Time and the Latest CERA Report: Why 2030 for the Peak?

One of the features of many models that are used to predict future events is that they focus on target years. Decadal years are the most common target years, so that whether talking of climate or the amount of oil or natural gas available, models focus on, for example, the amount that will be available in 2030. The problem with this approach is that it leaves the public to think that a problem is not yet serious. For example if the prediction is that the production of oil will only be 75 mbd, in 2030 then there is an implication that until 2030 that the situation will remain fine.

However the world does not reach those levels by continuing in the business as usual mode for the next 21 years, and then suddenly have production drop off a cliff one Friday night. Rather it is a problem that inexorably will grow, year on year, between now and then. I was struck by this thought as I looked through the latest comments from CERA/IHS on their view of the future of oil supply. Their view, as we have come to expect, is an optimistic one, and though we are not still living in the days of $30 oil that they had, at one time predicted, it is worth looking into so as to provide some explanation of the difference between their view and mine.

Let me begin with a reason why I tend not to be immediately and totally swayed by the thinking behind the CERA report, and their conclusion that:

Global oil productive capacity will grow though 2030 with no evidence of a peak of supply before that time.

It has not been that long since we were assured that production of oil from Mexico would be maintained at levels of 4 mbd through 2015. In 2005 we have:

CERA said that oil from non-conventional sources would widen to 35% of capacity in 2015 compared with 10% in 1990. The research points to growth in output from ultra deepwater drilling in the U.S. Gulf of Mexico, Brazil, Angola and Nigeria; 250% more heavy oil production capacity from Canada and Venezuela; and the expansion of condensate and natural gas liquids to 23 million barrels per day from 14 million barrels per day currently.

The EIA is anticipating that Mexico will produce an average of 2.9 mbd in 2009, falling to 2.7 mbd in 2010. And the latest chart from CERA (downloadable at their site) shows a much reduced increase in production of the heavy oils by 2015, for a start.

CERA has, unfortunately, not only continued to shine an overoptimistic light on future production, but has also tended (as sadly it has also done in the past) to gloss over some of the problems – vide:

Though a peak in global production is not imminent, there are major hurdles above ground to negotiate.

These surface hurdles no doubt include the minor details as to how to get significantly more production out of Iraq. It is all well and good to read reports such as:

Iraq is planning to increase its production capacity to approximately six million barrels per day within 80 months, following the signing of service contracts with a number of major international oil companies. This is in addition to the other agreements which are expected to be reached by next December, whereby Iraq’s production capacity may be increased to reach around 10 million barrels per day at the end of the next decade, compared to 2.5 million barrels per day at present. The overall cost that will be borne by the international companies investing in developing the Iraqi oil fields will amount to about one hundred billion dollars. Needless to say, these agreements are considered to be a historic event (both economically and politically), not only for Iraq, but also for the oil industry itself in the Middle East, and for the global oil industry.

Adding 7.5 mbd to existing world supplies would certainly go a substantial way toward meeting the existing and well documented declining production from so many of the major fields of the world. But is that target a realistic one – let me sound perhaps a little more cynical than some and raise a slight modicum of doubt. While it is nice to be optimistic, the reality still fills the headlines of too many papers and news reports.

Of course, it is expected that these companies will face some obstacles and delays as a result of terrorist attacks against their employees and sabotage against its installations. Also, the need arises to increase export capacity that can accommodate the ensuing increase in production, in addition to attracting a sufficient number of professionals and technicians to work in Iraq under the current circumstances, and procuring the necessary machinery and equipment on time. Despite all these potential obstacles, the delays in these projects are not expected to be significant, since similar experiences in other oil producing countries have shown that such delays only cost a relatively limited and not long amount of time.

Thus even though there are some big players moving into that game, it is a little premature to be optimistic.

In other aspects of the report the average field decline rate, which CERA ties to 4.5% - but includes fields with rising production in the calculation, masks the reality of an increasing level of decline in fields that are past peak. As we saw with Cantarell, post-peak collapse can come more rapidly and severely than earlier forecast.

At the same time the move to produce alternate fuels, such as cellulosic ethanol for vehicles, seems to have hit more technical and economic snags that may well considerably delay the target production that has been anticipated for this alternate fuel, feeding into an overall reduction in “other” fuels beyond the level that CERA still optimistically holds to (raising unconventional liquids, in their view, from 14% of global capacity today to 23% by 2030).

It is notable that in the version of the report I got, while CERA lists three scenarios, Asian Phoenix, Global Fissure and Break Point, it only briefly mentions the assumptions and impacts that the different scenarios will have on both demand, and thereafter supply. Given that I noted just recently that China is signing up for another 1 mbd delivery from Saudi Arabia, and that sales of cars in both countries are rising at significant rates, one can anticipate that that market is likely to develop into the Asian Phoenix that one might imagine is presaged by the title of the CERA scenario.

The growth of that new market is recognized with the opening of the new port of Kozmino by Russia with the potential for shipping up to 1 mbd of oil, with China as a major customer. (Which raises a question for another post on which customers will lose out as China gains.)

But to now get to the nub of my point; this is that there is already a changing market and demand for oil and its products that is developing in the short term. The longer term view of potentially available resources that are not yet found, does not address the problem of how big a tap can be made available to meet demand over the next six years. There are serious questions, within that time frame, of the ability of some of the largest fields in the world to sustain production at their current levels.

Longer term forecasts will be forgotten long before they are called to face reality. Unfortunately the optimism they project can lead people astray in the shorter terms, where the conditions have been glossed over.

The script is in.
Think of last years (yeah right...) economic meltdown. All was well until we were three days from the economic system freezing up. It'll be just like that.
Bad luck we can't just print energy. Sigh.

CERA or IEA forecasts are now either irrelevant or dangerous.

Heading Out, as you mention in your post, CERA's forecasts in particular have been tracked and shown to have been in some cases highly inaccurate. This is not a good situation for a company primarily in the business of selling forecasts.

Now both institutions are backed into a corner of the oil supply debate, denying to varying degrees that there is a major supply concern. The supply data evidence is stacking up against them. It looks like it is coming to a head in terms of credibility destruction. This is the rationale behind their increasingly frequent use of the term "peak demand". Use of the phrase "peak demand" allows both of them to claim as supply declines that it is not a supply-related issue and that their lack of any warning was still right. This sort of word-spin is dangerous as it actively discourages addressing a very serious issue.

