Tag Archives: peak cheap oil

  • Blog
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    Future Shock – Crash Course Chapter 25

    The unsustainable often ends abruptly
    by Adam Taggart

    Saturday, December 27, 2014, 3:24 AM


    Chapter 25 of the Crash Course is now publicly available and ready for watching below.

    Here at the penultimate chapter of The Crash Course, everything we've learned comes together into a single narrow range of time we'll call the twenty-teens. 

    What this chapter offers is a comprehensive view of how all of our problems are actually interrelated and need to be viewed as such, or solutions will continue to elude us.

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  • Blog
    Peak Prosperity

    Peak Cheap Oil – Crash Course Chapter 20

    Still a very big, very real, threat to our way of life
    by Adam Taggart

    Friday, November 7, 2014, 11:31 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.

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  • Insider

    The Hard Facts About Shale Oil

    Its impact wil be short-lived. Much shorter at these prices.
    by Chris Martenson

    Tuesday, October 28, 2014, 12:15 PM


    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…

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  • Insider
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    Getting to a Future That Has a Future

    It all depends on how well we manage contraction
    by JHK

    Wednesday, October 16, 2013, 12:18 AM


    Executive Summary

    • The 3 fundamental activities society will need to prioritize in order to manage our contracting economy & resources
    • How food production will need to evolve if we are to continue to feed ourselves in the future
    • How pursuing "growth" is wasting us precious time and energy
    • Mandatory transition will be needed across all sectors: transportation, health care, urban planning, manufacturing, trade, etc..

    If you have not yet read Part I: Growth is Obsolete, available free to all readers, please click here to read it first.

    The problem of growth in its current context is first a problem of language, but  do not make the mistake of supposing that this is just a semantic argument. Language is the human animal's primary tool-kit for accomplishing anything in groups, whether it is hunting bison or putting a spacecraft on the moon. If you use the wrong tool you are likely to mismanage the task. Now the primary task facing humans in this moment of history is managing contraction and our goal should be to manage it in a way that minimizes the potential for hardship and suffering. It must be obvious, then, that "growth" in the broad sense that we use the term is not conducive to facilitate "contraction" in the broad sense. The promiscuous use of the word "growth" in our economic debates only confuses us and paralyzes our ability to construct a coherent narrative about what is happening in the world and how we might enter a plausible future which extraordinary events are now shaping.

    Three Fundamental Activities

    I propose that we substitute the term "activity" for "growth" in our public debates over how our economy can function in the face of the manifold crises of population overshoot, climate change, peak cheap oil, and capital scarcity. There are an endless number of purposeful activities we can undertake to address these large problems that do not connote growth. The three fundamental categories of these activities can be stated with precision, namely:

    1. re-localizing
    2. downscaling, and
    3. de-complexifying.

    The quality in common with all of them is indeed the opposite of growth. Yet they all imply a range of positive actions that we can undertake as communities to make new arrangements for the human project to continue in a favorable way.

    I will describe the particulars in a moment, but first the point must be made that…

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  • Insider

    Peak ‘Cheap’ Oil: Shale Oil Proves Peak Oil Is Indeed Upon Us

    We wouldn't drill for it if the cheap stuff were still here
    by Chris Martenson

    Monday, September 30, 2013, 2:40 AM


    Ever the contrarian, I have been quite skeptical of the many breathless claims being made by wide swaths of the media about how a new energy bonanza is going to overtake the U.S. and eventually the world.  The subject, of course, is the new shale plays in both natural gas and oil.

    While these plays are in special cases quite extraordinary, and the technology is just brilliant, many of the more exuberant claims made in the past about the potential contributions of these plays are now being dialed back.

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