The Crash of 2015: Day 29 [UPDATE Day 30]

You have this perfectly good structure, and then you kick out a few of the supporting pillars, and the next thin you know the SEC is on the phone.

Maybe we could still live in the top floor? If we could just slow it down a little?

A couple of things to keep firmly in mind as we watch the Crash of 2015 unfold, pretty much on the schedule I’ve been writing about here for six months. First, the drop in oil prices is not the cause of this disaster, merely an accelerant. The fracking industry is succumbing to its inherent high expense, toxicity, rapid depletion rates and over-reliance on junk financing. Similarly, the stock market crash we expect to follow the fracking collapse would have come anyway because of its inherent instability, and indeed may yet occur before the chain reaction in the fracking fields has run its course. And finally, what is happening to fracking is also happening to the legacy oil business, only slower. Continue reading

The “Worst News of 2015” Just Got Worse

Just a garden-variety protest in some Middle Eastern county, you say, nothing to be afraid of here? Wait till you find out where these people are. (BBC Photo by Safa Al-Ahmad)

Just a garden-variety protest in some Middle Eastern county, you say, nothing to be afraid of here? Wait till you find out where these people are. (BBC Photo by Safa Al-Ahmad)

The news photo I labeled the scariest of 2014, back in August, and the news story I called the worst of 2015 a few weeks ago, just got scarier, and worse. The photo was of demonstrators who have managed to keep an insurgency alive in the Eastern Province of Saudi Arabia for three years despite everything a boundlessly wealthy state can do to snuff it out. Bad for us, because the Eastern Province is where the Saudi oil is. The worst news of the year for us was that the Saudi king was in hospital with a terminal illness. Now the king is dead, and the difficulties faced by his successor just became worse by at least an order of magnitude. Continue reading

The Crash of 2015: Day 21 [Update: Day 22]

Hold on a second, we’ve changed our minds. Can you just hold it right there, please? We’ve decided we like it the way it is…..

The economy of the United States and the world is on fire, and with the flames and smoke visible in any direction one cared to look, the President of the United States declared last night that the worst is over, “the shadow of crisis has passed,” and happy days are here again. In reality (a state that presidents and candidates for president never seem to visit) 2015 is shaping up to be one of the worst any of us have ever seen.

It’s a potent mix of flammable situations, from an unhinged stock market to a drought-ravaged West to the fiscal convulsions of China, Russia and Europe. But for us in America, the collapse of the bogus New American Oil Revolution is the fire that’s burning hottest and spreading fastest. This is how it’s likely to go: Continue reading

The Crash of 2015: Day 9

You have this perfectly good structure, and then you kick out a few of the supporting pillars, and the next thin you know the SEC is on the phone.

You have this perfectly good structure, and then you kick out a few of the supporting pillars, and the next thing you know the SEC is on the phone.

With oil prices at about half what they were six months ago, the most vulnerable players in the oil business, the frackers who brought about the new American Oil Revolution, are imploding. If you think that’s just their end of the boat sinking, no worries here, think again. They are, or were, the last best hope of continuing the oil bonanza, and they’re done. As soon as that fact is so obvious that even Faux News has to admit it (this may take a few months), it will dawn on us all that the very same thing is happening to the deep water drillers, the Arctic drillers and the tar sands wringers.

It would have happened at any oil price. The slump has merely brought it on sooner, and will force us to face — this year! — the reality that we will never again have quite enough cheap oil. That’s the meaning of the Crash of 2015. Now, about the schedule: Here’s what’s happened, what’s happening and what’s about to happen. Continue reading

Attention in the Crowded Theater: Fire!

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Firefighters try to snuff an oil well fire in Iraq in 2003. What is happening to the oil business today, especially in the United States, is akin to a thousand such fires. (Wikipedia Photo)

The flames of the next financial crash are leaping up everywhere you look (if you look without wearing the rose-colored glasses): in the Bakken fracking fields of North Dakota, the Eagle Ford in Texas, the tar sands of Alberta, the deep waters of the Gulf of Mexico. They are lighting up the night sky in all directions, and in the daytime the smoke is sickening the light and smelling up the air in the skyscraper offices of the Masters of the Universe where they shuffle decks of junk bonds, subprime loans and derivatives. Along with the smoke, you can smell the fear. This is going to be bad. Continue reading

The Oil Crash is Under Way [UPDATED 12/13]

When big trees come down, they start slow and end with a crunch. (Photo by geograph.org.uk)

