Peak Oil, Abiotic Oil & EROEI: Real(ish) Things That Don’t Matter, Part One: Peak Oil

By David Middleton – Re-Blogged From WUWT

The plots of the Seinfeld TV show often revolved around trivializing important things and blowing trivial things out of proportion. While not a Seinfeld fanatic (I’m more of a Frasier fanatic), I thought the comedy routines were generally brilliant and quite effective.

Peak Oil, abiotic oil and EROEI (energy returned on energy invested) are largely academic concepts. They are the subject of books, academic publications and Internet “debates” The “debates” about Peak Oil, abiotic oil and EROEI are a lot like the Seinfeld show. They magnify the trivial and trivialize things that actually matter. The “debates” often divide into two camps:

  1. It’s the end of the world (Peak Oil, EROEI).
  2. It’s our salvation from the end of the world (Abiotic oil).

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The Coming Middle East Oil Crisis: The Collapse Of Net Oil Exports

By SRSrocco – Re-Blogged From Silver Phoenix

The Middle East is heading for a crisis in its oil industry.  Unfortunately, the market doesn’t realize there is any danger on the horizon because it mainly focuses on how much oil the Middle East is producing rather than its exports.  You see, it doesn’t really matter how much oil a country produces but rather the amount of its net oil exports.

A perfect example of this is Mexico.  As I mentioned in a recent article, NEXT OIL DOMINO TO FALL? Mexico Becomes A Net Oil Importer, Mexico is now a net importer of oil for the first time in more than 50 years.  Furthermore, the IEA – International Energy Agency, published in their newest OMR Report that Mexico is forecasted to lose another 170,000 barrels per day of oil production in 2019.  Thus, this is terrible news for the United States southern neighbor as it will have to import even more oil to satisfy its domestic consumption.

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Silver Miners’ Q4’18 Fundamentals

By Adam Hamilton – Re-Blogged From Silver Phoenix

The major silver miners have rallied higher on balance in recent months, enjoying a young upleg. That’s a welcome change after they suffered a miserable 2018. Times are tough for silver miners, since silver’s prices have languished near extreme lows relative to gold. That has forced many traditional silver miners to increasingly diversify into gold. The major silver miners’ recently-released Q4’18 results illuminate their struggles.

Four times a year publicly-traded companies release treasure troves of valuable information in the form of quarterly reports. Required by the US Securities and Exchange Commission, these 10-Qs and 10-Ks contain the best fundamental data available to traders. They dispel all the sentiment distortions inevitably surrounding prevailing stock-price levels, revealing corporations’ underlying hard fundamental realities.

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Economist Foresees “Quick Decline” in US Oil Production

By David Middleton – Re-Blogged From WUWT

U.S. Oil Production Is Headed For A Quick Decline

By Philip Verleger – Mar 11, 2019

The most recent forecasts published by the US Energy Information Administration show US oil production increasing steadily. The February Short-Term Energy Outlook sees the output from US wells rising from 11.9 million barrels per day at the end of 2018 to 13.5 million barrels per day by the end of 2020. Most other forecasters agree.

Thus, it may come as a surprise to learn that production at the end of 2020 may have actually decreased from December’s 11.9 million barrels per day level to between 11.3 and 11.5 million barrels per day. This lower figure represents the production level that should be expected given the financial activity of the independent firms behind the shale output surge.
The coming decline will occur mostly in the areas that have produced the most growth over the last five years: the Bakken, Eagle Ford, Haynesville, Julesburg, and Permian basins. The production drop will occur because the firms operating there have been forced by monetary constraints to cut back on drilling. The recent reduction in debt and equity issuance by these firms assure the output decline.

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Is Capital Creation Beating Capital Consumption?

By Keith Weiner – Re-Blogged From Gold Eagle

We have written numerous articles about capital consumption. Our monetary system has a falling interest rate, which causes both capital churn and conversion of one party’s wealth into another’s income. It also has too-low interest, which encourages borrowing to consume (which, as everyone knows, adds to Gross Domestic Product—GDP).

What Is Capital

At the same time, of course entrepreneurs are creating new capital. Keith wrote an article for Forbes, showing the incredible drop in wages from 1965 to 2011. There was not a revolution, because prices of goods such as milk dropped at nearly the same rate. The real price of milk dropped as much as it did, because of increased efficiency in production. The word for that which enables an increase in efficiency is capital.

Or, to put it another way, capital provides leverage for productive human effort. We don’t work any harder today, than they did in the ancient world (probably less hard). But we are much richer—we produce a lot more. The difference is capital. They had not accumulated much capital. So they were limited to brute labor, to a degree which we would find shocking today.

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American Energy Boom

By Michael Bastasch – Re-Blogged From WUWT

President Donald Trump touted booming American energy production and exports during his State of the Union Address Tuesday night to thunderous applause, but not from Democrats.

“We have unleashed a revolution in American Energy – the United States is now the number one producer of oil and natural gas in the world,” Trump said. “And now, for the first time in 65 years, we are a net exporter of energy.”

Republicans stood up and cheered the news, while Democrats stayed in their seats. However, Democratic West Virginia Sen. Joe Manchin applauded Trump’s touting of booming American energy production.

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U.S. Set To Pump More Oil Than Russia And Saudis Combined

In a major shift, the United States is set to produce more oil and liquids than Russia and Saudi Arabia combined by 2025.

In Rystad Energy’s base case oil price scenario, US liquids production is forecast to surpass 24 million barrels per day over the next six years, thereby outpacing the combined output from Russia and Saudi Arabia.

oil rigs

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