The IEA should stick to reporting the past as accurately and promptly as possible, publish the data, and let the interpreting and forecasting to us. They should provide all their data free on the internet. The IEA gets only 15% of their budget from charging fees. These fees severely restrict public access to oil data. The IEA fees could be eliminated with savings from closing the allegedly compromised IEA long-term forecasting unit.

CERA, on the other hand, are fond of reminding everyone that there have been many predictions of a decline in oil supply in the past that have proven wrong. They have incorporated this into their business strategy: if everyone is predicting a decline, then the no-decline side of the market is under-served with little competition and longevity. If one is in the business of selling forecasts, the no-decline side is the sweet spot. They just have to be careful with prepared spin (lace forecasts with mention of "peak demand" without saying that this is the equivalent of "peak supply" - oil prices being the link) which can be used as cover as supply declines.

CERA or IEA forecasts are now either irrelevant or dangerous.

TheOilDrum forecasts, though far more relevant are also dangerous. It depends on ones horizons and goals.

Dangerous to whom? I've read that "Confessions of an Ex-Doomer" sob story if you mean that sort of danger, i.e., thousands of dollars "wasted" on MREs/bottled water/ammo/etc. But I seriously doubt TOD moves markets.

Bad luck we can't just print energy. Sigh.

Crappy inkjet printers, I have the same problem ...

Crappy inkjet printers, I have the same problem ...

Silly rabbit, that's because you bought an "Ink" jet printer. See?

I went to the the store and bought a "Kerosene" jet printer.

Unfortunately I'm still having problems with the "settings" software because it keeps producing 747s instead of just kerosene.

Clearly I need to flip one of those checkmark boxes in my Control Settings dialog box.

Any software gurus out there who can help me? Much appreciated.

Your printer's Adjective Bindings are flipped, but there doesn't appear to be any software settings in the screenshot to fix that. Perhaps it is a hardware setting.

Do you think that if I upgrade to Operating System Administrator privileges I might be able to toggle the Conjunction Bindings in the Grammar selection registry?

(Darn this is becoming a tougher bug to fix than I first thought. I am sure that the market will provide a solution though. So no sweat just yet. Although ... my back yard is getting kind of crowded with all those 747's piling up. I may soon need a new kerosene jet cartridge to replace the limited size one that came with the original printer.)

Unfortunately I'm still having problems with the "settings" software because it keeps producing 747s instead of just kerosene.

OMG, It sounds like you may have been infected with the infamous Dembski virus of tornados blowing through junk yards and creating 747s. This is usually caused by an ID 10 T error
Or by some denialist or creationist hacker hijacking your machine and trying to use it to create a denial of service attack in Iraq.

To fix this you are going to need to upgrade your OS to Windows 777 (coming soon) and then apply a software patch available for download direct from CERA's website called BAU 2030.

Then you need to add the latest hardware version of Abiotic's FF Infinity, it's a plug and play black box that connects either wirelessly or via USB port to your computer.
No software is needed for this addon it just produces pure kerosene right out of the box.

You will also need to download and install the latest printer driver with the new user friendly control panel. This will give you the option for printing kerosene lanterns instead of 747's, Once the lights go out you will find them much more useful.

Should you need technical support for this procedure just wish for it and we will call you.
Really, we will!

BTW, I am neither a denialist or a creationist. Unfortunately I cannot say the same for all of my relatives.

Is the output from the Abiotic FF Infinity counted in CERA's FUD, FUA, YTF or Other source in their future projections. I can't tell from the report. It could be that they've missed this source entirely, in which case their report is potentially an underestimate of the future availability of oil.

Obviously, any media reporting on the CERA report that doesn't take into consideration that the report may be grossly underestimating future fossil fuel availability can be dismissed for not being fair and balanced.

BTW, I am neither a denialist or a creationist.

I didn't really think you were it just happens to be theme of a Creationist Book and I couldn't resist the reference: Tornado in a Junkyard: The Relentless Myth of Darwinism
"That is about as likely as a Boeing 747 falling together as the result of a "tornado in a junkyard." is a very tired canard of theirs...

Is it backwards compatible to Windows 666?

It is listed as officially compatible on their website but they don't actually suport it any longer and the devil is in the details ;-)

Is it backwards compatible to Windows 666?

My local MS dealer just called and said I should wait because they are coming out very very soon with a new Windows Dreamline 787 suite that will probably fix all my problems. Advance peek at the control panel shown below.

Or you could just scrap Windows altogether and get the latest Mac OSX PanguarCheeta.

You will need to get a new Mac Driver for the printer and you will end up printing only Airbus 380s via your wireless airbus card, which probably won't fly by wire, so be prepared for a few major crashes ;-)

There is also the alternative fusion powered Ubuntu 9000 option but you really don't want to go there...You need N dimensional ink cartridges and the warp drives of the printed galactic starships are really finicky! Invisible pink unicorns are always getting stuck in the intake ports.

crashes --hadn't thought about that --ROFLOL

One experienced user of the Kerosene Jet printer technology has warned me about the jets flying straight up to the sky. It's called the Blue Scream of Death. Followed soon after by a system crash of course. ;-)

My problem is all the smoke and noise from my diesel typewriter.

We have a solution for that as well, you need the hydroponics algae grow kit with the bio diesel processor module. The the total EROEI is currently -1.38 but cold fusion will soon solve that.
On this one you do need to call if you require tech support and there's a couple years long wait to talk to an actual humanoid. The hold music is randomly generated.

Bad luck we can't just print energy.

True. But those who do have access to energy can sell it - and then print energy bills ;-)

Actually, you can print energy. It's called Rationing. Instant savings.

It doesn't work forever, but in the short (months/few years) to midrange (decade or so) term, it is supremely effective.

Based on all the information that I've read here and other sites, I went yesterday and bought WTI Oil futures for December 2015 (Z15 in Wall Street's lingo). There are currently at ~$95 and under all scenarios I feel that the price of oil in 2015 will be considerably higher than $95. What do you think?

This seems a forum of true experts and I'd love to get your thoughts on my trade.

Ok, I'm not an expert (much less a true expert), but I think the problem isn't so much what oil will be worth in 2015, but whether the $ will be worth anything at all.

In real terms $80 (inflation adjusted) seems to be high enough to dump the economy into recession. I'd imagine that given a few undulations the economy will adapt to somewhat higher real prices - it's not like $80 is the speed of light or anything - so $95 doesn't seem out of the question.

Can we evolve the pot to boil as the flame wanes?

