Image by Yuan2003
So, we had a crash of oil prices, where some futures contracts were actually negative, which means that sellers had to pay people to take oil off their hands.
Obviously, oil use has dropped during the Covid-19 crisis, and before that, prices had already decreased in an attempt by non-US producers to reduce prices low enough to crush US shale production.
Oil is a real thing: It takes up storage. Storage space is running out, and it’s not clear when demand will recover, so oil that is to be delivered now-ish is an expense–you have to pay to store it. Thus, the negative prices.
There was a bounce Wednesday, ostensibly due to Trump saying he had ordered the US Navy to blow up Iranian boats if they continued to hassle other ships. (If they do this in the Gulf, and it goes to shooting, Iran will win the initial confrontation. They have a lot of missiles.)
One could equally say this is a dead-dog bounce.
At any rate, even double digit prices are below most people’s production costs for oil, and they are above the price every major government that relies on oil needs to balance their books. This means Saudi Arabia, the four gulf oil states, Iraq, Iran, Russia, and so on. Ironically, Iran, having been under sanctions already, will be in better shape than most of the others.
It is also, obviously, low enough to make US (and Canadian) shale oil production completely uneconomical: generally that needs at least $60/barrel, and much of it needs more.
So we have countries and companies with bleeding treasuries. The US has the ability to print money, presumably it will do so to keep Shale oil around in Zombie form. Countries which cannot print money and have other countries accept it could be in trouble. This depends mostly on how long this goes on. A couple months, even three or four, uncomfortable, but no big deal.
If this crisis bubbles on for a year and a half of shutdowns, partial relaxations, then more shutdowns, we’re into some very dangerous territory. I’m not sure the House of Saud, for example, can survive that scenario (it couldn’t happen to a nicer country, etc.).
The world has been in a very long economic relationship, in which the most important commodity has been oil, and the producers sold it in dollars, so the US and the swing producers all benefited. Obama and Trump more or less broke the deal with the promotion of shale oil, and China has increasingly been insisting on buying oil in Yuan, but the relationship had stumbled on, even though it meant enabling countries that the US has been treating as enemies, like Russia.
Trump wanted to force Europeans to buy more American oil and less Russian oil: This was a major part of his economic plan, such as it was. Trump likes to find a place where he’s more powerful, and push that as hard as possible, and things like sanctions against Russia, Iran, and Venezuela were–and still are–situations in which he has unilateral power that no one else has been entirely able to get around (though China has somewhat). The EU has proven unwilling to stand up to the US in the case of sanctions.
Right now, there’s no particular reason to think this can’t continue. The US can still print infinite dollars, because foreigners will still accept them–even though the US is no longer the most important manufacturing state. So the US can bail out shale oil. Oil producers, who do not have hegemonic currencies, do not have infinite rope.
This changes only the major producers of things the US needs cease to be willing to trade in US dollars. China and the EU could (but I very much doubt will) cut the US’s throat if they ever chose to act together. Perhaps China could even do it alone. The problem, of course, is that there would be a lot of collateral damage to them. US oil is expensive, but the US can produce it. China and the EU need to import it. If they want to make such a change, they have to secure strong supply guarantee from other nations.
This is theoretically possible, but the problem is simple: Any nation that did this would then fall under (even more) US military threat. Bombs are very good at ending oil exports, and neither the US nor China is willing to go to war over this. Perhaps China could move troops and nukes into vulnerable countries, but that would trigger a new cold war, and the Chinese don’t want that–at least not yet. China is working on their own trade area, to compete with the US-led trade area (which the US is abandoning anyway, as it shits on the WTO it created), but it is not ready yet (the Belt and Road Initiative is China’s name for this trade restructuring).
The current collapse of oil prices is unexpected; while a pandemic has always been possible, knowing when it would happen was not. The pandemic has simply revealed the current production’s costs and dynamics. Saudi Arabia has been moving towards vast danger for ages because of its over-reliance on oil; this simply means the consequences may hit sooner. Oi-consuming nations have been maneuvering to reduce their dependence on imported oil in general, and unreliable oil in particular, but they were not yet ready to make any big moves. Almost everyone has been chafing under the petrodollar and under the current world payment system, which the US has abused with its constant sanctions. Despite this, no one has created a viable alternative and been willing to take the hits necessary to move off the dollar and the US/eu payment system (“EU” is in lower case deliberately).
