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peak beat team head 哪个是相同字母读音不同的?
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head 不同看看它们的发音就知道了peak [ pi:k ] beat [ bi:t ] team [ ti:m ] head [ hed ]
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扫描下载二维码‘Peak TV in America’: Is there really too much good scripted television?
Cinemax/FX/AMC/Lifetime/Netflix
When I wrote my
a few years ago, I feared that it was going to come across as whining from and for a very small and specific subset of the audience: #TVCriticProblems. But my fellow reviewers weren't the only ones who responded with some version of “Thank God someone finally said it!” It turns out many of you were feeling just as overwhelmed by the sheer amount of choice in the ever-expanding world of scripted television.
That expansion has only accelerated, and when FX CEO (and unofficial Mayor of Television) John Landgraf came to press tour earlier this month, he was armed with statistics showing that the number of original scripted shows in primetime across broadcast, cable, and various streaming services would top 400 by the end of this year. , you could devote each day of 2015 to watching all the episodes of a different comedy or drama and not have time to finish them all. Landgraf suggested we had reached “peak TV in America,” and that over the next few years, the bubble might not burst, but slowly deflate, because this number, and this rate of growth (nearly doubling the amount of original shows made just back in 2009) isn't sustainable.
Or is it? And outside of TV critics who are tearing what's left of their hair out at the thought of trying to stay current with it all, is this really a problem?
After all, Peak TV in America has led to not only an incredible amount of quality, but a diversity in both the kinds of quality shows and the kinds of people whose stories are being told. There's room in this current universe for the widescreen fantasy action of “Game of Thrones,” but also for the leisurely, incredibly intimate storytelling of “Rectify,” a show that surely wouldn't exist if every channel and service out there wasn't in an arms race to make or acquire as much original scripted content as possible. There are still the familiar white male antihero shows like “Better Call Saul” or “The Knick,” but also the diverse voices of “Orange Is the New Black,” “Transparent,” “Broad City,” and a lot more. Hell, there was a window this summer where the best show on TV may have been “UnREAL,” which is on Lifetime. Everyone is trying to get in on the act to create an addictive new series that will keep the channel in question essential in some way in an a la carte world.
Landgraf suggested that the abundance of good shows “often get in the way of the audience finding the great ones,” and on some level, that's likely the case. Landgraf's own “The Americans” is one of TV's very best series, and almost no one is watching it. Maybe in a TV landscape where excellence wasn't so taken for granted, it would stand out more.
On the other hand, the very fragmentation of the audience that inspired this particular gold rush has also earned renewals for shows like “The Americans,” “Rectify,” and “UnREAL” that would surely have been much shorter-lived under TV's old math. Unless
the last Great Show to be canceled early in its run while its creator still had stories to tell would be… HBO's “Enlightened” two years ago? (I liked “The Bridge,” which was more recent, but it never quite got to Great.) And even there, “Enlightened” lasted two seasons and ended in such a perfect place that future stories felt somewhat redundant. Even NBC was able to somehow give “Hannibal” three seasons, which will bring the creative team to the end of adapting “Red Dragon.” We're closing in on the fifth anniversary of the premiere of one of FX's best series ever, the private eye drama “Terriers,” which Landgraf canceled after only a year due to a while back, I asked him if he felt the show might have survived longer in these strange new atmospheric conditions, and while he said he didn't know for sure, the fact that it had become uncertain for him speaks to how much more nurturing an environment TV is at the moment.
How long can that environment sustain itself? That's unclear. The way the audience consumes television – and, in turn, the way TV shows make money – is changing faster than anyone can keep up. To a degree, this flooding of the marketplace with content is everyone's best guess on how to survive those changes, and eventually some outlet is going to recognize that there simply isn't enough cash to be had – whether in ad dollars, subscription fees, downloads, or anything else – to justify the existence of many of these shows.
Will that happen in the next couple of years, as Landgraf predicts? Maybe we'll see a bit of pruning here and there, but it feels like it'll take some drastic event – like a significant channel/service either going out of business, or at least getting out of producing its own originals – for anyone else to catch their breath and ask if this still makes fiscal sense.
There are some ephemeral downsides to living in Peak TV in America, but nothing that should require anyone to slow down and stop producing so much stuff. It's harder and harder to find points of conversation about the best shows, because our attention is scattered across so many of them, but that genie's been out of that bottle at least since so many past and present series became available for streaming. (As I type this, someone is just beginning to watch “The Wire” for the very first time and would really rather you not tell her what happens to Bubbles.) It makes my job harder – not just for my own edification, but for keeping my readers aware of the great and potentially great new shows that are out there – but in a way that's difficult to complain too much about. Yes, I'd like to have time to catch up on “Humans,” “Orphan Black,” “Vikings” , and the thought of narrowing down the best shows of this year into a top 10 list makes me cry like I just watched an episode of “Friday Night Lights,” but if this isn't the best time in TV history to be a reviewer of it, I don't know what is.
There have been years on this beat where I've had to put some pretty sketchy shows in my top 10, and where I've struggled at various times of that year when someone asked me to recommend something good, or preferably great, to watch. Now, if I freeze on that question, it's simply because there are so many options – which, again, include easy access to most of the best shows ever made (writes the man who spent much of his Sunday watching old “Columbo” episodes on Netflix) as well as our current bounty – that it's hard to isolate one or two.
Maybe the bubble slowly leaks. Maybe it bursts altogether. But I think back to the start of the reality TV boom, and all the doomsday warnings about how “Survivor” and “The Bachelor” were going to put scripted TV out of business, and I laugh. And I can envision a future where the economics have flipped again, many of these players have gotten out of the game, and suddenly I'm sitting around a table at press tour with a bunch of critics sadly lamenting how good we had it back when it was Peak TV in America.
How's everybody feeling about this whole matter? Are you feeling anxious about the abundance of choice, or delighted that there's a good show for practically every demographic and taste profile?
Alan Sepinwall may be reached at
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team deal中的ea发音相同吗还有park great中的ar ea发音相同吗
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[ti:m] [di:l] 所以ea发音相同[pɑ:k] [ɡreit] 所以不同
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扫描下载二维码Peak Oil - the clear and present danger
on June 22, 2011 - 10:53am
Tags: , , , , , , ,
Global oil production (crude oil plus condensate) has been on a plateau / in decline for 7 years, resulting in high energy prices that are feeding inflation, eroding family budgets and crippling the World economy. It is time for the international political community to awaken to the risks posed by Peak Oil. A British Government report published last week under a Freedom of Information Act (FOIA) request makes clear that civil servants working at the UK department of Energy and Climate Change (DECC) seem very aware of the risks posed by peak oil, and yet the British Government seems happy to continue to ignore warnings.
