Beginning of the End? Oil Companies Cut Back on Spending

1 03 2014

Interesting analysis of Steven Kopits’ presentation from Gail… MUST READ!

Our Finite World

Steve Kopits recently gave a presentation explaining our current predicament: the cost of oil extraction has been rising rapidly (10.9% per year) but oil prices have been flat. Major oil companies are finding their profits squeezed, and have recently announced plans to sell off part of their assets in order to have funds to pay their dividends. Such an approach is likely to lead to an eventual drop in oil production. I have talked about similar points previously (here and here), but Kopits adds some additional perspectives which he has given me permission to share with my readers. I encourage readers to watch the original hour-long presentation at Columbia University, if they have the time.

Controversy: Does Oil Extraction Depend on “Supply Growth” or “Demand Growth”?

The first section of the presentation is devoted the connection of GDP Growth to Oil Supply Growth vs Oil Demand Growth. I omit…

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6 responses

1 03 2014
Graham

I think I get the picture. Things are moving far faster than we realise and beneath the mirage of the “normality” of the life we are leading there are financial and supply and demand pressures working to cause the economy to fail again sooner rather than later.
My biggest problem is how to explain this to those I love and care about but all I get are blank stares followed by a quick change in the subject.

1 03 2014
Eclipse Now

And what happens when production lowers 25%? We all starve to death because of some worldwide oil war, or failure in agriculture? Oh wait, the GFC already cut consumption in America 25% because people decided not to take that road trip or holiday. How long before production drops to 50%? Government rationing systems will have kicked in long before then, *ensuring* oil gets to the right industries and places to keep society ticking along. In the meantime companies like Tesla motors and ideas like the boron economy (that James Hansen promotes) will be growing exponentially. When production drops to 50% the world *will* stop pretending it isn’t happening, and SWITCH, big time, to the next big thing. Gail T just brushes away technical alternatives with a terse ‘there isn’t enough money or time.’ She fails to demonstrate either STAGGERINGLY ENORMOUS proposition! She takes a leap of faith, and just says meaningless words to make objections to her doomerism go away.

I’m sorry, but that’s just pathetic. The financial system can be restructured. The remaining oil can be rationed. Emergency alternatives can be kicked into gear quick time. What can we do? Some items below will be laughable, because they’re only for *extreme* emergencies if we can’t roll out the EV + boron economy fast enough, but in a real emergency we could:
* Car pool, co-ordinated by websites and smart phones
* Bike share clubs like Velib in France
* Emergency roll out of electric trolley bus routes
* some ‘brown tech’ in a real emergency, but preferably not! (CTL would be a real bad thing to get addicted to).
* Holiday locally rather than internationally
* Pedal power rickshaws make a comeback, with fit young rickshaw drivers now taking the elderly to the local shops
* Local corner stores make an emergency comeback, so that 1 truck delivery replaces 100 car trips
* Eventually electric trolley trucks can replace that 1 truck of society is really struggling to adapt to a post-oil world

Catastrophic collapse is not inevitable. I don’t think it’s even *likely*.

1 03 2014
mikestasse

You’re out of your depth…… when the oil majors go tits up, oil production will fall by 95%, Tesla Motors will shut down, and you won’t be able to buy bicycle tyres…….

2 03 2014
MargfromTassie

So you don’t think catastrophic collapse is inevitable. Hasn’t it happened at other times, in other places? Or are we smarter than they were? We are already collapsing!! 1/4 of the world already goes to bed hungry each night and this is increasing. Flora and fauna species are becoming extinct every day. Our forests, soils and oceans are already over exploited and deteriorating. Financially, the global economy is one gigantic ponzi scheme, in which the majority of people have been willing participants. Meanwhile human population continues to grow, as does its belief in materialism, consumerism and self indulgence. Yes, there are some good ideas out there but the overwhelming majority of people won’t be willing to change on the scale needed in time…..

2 03 2014
mikestasse

Exactly Marg…….. Look at this advert for the new Cadillac EV. I wish it were satire…… but no it isn’t!

The opening shot shows a middle-aged man, played by the actor Neal McDonough, looking out over his backyard pool, asking the question: “Why do we work so hard? For this? For stuff?”

As the ad continues, it becomes clear that the answer to this rhetorical question is actually a big fat YES. And it gets worse. “Other countries, they work,” he says. “They stroll home. They stop by the cafe. They take August off. Off.”

Then he reveals just what it is that makes Americans better than all those lazy, espresso-sipping foreigners.

“Why aren’t you like that?” he says. “Why aren’t we like that? Because we’re crazy, driven, hard-working believers, that’s why.”

By this point, the ad has already become little more than a parody of itself, but we had to ask: believers in what? The pursuit of “stuff.” The other reason for America’s superiority, according to Cadillac? Our unrivalled space exploration program (“We’re the only ones going back up there,” the ad boasts). Never mind the fact that the U.S. government is now paying Russia $70 million a pop to shuttle NASA astronauts to the International Space Station.

Cadillacs have long been a quintessentially American symbol of wealth and status. But as this commercial proves, no amount of wealth or status is a guarantee of good taste. Now, the luxury car company is selling a vision of the American Dream at its worst: Work yourself into the ground, take as little time off as possible, and buy expensive sh*t (specifically, a 2014 Cadillac ELR).

5 03 2014
Idiocracy

For those interested – “Collapse” (2005) by Jared Diamond gives many a good example of “how societies choose to fail”.

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