Andrii-zvorygin Peak-oil Meeting Transcript — August 6, 2026

00:00:01 Speaker 01: Greetings in the love and light of the infinite Creator.

00:00:03 Speaker 01: I'm Andrii Zvorygin.

00:00:04 Speaker 02: Joined here today with Jean Laherrère, Roger Bentley, Dan, and Gail Fairbairn, and we're going to begin with a presentation from Jean and Roger about the forecast updates for world oil.

00:00:20 Speaker 02: And then Arthur Berman should join us for the second hour on adaptive oil markets.

00:00:28 Speaker 02: And Gail may also tell us about how affordability ties into reality.

00:00:36 Speaker 02: Okay, Roger, would you like to introduce yourself?

00:00:39 Speaker 02: I'll start off myself.

00:00:42 Speaker 02: I've been very privileged to work with Jean Laherrère and with Colin Campbell from the early days of the reports they did with Petro-Consultants on oil and gas.

00:00:57 Speaker 02: Very privileged.

00:00:58 Speaker 02: Worked about thirty years.

00:01:00 Speaker 02: Jean longer than me, and my background was physics and chemistry, then solar energy, and then oil.

00:01:09 Speaker 02: And I'm still writing papers, helping Jean write his.

00:01:13 Speaker 02: Okay, Jean, perhaps you introduce yourself, Jean briefly?

00:01:19 Speaker 02: Well, first, I'm an old man; today ninety-five years old.

00:01:25 Speaker 02: Ninety-five years old, so you can see I've been working on oil for a long, long time.

00:01:35 Speaker 02: I started with the discovery of the largest oil field and gas field in Africa: Asimissa Wood and Asela Well, in 1956.

00:01:51 Speaker 02: Also, so I moved from two different places, and I went to Australia.

00:02:01 Speaker 02: I was there five years—five years, five years.

00:02:04 Speaker 02: I was living there working with Colin Campbell, and now [I'm] in Austria.

00:02:09 Speaker 02: But I like to make art, and for me, you understand...

00:02:18 Speaker 02: Okay.

00:02:19 Speaker 02: Only when you see on the graph.

00:02:22 Speaker 02: Okay, thank you.

00:02:23 Speaker 02: All right.

00:02:23 Speaker 02: So Roger, here's the first slide.

00:02:28 Speaker 02: Thank you.

00:02:28 Speaker 03: Thank you, Andrew.

00:02:30 Speaker 03: So yes.

00:02:31 Speaker 03: So this is a report—a big report that Jean has done on world fossil fuels: all the fossil fuel forecasts to 2150.

00:02:43 Speaker 03: We'll go through it; it's fairly short.

00:02:46 Speaker 03: Jean says he was head of exploration techniques.

00:02:49 Speaker 03: The big report exists.

00:02:51 Speaker 03: It's on ASPO France website, and I and three others are helping him write a paper—submitting a cut-down paper on the same thing.

00:03:03 Speaker 03: Roger, may I stop?

00:03:05 Speaker 03: Sorry to stop you.

00:03:06 Speaker 03: You see: most of the reports in the past were data by volume.

00:03:11 Speaker 03: For the first time, it was data by weight.

00:03:14 Speaker 03: It is completely different.

00:03:16 Speaker 03: Yes; that's why I think this report is different from what I did in the past.

00:03:23 Speaker 03: Very, very good.

00:03:24 Speaker 03: Thank you, Jean.

00:03:25 Speaker 03: That is a very good point.

00:03:27 Speaker 03: So he says most of his studies in the past were by volume—barrels of oil and so on, cubic feet of gas—and now he's doing weight, which makes it more comparable.

00:03:38 Speaker 03: So very good.

00:03:41 Speaker 03: Can we just go back to the previous one, Andrew, briefly?

00:03:46 Speaker 03: Yes; because there he is...

00:03:48 Speaker 03: He was theory: Jean was an associate consultant at Petro Consultants, and those first three reports (1994 to 1996) were groundbreaking.

00:04:00 Speaker 03: Petro Consultants existed before IHS Energy turned into S&P Global.

00:04:08 Speaker 03: And the important point: Petro Consultants had decided they would share oil consultancy data, and almost asked people like Jean to be associate consultants to write these really landmark reports.

00:04:23 Speaker 03: So they were absolutely solidly based on really good data, and you can see three major reports there: petroleum potential; supply of oil and gas potential—really, really good.

00:04:37 Speaker 03: And out of that came the really famous landmark paper by Colin Campbell and Jean Laherrère, "End of Cheap Oil."

00:04:45 Speaker 03: The End of Cheap Oil (Scientific American), which has, of course, turned out to be completely correct, as we will show.

00:04:53 Speaker 03: And then there's some other papers—many on the ASPO website—which John [Laherrère] has written over the years.

00:05:00 Speaker 03: But as he says, this one on fossil fuels is the first to be weight-based, not volume-based.

00:05:08 Speaker 03: And then you've got some other papers there that are in press and in train.

00:05:12 Speaker 03: Okay, thank you.

00:05:13 Speaker 03: Next slide, please.

00:05:16 Speaker 03: So this is the main conclusion from the main report: extraordinary figures that you'll be presenting.

00:05:25 Speaker 03: You've got historical production data from a dataset that ASPO France has been collecting—historical production from 1900 to 2150.

00:05:36 Speaker 03: It's a wonderful thing; you don't normally see charts quite so long, but Jean is a chart expert, and you can see it's in gigatons (by weight).

00:05:49 Speaker 03: Coal [in black] goes up and peaks—in Jean's analysis—which we'll discuss later—about now, 2025.

00:06:00 Speaker 03: Oil—the green line—went up in the seventies and then went down with the oil shocks of the seventies.

00:06:07 Speaker 03: Gail Tverberg and others are all well aware of this; it has gone up again and is shown here: oil going over the top and down.

00:06:17 Speaker 03: Likewise gas (conventional gas, to be fair), and also in this model is brown coal—the kind we mine—oil shale [in green].

00:06:30 Speaker 03: It's been significant but not a huge amount.

00:06:33 Speaker 03: And then coal bed methane.

00:06:36 Speaker 03: So that's...

00:06:36 Speaker 03: We'll go into it later; look at that graph again later on—but that's the main message: they're all more or less at peak,

00:06:45 Speaker 03: and we'll discuss which ones are resource-limited peaks (and that's important) versus those reflecting costs and so on.

00:06:57 Speaker 03: So let's go to the next slide, please.

00:06:59 Speaker 03: Thank you, Andrew.

00:07:01 Speaker 03: Here's a wonderful chart from Jean using Hubbert linearization.

00:07:06 Speaker 03: Hubbert linearization was developed by M.K. King Hubbert:

00:07:13 Speaker 03: if a mineral or resource is following a logistic curve in its cumulative production (one that goes up exponentially and then through an inflection point before going down exponentially), then as Hubbert showed,

00:07:33 Speaker 03: if you plot on this graph—annual production divided by cumulative production on the y-axis, and cumulative production on the x-axis—and it's following perfectly... well,

00:07:46 Speaker 03: actually it never does because of course it starts at zero while logistic curves start at minus infinity, so it can't follow that to begin with.

00:07:55 Speaker 03: But pretty soon, if it is following a logistic curve for the cumulative production of that mineral or resource, then you start to get this strange straight line here—amazingly,

00:08:05 Speaker 03: global oil production has been a straight line for many years, all pointing to a limit: production will cease when there's no more production left.

00:08:18 Speaker 03: You've used up your ultimate resources when you reach 400 gigatons of oil; and importantly—and never to be forgotten by Andrea [Zvorygin] and everybody else—you actually go over the midpoint halfway through.

00:08:33 Speaker 03: So you might have lots (and lots) of oil, coal or chromium left, but once you pass the midpoint it starts declining.

00:08:42 Speaker 03: That's the background number that Jean generated with one of his wonderful graphs.

00:08:49 Speaker 03: And then the next slide shows what that says about world output: so Jean takes those 400 gigatons—as you can see, actually around 390 gigatons—and shows that cumulative production goes up (on the purple curve).

00:09:09 Speaker 03: You've already gone past the inflection point and are going over the top.

00:09:13 Speaker 03: And again with global oil: you had the 1970s production peak right down because prices shot up—as we'll look at later—then prices went back for a while, then [production] went over the peak.

00:09:27 Speaker 03: So this is all oil (global).

00:09:32 Speaker 03: But if you look just at conventional oil—that subset—in fact since 2005, marginal barrels have been non-conventional oils and NGLs.

00:09:46 Speaker 03: This had four effects: it put up the price of oil; increased decline rates; more CO₂ emissions per average barrel; and lower energy return on investment (EROI).

00:09:58 Speaker 03: Charlie Hall's favourite important parameter—energy return on energy invested—which Andrew's workshops have discussed many times and will discuss in future.

00:10:10 Speaker 03: So that's global oil.

00:10:12 Speaker 03: And here we go: let's look now at conventional oil.

00:10:16 Speaker 03: Here's a lovely chart from the IEA (International Energy Agency), produced late 2025 showing total production 2000 to 2024 of global oil by IEA definitions, with onshore conventional (dark blue), shallow water (lighter blue),

00:10:39 Speaker 03: deepwater (darkest blue).

00:10:42 Speaker 03: You put all those together and you can see that global production of conventional oil—those three combined: onshore, shallow offshore, deepwater offshore conventional—actually reached a plateau in 2005.

00:10:56 Speaker 03: So in 2005 it plateaued to about 2008 and has been declining since.

00:11:03 Speaker 03: And we did a lovely little survey with some people at the London Energy Institute; not one of them—all experts—not one knew that global conventional oil had reached maximum and was in decline.

00:11:16 Speaker 03: Not one!

00:11:18 Speaker 03: Wow.

00:11:18 Speaker 03: So, what do we produce now?

00:11:20 Speaker 03: We've still been producing more oil—as you can see—but most of it has been natural gas liquids (NGLs).

00:11:27 Speaker 03: Some [data] only goes to 2024: light tight oil mostly in America; some in Canada and other places; then there's extra-heavy oil, tar sands.

00:11:40 Speaker 03: But global conventional oil plateaued from 2005 to 2008 and has been declining since—that's the "other oils" we've produced.

00:11:49 Speaker 03: And this is a lovely IEA plot.

