You're still having trouble distinguishing between reserves and resources, I see...

Just to be clear: Do you honestly believe we'll harvest a total of 400 billion barrels from Bakken, even though the U.S Geological Survey confirms a mere 3-4 billion?

Keep clinging to myths just like that. It's what's at the core of YOUR argument.

You can actually really easily disprove this. The US consumed 6.95 billion barrels of oil in 2014 (and this number is very slowly going down each year).

So let's say at 60$ oil that is a total of 417 billion $. At 120$ oil that is 834 billion $.

Total US GDP was like 17400 billion $ in 2014.

So if oil doubles that is 2.2% of GDP. For a total of 4.4%. BUT people make money on that oil, and people are employed to get it out of the ground. So that negates some of the negative effects of high oil prices. As the US produced over 3.7 billion barrels of oil in 2014. Probably over 4. More then half what they consume, so that creates jobs . And that money is then returned in the economy.

Now let's take 1980 when oil spiked and you had massive inflation still.
http://www.indexmundi.com/energy.asp...ph=consumption

The us consumed 6.2 billion barrels.

The oil price was around 80$ inflation adjusted (since i use real gdp i gotta use inflation adjusted oil price right?)

http://inflationdata.com/Inflation/I...ices_Chart.asp

So that is 500 billion $.
http://knoema.com/tbocwag/gdp-by-country-1980-2014

And GDP was only 2800 billion$. So a whopping 18% of GDP. No wonder it caused massive inflation!

https://en.wikipedia.org/wiki/Oil_re..._United_States

30 billion barrels and growing (if you do some research in those companies, I have). That is enough to sustain production for at least 8 years. And those 30 billion barrels have 90% recovery rates. Then those 198 billion barrels have probably between 10-90% chance of recovery.

I do agree that if we dont find alternatives, cheap oil will run out, and oil could go into the 100-200$ range. But as i have shown earlier, it would not be a disaster. It would be somewhat painful though. But we will find alternatives. And things would become only slightly more expensive. 60-70 years down the road you really gotta worry.

You understand that the meaning of "proven reserves" changes a bit when the price of oil plummets 60% from what it was at the time of the original claim, yes?

Yeah marginal production. It shuts down, price goes up untill it finds a balance between seller and buyer. And since I have already shown that oil is only a tiny part in our world economy, this is not a problem. The price rebounds to a level where they can actually get them out of the ground and everyone is happy again (except you ofcourse, because then you are proven wrong).

Nah, you really don't. We have more than enough easily extractable lithium using current technology to replace all the world's cars with batteries, which means about 2/3 of oil demand will disappear - down to about 30 million barrels. In the next 10 years, even with business-as-usual - this will start bringing down oil demand in an exponential trend. In 20 years oil will be around the marginal cost of production of Saudi Arabia.

In 20-30 years we should have perfected sunlight to fuels (hydrogen or even hydrocarbons), meaning that instead of Saudi Arabia producing fuel, the Sahara or Nevada deserts will be producing endless supply of the world's liquid fuels (if we choose to go that route).

Long before that, improving extraction technology will mean that the vast reserves of existing oil will continue to produce more. Everyone was blindsided by shale, including the experts, who said it couldn't be done. Well, it was done. Humans are pretty ingenious, and the reserves are absolutely vast, many multiples of what's extractable with present day technology.

There really is no possibility of running out of liquid fuels, ever. In fact, the world is in for a huge supply glut starting in the early to mid 2020s. This thread is just a giant brain fart on Jigg's part. He'll never see it though. Well, maybe in 2022.

I showed him the same thing. He didn't understand the simple concept:
He has a weird convoluted theory. Since he admits that there is ample oil above $100, enough for decades, he needs to believe that $100 is some special threshold under which the economy just falls apart, despite it being completely at odds with reason, as we've both shown.

It's an interesting study in psychology. It's almost like he wants the Apocaloil to come so badly that reason goes out the window.

Gumdrops and lollipops from a free market cultist with zero capacity for understanding limits to growth, nor the very basic laws of thermodynamics.

Good job pretending you didn't get caught confusing consumption rates for demand forecasting though. Better to just ignore that misstep, take another hit of hopium and shift gears to what "should" happen when we perfect "sunlight to petrol" fantasies.

Tell us more about how the Greeks are just collectively dumb compared to their Northern European homogeneous betters.

