It is not a shale revolution, it is a retirement party

25 03 2014

martensonheadshotThe Oil Revolution is Dead Wrong

Over at Chris Martenson’s website, Peak Prosperity, there’s a podcast of an interview he did with Richard Heinberg, now on youtube… I’ve downloaded this, and listen to it in the ute from an SD card.  Ah, the beauties of modern technology.

It’s fascinating listening to these two men, both of whom were instrumental in my understanding of our looming predicaments.  It’s also interesting that it was Richard’s first book written in 2003 on Peak Oil, The Party’s Over, that got Chris going on communicating his beliefs that the end was nigh at what was then Chris Martenson dot com where the Crash Course was born.  If you haven’t done the Crash Course yet, make some time and do it soon.  Like NOW!!

From the transcript of the interview…..

“…the big news right now is that the industry needs prices higher than the economy will allow, as you just heinbergoutlined. So we are seeing the major oil companies cutting back on capital expenditure in upstream projects, which will undoubtedly have an impact a year or two down the line in terms of lower oil production. That is why I think that Campbell and Laherrère were right on in saying 2015, 2016 maybe, we will also start to see the rapid increase of production from the Bakken and the Eagle Ford here in the US start to flatten out. And probably within a year or two after that, we will see a commencement of a rapid decline.

So you know, on a net basis, taking all those things into account, I think we are probably pretty likely to see global oil production start to head south in the next year or two.

But this change in capital expenditure by the majors, that is a new story. You know, just a couple of years ago, they needed oil prices around $100 a barrel in order to justify upstream investments. That is no longer true. Now they need something like $120 a barrel but the economy cannot stand prices that high. So you know, if the price starts to go up a little bit, then demand just falls back. People start driving less. And so the economy is unable to deliver oil prices to the industry that the industry needs. This is—I think Gail Tverberg is saying this is the beginning of the end. I think she is right.”

“….this is extraordinarily important news and we are just not hearing it really. I mean, you know, the occasional article in the Wall Street Journal. But this is going to impact our entire way of life.”

“……the Department of Transportation in Texas did this analysis and said, “Fracking is doing about four billion dollars of damage to our road surfaces and bridges on a yearly basis. These eighty-thousand-pound trucks, of which it might take as many as almost twelve hundred to complete a single well—six hundred if you want to re-frack it—and those twelve hundred trucks weighting eighty thousand pounds filled with sand and water and fracking fluid and who knows what and giant diesels and……drilling rigs and stuff. They are only collecting about a billion dollars in severance tax back to repair the road damage and doing four billion in damage. Who is going to pay that?”

“…the only preparations we see are, frankly, the militarization of police forces around the country and the ubiquitous surveillance. So that is not very confidence-building in terms of our future….. they see that more social unrest is likely as a result of the current trends, so they are preparing for social unrest rather than addressing the trends.”

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5 responses

25 03 2014
gbell12

Does anybody else worry about the accuracy of the predictions from the same ol’ Peak Oil voices, given it’s 2014 and still no obvious crisis? When I started listening to these guys in 2005 or so, there was no way I’d have guessed we’d still be “happy motoring” in 2014.

25 03 2014
mikestasse

Well they have been scraping the bottom of the barrel to keep the “happy motoring” going….. but it’s obviously not working, and won’t last too much longer.

Making predictions involving dates is fraught with danger…. but it doesn’t mean the end result is in doubt.

1 04 2014
Mulga Mumblebrain

Peak cheap, easily accessible oil was in 2005. Since then it’s been downhill, depletion rates of the mega-resources are about 6% a year, there are a few temporary fixes, like tight oil in the USA, and shale fracking is a highly destructive, greenhouse gas emitting, con-job, as all non-compromised experts have been pointing out for years. The Big Crunch is nigh.

25 03 2014
John Theodorou

Well, I for one don’t worry about their accuracy, as these were always only ever forecasts – which have been playing out pretty well actually. Much better than their cornucopian counterparts, like Yergin and the EIA, who were actually predicting well over 100mbs p/d by now. But of course there’s no rebuke or criticism of them in the MSM, is there? There are no consequences for the eternal optimist getting their story wrong and when the SHTF the excuse will be, as always, “Who could have known?”

http://blogs.platts.com/2014/02/19/cera-criticism/

1 04 2014
Mulga Mumblebrain

Exactly, John. The GFC was predicted for years, by Marxians and historians of capitalist financial excess. No-one (acceptable) saw it coming, quoth the MSM, but they are habitual, recidivist, liars and confabulators, and no-one ought to give their rewriting of history a second thought.

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