[peeker01]

There is hope for the future.......

http://www.prweb.com/releases/2011/9/prweb8791211.htm

[kublikhan]

Just FYI, GS is not talking about crude oil here. There are talking about all liquids production.

Editor's Note: After posting this article, we received the cited report thanks to a Goldman Sachs partner. The report does not claim that the present or future liquids production is "oil" although the production levels reported by The Times are corroborated in the report. We have accordingly changed the title and made other minor modifications to the post but remain firm that the message is relevant and important.

On Sunday, September 11, 2011, The Sunday Times quoted a Goldman Sachs (GS) report also summarized by Rigzone that predicted the United States will become the world's largest oil-producing country. This astonishing production increase is accomplished by changing the definition of oil and by using optimistic projections of liquids-rich shale production. The claim was that U.S. daily production will increase from 8.3 to 10.9 million barrels of oil per day (Mbopd) by 2017.

Sunday Times Predicts US As Top Oil Producer In 2017

[ian807]

There is hope for the future.......

http://www.prweb.com/releases/2011/9/prweb8791211.htm

It's not hard to see how they came to this conclusion.

1) The naive view of oil is to only consider quantity. GS Analysts may still be at that stage. Actually useful measurements like the EROEI/price ratio, or oil price feedback's effect on marginal oil costs over time may not have factored in.

2) There is a lot of um..., dubious information regarding oil supply and production in general. NOCs and large private oil companies keep stock prices high and financing flowing by exaggerating supply numbers and making "optimistic" assumptions about future production capacity. NOCs do so to enhance political prestige and reduce the odds of attack coordinated with a shortage in supply and the cashflow it represents. A GS analyst is unlikely to have factored this in, perhaps not even for obvious cases like Saudi Arabia.

3) The human factor. Frankly, nobody at Goldman Sachs who tells the truth about this is going to get their bonus. The announcement is more likely some sort of investment play. Any factual accuracy is likely to be coincidental.

[nobodypanic]

Welcome to the “oil expense indicator”It tells us at what percent of GDP our crude oil expenditures must be for a healthy [capitalist] economy to function.

it needed clarification.

[peeker01]

You people are so full of it. Germany is paying 8 bucks a gallon and doing quite well. Do you
guys just make this stuff up?

[peeker01]

So what about Germany PEE? Economists are right up there with liberal climate scientists in
my book.

[dolanbaker]

Germany's bricking it at the moment, Greece is almost certain to default before the end of the year, Italy is looking shaky and too big to bail. The whole €URO zone is looking at stagnation.

Yes Germany's flying!

[peeker01]

Aside from the Eurozone issues, Germany has developed a very robust economy on expensive
oil.

[dolanbaker]

Aside from the Eurozone issues, Germany has developed a very robust economy before expensive
oil.

Fyp, Their economy was built up when oil was cheap plus the fact that Germany had huge supplies of coal.

[peeker01]

Nonsense. Europe has had expensive petrol for many years.

[dolanbaker]

Nonsense. Europe has had expensive petrol for many years.

I know, I live here.
But, don't forget that Industry offsets to cost of fuel tax so it makes little difference to the price of the end product.

Anyway, we dont run our manufacturing plant on petrol, that goes in the cars.

[peeker01]

You people are so full of it. Germany is paying 8 bucks a gallon and doing quit well. Do you
guys just make this stuff up?

I don't believe you read anything posted here except your own snarky comments? Economists and Reuters news agency report that total oil expenditures in excess of 4% of GDP cause recession. Always have alway will.

Dolan, this is the post I was responding to. What exactly are you responding to?

[dolanbaker]

Your post that followed my post!

[SilentRunning]

Nonsense. Europe has had expensive petrol for many years.

It's interesting to note that in the European case, the high petrol prices have been caused by high taxation. The taxes remain in the European country - only a minority of the money ended up leaving to pay for oil imports. The high taxes also helped reduce consumption - which again reduced the amount of money paying to import oil.

In the US case, a vastly larger amount of money ends up being sent overseas. This is a huge drain to economy.

[SilentRunning]

There is hope for the future.......

http://www.prweb.com/releases/2011/9/prweb8791211.htm

We can increase US domestic "oil" production endlessly - if only we define "oil" in a very flexible fashion.

Similarly, if I can redefine my income to include "money substitutes" rather than dollars, then I can easily be a multi-millionaire. I will count every mosquito on my property as "money", and evaluate each mosquito as worth $1. I'm extremely rich!

[nobodypanic]

Welcome to the “oil expense indicator”It tells us at what percent of GDP our crude oil expenditures must be for a healthy [capitalist] economy to function.

it needed clarification.

Not true at all. All theologies are vulnerable to ecological limits. Time for an old parable, a favorite of mine. (in fact it is mine. )

]

you are dying of thirst in the desert. The water is two feet under the sand. you dig and sweat and sweat and sweat but the sand keeps collapsing just as you get a drop of water. Do you dig frantically and sweat the previously acquired water, or enjoy your last minutes gazing at the distant palms and thinking beautiful thoughts?

It doesn't matter your political persuasion. If too much energy is required to maintain the energy-production infrastructure, then other social/security/industrial/agriculture sectors in that economy also suffer in proportion. Which sectors and how much they must suffer is an important detail certainly, but not one that any society is immune to.

because the capitalist economy is predicated on accumulation and profit, it reaches crisis at a different point than would another economic system.