Most oil producing nations, including the US and Canada, are generally bad actors on the international stage: with crimes ranging from moderately bad to invading oil producing nations regularly and sanctioning other ones constantly, or to being the world’s premier supporters of fundamentalist religion and terrorists.
So don’t cry too much for oil producing nations, nor even for their customers, who have enabled them greatly. But beware that the game is changing: Covid-19 has highlighted existing issues and if it continues long enough it could precipitate changes which have been desired by many, but remained unimplemented because people have been unwilling to bear the costs and risks.
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Mojave Wolf
Yes to all.
Eric Anderson
My gut has told me from the beginning of this pandemic that covid problem + oil problem = global war problem is distinctly possibile.
So, here goes.
House of Saud falls. Iran is emboldened because they’ve got nothing to lose at his point. Chaos favors their hand. Global powers forced to pick sides to try and secure their chunk of reserves.
Armageddon ensues.
Mark Pontin
Ian wrote: “But beware that the game is changing”
The geopolitical tectonic plates are shifting, in a very profound way. Michael Hudson explained it last year —
https://michael-hudson.com/2019/08/global-warming-and-u-s-national-security-diplomacy/
“Control of oil has long been a key aim of U.S. foreign policy. The Paris climate agreements and any other Green programs to reduce the pace of global warming are viewed as threatening the aim of dominating world energy markets by keeping economies dependent on oil under U.S. control. Also blocking U.S. willingness to help stem global warming is the oil industry’s economic and hence political power ….
“This fatal combination of the national security state’s mentality and oil industry lobbying threatens to destroy the planet’s climate. The prospect of raising temperatures and sea levels … is viewed simply as collateral damage to the geopolitics of oil. The State Department is reported to have driven out individuals warning about global warming’s negative impact ….
“The aim is to increase foreign dependence on U.S., British and French oil, giving American strategists the power to make other countries “freeze in the dark” if they follow a path diverging from U.S. diplomatic aims.
“It was the drive to control the world’s oil trade – and to keep it dollarized – that led the United States to overthrow the Iranian government in 1953, George W. Bush and Dick Cheney to invade Iraq in 2013, and most recently for Donald Trump to isolate Iran while backing Saudi Arabia and its Wahabi foreign legion in Syria, Iraq and Yemen. Sixty years earlier, in 1953, the CIA and Britain joined to overthrow Iran’s elected President Mohammad Mosaddegh to prevent him from nationalizing the Anglo-Iranian Oil Company. A similar strategy explains U.S. attempts at regime change in Venezuela and Russia.
“Control of oil has long been a major contributor to the U.S. trade and payments, and hence of the dollar’s ability to sustain the huge outflow of overseas military spending. In 1965 I conducted a study for the Chase Manhattan Bank and found that in balance-of-payments terms, every dollar of oil industry investment outflow is recovered in just 18 months ….”
“If other countries produce their energy by solar power, wind power or nuclear power, they will be independent of U.S. oil diplomacy and its threats to cut off their energy supplies, grinding their economies to a halt if they don’t endorse U.S. neoliberal economic policies.”
Hugh
Commodity producers always get hammered harder in a major downturn. This is especially true of oil producers. In theory, there has been a quota system for decades for oil through OPEC and the ability of the KSA to use its capacity to flood markets. But this has been increasingly a fiction even before Canadian oil sands nd US shale oil hit the scene. The reality is most oil producers have not used their revenues to develop their economies wisely, sustainably, or fairly. Corruption is rampant. As a result, in good times oil producers pump as much as they can blasting past their quotas because ka-ching! In bad times, they need to pump as much as they can just to keep their heads above water (and their rulers with heads). Even so, there has been an attempt on the margins. What brought on the current debacle was Putin’s decision to pump without limit. This is a reflection of the fact that the Russian economy sucks (partly from sanctions, mostly from oligarchic looting) and Putin’s military spending and foreign adventures. MbS responded by opening up Saudi production. He could do this, because with oil shale, world oil production was already at near glut levels. So the KSA had the production overcapacity it had largely lost because of the shrinkage in the that overcapacity ability due to some of its major fields being past their peak. That this might also take out some of American shale oil was just icing on the cake. So we went from near glut to glut and then the economic effects of the pandemic began to sink in and demand cratered. So they have been backtracking but it is way too late.
Other items:
The reason the US has the world reserve currency is because A) it is still seen as more of a safe haven than anywhere else (scary thought I know about what the rest of the world looks like, B) the dollar is freely interchangeable, C) the US is willing to run large trade deficits to put dollars out in the world economy, D) the Fed in 2008 and again now has been acting as the world’s reserve bank. Not all of these are positives for ordinary Americans. For example, you get more cheap (and often crappy) goods from China but at the cost of your good job being nothing but a distant memory. Anyway, no country (China) or group of countries (the EU) even remotely begins to fulfill these conditions.
