Peak Prosperity

Jeffrey Brown: To Understand The Oil Story, You Need To Understand Exports

Peak Oil is very much alive
Sunday, September 13, 2015, 4:31 PM

Despite the attention-grabbing economic volatility that is grabbing headlines, it's important to keep our eye on the energy story firmly in focus. This is especially true as the headlines we regularly read about Peak Oil being dead " are "manifestly false" according to this week's podcast guest, petroleum geologist Jeffrey Brown. 

As concerning as the fact that global oil production has plateaued over the past decade, despite trillions invested in trying to goose it higher, are Brown's forecasting model for oil exports. His Export Land Model shows how rising internal consumption can swing (and has swung) countries from major exporters to permanent importers within a dizzyingly short period of time. » Read more



Arthur Berman: Why Today's Shale Era Is The Retirement Party For Oil Production

A leading geologist delivers the hard facts
Saturday, February 7, 2015, 5:00 PM

Much of what's been 'sold' to us about the US shale oil revolution is massively over-hyped. The amount of commercially-recoverable shale oil is much less than touted, returns much less net energy than the petroleum our economy was built around, and is extremely unprofitable to extract for most drillers at today's lower oil price.

To separate the hype from reality, our podcast guest is Arthur Berman, a geological consultant with 34 years of experience in petroleum exploration and production, who sees the recent US oil production boost from shale drilling as and short-lived and somewhat desperate; a kind of last hurrah before the lights get turned out. » Read more


Peak Prosperity

Shale Oil - Crash Course Chapter 21

Expensive. Over-hyped. And short-lived.
Friday, November 14, 2014, 6:38 PM

If you've watch the previous video chapter on Peak Cheap Oil, you may be wondering how any of that could be still be true given all the positive recent stories about shale oil and shale gas , many of which have proclaimed that “Peak Oil is dead”.

The only problem with this story is that it is misleading in some very important ways. And entirely false in others. » Read more


Peak Prosperity

Peak Cheap Oil - Crash Course Chapter 20

Still a very big, very real, threat to our way of life
Friday, November 7, 2014, 6:31 PM

Energy is the lifeblood of any economy.  But when an economy is based on an exponential debt-based money system and that is based on exponentially increasing energy supplies, the supply of that energy therefore deserves our very highest attention.

What’s clearly at work here is that we’re finding more oil, but it’s expensive. Yet total global demand for oil will climb as developing countries expand their economies and world population continues to grow. Competition for hydrocarbons will become more fierce than it has ever been. » Read more


Calin Tatu/Shutterstock

About that Shale Oil 'Miracle'…

Unpacking the propaganda
Tuesday, October 28, 2014, 7:16 AM

It's been said that humans are rationalizing -- not 'rational' -- animals. The deep truth in that statement is that we humans have strongly-held beliefs that color the information we take in an accept. We're often guilty of recognizing only the data that supports those beliefs while rejecting the rest.

For example, today most people place a great deal of faith in the potential for technology to fix whatever predicaments society may face in the future. And they support that view with cherry-picked data, while conveniently overlooking evidence suggesting technology is instead a sword with two edges. » Read more



The Hard Facts About Shale Oil

Its impact wil be short-lived. Much shorter at these prices.
Tuesday, October 28, 2014, 7:15 AM

Executive Summary

  • Why prices under $100 per barrel just aren't cash flow positive for shale oil producers
  • VIDEO: all you need to know about the shale oil industry
  • Why the Boom/Bust cycle is swinging to 'Bust' for shale companies
  • Why a prolonged 'Bust' in oil prices will create massive economic shockwaves

If you have not yet read Part 1: About That Shale 'Miracle'... available free to all readers, please click here to read it first.

The Shale Reality

Now, let me build on the case that not only are shale companies not profitable at $50 per barrel oil, but they are often not profitable at prices nearly 100% higher than that.

I’m not about to make the case that all shale operators are unprofitable or about to go bust on the plays, but I am going to make the case that any sweeping statements like “technology will bring us Shale 2.0” are utterly adrift from the evidence at our disposal.

Let’s go back to September 2014, before any oil price weakness had crept into the picture.  At that point in time, according the WSJ author, the shale operators should have been swimming in cash.

Well, that’s just not the case. And some of them were losing their shirts:

Sumitomo’s US shale oil foray turns sour

Sept 29, 2014

Sumitomo Corp of Japan has drawn a line under its disastrous two-year foray into shale oil in the US, with writedowns connected to the project almost completely erasing its full-year earnings.

