Tim Garret, an associate professor of atmospheric sciences at the University of Utah has designed an economic model that posits that the global economy’s current rate of primary energy consumption is tied through a constant to a general representation of its historically accumulated wealth.

Perhaps another way of looking at this is that in the global economy there is a known relationship between the amount of energy and the wealth produced.  That shouldn’t surprise anyone.

Mr. Garrett has discovered that In each of the past 40 years for which records are available a continuous 7.1 Watts has been required to maintain every one thousand inflation-adjusted 2005 dollars of historically accumulated economic wealth (not yearly economic output or GDP)

So the next time somebody tries to convince you to “conserve” your way to prosperity – don’t buy it.

William Cavalier

http://www.inscc.utah.edu/~tgarrett/Economics/Economics.html

China and India are the two primary drivers of energy consumption. OECD will account for a full 90 percent of population growth and energy demand growth until 2030.

Supply Whales Around the World

The Tamar gas field off the coast of Israel required the development of Israel’s largest infrastructure project in history. The Tamar Field and the adjoining Leviathan Field are among the largest offshore natural gas discoveries in the past decade.

Russia is developing deposits of unconventional oil from western Siberia’s Bazhenov Shale which may produce as much as 10 million barrels a day for years.

India is starting an extensive shale oil and gas exploration project on 250 blocks allocated by the government.

Saudi Arabia, the world’s largest exporter of crude oil, is conducting exploratory shale which could establish reserves of 500 trillion cubic feet of natural gas.

In the Gulf of Mexico, Anadarko Petroleum and its partners found a huge field in the Lower Tertiary trend with as much as 3.7 billion barrels of oil equivalent.

Industry Moves To Cheap Energy

Shale energy is making the US economy economically competitive by delivering huge supplies of low cost natural gas (whiners notwithstanding).

Europe has begun to question their “green” energy policies as industries leave for the United States to take advantage of abundant and low cost natural gas. Bureaucratic meddling has created what is now known as a “energy-price gap” (aka expensive energy for no good reason).

Rest assured, as technology advances, so will our proven natural resource reserves.

William Cavalier

“We hold these truths to be self-evident, that all men are created equal; that they are endowed by their Creator with inherent and inalienable rights; that among these, are life, liberty, and the pursuit of happiness; that to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed; that whenever any form of government becomes destructive of these ends, it is the right of the people to alter or abolish it, and to institute new government, laying its foundation on such principles, and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness.” –Declaration of Independence as originally written by Thomas Jefferson, 1776. ME 1:29, Papers 1:315

Gasoline has four main cost components:
• Supply and demand for oil worldwide (68%)
• Federal, state and local taxes (13%)
• Cost of refining (8%)
• Distribution and marketing cost (11%)

These costs of course could be a lot lower if the government wanted to lower taxes, stop requiring seasonal refinery blends, reduce federal meddling in state fracking regulation or even reduce healthcare regulations which dramatically increases labor costs.

Excessive government regulations have also limited refinery capacity in the United States. Regular refinery outages contribute to price spikes independent of oil prices in the USA.

Perhaps most importantly (and permanently) gasoline prices will stay high because there is ever increasing world market oil demand, particularly from China and India.

The Energy Information Administration (EIA) projects that total world oil consumption will grow by1.05 million bpd during 2013 and 1.4 million bpd in 2014. The largest increases in oil consumption will be non-OECD Asian countries, which are targeting rapid economic growth. U.S. liquid fuels consumption has declined since 2010.
.
Since 2009, commodity prices (like food and fuel) have risen with Federal Reserve interest rate cuts and printing lots of dollars to finance federal deficit spending. Smart investors commit capital to real assets, like oil and precious metals to mitigate the risks of inflation and a devalued dollar which follow inevitably from this government folly.

So, you tell me. When do you think that world oil demand growth will slow, when meddling governments will back-off and when fiscal conservatism will ascend? Otherwise you might want to get used to high and increasing prices for this most basic commodity.

William Cavalier

DEBT LIMIT – A GUIDE TO AMERICAN FEDERAL DEBT MADE EASY. – YouTube.

“To States, or any one of them, or any city of the State,
Resist much, obey little,
Once unquestioning obedience, once fully enslaved,
Once fully enslaved, no nation, state, city of this earth, ever afterward resumes
Its liberty.”

Walt Whitman in “To the States”: