WEEKLY -- On Sunday -- All previous Editorials are available on the Substack Archive Further long term archives are available at LinkedIn and Wordpress https://boomfinanceandeconomics.wordpress.com
What is your opinion about the issue of energy, the fact that oil production has allegedly reached a 'peak plateau' and will from here on be declining, impeding economic growth? Guys like Art Berman suggest that there is some seven decades of oil left, depending on use and the economics of production.
Is this the underlying cause of the global events that are currently taking place, as countries are starting to fight for whatever is left?
I don't lose sleep about Peak Oil. The price pf West Texas Crude has averaged about $ 80 per barrel for the last 20 years. Its current price is around $ 62.00
I agree that it is all a long term concern but not a pressing one.
Most of the peak-oil people acknowledge that it hasn't happened the way it was projected because of shale, adjustment of production, etc., but the end of oil is inevitable, even if oil were abiotic because extraction is greater than replenishment, at least according to all viable sources out there.
Be that as it may, what I wonder is whether the end-of-oil issue is the undelying cause of the current turmoil, whether the powers that be even consider it and to what extent.
I agree. It is possible (maybe probable) that the US (and UK) obsession with the Middle East is not about Israel but about oil. The same statement can be made about Russia. And that obsession began a long time ago when William Knox D'Arcy found oil in "Persia" in 1908. Our modern economy could not have evolved without oil. It is that simple. Oil was (and still is) a critical energy source for rapid development. So far, the predictions of "Peak Oil" have proven false. In China, petroleum was used more than 2000 years ago. The earliest known gas wells were drilled in China in AD 347 or earlier. They had depths of up to about 800 feet (240 m) and were drilled using bits attached to bamboo poles. Oil was then "discovered" in Azerbaijan and the USA in the mid 19th century. How long it will last is a difficult question to answer.
I with there were an informed debate between experts, economists, geologists. I've listened to guys like Art Berman and Dan Gowin, and they mostly say the same thing. The problem is not necessarily the unavailability of oil, but its cost, basically in the sense of EROEI, even though that's an abstract indicator that doesn't really come into play in the real world. But it's basically the viability of production - how much surplus value can be obtained from oil/gas to make extraction feasible, and that margin is diminishing.
Oil is what spins the wheels of this civilization and the people who run the show would have to be mega-fucking stupid (even though they look it) not to be aware of that. All this fascism, nazism, democracy, freedom this freedom that, is bullshit as far as I'm concerned. Red herring for people, something to screw up their head with. They want to secure access to as much of the stuff as possible - or any at all in the case of Europe - and hope that something will be discovered in the future to keep industrial civilization going. They know that electrification is a pipe dream, but it's the best they've got at the moment, so they're going ahead with it for now. Ditto hydrogen, even though it's a net energy sink. That's what my government sources tell me. And BTW, the mid-level people at the ministry are reportedly not stupid, they can do the math.
I don't know about the abiotic theory. Has anyone described something like a carbon cycle? A cycle that would make carbon from CO2 produced by combustion be reabsorbed into soil and then be converted into oil? I guess it's happening all the time, through plants, but that would be at a rate that is nowhere near the rate of oil extraction.
Artificial Scarcity, Black Gold? The question of Gold Digital or Physical? He who has the gold makes the rules.Polishing the Golden Turd #TurdsAllTheWay Down
I have to agree with Grub Street's excellent articles -- "Tim Morgans blog is a stylised conclusion searching for a theory with no empirical evidence." And if the Russian theory of Abiotic/Abiogenic Oil is added in to the mix, it all gets much more likely that Peak Oil is a very long way off. Also, advanced economies like the US are very Services based (which are not as energy intensive as Goods based economies). I find the dinosaur argument hard to believe re the souce of oil and gas especially as Titan (a Moon of Saturn) has an ocean of Methane (!!)
Here is how I see it and what I alluded to in my question above.
