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@realRodster's avatar

Chris Martenson posted this comment on his website. It paints a clear picture at the types of investment(s) and commitments it takes to extract oil out of the ground. This is all going to end pretty much as Gail Tverberg has said that we will reach a point where oil must be sold at a minimum price and that price will be much too high for the consumer, so it stays in the ground. Michael Rupert who made the Movie Collapse was also of this belief.

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” was just speaking yesterday with a gentleman with 40 years of experience in the oil services business. He operated all over the world, from the North sea, to the Middle East, Africa, and all over the US.

His assessment of the ANWR oil was based on having also worked there putting in man camps, delivering water and oil tanks and other services.

He said, point blank, “They could give that lease land away, and remove every possible fee or tax and it still wouldn’t get drilled. The price of oil is too low.”

Bang! There it is.

His reasoning was that there’s no infrastructure up there. No roads. No electrical lines. No pipelines. No conditioning plants. No welding shops. No restaurants. Nothing.

You have build or bring everything to the show.

By way of example, he said “Just consider the man camps, which were a focus of mine. To build out a 400 person facility is at least $15 million. That’s about what you’d need for a mid-sized operation. We can’t fly all that in, so we have to build roads. In that part of Alaska you have to hug the coasts so you have something solid under your trucks. Alternatively you have to wait for the right temperatures and then build ice roads. Depending on condtions and topography those costs range from heavy to extreme. So who pays for that? If you’re asking my company to do that, and we did, we need contracts that both cover our costs and reasonable profits. At a minimum those are 5 year contracts. After Biden, who is going to sign a 5-year contract to build something that might be zeroed out by the next administration?”

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Hubbs's avatar

We are burning the industrial civilization (IC ) candle at both ends: through the artificial man made construct of debt and through the natural laws of physical thermodynamics of energy cost of energy (ECoE) / energy returned on energy invested (EROEI).

Producing oil coal or NG is a complex specialized task that requires a form of money as a medium of exchange to coordinate drilling , refining, maintenance, and transport.

When the financial system crashes, then so does the specialized interconnected industry needed for extracting energy. When it costs more energy to get that barrel of oil out of the ground than that same barrel provides, then the system also crashes.

Debt and physics. Either way.

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