[Graeme]

Fossil Fuel Euphoria

For years, energy analysts had been anticipating an imminent decline in global oil supplies. Suddenly, they’re singing a new song: Fossil fuels growing scarce? Don’t even think about it! The news couldn’t be better: fossil fuels will become ever more abundant. And all that talk about climate change? Don’t worry about it, they chant. Go out and enjoy the benefits of cheap and plentiful energy forever.

This movement from gloom about our energy future to what can only be called fossil-fuel euphoria may prove to be the hallmark of our peculiar moment. In a speech this September, for instance, Barry Smitherman, chairman of the Texas Railroad Commission (that state’s energy regulatory agency), claimed that the Earth possesses a “relatively boundless supply” of oil and natural gas. Not only that -- and you can practically hear the chorus of cheering in Houston and other oil centers -- but many of the most exploitable new deposits are located in the U.S. and Canada. As a result -- add a roll of drums and a blaring of trumpets -- the expected boost in energy is predicted to provide the United States with a cornucopia of economic and political rewards, including industrial expansion at home and enhanced geopolitical clout abroad. The country, exulted Karen Moreau of the New York State Petroleum Council, another industry cheerleader, is now in a position “to become a global superpower on energy.”

There are good reasons to be deeply skeptical of such claims, but that hardly matters when they are gaining traction in Washington and on Wall Street. What we're seeing is a sea change in elite thinking on the future availability and attractiveness of fossil fuels. Senior government officials, including President Obama, have already become infected with this euphoria, as have top Wall Street investors -- which means it will have a powerful and longlasting, though largely pernicious, effect on the country’s energy policy, industrial development, and foreign relations.

The speed and magnitude of this shift in thinking has been little short of astonishing. Just a few years ago, we were girding for the imminent prospect of “peak oil,” the point at which daily worldwide output would reach its maximum and begin an irreversible decline. This, experts assumed, would result in a global energy crisis, sky-high oil prices, and severe disruptions to the world economy.



As is so often the case with mass delusions, those caught up in fossil fuel mania have not bothered to think through the grim realities involved. While industry bigwigs may continue to remain on an energy high, the rest of us will not be so lucky. The accelerated production and combustion of fossil fuels can have only one outcome: a severely imperiled planet.

huffingtonpost

Michael T. Klare is a professor of peace and conflict studies at Hampshire College and the author, most recently, of The Race for What’s Left (Picador).

[rollin]

If the oil companies don't seem excited about the new production and all sun-shiney, the investors and banks will not throw much money their way. They have to keep up the game to keep the profits pouring in.

The oil companies, drillers, frackers, railroads and truckers are not going to back off until they see red coming up on their books. The fat lady hasn't sung yet so sunshine is over the land!

The hit rate in the Bakken is close to 99%, not that all of them are profitable wells, that varies. With a hit rate that high, no wonder the oil companies and drillers are whooping up a storm. Potential profits of 5 million to 20 million per well is nothing for smaller companies to sneeze at.


"The speed and magnitude of this shift in thinking has been little short of astonishing. Just a few years ago, we were girding for the imminent prospect of “peak oil,” ..."
We will be girding our loins for peak oil in the not distant future and peak liquid fuels not too long after that. Right now life is good in the oil business.

Think about it, another few years to make your lifestyle changes and prepare for rough times ahead. Unless of course the economic situation gets out of hand again.

[ROCKMAN]

Rollin- I’ll beat that dead horse one more time: “Just a few years ago, we were girding for the imminent prospect of “peak oil….We will be girding our loins for peak oil in the not distant future…Think about it, another few years to make your lifestyle changes and prepare for rough times ahead. Unless of course the economic situation gets out of hand again.”

