The Etp Model Has Been Empirically Confirmed

Have you ever been to China in the summer? It's HOT! Once it cools off this winter the property bubble will no doubt deflate. Ideal Gas Las and all.

 

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Thanks, that was both funny and made a lot more sense than his claim collapse and or higher oil prices were a "law of physics."

There is a minor correction on the timing:
The property bubble deflated last winter, it is the stock market bubble, especially in China, that is deflating now as the weather cools.

 

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In that case, let me retroactively claim that that's what I meant all along! My predictions are CORRECT!

 

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Hey Russ.

I keep answering your questions and you keep claiming that I am not answering your questions. You are being intentionally vexatious. You are trying to create rhetorical loops that obscure what we are actually talking about in order to confuse the readers. This is very disingenuous. It amounts to cheating. And it is very annoying.

Let's review, shall we?

arfa brane said:
I can follow the argument about oil companies not investing in new production if the price of oil is low, but not that future demand won't change the price.
I can imagine the US government subsidising exploration and production if that's seen as a solution, hell it bailed out Wall St to keep the economy afloat, why not the oil companies?

Futilitist said:
When oil companies don't invest in new production, that means that they don't spend money. That means job losses. Lot's of job losses. Think about all the soon to be bankrupt frackers. 9 out of 10 jobs created since the last recession have been oil related. And don't forget the banks, and all the jobs in the financial sector related to loans to frackers.

People without jobs don't buy much oil.

Demand is dropping rapidly. The entire commodities complex is basically cratering. Stock markets are crashing around the world. Many indicators point to a near term recession. I believe we are falling into a world wide deflationary spiral, like the Great Depression. The Great Depression lasted more than a decade. We never really recovered from it. We had WWII instead.

So where will future demand come from? When millions of people are out of work, it won't matter how low the oil price goes, it won't generate demand. See?

The price of oil cannot rise until the oil glut stops. But the oil glut cannot stop until much of the oil industry collapses, tanking the economy. And if the economy tanks, people will not be able to afford expensive oil. It is a giant catch-22.

Russ Watters said:
Is it your claim then that the drop in oil prices last year was caused by a massive recession and extreme unemployment?

Futilitist said:
No Russ, obviously not. Why do you always try to put words in my mouth?
The oil price fell when the economic value of a barrel of oil had fallen well below the actual price, due to the entropy of the oil production system. You really don't understand the Etp model, do you?

Russ Watters said:
By what mechanism, specifically, did that happen? IE, a barrel of oil, sitting in the ground in an already tapped well and recoverable at 80 a barrel suddenly became cheaper to pump out of the ground? And even if it had, why would someone sell oil at 50 a barrel if people were just a few months ago willing to pay 80?

Futiitist said:
It isn't that mysterious, Russ.

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As the graph above clearly shows, the Etp Model Curve intersected the Etp Maximum Price Curve around March of 2012. Although the oil price immediately plunged quite rapidly, the Fed unleashed Operation Twist and QE3. This helped the price recover and it broke through the Etp Maximum Price Curve and managed to continue to rise for a while. At the time of the start of the price collapse in June of 2014, the oil price (WTIC) was around 107 dollars a barrel, but the Etp Maximum price had already fallen well below the actual price. That meant that the economic benefit (GDP/barrel) of a barrel of oil had fallen to the point that the energy in a barrel of oil could no longer support such a high price. So, the price naturally collapsed. Simple.

Interestingly, the oil price bounced hard off of the Etp Maximum Price Curve on the way down. The bounce happens at the exact mid point of a sinusoidal wave. Another amazing Etp model coincidence!

The oil price could theoretically be somewhat higher than it is currently. But the reason the oil price does not rise to reach the Etp Maximum Price curve is because of economic damage positively feeding back through the system. We are in the early stages of a multiphasic collapse. This process will continue. What could possibly stop it?

And remember Russ, the Etp maximum Price Curve represents just that: a maximum oil price. The minimum price is zero.

Russ Watters said:
What is the economic value of a barrel of oil today and what was it a year ago? How can I calculate it? Considering that I didn't buy a new car in the past year and my house will require roughly the same amount of heating this winter as last winter, how can the value that I receive from a barrel of oil have changed?

Futilitist said:
This has all been well covered before. And you know it.

Russ Watters said:
What, specifically, caused the drop? Don't just say that two lines crossed on the graph -- they have to represent something out in the real world. I know, for example, that my car didn't suddenly get much more efficient in 2012, so how could the value of oil have dropped for me?

Futilitist said:
I explained it all pretty well, Russ. Read it again. You don't really understand the Etp model, as you just claimed. If you really did understand it, you wouldn't be asking this question yet again. Making false claims is lying.

On the other hand, you might actually understand the Etp model and it's consequences well enough that you can't really come up with a rational argument against it. So, instead, perhaps you are choosing to be intentionally vexatious. That is trolling (as well as lying).

So which is it, Muddy Watters? Are you actually unable to grasp the Etp model, or are you lying and trolling? Tell the truth for once.