With climate change, overpopulation, and their effects China’s Belt and Road is a Belt and Road to nowhere. The pandemic has highlighted just how absurd and dangerous long supply lines are.
Oil corporations only account for about 10% of oil production, the other 90% is controlled by national oil companies.
The oil futures market was going to get hammered by overproduction and the plunge in demand, but it gets magnified when you consider that most barrels are bought on margin, the ratio of paper barrels to wet barrels is 20+, then add in darkpool trading and you have a witch’s brew for a lot of traders losing their shirts.
I can’t believe anyone would cite the empty shell, not much, way too late Paris Climate Accords as a major driver of well, really anything.
bruce wilder
There is a meta lesson here, too, for those who would try to think about the future. Some people despair in the face of pervasive uncertainty, claiming no one knows nothin’ but quite a lot is actually predictable, and yet still hard to imagine realistically.
People tend to want to think about a systematically dynamic world as if it is (approximately, that’s the dodge) linear. Econometrics is linear, and it does in much formal modeling in economics. But, it is deeper and more profound than that.
It was not that long ago that peak oil theorists imagined an apocalypse of scarce and expensive oil. Here we are in a world of expensive (to produce) oil and we are drowning in the stuff and suffer a glut and low prices.
“Peak oil” was not wrong in its core insight: that oil would become more and more dirty to mine from the earth.
But, I think the same linear thinking that projects a temporary crisis of high energy prices along linear vectors into a future imagined like a bad Hollywood script traps the thinking of business leaders and governments. The economic magic of high-energy-yield oil organized political economy for so long, statesmen and business leaders rode those seemingly straight rails right into a future where that world turned upside down.
It is not the case that the future will be either scarce and expensive oil or an oil glut, or that favorite fantasy of techno-ecologists the smooth and seamless transition to a “renewable” system because “renewable” is now “cheaper”. The future is unstable, because it can no longer be usefully organized around the economic rents attendant on the black gold of oil. America no longer has an economic basis for hegemony; it has good options — more potential for autarky than its rivals save Russia (and unlike Russia, defensible frontiers) — but won’t take them, because its elites are invested in that vanishing hegemony and the dollar as global fiat currency. Peak stupid follows peak oil.
Ten Bears
Everything is physics, Bruce, physics is everything. “Wheels coming off” implies momentum. Momentum implies a certain degree of anticipation where the wheels will go. “No one could have…” predicted someone would use airplanes as bombs and kamikaze them into iconic structures miraculously causing them to collapse into their own footprint in a perfectly controlled demolition, though we’ve been making movies about airplanes flying into iconic structures since 1933, and of skyscrapers burning without collapsing into their own footprint since the seventies. So to with the Trump Plague, we’ve been making movies about plagues and zombies and shit since the seventies. No one could have predicted.
Well, OK, only the stupid could not have predicted.
My general take is if someone made a movie about it it will happen.
It’s been ‘predicted’.
Ten Bears
There is only one cure for stupid: natural selection.
I laugh, at the ‘superiority’.
Ché Pasa
Future casting is hard. Just about the only thing we’re encouraged to think of once This Thing is Over is that we’ll go back to the way things used to be, re-establishing much of the status quo ante, and we’ll carry on as if nothing had happened. Too bad about the olds and the poors, but you know, survival of the fittest and all that. God’s Will.
But the shock this time has been much larger than any previous one this century. And it’s been a softer shock than previous ones though more thorough and seemingly more long lasting. The status quo ante cannot be restored and won’t be. But what comes after the shock wears off is still a foggy mystery.
The oil glut is interesting because it defies predictions of an extreme oil shortage as the reservoirs are inevitably pumped dry — as would have been the case in earlier future casts. If anything, there’s been too much oil circulating for quite a long time and given the current crisis, there’s more oil than can be used or stored, and nobody but Mr. Market and the environment is the worse for it. Hm. Maybe we don’t need all this oil and never did? Well, that’s a thought.
We hear reports that atmospheric pollution has nearly disappeared in major cities around the world as manufacturing and transportation has largely ground to a halt. People confined to their homes are adapting rather well — exceptions of course are many — and so far the shortages of food, paper products and spending money haven’t severely impacted populations in rich countries. That won’t be the case in poor countries, but the famines and mass die-offs haven’t started yet, so we can ignore that for the moment.
