E-Mail 'Economics & Investing For Preppers' To A Friend

5 Comments

1. I am curious regarding if other readers are stock piling solar panels just for the tax cut. My experience is that almost anything electronic diminishes in cost and increases in ability/productivity in a few years which I have seen in the building of solar panels. Increase in voltage, strength and reliability over the last several years. I have been reluctant to purchase a huge solar power system due to this fact. Do you currently use solar systems on the ranch?

2. RE: Peak Oil Finally Arrives

   Nice clickbait title from Seeking Alpha, but I have another viewpoint, formed from participation as a tertiary service provider to oilfield activity.
   The buzz I’m hearing, and many of the numbers quoted in the article bear this out, is that capex across all oil activities is dropping somewhat in anticipation of an oil demand drop due to an expected recession. The price is already at a marginal profit level for many wells, demand has been soft, and now a drop in demand is anticipated. With shale and offshore wells being expensive to bring online, and shale wells having a limited shelf life, it makes no sense to keep drilling at 2018 levels when the demand forecast just isn’t there.
   There is no solid reason out there to think that US oil production can’t hold the current production level for many years or even decades, and possibly even increase, as has been forecast. It’s just that it’s probably not profitable for most companies to continue to increase production into a recession.

   1. You bring up an interesting point I either read or heard from a friend in oil or maybe both. (I think I may have gotten this from Thomas Sowell and an old friend of mine in oil well management.) I hope I can get it right.

      My understanding is that when you refer to oil “reserves” (or reserves in any geological resource) you are not referring to all the oil (or whatever resource) that is known about at a given time. You are referring only to the resources that are economically extractable at the current price with the current technology. There is typically far, far more known about in the ground that is not currently economical to extract with current technology. As prices go down, reserves shrink. As prices go up, reserves increase. As technology improves, reserves increase.

      I believe there is another term (not reserves) for all of the oil we actually currently know about but I cannot currently remember it.

      This is something that confuses layman like myself. You hear “reserves” and that sounds like everything we know about in the ground when it is not.

      Perhaps someone more knowledgeable can elaborate or correct me.

      1. I always thought of reserves as fuel thats setting in tanks or counted in transport to be refined or thats ready for use as fuel. When i think of it as economists talked about it when prices got high during the Clinton presidency he released the strategic reserve to help lower prices at the pump. (Dont think it helped more than a few cents!)

      2. AFAIK, “reserves” is the estimated total of known oil in the ground that can be extracted with current technology.
         Whether it is profitable to do so, or not, is another story.

Comments are closed.