Eyeballing the graph. Production should drop to zéro with two yers if the trend continue!

Hi Ron,

thanks for this. Do you (or anyone else) have a similar chart of Norway's nat gas production over similar time frame. Seeing as as Britons are heavily reliant on Norway to keep us cosy in the winter I would like to see a comparison.

Thanks

Ron, I believe your last data-point (big drop) is from the oil_only table, no?

While we disagree on some things Ron, on this we are in perfect agreement. No point in cursing Malthus, he was describing reality not creating it. Of course cursing when it does no good will be one of the mental coping mechanisms that will help for a few weeks after the crash starts in earnest. After that other equally useless coping mechanisms will come into play such as scapegoating.

Well as I have said many times everyone now alive will die, the only thing this affects is the timing and nature of our deaths and whether or not our genes move forward to future generations.

We are not running out of oil, not right away anyway, but we have already run out of growth in the oil supply. We ran out of that growth in 2005.

Using the word 'growth' really helps define what happened. The world had been used to 2% growth on average per year and suddenly that went away.

I'm amazed at how steady the plateau has held.

I think that part of what has kept the world economy from falling apart is the continued rise in coal production (whether we like it or not!), helping to offset the lack of increase in oil production.

The countries whose economies continued to grow were the ones with big increases in coal use, by and large (China, India, other east asian countries). So coal use becomes another variable besides oil use, at least with respect to the future of the world economy. It was only in 2009 that total world energy production / consumption began to fall.

I really don't think the author of your article was thinking of coal as an alternative to oil--but that seems to be what part of the world is thinking. This is a major reason why the climate talks are going nowhere, IMO.

Euan will have a post next week with respect to Chinese coal.

Others have insisted that ethanol, or palm oil, or solar, wind and electric vehicles, or some combination thereof, can step up to the plate and perform almost as well. Poppycock!

Well, actually there are some places where E100 (180 proof alcohol = 90% ethanol + 10% water) will out perform gasoline.
In any equipment that sits for long periods of time (lawn mowers, tractors used only in summer time, outboard motors, collector cars, some general aviation aircraft and others the problem of fuel deterioration due to time between use might make E100 more attractive as a fuel than gasoline ( especially today's gasoline with anhydrous alcohol mixed with it)
The deteriorating gasoline makes it difficult/impossible to start the engine and doesn't run well even if you can get it started. Also the deteriorating fuel precipitates out tars and varnishes that plug filters, carburetors/injection systems.
The deteriorated gasoline after a year or so needs to be removed from the tank and properly disposed of as hazardous waste (or illegally dumped somewhere)
E100 would eliminate those problems in these specific nitch uses.
We need to find some way in particular to encourage small engine manufacturers to develop and manufacture lines of small engines that will run well on E100 (only) for these seasonal uses.

Spot on Ron

True that, Ron.

We're not running out of oil production quite yet, but we're unfortunately starting to run out of net energy. And when oil production starts to decline, net energy will take a nosedive.

At some point, physical economic issues take over. The money and finances won't matter. When we expend 1 boe of energy and get .99 boe in return, game over.

And in the meantime, the portion of net energy that gives us lifestyle, diversion, food, water, heating, clothing, transportation, the Internet, all gets eaten away by the portion that goes to maintaining energy production from ancient sunlight.

And in my own hubris, I think we can still keep this going for at least 2 to 8 years before a net energy collapse. Which I kind of like, because I like central A/C and heat, the Internet is amazing, and dry-aged ribeye is great. I'd like to be wrong on the back-end, and have the collapse happen after my own collapse (death). But I could just as easily be wrong on the front-end and net energy falls off much faster than I think.

In the past few weeks, I have seen changes in the places I go both on the net and IRL. People are beginning to scramble to find ways to augment their inflows or reduce their outflows. Matt Savinar added consultation services. Marc Maron's WTF Podcast started charging for premium content, and has started reminding people to donate on every podcast. More small lawn signs are going up on street corners for all kinds of services, from foreclosure to remodeling. People in various levels of government are actually seriously considering legalizing marijuana, which should have been done for a million reasons 30 years ago.

And the accuracy of weather forecasts also seems to be crashing. Meaning that the models that used to do a fair job of predicting weather are failing because the weather patterns are changing at a fundamental level.

