Double Whammy

brucefan

EOG Dedicated
June 26, 2009


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By Peter Schiff

Misguided government policies have already dealt vicious body blows to our economy, but that hasn?t stopped politicians this week from launching two new kicks to the groin: a national health insurance plan and a carbon emissions regulation system called ?cap and trade.? Even if these plans could achieve their desired ends, which is highly unlikely, I would have hoped Washington would refrain from throwing more monkey wrenches into the economy until it shows some signs of resurgence. The last thing we need right now is to further encumber our economy with higher taxes and additional regulations.

The meteoric rise in health care costs, which has become an unending nightmare for U.S. businesses and consumers, is not an accident. This painful condition has arisen from excess government involvement in the system, tax provisions that encourage the over-utilization of health insurance, and government support of an out-of-control malpractice industry. Rather than allowing more bad policy to drive health care costs further upward, we should be looking at ways to allow market forces to reign them back in.

If left alone, the free market drives quality up and costs down. Government programs produce the opposite result. Despite the president?s claim that a federal plan will bring costs down, there is no historical precedent for such faith.

Simply providing more widespread health insurance, as the Obama plan offers, is not a solution. In fact, it will aggravate the problem. Since consumers no longer pay for routine medical expenses out of pocket, comprehensive health insurance creates a moral hazard for both patients and doctors. To maximize the value of the health insurance ?benefit,? most workers opt for low deductibles and co-pays. Therefore, doctors learn that their patients are not concerned with the cost of care, and so they are free to bill insurance companies at the maximum allowable rates.

Given our current tax code, the simplest way to bring down medical costs would be to fully tax health care benefits as wages and simultaneously increase the personal deduction by an amount significant enough to neutralize the effect of the tax increase. This would do two things. First, the uninsured would get a huge pay increase, enabling them to buy reasonably priced catastrophic policies. Second, those currently insured could opt out of expensive employer-provided plans, trading premiums for extra wages, then buy a more economical plan. The savings would go right into their pockets.

The bottom line is that aggregate medical costs will never come down unless services are rationed more wisely. Rather than being used as a pre-payment plan for routine care, insurance should only cover unpredictable, catastrophic costs.

As a comparison, homeowners often carry fire insurance, but seldom maintenance insurance. You buy fire insurance to guard against a catastrophic loss, which is a low probability but high cost event. As a result, fire insurance is relatively affordable, since premiums paid by all those homeowners whose houses do not burn down more than pay for the losses on those few whose houses do.

On the other hand, no one carries home maintenance insurance to pay for a clogged drain or broken garage door. If insurance paid for the plumber visit every time a toilet overflowed, we would now have a plumbing crisis, and Congress would be looking to reign in runaway plumbing bills with ?national plumbing insurance.?

In his press conference, President Obama claimed that government insurance would not drive private providers out of business. This is absurd. As the government provider will not have to produce a profit or accurately account for its contingent liabilities, it will provide insurance on an actuarially unsound basis. With taxpayer subsidies, the government provider can run losses indefinitely. If private insurers did this, they would either be shut down or go bankrupt. Therefore, the cost of government provided health insurance will not be confined to the premiums paid, but will include the taxpayers? bill to continually bail out the government provider.

When Medicare was first proposed back in 1966, it cost $3 billion per year, and the projection was for inflation-adjusted annual costs to rise to $12 billion by 1990. The actual cost in 1990 was $107 billion, and the 2009 estimate is a staggering $408 billion! So much for government estimates on health care.

As if this were not bad enough, today the House votes on ?cap and trade? legislation. Disguised as an environmental bill, this proposal would merely be another gigantic tax. The lion?s share of the new revenue is already committed to politically connected special interests that will reap windfalls at everyone else?s expense. To make matters worse, the bill before Congress amounts to a blank slate, with the EPA empowered to draft the details in any manner they see fit. If Congress is going to shoot the economy in the knee, they should at least be required to pull the trigger themselves.

?Cap and trade? will do nothing to reduce pollution, yet it will drive up production costs throughout the economy ? rendering us even less globally competitive that we are today. In addition to the huge cost of paying the tax, its enforcement involves the creation of an entire new bureaucracy, the costs of which will be borne by American consumers in the form of higher prices.

Years of reckless borrowing and spending have left us in a gigantic hole. Getting out of it requires that we make the most effective use of all available resources. We need labor and capital to operate as efficiently as possible so we can save and produce our way back to prosperity. Unfortunately, national health insurance and ?cap and trade? are two steps in the wrong direction. Rather than getting us out of this hole, they will merely cave in the walls around us.


:hung


 

scrimmage

What you contemplate you imitate
Re: Double Whammy

<TABLE width="95%" border=0><TBODY><TR><TD align=left width="80%">Double Whammy
June 26, 2009

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By Peter Schiff

Years of reckless borrowing and spending have left us in a gigantic hole. Getting out of it requires that we make the most effective use of all available resources. We need labor and capital to operate as efficiently as possible so we can save and produce our way back to prosperity. Unfortunately, national health insurance and ?cap and trade? are two steps in the wrong direction. Rather than getting us out of this hole, they will merely cave in the walls around us.

Brucefan;
Not going to happen,there's going to be no turning back to the former level of prosperity,we are past peak oil.
In a best case scenario with adjustments to a more frugal lifestyle,
a stable decline may be possible,worst case the system falls off a cliff,reorganizes,and finds a new level.
Post quoted below crunches the numbers:

Thursday, June 25, 2009
Review of the Data

Posted by Greg T. Jeffers
From:
http://americanenergycrisis.blogspot.com/2009/06/review-of-data.html

Total Petroleum supplies into the U.S. peaked in 2005 (not 2007, as I had previously reported) at 20,802,000 barrels per day ("BPD").

For the last 4 weeks, total petroleum supplies into the U.S. system were 18,320,000 BPD.

The official decline: -2,482 BPD.

Well, sort of.

Ethanol supplied into the system in 2005 was immaterial (not zero, but close enough for statistical analysis). Over the past 4 weeks ethanol supplied 731,000 BPD of U.S. total supply(under "other liquids new supply").

In order to make an "apples to apples" comparison we should remove that number as well. Ethanol is NOT petroleum.

20,802,000 - 2482 - 731 = 17,589,000, or a decline in supply of 3,213,000 BPD. That is a decline of 15.44% over 4 years, with most of the decline ( nearly 15%) coming over the past 2 years.

OK so far?

Petroleum supplies to the U.S. have declined from 20,802,000 BPD in 2005 to 17,589,000 BPD in 2009. Here is a table for total products supplied 1990 - 2009. Please notice that we are back to 1997 levels of supplies.

(BTW and just FYI

U.S. population on January 1, 1997: 266,490,000

U.S. population on Janurary 1, 2009: 305,529,237

40,000,000 more folks, no more petroleum, and this metric is going to get much, much worse.)

Will the U.S. total products supplied continue to fall by 7% per year, as it has over the past 2 years? I think that the rate of decline should accelerate for several years, with the period 2010-2015 having the steepest rate of decline. This is due to domestic production remaining nearly constant (perhaps a 2-3% decline) while declines in imports accelerate. As the proportion of domestic supplies increases as a percentage of total supplies, the rate of decline will by necessity decline (provided that the rate of domestic decline remains in the 2 - 3% range. The Mad Scientist thinks that the decline rate for domestic production this year will be at least 3.5% and 6% in 2010 because of collapsing rig counts for NG production).

For the sake of argument, and for our purpuses here, let us assume that I am correct. Let us move the discussion 3 years hence, 2012, and let us assume that total products supplied has continued to decline at 7 % per year and total supply into the U.S. system is somewhere in the 15,000,000 BPD area.

What are the ramifications and outcomes? And "what if" the market place recognizes that this trend is going to continue?

This is really happening. Right now.

For those of you that beleive that the NG people are correct in their claims... the data does not support them just yet. Yes, we are going to have NG storage full this October/November, and yes, that likely means a significant decline in NG prices for 2009. Which also means a significant decline in E & P for NG, which results in less Crude production...

This does not mean that either commodity will move in a straight line. I think it means wild swings which will be far more damaging to the economy than if we could project the E & P budgets better.

Now throw in $2 Trillion per year U.S. budget deficits for as far as the eye can see...

This just gets weirder and weirder.

 

mr merlin

EOG Master
Re: Double Whammy

Scrimmage - the decline in oil consumption the last couple years is do to lower economic activity(less trucks, shipping, travel to work, etc) and increased efficiency due to higher prices. not due to lower supply or availability of oil. the world is swimming in oil right now and will remain that way for a long,long time.
Peak oil, if it ever happens is a long way off. truly enormous discoveries have happened in the last couple years offshore brazil(35 billion bbls plus) and the surface has barely been scratched.
I'm sure you would rather have us "running out" of oil but rest assured any move away from an oil based economy will be purely political.
 

scrimmage

What you contemplate you imitate
Re: Double Whammy

Scrimmage - the decline in oil consumption the last couple years is do to lower economic activity(less trucks, shipping, travel to work, etc) and increased efficiency due to higher prices. not due to lower supply or availability of oil. the world is swimming in oil right now and will remain that way for a long,long time.
Peak oil, if it ever happens is a long way off. truly enormous discoveries have happened in the last couple years offshore brazil(35 billion bbls plus) and the surface has barely been scratched.
I'm sure you would rather have us "running out" of oil but rest assured any move away from an oil based economy will be purely political.
mr merlin;
The worldwide economic contraction is only masking the effects of peak oil temporarily.Should economies attempt to re-expand to their previous output,or beyond,they will hit a wall quickly because of energy limits.
Most of the easy oil has been discovered,what's left is much harder and costlier to pump out,your Brazilian field Carioca may have 33 billion barrels,but 30% or so is actually recoverable,and the EROEI[energy return on energy invested] ratio is far lower than eg.Saudi Arabian light sweet crude.
Drilling in deepwater [7000 feet +]like where the Brazilian oil lies is expensive,one well there could cost $200 million.