00:11:53 Speaker 03: Okay—is that all clear, Andrew?

00:11:55 Speaker 03: Clear enough?

00:11:56 Speaker 03: Yeah.

00:11:56 Speaker 03: Next slide, please.

00:12:00 Speaker 03: So one more on the conventional oil base: similar chart produced some time ago combining global shift data.

00:12:07 Speaker 03: If you want to know anything about oil, go to globalshift.co.uk website.

00:12:12 Speaker 03: Again, the nice thing about this is we added the price of oil so you can see that for many years—the real terms price—oil was only $20–$25 a barrel for a long time (1925).

00:12:29 Speaker 03: This chart covers 100 years; then suddenly there were the shocks of the seventies.

00:12:35 Speaker 03: I lived through them: first increase in '73, and second in '78.

00:12:40 Speaker 03: Thank you, Andrew, for pointing it out.

00:12:43 Speaker 03: Then prices fell back but importantly did not fall to previous levels because we are now producing more difficult oil—North Sea oil in the UK,

00:12:53 Speaker 03: Alaska oil—we're producing more expensive oil—and then we hit 2005 with global conventional oil plateauing; prices shot up again: $80–$90 a barrel.

00:13:07 Speaker 03: They went as high as $140 and came down—but we're still twice what they were before.

00:13:15 Speaker 03: So the crucial thing on price: fifty years at only about $25/barrel, then first oil shocks destroyed economies but left us with more expensive oil for about twenty years;

00:13:31 Speaker 03: then after 2005 we hit end of plateau of global conventional oil—prices went up again—and now we're at seventy or eighty dollars a barrel.

00:13:41 Speaker 03: It's a new world.

00:13:42 Speaker 03: That's the simple message that ninety-five percent of all energy analysts have missed: they haven't got it into their heads,

00:13:49 Speaker 03: and here you see quite clearly NGLs going up (and a little bit of biofuels at top), but conventional oil flat as flat as a pancake.

00:14:02 Speaker 03: Okay, thank you, Andrew—is that all clear everybody?

00:14:04 Speaker 03: Any questions so far?

00:14:08 Speaker 03: Okay; I'll push on.

00:14:10 Speaker 03: So that was oil.

00:14:10 Speaker 03: Now we do the same thing for conventional natural gas: another splendid Jean Laherrère chart—another Hubbert linearization saying if global natural gas cumulative production were following a logistic curve it would give you a straight line,

00:14:31 Speaker 03: and here it does indicating something like 190 gigatons (billion tons) going in that direction.

00:14:45 Speaker 03: If you take that ultimate—that's total amount to be produced—it indicates the world total for that commodity.

00:14:54 Speaker 03: Then we go to next slide please.

00:14:58 Speaker 03: And this is what it says for natural gas production: once again peak about now—fairly interesting; peak of just about everything is about now.

00:15:09 Speaker 03: That takes the ultimate recoverable resource (URR) at 175 gigabarrels.

00:15:17 Speaker 03: There's cumulative curve going up and turning over, annual production curve up then down.

00:15:24 Speaker 03: And crucially Jean in these models sees decline constrained by URR—that's constraint—and he sees decline as roughly symmetric to increase (not exactly).

00:15:41 Speaker 03: Metrics don't know how it goes exactly but as we all know the crucial point isn't really climb; it's going over top and back down—where society changes.

00:15:52 Speaker 03: Good chart from Jean March, 2026.

00:15:56 Speaker 03: Let's look briefly at another: natural gas plant liquids (NGPLs).

00:16:02 Speaker 03: It's always tricky for Jean to separate out natural gas from fields where production happens in plants specifically—the U.S.

00:16:15 Speaker 03: changed its rules years ago—but again indication there may be nearly 40 gigatonnes of NGPL produced ultimately—and

00:16:27 Speaker 03: if true we've still got way to go up;

00:16:30 Speaker 03: haven't reached peak yet (peak isn't till 2030 or something like that—maybe 2040).

00:16:41 Speaker 03: So it goes up because you can keep getting more gas and increase amount with your plants.

00:16:52 Speaker 03: And as shown in other graphs NGLs have indeed been key part of what we've produced since conventional oil plateaued.

00:17:03 Speaker 02: So what's difference between NGLs and NGPLs?

00:17:08 Speaker 03: NGLs are produced at formal gas plants; the gas comes up from well—not an oil well—and some condenses right at surface as pressure/temperature change, effectively becoming petroleum (natural gas liquids) which is separated off.

00:17:32 Speaker 03: Sometimes counted in oil production sometimes not—that just happens naturally—but you've got to reduce pressure a bit and suddenly out come plantless roots [NGLs] sent away under that pressure.

00:17:46 Speaker 02: So they're kind of like lighter hydrocarbons: naphtha, natural gas—those kinds of molecules.

00:17:56 Speaker 03: Yes; okay thank you Dan—you know more about this than I do—I have to admit.

00:18:03 Speaker 03: Next slide please.

00:18:07 Speaker 03: Okay sure—that was NGPLs.

00:18:09 Speaker 03: Now we're looking at shale gas.

00:18:10 Speaker 03: Now I will warn you: information on conventional oil and gas is very solid with long straight lines in Hubbert curves—thirty,

00:18:24 Speaker 03: forty years of convincing data—but now moving to products like shale gas then coal where you aren't seeing those long straight lines yet John—you happy?

00:18:40 Speaker 03: Yes man.

00:18:41 Speaker 03: So now we're looking at more indicative info not as solid as conventional stuff but if look here there's a few years' straight line seeming indicate 16 gigatons—who knows where going with shale gas production?

00:18:59 Speaker 03: Not allowed in UK; not allowed in lots of European countries—how to do it elsewhere?

00:19:08 Speaker 03: China looked hard found some—but tough old road being shale producer outside America.

00:19:16 Speaker 03: America lovely place:

00:19:23 Speaker 03: everybody owns minerals underneath farm land nowhere else true sadly government owns them Roger somebody actually done horizontal drilling fracking for shale requires right geology—for example lot want drill California but so faulted fractured can't pressurize

00:19:43 Speaker 03: system only certain places possible What's your take Dan how far around world will go?

00:20:01 Speaker 03: Who who I think great opportunity Australia greater Russia two big ones Yeah Okay Very interesting mean talk UK Geological Survey haven't done yet to-do list if horizontally frac under North Sea might be possible good

00:20:24 Speaker 03: question Keep going nearly there Andrew So that shale gas and if HL ultimate URR 16 gigatons then what get world coming back Dan saying know other places look rules different not everywhere geologically sound Jean

00:20:50 Speaker 03: certainly says basis sees probably shale gas also about peak so about now globally plenty more but goes down slowly at peak-ish Okay Now switch oil gas third last fossil fuel kerogen brown coal careful lot

00:21:54 Speaker 03: tons thousands gigatons modern constraints pollution CO2 costs here straight lines ambiguous 130–150 gigatons Same Hubbert plot data Aspo France mind adding Roger remember guys brown coal lignite yes high water content two-thirds not carbon I

00:22:10 Speaker 03: Dan didn't know thank you educate knew wasn't dark black coal coals graded by weight carbon Yes Next entry hard coal nice HL graph ambiguous lots narrow seams deep under sea England same Ruhr Germany go

00:22:50 Speaker 03: under sea get it charts can't see clear John analysis more conservative total amount sees 500 billion tons recoverable due constraints haven't got clear Hubbert lines assuming reasonable estimate gigatons hard coal put together next chart

00:24:01 Speaker 03: two coals dark line off to 500 brown coal much water upperty downy amount assuming 140 coverable Next slide gets back started same beginning context hard cold [coal] green oil gas red shale no brown coal

00:24:23 Speaker 03: then shale coal bed methane many peak now recently estimated dates brown coal peak 2012 crude oil 2017 conventional oil plateaued 2008 down by 2017 conventional gas 2019 past hard coal about now others smallest smallified

00:25:04 Speaker 03: bit big read blurb fine print always So conventional coal these dates pretty damn certain reflect intrinsic limits production price spectacularly desperate produce more but not much constraints Coal different China beginning move away pleased Production

00:25:35 Speaker 03: cost CO2 limits factors extraordinary picture really Jean Laherrère debt putting together conservative places coal brown telling world want live fossil fuel world had century growth prosperity back all Gail Tverberg expertise wonderful century profit stability

00:26:13 Speaker 03: food summer winter holidays skiing produced by coal nice fires school home petrol dad's car changed world now small modular reactors nuclear fusion solar lots energy nobody yet done sums correctly look away comfortable supplies to

00:26:59 Speaker 03: other supplies everybody knows charts seen not transitioning bringing new fuels reducing old ones big question Andrew chat shows discuss Next slide Two further readings won't go through If only read one document whole area must

00:27:17 Speaker 03: read Scientific American End of Cheap Oil makes clear talking conventional oil mentions thirteen times critiques say haven't had end conventional because don't understand it's conventional

00:27:37 Speaker 03: And those, so there's Campbell; there's a wonderful one more, and then we're finished.

00:27:42 Speaker 03: So another set of next slide, another set of further reading, which if you've got time—but certainly read Scientific American.

00:27:50 Speaker 03: Sean, have I done that justice?

00:27:52 Speaker 03: Is that fair?

00:27:53 Speaker 03: Do you think?

00:27:54 Speaker 03: I think it's fair.

00:27:55 Speaker 03: Yes.

00:27:56 Speaker 03: Thank you, Missy Bocul; Monsieur.

00:28:00 Speaker 03: If anybody wants a chart produced, Sean—produced by Jean LaRue, your chart expert—all right—and so do we have any questions from the panel about the presentation or anything?

00:28:20 Speaker 02: I guess we kind of know a lot of it already.

00:28:24 Speaker 02: Let me check...

00:28:26 Speaker 02: From—I cannot go ahead.

00:28:28 Speaker 02: I was wondering...

00:28:30 Speaker 02: Okay, so we're at sort of the peak of everything right now—more or less figured out in gigatons total—or are we a little past the peak of kind of everything right now?

00:28:44 Speaker 02: Just curious; kind of add them all together, you know.

00:28:49 Speaker 02: No, well Jean's numbers will show.

00:28:51 Speaker 03: You've got to go to the big data sets to really look—but I don't think we're past the peak, and we're at about... it is the right thing either way: okay,

00:29:01 Speaker 03: we're about at the peak of everything.

