How Low Can Oil Prices Go?

Peak oil? What peak oil?


Pro Fracking

The price of oil in global markets has plunged by nearly 40 percent over the past six months. As a result, the price of a gallon of regular gasoline in the U.S. has dropped from an average of $3.68 in June to $2.74 this week. In June, the U.S. Energy Information Administration had projected that a gallon of gas would average $3.48 per gallon this month. What happened, and where might oil prices go in the next two to five years?

What's going on is that the world is awash in crude oil while the world economy is slowing down. Demand for crude has dropped, yet supplies are increasing; the predictable result is lower prices. A huge part of the glut in global production stems from the fracking boom in the United States that has seen domestic oil production rise from a low of 5 million barrels per day in 2008 to over 9 million barrels per day in November.

Over the Thanksgiving holiday, the Organization of Petroleum Exporting Countries (OPEC) declined, reportedly at the behest of Saudi Arabia, to reduce its members' production. Some analysts have suggested that this strategy aims to keep global oil prices low with the goal of killing off fracking in the United States and preventing the drilling technique's spread to other parts of the world. It costs less than $10 per barrel to get oil out of the ground in most Middle Eastern countries, whereas production costs hover around $65 per barrel for U.S. fracked wells.

Oil Price Chart December 2014

Michael Lynch, an analyst at Strategic Energy and Economic Research, thinks this strategy is unlikely to work. Lynch estimates that most fracked wells in the U.S. break even below $60, although sustained lower prices will likely cut future drilling investment by 10 to 15 percent. But even that has upside because slackening demand for drilling rigs and crews will lower the costs for new fracked wells. In addition, technological improvements are generating something like an annual 10 to 20 percent reduction in fracking costs and offsetting increases in production. In any case, owners will pump oil from wells already drilled as long as production covers their variable costs.

Lynch argues that during the first decade of this century, oil prices were affected by the perceived threat to production capacity caused by strife in places like Iraq, Nigeria, Iran, and Venezuela. In effect, purchasers paid a security premium. He now believes, despite the continuing turmoil in the Middle East, that the geopolitical risk premium has abated somewhat. If that's true, leading technologically savvy private oil companies might be enticed back into certain oil-rich hellholes to rescue their heroically mismanaged petroleum fields. The sad fact is that nearly 80 percent of the world's oil reserves are in the hands of government-owned companies. It's not too far-fetched to believe that, if properly handled, the combined additional production from Libya, Iraq, Iran, Russia, Nigeria, Venezuela, South Sudan, and Mexico might amount to an extra 10 to 15 million barrels per day. 

In the meantime, budget shortfalls stemming from lower oil prices might encourage unsavory petro-state regimes—Russia, Venezuela, Iran—to be more tractable. Furthermore, the International Monetary Fund estimates that lower oil prices will goose U.S. economic growth from 3.1 percent to 3.5 percent next year.

During the last decade, even as alarums about the advent of "peak oil" grew ever more frenzied, world oil production actually increased from 77.6 million barrels per day in 2003 to 86.8 million barrels per day in 2013. Lynch's book The "Peak Oil" Scare and the Coming Oil Flood, scheduled for publication this coming spring, predicts even larger leaps in the global production of crude. Lynch thinks world oil production will increase to around 110 million barrels per day during the next decade. In the meantime, global oil prices will hover around $60 per barrel over the next couple of years and conceivably drop to $40 per barrel in five years. At $40 per barrel, the price of oil would, in inflation-adjusted dollars, just about equal the annual average price of $17 per barrel in 1998.

I asked Lynch if this meant oil markets might be in for a replay of the price collapse that occurred in the 1980s. He replied that he thought so. In inflation-adjusted dollars, the price of oil reached its peak annual average of $106 per barrel in 1980 and then collapsed to an annual average of $30.80 per barrel in 1986.

