Gail Tverberg: Why There's No Economically Sustainable Price For Oil Anymore

It is a very unusual person who voluntarily reduces their standard of living. I get a distinct sense that ’ eat drink and be merry for tomorrow you will die’ informs the repeated borrowing habits of our culture. If there is a 0.5% who buck the flow then when the flow stops, those 0.5% will be the only ones moving. They become leaders almost by default.

At this point in time, discussions need to go somewhere.  "Hey you know the bridge is out and if we don't cross the river soon we are in real trouble.  OK, so now what do we do.  You know I wonder if it was the rebar in the bridge deck that failed or the rusting beams below that caused the collapse. I don't know, I thought you said we had to cross the river?  Well you know maybe the abutments moved that put lateral stresses in the beams that cause bending failure, lets go down and take a closure look.  Hey don't we have to figure out how to cross the river?.."  I guess it suddenly hit me this morning, it was starting to feel way to much like analysis paralysis.  We are seriously out of the analysis phase, time to start the visioning process. Sure if a little bit of analysis as a preamble to a next step.
We are in collapse now, the beginning stages of it anyway and it is going to continue to be complicated, multidimensional and unpredictable.  And it is going to take a while.  It seems that those who are most angry and frustrated with the situation (and for good reason) seem to imagine a sudden event that will end it all.  Its seems to  be a bizarre kind of death wish.  It ain't going to be that simple.

Reporting of the numerical data, GDP, inflation, unemployment rates, interest rates, commodity prices, reserves, consumer confidence, etc., are becoming more and more suspect and divergent from underlying realities. The euro group is dictating economic policy to European finance ministers,  past American presidents are telling us that we no longer have a functioning democracy, corruption endemic. In spite of knowing all this while being lucid about the underlying disease, we seem to get tangled up in tracking the symptoms, this half baked mess of data, looking for sign posts, prognostications for future events. But analysis can only take you so far, it is trapped by the limitations of what is known now.  What we need is to build an alternative narrative that will take us into the unknown. 

I love the interviews with Gail Tverberg!
As Chris says "Oil" is the master resource and understanding what is happening in the Oil Industry should interest us all. I don't agree that a lot of people get it and ever so many young people are completely clueless with zero thought to the limitations of our master resource preferring, I think, to believe technology will save us.  There will come a time when people will say "I wish I had known".

I listened to the podcast at least three times.  If we can understand the resource limitations we face then we can take steps to mitigate the impact to our lives and those of our children and grand-children.  Remember new people  are coming to this site all the time and what we old-timers have heard before may be completely new to a visitor.  Discussing oil on this site doesn't happen often enough, in my opinion.  But then I live in an oil state and the changes I see are deeply concerning for the state and all the people that live here.  Our future is precarious. The oil hurricane has petered out up here and the economy is slowing.  So discussing the master resource will always be welcome in my opinion! Knowledge is power ignorance is not.

Please don't wait so long to bring Ms. Tverberg back.

AKGrannyWGrit

treebeard,
I'm sorry that you feel that we are just rehashing the same material. I was waiting for the transcript before listening to the podcast, so I just finished hearing it. There were lots of items that could be considered rehashing, but I personally enjoyed the discussion. It has lots of relevance to me.

So, why do we "rehash" old discussions? Be honest with yourself, when was the last time you looked up something in the archives here? I've looked things up that I kind of remember and want to get a better picture before shoving my foot in my mouth, but I don't go looking for stuff I don't know that I may care about. Besides, information gets dated quickly. Although 90% may be a total rehash, there are enough new facts, perspectives, insights, etc. that make the trip worthwhile.

There are areas of this site that I stay away from as much as possible. Others may view the particular subjects as potentially catastrophic, but I don't. Does that mean that I should demand that they quit discussing it (over and over) because it bothers me? Unless someone makes an egregious error or is just marketing their personal doom without any redeeming options, I exercise my right to remain silent.

Grover

Totally agree, I hold Gail in the same high esteem as Chris and Adam. well worth having her back on.
I've always viewed a large purpose of this site is to break down peoples misconceptions and get them to recognise their views on what the future will be are just hopes & beliefs, based on little evidence or even worse, inaccurate data and normalcy bias.

