The company I work for is spending 500M to upgrade our system to use condensate instead of synthetic crude as a diluent, should cut the cost to produce a barrel by 6-8$. Also implementing a new system at the wells injecting non-condensable gas that will lower emmisons and steam generation costs by at least 15%. This is in Alberta where oil was 10$ 2 weeks ago.

Thread should be renamed Peak Oil and its Perpetually Imminent and Relentless Slow Motion Collapse

How long would you have to live to be a favorite to come into contact with anyone who is as aggressively and loudly wrong on any subject? A thousand years?

Don't get me wrong I am impressed more than anything. I hope Jiggs will drop by to give us updates for years to come.

No, it absolutely isn't. You're confusing overall consumption with refined product. We are a net exporter of refined product. We still consume far more than we produce, overall, and import almost 8m per day.

Come on, bro. That's just basic stuff.

Here you are:
https://www.eia.gov/dnav/pet/hist/Le...s=mcrimus2&f=m

lol.... citation please.

And, 500 years at what cost?

When all costs are considered, the average fracked well in the US needs way more than that, especially when dividend payments are required. I've linked to that fact a few times now. These producers aren't in the business of "breaking even."

Big Fracking Profits at $50 a Barrel? Don’t Bet on It
Claims of low ‘break-even’ prices for shale drilling hardly square with frackers’ bottom lines
https://www.wsj.com/articles/big-fra...-it-1543919401

many of the companies curtailed drilling to their choicest acreage, which caused the break-even figures to fall significantly in 2016, and helped create the impression that shale companies could generate overall profits even at lower prices.

sigh... no.

There's that too. Which is what depletion is all about. There's plenty there, if you wanna dig deep enough, go bankrupt, and fry the planet faster.

Extra lol @ "how cleanly can we burn the stuff"

At least you admit it's still a negative. But again, no. ... Producers aren't in it for a "wash."

You realize the blood bath energy hedge funds took last year?

Bad bets on oil, gas spark wave of energy-fund closures
https://www.reuters.com/article/us-u...-idUSKCN1PC0EG

“There is a massive decline in the number of funds, and no replacements,” said David Mooney, founder of Casement Capital. “There has been a near ‘extinction event’ in commodities hedge funds.”

Trouble In Paradise For U.S. Frackers
https://oilprice.com/Energy/Energy-G...-Frackers.html

The frackers’ problems will be compounded by continued demands that producers pay dividends and return capital. As the various investors quoted by Bethany McLean in Saudi America explained, the fracking business has rarely if ever been cash-flow positive. The consequence could be stagnation or even a decline in U.S. production from end-December 2018 levels by the close of 2019.

And where did you pull that figure from? I'd love to read it. Last industry reading had us at 11.3m in August. Who in the world says we're on track to reach 13.5m by Dec. 31?

So, ignoring what "economically recoverable" means from a "no problem/invisible hand" troll like you, as opposed to what it means to the industry... but, 11.3m is "30% more" than 10.8m? ... that's some curious maths. You must have real trouble at the table counting outs. Is that why you're on here literally every day arguing the virtues of homogeneous cultures and blaming more pluralist societies for all the world's economic problems?

never mind that most of that US total is a very light blend that doesn't fit well with America's Gulf Coast refineries.

But you don't know anything about that, or what that means, as we've seen.

Surely they're must be some recognition at this point - with thread about to hit its 5-year anniversary as the US hits its highest ever production output (in a low-cost oil environment!) - that you diagnosed the oil market very, very badly in the OP.

Nice bump by Jiggs. I guess the poor guy's world falls apart if it turns out he was clownishly wrong on this...so he doubles and triples down. Imagine being so passionate and so provably, unequivocally wrong about this. Your entire worldview would crumble.

Because oil is cheap because there's so much excess oil?

This is like the 10 year anniversary of Jiggggzzzzzz posting on 2+2 about how We. Are. At. Peak.

This thread may be 5 years old, but Jiggs has been megaphoning peak oil since at least 2010.

wow this is amazing lol.

Its hard to follow this thread...he was /is predicting supply side issues?

during the 2015 investment decline my friend who runs funds including an oil fund was pumping the idea that investment decline during the crash would end in very high prices by now. nope. investment numbers went down by stalling projects, and their lead time was not the leadtime of starting from scratch. if they had to start from scratch it would be a different story, but it was a pause not a reboot, and as soon as investment picked up, it was projects with a short leadtime to completion. I told him this as my justification that we will never see high oil.

anyway, when the production war with opec happened in 2015 happened i pretty much closed the books on ever having high oil prices again. take away the cartel and this market is no more interesting than softwood lumber.

demand will always be solid. the richer we get the more material we need period. oil will not keep pace with progress with other areas, due to the switch to other tech...we just arent going to be using enough to run the price up in a short time