The post is co-authored by Oil Drum contributor Sam Foucher, who did most of the data mining and provided the adjusted JODI and IEA data. Oil Drum commenter
deducting natural gas liquids from the BP data.
In recent weeks we have been taking a detailed look at discrepancies between oil production data reported by various agencies. Whilst doing this is important, there is the risk that we lose sight of the big picture shown in the chart above. Despite continued high price, it has not been possible to raise global oil production since 2004, indicating that supply has become inelastic. Data sources and methods are described in the box at the end of this post.
Last week The UK Guardian "newspaper" carried a story about an internal
that the government failed to make public and was eventually released under a Freedom of Information Act (FOIA) request made by French student Lionel Badal. The report, in form of a data and text rich Power Point presentation, landed in my inbox (hat tip to Jerome) and I was quite amazed by the content. Slide 16 in particular caught my attention:
Of the 17 bullet points on the slide, 16 have come to pass in the UK and in the neighbouring countries of Europe (click on slide to enlarge and open in separate window). Given that the research was conducted in 2007 and the report compiled in 2009, this conveys amazing insight by the DECC civil servants. Many may argue for different causes for the peak oil symptoms listed by DECC. But given the length of the list, near perfect correlation between forecast and events, and the fact that global oil production has not increased for seven years, is it not safe to now draw the conclusion that peak oil lies at the heart of the UK and global economic woes?
Two important items are missing from the list and when these are taken on board, the story is complete.
1. Peak oil may threaten the global banking and financial system since the
of growth based on credit expansion requires a growing stream of cheap energy to fuel the real economy. When the stream of cheap fuel dried up, the real economy failed, toppling the global
that lay at the heart of the Ponzi scheme. Fractional reserve banking has now been supplemented by Quantitative Easing as a means of creating money to drive consumption of finite reserves.
2. Peak oil will threaten pensions since these are based upon the excess net energy produced from high ERoEI energy sources (Energy Return on Energy Invested). As the ERoEI declines and the lifeblood of cheap net energy dries up, it is inevitable that society's ability to care for those not in work (young, old and dysfunctional) will be steadily eroded. This links to point 1 above via declining stock market valuations.
It seems that the global economy may be on the rocks again for the second time in three years, stemming from energy prices that society can ill afford to pay. It is time for OECD and other governments to wake up and introduce serious energy policies to deal with the clear and present dangers posed by peak oil.
Methodology and observations
There are four main agencies reporting on global oil production:
in Washington that is a US Government agency.
in Paris that is an OECD agency.
3. , produced by BP, the UK based international oil company
(JODI) that is a voluntary form of NGO.
These agencies may gather information in different ways and they also report data in different ways using different categories and definitions of oil. The EIA reports monthly production data for crude oil + condensate (C+C) that includes synthetic crude oil produced from tar sands in Canada and Venezuela for all countries and giving a world total. JODI also reports C+C but only for 90 countries accounting for around 90% of global production. In the
in this mini series, Dr Sam Foucher filled in the missing countries from the JODI data using EIA data giving an adjusted JODI proxy for global production that may then be compared with the EIA global total. BP report annualised average daily production data for C+C+NGL (natural gas liquids) and these data are not directly comparable to C+C reported by EIA and JODI.
deducted NGL data reported by the EIA from the BP data to get a BP proxy for C+C that is plotted in the chart up top.
The IEA report total liquid production. Bio fuels, refinery gains and NGLs were deducted from total liquids to derive the C+C figures.
Categories of liquids not included in the chart up top are NGLs, biofuels and the volume expansion that takes place during refining known as refinery gains. The latter are not actually gains at all since they represent volume and not energy expansion.
The chart shows annual average daily production. For EIA, JODI and IEA this is a simple arithmetic mean of the monthly reports unweighted for length of month.
Key Observations
The two previous posts in this series
examined the divergence between the EIA and JODI data since 2009 (see chart). Introducing BP and IEA data to the mix shows good agreement with the EIA and may tend to argue that these three sources provide the most reliable data. However, it may be the case that the EIA, BP and IEA are obtaining their data from the same source which remains unknown but rumored to be IHS. The source of JODI data is known to be direct reporting by national governments to JODI and it remains intriguing that the JODI data, which are based on government statistics, are diverging from the rest. The latest JODI production data reported for March 2011 shows production below 70 mmbpd. That is 6 mmbpd below the equivalent IEA data.
A production plateau was reached in 2004. The JODI data suggest that production may now be in decline whilst the EIA, BP and IEA data suggest that production remains on the range bound plateau. The difference here is really immaterial since high energy prices post 2007 caused by a failure to raise production to meet demand are traumatising the global economy.
Lovely work. Thanks so much. And a well deserved hat tip to Lionel Badel who has shown great resourcefulness and an elegant simplicity in his investigations. A simple FOIA request? Ab fab!
Here in the States of course we struggle with new uncertainty about EIA data. And even though EIA keeps updating international oil production (which they have so far) it's a lot less easy to pull the data from their databrowser. One of their normal categories, North Sea oil, is one you'll have to put together on your own. I did so overnight.
Best to all, and thanks so much for the data sets!
Very slow process to get it (about a year), but worth it... UK Information Commissioner (ICO) did its job.
I’m sure there are also interesting reports in the US about Peak Oil, but FOIAs are more difficult (many documents to fill and expensive...). Unfortunately, no FOIAs for the IEA…
Kudos Lionel! So you had to know that the report existed before you could request it under a FOIA request. How did you learn of its existence?
Its full of interesting stuff that I'd characterise as semi-competent. For example they try to make believe that the UK is somehow uniquely well placed to survive Peak Oil since we have low oil intensity in our economy - backing the buying and selling of CDFs ahead of manufacturing Mercedes Benz and Audi.
Second that! Outstanding work, Yoon, Sam, et al., and huge props to Lionel. Rationalizing those data sets was no easy task, and I'm grateful!
That is a nice plot of North Sea production. I assume this combines UK and Norway.
My own models of UK and Norway are separate and I got a combined average of around 3 million barrels per day as of 2010.
My UK prediction was low and the Norway is closer to the actuals.
UK prediction from 2005
Norway prediction
Documented in
If peak oil were reached several years ago, why is the price of oil so low?