Saturday, May 3, 2008
Technological Barriers To Carioca Field

Brazil Oil Trapped by 500-Degree Heat, Salt Barrier

Excerpt from:
http://oilismastery.blogspot.com/2008/05/technological-barriers-to-carioca-field.html
Brazil's oil will be harder to develop than the Gulf of Mexico, where the deepest wells are now in production, Cline said. Exxon Mobil Corp. and Chevron Corp., the two biggest U.S. oil companies, saw diamond-crusted drill bits disintegrate and steel pipes crumple when they attempted to tap deposits beneath the Gulf's seafloor two years ago.

Uncharted Depth

Pumping oil from the Brazilian finds, parts of which are 32,000 feet (10,000 meters) below the ocean's surface, will require boring almost twice as far down as the world's deepest producing offshore well.

The obstacles will discourage development unless crude prices stay high, said Tina Vital, an analyst at Standard & Poor's in New York.

Engineers will have to overcome temperatures that range from near freezing above the ocean floor to temperatures that can melt bismuth, used for transporting uranium rods and for shotgun shells. Layers of salt will also increase the challenge because the crystals absorb seismic waves used to pinpoint oil deposits.

Petrobras hasn't said how much it spent to sink wells at Tupi and Carioca. Similar drilling by Exxon and Chevron Corp. in the Gulf of Mexico cost $180 million to $200 million for each well.


 

mr merlin

EOG Master
Re: Double Whammy

Saudi arabia has several large development projects under development(some on hold due to recent price declines) that will add millions of bbls capacity. Iraq is also itching to expand their current 3 million bbls daily and some say it could hit 8 million daily in ten years. add in brazil, africa, lybia, even china, canada, offshore alaska(if the chimp lets em) and there will be no shortage.
The same cycle of boom and bust will continue as long as we are alive scrimmage.
 

mr merlin

EOG Master
Re: Double Whammy

Also, the recent brazilian finds have been found in relativly shallow water at much, much lower(closer to the surface) depths.
 

scrimmage

What you contemplate you imitate
Re: Double Whammy

Saudi arabia has several large development projects under development(some on hold due to recent price declines) that will add millions of bbls capacity. Iraq is also itching to expand their current 3 million bbls daily and some say it could hit 8 million daily in ten years. add in brazil, africa, lybia, even china, canada, offshore alaska(if the chimp lets em) and there will be no shortage.
The same cycle of boom and bust will continue as long as we are alive scrimmage.

Also, the recent brazilian finds have been found in relativly shallow water at much, much lower(closer to the surface) depths.
New production won't come close to replacing the decline in output of the so called "elephant fields" like Ghawar Saudi Arabia,Cantarell Mexico,or Burgan Kuwait.
Fields coming on line now are hard to access,costly to produce,and yield much heavier grades,making extraction,shipping,and refining all more expensive.
The 2 recent Brazilian mega-fields Tupi and Carioca are in deep water from 7,000 to more than 20,000 feet deep,and will be difficult to drill.
When the world economy was booming it required over 85 million barrels a day to run,an amount that is unsustainable in the near future,so don't count on any long recovery.
Stay in denial if you like,or do some serious research on the subject:

?My father rode a camel.I drive a car.
My son flies a plane. His son will ride a camel.?
- Anonymous Saudi Sheik ? 1982


A study of the oil-field production data reveals the Pareto's principle ? that is, a very small percentage of the oil fields contribute a disproportionately large share of the production. As the inverted-triangle diagram shows, of the more than 4,000 oilfields in production today, less than 120 (3 per cent) contribute nearly 48 per cent of the output.
http://www.thehindubusinessline.com/2007/02/05/stories/2007020500490900.htm

Ghawar Is Dead!
Mar 7, 2007 ... Her name is Ghawar, and she is the mother-of-all oil fields. ... The decline would have been closer to 14% without the addition of the ...
<CITE>www.commondreams.org/views07/0307-33.htm </CITE>
<CITE></CITE>
<CITE></CITE>
<CITE>Cantarell, The Second Largest Oil Field in the World Is Dying ...The second largest producing field in the world is the Cantarell complex in Mexico. It lies 85 kim from Ciudad del Carmen. The field was discovered in 1976 ...
<CITE>www.energybulletin.net/node/1651</CITE>
<CITE></CITE>
</CITE>
Kuwait Oil Field, World's Second Largest, 'Exhausted' | Energy ...
Brought into production in 1948, Burgan accounts for more than half of Kuwait's 96.5 billion barrels of oil reserves, or 55 billion barrels. ...
<CITE>www.energybulletin.net/node/10878</CITE>
<CITE></CITE>
<CITE></CITE>
<CITE></CITE>
 

mr merlin

EOG Master
Re: Double Whammy

New production won't come close to replacing the decline in output of the so called "elephant fields" like Ghawar Saudi Arabia,Cantarell Mexico,or Burgan Kuwait.
Fields coming on line now are hard to access,costly to produce,and yield much heavier grades,making extraction,shipping,and refining all more expensive.
The 2 recent Brazilian mega-fields Tupi and Carioca are in deep water from 7,000 to more than 20,000 feet deep,and will be difficult to drill.
When the world economy was booming it required over 85 million barrels a day to run,an amount that is unsustainable in the near future,so don't count on any long recovery.
Stay in denial if you like,or do some serious research on the subject:


listen pal, gwanwar is not running out of oil, cantrell is already out of oil(mexican production is no longer important) and the bergen field couldnt be less important. the kuwaities with their pathetic 2 million bbls a day will be producing the same amount until the cows come home.

What you dont understand is that the oil wells drilled in the brazilian offshore fields have already been done. Dont you understand that the hard part is not drilling the wells, but building the platforms(that will accomodate dozens of wells and reinjection facilities, etc). That is the challenge, not the wells that have been done and can be repeated at will.
We are not, nor will we be running out of oil for decades. The end is not near my friend, and the sky is not falling - yes the oil companies will do their best to manipulate the price( they love the scarcity scare tactics), but in the end the oil will be there.
 

scrimmage

What you contemplate you imitate
Re: Double Whammy



Warning: Oil supplies are
running out fast

<AUTHOR>By Steve Connor, Science Editor
August 3, 2009
From:
http://www.independent.co.uk/news/science/warning-oil-supplies-are-running-out-fast-1766585.html

The world is heading for a catastrophic energy crunch that could cripple a global economic recovery because most of the major oil fields in the world have passed their peak production, a leading energy economist has warned.

Higher oil prices brought on by a rapid increase in demand and a stagnation, or even decline, in supply could blow any recovery off course, said Dr Fatih Birol, the chief economist at the respected International Energy Agency (IEA) in Paris, which is charged with the task of assessing future energy supplies by OECD countries.

In an interview with The Independent, Dr Birol said that the public and many governments appeared to be oblivious to the fact that the oil on which modern civilisation depends is running out far faster than previously predicted and that global production is likely to peak in about 10 years ? at least a decade earlier than most governments had estimated.

But the first detailed assessment of more than 800 oil fields in the world, covering three quarters of global reserves, has found that most of the biggest fields have already peaked and that the rate of decline in oil production is now running at nearly twice the pace as calculated just two years ago. On top of this, there is a problem of chronic under-investment by oil-producing countries, a feature that is set to result in an "oil crunch" within the next five years which will jeopardise any hope of a recovery from the present global economic recession, he said.

"One day we will run out of oil, it is not today or tomorrow, but one day we will run out of oil and we have to leave oil before oil leaves us, and we have to prepare ourselves for that day," Dr Birol said. "The earlier we start, the better, because all of our economic and social system is based on oil, so to change from that will take a lot of time and a lot of money and we should take this issue very seriously," he said.

There is now a real risk of a crunch in the oil supply after next year when demand picks up because not enough is being done to build up new supplies of oil to compensate for the rapid decline in existing fields.
The IEA estimates that the decline in oil production in existing fields is now running at 6.7 per cent a year compared to the 3.7 per cent decline it had estimated in 2007, which it now acknowledges to be wrong.

"If we see a tightness of the markets, people in the street will see it in terms of higher prices, much higher than we see now. It will have an impact on the economy, definitely, especially if we see this tightness in the markets in the next few years," Dr Birol said.

In its first-ever assessment of the world's major oil fields, the IEA concluded that the global energy system was at a crossroads and that consumption of oil was "patently unsustainable", with expected demand far outstripping supply.

Oil production has already peaked in non-Opec countries and the era of cheap oil has come to an end, it warned.
In most fields, oil production has now peaked, which means that other sources of supply have to be found to meet existing demand.
Even if demand remained steady, the world would have to find the equivalent of four Saudi Arabias to maintain production, and six Saudi Arabias if it is to keep up with the expected increase in demand between now and 2030, Dr Birol said.

