The gap could narrow to 300,000 barrels a day by the fourth quarter, assuming increases production to 9.5 million barrels a day, to 1.7 million and to 3 million, though “that may prove a stretch,” the bank said. Output from those three OPEC countries in March was 8.66 million, 1.56 million and 2.69 million barrels a day, respectively, it said.As I pointed out in the April 30 blog, the runaway Global Casino speculates on everything on the Earth and distorts all prices everywhere. Mr. Casino is totally divorced from Ms. Reality, and his current bets on a lower oil price are as imaginary as his bets to the contrary. Earthlings beware! These speculative bets and brazen market manipulations can only last for seconds or days.
Marion King Hubbert is one of the two greatest American-born scientists of all times, and my hero. (Dr. Hubbert created the venerable Shell Development, which shaped me more as a researcher than U.C. Berkeley and U.T. Austin combined.) Dr. Hubbert made several contributions to geophysics, including a mathematical demonstration that hot rock in the Earth's crust, because it is also under immense pressure, should exhibit plasticity, similar to clay. This demonstration explained the observed deformations of Earth's crust over time. He also studied the flow of underground fluids.
Hubbert is best known for his studies on the production capacities of oil and gas fields. He predicted that the petroleum production from all oil & gas fields in a petroleum province, such as the U.S., over time would resemble a bell curve, peaking when half of the petroleum has been extracted, and then falling off. (We have extended Hubbert's work to a more complicated situation that involves multiple curves and provided a theoretical justification for Hubbert's approach.)
During a 4-hour interview with Stephen B. Andrews, on March 8, 1988, Dr. Hubbert handed over a copy of the following, which was the subject of a seminar he taught, or participated in, at MIT Energy Laboratory on Sept 30, 1981.
The world's present industrial civilization is handicapped by the coexistence of two universal, overlapping, and incompatible intellectual systems: the accumulated knowledge of the last four centuries of the properties and interrelationships of matter and energy; and the associated monetary culture which has evolved from folkways of prehistoric origin.
The first of these two systems has been responsible for the spectacular rise, principally during the last two centuries, of the present industrial system and is essential for its continuance.
The second, an inheritance from the prescientific past, operates by rules of its own having little in common with those of the matter-energy system. Nevertheless, the monetary system, by means of a loose coupling, exercises a general control over the matter-energy system upon which it is superimposed.
Despite their inherent incompatibilities, these two systems during the last two centuries have had one fundamental characteristic in common, namely, exponential growth, which has made a reasonably stable coexistence possible.
But, for various reasons, it is impossible for the matter-energy system to sustain exponential growth for more than a few tens of doublings, and this phase is by now almost over. (log1000/log2 = 10 doublings to grow by a factor of 1000. Hubbert's "now" was in 1981, or 20 years ago. Growth by a factor of 1,000 from the early stages of industrial production seems to be the magic limit for the production rates of all major resources on the planet Earth, TWP.)
The monetary system has no such constraints, and, according to one of its most fundamental rules, it must continue to grow by compound interest. This disparity between a monetary system which continues to grow exponentially and a physical system which is unable to do so leads to an increase with time in the ratio of money to the output of the physical system. This manifests itself as price inflation. A monetary alternative corresponding to a zero physical growth rate would be a zero interest rate. The result in either case would be large-scale financial instability.
With such relationships in mind, the following questions can be posed regarding the future:
It appears that the stage is now set for a critical examination of the growing disparity between resource availability and the technological superstructure that will vanish without the physical resources, but strives to grow ad infinitum. Out of such inquires, a major scientific and intellectual reassessment of the current unattainable priorities must take place.
- What are the constraints and possibilities imposed by the matter-energy system?
- Can the human society be sustained at near optimum conditions?
- Will it be possible to so reform the monetary system that it can serve as a control system to achieve these results?
- If not, can an accounting and control system of a non-monetary nature be devised that would be appropriate for the management of an advanced industrial system?
Unless we reassess real fast, Earthlings beware!