From some perspectives, the responses to the crisis have been beneficial to the globe, to countries, to individuals. Again, too bad about the olds and the poors, but as some wags have pointed out, they would have died anyway.
The always on Fed money spigot means that the rich and well-connected will be fine, no matter what, and their gambling losses will be covered by the house, just as they have been over and over again. The rest of society will have a more difficult time of it, as it should be in the eyes of their betters, but so far not so bad they can’t handle it. The future doesn’t really look that bleak for the survivors of this Outbreak.
Not yet anyway.
nihil obstet
This adds a lot to the elites’ push for the TPP to contain China. It is also hopeful that the treaty which would have ripped off everybody but a small, powerful contingent of the ruling class was stopped, apparently by the anger and disgust of most people.
Eric Anderson
Re: Peak oil comments and linearity.
If I had to choose one thing, with the most profound impact to our well-being that our species doesn’t get, it’s understanding scale. The average Dick or Jane just doesn’t get it — which definitely includes our ill educated media.
Take Paul Erlich and “The Population Bomb.” Five years after he wrote the book every scribe in the country was furiously writing about how stupid he was b/c his predictions didn’t come true. We shall see how it plays out, but this scenario we find ourselves in may prove him right. And that’s what I was talking about in my last post. One shock to the system and suddenly 8 billion people are struggling to find food. Population — meet bomb.
The same with peak oil. The people making these predictions are not wrong, per se. And I think this gets to Ten Bears point. Our scribes like to tell these linear stories, and the public likes them told that way, because time playing out linearly doesn’t make their brain hurt. Reality differs.
Yes, the road to the peak oil asymptote is a bumpy one. I use asymptote to illustrate the idea that we will always have ’some’ oil in the ground. But the curve will be so close to the complete absence of oil that functionally it will be the same thing. Reality is we reached peak oil some time ago or we wouldn’t have to be using precious water resources to steam it out of the ground.
Moral of the story? Don’t shoot the proclaimers. History will verify their claims. Shoot the messengers.
Ten Bears
I am of the conviction, Eric, that if you can’t think in geological time, you can’t think.
zac
I think the revelation that oil could *ever* go this low is the game-changer. oil plays right now are already gigantic capital investments with uncertain returns. unconventional oil peters out much faster than big conventional reservoirs, so it’s very unclear that when you sink a well that it will last very long. recall all the bullshit with deepwater horizon, or the arctic drilling rigs that just broke loose and drifted away. it’s pouring money down a rathole, and if oil can just go negative at any point? smart money starts looking for the door. that’s the real shockwave in the near term.
Some Guy
Oil demand was already facing three big challenges:
1) Demographics – the wealthy world is getting old fast, and as it does, people use less oil
2) Fuel shifting – for environmental and economic reasons, activities are shifting away from oil use towards natural gas, electrification, reduction of consumption, etc.)
3) Inequality/poverty – poor people don’t use much oil, another $100 billion for Bezos doesn’t buy as many cars or oil as $100k for 1 million people would.
When you pile the COVID impacts on top of all this, now you really have a game of musical chairs, where the chairs are getting removed even faster than expected.
Especially since it seems like some of the most permanent impacts of the virus will be the oil consumption reducing ones – fewer conferences, less travel, more working from home, etc.
So if the U.S. is looking to take some more global oil supply off the market to sustain their own production (I’m not convinced this is the best thing the U.S. could do for itself, but I think it is likely that they are trying to do so all the same), the question is how do they go about it.
One option is to just shovel so much money at the Shale producers that they are effectively one of the lowest cost producers, and then let the market do its work bankrupting other producers that can’t ‘compete’. The ability to do this is less about how dollars are priced or the dollar as world currency and more just the U.S. is a big, wealthy country with lots of money to throw around (e.g. China can do the same if they wish, and oil is not priced in Yuan). This will be a hard option for high cost producers like Canada, and will generally put financial pressure on all oil producers. Also risky since if other producers do the same, and are able to keep their production online, then the low prices will drag on for longer.
Another option is the OPEC style approach of voluntary supply restrictions to raise the price. But are there enough producers willing and able to make this happen, and would the U.S. be willing to reduce shale production as well (and even if they wanted to, would they be competent enough to do so). Traditionally the Saudi’s play the biggest role in this type of arrangement, but the U.S. has betrayed them by ramping up so much shale production and now their back is against the wall, plus their leadership is deeply corrupt and incompetent so this might be risky. Also, this approach will not sit well ideologically with the U.S. and its fever dreams of free markets, although this might not make any practical difference.
