So the water will drain out of course !
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| Economy |
| Our Economy in a nutshell |
| 2022-06-19 |
| [Two Minds] The economy has reached an inflection point where everything that is unsustainable finally starts unraveling. Our economy is in a crisis that's been brewing for decades. The Chinese characters for the English word crisis are famously--and incorrectly--translated as danger and opportunity. The more accurate translation is precarious plus critical juncture or inflection point. Beneath its surface stability, our economy is precarious because the foundation of the global economy-- cheap energy--has reached an inflection point: from now on, energy will become more expensive. The cost will be too low for energy producers to make enough money to invest in future energy production, and too high for consumers to have enough money left after paying for the essentials of energy, food, shelter, etc., to spend freely. For the hundred years that resources were cheap and abundant, we could waste everything and call it growth: when an appliance went to the landfill because it was designed to fail (planned obsolescence) so a new one would have to be purchased, that waste was called growth because the Gross Domestic Product (GDP) went up when the replacement was purchased. A million vehicles idling in a traffic jam was also called growth because more gasoline was consumed, even though the gasoline was wasted. This is why the global economy is a "waste is growth" Landfill Economy. The faster something ends up in the landfill, the higher the growth. Now that we've consumed all the easy-to-get resources, all that's left is hard to get and expensive. For example, minerals buried in mountains hundreds of miles from paved roads and harbors require enormous investments in infrastructure just to reach the deposits, extract, process and ship them to distant mills and refineries. Oil deposits that are deep beneath the ocean floor are not cheap to get. Does it really make sense to expect that the human population can triple and our consumption of energy increase ten-fold and there will always be enough resources to keep supplies abundant and prices low? No, it doesn't. Many people believe that nuclear power (fusion, thorium reactors, mini-reactors, etc.) will provide cheap, safe electricity that will replace hydrocarbons (oil and natural gas). But nuclear power is inherently costly, and there are presently no full-scale fusion or thorium reactors providing cheap electricity to thousands of households. Reactors take many years to construct and are costly to build and maintain. Cost over-runs are common. A new reactor in Finland, for example, is nine years behind schedule and costs have tripled. The U.S. has built only two new reactors in the past 25 years. The world's 440 reactors supply about 10% of global electricity. There are currently 55 new reactors under construction in 19 countries, but it will take many years before they produce electricity. We would have to build a new reactor a week for many years to replace hydrocarbon-generated electricity. This scale of construction simply isn't practical. Supplying all energy consumption globally--for all transportation, heating of buildings, etc.) would require over 10,000 reactors by some estimates--over 20 times the current number of reactors in service. Many believe so-called renewable energy such as solar and wind will replace hydrocarbons. But as analysts Nate Hagens has explained, these sources are not truly renewable, they are replaceable; all solar panels and wind turbines must be replaced at great expense every 20 to 25 years. These sources are less than 5% of all energy we consume, and it will take many decades of expansion to replace even half of the hydrocarbon fuels we currently consume. To double the energy generated by wind/solar in 25 years, we’ll need to build three for each one in service today: one to replace the existing one and two more to double the energy being produced. All these replacements for hydrocarbons require vast amounts of resources: diesel fuel for transport, materials for fabricating turbines, panels, concrete foundations, and so on. Humans are wired to want to believe that whatever we have now will still be ours in the future. We don't like being told we'll have less of anything in the future. The current solution is to create more money out of thin air in the belief that if we create more money, then more oil, copper, iron, etc. will be found and extracted. But this isn't really a solution. What happens if we add a zero to all our currency? If we add a zero to a $10 bill so it becomes $100, do we suddenly get ten times more food, gasoline, etc. with the new bill? No. |
| Posted by:Besoeker |
| #35 It's just obvious to anyone who understands how the oil industry works that we the American people are losing from this crazy policy of punishing us in order to try to punish putin It may be obvious to the Russian stooges that IT MUST NOT BE ACKNOWLEDGED THAT THE PAIN IS FROM BIDEN DESTROYING THE AMERICAN OILFIELD AND NOT FROM HIS HALFHEARTED FAKE ATTEMPTS AT FIGHTING PUTIN but what do I know, I don't have a fucking boiler room and don't enjoy seeing Rantburg turned into a czarist equivalent. |