I responded to your arrogant premise at the time. Interesting that you're, again, unwilling to actually link to the exchange for context. Pretty sure I linked to Chris Martenson's "Crash Course" to help people like you understand depletion and net energy, but why actually challenge your rigid "economics solves everything" mindset when you can remain blissfully ignorant?

Oil is absolutely NOT a "tiny" proportion of the global economy, and anyone who claims such should be embarrassed.

God you are like Steelhouse who got bitten by a dog with rabies.

And you're a gimmick account.

Dude, I understand the arguments. And they're ****tarded. Without even clicking on the link, I'm quite sure this clown is talking about some form of energy returned on energy invested. Basically, the idea is that the amount of free energy you get when extracting a barrel of oil is declining, such that it's turning into something almost as bad corn ethanol (the ultimate ******ation, but I digress). At some point you're no longer extracting much net energy, and the whole system collapses, as economies run on free energy. It's heavily exaggerated, but let's say I take the idea at face value in the worst-case scenario - all the energy available from oil is going into getting it out.

And you know what? If oil was the only energy source we had, the argument would be viable. But oil isn't the only energy source we have. We have coal, highly abundant and cheap, and nuclear, highly abundant and cheap, and natural gas (often a waste byproduct of oil, and also highly abundant and cheap) which produces ample energy for the extraction and processing. So the problem is moot.

What you're doing when mining oil that requires high energy processing, in effect is a coal-to-liquids, gas-to-liquids or nuclear-to-liquids energy transfer. It's easier than directly liquefying coal or gas (although that is viable at $40, apparently, if companies are willing to do the long-bet capex), but it's essentially the same thing.

So the problem seen is absolutely illusory while there other reliable, viable, abundant sources of energy to power heavy oil extraction and refining.

Get it, now? Please tell me that you do. This is really ****ing important so try hard to bend your brain cells to understanding. And then please, please understand why all this theoretical hand waving about energy depletion and net energy is total bull**** as long as we have an abundant, cheap, reliable source of energy to provide the energy to extract and process low net energy return oil.

I laughed when you mentioned me not understanding thermodynamics. I have a physics degree. It's straightforward lack of common sense that's the problem, and the problem is 100% yours, dude, not ****ing thermodynamics.
No one said it was. We said the oil PRODUCTION is a tiny proportion of the world economy.

Let me walk you through this so you understand.

Let's say 0.00000001% of the global economic output - equivalent to 7 workers and what they consume - are used in oil production, and oil costs 0.1c per barrel.

Let's say that extraction costs increase, such that 0.000000002% of the world's economic output - 14 people - are needed to produce the oil. And oil goes up to 0.2c per barrel.

Will this change kill the economy? Why or why not? Answer: it won't, because 99.999999998% of the world's people are still free to do as they please, with the same amount of oil as before.

Now let's say that 0.3% of the global workforce are employed in oil production. Oil price is $20/barrel. More difficult extraction doubles this to 0.6%, and the oil price doubles to $40/barrel. Does the economy get killed? Why or why not? Answer: it doesn't, because 99.4% of the world's population are free to do what they please, with the same amount of oil as before.

Now let's say that 1% of the global economic output goes into extracting oil - equivalent to $100/barrel. More difficult extraction double this to 2% of the global economic output being used to extract oil, and oil goes to $200/barrel to cover this. Does the economy get killed? Why or why not? Answer: it doesn't, because 98% of the world's population are free to do what they please, with the same amount of oil as before.

Do you understand why >$100 oil is not economy killing? Why $100 is not some magic number? The free energy of a system is simply not affected in any meaningful way.

Will it be a minor drag until readjustment occurs? Of course. Changes always are. But that will be absorbed in a one-off 2% inflation or so, and it's back to normal as the system has absorbed the shock.

You can see this right now. Oil has recently dropped from $100, where it's been for years, to $50. According to your clownish theory, this should mean the economy should start roaring again, as your MOST PRECIOUS commodity is now half the cost it was.

You know what? Oil dropping has made not even a blip on global economic growth. For something that went from the threshold of global-economy-killing levels back to historical levels, that seems a tad bizarre, no?