Here in New York, it is under $95/barrel.
Gasoline futures are below $3/gallon.
Peak oil theorists postulated years ago that within 5 years after Peak Oil, prices would skyrocket.
Even the $150/barrel seen in 2008 was not the type of "skyrocketing" the peak oil camp had postulated.
I had really hoped for Peak Oil because I wanted change, but as each year passes, I become more and more disappointed.
Oil is a little more expensive than it was 15 years ago, but overall, it is still incredibly cheap.
Highways are jammed with gigantic autos, I'm covered in plastic, and the sky is crowded with jets.
How can this be if Peak Oil was reached almost 7 years ago?
Because, as the post highlights, the action is over in the financial sector of the economy, where we see increasingly desperate attempts to keep growth going and with it, the worldview of "progress" and "a rising tide lifts all boats."
Despite being an existential threat, as the post makes clear, for the vast majority of people, PO is literally unthinkable.
Yes, and clearly some boats are a lot more buoyant than others.
The price has stayed low because we're still on the plateau, and especially because we've just been through a major round of demand destruction.
What has happened to the global economy since 2008?
I think a lot of PO price predictors failed to account adequately for demand destruction.
I know I did.
Back in 2006 I had no idea the global economy was that close to the brink, how much impact rising oil prices would have, and how much the demand would decline as the economy slumped.
The economy is a complex beast with a lot of feedback loops in play.
It's easy to get caught in a "ceteris paribus" trap when making predictions, when the "ceteris" will turn out to be anything but "paribus" in the future.
The EIA reports that 2010 crude oil consumption broke all prior records, i.e., oil consumption in 2010 was greater than ever before.
This is not demand destruction, just the opposite.
Yes, demand has declined in the US since 2007 but the demand increase in the rest of the world has been so great it has more than compensated for the US decrease.
So, there has been no demand destruction since 2007 and the price of oil is still low?
First, I recommend banishing the idea that the price of oil indicates if the world is pre / post peak. It does not. Price indicates supply and demand at this very moment in time. The price will follow spikes and dips as we ride over the peak. Spikes as demand tries to increase, and dips when companies and people go bankrupt trying to pay those high prices and leading to recessions. If the financial system collapses, we could see $10 oil with no one solvent enough to afford even that low price. To really see the peak you need data on the cost of production (or some proxy, such as # drilling rigs, or meters drilled, etc).
Secondly, the current price is not low. $95 is almost 4 times the price oil traded for decades. It is a price anyone at that time would have claimed would induce a recession. It is lower than recent highs but still well into recession inducing territory.
Yes, demand has declined in the US since 2007 but the demand increase in the rest of the world has been so great it has more than compensated for the US decrease.
Oil is very inelastic. Meaning a 1% difference between supply and demand can cause a huge price swing. All of these statistics are likely to have more than 1% error, and so it is very hard to be certain where the price "should" be. I would say the OECD may have been the high price bidders. They are now unable to sustain oil prices above $80 - $90 dollars per barrel. Those countries with growing demand have small amounts of imports (relative to total energy mix) or are oil producers. They can afford higher prices.
Interesting.
One could actually imagine that rising oil prices would lead to rising consumption amongst oil exporting nations.
As prices rise, export earnings increase, leading to greater cash inflow, greater investment and improved economic growth.
Greater growth = greater prosperity and greater oil consumption, especially if domestic fuel prices are subsidised, as they are in much of the Middle East.
Did we actually see such a magnifier effect in the run up to July 2008?
Perhaps you are looking at different oil price charts than what the rest of us are looking at.
US annual spot crude oil prices:
Incidentally, the price of Brent, which appears to be more indicative of current global supply & demand factors, was about $111 through the first five months of 2011, versus $105 for the first five months of 2008 (EIA).
In any case, note that we have seen a measurable decline in Global Net Exports* (GNE), from 45.5 mbpd in 2005 to 42.6 mbpd in 2010 (latest BP data, plus minor EIA input), with what I define as Available Net Exports (ANE, which is GNE less Chindia's combined net oil imports) falling from 40.4 mbpd in 2005 to 35.1 mbpd in 2010.
A plausible estimate is that ANE may be down to 27 to 30 mbpd in 2015.
The general appearance of BAU is primarily due to a sky high
depletion rate in post-2005 Cumulative GNE.
Based on extrapolating the 2005 to 2010 rate of increase in the consumption to production ratio for global net oil exporters, a rough estimate is that we had about 45 years of net oil exports left, after 2005.
Given the fact that a good rule of thumb is that about half of post-peak cumulative net exports are shipped about one-third of the way into a net export decline, a rough estimate is that about half of post-2005 Cumulative GNE will have been consumed by 2020--ten years hence.
In other words, the global Net Export "Fuel Tank" was full at the end of 2005.
A rough, but reasonable, estimate is that the global Net Export "Fuel Tank" will be half empty in about 10 years, with Chindia presumably taking an increasing share of what is left in the tank.
From one of our articles:
(Showing data through 2009)
Consider the first 15 minutes after the Titanic hit the iceberg versus the last 15 minutes before the ship sank. In the first 15 minutes, only a handful of people knew that ship would sink, but that did not mean that the ship was not sinking. In the last 15 minutes, it was readily apparent to everyone that the ship was sinking, but by then it was far too late to try to get to a lifeboat.
*Global net oil exporters with 100,000 bpd or more of net exports in 2005, which comprised 99% + of 2005 global net oil exports (BP + Minor EIA data)
Yes, I know that all oil price charts show an increase in price.
However, if Peak Oil had happened in 2004 as Mr. Euan suggests (and others suggested in '05 or '06), the rise in price should have been much greater by now than your and all other price charts suggest.
The price increase shown on your chart does not seem to be enough if Peak Oil has already happened.
If Peak Oil had already happened years ago, the price should be upwards of $1000/barrel already, not $95.
How much longer do I need to wait?
Yes, your thorough and learned analysis of GNE points to Peak Oil, but sometime in the future, not 7 years in the past, as Mr. Euan suggests.
If Peak Oil had already happened years ago, the price should be upwards of $1000/barrel already, not $95.
Sorry but that is simply not correct. The price of oil cannot be divorced from the economy. If we are at peak oil today, or peaked in 2006 as JODI indicates, there is a good chance that oil will never reach even $200. The reason is because high oil prices knock down the economy. We go into a recession as we did in 2008 and we are still in that recession. That has kept demand down. If we go into a very serious depression oil may go to $50 a barrel or even lower even as oil production declines.