Thanks Joseph,

I noticed that $80 number is quite a few places and I was wondering what's the reasoning/background on that number? It seems that, for example, the oil went well above that (say up to $120) in 2008 before there was even a hint of a recession (which was caused at least in no small part by the collapse in financial sector, so oil definitely wasn't the only or even major reason).

The $80 number was in this article in the National Post: (Found it through the Drumbeat.)

“The US has experienced six recessions since 1972. At least five of these were associated with oil prices. In every case, when oil consumption in the US reached 4% percent of GDP, the U.S. went into recession. Right now, 4% of GDP is US$80 a barrel oil. So my current view is that if the oil price exceeds US$80, then expect the U.S. to fall back into recession,” wrote Steven Kopits, managing director for U.K.-based energy-consulting and research firm Douglas-Westwood LLC in New York.

Like I'd said, there is nothing exactly magical about $80, (Or 4% or GDP) it's an observation of historical data. The price spike in 2008 was probably overshoot propelled by the housing bubble, and the expectation that it would grow forever. It's ironic that were voices in the wilderness warning against the looming inevitability, but they got as much attention on CNBC as... well... Peak Oil voices get TODAY.

History is getting ready to serve us up one hella rhyme soon.

Thanks Joseph. This was really helpful.

In part the $80 value comes from the price range that OPEC would like to keep the price of oil within. Saudi Arabia (and some of the other members) have been quietly releasing increasing amounts of oil to meet demand, and have just announced plans to release more, thus keeping the supply and demand in balance in the price range that they want. (With non-OPEC apparently peaked and declining they own the ball game).

The $80 value also comes from work done by Dave Murphy here on The Oil Drum. This is his graph of inflation adjusted prices, showing when the economy went into recession:

Thanks Heading Out, this is really interesting (and important!) piece of information. I'm curious where do you get the information on what Saudi Arabia does, is it public information or not? Are there good oil news sites/forums that you frequent and would recommend?

Saudi production by month came from the EIA, and their current plans to increase production came, I believe, from a story that Leanan ran in Drumbeat. (Sorry bit of a rush today).

Thank you very much Heading Out, much appreciated.

As a trader, I can recommend against putting on this position. Even if you are correct and the market ends up at $300, it is highly likely that between now and then, the margin requirements to keep the trade open will at some point overwhelm you. Oil (and energy commodities in general) will continue their boom-bust cycle for years. 3 crashes in the last 10 years should scare you. Trading is not about being right on predicting the final price as much as it is about timing. Only trade Dec 15 if you think it will go up in the next few weeks/months, or if you can put on a swap without margin requirements. A better bull trade would likely be some kind of call spread.

Thank you very much - really informative. 2 things though - My leverage is 3:1, so the price will have to go down by 33% for me to lose the trade and even when the price of oil went to $30 in early 2009, the price of Dec 2015 stayed about $70. Don't you think that 3:1 leverage has sufficient cushion for price drops?

I thought about buying call options or call spread, but the options market for Dec 2015 for retail investors is extremely non-liquid. Do you know any markets/companies that offer decent liquidity for WTI options for retail investors?

Thank you very much in advance!

Over the long term, 3:1 is not enough, but in the short term it should be. You need to be more clear on your view of the market. Will it go up soon? slowly over time? or rush up in a huge short squeeze (or puke $40 one day)? you have to have an idea of what the market will do and then structure a position to maximize gains and minimize losses around your scenario. Personally, i think in the near time we will have an "event" that moves prices drastically in the front, but as for the back of the curve, it will take time.

As for options, any futures broker could work, you just need to ask the floor for the right trade. Perhaps a 150/200 call spread would be a good start? Many of these spreads could get you 10-1 or more of a return on your investment, depending on the expiration date of your options. It goes back to the question above, of when and how do you think the market will rally?

What you are trying to achieve is not easy. You may be better off sticking with equities.

These are the same issues that utilities, IPP, and even hedge funds deal with all the time. Trying to figure out how not to go broke while waiting for their research to actualize.

Thank you very much, really good points. I hadn't considered a 150/200 call spread, I may put in that trade. Thanks :). My view of the market is, fundamentally, because of supply-demand issues the price will rally in a major way at some point between now and 2015. I don't think the price in the back would go down more than 30% simply because when the price on the front crashed to $30, the back (Z15) was about $70. Based on these 2 arguments I want to build a strategy that would be really profitable. I know it's easier said than done, but I think it's doable :).

I guess you're running into the issue which has carried out many, many traders: the mismatch between the horizon of analysis and the horizon of your trades. The only way to be sure you can stick it out is to be unlevered......Not sexy, not juicy, but it works.

I agree, that would be the least riskiest strategies. But, the upside in that case would also be much lower. In any case, I will deleverage if the market starts to move against my position. Thanks for the warning though!

daxr - thanks, good point. However, even if dollar continues to lose value against Dollar Index (which I think at least in short term is highly likely) the buying of Z15 would be a good move to hedge against possible dollar collapse. No?

Why do you think that you would have any more advantage than anyone else? Short of insider knowledge, it is becoming more and more obvious that these investments are a zero-sum game.

Moreover, have you even considered the ramifications of fat-tail probabilities? Even if you had insider knowledge, the risks are all unknown.

The last thing the Wall Street types want is a good stochastic oil depletion model. In the sense that Heading Out is implying, having a model that produced a good estimate over an extended time (none of these lousy CERA "point-in-time" estimates) will essentially completely screw up all speculative goals of the market. This would reduce substantially the price fluctuations and that way to make money would become even more of a zero-sum game. As Steve from Virginia says, wealth isn't produced by financial instruments.

I don't have any insider information, but I think the probabilities of fat-tail event, at least in a short term, are much more likely to be in the favor of a trade than against it. In other words, I see many scenarios that the price can jump radically but not as many possibilities that the price would drop greatly in a very short period of time (before one can get out of the trading position).

I agree with you on one point though - it is a zero sum game, BUT certain market participants (say oil producers) are not in the market to make money but are in the market to hedge their exposure. They would be, for example, perfectly happy to buy put options at $100 for 2012 and let it expire worthless.

I do the modeling of oil depletion but I have essentially zero investments in any speculative venture. I rationalize this by saying I show no confirmation bias wrt my findings :)

It's very hard to trade any kind of derivative by 'remote control'. You are always the 'fool in the market' to some degree because you never know what the other traders are doing. I learned that the hard way. Electronic trading favors those with lots of capital and micro- strategies that always give them the long- term odds- advantage. Most successful long- term remote trades are forms of arbitrage, where the distance facilitates the trade. That is, you buy less- expensive oil on one exchange and simultaneously sell the same oil in a different exchange and pocket the (small) difference. This adds up for pro traders.

