The Internet makes us dumber: the Bakken euphoria, a case study

Summary:  A case study of information flow on the Internet, and some conclusions.  Why does the Internet sometimes make us dumber?  How can we use it better?  We will need all the help we can get in the days to come.

The Internet can make us smarter — or dumber.  It depends on how we use it.  This post examines the euphoria over the Bakken Formation, and how it grew, briefly flowered, and died.  It is a case study, showing the flows through the Internet of information and misinformation.

I.  We start at the beginning.  This paper sparked new interest in the potential oil output of this area:  “Origins and Characteristics of the Basin-Centered Continuous Reservoir Unconventional Oil-Resource Base of the Bakken Source System, Williston Basin”, Leigh Price (1999/2000) — Price estimated the Bakken formation may hold as many as 900 billion barrels of oil. He died in August 2000; the study was never published by the USGS.   Here is a link to the paper. 

Price’s paper was both technical and obscure.  For anyone wanting facts about this topic, the North Dakota state website provides a clear statement of the facts: Bakken Formation Reserve Estimates.

As interest in the Bakken formation grew, with drilling of several successful low-output wells, more reports appeared on the Internet. 

II.  Some good:  “The Bakken Trend: Lost Dutchmen Mine of the Oil Patch?“, Steven Ward at Seeking Alpha (22 January 2008) — An excellent description of the history, current work, and prospects of the Bakken Formation.  Ward is an independent oil analyst, formerly with Amoco Oil Company.

III.  Some less so:  “Massive Oil Deposit Could Increase US reserves by 10x“, Next Energy News (13 February 2008) — Excerpt (bold emphasis added):

America is sitting on top of a super massive 200 billion barrel Oil Field that could potentially make America Energy Independent and until now has largely gone unnoticed. Thanks to new technology the Bakken Formation in North Dakota could boost America’s Oil reserves by an incredible 10 times, giving western economies the trump card against OPEC’s short squeeze on oil supply and making Iranian and Venezuelan threats of disrupted supply irrelevant

IV.  The much-derided mainstream media published an excellent article on this:  “Report on Bakken oil potential expected“, Business Week (7 April 2008)

Now the blogging community had some red meat to chew on!  Which did they focus on?  The wild article by Next Energy, or the boring but factual Business Week story?  The first post I could find was mild.

V.  “The Bakken Formation: How Much Will It Help?“, Gail the Actuary, posted at The Oil Drum (23 April 2008) — An excellent review of what we know, and do not know.

VI.  “Peak Oil Update, 10x increase in US reserves“, Russell W. Steele posted at NC Media Watch (8 April 2008) — A reasonable opening “We have heard a lot about the decline of oil reserves, which are estimates based on current technologies. With new technologies and higher prices, new reserves come on line.”  Then he links to the explosive, exaggerated Next Energy News Story.

 But things quickly spun into fantasy-land.

VII.  North Dakota Discovery – 200 Bn Bbl Of Oil“, M. Simon posted at Power and Control (9 April 2008) — Also posted at Classical Values.  Note the certainty of his opening line.  Only 400 words later, does he give a caution, before ending on a note of euphoric absurdity — as if low-flow discoveries like this are substantial offsets to the peaking of super-giant fields like Ghawar, Burgan, and Cantarell.

Two hundred billion barrels of oil have been discovered in North Dakota.

… The first report was a quote from New Energy which often gets things wrong. I’d say the Business Week Report is more reliable.  Here is a technique for Mining Oil. I think the peak oil folks got it wrong. As usual. Capitalism beats the fear mongers. Again.

VIII.  Once the story assumed its mature form, the Instapundit linked to it — posting it in his center ring under his Big Top as “BLACK GOLD. NORTH DAKOTA TEA“.  From this foundation, thousands of blog posts flowered.  Note how the Instapundit often prefers links to folks with no background in the subject under discussion.  That is, outside his own professions, of course.  With legal issues he usually links to experts with credentials. 

IX.  The US Geological Survey published their long-awaited National Assessment of Oil and Gas Fact Sheet.  “{An} estimated mean undiscovered volumes of 3.65 billion barrels of oil, 1.85 trillion cubic feet of associated/dissolved natural gas, and 148 million barrels of natural gas liquids in the Bakken Formation.”