The abiotic theory notwithstanding, it's likely, if not certain, that oil will sooner or later be depleted or become unfeasible to extract. How things will happen is difficult to predict because they will not develop along a linear trajectory, especially in consideration of demographics.
Building an economy, in the physical sense, around highly complicated supply chains, where basic necessities, or components, are transported from the other side of the globe, entails high risk of collapse, not to mention such inherently detrimental factors as eating tomatoes grown thousands of kilometers away and pumped with chemicals to survive the trip - you get the picture.
Since humans have somewhat functional brains capable of considering shit on a time scale, it would be judicious to turn the trajectory the world is on into a more sustainable direction, to reorganize the human enterprise for the coming end of oil, however that happens. That would mean reshoring production, building infrastructure that doesn't depend on oil, such as waterways, etc. Stuff that would allow people to live in relative comfort when 'the trucks stop running'. Or prolong the time they do, perhaps indefinitely, if technologies can be devised to that effect.
People, of course, want to hear none of that. They want abundance, more shit, even more shit, and then some. Nobody gives a fuck about gluttony, which happens to be a mortal sin. Nobody pays much attention to anything of substance or consequence - consider AI or computers in general, which now run pretty much everything. A major solar eruption or some electromagnetic event, and we're as good as fucked.
So, I wonder if the people at the helm, or those who control their strings, think basically along these lines and are trying to steer the world toward a different course as per the above. Including wars to secure the best possible position for themselves.
Now, you can argue that doing so is dictatorial, which it is, that people should be free beings in charge of their destiny, which they should. That, however, requires responsibility, an inner force that opposes such urges as unbridled consumption, which is pretty much non-existent today, as religion, which provided that, has been replaced with soulless materialism.
The Great Energy Debate: A Chestertonian Analysis in Five Parts. AI generated see notes for inputs
Lies, Damn Lies and Economics - National Debt is Not a Problem - Government Debt to GDP Ratios — What do they Mean? - Net Interest Costs in the Federal Budget - The Power of Italy - Trump's Tariffs
QE is actually a rare event in the history of the Federal Reserve (except since the huge US Banking Fraud Crisis of 2008 after which there has been a handful of QE Programs). The Fed Balance sheet has expanded from $ 900 Billion to 9,000 Billion in May 2022. That is a ten fold increase during those 14 years. Roughly a $ 9 Trillion increase. During that time, the Nominal Annual GDP of the US economy went from $ 14.7 B (2008) to $ 25.7 Trillion (2022) -- roughly an increase of $ 11 Trillion p.a.. BUT, more importantly, the CUMULATIVE GDP during that time frame was $ 280 Trillion. So $ 9 Trillion of QE to save the banking system of the US (and possibly the Globe) resulted in $ 280 Trillion of US economic activity in that 14 year period. Nine to save 280 Trillion seems a good trade off to me. And, without QE, it would have been a financial Armageddon, resulting in a global Depression with MILLIONS of people unemployed and MILLIONS of homes lost with many thousands of banks lost. None of that excuses the US bank regulators and the US banking criminals who created the massive crisis of potential bank failure in 2008.
My own enquiries into these matters are distilled into this mind map which I have been working on for the past four years or so, it delves back quite far.
Currencies of the tides, Time and the nature of things.
Time passed and Man forsakes the Golden Orb
and its silvery moon. No credit he gave
to drivers of Tides, Time and the nature of things
Fiat of imperial rule enforces debts,
new tides in political Economy.
FIAT dictates the new tides of Commerce.
Ephors of debt above and astride the law.
No silvery moon complementary to the Golden Orb.
There are no tides by means of which the common man
may be fed. Hard food of Midas alone- Starvation.
King Kanute Like those ephors
wave bidding the advancing tide backwards
Still they advance tides in a tsunami of debt
Tides of a Dollar moon by fiat
Hegemonic Tides of the Dollar Moon.