Finally, the U.S. can take the military/sanctions Iraq/Libya/Iran/Venezuela style approach to reducing production from certain areas. The question is who is left / best to target with this approach?
Escalation with Iran carries huge risks, and their production is already crippled so the cost/benefit is poor. The U.S. could shut down Iraq or some of the gulf players (UAE etc.) but this is tough from a PR perspective and would disrupt the quid pro quo of allowing oil production in return for US/Israel friendly governance.
Russia and China have too much military/economic strength to be really shut down
Canada is a high cost producer already bleeding cash and constrained by pipeline problems and an ally so again the cost/benefit is poor, better just to letter economics do its work here.
That leaves, Saudi Arabia.
Honestly, when you spell it all out, it’s hard not to think that the best play for the U.S. (from a geopolitical standpoint of prioritizing U.S. oil production) is to throw the Saudis under the bus.
1) They are the biggest remaining producer for which this is really feasible
2) They are deeply unpopular so limited PR hit
3) The leadership is hugely incompetent and fragile so easy to destabilize/regime change/etc.
4) Basically no military strength
The wildcard here is that not all oil is equal. Oil from oil sands or shale has a low multiplier economic effect because the cost to produce is so high. It is the huge pool of cheap and easy middle east oil ‘the prize’ that really produces the surplus energy that makes the world go around, so messing with this could have profound economic impacts around the globe.
Another wildcard is likely Israel’s nervousness about upsetting the status quo in Saudi where the oil and power is controlled by a friendly regime which is not necessarily a stable equilibrium for Saudi Arabia.
Still, if I was running Saudi, I’d be nervous about pissing the U.S. off – even more than usual.
And finally, the U.S. is in such a mess, with conflicting elite factions and a general lack of competence that who knows if they are even capable of forming or executing a coherent plan – they may just stumble from day to day on inertia and happenstance and whatever ends up happening will be almost as much an accident rather than result of any kind of focused design or plan.
Mark Pontin
Ché Pasa wrote: “We hear reports that atmospheric pollution has nearly disappeared in major cities around the world as manufacturing and transportation has largely ground to a halt.”
We’ve seen this movie before in 2009. Global warming will accelerate — temporarily at least — with the decrease of aerosolized particulates in the atmosphere.
https://www.nature.com/articles/ngeo2670
‘Disentangling greenhouse warming and aerosol cooling to reveal Earth’s climate sensitivity’
‘…we present an observation-based study of the time period 1964 to 2010, which does not rely on climate models. The method incorporates observations of greenhouse gas concentrations, temperature and radiation from approximately 1,300 surface sites into an energy balance framework … We find that surface radiation trends, which have been largely explained by changes in atmospheric aerosol loading, caused a cooling that masked approximately one-third of the continental warming due to increasing greenhouse gas concentrations over the past half-century.’
Mark Pontin
Ironic if the global pollution decrease triggers the tipping point in the release of methane — and more bugs — from the melting Siberian permafrost.
Yikes.
Mark Pontin
Hugh wrote: “…the US has the world reserve currency is because … Not all of these are positives for ordinary Americans.”
To say the least, having the world reserve currency isn’t positive for ordinary Americans, as opposed to elites and the capital flows that global empire provides (provided) them. You are familiar with the Triffin paradox, aren’t you?
https://en.wikipedia.org/wiki/Triffin_dilemma
“…in the 1960s … Belgian-American economist Robert Triffin … pointed out that the country whose currency, being the global reserve currency, foreign nations wish to hold, must be willing to supply the world with an extra supply of its currency to fulfill world demand for these foreign exchange reserves, thus leading to a trade deficit.
“The use of a national currency, such as the U.S. dollar, as global reserve currency leads to tension between its national and global monetary policy ….reflected in fundamental imbalances in the balance of payments ….
“Specifically, the Triffin dilemma is usually cited to articulate the problems with the role of the U.S. dollar as the reserve currency under the Bretton Woods system. John Maynard Keynes had anticipated this difficulty and had advocated the use of a global reserve currency called ‘Bancor’…..
“In the wake of the financial crisis of 2007–2008, the governor of the People’s Bank of China explicitly named the reserve currency status of the US dollar as a contributing factor to global savings and investment imbalances that led to the crisis.”
Stirling S Newberry
Remember paying for homegrown oil is part of the price to pay for a carrier-based navy. This is looking as if it will have an increased component.