If we stop reaching out and stop trying to convince new people (sometimes repeated efforts) to take some action, the site loses a lot of its value.

I'd also be very interested on Chris'es detailed analysis of Louis Arnoux's presentation on the ThermoDynamic collapse of Oil. Do Govs or Oil companies publish EROEI for an average Barrel. My guess the the last decade Globally its been about 10:1?

But would love to see upto date accurate stats and predictions from Chris.

I admit that I am almost obsessively forward thinking,  There are always solutions, always. They may take us outside of our comfort zone and they may not be to our liking but they are always there.  This is like debating whether winter is coming or not or standing at the bar of the Titanic arguing with someone about whether the ship is sinking or not.  Sometimes this debate isn't even with another party, but just a dialogue in our own head, a way of reinforcing our own sense of reality.
To me this is a form of procrastination or avoidance.  There is so much preparation needed.  It seems if we are talking about solutions, we are way down in the weeds, talking about the best way to grow strawberries.  But once we get to ten thousand feet, we are back in rehash mode.  I do have a lot of respect for Gail, which was why I was so critical, this kind of conversation is irresponsible.  This is not a dress rehearsal, solutions, solutions, solutions.  Throwing your hands in the air saying we're all going to die just doesn't cut it any more.

One conclusion we should draw from discussions like this:  we need to lower our standard of living.  ASAP.
Guess the name of this website alludes to that.  But it should probably be more directly addressed.Along with a reminder that lower standard of living does NOT have to result in a lesser quality of life!

As for nationalizing oil production and printing money to pay for it, that sounds like just the solution politicians (and US citizens) will go for.  What alternatives would be palatable?

Treebeard,
I would welcome more forward thinking.  And I would invite YOU should take the lead here.

What vision(s) do you have?

I can understand your frustration, if I understand correctly it can be summed up with “all talk, no action.”
I don’t know that there will be any (meaningful) action until there is more pain. Pain is here already for many Americans but they don’t have a loud enough voice yet. I don’t think many who are hurting fully understand the situation (I don’t either for that matter) nor are they comfortable with the prospect with an even lower standard of living.

Consciously they want a reset (change), but I don’t believe many understand the pain that will come with that reset. It is my opinion that discussing solutions now is great but will get NO traction until we are forced to make a change. The fact that Chris’s message has reached the UN is remarkable in my mind, but as he said it is a huge bureaucracy that moves very slowly.

The Crash Course opened my mind to a new way of thinking, since then my impatience with an unsustainable system has gotten the better of be countless times. Looking back I have gained the virtue of patience. Patience not to go leverage up and buy every ounce of silver I can, patience to keep stockpiling food, water, ammo and toiletries at the expense of being called crazy, patience with my peers’ decisions to live a borrow and consume lifestyle.

Talking solutions at this point is no different than having a discussion about solving the world’s problems. The people in power who run system aren’t listening yet. Solutions will come but not before more pain is felt and the yells get deafening. It is the human phenomena of procrastination. 

MJB.  I agree with you that solutions will come when the people in power wake up. The first step in that process for me was to look in the mirror and realize that I was the person in power. I may not have power over as much as some, but where I do I need to make the changes I can and be visible enough about it that others can see what I'm doing. Just be ready to be labeled. If you stand angainst the mainstream you will stand out.  "Hey!, why aren't you floating downstream like the rest of us?" Unlike the sticks and stones may break your bones ditty we have all heard, words do hurt, so be mentally ready for a few digs here and there.  Most don't deserve a reply.
If you have trouble getting started, go to your main power switch for your house and turn it off for 24 hours. That will get your perspective realigned quickly. If you can learn to live with this power down on a regular basis you will be much more prepared both mentally and physically.

Treebeard is correct! We are in collapse. It is time to discuss, but it is also get up and make change now time.