Another factor to consider when attempting to project future prices is that demand for oil appears to have peaked in the United States and Europe. This is due in large part to the recent period of sustained high prices that encouraged drivers to buy more energy-efficient vehicles and to conserve the amount of fuel they burned. U.S. gasoline consumption peaked at 142 billion gallons in 2007 and has since fallen by 6 percent to 135 billion gallons in 2013. In the European Union, transport fuel consumption has fallen by 8.4 percent since peaking in 2007. In addition, the total estimated vehicle-miles traveled by Americans has dropped by more than 2 percent since 2007. (Lynch muses that low oil prices may mean we'll "see the death of the electric car" once again.) Finally, if the big industrial countries do get serious in the next decade or so about cutting carbon emissions, that too will tank demand for oil.

In other words, oil consumption may well eventually peak. But not because we ran out of the stuff.

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  1. What a dilemma for the lefties. On one hand, the low oil prices mean that fracking, which is single-handedly destroying the earth right before eyes, is less viable and could mean less drilling in the country. on the other hand, lower energy prices mean people will want to use more.

    1. Not really:

      Obama is making the gas prices low.

      Dilemma solved.

    2. Actually, this is a dilemma for the global economy. Lower prices due to demand destruction means lower production, but higher prices means demand destruction for rich countries. Either way, the world faces economic crisis.

  2. Nice logic, Ron. They also never thought we were going to run out of typewriter ribbon or opera glass cleaner, and now I can't find either at my local five and dime.

    1. Holy christ you are terrible at this, Tulpa. I can't even believe how pathetic you are.

      1. You should get a better hobby. You off your meds?

        1. Great response, Tulpy-poo. Typical excellence from you. How does failing again feel? I bet it feels just like it always does.

          1. such angry. much posting. lol.

            1. You didn't answer the question. How does being a complete and utter failure feel? You're the expert, tell us. Also, please whine about how lying about your identity is ok because we all have handles. That never gets old.

              1. Oh, you! You got, me, I'm totally Tulpa!

                1. This is a wonderful new low for you, Tulpy-poo. It will go in the collection of your other pathetic lows. I like it. It's new, but pathetically incompetent, which is just perfect for you.

                  1. Would you have known it was me if I had made my handle "Not Tulpa" or "Totally Not Tulpa"?

                    1. I always know it's you, Tulpy-poo. Because you're too stupid to do anything else besides yourself. You can't help it; you just suck at, well, everything. Poor Tulpy-poo; delusions of grandeur, but reality just won't play ball. So sad.

                  2. It might be MNG. It has enough little, whiny bitch in it to be him.

                    1. Well we can't all be internet tough guys like you, JW.

                    2. SAY THAT TO MY FACE.

                    3. Don't yell at me like that! I just soiled myself 🙁

                    4. Yes, but you do that anyway.

                    5. I wish MNG would come back. He was a barrel of monkeys.

          2. Wait, do you actually think he's a Tulpa sock or are you just fucking with him?

              1. sarcasmic still owes me $20 from the Obama electoral college results. Even though I told him to give it to a waitress.

      2. He actually has a point, Epi. We don't buy much typewriter ribbon because technological advances made it obsolete.

        We might quit buying as much oil because of other disruptive innovations, like economical fusion power, or even little marginal improvements like car engines turning off at stoplights to save fuel.

        1. There's no might about it.

          Over time the price of oil will rise as it becomes more expensive to pull out of the ground, and in the mean time the price of alternative energy should decrease. At some point alternative energy will cost less than oil, and petroleum as a source of fuel will be as obsolete as whale oil lamps.

          1. We might get around to synthetic petroleum. I read about a group that turns algae into fuel. Maybe nuclear will make power so cheap we can use it to fun algae plants which we can custom adjust by synthetic biology and other means to give us perfect fuel with greater ease. We could also use the algae farms to produce pharmaceuticals.

            1. I read about a group that turns algae into fuel

              That's already slowing down. A friend of mine just got laid off from a similar bio-fuels program.

              1. I still think it could happen.

                1. I don't doubt it'll happen*, I just think it's going to be mothballed for now while oil prices are lower, so we'll be waiting for it for a while. I think this dip will also mean a lot of talent in the area will go elsewhere and some of the progress will have to be retraced when it starts up again.

