Guest Post by Jim Kunstler
Don’t hold your breath waiting for a coherent pre-election debate about the mother-of-all-issues facing this republic, namely, that we can’t afford the living arrangements Americans think of as “normal” anymore. This quandary has stalked us since the millennium turned. It thunders through all the activities of daily life, and the tensions emanating from it are so agonizing and difficult to face that our politics have deflected off into the kind of hysteria spawned by bad dreams.
As the great Wendell Berry pointed out years ago, this is about the nation’s home economics: energy and resources in, production out, surplus wealth saved. America had a brush with reality in 2008 when all the distortions of our home economics came together and whapped the country between the eyes with a two-by-four. Our energy-in was faltering. US oil production had fallen to a new low of under 4 million barrels a day and we were importing around 15 million. We papered over the problem with borrowed money in ever-larger amounts. This dynamic prompted ever riskier work-arounds on Wall Street, especially “innovations” in securitized debt, which invited criminal shenanigans. It blew up badly. Wealth vaporized. Industries collapsed. Homes and jobs were lost. Lives ruined.
The fairy-tale narrative since then is that technology rode to the rescue. The shale oil miracle “solved” the energy-in problem. Sure seems like it. But lots of things aren’t what they seem to be. Shale oil was a neat stunt. Turns out you can produce a helluva lot of it by paying more to pull it out the ground than you get from selling it. You can goose the process nicely by paying for it with borrowed money. And so it has gone. America now produces a new record of over 12 million barrels a day, and most of the companies doing it can’t make a red cent. And since it is increasingly obvious that they won’t ever pay back the money they borrowed before, they are unlikely to get new loans to continue their profitless operations.
Notice how rapidly shale oil production shot up after 2008. It’s worth a peek at analyst Steve St. Angelo’s latest essay on shale oil company debt (Finance Costs Are Killing the Shale Industry) to understand just how this stunt worked. As blogger Tim Morgan at Surplus Energy Economics points out, the dis-economics of energy production — and shale oil in particular — are stealthily damaging everyday life: “…the world economy is already suffering from these effects, and these have prompted the adoption of successively riskier forms of financial manipulation in a failed effort to sustain economic ‘normality.’”
That tells you exactly why the stock markets are at record highs now, along with US oil production. What the nation doesn’t get is that the shale oil industry is sure to collapse, and at least as rapidly as it shot up. So, expect the stock markets to collapse with it, along with tremendous collateral damage to all the other instruments that represent “money” — bonds, currencies, and their derivatives. It will make the 2008 episode look like a mere overturned poker table when it happens. In the meantime, many of the activities enabled by the oil industry are wrecking the planet, not just CO2 emissions, but the plastics and chemical industries especially. So, the oil quandary bites at both ends: damned if it quits on us and damned if it keeps going.
That’s the main issue of our time. We’re faced with the imminent and rather drastic re-organization of everyday life in America without oil. It should be reasonable to assume that the process will be disorderly, and the longer we ignore it, the more disorderly it will be. Granted, it is a tall order for politicians to talk about things this scary. The hard truth is that intelligent responses to this quandary would require heroic effort and painful change — and would probably be emotionally unacceptable to voters. It would entail the dismantling of suburbia and all of the activities associated with it, a severe shrinking of government at every level, the abandonment of most of our military playthings and overseas commitments, a wholesale overturning of Agri-Biz as currently practiced (along with a transition to smaller scale farming with a much higher percentage of the population working at it), and a stupefying aggregate loss of perceived wealth.
I’m describing events that go far beyond the common understanding of political revolution — though these discontinuities will surely produce political and social strife of a high order. This mega-issue and its spinoffs are what looms behind all the pitiful political comedy of the moment, especially the incendiary buffooneries of race and “gender.” Ponder this as you read the latest New York Times sponsored melodramas about “white supremacy” and the unfair pay in women’s soccer tournaments.
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He’s worth paying attention to although his projections will scare the shit out of you. He has a very interesting web site and his pod casts are well worth the time.
Far from being “fossil fuel”, hydrocarbons are not only plentiful but are being renewed by yet-unknown processes deep within the earth.
The term “fossil fuel” was coined in the 1950s when little was known about the processes by which oil is produced. Oil is “abiotic” in nature, as even depleted oil wells are “filling back up” from deep below the earth’s surface.
Oil interests are drilling wells at 5,000 feet, 10,000 feet, and 15,000 feet and deeper, and coming up with oil deposits way below the layers where “fossils” were known to exist.