IX.  Eventually the major media writes realistic descriptions of the situation.  See this nice description of drilling in the Bakken fields: “Dakota Oil Fields of Saudi-Sized Reserves Make Farmers Drillers“, Bloomberg (3 June 2008) — There is a long excerpt in the comment section.

Conclusions

The Internet links us together into a vast cybernetic organism.  As with the forged documents shown on Sixty Minutes, it disseminates information and insights such that the America seems like a village.  But does the Internet serve us as well with complex events that require more expertise?  The mainstream media, for all their faults, does bring experts into the national discussion — who (at their best) paint issues with some depth.  We see a different dynamic at work as the Internet “processes” recent events in Basra, the “cut cable crisis”, and the Bakken Formation.  Here fact takes second place to emotion, expertise to sensationalism.

It need not be like this.  Most bloggers on such serious subjects have good educations.  Bloggers — we — can take the extra few minutes to locate good sources, and exercise responsibility for our roles before hitting the enter key.

I believe there are difficult times ahead for America.  The Internet can help us, if we use it wisely.  It just magnifies our abilities, our strengths and weaknesses.

Please share your comments by posting below (brief and relevant, please), or email me at fabmaximus at hotmail dot com (note the spam-protected spelling). 

Click here to see other articles about Peak Oil on this site.

Posts about the Internet: does it make us smarter or dumber?

  1. Cable Cut Fever grips the conspiracy-hungry fringes of the web, 7 February 2008
  2. Resolution of the Great Submarine Cable Crisis — and some lessons learned, 8 February 2008
  3. What do blogs do for America?, 26 February 2008
  4. The oddity of reports about the Iraq War, 13 March 2008
  5. Euphoria about the Bakken Formation, 10 April 2008
  6. The Internet makes us dumber: the Bakken euphoria, a case study, 15 April 2008
  7. Does reading Debkafile make us smarter, or dumber? , 15 June 2008
  8. A Congressman ignites a netstorm about Twitter, 9 July 2008

Posts about rumors of a US armada sailing to blocade Iran

  1. More rumors of war: our naval armada has sailed to Iran!, 9 August 2008 — Tracing the origin of these rumors.
  2. Update on the rumored armada sailing to Iran, 13 August 2008 — With updates from Stratfor and Debkafile.
  3. A US naval armada is en route to blockade Iran and start WWIII (the story gets better every day), 14 August 2008 — More details from one of the bloggers who shot this story into cyberspace, and an official US denial.
  4. UPI reports on the multi-national armada sailing to Iran, 15 August 2008
  5. Stop the presses: no naval armada has sailed to blockade Iran!, 20 August 2008

16 thoughts on “The Internet makes us dumber: the Bakken euphoria, a case study

  1. On this subject, I completely agree. The internet is an amorphous creature, though. It may be 90% opinion, or gossip, but it also includes all the major newspapers, news aggregator sites, learned journals, expert commentators like William Lind, etc. A real democratic agora, you might say!

    My biggest concern is that we all spend too much time on the internet. A virtual community is not really a community at all, and blathering and shouting back and forth with someone in North Dakota is not the same as getting your neighbor to vote for a local school bond.

  2. Yes, the internet does make society dumber…

    Before the rancid, parasitic libtards had to make a real effort to spew their inane nonsense…

  3. Have to take issue with your conclusions about the Bakken Trend hoopla. The final government report specifically made no estimates of provable reserves. Rather its conclusion was limited to amounts it believed could be recovered. The number they came up with was far less than any one in the industry would have predicted. It is less than one percent of the in ground oil at the low end of estimates. Under current drilling technology, somewhere between 8 to 50 percent of the reserves in place would be recoverable. Take the low end and you still come out with 16 billion barrels. Current wells being drilled on site initially produce over 2000 barrels per day. Over time it is expected to decline to about 500 per day. Production is greatly increasing in this area, which also includes part of Canada. Montana declared an 18 month tax holiday which has seen exploration explode in the state. If ND were to do the same and perhaps throw in some rebates, who knows how much production could be realized. All I know is that there is more oil being produced now than the pipeline can handle and they have resorted to trucks to ship it out. This is surely not the sign of a minor find. Through the miracles of sideways–horizontal–drilling many promising domestic oil fields are being developed.