"It's a big challenge in terms of the geology, in terms of the investment and in terms of the geopolitics. So this is a big risk and it's mainly because of the rates of the declining oil fields," he said.
"Many governments now are more and more aware that at least the day of cheap and easy oil is over... [however] I'm not very optimistic about governments being aware of the difficulties we may face in the oil supply," he said.
 

mr merlin

EOG Master
Re: Double Whammy

Its BS scrimmage. Existing oil fields are always in decline, not a surprise and nothing new.
 

scrimmage

What you contemplate you imitate
Re: Double Whammy

Its BS scrimmage. Existing oil fields are always in decline, not a surprise and nothing new.
It's nothing new,as experts in the energy field knew "peak oil" was coming,and it's not a surprise either with all the information out there on the subject.Past the peak the easy energy's no longer available to power the American society we've become accustomed to.

If You Hated Gasoline at
$4 a Gallon,
Imagine It at $20:
Review by James Pressley
August 3,2009
From:
http://www.bloomberg.com/apps/news?pid=20601088&sid=aabdwFGiKH1E


Aug. 4 (Bloomberg) -- As U.S. gasoline prices spurted last year to more than $4 a gallon, Americans shuddered.
Presidential candidates called for a gas-tax ?holiday.? Sales of SUVs plunged. Commuters rediscovered trains, buses and bikes. Americans drove 100 billion fewer miles in the 12 months through October 2008 than they did a year before.

That was just a glimpse of things to come, says Christopher Steiner in "$20 Per Gallon", a surprisingly upbeat look at how rising gasoline prices ?will change our lives for the better.?

From the outset, Steiner dismisses the tiresome debate about whether oil production will really peak, plateau and decline. Even T.Boone Pickens, who made a fortune on oil and gas, says we must learn to live with peak oil.
With supplies of cheap, easy-to-extract oil dwindling and demand expected to rise in lockstep with the planet?s growing middle class, prices in the long haul can only go up, as economist Jeff Rubin argues in his book, ?Why Your World Is About to Get a Whole Lot Smaller.?
?$20 Per Gallon? takes peak oil as a given. ?This book is the next step in the conversation,? Steiner says.

And a fun discussion it is, as the author lays out how everyday life might look as gasoline prices climb ever higher. In place of Chapter 1 and Chapter 2, Steiner gives us Chapter $6 and Chapter $8, leading up by $2 increments to a $20 Epilogue. Gimmicks don?t usually appeal to me; this one works.

We often overlook the fact, Steiner says, that the price of oil affects much more than just the cost of filling up your Audi Q7.
?It?s the bricks in your walls, the plastic in your refrigerator, the asphalt on your roads, the shingles on your roof, the synthetic rubber in your ball,? he writes with characteristic bounce.

Since the entire economy runs on oil, Steiner weaves together themes ranging from the future of the automobile to the sustainability of our food network.

He did his homework. A civil engineer and staff writer at Forbes magazine, he interviewed people -- from economists to airline pilots -- who have calculated how oil at various prices will change where we live, how we travel and what we eat.
He rides shotgun in UPS package trucks that run on batteries or energy stored in pressurized tanks of hydraulic fluid. He watches workers swarm over the scaffolding surrounding a Boeing 787 Dreamliner, the first commercial plane with a fuselage and wings made mainly of plastic composites to reduce weight and conserve fuel. He travels to a factory on the Iowa prairie where corn will be turned into biodegradable plastic.

So what will happen as gasoline prices tick ever higher? Here?s a smattering of Steiner?s predictions:

At $6 a gallon, Americans will embrace diesel engines. At $8, many airlines will shut down, leaving Southwest Airlines Co.and JetBlue Airways Corp. as the dominant domestic carriers.

At $10, car ownership rates will plummet. At $12, exurbs will start becoming ghost towns. At $14,Wal-Mart Stores Inc.will die; its business model is built on cheap oil.

At $18, Americans might get what Europeans have enjoyed for years: high-speed trains. And as the price creeps up to $20 a gallon, the U.S. may finally frame a comprehensive energy plan.

Purer Air
Far from hurling us into a new Dark Age, high oil prices will usher in a cleaner, safer future, Steiner argues. Like Rubin, he imagines lost jobs returning to U.S. shores and pictures us breathing purer air and eating healthier, locally grown food. Though he gets a bit too utopian and speculative for my taste, he does offer evidence that technology already exists to effect such changes.

Steiner is good at explaining how things work and seeding the text with interesting facts: Did you know that garbage trucks get an average of 2.8 miles per gallon? And he?s realistic about how hard it will be to end our love affair with cars and planes.
?People will cling to their steering wheels and their airline seats until their fingers are pried off by sheer financial behest,? he writes.

?$20 Per Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better? is from Grand Central in the U.S. (275 pages, $24.99).
(James Pressley writes for Bloomberg News. The opinions expressed are his own.)
To contact the writer on the story:James Pressley in Brussels at jpressley@bloomberg.net.
 

scrimmage

What you contemplate you imitate
Re: Double Whammy

"Running out of oil"

The envirowackos have only been saying this for....30 years!!!

:LMAO:LMAO:LMAO:LMAO
Why is "running out of oil" in quotes,who said that?
"Peak Oil" is the issue,and it's a fact which can't be laughed off.
US domestic oil production peaked more than 30 years ago in the early 1970's,and only by steadily increasing imports was economic growth and prosperity maintained.
Now world oil production is beginning to decline,year on year,oil's still out there,but it isn't easy to get at,and is more costly to recover.Substitutes[wind,solar etc.] don't have the EROEI[energy return on energy invested]of light sweet crude.
If credible sources are available which dispute "Peak Oil",then post them for us to read.

[FONT=Verdana, Arial, Helvetica, sans-serif]The issue is not one of "running out" so much as it is not having enough to keep our economy running. In this regard, the ramifications of Peak Oil for our civilization are similar to the ramifications of dehydration for the human body. The human body is 70 percent water. The body of a 200 pound man thus holds 140 pounds of water. Because water is so crucial to everything the human body does, the man doesn't need to lose all 140 pounds of water weight before collapsing due to dehydration. A loss of as little as 10-15 pounds of water may be enough to kill him.[/FONT]

[FONT=Verdana, Arial, Helvetica, sans-serif]In a similar sense, an oil based economy such as ours doesn't need to deplete its entire reserve of oil before it begins to collapse. A shortfall between demand and supply as little as 10 to 15 percent is enough to wholly shatter an oil-dependent economy and reduce its citizenry to poverty.[/FONT]

From:
http://www.lifeaftertheoilcrash.net/
 

mr merlin

EOG Master
Re: Double Whammy

When I was young and foolish in 1973, during the first oil embargo,I said to my dad that we were running out of oil and that in 20-30 years we were going to be in real trouble.
My dad laughed and said(with the experience of time) that "they have been saying that since I was a kid".

That was almost 40 years ago scrimmage, and not much has changed. Wise up!
By always claiming scarcity they can prop the price up...understand?
 

scrimmage

What you contemplate you imitate
Re: Double Whammy

When I was young and foolish in 1973, during the first oil embargo,I said to my dad that we were running out of oil and that in 20-30 years we were going to be in real trouble.
My dad laughed and said(with the experience of time) that "they have been saying that since I was a kid".

That was almost 40 years ago scrimmage, and not much has changed. Wise up!
By always claiming scarcity they can prop the price up...understand?
mr merlin;
Well you were right back then,because the continental US oil production did "peak",which is why imports today make up most of the total energy consumed in America.
Your prediction of 20-30 years may not have been exact,but on a geologic time scale what's a few decades?
If you'd like us to "understand" something,then back it up with something more than an anecdote,otherwise you got nothing.

Equating Economics,
Energy and Oil

By John Howe, author of
?The End of Fossil Energy?
August 8th, 2009
Excerpt from:
http://www.321energy.com/editorials/howe/howe080809.html

Oil is presently the world?s primary source of energy, providing 40% of all energy and over 90% of transportation fuel. (Fuel is another term for energy.)

B. WORLD PRODUCTION OF PRE-STORED OIL (representing millions of years of conveniently stored solar energy and photosynthesis) HAS PEAKED.

Conventional (light and easily accessible) oil reached a maximum of over 75 million barrels per day in May of 2005. All liquid fuels including tar sand oil, heavy oil, deep off shore oil, polar oil, natural gas liquids, and bio fuels peaked at about 85million barrels per day in the third quarter of 2008.

These numbers are historic facts as presented by the International Energy Agency and our own Department of Energy. (www.eia.doe.gov)

USA production peaked in 1972 as predicted in the 1950's by M.K. Hubbert. This fact resulted in the ?energy crisis? of the seventies and a sharp increase in the price of oil as well as a temporary reduction of world oil production. This setback was quickly resolved and superceded be vast sources of new world oil from our arctic, the north sea, Russia, Mexico, South America, Africa, and the mid-east.

D. THE CRUX: NOW THAT PRE STORED ENERGY, REPRESENTED BY OIL, HAS PEAKED AND IS IN TERMINAL DECLINE, GROWTH AND OUR ECONOMIC SYSTEM CANNOT CONTINUE.

Prosperity, food to feed a growing population, an oil-based transportation system, and new building are all forms of energy dependence, which must now go into terminal decline.

This is a geophysical constraint, not choice or something that can be avoided by changing the laws of physics, political action, increasing demand, or wishful thinking.

Civilization and our cheap-energy lifestyle are on the verge of collapse. The longer we deny the situation and try to perpetuate the past party, the more severe will be the crash and fewer will be our options.

