tag:blogger.com,1999:blog-8861605.post6819980625561345160..comments2024-03-24T11:01:27.668-04:00Comments on Resource Insights: Oil prices and the coming financial 'Ice Age'Kurt Cobbhttp://www.blogger.com/profile/05330759091950742285noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-8861605.post-31920460926207991372019-09-13T17:20:10.197-04:002019-09-13T17:20:10.197-04:00For a non-academic but easy to read ecological per...For a non-academic but easy to read ecological perspective on the economy read my book.<br /><br />https://www.amazon.com/Gross-Deceptive-Product-Ecological-Perspective/dp/1640037896/ref=sr_1_1?crid=22TXHIU8OJ5WX&keywords=gross+deceptive+product&qid=1555954235&s=gateway&sprefix=gross+de%2Caps%2C158&sr=8-1<br />Anonymoushttps://www.blogger.com/profile/17110014085003491166noreply@blogger.comtag:blogger.com,1999:blog-8861605.post-9271164084183041592019-09-13T04:41:12.341-04:002019-09-13T04:41:12.341-04:00Apologies for this, but I could not help myself. A...Apologies for this, but I could not help myself. A bit of oil history<br />The industrial start of Romania’s oil industry is considered to be 1857 because of<br />three world firsts that year.<br />The first country in the world to officially record petroleum production.<br />Romania was the first country in the world to officially record an oil production of 275<br />tonnes in the international statistics. Romania was followed by official oil production<br />from the United States in 1859, Italy in 1860, Canada in 1862 and Russia in 1863.<br />The world’s first refinery<br />Romania‘s first oil processing refinery in the 1840’s was a simple handmade<br />equipment using rudimentary methods similar distilling alcohol in a rustic boiler.<br />Distillation on industrial scale started in 1857 with the building of the Mehedinteanu<br />Brothers refinery. The refinery installations were primitive, with all the equipment and<br />cylindrical vessels were made from wrought iron and heated with wood fire.<br />Bucharest, the world’s first city illuminated with kerosene<br />Bucharest was illuminated with 1000 street lamps. On 1st April 1857 everything was<br />ready and working. The oil offered by Mehedinteanu brothers for public illumination<br />had incontestable properties: colourless and with no smell, burning with a light flame<br />with a constant intensity and shape, without smoke, ash or resin. <br />Romanian scientists and inventors have made lasting contributions to the worldwide<br />oil industry. These include:<br />Blowout Protector By Ing. Virgiliu Tacit and Ing. Valeriu Puscariu<br />Refining oil based with sulphur dioxide by Lazar Edeleanu. separation from the oil<br />of some hydrocarbon groups, without their chemical alteration<br />Additional important dates:<br />1861 – 1st well drilled using wooden rods and auger type bits to a depth of 150m<br />1882 – Establishment of the Geological Bureau<br />1904 – Establishment of the School for Drilling and Refining Foremen in Campina<br />1906 - The founding of the Romanian Geologic Institute<br />1907 - The Romanian-American Company drilled the first well with a rotary bit<br />1907 - The testing of the first air-system extraction<br />1908 - First manufacture of oil equipment , installations and the start of repair<br />workshops<br />1913 - The first natural gas production<br />1914 - The start of the Petroleum and Mines Section within the Roads and Bridges<br />Construction School<br />1921 - The testing of the gas-lift extraction system, by ASTRA ROMANA<br />1927 - First mechanical core and the first gun casing perforation<br />1931 - The execution of the first electrical well logging<br />1936 - The first gas injection, on an industrial scale by ASTRA ROMANA, at the<br />Meotian Boldesti oil field, at a 1800 m depth<br />1951 - The first water injection operation on an industrial scale at Sarmatian<br />Boldesti oil field, at a 2600 m depth<br />1984 - 7000 Baicoi well reaches a depth of 7025 m.