Art Berman: Think Oil Is Getting Expensive? You Ain't Seen Nothing Yet.

It just occured to me, has anyone ever considered a podcast with Amory Lovins?

How about a debate between James Howard Kunstler and Amory Lovins? (Or any of the many who have blown holes in the Amory Lovins shtick.) That would be fun…

Rodster wrote:
As Gail likes to say, the reason(s) Nations export their oil instead of using it, is that it generates revenue for the export country. That goes to fund the government, roads, and all kinds of benefits for it's people.
Because those nations refuse to tax the rich who don't like to fund roads and all kinds of benefits for people, but do like continually sucking wealth from the middle class and then blaming it on food stamp recipients.

I always try to relate everything financial to real-world energy and resources underneath.
We can say that fracking oil has never been profitable because presumably the EROEI of all the inputs to it exceed the energy we get out of the final produced oil; all manifested in dollars. In response to this, the central banks create cheap money out of nothing and throw it at the problem to artificially stimulate oil production. This understanding of the situation makes sense.
But what does this “cheap money out of nothing thrown at the problem” actually mean in the language of energy? Economists can’t violate the laws of thermodynamics no matter how much they’d like to so overall, the economy MUST still be operating at a significantly positive EROEI, at least over 5 and I’d say over 10. We can’t say that “central banks are sacrificing future money energy for the sake of today, bringing oil produciton back in time”. This isn’t exactly right because thermodynamics apply RIGHT NOW. Those laws don’t care about future energy production, they apply to what’s happening RIGHT NOW.
So there must be some other significantly positive source of energy coming into the US that is subsidizing this negative EROEI shale oil activity. It all has to do with the US petrodollar and the ability of the US to print up dollars out of nothing and export them in return for real oil imports. The US is getting access to high EROEI oil like from Saudi Arabia, can import it for “nothing”, which then powers a significant portion of the economy like before. With a lot of other “money from nothing” thrown around.
In this respect, one can only presume that America’s oil energy efficiency for the overall economy is going down even further because now, half the oil the US consumes comes from negative EROEI sources but the other half that comes from Saudi Arabia and frineds still has the same EROEI it always had, maybe even lower. As a result, I suspect that if one were to dig into some analysis with Shadowstats real statistics and relate real GDP output in relation to total oil energy consumed, and factor int he dollars that were exported to import the oil, one would find that overall economic energy efficiency is going down. But I am partially thinking out loud here, maybe someone else can take this further.
As David Allen points out above, The Oil Drum made one dated observation which turned out to be wrong: that no previously peaked oil production country can come back from such a slide to make a new high. But the US has done it. But not without a little help from its “friends” and it will be a one-country, one-time anomaly signifying the peak of the Petrodollar.

Did Hubbert really have it wrong with peak oil? Didn’t his curve just factor in oil production via standard drilling practicies? If that is the case then he was dead on. I know that North Sea and Prudhoe field’s were after the peak but most major discoveries were by means other than standard drilling practices. American’s are so delusional it’s not even funny.

Saudi Arabia’s EROEI is accelerating towards the Seneca Cliff as we continue to push them to over pump. We have to get those “evil” resource rich countries that don’t get on their knees and kiss Dr Death Kissinger’s petro dollar to get back down on their knees. “Coincidentally” these same countries are acquiring more and more gold. The all powerful propaganda machine must be working overtime to prop up Russia as the ultimate evil. Maybe I should profit from this insanity and buy some stock in the “incubator baby” company Hill & Knowlton. They will always be profitable as long as they succeed in keeping the petro dollar king.

To my untrained eye, this article - predicting future oil under-supply and increasing future oil price to a level triggering demand destruction after Nov 2018 (and resulting economic impact) - seems to be quite detailed and well researched…
Of course it’s nothing new and follows comments consistently made on this site for many years - I wonder what Chris and Art think about it’s accuracy / predictions?
I also posted the same question in the Daily Digest 6/26, where the article originally appeared, but thought I would post it here too, as it is so similar to Art and Chris’s discussion in the podcast…