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Seriously though, I find you to be the most pompous, humorless, posturing, game playing, uptight and downright annoying posters ever. It is well within my rights not to answer any of your questions. Quit trying to waste my (and everyone else's) time. This is supposed to be a science forum.

Oh, and thanks for the 2 cool points, by the way. I appreciate that.

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---------------
Note---In my interactions with you through the years, I have noticed that you tend to use a lot of rhetorical tricks in place of good arguments. Even though I believe I was justified to slam you, I decided that maybe you just don't understand what I have been saying over and over, so I found a recent quote from BW Hill that also address your question:
---------------
Futilitist said:
Hey Russ.

Here is some more information to help you understand the Etp model:

"According to the Etp Model 2012 was when world petroleum production passed through the energy half way point; the point where it required 1/2 of the energy in a unit of petroleum to extract, process, and distribute it. Using an energy metric that means that the general economy is receiving less energy that what was required to have it delivered. If it requires at least 1 BTU to acquire 1 BTU, the economy can no longer acquire all the oil produced.

Using a dollar metric, the demand for petroleum is dependent upon the amount of economic activity occurring. A stronger economy uses more oil than a weak one. The amount of economic activity resulting from the use of petroleum is dependent on how much activity a unit of petroleum can power. Oil that could power zero activity would produce zero demand. That is, a dollar's worth of petroleum must be able to power a dollar's worth of economic activity to allow that economy to buy the oil. We have reached the point where a dollar's worth of oil no longer powers a dollar's worth of economic activity. Thus there will always be from this point forward more oil than demand for it. Because, of the lower price, producers must maximize production to maximize revenue. It is better to lose 1 dollar than 2 dollars. Consequently, inventories will continue to rise."
~BW Hill

BW Hill, the Etp model's creator, regularly answers questions about the Etp model at:

http://peakoil.com/forums/the-etp-model-q-a-t70563.html

If you are really interested in understanding the Etp model, why not go to peakoil.com and ask your questions directly to BW Hill? I am sure he will be glad to answer any real questions you might have and help you clear up your misunderstandings. After that, come back, we'll talk. Put up or shut up, Mr. Science.

Russ Watters said:
None of that contains the information I requested.

------------

Russ, you asked what caused the plunge in the oil price beginning in June, 2014. I answered you. Multiple times. The concept is quite simple. If you still don't understand what I am saying, then I can't really help you much.

Your personal confusion over basic concepts does not amount to a valid argument against the Etp model.

Why not take my suggestion and drop in at peakoil.com and ask the questions you feel are not being sufficiently addressed by me? Are you actually curious about how the Etp model really works, or are you just trying to be a pain in the ass?



---Futilitist

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Exchemist said:
The notion that there is a looming catastrophe, due to thermodynamics, which has somehow been missed by everyone in both government planning and in the relevant industries, is stark staring mad.

Futilitist said:
It is quite apparent from your reaction, and the general reactions from almost everyone on this forum, that people aren't necessarily very open to hearing about this looming catastrophe. People don't like bad news. And this is really, really bad news. Hell, it's pretty much the worst news ever.

If you were the President of the United States or the CEO of a major corporation, how would you break the news of the upcoming apocalypse to the world?

-----------

So, anyway, you completely dodged the question. How about answering it now?



---Futilitist

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That no one is interested in your incessant vapid trolling shouldn't surprise you. I rather expect that's the reaction to get everywhere you troll.

@moderators: Please move this to the Cesspool where it can degrade into natural crude. Maybe we can stave off the "looming catastrophe" that way.

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Flooding by copying and pasting other peoples' work and old discussion where you were unresponsive to the central issue does not help. I'll be real specific/concice: please either:
1. Provide the equation for the second curve.
2. State clearly that the equation was not in the book you received.
3. State why you are refusing to provide the equation (if the equation was in the book).

Note that asking you for explanation with words was an attempt to work around your refusal to provide the equation by figuring it out for myself if you provided the requested descriptions. That's more work than can reasonably be expected of me, but since you didn't/couldn't do that either, it is moot anyway: all roads lead back to the equation you are refusing to provide.

 

You seem to insinuate that the president of the USA and the CEOs of major corporations know that there is an impending apocalypse but are not telling people. Do you really believe this ?

 

Ah yes of course, how silly of me.

 

It is not an old discussion. It is the one we were just having where you kept asking me the same question over and over. My post helps show that you are ignoring my direct answers while claiming that I am not answering you.

This is important, since my supposed unresponsiveness seems to be your strongest argument against the Etp model. I was simply showing that your argument was false. What else do you have?

1. There is no specific equation for the second curve.
2. Since there is no specific equation for the second curve, it is not in the book.
3. I am not refusing to provide anything.

We have also covered this before. One more time:

The two Maximum affordable price curves labeled 71% (black), and 62% (light blue) are skewed logistic curves. There is no explicit mathematical equation to describe them. They are derived numerically, and the dots represent values for specific years. The 71% curve is the maximum theoretical energy that can be extracted from a unit of 37.5° API crude. Its value is derived from the combustion equations of hydrocarbons. The 62% curve is the average energy extracted from the same hydrocarbon by the end user. It passes through the ETP derived price curve at the inflection point of the ETP curve in year 2012. 2012 was the energy half way point for petroleum production. It was the year when it required one half of the energy content of petroleum to produce the petroleum, and its products.