I'm not a scientist or accountant and I do not have a graduate degree so I have to say I agree with treebeard. I have the ability to understand the concepts presented here and that is all that is necessary in my mind. The particular numbers and ratios are irrelevant to me. What is important is having an understanding of what the problems are and coming up with solutions that can be put into action. Action is the most important factor in my mind. We could talk all day about problems and solutions but nothing will change if it's all talk. One thought that came to mind after listening and reading the comments was that Chris just casually mentioned insulating buildings and no one brought this topic up in the comments. If I remember correctly buildings are one of the greatest consumers of energy. We don't need to acquire any alien technology to greatly reduce these needs. I do understand that transport fuels are the main concern. It seems to me that we still have a lot of lessons to learn from observing nature. Maybe if you choose to live in Manhattan you may only be able to afford 600 calories a day on an average wage but that's a choice. There is a system that is in place we sometimes call nature that can be tapped into. Permaculture principles seem to have many worthwhile solutions to problems we think may arise in the future. Being sustainable isn't good enough. Regenerative should be the goal. Personal responsibility is a big key in any aspects of our society. I believe if I am going to complain then I need to be willing to do things that I don't want to do like participate in government. Maybe just attend a local two meeting. People like Alan Watts may also have a lot to teach us. Our minds and thoughts can greatly alter our realty without any change on the physical domain. This brings to mind our health and the gut brain connection…stay positive as we acknowledge and confront the negative.

Leaving the systems of the world destroying machine behind is the goal, one step at a time. Do not fall victim. Do it in your own way in your own timing. What isn't started can never be accomplished. Replace existing systems with newly created ones, be creative and take risk. For example that idea of retirement maybe better used else wheres and in different ways. 
Do what is possible today then reassess tomorrow, tomorrow. Find your people and connect to them with bonds of shared values and experiences. Turn off the financial stats and turn up the highly experiential volume then open your eyes and get to work. 

For me this chart was instructive:
\college.mptc.techStaffhomejsiemersDesktop2016-10-27_1513.png

not sure if you'll be able to see that

Need a complete link…I tried several variations and got nowhere.

I spent some time editing that and then my edit didn't get saved.
Anyway,

https://www.youtube.com/watch?v=k7gJcfjyFpA&app=desktop

That link was given out earlier in the thread. Please take a look at the chart at 43 minutes.

 

I can get on board with personal preparedness and ‘be the change you want to see in the World’ thinking. I thought Treebeard was referring to larger problems that affect the masses i.e. Obamacare premiums going up and the penalty (tax) for not subscribing doubling. This unfortunately is out of our hands. The fact that people’s pensions will be cut in half and social security is broke is also out of my hands.
I look around (read the news) every day and it seems that once in a lifetime events are occurring more and more often. Not to mention the complete dysfunction in Washington. I do not believe that politicians act this way in a healthy democracy/system. I don’t want to seem narcissistic but I am ready for a major shakeup. At the very least it will wake the masses up and at the worst? Not MadMax but an extremely pissed off public, one that will make the BLM riots seem like church picnics. Maybe a war with Russia (scares the sh*t out of me).

There is nothing you or I can do to prevent the collapse that has already started; we can hope to make ourselves and others around us as comfortable as possible during the worst of it. It will not last forever. I admit I am not prepared for every scenario but I am fairly smart, fairly resourceful and flexibly resilient. My goal is to come out of this better than when I went in: IF I can increase 5 of the 8 forms of capital while holding 3 constant I win!

I enjoyed the podcast and hope ones like this continue to be produced if for no other reason than that they continue to support my thoughts that I am doing the right thing as I try to prepare.  I don't know about the rest of you, but I'm pretty much all alone when it comes to discussing, let alone acting on these subjects in my daily life.  So while I probably shouldn't need it, it is comforting in an odd way to hear others speak intelligently about the topics.
That said, I understand what Treebeard seems to be voicing as well.  Talking about a problem and raising awareness is one thing, but at some point actions need to be taken, and it does seem long past the time we should be taking actions.  Maybe I'm being a cynic but I don't think any significant actions are going to happen beyond those we each take at a personal level, or perhaps family level.  I imagine there will be, or are, some enlightened small towns capable of doing more as a small community but I don't see that I live in one.