    It must be understood that the government report relied on flawed methodology about how much oil was recoverable and it never attempted to measure the total amount of oil in the ground. Now I have unfortunately misplaced by tin foil hat, so I won’t begin to speculate on why this was so. All I do know is that Shell and Marathon, two majors looking to cash in are anxiously looking for opportunities here. In addition, the property clerks’ offices in ND and Montana have been overrun by oil men looking to identify and buy up leases. If Exxon or Chevron decide to forgo this play, then one must wonder why.
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    Fabius Maximus replies: What specific conclusions do you take issue with? This is not clear to me from your comment. You do not seem to address any of my key points. Esp the relevance of flows over reserves for unconventional resources.
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    Your last paragraph is esp irrelevant to my post. I never said or implied that folks could not make money exploiting these fields, just that these fields have minimal significance on the national and global levels.

  4. Update: Nice description of drilling in the Bakken fields: “Dakota Oil Fields of Saudi-Sized Reserves Make Farmers Drillers“, Bloomberg (3 June 2008) — Excerpt:

    “The challenge is getting the oil out. Bakken crude is locked 2 miles (3.2 kilometers) underground in a layer of dolomite, a dense mineral that doesn’t surrender oil the way more-porous limestone does. The dolomite band is narrow, too, averaging just 22 feet (7 meters) in North Dakota.

    … For decades, the Bakken was the fool’s gold of the oil industry. The name describes a geological formation that looks like an Oreo cookie: two layers of black shale that bleed oil into the middle layer of dolomite. It’s named after Henry O. Bakken, the North Dakota farmer who owned the land where the first drilling rig revealed the shale layers in the 1950s.

    All of the layers are thin — about 150 feet altogether — and none of them give up oil easily. In older, vertical wells, oil would often flow for a month and then fizzle.

    Now, companies like Austin, Texas-based Brigham Exploration Co.; Denver-based Whiting Petroleum Corp.; and EOG are drilling horizontally. They go straight down 10,000 feet and then put a slight angle in the mud motor, a 30-foot piece of tubing that drives the bit, so they hit the Bakken sideways, making a horizontal tunnel 4,500 feet long through the dolomite.

    That exposes more of the oil-bearing rock. Then they pump pressurized water and sand into the hole to fracture the dolomite, making cracks for oil to seep through.

    … It drilled a horizontal well in western North Dakota just north of Parshall — population 1,028 — in April 2006. The well came online a month later and kicked out 1,883 barrels in the first seven days. Unlike the older vertical wells, it’s still going. In March, it produced 2,305 barrels, according to the North Dakota Industrial Commission. {FM note: the well initially produced 270 b/day; output dropped by 70% over two years to 74 b/day}

    … The Bakken isn’t foolproof. Far from it. Drilling there is expensive — about $5 million a well, according to EOG — and takes experience. Dallas-based Petro-Hunt’s first well in the North Dakota Bakken didn’t make money, company geologist Steve Bressler says. Brigham’s Bergstrom Family Trust well came online at 277 barrels a day — viable at today’s high oil prices but not a gusher.

  5. Just noticed this post and the comments. Some specific descriptions of terms could clear up much of the misunderstanding. The original oil in place (OOIP) is estimated to be between 200 and 400 billion barrels, but the recovery estimate is slightly above 1 percent of the OOIP. That puts the 3.65 billion barrel resource estimate in perspective. Apparently many of the “reporters” did not distinguish between OOIP and resources. Also, the middle layer of the Bakken Fm is not dolomite. It consists five different lithologies: from top to bottom they are siltstone, interbedded shale and sandstone, sandstone, interbedded shale and sandstone, and siltstone. The comments on the challenges of drilling and producing the Bakken are on target.

  6. {FM note: this site is about geopolitics; there are thousands of other sites about investmnets.}

    {snip, no discussion of investments} Published yesterday: daily oil productivity in Mountrail County (one of several counties in North Dakota in the Bakken) is now averaging 60,000 barrels of oil/day; up from 2,000 barrels of oil per day 18 months ago. Most of that growth has been in past 12 months. Local folks say the drilling has barely begun. Folks who think the Bakken was overhyped misunderstood the technical information.