Roger G Lewis (2016)
What has the A(rab ) Spring, Libya, and Ukraine ( M(aid)en) all got in common with the Co(vid )19 v(a)xx pushaganda?. Social Media Spookery! Some loose associations. SAMIZDAT
Love and War at BITNATION Life Imitating Art. April 5, 2021 rogerglewis.
# The Substack Guide to Trolling the Web. For Paul
# The Substack Guide to Trolling the Web
*Mostly Harmless*
## Part 1: Don't Panic, It's Just EROI
In which our protagonist encounters a mysterious commenter named Paul, who, like the Vogons of bureaucracy, insists on debating Energy Return on Investment (EROI) with all the charm of a poetry-reading session. The protagonist maintains a remarkably civil tone while explaining that EROI is based on measurable propositions, much like knowing where your towel is, but with more complicated math.
The protagonist notes, with Arthur Dent-like patience, that the dollar values might be abstract, but they're still better than trying to measure pure energy terms - rather like trying to measure the improbability of a whale spontaneously appearing in mid-air.
What is your opinion about the issue of energy, the fact that oil production has allegedly reached a 'peak plateau' and will from here on be declining, impeding economic growth? Guys like Art Berman suggest that there is some seven decades of oil left, depending on use and the economics of production.
Is this the underlying cause of the global events that are currently taking place, as countries are starting to fight for whatever is left?
Hi Paul,
I wrote about this here -- THOMAS MALTHUS WAS WRONG — MALTHUSIANISM IS A FALSE RELIGION – A 200 YEAR OLD NARRATIVE -- FOSSIL FUELS – ANOTHER ANCIENT FALSE NARRATIVE -- https://boomfinanceandeconomics.substack.com/p/boom-finance-and-economics-27th-january
Also -- Service based economies use less energy as they grow compared to Goods based economies.
Then there is Abiotic/Abiogenic Oil to consider -- https://en.wikipedia.org/wiki/Abiogenic_petroleum_origin
Thomas Malthus was wrong about everything.
Charles Fourier was wrong about everything.
King Hubbard was wrong about everything.
I don't lose sleep about Peak Oil. The price pf West Texas Crude has averaged about $ 80 per barrel for the last 20 years. Its current price is around $ 62.00
I agree that it is all a long term concern but not a pressing one.
Most of the peak-oil people acknowledge that it hasn't happened the way it was projected because of shale, adjustment of production, etc., but the end of oil is inevitable, even if oil were abiotic because extraction is greater than replenishment, at least according to all viable sources out there.
Be that as it may, what I wonder is whether the end-of-oil issue is the undelying cause of the current turmoil, whether the powers that be even consider it and to what extent.
Hi Paul
I agree. It is possible (maybe probable) that the US (and UK) obsession with the Middle East is not about Israel but about oil. The same statement can be made about Russia. And that obsession began a long time ago when William Knox D'Arcy found oil in "Persia" in 1908. Our modern economy could not have evolved without oil. It is that simple. Oil was (and still is) a critical energy source for rapid development. So far, the predictions of "Peak Oil" have proven false. In China, petroleum was used more than 2000 years ago. The earliest known gas wells were drilled in China in AD 347 or earlier. They had depths of up to about 800 feet (240 m) and were drilled using bits attached to bamboo poles. Oil was then "discovered" in Azerbaijan and the USA in the mid 19th century. How long it will last is a difficult question to answer.
Agreed Gerry - I wrote about Gaza in 2023 - https://austrianpeter.substack.com/p/gaza-israel-war-special-report-end?sd=pf
Paul, I can only refer you to my post here ( Dr Gerry doesn't agree with Dr Tim Morgan and Gail Tverberg) - EROEI - https://austrianpeter.substack.com/p/the-financial-jigsaw-part-2-the-end?s=w
I with there were an informed debate between experts, economists, geologists. I've listened to guys like Art Berman and Dan Gowin, and they mostly say the same thing. The problem is not necessarily the unavailability of oil, but its cost, basically in the sense of EROEI, even though that's an abstract indicator that doesn't really come into play in the real world. But it's basically the viability of production - how much surplus value can be obtained from oil/gas to make extraction feasible, and that margin is diminishing.