When big trees come down, they start slow and end with a crunch. (Photo by geograph.org.uk)

When you are felling a really big tree, the first signs that it is coming down are subtle; a crack here and there, a twitching of the crown. By the time these clues register on you, the tree is on its way down. The cracks and twitches from the U.S. oil industry are coming almost hourly now, and although it is a really big tree, and won’t actually hit the ground until next year, its fate is pretty well sealed. Here are this week’s signs and portents: Continue reading

Rage Against the Dying of the Lights

The lights went out in Hoboken in 2012. They’re going out more often, for longer, in more places. Are you ready? (Photo by Alec Perkins/Flickr)

The lights went out in Hoboken in 2012. They’re going out more often, for longer, in more places. Are you ready? (Photo by Alec Perkins/Flickr)

Much of Detroit went “gentle into that good night” this week, its entire municipal power grid succumbing to age, infirmity and neglect.  It was no big surprise, Detroit’s public buildings (schools, fire and police stations, courts, a hospital, etc.) and traffic signals went dark in 2010, 2011 and 2013. Nor would it have surprised the readers of a recent study [“The Technology and Sociology of Power (Failure)”] whose authors concluded that “Blackouts are dress rehearsals for the future in which they will appear with greater frequency and severity, and as urban areas become more compact, with greater consequences.”

The world, they said, should “prepare for the prospect of coping without electricity as instances of complete power failure become increasingly common.”
Continue reading

Troubled Oil is Under Water [UPDATED]

A Russian oil rig in the North Sea. New oil wells are deeper, more expensive, more complicated -- and play out faster -- than ever.

A Russian oil rig in the North Sea. Used to be only part of the oil business was in deep water. Now it pretty much all is.

The whole global edifice erected with oil profits is trembling and cracking while the people responsible for its imminent implosion refuse to even get under their desks, insisting that there is no problem. This crash that is already under way is not the ultimate one that will bring down the Industrial Age, not quite yet, but it is going to drop us from the rubble-strewn “new normal” of the post-2008 Great Recession to the cratered moonscape of the newer normal that will follow the Crash of 2015. The problem in 2008 was subprime home loans. The problem now is subprime oil wells. Continue reading

War Criminal Charged in War on Coal

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A battlefield in the real War on Coal (the 1968 Farmington Mine disaster in West Virginia). The aggressor is not who you think it is, nor are the victims. (Wikipedia Photo)

A long, long list of lies have been perpetrated by industrialists to confuse ordinary people about how, and by whom, the world is being destroyed. Proceedings in a Federal courthouse in West Virginia are about to bring some clarity to the issue. The quality of the lies has been uniformly low — none of them stands up to a moment’s rational examination. Their success rate, on the other hand, has been high; a dismaying proportion of Americans believes that the people who are exploiting them the most are their best friends, and the people who are trying to save them are their enemies. There is no worse example than the bogus “War on Coal,” imagineered by coal-mine operators as a unifying theory of everything bad that happens: Obama did it, as part of his “War on Coal.”

As propaganda, the War on Coal was a brilliant stroke. How else could an industry whose air pollution is destabilizing the entire planet, whose operations are obliterating mountain ranges, poisoning groundwater, and routinely killing and sickening its employees, instantly make itself seem a blameless victim of outside aggression? Its audacity was exceeded only by the gullibility of a grateful nation, which never paused to remark on the oddity of Coal declaring a war on itself, on behalf of an enemy that did not seem to be aware of it. Continue reading

International Energy Agency Says: Brace for Impact

What America will look like of the frackers have their way -- and what Huntington Beach, California looked like in 1926. But according to the IEA’s World Energy Outlook, we shouldn’t be too concerned about what the frackers are going to be able to do.  (Photo courtesy Orange County Archives)

What America will look like of the frackers have their way — and what Huntington Beach, California looked like in 1926. But according to the IEA’s World Energy Outlook, we shouldn’t be too concerned about what the frackers are going to be able to do. (Photo courtesy Orange County Archives)

The customarily cheery International Energy Agency (IEA), created to advise the member nations of the Organization for Economic Co-operation and Development (OECD), has taken a more somber tone in its latest annual World Energy Outlook released today. The agency dismisses the wildly hyped shale-oil and -gas “boom” in the United States as a band-aid on a malignant tumor, a temporary mask distracting the world from the pervasive illness afflicting its oil supply. Continue reading