 

scrimmage

What you contemplate you imitate
Re: Double Whammy

Peak at 85 Million Barrels of Oil a Day
Oct 23rd, 2009 | By Byron King | Category: Featured, Oil


Eighty-five million barrels a day.
That?s the most that can be produced. So when recession causes a temporary decrease in world consumption, it can seem like those 85 million barrels are enough. But consumption is bound to resume its upward climb, while those 85 million barrels a day are all we get. The day of reckoning has just been delayed for a little bit.

?Can?t we get more than 85 million barrels?? some folks are bound to wonder. Let?s look into that.
Excerpt from:
http://whiskeyandgunpowder.com/peak-at-85-million-barrels-of-oil-a-day/

Deep-Water Oil
Won?t Cure Peak Oil
Oct 27th, 2009 | By Byron King | Category: Featured, Oil
Excerpt from:
http://whiskeyandgunpowder.com/deep-water-oil-wont-cure-peak-oil/
Not a Hoax ? We?re in Trouble
I?ll tell you about something that was drifting over Colorado last week, and it?s NOT a hoax. It?s Peak Oil. I attended the 2009 international conference of the Association for the Study of Peak Oil and Gas (ASPO), out in Denver. Here?s the long and short of it. We?re in trouble. With a capital ?T,? and that rhymes with ?P,? and that stands for Peak Oil.

Last week, I told you about how Marcio Mello, one of the explorationists that discovered the offshore Tupi oil field of Brazil, gave ASPO a spellbinding stemwinder of a keynote talk about the newly discovered oil resources of the Brazilian pre-salt play. It was a great talk. I believe Marcio. Not only do I believe him, but I?m choosing investment ideas based on his research. Marcio has changed the thinking within the world oil exploration community. Marcio is a player. He?s a game changer.

But let?s get real about this. Sure, there?s a LOT more oil out there. As in, ?out there,? 150 miles and more offshore, in 8,000 feet of water and deeper, beneath 20,000 feet of rock and salt. You see the problem, right?
Yes, that offshore resource is out there, and it?s super hard to extract. This is not the ?easy oil? of the good old days. (Just kidding. It?s never been easy.)

But we?re looking ahead. And that?s why we?re invested in the future of deep-water oil, plus subsea equipment builders and service companies. These are long-term plays, for a long-term process of deep-water development.

Meanwhile, Brazil is still building the shipyards in which it will build the drill ships and platforms, which will develop the offshore arenas, over many, many years. Again, you see where I?m going with this, right?
Sure, there?s a lot of offshore development going on now. But there?s much, much more that?s going to happen in the coming decades. It HAS to happen. And that?s the problem. It?ll take time. And capital. And many people with critical skills. And some of those critical skills have not yet been developed. And it?s just super complex. By comparison, maybe building a flying saucer is easy.

Peak Oil: We?re There
By every measure, the world?s output of crude oil peaked between 2005 and 2007. Peak Oil? Hey, we?re there.

What do I mean? That?s output of crude oil, as in conventional petroleum that flows or gets pumped out of wells. Yes, the worldwide total output of what we generically call ?oil? has risen ? slightly ? in recent years. But that?s because there are increasing volumes of natural gas liquids (NGLs) in the mix, plus unconventional oil like what the global marketplace obtains from Canada?s oil sands.

Let me focus on NGLs for a moment. In other words, the global energy industry is blowing down the gas caps on older fields. That?s how you get NGLs. That, and spinning the NGLs out of tight gas, like what we see with another recent addition to the OI portfolio.
In a macro sense, it means that the global energy industry is pulling what?s left of the conventional oil out of the early-discovered fields and taking the gas too. When it comes to Peak Oil, we?re there, and in fact, we?re past it.

The future of conventional petroleum output is downhill, even with the future output from the deep-water offshore discoveries. That deep-water oil will sure help, but it won?t power the world of the future the way it powered the world of the past. We live in a different world now.

Thus, the energy future is all about transition to something else. It gives a whole new meaning to that phrase, ?Take me to your leader.? Huh? What leader? Most of the world?s policymakers are clueless about this.

...?Oil Pharmacies?
According to Matt Simmons last week in Denver, ?There?s no such thing as West Texas Intermediate [WTI] oil anymore.? Mr. Simmons states that places like the pipeline crossroads at Cushing, Okla., are little more than ?crude oil pharmacies? anymore.

That is, there are lower and lower flows of conventional oil from the wells of the traditional U.S. oil patch. Thus, operators at Cushing take whatever oil they can obtain from one place, plus whatever oil they can obtain from another place. They mix and match, and blend it all with synthetic crude from Canada. Maybe they add some imported oil juice and then send it down the line as WTI.

Along those lines, Venezuelan economist Carlos Rossi stated to ASPO his analysis of oil trends in the U.S. ?You are worried about your foreign oil imports now,? he said. ?You in the U.S. import about 65% of your oil today. You don?t like it. But if you follow the clear trends, by 2025, you?ll be importing about 92% of your oil. You?ll like that even less.? No doubt.


 

mr merlin

EOG Master
Re: Double Whammy

Oil production in the US is even up this year, we peaked 35 years ago and,here it goes up year on year...dont believe the bs scrim. Quite a few middle eastern countries have put their large expansion plans on hold recently because....there may be too much oil, TOO MUCH!

It's never running out, enjoy your sunday drives!
 

scrimmage

What you contemplate you imitate
Re: Double Whammy

Oil production in the US is even up this year, we peaked 35 years ago and,here it goes up year on year...dont believe the bs scrim. Quite a few middle eastern countries have put their large expansion plans on hold recently because....there may be too much oil, TOO MUCH!

It's never running out, enjoy your sunday drives!




The Truth About Energy
By Pura Saxena
10/26/09</ABBR> Hong Kong, China ?
Excerpts from:
http://dailyreckoning.com/the-truth-about-energy/
Look. Skeptics can say what they want; it does not change the fact that our world is struggling to maintain daily flow-rates. Whether you agree with us or not, the energy reality is that the supply of conventional crude oil is very close to its peak and no other fuel source can easily fill the supply gap.

Yes, various governments are now promoting alternative sources of energy and over the following years, we expect this drive to intensify. But those sources will provide too little, too late. So there remains, today, an unbelievable degree of denial when it comes to ?Peak Oil.? Most people simply dismiss it as a conspiracy. Others gleefully point to alternative sources of energy, whereas some believe that the vast improvements in oil drilling technology will save the day. Do not be seduced by these delusional hopes.

First, as far as drilling technology is concerned, it is worth noting that America is home to the best oilfield technology on this planet. However, its oil production peaked in the early 1970s and has been in a relentless decline. Furthermore, apart from America, other technologically advanced nations in the world have also failed in maintaining their daily flow-rates. For instance, after exporting crude oil for over two decades, Britain is now a net importer and its production is in a state of permanent decline. Hard data confirms that two of the most advanced countries in the world now live in a post ?Peak Oil? era, so what are the odds that other less fortunate nations will succeed in averting ?Peak Oil??

Secondly, as far as alternative sources of energy are concerned, they represent a drop in the energy ocean and will not be able to offset the depletion in crude oil. Despite all the euphoria surrounding renewable energy, the ?sources? like ethanol and solar panels are net energy losers. In other words, it takes more energy to produce ethanol and solar panels than the energy you obtain from them. For sure, hybrid and electric cars will help us to some degree but you must keep in mind the fact that electricity is not a source of energy; it is a carrier of energy. Even if electric cars become popular, how will we generate sufficient electricity?

As far as Canada?s tar sands are concerned, Alberta currently produces roughly 1.4 million barrels of oil per day and under the best case scenario, this figure is expected to rise to just 3.5 million barrels per day by 2020. To complicate matters even further, the tar sands require huge amounts of water and natural gas. In addition to this, the mining procedure is extremely polluting. For example, the process of extracting ?oil? from bitumen releases at least three times the amount of carbon dioxide emissions as regular oil production. Accordingly, we have no doubt in our minds that Canada?s tar is not the Holy Grail.

Finally, the new oil shale discoveries in America are not going to help us either because the ?oil? trapped in the shale is in fact kerogen ? a precursor to oil. So far, all major oil companies have struggled to convert the kerogen into usable oil and it will be interesting to see whether any of them succeeds in the future. In any case, this conversion process is extremely expensive and we can assure you that shale will not be producing any oil at today?s prices. Recent studies reveal that the price of oil will have to rise to several hundred dollars per barrel to make this process economically feasible.

Well, now that we have covered the supply side, let us briefly discuss the demand side of the equation. According to the IEA, global oil usage in 2009 will amount to 84.4 million barrels per day and it will rise to 85.7 million barrels per day in 2010. This means that oil demand will rise by 1.5% over the next twelve months which is in line with the growth rate over the past two decades. If this growth rate continues over the next 4-5 years, there is no way our world will be able to ramp up production.

Unfortunately, positive thoughts and wishful thinking will not change the equation. Precious time has been wasted and we have no margin of safety. We must prepare ourselves for sky-high commodity prices and periods of acute shortages, which will make wartime conditions seem rosy. In fact, we believe we are already a decade into this painful transition but let us warn you that we have seen nothing yet.
 

scrimmage

What you contemplate you imitate
Re: Double Whammy

Oil production in the US is even up this year, we peaked 35 years ago and,here it goes up year on year...dont believe the bs scrim. Quite a few middle eastern countries have put their large expansion plans on hold recently because....there may be too much oil, TOO MUCH!
It's never running out, enjoy your sunday drives!

