What If Trump Were a Genius?

"Kidneys!"

Bear with me now. If it helps, consider him an idiot savant-ic genius, or a genius marred by severe mental illness, or if you prefer, just plain genius born with a MAGA tattoo on his butt. 's all good.

Anyway, consider that he just might know what he's doing part of the time, and that he might even excel in certain understandings even if (like most of us) he doesn't understand what he understands or why.

Just consider that sometimes he might be right if only because if a stopped clock is right at least twice a day, how often right might be a clock that shifts position minute-by-minute, going backward and forward at whim, like how Trump frequently contradicts himself between his first and third statement of a given day?

Imagine that Trump knows what he's doing calling for bailout money for the domestic oil industry even though it is a) the victim of its own rock-headed folly and b) bailing it out will only hasten its decline by subsidizing more of the same folly, by which folly it must surely fail because it simply cannot compete with cheaper Saudi/Russian/OPEC/et al oil. 

It simply can't. 

It's gone this far with the phony 'shale oil' miracle only because of super-cheap loans from the central banks (let's just say 'The Fed'). There is no other reason. 

This domestic shale/tar sands oil is far too expensive to produce for it to compete with the global oil market, a market which itself is already desperately pumping oil wastefully in attempts to make enough money to pay the huge unwise loans taken by countries once swimming in oil much cheaper to produce during a time of record high oil prices but now struggling to make a buck pumping twice as much oil as before but at much thinner profit margins.

But if Trump keeps the USA domestic oil zombies alive awhile longer, they'll continue to add to the global oil glut which in turn will make oil much less expensive to obtain... and we DO need oil. We live on oil. It is the basis of our entire industrial civilization.

Some context by a certified Smart Guy in the oil industry wrote last January:

“Today approximately 90% of the supply chain of all industrially manufactured products depend on the availability of oil derived products, or oil derived services. As the source material for various types of fuels, oil is a basic prerequisite for the transportation of large quantities of goods over long distances. Oil, alongside information technology, container ships, trucks and aircraft form the backbone of globalization and our current industrial ecosystem.


“Approximately 70% of our daily oil supply comes from oil fields discovered prior to 1970. Most of global oil supply still comes from 10 to 20 huge oil fields. In 2006, 10 oil fields accounted for 29.9% of the global proved reserves. Since 2006, comparatively very small oil fields have been discovered. 74% of the current global oil reserves is geographically concentrated in what is termed the Strategic Ellipse, which is the Middle East and Central Asia. Peak oil discovery was in 1962, since then rates of resource discovery has been declining persistently. New discoveries are limited: the exploration success rate in 2017 was a record low of 5%, and the average discovery size was 24mbbls. A projected range for average decline rate on post-peak production is 5-7%, equivalent to around 3-4.5mb/d of lost production every year.


“Currently the market is oversupplied. When the market returns to demand taking up all global supply, effective spare capacity could only shrink by just 1% of global supply/demand of 96mb/d, leaving the market very susceptible to disruptions. Oil demand is still growing by ~1mbd every year, and no central scenarios that have been recently assessed see oil demand peaking before 2040” (emphases mine)

from a January 2019 report by Simon Michaux Geologian tutkimuskeskus | Geologiska forskningscentralen | Geological Survey of Finland http://www.gtk.fi  Puh/Tel +358 29 503 0000  Y-tunnus / FO-nummer / Business ID: 0244680-7:

It would appear that we have, at least temporarily, a 'central scenario that... (doesn't) see oil demand peaking before 2040'. Whether this scenario lasts or we revert to something like our former rates of oil consupmption is unknown. A reversion to former consumption rates is what most people want, that is, if they want their homes to continue staying warm/cool as needed, their stores to be stocked with lots of good food, their cars still able to see the USA in their Chevrolet, etc.


We're not very likely to succeed but I suppose we'll try to revert to normal. What's more likely is that we'll continue trying to restart the moribund economy in the same old way: consume, consume, consume, because The Man makes money by selling the world to you at a profit. The less we consume, the less money He makes and the less power He has over us.


So, along the short run, the sooner we entice our domestic oil producers to drill, baby, drill and pump, daddy, pump, the sooner oil prices will push them out of the global market for good.

This will leave the oil in the ground, which is where it belongs for now. Later, when we've learned to live using much less energy, we will still want oil: for example, for making plastics, for the incredible increase of work that fuel-driven machines can deliver, for the natural gas that usually accompanies underground oil (which natural gas we use to make the fertilizer our farms run on: we literally eat fossil fuels in our culture).

We won't mind -- at that point -- that it only has an EROEI (Energy Returned on Energy Invested) of 2-10:1 (2-10 units of energy for every 1 unit invested into exploration and production).

We'll just be be very happy to have the oil, period.

I don't know if we have enough oil/natural gas left under USA soil to withstand another (brief) glut of shale oil production without running the wells entirely dry. I only know there already isn't much left in them, period, and we'd be wise to save what there is.

It seems counter-intuitive to propose saving oil by subsidizing the oil industry to pump more. The idea here is that if we let our oil barons shut down now, and sell their inventories, equipment, and infrastructure at fire-sale prices, two things will happen: 1) the loss of USA oil on the global market will be a factor to drive oil prices up when the economies start turning again in whatever fashion they're able to resume turning, and 2) this will allow another generation of numb-nuts wannabe oil barons to start pumping and selling our oil abroad profitably since they won't have nearly as much overhead because they were able to buy that inventory, equipment, and infrastructure so cheaply.

So maybe Trump knows what he's doing here even if he doesn't know what he's doing here.

His left hand may not know what his right hand is doing, judging by his daily self-contradictions. But at least he knows his left hand from his right hand unlike Old Uncle Joe Biden.


Let us be grateful for these small blessings. Small blessings are all we're liable to receive for awhile.


Burning Beds