World oil prices are now around $115 a barrel and that is about as high as they can go without a serious adverse effect on the economy. I mean a worse effect than they are having right now.
So, in reality, when people such as Matt Simmons were warning of oil at $X00's a barrel they were wrong to the extent that the BAU world economy could never possibly afford that price.
When the whole thing (BAU world economy) collapses and the only people buying fuel are the Ultra-Rich for their 200 feet yachts, then that price range could be reached. I'm being a bit hyperbolic, I'll admit......
Yes Matt was wrong, I was wrong and a lot of other people were wrong. But we are not stupid. When we saw what a dramatic effect the price of oil has on the economy we changed our minds. Most of us did anyway.
I think you have the wrong idea about oil getting so high only the Ultra-Rich can afford it. That goes against the grain of everything we have learned about the price of oil and the economy since the crash. Oil will just not get that high. Even if oil production were cut in half, say by 2030 or so. The world would be in the midst of a great depression and many economies would have totally collapsed. Oil prices, in those conditions, even at half of today's production, would likely be very cheap.
My Educated guesses
Matt Simmons will be proven correct and oil will surpass $200, hopefully not going to $300-500..
The world has increased it's need more or less every year for the last 20 (excepting 08 and 09)by 1,5 million barrels.
China and India have been growing gang busters for 20 years.
The energy exporters (ie Mexico) will continue to increase use and decrease exports.
The 300 million in the U.S who have been consuming 20-25% of commodities are now debtors to billions of people who want the U.S. lifestyle (reasonably they want heat, meat, transportation).
China is using our $ to buy up commodities around the world.
The U.S. dollar particuarly is in danger of sinking due to excess political promises.
The Chinese middle class is now larger than the population of the U.S. and they have over 200 cities of over 1 million when the U.S. has 11.
Not only will energy rise though the roof but it will be particulary painful for those accustomed to the U.S. lifestyle (it is always harder to reduce your lifestyle once you become accustomed to some luxury) .
This summer or next or certainly by 2015 we will see just how high oil prices can go.
If the U.S. military is right and there is a 10 million per day shortfall people will have to pay a premium around the world.
When it does rise though the roof it will mean the U.S. lifestyle will change somewhat, to smaller abodes like in Europe and smaller cars.
Less distant vactions too and that will help offset the shortages.
It will not be fun for many but I think we will adjust in the long run.
The 2008 recession was caused largely by a housing bubble that was going to explode sooner or later as the government was buying up and securitizing and pushing huge amounts of no income check loans and other subprime loans.
While oil prices helped cause that pile of blocks to fall they would have fallen anyway and had the housing bubble not existed it could be argued that the economy would have turned at Much higher oil prices.
Even if you don't agree with all the above, I can prove it another way...instead of demand vs. supply simply look at the cost of production ...$20 in 2002...$40 in 2005...$60 in 2008...$77 in 2010 (source: Barclays Capital capital cost of production with 12% IRR (figures were pulled approx. from their charts).
The mix of production is moving to expensive sources (ie. 1/2 to 1 billion for a rig in the ocean versus 2-5 million on land in a big change in cost).
We will see soon enough the Chinese curse "may you live in interesting times" (ironic that it is Chinese.)
That is a very bad guess :)
Long before oil hit 300, the economy would slow down so much nobody would be buying it -- demand destruction.
If you think oil can go that high, explain who can pay that much and still make a profit.
Maybe only the gov because they don't care what they pay for anything.
I don't think you're stupid for a minute. Hindsight Bias is an easy trap to fall into.
I suppose if civilian industrial consumption does fall off of a cliff that high, the next big consumers would be the military and they are more likely to take, rather than pay for, the oil they need.
So many variables, so little time!
Good comments, Ron.
I would add that it's very hard to know when peak oil has been reached.
Is production below peak because demand is down, or because production has peaked?
Demand destruction is not just from higher commodity prices.
We have credit destruction and we have capacity oversupply going on at the same time.
It may be decades before we can look back and say 2006-08 was the peak. I would say we won't know until prices are relatively high and storage is being drawn down.
Producers won't pump at capacity unless the price is high enough to make it worth their while, and they won't pump if nobody's buying it at the margin and there's nowhere to store it.
I'm thinking Simmons $200/barrel could be reached if nothing major breaks first(as it did the last time) but $1000/barrel would equate to about $30/gallon at US pumps. I'm not sure how much gasoline would be selling in the US at that price although the "ultra-rich" could afford it. In the UK I think I would be using no liquid fuel directly at all at $1000/barrel.
Exactly what happens next to the price and world economy, the sad part is, we are probably about to find out.
Peak oil watchers overestimate the strength of the credit economy.
I highly doubt oil would breach $200 for more than an instant because it would cause way too much stress to the fragile banking/credit system as it would increase the default-deflation feedback as well as suck profits out of the system.
It would also increase revolutionary pressures in the bottom half of the planet with increased food prices. see the mid east.
There is a ton of "fat" in the system that could be shed, specifically in western high per-capita consumption patterns,
through credit events i.e removing money from the system.
Of course, this shedding adds another kind of stress and revolutionary pressures in the top half of the planet's social strata see greece and spain for example.
The eco we are in a depression.
Oil and other commodity prices are going higher because governments are printing money.
It is a tale of multiple economies: developed and developing, oil producing or not.
All of the world’s population is aging and caring for the aging will divert spending away from other consumption.
The developed economies have a structural problem:
the productivity gains from the technological revolution are almost exhausted.
The science timeline tells us that the great advances that gave us our modern understanding of the universe such as Newtonian physics, chemistry electromagnetic and nuclear theory are fairly complete.
The pieces of the puzzle came together mostly in the late 19th and early 20th centuries and although we continue to discover things the importance of the discoveries is trivial compared to what we already know.
There is very little unexploited technical knowledge.
Productivity growth in the U.S. slowed down rather dramatically in the late 1960s and wages have been stagnant since 1973, the same year that both absolute and per capita steel consumption peaked.
Agriculture in the U.S. was fully mechanized time by that time tractor sales fell to half the 1950 level, never to return.
The highway system was also mostly complete.
We have saved almost all of the labor and energy we ever will with today’s mining, manufacturing, and distribution processes.
We are approaching the absolute limits of economic growth, which will soon be overtaken by increasing inputs for resource extraction.
As a consequence discretionary income is falling and the economic system is collapsing.
