The Really, Really Big Picture

[Many longtime followers of the Crash Course have asked Chris to update his forecasts for Peak Oil in light of the production increases in shale oil and gas over recent years. What started out as a modest effort at clarification morphed into a much more massive 3-report treatise as Chris sifted through mountains of new data that ultimately left him more convinced than ever we are facing a global net energy crisis despite misguided media efforts intended to convince us otherwise. His reports are being released in series over the next several weeks; the first installment is below.]

There has been a very strong and concerted public-relations effort to spin the recent shale energy plays of the U.S. as complete game-changers for the world energy outlook.  These efforts do not square up well with the data and are creating a vast misperception about the current risks and future opportunities among the general populace and energy organizations alike.  The world remains quite hopelessly addicted to petroleum, and the future will be shaped by scarcity – not abundance, as some have claimed.

This series of reports will assemble the relevant data into a simple and easy-to-understand story that has the appropriate context to provide a meaningful place to begin a conversation and make decisions.

Since completing the Crash Course in October of 2008, much has gone as I anticipated in the way of money printing, official neglect of the main predicaments we face, and generally higher petroleum costs (2012 was the record so far on a yearly basis).

What has not changed is the general trajectory of liquid fuels becoming increasingly expensive and more difficult to produce.  I know that this runs counter to virtually every news article that has come out recently.  It is time to separate the data and facts from the hype.  Much has recently been either muddied or presented so far out of context as to be more distortive than helpful.

This entire body of analysis is so large that it will be broken into three pieces. 

The first is a general world outlook for petroleum that presents the macro picture, provides some necessary clarifications on definitions, and illustrates that all of the data is consistent with the idea that the world is on a plateau of oil production.  Here we note that exactly zero of the major energy outlooks provided by the IEA, the EIA, BP, and especially the inexcusably sloppy piece put out under the auspices of Harvard (the Maugheri report of 2012) all failed to make any mention of the declining net energy provided by any of the new unconventional oil finds.  This is a crucial oversight.

The second report will focus on natural gas in the U.S., with a particular emphasis on shale gas, the supposed game-changer that we have read so much about.  There are some very important elements to this story, but the punch line is that there's nowhere near "100 years" of this magic fuel, it costs more to produce than it is being sold for at present here in early 2013, and – once we include the idea of future increases in consumption – there may only be in the vicinity of 20-30 years of proven and probable reserves. And that is if and only if prices rise by a factor of 2.5x or more from the current $3.30 per therm market price. 

The third will focus on tight oil, often called shale oil (not to be confused with oil shale, a very common mistake), and make the case that, while it may have some modifying effect to the Peak Oil story, it lacks the ability to return the world to anywhere near its prior glory years of ~2% per year growth in global oil output. 

The summary of all three reports leads to the conclusion that all efforts to cram the world full of fresh rounds of new debt lending are going to end in failure because the requisite net energy is simply not there to support continued debt accumulations running several-fold faster than actual economic productive output.

Enormous risks are continuing to build in the world's financial landscape, and the continued unwillingness to confront the truth about our global energy predicament is both puzzling and frightening. The conclusion is that our future resilience as individuals, corporations, or countries will hinge to a very large degree on whether or not we heed the warning signs and adapt our lives and habits to the actual circumstances.

The Really, Really Big Picture

The really big picture goes like this:  Humans discovered about 400 million years worth of stored sunlight in the form of coal, oil, and natural gas, and have developed technologies that will essentially see all of that treasure burned up in just 300 to 400 years. 

On the faulty assumption that fossil fuels will always be a resource we could draw upon, we fashioned economic, monetary, and other assorted belief systems based on permanent abundance, plus a species population on track to number around 9 billion souls by 2050.

There are two numbers to keep firmly in mind.  The first is 22, and the other is 10.  In the past 22 years, half of all of the oil ever burned has been burned.  Such is the nature of exponentially increasing demand.  And the oil burned in the last 22 years was the easy and cheap stuff discovered 30 to 40 years ago.  Which brings us to the number 10.  

In every calorie of food that comes to your table are hidden 10 calories of fossil fuels, making modern agriculture and food delivery the first type in history that consumes more energy than it delivers.  Someday fossil fuels will be all gone.  That day may be far off in the future, but preparing for that day could (and one could argue should) easily require every bit of time we have.

