In a previous post, I defined this graph as “the most amazing graph of the 21st century.” It shows how the US oil production restarted growing in 2010, picking up speed and surpassing the historical record of the “Hubbert Peak,” which took place in 1970. It overcame the dip caused by the Covid pandemic and, two years after my first post on this subject, it keeps growing.
I can't remember who it was that first said "You can print money, but you can't print energy." This is mostly correct, but I think the US tight oil (shale oil) boom, along with Canadian tar sands and Venezuelan extra-heavy oil extraction, prove that we CAN print money and subsidize the extraction of large amounts of gross energy extraction. This is not to say that the yield of net usable fuels from those sources is particularly favorable. In the end, we end up subsidizing one form of low-EROI, high-value energy (diesel, jet fuel) with another temporarily more-plentiful local source (gas, in the instance of the extra-heavy oils) and/or unpayable debt.
I do know that many countries and even some US states consider fracking environmentally hazardous, and have banned it. Perhaps all of them that have the appropriate shale formations? Maybe.
However, I also suspect that Jon W may have put his finger on it with his comment about our ability to print money—the US, that is. I don’t have it completely worked out, but it may very well have something to do with two facts. The first is that the US dollar is the world’s reserve currency, and the US is the only country that can print almost with abandon and not suffer much of an immediate effect. The second is that for the most part, world oil prices are still quoted in dollars.
Everyone needs dollars to buy oil, which keeps the global demand for dollars high, so the US has continued to get away with it. One problem--the massive debt creation necessary to service US debt begets yet more debt, and all of it carries interest. The cost of US debt service is going exponential.
Somehow I suspect this financial alchemy has given the US an advantage, unique in the world, that allows them to occasionally ignore, at least for a time, the inconvenience of having production costs exceed the value of output.
One important function of money is to serve as a universal yardstick, a “unit of account”, to determine if a financial activity produces more wealth than it consumes. What is unique about the US is that it in essence owns the yardstick.
Of course, this whole system is in the process of some radical change. The international financial shenanigans set in motion by the happenings in Ukraine have put the global financial system on a fast track to some dramatic change. The effect on the US will not be good.
[OK, he is skeptical of future 'renewables', at least in the context of N. America replacing the present extravaganza.]
Art's time line can't be too far off. Relevant that he notes most global growth in total oil supply last 10 years has been from US shale. Nate Hagens flags up the 'Devil is in the Diesel', which is key to the economy and not sourced directly from the rocks or from the tar, I understand?
PS Ugo, I can't remember clearly the original discussion of 'incorporeal' entities. There seem a number of these enfities around! Smile.
Can I suspect that Eldritch Things are not involved in US oil? Too busy with dreams and souls, I suppose...
About the big push on shale in the USA, I see more cultural factor at work, the country is quite dependent on oil for historical reasons: they thrived on oil for a century and had the biggest companies on their soil, Saudi got their kingdom from them in exchange for cheap oil and granted sales in USD, and they are the source of the modern industry with the automotive one (FORD) so the majority of what roll on the roads is quite thirsty, fuel economy is a recent thing.
China is a recent player in automotive and is quite poor on oil (and energy in general) so have no interest in having oil in particular as a source of mobility so are looking at better EOROEI, South America is found in oil but have a long history of problems to pay for it so usually their mobility use a more flexible approach (in Brazil usually gasoline is standard because can be blended with alcohol and integrated with LNG or methane https://en.wikipedia.org/wiki/Flexible-fuel_vehicles_in_Brazil) and the old Europe is so depleted of resources that going for oil only is counterproductive.... energy in every form is ok, in-house better and if green is also good for marketing.
Oil is AN energy source so as usual every civilization have his favored one! Shale can be a temporary dream, even if there is still a lot there, but the drilling tech that use is quite something, directional drilling is now used for a lot of different purposes and is beginning to be used for geothermal energy harvesting, similar I suppose oil seems to be fading and probably will be quite pruned in use but hydrocarbons as energy medium I'm sure are not going to disappear... still not sure if they will come from underground.
so we will still not collapse before the year 2027 according to art berman not before 2035 they will expand natural gas at max in 2035 according to his blog di not know if he is correct do ?
