Thursday, April 7, 2011

Well, well, well...

RBOB gasoline, that's the wholesale trading vehicle in the harbor, is $3.17 as I write this. Heating Oil in the harbor is $3.18. And this is the "Shoulder Period"!

Forget WTI. Products, such as gasoline and heating oil, far more likely trade off of Brent, as "products" are exported from Europe to the U.S. and delivered along the coast. Brent is $122 and front month WTI is just over $109.  I would have thought we would have seen some demand destruction at this level... but I can't find any evidence of that. So I am still Long Oil.

How much higher will Oil go before it cinches down hard on demand? I don't know... I didn't think we would retest the 2008 highs just yet, but I am having a change of heart. Oil prices are not terribly elastic, and Libya's missing 1.2 million of exports has driven the market $25 higher (and that's not really true... the contango was very, very steep and Libya flattened it quite a bit... in reality Libya probably moved Oil $12 to $15 over the entire curve).

It is my opinion that there is no way to stop the demands of the Arab people. Ergo, there is likely more short term upside to Oil. At some point the U.S. and the West will have to go through another brutal contraction in order to ration Oil by price.

Peak Oil, with all its effects and consequences, is here.

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Peak Oil is here, and you can still enjoy your life!

My wife and I are planning to spend next winter in South or Central America. We will surf, hike volcanoes, fish, ride horses... for about 1/4 of what many of my friends in Boca Raton consider an acceptable monthly family budget.

Being frugal in the extreme has its rewards. Don't miss them. It does not have to be travel (I can work from anywhere), but to be rich in time is to be truly rich. Rich in money will end your life early - just look at Matt Simmons and Bruce Wasserstein, 2 very wealthy investment bankers that spent 1 too many days at the office and dropped dead in their early 60'swith ooddles of money in the bank - if you have work too hard for it.

Yes, you gotta work and save money, but you have to enjoy yourself and keep your health. Clear the decks of every repeating expense (monthly bills) and work to keep them low. You will love yourself for doing it.

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Its not often that I find myself on the same side as Slate magazine...

But WTF??!!  The Right on the SCOTUS are completely out of bounds. As former prosecutors and government attorneys these Justices are far too sympathetic to prosecutors and other government thugs.

I am sickened by some of their recent decisions. We, as a people, are getting meaner, and meaner, and meaner... so too, it appears are the individuals that are sworn to protect the American People from unconstitutional and oppressive government.

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I know that may civil libertarians are bemoaning the fact that our cell phones are tracking our every move. Here is another way of looking at it:

Remember the Duke Lacrosse players falsely accused of rape (and, BTW, their accuser has just been arrested for attempted murder for stabbing her boyfriend... and this is only her most recent arrest)? The only reason the guys are not buried alive in prison IS THEIR CELL PHONES. Without the location data provided by their phones these guys would definitely have gone to trial, at great personal expense in stress and treasure, and at great risk of false conviction (partly because of that anger I spoke of earlier).  Yes, your cell phone is tracking you.... it is also giving you the perfect alibi should you come under attack from a false accusation.

That I even feel in any way positive about being tracked says volumes about my respect and confidence in our law enforcement and justice system.

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Climate change is real. If you are a denier, its ok to come around. The data is simply overwhelming.  The good news is that there is not enough Oil nor Coal to accomplish the projected damage... and there is nothing to be done with what has been done. Still, it is what it is.

23 comments:

Anonymous said...

How long will it be until the Russians figure out that their giant bubble of NG is worth 5X turned into diesel fuel? Getting the timing of that right can make you filthy rich.

Regards,

Coal Guy

oOOo said...

Yea, time rich is in many ways better than being cash rich, as long as you can pay your bills and not starve. In 2 weeks, I'm taking off 4 months to look after my 10 month old and to travel for a month with my wife before she goes back to work as a doctor. Then going part time the rest of the year so I can look after the wee man and take him to kindergarden. Will have less money but I am quite looking forward to it. Life is too short to live it on your own terms if you can.

oOOo said...

Sorry, typo, "Life is too short to NOT live it on your own terms".

Anonymous said...

Jeffers,

First time I have ever called you on a logical fallacy, but here I go. You say that if you don't believe in climate change you are a denier. The problem is that it is not an either or answer. This is called the fallacy of false choices and you are one of the best I have read in identifying them in advocacy groups. There are 4 choices to the global warming issues.

First: there is no global warming.

Second: There is global warming.

Third: Is that there is global warming, but it is not anthropogenic, meaning mankind has no or limited hand in it. Humans create 1/90 of CO2 emissions, which represent less than 26% of greenhouse effect.

Dextred

Greg T. Jeffers said...

Ha!

Very good, Dex.

This is a complicated issue, one that I am not terribly well educated in. So I must make a judgment by proxy, if you will.

My judgement (by proxy) is that we are experiencing anthropogenic climate change. My judgement (by induction) is that there is not enough fossil fuels to complete the projections.

Stephen B. said...

I've been gardening since I was a kid in New England and it's *easy* to see that the climate has been warming in terms of what week Macintosh apples bloom, etc. After 40+ years, I can separate out the occasional cool winter and still see a trend.

