Connect with us

Culture

Shale ‘Miracle’ Is a Retirement Party For the Oil Industry

Voice Of EU

Published

on

The author is a prominent American social critic, blogger, and podcaster, and we carry his articles regularly on RI. His writing on Russia-gate has been highly entertaining.

He is one of the better-known thinkers The New Yorker has dubbed ‘The Dystopians’ in an excellent 2009 profile, along with the brilliant Dmitry Orlov, another regular contributor to RI (archive). These theorists believe that modern society is headed for a jarring and painful crack-up.

You can find his popular fiction and novels on this subject, here. To get a sense of how entertaining he is, watch this 2004 TED talk about the cruel misery of American urban design – it is one of the most-viewed on TED.

If you like his work, please consider supporting him on Patreon.


Editor’s note: Kunstler is an expert on the shale question, which is central to his theory that the gradual drying up of hydrocarbon energy around the world is going to lead to inexorable economic and social upheaval.

It is great to have someone writing about this in a way that not only doesn’t make ones eyes glaze over, but is actually fun and entertaining.

Shale is also central to Russia’s fortunes. The Russians invented fracking in the 70s and never implemented the technology because it is not profitable. They have been very dismissive of it in recent years, arguing that it is a short term phenomenon made possible with ultra-low interest rates and is ultimately economically unsustainable, which coincides with Kunstler’s view.

Should the US shale industry get ship-wrecked on the rocks of rising interest rates, global oil prices will rocket to economy-busting highs again, albeit giving a temporary windfall to low-cost producers like Russia, Iran, and Saudi Arabia.


As of this week, the shale oil miracle launched US oil production above the 1970 previous-all-time record at just over ten million barrels a day. Techno-rapturists are celebrating what seems to be a blindingly bright new golden age of energy greatness. Independent oil analyst Art Berman, who made the podcast rounds the last two weeks, put it in more reality-accessible terms: “Shale is a retirement party for the oil industry.”

It was an impressive stunt and it had everything to do with the reality-optional world of bizarro finance that emerged from the wreckage of the 2008 Great Financial Crisis. In fact, a look the chart below shows how exactly the rise of shale oil production took off after that milestone year of the long emergency. Around that time, US oil production had sunk below five million barrels a day, and since we were burning through around twenty million barrels a day, the rest had to be imported.

In June of 2008, US crude hit $144-a-barrel, a figure so harsh that it crippled economic activity — since just about everything we do depends on oil for making, enabling, and transporting stuff. The price and supply of oil became so problematic after the year 2000 that the US had to desperately engineer a work-around to keep this hyper-complex society operating. The “solution” was debt. If you can’t afford to run your society, then try borrowing from the future to keep your mojo working.

The shale oil industry was a prime beneficiary of this new hyper-debt regime. The orgy of borrowing was primed by Federal Reserve “creation” of trillions of dollars of “capital” out of thin air (QE: Quantitative Easing), along with supernaturally low interest rates on the borrowed money (ZIRP: Zero Interest Rate Policy). The oil companies were desperate in 2008. They were, after all, in the business of producing… oil! (Duh….) — even if a giant company like BP pretended for a while that its initials stood for “Beyond Petroleum.”

The discovery of new oil had been heading down remorselessly for decades, to the point that the world was fatally short of replacing the oil it used every year with new supply. The last significant big fields — Alaska, the North Sea, and Siberia — had been discovered in the 1960s and we knew for sure that the first two were well past their peaks in the early 2000s.

By 2005, most of the theoretically producible new oil was in places that were difficult and ultra-expensive to drill in: deep water, for instance, where you need a giant platform costing hundreds of millions of dollars, not to mention armies of highly skilled (highly paid) technicians, plus helicopters to service the rigs. The financial risk (for instance, of drilling a “dry hole”) was matched by the environmental risk of a blowout, which is exactly what happened to BP’s 2010 Deepwater Horizon platform in the Gulf of Mexico, with costs estimated at $61 billion.

Technology — that El Dorado of the Mind — rode to the rescue with horizontal drilling and fracturing of ”tight” oil-bearing shale rock. It was tight because of low permeability, meaning the oil didn’t flow through it the way it flowed through normal oil-bearing rocks like sandstone. You had to sink a pipe down, angle it horizontally into a strata of shale only a few meters thick, and then blast it apart with water under pressure and particles of sand or ceramic called propants, the job of which was to hold open those fractures so the oil could be sucked out. Well, it worked. The only problem was you couldn’t make any money doing it.

The shale oil companies could get plenty of cash-flow going, but it all went to servicing their bonds or other “innovative” financing schemes, and for many of the companies the cash flow wasn’t even covering those costs. It cost at least six million dollars for each shale well, and it was in the nature of shale oil that the wells depleted so quickly that after Year Three they were pretty much done. But it was something to do, at least, if you were an oil company — an alternative to 1) doing no business at all, or 2) getting into some other line-of-work, like making yoga pants or gluten-free cupcakes.