Oil is what spins the wheels of this civilization and the people who run the show would have to be mega-fucking stupid (even though they look it) not to be aware of that. All this fascism, nazism, democracy, freedom this freedom that, is bullshit as far as I'm concerned. Red herring for people, something to screw up their head with. They want to secure access to as much of the stuff as possible - or any at all in the case of Europe - and hope that something will be discovered in the future to keep industrial civilization going. They know that electrification is a pipe dream, but it's the best they've got at the moment, so they're going ahead with it for now. Ditto hydrogen, even though it's a net energy sink. That's what my government sources tell me. And BTW, the mid-level people at the ministry are reportedly not stupid, they can do the math.
I don't know about the abiotic theory. Has anyone described something like a carbon cycle? A cycle that would make carbon from CO2 produced by combustion be reabsorbed into soil and then be converted into oil? I guess it's happening all the time, through plants, but that would be at a rate that is nowhere near the rate of oil extraction.
All agreed Paul, thank you.
https://open.substack.com/pub/grubstreetinexile/p/tim-morgans-seeds-falsified-peak?r=l1oox&utm_campaign=post&utm_medium=web&showWelcomeOnShare=false Tim Morgans theories are not suppoorted by empirical data . End of.
https://open.substack.com/pub/grubstreetinexile/p/peak-oil-the-non-evidence?r=l1oox&utm_campaign=post&utm_medium=web&showWelcomeOnShare=false
Peak Oil, The non evidence
Artificial Scarcity, Black Gold? The question of Gold Digital or Physical? He who has the gold makes the rules.Polishing the Golden Turd #TurdsAllTheWay Down
No comprehendo, meine friendo.
If you care to coherently formulate what you're trying to say, I'm one big ear.
Read the extensive posts linked to.
Tim does not stand up the claims he makes about eroi empirically.
I have to agree with Grub Street's excellent articles -- "Tim Morgans blog is a stylised conclusion searching for a theory with no empirical evidence." And if the Russian theory of Abiotic/Abiogenic Oil is added in to the mix, it all gets much more likely that Peak Oil is a very long way off. Also, advanced economies like the US are very Services based (which are not as energy intensive as Goods based economies). I find the dinosaur argument hard to believe re the souce of oil and gas especially as Titan (a Moon of Saturn) has an ocean of Methane (!!)
Here is how I see it and what I alluded to in my question above.
The abiotic theory notwithstanding, it's likely, if not certain, that oil will sooner or later be depleted or become unfeasible to extract. How things will happen is difficult to predict because they will not develop along a linear trajectory, especially in consideration of demographics.
Building an economy, in the physical sense, around highly complicated supply chains, where basic necessities, or components, are transported from the other side of the globe, entails high risk of collapse, not to mention such inherently detrimental factors as eating tomatoes grown thousands of kilometers away and pumped with chemicals to survive the trip - you get the picture.
Since humans have somewhat functional brains capable of considering shit on a time scale, it would be judicious to turn the trajectory the world is on into a more sustainable direction, to reorganize the human enterprise for the coming end of oil, however that happens. That would mean reshoring production, building infrastructure that doesn't depend on oil, such as waterways, etc. Stuff that would allow people to live in relative comfort when 'the trucks stop running'. Or prolong the time they do, perhaps indefinitely, if technologies can be devised to that effect.
People, of course, want to hear none of that. They want abundance, more shit, even more shit, and then some. Nobody gives a fuck about gluttony, which happens to be a mortal sin. Nobody pays much attention to anything of substance or consequence - consider AI or computers in general, which now run pretty much everything. A major solar eruption or some electromagnetic event, and we're as good as fucked.
