Urban survival is a constantly changing task. As it changes, clocks are heard ticking all over the place. Damn cacophony of ’em this week. Where to begin?
We expect the stock market timer to go off in the final third of August – something we’ve been saying 6-months – well ahead of so-called “experts.” One the Peoplenomics.com side, we’re watching short position options strategies for this winter. North Korea is on a time fuse. And the doom porn folks never seem to tire of headlines about “climate change” though as we showed in PN yesterday, mostly it’s a PR term and not a scientific fact.
Elsewhere, the Nazi-group think of Germany is coming back into focus as Angela Merkel returns to her communist (“We’re in charge of everything and will tell you what you’re allowed to think…”) roots and Germany votes this fall on the next politically illiterate clown posse to seize the Reichstag. But there is another clock running that will kill off urban life within 30 years and it ain’t getting much respect at the moment…
The stalker behind the headlines is Oil Depletion.
I mention this because on the discussion part of this site Wednesday, ol’ Jon called out Oilman2 to explain what’s going on with oil. Reader Jon does ask a good question now and again…
You really need to read the detailed overview of the oil patch offered by OM2:
“In reply to Jon.
I can refer you to several recent articles, but the main thing you need to be cognizant of is this little oilfield phrase – “depletion never sleeps”.
Even in a crappy economy, or even a zero growth economy, every day that we use fossil fuels for our lives ((ahem) gasoline, diesel, jet fuel, plastic, power generation, etc.), the amount of proven reserves declines. Every single day this is happening, rain or shine, war or peace, electric self-driving cars or motorcycles – unless you are Amish, you are using tremendous amounts of fossil fuel just to get to work and back (even on a subway).
The trick that we have been using is that we are always discovering more oil, or finding new ways to get at oil. This allows us to replace these proven reserves with more. However, since about 1973 or so, every replacement we find is more expensive. At this point, EROEI on shale oil is pitifully low. So while we can replace what we use, it costs us MUCH MORE to replace it today.
Zero or near-zero interest on loans has allowed oil companies to explore and fund shale oil. Most are negative cash flow on their balance sheets, even with minimal loan interest, at $50/bbl. Never mind what you read in the headlines – go look at some publicly traded companies and see for yourself.
Low oil prices are good for economies, as the lower fuel price allows for more free cash to develop whatever the economy is developing. Higher oil prices disallow a lot of this development, as the fuel bill includes and impacts all transportation, all electricity and most modern food and shelter.
The problem is that low oil prices DISCOURAGE exploration because it is inherently risky and cash intensive. The net result these days is that exploration budgets worldwide were slashed by about 60% or more since 2014. In short – we haven’t found replacement deposits or technologies for what we have been using.
We are running the planet on the oil fields and technologies discovered prior to 2014 – and many of those fields are 40-50 years old or more. Since depletion never sleeps – you can take the EIA production numbers and then the EIA consumption numbers and see where we sit today.
My guess is a huge oil price spike in the period from late 2018 to 2020. We haven’t been replacing what we use because oil companies cannot make any money at $50/bbl due to the higher cost of finding smaller deposits.
Here is a place where you can get lost in the details, and they have some lively discussions… http://peakoilbarrel.com/
What is the electricity generated from that powers the nascent EV fleet? Do these EV’s use any plastic in their construction? Do batteries use any plastic in their construction? Do the computers that run the EV and self-driving things utilize any plastic in their manufacture? Do the roadways they run on utilize any fossil fuels in their construction or repair? Is lithium mined by hand or with modern fossil fuel powered mining equipment?
The single biggest issue with wrapping your head around this is that damned near everything you own or build or eat has a very significant fossil fuel component. In most cases, the power density required to do the same thing with solar requires a net negative amount of solar panel construction and computer controls and batteries and wiring (yes – all wiring uses plastic insulation). Imagine a battery powered bulldozer or Abrams tank – and you will get the power density required for heavy work like construction and mining.
If you want to truly understand how addicted we are at this point, I wrote an article years ago for George which he can point you to somewhere, or maybe repub it here in the free section. In it, we just remove anything that requires fossil fuel from a typical suburban human – then you can see what is left after modern things requiring fossil fuel are removed.
The simple but politically impossible solution is to have interest rates low but not stupidly so, as in QE, and to have an oil price in the $75/bbl range. That will work for a decade or so, until we find all the oil we can get at those prices. Then to find more, the price has to rise because of declining EROEI and declining volume and accessibility of the remaining oil fields.
American energy independence is a complete myth, created by politicians. Simply look at our oil import figures for the last 2 years – because we are still importing in spite of the “shale oil revolution”. Art Berman was very correct when he called shale oil and gas a “retirement party” rather than a revolution.
I have friends who sold their companies in the last few years simply due to being unable to find any new economical oil and gas deposits. They cashed in because of a dearth of viable oil prospects to drill!
Now bankers and politicians want us to export LNG, which is the cleanest energy source we have. And they want us to export it in a depressed market – geniuses at work….
One other thing – “Libya is increasing oil production”….
From what point? From before they were bombed and destroyed by NATO or from their production levels last year?
“Russia ruled out cuts”… but did they scale back their exploration budget? What is their depletion rate for their current reserves? Is that for oil or gas or both?
These blanket statements plopped out like info nuggets by people writing articles are better classified as butt nuggets, simply due to their lack of critical thinking and accompanying critical questions.
In these modern times where everything is monetized including most news via clicks on web-pages – you MUST always ask critical questions.
What you discover when you do is that Libya may not be really increasing output and Russia may not need to make cuts because their depletion rate will do just fine. Neither statement is proven, but they can still be true without making the original statements in your post false.”