| Posted by: Thing From Snowy Mountain 2022-06-19 23:54 |
| #34 Oh boy, another brand new person with a never before seen name and the same irritating as fuck "son" shit. |
| Posted by: Thing From Snowy Mountain 2022-06-19 23:49 |
| #33 You miss the point because it's against your slimy fucking lies. Drunk and stupid is no way to go through life, son. As someone above said, Biden and Johnson aren't punishing Put |
| Posted by: Mclaughlin, Tom 2022-06-19 23:01 |
| #32 Which is why they don't understand the unintended consequences of their retarded sanctions |
| Posted by: Crolusing Ulavise3940 2022-06-19 22:54 |
| #31 Biden's not a capitalist. He and Raytheon and the MIC and other Swampies are crony capitalists at best ... socialists at heart. These assholes wouldn't know a "supply shock" if it bit them in the balls |
| Posted by: Billy Budd 2022-06-19 22:15 |
| #30 ^ That's capitalism, Jake. The global markets don't give a fuck about your "morality". |
| Posted by: Unusotle 2022-06-19 22:06 |
| #29 It's really important to understand that this hyperinflation is not demand-driven. It's not a demand shock, it's a supply shock. There's not enough supply. This insufficient supply is 100% a problem of US policy. It used to be just because Biden wanted to throttle American oil production but it's gone way beyond that. It's now about Biden's drive to starve the world of Russian oil. That's a joke. The Chinese and Indians and even the Europeans are buying all the Russian oil they can get. Even at discount prices, the Russians are making money hand over fist. There's just no other way to get out of this very deep hole we're in except to free up purchases by Europe and the US of Russian oil. You can bitch and moan all you like about putin but this is just the simple hard reality of the situation we're in. |
| Posted by: Oil Derek 2022-06-19 22:01 |
| #28 I'm not into politics... just an oil guy with no dog in the Ukraine-Russia dustup, and I really don't care who "wins" over there. It's just obvious to anyone who understands how the oil industry works that we the American people are losing from this crazy policy of punishing us in order to try to punish putin |
| Posted by: Oil Derek 2022-06-19 21:41 |
| #27 tw: Biden's people shut them down. Thank you, Oli Derek. I was discussing this with Mr. Wife over dinner tonight — he trained as a chemical engineer and worked with/on internal and external manufacturing throughout his career. He pointed out that just to restart a closed processing facility takes 18 months to 2 years, plus the cost of refurbishment of untouched equipment. |
| Posted by: trailing wife 2022-06-19 20:36 |
| #26 Top ten biggest refineries in the world. How do we help them operate at peak capacity while we push an Operation Warp Speed to build several in CONUS? https://www.iqpc.com/media/7791/11215.pdf |
| Posted by: NoMoreBS 2022-06-19 20:04 |
| #25 So dumping Russian oil on the market is going to affect refining capacity how? REFINERIES DON'T MAKE OIL. Y'all's lies and half truths get more insulting by the hour. |
| Posted by: Thing From Snowy Mountain 2022-06-19 19:50 |
| #24 There's nothing that can be done now about the lack of spare refinery capacity. The only thing to do is free up existing production, and the swing producer whether we like it or not is now Russia. The guy above is right. Dump Russian oil on the market is unfortunately the only way out of this jam |
| Posted by: Oil Derek 2022-06-19 19:35 |
| #23 Except I'm pretty sure a foreign enemy _did_ come up with the plan. Also, the refineries aren't the bottleneck. I think that's just another layer of scapegoating. |
| Posted by: Thing From Snowy Mountain 2022-06-19 19:25 |
| #22 The analyst above us also right that Biden and Jay Powell are pursuing the absolute worst policy you could imagine. They're raising the cost of capital thus the hurdle rate for new projects, starving the American oil industry of investment and new capacity, while preventing Russian supply from reaching western buyers. A foreign enemy could not come up with a policy better designed to screw the American and European economies. |
| Posted by: Oil Derek 2022-06-19 19:09 |
| #21 tw: Biden's people shut them down. Chevron CEO Wirth said, "Capacity is added by de-bottlenecking existing units by investing in existing refineries … but what we’ve seen over the last two years are shutdowns. We’ve seen refineries closed. We’ve seen units come down. We’ve seen refineries being repurposed to become bio refineries. And we live in a world where the policy, the stated policy of the U.S. government is to reduce demand for the products that refiners produce.” Wirth said that the federal government’s current policy is to reduce the demand for oil, making it “very hard” in a company “where investments have a payout period of a decade or more.” |
| Posted by: Oil Derek 2022-06-19 19:02 |