                  *Provided we don't get hip to terrestrial energy

            2. Actually, there's probably a decent efficiency in colocating waste-treatment, carbon-fired power, and algae farms in latitudes that don't freeze often.

            3. Cytotoxic|12.5.14 @ 2:03PM|#
              "We might get around to synthetic petroleum"

              IG Farbin thought so in the 1920s, which mean they had a horribly expensive plant in place to deliver syn-fuel to the oil-starved Nazis.
              It served to eat their resources and contribute to their demise.

              1. It ain't 1920.

          2. "Over time the price of oil will rise as it becomes more expensive to pull out of the ground, and in the mean time the price of alternative energy should decrease. At some point alternative energy will cost less than oil, and petroleum as a source of fuel will be as obsolete as whale oil lamps."

            "And your grandchildren might still be alive to enjoy that.

          3. The problem is that alternative energy doesn't provide petrochemicals, and many processes in manufacturing, transport, etc., require oil. In fact, oil is needed to manufacture and ship components as well as develop infrastructure for alternative energy sources.

            Finally, all energy sources now have low energy returns.

      3. "Episiarch|12.5.14 @ 1:40PM|#

        Holy christ you are terrible at this, Tulpa. I can't even believe how pathetic you are."

        Epi...I'm impressed. How did you pick this turd off based on one post ?


    2. Try buying a buggy whip!

        1. I wonder how many of those are sold for the purpose of kink?

          1. All of them. Duh.

          2. Even when a horse is involved

            1. Oh-h-h-h Wilbur!

  3. This is due in large part to the recent period of sustained high prices that encouraged drivers to buy more energy-efficient vehicles and to conserve the amount of fuel they burned.

    Naah, in the U.S. this is due in large part to brain-dead CAFE government-set fuel economy standards forcing auto manufacturers to spend money on fuel-efficiency measures that won't repay the cost over the lifetime of the car. Basically, the government is ordering us to ignore price signals about the optimum level of fuel efficiency.

    1. Is it possible to customize your car to remove those CAFE standards and get back the power and other good stuff that was sacrificed for them?

      1. To some extent, yes. Automakers build engines that are more powerful than they actually allow them to run. They "throttle them" with the programming on the car's ECU.

        I've rechipped both our cars. They pick up some juice, and the chip can be custom tuned.

        1. Thank you! Damn I love this place sometimes.

          1. Technically, CAFE standards aren't a specific thing done to a car, they are a bureaucratic dictate to car manufacturers to make their entire fleet average a certain MPG goal, or else pay a tax.

            And, yes, any hotrodder can tell you that there are things you can do to any car to make it more powerful and better performing that will result in lower fuel economy: bumping up engine output, swapping out engines entirely, putting on wider, stickier tires, etc.

            Or simply push on the accelerator way harder than they do during fuel economy tests at the EPA or whoever tests this stuff.

      2. Lower gear ratios #1
        Looking at the newer cars coming out its going to take forced induction or engine swaps

        1. The trend for new performance cars is moving toward forced induction. Even Porsche is making the move. Eventually they will sell a turbo flat four Boxster/Cayman.

          1. The trend for new performance cars is moving toward forced induction.

            What I find hilarious is that Turbos only get you marginal if any fuel savings. Ford calls their Turbo V6 the "Ecoboost" because it has the horsepower of a V8 and the rated gas mileage of a V6. The problem is that as soon as you put "v8" demand on that Ecoboost, you are getting V8 mileage. Sure, you could get better mileage by driving like grandma, but my previous ford hardly ever got better than 18mpg with highway driving.

            FWIW, I am a fan of the move towards forced induction. It is much better at altitude. I test drove the lexus gs 350 with it's naturally aspirated v6. It is rated at 305 hp, compared to the A6 3.0l supercharged at around the same. At colorado altitude, the Audi was so much zippier, it was crazy. Back in the day people didn't like Turbos because of the narrow power bands, but today's dual or variable aperture systems seem to make up for that greatly.

            1. I live at sea level, so NA for me. Porsche flat 6...

            2. I've got the turbo Cobalt SS.

              It's faster than the V8 mustang from that year, but I can get better than 30 MPG out on the highway. I usually get about 24, because I'm not on the highway, and I drive like a maniac.

