---- Original Message ----
Subject: RE: [the_dieoff_QA] Mortgage doom soon, or doom posponed?
Date: Mon, 25 Jun 2007 06:20:42 -0700 (PDT)
From: Ron Patterson
Reply-To: the_dieoff_QAyahoogroups.com
To: the_dieoff_QAyahoogroups.com

Richard wrote:
>>>

BP now concurs that 2006 production rose over 2005 (I seem to recall that you were convinced that 2006 production had fallen). There is no prima facie production data that I have seen that says we're at peak.
A production drop, even when seen in the rear view mirror, doesn't necessarily mean that we've just whizzed past the Peak. Production fell in 1999,
and for two consecutive years in 2001/2002, but not because of supply constraint. I suggest we really need to see two consecutive years of falling
production, with a concomitant, very large, price increase, to be fairly sure that that was Peak (andno, we have not yet seen the great price increase. Who said Europe averages $5/gallon? I wish...!)

Richard, I believe the BP data is by far the most unreliable of all. They have an ax to grind and many think they fudge the data to match it. You get far more reliable data from the EIA and the IEA. The EIA has 2005 as the peak while the IEA has 2006 slightly higher. That being said, which year is peak is relatively unimportant, the fact is both have us post peak. But the reliability of BPs, or anyone else?s data is only a sidebar to the main event. The world has peaked no matter whose data you are using.

Then there is the issue of Crude + Condensate verses All Liquids. Condensate is just light oil that condenses out of natural gas at the processing plant. It is just dumped in with crude and sold as such therefore it is counted as crude.

All liquids are a different matter. That includes natural gas liquids such as propane and butane. In other words it includes bottled gas. All liquids also
include agricultural products such as ethanol and biodiesel. This amounts to double counting since it takes a considerable amount of fossil fuels to produce ethanol and biodiesel. All liquids also include a little water believe it or not. All liquids include ?Orimulsion?, a boiler fuel made from the Orinoco bitumen. Orimulsion is 30% water. They say it improves its combustible prosperities.

So for obvious reasons I only track Crude + Condensate. But another reason is the fact that the EIA breaks C+C down by country and they do not do that for All Liquids. C+C peaked in May of 2005 at 74,272,000 barrels per day. As of March
World C+C production was 73,358,000 barrels per day, almost one million barrels per day below peak. Also world crude oil production had declined to just over 73.5 million barrels per day in September of 2006, before Opec decided to cut. Most people who follow this issue very close believe Opec is, still today, producing flat out.

Production cuts in 1999, 2001 and 2002 were made at a time when oil prices had hit rock bottom. Only Opec made cuts, the rest of the world continued to increase production during all three of those years. The same can be said for those severe cuts by OPEC in the early 80s. And the only other significant dip in world oil production was caused by the collapse of the Soviet Union.

The IEA has world oil production dropping by 565,000 barrels per day in May. This is mainly in drops from Mexico, the North Sea and Russia. This should put us about 1.3 million barrels per day below the past peak. This will cause many
skeptics to start changing their mind about when the peak might occur. The other shoe drops in September. Oil prices will still be near their all time highs. (Malaysian Tapis and Brent have set new highs in recent months.) They will fail to do so. Some countries will give excuses explaining why they are physically unable to do so at this time. Their credibility will then be stretched to the
breaking point. It will then begin to dawn on people that perhaps those vast Middle East reserves are largely a myth. Oil will then shoot to over $100 a
barrel. This will be the point when everyone begins to talk about peak oil.

One more point. Some folks on this list talk about what rich people can afford verses poor people. This clouds the issue and totally misses the point.
Higher oil prices will cause everyone to cut back on things they purchase. Industry will start to shrink. The stock market will collapse. This will throw
thousands of people out of work. This will lower oil demand somewhat and things will muddle along for awhile but the cat will be out of the bag so to speak.
Because everyone will now realize that future growth will depend on continuing growth of the oil supply, a growth that they now realize will never happen. This means that the stock market will never recover. In fact it will only collapse
further. The recession will turn into a depression. The market collapse will affect everyone, rich and poor alike.

So to sum things up, peak oil will become common knowledge before years end. The recession will happen in 2008 and the depression by 2009 or 2010. That is my prediction. I only half-way hope I am wrong. It will cause much pain and suffering but that is inevitable at any rate. It must happen sooner or later. And the sooner it happens the fewer people will suffer and the less we will destroy the rest of the earth.

Ron Patterson



- For more than 50 years sane voices have called for an end to the debate. Nature versus nurture has been declared everything from dead and finished to
futile and wrong?a false dichotomy,. Everybody with an ounce of common sense knows that human beings are a product of a transaction between the two.
- Matt Ridley: Nature via Nurture