With decreased demand in the U.S. because of lower economic activity,there was a surge of inventories in Cushing Oklahoma,where WTI[West Texas Intermediate]oil is delivered into the American pipeline system.
Since WTI is a widely used benchmark to price future oil,prices were artifically low as a result,and didn't relect the true value,or real cost of producing oil elsewhere.
This is going to change in January[2010] as the Saudis,who are the biggest exporters are going to use a different index[based on Gulf of Mexico crude which is more expensive to recover,and bring to market] to determine what they're going to charge,expect to pay more next year.
Saudis Drop NYMEX
WTI Oil Contract

<SMALL>October 29th, 2009 </SMALL>
By Javier Blas in London
From:
http://www.ft.com/cms/s/0/8cda145a-c3fe-11de-8de6-00144feab49a.html?nclick_check=1

Saudi Arabia on Wednesday[10/28/2009] decided to drop the widely used West Texas Intermediate oil contract as the benchmark for pricing its oil, dealing a serious blow to the New York Mercantile Exchange.
The decision by the world?s biggest oil exporter could encourage other producers to abandon the benchmark and threatens the dominance of the world?s most heavily traded oil futures contract.It is the main contract traded on Nymex.

The move reveals the growing discontent of Riyadh and its US refinery customers with WTI after the price of the benchmark became separated from the global oil market this year.
The surge in oil inventories in Cushing, Oklahoma, where WTI is delivered into America?s pipeline system, depressed the value of the WTI against other global benchmarks, throwing the global oil market into disarray.
In January, WTI, which usually trades at a premium of $1-$2 a barrel to Brent, fell sharply, leaving it at a discount of almost $12 ? a record gap. This dislocation in the market continued well into the summer.

From January, Saudi Arabia will base the price of oil for its US customers on a new index developed by Argus, the London-based oil pricing company.
The Argus Sour Crude Index will track the price in the physical market of a basket of US Gulf Coast crudes, including Mars, Poseidon and Southern Green Canyon.
Argus said the change in policy reflected the ?increased importance of the US Gulf coast sour crude market, in which both production and trading activity was rising sharply?.

Paul Horsnell, head of commodities research at Barclays Capital in London, said Saudi Arabia?s decision was likely to reflect a ?wider discontent? from its customers in the US about WTI performance.
ExxonMobil, Marathon and Valero are among the US?s biggest buyers of Saudi crude oil.
Edward Morse, chief economist at LCM Commodities in New York, said: ?It is a recognition by large players that WTI sometimes does not reflect the true value of crude oil in the waterborne market.?
Saudi Arabia has priced its oil using WTI since 1994.
The price was based on quotes from the physical market which were compiled by Platt?s, a unit of McGraw-Hill.
Oil companies then covered their exposure to WTI using the futures market on Nymex.

 

scrimmage

What you contemplate you imitate
Re: Double Whammy


Rare Earths and Other
Critical Technology Metals
October 30 2009
By Byron King
Excerpts from:
http://whiskeyandgunpowder.com/rare-earths-and-other-critical-technology-metals/

United States of Windmills

Some so-called ?technologies of the future? are destined to fail due to lack of critical metals with which to effect buildout. Take the rare earth, neodymium, for example. It?s a component of strong permanent magnets ? which are made out of a mixture of neodymium, iron and boron.

Strong permanent magnets are critical to gaining efficiency in rotating power-generation units like, say, windmills. Y?know? we?re going to replace burning fossil fuels with windmills, right? Isn?t that the idea? We?re going to live in the United States of Windmills, right?
Except one fact of physics is that without strong permanent magnets, you can?t generate nearly as much power with each turn of the large blades. So neodymium ? in the magnets ? is critical to our windmill future. There?s NO substitute for neodymium, and believe me, people have tried to figure a way around it.

But with neodymium, as with a host of other relatively obscure substances from the periodic table, the global supply is precarious. In some cases, the supply chain is at great risk because there are but a few sources. For some of those sources, we see things like a major mine playing out due to depletion (Baotou, China, for rare earths) or shut down due to environmental issues (Mountain Pass, Calif., again for rare earths). With other metals, many mines are effectively off-limits due to political problems (in the Congo, for instance).

Looking Ahead with Critical Metals

Most of the strategic and critical metals are just plain ?different? than other major industrial metals, like copper, aluminum, lead and even gold and silver.

From the standpoint of nuclear physics, for example, rare earths are not like the other elements. They are brilliant, stubborn and complex, and at the same chemically similar and uniquely individual. You take each rare earth atom the way it was formed in a nuclear reaction within some long-gone, exploded sun, billions of years past.

Another more mundane aspect of the critical metals is that few are exchange traded. For the most part, there?s no futures market, other public market or well-defined transparent price discovery mechanism. There has never been sufficient volume to build up a worldwide market for futures in these obscure elements. So most of the critical metals that get used in world commerce are sold under one-on-one, long-term contracts.

Lacking a forward market, industrial users can?t lock in future prices or deliveries through traditional hedging. They have to sign a contract and agree to pay for future product. It sounds straightforward, but the reality is different. The firms that use many specialty metals live in the worst of both worlds. There?s no futures market, but they are still vulnerable to supply interruptions, spot shortages and price squeezes in the market.



October 30th, 2009 <!-- by Kevin -->


Chinese-Made Turbines to fill
U.S. Wind Farm
By Rebecca Smith
Excerpts from:
http://online.wsj.com/article/SB125683832677216475.html

A Chinese wind-turbine company, with financing help from Beijing, has struck a deal to be the exclusive supplier to one of the largest wind-farm developments in the U.S., a sign of how Chinese firms are aggressively capitalizing on America?s clean-energy push.
The 36,000-acre development in West Texas would receive $1.5 billion in financing through Export-Import Bank of China. Shenyang Power Group, a five-month-old alliance, would supply the project with 240 of its 2.5-megawatt wind turbines, among the biggest made in the world.

The Obama administration is hoping a shift to renewable energy will inject new life into the U.S. manufacturing base and provide high-paying jobs, making up for losses in other sectors. But while the U.S. has poured money into renewable energy through tax credits and other subsidies, China has positioned itself to reap many of the benefits by ramping up its export machine.

Global manufacturing of wind turbines shifted primarily to Europe from the U.S. after the 1980s, as nations such as Spain created special pricing for renewable power. By 2005, less than a quarter of components going into turbines installed in the U.S. were made domestically.
 

scrimmage

What you contemplate you imitate
Re: Double Whammy


The Beverly Hillbillies -
opening credits with Winston verse
<EMBED src=http://www.youtube.com/v/tkOGM6gHvao&hl=en_US&fs=1& width=425 height=344 type=application/x-shockwave-flash allowscriptaccess="always" allowfullscreen="true"></EMBED>


Key oil figures were distorted by US pressure,
says whistleblower

Exclusive: Watchdog's estimates of reserves inflated says top official
Terry Macalister guardian.co.uk,
Monday 9 November 2009
Excerpts from:
http://www.guardian.co.uk/environment/2009/nov/09/peak-oil-international-energy-agency
The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.

The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.

Now the "peak oil" theory is gaining support at the heart of the global energy establishment. "The IEA in 2005 was predicting oil supplies could rise as high as 120m barrels a day by 2030 although it was forced to reduce this gradually to 116m and then 105m last year," said the IEA source, who was unwilling to be identified for fear of reprisals inside the industry. "The 120m figure always was nonsense but even today's number is much higher than can be justified and the IEA knows this.
"Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources," he added.

A second senior IEA source, who has now left but was also unwilling to give his name, said a key rule at the organisation was that it was "imperative not to anger the Americans" but the fact was that there was not as much oil in the world as had been admitted. "We have [already] entered the 'peak oil' zone. I think that the situation is really bad," he added.

A report by the UK Energy Research Centre (UKERC) last month said worldwide production of conventionally extracted oil could "peak" and go into terminal decline before 2020 ? but that the government was not facing up to the risk. Steve Sorrell, chief author of the report, said forecasts suggesting oil production will not peak before 2030 were "at best optimistic and at worst implausible".

But as far back as 2004 there have been people making similar warnings. Colin Campbell, a former executive with Total of France told a conference: "If the real [oil reserve] figures were to come out there would be panic on the stock markets ? in the end that would suit no one."
 

mr merlin

EOG Master
Re: Double Whammy

Several more new oil discoveries off Brazil scrim, apparently they strike oil almost everywhere they drill! Also huge new discoveries in the last few months off africa , angola, ghana and australia, etc,etc.
Shell is poised to drill the first well in the beufort sea off alaska next year - something tells me Obama will block it, since its almost guaranteed to strike oil and you know the libs cant stand that.
 

scrimmage

What you contemplate you imitate
Re: Double Whammy

Several more new oil discoveries off Brazil scrim, apparently they strike oil almost everywhere they drill! Also huge new discoveries in the last few months off africa , angola, ghana and australia, etc,etc.
Shell is poised to drill the first well in the beufort sea off alaska next year - something tells me Obama will block it, since its almost guaranteed to strike oil and you know the libs cant stand that.


 

scrimmage

What you contemplate you imitate
Re: Double Whammy

Cast & Credits
Vitagraph Films presents a documentary directed by Chris Smith.
Featuring Michael Ruppert. Running time: 82 minutes.
Collapse (No MPAA rating)
Ebert: Users: ********​

Michael Ruppert in "Collapse."

