[asg70]

$this->bbcode_second_pass_quote('BahamasEd', '
')It's too expensive

[asg70]

$this->bbcode_second_pass_quote('pstarr', '
')you have bankrupted all future generations.

[creedoninmo]

Has anyone adequately explained the over supply of crude on the world market. The evidence from a a recent personal traveling vacation is that we are at peak cars and peak driving.

[creedoninmo]

My explanation would be that the refineries are clogged with an over supply of poorer and poorer oil, but I can't prove that.

[shortonoil]

$this->bbcode_second_pass_quote('', '
')The cornies in the United States of Debt don't just don't seem to get it.

Asgy, you have bankrupted all future generations. Tsk tsk tsk on you.

[donstewart]

Tad Patzek; Biological Analogues; Falling Velocity of Money
I brought up Tad Patzek in a previous post, and some people chose that as an opportunity for some vicious attacks. You get another chance prompted by yesterday's post (also reprinted by Ugo Bardi):
http://patzek-lifeitself.blogspot.com/2 ... mment-form

I suggest you also read my comment on the preceding post also, and Professor Patzek's reply. How would you draw a parallel between what is happening in the circulation of money in the US and what happens when flows in the body slow down?

Don Stewart

[onlooker]

Well in response to Don's inquiry, I found this:
https://iqballatif.newsvine.com/_news/2 ... confidence

$this->bbcode_second_pass_quote('', 'Y')ou never play with M1 ' the currency has been debauched ' - It is now all about 'velocity and circulation' to be far in excess of the previous money in circulation to restore the confidence

[ROCKMAN]

creed - "My explanation would be that the refineries are clogged with an over supply of poorer and poorer oil, but I can't prove that."

US refineries process blended oil. And the quality of that oil has remained constant for many years...around 31° API. US API gravity (Weighted Average) of crude oil input to refineries:

https://www.eia.gov/dnav/pet/hist/LeafH ... RAPUS2&f=M

And don't let anyone confuse you with the fact that the blended oil processed by US refineries in recent years has been made from a lot of the increased condensate/light oil from the shale boom. Prior the blended oil required just as much light oil as it does now. The difference is that the light oils had to be imported.

Now let's address the "refineries are clogged" bullsh't. Check out the primary refinery out put: gasoline. Since Dec 2014 US refineries have gradually INCREASED their sales of gasoline. Look at the chart:

https://www.eia.gov/dnav/pet/hist/LeafH ... timus2&f=4

Isn't that just the opposite of what you would expect if they were "clogged"? And check this out from:

http://marketrealist.com/2017/04/us-gas ... ight-week/

US Gasoline Inventories Fell for the Seventh Straight Week

"US gasoline production fell by 513,000 bpd (barrels per day) to 9,515,000 bpd from March 24–31, 2017. Production fell 5.1% week-over-week and 1.1% year-over-year. US gasoline imports rose by 86,000 bpd to 607,000 bpd during the same period. Gasoline demand fell by 279,000 bpd to 9,245,000 bpd."

So the refineries imported an EXTRA 22 million gallons of gasoline because they were choking to death on their own production?

But let's address the real stupidity behind this clogged propaganda. Old joke: what's the first thing you do when you discover you're digging yourself into a whole? You stop digging. US refineries are not obligated to buy oil: they only buy enough to satisfy the demand projections they make. And then only if the price is right. Why do you think they cut back of gasoline production and increased gasoline imports? Would you believe to make a better profit? Well, da! LOL.

There's seems to be a very silly view of how the refinery industry works. It always generates a positive revenue regardless of the price of oil and the volume on the market. And regardless of the quality of the crudes used to make the blended oils they refine. The refineries decide how much oil they buy and, most important, what they'll pay for that oil.

Not directed directly at you but in general: it's a tad frustrating to see folks repeat bullsh*t they read hear when there's seldom any DOCUMENTED evidence shown to support it. Just as I did above. Folks are certainly free to interpret the FACTS as the choose. But we need to be doing that from DOCUMENTED FACTS and not just based on what someone claims.

[asg70]

Nobody cares about how a refinery works. You guys spend all your time in the weeds to the point where you fail to see the actual situation. All we care about is the final cost of finished products, which is still cheap--hence this ALL CAPS HYSTERIA is what's propaganda.

[asg70]

$this->bbcode_second_pass_quote('pstarr', '
')By aggressively consuming the children's seed corn. And telling stories why you are not complicit. Your insistence that peak oil is not here/now, coupled with your seeming obligation and task to aggressively dismiss that possibility will come back to you as a tragic mistake. Sorry for you

[donstewart]

@Rockman
Regarding: 'The difference is that the light oils had to be imported.'