    The USGS estimate that “recovery estimate is slightly above 1 percent of the OOIP.” No one has any idea what the actual percent recovery is but some sources say some drillers are getting as much as 5 – 10%. If so, that’s 5 to 10 times the USGS estimate. It’s USGS’s responsibility to remain conservative. {snip} One in five drilling rigs in the US are now drilling in North Dakota; I forget if that’s in all of US or just in lower 48. But one in 5 drilling rigs, pretty impressive. NDIC is limiting production of oil from some fields because companies cannot transport it all out without losing natural gas. The story is just beginning.

    “277 barrels a day — viable at today’s high oil prices but not a gusher.” Well, let’s see, $277 x $100/barrel = $27,700 day = $2,770,000 every hundred days. And not all wells are decreasing production. One well’s IP was 1,110 bopd is now up to 1,500 bopd. Technology keeps getting better. {snip}

    We all have our myths, said JRR Tolkien. Fact: North Dakota is poised to move to number 5 among US states in oil production. How that translates to the Bakken has no implication for national/global supplies is beyond me. {snip}
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    Fabius Maximus replies: This is an impressive example of someone not getting the point. The numbers cited are trivial vs. global consumption of 85 million barrels per day.

    This is not worth the trouble to check, but one error is obvious: “One in five drilling rigs in the US are now drilling in North Dakota.” Per the Baker Hughes data, as of 10 October there were 1,889 land rigs in the US — and 74 of those were in North Dakota (4% of the total).

  7. Baker Hughes Data is “land rigs.”

    I was referring to actively drilling rigs. There are about 429 actively drilling rigs in the US; at the NDIC site we show about 88 rigs in North Dakota and about 84 of them actively drilling any given day.

    80/400 = about 1 in 5. “This is not worth the trouble to check, but one error is obvious.” I guess fact checking is important, but not always worth the trouble.

    In 2010 it is projected that production from the Bakken will surpass that of Prudhoe Bay (Alaska) — the biggest oil find when Prudhoe was discovered. How one can say that the Bakken was overhyped and has no national/global impact is beyond me.
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    Fabius Maximus replies: That is a bizarre way to evaluate the significance of an oil find. At some point in the future, Prudhoe Bay’s production will be zero, and recycling oil from my car will be a greater source of oil.

    “Organic” production at the world’s existing fields is declining at 4% – 8% per year. That is, new wells must be drilled each year to produce 4 to 6 million b/day. That means opening dozens of new fields like the Bakken’s annually. Another way to put it: On a bad day Cantarell’s production drops more than Mountrail County produced.

    As for fact checking, it is important to catch when people use non-standard and hence misleading numbers. Since we know only what you said, not what you meant , that suggested 1 in 5 rigs meant 377 rigs, not the 85 actual.

    I do not know what you mean by “One in five drilling rigs in the US are now drilling.” Esp since you gave no source. As you include only 1/5 of the US active rig count, your definition must be very narrow. The industry standard definition of an “active rig” is:

    “To be counted as active a rig must be on location and be drilling or ‘turning to the right’. A rig is considered active from the moment the well is “spudded” until it reaches target depth or “TD”. Rigs that are in transit from one location to another, rigging up or being used in non-drilling activities such as workovers, completions or production testing, are NOT counted as active.”
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  8. I’ve lost track. Is fabius proponent/opponent of “Peak Oil” theory.

    Obviously “peak oil” theory is a myth. I was taken in by it in the 1970’s when I started taking the bus during the oil embargo. Then I got sucked in again recently when oil went to $147/barrel.

    But now oil is well below $70. Plenty of oil. OPEC calling emergency meeting. Has to curtail oil; too much production; too much oil. We won’t run out of oil in my lifetime and not in the lifetime of my children, and probably not even in the lifetime of my grandchildren.

    The Bakken will take me through my lifetime (20 more years). US offshore will take my children through their lifetime (50 more years). Brazil offshore will take my grandchildren through their lifetime (70 more years).