              The Ford bigger Ecoboost vehicles are tuned more for performance than economy, but they get pretty good mileage for their output.

        2. What's a forced induction?

          1. forcing the air into the cylinder head by either turbo charging (exhaust gases drive a one side of a two sided impeller which means the other side compresses the intake air) or super charging which is usually a belt driven device that forces air into the intake system. Compressed air + gas = more powah.

          2. Turbo. Most engines either just use an air dam to get some pressure into the engine (natural aspiration) or they run a turbine compressor to get higher pressure air into the cylinder (forced induction).

          3. Cytotoxic must be a girl who rides the bus

            1. Shut up! I'm a MAN who rides the bus.

          4. The simplest defiinition is any means of mechanically forcing additional air into an engine to increase it's volumetric efficiency.

            Another benefit of forced induction, especially in diesels, is that it aids in scavenging the cylinder (forcing out the dirty exhaust).

            1. Its all about cylinder pressure.

      3. Forced induction engines are easier to "chip"

      4. Actually, while CAFE standards have TENDED to increase overall efficiency of cars, the bigger effect is to decrease the options you have for available cars. Because CAFE standards say "Your average FLEET fuel economy must be X", companies achieve this goal partly by eliminating the middle ground and lower end. The net result is that you often have to settle for a pretty underpowered (but efficient) engine or pay a LOT for the top line engine, rather than having a choice of engines in between.

        For example, the 2010 Genesis had a 3.8l 6 cylinder, a beefier 4.6l 6 and then their 5.0l 8 cyl. Today you can only get the 3.8 and 5.0.

        Likewise, in 2010, you could get an Audi A6 with a 3.2l V6, 3.0 Supercharged, or 4.2L V8. They have since dropped that to a 2.0l Turbo 4 cyl and the 3.0l Supercharged.

        So it is pretty hard to improve the performance of your car if your engine was neutered from the beginning.

        1. I hope someday soon we'll make custom-make cars in a decentralized manner.

        2. CAFE standards demand for aerodynamic efficiency have totally destroyed style in design of all but the exotics.

          1. demand for aerodynamic efficiency have totally destroyed style in design

            I disagree, aerodynamics have made vehicles prettier, it's just that the other competing requirements (safety, efficient use of space) drive engineers into a very small region of flexibility.

            1. His point is that they all tend to look alike.

  4. Great piece Ron, nice detail.

    I've seen estimates of Saudi production as low as $2/bbl.

    Peak oil now looks to be maybe 50-100 years off.

    I suspect demand from China is not increasing as fast as was thought a few years ago. They're pretty close to the limits of the economic growth that can be accomplished under a Communist regime.

    1. The economic growth in Mainland China was due to relaxing restrictions on economic activity. If you're at Cultural Revolution levels of repression and economic activity, even a slight easing of those government controls can result in explosive growth, even if the productivity per citizen is still very low compared to the U.S.

      Economic growth in China could explode again if the commies loosen up more and allow more entrepreneurship.

      1. I don't know. I've seen some estimates that off-book non-performing loans are several trillion dollars. Now, as long as they needed to essentially destroy some of their cash reserves to keep their currency pegged to ours, they could afford to write these off. At some point, though their system is going to be all bad paper.

        1. China appears to be undergoing some much-needed loosening of capital markets ex the Shanghai-Hong Kong direct investment link up but they are too slow because they don't want to bite the bullet of writing down debts.

    2. But,the Saudi government needs around 90$ to pay all the welfare to keep their 'subjects' happy,sort of.Their dipping into cash reserves to do it now.Most OPEC countries do not have this luxury ,and Russia I understand has to spend their gold reserves. as the ruble free falls and the economy goes into free fall.Couldn't happen to a better bunch

      1. This. The whole " low oil price" thingy we a re seeing right now is OPEC refusing to lower it production to keep prices up because they are such poorly run ecenomies that they have to subsidise everything to stay in power.

