Note:This is the first half of a talk I presented at the recent Rebel Capitalist conference in Miami (June 24/25, 2022). The conference was amazing and this talk was very well received by the audience. I highly encourage anybody interested in economics, investing and/or finance to attend future Rebel Capitalist events! The second half is reserved for paying members.
If you understand energy, and its foundational and irreplaceble role in the economy, then you understand something most people don’t get. I’m not sure why this blindness to the importance of energy exists, but it is as mysterious as it is widespread. Perhaps, the implications are just too profound for many people to really entertain?
After all, if energy is that important, and it’s now winding down (meaning there is less of it), what does that mean for the long march of human progress and what the future might hold? At a minimum, it means that things simply won’t carry on as they have been. No more endless growth. No more increasingly complex systems; heck we’ll be lucky to simply keep what we’ve got now operating and properly maintained.
It all comes down to the amount of oil that’s available because oil is the KING of all energy sources. And the king is weak and fading…it’s entirely possible that we’ll never again see as much oil come out of the ground as we did back in 2018. That might have been the actual peak…
There are warning signs everywhere that oil supplies are extremely tight and spare capacity simply doesn’t exist at the moment. Someday oil will forever be in the rearview mirror and this is why an economic collapse is inevitable.
Please, take the time to learn this data and ponder not just what it means to the world, but to yourselves and your loved ones.
In the second part of this video for subscribers, I unpack both the complexity of the oil business and its relationship to our economy, but also something called “the credit impulse” which is flashing a strong recession (depression?) warning signal.
I feel like I’m being ripped off. We were promised part 2 of the regular videos on the information scout package. Now it has changed. What am I paying for, exactly?
Your “Energy Out / Energy In” chart has the return on Shale Oil being 2:1.
What your chart is missing is how simply getting shale oil out of the ground is not enough. Shale oil as it comes out of the ground is unusable. It is loaded with the material used to frack the rock.
These chemicals and water must be taken out to just get the shale out of the oil. Then that oil can be refined.
You don’t have to do this cleaning up of (light sweet) crude oils. This extra step is an added cost, further diluting your ROI (Return on Investment).
That 2:1 is more like 0:2.
The kicker here is the US government has been pumping out the Strategic Oil Reserve (SPR) of its light sweet crude oil and then exporting it to Europe because of the energy crisis there. The real kick in the head is that the US government is replacing light sweet crude oil in the SPR with shale (fracked) oil.
How’s that ROI “Energy Out / Energy In” doing now?
I know it’s tough. I just decided to join Premium and it’s worth it. I’m sad that it took me so long. With Big Tech blocking, demonizing, and attempting to criminalize content they don’t like, it’s more important than ever that we support creators like Chris and his team. You can join for 1 month every few months if it’s too high. Trust me though - it is worth it.
My chart lists “oil shale” not shale oil. Confusing, I know. Oil shales are basically rocks with kerogen locked in them. Shale oil is the light sweet - sometimes too light - stuff unlocked by fracking.
I think I was being generous in granting that stuff a 2:1 return, but you never know - somebody may unlock a means of getting there someday.
I really don’t know what the honest energy return is for shale oil…Dave Murphy puts it as high as 5:1 to 10:1. Could be. But that’s for the core (“tier 1”) areas. And it has to use economic return as a proxy for actual energy investment. Which is a poor proxy in my mind.
We desperately need a HUGE study on actual EROEI which have appropriately wide boundaries so the full cost is actually understood.
This would be a great use of government money…and it should be a key input to EVERY major public investment decision. “How much does it cost, and what’s the EROEI?”
Maybe bullet trains make gigantic sense, maybe they don’t. We are literally making such decisions completely blind from an energy standpoint.
We’re stumped. Looking into it now. You should have access…but we did discover that Vimeo (which is hosting part II) is no longer working with old versions of Brave. It gives a strange “you don’t have permissions” error msg.
But that’s different from page access, which you should have.
Which link were you trying to share? Peakprosperity./com, or the direct Youtube link?
I’m wondering if PP.com has finally made FB’s list of unacceptable sites. That wouldn’t surprise me - after all, we’re trying to help people by sharing real information, and not harming children, which places us at a considerable disadvantage with FB.
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Hi Bradford,
When you get a chance, please log out and back in, if you havent already. I believe I fixed your issue. If not, please feel free to message me directly and I will help further.
Hi Donn,
I have just sent you an email in an effort to help figure out why you cant see the part 2’s. You absolutely should be able too.
Respectfully,
Mike
Thank you!