Currently, it's easy to see what the other traders are doing and it's like a chapter from a Steinbeck novel. The stock market rises and I visualize Okies migrating out of the Dust Bowl.

The large trade that envelopes all the little trades is shorting the dollar to buy risk assets or investments overseas. This trade is a consequence of the securities markets morphing into credit laundering operations for Ponzi- finance. The markets don't 'discover price' any more but allow insiders to launder finance- created credit into cold, hard cash. To do this the central banks have has flooded cash into the markets. Flooding the markets drives prices up, which facilitates the laundering process in a (perverse) virtuous cycle.

The central banks are doing this, particularly the Fed, because much of the worlds wealth is in the form of illiquid securities, options, equities, bonds and futures contracts. These derivatives represent credit, not cash. They have to be sold in order to be transformed into money.

What this implies is a vote of no- confidence in the economy. The rats are truly cashing out of a sinking financial ship. Do you really want to get on board? You will buy into these markets with all the odds stacked against you and the risk increasing.

Nobody knows how long this laundering game is going to last. 'Dumb money; around the world is shorting the dollar to buy risk assets. There are too many people on the same side of this trade. When the trade becomes unsupportable for any of a dozen reasons, everyone will rush to buy dollars at the same time. That is ... if they can find them. Most will not; there will be the 'Mother of All Short Squeezes'. The step after will be the onrush of deleveraging that cannot be stopped This squeeze will represent all the speculators that are not able to cash out, these will all be ruined.

This includes all those second- tier real estate speculators who are 'snapping up' houses in Phoenix and San Diego.

The smart money is already out of these short- dollar trades. The next in the queue are waiting nervously to launder their own securities. The smart money always exits risk assets the instant problems emerge. The rivulet of redemptions by smart money started prior to last summers' crisis when Goldman- Sachs shorted the very same mortgage bonds it was selling to the public. That was the smartest money getting out. Right now, the redemptions are taking place in plain sight. The process is so blatant, it is unnerving. We live in interesting times, indeed.

The rule is simple; follow the smart money.

Your trade is another dollar- short trade. I would avoid it; the dollar short is overdone, too one- sided. Invest in yourself, that is the place with the best returns and you cannot be cheated.

Steve's comment is brilliant.

Also, don't forget to factor in counterparty risk. If the ship is sinking, how do you know the rat you are betting with will still be on the ship when it comes time to pay up?

At some point it is likely that there will not be enough oil on the market at any price. Not because there is no more oil, but because it is all spoken for and the market breaks down. The short squeeze will be brutal, and those shorting might not survive. Those are your counterparties.

i am no expert, but i expect this is a pretty good bet. (link to contract chart/stats) the price of those contracts can swing pretty dramatically depending on volatility in the market - regardless of underlying prices hitting your strike price - and as a result, you could cash out with a nice profit long before 2015 if prices bounce around a bit.

Thanks - that's my hope and thought process as well.

The above comment is my sentiment as well. I expect lots of volatility. Though I expect oil futures to drop first, during the next leg down in economic contraction before rising dramatically in the medium term.

But who knows? If Chinese consumption outpaces the economic downturn or the dollar crashes first then your bet could have a quick turnaround.

To get a sense of the week-to-week volatility in the futures chain you can review historical futures gyrations at the Energy Futures Databrowser.

Thanks Jonathan for your comment and the link.

daxr -- I am a true expert. Been in the business for 34 years. What will the price of oil be next year? I have no idea. And that assesment is based upon watching the results of hundreds of folks predicting the price of oil over the last 3+ decades.

Make your next investment in shovels, hoes, land and classes in farming

I think you made a mistake, greekguy.

I bought the Barclay's ETN on WTI back in (IIRC) February when it was at around $42. That was the time to buy. Right now, I'm poised to pull the "sell" trigger. I think we can get a little more out of this goose, but prolly only another ten bucks or so before it tanks the "recovery". At that point I'll also sell off some of my remaining stocks. I plan to put the proceeds from the WTI into short term cash with the view to pick up more gold and silver (bullion) on dips.

So far, this strategy has been working pretty well for me since the crash. I have rebuilt back from -38% to around -9% to date.

I wish I had the wisdom to buy oil at $42 :). But I still hope to make quite a bit of money from these levels.

I don't understand how this constitutes "doing well". It seems that your investment is still down 9%. Does doing well now imply staying even? (Sorry for any implied tone, as I have been reading The Black Swan recently)

It's an intelligent question, WHT.
For sure, down 9% is could be viewed as horrible in absolute terms. But I believe the average for investors who "weathered" the crash is to still be down approx. 25-30%. With an average damage at the nadir of well over 40%. 9 percent is pretty close to "normal" volatility swings for many investments.

Here's the thing I'm most happy about. I've way out performed the average and I have done it in part by going counter to the recommendations of my "professional" advisors. You need to understand that my formal educational background is Fine Arts. It has been difficult for me to trust my own intelligence, good judgement and self education on the economy when arguing my economic views with the Wharton School grads (and the like) whom I pay to advise me.

Perhaps you can appreciate that, (maybe not).

Thanks Heading Out

I think the exposition on decline rates in the report on page 10 is worth some analysis.
In the 1000 field study he states that only 40% of production comes from fields in decline (so 60% comes from plateauing or fields building up)
The weighted decline rate for the 40% is 6.1%
so 40% X 6.1% = 2.44% of the total
But the decline rate for the 60% must be positive (or else they would not be building)
So the total decline rate for the 1000 field study must be less than 2.44%

He then states the global decline rate for ALL fields (growing,plateauing and declining) is 4.8%

Something is amiss here
Either my math is wrong or the 1000 field study is not representative
of global production

If the world produces 85 mbpd(or is it 92mbpd?) then 50 mbpd(60%) would be from plateauing fields
and 35 mbpd(40%) would be from fields declining at a rate of 4.5% per year.

So in 2030 the declining fields would produce 14 mbpd; 35 x(.955^20)
plus 50 mbpd = 64 mbpd in 2030.
Add in a 13mbpd increase in unconventional forecast by CERA that's 75 mbpd or a 0.6% annual decline.

Meanwhile world population will increase by +20% ( so it may feel like a bigger decline).

CERA is very bullish on conventional oil development but the economics is against them.
Sure developing countries want more oil but they can't afford the development costs while rich countries are projected to shrink by choice,
wealth reduction or demographically.

