decisions about fossil fuel development. And number that can't go much below 5 or 6 before the economics kill a project.

But it's your time...have at it. LOL.
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Re: Oil Prices Will Never Recover Pt. 3

Unread postby AdamB » Sat 10 Sep 2016, 20:49:58

$this->bbcode_second_pass_quote('SumYunGai', '
')Long posts with lots of data don't prove anything if it is all the wrong data.


Same with models. It is called GIGO, garbage in, garbage out. Like the ETP. When what's his name was faced with obvious examples as to why this is so, the coward ran. Such is the way of intellectual dishonesty, although admitted he/she was a salesman, so, it makes sense that he/she couldn't think, and was a coward at the same time.
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Re: Oil Prices Will Never Recover Pt. 3

Unread postby AdamB » Sat 10 Sep 2016, 20:52:18

$this->bbcode_second_pass_quote('onlooker', ' ')Losing tons of money, facing the prospect of more difficult to produce oil and an Economy and consumers unable to bear the burden of higher oil prices.


What higher prices? Right now, real gasoline prices are about the same as they were in 1972. Where do you live that they are any higher than, say, 1975? Otherwise known as The Good Ol' Days!
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Re: Oil Prices Will Never Recover Pt. 3

Unread postby ennui2 » Sat 10 Sep 2016, 20:53:40

It's been revealed that Whatever didn't run.

He was banned for forum abuses (even worse).

Then he came back under a new account, which is a violation of COC.

He's here purely at the disgression of the mods.
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Re: Oil Prices Will Never Recover Pt. 3

Unread postby kublikhan » Sat 10 Sep 2016, 22:23:43

$this->bbcode_second_pass_quote('BahamasEd', 'Y')es, because we, the world, could afford it then, the key word being 'then'.

In 2000 the ETP Maximum oil price curve was about $140 dollars and the price of oil was about $30 dollars, for a different of about $110 per barrel.

Today the ETP MOPC is around $70 so with oil selling at $45 we only have about $25 per barrel left over for the end user not involved with the oil industry.
What you are doing here is starting with the ETP and trying to make the data fit it. You should do it the other way around. Start with the data and then try to explain the data. In this case we have a growing global consumption class both in numbers and in income. This means their demand for and ability to pay for oil are both growing. Not shrinking. And the developing nations are starting off at very low per capita levels. So a rise in oil price is a much smaller portion of their budget. Especially since they have growing incomes to more than pay for it. From my earlier post:

$this->bbcode_second_pass_quote('', 'O')ver just the past decade global oil consumption increased by an average of 900,000 bpd each year, and consumption has risen in 18 of the past 20 years. If we look back 30 years, global oil consumption increased by an average of 1.1 million bpd annually. Demand did decline in member countries of the Organisation for Economic Co-operation and Development (OECD) — the grouping of the world’s developed countries. But demand growth in developing countries overwhelmed the declines in the developed world. In just the past five years, demand in developing countries has increased by an average of 1.6 million bpd annually, and now exceeds OECD demand.

Note that there was hardly any negative impact on demand in developing countries even with oil prices at $100/bbl. What drives consumption in these countries is a very large number of people using just a little bit more oil than they did before. High oil prices will do little to dissuade them from buying a little bit more when it can make such a big impact on their lives, especially when incomes are rising.

This is why, in my opinion, oil can’t go to $20/bbl. Despite very vocal predictions of much lower oil prices, many people are aware of the dynamics I have laid out here.
Why the $20 Oil Predictions are Wrong

$this->bbcode_second_pass_quote('', 'O')il demand in developing countries surpassed that of wealthy nations for the first time ever in April, a U.S. report revealed on Tuesday, in the latest demonstration of how rapid growth in Asia has upended trade and increased competition for resources. Led by surging growth in China, oil demand outside the wealthy nations' club of the Organization of Economic Cooperation and Development (OECD) has jumped by almost 50 percent in the last decade, hitting 44.5 million bpd in April.
Developing world oil demand surpasses wealthy nations: EIA