On Monday, Sumitomo, the fourth biggest of Japan’s trading companies by market capitalisation, said that an impairment loss of Y170bn ($1.6bn) on a “tight oil” project in west Texas would form the bulk of Y240bn of charges for the fiscal year to March 2015.


Hmmmm. I guess Sumitomo just failed to use enough smart technology or something, because otherwise how is it possible to lose $1.6 billion at a time when oil was solidly priced in the $100 range?

Sarcasm aside, the truth is that it’s all too easy to lose money in the shale plays, something I believe is already completely indicated by the negative free cash flows of the industry. 

In fact, that negative free cash flow evidence tells me that... » Read more



Peak Cheap Oil Rears Its Head

Oil majors throw in the towel
Monday, March 24, 2014, 7:31 PM

This is a critical update on the Peak Cheap Oil front. 

Yes, I am talking about that tired old concept that was allegedly slain by American drilling ingenuity. It's back in the news... if you know where to look.

I remain steadfastly interested in the oil outlook because everything, and I do mean everything, in our exponential monetary and associated economic system is hinged upon there being more cheap oil next year than last. » Read more


Bruce Rolff/Shutterstock

Richard Heinberg: The Oil 'Revolution' Story Is Dead Wrong

The data tell a vastly different tale than the media
Sunday, March 9, 2014, 12:45 PM

With all the grandiosity of the media headlines touting our destiny as the new "Saudi America", many pundits have been quick to pronounce Peak Oil dead.

Here at, one of the most frequent questions we've received over the past two years is: will the increased production from new "tight" oil sources indeed solve our liquid fuels emergency?

Not at all, say Chris and this week's podcast guest, Richard Heinberg. Both are fellows at the Post Carbon Institute, and you are about to hear one of the most important and most lucid deconstructions of the false promise of American energy independence: » Read more


Teresa N. Fischer

The Stock Market's Shaky Foundation

Crumbling fundamentals in both the short term & long
Wednesday, February 26, 2014, 7:21 PM

According to the stock markets in the US and in Europe, the world’s economy is not just in good shape, but is in the best shape it’s ever been

The S&P 500 hit an intraday new record high of 1858.71 on Feb 24, 2014, and is now 18.6% above the peak it hit in 2007, a moment everybody now recognizes was heavily overvalued.

A nearly 19% gain above the prior all time high is an enormous and unusual event.  Surely there must be an equally compelling story and loads of fundamental data to support such a bull market? » Read more


Kunal Mehta/Shutterstock

Why Your Own Plan Better Be Different

Because the cavalry isn't coming
Tuesday, January 21, 2014, 2:40 PM

Executive Summary

  • Why the insolvency hole the U.S. is in may be much deeper than appreciated.
  • Current 'best case' assumptions show us doubling the size of our economy TWICE over the next 75 years. Why that's just not achievable.
  • Why the above assumptions get even worse when the energy story is taken into account.
  • Why action at the individual level is your best bet now.

If you have not yet read Part I: "Endless Growth" Is the Plan & There's No Plan B available free to all readers, please click here to read it first.

A Big Hole

When the Treasury Department estimates that the U.S. has a ~$65 trillion NPV (Net Present Value) shortfall in its main accounts, it's saying that using its assumptions, the U.S. government would need to have $65 trillion today in an account, earning a stated rate of interest, in order to be solvent.

Since the U.S. government don't have that have that kind of scratch, it's insolvent. 

But the real picture is likely worse. The Fed calculates the NPV shortfall to be closer to $100 trillion. And if you believe Lawrence Kotlikoff's math, the figure is closer to $200 trillion. Either way $65 trillion, $100 trillion, or $200 trillion the sum cannot be paid.

So it won't be.

And the real trouble is that all of these numbers make the same implicit assumption: The future will more or less resemble the past. That is, some form of future growth exponential future growth of the economy is at the heart of every single calculation.

But we might question that, because somewhere between here and there, economic growth will have to come to an end. Or at least a pronounced deceleration. Why? Quite simply, because the earth is finite.

Now, we might comfort ourselves with the belief that our future date with hard limits is lifetimes away. But when we do, we shortchange ourselves (if we're wrong) and our progeny (if we're right). After all, the time to make an adjustment is when the resources and energy exist to make that change.

And that's now. Or, really, decades ago... » Read more