        They are trying to bust the independent frackers in th US who are, for the most part, highly leveraged small businesses.

        Oil will be back to $80 by the end of the 2nd quater in 2015. That is the desired level by the US and the Saudis. Opec and Russia need it to be over $110 to $120 to keep their hold on power.

    3. The cost estimates in that Reuters link, if accurate, are a bit deceptive. Whatever their costs, Russia was budgeting on oil going for $100/barrel. Iran needs $140/barrel to balance its budget. Venezuela needs $150/barrel.

      Saudi Arabia may be targeting Iran (and maybe Russia?) as much as they are targeting U.S. fracking.

      1. Again. This.

    4. "Peak oil now looks to be maybe 50-100 years off."

      Which, given the average margin of error of historic 'peak oil' estimates, means "Never"

      There was a wonderful article which i can no longer find which showed the sequence of 'expert' assessments by the USGS, EIA, etc. going back 100 years. It was hilarious.

      Basically,despite the fact that proven-reserve estimates have increased exponentially, the panic about inevitable Doom has been perpetually unaffected

      In 1874, the state geologist of Pennsylvania, the nation's leading oil- producing state, estimated that only enough U.S. oil remained to keep the nation's kerosene lamps burning for four years.

      A 1998 Scientific American article entitled "The End of Cheap Oil" predicted that world oil production would peak in 2002 and warned that "what our society does face, and soon, is the end of the abundant and cheap oil on which all industrial nations depend."

      Hint: they were roughly as correct as the first estimate.

      also = Hi Dave. Haven't seen you in a few years.

      1. Guys like Erhlich and Hansen are the wrongest people on the planet.

        1. "Guys like Erhlich and Hansen are the wrongest people on the planet."

          Well, not really. theat distinction belongs to the millions who bought their books and believed their BS.

          Those guys make bank. That can't be too wrong. They were right to say what they said. It's their believers who are wrong.,

      2. Did you see you got named as Welch's favorite commentor on the AMA?

        1. The NYC ticker-tape parade is being scheduled as soon as the Eric Garner protestors disperse

          1. That and a fiver will buy you a beer in most bars.

        2. ?

          1. The reddit "Ask Me Anything" segment. Rastonbot asked who their favorite commentator was.

            1. Roger

      3. "e.g.
        In 1874, the state geologist of Pennsylvania, the nation's leading oil- producing state, estimated that only enough U.S. oil remained to keep the nation's kerosene lamps burning for four years."

        Every one if the idjits making these predictions ignores the fact that from pure business sense, no company is going to prospect beyond a time threshold they see as 'not reliable'.
        When oil started to replace other forms, which business would bother to prospect beyond 4-5 years? Maybe people wouldn't give up coal; all the infrastructure was in place.
        Now, why bother prospecting beyond 10 years or so? Maybe Lockheed really does have a handle on fusion.

    5. Conventional production peaked in 2005.

      In terms of population, per capita global production peaked back in 1979.

      Oil consumption outside the U.S., EU, and Japan had been increasing and offsetting demand destruction in industrialized countries since 2005.

      China is not the only country that requires more resources. There's also India and many emerging markets.

    1. Interesting how rape apologists think that if they can "discredit" one rape story, that means no other rape stories can be true, either.

      Amanda is doing what she can to reinforce the old stereotype that women are not logical.

    2. What I don't get is if rape apologists are so sure rapes are hoaxes, why oppose investigating them and getting out that fact?

      "I am totally puzzled by this straw man I have constructed."

      1. Amanda seems to believe that you can't possibly believe that some rapes are hoaxes. You can either believe that every single rape is a hoax, or that nobody ever falsely accuses someone of rape. But not that most rape accusations are real, but some are not.

        She also seems to be confusing calling for an investigation of the UVA story with being opposed to investigating the UVA story.

    3. Holy fuck, why subject yourself to the that scattershot collection of fallacies, strawmen, and general derpiness.

      It made my eyes burn and my stomach upset.

    4. You can see what this farce has in common with the recent police shootings (including the Dorner and Trayvon Martin case).