<br />Petrol and gas prices at the pump are pretty big, almost 1,50 usd per liter, due, of course, to high taxes and tariffs. And since Europe imports oil, any uptick in prices translates in bigger prices at the pump. With incomes so low, no wonder that people in France exploded when Macron tried to pass the cost of green taxes onto them<br />The european consumers are getting squeezed by high prices and high taxes on everything, plus a huge bureucratic superstructure. If the economy tanks and european consumers reduce their overall spending, as low as it is today, to nothing but food, medicine, bills...the economy goes down in flames aka deflation, which will translate not only in low consumption of oil products by the population, but also by ALL, since fossil energy resources permet ALL level of our economy and our society. <br />I dont know how oil companies can survive on low price of oil and gas without another round of QE to boost spending...since those who have trillins in the banks now dont want to spend a dime.<br />Yes, trillions are sitting idly in the banks world wide...until states probably will conficated them to escape the debt trap...as almost happended in Cyprus.<br />Have a good day, sir!Diaconu Radu Ionutnoreply@blogger.comtag:blogger.com,1999:blog-8861605.post-86091612555524374682019-09-11T09:39:37.072-04:002019-09-11T09:39:37.072-04:00Mr. Cobb, your article and Gail Tverberg's is ...Mr. Cobb, your article and Gail Tverberg's is an inspiration. My country of Romania, where the oil age was born - first country to record a oil production, first refinery in the world and I could go on with the inventions of our engineers, which patents, stolen by Big Oil, are now object of major litigation in the US - is in a dire situation.<br />We are hit now by a severe drought. For 3 years now the Social Democrats have imposed a Wage-led growth model, based on borrowing large sum of money from lenders abroad in order to give bigger paychecks to all government bureaucrats. This wage increases have translated so far inta a spiralling commercial deficit and inflation. The reckoning is near and if that financial tsunami hits us, we are in a very bad spot.<br />Back in 1989, when communism felt, Romania was an independent country with a self relient economy, no imports, but almost a failed economy, cause nobody cared to have relations with a dictatorship. Today we are a democracy, but a dependent state on EU and NATO, and our economy is an export oriented economy, barely producing for the internal market. If those buying from us stop buying, we are toast, since we cannot turn our economy overnight to became self reliant and to produce for the internal market - we depend vastly on imports, much like all economies around us and around the world.<br />Virtually, the today interconnected world economy has created not only a wide gap in income between people, but also between nations and states.<br />There is a codependency - we send to you whatever you need, resources, manufactured goods, even people, either as workforce or sex slaves, and you the West pay for that. And the West sends back expensive goods - processed food, cars etc. And waste products, until recently.<br />This simbiotic relationship was possible because of cheap fossil fuels, cheap energy, cheap labor and huge logistic chains. And cheap money to delocalize everything. And a lot of corruption.<br />If those things that in the past were cheap become expensive, the relationship gets murky or, possibly, ends. And yes, cheap money no longer have the bang they used to have.<br />I sincerely wonder how entire nations will survive, since megatons of whatever those societies need to function are imported and no longer locally produced.<br />I don't see any serious attempt to wean world of fossil fuels, long supply lines and supermarkets on the corner, from wich a cornucopia of mainly chinese goods get consumed every day. <br />I cannot imagine what will go down if this state of play existing today implodes. Forget financial tsunami, Armaggedon is more likely...and dont count on cops, soldiers etc...those are human too, and the Maslow pyramid is very much alive and kicking.Diaconu Radu Ionutnoreply@blogger.comtag:blogger.com,1999:blog-8861605.post-15147196947633652582019-09-10T13:05:09.432-04:002019-09-10T13:05:09.432-04:00Thanks for all the thoughtful comments. Gail, you ...Thanks for all the thoughtful comments. Gail, you already know that I follow your work closely and find it very compelling. I am glad to have a chance to feature it here and marry it with a long-running financial analysis that seems to be very much aligned with your analysis.Kurt Cobbhttps://www.blogger.com/profile/05330759091950742285noreply@blogger.comtag:blogger.com,1999:blog-8861605.post-42201830644149658962019-09-09T13:42:15.778-04:002019-09-09T13:42:15.778-04:00As always, Kurt, thanks for an interesting post.