Collapse

<!--if category is glossary or critical debate, don't print byline or pubdate, otherwise, print the byline that's there (or BY ROGER EBERT if it's not.)-->By ROGER EBERT / December 9, 2009
From:
http://rogerebert.suntimes.com/apps/pbcs.dll/article?AID=/20091209/REVIEWS/912099993

I have no way of assuring you that the bleak version of the future outlined by Michael Ruppert in Chris Smith's "Collapse" is accurate. I can only tell you I have a pretty good built-in B.S. detector, and its needle never bounced off zero while I watched this film. There is controversy over Ruppert, and he has many critics. But one simple fact at the center of his argument is obviously true, and it terrifies me.

That fact: We have passed the peak of global oil resources. There are only so many known oil reserves. We have used up more than half of them. Remaining reserves are growing smaller, and the demand is growing larger. It took about a century to use up the first half. That usage was much accelerated in the most recent 50 years. Now the oil demands of giant economies like India and China are exploding. They represent more than half the global population, and until recent decades had small energy consumption.
If the supply is finite, and usage is potentially doubling, you do the math. We will face a global oil crisis, not in the distant future, but within the lives of many now alive. They may well see a world without significant oil.

Oh, I grow so impatient with those who prattle about our untapped resources in Alaska, yada yada yada. There seems to be only enough oil in Alaska to power the United States for a matter of months. The world's great oil reserves have been discovered.

Saudi Arabia sits atop the largest oil reservoir ever found. For years, the Saudis have refused to disclose any figures at all about their reserves. If those reserves are vast and easy to tap by drilling straight down through the desert, then ask yourself this question: Why are the Saudis spending billions of dollars to develop offshore drilling platforms?

Ruppert is a man ordinary in appearance, on the downhill slope of middle age, a chain smoker with a mustache. He is not all worked up. He speaks reasonably and very clearly. "Collapse" involves what he has to say, illustrated with news footage and a few charts, the most striking of which is a bell-shaped curve. It takes a lot of effort to climb a bell-shaped curve, but the descent is steep and dangerous.

He recites facts I knew, vaguely. Many things are made from oil. Everything plastic. Paint. There are eight gallons of oil in every auto tire. Oil supplies the energy to convert itself into those byproducts. No oil, no plastic, no tires, no gas to run cars, no machines to build them. No coal mines, except those operated by men and horses.

Alternative energies and conservation? The problem is the cost of obtaining and using it. Ethanol requires more energy than it produces. Hybrid and battery cars need engines, tires and batteries. Nuclear power plants need to be built with oil. Electricity from wind power is most useful near its source. It is transmitted by grids built and maintained by oil. Wave power is expensive to collect. Solar power is cheap and limitless, but we need a whole hell of a lot more solar panels and other collecting devices.

Like I say, you do the math. Ruppert has done his math, and he concludes that our goose is cooked. He doesn't have any answers. We're passing the point of diminishing returns on the way to our rendezvous with the point of no return. It was nice while it lasted. People lived happily enough in the centuries before oil, electricity and steam, I guess. Of course, there were fewer than 6 billion of us. In this century, Ruppert says, there will be a lot fewer than 6 billion again. It won't be a pretty sight.

I'm not going to mention his theories about global warming, because that's a subject that inflames too many zealots. About peak oil, his reasoning is clear, simple and hard to refute.

So you can stop reading now. That's the heart of Ruppert's message, delivered by a calm guy who could be Wilford Brimley's kid brother, lives alone with his dog and is behind on his rent.

I was fascinated by some of the directions peak oil takes him into. For him, he says, it was the key to understanding many seemingly unconnected geopolitical events. The facts he outlines are known to world leaders, who don't talk a lot about them in alarmist terms, but they explain why Bush/Cheney were happy to have an excuse to invade Iraq. And why our embassy compound in Baghdad is the largest we've ever built, larger than Vatican City. And why we're so much more worried by Iran than North Korea. They may also explain Obama's perplexing decision to increase troops in Afghanistan. An undeclared world war for oil is already under way.

I don't know when I've seen a thriller more frightening. I couldn't tear my eyes from the screen. "Collapse" is even entertaining, in a macabre sense. I think you owe it to yourself to see it.

Note: Through local cable providers, "Collapse" is available now via on demand. Check local listings and movies on demand channels.
 

scrimmage

What you contemplate you imitate
Re: Double Whammy

Collapse -
Official Trailer
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Collapse -
Dick Cheney's NEPDG
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Collapse -
The USA Has No Intention Of Leaving Iraq
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mr merlin

EOG Master
Re: Double Whammy

<table width="416" border="0" cellpadding="0" cellspacing="0"><tbody><tr><td width="213">
</td> <td width="203"> Printable version </td> </tr></tbody></table> <table class="storycontent" cellpadding="0" cellspacing="0"> <tbody><tr> <td colspan="2"> Iraq oil capacity 'to reach 12m barrels per day'


</td> </tr> <tr> <td class="storybody"> <!-- S BO --> <!-- S IIMA --> <table width="226" align="right" border="0" cellpadding="0" cellspacing="0"> <tbody><tr><td> Iraq has the world's third largest oil reserves, after Saudi Arabia and Iran

</td></tr> </tbody></table> <!-- E IIMA --> <!-- S SF -->Iraq's oil capacity could reach 12 million barrels per day (bpd) in six years, the country's oil minister says.
Hussein al-Shahristani told reporters in Baghdad that oil producers would not necessarily operate at full capacity, but would take into account demand.
Saudi Arabia, the world's largest oil exporter, has a capacity of 12.5m bpd.
Earlier, a joint bid by Russian and Norwegian oil firms won the contract for the "supergiant" West Qurna field, said to have reserves of 13bn barrels.
<!-- E SF -->Lukoil and Statoil will get $1.15 a barrel and will work to raise output from West Qurna Phase 2, in the Basra region, to 1.8m bpd. In June, a winning bid to develop another Iraqi field received $2 a barrel.
<!-- S IBOX --> <table width="231" align="right" border="0" cellpadding="0" cellspacing="0"> <tbody><tr> <td width="5"> </td> <td class="sibtbg"> The terrorists tried to send a message to the companies through the bombings... But [it] was not delivered and never deceived them


Hussein al-Shahristani

</td> </tr> </tbody></table> <!-- E IBOX --> On Friday, the contract to develop the 12.6bn-barrel Majnoon field in southern Iraq was won by a consortium led by Shell. It also pledged to increase daily production to 1.8m barrels, up from only 46,000.
Rights for the eastern Halfaya field, with 4.1bn barrels of reserves, went to a consortium led by the Chinese state oil company, CNPC.
But the East Baghdad field, part of which lies under the city's Sadr City area, and another in the Diyala province attracted no bids.
'Big achievement'
At a news conference on Saturday, Mr Shahristani called the result of Iraq's second international oil auction since 2003 a "major success".
"It is a big achievement for Iraq to win such contracts at the current prices," he said.
The minister said the contracts awarded over the past two days, coupled with those from the last auction in June and government efforts, would allow Iraq to boost daily production from 2.5m barrels to 12m.
The projected plateau production from the winning bids of the second round alone was 4.765m bpd, he said.
<!-- S IIMA -->

<!-- E IIMA --> If a daily total of 12m barrels was achieved, Iraq would overtake Russia and challenge Saudi Arabia for the position of the world's largest oil producer. However, Riyadh says it could produce 15 bpd.
Iraq's proven reserves now stand at 115bn barrels, below Iran's 137bn and Saudi Arabia's 264bn. But Iraq's data dates from the 1970s, before improvements in technology transformed the industry.
Mr Shahristani declared that Iraq had "scores" of oilfields, including "supergiants" - fields of 5bn barrels or more - to offer international companies in the future.
On Friday, he insisted that bidders had not been deterred by security concerns, pointing out that they had agreed to help develop Iraq's biggest oil fields at remuneration levels lower than they hoped for.
A series of bombings in Baghdad on Tuesday left 127 people dead.
"The terrorists tried to send a message to the companies through the bombings... that Iraq is unstable and investment will be overshadowed by risks," he told state television.
"But this message was not delivered and never deceived them. They came and submitted competitive offers that surprised the global oil industry," he added.
Nevertheless, correspondents say the failure to attract bids for more than half of the oilfields suggests Iraq's abundance of easily extractable oil was not enough to overcome many firms' concerns about security, as well as Iraq's political and legal system.
<!-- E BO -->

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tank

EOG Dedicated
Re: Double Whammy

This is a good thread. Just when I think scrimmage has me convinced that we are running out of oil, Merlin comes back and has me thinking we are not running out.Good job on both sides.
 

mr merlin

EOG Master
Re: Double Whammy

Check out the recent Brazilian discoveries tank - huge finds all over. Brazil will be one of the top oil producers in the world in 10 years. You can hate oil for what it is, but the world is not running out of it.
 

scrimmage

What you contemplate you imitate
Re: Double Whammy

This is a good thread. Just when I think scrimmage has me convinced that we are running out of oil, Merlin comes back and has me thinking we are not running out.Good job on both sides.