The economics of saudi and similar countries are still far better i think, but those countries are indirectly an unwittingly imposing a huge tax.

lets say US pumps oil at 40-50 and can still make a profit (dont check my exact numbers i did this analysis a while ago cant remember the numbers and dont care if they've changed), but saudis pump it at 25 but they are the ones struggling at 60 buck barrels, because their entire budget is tied to higher oil prices, their system or their "company" is in a deficit. So us at 40 bucks is the low cost competitor, and I call the lost competitiveness of saudis et al, a tax they must pay to preserve non-capitalism - good luck to them but that approach is getting murdered. even in canada we will need to remove taxes...i think we charge each barrel out of the ground. nope cant do that.

without a cartel the oil industry would be a very low margin industry. there is very little risk pulling oil out of the ground, demand is very predictable, as is supply. corn, wheat softwood lumber are all way more complex, can have catastrophic incidents of blight and weather and therefore demand a higher return.


we just need to get used to having oil trade in a tight range and probably no recessions (i would guess almost never again). unless things change. forever low oil and never recession is my investment backbone. i dont believe its possible to have a recession if oil prices stay low, because thhen inflation is certainly low. so once im comfortable with that, i pick tech stockslol

So I've never experienced being as wrong about anything as Jiggs is about peak oil. That's because I give up waaaay before this point. That being said I've been wrong about a lot of stuff, and at one point was laying face down on my bed struggling for breath because I'd just blown 15% of my net worth out of my ass shorting NFLX (this was years and years ago now).

As it turns out that moment was a big deal for me. I learned a lot about myself through that pain. Jiggs... dude you need to accept that you're just 100% wrong about this and accept the cognitive dissonance that goes with it. Pain means you're supposed to be learning something. You need to examine how you synthesize information and do some significant reworking of those systems. The pain will motivate you to make sure this never happens to you again.

yeah I think Jiggz is finally ready to learn from this and move on. Good for him!

The thing about Jiggs is that he knows a lot about oil and the oil industry. He just has no concept at all about how economics actually works so his interpretation of the state of the industry and predictions for the future are just garbage.

It's a tough thing to self-correct. Because its not like we're predicting a specific future for Jiggs that prove him wrong. So something happens and Jiggs waves it away as some one-time event that has just delayed his prediction. But the next 2 decades are probably going to be "one-time events" that push off the inevitable as things happen and the market reacts. (Except of course for the inevitable recessions / global events that will cause short-term problems. He'll declare victory for a brief period of time. Then gradually go back to where we are now.)

By the way Jiggs, notice how we all still have internet access? Peak oil!

Jiggs almost certainly doesn't have money riding on this and there is no real cost to being wrong.

You see this in the TSLA thread too where some people are just being aggressively wrong (or overstating their cases, both bull, and bear) for whatever reason there may be.

People who put their money where their mouths are end up at some point having an episode like the one BS described and learn to be much more self-reflective and to recognize when they are wrong. I call this learning the "hard way." This is a big part of why a big loss/going broke seems to be almost a rite of passage for professional traders/poker players.

Of course, some people are wiser and don't even need to learn the hard way. They seem to be the exception though, at least among the population that gets attracted to trading/poker and other types of high stress, results oriented, and risk taking businesses. (certain areas of law actually fits this description too)

This is a good post and very accurate. The thing is, letting yourself hold incorrect opinions in the long run is very toxic. Every time you come to a false conclusion and let yourself feel smart you're actively getting stupider. I have a brother who has been a full blown conspiracy tard for over a decade because he got hooked on this particular drug.

Jiggs knows a lot of facts about the oil industry, but I'd argue that his knowledge is worthless because he's actively ignored absolutely every fact that didn't already support his conclusions... Which means he honestly doesn't know much. My brother knows a whole bunch about 9/11 because he's convinced our government did it. You can be assured he's learned exactly nothing about construction, engineering, or physics during the process because none of that would help him feel smarter than the rest of the human race.

A sizable chunk of that industry know a lot but make disastrous calls. its not 5% outliers its 30% of the analysts are flat out absurd in retrospect. WE just have to take their data and reinterpret it. I think they must have started with a thesis and worked it back, anyway theres lot of mental traps and biases in play and someone knowledgeable can easily make a bull or bear case for anything.

the first five years in that industry is cranking models and adjusting earnings reports. I honestly dont know anyone mired in that **** that is a good investor.

Eventually they get good at economics. 2-3 years of being asked macro questions they learn to have a story preped, and the only way to prep it is to know it.

out of the gate noone knows macro. there is no blueprint otherwise the central bankers would get it right every now and then, instead of never. macro is so misunderstood and people get on tv and **** it up all the time.