It seems very unlikely conventional oil will grow assuming it is there to be had which most here doubt.

So what good are CERA's projections?

barrel -- a small point about field declines. All fields, from the first day the first well begins producing, are depleting. The field production rate certainly increases until all the development wells are drilled. And the production rate may be flat for years after that. I've had many fields (water-drive oil reservoirs) show a flat plateau even after recovering 30%+ of its ultimate recovery. But when the water level reaches the wells it's not uncommon to see a 10% or greater decline. I've seen more than one such field go into a sustained 30% decline rate. A very good example of how quickly a non-declining field rate can go into a steep decline we need look no farther then Mexico's Cantarell Field. If 60% of the fields in the study haven't shown a decline in rate yet then they must be fairly new. You can't predict the decline rate of a field based upon its current decline rate if it isn't declining. But as I said, a non-declining field rate doesn't mean the field isn't depleting and depleting quickly in some cases. You just haven't gotten to the decline stage yet. At some point the analysis must estimate the timing of the onset of decline to make some future projection. This can only be done with a detailed reservoir engineering analysis. And I'm certain those folks didn't have that data. They might be good guessers. The error rate might average out over the 1000 fields but that remains to be seen.

I don't think your math is wrong. A thousand field study can't be representative of global production if it isn't even a good representation of itself. What would be a good representation of global production? A detailed sturdy of global production. That isn't as big a chore as many might think. At the current downturn in activity the industry could volunteer enough manpower to get the job done in a year or so IMO. But such a study is impossible. The countries will not proved the needed data. And I doubt that position will change...ever.

The math isn't wrong, but the presumption that in 2030 50 mbd comes from fields on plateau is very optimistic. Most fields developed since 1990 are relatively small and many offshore. So, the next decade many of them will go into decline and offshore fields generally have high decline rates. Then, the majority of fields developed the next 5 years, are starting to decline around 2030. If the 'yet to be discovered' oil is not what CERA projects, then after 2015 'new oil' from development of new projects will diminish considerably.

I agree with that.
CERA is super-optimistic on conventional oil.

If they want to be super-optimistic though they need to show that above-the-ground economic resources can actually deliver their projections and they don't bother showing it.

This bit of role-reversal is amusing because Peak Oilers spend lots of time pointing out above-the-ground reasons(debt, EROI, etc.) why oil is going to decline without looking at oil resources while CERA looks at
geological potential resources (and undiscovered ones FWIW, piling optimism on optimism) while ignoring the above-the-ground factors as beyond their abilities to predict.

Good synopsis of another CERA "rosy" report Heading Out.

CERA's key to making the 2030 peak seems to be Iraq's production going from less than 2.5 mbpd to 10 mbpd within the next ten years, plus nat. gas liquids worldwide increasing by 80%. I don't understand how any oil company except maybe CNOC or Sinopec, the Chinese companies, would be willing to invest billions $$ in developing Iraq's fields (and searching for possible fields) with a profit margin of only 2.5% or $2 per barrel on $80 per barrel price. China wants the oil regardless of profit, so they will sign production agreements perhaps taking a majority of the contracts. Other cos. may wait for better opportunities and the world export market for oil shrinks.

As far as natural gas liquids increasing 80%, this presumes one of two things: Natural gas production will swell, allowing more liquids to be produced at the same low margin (profit) as now. Or a higher percentage of natural gas (pipeline pruduct) will be converted to liquids (propane or ethane?) thus squeezing the world natural gas market. Either way I don't see how getting such a huge amount more nat. gas liquids will not adversely affect the current gas users or producers.

Just a quick note on Iraq. The $2/b profit oil figure represents a significantly higher profit margin than the 2.5% you mention. You need to look at the overall capital and operational costs employed rather than the price of oil - the $2/b comes whatever the oil price is, and companies can amortise the capital expenditure once the increased volumes start flowing. When you look at the total investment numbers quoted and consider opportunity costs on the capital employed, the return is more like 12-15%. That's about right for sanctioning any project, but as the price is fixed there is absolutely no upside for the developers. The real opportunity lies in the possible future E&P contracts for finding new fields - which is why they want in now. What Iraq is doing right now is equivalent to the Russian surge in the late 90s - existing fields with known geology requiring relatively simple development. Given the right legal framework (there needs to be some institutional stability and an oil law!) and adequate security, pushing Iraq from 2.5 to 7.5 million b/d is pretty straight-forward. Getting to 10 is another matter.

The future really hinges on two things - Iraq and China. If China maintains trend demand growth then demand will outpace supply sooner rather than later (but surely the Chinese have figured this out themselves....?). If Iraq remains a basket case, then supply cannot extend very far. But the reverse would definitely buy time and, as I've stated before, I'm not convinced that China is quite what it seems. I think they may be soon headed for a painful reversal.

The dire effects of peak oil will be felt first in third world countries and will be felt more slowly in those countries who still have large armies.

I should say are being felt http://www.energyshortage.org/

Instead of looking around us and saying "well we are still OK" we should be looking over the world to see how this is beginning to play out so we won't be so surprised when it hits us.

For instance from the link above

Indonesia: Fauzi to ask offices to switch off

The Jakarta governor will issue instructions to city offices to cut down on their power consumption amid the current shortage that has left Jakarta with a program of rotating blackouts for the past two months.

Jakarta Governor Fauzi Bowo will issue a circular instructing all buildings to reduce power use, economic affairs secretary Mara Oloan Siregar said after a meeting with PLN on Tuesday.

The move was intended to set an example for other businesses around Jakarta, Mara said.
“We’re calling on [everyone] to reduce their electricity use so the rotating blackouts can be minimized,” he said.

State electricity provider PT PLN introduced the rotating schedule of blackouts affecting different areas of Jakarta at different times after two of the company’s facilities in Cawang, East Jakarta, and Kembangan, West Jakarta, malfunctioned and were razed by fires.

As has been mentioned here and elsewhere recently, is not one of the biggest problems (running parallel to EROEI) the fact that all the unconventional fuels (say ethanol or tar sands) have embodied in them significant amounts of energy (frequently oil) that are involved in their production BUT that oil is counted as production IN ADDITION to the product of the process - the ethanol or tar sand oil. So the majority of the additional production identified for these unconventional fuels must be discounted by the double-counted oil used to manufacture the 'new' fuel.

I guess its a form of the EROEI appreciation, but it is a lot simpler for folk to understand.