00:29:03 Speaker 03: Yeah.

00:29:05 Speaker 03: Okay.

00:29:06 Speaker 02: Thank you.

00:29:08 Speaker 02: Yeah; it looked like only coal was really a question—and we're past peak both in terms of liquids and gas.

00:29:20 Speaker 03: Yes—yes!

00:29:21 Speaker 03: Certainly conventional oil, conventional gas is solid peak.

00:29:24 Speaker 03: The others are more interpretive, and they depend on what we do.

00:29:28 Speaker 03: And there's no question: if you let's take the UK—I think I mentioned this once before, Dan, on your chat shows—if you really needed oil,

00:29:38 Speaker 03: if oil was necessary—like to stop disease—we would go to the North Sea.

00:29:43 Speaker 03: We'd put in huge caissons, pump all the water out, and then go down and drill up all the oil rock; and then we'd put in acetone and dissolve out the oil.

00:29:55 Speaker 03: Yeah—you can get much more of our recovery factors.

00:29:57 Speaker 03: They're now forty percent world average.

00:30:00 Speaker 03: There's a lot—and Ricehead makes the point: there's a lot of potential extra recovery, but it costs more money.

00:30:07 Speaker 03: And we're already up at nearly eighty dollars a barrel—costs more money!

00:30:11 Speaker 03: Too high an oil cost destroys economies.

00:30:14 Speaker 03: Mr. Trump isn't happy that oil/gasoline is four dollars in America now—not three dollars a gallon.

00:30:23 Speaker 03: So you know—you can get more—but it costs...

00:30:26 Speaker 03: It destroys your economy.

00:30:28 Speaker 03: Roger, Roger—you know; added what you're talking about there—and how I got dragged into this years ago—twenty years ago—I had to do the converting of coal-fired power plants over to gas turbines,

00:30:38 Speaker 03: and the reason why was because when you're down to the point where you've mined out all the hard coal—the bitumen and the lignite—you go down in... sorry: the bitumen and anthracite; not lignite.

00:30:51 Speaker 03: You can't run a power plant on lignite.

00:30:53 Speaker 03: The cost of diesel exceeds the energy content of the fuel—and when you're talking about oil and gas, we understand two-thirds of those carbon hydrocarbons are still in the ground, right?

00:31:04 Speaker 04: We can only get so much out using water, using CO₂, using steam—right?

00:31:10 Speaker 04: And but that... like Roger said—the only way to get at it is actually mine down;

00:31:15 Speaker 04: tunnel down six thousand feet—and physically—you know—dig it out and somehow you know use paint thinner or something like that—or steam—to physically dig it out.

00:31:26 Speaker 04: But the costs of doing that are just astronomical.

00:31:28 Speaker 04: So that's exactly right!

00:31:30 Speaker 04: Yeah, yeah.

00:31:33 Speaker 02: So am I standing correctly then: we're talking about more like heavy/ultra-heavy crude, similar to Canadian tar sands?

00:31:43 Speaker 04: It'd be something similar—but you'd have to dig through six thousand feet of rock to get to it.

00:31:48 Speaker 04: Okay—I see.

00:31:49 Speaker 04: Think about the engineering of that...

00:31:50 Speaker 04: Yeah!

00:31:50 Speaker 04: So it would be a low EROI—yeah!

00:31:55 Speaker 04: I mean think about some of the deepest gold and diamond mines we have in the world—that's that kind of engineering—and you'd be dealing with massive quantities you'd have to dig out for hydrocarbons.

00:32:04 Speaker 04: Is it really worth digging them out?

00:32:08 Speaker 04: Not compared to diamonds or gold, which are high-value products.

00:32:13 Speaker 04: Compared to a product like hydrocarbons—are we willing to pay that much?

00:32:17 Speaker 04: I mean...

00:32:18 Speaker 04: That's a guess!

00:32:19 Speaker 04: And when it gets to a certain point—you're going to get demand destruction—which is what we're seeing right now!

00:32:24 Speaker 04: Yeah—one of the reasons why oil isn't higher than what it is right now: a lot of different factors—but part of those factors is demand destruction.

00:32:31 Speaker 04: People in Asia are just not driving their cars—yes!

00:32:34 Speaker 04: Good example!

00:32:36 Speaker 04: Now don't forget, Andrew—that's very Dan; excellent points—I just quickly won't forget your international...

00:32:43 Speaker 03: EIA—the American Energy Information Administration.

00:32:47 Speaker 03: When America oil was going down year after year before the shale/fracking oil—the EIA used to say:

00:32:57 Speaker 03: "Well we'll get our oil from kerogen," and America is blessed with an awful lot of kerogen—you've got a thousand billion thingies of kerogen—but again you're back to rock!

00:33:10 Speaker 03: You're back—Dan's point.

00:33:11 Speaker 03: You've got to get the... there have been some projects—and when oil was a bit more expensive—the carriage boys came forward and said: "We can produce it."

00:33:19 Speaker 03: You've got to get the—it's all in the rock—you've got to get the rock up, crush it, heat it, then get the oil—then change it.

00:33:26 Speaker 03: You've got to pyrolyse the kerogen to turn it into oil!

00:33:31 Speaker 03: So yes—all that can be done—but so there's a lot there.

00:33:33 Speaker 03: But it is expensive and difficult.

00:33:36 Speaker 03: Dan's quite right!

00:33:39 Speaker 02: I have a YouTube question: How do bottlenecks in the Gulf, Red Sea, and Black Seas affect the charts?

00:33:47 Speaker 03: Thank you kindly, Andrew—none at all—not one bit!

00:33:49 Speaker 03: They're fun; very good questions—but we're facing very interesting times—and we've been asked (in some papers) to write about them.

00:33:58 Speaker 03: We've been asked to put reference to the Strait of Hormuz and stuff—but I fought against it:

00:34:05 Speaker 03: Strait of Hormuz is a political thing right now—and it could be solved—you know—it probably won't but it could be solved tomorrow!

00:34:12 Speaker 03: A man and Ryan are talking; it's nothing to do with resource limits.

00:34:16 Speaker 03: What we're talking about here is fundamental resource limits: how much there was in the ground, how many years we've used it—and how much we can use in the future—nothing to do with politics!

00:34:27 Speaker 04: Roger—there's another kind of question too—that is: we live in an age where we've pretty much mapped out planet Earth geologically.

00:34:35 Speaker 04: The USGS and other surveys have drilled and pretty much mapped out the planet as to where certain types of resources are located—and so we're kind of blessed in that regard—but on the other side—we're kind

00:34:49 Speaker 04: of cursed because we actually know those numbers,

00:34:53 Speaker 04: and there really aren't that many blind areas out in the world that we don't!

00:34:57 Speaker 03: Very very good point—I I know not enough about how Jean got into all this—but that's certainly how Colin Campbell got into it: he was in South America looking at availability—he knew what they drilled;

00:35:11 Speaker 03: he knew what they hadn't—and then when asked to look at next areas, his company told him to look elsewhere.

00:35:20 Speaker 03: He slowly started realising—it wasn't immediately "oh boy we had exactly as you say"—we've drilled most places!

00:35:26 Speaker 03: Our geological knowledge is solid—we know what we're doing—but there are some good places to go and look—not many!

00:35:35 Speaker 03: And the classic story: twenty-five years ago at Reading University, long came the really big oil companies—and we said: "Look—conventional oil's going over peak soon."

00:35:51 Speaker 03: And a senior man from Chevron (I think) said: "No no this can't be true—we've just found a big new field offshore!"

00:35:59 Speaker 03: He wouldn't even say where it was—but everybody in the room knew it was Namibia!

00:36:05 Speaker 03: So we'd just found this huge field—how could we possibly be running out?

00:36:11 Speaker 03: And as you say Dan—we know where it is and how much there is.

00:36:16 Speaker 03: A big new field in Namibia helps—but it doesn't stop conventional oil going over peak!

00:36:22 Speaker 02: I know Gail also has a lot of information about how price might not go up even with scarcity—I don't know if Gail—you wanted to speak to that?

00:36:34 Speaker 02: Anyway thanks Andrew—much appreciated—and Andy too!

00:36:37 Speaker 02: Yeah well the area I look at...

00:36:41 Speaker 02: let's see—the area I look at has more to do with how the economy is hooked together in a very strange way—we expect prices to go up if there's

00:36:59 Speaker 02: shortage—that's why you said "end of cheap oil"—and in 1998 that was interpreted as:

00:37:09 Speaker 05: if we're running short—but it doesn't turn out that's the way it works out in practice!

00:37:15 Speaker 05: It's end of as many finished products as we like—and our ability to buy those is changed by young people getting poorer and wage disparities—it fits; system works differently than expected.

00:37:40 Speaker 05: And what happens when you hit limits-to-growth?

00:37:58 Speaker 05: There are wars—like collapse of central government of Soviet Union—so there are things people don't think of!

00:38:05 Speaker 05: My analysis looks at this from different perspective as to what happens when hitting limits—to growth basically—and so it's not the story that price will go up isn't quite right.

00:38:27 Speaker 02: Thank you Gail—I know Arthur Berman has joined us and you have a presentation for us too—and Gail will be presenting next time!

00:38:37 Speaker 02: Okay Arthur I don't know if you could mute and say something?

00:38:43 Speaker 02: Yeah—okay hi Andre yes I do have a presentation; do you want me to run it from here?

00:38:49 Speaker 02: You want me to send it to you?

00:38:50 Speaker 02: What would be best?

00:38:51 Speaker 02: Okay.

00:38:52 Speaker 02: Yeah.

00:38:53 Speaker 02: You could try running it, or if you prefer, you could email it to me, and then I can go through this live.

00:38:57 Speaker 02: And then I can go through the slides.

00:39:00 Speaker 02: Okay.

00:39:00 Speaker 02: Well, we can try it.

00:39:03 Speaker 02: Okay.

00:39:04 Speaker 02: So I need to share my screen.

00:39:06 Speaker 02: You'll have to talk me through how to do this on your end.

00:39:09 Speaker 02: So it's the third button at the bottom: microphone, video, and then the third one is Share Screen.

00:39:16 Speaker 02: Okay.

00:39:17 Speaker 02: So, Share Screen.

00:39:21 Speaker 02: And then you can select either entire screen or where you're going to have the presentation.