    I have moved on. No more postings on “peak oil.” Like global warming, it’s over — the discussion is over. I guess “too much oil” starts to put the crimp on alternative energy. Folks are going to enjoy paying increased subsidies to support alternative energy. It’s the patriotic thing to do.
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    Fabius Maximus replies: Do not duplicate post comments on different threads!

    As for these forecasts, the basis for them is unlcear as Oksol cites no sources and gives no numbers. Is he speaking ex cathedra? Using psychic powers? Or just making stuff up, as in his previous comments?

    (1) I know of no experts who belive Peak Oil is not coming (other than the “hot oil” folks on the fringe). The public data is insufficient to determine when, hence the range of forecasts from now through 20 years plus. Also complicating the calculation: global GDP over the next 20 years might increase 22% (1% annual) or 165% (5% annual).

    (2) Short-term demand changes can move commodity prices by large amounts. This says nothing about the long-term availability of oil.

    (3) I suggest that you subscribe to a newspaper, or start reading Yahoo News. Oil prices are falling due to a decline in demand as the world slides into a recession (US GDP was negative in the 4th quarter of 2007, and things have gotten much worse since then). How can you write about oil and not know this?

  9. Supply is now about 3 million bopd in excess of demand (according to OPEC). That would be in today’s newspaper.

    I no longer worry about “Peak Oil” — it doesn’t matter if we produce less oil in the future. All that matters is whether there is enough oil to meet demand.

    It is clear that there will be more than enough oil to meet demand during the rest of my lifetime (20 years). The Bakken and similar fields will ensure enough oil to meet demand through the lifetime of my children (50 years). And Brazil offshore, US offshore, coal to oil, better technology, alternative energy sources, will ensure enough oil through the lifetime of my grandchildren (70 years).

    Folks, including very smart oil men, have been all over the map on predicting future oil supplies. It seems through all these predictions we have never been short of oil — except those generated by political actions, such as the embargo on Mideast oil (the 1970’s) and the pseudo-shortage perpetuated by government policy (no drilling in certain parts of Alaska, or offshore; well, duh, that tells me there’s no shortage for at least 50 years in the minds of those who make policy).

    I was fooled into taking the bus in the 1970’s during the oil embargo (that was turned around pretty quickly with just a bit of discipline — limiting folks to filling up only 10 gallons at a time) and I was fooled before the Bakken, thinking that gee, “they” really might be right — there really could be a point when there won’t be enough oil.

    Well, supply is now outstripping demand by 3 million barrels per day (October 19, 2008; source: OPEC; today’s newspaper). Before the Bakken came on-line: oil approaching $147/barrel; the Bakken comes on-line: oil approaching $68/barrel.
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    Fabius Maximus replies: How nice that you finally use a number! Unfortunately you do not understand its significance. OPEC’s (i.e., the Saudi Princes’) practice has been to maintain a cushion of spare capacity in this most vital product of aprox 2% of consumption (aprox 1.7 million b/d at cuurent usage of 85 mpd). So the 3 million of capacity above demand (3.5%) is a roughly 1.5% excess. That excess resulted from a decline in demand, not new supply (which has flat-ish since 2005) — and can be absorbed by in year or so when growth resumes (which it will, eventually).

    As for the rest, since you appear to have no interested in data, there is no point in continuing this discussion.

  10. Today’s news from the Bakken (nothing made up, unless the reporter was lying; simply cut and paste; this is really too easy)

    1. “State and industry officials say North Dakota is on pace to set a state oil-production record this year, surpassing the 52.6 million barrels produced in 1984. A record number of drill rigs are piercing the prairie, and North Dakota has nearly 4,000 active oil wells….”

    {Snip. Please, no promotion of your stock ideas; this is totally off-topic for a geopolitical site. Repeat offenders will have future posts moderated}
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    Fabius Maximus replies: That is 144 thousand barrels per day, only 0.17% of world production. Probably more than this is spilled every year.

    Since production declines of the world’s wells averages aprox 4 or 5 million barrels (5%; estimates range up to 8%), the world needs to open new production equivalent to 30 North Dakotas every year just to maintain current consumption. And global demand is growing over time …

    This is childish and a waste of time. Future comments will be moderated. Comments like the following one, with a reasonable basis in fact and logic, will be posted.

