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15900Re: [gaiapc] Could oil demand peak in a few years?

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  • narguimbau@earthlink.net
    27 Dec, 2017

      Because of the unexplained difference between production since the once-predicted 2008 peak and the production crash that I and many many others predicted for post-2012, I'm beginning to think Wall Street investment shenanigans arte also responsible for the level of production of conventional as well as unconventional crude.

      Strangely, I think Gail's  "oil that cannot be sold at a profit will not continue to be produced" is at least misleading, because the profit may come from somewhere else than sale of the oil.  It may come from an inveestment, with investments being spent on getting the oil out of the ground and expecting it to be sold at a profit later.  Profit may come from sale of the lease rather than sale of the oil, and the value of the lease is pure guesswork.  Once the well is drilled, oil will be sold to pay for the drilling no matter how poor the return is.  The "break-even point" for shale oil is said to be $80/barrel and the "break-even point for fracked natural gas is said to be over $6/thousand cubic feet,  which are prices never met,  but drilling and selling continues with abandon, not very clearly why,  making it unclear why we are said to have or ever to have had any viable reserves of either or are just carrying on to create an illusion.  Investment in Bakkin in fact, was considered a fool's errand for decades because it was known to have huge reserves that were  economically inviable, and that still is probably true..  You tell me what supports it.

      On 12/27/2017 12:49 PM, Jada Thacker jadathacker@... [gaiapc] wrote:.

      As Gail points out, however, oil that cannot be sold for a profit will not continue to be produced,

      Nick is altogether correct that Wall Street investment shenanigans are responsible for the current uber-debt-financed production of high-priced, unconventional oil/gas. Similarly, consumer debt historically allowed consumers to "consume beyond their means." But this only works as long as the debt level remains serviceable. For producer and consumer alike, those days are numbered. 

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