00:39:29 Speaker 02: Let's get me out.

00:39:33 Speaker 02: Okay.

00:39:36 Speaker 02: Oh gosh!

00:39:44 Speaker 02: Oh wow!

00:39:46 Speaker 02: Or you could select the window.

00:39:48 Speaker 02: Oh.

00:39:51 Speaker 02: Oh, Arthur accidentally left.

00:39:55 Speaker 02: Um.

00:39:56 Speaker 02: Okay.

00:39:56 Speaker 02: Well, hopefully... well, Dusty, go ahead.

00:40:02 Speaker 02: You have to unmute first.

00:40:04 Speaker 02: While he's getting his tech stuff figured out, I figured we could just chat a little bit more about what Gail was talking about.

00:40:11 Speaker 02: That is a really interesting way to think about how monetary things can cover over physical reality for a period of time; and thinking of it in a generational/political sense is very interesting.

00:40:26 Speaker 06: It's something I'm going to have to think about more because it does seem like the burden of lower EROI oil is being placed on the shoulders of younger generations, which aren't politically impactful yet.

00:40:43 Speaker 06: So that might be part of the play here.

00:40:46 Speaker 06: It's a lot to think about.

00:40:49 Speaker 06: I don't know if anybody has a comment on that?

00:40:53 Speaker 02: Yeah, no—that's a great point.

00:40:55 Speaker 02: I know like...

00:40:56 Speaker 02: I'm running for mayor of Owen Sound, and part of my platform is rural affordable housing and making housing legal again.

00:41:09 Speaker 02: For example, currently you're not allowed to make units that would be affordable for young people.

00:41:19 Speaker 02: But I did the calculations: if you have a yurt with full insulation, composting toilet, and rain catchment, it's $56,000.

00:41:30 Speaker 02: So young people can actually afford that, and it comes with like two-and-a-half acres of land; payments are only five or six hundred—five or seven hundred—a month.

00:41:40 Speaker 02: So yes, it is doable.

00:41:42 Speaker 02: There are ways to make this work.

00:41:48 Speaker 06: Do you think that could potentially be a tactic used by people in power who know using the monetary system can sort of cover the realities of peak oil and they're putting the impact on people

00:42:07 Speaker 06: under twenty-five that don't maybe vote as much or aren't as impactful yet?

00:42:12 Speaker 06: Does that seem like a plausible hypothesis?

00:42:16 Speaker 02: Well, I think there's always some of that.

00:42:19 Speaker 02: Just because younger people don't vote as much, and older people vote more, so politicians have to appeal to those who vote for them.

00:42:30 Speaker 02: However, right now the average Boomer is already 70 years old, and life expectancy is less than that.

00:42:38 Speaker 02: So a lot of Boomers are dying out, and we're having more Millennials.

00:42:45 Speaker 02: Hey Art—I can't hear you now.

00:42:47 Speaker 02: Uh...

00:42:47 Speaker 02: You have to unmute.

00:42:49 Speaker 02: There we go!

00:42:50 Speaker 02: I'm unmuted.

00:42:50 Speaker 02: All right, let's try this again.

00:42:52 Speaker 02: Okay.

00:42:53 Speaker 02: Very good.

00:42:54 Speaker 02: Do you want to try sharing again, or do you want to email it to me?

00:42:58 Speaker 02: I'm going to try.

00:43:01 Speaker 02: Yeah, yeah.

00:43:02 Speaker 02: Um.

00:43:04 Speaker 02: Okay.

00:43:04 Speaker 02: And then we'll go to PowerPoint.

00:43:08 Speaker 02: If it's not letting me select it...

00:43:12 Speaker 02: Uh.

00:43:13 Speaker 02: Okay.

00:43:15 Speaker 02: Fire screen.

00:43:15 Speaker 02: Okay, go to—Okay.

00:43:19 Speaker 02: Yes!

00:43:20 Speaker 02: Here we go.

00:43:20 Speaker 02: Okay.

00:43:21 Speaker 02: Yeah, seeing it now.

00:43:22 Speaker 02: Yep.

00:43:23 Speaker 02: All right.

00:43:24 Speaker 02: So let's: you can go into presentation mode.

00:43:28 Speaker 02: There we go.

00:43:28 Speaker 02: All right.

00:43:29 Speaker 02: Yep.

00:43:29 Speaker 02: Great.

00:43:32 Speaker 02: So this is just a brief summary of what I think is going on right now with oil systems...

00:43:42 Speaker 02: and I'm going to explain—or try to explain—a few things that perhaps Gail was alluding to minutes

00:43:52 Speaker 02: ago.

00:43:58 Speaker 07: First slide: it basically summarises how 20 million barrels/day of lost oil, refined products, natural gas liquids, and a few other things coming through the Strait of Hormuz—instead of losing 20 million barrels,

00:44:16 Speaker 07: in the end we only lost about 4 million barrels.

00:44:21 Speaker 07: Without going into all the details, the biggest factors were bypass pipelines already built that could avoid having to go through the Strait: one pipeline went west to the Red Sea;

00:44:41 Speaker 07: the other kind of cuts around the backside of the United Arab Emirates and comes out on the other side of the Strait.

00:44:47 Speaker 07: So about six million barrels is making it through that way.

00:44:53 Speaker 07: The other big factors were reduced Chinese imports—China somehow reduced its crude oil imports by something like three-and-three-quarter-million barrels/day.

00:45:06 Speaker 07: Another big one was inventory withdrawals, mostly from Strategic Petroleum Reserves (SPR) by the U.S.

00:45:15 Speaker 07: and other OECD countries; and finally demand destruction—we don't know exactly how much that is, but I'm just saying three million.

00:45:27 Speaker 07: So you add six through pipelines, 3.75 from Chinese import reductions, 3.5 from inventory withdrawals, and 3 from demand destruction—and you end up with sixteen-and-a-quarter-million barrels/day instead of twenty.

00:45:48 Speaker 07: The point I want to make: this is adaptation.

00:45:53 Speaker 07: It doesn't resolve the problem; it's hardly a long-term solution—but it is how the system adapted to what looked like an absolutely devastating loss of oil supply.

00:46:09 Speaker 07: Now, four million barrels/day is a massive loss—don't get me wrong—but sure isn't twenty!

00:46:19 Speaker 03: Just to interrupt for a second: sorry—I shouldn't have... but that's just an excellent chart I wish we'd had in newspapers and things—a really good one.

00:46:27 Speaker 03: Thank you kindly; thank you!

00:46:29 Speaker 03: Sure.

00:46:32 Speaker 07: Well, again—they're estimates—but given our confidence intervals (plus or minus about a million barrels/day either way)—then the current narrative in the oil business is:

00:46:50 Speaker 07: "We are right now dangerously close to what some people call 'tank bottoms':

00:46:57 Speaker 07: so much oil has been withdrawn from SPRs that we'll very soon be at the level where you get that giant sucking sound and can't get any more out of storage.

00:47:16 Speaker 07: When that happens, horrible things are supposed to happen."

00:47:24 Speaker 07: That's the current story—and with most stories, there's definitely a kernel of truth to it.

00:47:29 Speaker 07: But back to what Gail said: markets aren't exactly freaking out about this, so there are many ways you could interpret that.

00:47:39 Speaker 07: Either markets are stupid (I don't think that's the case), or they're not taking this quite as seriously as certain analysts are.

00:47:50 Speaker 07: I'm not going to answer the question necessarily—but the truth may be somewhere in between.

00:47:57 Speaker 07: What I want to talk about is a method I've been using for 20 years called comparative inventory.

00:48:06 Speaker 07: I don't want to get too deeply into details or bore people with technicalities—except to say this really cuts through a lot of crap and helps us understand what's going on.

00:48:27 Speaker 07: Comparative inventory is very simple: you take the five-year average of how much oil is in storage (I'm using U.S. data here—I'll be glad to answer questions about why I use the U.S.,

00:48:42 Speaker 07: but suffice it to say that over 20 years, despite objections like "the U.S.

00:48:57 Speaker 07: isn't the whole story," empirically it works).

00:49:05 Speaker 07: Bottom line: if you take current levels of storage (crude oil and select products—distillate, gasoline, jet fuel, etc.) and subtract the five-year average for the specific week/month we're in—that gives comparative inventory.

00:49:35 Speaker 07: It's useful because taking seasonality out lets you compare how inventory today stacks up against last year at this same time.

00:49:57 Speaker 07: Basically: if above the five-year average → blue = surplus; below it → yellow = deficit.

00:50:07 Speaker 07: There's a y-axis in the middle representing that five-year average.

00:50:18 Speaker 07: If on the surplus side (right), oil markets are shorting—they're not willing to spend more than necessary, and oversupply signals will drop prices and discourage drilling.

00:50:45 Speaker 07: If on the other side of the axis—in deficit—markets go long; price rises motivate producers to drill wells.

00:51:07 Speaker 07: Simple concept!

00:51:09 Speaker 07: And then there's this sloping blue line I've drawn: what I call the attractor yield curve.

00:51:18 Speaker 07: You can't see all data here—I'll show you in a minute—but it's kind of a fit through accumulated points (not regression, but trend).

00:51:41 Speaker 07: Markets are bets; futures contracts aren't based on today's conditions alone—they're bids for one month out, two months out...

00:52:21 Speaker 07: up to twelve.

00:52:28 Speaker 07: So markets say: "Yeah, things look bad right now, but we'll discount the present because maybe they'll be different in a few months."

00:52:40 Speaker 07: This is what real data looks like—I just updated this morning!

00:52:46 Speaker 07: I'm not showing every point—just representative ones from past years (blue) and today's red point.

00:53:02 Speaker 07: This February: war between U.S., Israel, Iran began; March moved up here...

00:53:08 Speaker 07: April, May, June, July 10th—and as of this morning, we're right here.

00:53:19 Speaker 07: What happened?

00:53:20 Speaker 07: A big price excursion!

00:53:30 Speaker 07: Throughout the Iran War, analysts complained: "How come oil is only $95–$100/barrel in April/May when we have a world-class crisis?"

00:53:41 Speaker 07: I can't answer that except to say it's like a 30% risk premium.

00:53:56 Speaker 07: If you take an April number (~$100), draw perpendicular down to the attractor, and read across—you get ~$70.

00:54:21 Speaker 07: So $100 is about 30% more than $70—that's a healthy premium!