So, I wonder if the people at the helm, or those who control their strings, think basically along these lines and are trying to steer the world toward a different course as per the above. Including wars to secure the best possible position for themselves.
Now, you can argue that doing so is dictatorial, which it is, that people should be free beings in charge of their destiny, which they should. That, however, requires responsibility, an inner force that opposes such urges as unbridled consumption, which is pretty much non-existent today, as religion, which provided that, has been replaced with soulless materialism.
The Great Energy Debate: A Chestertonian Analysis in Five Parts. AI generated see notes for inputs
Lies, Damn Lies and Economics - National Debt is Not a Problem - Government Debt to GDP Ratios — What do they Mean? - Net Interest Costs in the Federal Budget - The Power of Italy - Trump's Tariffs
https://open.substack.com/pub/grubstreetinexile/p/the-great-energy-debate-a-chestertonian?r=l1oox&utm_campaign=post&utm_medium=web&showWelcomeOnShare=false
‘Gov’t debt does not increase the money supply except in a RARE (my emphasis) QE..
Does an increase in US Treasury assets from about USD 900 bn in 2008 to about USD 9 trillion in 2020 seem rare?
QE is actually a rare event in the history of the Federal Reserve (except since the huge US Banking Fraud Crisis of 2008 after which there has been a handful of QE Programs). The Fed Balance sheet has expanded from $ 900 Billion to 9,000 Billion in May 2022. That is a ten fold increase during those 14 years. Roughly a $ 9 Trillion increase. During that time, the Nominal Annual GDP of the US economy went from $ 14.7 B (2008) to $ 25.7 Trillion (2022) -- roughly an increase of $ 11 Trillion p.a.. BUT, more importantly, the CUMULATIVE GDP during that time frame was $ 280 Trillion. So $ 9 Trillion of QE to save the banking system of the US (and possibly the Globe) resulted in $ 280 Trillion of US economic activity in that 14 year period. Nine to save 280 Trillion seems a good trade off to me. And, without QE, it would have been a financial Armageddon, resulting in a global Depression with MILLIONS of people unemployed and MILLIONS of homes lost with many thousands of banks lost. None of that excuses the US bank regulators and the US banking criminals who created the massive crisis of potential bank failure in 2008.
Hubbert, Ehrlich et al will all tell you about Exponentials for them its all about the exponential.
The other side of the Coin is of course the Logaritim, particularly the Natural Logarithm
12 Log 2 -8 we are the 31.7766166719343%.
I’ve a dream some nights where we all go to Heaven – the world’s put to rights, and there’s tea before seven.(John Ward The Slog)
https://open.substack.com/pub/grubstreetinexile/p/12-log-2-8-we-are-the-317766166719343?r=l1oox&utm_campaign=post&utm_medium=web&showWelcomeOnShare=false
Cooperation,GameTheory,12Log2-8, Axelrod,Nowack & Goodwill Hunting
Grub Street In Exile
·
June 21, 2024
https://open.substack.com/pub/grubstreetinexile/p/cooperationgametheory12log2-8-axelrodnowack?r=l1oox&utm_campaign=post&utm_medium=web&showWelcomeOnShare=false
Thu, Jan 6, 9:25 AM
I have been getting my head further around The Energy Market and how it affects the money supply
I think the priority variables are:
1. Electricity Base Load production, Coal and Natural Gas, and LPG products?
2. Crude Oil Production and Refinery capacities, Volumes of production are more important than the price per barrel
3. Swing Production from Shale or Capped and ready to go existing discoveries, Very important to who has upper hand
on Marginal pricing on swing production, Texas Rail Road, OPEC, US Shale production?
4. Gas Production and Coal production are probably equal with 3 or interchangeable with 3.
5. Venezuelan and Iranian supply disruption through Sanctions is a political bottleneck to an otherwise trivial supply problem
in the Oil Market.