$this->bbcode_second_pass_quote('', '[')b]Demand: Non-OECD
Oil consumption in developing countries that are not part of the Organization of Economic Cooperation and Development (OECD) has risen sharply in recent years. While oil consumption in the OECD countries declined between 2000 and 2010, non-OECD oil consumption increased more than 40 percent. China, India, and Saudi Arabia had the largest growth in oil consumption among the countries in the non-OECD during this period. Rising oil consumption reflects rapid economic growth in these countries. Current and expected levels of economic growth heavily influence global oil demand and oil prices. Commercial and personal transportation activities, in particular, require large amounts of oil. Many non-OECD countries are also experiencing rapid growth in population, which is an additional factor supporting strong oil consumption growth.

Although transportation oil use is usually a smaller share of total oil consumption in non-OECD countries, this use tends to increase rapidly as expanding economies increase the need to move goods and people. Vehicle ownership per capita is also highly correlated with rising incomes and has much room to grow in non-OECD countries. For these reasons, non-OECD economic growth rates tend to be an important factor affecting oil prices. China's strong economic growth has recently resulted in that country becoming the largest energy consumer and second largest oil consumer in the world. In addition, China's rising oil consumption has been a major contributor to incremental growth in worldwide oil consumption. EIA projects that virtually all the net increase in oil consumption in the next 25 years will come from non-OECD countries.
Demand: Non-OECD
The oil barrel is half-full.
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Re: Oil Prices Will Never Recover Pt. 3

Unread postby SumYunGai » Sat 10 Sep 2016, 23:50:03

$this->bbcode_second_pass_quote('kublikhan', '')$this->bbcode_second_pass_quote('BahamasEd', 'Y')es, because we, the world, could afford it then, the key word being 'then'.

In 2000 the ETP Maximum oil price curve was about $140 dollars and the price of oil was about $30 dollars, for a different of about $110 per barrel.

Today the ETP MOPC is around $70 so with oil selling at $45 we only have about $25 per barrel left over for the end user not involved with the oil industry.
What you are doing here is starting with the ETP and trying to make the data fit it. You should do it the other way around. Start with the data and then try to explain the data.

The Etp model fits the data just fine. It keeps on correctly forecasting the declining trajectory of the oil price. And it logically explains why we are having a glut in the first place.

Starting with the data and then trying to explain that data is nothing more than story telling.

$this->bbcode_second_pass_quote('kublikhan', 'I')n this case we have a growing global consumption class both in numbers and in income. This means their demand for and ability to pay for oil are both growing. Not shrinking.

Demand for oil is not growing anywhere near fast enough. We can no longer sustain an oil price high enough to pay for the full cost of oil's production. We are reaching limits to growth.

Image

Why can't all this spectacular demand growth you are always talking soak up the oil glut?

$this->bbcode_second_pass_quote('kublikhan', 'A')nd the developing nations are starting off at very low per capita levels. So a rise in oil price is a much smaller portion of their budget.

People in developing countries are very poor. So even a small rise in the oil price has a profound effect on their budget.

$this->bbcode_second_pass_quote('kublikhan', 'C')hina's strong economic growth has recently resulted in that country becoming the largest energy consumer and second largest oil consumer in the world. In addition, China's rising oil consumption has been a major contributor to incremental growth in worldwide oil consumption.
"Has been" is the right way to describe it.

http://www.wsj.com/articles/china-slowd ... 1453736237

$this->bbcode_second_pass_quote('', '[')b]China Slowdown Stokes Fears of Peak Oil Demand
Exxon cuts China energy demand forecast to 2025

A bedrock belief among oil forecasters has been that China’s voracious appetite for fossil fuels would stoke global energy demand for decades to come. That assumption now appears increasingly shaky.

...a slew of data is emerging that points to the toll a weakened economy has taken on Chinese energy demand, which is among the most important factors in determining the price of crude oil.

A study issued last week by consultancy ESAI Energy said China’s oil-demand growth rate between now and 2030 would be less than half that of the previous 15-year period.

“If demand won’t come from China, who will step in to fill China’s shoes?” said Erica Downs, a senior analyst for the Eurasia Group who focuses on the country’s energy sector.