00:55:03 Speaker 07: People say: "But during Iran War or Ukraine War prices were much higher—$120–$130!"

00:55:10 Speaker 07: Here's the data: red = Iran War; orange = Ukraine War.

00:55:17 Speaker 07: Remember this is five-year average.

00:55:26 Speaker 07: In February (Iran War start), even March/April—we were still on surplus side of comparative inventory!

00:55:34 Speaker 07: That's part of why markets didn't freak out—it's like having money in savings: you're not happy about a major expense, but you've got the funds.

00:55:58 Speaker 07: On the other hand—if you move left into deficit territory ("my savings are really low"),

00:56:08 Speaker 07: then unexpected expenses make you sweat—but even so... where we are today (July)—we're still at relative surplus compared to when Ukraine War ended!

00:56:23 Speaker 07: Time matters: this is a cross-plot.

00:56:26 Speaker 07: Ukraine War began over here, spiked up to $148–$150-ish, trailed off—but comparative inventory never hit same deficit depth as during Ukraine War.

00:56:45 Speaker 07: That cuts through some crap explaining why prices are high now—though risk premiums (percentage-wise) may actually be higher!

00:57:21 Speaker 07: Looking bigger: this goes back to 2014/2015 collapse (black points), recovery...

00:57:35 Speaker 07: fits into coherent story that oil prices aren't predictable—but there's order in what looks chaotic.

00:57:56 Speaker 07: Sometimes point isn't "everything reverts to mean"—this is an attractor, borrowed from complexity science!

00:58:06 Speaker 07: System tries to manage back toward homeostasis—not necessarily "normal," but stable equilibrium.

00:58:47 Speaker 07: In cases shown, everything came back to attractor... except one example where it didn't (2014–15 details: early hope that crisis was mistake; by 2016 we were in giant surplus territory!

00:59:03 Speaker 07: Chaos ensued—overshooting/undershooting—but markets eventually said "we've exhausted possibilities of this attractor" and chose a lower one.

00:59:26 Speaker 07: Slope lowered → less supply urgency → moves toward surplus/deficit have smaller price effects than before.

00:59:45 Speaker 07: System adjusts/adapts until it can't—but not overnight!

00:59:53 Speaker 07: Like marriages: we try to make work, then say "okay, done—trying something different."

01:00:05 Speaker 07: Similarly with COVID (data from 2018–20): Trump took office in deficit territory; walked away from Iran nuclear deal → sanctions pressure on Iran → excursion away from attractor.

01:00:44 Speaker 07: Then COVID hit—we undershot by quite a bit and stayed undershot for months—but eventually returned!

01:01:07 Speaker 07: Oil is complex adaptive system—like markets, life, evolution—attracted to tendencies until it can no longer maintain them.

01:01:19 Speaker 07: People ask: "If Hormuz crisis continues, won't we get serious deficit?"

01:01:33 Speaker 07: Answer: let's see—and beauty of comparative inventory lets us experiment!

01:01:52 Speaker 07: Someone says oil should be $150/barrel—I say: "Let's assume inventories continue falling at current rate since Iran War started; project forward."

01:02:17 Speaker 07: Using charts: here's where we are—what price does that give?

01:02:25 Speaker 07: Play game forward: if drawing down continues, maybe by November we hit $150.

01:02:50 Speaker 07: Not prediction—it's fiction showing why markets don't think it should be wrong yet—but you insist on $150... well, takes time!

01:03:01 Speaker 07: Need sufficient deficit so markets say "oh my gosh—I'm out of savings!"

01:03:11 Speaker 07: Strategic Petroleum Reserve (SPR): updated this morning—U.S.

01:03:18 Speaker 07: had 700 million barrels; June 2020 we were here; Ukraine War hit → Biden drew down to 349, slowly put back a bit in SPR;

01:03:43 Speaker 07: March 2026 Iran War hits—we're at 305!

01:03:52 Speaker 07: Historical low?

01:03:53 Speaker 07: Are we at tank bottom?

01:03:59 Speaker 07: Controversy—I've drawn two lines: legal limit (252 million where Congress intervenes); lower operability guess 180 million.

01:04:25 Speaker 07: Points: (1) not there yet; (2) could get there soon; (3) how much does it matter?

01:04:37 Speaker 07: Trend shows withdrawals almost 3M barrels last week—but since Iran War began, drawing less per week—trend improving!

01:05:00 Speaker 07: When doing comparative inventory: do you include SPR?

01:05:09 Speaker 07: Answer: no.

01:05:11 Speaker 07: Many reasons—and principle is markets don't treat SPR as supply—it stays flat historically hence excluded.

01:05:27 Speaker 07: But if calculated with SPR included (same method): we're ~$15 above marginal price!

01:05:49 Speaker 07: Markets pay attention: five-dollar premium using commercial inventories only; fifteen-dollar including strategic reserve—"Yeah, this matters to us—we're not freaking out but it does matter."

01:06:09 Speaker 07: That's really all I wanted to present today.

01:06:13 Speaker 07: Not trying to argue or defend how financial markets work—not saying they're right/wrong—just showing perspective!

01:06:25 Speaker 07: I'm just trying to explain the way I think the mechanics work and try to give you some sort of context in which to understand that you can't just say, "Oh my gosh,

01:06:38 Speaker 07: we're in a war," and so things should be like they were the last time we were in a war.

01:06:44 Speaker 07: I mean, you know, that's not an illogical assumption, but then you look at the data and say, "Yeah, but you know... conditions are not the same."

01:06:54 Speaker 07: And then well, could we get there?

01:06:57 Speaker 07: Could we get to the same place?

01:06:58 Speaker 07: And I've shown you: yeah, we absolutely could.

01:07:02 Speaker 07: We could get there relatively soon, but not overnight.

01:07:06 Speaker 07: We could get there in three months or four months.

01:07:10 Speaker 07: So that's what I've got to say today.

01:07:12 Speaker 07: That's my presentation.

01:07:14 Speaker 02: Thank you, Art.

01:07:16 Speaker 02: That was really excellent.

01:07:17 Speaker 02: Um, I enjoyed it.

01:07:19 Speaker 02: How do I get out?

01:07:21 Speaker 02: Oh, how do you stop sharing the screen?

01:07:22 Speaker 02: You click the third button again.

01:07:25 Speaker 02: There we go.

01:07:26 Speaker 02: Yeah.

01:07:27 Speaker 02: Okay.

01:07:27 Speaker 02: There we go.

01:07:28 Speaker 02: Okay.

01:07:29 Speaker 02: Awesome.

01:07:29 Speaker 02: Okay.

01:07:30 Speaker 02: Now questions from the panel for Art.

01:07:38 Speaker 02: Anybody?

01:07:39 Speaker 06: Dusty, go ahead.

01:07:39 Speaker 06: "Art, have you done some similar work to what you showed there for the USA, showing like China's reserves?"

01:07:52 Speaker 06: I didn't hear the last few words in your question.

01:07:54 Speaker 06: Sorry.

01:07:55 Speaker 06: Have you... have you done any of the similar work on China's reserves compared to the USA?"

01:08:07 Speaker 07: Okay, well, I knew this question would come.

01:08:09 Speaker 07: No, because nobody knows China's reserves.

01:08:13 Speaker 07: So you have to have data to be able to do this.

01:08:16 Speaker 07: The reason that I use U.S. reserves is because the U.S. has very accurate and timely reports with a reporting schedule every week; they provide a number now.

01:08:31 Speaker 07: If you look at OECD—the same countries that support the International Energy Agency—I can get data on that monthly, but it's not nearly as good.

01:08:43 Speaker 07: It involves a lot more uncertainty and estimates.

01:08:47 Speaker 07: But I do calibrate what I have.

01:08:49 Speaker 07: We have no idea of China's reserves—absolutely none.

01:08:52 Speaker 07: Well, I wouldn't say absolutely none; we can guesstimate a number, but we have no way of knowing how they change from week to week or month to month.

01:09:02 Speaker 07: Similarly, we have no idea of Russia's reserves.

01:09:08 Speaker 07: Basically, we don't know.

01:09:12 Speaker 07: So the answer to your question is that it's purely empirical: I've been using this method for twenty years and it always works.

01:09:26 Speaker 07: The reasons why it works are that the U.S. is both the largest supplier and the largest consumer of oil in the world.

01:09:35 Speaker 07: The U.S. accounts for forty-five or forty-six percent of OECD storage, and so the United States remains a central part—not only of the oil production and consumption equation—but also as the financial centre of the world.

01:09:42 Speaker 07: This has worked for twenty years because of data credibility, reporting frequency, and our role in global trade.

01:10:14 Speaker 07: I just led you through an explanation that is probably as credible as anyone can show regarding why prices are where they are; it still works.

01:10:25 Speaker 07: So you know that's not exactly proof, but I guess I take what works over theory any day of the week.

01:10:43 Speaker 07: Okay... then yeah, I was wondering if this is kind of like when I went into a store recently—West Marine—and they're going out of business.

01:10:53 Speaker 07: They're selling everything at fifty percent or something.

01:10:56 Speaker 08: I was wondering if this is kind of like the world's inventory reduction sale.

01:11:02 Speaker 08: Is that what it is?

01:11:05 Speaker 08: I mean, are we just speculating and getting stuff out there before the world economy crashes?

01:11:12 Speaker 08: Just an idea.

01:11:15 Speaker 08: Well... you know, I do think that the Iran war is a world-changing event.

01:11:22 Speaker 07: I think that we are going through an energy phase shift right now, regardless of what markets may think or not think.

01:11:32 Speaker 07: I don't believe that this is something we're going to look back on in two years, three years, five years and say, "Oh, it's just another bump in the road."

01:11:43 Speaker 07: No, I don't think that's the case.

01:11:47 Speaker 07: Energy is the functional metabolism of the global economy, and the fact that energy and oil markets are as adaptive as they've shown themselves to be over the last five or six months is impressive.

01:12:07 Speaker 07: That doesn't mean, as I said in my first and second slides, that adaptability is the same thing as resolution.

01:12:16 Speaker 07: So you know... in the same way that COVID is still with us in many ways—even though we don't want to admit it—or the great financial crisis is still with us in many ways—this I think

01:12:30 Speaker 07: is bigger than either of those personally.

01:12:32 Speaker 07: But that's an opinion.

