“No long, slow sleep of death embalmed. We shall burn, like the heathen kings of old. Bring wood and oil.” – Return of the King
AOC is introducing legislation to make him climate friendly and change his name to Vin Solar.
Arguably, the biggest machine humanity ever built is the hydrocarbon industry. Annually over half of a trillion dollars are spent exploring for it. Oh, sure, that’s what a Big Mac© will cost in 2036, but right now I wouldn’t turn it down. That’s just finding and getting it out of the ground. All in, with pipelines, ships, rail cars, and refineries, it costs about $1.2 trillion a year. Well, that was last year.
This year it will be more.
The killer is supply and demand. Less oil is getting on a boat and going to Rotterdam, so that takes it off the market. The Strategic Petroleum Reserve is nearing levels that some have said risk damaging the storage infrastructure itself, but it’s in Louisiana and Texas, so they’re used to the smell of oil in the morning. Smells like . . . money.
But what people miss is that it’s a finely tuned industry. It’s not like there are extra wells sitting around, waiting to produce. And, after Ukraine sent all those flying lawnmowers covered in C4 into refineries in Russia, that stung. It ended up taking out millions of barrels of capacity versus their peak refining capacity. That’s less bubbling crude being turned into diesel.
What would Jed Clampett do?
Thankfully, we also have Gulf War VII, Part 58, so that the oil produced is actually even lower than the capacity of the refineries. The IEA© (That stands for International House of Pancakes®, but in French, I think?) is guessing that things are rapidly falling apart when it comes to the amount of oil available and the fuel we can make out of it.
We have an oil tank. And its level is dropping.
Even when the oil comes back, we still need to figure out how to mash it into diesel, which won’t happen overnight.
What does that leave?
Demand destruction. Those are fancy words, but the short version is that the solution to high oil prices is high oil prices. Yes, I used to drink gasoline like it was milk back in the day, because despite trillions of dollars being spent to find it, drill it, pump it, pipeline it, smash the dead dinosaur molecules around so the T. Rex bones don’t get stuck in the bottom of my gas tank, gas was cheaper than bottled water.
Was.
Now it’s expensive, so people will stop drinking gasoline and diesel. And they’ll stop driving. And they’ll stop idling their cars so they use less of that wonderful fuel.
If you lock your girlfriend and your dog in the trunk for an hour, generally only one of them is happy to see you when you open it back up.
As we’ve discussed before, the poorer nations will be hit first, and hit hardest. For me, it means, well, nothing as far as my fuel purchases. I drive about four miles a day on the average day, so add the three and carry the two . . . that’s about 120 miles a month. At $4.50 a gallon and 20 miles per gallon, that’s, dang, complicated. It’s too complicated to figure out. You’d have to use multiplication or some other tool of the Devil.
As gas. Not as the economy, and it’s an isolated view.
But the cost of fuel is a tax that hits every physical object that is moved in space to be bought and sold. I know that now that if I want steak, because it’s steak and who doesn’t want steak, it will now cost more. It costs more to get food to the cattle, move the cattle, convince the cattle politely to disassemble themselves into Wilder-sized portions, and move their soon-to-be-grilled-ribeyes to my house.
What’s more Irish than potatoes? No potatoes.
If that gets too expensive, maybe I’ll have chicken. But for the person who can already only afford chicken, I think they have to move to something like mouse.
The short version is that demand destruction means people don’t buy as much of whatever demand is being destroyed because they can’t afford it. Demand destruction is just a fancy way of saying, “you’re all getting poorer, so learn to catch raccoon”.
There’s other positive news!
10 of 11 postwar (World War II, not the Franco-Prussian War) recessions were produced by . . . oil price highs that exceeded the three-year high. Which is right where we are. This didn’t happen in 2022, because everyone just decided to print money so we could build all the data centers we can eat instead of having a recession, so in my mind we just kicked the can down the road a bit.
Money printing is magic! Do you think they’ll stop now?
No. But what about oil. We make and export oil now. Surely, John Wilder, that will save us!
No, it won’t.
Surely that will never happen with the dollar, right?
I mean, sure, it’s nice that roughnecks will be getting some more hours in down in Texas, but that doesn’t help much when you’re a farmer trying to harvest the crop with diesel that’s now twice as expensive as you planned on. On balance, my money is still on this increase in oil prices resulting in not only demand destruction but salary deconstruction.
Salary deconstruction? Oh, nevermind that. It’s just a fancy name for people getting fired, or not getting hired. Raises will be down right at the time that people will be feeling more costs, and it will be harder to get a job. In the 1970s we had stagflation.
I wish this would be Epsteinflation, because at least then we’d never see it.
