Well, while it's clear at this juncture that "bigger points" are lost on people like you, who prefer to lead others down irrelevant rabbit holes of their choosing, perhaps you should refine your question.

You asked if we should "only be concerned" about the kind of oil we can afford. I responded that industrial society doesn't have that luxury. If you were trying to get at something else entirely, do flesh it out.

Cornucopians were saying fusion was ~10 years away in the mid 1960s. It is the energy source of the future, and always will be.

It was basically a definition question. You use "Conventional Oil" as a synonym for "Oil that we can afford", but then you also make it very clear that conventional oil has a very precise technical definition (different from affordability, although correlated with affordability).

Your arguments involve having an actual price point (or small range) for oil, below which society can afford to pay for oil without any real problems. So my question was basically shouldn't you stop using 'conventional oil' and instead focus on all oil that can be extracted below your affordability price. Most of that may be conventional - but certainly not all of it.

Another month, another huge jobs report. This peak oil stuff isn't holding back the U.S. economy, OR IS IT??

I forgot that those suffering from confirmation bias ditch all nuance, and insist on semantics arguments weeks after learning for the first time that conventional oil does indeed have a specific definition.

I mention "conventional" and "unconventional" mostly in order to differentiate what has physically peaked in terms of total production volume, and what continues to grow (a bit) in terms of total production volume. I guess I should have used the term "C+C" as what has peaked since 2005 - or crude plus condensate. Of course there is an enormous range of energy density between the best sweet crude from the Persian Gulf and the most disgusting bitumen from rock and clay formations in Alberta. Just like there is an enormous gray area in defining what price per barrel is "affordable" to the median consumer or small business. The point is that fewer and fewer people/businesses/municipalities can afford, say, $80 oil as debt increases and budgets fail, while more and more $80+ oil is all that these producers have left to find, extract, refine and deliver. You can "focus" on what we may agree on as "affordable oil" all you like. That doesn't make it magically appear in endless abundance.

So, this again:



The carnage of U.S. shale producers is reaching full throttle. Layoffs are underway, and foreign investment is running for the hills. Some producers will be able to keep pumping for a year - maybe two - based on contracts bought many months ago. But a huge chunk won't. With that, nothing changes the fact that 1) the "plenty of oil" crowd needs every last drop brought to market for consumption, and 2) some percentage of those producers will be padlocked and mothballed with prices this deflated. There is little indication investors will return if/when prices shoot back up. I believe prices will eventually increase, but there's no guarantee they will as long as oil's value (in terms of net energy) continues to fall, and as long as demand continues to be mired by destruction. Both symptoms confirm the peak oil thesis. There's just no way to spin that.

In short, the tight oil hail mary is doomed, yet the play was always the focal point of the industry's game plan. The desperation kinda shows how short on ideas the oil industry has been since C+C peaked almost a decade ago.

Why Cheap Oil Does Not Mean that Peak Oil is a Myth

So, can we now forget about peak oil? No. Due to (5) and (14/15), the oversupply of oil will peter out. We still have the background global decline rate, so needing to produce a new Saudi every 3 years, and from unconventional oil, which is more difficult, tends to have a lower net energy return, and is expensive. Due to the current low oil price, new infrastructure is now not being built, meaning a further loss in production a year or so ahead.

The World After Cheap Oil
By Rauli Partanen, Harri Paloheimo and Heikki Waris
250 pp. Routledge – Oct. 2014

A crucial concept visited throughout The World After Cheap Oil is that of the “energy trap.” It can be summarized thus. Once world oil production begins to decline and the resource goes from being abundant to scarce, the oil that would be needed to reduce society’s dependence on oil is no longer available. This is because, as noted earlier, alternative energy sources sorely depend on oil just for their current production, not to mention the massive build-outs required to make them the dominant fuels. In a world of scarce oil, every ounce of it we possess will have to meet essential needs before those of alternative energy. The trap will become ever more acute the further we move along the depletion curve, since the sacrifice required to invest in renewables will have to come out of an ever-shrinking pie.

As night closes in

Take a cubic yard of tar sand fresh from the pit mine, with the sand still in it, or a cubic yard of oil shale with the oil still trapped in the rock, and you’ve simply got less energy per unit volume than you do if you’ve got a cubic yard of light sweet crude fresh from the well, or even a cubic yard of good permeable sandstone with light sweet crude oozing out of every pore.

It’s an article of faith in contemporary culture that such differences don’t matter, but that’s just another aspect of our cornucopian myth. The energy needed to get the sand out of the tar sands or the oil out of the shale oil has to come from somewhere, and that energy, in turn, is not available for other uses. The result, however you slice it conceptually, is that the upper limit of complexity begins moving down.