01:12:38 Speaker 07: I can't pound the table about it, and so my sense is: you know, I don't think the world is coming to an end, but I think the world is fundamentally changing.

01:12:49 Speaker 07: One way it's changing is that the way the world partitions and allocates energy resources is fundamentally different than it was a couple of years ago; we're increasingly into geopolitical camps.

01:13:07 Speaker 07: What's happening in the Persian Gulf right now is quite significant beyond just the details of how many tankers you're getting through, et cetera.

01:13:20 Speaker 07: You know,

01:13:22 Speaker 07: the entire post-World War II global order was based upon several things including the Bretton Woods Agreement and the U.S.

01:13:35 Speaker 07: being the policeman of maritime free trade in exchange for the privilege of having the U.S.

01:13:45 Speaker 07: dollar be the world reserve currency.

01:13:48 Speaker 07: What this Iran war is showing is that the United States can no longer uphold that part of the grand bargain.

01:13:58 Speaker 07: And again, I'm not saying at all that I think the U.S.

01:14:05 Speaker 07: dollar will no longer be the world reserve currency—but you know, this is a blow to U.S.

01:14:14 Speaker 07: geopolitical power globally in the Persian Gulf.

01:14:18 Speaker 07: You know, it was Henry Kissinger many years ago who said, "Control oil; if you control oil, you control nations."

01:14:28 Speaker 07: Well, the United States no longer controls the main source—the single largest source of oil in the world—and guess who does?

01:14:42 Speaker 07: Iran.

01:14:43 Speaker 07: So again...

01:14:44 Speaker 07: I don't want to be taken the wrong way.

01:14:48 Speaker 07: I don't think Iran has suddenly catapulted to superpower status, but it clearly has a lot more leverage than it did six months ago.

01:15:01 Speaker 07: Yeah.

01:15:02 Speaker 04: Thank you, Dan.

01:15:04 Speaker 04: Yeah, I just wanted to add on to what Art was talking about mainly regarding Dusty's question here.

01:15:12 Speaker 04: And I think Art kind of alluded to when he was talking about the Petrodollar—that is what's going on there in Asia.

01:15:18 Speaker 04: If you look at Kazakhstan: Kazakhstan was using a Russian pipeline to deliver oil to ports in the Black Sea, but they shut that down on May 1st.

01:15:28 Speaker 04: Well, if you look at satellite surveys built by China between Kazakhstan and China, the capacity there has to be close to three million barrels a day.

01:15:36 Speaker 04: So there's another source of oil we don't know about—just looking at satellite pictures of pipelines these people physically built between those two countries.

01:15:45 Speaker 04: And then the other thing you have to remember is that Russians and Chinese built the Trans-Siberia oil pipeline system, and they're still talking about parts of it too.

01:15:56 Speaker 04: There's all this significant infrastructure: pipelines for oil and gas, railroad systems—there's a major railroad system between Tehran, Beijing, and Moscow that we don't talk about.

01:16:09 Speaker 04: So there's all this major infrastructure; now we're basically starting to see what the effects are.

01:16:14 Speaker 04: So as far as China's reserves—or truly even Russia's reserves—you're really going to have a hard time determining them because of all this infrastructure these guys have been preparing for the last twenty years.

01:16:31 Speaker 04: For the last twenty years, we're seeing results from military preparation by Iranians; that's causing this kerfuffle we're dealing with.

01:16:38 Speaker 04: We're finding out it's not an easy nut to crack—that's what we're learning now.

01:16:44 Speaker 07: Those are good points, and certainly Putin discovered this while we didn't learn the lesson:

01:16:56 Speaker 07: it appears that "shock and awe" conventional military just isn't working very well—not necessarily because it hasn't worked since World War II if you look at the record—but geez...

01:17:11 Speaker 07: Russia should have conquered Ukraine years ago but has not principally because Ukraine found ways of using a different kind of warfare.

01:17:24 Speaker 07: And the United States should have crushed Iran except for the fact that Iran's unconventional or asymmetric warfare was able to keep the U.S. from defeating them,

01:17:40 Speaker 04: even though they couldn't defeat us outright—that's a perfect point there, Art.

01:17:45 Speaker 04: Warfare has changed and the United States didn't learn its lesson.

01:17:49 Speaker 04: I know... in defence groups I work with we've been talking about drone warfare for years.

01:17:55 Speaker 04: For whatever reason—and I was part of the Letter programme for air defence systems—but the government never adopted it, and now we're paying the price.

01:18:04 Speaker 04: Warfare changed; the U.S. government didn't learn the lesson.

01:18:08 Speaker 04: That's the truth—that's the important truth.

01:18:11 Speaker 02: Excellent point, sir.

01:18:13 Speaker 02: So I think I saw Gail—did you put your hand up?

01:18:17 Speaker 05: Was that... yeah, I was going to say: what Art is saying and Gene are saying too is that we're going through an energy phase shift,

01:18:27 Speaker 05: and what markets are pricing in is current inventories—which doesn't have anything to do with the phase shift.

01:18:36 Speaker 05: When we look at phase shifts, strange things happen.

01:18:43 Speaker 05: My study shows you get collapses of central governments.

01:18:48 Speaker 05: Let's suppose the central government of Japan collapses or some other country running into difficulty collapses—I have one slide showing how demand for Soviet Union countries collapsed over years after their central government fell;

01:19:14 Speaker 05: consumption went down even in nuclear and hydroelectric as the economy collapsed.

01:19:21 Speaker 05: So while we think it will affect prices, what happens is that demand goes down in strange ways very quickly—that's the way the system can most easily clear itself isn't it?

01:19:43 Speaker 07: But I guess my comment would be: supply and demand are perhaps the two most important factors but they're not the only ones.

01:20:01 Speaker 07: You know... to change subject just for clarity: I deal with this all the time regarding climate change.

01:20:17 Speaker 07: Ninety percent of people—even climate scientists—are pounding the table about carbon dioxide, and don't get me wrong; I don't think there's any question that CO2 is the primary forcing factor in today's climate.

01:20:32 Speaker 07: But saying it's the only factor or necessarily the most important all the time is incorrect.

01:20:45 Speaker 07: You have to look at feedbacks: methane, water vapor, planetary motions of liquidity... these kinds of things.

01:20:58 Speaker 07: And I'm not saying CO2 isn't important or even primary here—but by itself it doesn't explain the whole story.

01:21:08 Speaker 07: Supply and demand are primary but they're not the whole story; you won't get a satisfactory answer if that's all you look at.

01:21:20 Speaker 02: Okay, I just wanted to quickly share because I actually validated Art's... what was it called?

01:21:31 Speaker 02: Comparative inventory—and tracking it using some graphs over here—so what I found is that it tracks USO 28%, Brent 13% and 14%.

01:21:48 Speaker 02: So I just wanted to show this: here is the inventory tightness.

01:21:59 Speaker 02: It can be a bit confusing because when inventory tightness is low, prices go high; so I got an inverted version to make it easier to see.

01:22:10 Speaker 02: You see it tracks USO pretty well.

01:22:13 Speaker 02: In terms of explaining price, what actually seems to work very well is global M2 money supply—it has fifty-three percent correlation—and with the z-score you can see here: if you do it at the same time,

01:22:33 Speaker 02: it basically leads by four or five months anyway so then you can see that relationship there.

01:22:43 Speaker 02: Okay... yeah, I just wanted to quickly share that and I don't know if anyone had any comments on it.

01:22:51 Speaker 07: Yeah—the only comment I would have there, Andre—is to be careful about circular causality because money is a claim on energy; so if you want to think about it

01:23:09 Speaker 07: Money is a derivative of energy, so the fact that money correlates with energy means it has to be true.

01:23:22 Speaker 07: Yeah, but then to leap from that to saying M2 is causing oil prices: I would say that's a correlation that has no causality.

01:23:34 Speaker 07: So, let me show this again to explain more.

01:23:45 Speaker 02: There is about a five-month bleed; if the money supply goes up, four to five months later the price of oil goes up, and it explains what was called 53 percent of the price change.

01:24:06 Speaker 02: That leaves forty-seven percent due to other factors.

01:24:11 Speaker 02: Okay?

01:24:11 Speaker 02: I hope that makes sense regarding why there is causality—it has to do with what you're saying: if there's more money supply, people use more money to buy oil or produce more; whatever it may be,

01:24:28 Speaker 02: the relationship is very clear over the entire time we have these indicators.

01:24:35 Speaker 02: The correlation is strong because you are measuring it.

01:24:40 Speaker 07: As I said, money is a second- or third-order derivative of energy.

01:24:46 Speaker 07: Energy drives the economy, and money is a variable in that economy.

01:24:52 Speaker 07: So the correlation should be strong, but causality?

01:24:57 Speaker 02: Maybe not necessarily; maybe it's just about price.

01:25:04 Speaker 02: Okay, so let's go to Dusty.

01:25:06 Speaker 02: I think Dusty was next.

01:25:13 Speaker 02: Dusty, you're muted—you have to unmute.

01:25:23 Speaker 02: Okay...

01:25:24 Speaker 02: Nope, still muted.

01:25:25 Speaker 02: Alright, I'm going over to Ivor now.

01:25:30 Speaker 08: Just wanted to mention something very interesting from the last couple of months:

01:25:38 Speaker 08: apparently someone heard there was a shortage of diesel and decided that refineries should pump up production not of diesel but of jet fuel instead.

01:25:52 Speaker 08: So jet fuel went way up; we produced a lot of it.

01:26:01 Speaker 08: Then, just recently—like a week ago or so—that became the biggest day for commercial aviation ever.

01:26:08 Speaker 08: I thought: this is how things work.

01:26:12 Speaker 08: It's almost like a buffet line where everyone hears the steak is going to run out and piles on five steaks each when they get there.

01:26:28 Speaker 08: So our whole culture seems focused on flying around rather than producing diesel that could be used elsewhere anyway.

01:26:35 Speaker 08: That was just an interesting observation.

01:26:41 Speaker 07: Go ahead, Art.

01:26:44 Speaker 07: Yeah, I'd be very careful with that kind of argument.

01:26:48 Speaker 07: Diesel is expensive because of logistics.

01:26:54 Speaker 07: For example, in places like Singapore or Manila, the cash price of diesel is $150 per barrel—not because there's a global shortage,

01:27:13 Speaker 07: but because supply lines to regions without indigenous oil supplies have been broken by tremendous prices.