Garden report: drowned
S. Saskatchewan has experienced heavy flooding in early summer. Many farmers, including most of the Qu'Appelle Valley veggie farmers (suppliers to Regina), have lost the year. My plot at the community gardens where I raise much of our year's veggies, is still under water with duckies. Very sobering as without long distance shipping we (the district and province) would be facing a hard year. I have hauled rotten straw to raise part of my garden, and tomorrow will add a layer of composted manure and plant out turnip, carrots, beets, kohlrabi, spinach seeds (anything fast growing) and spare seedlings that I have been moving to bigger pots (hopefully not too pot bound). Have dug up alot of lawn around house for veggies, but area is too shady for non-leafy vegetable production. Sigh - no potatoes for winter, suspect no local ones made it through flooding period. Fear some small, young truck farmers will be wiped out.

Garden Report: Southern Willamette Valley Oregon.
After the longest cold, wet spring I can remember (had our last fire in the wood heater in mid-June) we are getting some hot, dry weather more typical for this time of year but thankfully not quite the level of heat the east coast is getting (mid 80s to mid 90s)

raspberries have some kind of blight but are beginning to bear some.
blueberries appear to be doing well.
strawberries are kind of stunted and slow to get going.
snowpeas doing well but the &$%# voles killed off the sugar-snaps
corn doing well
potatoes doing great, planted them where last years compost heap was
great salad stuff and khol crops doing very well.
wine grapes doing reasonably well, no fungus apparent.

This is a mandatory irrigation climate, so we are critically dependent on a good water source.

Best wishes to fellow gardeners and to wannabe gardeners as well.

Eric

Garden report: Cumberland, MD

Hot and humid has been the keynote of the spring and summer here: not too pleasant for H. sapiens, but great for the plants. This is my first year of gardening here, which limited yields of some crops -- for example, I didn't get the snow peas in soon enough, so got only a very small crop before the heat did them in -- but others have done stunningly well.

Very good: spring radishes, Romano bush beans, pole beans, corn, winter squash, onions

Good: spring lettuce, field peas, tomatoes (so far)

Poor: snow peas, carrots.

The first round of perennial crops, asparagus and rhubarb, are still getting settled in -- won't know how they're doing until next spring, really, but so far they look happy.

I notice more than once they mention "house as financial investment" i.e. there is less emotional investment in the home to begin with. Easier to walk away.

http://www.doctorhousingbubble.com/

"The real estate market has morphed into a beast that is largely sinking the overall economy into the ground. If we combine the commercial real estate market ($3.5 trillion in debt) with residential outstanding mortgages ($10.3 trillion) we arrive at a figure that nears the annual GDP of our country. What makes the figure even more troubling is the amount of leverage found in the real estate market."

...The rich and successful often come naturally to this sort of attitude,

I'm beginning to think that that statement has it backwards. Those with this sort of predatory attitude become the rich and successful. I had no problem dreaming up get-rich schemes when I was younger. Its just that my upbringing was such that exploitation wasn't considered to be ethical. I suspect that a pretty good fraction of the top one percenters got there due to owning an ethical deficit.

south pars/north dome gas condensate field:

http://en.wikipedia.org/wiki/South_Pars_/_North_Dome_Gas-Condensate_field

50 gb of condensate in place, 90 % (not a misprint) of which may be recoverable as liquids (condensate and ngl) if they play their cards right(gas cycling). dont count on it.

quatar is pissing away their gas by letting the uber-capitalists turn it into under valued lng. quatar may see the light(from the wiki article):

The prospects for further growth in Qatari gas production beyond 2012 are clouded by the uncertainty created by a moratorium on new export projects, which was imposed in 2005 while the effect of existing projects on North Field reservoirs was studied.[38]

north dome (north field) was studied as early as the '80's as a possible gas cycling project with all the dry gas returned to the reservoir.

the doomer denizens won't want to hear it, but ghawar' khuff reservoir has the same potential(gas cycling). cheer up doomers, it is doubtful aramco can get'rdone. i give them (aramco)credit for maybe connecting the dots.

someone more articulate and nimble with posting graphs than i should post a key post on the subject, imo.

In nominal terms, the average price of oil through the first half of 2010 was $78, which exceeds all prior annual oil prices, except for 2008, when we averaged $100--and all post-2005 annual oil prices, including 2010 to date, have exceeded the $57 that we averaged in 2005. Despite the strong price signal, annual global crude oil production has not yet exceeded the 2005 annual rate (EIA)--in marked contrast to the sharp increase in crude oil production from 2002 to 2005, in response to rising oil prices. So far, in the post-2005 period, rising unconventional crude oil production has simply served to partially offset the (so far) slow decline in conventional crude oil production.