So a few more years to prepare: In the last ten years the US economy has gone from spending $230 billion/yr for just oil to over $630 billion/yr today. While a good bit of those monies are going to domestic oil companies (along with the $260 billion/yr we’re sending to foreign oil producers) it still represents a huge drain on all the other segments of the economy. I suppose the definition of “out of hand’ will vary with the individual. For the Rockman “out of hand” as a concept doesn’t exists. For millions of unemployed/underemployed Americans I suspect they wake up every morning with that bitter “out of hand” taste in their mouths. The bad times began years ago. There are not “rough times” ahead IMHO…there are rougher times ahead. The time to start making lifestyle changes was at least 5 years ago IMHO. But better late than never…if you can still afford to make the change. Difficult to do when those lying oil patch bastards are sucking the life out of you. LOL.

[ROCKMAN]

Words of reason. And from all places - the Wall Street Journal. I wonder how they let these slip through:

“Daniel Yergin misses the most important point ("Why OPEC No Longer Calls the Shots," op-ed, Oct. 15). If OPEC is no longer calling the shots, then why is its marginal production still dictating high crude oil and liquefied natural-gas prices? And, after decades of high prices of crude oil and the resulting high prices of refined products, the OPEC cartel will soon be impacting domestic prices for natural gas, as U.S. LNG exports rise. LNG prices are indexed to OPEC crude oil. The artificially high OPEC price of LNG is driving U.S. LNG exports that will eventually force higher prices for domestic natural gas and electricity.

Sounds to me like OPEC is still calling the shots.

Paul Cicio
President
Industrial Energy Consumers of America
Washington

[sparky]

.
On the cornucopian side , the dearth of exploration in the late 1990ies resulted in a supply problem
the higher prices saw a burst of discoveries from the deep Atlantic to the pre-salt Eastern Mediterranean
and all over Africa from Chad to Kenya .
It all fit with the general idea , depletion bring a rise in price , this open new expensive deposits
it's all like climbing a stair , the only time price go down is when the economy buckle under the price load

[rollin]

Hi Rockman, since you addressed me directly I will respond directly. This is a response to your writing of Thu Oct 17, 2013 8:06 am.

Rockman said " For the Rockman “out of hand” as a concept doesn’t exists. For millions of unemployed/underemployed Americans I suspect they wake up every morning with that bitter “out of hand” taste in their mouths. The bad times began years ago. There are not “rough times” ahead IMHO…there are rougher times ahead. The time to start making lifestyle changes was at least 5 years ago IMHO. But better late than never…if you can still afford to make the change. Difficult to do when those lying oil patch bastards are sucking the life out of you. LOL.

First, possibly the term " out of control" would have been more explicit. Out of control means that the system has gone outside it's normal limits and is in an unplanned operational mode.
Second, rough times have always existed, never left. As George Carling said, the homeless are very effective at putting fear into the middle class and keeping them on the job.
I understand your view at the individual level, of people falling through the cracks economically and those that are already in a bad position. That is partly a planned result and partly a result of profit maximization. The machine culture in the US and the new "slave" culture has dramatically reduced jobs availability.
At the same time the business system is designed to harvest large amounts of money from everyone, even the poor (just making their situation worse).

The poor, underemployed or unemployed can prepare for tough times. Having talked to many people who survived the Great Depression of the 30's, it is more a matter of thinking outside the system than depending upon the system.
Picking blueberries from public lands and selling them, collecting lead from exploded artillery shells on army gunnery ranges and selling the lead to sport fisherman were two of the money makers I heard about. Raising rabbits, doing odd job repairs for people. Fishing and hunting. Garage sale fishing tackle is cheap. Multiple hooks on a line were strung across streams, come back later to collect the fish.
This year and last year there was a bumper crop of hickory nuts and black walnuts in my region. I can hardly walk down the dirt roads without twisting an ankle from these nuts. An afternoon collecting a bushel or two of this dense food goes a long way toward survival. http://www.motherearthnews.com/real-foo ... cleContent

The poor can collect blankets, old sleeping bags, layers of clothing. They can collect canned food from various food charity organizations (usually in churches). Learning how to find clean water, filter water and to make survival shelters from sticks and leaves costs no money. Making simple traps from wood and string or fishing line gives one access to the plethora of rodents running about. Making fire from sticks is another costless survival activity. Numerous books have been written on both rural and urban survival.

