Great interview
Talking about peak oil and oil is too cheap and will/must go up over the last few years has me thinking of gold and silver ( or the stocks) 2016 for numerous years until the last couple on physical and more recently on stocks. Sure was painful for gold silver bugs but was a great time to buy with patience
So if i want an easy O&G energy investment ( i have uranium covered) what to look at?
Bonner has XOP as their trade of the decade.
This video mention GRHAX which i should look at
That late? Rozen and at least one other oil market analyst said current demand cannot go up even 1% as supply simply cannot flex. 100mn bpd is high level of demand(use) in historical terms. As Rozen said, many wells already are on last legs fuming gases, Id be surprised we dont see anything next year. Of course US+west governmental plans seem Trump admin policy: squeeze economies hard to limit consumption. China, India use coal which isnt in shortage and is way less global market item(most dig it from their backyard, not import) so that is not energy issue. See, they dont care about CO2, they care only about economy.
I cant think ASML could move out. Decades if not centuries of university R&D institutes nearby provide bleeding edge knowledge,staff and engineering (eg optical lenses) supplies making them similar as TSMC in Taiwan.
How is your heating? Even âcheapâ electric times, that was 5eurocents back in 2020 I moved here, heating bill from electric was several hundred euros in tiny apartment. Current system costs less than couple hundred all included so residential use electric is very expensive. As comparison current prices are 2-3x and I expect them to rise as demadn is so high (although due to heavy industrial legacy, companies and âbig usersâ, sweden that limit is 100,000kwh per month, have way way cheaper price and 1:60 taxlevel for that electric. In principle electric is decent heating option but looking back just 5 years, that gets first wrecked even before gasoline everyone also here complain(oil prices dont react that fast).
I consider the Rystad âthat late?â moment to be something of an outer limit. Rystadâs revenues come from within the industry, and those, in turn, are dependent on staying int he good graces of the regulating governments.
Which means Rystad is spinning this as best they can.
Well before the true limits of shortages, the national psychology of exporters will shift from âletâs get a many paper promise tickets as we canâ to âoh shitâŠmaybe we should keep this for ourselves?!â
But people are dumb and governments dumberâŠso at best we can only shave a year or two off of the âthereâs only one logical conclusion chartâ I presented.
Ah so similar as with microchips and dependent products past 3 some years, we can expect manipulation in oil and one day overnight suddenly first importers start asking and ringing bell to governments and local council when promised oil shipment isnt coming. Then days turn into weeks waiting that. Companies simply keep you waiting for 6-18+ months as long as you have patience for some product. I would call this âexternalized costâ as time waste and uncertainty is on customer, not company. Datacenters have opposite: if they have downtime, that has straight contract penalty and fines.
If I were having a company relying on gasoline, oil based fuel, Id build giant containers and store as much buffer as possible within economic means(target 6-12months or more) as governments arent doing that. Eg trucking company , that would be sensible move and not that expensive comapred to many expensive trucks needed already. Otherwise they go bust. Bankers simply love these squeeze situations and every company who can get away with screwing customers for profit. Weâve seen this many times in past years.
Concerns raised about SHTF and energy shortages had us move to the country 4 years ago. In the spirit of using cash for assets i had a 22kw generac paid for and ready to install once we closed on home. Then with solar credits and ability to sell back to TVA we had solar and 40kw of batteries and a level 2 charger installed for an electric car i had on order - i pay .12kw and sell back at .05 so i make .07kw charging my 75mw car. Plus i get to depreciate the cost of solar install as a business selling to TVA. Never was to make financial sense w/o a shtf but we sleep well.
I am still waiting for SHTF and $10gas
One dayâŠ
I may be early but i am not wrong
What does Chris say âŠtodays overreaction will be looked back on as an under reaction!!
I havent seen any scenarios even from Chris. Economists run simulations almost constantly, some of them anyway.
Covid was external exception.
But lets say your scenario happens, slow decline then production collapse then oil perhaps 300$⊠we have to assume governments dont go into fomo but 99% likelyhood they do and do shenanigans that likely make things much worse in mediumterm(like print gazillion money etc).
Looking from covid, there are spikes. Would 300$ oil be similar? Demand would crash. But economies need oil. At least diesel for trucks. Would it incentivize quick R&D for fuel savings, quick optimization of logistics businesses? Amazon put tariff button in their website. No reason they couldnt put âprime airmail kerosine tabâ or super fast trucking tab too. But likely wont.
Would companies stop âmust come to office!â and start thinking eg microhotels tokyo style to help commuters with commute costs?
Here are some topics that would raise. We really need these discussions anyway. I dont like corporate or government approach âwe are right! eveyrthing must continue as before!â.
I have been pondering the idea of buying a plugin hybrid and using a solar carport to charge it. It seems some can be driven on electric alone and would have enough range to get to the grocery store and back.
