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Originally Posted by jjshabado
But that's the whole cruxt of the problem, isn't it? At one end we have a slight decline in standard of living from oil that gets washed out by thousands of other standard of living factors (like technological advancements). And at the other end we have a 'civilization ending' regression to the stone age.
Even in the comfortable scenario (and we both know it will be somewhere in the middle), a radical change in energy (and foreign) policy is obviously needed. I'd say THAT is the whole cruxt of the problem.
Quote:
Originally Posted by jjshabado
It's not happening. From wikipedia:
As I've displayed numerous times, what you're alluding to there is total liquids, including 4x-more-expensive unconventional oil plays which is ALL that has maintained tepid production growth since 2005. The more telling chart is the one that shows conventional production has flattened off for 9 years running. So, as we go forward, and conventional production begins to decline, more of the crap-grade oil will "need" to make up for it. It is axiomatic that margin costs will rise. If the public can't afford the elevated price (as we've seen time and time again as price bumps up against that $100-110 ceiling), then these companies won't be able to expand drilling.
Production growth is being maintained by debt. These companies, for the most part, are NOT making money on this U.S. shale "bonanza." I'm sorry, they're just not. And now foreign investment is backing out.
Shell shale woes hit Houston-based unit
Shell's Houston-based exploration and production unit for the Americas will take a hit including financial cutbacks and possible job losses in a shake-up the Dutch company announced Thursday, citing disappointing results in U.S. shale plays
Sumitomo to Probe $1.8 Billion in Shale And Coal Losses
Net income is forecast to total 10 billion yen ($91 million) in the year ending March 31, down sharply from the company’s May forecast of 250 billion yen, Sumitomo said in a statement. The bulk of the change comes from a 170 billion yen write down on the value of the shale oil development in the Permian Basin in Texas
Itochu Writes Down Samson Investment as U.S. Shale Bet Sours
The latest impairment of 29 billion yen ($279 million) follows charges of about 33 billion yen reported by the Tokyo-based company last year. Itochu has now written down most of the 78 billion yen, worth $1.04 billion at the time, it paid in 2011 for a 25 percent stake in family-owned Samson.
I could go on and on. The industry does a great job painting a different picture, but their actions, and the actions of foreign investment tell a very different story.
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Originally Posted by jjshabado
How isn't this debatable? Society isn't breaking down now even though oil prices have been between $80-$105 for the past 5 years.
I have to laugh whenever I see you guys suggest this, as if you've forgotten the extent to which QEx, TARP and all the other bailouts have kept the global economy together with duct tape. You're either not watching the same daily international news reports I am, or you just can't see past gated-community America.
China's growth is slowing, the Middle East is on fire, concerns are rampant that Europe is on the brink of recession, Wall St. continues it's pump-and-dump, corporate debt is back to '07 peak levels, as is stock buybacks and margin debt.
Hell, how many European banks are going to fail the EU's stress test this week? 12? 18? 36? Reports vary.
Are you quite sure you're being honest about the health of the global economy?
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Originally Posted by jjshabado
The idea of a "razor thin" spare capacity is kind of silly. That's not a bug of the system - it's a feature. It's why the price fluctuates the way it does.
I'm not sure what you're ultimately claiming here. That spare capacity isn't important? That world events don't disrupt production (Egypt, Libya)? That it's just not "razor thin" at all?
Quote:
Originally Posted by jjshabado
So I agree with the "Oil Prices will probably keep going up" premise. I just don't see any proof/evidence/arguments from you about:
1. The effect of these higher prices on society.
2. The conclusion that other energy sources won't respond to provide cheaper energy when oil prices get too high.
3. That any of this is going to happen in the next 5-20 years.
1. Detoit sez hai
2. I asked the thread to allude to what that energy source will be, exactly. Still waiting.
3. I guess you're just not very familiar with my work here.
Former BP geologist: peak oil is here and it will 'break economies'
Industry expert warns of grim future of 'recession' driven 'resource wars' at University College London lecture
"... a sustained decline in global conventional production appears probable before 2030 and there is significant risk of this beginning before 2020... on current evidence the inclusion of tight oil [shale oil] resources appears unlikely to significantly affect this conclusion, partly because the resource base appears relatively modest."
..."If we can afford to pay $150 per barrel, we could certainly produce more given a few years of lead time for new developments, but it would break economies again."