Oil
by
Chris Martenson
Any sense of prosperity in today's economy is based on a falsehood, claims Steve St. Angelo, proprietor of the SRSrocco Report website.
Like we here at PeakProsperity.com, Steve is a student of energy. He shares our worldview that net energy per capita has been in steady decline, and a result, future growth will be limited. Also like us, he notes that the "growth" seen over the past several decades hasn't been due to surplus net energy (which makes being able to do more possible). Instead, it has been fueled by debt — which essentially steals prosperity from the future and consumes it today.
Any third-grader with a crayon can quickly tell you that kind of scam can't last forever. And it can't. Once the can can't be kicked any further and the next economic and/or financial crisis is upon us, Steve sees today's over-inflated asset prices quickly dropping by a gut-wrenching 50-75%.
Steve St. Angelo: Prepare For Asset Price Declines Of 50-75%
by Chris MartensonAny sense of prosperity in today's economy is based on a falsehood, claims Steve St. Angelo, proprietor of the SRSrocco Report website.
Like we here at PeakProsperity.com, Steve is a student of energy. He shares our worldview that net energy per capita has been in steady decline, and a result, future growth will be limited. Also like us, he notes that the "growth" seen over the past several decades hasn't been due to surplus net energy (which makes being able to do more possible). Instead, it has been fueled by debt — which essentially steals prosperity from the future and consumes it today.
Any third-grader with a crayon can quickly tell you that kind of scam can't last forever. And it can't. Once the can can't be kicked any further and the next economic and/or financial crisis is upon us, Steve sees today's over-inflated asset prices quickly dropping by a gut-wrenching 50-75%.
by
Chris Martenson
Executive Summary
- The importance of understanding the difference between depleting vs declining
- Why the shale "miracle" can't rescue us from this predicament
- Why 2019 will be a seminal year
- How high will oil prices go when the shock arrives?
- Why the next oil shock will force the economy — and EVERYTHING we depend on — to diminish
If you have not yet read Part 1: The Looming Energy Shock available free to all readers, please click here to read it first.
There are two words that are related but important to understand the distinction between. One is depletion, which refers to the amount of oil that is removed from a reservoir. The other is decline, which refers to the amount of oil flowing from a given well or field.
Depletion is a relatively straightforward process. If there are 100 units of removable oil in a field and you pump out 3 of them, the field has depleted by 3%.
But you might be able to hold the rate of pumping constant for a long time by injecting water or performing other stunts to force more oil out of a given well. If in our example we kept removing those same 3 units year after year, our decline rate would be zero. But the depletion rate would be increasing, because 3/100 = 3% but 3/97 = 3.1%. And after ten years the rate would be 3/70 = 4.3%.
That is, all efforts to keep oil flowing out of the wells at a maximum rate results in increasing rates of depletion. But we should also point out here that fighting decline rates is an expensive proposition. And that funding, too, has dried up of late.
The bottom line is that depletion is what really matters. Because once the oil gone, baby, it’s gone. All of the MSM headlines will keep you focused firmly on rates of extraction but only rarely on the rates of depletion.
So where is the world in the story of depletion? This is where our various sphincters should be involuntarily tightening. Rates of depletion are increasing, and they are substantial as seen here in…
Preparing For The Coming Shock
PREVIEW by Chris MartensonExecutive Summary
- The importance of understanding the difference between depleting vs declining
- Why the shale "miracle" can't rescue us from this predicament
- Why 2019 will be a seminal year
- How high will oil prices go when the shock arrives?
- Why the next oil shock will force the economy — and EVERYTHING we depend on — to diminish
If you have not yet read Part 1: The Looming Energy Shock available free to all readers, please click here to read it first.
There are two words that are related but important to understand the distinction between. One is depletion, which refers to the amount of oil that is removed from a reservoir. The other is decline, which refers to the amount of oil flowing from a given well or field.
Depletion is a relatively straightforward process. If there are 100 units of removable oil in a field and you pump out 3 of them, the field has depleted by 3%.
But you might be able to hold the rate of pumping constant for a long time by injecting water or performing other stunts to force more oil out of a given well. If in our example we kept removing those same 3 units year after year, our decline rate would be zero. But the depletion rate would be increasing, because 3/100 = 3% but 3/97 = 3.1%. And after ten years the rate would be 3/70 = 4.3%.
That is, all efforts to keep oil flowing out of the wells at a maximum rate results in increasing rates of depletion. But we should also point out here that fighting decline rates is an expensive proposition. And that funding, too, has dried up of late.
The bottom line is that depletion is what really matters. Because once the oil gone, baby, it’s gone. All of the MSM headlines will keep you focused firmly on rates of extraction but only rarely on the rates of depletion.
So where is the world in the story of depletion? This is where our various sphincters should be involuntarily tightening. Rates of depletion are increasing, and they are substantial as seen here in…
by
Chris Martenson
By popular demand, we welcome Joseph Tainter, USU professor and author of The Collapse Of Complex Societies (free book download here).
Dr. Tainter sees many of the same unsustainable risks the PeakProsperity.com audience focuses on — an overleveraged economy, declining net energy per capita, and depleting key resources.
He argues that the sustainability or collapse of a society follows from the success or failure of its problem-solving institutions. His work shows that societies collapse when their investments in social complexity and their energy subsidies reach a point of diminishing marginal returns. That is what we are going to be talking about today, especially in regards to where our culture is today, the risks it faces, and whether or not we might already be past the tipping point towards collapse but just don’t know it yet.
Joseph Tainter: The Collapse Of Complex Societies
by Chris MartensonBy popular demand, we welcome Joseph Tainter, USU professor and author of The Collapse Of Complex Societies (free book download here).
Dr. Tainter sees many of the same unsustainable risks the PeakProsperity.com audience focuses on — an overleveraged economy, declining net energy per capita, and depleting key resources.
He argues that the sustainability or collapse of a society follows from the success or failure of its problem-solving institutions. His work shows that societies collapse when their investments in social complexity and their energy subsidies reach a point of diminishing marginal returns. That is what we are going to be talking about today, especially in regards to where our culture is today, the risks it faces, and whether or not we might already be past the tipping point towards collapse but just don’t know it yet.
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