  11. Today’s news from Oil & Gas Journal: “US replaced more than twice 2007 gas used” (see below).

    More than twice the amount of gas used this past year. Replaced more oil reserves than the country used. This was without offshore drilling and no additional drilling in Alaska. I guess the Bakken (came on-line in 2007) must have had some global/national impact.

    Yeah, the internet makes some folks dumber, I suppose, but the Bakken was the wrong case study to use.

    Wow — replaced natural gas reserves by more than twice what we used; and replaced oil reserves by more than what we used. And the only really new finding was the Bakken. Wow.

    Here’s the whole story, verbatim (a Latin word). Full of records, firsts, and nothing about “peak oil theory” (breath of fresh air). Note the paragraph about the Bakken (yeah, I know it has no national/global significance):

    HOUSTON, Oct. 18, 2008 — The US replaced more oil reserves than the country used in 2007 and added more than twice the amount of gas used that year, the US Energy Information Administration said Oct. 17. The oil additions were the first in 4 years, and the gas additions set a record, the agency said.

    Operators added 2 billion bbl of proved oil reserves in 2007, a year in which the country produced 1.7 billion bbl. They added 46.1 tcf of proved dry gas reserves while producing 19.5 tcf. The changes brought yearend 2007 reserves to 21.3 billion bbl of oil and 237.7 tcf of gas. That left the country with 13% more proved gas reserves and nearly 2% more proved oil reserves than yearend 2006.

    “The dry natural gas reserve additions mostly reflected the rapid development of unconventional gas resources including shale, coalbed methane, and tight low-permeability formations,” EIA said. It said shale proved reserves rose 50% in 2007 and now account for 9% of the US total.

    … Alaska’s year-to-year proved oil reserves were up 284 million bbl or 7%, including 45 million bbl in new field discoveries. Texas was up 251 million bbl or 5%. North Dakota had the third largest gain, 70 million bbl or 17%, due to rapid development of unconventional oil in the Bakken formation.

    The US produced 76 billion bbl of oil in 1977-2007, more than twice the proved reserves estimated in 1977, EIA noted. Coalbed gas reserves grew 11.5% in 2007 to 21.8 tcf and account for 9% of US dry gas reserves. Natural gas liquids reserves, which represented 30% of total liquid hydrocarbon proved reserves in 2007, climbed 8% to 9.1 billion bbl in 2007. NGL reserves include condensate.
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    Fabius Maximus replies: And its significance is? If we did this consistently it would be of significance. If the world did this consistently, it would be historic. As it is, this is nothing exceptional. As the release says, this is the first time in 4 years — one of a series of blips up in a 30 year trend of net depletion. There are no straight-line trends in nature.

    This is increase results from increased prices, stimulating higher capital investments. The current oil price crash probably renders some large fraction of these investments uneconomic, at least for now. Continued oil prices at these levels — or, as some forecast, down to $50 for WTI — will result in a crash in captial expenditures on exploration and development at all but the largest E&P companies. Hence a return to declining reserves for the next few years.

    The natural gas news is interesting — and unexpected by experts, the result of a massive increase in rigs over the past several years. The US has 1576 rigs drilling for natural gas, an astonishing 40% of the world’s total of 3521 rigs. It’s expensive, gets results — but somewhat of a Red Queen race. To keep production flat-ish we must constantly increase the number of rigs. When the race ends, we must tap the LNG markets, at far higher cost. The transition might be painful.

    Note: of the 2 billion bbl of new proved US oil reserves, North Dakota contributed 3.5% (70. The world trembles with the news.

  12. Foreign oil as percent of total oil used in United States (source: Wall Street Journal):

    1974: 35%
    1975: 36%
    1980: 37%
    1985: 27% (the Reagan years)
    1990: 42%
    2005: 60%
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    Fabius Maximus replies: (1) Please give additional information about your sources. Standard practice is at the very least the date and title of the article (so others can find it). If you are viewing it on the Internet, please share the link with us.

    (2) I don’t know what this is supposed to mean. Without context it is chartjunk.

