GAK! MORE PEAK OIL*
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Yep, that’s right my loyal minions. You all act like you hate it but you keep coming back for more on Peak Oil. Gore Warming, climate change, weather weirding? A piece of cake compared to Peak Oil. If we had plenty of oil we could continue to ignore weather change and overpopulation just as we have done for several generations. So Peak Oil is more the chicken to climate upheaval’s egg, panic-wise. Will you panic? Last I checked, no. You read my screeching drivel and grin before heading to your imported fuel powered SUV to drive down to the market for a German beer and a fried chicken bucket prepared in palm oil, on your day off from working a job dependent on importing Chinese manufactured goods sent three thousand miles away to customers whose jobs in the financial industry depend on the continued reign of the PetroDollar which is a monopoly guaranteed by a high tech military powered by Asian microchips and House Of Saud oil. Why in the name of all that is holy and just should you worry?
Speaking of Saudi Arabia, let’s start there. Their state oil company is talking about an IPO, taking the company public to raise money. Now, let’s look at this rationally. The country rightfully and with plenty of justification from a nationalistic view, stole the company from under the control of western oil interests. They then guarded all information pertaining to reserves ( the real reserves, not the inflated numbers the public gets ) so that ten years ago Matthew Simmons in his book had to play detective to try a best guess research attempt at the true state of Saudi oil supply. Which, by the way, didn’t look pretty at all over ten years ago. A decade ago a good portion of the global supply of drilling equipment was being used by the Saudi’s to frantically ramp up production off shore, a clear indicator their super huge elephant field in use for over forty years and seeing a 90% + rate of saltwater injection to maintain pressure was in serious trouble. Now you have them decrease production in times of high or low prices and if you’re smart you know to discount the official excuses. During high prices they claim they want to stabilize the market and in times of low prices suddenly they are supposed to be trying to sink the US fracking industry? Come On! Decreased production is ongoing regardless of supply and demand. The attempt to cash out their cash cow is a last desperate gasp at survival. We might not even need to see the PetroDollar standard crash before Saudi oil ceases to be significant.
And that is not even factoring in domestic demand which is skyrocketing due to overpopulation, the need for food imports and their overtures to both the Russians and Chinese which obviously were rejected, and not just to avoid military confrontation with us but perhaps also their far better grasp on the reserve situation than Americans have. Saudi production is around seven million barrels a day, far below their regular nine and barely over half of their emergency production of yore when twelve was achieved for short periods. Russia is also seeing slight decreases, but they are not that dependent on sales from oil as they were during their immediate post Soviet days. They have oil trade with China and that handles the items they lack domestically. The sole point here is that the number one producer globally doesn’t need to export to anyone else, especially not us if they choose ( and you thought last of Mosin-Nagant ammo was the worst of the responses to Obammy’s Ukrainian adventures? ) and can weather the downwards spiral far better than we can ( and with the Russian partnership, China can also. They need our Treasury bonds as much as they need a rectal wart ).
Remember Mexico? They used to be our number one or two oil supplier. Not anymore. For ten years their production has decreased at an annual average of 3.5%. To the point now they are near bankruptcy for the national oil company ( no profits since 2012-it isn’t just recent events ). Not to mention the country is barely functioning ( my analysis is that the US allows the drug cartels free reign as that is the only group governing the northern section of the country. In effect, out of control crime near the border as a lesser evil of complete anarchy and a far worse threat to us ). When their oil production started to drop we stopped bribing them with cheap corn and turned it into domestic fuel. That caused all the follow on events. And don’t forget the same corn export decrease that also caused the Arab Spring, taking out oil production in several areas due to war and revolution. But all that? That was just VOLUME decrease. Remember that pesky EROI factor? The decrease in the net energy globally?
In the 1990’s, EROI globally was 30:1 and in a mere ten years had declined to 18 to 1. In the US we declined in a shallower arc, 1970 was 25:1 ( down from 100:1 forty years previous ) and in 2007 it was 10:1. And that was ten years ago. Care to guess how low it is now? Since our number one fuel exporter is Canada, and that is mostly tar sands, and those get 4:1 EROI, perhaps you can do the math on that. And EROI is actually the good news. Believe it or not. We are not running out of oil as was previously assumed. We are just getting far worse net oil. It could be worse. The volume could be far lower. So far, as bad as our economy has gotten due to contracting energy yield, it is akin to going from 112 octane gasoline to 87. So far, we just retooled cars to run on less energy intense fuels ( ethanol is even worse, and that is ten percent of a gallon ). So far. You can’t do that indefinitely. Just as you can’t run a First World nation on less and less energy yielding fuels forever ( we’ll continue the polite fiction for now that we are still a First World nation ). The destination is set in stone and only the timing is debatable. I know I’m a bit of a professional worrier, but if I were you I’d start to panic.
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