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15914Re: [gaiapc] Could oil demand peak in a few years?

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  • narguimbau@earthlink.net
    28 Dec, 2017

      How much oil has actually been found in the last decade?  I mean petroleum.

      On 12/28/2017 2:08 PM, Steve Kurtz kurtzs@... [gaiapc] wrote:

      With a thawing arctic, I expect drilling to gear up pronto. I’m not happy about that. Russian oil exploration and drilling rigs have been seen heading that way recently. DJT wants to open up areas for exploration that had been off limits. Again I’m not happy. Meanwhile, oil accounts for a small % of the fuel used to make electricity. I posted the source and chart.


      On Dec 28, 2017, at 1:55 PM, Luis Gutierrez ltg4263@... [gaiapc] <gaiapc@...> wrote:

      Is it conceivable that more easy-to-produce high EROI oil can still be found?


      On Thu, Dec 28, 2017 at 1:09 PM, Jada Thacker jadathacker@... [gaiapc] <gaiapc@...> wrote:

      Steve said: "Some of he above examples I gave can be years into the future for settlement. The prices are agreed upon between buyer and seller in advance. Thus no curves are involved except the contract prices themselves over time."

      This is precisely beside the point, however. Contracts between buyers and sellers are words on a piece of paper agreeing to a quantity of a medium-of-exchange (i.e., money). But words do not discover and physically produce oil, or ensure its profitability once produced, or provide consumers with the wherewithal to buy the necessities oil makes possible. Contracts for future settlement may indeed manipulate the market, but they do not ultimately determine present or future economic reality.

      In fact, money itself does not determine economic reality. Easy-to-produce (high-EROI) oil has determined economic reality in our industrialized economy for the last century. Since there is no more easy-to-produce oil, our economic reality is rapidly changing and cannot continue to feed the parasitic casino of financialized capitalism without killing the host society in the process.

      This cannot be understood unless one has internalized the fact that energy backs the value of all media of exchange (i.e., money), not the other way around. 


      On Thursday, December 28, 2017 8:03 AM, "Steve Kurtz kurtzs@... [gaiapc]" <gaiapc@...> wrote:


      On Dec 27, 2017, at 12:49 PM, Jada Thacker jadathacker@... [gaiapc] <gaiapc@...> wrote:

      For any discussion of "peak demand" to be sensible, it seems to me we first need to know what we're all talking about. What is "demand," anyway? Is there a consensus operational definiti on of the term? Do we all agree on which measurable activity constitutes "demand?”


      Demand in markets (crude oil is one), the quantity bid for equals the demand.

      According to energy forecasters, "demand" apparently is assumed to be "projected consumption." Problem: that which is not produced cannot be consumed. Hence, a nonexistent commodity cannot be "demanded.”

      The Futures (on exchanges) and Forward (off exchange) markets are contracts for future delivery. They constitute real demand. There are a buyer and seller for every contract.

      According to orthodox economics, "demand" is what automatically occurs at a given price for a commodity that possesses utility. But as Gail Tverberg repeatedly points out at her blog www.ourfiniteworld.com , supply/demand curves work fine until they don't. Problem: that which is not affordable will not be demanded, regardless of supply and demand curves. 

      Some of he above examples I gave can be years into the future for settlement. The prices are agreed upon between buyer and seller in advance. Thus no curves are involved except the contract prices themselves over time. Delivery in the future is another matter!


      As usual, energy forecasters don't know much about economics, and economists don't know much about oil production. As a result, they end up talking past each other. As Gail points out, however, oil that cannot be sold for a profit will not continue to be produced, and people who need stuff that oil makes possible will not buy what they cannot afford, much less what isn't produced in the first place.

      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. 

      So what does "peak demand" mean in a country where energy majors are selling oil at a loss (while borrowing to pay stock dividends), and where consumers -- who have not seen a real wage increase in decades -- increasingly cannot afford to buy the stuff made possible only by oil (even when oil is sold at a loss)? 

      With regard to "peak demand," maybe this would be an excellent time to put on an old Rollings Stones album and hum along with the lyrics to "You Can't Always Get What You Want."



      On Tuesday, December 26, 2017 4:44 AM, "'narguimbau@...' na rguimbau@... [ gaiapc]" <gaiapc@...> wrote:

      The optimisticprojections call primarily for efficiency increases, whichcan be wiped out byincreased use of more efficient vehicles or coal generators, and of course inpeople turning to "efficient" gas-guzzling suvs. Everything is predicted to begin in2020, which just happens to be the year consumption MUST peak to meet the 2-degree limit.  Electric cars appear to be counted as "full wins," but the electricity for them will come primarily

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