And then there is the net export question.

that is not different than practices ubercapitalists have used in the past. wine'em'dine'em'f*ck'em and forget'em. move on to greener pastures. paint your wagon.

Creativity and freedom of thought are absent--
Almost all advancements in science are still coming out of Europe and the US, with Japan contributing also.
The US will soon be in trouble, as our anti science culture will soon fall to the wayside.
Dumber, fatter, and shorter is not the direction one wishes on a population.

http://www.newyorker.com/archive/2004/04/05/040405fa_fact

Now the Clerics are speaking out. I just don't see how this can stop from escalating out of control.

eeyore, yes I think the $64,000 question is not what the U.S. or Israel will do, it is what Iran will do?

Unintended consequences and blowback are still factors whenever international players move pieces on the chess board. And these sanctions are not about mustering the pawns, more like maneuvering the knights or casting with the rook.

Last summer's disputed re-election of Mahmoud Ahmadinejad has put strains on the internal power structure and has raised questions about the sustainability of the 1979 Islamic revolution. The clerics won't let go and sanctions carry the real prospect of clearing the temple. From the mujtahid's perspective, better public relations to go down fighting Zionists and usher in the age of the 12th Imam than to cave into submission and invoke the wrath of their own people.

Another element sometimes overlooked by the West is the nostalgia undercurrent. The Persians are a fiercely proud people and much to be proud of. The ghosts of Cyrus the Great, Darius, and Xerxes are apparitions on the political landscape today, not distant figures of twenty five hundred years ago. The Iranians didn't give in to the brutal tactics of Saddam Hussein, a secular thug next door, they won't be shy to push against a bully from across the seas, especially one already mired in the sands of Iraq and the dust bowl of Afghanistan. What's more their history has conditioned them to see themselves at the table of the great powers. They won't hesitate to put diplomatic pressure on the Russians and the Chinese to help them out or to use a bit of bribery to get their own way. It is no accident that the late Shah styled himself the King of Kings - all Persian regimes, religious or secular, are conditioned by the same historic memories and culturally-induced imperial ambition.

Meanwhile, the United States is compelled by the Carter doctrine to preserve American interests in the Persian Gulf. Iran by securing the wherewithal to develop a nuclear warhead is a threat, real and imagined, against Israel, the Sunni neighbours, and supply lines in the Caucus region. Obama is right to see this as a troublesome development and as an infraction against American security.

What worries me is that the player in the east is reading the chess board one way while the player in the west is reading it entirely differently. Check mate, unhappily, isn't the only possible outcome.

Even without large-scale "flash-crash" problems, it appears that computer trading is changing market behvaiour.

Using high-frequency time series of stock prices and share volumes sizes from January 2002-May 2009, this paper investigates whether the effects of the onset of high-frequency trading, most prominent since 2005, are apparent in the dynamics of the dollar traded volume. Indeed it is found in almost all of 14 heavily traded stocks, that there has been an increase in the Hurst exponent of dollar traded volume from Gaussian noise in the earlier years to more self-similar dynamics in later years. This shift is linked both temporally to the Reg NMS reforms allowing high-frequency trading to flourish as well as to the declining average size of trades with smaller trades showing markedly higher degrees of self-similarity.

http://arxiv.org/abs/1006.5490

Here's a clue Krugman as to what went wrong... how about that little issue of trying to base an entire economy largely on selling homes to each other at ever inflating prices. That's a good place to start for your incredible investigative journalism. Then follow that up with simultaneously dropping an entire economic class of people down the ladder by one (or more) rungs through the magic of globalization. No amount of stimulus is going to fix these kinds of structural problems...

The key to creating jobs is not stimulating consumer spending or reducing taxes.

The key to creating jobs is to make the economy more complicated.

Over the last 70 years, there have been huge productivity gains in many aspects of business. For example, the cost of a voice channel mile of communications capacity has declined exponentially over much of the period. The cost of gasoline retailing has declined with the introduction of self-service, credit-card operated gas pumps. Bank employees once processed paper checks which were mailed back to the customer, but now paper checks are imaged and destroyed at the first opportunity when the customer chooses to write a check instead of using a card.