It will never get better for the developed countries.
Our leaders are in denial and are ignorant of technical and economic processes, still expecting a return to economic growth that is never going to happen.
I'll pay thirty dollars for diesel in today's dollars before I
buy a horse or mule-but I'll be looking for likely colts to train just in case at that point, and seriously studying the small scale
manufacture of bio diesel.
I haven't used my tractors yet
this week, and they consume nothing at all on days they aren't used.
Oil might concievably crash for a few months to under fifty bucks before the marginal suppliers can fill thier contracts and shut down , but oil is going nowhere but up, on average,
for two irresistable reasons:geology and inflation.
Anybody who believes in
a world without adequate supplies of funny money to make
inflation as sure as sunrise tomorrow has only a very
feeble grasp of human nature and the nature of politics.
Nominal prices will hit three hundred dollars within a decade, probably sooner, as sure as sunrise.
I have never seen an argument that CONVINCES
me that demand destruction
can force prices down faster than declining fields and increasing production costs can force price increases.
I do agree that demand destruction will probably have this effect in the short to near medium term.Prices in constant money may not reach two hundred dollars for a long time yet, but they will, sooner or later.
Remember what a gallon of fuel is worth to somebody who really needs it-a
very few gallons makes it possible for me to sell thousands of dollars worth of crops.
Nobody is likely to outbid me for those few gallons.
Hi, Mac. The problem, as I see it, is that the customers for your "thousands of dollars worth of crops" have incomes that are even more reliant on oil, systemically, than yours is. It may be an oversimplification, but your crops are only worth what others can afford to pay.
Agree with OFM.
When food rises to 20, 40 or more % of income, the tradeoff will still be oil vs labor. The energy slaves of oil will beat the others. Be along time until Babe and his Blue Ox return to the North Woods.
Agreed-but there is nothing else in the world so INTRINSICALLY
valuable as food, excepting possibly drinking water.
So long as there is commerce, there will
plenty of buyers of food.
Maybe I will get only a
marginal profit over my expenses-perhaps a thousand dollars worth of inputs will net me only two thousand dollars in sales, and my real income might go
nearly to zero, along with my customers incomes.
But farmers will be among the very last users of oil , both as fuel and as
manufactured inputs in the form of insecticides, tools, machinery, lubricants, etc.
Of course at some point, the only oil available may go to the people
in actual positions of raw power-the remaining police, military, mob, ultra rich, and so forth.
But there won't be nearly as many people around to serve as thier servants and footstools by that time.
Most of what you have laid out is impossible to argue with except future price.
I don't believe 'demand destruction' is the cause as much is credit contraction.
The fallacy of helicopter money sticks for most but it has been credit that caused most prices to rise insanely.
Credit destruction is causing the giant sucking sound that is dragging down prices of most things.
The "price" of oil is relative to price of other items you can also buy.
Housing is getting cheaper or is oil getting more expensive?
Because credit serves as money then falling housing prices means less collateral available for the basis of loans.
Net effect - less credit available, so less money available.
Housing values are dropping with the destruction of credit(money) Oil is holding steady or increasing in current dollar amount, however it's value relative to total available money is increasing at a rapid clip.
What you get to sell your crops for is very dependent to what others can pay, not what you need to charge.
If they cannot pay they might steal it.
"you only need to feed tractors when you ride them" vs a horse, ox, what ever, makes me a believer in small scale gasifiers/ biodiesel/ and methane. Only when we get to the point of true 'will do hard labor for food" will that be different, imho.
Check out springboard biodiesel.
They make automated batch biodiesel processors for small scale.
Full disclosure:My brother-in-law and his brother started the company and developed the technology, they sold off in 2007, but are still working there.
Marten - Maybe not just the Ultra rich will be doing good. Even the modestly comfortable will be doing OK. My sister-in-law bought a house in FL a couple of months ago. Paid $230,oo for a house that sold for $780,000 just 4+ years ago when it was first built. And she's just comfortable middle class.
Folks tend to be disturbed when they see ExxonMobil's profits. A very large chunk of those profits come from old fields/leases that XOM acquired during big economic downturns in the oil patch. XOM went on a short bying spree after the price collapse in '08. This has been the pattern since the earliest days of the oil patch. Sounds simplistic but it still true: buy low...sell high. From a point of pure self interest my partners and owner would be thrilled to see oil collapse to $30/bbl and NG less than $2/mcf. We're a new company and thus have very little production to sell. But a huge capex war chest. A price collapse would drive almost all our competitors out of business. And folks would start buying those big SUV's and all the alt companies would go under. We would be like kids in a candy shop with no adults around. And then in a sort while we would have you right where we want you: at our mercy. Hey...nothing personal...just business. My company was formed specifically because of PO...not despite it. Turns out we're a bit late to the party.
Most wealth is made by either:
Trade - in which you buy something cheaply and then sell it for a lot more, or
Capture - in which you hit the gusher, win the lottery, strike gold on your claim, invent the next iPod, shoot the next blockbuster movie,...
If you "work hard, persevere and do your best", you might make a good living. But this American meme is greatly overrated.
Right, Ron. I believe that in 2008, before prices crashed then, WalMart said it would not be able to afford all those Chinese imports it sells if oil hit and stayed above $150/bbl. So ... maybe $115 is sustainable, but not too much above that.
The price rise in 2008 was terminated by the world almost entering another "Great
Depression" - which was just reduced to "severe recession" by loading up with debt and printing money. World oil consumption collapsed so much that OPEC really did have to reduce production. Now we again seem to be bumping up against the supply limits after a 3 year forced "reset". The world has never paid as much for liquid fuels as it has in 2011 so far.
Why on earth should oil be $1000/barrel (in constant dollars)? So much demand would have been suppressed by that point that I could only see a spike like that if we had a really rapid oil production crash (removing 10 million barrels/day overnight or something like that) and then it would be likely a temporary spike before the world skidded to a halt.
And once again the price of oil is not $95. That's landlocked, broken WTI.
Louisiana Sweet Crude Oil Spot Price
Current $114.10
The current slight pullback is probably simply because the price overshot on the upside after the Libyan shutdown but unless something happens to suppress demand, it looks to me as if we will soon return to the rising trend.
unless something happens to suppress demand
Wot, like high energy prices that consumers -) Especially the unemployed ones with an endowment mortgage on a damp and cold house they can't afford to heat?