No, this will be Zendayaflation, because even though no one wants Zendaya, Zendaya is everywhere and in everything. Like the inflation we’re starting to see, small, mean looking, but you know that it’s going to grow and resemble a linebacker.
I bet when Zendaya starts counting carbs, she’ll go for a high score.
How do you get $1.2 trillion?
Just jam up the world’s biggest machine, and then create ones and zeros so we can spend them faster. The downside of that Big Mac© that costs only $1.2 trillion?
You don’t get any fries. And the burger isn’t exactly made of beef.
Well, regular jumped 30¢/gal. over the weekend. Moved to the SC Lowcountry in 2018 to escape snow & cold weather but my clientele is in the Charlotte Metro. Headed there today. 500 miles round trip at $4.20/gal. Plus a safe hotel, which is $250 w/ tax & parking. Two $500 jobs. Becoming a waste of time when overhead gets involved and when my Phase One CRE work dies, which it is.
Enough bitching. One question – who is Zendaya? Actress or bad singer or reality TV star?
IMO, people have no idea how bad times are going to get.
Zendaya and recent husband Tom Holland are the current “it” couple in Hollywood; both were in The Odyssey as well as the new blockbuster Spiderman movie.
https://www.yahoo.com/entertainment/celebrity/articles/tom-holland-zendaya-living-large-121507701.html
I think Tom played Mediocrates.
10 4 no idea
Zendaya is a movie actress. Not a good one. Her entire acting range looks like the expression of someone whose bowels are bound up after eating far too much cheese.
Happy for me, gas is the number one expense for my business so I’ve got that going for me…which is nice. Driving hundreds of miles a week in very fuel inefficient vehicles means I pass my higher costs on to my clients who in turn are passing those costs on to their customers and those customers? Pass the higher costs on to the next step in the line.
This promises to be bad and right before the midterms? Trump is going to lose the House and the Senate hugely, like no incumbent President has ever lost the midterms before.
It is very bad. And now interest rates are up.
A Weimar wheelbarrow for a goyslop MAC?! All part of the intentional collapse and 2030 Great Reset Leap Forward with a side of Bolshevik Revolution II.
All fiat currency eventually returns to its real value of zero.
Israel’s rump vassal Under Satan’s Authority won’t be conquering anything due to the Frankfurt School Long March.
Blow on. Nobody helped us get where we are. We the “people” have been fat dumb and medicated for 30 years.
What happens to a “consumer economy” when the consumer cannot consume at a rate that will pay the “investors” 5x equity return in three years without ever turning a profit while paying its labor 1990 wages and floating its inventory and capital assets on junk debt that the bank can’t call because they know its illiquid until a bigger whale comes along flush with PE money because they just fired a bunch of their best salespeople and jammed their best clients with an arbitrary war profiteering price increase across the board so they could juice their valuation to buy out the mom and pops who keep getting in the way of moar profits?
The die is cast. Demand destruction is cooking some real nice Goose al la orange. Its a cannibals feast and we are all invited.
Whatever is coming is much less than we deserve.
This. Very well said.
We’re headed to zero in a hurry . . .
The US uses 3.75 million barrels of diesel a day, 75% of which is used for transportation. We export a further 1.5 million barrels a day. Calls for a diesel export ban are growing. Good idea or bad? Who knows.
https://www.forbes.com/sites/davidblackmon/2026/09/16/explainer-a-diesel-export-ban-is-an-idea-whose-time-has-not-come/
Good idea. But we won’t.
Remember being taught in school how oil was made from those squished up dinosaur molecules? What had me scratching my head was how there had to be so many freaking dinosaurs, given that we were pumping around 80 million barrels of oil a day. I mean…. come on….a T-Rex might yield 10 to 20 barrels of oil on a good day, but that still means we are sucking up the equivalent of about a million dinosaurs a day. That’s a sh*t ton of dinosaurs and that is just for one day”s energy production. How in the heck did all of those dinosaurs move around without tripping over each other?
Looking back, the disturbing part for me was how long that it took for the adults in the room to figure this out. I was still a kid recreating battles with my plastic army men fighting my dinosaur figurines, and even I could see that the “settled science” wasn’t passing the giggle test..
Oil comes from plankton and algae that sank to the bottom of the ocean. Coal comes from land biomass like ferns and later trees. Let geological forces cover them over and pressurize them under heat, and voila, the gooey goodness of sunshine captured over millions of years for us to squander in a mere century or so of wanton consumption! Gee, thanks, plate tectonics!
Coal has fossils in it, you can see the outlines of palms and ferns. Oil does not have fossils in it, not even microscopic fossil pollen which they now realize is everywhere. en.wikipedia.org/wiki/Thomas_Gold noticed that Helium, which comes from radioactive decay deeper in the planet, is found next to oil. This suggests oil is made a different way than coal, starting deeper and not from carbon sinking from the surface.