Everywhere, each individual business process has been made cheaper by scaling up volume, improving process design and controls, automating whatever could be automated, engaging the customer to participate in self-service delivery, and outsourcing the rest to low-wage countries.

The antidote to improved productivity has been to make business more complicated. While gas station attendants were losing their jobs, a dentist invented the acrylic nail, salons were opened, and nail technicians were hired. Improvements in auto manufacturing efficiency were partially offset by new efficiency, safety and convenience features that make the current car far more complex than a 1950 vehicle. Financial products proliferated in number and complexity providing employment for lots of mortgage brokers and now foreclosure processors.

As a result, there has been a great expansion in the types of jobs people do, the training they need, and the information that they need to understand. This is easily seen by the majors offered by universities or by the number of specialized occupations in the medical community. Infomation technology systems businesses have proliferated greatly in their role of arms merchant to both sides of the productivity versus complexity war.

So the key questions are:

• Can we still continue to create enough new jobs through increased complexity to be able to distribute the fruits of productivity increases fairly to the population?
• Is the energy sector a good place to look for new jobs through replacing high revenue per employee oil with an array of low revenue per employee alternative energy and energy conservation businesses?

Denninger's rant is rather familiar. I think his presentation of the problem of the impact of debit financing with great leverage is likely true. We in the US are addicted to deficit spending, which has been a fact for most of the past 35 years. Then he gets on the Government's case, presenting a typical neocon mantra:

But far worse is the refusal to recognize that absolutely nothing the government does produces anything. That is, government can redistribute a unit of currency (or credit) from Joe to Jane, but government in doing so does not and will not cause more units of currency in terms of output to be produced on a sustainable basis.

He seems to forget that government does "produce things" by spending tax monies. An obvious example is roads, which the US pays for thru gas taxes and local governments tend to pay for by way of income and property taxes. Also, the Feds pay for all the expensive military hardware which is then used to "influence" other nations, in support of our "national interests", like it or not. Most of the US economy is said to be in the form of services and the Government provides lots of those, such as police and fire protection, medical care for old folks and scientific research. The Government also provides for K-12 education, which is not a product, but without which the rest of the US economy would cease to exist on the world stage.

One could easily add many "items" to the list. But, as we all know, one man's excessive tax pays for another man's job. The question of whether government's re-direction of national consumption provides larger benefits to individuals than the costs is the subject of continual debate. However, it should be clear by now that no government (meaning no taxes), is not a reasonable solution, given the fact that other nations are going to continue to function in support of their own national interests. That recent excesses of the financial community have resulted in unsustainable borrowing does not imply that the US Government can simply walk away from the millions of people who are presently out of work and for whom there are no jobs. Desperate people do desperate things...

E. Swanson

Give me a break, you jump all over Krugman, yet he was one of the few economists who got the story right on the 2008 crash.

So who should we be listening to?

Hint: JOBS > DEFICITS. Coming from someone feeling the pain firsthand, let me assure you that artificially imposed austerity helps nobody. With no stimulus we'd be another 5 million jobs in the hole.

http://www.todaysthv.com/news/news.aspx?storyid=28243

Sorry there, got side tracked, This is the link.

Charles,

So if you thought that another old timer had bittent he dust and gone the way of the dead oil making creatures and other stony things, well yes and no.

500 things going on.

Sounds like life. Might be time to learn to be easier on yourself.

Remember, it's not your job, Charles, to save the world - don't put yourself in the grave trying. You won't be any damn good to anybody doing that.

Btw, advice from an ex-smoker who quit after thirty years - "smoke 'em if you've got 'em." . Nagging - whether from yourself or others - doesn't help with ending the addiction. The day will come when you'll be ready and able to quit. Trust me, it will happen.

Meanwhile, keep the volume of smoking down to a minimum so as to ease up on the asthma. Trust me, again, you can cut way back even amid stressful times. Try, as best as you can, to adjust the pace of your cigarette breaks.

Don't beat yourself up if it takes longer than you anticipate. Challenges are to be expected. As you know, nicotine holds quite a grip on the chemistry of the brain.

Good luck and godspeed with the other 500 things going on. Your garden sounds like it's growing great!!

One part sunshine, two part rain, three part prayer.

Here's to living the best way you can,

Tom

Iran exports oil but imports gasoline.

BAU here is like nowhere else in the world ;-D

Yep, sure is nice to see again.