About that whole “peak oil” thing…

The idea that one day we would hit peak oil, that point in time where the maximum extraction rate of petroleum is reached and henceforth decline from there on, like many other theories foisted upon us, seems too to be greatly exaggerated.  ScienceDaily recently put out a piece that the US Geological Survey has discovered the largest ever continuous oil and gas reservoir ever found in the Texas and New Mexico Delaware Basin.

Today, the U.S. Department of the Interior announced the Wolfcamp Shale and overlying Bone Spring Formation in the Delaware Basin portion of Texas and New Mexico’s Permian Basin province contain an estimated mean of 46.3 billion barrels of oil, 281 trillion cubic feet of natural gas, and 20 billion barrels of natural gas liquids, according to an assessment by the U.S. Geological Survey (USGS). This estimate is for continuous (unconventional) oil, and consists of undiscovered, technically recoverable resources.

“Christmas came a few weeks early this year,” said U.S. Secretary of the Interior Ryan Zinke. “American strength flows from American energy, and as it turns out, we have a lot of American energy. Before this assessment came down, I was bullish on oil and gas production in the United States. Now, I know for a fact that American energy dominance is within our grasp as a nation.”

“In the 1980’s, during my time in the petroleum industry, the Permian and similar mature basins were not considered viable for producing large new recoverable resources. Today, thanks to advances in technology, the Permian Basin continues to impress in terms of resource potential. The results of this most recent assessment and that of the Wolfcamp Formation in the Midland Basin in 2016 are our largest continuous oil and gas assessments ever released,” said Dr. Jim Reilly, USGS Director. “Knowing where these resources are located and how much exists is crucial to ensuring both our energy independence and energy dominance.”

Although the USGS has previously assessed conventional oil and gas resources in the Permian Basin province, this is the first assessment of continuous resources in the Wolfcamp shale and Bone Spring Formation in the Delaware Basin portion of the Permian. Oil and gas companies are currently producing oil here using both traditional vertical well technology and horizontal drilling and hydraulic fracturing.

The notion that we are going to run out of oil and gas anytime soon is yet another fear mongering tactic used to drum up hysteria that a situation is much worse than it actually is.  Like global warming climate change, it was theorized that we would hit peak oil in the 1970s.  Clearly this has not been the case.  In fact, there are many who think that we’re not running out at all and that Earth is replenishing its reserves.

“Thanks to investment into supercomputers, robotics and the use of chemicals to extract the maximum from available reservoirs, the accessible oil and gas reserves will almost double by 2050,” Engineering and Technology said.

 

A BP official told the magazine that “energy resources are plentiful. Concerns over running out of oil and gas have disappeared.”

 

Things are so good, in fact, that Engineering and Technology says “with the use of the innovative technologies, available fossil fuel resources could increase from the current 2.9 trillion barrels of oil equivalent to 4.8 trillion by 2050, which is almost twice as much as the projected global demand.” That number could even reach 7.5 trillion barrels if technology and exploration techniques advance even faster.

 

This information backs up the idea that Earth is actually an oil-producing machine. We call energy sources such as crude oil and natural gas fossil fuels based on the assumption that they are the products of decaying organisms, maybe even dinosaurs themselves. But the label is a misnomer. Research from the last decade found that hydrocarbons are synthesized abiotically.

 

In other words, as Science magazine has reported, the “data imply that hydrocarbons are produced chemically” from carbon found in Earth’s mantle. Nature magazine calls the product of this process an “unexpected bounty ” of “natural gas and the building blocks of oil products.”

It really wouldn’t shock me at this point if this were the case and we had just been misled by those claiming to be environmentalists.

Pirates of the Caribbean II: Welcome to Venezuela

Lawlessness abounds in socialist nations.  I don’t think bringing back piracy to the Caribbean was what they had in mind.  The Washington Post actually does a pretty good exposé on this.

There have been reports of piracy over the past 18 months near Honduras, Nicaragua, Haiti and St. Lucia. But nowhere has the surge been more notable, analysts say, than off the coast of Venezuela.