I think we mostly know this, that individual actions are our best actions at this point, and there's no one stopping us from doing them.  However, discussing these actions never seems to generate much significant interest, because they really aren't all that exciting.  I could tell you how I made major modifications to my small home to massively increase the insulation, or discuss any of the other things I've done or hope to do to decrease my energy use in the future.  I'm guessing though that for the most part we all know about these already in abstract, and what to do specifically is going to depend on each specific situation.  So how do we really talk about these sorts of individual actions?  Do we set up a specific scenario and make a game of it suggesting ways to reduce energy use and increase quality of life?

As has been mentioned on this site before altering our narratives is probably the most powerful way to change our own actions and those of others.  Sometimes that involves recognizing narratives that guide our own lives without our conscious awareness.  I'll share a small specific thing that struck me yesterday.  Were I live yesterday was a cold miserable day, solid overcast skies and a constant all day soaking rain making it seem even colder.  I had errands I had to run in the nearby village and rather than ride my bike in as I have been trying to do lately I told myself the story that, "I can't ride my bike to town on a day like today."  So I hopped in the car and drove.  Thoughts resulting from this podcast and the one linked to above regarding thermodynamic oil collapse made me think later what would I be doing on a day like this in perhaps the not to distant future if I couldn't just default to using a car?  I realized the problem of walking or riding a bike in cold rain is not some hyper complex problem no one has a solution for.  I believe the solution is called good rain gear.  It's something I've never really investigated before because my narrative told me those were just days when I should use a car.  I need to see about getting good rain gear, esp. while such things are still readily available.  If I then put it to use in public perhaps I can start shifting the narrative for others.  Yesterday in fact, the teller at my bank had commented that I wasn't going to be riding my bike today.  What if I was demonstrating that it was normal behavior for me at least to still be riding?

pyranablade,
This interview was posted on 10/23/16 by PP member amusedtodeath on an obscure thread. I think it is relevant to the discussion here and supports Gail Tverberg's stark warnings. I would add my voice to some here who have asked Chris to comment on the information presented in it. Thanks for posting this.

Tim.

 

I listened to the Louis Arnoux podcast.  It was 60 minutes of OMG the end of oil and 5 minutes of I am developing an eGene energy product and am looking for funding.  Lots of fishing line and yank the hook at the end.  What's the motivation here, it seems to me pile on the gloom and doom, spread the fear and get funding.  Is any government going to let an individual develop, market or give away a perpetual energy device?  Doubtful, governments are about control and if this were viable it would be a case of "in the interest of national security" and poof the product is gone.  So how accurate should we believe this podcast when there is an agenda attached?  Personally I would like Chris's opinion on this.
AKGrannyWGrit

Look, we here at PP generally understand the nature of our nested predicaments.
But other people really don’t and there’s a near incessant drumbeat of happy talk and utterly ignorant claims being made faster than they can be refuted.

Here‘s a recent example from the Financial Times:

Renewables overtake coal as world’s largest source of power capacity

Oct 25, 2016

Well all right!  Let’s just stop right there!!  No need to read past the headline, my happy quotient for the day has been met.

If I am eco minded I am now happy and can confidently tell people that renewables are now larger than coal proving that they work and to shut down the remaining fossil fuel plants all we need is just a couple more years like 2015.  Done!  Easy.

Wait a minute…perhaps we should read a bit further in, just to be sure.  I know this is the Financial Times and they tend to get things right, but still maybe we should, just in case, read a bit deeper.

About 500,000 solar panels were installed every day last year as a record-shattering surge in green electricity saw renewables overtake coal as the world’s largest source of installed power capacity.

Two wind turbines went up every hour in countries such as China, according to International Energy Agency officials who have sharply upgraded their forecasts of how fast renewable energy sources will keep growing.

We are witnessing a transformation of global power markets led by renewables,” said Fatih Birol, executive director of the global energy advisory agency.

Part of the growth was caused by falls in the cost of solar and onshore wind power that Mr Birol said would have been “unthinkable” only five years ago.