I heat with kerosene oil which has proven to be pretty affordable over the long term ⊠despite some really nasty peaks in price from time to time. The nice thing is that I have an oil tank easily large enough to get me through an entire Winter so I just fill it up when I see what I consider a sensible price. That can include during Winter sometimes but is mostly off-season. Then when Winter rolls around, I know I have enough to go all the way through.
My house also has what is theoretically a functioning fireplace with back-boiler connected to the central heating but Iâd want to get a chimney sweep and boiler technician in first to check it as the fire hasnât been used from probably 20 years or more now. But it would be an option to be able to burn coal or even wood in a pinch (though ideally Iâd need to get the chimney lined if I wanted full wood heating).
The nice things about all those options is that they are âoff gridâ in that I can keep a supply of fuel myself, purchased at my discretion. OK, the oil heating needs some electricity to operate the boiler but that could be sorted pretty easily with a backup battery.
Two thoughts I have been formulating since watching this interviewâŠ
How Malthusian should the chart with drawn in steep decline for shale oil be?
Yes, nobody was ready for peak in conventional onshore, American oil, but it seems to me that there was far more unintentional readiness than now.
*The decline was not nearly as steep as this promises to be.
*The decline was greatly softened by Alaska and offshore production.
*The rest of the world was not peaked in conventional oil and over time made arrangements with the US.
*The financial situation on individual, government and global levels was vastly more âpreparedâ to weather the hard times.
The thought that this situation is not so Malthusian and we have worked through similar situations before makes me ask,âWork through to what?â
The US had the rest of the worldâs oil and eventually shale to work through to. Minus some bright future from some other promising energy source that can replace, function like, and increase in availability and affordability to the masses, the only thing the modern world has to work through to is, at best, greater scarcity.
Yikes! Obviously, we wonât stop all drilling and completing, but the point of this chart is to say that all outstanding issues related to the drilling and completing of these wells has to be paid out of these wells. This means all debts, plugging, and other related wind-down and disposal activities.
I really like the work they do at NoviLabs BTW; nice chart!
But the main point is that these shale wells deplete viciously and thatâs âa thing.â FYI - each of those vertical lines is a year, translating into an ~80% loss of production over 10 years.
The related issue is that the US government is expanding its debt load at rate of ~7%/year for the past ten years:
As energy delivers less and less âoomphâ to the economy, the tendency will be to print and spend to try and create that vigor. It wonât work because the printed currency isnât the same thing as true economic output. It merely makes a claim on it, so those claims will grow at a faster and faster pace until it all breaks in a hyperinflationary spiral.
Keeping a room warm enough to sleep can be very inexpensive. The larger energy eating issue is preventing pipes and water heaters from freezing. If building a home these are things to consider when selecting floor plans or designing a floor plan.
My pipes are in the truss space between basement and main levels. The plan would be to live in basement and keep it heated to some extent in a crisis. Heat rises so hopefully the pipes would stay above freezing. They are pex so that is helpful also.
Thatâs excellent question. Now Ive followed Gaza situation (try to avoid political/religious side). Trucking there is staggering 300+ trucks per day or week. Looking fracking trucking needs, of course in malthusian downstream sense, all these humanitarian operations donating dollars and food items require energy. That will be good question as US is one of the big, and if energy becomes issue, it will also become issue in europe, second humanitarian superstate.
At this point malthusian doesnt take empathy or morality, it is hunger games territory.
Same over time goes to US and europe populations. Either dollar bends or there are simply not enough resources to go around and food prices give. Forget âafricanâ starving kids, lots of people cant afford enough food in so called western countries.
As expected abundant cheap energy has made malthusian problems worse in that eg immigration issue is ignored. George Gammon points out these blunt realities in Chris/Gammon discussion piece.
If you can follow my thoughs⊠Jevonâs paradox in play. Shale gave 15+ years extra time for US and europe you could argue. But energy shortages looming, forget free euros and dollars going to â3rd world countriesâ in help.
Sure peak shale doesnt mean instant energy shortages but geopolitical tensions are expected to rise.
Oil might be getting hammered down in order to gain more leverage over Russia in the upcoming talks.
Itâd also put more pressure onto the Middle-East nations too, if Israel/US plans to go for another round.
This certainly could be case but in this case Russia wouldnt make any deals⊠US would be in 2front proxy war⊠draining resources. Which is bad. Although by all logic, this would be done ASAP as shale oil is clock ticking for US⊠when it is truly running out and others in world see that, negotiations get way harder from weak position.
Assuming the 16 Gb is correct, and if Argentina hits 1 Mb/d and stays there, theyâve got ~40 years of oil to extract.
Since Argentina consumes ~700,000 b/d they are now in the position to export for hard currency. This alone will reverse much of their monetary pain and, if not completely raccooned by greedy players, could go a long way toward raising the living standards of Argentinians.
Norway and Qattar are shining examples.
Alberta shows what happens if you let the raccoons get the upper hand.