As others have identified the EROEI of corn-based ethanol only gets above one in the few states where climate and soil combined to see corn growth optimised. Everywhere else the EROEI is below one, and no doubt if the double counting is accounted for this should show as a net loss of production, not the gains IEA and others see.

"First they ignore you. Then they laugh at you. Then they fight you. Then you win" Gandhi

"First CERA (beewax in spanish) win. Then "damos Cera a CERA" (we fight CERA). Tomorrow we will laugh at CERA. Next week we will ignore CERA, please."

Que Sera CERA?

muy bien!

What you are saying about the declining EROEI is related to the net export issue. If a country is spending (using) a lot of energy on producing oil, their exports will be lower.

I think you underestimate the use on non-petroleum products reflected in the EROEI calculation.

In Canada, the energy for producing oil sands mostly comes from natural gas, but some comes from gasses that separate out in "upgrading" the bitumen. Oil is used, but probably less than you would think.

The inputs for corn ethanol are mostly natural gas or coal, depending on the plant. I think that some people view ethanol production as a way of turning non-liquid fossil fuels, into a liquid. Coal and natural gas are lower in price per BTU, because they are not in liquid form. Some studies I have seen do an energy return on "oil" invested calculation, the point being that the researchers thought we had plenty of coal and natural gas, it was just the oil we wanted to enhance the production of.

Yegin's forecast in November, 2004 (rising oil production will bring oil prices down to a long term price of $38):


Given these facts, where will oil prices be a year from now--$75 a barrel? $100?

Wrong numbers, says Daniel Yergin. Wrong direction, too. Try $38. Yergin knows oil. . .

Yergin's prediction of cheaper oil prices is noteworthy because he doesn't dispute any of the alarming facts cited in my opening paragraph. Not that he would. The facts came straight from Yergin's own mouth at the recent Forbes Global CEO Conference in Hong Kong. I jotted down Yergin's comments while listening to him speak at a dinner. Then he gave a formal speech the next morning and, fueled this time by highly caffeinated tea, I again took notes, just to be sure. Yergin is pretty clear about his predictions. He says oil demand will rise, yet prices will drop. How can this be?

Answer: capitalism's amazing resiliency. Oil prices rise--oilmen become innovative. They work, they invest, they put their heads to the task, they apply technology, and pretty soon they'll discover how to extract oil profitably from oil sand. Or open wells in deeper water. Or scour the planet for new sources using scanners thousands of miles in space. As Yergin reminds us, oil output is 60% higher today than it was in the 1970s. Not many sages from the 1970s would have bet their reputations on this development. The opposite sentiment prevailed back then; experts said the planet was running out of oil. Wrong.

Yergin was blindsided by 'political factors', a phenonomen theretofore unheard of in the world. There were no wars or civil strife in oil producing countries/regions in 2004, no countries denying access to private companies owned and operated by real white people, no market-unfriendly political leaders/dictators/enemies of us in or out of OPEC. All was swell in 2004, so how could anybody, even somebody with real, but necessarily secret, data, have anticipated the surprising emergence of political factors.

You're just not fair, Westexas.

Yergin's prediction of a price drop is contrary to the experience of exponential price increases with offshore drilling in progressively deeper water and with producing alternates like tar sands and shale gas. Alternates require such vast amounts of capital and materials, and have such long lead times that they cannot possibly be developed in time to hold prices at constant levels, much less bring prices down.
Yergin makes the same mistake as most economists, expecting another productivity miracle. Perhaps they should read:

An Encyclopedia of the History of Technology and the science timeline


Productivity growth peaked a long time ago (1880-1920 in USA), as did scientific discovery.

I would love to see another miracle technology like electrification or a scientific discovery like the periodic table of the elements and the science of chemistry.

EROEI is the force of anti-productivity and it is not on many radar screens.

Yeah, those theoretical physicists have been slacking around for far too long. Let's have some results, guys! I want my Warp Drive!

The LASER was the last major science based innovation of the 20th Century. The physics principle for the LASER was described in a 1917 paper by Albert Einstein, but theory was not put to practical application until the 1950's.

The development of nearly pure optical glass was required for fiber optics, which enabled cheap telephony and the internet.

Biotechnology is one of the leading areas of discovery in the late 20th Century; however, most biotechnology is geared to medicine, which ironically is anti-productive in that we end up prolonging life of the marginally productive at very high cost.

"Global oil productive capacity will grow though 2030 with no evidence of a peak of supply before that time."

Great. Got to love that one. "Productive capacity" will grow. Wow. Impressive. "No evidence" of a peak of supply. Not if you have your head in the sand, that's right.


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Why is it that the US population cannot live with a $4 per gallon while the Europeans have a $7 per gallon for quite some time and their economies did not go into recession because of this? It may be that the US population, for many decades, was accustomed to pay next to nothing for energy and that is imprinted into their genes.

4% of GDP for energy equates to a crude oil price of $80 and it has been demonstrated that 4%-6% of GDP triggered recessions in the past. This may be because the population likes to live as accustomed and unwilling or unable to trim the exuberant consumer-driven lifestyle of those fat years where the US was the consumer's paradise (shop til you drop attitude). The average consumer was not aware and would not have cared that they were living on borrowed money form other nations that payed the bills for their craze. Time has changed and reality has sunk in (hopefully). The next step would be to cut the sick materialism and focus just on necessities. That would support a higher oil price without diminishing the "choix de vivre". Or are Europeans less happy in their more expensive environment?

"Why is it that the US population cannot live with a $4 per gallon while the Europeans have a $7 per gallon...."

One problem is that many americans think it is safer to drive a 4,300~5,500 lbs SUV
than a 2,070 lbs Ford Ka or a 2,300 lbs Toyota Yaris.


Another issue is that the average number of passengers per vehicle in the USA is about 1.6 (according to the book: Plan C).

Most of that price difference is taxes levied pre-pump, which is then used to provide services to the populous, such as universal health care.

The total cost of driving a vehicle is something most Americans don't consider, but that doesn't mean the costs aren't there. In any case, if we look at the total costs of driving a Honda Civic at about $2.50 per gallon versus $20 per gallon, the total cost per mile at $20 per gallon is only about twice as much as at $2.50 per gallon.


If only we could get Americans into Honda Civics. But back on point: if your argument was pertinent, the shit wouldn't have hit the fan at $4.00 a gallon. And yet it did. I suspect that the American consumer experiment has been so effective that there is absolutely no stretch in the system. In other words, when you have maxed out your borrowing, and are already living at the limit of your paycheck, it doesn't take much to overextend people. It doesn't matter how small the amount is; after all, it was only one "waafer-thin mint" that caused Mr. Creosote to explode. Also, the price of gas is an immediate flexible cost while the vehicle and Insurance costs are fixed costs, amortized over time and which the consumer has budgeted for (which is why we don't think about them). The gas price doubling has an instant effect and requires an immediate change in some other use for money, be it food, saving or entertainment.