      The left WANTS and NEEDS there to be a rape crisis. If they find a rape victim with a particularly compelling story, their first instinct is to rally around the victim or make a larger statement about society's ills, even before the facts are known.

      If you question the narrative (even if it's outlandish), then you're being coldly and needlessly "objective" while neglecting the well being victim or ignoring the ongoing rape mania.

      Their equivalency game is disturbing to me. There are probably more murders than people falsely accused of murder. But if I'm accused of murder, why I would care about that? "I" didn't commit any murder, and I don't deserve to be scrutinized or punished.

      It's such a simple concept. Why is it so difficult?

  5. OT. That was quick.

    Rolling Stone retracts UVA rape story.

    Rolling Stone magazine retracted Friday its controversial story about an alleged gang rape at the University of Virginia after it discovered new information that discredited the piece, a shocking retreat coming merely days after author Sabrina Rubin Erdely defended the reporting

    1. Here's wishing Robby S. a boozy, and quite enjoyable, Friday evening.

    2. Oh boy, I hope you get a h/t on the article about this... the jezzie heads exploding will make it look like the 4th of July.

  6. The usual oil patch boom and bust. Here's how this will go:

    Many/most planned fracking projects will be shelved, for now.

    Any completed or near-completed wells will go into or stay in production. A few may be capped, but very few.

    Many overleveraged oil companies will lose their bet that oil prices would remain high, and go out of business.

    Technological development of fracking will continue, although likely at a slower pace.

    As the price rises, fracking will pick up as the increased price exceeds the cost of bringing a well online.

    Oil prices are now effectively soft-capped by the cost of the next significant tranche of dormant fracked projects.

    This is an old story in the oil patch.

    1. The easing of labour tightness will not be a bad thing for many operations.

    2. Although it does appear that the green lights are staying on for many much-needed capital improvements and additions, especially on the natural gas side. (ethylene plants, pumping and shipping terminals).

    3. I live in fracking-boom country out here in Colorado, and I have observed some pretty interesting stuff.

      First of all, the oil companies are fracking as quickly as possible- you can't go up I-25 without seeing at least 50 drilling operations between Denver and Fort Collins- and that's just from the main interstate. I think they are going to keep drilling for awhile, even if it is done in the red. My bet is that they realize even if they take a break, environmentalists will not. They probably only have 5 years before environuts shut them down.

      Second, there is a HUGE amount of efficiency to be gained here. Right now, many wells just burn off Natural Gas and pump the oil. As the price of oil goes down or drilling becomes economically or legislatively un-feasible, they will start capturing that nat-gas to improve margins. On top of this, there are so many wells all over the place that they can spend decades improving their distribution infrastructure to recoup efficiency losses during transportation.

      Third, this is truly goosing the economy. The nat-gas utility is so overwhelmed by growth that they are competing with the oil companies to get pipe-welders who can increase the distribution of gas to all the sub-divisions popping up around here. It's nuts.

      1. They probably only have 5 years before environuts shut them down.

        I highly doubt that. Obama was their best shot and he let the cat out of the bag. The economy will go back into recession and that tends to sharpen peoples' focus. Environmentalists get sidelined in those conditions.

        1. I hope you are right, but it won't be done at the federal level. It will be done at the state. And the environuts are going er, nuts here. Soros pours tons of money into Colorado to turn it blue. Those groups are helping the environuts go from county to county, attempting to shut down fracking.

          1. Colorado is purplish but I understand your concern.

    4. The catch is that the global economy can only afford oil at a certain price range, and oil companies have no choice but to sell at the price that the market will accept. They can choose to cut production, but their on-going costs continue.

  7. I have heard a theory floated around that the currently accepted paradigm of fossil fuel genesis-living stuff dies and is compressed and heated into oil and gas-might be wrong. Some say that water and carbonate are dragged down into the mantle and then heated and compressed there into oil and gas. I am not saying it's right but it's intriguing because it implies our energy in fossil fuels is born of the radioactive decay of the Earth rather than the fusion of the Sun, and it is probably FAR more abundant than we thought.

