The most important thing to understand about the coming oil production cutbacks

What the current oil price slump means for world oil supply is starting to emerge. "Layoffs," "cutbacks," "delays," and "cancellations" are words one sees in headlines concerning the oil industry every day. That can only mean one thing in the long run: less supply later on than would otherwise have been the case.

But perhaps the most important thing you need to understand about the coming oil production cutbacks is where they are going to come from, namely Canada and the United States.

Why is this important? For one very simple reason. Without growth in production from these two countries, world oil production (crude oil plus lease condensate which is the definition of oil) from the first quarter of 2005 through the third quarter of 2014 would have declined 513,000 barrels per day. That's right, declined. Including Canada and the United States, oil production rose just under 4 million barrels per day.

U.S. Department of Energy: Our forecasts aren't really forecasts (or are they?)

Put this in the category of things that can't be true, but that are nevertheless affirmed with a straight face: The U.S. Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy, does not issue forecasts, at least not long run forecasts.

So says Howard Gruenspecht, deputy administrator of the EIA, in a letter to Nature, the respected science journal. Gruenspecht was responding to recent coverage of an alleged EIA forecast which paints a rosy picture of U.S. domestic oil and natural gas production through 2040, a view challenged by the article in question.

Here is the bureaucratese from the letter: "Contrary to the presentation in the Nature article, EIA does not characterize any of its long run projection scenarios as a forecast." Long run projection scenarios....huh. What could those actually be if not forecasts? And, why is the deputy administrator making such a big deal of this? We'll come back to the second question later.

The central contradiction in the modern outlook: 'Planet of the Apes' vs '2001: A Space Odyssey'

When talking about the perils of climate change or resource depletion, soil degradation or fisheries collapse, water pollution or nuclear waste--how annoying it is to have one listener respond dismissively, "They'll figure something out. They always have."

It's a nonsense rejoinder and yet, it often gains the assent of many--as if this assertion were a self-evident truth that only an enemy of progress would question. And, that's where we'll start examining the central contradiction in the modern outlook--with a statement that is offered as if it were a scientific fact, when, in truth, it is nothing more than a piece of dogma enunciated by the religion we call modernism.

At first glance, the statement seems backward-looking because it asserts that we humans have always averted catastrophe through our ingenuity. But, of course, this is complete hogwash. History is replete with civilizations that have risen and then fallen, crumbling for myriad reasons eerily similar to ones said to threaten our own: climate change, resource depletion, soil degradation, water pollution, plagues, war, and political disintegration. The listener's statement above can't really be backward-looking for it would fall to pieces with only a cursory review of history.

Taking a short break--no post this week

I'm taking a short break this week and expect to post again on Sunday, January 11.