I think that the increase in oil prices was the match that ignited the inevitable credit firestorm, but on the other hand we are still consuming a huge amount of refined petroleum products per day.

I resent your comment. It is quite off the mark. Mr. Creosote's wafer thin mint was, after all, "on the house", therefore free. It couldn't have caused all the ruckus.

Why is it that, not content with surviving with 7-8$ gasoline per gallon, Europeans generally make do also with not much more than half the energy consumption of US citizens (on average)?. And this, mind you, while mainatining a reasonable facade of happiness on a level with that of Americans. I have been to the US a lot, and I think Americans are not noticeably happier than Europeans. In fact, they're not noticeably happier than portuguese people, whose GDP trails the US's by a large amount.

There is a lot of slack in the American life style... if it weren't for the credit thing.

We aren't really smiling. That's the key.. we're wincing, with style!

There is a lot of gravy and thick frosting layered onto the US system that could be trimmed, no doubt.

Unfortunately, we've built our economic and nutritional models almost exclusively ON gravy and thick frosting.

I'd like to see the math, since I own a Civic. $20 per gallon at 40mpg is 50c per mile. Civic should have about $4K depreciation per year if you're a heavy driver, and maybe $1000 for taxes and insurance. Maintenance is pretty much oil and tires, which is only a few hundred per year -- say $5000 per year total.

If you drive just 10000 miles per year (a light driver), you'd be at 50c per mile. Your numbers work.

If you drive a bunch, though, 30K per year is only about 16c per mile, so the gas increase hurts a lot more, relatively speaking. Whadyaknow - a progressive tax on driving!

With gas at $2.50 though, and most cars costing more than a Civic, the cost of gas is almost negligible. I figure I could do my necessary driving at $20 per gallon just fine, and $5 would be a gripe. Which shows how screwed we really are overall, since society will collapse at a price that some won't even see as a habit-changer.

Even at the $4-5 gas point, though, buying a more expensive but more efficient car makes a lot of sense when you're buying a car anyway. Which is why I drive Honda's now instead of big Chevy's that I once did.


It's actually probably closer to 2.5 times as much (assuming no other changes in the fixed and variable costs), as we go from about $2.50 per gallon to about $20 per gallon. The per mile costs, based on the above car and assumptions (15,000 miles for five years), would go from $0.44 per mile to about $1.12 per mile.

The Civic Hybrid would go from $0.49 to $1.04 per mile:


Of course, a more likely scenario is that we would see a huge drop in miles driven, which would pull the total out of pocket expense down, since fuel prices would be such a large variable cost.

I think that somehow the depreciation v cost per mile analysis while simple/appealing, lacks a bit of ground truth for large segments of our population. I live in a rural area - about $16 gas/wear and tear to get groceries. Most people in rural Maine have used vehicles - depreciation is not applicable in a normal sense. The poorer folk will junk a vehicle if the repair is steep.
For me - single income family, I paid $700/month for gas when it spiked - little choice. When gas dropped, a huge difference - a relief. The people around me generally (sadly)earn a lot less than I do(don't know about this year though)- hard to understand how they make it - 2 income, one car families are not rare. eg the people who work at the nearest mini mart - mostly middle age or older, limited to 30 hrs a week so no benefits - about 180 take home after taxes etc. Two people working such jobs, one car between them, no kids, don't think they quite make the poverty guidelines - maybe they do, one of them told me they didn't, anyways the US gov has nearly defined poverty out of existence.
Anyways - the working poor actually are an important part of the gov's tax base & every penny they make gets circulated back into the economy.
When gas spiked my wife and I noted a lot of out of gas cars - it was a clear effect - lasted a few weeks, people driving with a gallon in their tank. Local gas stations had a large problem with drive offs, new cameras installed, signs posted, no more pump & pay. Irritating. Now we're back to pump & pay at many stations.
I think a person living in a good neighborhood in an urban/suburban setting, with a good profession, may not have opportunity to see some of what actually occurs out in the country.
A passing rant, perhaps of some value as food for thought - the wealthy will always do well, in my opinion, with or without oil, after a period of adjustment. All that will happen is 2/3, maybe more (pure spec on my part) of the middle class will disappear, their kids will be like the people in my neck of the woods, working for bare survival in a system that sucks away all their money, thus removing any opportunity for betterment, all the while being told they are middle class & not poor. Sure look poor to me. I remember when I went to college - $15/credit. Now a profusion of loans avail., college cost keeps jumping to match the loans completely out of proportion to the inflation rate for many years, the effect compounding - college appears to be now a business of extracting the future wealth to be generated by our kids, all the while still promoting a plethora of relatively useless degrees - buyer beware - many good degrees engineering etc but economically I would suggest technical school for many people. Some good businesses can be built on tech degrees & still economical. Good vocations eg nursing.
There was great wealth & domestic comfort available in Roman and Greek times, slavery and confiscation of land/goods by conquest accepted to support those at the top. Eventually with industrialization slavery went away - cheaper to pay them & let them feed & house themselves. Hard telling what will happen if industrialization rolls back significantly - perhaps the bottom tier will need bicycles to escape forced conscription into work farms - after all the lawmakers in cities will need to be fed - outlandish but amazing what can happen legally one small step at a time over a period of years & what rationalization & redefinition can occur to support it (eg enhanced interrogation is legal and not torture - thank god that appears to be rolled back (??) - proof our gov has some good people left).
PS the town next door to me just issued legal notices that it was ending road maintenance on several dead end roads with 1 to 3 homes each - the notice stated that the town had determined the roads were driveways. They've been town roads for god knows how long. I feel bad for those homeowners - snow is a big problem.
Later - from the Land of Snow

I think the recessionary impact has to do with the rise in the price in oil, and incomes not rising to offset the rise in the price of oil. In the US, this works out to $80 barrel, coming from a few years back at $20 barrel.

If we think of the cost of oil itself (not including taxes), the US spends quite a bit more per person on oil products than Europe because we drive farther and have bigger cars. Therefore, as the price of oil rises, we are more affected than Europe, if the price of oil rises. Incomes don't rise to match the rise in the price of oil, so this puts a stress on budgets. Europe is affected to a somewhat lesser extent, because the amount of oil purchased per person is lower, so the increase makes less of a difference.