    1. There are reports that some oil fields have sort of replenished themselves as well. Which seems more likely if oil really is manufactured geologically, rather than is a fossil fuel.

      Still, the consensus (for what that's worth) still is that oil and natgas are fossil fuels.

      1. Only Prog "science" is by consensus...Post Modern gibberish.

        1. I think he means that the best theory that fits the most known facts still point to anaerobic decomposition of (mostly) plant matter. It is important to point out that there are some data that don't fit in the current prevailing theory but that a single mechanism is not a requirement. (They could both be true in different places.)

    2. That theory has been floating around for some time now.

      Mainly that oil isn't organic after all.

    3. I suspect the abiogenic theory is true because

      A) In a way it sort of makes more sense than the biogenic theory. I mean, the latter does sound kind of stupid when you say it to yourself. It's just initially believable because so much of science involves counter-intuitive, convoluted mechanisms in nature. There are of course specific issues it's better at explaining, like self-re-filling oil reserves (but again, this is only a sort of. They could just be refilling from nearby oil deposits)

      B) Because it would make us look stupid to future people, which is always what happens in history. Whatever the hell people are worried about or think is the way something happens always ends up being completely stupid and wrong.

      C) It would mean the lefties are wrong, and they usually are in fact colossally wrong about everything.

  8. I initially read that t-shirt as saying, "I *heart* fucking.

    Yeah, I've got sex on the brain.

    1. It's a BSG shirt?

  9. Belief that "peak oil" is a thing is rank economic illiteracy, failure to understand concepts like supply and demand, economies of scale, and substitute goods.

    In my experience the peakniks are so emotionally invested in their belief in impending doom and gloom that any evidence to the contrary only makes them stamp their feet and wail and moan even louder. The fracking boom is a case in point.

    I'm not exactly sure what the peakniks want us to do since according to them, we're all dooomed and billions are going to starve. Don sackcloth and ashes and hold "repent" signs?

    1. Actually, peak oil has nothing to do with economics, as it is based on physics. That is, given limited amounts of oil, then production will obviously reach a peak.

      The effects of peak oil are connected to economics, but increased credit creation can only do so much.

  10. $10/42 v $35/42 for oil is $10/19($0.52/gal) or $35/19($1.84/gal) gasoline.
    Even using "fracking" the consumer price of gasoline is headed towards 2/3 the price of milk. http://www.walmart.com/ip/Grea.....l/10450115 3.65 X 2 = 7.30 / 3 = $2.43 Looks like the price will average very close to $2.40.gal by the end of 2015 or lower with the pipeline?

  11. My best friend's mother-in-law makes $85 /hour on the internet . She has been out of work for 5 months but last month her pay was $16453 just working on the internet for a few hours.
    Visit this website ????? http://www.jobsfish.com

  12. here's a serious question. Why the hell are we still using the same damned internal combustion engine? Why the hell can't they use the double-linkage Atkinson cycle? I always read that there's "issues with vibration and balance", but are those really not solvable problems? Can't they mount the engine on vibrational dampers or something? Or just add more cylinders but facing the other way to cancel out the vibration?

    Or better yet a ROATRY engine that has a much larger expansion stroke than compression stroke. There are like a million obscure engine designs out there by independent inventors. I just can't believe there isn't some way to make an exaggerated (and thus extra-efficient) Atkinson cycle engine that gets over the balance/vibration problem.

    1. Efficiency, manufacturability, operational reliability, cost. You need all four.

      So far no other engine can do it.

  13. I just got paid $ 7500 working off my computer this month. And if you think that's cool, my divorced friend has twin toddlers and made over $ 8 k her first month. It feels so good making so much money when other people have to work for so much less. This is what I do,,


    ??????? http://WWW.PAYFLAME.COM

  14. Production increased because unconventional production (such as shale oil) was added. Conventional production peaked in 2005, as explained by the IEA.

    The oil price is going down not because of major increases in production but because demand is dropping for Europe and China. The cause is economic crisis, which is why markets for metals, bonds, etc., are also becoming volatile.

    Given that, the current situation may be seen in light of what happened only a few years ago, when prices also dropped.

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