6. Geo-Political and Green New Deal political economy choices vis Gas Pipe Lines are again self-inflicted own goals?
Why?
7. Money Velocity and Money Supply related to energy use growth are being severely impacted by levels of Consumer, Corporate and Sovereign debt.
https://longhairedmusings.wordpress.com/?s=integral+money
Addicted to Distraction: Psychological consequences of the Mass Media
"Where Infinite Scrolling Meets Invisible Strings: A Chestertonian Tale of Modern Mind Control"
Addicted to Distraction: Psychological consequences of the Mass Media
The Home Node of the Going Direct Mind Map
https://bra.in/6pdemJ
My own enquiries into these matters are distilled into this mind map which I have been working on for the past four years or so, it delves back quite far.
Escaping the Martix 1995 ( Richard Moore )
https://bra.in/4pJmeg
Tides of the Dollar Moon
A planet to its Star must look
The planet no less needs its moon.
As the Sun is the store of energy, New.
The moon drives and regulates currents,
of the tides , time and the nature of things.
That Golden Orb gives all
That silvery Moon regulates all
Both work together even as the other
Seemingly sleeps and yet currents
of the tides, Time and the nature of things pass.
On the nature of Man made things
On a standard of gold which
Jennings would not be crucified upon ,
That cross Of Gold-alone hard food of Midas.
No tides to complement the Orb
For Silver was its currency,
the Silvery moon to that crosses Golden Sun
which means of exchange fed the common man
The Silver Moon drives and regulates
Currencies of the tides, Time and the nature of things.
Time passed and Man forsakes the Golden Orb
and its silvery moon. No credit he gave
to drivers of Tides, Time and the nature of things
Fiat of imperial rule enforces debts,
new tides in political Economy.
FIAT dictates the new tides of Commerce.
Ephors of debt above and astride the law.
No silvery moon complementary to the Golden Orb.
There are no tides by means of which the common man
may be fed. Hard food of Midas alone- Starvation.
King Kanute Like those ephors
wave bidding the advancing tide backwards
Still they advance tides in a tsunami of debt
Tides of a Dollar moon by fiat
Hegemonic Tides of the Dollar Moon.
Roger G Lewis (2016)
What has the A(rab ) Spring, Libya, and Ukraine ( M(aid)en) all got in common with the Co(vid )19 v(a)xx pushaganda?. Social Media Spookery! Some loose associations. SAMIZDAT
Love and War at BITNATION Life Imitating Art. April 5, 2021 rogerglewis.
https://open.substack.com/pub/grubstreetinexile/p/what-has-the-arab-spring-libya-and-17c?r=l1oox&utm_campaign=post&utm_medium=web&showWelcomeOnShare=false
My BOOM on Jan 5th --- Climate Change Strategies have Failed over 35 Years - The Transition to Renewables is increasing Demand for Coal, Oil, Gas and Boosting CO2 Emissions - And Global GDP has Tripled - All part of a Plan? https://boomfinanceandeconomics.substack.com/p/climate-change-strategies-have-failed
https://open.substack.com/pub/grubstreetinexile/p/the-substack-guide-to-trolling-the?r=l1oox&utm_campaign=post&utm_medium=web&showWelcomeOnShare=false
# The Substack Guide to Trolling the Web. For Paul
# The Substack Guide to Trolling the Web
*Mostly Harmless*
## Part 1: Don't Panic, It's Just EROI
In which our protagonist encounters a mysterious commenter named Paul, who, like the Vogons of bureaucracy, insists on debating Energy Return on Investment (EROI) with all the charm of a poetry-reading session. The protagonist maintains a remarkably civil tone while explaining that EROI is based on measurable propositions, much like knowing where your towel is, but with more complicated math.
The protagonist notes, with Arthur Dent-like patience, that the dollar values might be abstract, but they're still better than trying to measure pure energy terms - rather like trying to measure the improbability of a whale spontaneously appearing in mid-air.