When Europe added all the taxes to oil products (a few years ago, or whenever this tax structure was initiated), I presume that they removed taxes in other places, so that the shift in taxes was pretty much a zero-sum proposition. If they didn't, I would expect that they too, would have run into a recessionary impact, at the time the taxes on petroleum products were imposed. As long as it is just a shift in taxes from one place to another, and incomes remain the same, people have enough funds left over to buy the things they bought before, and recession doesn't occur.

I'm not aware of the UK removing or reducing any other taxes "to compensate" at any time since the introduction of the "fuel duty escalator" (although if they just didn't raise other taxes "as much as they otherwise would have" then I wouldn't have noticed that, obviously). I think the key point is that the rise has been "incremental but relentless" so that people in general figured out how to adapt their behaviour so that there was never a "sudden shock point" and that, along with global price drops from increasing globalisation, meant there was no recession.

The other thing is that my impression is that although petrol use larger in the US than in Europe equally important is that it's much less amenable to "easy reduction": I know quite a few people who have made relatively minor changes (taking some proportion of journeys by public transport, using more local facilities -- shopping centres, etc -- than driving further to "better" ones, avoiding "unecessary" physical trips altogether, etc) whilst not drastically changing their lives. In constrast I gather many in US can't change their gasoline usage by any significant amount without quite drastic changes to their lives (moving, buying a smaller vehicle, etc), which they may not be able to do financially.

You forget that the elasticity of demand for oil in Europe is MUCH higher than in the USA because Europe has a parallel Non-Oil Transportation system and the USA does not.

A German, French, etc. worker may drive 11 minutes to work today, but he/she can take the [electrified] tram there in 22 minutes (or bicycle there in 30 minutes) with motivation.

Cost being a primary motivator, but no more free parking @ work, an oil shortage, guilt over GW, etc. can motivate too. This is simply not an option for the vast majority of US workers.

A European shipper may use trucks today for intra-EU (or >Russia), but electrified rail is an option with sufficient motivation. The Trans-Siberian is an electrified option for shipments to China, Korea and Japan (China is building three standard gauge rail links to teh EU, bypassing the change of gauge using Russian Railways).

US shippers can use diesel trucks or diesel RRs.

Best Hopes for the USA building a parallel Non-Oil Transportation system,


Individuals and corporations in Europe are just used to these higher operating costs. When the price increases for energy, especialy if it is a rapid increase, then both Europeans and Americans suffer because they have to re-evaluate their positions.

Those that cannot keep up with the price increases go into foreclosure or bankrupcy.

edit: removed - redundant. See comments by Gail, embryonic, Alan, and Grautr.

Thanks, Heading Out,

1) Easy as it is for me to take the POV of the almost-completely-uniformed, my first reaction to your title:

"Why 2030 for the Peak?"

Very simple: Hirsch report gives 20 years as the least painful of its three scenarios, so...20 years it is!

Published Mar 6 2005 by PeakOil.com / US DoE, Archived Mar 6 2005
Peaking of World Oil Production: Impacts, Mitigation and Risk Management
by Robert L. Hirsch et al.

2) The phrase "productive capacity" is left undefined, is it not?
Define it in a particular way, and it's sure to grow.

3) "No evidence" of a peak in supply? What is the criteria for "evidence"?

4) One wishes to put forward to CERA a request for some accountability measures - something specific.

What is resting on a report like this?

One tends to think not in terms of financial bets, but in terms of mass graves and orphanages.

I'll have to try to bridge the gap.

2) The phrase "productive capacity" is left undefined, is it not?
Define it in a particular way, and it's sure to grow.

CERA's productive capacity ruse

CERA defines2 productive capacity in its 2005 report Worldwide Liquids Capacity Outlook to 2010: Tight Supply or Excess of Riches.

... productive capacity [is] the maximum sustainable level at which liquids can be produced and delivered to market. This number is independent of economic or political factors and temporary interruptions such as weather or labor strikes. Productive capacity is different from production, which is the actual amount of oil produced at any time.

The words that make it all meaningless are can be produced. It has little to do with how much oil is produced but how much CERA estimates can be produced. They can pick any number and say this much could be produced if only.....

Ron P.

Thanks, Ron.

I hadn't seen Dave Cohen's article on this.

That definition you quote is just amazing - even weirder than I'd imagined.

What strikes me as particularly deceptive about it, is that the phrase "can be produced" seems to imply something very physical by use of the words "can" and "produced," since "produced" gives rise to the association with oil rigs and equipment.

So, the naive reader - (or any normal reader, actually) - would naturally take this to mean some physical ability that means something specific in the real world.

Then, this meaning further reinforced by the contrast with "soft" factors: economy, labor (those pesky guys), weather (troublesome), and "temporary" interruptions.

(It seems like even with this, they'd have to justify something in the way of oil that is physically recoverable...I mean...oh well, my brain is getting boggled.)

All hinges on what is meant by 'Can'

..and THAT's why the once-and-future Can Opener is SO important to this discussion!

Well, oil looks like it's going on up, then a bit down, then even more up. Meanwhile the economy goes a bit down, then a bit up, then a bit down, then, a bit more down, probably. Meanwhile manufacturing production seems to be falling and people are losing work. Production will rise a bit in China, to supply those on newly devastated incomes in the west with cheap essentials, and junk of course, and for some this will appear to indicate increased world production; and therefore seem good, but the increased production will put renewed strain on oil supplies, and the price will rise yet again, so stressing everyone's balance of payments, putting up the price of food and causing even more job losses, and wrecking the banks' revenue stream: leading to more bank failures and ever greater pressure on everyone's economies. And people will blame governments, and governments will blame foreigners, and foreigners will blame us, and things will turn very very nasty indeed. The denouement within three years, max, I reckon.

CERA is in the spin business; it's job is to pose as a scientific, objective research organization which MSM and political leaders can "take seriously". Of course it is nothing more than a PR firm, albeit one which is richly compensated to allay fears that business as usual might be on a collision course with reality.

It's just pseudo-science, sort of like Growth Economics. Not worth taking seriously...other than the fact that they are aiding and assisting the reining plutocrats who are gonna flush a good part of the human race down the toilet with their excreta.

Not worth taking seriously...other than the fact that they are aiding and assisting the reining plutocrats who are gonna flush a good part of the human race down the toilet with their excreta.

Well that's a relief, because here I was all worried that the sh*t was gonna hit the fan!