An economic crisis in the South American country has sent inflation soaring toward 1 million percent, making food and medicine scarce. Malnutrition is spreading; disease is rampant; water and power grids are failing from a lack of trained staff and spare parts. Police and military are abandoning their posts as their paychecks become nearly worthless. Under the socialist government of President Nicolás Maduro, repression and corruption have increased.

The conditions are compelling some Venezuelans to take desperate action.

One Venezuelan port official, who spoke on the condition of anonymity to address official corruption, said that Venezuelan coast guard officers have been boarding anchored vessels and demanding money and food. He said commercial ships, in response, are increasingly anchoring farther off the coast, and turning off their motors and lights to avoid being seen at night.

It’s important to remember that this could happen to us.  Socialism is often times a slow creep.  It’s part of the reason there was such a huge outcry to Obamacare.  In the United States, health care is about 20% of the gross domestic product.  Thankfully, we’ve elected a President who recognizes this disaster and has tried to dismember it, or encourage Congress to do so.

Venezuela turned to socialism in 1998 with the election of Hugo Chavez.  He redistributed land to the poor and in 2007 took over many of the major oil projects.  Oil is half of the country’s GDP and accounts for nearly 100% of its exports.  Price control, a heavily government controlled economy, and plummeting oil prices have wrecked what should be a prosperous nation.  Venezuela has the largest oil reserves in the world.  There is no reason they should be floundering this badly, or having to cross into Colombia to buy simple necessities such as toilet paper and milk.

Forbes.com has a nice little slideshow here which highlights many other countries that have tried socialism and failed.  The dumbing down of the populace is one of the greatest injustices we have ever seen.  There should be absolutely no reason socialism and communism are as popular as they are, especially among millennials.  Via The Washington Times:

The majority of millennials would prefer to live in a socialist, communist or fascist nation rather than a capitalistic one, according to a new poll.

In the Victims of Communism Memorial Foundation’s “Annual Report on U.S. Attitudes Toward Socialism,” 58 percent of the up-and-coming generation opted for one of the three systems, compared to 42 percent who said they were in favor of capitalism.

The most popular socioeconomic order was socialism, with 44 percent support. Communism and fascism received 7 percent support each.

Let that sink in.  This falls directly on us and our educational system.  This isn’t altogether surprising as the vast majority of academia consists of far left professors and administrators.  While immigration is our most glaring problem right now, reforming the education system is just as important though a much longer process.

Let us not forget the horrors of socialism.  Nationalizing major industries and redistributing wealth always leads to disaster.  The faster we can leave industry to the free markets and disband welfare and other government programs that force redistribution of wealth the safer and better off we will be.

Financial advice in a socialist country

One of the greatest problems of any civilization is forgetting about the past.  We can’t learn from history’s mistakes if we don’t read up on it, or as is more often the case with our education system these days, if we’re not taught about it in the first place (or taught an alternate version).  Enter socialism, a system that no matter how many times it proves to be a total trainwreck, rears its ugly head over and over again.  And we’re promised that “last time it didn’t work, but this time it totally will”.  This article from The Economist explains some of the pains many in Venezuela have to go through because of socialism.

ASK the chief investment officer of a fund-management firm how to spread your investments and you will be told to put so much in stocks, so much in bonds and something in hedge funds or private equity. Chances are that white-elephant buildings, eggs and long-life milk will not feature. But in Venezuela, where the inflation rate is in the tens of thousands, things that people elsewhere would shun for fear they will lose value have become stores of real wealth.

That is why you can see scaffolding and other signs of a building boom dotted around Caracas, the capital of a country that has endured an economic collapse. Businesses need to park their earnings where they will not be wiped out by inflation. A smaller-scale response to galloping prices is the emerging “egg economy”. Eggs hold their value better than cash, for a while at least. They make for a convenient currency, too. It is easier to carry around a half-dozen eggs than a trunkful of banknotes. And many tradespeople would be happier to receive the eggs.

Is that the kind of place we want to live?  Where eggs are the currency and hold more value?  Or where a car is a better investment vehicle (har har) than a mutual fund?  The nation that has the largest oil reserves by country in the world should never in any circumstances be in the kind of financial trouble that they are in.  Socialism has the ability to destroy even the richest of natural resources.

Let this serve as a reminder to us.  Socialism, not now, not ever.

socialism