Image

Chinese energy consumption rose just 0.9% last year, according to government estimates, as gross domestic product increased 6.9%, the weakest annual rate in a quarter century.
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Re: Oil Prices Will Never Recover Pt. 3

Unread postby kublikhan » Sun 11 Sep 2016, 00:59:11

$this->bbcode_second_pass_quote('SumYunGai', 'T')he Etp model fits the data just fine. It keeps on correctly forecasting the declining trajectory of the oil price. And it logically explains why we are having a glut in the first place.
I'm not talking about curve fitting oil prices. I'm talking about the data on consumer's ability to pay for higher priced oil.

$this->bbcode_second_pass_quote('SumYunGai', 'D')emand for oil is not growing anywhere near fast enough. We can no longer sustain an oil price high enough to pay for the full cost of oil's production.
Demand is currently growing faster than supply is. Which means a shortage is coming. Which means prices will rise.

$this->bbcode_second_pass_quote('SumYunGai', 'W')hy can't all this spectacular demand growth you are always talking soak up the oil glut?
Supply overshot demand. It happens in the oil business. It's called the oil boom bust cycle. I must have answered this question a dozen times already. Not counting the dozens of times other posters have answered this question.

$this->bbcode_second_pass_quote('SumYunGai', 'P')eople in developing countries are very poor. So even a small rise in the oil price has a profound effect on their budget.
Really now? Have you done the math on this? China wages average $9,269 per year. While oil consumption is 2.56 barrels per year per person. At $50 a barrel, that's $128 per year in oil costs. At $100 a barrel, that goes up to $256 per year. That oil price increase amounts to 1.37% of their wages. Even in China's slower growing economy, wages are still growing 7% per year. Meaning China's consumers can afford the more expensive oil from wage growth alone, 5 times over. From just 1 year's wage growth. Don't forget they grow again next year, and the year after, and the year after, etc.

$this->bbcode_second_pass_quote('SumYunGai', '&')quot;Has been" is the right way to describe it.Like I just said, even with China's lower economic growth rate wages are still growing around 7% per year.

$this->bbcode_second_pass_quote('SumYunGai', 'C')hinese energy consumption rose just 0.9% last year, according to government estimates, as gross domestic product increased 6.9%, the weakest annual rate in a quarter century.And yet China's oil consumption continues to see robust growth:

$this->bbcode_second_pass_quote('', 'C')hina's oil demand will grow 4.3 percent this year to surpass 11 million barrels per day. The forecast, in an annual report released by CNPC's research institute, also put the country's net crude imports up 7.3 percent this year. China oil demand to grow 4.3 percent in 2016
The oil barrel is half-full.
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Re: Oil Prices Will Never Recover Pt. 3

Unread postby AdamB » Sun 11 Sep 2016, 09:37:25

$this->bbcode_second_pass_quote('SumYunGai', '')$this->bbcode_second_pass_quote('kublikhan', '')$this->bbcode_second_pass_quote('BahamasEd', 'Y')es, because we, the world, could afford it then, the key word being 'then'.

In 2000 the ETP Maximum oil price curve was about $140 dollars and the price of oil was about $30 dollars, for a different of about $110 per barrel.

Today the ETP MOPC is around $70 so with oil selling at $45 we only have about $25 per barrel left over for the end user not involved with the oil industry.
What you are doing here is starting with the ETP and trying to make the data fit it. You should do it the other way around. Start with the data and then try to explain the data.

The Etp model fits the data just fine. It keeps on correctly forecasting the declining trajectory of the oil price. And it logically explains why we are having a glut in the first place.


What's his name said the same thing, and when he couldn't defend it he tucked tail and ran away. What makes you think you can defend it any better? He ran away because it was becoming obvious very quickly that it couldn't be defended as a valid relationship any better than that between margarine sales and teen drownings.
Plant Thu 27 Jul 2023 "Personally I think the IEA is exactly right when they predict peak oil in the 2020s, especially because it matches my own predictions."

Plant Wed 11 Apr 2007 "I think Deffeyes might have nailed it, and we are just past the overall peak in oil production. (Thanksgiving 2005)"
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