I can't remember who it was that first said "You can print money, but you can't print energy." This is mostly correct, but I think the US tight oil (shale oil) boom, along with Canadian tar sands and Venezuelan extra-heavy oil extraction, prove that we CAN print money and subsidize the extraction of large amounts of gross energy extraction. This is not to say that the yield of net usable fuels from those sources is particularly favorable. In the end, we end up subsidizing one form of low-EROI, high-value energy (diesel, jet fuel) with another temporarily more-plentiful local source (gas, in the instance of the extra-heavy oils) and/or unpayable debt.
I do know that many countries and even some US states consider fracking environmentally hazardous, and have banned it. Perhaps all of them that have the appropriate shale formations? Maybe.
However, I also suspect that Jon W may have put his finger on it with his comment about our ability to print money—the US, that is. I don’t have it completely worked out, but it may very well have something to do with two facts. The first is that the US dollar is the world’s reserve currency, and the US is the only country that can print almost with abandon and not suffer much of an immediate effect. The second is that for the most part, world oil prices are still quoted in dollars.
Everyone needs dollars to buy oil, which keeps the global demand for dollars high, so the US has continued to get away with it. One problem--the massive debt creation necessary to service US debt begets yet more debt, and all of it carries interest. The cost of US debt service is going exponential.
Somehow I suspect this financial alchemy has given the US an advantage, unique in the world, that allows them to occasionally ignore, at least for a time, the inconvenience of having production costs exceed the value of output.
One important function of money is to serve as a universal yardstick, a “unit of account”, to determine if a financial activity produces more wealth than it consumes. What is unique about the US is that it in essence owns the yardstick.
Of course, this whole system is in the process of some radical change. The international financial shenanigans set in motion by the happenings in Ukraine have put the global financial system on a fast track to some dramatic change. The effect on the US will not be good.
Useful Ugo, thanks for framework. And thanks for comments. I note ongoing assessment by Art Berman of growth and decline of US shale, tight oil and gas from the source rocks, e.g. https://www.artberman.com/blog/eagle-ford-shale-a-preview-of-permian-decline/
[OK, he is skeptical of future 'renewables', at least in the context of N. America replacing the present extravaganza.]
Art's time line can't be too far off. Relevant that he notes most global growth in total oil supply last 10 years has been from US shale. Nate Hagens flags up the 'Devil is in the Diesel', which is key to the economy and not sourced directly from the rocks or from the tar, I understand?
PS Ugo, I can't remember clearly the original discussion of 'incorporeal' entities. There seem a number of these enfities around! Smile.
How about that natural gas miracle?
https://www.eia.gov/dnav/ng/hist/n9010us2A.htm
Can I suspect that Eldritch Things are not involved in US oil? Too busy with dreams and souls, I suppose...
About the big push on shale in the USA, I see more cultural factor at work, the country is quite dependent on oil for historical reasons: they thrived on oil for a century and had the biggest companies on their soil, Saudi got their kingdom from them in exchange for cheap oil and granted sales in USD, and they are the source of the modern industry with the automotive one (FORD) so the majority of what roll on the roads is quite thirsty, fuel economy is a recent thing.
China is a recent player in automotive and is quite poor on oil (and energy in general) so have no interest in having oil in particular as a source of mobility so are looking at better EOROEI, South America is found in oil but have a long history of problems to pay for it so usually their mobility use a more flexible approach (in Brazil usually gasoline is standard because can be blended with alcohol and integrated with LNG or methane https://en.wikipedia.org/wiki/Flexible-fuel_vehicles_in_Brazil) and the old Europe is so depleted of resources that going for oil only is counterproductive.... energy in every form is ok, in-house better and if green is also good for marketing.
Oil is AN energy source so as usual every civilization have his favored one! Shale can be a temporary dream, even if there is still a lot there, but the drilling tech that use is quite something, directional drilling is now used for a lot of different purposes and is beginning to be used for geothermal energy harvesting, similar I suppose oil seems to be fading and probably will be quite pruned in use but hydrocarbons as energy medium I'm sure are not going to disappear... still not sure if they will come from underground.
so we will still not collapse before the year 2027 according to art berman not before 2035 they will expand natural gas at max in 2035 according to his blog di not know if he is correct do ?