But oil is losing money for quite some time. It means we need to change our economy, which is some the has been clear for at least 30 years.
450.org
I have an old post related to this and specifically what Stirling just mentioned. You can post it if you like, Ian. As a guest post. Just let me know.
someofparts
I’ve heard that the Saudi royal family has been hit hard by the coronavirus, something like 150 members of the respective families. The whole clan has apparently decamped to some island. They appear to be ending the genocide against Yemen because of this, which struck me as one of the few pieces of good news I’ve heard out of this mess.
Also, I keep wondering how military action of any sort, but especially naval action, can proceed with this killer virus rampaging through the ranks. Same for the police. Telling people to work for shit wages is one thing, telling them to risk death for themselves or their children for shit wages is an entirely different ballgame.
Mark Pontin
Stirling N: “Remember paying for homegrown oil is part of the price to pay for a carrier-based navy.”
The carriers themselves are nuclear-powered. The carrier groups’ component ships could be, too. Maritime nuclear generators are a technology that’s almost three-quarters of a century old now.
Back in WWII already, new U-boat captains would visit Admiral Tirpitz’s office and he’d say “Shall I show you the future of naval warfare?”, then point to a picture on his wall of the open sea.
Here in 2020, there are so many issues of strategic questionability/fatuousness about carriers and carrier groups that it’s hilarious. Given the democratization of missile tech over the last three decades, it’d have to be a pretty low-rent nation of brown people for the U.S. to be beating on for power-projection via carrier-based air power to outweigh those things being massive, lumbering targets that’d come off like the French knights at Agincourt in a real war.
bruce wilder
“Costly” and “expensive” can mean quite different things.
An expense is a financial or accounting term. What is “expended” is an asset used in executing a transaction, an exchange of goods for money.
Cost, in economist’s terms, is a foregone opportunity; cost is a property of choice: the value of the next best path-not-taken, subjunctive, imaginary.
Realistically, it may not be possible to really know exactly or objectively how costly a choice is, but it is almost unavoidable to know how expensive a transaction has been. In an important sense, a primary service that money renders in organizing an economy is to virtualize assessment of cost and value into calculation of expense and profit.
It would be wrong to suppose finance is ever purely reflective, but economists often pretend it is, for reasons of ideological convenience.
I think shaping the instrument of finance is the most profoundly political choice made thru the state and yet the choices made and their consequences, even the means of choice are obscure. The language is arcane, the metaphors ill-chosen and the preaching of virtue both unending and misleading. Perhaps this is so, not just because power prefers disguises, but because money is a language in which fictions are written precisely because simple truth is unknowable.
Still, in my lifetime, money and finance has been used for fictions profoundly destructive to the real resources of the country. Fracking for oil is just one, though it is appalling for its environmental consequences. The housing bubble was another. Cooperating with China and a rapacious Corporate Finance in the U.S. in disinvesting from manufacturing was another.
We may be headed soon into the final act for the Almighty Dollar. And, very few seem inclined to even try to tell the truth.
Anonymous
OIl sucks, global warming, we’re all gonna die.
All true.
Fracking saves lives.
Energy independence stops wars and (on a scale) saves the environment?
Maybe.
What does a solar installer make compared to a welder on a hydraulic fracturing rig?
What is the average hourly wage in wind power vs. coal mining?
Fuck it, our privileged lives (for the kids we’re never gonna have) are going to go down the toilet if the unwashed peasants don’t bite the bullet and take a pay cut.
Maybe china could frack?
Maybe CIA drug war refugees could frack for minimum wage?
What do incels and oligarchs have in common?
They both like them poor, desperate, and dependant.
Feminism rocks, rich white feminism. endlessly searching for manufactured outrage is fake as fuck.
I’m drunk, LOL
Eric Anderson
Thanks for the laugh Anon 🙂
Way to keep it honest.
Ten Bears
What’s the difference… Twixt experimenting on a captive population, veterans; injecting, killing them with fish tank cleanser, Lysol, or bleach, and Menegele experimenting on Jews, Gypsies and homosexuals? Encouraging the spread of the Trump Virus and handing out smallpox and measles laced blankets to the natives? The “Department of the Interior, Bureau of ‘Indian’ Affairs” sterilizing native women well into the nineteen sixties? The three hundred year breeding records of what would become the American Kennel Association?
They’re not trying to kill all of us.