01:27:23 Speaker 07: The refinery issue operates on an entirely different level of complexity.

01:27:32 Speaker 07: Basically, since probably 2014 (following the collapse in oil prices), and certainly since COVID, many global refineries have gone offline because they were old, inefficient, or unprofitable.

01:27:52 Speaker 07: We're limping along at a reduced level of global refining capacity.

01:28:01 Speaker 07: There's understandable hesitation to make multi-billion-dollar investments with thirty- to forty-year paybacks due to concerns about peak oil demand and the energy transition, among other things.

01:28:20 Speaker 07: Then you add Ukrainian oil issues—drone attacks on Russian refineries.

01:28:25 Speaker 07: Russia is actually the second-largest oil producer in the world yet imports gasoline from India because its own refineries aren't working.

01:28:35 Speaker 07: So yes, the problem you point out is real; I'm not diminishing it at all.

01:28:43 Speaker 07: But please be careful interpreting any kind of price gouging or attributing jet fuel issues to simple shortages.

01:28:50 Speaker 07: Jet fuel and diesel are geochemically very similar—there's significant overlap.

01:29:02 Speaker 07: A refinery can shift its slate: increase jet fuel output by 10–15 percent at the expense of diesel, or vice versa toward gasoline production, simply by adjusting flows through catalytic crackers and other processes.

01:29:21 Speaker 07: The bottom line on jet fuel is that demand hasn't been affected much because people value travel experiences highly.

01:29:34 Speaker 07: I would have thought—and many others did—that jet fuel consumption would have cratered since it's largely discretionary spending.

01:29:41 Speaker 07: But apparently, people are willing to pay a premium to continue travelling and having those experiences.

01:29:46 Speaker 07: So, you know, we don't really understand how all of that works.

01:29:56 Speaker 07: I guess that's what I'm trying to say.

01:30:00 Speaker 07: Roger.

01:30:04 Speaker 07: Yeah.

01:30:04 Speaker 07: Thank you.

01:30:05 Speaker 03: Thank you, Andrew.

01:30:06 Speaker 03: Just just to say, excellent talk.

01:30:08 Speaker 03: Some very good points.

01:30:10 Speaker 03: I'm very pleased.

01:30:11 Speaker 03: I've got to leave unfortunately, but I'm very pleased to have stood in for Jean and to have had this opportunity to give our slides and this talk; it was much appreciated.

01:30:23 Speaker 03: Really good conversations and good information.

01:30:25 Speaker 03: So, unfortunately, I must pull out now.

01:30:27 Speaker 03: But thank you very much indeed.

01:30:29 Speaker 02: Okay, thank you, Roger.

01:30:30 Speaker 02: Okay, Dan.

01:30:34 Speaker 04: Yeah, just—you know—everybody seems to praise the fact that China isn't importing four or five million barrels a day, but they also seem to forget well how they did it: is they stopped exporting diesel, gasoline,

01:30:47 Speaker 04: and jet fuel, right?

01:30:49 Speaker 04: And so there's a huge producer/exporter of gasoline, diesel, and jet fuel that's not in the market.

01:30:56 Speaker 04: They're not importing it; therefore, they're not exporting it.

01:30:59 Speaker 04: And the other thing going on over there in Russia with the refinery outage—between 30 and 40 percent of refineries being out right now—the Russians are buying jet fuel from Japan,

01:31:10 Speaker 04: which is a heck of a place considering the Japanese are paying some pretty healthy prices for crude oil in that part of the world.

01:31:16 Speaker 04: So even though we're not seeing high prices here in Asia, when I talk to people in Japan and Korea,

01:31:25 Speaker 04: they're paying $110–$120 per barrel for crude that they turn into jet fuel and sell it to the Russians for close to $200 a barrel.

01:31:32 Speaker 04: Right?

01:31:32 Speaker 04: We just aren't seeing it in our part of the world.

01:31:40 Speaker 04: Okay, Dusty, and then I have some YouTube questions.

01:31:47 Speaker 06: It seems like the United States has been very good at hiding reality and kind of insulating us from it.

01:31:55 Speaker 06: Like you mentioned there, Dan—like different parts of the world really dealing with reality kind of brutally.

01:32:01 Speaker 06: My question is maybe to Art or Dan or anybody: Is this stuff too big to fail?

01:32:09 Speaker 06: Right?

01:32:09 Speaker 06: But it seems like governments have a certain limited ability to cover that.

01:32:14 Speaker 06: So if demand is lower, prices are lower, and supply is all low at the same time—can they?

01:32:24 Speaker 06: Can governments step in and keep refineries from going bankrupt or closing down?

01:32:30 Speaker 06: Like, what's the process there?

01:32:38 Speaker 07: All right, go ahead.

01:32:41 Speaker 07: Well, refineries aren't going bankrupt; refineries are making money hand over fist.

01:32:49 Speaker 07: The so-called crack spread—which is the margin a refinery makes compared to what it pays for crude oil—is essentially equal to the price of crude oil.

01:33:00 Speaker 07: The three-two-one crack spreads are running $60–$70 per barrel at most.

01:33:06 Speaker 07: So the problem I tried to explain: Aren't you need to explain that "three, two, one" to them because they don't understand it?

01:33:11 Speaker 07: Okay, so if you take the three major components of a refinery—crude oil, gasoline, and diesel—and do a ratio weighting them accordingly (I won't get into details), looking at relative pricing:

01:33:36 Speaker 07: what it costs for crude versus what you're paid for refined products—you come up with this thing called the crack spread.

01:33:44 Speaker 07: For example, if I pay $50 per barrel for crude and make $100 on gasoline and diesel, my spread is $50.

01:33:59 Speaker 07: Okay?

01:34:01 Speaker 07: That's essentially what that is.

01:34:02 Speaker 07: So but the point: refinery refining is a hugely profitable business at the moment.

01:34:10 Speaker 07: The problem I was describing—and part of why it's so profitable—is because there aren't enough refineries.

01:34:19 Speaker 07: Right?

01:34:20 Speaker 07: So you know—I just want to keep going.

01:34:23 Speaker 07: And to your other point, Justin, about the United States hiding information from people: I mean, I think the business of all governments is to hide information from people because the truth doesn't get you reelected.

01:34:41 Speaker 07: And there's—uh—I mean Jimmy Carter was—you know—the perfect example of a guy who was too honest.

01:34:50 Speaker 07: Many people here are as old or almost as old as I am can remember when Jimmy Carter got on television in late 1979, or maybe early 1980;

01:35:04 Speaker 07: he was wearing a cardigan sweater and sitting in the White House saying, "Ah, you know—we've got to conserve energy.

01:35:10 Speaker 07: We're kind of running out of it.

01:35:11 Speaker 07: We're going to have to start looking at renewables and nuclear."

01:35:16 Speaker 07: And that was the end of Jimmy Carter's presidency.

01:35:20 Speaker 07: They don't want to hear that abundance isn't the story.

01:35:25 Speaker 07: And every U.S. president since then learned from Jimmy Carter less than they should; he taught them a lesson, but instead of learning it,

01:35:33 Speaker 07: they tell you every time—despite reality—that there's no problem because that gets them elected.

01:35:42 Speaker 07: But that's not unique to the United States.

01:35:47 Speaker 07: That's how governments always have been.

01:35:50 Speaker 07: And I will give China credit for having done better planning in many cases than the United States; but also: if you don't have a Congress or an electorate to disagree with you,

01:36:06 Speaker 07: there are things you can get done.

01:36:20 Speaker 07: For example, electric cars—they're not profitable—but China said, "Hey, we don't care.

01:36:24 Speaker 07: We're going to be number one producer of not only electric cars but all the components for strategic reasons."

01:36:34 Speaker 07: And they'll fund this whole thing from now until kingdom comes.

01:36:38 Speaker 07: Okay—you can't do that in the United States because you get voted out of office; but you can't get voted out of office in China because it's an autocracy.

01:36:49 Speaker 07: So true and fair enough: China has done a better job, or Iran with their drones—but again, you don't have to get parliament approval for billions of dollars worth of drones and ballistic missiles.

01:37:07 Speaker 07: You just build them, right?

01:37:11 Speaker 02: So I've got several YouTube questions.

01:37:14 Speaker 02: One from Robin Schaffler: "U.S. middle distillates rely on Canadian—and to a lesser extent Venezuelan—crude; with infrastructure destruction in the Middle East and Russia, could CI for the rest of the world diverge?"

01:37:31 Speaker 02: Well again—I'll take the question without putting my hand up.

01:37:36 Speaker 07: I've already explained that CI (Comparative Inventory) as I calculate it is based on U.S. data and calibrated to OECD.

01:37:48 Speaker 07: Nobody knows what global CI really is; but the simple answer: first,

01:37:57 Speaker 07: Canada is the leading exporter of crude oil to the United States—four million barrels a day—that's two-thirds of what the U.S. imports comes from Canada.

01:38:10 Speaker 07: So Canadian crude being crucial to U.S. refineries is very well known and unavoidable.

01:38:18 Speaker 07: Venezuela?

01:38:19 Speaker 07: It's coming back from a big deficit after years run by a government the United States didn't like—but no, this doesn't affect global comparative inventory because CI isn't based on that alone.

01:38:41 Speaker 07: Okay—thank you, thank you Dan.

01:38:44 Speaker 07: Did you want to talk about what we get out of Canada?

01:38:48 Speaker 04: If you look at the United States and draw a line from Indiana all the way down to Texas—all states in between—you'll find some of the lowest gasoline prices in the U.S.:

01:39:00 Speaker 04: average over $4 per gallon here nationally; but where I'm at, it's only about $3.36.

01:39:04 Speaker 04: That's because we're getting those four million barrels a day via pipelines hitting refineries like White Refinery in Indiana—that's why fuel is so cheap there.

01:39:13 Speaker 04: As far as Venezuela: that really heavy crude—we only have three U.S. refineries with coker units capable of processing it.

01:39:21 Speaker 04: So even if we ramp up Venezuelan production, it'll take time and lots of investment to reinvest in U.S. refineries able to process that crude—not a simple thing.

01:39:39 Speaker 04: Right now they're producing about 1.1 million barrels a day from Venezuela to the United States—but like I said: Chevron already has contracts with those three coker-equipped refineries.