The two original big shale plays, the Bakken in North Dakota and the Eagle Ford in south Texas, have now apparently peaked and the baton has passed to the Permian Basin in west Texas. If the first two bonanzas were characteristic of shale, we can look forward not very far into the future when the Permian also craps out. There are only so many “sweet spots” in these plays.

The unfortunate part of the story is that the shale oil miracle only made this country more delusional at a moment in history when we really can’t afford to believe in fairy tales. The financial world is just now entering a long overdue crack-up due to the accumulating unreality induced by Federal Reserve interventions and machinations in markets.

As it continues to get unglued — with rising interest rates especially —  we will begin to see the collapse of the bonding and financing arrangements that the fundamentally unprofitable shale “miracle” has been based on. And then you will see the end of the shale “miracle.” It is likely to happen very quickly. It was fun while it lasted. Now comes the hard part: getting through this without the nation completely losing its marbles and doing something stupid and desperate — like starting another merry little war.

Source link

Culture

Social media: Why vaccines, paella and ‘tortilla’ trend on Spanish Twitter | Opinion

Voice Of EU

Published

on

The content that gets shared the most on social media is not always an indignant message or an ingenious insult. Sometimes, it can even be pleasant to be on Twitter. This past weekend, the German television network Deutsche Welle published an English-language video special about Spain’s successful Covid-19 vaccination campaign. This video has been shared by Twitter users more than a thousand times in messages that expressed pride and included the hashtag #marcaEspaña (or, Brand Spain).

The Deutsche Welle video compared the 78% rate of fully vaccinated people in Spain at the time the report was made (the figure is now closer to 80%) to the 69% in Italy, 68% in France and 65% in Germany. Some of the reasons put forward to explain this success, despite a slow start, include widespread faith in the country’s public health system, the media’s scant coverage of vaccine conspiracy theories, and also “the devastating first wave of the pandemic.”

Positive messages about Spain from a foreign source are usually popular on social media. But at the same time it seems that if a Spaniard mentions that the country is doing something reasonably well, such as the vaccination campaign for instance, their fellow countrymen have trouble believing it. The impression (not always off base) is that the speaker has an axe to grind or may be trying to sell us a story (or even worse, a flag). But if a foreign media outlet says the same thing – well, we may not be fully convinced, but at least we enjoy hearing it.

And it’s not just with crucial subject matter such as vaccines. It also happens with other less critically important issues, such as Spain’s famous potato omelet, or tortilla de patatas. When a reporter from The New York Times extolled celebrity chef Ferrán Adriá’s version, made with potato chips from a bag rather than freshly sliced potatoes, it prompted nothing but satisfied tweets. But messages about the same recipe shared before the article came out showed a marked difference of opinions, to put it mildly.

It also works the other way around: when our dear old Spain comes under attack, we view it as an affront requiring revenge. There are still Twitter users out there who have not forgiven British celebrity chef Jamie Oliver for making a paella with chorizo in 2016 (at the time, some people compared his creation with the notorious botched restoration of a Christ figure in 2012).

And let’s not forget what happened to an Italian citizen who tweeted this summer that Spain was like Italy, but a bit worse. I will refrain from mentioning his name because he has already put up with enough grief. “Hey guys,” he amusingly tweeted afterwards. “Just checking, does ‘me cago en tu puta madre’ mean ‘I respectfully disagree’?”

I don’t think that Twitter turns us into patriots, fortunately enough for everyone. There’s no doubt that a lot of different elements are at play here: it’s easier to praise the Deutsche Welle video if you are a supporter of public healthcare (or even of the government). As for the food disputes, there is a lot of joking and pretending going on there. There is also an element of surprise: while we find it normal for there to be talk in Spain about the US, the UK or Germany, we are surprised every time Spain is mentioned abroad, and that’s because we tend to view ourselves as rather insignificant (which is understandable). And I’m also not ruling out the view held by some that focusing so much on what the foreign media says is, in itself, quite provincial.

But it’s also true that we should all find some joy in the fact that, once in a while, we can work together to do something well. And perhaps even celebrate with a good tortilla de patatas. I won’t go into whether it should have onion in it or not, because I don’t want to ruin the moment with another argument.



Source link

Continue Reading

Culture

Misconceptions about meaning of antigen results widespread, report finds

Voice Of EU

Published

on

Widespread misconceptions exist about Covid-19 antigen testing, according to a new report, with almost half of us thinking a person with symptoms doesn’t have to self-isolate if there is a negative result.

Twelve per cent say they do not know how to interpret a negative antigen test and another 4 per cent say it is fine to socialise, even with symptoms.

This baseline level of public understanding presents a “clear set of communications challenges,” according to the interim report of the rapid testing expert advisory group.

The Government earlier this week gave the go-ahead for the use of antigen testing for asymptomatic close contacts, and their wide use for large events. Up to now, the National Public Health Emergency Team has resisted the wider use of antigen testing, arguing it was inferior to the system of PCR testing already in place.