Ché Pasa
@Mark
Yes, ironies as well as contradictions abound. The 60-90% reduction in productive and non-productive activity may result in a far less polluted atmosphere, but that in turn can lead to a quickening of global warming and climate change. But then that has long been prepared for by the overclass, so they’ll be fine. Won’t they? The rest of us, well…
We see in real time that there is no limit to the money that can be/will be/is being made available for the overclass’s pleasure — same for wars of aggression — despite strict limits and austerity imposed on everyone else “because we can’t afford it.” We see that doctors and nurses and other essential health care line staff are part of the same precariat the rest of us are. Only the owners and administrators are not disposable. We see bodies stacked up like cord wood in nursing homes and parts of New York where the hospitals and morgues are overwhelmed, and happy talkin’ from the politician-entertainers yammering on about injecting poisons and ultraviolet light and “heat” to cure the disease. “Try it! What have you got to lose?” Hoo-boy.
Meanwhile, “the economy” is revealed to be a vast fiction, a monumental fraud, as it collapses right around the world, and yet little seems to change in part because the fictional wealth of the fictional overclass remains no matter what, and with their wealth their power is enhanced as endless lines overflow the food banks and relief agencies, none able to cope with the scale of the catastrophe for long, but everyone pretending we can get back to normal one day soon.
Which may be a year or a month or whenever, no one knows.
Yes, ironies abound.
Not so much.
Average break-even drilling cost for Bakken is about $50 per barrel – Eagle Ford and the Permian are a bit lower. There\’s obviously variability, but $60 is on the high end.
Willy
All of the stars have been perfectly aligned for supply side economics to do its magical handy thing.
Low taxes, boatloads of printed money, and an endless supply of free oil.
Yet the people haven’t responded. This is a mystery, since theoretically, a free people who’ve lost their jobs to whatever will go out and create other prosperous incomes to adapt. (and no, there’s no difference between a stay-at-home mandate or an offshored job or an automated away job) In any case where the job has been lost, a free people shall always adapt to find something better.
So everybody, go out there and get some of that oil!
What are you waiting for?
Mark Pontin
Ché Pasa wrote: “But then that has long been prepared for by the overclass, so they’ll be fine. Won’t they?”
No. If a Neo-eocene era occurs, they really won’t.
Humanity confronts psychopathic thinking here, in the sense that psychopaths, unless they’re bright, simply don’t do long-term thinking well.
Arguably, a lot of we confront is institutionally psychopathic thinking and institutions present some hope of being changed. Also, malign narcissism and psychopathy are a spectrum of behaviors, and many more malign narcissists exist than neurally abnormal, congenital psychopaths.
But also going forward humanity needs to have a debate about establishing programs for detecting psychopaths — because the technology now exists to detect first-order, congenital psychopaths — and barring them from positions of power and, in general, from rising to the top levels of society as they’ve done all through human history.
To be sure, there also needs to be a debate about humans’ tribalism and willingness to overlook and praise psychopathy in their tribe’s leader.
Mark Pontin
There’d of course be arguments from psychopaths about their civil rights and psychopaths being a disadvantaged minority.
Bring them on. It’s the 21st century.
nihil obstet
I’d argue about psychopaths’ civil rights, too. We in human societies do not have a good record of controlling individuals because of characteristics that we think indicate that they might do harm. I know this time is different and now we have science. So did the eugenicists in the early 20th c. Bad results.
Actually the people classified as psychopaths by psychological testing can be very valuable. They tend to be very self-confident and to lack the natural levels of empathy that most of us have. That means that they can be very good brain surgeons, since they focus on the task without the emotional squeamishness that make more empathetic persons hesitant.
There’s not a psychological testing short cut that will relieve us of the responsibility of governing ourselves and holding our governors to account.
Mark Pontin
nihil obstet wrote: “Actually the people classified as psychopaths by psychological testing can be very valuable. They tend to be very self-confident and to lack the natural levels of empathy that most of us have.”
To cut to the chase, I’m quite familiar with the pseudo-evolutionary arguments, thank you. I don’t buy them.
I’ve been around these people. They need to be nowhere near positions of control and responsibility.
We don’t give driving licenses to autistics when their processing and reflexes don’t let them process information fast enough to pass driving tests. If we did give cars to autistics, they’d crash and harm others, sometimes deliberately because they can’t process their own emotions and their temper tantrums particularly.
Same deal with first order, congenital psychopathy. They’re incapable of proper responsibility in situations involving potential harm to others.
