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141 comments on DrumBeat: November 28, 2006

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Rethin on November 28, 2006 - 10:10am Permalink | Subthread | Parent | Comments top
WT,

Do us newbies a favor an redifine ELP or link to a definition.

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Rethin on November 28, 2006 - 10:15am Permalink | Subthread | Parent | Comments top
Shucks,

I forgot to say please.

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hummingbird on November 28, 2006 - 11:04am Permalink | Subthread | Parent | Comments top
As I recall, Economize, Localize, Produce.  (Hope I got it right.)
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westexas on November 28, 2006 - 11:29am Permalink | Subthread | Parent | Comments top
Economize--try to adjust your lifestyle so that you can live on 50% of your current income.

Localize--try to reduce the distance between home (in smaller, more energy efficient housing) and work to as close to zero as possible and/or commute to work using mass transit.

Produce--try to become a provider of essential goods and/or services.  If nothing else, look into starting a permaculture garden.  

Regarding Peak Oil/Peak Exports, either I'm wrong (based on work done by Hubbert/Deffeyes, et al), or Yergin is wrong.

If I am wrong, you will have a lower stress way of life, less debt and more money in the bank.

If Yergin is wrong. . .

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b3NDZ3La on November 28, 2006 - 12:13pm Permalink | Subthread | Parent | Comments top
But WT, this is just too simple! Even the hoi-polloi can understand it!

Whereas reading TOD forums shows us that "experts" have to complicate things beyond belief in order to be believable.

</sarcasm>

The degree to which experts get involved in discussion is directly proportional to the confusion in the general pop.

Hence, paralysis.

Hence, thank jeebus for the clarity of writers like WT.

[Rethin: HEAR THAT?]

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SaturnV on November 28, 2006 - 8:15pm Permalink | Subthread | Parent | Comments top
Hi WT,

ELP

This is great and all but what if your significant other is dead set against any self imposed power-down, and you also have kids? :(

Regards,

Tony

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westexas on November 29, 2006 - 10:02am Permalink | Subthread | Parent | Comments top
Tony,

Hand her printouts from the Housing Bubble Blog.  

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SaturnV on December 2, 2006 - 9:22am Permalink | Subthread | Parent | Comments top
Thanks WT.
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westexas on November 28, 2006 - 12:44pm Permalink | Subthread | Parent | Comments top
Previously, I have introduced ELP with a thought experiment, to-wit, assume that on 1/1/07 you knew with certainty that your income would drop by 50% and that gasoline prices would be in the $6 to $8 range.  What changes would you make in your lifestyle?

I have also previously described how downscaling your lifestyle gives you a competitive advantage as it becomes more apparent that a lot of industries are facing labor surpluses, i.e., you can volunteer for a wage cut.

I have basically been outlining the survival techniques that I used to keep feeding my family from 1986 to 1989.  After the 1986 oil price crash, I took a job in Dallas, with a 50% pay cut.  In early 1989, when I hadn't found a lot of oil, and oil prices still weren't too high, I volunteered for a 50% pay cut, with a stipulation that I would receive equity ownership in any oil fields I found.  I anticipated that layoffs were coming, and I moved myself from the most expensive employee to the least expensive employee.  As I expected, half of the staff was laid off (but not me!).  It's kind of cold blooded, but feeding my family comes first.  In any case, from early 1986 to 1989, my income dropped by 75%.,  

But then in late 1989, I found a field that had peak production of over 1,000 bpd at a depth of 2,000' (tiny by world standards, but pretty impressive for West Central Texas).  I finished 1990 with my income five times higher than 1986.  Life, as they say, is a roller coaster.

In any case, regarding ELP,  I know of what I speak.

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frontierenergy on November 28, 2006 - 4:40pm Permalink | Subthread | Parent | Comments top
Westexas:

Usually when I tell non-oil types and the new hands coming in the oilfield  about 1986 they look at me like I'm nuts.  I may be, but that is beside the point.  The depression that hit the US oil industry was met by the media with cheers at the time.  The oil issue was "solved" for all time.  Back then I was working on rigs during days on and installing solar systems on days off.  Both industries disappeared instantly.  

The same day that I was laid off, my wife told me she was pregnant.   Fortunately, I had computer skills to parley at the time and went to work for a company that built an essential component for power generators.    It didn't take me long to figure that at some point in the future that the gas turbines would finally eat the "bubble" up some day.  Gas Turbines were about the only capacity being added.

I remember for a long time thinking I was like a stranger in a strange land, knowing the inevitable was going to happen but found it pointless to try to explain it.  Now I still wonder if you are doing someone a favor by explaining  Peak Oil to them.  Once they have their "oh my god" moment, it is up to them to  follow their better judgement.  It will suck being right about this.

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westexas on November 28, 2006 - 4:56pm Permalink | Subthread | Parent | Comments top
Tales of the boom. . .

I circulated a memo in early 2000, to the effect that 2000 was the inflection point for the Three P's:  Prospects; Product and Personnel.  I predicted that we were going to see strong inflationary pressures in all three sectors.  

A friend of mine in Midland, who owns a mud company, said that he hired a guy with a high school degree and trained him as a mud man.   After the guy had six months experience, he was hired by another company for $75,000.  