What galls me at this stage is that all of the pronouncements of additional oil being squeezed, fractured, and otherwise expensively coaxed out of the ground are being delivered with the message that there's so much available, there's nothing to worry about (at least, not yet.)  The message seems to be that we can just leave those challenges for future people, who we expect to be at least as clever as us, so they'll surely manage just fine.

Instead, the chart above illustrates that on a reasonably significant timeline, the age of fossil fuels will be intense and historically quite short.  The real question is not Will it run out? but Where would we like to be, and what should the future look like when it finally runs out?  The former question suggests that "maintain the status quo" is the correct response, while the latter question suggests that we had better be investing this once-in-a-species bequeathment very judiciously and wisely. 

Energy is vital to our economy and our easy, modern lives.  Without energy, there would be no economy.  The more expensive our energy is, the more of our economy is dedicated to getting energy instead of other pursuits and activities.  Among the various forms of energy, petroleum is the king of transportation fuels and is indispensible to our global economy and way of life.

To what do we owe the recent explosion in technology and living standards?  To me the answer is simple: energy. 

(Source)

Because a very large proportion of our society was no longer tied up with the time-consuming tasks of growing their own food or building and heating their own shelter, they were free to do other very clever things, like devote their lives to advancing technology.  

When energy starts to get out of reach either economically or geologically, then people revert to more basic things, like trying to stay warm – such as this fellow:

Greeks Raid Forests in Search of Wood to Heat Homes

Jan 11, 2013

EGALEO, Greece—While patrolling on a recent cold night, environmentalist Grigoris Gourdomichalis caught a young man illegally chopping down a tree on public land in the mountains above Athens.

When confronted, the man broke down in tears, saying he was unemployed and needed the wood to warm the home he shares with his wife and four small children, because he could no longer afford heating oil.

"It was a tough choice, but I decided just to let him go" with the wood, said Mr. Gourdomichalis, head of the locally financed Environmental Association of Municipalities of Athens, which works to protect forests around Egaleo, a western suburb of the capital.

Tens of thousands of trees have disappeared from parks and woodlands this winter across Greece, authorities said, in a worsening problem that has had tragic consequences as the crisis-hit country's impoverished residents, too broke to pay for electricity or fuel, turn to fireplaces and wood stoves for heat.

I think it is safe to assume that all of the people in Greece who are chopping down trees to stay warm are not simultaneously working on the next generation of technology.  Energy first; everything else second.  In other words, our perceived wealth and well-being are both derivatives of energy. 

Like every other organism bestowed with abundant food – in this case, fossil fuels that we have converted into food, mobility, shelter, warmth, and a vast array of consumer goods – we first embarked on a remarkable path of exponential population growth.  Along with these assorted freedoms from securing the basics of living, we also fashioned monetary and economic systems that are fully dependent on perpetual exponential growth for their vitality and well-being.  These, too, owe their very sustenance to energy.

It bears repeating:  Not just energy is important here, but net energy.  It's the energy left over after we find and produce energy that is available for society to do all of its complicated and clever things.

Not only is the world struggling right now to increase global oil production, but all of the new and unconventional finds offer us dramatically less net energy to use as we wish. 

Where We Are, in Three Simple Charts

One narrative that is being heavily marketed right now is that the shale plays are true game-changers and there's really nothing to worry about for the foreseeable future.  Heck, the story says that the U.S. will soon exceed Saudi Arabia in oil production and become energy independent, that it has so much natural gas that it might as well build export terminals, and that there's 100 years of natural gas just waiting to be used.

Unfortunately, none of this is really true.  Here's how I can make the case for that assertion using just three charts. 

This first chart comes to us from the EIA courtesy of one Mr. Sweetnam, a former director at the EIA who was promptly reassigned to a distant position when his superiors discovered that this chart revealing declines in existing conventional oil fields had been released to the public.

What this graph shows is the projected decline of all known projects in 2009 (so this does not have the U.S. shale 'revolution' baked into it, but I'll get to that shortly), and it shows that those projects are going to slip from delivering 85 million barrels per day (bpd) of crude oil to just 45 million bpd between 2012 and 2030.  In other words, 40 million bpd will go missing.  But it's worse than that, because demand is expected to grow, leaving a gap of more than 60 million bpd by 2030.

If that sounds like a lot, it is, but that's just an assumed rate of production decline of 4.08% per year, which is right in the midzone of expert estimates.  Some estimate decline rates as high as 6.5%, which would really amplify the drop and the resulting gap.