Yes, that's why I can't see the price really accelerating away to the upside but I think there could be some way to go yet barring a major discontinuity of the 2008 variety - especially if production starts to slip rapidly. I fully expect some more "discontinuities" but exactly what form they take and when they hit remains to be seen. The world has so far endured higher average oil price in 2011 than in 2008 and the wheels haven't come off this time - yet...
Future Chinese demand remains a big mystery as well.
Easy there. The chineese can't pay $200 for a barrel of oil the same way that people at the US or Europe can't.
In fact, they can pay even less. That's one reason why consuption per capta is lower...
Yet according to official stats, the Chinese people are using far more oil despite the price increases while almost everyone else is using less. Consumption per capita is rapidly increasing according to all the reporting bodies. They could be wrong of course.
Chinese won't have a problem converting to F-T coal gasification if necessary, thereby polluting their environment even more.
Hmm. I can't quite figure out the relevance of the Head and Shoulders advert, Euan.
Head and shoulders is a chart pattern in investment circles. Brent chart looks pretty similar to Louisiana sweet. Roughly speaking we have a "head" at about $130 and shoulders either side at about $115 and support at $110. If the support breaks to the down side its normally a long way down. Brent has just busted through to $109, down 4% so far on the session. Copper is holding just in no more to its support.
In real world terms, the recovery in commodities of last 2 years has been driven by easy money and QE. Now that QE is about to be switched off many expect that trend (recovery) to reverse. Other manifestations of this are slowing growth in China and Europe.
Inflationary fears are about to start receding and will once again be replaced by the even bigger fear of deflation. I'm still intrigued by that JODI data since oil consumption should be a leading indicator for state of global economy.
However, if Peak Oil had happened in 2004 as Mr. Euan suggests (and others suggested in '05 or '06), the rise in price should have been much greater by now than your and all other price charts suggest.
This very common assumption is false. Morgan Downey, author of Oil 101 does a very nice job of showing that it will take a substantial drop in oil production to reach higher prices. I highly recommend reading his blog (and book) to anyone who is just joining the peak oil discussion.
The very basic argument is this: The economy can only pay so much for energy. If the cost rises too high, the economy contracts. Energy comes in a bunch of forms (coal, gas, oil, wind, hydro, etc). As oil declines in production, it becomes a smaller part of the mix. Thus the economy can pay more per barrel.
This exact argument helps explain why China can grow consumption at these prices. Imported oil is a much smaller fraction of its total energy mix than for the US. Check this out at the Energy Data Browser
One other note that will keep oil prices down: If the cost of other energy sources rise, then the ability to pay for expensive oil decreases, holding down the maximum price of oil. Here in the US, our industry is powered by natural gas and coal. If those prices rise, we may see a decline in ability to pay for oil and thus oil may take years to reach the 2008 peak. Instead of high prices, we should expect to see growing unemployment.
Its a good question?
one suggestion is the deflationary destruction of huge amounts of capitol in 08 are not present in casual observers mind... so if you whack 1/3 of the available money in the world and the price of oil drops by 1/3 effectively the same proportion of the worlds money is chasing the oil...
In response to rising oil prices, global C+C production rose at about 3%/year from 2002 to 2005.
At this rate of increase, we would have been at about 86 mbpd in 2010.
Instead, we have seen flat to declining global crude oil production, in response to generally rising oil prices.
From 2005 to 2010, average annual US spot oil prices rose at about 6.5%/year (with a spike to $100 in 2008, and a year over year decline to $62 in 2009).
Why the production increase from 2002 to 2005, but flat to declining crude oil production since then, over an 8 year period of generally rising oil prices?
Also in response to rising oil prices, GNE rose at 5.1%/year from 2002 to 2005.
At this rate of increase, GNE in 2010 would have been at about 59 mbpd in 2010.
Instead we have seen a measurable decline in GNE, in response to generally rising oil prices.
Why the increase in GNE from 2002 to 2005, but flat to declining GNE since then, over an 8 year period of generally rising oil prices?
I think Constellation21 makes the mistake that most people do, even those who follow TOD, namely, they confuse "all-liquids" production with C&C production.
As do most MSM articles, too.
All-liquids has continued to increase, and the graphs are often titled "oil production".
Even Stuart Staniford does this on his blog, and I really don't understand why.
C&C + oil sands = oil.
ngls are a distraction used to fool the sheeple.
Constellation21:
You obviously have alot of learning to do.
Have you not been paying attention to what's actually been going on?
Every time the oil price rises, it causes a slowdown in economic activity.
Oil's main use is in the instant of time that it is burned in combustion engines to generate motion.
If oil becomes too expensive to burn, things basically just shut down, nobody goes anywhere and goods stop being transported.
This is euphemistically called "demand destruction" but really it's the real global economy, which is utterly dependent on oil, slowing down.
However, your fanciful idea of $1000/barrel oil does bring up an important point.
Overlayed on the real economy is the financial economy, which is not real.
All currencies today are fiat currencies, backed by nothing tangible except for confidence and the ability of banks to extend and withdraw them at will.
Thereby, pr the collapse of 2008 was the veil being lifted off the banking system.
Prices do not represent market activity, they represent political activity.
So can the price go that high?
But that would mean the central banks printed so much money that they created hyperinflation.
I doubt they would do that.
Still, there's a small chance that could happen.
In this environment, the only way you can protect yourself is to divorce yourself from the financial system and acquire physical precious metals, held outside of banks.
This is pretty much the one and only way you can preserve purchasing power, regardless of what other prices may or may not be.
Of course, if you want to speculate in the markets or be the patsy and keep your money in a savings account or government bonds, be my guest.
We are on an undualting plateau and I believe heavier sour oil is currently making up for loses in light sweet crude.
Incidentally, the price of Brent, which appears to be more indicative of current global supply & demand factors, was about $111 through the first five months of 2011, versus $105 for the first five months of 2008 (EIA).
And if we look at US gasoline spot.
Average price first five months 2011: $2.81
Average price first five months 2008: $2.62
The "Broken" WTI however
Average first five months 2011: $98.21
Average first five months 2008: $106.36
Anyone following WTI would think world oil prices (and hence product) have been lower on average this year than in 2008 but that's wrong. Any indicator is better than WTI since it "broke" (unless you happen to trade in WTI).
I find these relatively long term pricing charts amazing.
For those familiar with nonlinear dynamical analysis, it really looks like a bifurcation happened around 2007-7.
The nature of the underlying dynamics governing the behavior of gas prices fundamentally changed.
I guess peak oil would be the most likely culprit.