| #20 Even worse than that. We are screwed if we don't get Russian oil on the market again. Chevron CEO: There may never be another refinery built in the US again |
| Posted by: Oil Derek 2022-06-19 18:58 |
| #19 What did we do with all the extra oil we were pumping 2 1/2 years ago, Oil Derek? Because it was getting refined somewhere. |
| Posted by: trailing wife 2022-06-19 18:57 |
| #18 Palmerston is right. There is no excess refining capacity in the US -- none. Chevron's CEO talked about this the other day. So y'all can bitch all you like about Biden's screw ups but that horse has left the barn. The only way to push prices down in the next 18 months is by dumping Russian and Saudi oil on the market. |
| Posted by: Oil Derek 2022-06-19 18:53 |
| #17 You know there is a difference between soldiers and cannon fodder. I doubt Russia is running out of the latter. A German leader found that out to his sanguine. |
| Posted by: Procopius2k 2022-06-19 16:54 |
| #16 Conservative Russians throw curves, Discussing, maneuvring with verve, Saying "neocon c---," Sending Frankie to front... Where they'll follow on finding their nerve. |
| Posted by: Bob White3967 2022-06-19 16:43 |
| #15 Russia is running out of soldiers And yet his paid keyboardists still show up to proclaim how it's in "our" interests to stop the sanctions SO MUCH! |
| Posted by: Frank G 2022-06-19 16:16 |
| #14 America was not only supplying its own oil needs through January 2021, but had become a major exporter and the primary driver for for low oil prices worldwide — much to President Putin’s frustration. President Biden reversed that, as so much else, which helps Russia while making things difficult for China — though abetting China’s economic war against the U.S. |
| Posted by: trailing wife 2022-06-19 15:20 |
| #13 Putin will provide a cure, and end your suffering!" Just don't be surprised when he invades your metatarsals. |
| Posted by: SteveS 2022-06-19 14:47 |
| #12 "Got toenail fungus? It's all Biden's fault because of the sanctions! Lift them and Putin will provide a cure, and end your suffering!" |
| Posted by: Thing From Snowy Mountain 2022-06-19 14:39 |
| #11 You're trying, son, but you miss the point. You miss the point because it's against your slimy fucking lies. The sanctions are not hurting Russia anywhere near as much as they are hurting America, Britain and Europe. Sanctions are what football (soccer to you) fans call an own goal. You think this is about the sanctions when Putin's appeasing agent Biden and his predecessors has done everything in his power to SHUT DOWN the American oilfield? Not to mention the effect of banning coal in such a way that it has to be replaced with natural gas. It matters not a whit if removing the sanctions helps Putin. Doing so helps us. Who the fuck is "us?" You weren't here for the past thirteen years of aggresive sanctions against the _American_ oilfield but you came out of nowhere in 2022 to tell us all about how the real problem is we're not going along with Putin? If we want to avoid years of hyperinflation and a nasty recession, there is no alternative to lifting the sanctions. Our leaders should stop being so emotional and start using their brains for once. Again, "we?" You laid the groundwork for the hyperinflation and economic contraction with your silence during the last fourteen years of war on the US energy sector. If appeasing Putin but keeping the foot on the neck of the American oilfield _doesn't_ do anything to halt hyperinflation can Ukraine get their country back? Will you even be here for that conversation or will "you" vanish and another nym from the boilerroom be in your place? You're basically a propagandist trying to extinguish the argument for American energy production by flooding the zone with non-sequiturs. You're not going to say it's impossible but you refuse to say that anything _is_ possible except for appeasing Putin. You and Biden are codependent in this manner. |
| Posted by: Thing From Snowy Mountain 2022-06-19 14:31 |
| #10 You're trying, son, but you miss the point. The sanctions are not hurting Russia anywhere near as much as they are hurting America, Britain and Europe. Sanctions are what football (soccer to you) fans call an own goal. It matters not a whit if removing the sanctions helps Putin. Doing so helps us. If we want to avoid years of hyperinflation and a nasty recession, there is no alternative to lifting the sanctions. Our leaders should stop being so emotional and start using their brains for once. |
| Posted by: Palmerston 2022-06-19 13:58 |
| #9 Yes, there's another person with an semi-WASP name here to lecture us about how the main problem with the shut-down American oil industry is that it isn't going to work for Russia. Yeah, right. In other news: Biden and his son are CCP agents. The Big Guy probably gets kickbacks on China's discounted Russian oil buys from that bogus Chinese "energy company" that his corrupt crackhead son did a joint venture with after he flew with his Vice President dad to Beijing on Air Force Two Well, that's a definite possibility if you have overlooked all the evidence that they're also agents of Putin's. Which is what they try to distract away from with their flood. |