The top line is showing how much oil demand would grow if it was going to expand at the usual historical rates.  The gap between those two modeled states is 60 million barrels [Edit:  this orignially read "43 million barrels" but has been corrected].  To put that in a U.S. shale context, the EIA projects that the domestic shale plays might deliver as much as 3 million barrels per day by 2020, which is nothing to sneeze at, but even with that there's a projected 60 million bpd shortfall Edit:  this orignially read "40 million barrels" but has been corrected]

The second chart I want you to look at is this one which shows total world crude oil production over the past 12 years:

Between 2004 and 2012, the total supply of global crude oil + condensates (a definition which excludes the non-transportation fuels known as natural gas plant liquids and biofuels) has just flopped around in a tight band with only 5% wiggle.

It bears noting here that the 2004 average spot price for crude oil (using the Brent contract, as that better defines the 'world oil' price) was $38.35/bbl, while the average 2012 spot price was $111.63, or 2.9 times higher than the 2004 price. 

Despite this near tripling in price, the global supply is just sitting there stuck on a plateau.  Economically speaking, this is not supposed to happen.  What is supposed to happen is that suppliers will react to these higher prices and deliver more to the market, and then prices will settle down.  But that hasn't happened, which indicates that global oil supplies are, as expected, constrained by something other than market forces.

This brings us to the third chart of global spending on oil projects:

What also happened during the time that global supplies of crude oil were undulating along that 5% plateau?  Global expenditures on oil projects jumped by 100% from $300 billion per year to $600 billion.  With a 100% increase in capital spending by the petroleum industry, we saw petroleum supplies remain more or less stuck in the exact same spot. 

I am of the impression that $600 billion a year is a lot of money and that the people dedicating that capital are applying it to the very best projects available.  I make the further assumption that when a project is identified and pursued, it is brought on line as rapidly as possible.  There are not that many ways to look at this data other than noting that we are spending more and more to get the same...for now.

If you want to know why oil costs over $110 on the world stage, the last two charts above give you the answer:  There's just not that much of it to go around.

Despite all of this effort and expense, the world is basically treading water with respect to overall production.  The reason for that is contained in the first chart out of these three:  The race is now on to bring new projects on line quickly enough to offset the losses from existing fields. 

Petroleum is neither a U.S. issue nor any other specific country's issue, but rather a global commodity of immense importance. While the development of the shale plays in the U.S. is of domestic importance, it has not altered the global dynamic of static oil production – at least not detectably in the global supply charts. Not yet.

Conclusion (to Part I)

In Part II: How Energy Woes Will Trigger Financial Crisis, we look at the latest global petroleum supply and demand data and see clearly that cheap oil has become extinct. That era is over for humankind. 

My prediction is that the underlying rates of depletion will continue to fight the recent production gains in the U.S. and elsewhere in the world until they soon come to a standstill, eventually swamping even heroic efforts. 

Steadily rising energy costs and decreasing net energy yields will simply not be able to fund the future economic growth and consumptive lifestyles that developed nations are depending on (and that developing nations are aspiring to). In fact, the persistent global economic weakness we've been experiencing over the past years is an expected symptom of the throttling constraint decreasing net energy places on growth.

If you care about the future of the economy, your standard of living (or that of your children), and/or your quality of life, you need to fully understand this relationship between growth and net energy. Your individual future (and our collective one) depends on it.

Click here to read Part II of this report (free executive summary; enrollment required for full access).

This is a companion discussion topic for the original entry at https://peakprosperity.com/the-really-really-big-picture/

Its like the release of a new Star Wars movie or Tom Clancy book!  I love it when I get a surprise article on my iPad!  Ok; I'm going to read it now and then perhaps think of some insightful comment. . .

So I should keep the Prius and not get a new Camaro. I will really miss muscle cars.

I have been leading green initiative at work and have subsequently been labeled a "tree hugger".  If you can believe it in this day and age.  When all the gas plays became news, peolpe have been coming up to me saying, "how does it feel to be wrong" in there own inimical ways.  Chris has made me lazy on the energy research side, when he announced he would be doing these pieces, I said to myself that I would wait for his reports. The broad context of energy and resource depletion is so solid and well documented, even large discoveries don't dent the large picture as the report aptly points out.  Well done, thanks for the detail and confirmation, look forward to future reports.
It is still so strange, at work most people are so completely oblivious about the big picture, meet in the evening with the local transition initiating group and everyone takes the impending problems for granted. I know everybody experiences the mostly the same thing, but it still boggles my mind.  As Mike Rupert says, who are you going to relate to and work with, the guys sitting and drinking at the Titanic bar asking you to sit down and relax or those up on the deck frantically trying to build life boats.  I need to let this go.