The individual points are generated from the equation:

$/barrel = (Energy delivered - ETP value/ BTU/$) * 42.

Energy delivered = 140,000 BTU/gal *0.62 (140,000 BTU/gal - the energy content of 37.5° API crude)

ETP value is derived from the ETP function

BTU/dollars is taken from the BTU/dollars graph - Graph# 12

All roads lead back to your obfuscation. So, here we are. Again. You have your answer, again.

-------

Here is something more constructive. On the original Etp model thread you claimed:

Your statement above is obviously totally false. It is even kind of silly.

Of course the price of oil is, in fact, directly related to the energy required to produce it. How could it be otherwise?

So, that explains the problem, doesn't it? You don't accept one of the core assumptions of the Etp model. This is what the argument is really all about. But this core assumption is really just a given derived from the most basic understanding of the second law of thermodynamics. So, why keep asking for the detailed formulas that you obviously wouldn't understand?



---Futilitist

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Utter rubbish. The price of oil is related to its value to the economy. This has no necessary connection to the energy content required to extract it, any more than the value of a diamond is determined by the energy required to extract it.

 

Dude, diamonds are not a source of energy.

See what I mean? No one here accepts that oil use drives GDP! Understanding this simple concept is essential to comprehending the Etp model. All I ever see here is knee jerk denial by people who care more about economics than science.

Besides, you are just trying to distract me from this:

Answering my question with another question is dodging. Again.

I am not insinuating anything. You are the one who originally insinuated that I must be wrong because no one in a position of authority has said we are going to have an apocalypse. You implied that if the President knew we were going to have an apocalypse, he would tell us directly. I just asked you how he might break the news. So, once again:

If you were the President of the United States or the CEO of a major corporation, how would you break the news of the upcoming apocalypse to the world?

It is a simple question. Just answer it. I won't let you off the hook.

---Futilitist

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If there's no equation for the second curve, where does it come from? Why is it even in the graph?

 

I just answered that. Once again:

The two Maximum affordable price curves labeled 71% (black), and 62% (light blue) are skewed logistic curves. There is no explicit mathematical equation to describe them. They are derived numerically, and the dots represent values for specific years. The 71% curve is the maximum theoretical energy that can be extracted from a unit of 37.5° API crude. Its value is derived from the combustion equations of hydrocarbons. The 62% curve is the average energy extracted from the same hydrocarbon by the end user. It passes through the ETP derived price curve at the inflection point of the ETP curve in year 2012. 2012 was the energy half way point for petroleum production. It was the year when it required one half of the energy content of petroleum to produce the petroleum, and its products.

The individual points are generated from the equation:

$/barrel = (Energy delivered - ETP value/ BTU/$) * 42.

Energy delivered = 140,000 BTU/gal *0.62 (140,000 BTU/gal - the energy content of 37.5° API crude)

ETP value is derived from the ETP function

BTU/dollars is taken from the BTU/dollars graph - Graph# 12


---Futilitist

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He's playing one of his favorite games, which is "answer my question which contains my statement! Then once you answer it, I can claim you accept my statement since it's in the answer. Now ANSWER MY QUESTION!"

Another poster who does this often is GreatestIAm, who posts things like "Religions are fairy tales for adults. Should we encourage them to grow up?" Then no matter how you answer - he can claim a "win."

In this case the question is "If you were the President of the United States or the CEO of a major corporation, how would you break the news of the upcoming apocalypse to the world?" Anything you answer validates his latest apocalypse prediction. If you post "here's how he should" then he claims "See? You believe it too!" If you post "he shouldn't" he will reply "so you want to keep the apocalypse hidden from the people? Well, at least you admit it's coming!"

 

If it isn't mathematically describable, how can you be confident that you can extrapolate a future projection for it?

 

Bullshit, billvon.

I asked a fair question. Exchemist dodged it multiple times. Now you are jumping in to cover for him. Ha ha!

This started when Exchemist insinuated that I must be wrong about the upcoming apocalypse, because if I were right, the President would have told us by now. My point is that if there really were an upcoming apocalypse, it might not make sense for the President to tell everyone. Therefore, the fact that the President hasn't told us yet is not material to whether there is or is not an approaching apocalypse. Admitting that does not make me right or wrong about the apocalypse. See? Simple. Nothing to be scared of. You guys make it impossible to have a serious discussion.

But since you did jump in, why don't you answer the question:

If you were the President of the United States or the CEO of a major corporation, how would you break the news of the upcoming apocalypse to the world?



---Futilitist

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What's the nature of this "apocalypse"?

 

I thought you didn't care. Please check out this thread:
http://www.sciforums.com/threads/apocalypse-soon.133084/
The answer you seek is there. But be careful. You might not like what you find.



---Futilitist

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Or, y'know, you could just give a straight answer. I'm going to assume "zombie" apocalypse.