Why, you ask, does anyone have an emotional stake in this boring-sounding confusion about where a natural resource comes from? For the same reason as the policies made in anticipation of Anthropomorphic Global Warming. If peak oil doesn’t arrive in [strikethrough 1950, 1960, 1970, 1980, 1990, 2000, 2010, 2020] 2030 and strand us without oil, and nuclear power vanishes by magic, and we don’t have to live in the dystopia of en.wikipedia.org/wiki/World_Made_by_Hand, then how can we be herded off a en.wikipedia.org/wiki/Buffalo_jump in panic?
Rule one is stop believing anything that government employees told you during your compulsory attendance in government school.
Look, I get it, it’s scary thinking our entire planetary civilization is headed Thelma-and-Louse style over a cliff within our grandkid’s lifetime When The Oil Stops. You wanna believe there’s a way out and maybe abiogenic oil is that way out. And I’m the first guy to admit there’s a lot of weird stuff out there that hasn’t explained. Saturn’s moon Titan is literally floating in hydrocarbons at a frigid -290 degrees F and those lakes of ethane and air of methane sure didn’t come from squeezing dinosaurs. I’m hoping to live long enough to see the Dragonfly quadcopter drone get there in 2034 and tell me more. And I am perfectly willing to believe there is a vast underground deep underground biosphere (tip of the hat to Thomas Gold) right here on Earth – just not one that is continuing to produce huge amounts of tappable energy. It’s just gotta be a tough subsistence life deep down there.
The evidence for our ocean biomass as the source of oil is pretty compelling. It’s ALWAYS found in sedimentary formations and not igneous / metamorphic ones that come from deeper in the Earth, implying a water origin. The same geological formations that trap oil are equally efficient at trapping rising helium that come from much deeper in the earth from the completely separate process of radioactive decay – and that helium is an even more dear resource we are squandering from an even more tenuous source of supply, but that’s another story. (As an aside, to show I am perfectly capable of believing weird fringe theories with no real evidence, I totally believe the liquid drop reactor theory of heavy sunken uranium at the exact center of the Earth keeping the Earth’s core molten from fission and not just natural radioactive decay). Helium is not a clue about the origin of oil – both are trapped unrelated byproducts that are markers for specific geological formations. What IS a clue about the origin of oil is the fossil markers it DOES have – not pollen grains but worldwide “contamination” by porphyrins and isoprenoids which are markers of a biological origin and not an abiotic one. Even the abiotic advocates have to invoke deep biosphere contamination of rising abiotic oil to explain this. Occam’s Razor says it comes from the far more plentiful prehistoric ocean algae.
Those same prehistoric ocean algae and not abiotic or deep biosphere sources explain the REAL mother load of hydrocarbons on this planet that are sitting not underground but deep at the bottom of the ocean on the seabed floor. I am referring of course to methane hydrates or so called “fire ice”, the quantity of which is estimated to be double or more of all coal and oil out there combined. Let’s just hope it stays frozen and the Chinese and Japanese currently poking around trying to figure out a way to tap it for their own energy use just plain leave it alone. If that stuff significantly melts, we are screwed. We get so wrapped up in social and political issues we forget that we are on a planet that doesn’t care about us at all and can easily kill us all with the natural fluctuations in its environment.
https://en.wikipedia.org/wiki/Clathrate_gun_hypothesis
https://en.wikipedia.org/wiki/Snowball_Earth
I already know there’s a way out of the energy crisis. Coal contains Thorium, which causes lung cancer as coal is the largest contributor to radioactive air pollution. We could put the Thorium in nuclear reactors instead, like the US military demonstrated in the 60’s, and use the heat to rearrange coal into the fuels our current vehicles use. There’s a lot more energy in the Thorium than in the coal. en.wikipedia.org/wiki/Liquid_fluoride_thorium_reactor
> worldwide “contamination” by porphyrins and isoprenoids which are markers of a biological origin and not an abiotic one.
That I hadn’t heard of. But if every ocean floor had algae, why don’t we find traces of oil everywhere we find former ocean bottom? If there’s Uranium at Earth’s center then why not also in adjacent Mars? One would think there would be a seismic boiling noise from a reactor that large.
And don’t get me started on how many babies it takes to make a barrel of baby oil.
Didn’t know Zendaya was a real person. I’ve heard the name in passing and just assumed it was one of those new GLP-1 weight loss drugs on the market. Alll the new drugs seem to have really weird names.
Ha! That’s hilarious! “Too happy? Take Zendaya. Side effects are inability to smile and the impression that any other actress could have done a better job.”
