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Old January 13th, 2018, 03:29 AM   #21
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Originally Posted by imaginethat View Post
Well, the good thing is at that price America will start drilling new wells. That $30-40/bbl oil depressed the oil boom of a few years ago.

As an aside, the economies of China and India growing faster means CO2 levels will be rising more quickly.
This is how you keep the price of Oil down, and not fund terrorism.

you see if we can keep the price at $40/BBL we cannot be soaked by OPEC.
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Old January 14th, 2018, 09:48 AM   #22
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This is how you keep the price of Oil down, and not fund terrorism.

you see if we can keep the price at $40/BBL we cannot be soaked by OPEC.
Go ahead! Keep the price of oil at $40 per barrel...and watch as production of tight oil declines because $40 is unaffordable to continue developing tarsands, shales or deepsea drilling operations! Then, as supplies contract, prices rise again because of energy demand, and the whole cycle continues.

The problem today is the easiest-to-develop carbon sources have already been plundered....same as mining operations go after the highest grade ores first. It is far more likely that the US and global economies are in a long neverending period of economic contraction because of declining carbon and other non-renewable resource qualities.

It should have been obvious from the start, that unsustainable growth in a finite world eventually ends with a pushback, but few claimed 'experts' ever consider the obvious:

Could An Oil Surplus Be A Sign Of Things To Come?
https://oilprice.com/Energy/Energy-G...s-To-Come.html
Quote:

Today, we have a surplus of oil, which we are trying to use up. That has never happened before, or did it? Well, actually, it did, back around 1930. As most of us remember, that was not a pleasant time. It was during the Great Depression.

A surplus of a major energy commodity is a sign of economic illness; the economy is not balancing itself correctly. Energy supplies are available for use, but the economy is not adequately utilizing them. It is a sign that something is seriously wrong in the economy–perhaps too much wage disparity.

If wages are relatively equal, it is possible for even the poorest citizens of the economy to be able to buy necessary goods and services. Things like food, homes, and transportation become affordable by all. It is easy for “Demand” and “Supply” to balance out, because a very large share of the population has wages that are adequate to buy the goods and services created by the economy.

It is when we have too much wage disparity that we have gluts of oil and food supplies. Food gluts happened in the 1930s and are happening again now. We lose sight of the extent to which the economy can actually absorb rising quantities of commodities of many types, if they are inexpensive, compared to wages. The word “Demand” might better be replaced by the term “Quantity Affordable.” Top wage earners can always afford goods and services for their families; the question is whether earners lower in the wage hierarchy can. In today’s world, some of these low-wage earners are in India and Africa, or have no employment at all............................................... .................................................. .................................................. ..
Conclusions

In 2017, the world economy seemed to be gliding smoothly along because the economy has been able to get the benefit of artificially low energy prices and artificially low interest rates. These artificially low prices and interest rates have given a temporary boost to the world economy. Countries using large amounts of energy products, including the U.S., especially benefitted.

We cannot expect this temporary condition to continue, however. Low oil prices have already started to disappear, with Brent oil prices at nearly $69 per barrel at this writing. The trends in oil prices and oil stocks in Figure 8 are disturbing. If oil prices begin to rise toward the price needed by oil producers, they are likely to trigger a recession and a drop in world energy consumption, just as spiking prices did in 2008-2009. There is a significant chance of collapse in the next 12 to 24 months. It is hard to know how widespread such a collapse may be; it may primarily affect particular countries and population groups.

To make matters worse, our leaders do not seem to understand the situation. The world economy badly needs rising energy consumption per capita. Plans to raise interest rates and sell QE securities, when the economy is already “at the edge,” are playing with fire. If we are to keep the world economy operating, large quantities of additional energy supplies need to be found at very low cost. It is hard to be optimistic about this happening. High-cost energy supplies are worthless when it comes to operating the economy because they are unaffordable.

Many followers of the oil situation have had great faith in Energy Returned on Energy Invested (EROI) analysis telling us which kinds of energy supplies we should increase. Unfortunately, EROI doesn’t tell us enough. It doesn’t tell us if a particular product is scalable at reasonable cost. Wind and solar are great disappointments, when total costs, including the cost of mitigating intermittency on the grid, are considered. They do not appear to be solutions on any major scale.

Other researchers looking at the energy situation have not understood how “baked into the cake” the need for economic growth, rising per capita energy consumption, and rising debt levels really are. Rising debt is not an error in how the financial system is put together; a bicycle needs a front wheel, or it cannot operate at all (Figure 20). I have written other articles regarding why debt is needed to pull the economic system forward.

This economic growth cannot be “fake growth” either, where a debt Ponzi Scheme seems to allow purchases that real-life consumers cannot afford. Quite a bit of what is reported as world GDP today is of a very “iffy” nature. If China builds a huge number of apartments that citizens cannot afford without subsidies, should these be counted as true GDP growth? How about unneeded roads, built using the rising debt of the Japanese government? Or recycling performed around the world, because it makes people “feel good,” but really requires substantial subsidies?

At this point, it is hard for us to know where we really are, because every government wants to make GDP results look as favorable as possible. It is clear, however, that 2018 and 2019 can be expected to have more challenges than 2017. We have interesting times ahead!

By Gail Tverberg
https://oilprice.com/Energy/Energy-G...s-To-Come.html
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Old January 14th, 2018, 10:00 AM   #23
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Originally Posted by right to left View Post
Go ahead! Keep the price of oil at $40 per barrel...and watch as production of tight oil declines because $40 is unaffordable to continue developing tarsands, shales or deepsea drilling operations! Then, as supplies contract, prices rise again because of energy demand, and the whole cycle continues.

The problem today is the easiest-to-develop carbon sources have already been plundered....same as mining operations go after the highest grade ores first. It is far more likely that the US and global economies are in a long neverending period of economic contraction because of declining carbon and other non-renewable resource qualities.

It should have been obvious from the start, that unsustainable growth in a finite world eventually ends with a pushback, but few claimed 'experts' ever consider the obvious:

Could An Oil Surplus Be A Sign Of Things To Come?
https://oilprice.com/Energy/Energy-G...s-To-Come.html
https://oilprice.com/Energy/Energy-G...s-To-Come.html
The great equalizer are electric vehicles, better battery storage capacity, solar and wind installations, and natural gas conversion of generation plants. If it wasn't for those we would already be at $80 and climbing towards $100 by summer.
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