01:39:51 Speaker 04: Maybe in 15 years we can get three or four million barrels out of Venezuela, but it'll take time—not simple.

01:40:02 Speaker 04: Canada's crude is awesome by the way—you got awesome crude—thank you!

01:40:07 Speaker 02: So there's another YouTube question wondering if panelists are familiar with Norwegian Lars Larsen and his "end of global net oil exports" theory—or that might be a Simon question?

01:40:26 Speaker 02: Okay—all right—I'll hopefully have him on next time.

01:40:31 Speaker 02: And then someone remarked Art had earlier said peak oil was a failed paradigm; they wondered what he thinks now.

01:40:47 Speaker 07: Well, I still think it is—and I haven't changed my opinion at all.

01:40:55 Speaker 07: I'm here because I think it's worth studying: I was even on the board of directors of the Society for Studying T40 (Transition) because I think it's worth studying.

01:41:27 Speaker 07: But yeah—I don't think peak oil blew its wad in terms of making noise about running out by 2006–2008;

01:41:40 Speaker 07: people got tired hearing that—like President Trump was always on verge of a peace deal or blowing Iran into existence—you say it enough and nobody believes it anymore.

01:41:53 Speaker 07: So my issue with peak oil isn't that the world doesn't eventually run out of affordable oil—I mean, Rogers is gone but his point stands:

01:42:07 Speaker 07: if peak oil had stuck to what Colin Campbell and John Kucera wrote in 1998—we'd have been fine because we're already out of cheap oil.

01:42:23 Speaker 07: Instead we got spun off trying to predict when the peak was and lost credibility.

01:42:29 Speaker 07: That's my answer—thank you Dusty—you've got a question?

01:42:34 Speaker 07: Yep—and I forgot!

01:42:44 Speaker 04: Okay—all right—I'll throw it on that, Andrew: What Art said goes back to what we've been talking about—the cheap stuff is gone;

01:42:58 Speaker 04: as long as two-thirds of higher-carbon reserves remain underground there's always going to be a quest to bring them online.

01:43:08 Speaker 04: Maybe technology improves—but it's more a question of cost: how much will it take?

01:43:14 Speaker 04: When does it become impractical to drive your car?

01:43:19 Speaker 04: That really is the question—what does affordability look like?

01:43:31 Speaker 02: That reminds me what Gail was talking about—but here Dusty, did you remember your question?

01:43:36 Speaker 02: Yes I did.

01:43:38 Speaker 06: So I was curious if anyone had seen Sabine Hossenfelder's recent video on a new Russian drill site trying to prove abiogenic oil theory—and whether anybody has thoughts on that?

01:44:02 Speaker 04: I have some thoughts—I've answered before: last year we talked about geothermal and showed what's inside the planet—molten rock shooting up in various places.

01:44:12 Speaker 04: But I'm sitting on depleted fields too: Shelbyville, Indiana—we had gas wells drilled back in 1890s still producing until they stopped them; probably plugging those by next three years (Shelbyville).

01:44:33 Speaker 04: The other is Evansville—basically just natural gas left from Standard Oil's early drilling.

01:44:40 Speaker 04: Whenever we run out of oil the last thing coming out is natural gas—and eventually that runs out too.

01:44:49 Speaker 04: Maybe oil regenerates—but not at measurable scale; none of these fields regenerate within human-measurable timeframes.

01:44:59 Speaker 04: Maybe over longer periods but no—not relevant here.

01:45:10 Speaker 04: And Art—you're a better expert on this area—go ahead?

01:45:13 Speaker 04: Yeah, abiogenic oil is nonsense.

01:45:24 Speaker 07: When I was grad student riding dinosaurs to school we used to have seminars debating it:

01:45:38 Speaker 07: yes there's some hydrocarbons generated in Earth's mantle—but by virtue of temperature only very stable methane forms survive even upper mantle/lower crust temperatures.

01:46:05 Speaker 07: We've drilled Zilijian Ring in Sweden—we did this—and whole abiogenic theory is based on a mass-balance problem where someone calculated we can't account for discovered oil vs shale-generated amounts—so argument rests on data problems, not facts.

01:46:42 Speaker 07: I'd place very low probability of success: if it works maybe—but commercial volumes?

01:46:58 Speaker 07: Close to zero.

01:46:59 Speaker 07: And I'm with Dan: anything that exists will be very dry gas/methane.

01:47:09 Speaker 07: A lot these technological "Deus ex machina" ideas are just bedtime stories we tell ourselves—it doesn't matter oil or renewables;

01:47:29 Speaker 07: pick up any newspaper and find harebrained schemes like screwing light bulbs into dirt to generate current—"good for you buddy!"

01:47:48 Speaker 07: But question isn't whether you can do it: first what does it cost?

01:47:55 Speaker 07: Second, can you scale it enough to affect energy needs of 8.2 billion people?

01:50:16 Speaker 07: Maybe marginally—but economics don't work yet on enhanced geothermal as I've studied them today—not just drilling but fracking—you fracture wells at 15,000 feet pump volumes down heat up bring surface turn turbines onsite because you can't

01:50:49 Speaker 07: transport steam economically—it's not even about geothermal vs nuclear;

01:50:56 Speaker 07: both are profoundly non-commercial.

01:51:01 Speaker 07: If money weren't issue and U.S.

01:51:07 Speaker 07: government underwrote every cockamamie idea—including screwing light bulbs into dirt—you could theoretically get 100% electricity covered—but then still have 80% of remaining energy needs unsolved!

01:51:36 Speaker 07: My point: all these pie-in-the-sky ideas about nuclear,

01:51:40 Speaker 07: geothermal renewables only account for 20% of total energy use—that's why transition is a big bomb because we're not decreasing fossil fuel usage—which whole reason using renewables theoretically—to reduce carbon emissions.

01:52:03 Speaker 07: We've had spectacular success increasing EVs solar wind—but guess what?

01:52:12 Speaker 07: Haven't made difference in emissions or temperature because still burning more oil gas coal etc!

01:52:22 Speaker 07: Eventually you have to say wait minute guys—why keep trying make party go when right answer maybe time we all go home get sleep?

01:52:45 Speaker 04: I agree—we need rethink mix volume usage relationship energy—and thing happening Iran going force it on us soon.

01:53:13 Speaker 07: Flows are down—I'd be bewildered startled pleasantly surprised if Hormuz ever gets back 50% pre-war flows;

01:53:25 Speaker 07: Red Sea never has—not because can't move oil but shippers unwilling take risk insurance companies won't sell policies tanker operators refuse work: wouldn't sign up again after Persian Gulf incident—these real-world questions you must ask yourself.

01:53:55 Speaker 02: Gail—I've seen lots comments on transition wondering if you have something?

01:54:10 Speaker 05: On transition I'm not sure what to comment; think headed into major recession/depression financial crashes worse than 2008 based prior observations—but can talk more next time thanks!

01:55:09 Speaker 06: Okay Dusty—you had question: following might not be much hope but maybe...

01:55:20 Speaker 06: We talk about different things my big concern getting younger people under forty talking like we do here podcast recently Art got shoutout on pretty big young-audience podcast different genre Tucker Carlson's so didn't know if

01:55:43 Speaker 06: you heard yet—but did.

01:55:45 Speaker 06: Little glimmer of hope maybe as crisis approaches younger folks affected will start talking more topic?

01:55:58 Speaker 06: Could clarify who called out?

01:56:02 Speaker 06: Art was!

01:56:03 Speaker 06: Did comment?

01:56:06 Speaker 07: Yeah never been on Tucker Carlson show not sure want same room him—personal integrity issue don't think much guy's integrity but apparently one guest friend colleague former Royal Navy commodore got asked question turned back said

01:56:51 Speaker 07: ought answer Art Berman—that origin yes very good episode recommend excellent up alley conversations stuff talk here wouldn't call controversial even if dislike Tucker smart instincts chasing things admit right track my issue more integrity than

01:57:35 Speaker 07: intelligence fair!

01:57:38 Speaker 07: Another YouTube: Art says not choice but lower energy use true U.S.

01:58:22 Speaker 07: less dependent Middle East?

01:58:36 Speaker 07: Yes idea U.S. only 10% dependent Middle East fair say—but deprived 10% oxygen probably feeling poorly keep context perspective government tells us grain truth aren't fully true United States never been will be energy independent half

01:58:53 Speaker 07: import six million barrels crude daily four from Canada how country importing that can claim independence fraud completely untrue six million exceeds Europe consumption bean counter adding net imports exports coal LNG electricity biomass accountant says

01:59:43 Speaker 07: U.S. slightly net exporter sometimes even net exporter fifty-nine cents worth stupid!

01:59:58 Speaker 07: But question fair: if talking bad off I'd rather suffer Iran war in United States than Japan no natural resources—but argument things fine U.S.?

02:00:33 Speaker 07: Less bad but flip side Gail speak trade world most indebted us rest worse can't buy products pay debt now tell again better off?

02:01:03 Speaker 07: Could argue due trade finance relationships U.S.

02:01:13 Speaker 07: end up worse countries little oil knock-on effects thanks Art!

02:01:28 Speaker 07: Ivor next question:

02:02:05 Speaker 07: recently said bailing Japan buying yen euros keep selling T-bills wondering if relates paying more oil yes don't have any answer yes go ahead Den currencies beating dead horse problem United States government thinks control dollar

02:02:35 Speaker 04: banks actually control internationally fight impression Americans think infinite energy leads bad behaviours report North American Energy Reliability Council says summer 2028 AI data centres LNG export terminals power grids collide rolling blackouts cancel contracts likely

02:02:48 Speaker 04: already signed building AI centres New York moratorium Texas governor also moratorium enough requests build four hundred gigawatts demand state only ninety-six generating capacity what happens between now twenty-twenty-eight Americans wake shocker not infinite energy finite

02:02:58 Speaker 04: becoming more difficult change perception hard must do by shock unfortunately!

02:03:03 Speaker 04: Round up people happy see us closing remarks?

02:03:05 Speaker 04: Thank you Art coming show thank having me thanks coming appreciate Gail showing legend work lot looking forward September third first Thursday same time everyone welcome open meeting if can make it leave infinite love peace

02:03:15 Speaker 04: infinite creator rejoicing infinite power friends later everybody ended live stream okay that was