There are boundless things that people can do to improve their ability to survive and reduce hunger, even if they are poor or homeless. People just need to change their view and stop depending upon "the system" to solve their problems.
The people who will be worst off when the system "gets out of hand" will be those who had money but are suddenly dropped into the "very poor" category. They will not have a clue how to gather food, stay warm, find or make clean water. They will end up sick and starved without external help. Worst of all they will use the last of their resources clinging to the past and trying to keep all that stuff they had and the way of life they had.

Survival is attitude and developed skills, not so much about money.
Most people prepare from the top down, versus the bottom up. Learn and practice survival skills before spending a lot of money on stored food,solar panels, gardening and high mpg cars, bulletproofing the house walls, etc . All those things can be removed or disappear overnight when things go bad. So what do they do then?

Rockman, the oil people have done a great job in providing oil. It helped people to invent miraculous things that are really beneficial. It allowed us to achieve some grand visions. Chemistry (my main field) did that too. However, the huge gain in knowledge in the past 150 years and especially in the last 60 has shown us that dependence on fossil fuels has some horrific downsides. It's time to move on and the longer we linger in some form of BAU, the tougher it will be. When one grasps the future horrors being set by continuing with this version of civilization, it becomes very difficult to justify our current directions.

Nothing personal in all this, just that we finally are realizing the error of our ways and finding it tough to crawl out of the oil barrel we put ourselves into.
As Red Green would say: Keep your stick on the ice. We are all in this together.

[ROCKMAN]

rollin - "However, the huge gain in knowledge in the past 150 years and especially in the last 60 has shown us that dependence on fossil fuels has some horrific downsides. It's time to move on and the longer we linger in some form of BAU, the tougher it will be."

Couldn't agree more. Not sure what you thought I might take personally though. When think you think about who would appreciate the situation better than someone who has spent 38 years trying to do what they knew was impossible: perpetually expand the development of a finite resource. If you didn't catch it before: my first mentor at Mobil Oil in 1975 explained PO very clearly to me and did a fair job of predicting history as it has unfolded. Big Oil press releases say one thing. Us boots on the ground understand the reality very clearly. And IMHO the US hasn't even seen much more than the very beginnings of those downsides.

[Plantagenet]

Not a lot of opportunities to forage in a Walmart parking lot.

You're wasting your time foraging in the parking lot. The goodies are all in the dumpsters.

[ROCKMAN]

P - A quiet Sunday afternoon so a good time for a mild rant. Everyone here is familiar with the cornucopians/MSM doofases using the bbls of oil equivalent approach to hype NG reserves. Even worse then just tossing the number they seldom give the conversion factor used. A 6 mcg = 1 Bo is common but there is no hard rule. And obviously that's not even a monetary equivalence. Those folks don't irritate me much as when it's done by an oil patch source. Big report in RigZone about a big GOM field Shell Oil is developing: the Stones Field. So there's 250 million bbls of oil EQUIVALENT. Shell will have to lay the pipeline in deeper water than ever before. Searched every reference to the field I could find with none giving the amount of NG in the field or the conversion rate. Assuming 6:1 conversion it might 1.5 TCF. But there could be some condensate component but can't tell from the info provided.

Just more difficult to accept from folks on my side of the fence.

[Plantagenet]

Chevy will be manufacturing an Impala next year that can run on gasoline or NG.

Chevy to sell Impala that will run on NG

While we cognescenti know the difference between oil and NG, to the average American (and average MSM reporter) they are going to seem very similar---they are both fossil fuels and both are available at gas stations and both are pumped out of nozzles and into gas tanks in cars and both can then make the cars go vrooom!

[John_A]

Michael T. Klare is a professor of peace and conflict studies at Hampshire College and the author, most recently, of The Race for What’s Left (Picador).

That explains. Klare has been pulling this one for quite some time. Recently he did a webcast with Kunstler, and was quite bullish on resources because of all the evidence from the US, combined with obvious international presence of the same stuff. So instead he ran to water and climate change angles to cause a Rapture, Kunstler appeared to be a little disgusted that he couldn't bait him into hyperventilating himself into resource war scenarios.