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frontierenergy on November 28, 2006 - 5:10pm Permalink | Subthread | Parent | Comments top
That kid probably knows how to make a mud check but he is going to cost way more than $75 k after he fucks the mud up a few times.  My guess, a couple of million easy the first time he sticks pipe.  There is nothing like loss of well bore,drillstring/BHA to put on a mud engineers' resume.  Of course they'll figure a way out of responsibility.

That is what happens in this drilling environment with inexperienced people in the field  and inexperience people owning the companies.  The warm body syndrome.  Tell your friend-I feel his pain.

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BOP on November 28, 2006 - 5:01pm Permalink | Subthread | Parent | Comments top
My experience of 1986 was very similar. At one point I was a valued member of society; the next minute I was the cause of a mini-recession since my industry had mislead everyone about future prospects and bid up the price of houses and everything else (we gave briefings to the politicians. They overnight "discovered" and announced future prospects and reserves that we couldn't even imagine on the best of bar nights).


What was even harder to deal with was that it was not just my firm that was heading toward commercial extinction but also all of the other firms in the offshore sector. Having a rolodex full of contacts (how quaint that sounds) was no help at all when all of those contacts were also out of work.


That experience was a shock that I will never outgrow or overcome. Two colleagues took their own lives and I don't know many who rode it out easily. The majority of folks in North America have no understanding at all of the downside of PO or what that experience will truly be like. WT may lay it out but folks will not undertstand it until it hits and then it will be way too late.
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step back on November 28, 2006 - 5:20pm Permalink | Subthread | Parent | Comments top
Two colleagues took their own lives

No. The Invisible Hand pushed them over the edge.
It's your basic non-survival of the "economically" unfit. Thank you Adam Smith.

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frontierenergy on November 28, 2006 - 5:21pm Permalink | Subthread | Parent | Comments top
Look on the bright side - you'll also be the goat for peak oil and you   already know what it feels like.  So your coping mechanism is already in place.

Yes, there were suicides, divorces, alcoholism, drug addiction, you name it, after 1986. Now the same thing is happening while things are ball to the walls.  The first thing I ask a trainee is "Are you sure you want to be in this business?"  The money always wins though.

The most inventive suicide that I heard about back in 1986 was a guy who rented a plane in Lafayette, Louisiana and pointed it due south until he ran out of fuel and crashed into the Gulf.  

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southpaw on November 28, 2006 - 10:38pm Permalink | Subthread | Parent | Comments top
"That experience was a shock that I will never outgrow or overcome."

In my first year of college I met a very nice gentleman with a PhD in Geology.  He was working at the university on the weekends for a friend of his who happened to be a former school teacher.  He told me he lost his job as an oil geologist in the 80s and remade himself into a high school science teacher.  I got to know him over the next year as a good-hearted man intensely dedicated to his students.  He was constantly striving to increase his knowledge base by attending countless workshops and seminars for science teachers.

One weekend this normally cheerful guy seemed despondent.  When queried, he explained that he had lost his teaching job.  With his PhD and teaching experience he was on the highest pay track and the school district wanted to hire someone just out of college to save money.

He couldn't find another position and the last time I saw him he was depressed and emaciated working at a Safeway bakery for $6 an hour, unable to pay his son's tuition and his wife preparing to leave him.  It was heart breaking.  I will never forget it.  It still haunts me and has been one of many life experiences that taught me the sad truth of our society that so many workers are nothing more than a means to an end.

BOP is absolutely correct.  Very few people have any real concept of just how far down the economic ladder they can fall and this time the safety net below might completely unravel.  

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step back on November 28, 2006 - 5:17pm Permalink | Subthread | Parent | Comments top
I was like a stranger in a strange land, knowing the inevitable was going to happen but found it pointless to try to explain it.

Line of the day!

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oilmanbob on November 28, 2006 - 9:13pm Permalink | Subthread | Parent | Comments top
My 1986 experience was standing watching the logging if a well at Saratoga West Field in Hardin County when I heard from the Geologist that the price fro Gulf Coast Sweet had dropped from $29.00 to $12.00 that day. The operator completed the well-I had abot 3.5% NRI in override and minerals, and it IP at 300 bbls a day. Aweek later it sanded up, and it was never recompleted, the operator sold the wells and now its plugged.    Oh well, I was rich for a week, one of a number of times.
  For a couple of more years I hung on, and times just got skinnier. I ended up working for an asshole junkie  theif who proceeded to cheat me out of my override on a 2,000 acre lease block that ended up making 8 pretty good wells. He "oversold" all his interests and the leases are still in a lawsuit. But, he got his comeuppance. Someone threw him off the roof of a hotel and he ended up a parapalegic. Then his house in Sugarland had a mysterious fire and he burned alive in 1999. His wife didn't even have a funeral for him, and if I new where his grave was I'd go drive a stake through his chest and piss on it. But, I'd probably have to stand in line.
   Now I'm back in the oil business and he's dead. Isn't life wonderful? The moral is get away from thieves as quickly as possible, if they steal from their investors they'll steal from you. I'd rather pick up cans along a highway than ever work for another cheap theif.
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141 comments on DrumBeat: November 28, 2006

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