Why would producers not return as prices increase, does the profit motive not exist then? Also, as clearly stated above, the weak balance sheets will be bought by stronger balance sheets. For example this provides companies like Exxon a chance to establish a strong shale presence. I tried to explain this is how finance works earlier but you cannot see past your own slanted narrative. How many more years of being wrong do you need?

LOL samsonh.

http://www.gallup.com/opinion/chairm...mployment.aspx

'Gallup CEO: 5.6% unemployment is a Big Lie'

This has been covered, and shows you have zero idea what you're talking about when it comes to mothballing a well pad.

You are a classic troll long ago put to bed... There is no real need to acknowledge you any longer, as you are incapable of following the discussion, nor of getting my actual argument correct.

You last sentence is rich, however, considering how wrong you guys have been for so long.

Jiggs,

My guess is new pads will not be drilled, and existing ones will be drilled until they are gone. In fact that seems to be exactly what is happening now. It makes sense, ya know? Also you need to understand fixed vs variable costs and uderstand what sunk costs are and what cash flow is.

PS: This thread was created because you predicted a 10 million bpd shortage this year, we have a ways to go for that.

Don't be mad.

http://www.wsj.com/articles/jobs-rep...5-7-1423229564

'November, December Revised Up Sharply; Wages Climb Solidly'

Believe anecdotes or believe stats, I choose stats.

Only someone who did not know how stats are concocted, and I find it almost impossible to believe that could be true of a finance worker, would put that kind of faith in statistics.

Anacardo,

DO tell where I am mistaken.

The reported unemployment rate is completely, utterly bogus and the labor participation rate is a far better picture of the actual state of affairs for the American worker? How is there any good-faith analyst of the situation who doesn't realize this?

Am I arguing about the unemployment rate? No, I am stating a fact about the state of the labor market, which is almost certainly improving month by month. Had you read the article you would have read the rate went up because more people are being enticed into the labor market by rising wages. It is pretty simple. People like you and Jiggs pick and choose and miss the larger picture.

Not a good look for your argument...

LOL... yeah, at a 40-60% annual decline rate. That leaves you not growing, overall.

I understand them far better than you understand depletion, or the law of diminishing returns. And, as it pertains to this industry, it is clear that you are the one who doesn't understand what cash flow entails.

Well, not me. The Pentagon, and various other international entities, considered it likely and to plan accordingly. We didn't, because of trolls like you. And considering how sick the world is, and the track that consumption called for back then in order to maintain growth rates, I don't see how we're NOT several million bpd short. We should be closer to 95-97M bpd by now. We're stuck closer to 91M, and the top wedge of that total is crap-grade oil that has much lower energy density.

But you still don't understand what that means, do you?

Why would I be mad about being right at every phase of this discussion?

But do get back to cherry-picking economic data in a desperate ploy to pretend how healthy the global economy is.

Ya your graph is wrong. Almost all Canadian oilsands sites turn a profit at $50 a barrel.

and regardless, so ****ing what if it did, if prices eventually go up those come back online.

The CEO of Gallup is a crackpot. Both the unemployment rate and employment rate tell you something valuable and its completely transparent what the numbers mean.

Seems worth mentioning twice...

Not one of them has went off line or would unless there was a really long lull in prices. Over half their expenses are fixed.

Exactly my point. And points out how jiggs does not understand sunk costs and fcf.

Reality continues to conflict with his narrative, and it's creating ever more cognitive dissonance. He thinks I'm cherry picking statistics when I quote government labor stats. He has trouble dealing with the reality of facts. It's interesting to observe

Ah, cool. More laughable confirmation bias.

You clearly have no idea what you're talking about... There's been a 25% drop in U.S. land-based rig count just since Q3 of last year. They're suspending share buybacks and laying off workers left and right.

Helmerich & Payne may cut 2,000 jobs as it idles rigs

Driller Helmerich & Payne Inc said it may cut 2,000 jobs as it begins to idle rigs amid a slide in crude oil prices, following similar cost cuts by top oilfield services providers Schlumberger NV and Baker Hughes Inc .

The company's shares fell as much as 10 percent to $54 on Thursday as weak forecast for 2015 margins and revenue overshadowed a better-than-expected quarterly profit.

The 2015 forecast "reflects a severe opening blow from the global downturn", FBR Capital Markets analysts wrote in a note.

Here's net rig counts going back to 2000... I'm sure the cliff at the right is "no problem" for U.S. production totals later this year. Yeah.

You can shout your "super cycle" theory over and over again all you like. ... It remains irrelevant to what's actually being argued.

Huge sample size you got there, even if you disregard the fact that the oil shock of the 70s was man-made, while the oil shock of today is entirely geological.