This doesn't mean that world wide temps are going up, but any long-time grower in New England, as I say, can see what's going on at least here.

As to whether it's man-made, natural, or a combination, I cannot say, but regardless, the warming is certainly more than a urban heat islanding skewing the measurements regardless of what the driving mechanism(s) is/are.

PioneerPreppy said...

While temperature increases and expanded growing seasons have long been worthy of historical note. A few years ago they were all the rage for explaining European expansion and social progress.

Pretty basic stuff I know but even outside of Europe there were periods where the Northwest passage had completely opened as well. So these warming and cooling periods are pretty common and well documented.

I think the more widespread and wholesale usage of water more than likely effects climate change more than Co2 output. But what do I know.

Like Greg I just hope the oil runs out before a number of bad situations get worse. Not just climate change.

Anonymous said...

The US political rightwing has long been hostile to all types of science- especially climate science. The Foxnews spin is that climate scientists are leftwing political scammers who want to force socialism on the US and get a bunch of grant money in the process.

Sorry but that spin is nuts. Scientists are not political players. They hate politics and politicians. And they are not good at the political game. It would be virtually impossible to corral 2,000 of the world's top climate scientists into collaborating in a joint global warming scam- especially across international borders.

The process of peer review means that all scientific theories must go before a panel of peers who try to question/destroy any new proposed theories. Any scientist who tries to make up data or undermine the integrity of science gets torn apart like a hunk of beef in a shark tank. And one of the best ways to establish oneself in science is to conclusively debunk a false or erroneous theory.

Scientists by nature are very conservative about making big public pronouncements unless they have their conclusions well documented. Usually they will understate the impact of their conclusions instead of exagerrating. In fact, most climate scientists are much more pessimistic about the progression of climate change than they acknowledge publicly.

Best, Marshall

Anonymous said...

It seems to me that global warming on Mars points to an extraterrestrial cause for global warming. The sun is the most obvious cause; however there are many other factors in play. Cosmic rays influencing cloud formation for instance. That is not to say that we are not contributing, just that I don’t think that we are the primary causal agent; our actions aren’t as important as we like to think. There have been periods of both snowball earth and greenhouse earth climates in the past and we didn’t cause that. But then again, Anachronisms are literally everywhere so maybe Plato was right about Atlantis being an earlier more advanced civilization.

1 of 2

Anonymous said...

My, the comments have gotten incredibly picky about what they will post.

Also, I just recalled reading something a year or two ago about long hibernation cycle microorganisms in the upper atmosphere. The theory was they hibernated for 250 million years or so while they floated on the solar wind from place to place, so they could be the culprits. However very little is known about them and I only saw one paper on them. I think it was either in Science or Nature a year or two ago. Also keep in mind scientific research isn’t what it used to be. Even research published in top journals have experiments that can only be replicated around 50% of the time now. There is a relentless pressure to achieve positive results to make a career that has killed disinterested science. So this could berry well be bunk as well.

Best,
Dan

Anonymous said...

Also I am not so sure about oil being done, just our current knowledge of it, and where to find it. Abiogenic hydrocarbons are currently thought to hogwash in the realm of junk science delusions. However the largest known deposits of hydrocarbons in the universe are on Saturn’s moon Titan. To me that suggests either NASA totally botched the composition analysis, or abiogenic hydrocarbon production, or extraterrestrial life. I think NASA has reached the same conclusion via a few different methods so it is probably sound. Either of the other two are absolutely stupefying in their implications. It’s worth noting that nuclear fission was once ridiculed to the same degree. It was initially seen as a rebirth of alchemy along with the whole transmutation of lead into gold hooey. Heck even peak oil was thought to be bunk not too long ago.

Best,
Dan

Anonymous said...

9:50 was origanly posted before 9:47 and was 2 of 2

Stephen B. said...

Abiotic Oil?

Maybe the oil we use is abiotic. Maybe it's sedimentary. It actually doesn't matter because the oil reservoirs aren't refilling in any time frame useful to humanity, regardless of the reservoir source. If the situation where otherwise, oil fields wouldn't be drying up which, of course, is exactly what the fields ARE doing.

Then too, what created liquid hydrocarbons on some other planet or moon isn't necessarily *the* mechanism of creation of liquid hydrocarbons on every planet that has said hydrocarbons.

Anonymous said...

It’s obvious that the oilfields are being depleted. However, you look for where you expect it to be. A different understanding of how oil is formed will lead to a different expectation of where you should look for it. That could make all the difference. At any rate, there is something that doesn’t fit the model so the model is suspect. Empirical evidence always trumps theory. It is also worth noting that it might not amount to a hill of beans. The difference between a Newtonian understanding of gravity and relativity, for instance. Relativity is more correct but the Newtonian understanding is good enough to do just about anything you would want to do.

Best,
Dan

Donal Lang said...

Greg - I see few signs of real demand destruction anywhere. I suspect it doesn't come from daily consumer choices, it comes from entire economies going bust.

You're right about the Arab world demand; whatever happens next the Export Land Model will go into overdrive as they spend their own oil.