Just ****ing stop dude. It's over. Use a little Occam's Razor on this one, please. Your theory which you've invested so much time and energy into is false, disproven by reality. You've built up this convoluted theoretical model hinging on four ideas:

1. Oil is finite and resource peaking is real (true)
2. Newer extraction techniques have heavily decreasing return on energy invested (very true about decreasing ROE, but the effect is greatly exaggerated by oilisoverholdmemommybuygoldalsofrommyqualitybroker .com)
3. This means that oil past a certain point returns no net energy, and is supply limited past a certain point despite massive reserves of unconventional (lolwtfbqq due to not understanding that other energy sources power this)
4. The economy is ****ed, growth is finished, and it will collapse at above $100 oil (seems ridiculous on its face and contradicted by all the real world data)

1 & 2 are fine, but 3 and 4 - particularly 3 - are where you come completely unstuck. I suggest going back and rethinking it all. Your theory is shot, dude. I realize that years of believing this and reading it have created strong confirmation bias patterns, but for your own sake, know that your theory is completely off the reservation. I say this in good faith. Stop wasting your time on this nonsense. I'm going to

It doesn't seem at all like you do, considering this majority of the post is one long, rambling straw man ... especially the part where you pretend I've claimed EROEI drops to 1:1 or less.

I should clarify, as is usually the case when dealing with your ilk on this issue: It's difficult to decipher whether you're just not very smart, or painfully dishonest (thus, the straw man creation). In any event, I'll assume at least a bit of both.

No, he says world EROEI only needs to get down to roughly 5:1 for complex societies to seize up. Corn ethanol is closer to 1:1, but don't let that stop you from trolling up your response with laughable exaggeration. Still, it's telling that you'd label a renowned macro-economics trend forecaster with a post doctoral from Duke and an MBA from Cornell as the "clown" in this equation. Yeah, not you, who can't be bothered to actually check a short link for context and thinks all energy sources do the same work. Just him.

That's beyond the worst-case scenario, and you've officially begun arguing against straw man to make your own ridiculous "no problem" narrative seem better in contrast. Energy companies would go bust long before that point, which we're already seeing.

Holy ****, dude. You're completely lost, aren't you? EROEI is Energy Returned on Energy Invested. It's not Oil Returned on Oil Invested. So pointing to other sources of energy for the extraction and refining process doesn't change the ratio at all. They're still inputs, no matter what sources are used to get that tight and difficult oil to market.

Regardless, none of those sources are as abundant or interchangeable as you corns insist. None of those sources move freight for the very connected global economy, and all of them have serious capacity problems. Regardless, try and focus on what's being discussed. It's apples, not oranges. You can't just handwave the issue away by pretending all energy sources do the same work. They don't.

But just to play along, coal is disgusting (oh, wait, is this where you pretend climate change is a liberal hoax?) and isn't abundant (unless you wanna pretend peat and other crap grades of coal counts); nuclear expansion is going no where (for obvious reasons, including a lack of uranium); and natural gas still does not provide nearly the BTU energy that oil does for the same volume (there's that pesky EROEI again). Even if they figure out a way to get remotely close bang for the buck with NG as a fuel, we'd still need to transfer a global fleet of 800 million combustion engine vehicles to run on NG. Fail.

Nothing is as efficient nor as versatile an energy source as petroleum, and that's why it's been a petrol-based economy for many decades now. Might be a good time to start recognizing that fact, as it really has your "no problem" narrative drawing dead.

WTF are you talking about? Mining oil? Heavy oil extraction? Are we back to talking about tar sands production now? Bizarre gear shift, but OK.... The vast majority of crude today isn't mined, and there's a reason for that. Further, if you want to claim that industry is "viable" at $40, you're going to lose, just like the last cultist of growth who attempted that falsehood by trying to conveniently ignore some of the costs involved in heavy oil production. There's a reason oil production from bitumen has barely budged in 20 years. It's a marginal business in the best of conditions, and absolutely costs closer to $100 (by rail) and $75 (by pipeline) to pull a profit. Then there's dividends and interest payments, of course, and there's environmental and litigation costs that aren't considered either, which people like you insist is always someone else's problem. The biosphere, however, can't be privatized, and doesn't care that you only acknowledge some costs while ignoring others.

In the end, the heavy oil industry in Alberta is absolutely taking a beating right now, and it's no mystery as to why. If it were as easy as you claim, simply by burning "other" forms of energy to make it flow, then it would be expanding its production quotas rapidly and relentlessly. It isn't, and won't ... ever.

Speaking of "Moot." Shut up.