 

…it will go, you will just stop explaining and find comfort in the fact you are right, and taking care of those you care for. It's why we are here, Buds then… Good Luck
BOB

One small quibble:  In the third paragraph under the chart "World's Liquid Fuels Supply," you contrast the projected 3 MMBPD increased US production projected by the EIA for 2020 with the 43 MMBPD indicated in the chart for after 2030.  I would like to know what the EIA says the US production will do after 2020.  I understand it will probably still be a very small percentage of the total worldwide demand deficit, but if I am going to use this, I would like to be making as accurate a comparison as possible.

[quote=green_achers]One small quibble:  In the third paragraph under the chart "World's Liquid Fuels Supply," you contrast the projected 3 MMBPD increased US production projected by the EIA for 2020 with the 43 MMBPD indicated in the chart for after 2030.  I would like to know what the EIA says the US production will do after 2020.  I understand it will probably still be a very small percentage of the total worldwide demand deficit, but if I am going to use this, I would like to be making as accurate a comparison as possible.
[/quote]
To be as accurate as possible in reference to the recent EIA projections (which change wildly from year to year, so be prepared to adopt a different view next year) you would need to shave about a million bpd from the 3 million bpd peak they are forecasting.  I've added dotted lines for 2020 and 2030. 
(Source - David Hughes presentation to ASPO 2012)

From the The Telegraph:

 

Shale gas is unlikely to be a “game-changer” for the UK over the next two decades, energy giant BP said, as it warned that Europe would become increasingly dependent on imported gas.

Amen to that!  (To just letting it go.)

Its good to have some more definitive dates.  But when are we going to truly feel the negative affects worldwide, in every country.  Oil shortages would effect everyone on earth.  There are corrupt countries that maintain a wealthy minority just by printing money and putting it into briefcases I'm sure.  When are they going to feel it.  When will the top 1% feel it?  Heres one example, the most expensive houses near where I live in Sydney are struggling to be sold, and half of them are up for sale.  The asking prices are $10,000,000 to $20,000,000.  I think the rich are finally getting it.  Those houses weren't such a great investment.

Hi,
The 2012 AEO has a Table 23 with projections of world oil prices from 2015 to 2035. The average of all predictions goes from approximately $100 in 2015 to approximately $120 in 2035. The maximum prediction in that table is from AEO 2012 reference, at about $145 in 2035. I take it your price estimates would be much, much higher?

Mark

Hi Chris,
I just wanted to bring to your attention a couple of items:

1.  para 6  I believe you accidently have BP shown as PB

2.  second para after the chart "Worlds Liquid Fuels Supply"  I suspect that the gap that you are refering to between the two models is about 63 and not 43 as written (106 - 43 = 63).

"The gap between those two modeled states is 43 million barrels."

As always keep up the great work.

 

Chris,
Great piece, but you're mis-reading this excellent chart exactly the same way most people seem to.

[quote=cmartenson]

What this graph shows is the projected decline of all known projects in 2009 (so this does not have the U.S. shale 'revolution' baked into it, but I'll get to that shortly), and it shows that those projects are going to slip from delivering 85 million barrels per day (bpd) of crude oil to just 45 million bpd between 2012 and 2030.  In other words, 40 million bpd will go missing.  But it's worse than that, because demand is expected to grow, leaving a gap of more than 60 million bpd by 2030[/quote]

I use this same chart and most people misinterpret it. Specifically:

[quote=cmartenson]
The gap between those two modeled states is 43 million barrels. [/quote]

No, that's not what the "43" indicates. The "43" means that global production from projects known in 2009 would decline to 43mmbpd by 2030. It would "read better" if the number "43" were moved down and to the right.

As it is, most people interpret the "43" to be the size of the gap between the projected demand line and production from then-known fields. In actuality, the gap is 62mmbpd, i.e. 105mmbpd 2030 demand projection minus 43mmbpd production from previously known sources equals 62mmbpd shortfall, or more than 5 new Saudi Arabias worth of new oil discoveries needed to fill the gap.

Ok, but in fairness there are credible projections estimating that in aggregate, the Bakken, Eagle Ford, Barnett and other U.S. plays could collectively produce up to 4.8mmbpd. Let's give them the benefit of the doubt and accept their number without critique. Heck, let's round it up for good measure and call it 5mmbpd by the time all the new shale plays are exploited.