Enjoy your holiday!

Dex
Your concept is false. Here's an analogy; suppose you drive 100 miles to see a nice view and, when you get there, you park in front of the cliff to see the panorama. That last 100 miles, the odd 20 feet doesn't matter so much, but the next 20' could kill you!

Regarding global warming, the fact that we've been taken carbon which has been safely buried for a million years from a time when the climate was very different (forests on the South Pole) and released it back into the atmosphere, would indicate to any sane person that there has to be an effect. We're just arguing about how long that takes to happen.

Bottom line though - no-one is really interested in changing the ways of the human world to save the planet for the next generation, so when the news hit (2 years ago) that the north polar icecap would be gone in the summer within 10 years, did it cause a change of mind? No, it caused a rush to claim territorial rights to drill for more oil!

We're fucked, and the best we can do is apologise to our children and buy a houseboat!

Anonymous said...

Marshall,

While I am not a global warming denier I do take issue with your position that scientists are not political.

Nearly 75% of all science funding comes from the government. You can bet your azz they know how to get their funding. And its not by coming to conclusions that differ from the government line. Now there are scientists who just want to get paid and there are those who want to seek the truth just like in any industry. But the ones who want to get paid are the ones who get the funding.

Same is true when it comes to the private sector science. They want to get paid and they don't keep getting paid if their findings don't match their employers expectations. Why else would we laugh at the scientific findings made by the oil company's scientists? You honestly think that government scientists are any different???

Do not for one second think science is this ultra pure profession full of morally strong and ethical people. It is no different then anything else and its people are raised in the same society the rest of us are.

There is no utopia..

ChrisInGa

Stephen B. said...

On abiotic oil, Dan,

Some exploration attempts have been made for abiotic oil. In particular, there have been some Russian attempts. They've all come up empty.

Abiotic oil theory has been around at least since Thomas Gold was pushing it in the early 1980s. Proponents have had plenty of time to find oil inspired by this theory.

They have nothing to show.

Anonymous said...

Marshall,

The AGW thing proved they don't really believe in peer review. They destroyed the original copies of Data so no one could recreate the bullshit the computers spit out. Anyways if all the people doing the work have a predisposed idea, they tend to find information that supports that said bias. We even have a nifty little name called "Confirmation Bias" for it. There is just too much big money to be made on the whole thing to make me confident in it. There is an incestuous relationship nbetween the universities and the corrupt governments climate change nazis to implement such a destructive economic policy. If these were sceinetist hired by tobacco companies everyone would rightly call bullshit.

Plus even if the U.S cuts carbon emissions China will just use the excess coal, Oil and Natural Gas that we don’t. I think the only thing Climate change science hurts is the U.S. and European economies as we are the only one ignorant enough to let are economy rot because of a unproven hypothesis.

It is funny everyone forgets we were setting off nuclear weapons in the Ozone for like 30 yrs along with the French, British and Russians. Could that have actually been the cause of the Ozone hole and increased temps? They tell us we are using too much f**king hairspray and they are setting of thermo-nuclear devices.

Dextred

Anonymous said...

Donal,

The oceans are not going to rise that much. :) Too much hype in everything these days. We will all live and die, that is about it. The Earth has been around a long time. The whole thing was tropical when the dinosaurs were here and there was still a land mass. We will be okay!!!

Anonymous said...

Remember the scare about power lines causing leukemia? The "scientist" that released that fessed up later that he had fudged the data. How many $Billions of damage did he do to the property values of home owners near transmission lines?

Science or the resemblance to science is used today to support the credibility of political or business initiatives. Science is becoming less and less about discovering the true nature of the universe. It is becoming more and more about propaganda and fear mongering to achieve a particular goal.

Always, if you hear anything about scientific research, due diligence requires that you get the original peer reviewed paper. Marketers and the media spin the results to get a desired response from their audience, rather than to educate their audience. The actual conclusions of the study and what appears about it on the news are generally quite different. Just as important, understand who funded the research and what their goals might be. Then, it is up to you to decide how credible it is. Unfortunately scientific research is suffering the same fate as newd delivered by the main stream media. Jeffers' theory about the appearance of various articles in the news applies equally to "scientific research." It is a sad state of affairs.

Regards,

Coal Guy

Anonymous said...

Academic bias & biotech failures or 50% of top tier research is junk.

Stephen,
One can be wildly successful on false ideals or go bankrupt betting on the right ones. Life isn’t always fair. Also, I didn’t say that abiotic oil was a certainty just that it deserves a new look in light of new evidence. I happen to think it is a much simpler explanation than extraterrestrial life. Ya know, Occam's razor and all that...

Best,
Dan

Peak Oil Prepper said...

Whether there is any truth or not to abiotic oil I think it's probably clear that it's not going to happen quickly enough to make much of a difference.

Regards,

POP

Peak Oil Prepper said...

Being able to live on your own terms and doing what you really want is really one of the sweetest things in life. I walked away from a relatively lucrative situation a few years ago to become a homesteader and regularly spend time each year touring the country on my bicycle. My only regret is that I didn't do it sooner.

Regards,

POP