LOL... Your ignorance and dishonesty on this subject really makes your attempted arrogance rather impotent. But do continue claiming heavy oil production is no problem because of all the "coal and nuclear" we have to refine it. Holy ****, do you ever miss the point.

While it's telling that you're unwilling to link and back up your hollow claim that heavy oil production is "viable" at closer to $40, I'll go ahead and revisit some of the many links that absolutely insist otherwise:

Canadian Oil-Sands Producers Struggle
http://www.wsj.com/articles/oil-sand...gle-1440017716

Canada’s high-cost oil-sands producers are struggling as oil prices sink to fresh six-year lows, and even the most efficient drillers are losing money on every barrel they produce at current prices, according to a report published Wednesday.

Most Canada oil sands crude being produced at a loss
http://www.torontosun.com/2015/08/20...-a-loss-report

More than three-quarters of Canada's daily output of 2.2 million barrels of crude from oil sands is being produced at a loss at current prices, research from analysts at TD Securities shows, although producers are unlikely to halt operations.

Yes, keep chugging along at a loss, Alberta. Surely those prices will return for your exhaustive 2.2 million barrels of daily production.

But yeah... It's easy to pretend net energy concerns are all "bullsh**" when you literally believe all sources of energy can do the same work.

Yeah, gonna call "bullsh*t" on that one. You couldn't possibly, considering how laughably wrong your assessment of net energy and EROEI is throughout this post. ... You literally insist the ratio refers only to oil used to get oil, and somehow doesn't take into account other sources. LOL!!! Maybe you had compromising pictures of the dean of academics, or got your "degree" though some faith-based internet college.

The irony here is priceless. As the previous passage shows beyond a doubt, it's YOU who lacks basic common sense. Do show us where Post Carbon Institute (or anyone) claims EROEI somehow only refers to oil inputs for oil output.

No, genius. See, whenever its being discussed the ratios account for all inputs for pulling oil out of the ground, refining and delivering the product. It doesn't magically change from 10:1 to 1,000,000:1 just because you yell "coal" and "nuclear" a whole lot. All methods of producing the energy source are already baked into the cake.

LOL!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Upon which every aspect of the global economy relies and derives confidence from.

"let's say" your argument is a special kind of simplistic stupid.

Let's consider all the aspects your painfully dumb "no problem" outlook of macro economics ignores, gets dangerously wrong, or makes zero sense ... (you MUST be Republican).

- You're all over the place in defining what you mean by "global economic output." First it's a percentage of workers vs. world population (???), then it vaguely a percentage of all global economic activity (GDP)? Then you're back to talking about population percentages again.
- Global GDP is some $77 trillion; Global oil extraction costs for the industry are somewhere between $1.5 trillion and $2 trillion, annually (excluding subsidies and environmental costs and a number of other factors that bring it all much closer to $5-7 trillion, but whatever) ... In any regard, the direct cost of bringing oil to the market today is way more than "2%" of global GDP, global output, or any vague metric you're trying to claim.
- The futures price per barrel eventually affects the price of almost every good, most especially food. You ignore that in your simplistic assessment. ... so in your scenario, those 98% are getting killed by a thousand cuts on their discretionary spending as the cost of living balloons, wages continue to stagnate, and benefits continue to get slashed.
- Oil at $100 for 4 years most certainly affected the global economy adversely, and absolutely caused this era of slowed growth and reduced demand, as we've covered.
- Oil at $200 would never happen, but if it did, it would mean the end of the global economy as we know it. Your position is acutely ******ed if it insists that the global economy could handle that. You won't get much support for that claim outside of the ".00002%" of this forum that believes economics dictates to energy, ... It doesn't. Quite the reverse. Mmmkay, "physics major?"

Pretty much nailed it three years ago:

"Oil prices plunged to $40 a barrel after economic growth collapsed, taking global oil demand along for the ride. And that same movie is about to play out again. Recessions are already rolling across Europe. Economic growth in North America is lackluster, at best. Meanwhile, the specter of sovereign debt defaults in the euro zone continues to hang over global financial markets. Added up, it spells another sharp drop for oil prices not because fuel is abundant, but because once again the world can’t afford to stay out of a recession."
- Jeff Rubin, 2012

It's interesting that you guys can't seem to get your heads around lag time. It's only been 13 months, dude. And really, only 8-9 months since prices fell below marginal (tight oil) costs. Your ilk were all making the same dumb assessment as prices were rising past $85 through the first half of 2008. "Gee, no storm yet!! LOLdoomers!!"