Average global generation costs for new onshore wind farms fell by an estimated 30 per cent between 2010 and 2015 while those for big solar panel plants fell by an even steeper two-thirds, an IEA report published on Tuesday showed.

Wow!  So far no bogey-men, only awesome positive news, right?  Here we are a full five paragraphs deep in the article and all we know is that some sort of record-shattering surge in green electricity has taken place, and costs are dropping like a stone, and unthinkable things are now happening.

Cool.  We can stop reading now right?

Wrong.

Keep going…

An unprecedented 153 gigawatts of green electricity was installed last year, mostly wind and solar projects, which was more than the total power capacity in Canada.

This was also more than the amount of conventional fossil fuel or nuclear power added in 2015, leading renewables to surpass coal’s cumulative share of global power capacity, though not electricity generation.

A power plant’s capacity is the maximum amount of electricity it can potentially produce. The amount of energy a plant actually generates varies according to how long it produces power over a period of time.

Because a wind or solar farm cannot generate constantly like a coal power plant, it will produce less energy over the course of a year even though it may have the same or higher level of capacity.

Wait…what?  Now they've gone a bit wonky into a murky definition of "capacity."

153 GW of solar and wind were installed but then some softer language about wind and solar not producing as much over a year was given…but no numbers…nothing to put anything in any sort of scale…

So…the question now hangs…how much wind and solar was actually installed?  Was it 153 GW?

Well, that was the theoretical capacity, meaning if the sun never set and the wind always blew hard enough, that’s how much these installations could have theoretically produced.

But since we know that such things as night, and calm days, still occur with some frequency, that the actual generation capacity of wind and solar is usually about 30% of the rated capacity.

So ~ 50 GW of actual wind and solar capacity was installed, not 153 GW.

And the world installs roughly 75GW of coal every year (and retires 10 to 25 GW, so dial the bars back on this chart by that amount):

(Source)

In other words, more actual coal capacity was added last year than wind and solar.  Oh.  Well. 

But what about the headline?  It said that renewables overtook coal as the largest source of power?  Did that happen?

Well, no, that could not have happened and here's where the headline and opening paragraph failed miserably.  It (accidentally?) confused installed power with 2015's new additions.

Even according to this paragraph much deeper in the article itself that idea is refuted:

Coal power plants supplied close to 39 per cent of the world’s power in 2015, while renewables, including older hydropower dams, accounted for 23 per cent, IEA data show.
Obviously 39% is much larger than 23% and even here that 23% includes hydro power, which is a large amount and not likely to grow by much because most of the useful rivers have already been dammed.

So, the headline is obviously quite wrong.  Renewables have not overtaken coal as a larger source of power.  Not even close.  Some editor didn’t understand the topic and ran with a very misleading headline. 

An amended headline might have more properly read, “Renewable installations theoretical rated capacity overtakes coal’s actual capacity installations as world’s largest new source of additional electrical power capacity”

But that isn’t quite as sexy sounding or belief-confirming as the original headline, now is it?

I made several important corrections there too, one of which is that renewables only supply electrical power…not “power” more generally.  To the extent that people insist on confusing the issue by misusing the word “power” when they mean “electricity production” is the extent to which we delude ourselves.

Electricity is one of three main forms of energy we use with the other two being BTUs (for heating and industrial processes) and petroleum as a liquid fuel to move ourselves.

At any rate, the article headline is misleading, as are the first six paragraphs (after which you’ve lost most of your readers usually) and even the following paragraphs do not provide much clarity.

Are these articles written by numbskulls?  Possibly.

But more likely they are written by people with an existing belief system which desperately wants things to be hopeful and rosy sounding.

And I get that desire.

But the reality is so far detached from the basics of the article that it takes an enormous effort to even unpack and explain one of these pieces of tripe and they come out 100x per day.  It’s impossible to refute them all, and even more pointless.

The real point is that we have to continue to find ways to explain and describe the predicament in such a way that these article refute themselves.

And so I continue my education efforts and interview people like Gail.  Hopefully to some benefit, but perhaps not. 

Gotta keep trying though.