Conversely, we _can_ train high-caliber normals to the appropriate coolness and emotional self-control necessary for brain-surgery, etc. Consider the records on test pilots, forex, especially the ones who became part of the astronaut program.
The reverse, however, is not true: we cannot train psychopaths to full normal response. Though, yes, the smart ones can simulate it.
nihil obstet wrote: “There’s not a psychological testing short cut ….”
False. I’m not talking about psychological testing. I’m talking about neural scanning. First order, congenital psychopathy is produced by structural, material deformations in the amygdala. These are neuro-atypical types that show up as that via MRI, etc.
‘Localization of deformations within the amygdala in individuals with psychopathy.’
https://www.ncbi.nlm.nih.gov/pubmed/19736355
“Individuals with psychopathy showed significant bilateral volume reductions in the amygdala compared with controls (left, 17.1%; right, 18.9%). Surface deformations were localized in regions in the approximate vicinity of the basolateral, lateral, cortical, and central nuclei of the amygdala. Significant correlations were found between reduced amygdala volumes and increased total and facet psychopathy scores, with correlations strongest for the affective and interpersonal facets of psychopathy.”
nihil obstet: “…that will relieve us of the responsibility of governing ourselves and holding our governors to account.”
In fact, responsibility for governing ourselves and holding our governors to account would arguably begin with barring psychopaths from the positions of responsibility and power into which they have thrust themselves throughout human history.
nihil obstet
I have to think more about a study which first identifies psychopaths through a psychological checklist and then searches for physiological characteristics to conclude that the physiological characteristics define the psychopath. I think use of the psychological checklist constitutes psychological testing. Right now, this comes across to me kind of like phrenology.
I also have to think a little more about the difference between training high-caliber normals to wall off their empathetic response and training persons identified as psychopaths by psychological or physiological means to prioritize values that the rest of us get from empathy. Have we looked at enough of each category to see whether it works?
And yes, our responsibility does extend to keeping people that we identify as psychopaths from their willingness to inflict great harm on others for their own benefit out of positions of power. I’m just not convinced that we have scientific tests that can do that. It’s still about being engaged in self-government.
Mojave Wolf
I am bored, so will chime in agreement with Mark on the badness of psychopaths and the undesirability of them anywhere near power (my fondness for Villanelle notwithstanding) and with Nihil on not trusting our society AT ALL to appropriately/accurately designate who is a psychopath (barring them having already done something that gets them in trouble anyway).
Re sudden lack of pollution– this is a good thing, guys and gals. Some global warming is already baked in, but overall, more pollution equals more warming, and having some of it get here a couple of years early might even speed up our response time to really DO something. Which is kinda needed if we’re gonna avoid worst case death of biosphere or all mammals or whatever scenarios.
Mark Pontin
nihil obstet wrote: “I have to think more about a study which first identifies psychopaths through a psychological checklist and then searches for physiological characteristics to conclude that the physiological characteristics define the psychopath.
”
Yes, it would be necessary to know all about the individual subjects of such studies and how they came to be classified as psychopaths.
Nor would my proposal solve the problem of second-order psychopaths — those created by abuse in youth — and malign narcissists.
Trinity
I\’m with Mark. It\’s pretty easy, without any test, to identify sociopaths.
They provide information that is harmful to human bodies as fact, and attack anyone who questions them. They lie repeatedly. They buy million dollar properties while their employees sicken and die for lack of proper PPE. They grope women and then cover it up. They \”disappear\” former friends who know too much. They hang out with pedophiles. Must I really go on?
On a more local scale and at the lower end of the spectrum, they are that boss who presents others ideas as their own, or the coworker who needs all the attention in the weekly meeting. They are that neighbor who is always dressed to the nines but who\’s kids always look dirty, need haircuts, and are dressed in rags.
The real problem is that the current population is conditioned to not only aspire to be one, but to understand that if they fail to do so they are either worth-less or entirely unworthy. We are conditioned to equate bank balances with superiority, leadership, and for some ungodly reason, smarts or godhelpus, wisdom. And to ignore the actions that actually led to the accumulation of extremely large sums, most of which involve fraud, scams, outright theft, and other mayhem.
nihil obstet
I’ll gladly support guillotine building coops to address our current evil doers. The emphasis is on doers. My problem is with identifying characteristics that we believe drive people to do evil and then assigning them to a permanent underclass. Which leads pretty quickly to the belief that it’s pretty easy without any test to identify who the undesirables are.
The only long term successful program to restrain psychopaths is to build a society where everyone is a full, dignified member and no one has the power to immiserate another person.