Check out the recent Brazilian discoveries tank - huge finds all over. Brazil will be one of the top oil producers in the world in 10 years. You can hate oil for what it is, but the world is not running out of it.

tank;
I'm not trying to convince anyone,but just relaying the opinions on the issue that are out there,consider the facts and draw your own conclusions.
mr merlin can blow smoke about some "huge finds" in Brazil,but what is the cost of recovering that oil,and the EROEI[energy return on energy invested]?
The new fields being tapped won't come close to replacing the output of the "elephant fields" which are in decline.Note that even with a big worldwide drop in demand for oil the price of a barrel remains relatively high,what happens if there's an economic recovery and supplies start getting stretched again?
As far as what countries claim their reserves to be,in many cases they may be overstated:

Iraq oil goals: Are production targets unrealistic?

Iraq oil claims may be too high

Some international oil companies have overstated how high they can take Iraq's crude oil production, a senior government adviser said today, ahead of a second round of oilfield development tenders this week.
News wires Monday, 07 December, 2009

Thamir Ghadhban, adviser to Iraq's prime minister and a former oil minister, told an industry conference that he believed 6 million barrels per day (bpd) was a realistic target for Iraq's oil output within the next six to seven years.
This is well below the estimates of 10 or even 12 million bpd that have been mentioned as a result of plateau production targets proposed by some foreign oil companies as they bid for Iraqi oilfield contracts.
From:
http://www.upstreamonline.com/live/article200940.ece

91 86 90 -
Peak Oil Number-Crunching
<EMBED src=http://www.youtube.com/v/oC-koGwRu_A&hl=en_US&fs=1& width=560 height=340 type=application/x-shockwave-flash allowscriptaccess="always" allowfullscreen="true"></EMBED>


ExtremeWelder (1 month ago)
Number of oil barrels discovered during first half of 2009: 10 billions. Number of oil barrels used duing the same period: 15 billions. Yes, there was an upsurge in discoveries, but still less than was consumed. And these where difficult assets as well, such as deep water, pre-salt or heavy oils with production lead times of 5 to 15 years. This can NOT replace the 5 million barrels per day of lost annual oil production.

bdist (1 month ago)
Recent oil finds include oil sands + oil shale which cannot be produced quickly.

Peak oil is NOT about running out of oil, there is still many times more left than we have used. But we have used most of the light sweet crude that is easy to produce and can be done so quickly.

This is what Peak Oil is about - a maximum rate of production because of geological factors

We find roughly 1 barrel of oil for every 3 we use. It's been getting worse since the 70's. We just can't find as much as we use.

 

mr merlin

EOG Master
Re: Double Whammy

I agree that no way iraq produces 10-12 million bbls a day, just as no way saudi arabia expands their capacity to 15 million. Of course the reason none of this will happen is because the world doesn't need that much oil...there's too much oil out there and the price would crash if they started producing it.

Regarding the "expensive" difficult to produce brazilian discoveries - they are set to begin producing from the enormous Tupi field later this year, only about 100,000 bbls a day to start as it will take a few years to ramp things up.
Keep spouting the doom and gloom scrim if it makes you happy.

It will be interesting to see how shell makes out in this summers drilling in the beaufort sea offshore alaska - most likely it will be a huge success.
 

mr merlin

EOG Master
Re: Double Whammy

[



We find roughly 1 barrel of oil for every 3 we use. It's been getting worse since the 70's. We just can't find as much as we use.

[/quote]
Scrimmage, In 1972 US oil reserves were about 30 billion bbls. Today they are about 21 billion bbls(official figures are always low).
Since 1972 we have produced over 80 billion bbls - if what you say is true, how did that happen?:pop:
 

scrimmage

What you contemplate you imitate
Re: Double Whammy

Scrimmage, In 1972 US oil reserves were about 30 billion bbls. Today they are about 21 billion bbls(official figures are always low).
Since 1972 we have produced over 80 billion bbls - if what you say is true, how did that happen?:pop:
mr merlin;

#1-As usual no sources for what you claim.

#2-The chart below shows U.S. oil reserves from 1900-2005,in 1972
proven reserves were close to 40 billion barrels.
New discoveries over the last 37 years were added to reserves,yet the
trend for both reserves and actual production is down anyway,as is plain
to see.

Below from:
http://knol.google.com/k/why-gas-costs-so-much

Are we really running out of oil, the short answer
is yes,the United States is running out of oil.
Note the graph on proven oil reserves, and its decline.
We now have just as much oil that we had in the 1940, with just a few
more cars on the highway. The spike around 1970 is Prudhoe bay Alaska;
however oil production at Prudhoe Bay has been declining since 1989 [peak
oil]

Oil consumption increases 2% a year, so to break even you need to find at
least 2% more oil each year. The graph indicates the reverse as proven oil
reserves are decreasing as we consume it faster than we discover it. LEFT]

The US reached peak oil in the seventies, and oil production has been
slowly declining, and yes, that includes the North slope and Gulf oil fields.
However the US still produces a great deal of oil, but we also consume
three times that amount. And yes we still find new oil fields, but when you
read the data you find that we consume more than we find [net oil in the
ground is decreasing].

Of course there are those people that would say we could just discover
some great new field that would save us. Sure, but it will be 400 miles of
some coast in 4 miles of ocean and cost 100 billion to produce.

#3-80 biilion bbls since 1972 sounds like a lot of production,but divide
that by 37 ,and how much per year is that.
Note how production topped out at 3 billion bbls a year in the 1970's:


#4-What's the future look like,here's the best case scenario:

Below from:
http://www.financialsense.com/fsu/editorials/2007/0724.html

[FONT=arial,helvetica,verdana] [/FONT]​

  • [FONT=arial,helvetica,verdana]Despite discoveries adding 5% per year, United States oil reserves would be [/FONT][FONT=arial,helvetica,verdana]half of today?s level in only eight years.[/FONT]
  • [FONT=arial,helvetica,verdana]United States domestic oil reserves would be completely depleted in less than [/FONT][FONT=arial,helvetica,verdana]20 years.[/FONT]
  • [FONT=arial,helvetica,verdana]US oil imports would need to increase from the current 63% of consumption to [/FONT][FONT=arial,helvetica,verdana]84% within a decade, and to 90% within fifteen years.[/FONT]
  • [FONT=arial,helvetica,verdana]US oil imports would need to increase from less than 5 billion barrels per year [/FONT][FONT=arial,helvetica,verdana]today, to over 13 billion barrels per year once domestic reserves ran out.[/FONT]
[FONT=arial,helvetica,verdana]Today, no significant domestic oil discoveries are being made. If the US decided [/FONT]
[FONT=arial,helvetica,verdana]to shut in some of its domestic production to extend the life of reserves, oil imports?[/FONT]
[FONT=arial,helvetica,verdana]and the trade deficit?would need to increase significantly. (This of course also [/FONT]
[FONT=arial,helvetica,verdana]assumes that oil exporters will continue to accept dollars for oil indefinitely, which itself [/FONT]
[FONT=arial,helvetica,verdana]is an uncertainty.) On the other hand, if the US seeks to increase domestic production [/FONT]
[FONT=arial,helvetica,verdana]in order to reduce imports, reserves will be depleted even faster! Importing nearly two-[/FONT]
[FONT=arial,helvetica,verdana]thirds of our energy with an eroding manufacturing base, as we do today, is tenuous [/FONT]
[FONT=arial,helvetica,verdana]enough. Imagine trying to import 90%! The endgame is here. And contrary to what [/FONT]
[FONT=arial,helvetica,verdana]some would believe, corn will not save us.[/FONT]​
 
Last edited:

mr merlin

EOG Master
Re: Double Whammy

I saw a report earlier this week that US production is to actually rise from the current roughly 5.5 million bbls/day to approx 6 million and stay there until 2035 at least. Oil use will most likely drop from here due to car mileage requirements and other efficiencies - so our net imports wont likely be much different than today for the near future.

Once again your doom and gloom falls short. And no, I will not provide you with any links to any sources - this is common knowledge to anyone who is "into" the subject.
 

mr merlin

EOG Master
Re: Double Whammy

U.S. Prosperity Lies in the Huge Oil And Gas Deposits
by Mark J. Perry
|
Mclatchy-Tribune News Service
|
Thursday, December 17, 2009


<table width="100%" cellspacing="0"> <tbody><tr valign="top"> <td id="divArticleText">
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<!-- END: Toolbar --> Americans spend $400,000 every minute for imported oil. The cost of importing more than 8 million barrels of oil a day becomes even greater when we consider the military cost of protecting oil transported by tanker from the Middle East and other volatile regions.

Nonetheless, the demand for oil is projected to grow as the United States emerges from recession. The government projects that even accounting for gains in efficiency and an increase in the use of alternative fuels, the United States will require 2 million barrels more of oil per day in 2030, and 1 trillion cubic feet more natural gas every year.

For an economy that depends on energy reliability and wants greater energy independence, there's only one realistic solution: adopting government policies to boost production of America's oil and natural gas resources.

The government should allow oil and natural gas production on federal lands and offshore areas that have been off-limits, or where energy development is constrained by restrictive permitting.

These areas stretch from the Rocky Mountains and the Arctic National Wildlife Refuge to the Gulf of Mexico and the Atlantic and Pacific. Combined, these areas contain an estimated 102 billion barrels of oil and 635 trillion cubic feet of natural gas that could be recovered with today's technology -- more than the proven energy reserves of most OPEC countries.

The history of energy development in the United States shows that once actual production begins, new discoveries are made and estimates of recoverable oil and gas rise. Case in point: companies conducting tests 175 miles off the coast of Louisiana, 30,000 feet below the surface, came up with potentially the largest American oil discovery in a generation. Experts say there could be as much as 15 billion barrels, doubling U.S. oil reserves.