The report says rapid antigen tests (RADT) are an additional tool and not a substitute for existing public health measures. PCR testing remains the “gold standard” for diagnosing Covid-19 infections.

But antigen tests can reliably detect those most likely to be infectious and the speed with which the result is obtained enables “rapid intervention” to prevent onward transmission of the virus. Although they do not identify all cases, they are cheap and can be deployed at scale.

The results of antigen tests are available within minutes, whereas it takes about a day for the result of more expensive PCR testing to be provided.

Less than half of the population knew an antigen test was “less good” at detecting the virus than a PCR test, according to a survey carried out for the report.

Some 39 per cent of people though that where a person with symptoms took a rapid test and got a negative result, s/he had no need to self-isolate.

“Overall, the results suggest widespread misconceptions in Ireland about the sensitivity of RADT, how they are of benefit, and the implications of test results.”

“In a landscape of continual change as demonstrated by the unpredictability of this pandemic, it is possible rapid antigen testing may play an important part of future testing programmes.”

Antigen testing may have a role within specific settings as a complementary public health intervention to existing infection prevention and control measures, the report states.

There may be benefits to deploying it in specific settings “depending on the incidence of Covid-19 in the country”.

“It is important that the benefits and limitations of all tests are communicated to the public. It should be noted that rapid antigen detection tests should not be used to support behavioural changes that are contrary to public health recommendations.”

The expert advisory group, chaired by Prof Mary Horgan, was appointed by the Minister for Health last July.

Source link

Continue Reading

Culture

Travel disruption as storm wreaks havoc across Germany

Voice Of EU

Published

on

The German Weather Service (DWD) issued an orange (level 2) storm warning for most of Germany – and a more serious red (level 3) warning in some areas in a central strip across the country. 

READ ALSO: Germany braces for severe storm and high winds

Early on Thursday morning, the low pressure system – dubbed “Ignatz” by meteorologists – began to move over Germany bringing with it strong gusts, thunderstorms and rain. During the course of the day, the DWD expects heavy winds and hurricane-like gusts of over 100 km per hour.

Damage and travel chaos 

The storm has already caused major damage and impacted travel.

A goods train collided with a fallen branch in the Bonn district of Bad Godesberg on Thursday night, and long-distance traffic between Cologne and Koblenz was affected in the morning. According to a Deutsche Bahn (DB) spokesman, the branch had fallen onto the track on the left bank of the Rhine due to the storm.

“We have to divert to the right bank of the Rhine and are working flat out to repair the damage,” a DB spokesperson said.

The Tweet below by the German Weather Service shows wind speeds recorded in parts of Germany on Thursday morning. On Mountains the maximum wind speed reached 166 km/h. 

Long-distance trains between Cologne and Koblenz were diverted in the early hours, with delays of between 20 and 90 minutes. The stops at Andernach, Remagen and Bonn central station were cancelled. Long-distance trains between Würzburg and Nuremberg were also being diverted due to storm damage. 

A tree fell on an overhead line between Neumünster and Rendsburg. This caused disruption to train services between Hamburg and Kiel, and Flensburg. A Deutsche Bahn spokeswoman said that the report was received at around 7.30am. 

The rail operator warned there could be more disruption and cancellations throughout the day. People can check the DB site for current issues in their area.

In the state of Hesse, police and emergency services received several reports of fallen trees – and even a trampoline that was lifted and hurled across streets. There was some minor damage to property. According to the police, there were no reports of injuries. However, it remains to be seen how the storm will develop in Hesse over the course of the day.

In Rhineland-Palatinate, there were several traffic accidents due to branches, trees or bins blown onto the roads. The Rhine bridge near Speyer, which is part of Autobahn 61, was closed due to a truck overturning. The police believe gusts of wind caught the trailer of the lorry and caused it to overturn.

An overturned truck on Autobahn 61.
An overturned truck on Autobahn 61. Photo: picture alliance/dpa/Pr-Video | Rene Priebe

In Thuringia and Baden-Württemberg, trees were uprooted. In Delmenhorst, Lower Saxony, a man was hit by a falling branch on Wednesday evening but luckily he was not injured seriously, police said.

DWD has warned that there will be several rain storms across the country. 

In the northern half of Germany, the weather service warned of eastward-moving storms with gale-force winds of up to 105 kilometres per hour. Forecasters said it would also be particularly stormy on the Baltic Sea coast. 

The DWD warned of falling branches and roof tiles, and recommended that people try and stay indoors, particularly in badly-affected areas.

Forecasters say the wind will decrease from the west over the course of the afternoon. It is set to get cooler overall. Temperatures on Thursday will be between 15 and 18C, in the west and north between 12 and 15C.

Vocabulary

Storm – (der) Sturm 

Thunderstorm or storm – (das) Gewitter

Gale-force winds – (die) Orkanböen

Diverted – umgeleitet

We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.



Source link

Continue Reading

Trending

Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates 
directly on your inbox.

You have Successfully Subscribed!