I will speak only for myself. I don't argue that refineries are likely to lose money over any extended period of time. It seems to me that they are well positioned to buy only what they need at prices they think they can afford. (A footnote would be their debt position...it's possible that they might get into a situation where they are desperate for cash to pay debts...but I won't get into that).

But petroleum products are in a global market. IF the present and future growth in what we count as 'barrels of oil' includes a disproportionate share of very light oils which are not useful for transportation, then the global productivity of crude oil to power transportation is declining. The most important metric is what percentage of the barrels we count is directly useful in transportation. The second most important metric is probably how much manipulation the refineries have to do to make the oil which is available actually go through the refinery and produce gasoline and diesel and aviation kerosene and bunker fuel. Very light oils may be necessary to dilute heavy oils, but they are an overhead...not a resource. If very light oils are not directly useful for transportation, then we fall back on third order uses such as plastics or cigarette lighters and other uses. But those third order uses don't have the economic value that the basic transportation fuels have.

The fact that the US formerly imported very light oils to dilute very heavy oils such as Orinoco, but can now use domestically supplied very light oils, is basically irrelevant from a global perspective...it just leaves some stranded very light oils somewhere else.

I'm also not claiming that all shale oils are the same....because I really don't know. I dimly remember reading about the Russian shales, and as I recall they are very heavy. But I might well be wrong.

In summary, the question of whether the very light oils from US shale deposits are directly useful to produce transportation fuels seems to me to be relevant. Arguments about where refineries fit in the petroleum products food chain are interesting to specialists but not in terms of broad concerns.

Don Stewart

[ROCKMAN]

"Nobody cares about how a refinery works...All we care about is the final cost of finished products..."

A rather mystifying comment given that how refineries function is exactly what determines the price of those finished products. Consider just the simple process of refining blended oil. A fact probably few here were aware of before the Rockman began pointing it out. Not meaning to insult but many here, like most consumers, thought most of the oil refined in the US was the "WTI" constantly referred to by the MSM. In reality only a small amount of our refinery products come from blends containing WTI oil. In fact WTI represents just 19% of US production. Which still isn't exactly correct: that 19% is API 35°-40° whereas WTI is defined as 39.6°. But since we import a lot of heavy oil the % of even the entire 35°-40° category in the blends is probably less then 10%.

But that's another factor that should be of interest for those who only "care about is the final cost of finished products." All those other oil gravities sell for a different price then WTI.

In 2016, 51% of the 8.4 million bbls/d of crude oil produced in the Lower 48 states was light oil. OTOH 88% of US oil imports are heavier then WTI. In fact 66% of those imports are heavier then the 31° API oil blends run thru our refineries.

Which touches on a point the Rockman has made before: the incredibly ignorant statements made here that the condensate/light oil from the shale plays had insignificant value. Without that surge in production we would have been required to import every bbl instead. And that would significantly increased the demand and PRICE for light oil globally. And that would have impacted the price of our products. A price that some here are solely focused upon.

I'll repeat the true story as before. During the late 70's gasoline crisis heard some old bar fly spouting off: "They keep talking about drilling more oil wells. But that's not what we need. We need more f*cking gasoline wells!"

Obviously someone else that doesn't care "how a refinery works". As they say: Ignorance is bliss. LOL.

[donstewart]

@Rockman
Adding to my previous post. During WWII Germany had plenty of coal to liquids. But when they failed to capture the oil fields in the Caucasus, they lost the war.

So the most relevant question is perhaps 'how many barrels of liquids have to be produced in order to provide the gasoline, diesel, aircraft kerosene, and bunker fuel that are required by our modern industrial system?' If that ratio is increasing, then chances are that the thermodynamic equations are turning negative.

A more subtle question would ask 'is a blend of very heavy and very light liquids capable of keeping the thermodynamics required by our modern industrial system favorable?' In other words, have we hollowed out the supply of the most valuable liquids, and are now left with the more difficult and costly task of trying to extract fuels from less desirable liquids?

Don Stewart

[shortonoil]

$this->bbcode_second_pass_quote('', 'I')n other words, have we hollowed out the supply of the most valuable liquids, and are now left with the more difficult and costly task of trying to extract fuels from less desirable liquids?

Don Stewart

[vtsnowedin]

$this->bbcode_second_pass_quote('shortonoil', '')$this->bbcode_second_pass_quote('', 'I')n other words, have we hollowed out the supply of the most valuable liquids, and are now left with the more difficult and costly task of trying to extract fuels from less desirable liquids?

Don Stewart

[dissident]

$this->bbcode_second_pass_quote('shortonoil', '')$this->bbcode_second_pass_quote('', '
')The cornies in the United States of Debt don't just don't seem to get it.

Asgy, you have bankrupted all future generations. Tsk tsk tsk on you.