Recently, drilling began from far off the Gulf coast, drawing oil from a wellhead nearly two miles below the water's surface, the deepest in the world. Remote-operated vehicles controlled by technicians at the surface do everything from welding to connecting pipelines in thousands of feet of water.

Credit goes to American innovation and technology. Despite some "peak oil" theorists who believe energy supplies are fast running out, we have seen steady upward revisions in U.S. recoverable hydrocarbon reserves as energy companies invent new ways to find and pump oil and natural gas.

The industry has become remarkably efficient. A technique that combines hydraulic fracturing and horizontal drilling is being used to reach huge amounts of natural gas locked in shale rock. Experts believe that shale gas could meet the nation's natural gas needs for 100 years or more. In fact, shale gas now accounts for 40 percent of domestic gas production, reversing years of decline.

The success with new drilling technology has made western oil shale, another vast energy resource, much more appealing. Oil shale in western states is estimated to hold 800 billion barrels of oil, double the proven reserves of Saudi Arabia, though new techniques still need to be developed to bring down the drilling costs.

Developing oil and gas resources in the United States, modernizing existing infrastructure and improving efficiency will require not only fiscal stability but policy stability as well.

If ever there was a time for Congress to reject tax increases on oil and gas companies, it is now. Energy development in untapped government areas could generate more than $1.7 trillion in government revenue, create tens of thousands of jobs, and help reduce our nation's dependence on foreign oil. The bottom line is that encouraging increased domestic oil and gas production can be a cost-effective, win-win approach to achieving energy independence.
About the Writer

Mark J. Perry is a professor of economics at the Flint campus of the University of Michigan and a visiting economist at the American Enterprise Institute (www.aei.org). Readers may write to him at AEI, 1150 Seventeenth Street NW, Washington, D.C. 20036; e-mail: mjperry@umich.edu.

This essay is available to McClatchy-Tribune News Service subscribers. McClatchy-Tribune did not subsidize the writing of this column; the opinions are those of the writer and do not necessarily represent the views of McClatchy-Tribune or its editors.

(C) 2009 Mclatchy-Tribune News Service.. All Rights Reserved
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scrimmage

What you contemplate you imitate
Re: Double Whammy

Oil and gas exploration falls to
lowest level in five years
<AUTHOR>By Sarah Arnott
Friday, 15 January 2010
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</SCRIPT>
"The North Sea is in decline as a source of hydrocarbons and although there are companies out prospecting for more, Britain has no real incentives to encourage them and slow down the decline," Graham Sadler, the managing director of Deloitte's Petroleum Services Group, said. "There has been some tinkering, but only incremental adjustments, nothing like the sweeping changes that would bring the UK in line with Norway."

Despite the signs of recovery elsewhere in the economy, there are no green shoots in UK Continental Shelf (UKCS) exploration activity so far because of the long lead times of the oil and gas industry. Some improvements are expected in 2010.

The danger is that lower exploration rates now will lead to a market dip in production in the future, as the oil and gas industry's long lead times feed through. "We've got to keep things going year on year or production will drop back, the decline will be accelerated, and we will not make the most of what we have," Mike Tholen, the economic director at industry group Oil and Gas UK, said.
Excerpted from:
http://www.independent.co.uk/news/b...ls-to-lowest-level-in-five-years-1868501.html

If the MSM[Mainstream Media] is correct in their breathless reporting of fabulous new drilling technologies, then the planet will have plenty of fossil fuels for a hundred years or more--no worries, mate, buy your third vehicle straight-away!
If, on the other hand, the MSM is engaging in its usual propaganda for the Power Elites, then the planet will start experiencing a gap between global supply of oil/natural gas and global demand, a.k.a. Peak Oil.

At this point, the human beings on the planet will have a few decades at best to finance and construct a $100 trillion alternative energy complex capable of providing some percentage of the previous energy provided by depleting (oops, I mean "limitless") fossil fuels.

Markets have a funny way of pricing things very cheaply until suddenly they're in short supply, at which point prices skyrocket. The price curve is not smooth, slow and linear; it is prone to abrupt fractal moves.
By the time fossil fuel energy is so costly that alternatives are "obviously" cheap, there won't be enough time or money to construct the immense alternative energy complex everyone will want. As the old Chinese saying has it, "If you wait until you're thirsty, it's too late to dig a well."
Excerpted from:
http://www.oftwominds.com/blogjan10/carbon-trading01-10.html



Finally there's the global energy scene. The price of oil starts this week over $83 a barrel. That puts it about $1.50 from the price "danger zone" where it begins to kill economic activity in the USA. Things and procedures just start to cost too much. Gasoline. Deisel fuel (and, by the way, that means another problem for food production going into the 2010 planting season). One especially eerie situation the past few weeks has been the de-coupling of moves upward in oil from moves in the value of the dollar. Lately, oil has been going up whether or not the dollar has gone up or down. Two weeks ago the dollar went below 1.42 against the Euro and today it's above 1.45, and oil has been rising steadily from the mid $70 range all the while. 2010 may be the year that we conclusively realize that world oil demand exceeds world oil supply -- and that global oil production cannot hold above 85 million barrels-a-day no matter what we do.
Excerpt from:
http://kunstler.com/blog/2010/01/six-months-to-live.html


</SCRIPT>
 

mr merlin

EOG Master
Re: Double Whammy

just read a report today that russia, which was planning large liquid nat gas sales to the US in the coming years, is now gonna be out of the loop because of the enormous new natural gas discoveries being made in the US. These new shale gas reserves will pretty much make us natural gas self sufficient for decades. pretty good news - prices will be low as well!
 

scrimmage

What you contemplate you imitate
Re: Double Whammy


Endgame
Wednesday, February 03, 2010
Posted by John Michael Greer
Excerpts from:
http://thearchdruidreport.blogspot.com/2010/02/endgame.html

...From the early days of the industrial revolution into the early 1970s, the United States possessed the immense economic advantage of sizable reserves of whatever the cutting-edge energy source happened to be. During what Lewis Mumford called the eotechnic era, when waterwheels were the prime mover for industry and canals were the core transportation technology, the United States prospered because it had an abundance of mill sites and internal waterways. During Mumford?s paleotechnic era, when coal and railways replaced water and canal boats, the United States once again found itself blessed with huge coal reserves, and the arrival of the neotechnic era, when petroleum and highways became the new foundation of power, the United States found that nature had supplied it with so much oil that in 1950, it produced more petroleum than all other countries combined.

That trajectory came to an abrupt end in the 1970s, when nuclear power ? expected by nearly everyone to be the next step in the sequence ? turned out to be hopelessly uneconomical, and renewables proved unable to take up the slack. The neotechnic age, in effect, turned out to have no successor. Since then, for most of the last thirty years, the United States has been trying to stave off the inevitable ? the sharp downward readjustment of our national standard of living and international importance following the peak and decline of our petroleum production and the depletion of most of the other natural resources that once undergirded American economic and political power. We?ve tried accelerating drawdown of natural resources; we?ve tried abandoning our national infrastructure, our industries, and our agricultural hinterlands; we?ve tried building ever more baroque systems of financial gimmickry to prop up our decaying economy with wealth from overseas; over the last decade and a half, we?ve resorted to systematically inflating speculative bubbles ? and now, with our backs to the wall, we?re printing money as though there?s no tomorrow.

Now it?s possible that the current US administration will be able to pull one more rabbit out of its hat, and find a new gimmick to keep things going for a while longer. I have to confess that this does not look likely to me. Monetizing the national debt, as economists call the attempt to pay a nation?s bills by means of a hyperactive printing press, is a desperation move; it?s hard to imagine any reason that it would have been chosen if there were any other option in sight.

What this means, if I?m right, is that we may have just moved into the endgame of America?s losing battle with the consequences of its own history. For many years now, people in the peak oil scene ? and the wider community of those concerned about the future, to be sure ? have had, or thought they had, the luxury of ample time to make plans and take action. Every so often books would be written and speeches made claiming that something had to be done right away, while there was still time, but most people took that as the rhetorical flourish it usually was, and went on with their lives in the confident expectation that the crisis was still a long ways off.

We may no longer have that option. If I read the signs correctly, America has finally reached the point where its economy is so deep into overshoot that catabolic collapse is beginning in earnest. If so, a great many of the things most of us in this country have treated as permanent fixtures are likely to go away over the years immediately before us, as the United States transforms itself into a Third World country. The changes involved won?t be sudden, and it seems unlikely that most of them will get much play in the domestic mass media; a decade from now, let?s say, when half the American workforce has no steady work, decaying suburbs have mutated into squalid shantytowns, and domestic insurgencies flare across the south and the mountain West, those who still have access to cable television will no doubt be able to watch talking heads explain how we?re all better off than we were in 2000.

Those of my readers who haven?t already been beggared by the unraveling of what?s left of the economy, and have some hope of keeping a roof over their heads for the foreseeable future, might be well advised to stock their pantries, clear their debts, and get to know their neighbors, if they haven?t taken these sensible steps already. Those of my readers who haven?t taken the time already to learn a practical skill or two, well enough that others might be willing to pay or barter for the results, had better get a move on. Those of my readers who want to see some part of the heritage of the present saved for the future, finally, may want to do something practical about that, and soon. I may be wrong ? and to be frank, I hope that I?m wrong ? but it looks increasingly to me as though we?re in for a very rough time in the very near future.
 
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