Still.... you should perhaps re-wire your closed-minded brain and ask yourself if that - the economy not getting quickly better at all - is more alarming for my overall argument, or your own. Prices are in a deflationary spiral, and growth forecasts are still being revised downward seemingly every quarter.

It's funny watching you guys pretend the new normal of 1.6-2.4% growth is a check mark for your argument and not mine. Cool story.

Occam's Razor is firmly in my camp, dude. Not yours. ... And the only thing you've "disproven" is the straw man you've created for my argument. Not my actual argument.

But do tell us more about how abundant coal and nuclear makes the stated EROEI for heavy oil "bullsh**"... Can't wait.

Well, 1 is irrefutable... and 2 is not only "fine," but absolutely not "greatly exaggerated."

Well, your ridiculous straw man for it does, anyway. Never mind that you don't seem to understand that "other sources" are factored into the EROEI equation already.

As for No. 4, if it could seamlessly stay above $100, it would have because the producers absolutely NEED that price level (as the price points suggested in the OP clearly show, and you don't dare deny). Instead, price continues to bump up against that hard ceiling before recession sends it careening downward all over again. And the "real world data" of recession/slowed growth? That's not a notch in your argument's belt. It's most certainly one for mine.

Projection at its finest. ... Whatever you need to tell yourself, champ. Meanwhile, the doomsday clock for global financial meltdown is now at 11:59 as the bill comes due on unsustainable debt levels (due to central bank desperation amid shrinking global net energy) ... But I'm sure you can tell us more about how that has everything to do with dumb, non-homogeneous Greeks and other "Obama-like socialists on steroids" who don't bow to their Northern European betters.

Face it.... You're a financial Nazi who doesn't appear to understand basic physics concepts despite claiming to have a physics major.

You have no idea what you're talking about, so, no, you don't.

You mean stop turning your curious understanding of net energy depletion on its ear? No, I rather enjoy it.

OK.... Run along then.

Jiggs,

Tooth is pretty clearly one that makes money from markets in this forum. He is rare. He understands trends. You clearly do not. Jiggs, quite clearly you're theory of oil is dead. I am sorry.

i wish oil would go back up i dont love our CDN dollar at 74 cents.

Jiggs, do you have any thoughts on natural gas prices currently? Any fundamentals behind nat gas prices the rest of the year? Nat gas has been flat since spring and hasn't broken down (new lows) like most other commodities and assets. I see it falling very soon to new lows and just wondering if you could play devils advocate.

Why ask the guy who has been wrong on every prediction ever what he thinks? Jiggs is most likely the most broke investor in this forum. His advice is terrible. It's not even worth doing the opposite of what he says, because what he says is simply noise

Jiggs reading your posts is like listening to a schizophrenic. Jesus. And Tooth please stop feeding that troll. The fact that I now know this argument exists somewhere on the internet makes my head hurt. It is like every basic economic fundamental is being raped in his posts. A mind blowing lack of common sense.

DEMAND DESTRUCTION





http://seekingalpha.com/article/3472...mand-is-rising

Tooth... why are you going to other forums pretending you "gutted" me in this thread and that I "slinked" away, when, in fact, you're the one who disappeared from this exchange?

Are you still embarrassed you don't understand what EROEI refers to? Or did someone speak to you about how ignorant you sound when you claim Greeks are to blame for their own misfortune?

Excellent. I goaded you into bumping your own (now extremely embarrassing) thread. The people who read the OP for the first time with oil now at $30 are going to go WTF and have a fun read. As I said in the other thread:

The fact that you don't think that the price dropping to $30 and staying there despite increasing demand and deliberately decreased supply (wells being taken offline) says anything about the cogency of the thesis is just comical - it's textbook crazy.

Even if you don't accept that, you have to admit that anyone who invested based on your ideas lost an absolute fortune. And since this is BFI - that's a big fat lol.

As for EROEI, considering that I went into a detailed post some pages ago (when oil was $100) about why that doesn't matter while we have abundant non-oil energy sources, I think you're reaching a little.

Nice bump, Jiggs.

Maybe Jim will update his charts.

We all know that demand has dropped off the charts and supply is dwindling like a waterfall.

Umm...

I can't tell if trolling or very stupid.