Why There’s No Economically Sustainable Price For Oil Anymore
Our friend Chris Martenson had a very interesting discussion with Actuary Gail Tverberg focusing on the future for oil. Here is a description of the interview and the embedded YouTube video.
Actuary Gail Tverberg returns to provide an update on where we are in the global energy story. Her outlook is not rosy: she doesn’t see a path for society to transition to an affordable, plentiful substitute to petroleum as a transportation fuel. The physics as well as the funding do not pencil out, at least with today’s known technologies.
Without such a solution in hand, the world finds itself now mired in a scenario where there really is no long-term workable range for the price of oil. It’s either “too high” and demand suffers, or “too low” and producers can’t afford to extract it. The acceptable middle ground has disappeared:
When on the rising side of the Hubbert curve, everybody has good wage level and everybody can feed themselves. You can build new oil wells and everything works out fine. But what happens as you get past the 50% mark is that you no longer have enough oil coming out for the economy to keep growing. It starts going down. And what happens then is that the economy doesn’t function in the same way. You start getting the prices to spike as you try to get higher-cost oil out. And this is what we saw in the 2007-2008 period.
The price of oil spikes and you get recession. Then the price of oil comes back down. But wages don’t recover and you get the very low price problem that we have right now. So it doesn’t work right. You can’t keep getting the same amount of oil out, essentially because the wages of the people don’t stay up high enough in order to afford the output of the economy.
At this point, it has gotten bad enough that there is no price that works. The price that producers need is higher than what the market will bear.
If we go to a place like Saudi Arabia, you’d say: They can get it out of the ground for $20 a barrel. But then when you look at it, you discover that they really need a much higher price if you include in all of the taxes and all of the funding they need to keep social order, import lots of wheat and the many other things that their economy needs, and build a desalination plant. So they really can’t get along on $20 a barrel. They learned how they can get along on $100 or $120 a barrel, but they can’t get along on $50 a barrel — even in Saudi Arabia.
So you end up with a situation where there isn’t any kind price that really will work.
the report in mining.com was heavy on opinion and low on fact.
nice interview with frank holmes: https://www.youtube.com/watch?v=QGcJQ-NhclQ&feature=youtu.be
worldwide arrest warrants issued for Obama, gw bush & cheney? will it really happen? https://www.youtube.com/watch?v=FNWlPcZbuio
How much did Frank Holmes profit from the sale of Uranium One to Russia?
Probably several times the amount he bribed Hillary with to get the sale approval.
Good investor, he may be. Associated with a traitor and a crook, he appears to be.
I believe that was Frank Giustra, no?
nevermind!
http://www.wsj.com/articles/the-fbi-clinton-probe-gets-curiouser-1477352522?mod=trending_now_1
Devils Island needs to be opened back up for the scum.
So Mr. Big Al Korelin and Mr. Cory Fleck, who is right about the solar and the future of oil demand, the video above or the video you posted here
http://www.kereport.com/2016/10/16/tiping-points-interesting-reached-major-automobile-industry/
oil will be needed for:
plastics, fertilizers, aviation, lubrication, chemical industry,….wherever it is a cheaper starting point or a higher energy density is absolutely needed.
There will be a transition to solar and wind, which will become relatively cheaper and are in the long run less polluting. Not much in this world stays the same.
I saw a solar powered mega-yacht in Monte Carlo harbor last year, so ocean-going ships can even be non-oil-powered, but only a silicon valley kid with money to burn would be so wasteful of capital,
Clinton Foundation CEO request emediate asylum at Russian Embassy.
( guess he didn’t want to be in the body count ? )
Most likely, the energy required to build the power system put forth by the Chinese would exceed the energy out of the system.
Illinois Voting Fraud……just a calibration error, of course.
http://www.trunews.com/article/wikileaks-email-proves-obama-lied-about-emailgate
But Obama also used a private email address, which shows up in Wikileaks released emails.
Why is no one asking questions or making comments about this?
Tuesday was interesting in Copper. Volume of buying was up by a factor of 4 or 5.
this is well above statistical random variation.
California may have the best computer software engineers in the world, but it cannot keep its government computers hack-free.
After its DMV computers were hacked to give up credit card data 2 years ago, you would think they would take security seriously….
http://www.zerohedge.com/news/2016-10-25/did-russians-hack-dmv-too-statewide-california-systems-down-due-major-computer-outag
You think your vote is safe? What a joke!
Notwithstanding “Guru” reports of lower gold purchases from Asia, India is now projected to substantially increase buying.
Indian October Gold Imports Estimated to Be in the range 60-70 Tons
October gold demand is now expected to bounce of its 2016 lows.
India has very little domestic gold mining production, so it relies almost entirely on imports and recycled gold to satisfy demand.
Only one third of 1.2 billion Indians have bank accounts. The percentage of Indians without bank accounts in rural areas is even lower and virtually zero in some areas.
Indian households are estimated to hold 18,000+ tons of gold.
Many Indians had reduced gold buying on a temporary basis earlier this year, based in part on higher prices, a ten percent import duty and a jewelry surtax. Because of this, pent up demand has developed that is set to be unleash this fall.
Professional commentators, it seems to me, first are making a mistake of linear extrapolation and secondly are ignoring a good monsoon season producing good crops and profits therefrom.
where trump got his family fortune: https://www.bloomberg.com/features/2016-trump-family-fortune/
how I became a gold bug: hugo Salinas story: http://plata.com.mx/Mplata/articulos/articlesFilt.asp?fiidarticulo=294
china could be on the edge of a buying boom? http://www.mining.com/report-china-verge-gold-buying-boom/