James Howard Kunstler's blog has an obscene title, which I would hope he
changes soon. But other than that, his essays, especially this one, are well
worth your time.--Tom
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_May 2013 (3)_ (http://kunstler.com/blog/2013/05/)
The New Abnormal
By James Howard Kunstler
on May 20, 2013 10:03 AM
The collective state of mind in the USA these days may be even more
peculiar than what went on in Germany in the early 1930s, when the Nazis were
freely elected to lead the country and reconstructed the battered national
psyche into a superman cult that soon beat a path to mass death and ruin.
America has its own way of going crazy. We don't goose-step to tragedy; we
coalesce into an insane clown posse and stumble into it by pratfall -- juggaloes
dancing backwards off the cliff edge.
We've been softened up and made extra-stupid on a 60-year-long diet
of TV and kreme-filled donuts. Instead of a "master race," our political
fantasies revolve around a master wish - to get something for nothing. Want
to feel good about yourself? Smoke some crank. Want to become economically
secure? Buy a Powerball ticket or drive to the local casino. Want political
esteem? Plug a flag pin into your lapel. Want status? Borrow free money
from the Federal Reserve at zero interest and arbitrage it into massive
earnings for your primary dealer bank. All these behaviors are the consequence of
a culture that elevated advertising to such a high social good, it ended up
drowning in its own manufactured bullshit.
A subset of our master wish has been on vivid display in recent months,
namely the idea that God has blessed the USA with a limitless supply of new
oil that will allow us to keep driving to WalMart forever. This propaganda
from an oil industry desperate for capital investment has been swallowed
whole by people in authority who ought to know better, just as that same class
of people in Germany of 1934 should have known better about what they were
bargaining for in economic well-being with the Nazi agenda. In our case,
the propaganda drumbeat is being led by formerly respectable news
organizations. The New York Times, National Public Radio, Bloomberg News, Forbes, and
The Atlantic Magazine are media giants that have lately spread the "good
news" that America will soon be 1) "energy independent," 2) the world's
leading oil exporter (greater than Saudi Arabia is now!), and the "go-to
nation" for cheap manufacturing.
All of these claims are false, by the way. The American way-of-life
was designed to run on $20-a-barrel oil, not $90-a-barrel oil, and "new
technology" has not changed that. The unfortunate and, to some extent,
mendacious memes about the wonders of "new technology" have only snookered the
public into a false sense of security about a future that will disappoint them
badly and probably provoke an extreme political reaction as the reality of
our predicament sweeps through daily life.
Most of the current "endless oil" fantasy revolves around shale oil.
Just to get a visual idea of what this amounts to, consider this map. It
depicts the two major shale oil production regions of the USA: the Bakken in
North Dakota and the Eagle Ford "play" in Texas. Bakken production is
confined almost entirely to four counties in North Dakota (Williams, Mountrail,
McKenzie, Dunn). The Eagle Ford region touches perhaps ten Texas counties.
Now, realize that the oil fields all over the rest of the USA (including
Alaska) are in decline. Here's where the "bonanza" of new oil all comes from:
(http://kunstler.com/blog/assets_c/2013/05/Shale-82.html)
The oil coming out of these places is high cost and low flow-rate oil.
This is exactly the opposite of what US oil production used to be (low cost
and high flow-rate) when we were busy building all the freeways, strip malls,
housing subdivisions, suburban office parks and all of the other stranded
assets that now make up the infrastructure of daily life in this country.
Those were the days when you could pound a single pipe vertically 1000 feet
down (not much deeper than many home water wells) into the temperate
wheatfields of Oklahoma (drive to work in shirtsleeve weather!) and after that
modest investment in drilling you could kick back and depend on a great flow
rate (5,000 barrels-a-day, not unusual) of sweet light petroleum for years.
Horizontal drilling (often more than 10,000 feet down + many "laterals" an
additional 10,000 feet horizontally) and then fracturing "tight" rock for
shale oil is not only a way larger capital expense (lots of steel!) but the
flow rates per well (82 barrels-a-day average) are laughable compared to
the halcyon days of conventional oil -- little better than "stripper" wells.
Consider also that shale oil well flow-rates decline greater than 60
percent in the first year (rapidly thereafter, too) and you can see easily that
there will be no "kicking back" to run the pump-jacks like cash registers,
as in the old days. In fact, the rapid depletion only prompts more frantic
drilling and re-drilling to keep the production at its current rate - the
"Red Queen Syndrome" ("I'm running as fast as I can to stay where I am"),
which means fantastic capital expenditure to keep drilling and fracking more
wells (even more steel!). Consider also, that the small "sweet spots" in
the shale oil regions were the ones drilled first (in earnest after 2003),
for the simple reason that they were the most promising. This was the "low
hanging fruit" -- easy to pick. Outside these sweet spots the oil may be too
meager or difficult or costly to bother drilling for.
This is a picture of a boomlet that may run a few more years -- if
the banking system doesn't implode and the massive stream of capital doesn't
quit flowing to the shale counties. The excitement will all be over before
2020, but I suspect that troubles in finance and banking will put the
schnitz on the shale gas mania long before that date. What will happen when the
American public discovers that they were lied to about yet another
important matter? The discovery will coincide with very severe changes in daily
life that won't be avoidable. Everyone will be affected. Many will be
impoverished and suffer real hardship. That's when the public goes apeshit and
starts tearing down the house.
Apart from the issue of sheer economic suffering and all the damage
that will ensue, consider that it will be generations before anyone believes
the "authorities" again -- though, like the oil age itself, the era of
giant national media will probably prove to be a one-shot deal, too. Future
generations -- if they are lucky -- may read the news on one-page circulating
broadsides, printed laboriously in hand-set type by letterpress. Or maybe
they'll be reduced to just parsing out rumors.
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