The End of Fossil Energy and Per Capita Oil by John G Howe (5th Ed)covers updates to the book as well as other related material regarding the imminent global energy crisis.
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"History shows that the collapse of economies is very common. Collectively, we have closed our eyes to this possibility ever happening to the world economy in the modern era. If the issue with collapsing demand causing ever-lower energy prices is as severe as my analysis indicates, perhaps we should be examining this scenario more closely."
Economists tell us that within the economy there is a lot of substitutability, and they are correct. However, there are a couple of not-so-minor details that they overlook:
There is no substitute for energy. It is possible to harness energy from another source, or to make a particular object run more efficiently, but the laws of physics prevent us from substituting something else for energy. Energy is required whenever physical changes are made, such as when an object is moved, or a material is heated, or electricity is produced.
Supplemental energy leverages human energy. The reason why the human population is as high as it is today is because pre-humans long ago started learning how to leverage their human energy (available from digesting food) with energy from other sources. Energy from burning biomass was first used over one million years ago. Other types of energy, such as harnessing the energy of animals and capturing wind energy with sails of boats, began to be used later. If we cut back on our total energy consumption in any material way, humans will lose their advantage over other species. Population will likely plummet because of epidemics and fighting over scarce resources.
Many people appear to believe that stimulus programs by governments and central banks can substitute for growth in energy consumption. Others are convinced that efficiency gains can substitute for growing energy consumption. My analysis indicates that workarounds, in the aggregate, don’t keep energy prices high enough for energy producers. Oil prices are at risk, but so are coal and natural gas prices. We end up with a different energy problem than most have expected: energy prices that remain too low for producers. Such a problem can have severe consequences.
Let’s look at a few of the issues involved:
 Despite all of the progress being made in reducing birth rates around the globe, the world’s population continues to grow, year after year.
"In May, OPEC’s oil production had dropped to a 2015 low of 30.17 million bpd, as a major 200,000-bpd increase in Saudi Arabia’s production was unable to offset an even larger production decline in Iran"
OPEC’s crude oil production dropped to below 30 million bpd in June, down by 170,000 bpd from May and the lowest monthly output since April 2014, as higher Saudi oil supply was insufficient to compensate for declines in the cartel members subject to U.S. sanctions, Iran and Venezuela, the monthly Reuters survey showed on Friday.
OPEC pumped 29.60 million bpd in June, according to the Reuters survey that tracks supply to the market from shipping data and sources at OPEC, oil companies, and consulting firms.
Saudi Arabia, OPEC’s largest producer, boosted supply by 100,000 bpd in June over May, to 9.8 million bpd, the survey showed.
Despite the increase, Saudi Arabia was comfortably below its 10.311-million-bpd cap under the OPEC+ deal as it had been overachieving in its share of the cuts by 500,000 bpd in the previous months.
"The energy sector has made up almost a quarter of all U.S. bankruptcies in the past year"
Shale Patch Struggles 5 Years After Crude Collapse
Bloomberg) -- It’s been five years since crude started a precipitous drop that eventually saw it hit a low of $26 a barrel. While prices have recovered some of the lost ground, shale producers are still feeling the pain.
Oil’s 76% collapse from almost $108 a barrel in June 2014 was the worst plunge since the financial crisis of 2008. Below are some data points on how the industry has fared since.
In 2014, oil and gas companies made up almost 11% of the S&P 500 Index. Now, that’s just over 5% as some investors appear to have given up on the sector.
Shareholder antipathy stems at least in part from questions over the profitability of shale drilling. While the five big, publicly traded integrated major producers -- BP Plc, Chevron Corp., Exxon Mobil Corp., Royal Dutch Shell Plc and Total SA -- resumed generating free cash flow as a group in 2017, independent U.S. drillers only became cash-flow-positive (based on an average of 12 such companies compiled by Bloomberg) in 2018 -- and they were back in the red in the first quarter of 2019.
There is no doubt that a severe disruption to the transit of oil through this vulnerable route would be extremely serious,” said consultancy FGE Energy in a note.
U.S. oil soars 10% in week on fears of U.S.-Iran conflict
NEW YORK (Reuters) - Oil futures rose 1% on Friday, with U.S. crude up 10% in the week and global benchmark Brent gaining 5%, on fears the United States could attack Iran and disrupt flows from the Middle East, which provides more than a fifth of the world’s oil output.
U.S. gasoline futures, meanwhile, jumped around 4% following a massive fire at Philadelphia Energy Solutions’ refinery in Philadelphia, the largest on the U.S. East Coast.
“The heightening of tensions between the United States and Iran has evolved as primary price motivator in spiking oil values,” Jim Ritterbusch of Ritterbusch and Associates said in a note.
While the rise in U.S.-Iranian tensions has largely driven the crude price gains, analysts said an early July meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies to reassess production targets, a potential softening of trade tensions between the United States and China and the refinery fire were also supporting prices.
LONDON (Reuters) - The outlook for oil demand growth in 2019 has dimmed
due to worsening prospects for world trade, the International Energy
Agency (IEA) said on Friday, although stimulus packages and developing
countries should boost growth going into 2020.
The Paris-based IEA, which coordinates the energy policies of
industrial nations, revised down its 2019 demand growth estimate by
100,000 barrels to 1.2 million barrels per day (bpd), but said it would
climb to 1.4 million bpd for 2020.
“The main focus is on oil
demand as economic sentiment weakens ... The consequences for oil demand
are becoming apparent,” the IEA said in its monthly oil report.
“The worsening trade outlook (is) a common theme across all regions”, it added.
oil demand growth forecast assumes the maintenance of U.S. and Chinese
tariffs imposed on goods in 2018, but the IEA said it had not factored
in further U.S. tariffs announced in May.