With respect to oil, during oil's run up to 100s, analysts were predicting a downturn because they were projecting lower demand growth and therefore lower prices.

In the very same articles, there would be links to demand and supply growth projections. Demand growth was slowing (relative to previous years) but supply was still growing slower than demand and they were projecting lower inventories. It was literally just groupthink (remember what I said about people having no money on the line? Analysts for the most part didn't have money on the line.) This was with every OPEC member already producing near full capacity at the time with only maybe Saudi Arabia having significant spare capacity. I bailed when fracking oil and gas began to come online and supply growth began to catch up.

My head almost imploded and I eventually was like "This is stupid. Slower demand =/= lower prices if demand growth is still > supply growth." I put money down and did very well. In retrospect I got very lucky (I used more leverage than I probably should have) but that episode alone is enough to convince me there are significant inefficiencies in the market and there will always be opportunities if you keep your mind open and apply common sense and take the time to understand WHY other people hold their beliefs.

Understanding the why for the false beliefs is important because:
1. It's a self protection mechanism, due diligence, giving you a chance to go "oh, yeah, I didn't think about that. Actually the market is right."
2. It helps you form a counter thesis for timing. (See TSLA, I actually agree it's severely overvalued but I don't think the bull thesis is falsifiable anytime soon)
3. It also helps you identify goal posts to know if you're just wrong. (If "X" happens, it must mean I am wrong, or the probability I am right goes down by enough it's time to go.)

The poker equivalent is understanding the logic, however wrong, of how a villain arrived at his/her play so you can come up with a better range analysis.

He seems like a dickbag to me who knows little he hasn't read on peakoilconspiracies.com.

I started this thread with an open mind, maybe even sympathetic to the peak oil argument, then actually examined his claims, the evidence, the reserves, the cost and energy use of extraction...it quickly became clear that peak oil was pure bull**** at that point and all of his claims were absurd and that Jiggs is, well, a dickbag.

I laid out in detail the evidence for why he's wrong in this thread - it's really irrefutable and of course reality has borne that out - and he couldn't grasp it. Which proves to me he knows **** all about oil and the oil industry.

I think he has an ok grasp of economics, just a big blind spot when it comes to peak oil, a lack of ability to reason in unfamiliar situations, and a head filled with utter crap from the sites he reads which constantly bombard with arguments for peak oil, not unlike the various conspiracy sites like 9/11 truth. Then confirmation bias, stubbornness and the inability to reason from first principles do the rest.

One of the most adamant and fervent 9/11 conspiratards I know is a trained/experienced civil engineer turned day trader (that does very well, despite paying retail spreads. He has a knack for detecting and then front running pump&dumps.)

A sizable chunk of that industry know a lot but make disastrous calls. its not 5% outliers its 30% of the analysts are flat out absurd in retrospect. WE just have to take their data and reinterpret it. I think they must have started with a thesis and worked it back, anyway theres lot of mental traps and biases in play and someone knowledgeable can easily make a bull or bear case for anything.

the first five years in that industry is cranking models and adjusting earnings reports. I honestly dont know anyone mired in that **** that is a good investor.

Eventually they get good at economics. 2-3 years of being asked macro questions they learn to have a story preped, and the only way to prep it is to know it.

out of the gate noone knows macro. there is no blueprint otherwise the central bankers would get it right every now and then, instead of never. macro is so misunderstood and people get on tv and **** it up all the time.

He literally believes that oil will be in a price range where it’s too expensive for consumers to buy but too cheap for oil producers to extract.

He has no concept at all of how people and markets respond to different situations.

I’m not sure what grasp of economics he has.

Oh, his knowledge is absolutely worthless to him.

grunching here.

peak oil was real, probably peak natural gas too......... and then technogical advancement made it so we can a much higher recovery rate on oil we know is in the ground.

maugeri sp? who is associated with harvard called it completely although perhaps a bit vaguely....... basically technology will find a way to get more oil out the ground. and then it happened.

i think the continuous pattern we have seen the since 2010 is that when oil rallies strongly in the medium term that USA production surges really strongly.

off topic, but it reminds me of the reverse of the "fed put" where if the stock market is weak the fed acts. pattern repeats itself alot.

the other question around peak oil and $140 oil was how much large financial investors drove that increase through investing in oil futures (basically rolling them). giant pension funds and similar.

i have a question: what happened to baaken oil production? it stopped growing. was that technological? i.e. ran out of favourable drilling prospects, OR constraints on getting the oil to market.

i'd be pretty careful on oil right now........ i think most signficant news will be negative in short to medium term. then when oil goes down $10-$15, OPEC will step in again (another pattern that repeats itself over and over again)

Smh.

The reason that peak oil was always wrong is because it failed to account for technological advancement, both in finding oil and extracting oil.