| Posted by: Thing From "Angleton-99-666" Mountain 2022-06-19 13:50 |
| #8 So the water will drain out of course ! |
| Posted by: Besoeker 2022-06-19 11:57 |
| #7 The Fed is fighting inflation using an old playbook Raising interest rates discourages investment in homes cars and capital goods This inflation is being driven by energy policy and you can’t discourage inelastic demand people have to buy gas and groceries no matter what the cost Jacking the prime rate won’t touch that It will make investment in energy more expensive and exacerbate the cost of fuel |
| Posted by: Sock Puppet of Doom 2022-06-19 10:35 |
| #6 /\ Sort of a COSTCO buyers club discounted arrangement. Certain fees may apply. |
| Posted by: Besoeker 2022-06-19 10:08 |
| #5 China and India, which refused to join Group of Seven sanctions against Russia, reportedly are buying oil at a discount of $30 to $40 per barrel, while American and European consumers are paying the full price Biden and his son are CCP agents. The Big Guy probably gets kickbacks on China's discounted Russian oil buys from that bogus Chinese "energy company" that his corrupt crackhead son did a joint venture with after he flew with his Vice President dad to Beijing on Air Force Two |
| Posted by: Don Vito Snoth5891 2022-06-19 09:41 |
| #4 Biden tries to climb down from Ukraine ledge Twin strategic and economic crises prompt search for a way out of Ukraine trap By DAVID P. GOLDMAN Asia Times JUNE 17, 2022 "President Joe Biden’s administration faces a double disaster after its Ukraine miscalculation, namely a US recession and a second strategic humiliation in the space of a year. The US economy is almost certainly in recession, while oil prices drive inflation that has cut workers’ real pay by about 6% year on year. "Washington’s earlier boasts of driving Russian President Vladimir Putin from power, destroying Russia’s capacity to make war and halving the size of the Russian economy look ridiculous in retrospect.... "The world economy is reeling from supply shocks in energy and food provoked by Western sanctions on Russia. Monetary policy can reduce inflation only by forcing consumers to stop buying, which forces retailers to liquidate inventory at lower prices and crushes demand for raw materials – a cure that is worse than the disease. "Russia meanwhile earned a record €93 billion (US$97 billion) from energy exports during the first 100 days of the war, a Finnish study concluded. China and India, which refused to join Group of Seven sanctions against Russia, reportedly are buying oil at a discount of $30 to $40 per barrel, while American and European consumers are paying the full price..." |
| Posted by: Palmerston 2022-06-19 09:35 |
| #3 The oil price is ultimately responsible for about 70% of the inflation index: "Energy prices have become the main driver of G7 inflation. Changes in the oil price lagged by one to four months explain 70% of the monthly change in the CPI, according to an Asia Times study. "The sensitivity of the US Consumer Price Index to the oil price, moreover, was about twice as high during the February 2020 to May 2022 period than it had been during the preceding 15 years, the study shows." |
| Posted by: Palmerston 2022-06-19 09:30 |
#2  Photo depicts an oilfield power driven pump near Palestine, IL. Circa 1909 "technology." Still pumping last week, along with a 6 other units connected to the power. Power sits back in the woods and runs on propane. Many used to run on regulated natural gas from the wellhead. This well (termed shallow) is probably in the 1000-1300 foot depth range. Oil from this well is pumped via a 2 inch underground line back to a set of tanks in the woods. Tank trucks pump it out and take it to the refinery, trunk line, or larger tanks when the smaller tanks are full. An operator known as a "pumper" manages the process at the wellhead and power. The operation is termed a "lease" and is, or was generally named after the property owner, ie, the 'Johnson Lease' 'Goodson lease', etc. A lease could have numerous fractional owners or heirs due to family inheritances, farm sales, etc. 'Mineral rights' are oftentimes retained by the original owners.Farmers used to complain about having to farm around the elevated rod lines. Not much complaining going on today at $110. per barrel. Only a hand full of old oilfield powers operate today. |
| Posted by: Besoeker 2022-06-19 09:11 |
| #1 Not entirely true. Every "peak oil" prediction for the last half century has failed to materialize because of technology advances. The obvious solution to our current malaise is to produce more, build more pipelines and refineries, and immediately revoke America's foolish, ruinous, self-destructive sanctions. End the sanctions, now. Unleash the world's greatest oil companies to invest in exploration, production, R&D and refining capacity. |
| Posted by: Palmerston 2022-06-19 08:34 |