...As always, Kurt, thanks for an interesting post. <br /><br />As I was reading it, I received an email asking me to speak at one of the Thunberg-inspired climate change rallies. It struck me that a debt/oil related recession of the type you talk about could have a greater effect on slowing down climate change than all the rallies and speeches. <br />ChemEnghttps://www.blogger.com/profile/05168251215012150114noreply@blogger.comtag:blogger.com,1999:blog-8861605.post-90459190558414277262019-09-08T20:35:50.569-04:002019-09-08T20:35:50.569-04:00SRSroccoReport Interview with Louis Arnoux (Octobe...SRSroccoReport Interview with Louis Arnoux (October 20, 2016) YouTube:<br />https://youtu.be/k7gJcfjyFpA<br /><br />A more extensive description:<br />Louis Arnoux<br />https://medium.com/@GeeeBee<br /><br />It all hinges on net energy:<br />Resource Insights: The net energy cliff<br />http://resourceinsights.blogspot.com/2008/09/net-energy-cliff.html<br />Robin Dattahttps://www.blogger.com/profile/15358491380192365005noreply@blogger.comtag:blogger.com,1999:blog-8861605.post-40382872281386419162019-09-08T19:25:44.664-04:002019-09-08T19:25:44.664-04:00Thanks, Kurt. I think you did an excellent job wit...Thanks, Kurt. I think you did an excellent job with this article. I hadn't been aware of Albert Edwards forecasts. <br /><br />A finite world works differently than what a person might, on first analysis, expect. There are many different interconnections. The naive view is that we will run out of oil and because of this, prices will rise. It is hard to see that the real result close to the opposite of this: there will be a glut of oil and other energy products, at very low prices. Debt defaults will be a huge problem. Derivative defaults will be likely. Stock prices will fall. <br />Gail the Actuaryhttps://www.blogger.com/profile/10297597051464304720noreply@blogger.comtag:blogger.com,1999:blog-8861605.post-15233400508909293562019-09-08T18:55:57.484-04:002019-09-08T18:55:57.484-04:00Thanks Kurt as always for your interesting and ins...Thanks Kurt as always for your interesting and insightful synthesis of ideas.<br /><br />Several other bloggers have worked to quantify the rising cost of fossil fuel energy extraction, processing and delivery, and therefore the decreasing surplus energy to the non-energy economy. And how that relates to MONEY. Their conclusion also is that we are close to the tipping point in the global economy and the value of fiat currencies. <br /><br />I agree with the commenter above, broadly speaking, we seem to be approaching limits to growth as well outlined in 1972. In addition to energy, we are rapidly depleting the easy to extract non-energy natural resources. Untapped arable land in developed countries at least is very limited. Water is becoming limited in some places. The waste products of industrial civilization are beginning to overflow the waste sinks and negatively impact economic growth. The drag from these wastes will grow. Human population growth that might have previously additive to GDP growth now appears to have negative consequences. Economic and climate migration are beginning to destabilize political structures.<br /><br />Does the current social and economic model end when fossil fuel production and GDP growth turns permanently negative? Permabear financial analysts in the mainstream institutions don’t venture that far in their forecasts. <br />Shawnnoreply@blogger.comtag:blogger.com,1999:blog-8861605.post-79917779779591103172019-09-08T13:29:14.270-04:002019-09-08T13:29:14.270-04:00Both Tverberg and Edwards are describing factors t...Both Tverberg and Edwards are describing factors that will limit growth, Tverberg from the resource depletion angle and Edwards from the aspect of the burdens of excessive economic complexity. <br /><br />It has been obvious at least since "Limits to Growth", published in 1972, that economic growth would peak and then rapidly retreat, taking the human population of the earth down with it. The only question is, "When"? The "standard run" from "Limits" projects economic decline in the 2020s and population decline in the 2030s. <br /><br />Based on current evidence, I think it prudent to prepare for the "economic tsunami" as soon as possible. The best metric for preparation is the ability to subsist without money. If people can do that, they are as prepared as they can possibly be. Joe Clarksonnoreply@blogger.com