As Russia gained much expertise in deep-well drilling and coming up with oil deposits far deeper than that of the level of “fossils”, abiotic oil at extreme depths was actually a Russian ‘state secret” for a long time.
Not only that, but there are planetary bodies in which hydrocarbons are naturally occurring (without fossils).
“Peak oil” and “fossil fuels” are discredited concepts that environmentalists and others are latching on to, in order to display their hatred of oil being a renewable resource as well as to push prices up.
Follow the money.
ha ha, you fell for the Russian propaganda, they think the oil is generated by the earth, in real time, that is the fairytale. it is generated by the earth, it just takes millions of years, a small “fact” omitted by the propagandists.
you might as well pin your hopes on mining gold from asteroids, another myth, pushed by the same scientist that push all the frauds on humanity.
Science is state propaganda, a good scientist is the one that writes great grant requests and gets funding. The rest of the time, he is sharpening pencils and drinking coffee.
Healthcare is nothing but greed based on fear of dying, we are all going to die, it is only a question of : length of time spent living, vs. dying, and amount of pain involved during each stage. You doctor knows this, somehow, most people don’t.
Not propaganda.
How do you explain oil deposits at depths too deep to hold “plant or animal remains”? Problem is, you can’t.
Hydrocarbons ARE migrating upward from the depths. Hydrocarbons are likely to be very plentiful throughout the universe and have already been observed on other celestial bodies (planets).
Are you a rabid “environmentalist” who does not want to face the TRUTH? Plentiful hydrocarbon deposits throw the whole misguided environmental movement into a tizzy as they don’t want to see cheap, plentiful energy.
Environmentalism is based on communism and has always been based on CONTROL.
Oil is abiotic but it doesnt change the fact that we suck over a cubic mile of it out of the ground each YEAR. It doesnt replenish that fast, or anywhere even close to that fast. If it did then obviously there would be massive oceans of the shit everywhere because we didnt touch the stuff for millions of years. Which means obviously it is going to peak. To say that such a basic concept is discredited is like saying you can keep charging credit cards and never expect to run out of credit. It is just mindblowing the stupidity that passes for an argument these days. It is a fact that we have exhausted the largest reserves. It is a fact that we are blowing through billions of tons of sand just to frack wells that ultimately produce only a few thousand barrels before they trickle out. We’ve already blown through the biggest shale deposits. From here on out its a million dollars to frack a new well and the well is only going to produce a few thousand barrels. At some point it becomes absolutely impossible to extract this oil at any cost even close to reasonable, even though there will literally be billions of barrels of it sitting in the ground.
Oil is constantly being replenished by yet unknown geologic processes. I am willing to bet that we will never run out of oil. As our exploration processes get increasingly more precise and detailed, we will continue to find new sources. Natural gas is increasingly being used to manufacture synthetic oils as we speak.
As I recently stated, “follow the money”…
Kunstler never has claimed we will “run out of oil.” Instead he says it’ll deplete and the cost of extracting it will be prohibitive. Did you even read the article. He says the whole shale oil ramp is a sham built of cheap credit. On that he’s 100% correct. Nice of the Fed to pump a bubble in the cost of SUV’s. Want a cheap vehicle, go buy a used sedan.
I believe the solution is to offer every citizen of Venezuela, a US green card. Once they all move here, then, by default, we own Venezuela, and their oil, and all our energy problems are solved.
Someone please pass this idea to Trump, I am sure he will mention it during the 2020 election cycle,
it is a win win, and he can then fire Pompeo and Walrus face.
I am invested in oil, natgas and pipelines. I operate under the idea that rational people who employ engineers, geologists and scientists would not be investing billions in new pipelines to and from places producing oil that is about to run out, and that somehow our favorite agrarian reformer knows all about it, yet they have no clue.
He has come a long way in a short time but he hasn’t “woke” to the idea that the energy restrictions and “the sky is falling” pushed by the Prog fooks are part of the societal control they covet.
I grew up in OK in the middle of oil country and have had many investments in the oil industry. One of my best was to buy BP, after Deepwater Horizon. Held it for a couple of years and made a very nice return. Fossil fuels will be with us for a very long time and I will continue making money off them, as I can.
Reminds me of what someone else said: A million lawyers or bankers or politicians aren’t going to save this country. A million farmers just might.
Moar Kuntsler doom porn. Who writes this stuff, Mr. Ed’s sister (AOC :-)?
Who’s On First.
https://www.youtube.com/watch?v=kTcRRaXV-fg