Five million barrels a day of NEW production is nothing to shake a stick at. It's fully HALF of Saudi Arabia's output. Since we need to find 62mmbpd, again rounding generously, five million barrels of new production solves just 1/12th of the problem. We still need 4.5 more Saudi Arabias to be discovered in the next 7 years to replace the remaining 55mmbpd projected shortfall. If we can just find those 4 1/2 more Saudi Arabias in the next 7 years, the overall Peak Oil problem will have been solved completely.

The bottom line is still that to solve the problem we need to find exactly TWELVE TIMES the highest projected annual production estimate from all the U.S. shale plays combined. This is a big deal and even just 1/12th is still a major achievement against such a monumental goal as 60mmbpd. But we can't lose sight of where we stand. We are 1/12th of the way there, and no more major finds are even on the radar at this point. That's where we stand. 1/12th of the way to a real solution, 7 years to go. 55 million barrels per day of new oil production left to be discovered. 

Erik

[quote=Erik T.]Chris,
Great piece, but you're mis-reading this excellent chart exactly the same way most people seem to.
No, that's not what the "43" indicates. The "43" means that global production from projects known in 2009 would decline to 43mmbpd by 2030. It would "read better" if the number "43" were moved down and to the right.
As it is, most people interpret the "43" to be the size of the gap between the projected demand line and production from then-known fields. In actuality, the gap is 62mmbpd, i.e. 105mmbpd 2030 demand projection minus 43mmbpd production from previously known sources equals 62mmbpd shortfall, or more than 5 new Saudi Arabias worth of new oil discoveries needed to fill the gap.
[/quote]
Thanks Erik,  It seems I slipped in my meaning in my second paragraph but not my first, … I have the same interpretation as you.  Here's what I wrote again in the first paragraph:
 

[quote=cmartenson]
What this graph shows is the projected decline of all known projects in 2009 (so this does not have the U.S. shale 'revolution' baked into it, but I'll get to that shortly), and it shows that those projects are going to slip from delivering 85 million barrels per day (bpd) of crude oil to just 45 million bpd between 2012 and 2030.  In other words, 40 million bpd will go missing.  But it's worse than that, because demand is expected to grow, leaving a gap of more than 60 million bpd by 2030[/quote]
That is, all known producing projects in 2009 will decline by some 40 million bpd.  Once we factor in demand, then the gap swells to more than 60 mbpd.  
I stick to the round numbers here  (40 and 60) because that's a sufficient amount of precision when projecting into the future.  43?  62?  Nah, too precise for me because I know better.  Demand and supply are both a function of price and price is a function of supply and demand.  So who knows what will be produced from exotic plays in the future?
Given all that uncertaintude, best to just round to the nearest whole number and use that as a starting point for discussion.
Sorry for being unclear in my writing, I hope that by saying that existing production capacity was "going to slip from delivering 85 million barrels per day (bpd) of crude oil to just 45 million bpd between 2012 and 2030" I conveyed my point properly.
In the next section I bungled it.
Just to be crystal clear then, my intent with this chart was to say:
the gap between existing production and future production from those same sources will be ~40 Mbpd
the gap between future demand and production from existing plays will by 60 Mbpd.
Again, sorry for any confusion, and thanks for clarifying!
Best,
Chris M.

…and this will be proven also: Your numbers are too conservative still. Saudi Arabia will be absolutely proven (over time) to be far less than is even guess estimated. Before here to there the above ground issues will be so great that these numbers anticipated will just NOT materialize. Hoarding will be such a problem too that all these numbers are just a fragile attempt at making sense of it all, and yet all the ears of leadership are of the Mauldin kind (there's no problem Folks) and I just hope this isn't true.
I still get all of my best guess estimates and opinions from "Twilight in the Dessert" and Matt Simmons 'got it right' research.

Respectfully Given

BOB 

Since Erik has popped his head in PP again… and it's always nice to have him commenting here… I will point out that he wrote an EXCELLENT piece recently that gets down to brass tacks of energy and the future of the dollar (as the reserve currency);
http://www.resilience.org/stories/2013-01-07/commentary-why-peak-oil-threatens-the-international-monetary-system

excerpt: 

But that immunity cannot last forever. The loss of reserve currency status will be the forcing function that begins a self-reinforcing vicious cycle that brings about a U.S. bond and currency crisis. While many analysts have opined that the USA cannot go on borrowing and spending forever, relatively few have made the connection to loss of reserve currency status as the forcing function to bring about a crisis.