Self protection capabilities should be the next concern for sane people. When you don’t pay the animals that you have been paying not to steal, they not only steal but get angry.
Ding ding!
Stop the defeatist talk, you traitor. Trust The Plan. “We have those filthy Muslimes on the run. The grand poobah of Iran called me begging for peace. I told him I’ll nuke his scrawny ass. And the Houthis can suck my baby carrot. We have total control of the Bab-el-Mandeb Strait. The Saudis will have that pipeline fixed in no time.”
We are so “ducked” (you win, spielchek), yet a terrifying proportion of persons “on our side” think it’s all going well.
Yep we have two choices throw down or be UK’d.
There’s still the 50,000 sealed indictments to get to after locking her up and finishing Iran in 4 days or weeks.
And gas prices below $2, DOGE rebate checks, tariff rebate checks, and now $5,000 voting bonus and AI doing all the work from thousands of data centers.
We’re all gonna be rich!
Yes! No time!
Good read as always, but now I’m getting loe on electro lights wut wur yu riteing abowt agen? Hi pryses mene prosparitea is heer
So much better off than we were in 1980.
John, we had demographics on our side in 1980. Huge, decently educated white populace that wasn’t nutty like today. The DOW had tanked from ’74 onward (1,000 down to 500); gold did jump to 800 in ’80but fell to $250 of so by 2000. Yes, the prime went to 15% but most everyone had a fixed rate mortgage. And Carter was in the rear view mirror.
Illegal immigration was non-existent outside of Cali & the Southwest as well.
I was 27 in ’80. It’s worse now. Manufaturing was strong then. We’ve none now.
That was sarcasm… 🙂
Yup…composed late night!
Do we have 100 times more nuttiness today than in 1980? How did this happen? Was Buckaroo Bonsai a documentary? Did extraterrestrial aliens in invisible spaceships spread a make-humans-nutty bioweapon over North America? If we model nuttiness as growing exponentially, then 100^(1/(2026-1980)) = 1.105295 and starting in 1980 the middle class population voted 10.5% nuttier each year. Or how about this: the average human is a commie, and populations vote 10% nuttier each year until something drastic upsets it. There wasn’t anything special that changed in the 80’s, the “corner” just became human-perceptible.
If every single country stopped pumping oil, the Alberta tar sands could supply the entire world with oil (at current consumption rates) for 600 years. A true fact. There is no shortage of oil.
But the ROE (Return On Energy) is fairly low on that stuff. But, like our future food, we’ll just mine it.
Yeah, the country is getting poorer. You can see it with the large homeless encampments, delayed repairs to roads and sidewalks, parking lots where you have to guess where the parking lines used to be because the businesses don’t have the money to repaint them, the increased average age of vehicles on the road, and on and on. It’s the little things that first slide and then bigger problems show up.
It’s gonna speed up. It is speeding up.
Filled up (from just under half) yesterday to the tune of $46. Today I checked local station online and regular gas is up to $4.09 a gallon. Diesel (which we don’t use, but I keep an eye on) went up 22 cents. I tend to ignore the “OMG we’re all gonna starve” stories, since I’ve been seeing them for the past seven years or so . . . but if anything is going to give inflation a big jolt, diesel prices will do it. I’m not putting back anymore rice and beans etc., but I bought more deodorant and shampoo and laundry detergent. Meanwhile, more salmonella stories – all from produce from Mehico. And local grocery store had sweet red peppers for $2.50 each – yikes. It’s all predictable and infuriating and utterly unnecessarily. Invade the world, invite the world, destroy Western Civilization.
And the prices will keep going up.
This all reminds me of the Carter days. Theoretically, it appears as an oil production problem, but the real problem is people, and if you can’t force them closer to living in grass huts, you damn sure can starve enough of the folks without extra resources into the grave. It’s slower than mass executions, but most people are like frogs in a pan of water with the burner on high.
Folks with liberty are a threat to those that demand subservience. They have to whip their peons in line every now and then, but do so without being so obvious like the Communists, unless they can convince enough people Communism is a good thing. Then it’s much easier, and starving a few million is good for the collective.
Yup, and they’d like to replace us. Funny that.
Day late, dollar short, so I guess I am slow.
Just the other day, reading the Childer’s “quit the Team Trump doom-vibing” Report the light went on.
Why in the word are the architects of clownworld, top-tier elites, congresscritters and every man jack of the Deep State fighting Team Trump’s election security efforts if “we are not voting our way out of this.”?
Here’s today’s post, have not read it yet: https://www.coffeeandcovid.com/p/nato-froze-over-saturday-september?
Give the man a go. And remember, “if you are seeing it, it’s for you.”
παρατάττειν
I’ll give it a look!