OM2 mentioned an article he wrote a couple of years ago on the www.ruralpioneer.com website. The article he’s referring to is “What I think of Oil and the Future…”
The facts are unchanged. The present bump is from fracking. Ask me after the eclipse how that worked out.
Now to the “urban survival” part.
Elaine and I took a chance when we moved to the Outback along about 2004 because we wanted to “step-down” from the gerbil wheel life. sure, it paid $100K+ but it also consumed 70-hours per week (and more, depending on how you score the commute). And how do you score time on road trips away from home? Been a very successful road warrior but at some point you get road weary.
One of Oilman2‘s offspring seems to have taken root in his dad’s thinking. He and his S.O. have a very workable plan to build a genuinely sustainable life outside of the Urban core area.
And that’s the point to focus on today:
You know (I assume) that at least one – and likely several – of the following clocks will go off in our lifetime. Allow me to relist: (A huff of the China board marker, to get me started…)
- EMP Attack
- Oil Depletion
- North Korea overruns the South
- Iran lobs nukes at Israel
- U.S. and China go to war over the South China Sea island and resources out there.
- Terrorists attack a U.S. nuke plant – both control rooms
- Terrorists let loose a MASSIVE bioweapon attack in the U.S.
- Or a mass poisoning in the food chain
- Runaway inflation results in a replay of the Weimar – think wheel barrows of money for a loaf
- Then we have the August eclipse could set off a (massive quake) at New Madrid, Yellowstone, Seattle/Portland, or hell, just up the street from your place…
- Did I mention the cost of healthcare is going up 25% next year if congress doesn’t get off the dime?
- And what about state pension plans…they’re heading for collapse, too.
Then there’s the grand finale we’ve labeled the Second Depression which will happen when all of us “grays” all wake up one morning and want to have a final fling.
We get online, try to sell off some stocks but there are no buyers because everyone is transitioning to the “Rent Your Life” mode and everyone is believing the fairytale of government pensions. Thing is: SOMEONE has to pay for ’em which may be (as we have said many times previously) why there has been such a push for open borders…
This weekend, for the Peoplenomics.com side, I’m collecting “Lessons of the Great Depression” – a compendium of what people had to do to survive through that period. A workbook.
The major difference between then and now?
The new tech is not television or radio, it’s talking to computers. And they were up to their ears in energy just waiting to fuel WW II back then. Hydro dams could be built. Today? The low-hanging fruit has been picked..
That world of the 1930s didn’t sink into the interest rate disaster we’re in, nor were robots coming to take their jobs. Gumption and innovation could work a feller out of it. But this time? Medicated as the big cities are?
And they weren’t overrun with illegal immigrants in the 30s (that’s a legal description, not hate speech, you idiot!). The world has 2-billion people when the pallor of economic ,malaise settled over the world. Thanks to the Obama regime we kept bringing in under-vetted people – why?
Don’t get depressed about it. Just think how much more fun and suffering we can have with two and a half times more people fighting over depletion, food, government hand-outs…that stuff that never sleeps.
You can work your ass off planning for it, maybe coming up with workable strategies to cope forward. OM2’s boy HT is doing it.
It’s your call, but like a dear friend once told me:
“Some choices you just have get to on the bus, ’cause if you don’t, you’ll be under it.”
Damn smart woman.
Is there wisdom to chasing paper in an unsustainable city living in housing you don’t own, utterly dependent on banks that require power and internet connectivity and freedom from malware? When you could code in the woods and miss some money but skip the commute?
Hard time for choices, these. But when the dominoes begin to fall in our list as they will do in coming years, I’m thinking the right choice will come into focus quickly. Remember where you read it – and you do have a choice.
We hope you choose wisely.
For us, it’s Thursday morning in the Outback: Garbage out and wash down the solar panels. We know we have oil under our place. 8,750, 92,00, and 9,500 feet down on the north slope of the Palestine Salt Dome.
Here…some of the early history about the land we’re sitting on:
The Palestine salt dome has been known for many years, having been described briefly by Penrose* in 1890 and by Dumble 2 in 1891. The dome was recognized through the occurrence of salt, which was obtained here in small quantities prior to 1890. The production of salt lapsed for many years, but recently the industry has been re- vived- and a modern plant producing a large quantity of salt of vari- ous grades has been established.
There are no conspicuous indications of oil or gas here, and so far no deep test wells for oil have been put down. The discovery of tarry oil in a deep well on the Keechi dome, 6 miles north of the Palestine dome, has stimulated interest in the oil possibilities of the’ domes of this area and has led to the leas- ing of the- lands on and around them. The writer spent one week’ in October, 1916, in studying the geology of this dome and the surrounding area. He wishes to offer grateful acknowledgment to Judge O. C. Funderburk, of Palestine, for assistance in the field, and to Mr. A. L. Bowers, president of the Palestine Salt & Coal Co., for information relating to the drilling of salt wells. L. W. Stephenson, of the Geological Survey, studied the Cretaceous fossils from the area, and to him the writer is indebted for much of the information concerning the age of the formations present. “
Turns out that under the salt was this hugely productive oil field. And even without the subsurface rights, we figure the surface lease will be a nice back-up to Social Security, if it comes to that.
Lesson 1 for the week: Low income ain’t so bad, if you manage the outgo is even lower.
Lesson 2 for the week: Figure out where the highways of the future will be built and then buy property that is in the eventual right-of-way if you can.
G4 technology? My buddy Vince the tower tycoon is already leasing up sites. But even his client’s aggressive build-out plans depend on the good offices of people like OM2.
In case you’re wondering, yes, our third on-ramp to the internet (and one of the wireless networks here) has been solar-powered since 2008.
We were sure early, but I don’t think we’ll be wrong in what’s to come. Ask people in Illinois if government workers are underpaid.
Write when you get rich,