For those familiar with ordinary calculus, that is the sign of the first derivative of a sharp peak. On one side of the peak the derivative spikes positively and on the other side it goes negative. That's not a bifurcation, but an indication that price is a proxy for another real measure such as perceived shortage. Price is then related to the rate of change in perceived shortage with respect to time. The spikes in price can be anything depending on how fast that perceived shortage changes.
The question is whether it will happen again. Anyone that knows anything about derivatives and slope changes is that they accentuate the noise in the system, and any kind of scares can set them off.
Traders going long or short strongly amplify the fluctuations. e.g. by betting on
Derivatives have turned the world stock markets into the biggest casino ever. Derivatives are currently 20 times global GDP. See
That will impact oil importing countries far faster than total global production.
I don't think your derivatives are the same ones I am talking about.
Agreed. See:
" a derivative is a contractual relationship established by two (or more) parties where payment is based on (or "derived" from) some agreed-upon benchmark."
The casino is a bad metaphor.
Casinos are much better regulated.
Yes. I am talking about the point a bit earlier in the plot where a relatively monotonic rise turns into large oscillations.
These large oscillations are new to the scene and represent a fundamentally different dynamic, a bifurcation.
I would say it is not a perceived shortage, but a shortage. The amplitude might be exacerbated by the perception of severity via speculation. You could show this plot to mathematicians with no labels on the axes, and they would point to the same point and say: "something fundamental happened here."
Bifurcation implies something splitting into two or more parts. You should at least in a hand-wavy fashion be able to tell me what exactly is splitting, and where the splitting is visible. I take it that you think that there are two behaviors executing simultaneously, which is the bifurcation you imply.
I think it is one behavior and it's just operating in a different regime.
It seems to me that you are confusing consumption with demand...
It seems to me that you are confusing consumption with demand...
Yeah, and so am I. Perhaps you would be kind enough to tell us the difference.
If we are talking about electricity there is a tremendous difference between consumption and demand. Consumption is measured in kilowatt hours while demand is measured in kilowatts or megawatts. But oil is measured in barrels per day whether you are talking about consumption or demand. They are exactly the same thing.
Perhaps I'm thinking of something like "unmet demand" - like those unemployed workers who don't appear in the statistics because they've given up looking for work and are therefore exerting no influence on the marketplace.
Is there a word in economics for potential buyers who get marginalized out of the marketplace by high prices?
Other than "losers", I mean.
People whose "price elasticity of demand" has finally snapped...
It's tough to talk about this in Economics 101 terms like "supply and demand", because the assumptions built into that language never seem to include supply constraints or non-substitutability...
"Unmet demand" is tough to discuss if for no other reason than that it is limitless. There's virtually always more "unmet demand" at a hypothetically lower price.
Imagine what people in the USA might be driving, how many more super-commuters might drive how many more miles, if gasoline/diesel were 30?/US gallon. Imagine how many more might fly to Europe several times a year at the implied jet-fuel price. Imagine towns that
running them for base load. But alas, all the folks who might do all those things at 30? are "marginalized out of the marketplace" by current "high prices" greatly exceeding 30?.
Now, one may certainly define "unmet demand" according to idiosyncratic personal value-judgment, as folks so often do. So, let's say, flying to Europe once in two years is akin to a human right, but flying there several times a year constitutes wicked, immoral overconsumption and CO2 emission except when Al Gore does it. But that gets us straight into ex cathedra assertions raising unanswerable quasi-religious questions that tend to ignite interminable flame wars. Since Economics 101 is not a religion class, it's not well-equipped to go there.
There isn't a name for "unmet demand" because that concept doesn't exist. Demand is the amount of production people are willing and able to consume at a certain price.
By the normal way econ is stated (that is an approximation of reality), if you stopped caring about price, "unmet demand" would simply be infinite. In reality, it would just be a random huge number. Anyway, it is useless.
isn't that the difference between what you want and what you get?
Yes, but the problem is that no one can measure the amount "wanted". In control theory it is what they would call an "unobservable" quantity. Since it is unmeasurable and unobservable there is essentially no way to control it and it turns into an open-loop system. That is why I think that the price swings wildly. There are anticipatory compensation factors built into the pricing mechanism when the perceived shortage is on the upswing and then lag compensation factors figure in to the price when the demand destruction sets in on small downward corrections.
That explains the characteristic up-and-down price swings we see in 2008 and perhaps again this year.
Unfortunately, it is not worth doing the math on this because the estimates can only be qualitative, since we can't measure the underlying "unmet demand".
Looking at price alone is a sucker's bet. This gets into game theory too, as what everyone tries to do is game the system based on moves made by other people.
The concept is not useless and your heavy handed reply merely shuts down examination of this concept. What's being called "unmet demand" is only infinite or huge in the broadest sense, and that's the concept that's useless. Unmet demand doesn't have to be referenced to "everything people want if they could have everything," and to present it this way indicates very black and white thinking that lacks nuance on this matter.
"Unmet demand" could also mean demand that would have existed just a short while ago before some change in economic conditions, and using this concept can give insight on how things have changed. For instance, buyers being priced out of the oil market over the last three years indicates a type of "unmet demand" very different from the unmet demand of people simply not having everything they want. It indicates breakdown in the existing economic system, because the unmet demand for oil seen in recent years is choking the existing growth paradigm.
Your take on the concept under discussion, which has tentatively been labeled "unmet demand," is just another version of the trivial "demand always equals supply" meme of classical economics, which is a pretty worthless analysis. (It's also an analysis that suggests everything is always okay in the economy.) The simplistic view that demand always equals supply misses the fact that some changes in the supply situation kill demand that would otherwise have been there, and such changes in supply bode ill for the economic system that's been established.
If "unmet demand" isn't even worth discussing, then why even have discussions of the social consequences of peak oil? When the human population has to fall back to a billion or fewer over the course of a few generations, we can just say that there's no such thing as unmet demand for food and security because demand always equals supply, therefore things are in harmony.
Hmmm.... so "unmet demand" could be defined as the difference in demand at price x versus demand at price y?
Demand is the amount of production people are willing and able to consume at a certain price.
No, it's not. That's quantity demanded.
Demand is the relation, at one instant in time, between the set of possible prices and their corresponding quantities demanded
-- a relation, parts of which can be continuous and even differentiable functions (or approximated as such).
Again: demand is the set of all possible pairs (price, quantity), that describes the quantity that would be bought at each possible price.