    (3) To label the 1985 number “the Reagan years” is foolish. US consumption peaked in 1978, decreased by 19% to the trough in 1983 (source is EIA data). Reagan took office in 1981. US oil production declined 5 – 10% (depends how measured) during his 2 terms — as it has since peaking in the 4th quarter of 1970 — with fluctuations along the way, of course (source is EIA).

    The EIA has a nice one-page brief explaining “How dependent are we on foreign oil?

  13. No one will see this on this site because it will be censored, but I will post it elsewhere.

    Drudge reports that President Obama will use executive order to stop drilling for oil on BLM land in Utah (this drilling was recently allowed by President Bush). President Obama states that he is doing this for environmental reasons but the reason is that we are awash in oil. There is so much oil sloshing around the world we have to start cutting back somewhere. This will put peak oil to the right on the curve. This comes on top of OPEC cutting production drastically. Just too much oil. They’re even talking of slowing production in the Bakken. What next?

    Obama to use executive orders for immediate impact“, AP, 9 November 2008
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    Fabius Maximus replies: Deflation is a collapse in aggregate demand for goods. There is “too much” of everything, at least by comparison with our incomes.

    “What next” is described at considerable length in my series about the Financial Crisis – What’s Happening? How will it end? The last deflationary collapse we had was in the 1930’s, which pretty much says it all.

    By the way, do you ever answer your emails? I have sent you several about repeated violations of the FM site’s comment policy (repeating the replies placed here): repeated commercial references, repetition, and non-topical comments.

  14. The number of North Dakota millionaires increased by 17% last year (2007 over 2006). The bigger story is the significant increase in income for all North Dakotans since the discovery of the Bakken, and more importantly, how to access that oil. A great case study. Now there’s so much oil sloshing around, production is being cut back, and gasoline is now $1.79/gallon in our area.

    This will be censored by the webmaster for Fabius and won’t be seen here so it will be posted elsewhere.

    Source: http://www.bakkenresources.com/
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    Fabius Maximus replies: More spam. I blocked this person (the only one on my blocked list) as his comments — his frequent comments — were either trivia about North Dakota (irrelevant to this site) or promotational. This one is both. I find it amazing that people spend time posting this stuff. Fortunately we have spam filters.

  15. I’ve lost sight of the reason for this blog. I know that one of the points on this blog at one time had to do with peak oil theory. I’ve long lost the bubble. It seems no one else is reading this other than the webmaster and me, and at least one of us has lost the bubble.

    It seems we are awash in oil and natural gas. It was announced earlier this year (March, 2008) that there is a huge new natural gas field in eastern Washington/Oregon state. Now today, Shell Australia announces huge natural gas find off Australia (source: http://www.ogj.com/display_article/346951/7/ARTCL/none/none/Shell-Australia-finds-gas-with-Libra-1-wildcat/?dcmp=OGJ.Weekly.ED). It seems we are awash in oil. I would like to think the Bakken had something to do with that. The Bakken is viable starting in 2007; one year later we have so much oil, price is crashing and OPEC is cutting back.

    Gulf oil CEO says gasoline will get near $1/gallon next year.

    I don’t know if webmaster buys into / doesn’t buy into peak oil theory. But the facts are interesting. There’s so much oil, OPEC is going to have to cut back, and the discoveries keep coming even with oil at four-year lows.

    This may be censored by the webmaster for Fabius and might not be seen here so it will be posted elsewhere.
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    Fabius Maximus replies: Oksol’s posts are interesting for their inability to recognize that the world has changed. While it is easy to just attribute this to stupidity, that might be incorrect. I suspect that this is a widespread phenomenon. The global economy is in free fall — with consumption collapsing of copper, oil, shipping, cars, and a thousand other goods. But some people remain oblivious to these changes.

    At some point they will become so evident that even the most self-centered and blinkered Americans will see them. How will they react to a long-term decrease in our wealth and income? This will be interesting to watch.

    As for his point about usage, Oskol seems unable to read the wordpress traffic and sitemeter visitor counters at the bottom of the right-side menu bar. I suspect that is because his comments are just spam, and he does not read the replies to his comments (or emails).

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