We’re already seeing small leaks in the ship’s hull. China openly promoting the idea that the yuan should be asserted as an alternative global reserve currency would have been unthinkable a decade ago, but is happening today. Major international trade deals (such as China and Brazil) not being denominated in U.S. dollars would have been unthinkable a decade ago, but are happening today.

 
Demand and supply are both a function of price and price is a function of supply and demand.  So who knows what will be produced from exotic plays in the future?
So...what do you think the price will be? The AEO 2012 studies I linked to when from an average of about $100 per barrel in 2015 to about $120 in 2035, with a maximum value of about $145 in 2035. (All values were in 2010 dollars.) Do you think the real price will be $200 (in 2010 dollars)? $300? More? Or perhaps even more importantly, in 2011, the U.S. consumed about 134 billion gallons of gasoline, at a cost of about $3.50 a gallon. So that's a total cost of about $470 billion. The U.S. GDP in 2011 was about $15 trillion, so spending on gasoline was about 3.1 percent of GDP. What do you think the numbers will look like in 2035?

 
…and his opinion seems to be in direct conflict with Pettis and Chanos so who is to be weighted more?

Pettis wrote this and so much more:

http://www.mpettis.com/2012/11/17/is-there-an-asian-rmb-bloc/

Chanos this and so much more:

http://online.barrons.com/article/SB50001424052748704379604578187373254242836.html#articleTabs_article%3D2

Gordon Chang seems to NOT believe in the China story and I just don"t know what to think.

http://online.barrons.com/article/SB50001424052748704379604578187373254242836.html#articleTabs_article%3D2

I do understand though that China is a developing country and to get to developed status and a serious economy then they have to move their paltry 38% consumer driven economy to a world norm of somewhere near 60% (?). So, I will keep my mind wide open and just let things develop without over committing myself to any one ideal or opinion.

I believe Pettis has been on the ground focused on China, and Chanos has some serious boots on the ground too.

Perhaps ET can share his direct contacts, and where his research comes from.

I read and with great interest the article in "Resiliency", and many assumptions were made and some of it conjecture and not completely clear to me as it just isn't clear just yet. One question: If China wanted to destroy the dollar it most certainly can but in the process would destroy itself. So, this dance could go on for some time yet are my thoughts. Brazil and local Asian countries are one thing, being a part of a basket of currencies to a new reserve currency is quite another, especially when you are still a developing economy and NOT a developed economy. In any case, I get the contexts of the article by Mr. Townsend but too many assumptions, and no real timeline from point A to point B was established.

The "Triffin Paradox" had me smiling a bit as Charles had referenced this and Chris seemed to down play this as beneath the level of importance and not relevant but I never understood why.

So many brainiacs in conflict that who is completely sound in judgement is a toss up. I will say I completely agree with the negative influence "Peak Oil" will have on the world IS NOT fully appreciated by the economists and the public just on supply and demand. To be found energy is a serious issue and NO ONE truly understands where that will come from but then again we do have thin air money so thin air energy I guess.

Erik T gets my full support with regards to Peak Oil, and nothing he has written contradicts the research of Simmons, Nelder, Campbell, ASPO, Oil Drum and the like.

Respectfully Given

BOB  

Great article. Another thing to consider is the unknown externalities that are inevitably coming. As Japan can attest, there are Real energy costs (30% in their case) to Mother nature's push back on our externalities. We can't factor in the unkown, but considering the eponential rate of external costs, especially from those 'developing' counties (adding to the externals), I think we can logically assume bigger costs are coming in the future. How much more energy will we need to rebuild after these catastrophes?.. putting even more downward pressure. 
Bob, I agree, the ME cartel hasn't accurately reported oil levels since their conception. We really have no idea how much they have left, just rough estimates. 

Resilience is the key!

Thank You

…the greatest message Chris, Adam and all associated with PP can give is Preparations and Resilience.All oil and gas companies talk their books, they live with two sets of books, one for public consumption and one for them.
In Chris's next Part (2) of the energy equation he is likely to speak of natural gas and the depletion rate per well is incredible and can't possibly represent what the Oil and Gas talking heads are saying, yet that is what gets out there. Plus to get the price necessary for the production of the BTU from natural gas will be triple the price as it is now so kills the economy yet again.
Respectfully
BOB