Next step: demand depends on buyers' incomes and access to credit [and many other things, for example the prices of competing and complementary goods, expectations, the seasons, climate and geography, and, fundamentally, preferences].
A sudden negative shock to incomes or credit availability can decrease demand, i.e., lower the whole "curve" of quantity versus price. It's reasonable to talk about this reduction as "latent demand", at least while there is an expectation that incomes will recover (and preferences, etc. haven't changed).
You and Silenus above have articulated my tentative thoughts on the subject very well.
I was thinking about the step down in supply that prices out those at the bottom, who used to be participating in the market.
They have organized their lives around the assumption of being able to buy oil within a certain price range, and now suddenly can no longer live that way.
For many this creates enormous hardship because substitution (of transport capability, of heating source, of employment, of food supply...) is difficult to impossible within the time available - i.e. by the time the next paycheck is needed, by the time the snow comes, by the time the cupboard runs bare etc.
That's why I had earlier used the analogy of the unemployed who had given up looking for work.
The implication was that they had arranged their lives to need a paycheck, had indeed lived on paychecks, and now no longer had one.
"Latent" is definitely a better word than "unmet".
OK, I certainly agree that demand for oil would greatly increase with large decreases in oil price...but saying that demand would be infinite is incorrect.
In the shorter term, defined as a period in which population increase is small (say &5%), oil demand will be constrained by the fact the user base (population) is relatively fixed, and the other giant constraint is that there would still be only 24 hours in a day.
And people can't spend them all driving, there is sleeping, working, etc.
Also, of course your statement has some large unstated assumptions, first of which is that incomes remain the same as present.
The elasticity of demand for oil is not infinite.
It probably isn't, over the shorter term, be as huge of a number as you might imagine.
Over the longer term, other constraints would still doom us, and they would do so even more rapidly.
A minor nitpick:
consumption is part of demand. One can buy oil and not (immediately) consume it (think SPR and other inventories).
Or you can spill it (Torrey Canyon et al)
But yes, im grossen und ganzen
you’re right.
Weekendpeak
Ethanol helped a bit, without it you would queuing in lengthy lines or even rationed for your weekly hit....
The ramp-up in production since 2005 has been amazing.
Just a quick Google...............
At peak there is more oil available than ever before and ever will be, so why wouldn't there be cars, planes etc. burning it all? There has never been so much oil available for such frivolous use.
We won't see any of the expected shifts until production actually starts its long descent. When oil prices rise and production actually declines instead of increases, then all hell will break loose. We're currently in the calm before the storm.
If peak oil were reached several years ago, why is the price of oil so low? Here in New York, it is under $95/barrel.
Well a few years ago $95 / bbl would have been viewed as extremely high. A while ago now I would have belonged to the camp salivating over the thought of $200 oil and the impossibility of losing money on oil stocks. But then it became apparent to many that high energy prices drive the world economy into the ground and kill demand causing a reaction in price.
Figure 1 Daily Brent oil prices in red and the annual running average in blue. On current trajectory, the annual average will reach $100 / bbl this Fall. Is the recent spike the new top of the oil price cycle? Or has the World economy adapted to high energy prices? Daily oil price data from the .
Looking at that graph of Brent daily$, and one-year moving average, it immediately strikes me that longer-term moving averages would have a lot of content if produced.
I theorize that an accurate calculation of the "length (time frame)" of the moving average which can completely smooth out a section of that graph to a continuous curve or straight line would then tell us (in the length of the moving average period required) what the exporter's + customer's real response time capability is at that time.
That itself could be very valuable information, e.g. it is obvious that using such a strategy, up to 2006 the "response time" was quite rapid, likely on the order of 2 years.
the response time suddenly increased significantly.
Could such a strategy also be used to separate out supplier response time (price rises upward from the smoothed average) v.s. customer's response times (price drops below average) ??
Also interesting might be shorter-term moving averages, perhaps operating on a smoothed version of the daily or even hourly data, to try to identify the response times and changing response capabilities of the shorter-term input mechanisms to the markets.
(Tanker travel rates, layups, consumer habit changes...)
Perhaps usless at known discontinuities such as Libyan revolution starting....
It's also fascinating, to me as a Canadian who's sort of followed developments in the oil sands, to note that (now surprising to remember) the companies developing there were investing and building flat-out through much of the early 2000's, but Brent price was then below $30 / bbl.
Did they know the price hike was comming?
And why, now, with the price apparently sustained near $100 / bbl, have they backed off significantly in their developments?
Is their stated "we'd prefer a cooler pace of development" simply a desire unrelated to price?
Agreed, materials prices have increased significantly, but not that much compared to the commodity price change.
Labour shortages should also be solvable by means other than halting development....
It is indeed pertinent to note that billions were spent on developing the tar sands shortly after we had $10 oil in 1998. Someone must have had detailed insight to how this game would play out. The second part, cooling off the pace - could that be linked to what has been learned, and that is that high energy prices feeds development cost inflation. Or have they looked into our crystal ball and not liked what they saw?
Did thay make a bet among themselves that the Saudi's wouldn't be able to hold the then-stated $25 / bbl target price?
I wonder where / how high they then predicted the "Saudi target" and the real market to go?
Perhaps they predicted $50 and are now worried at $100?
Or did they forsee the dying of the British North sea fields, and perhaps some other minor declines, causing a rise to profitable $50, but were shocked to see that the Saudi's could no longer control the price (with those implications) and are now worried about entire world economy?
How about this for an example of why they made the bet on the tar sands when they did: two nights ago I finished logging a well that cost $6 million to drill. Why did we drill it? Because it appeared to have a fair chance of producing $40 million of NG and NGL. And that's why our owner wrote a check for half that cost with a group of partners supplying the rest of the capex. Heck...who wouldn't invest $6 mill to make $40 mill.
Now upon finding $40 mill of hydrocarbons folks on TOD would be asking how we knew there was such a profit to be made by this investment. And how freaking smart the Rockman must really be. But yesterday morning I order a cement retainer run into the hole and to plug it. It was a dry hole...not $1 of producible hydrocarbons. Needless to say it's very easy to wonder how someone was so smart to make such an investment or how dumb they were to waste money on such a failure...after the fact.
The folks who invested in the tar sands were given a profit projection of the project and pulled the trigger to go with it. Now they look like really smart folks. And if oil were selling for less than the cost of production from those deposits what we be saying about their intelligence today?
An extreme example: The guy that won the $200 million lottery didn't do so because he was smarter than the 30 million folks who didn't pick th}