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By Robert Rapier on Jul 10, 2014 with 37 responses

World Sets New Oil Production and Consumption Records

Last month BP (NYSE: BP) released the Statistical Review of World Energy 2014. This report is one of the most comprehensive sources of global and country level statistics on production and consumption of oil, natural gas, coal, nuclear power and renewables. Right after the release of the report, I wrote a short post discussing the highlights. Today I will take a deeper dive into oil production and consumption figures. In coming weeks, I will delve into the rest of the report.

Oil Production

First a note about BP’s definitions. “Oil” in the BP Statistical Review (BPSR) is defined as ”crude oil, tight oil, oil sands and natural gas liquids”, but excludes biofuels and liquid fuels produced from coal or natural gas. Consumption numbers do include all liquid fuels, so consumption numbers are always greater than production numbers, but this is merely an artifact of BP’s definitions.

Global oil production advanced in 2013 by 557,000 barrels per day (bpd), reaching a new all-time high of 86.8 million bpd (an increase of 0.6 percent over 2012). After declining in 2009, global crude oil production has now increased 4 years in a row. But as I noted in last month’s short article, while global oil production did indeed set a new record, the US production increase alone was 1.1 million bpd. Thus, outside the US global production actually declined by 554,000 bpd.

US Oil Production 1965 through 2013 Fracking

The 1.1 million bpd gain in US oil production was the largest year over year gain for any country in 2013, and the largest gain in US history. For perspective, the second-largest increase in oil production was recorded by the United Arab Emirates with a gain of 248,000 bpd over 2012, and Canada was the only other country in the world to record an increase of more than 200,000 bpd, at 208,000 bpd over 2012. The US remained the world’s third-largest oil producer at 10 million bpd in 2013, trailing Saudi Arabia’s 11.5 million bpd and Russia’s 10.8 million bpd. Rounding out the top five were China (4.2 million bpd) and Canada (3.9 million bpd).

Just to put the current US oil boom into further perspective, over the past five years global oil production has increased by 3.85 million bpd. During that same time span, US production increased by 3.22 million bpd — 83.6 percent of the total global increase. Had the US shale oil boom never happened and US production continued to decline as it had for nearly 40 years prior to 2008, the global price of oil might easily be at $150 to $200 a barrel by now. Without those additional barrels on the market from (primarily) North Dakota and Texas, the price of crude would have risen until supply and demand were in balance.

Libya had the largest decline of any country due to military action there. Oil production fell in Libya by 521,000 bpd, a 35 percent loss from 2012. Production in Iran was down nearly 200,000 bpd, while military action also impacted Syria’s production, which fell 115,000 bpd. Production in Saudi Arabia and Nigeria was down about 100,000 bpd from 2012.

Oil Consumption

Oil accounted for 33 percent of all the energy consumed in the world in 2013. Globally, oil demand increased by 1.4 million bpd over 2012 to 91.3 million bpd, keeping upward pressure on crude prices throughout the year. After two years of declines, US consumption increased by 397,000 bpd – a 2 percent increase from 2012. While much has been made of a slowdown in China, oil demand there still increased by 390,000 bpd (following a 500,000 bpd increase from 2011-2012). Despite the slowdown in the rate of growth from the previous year, this represented a 3.8 percent consumption increase for China, 2.5 times the global increase of 1.4 percent.

Together the US and China were responsible for 56 percent of the global increase in oil demand in 2013. The big difference between the two countries is that US oil production was up far in excess of our increase in consumption, while oil production in China edged up by only 24,000 bpd. This means that while US oil imports declined and finished product exports (e.g., gasoline, diesel, jet fuel) increased, China’s dependence on oil imports continued to increase.

Double-digit percentage increases in oil consumption were recorded by Pakistan, Venezuela, and Azerbaijan from 2012 to 2013, and over the past five years double-digit percentage consumption increases were recorded by Central and South America (15.2 percent), the Middle East (18.3 percent), Africa (12 percent), Asia Pacific (17.4 percent), and the former Soviet Union (12.8 percent). Oil demand in the developed countries belonging to the Organisation for Economic Co-operation and Development (OECD) decreased 5.3 percent over the past five years, while demand in non-OECD countries increased 20.3 percent.

Change in Oil Consumption

After posting the above graphic to my Twitter feed, several asked if I would reproduce it in barrels per day. I have to agree that this really puts Asia Pacific’s influence on global oil demand growth in perspective. Over the past 5 years, 87 percent of the demand growth for oil came from the Asia Pacific region:

Change in Oil Consumption MMBPD

Oil Prices

The loss of oil production from Libya and strong demand in developing countries ensured that oil prices remained high, despite surging US production. Contrary to expectations — given a tighter supply/demand picture for international crudes — Brent crude declined by $3.01 from 2012 to a yearly average of $108.66/bbl. Prices for West Texas Intermediate (WTI), on the other hand, actually averaged $97.99/bbl for the year, an increase of $3.87/bbl from 2012.

Conclusions

The story of oil in 2013 was one of surging US production and increasing demand in developing countries. The US continues to lead the world in increasing oil production, while developing countries — in particular the Asia Pacific region — have added the vast majority of oil demand in recent years. Arguably the only thing preventing the world from experiencing oil prices in the $150-$200/bbl range is the continuing shale oil boom in the US.

Link to Original Article: World Sets New Oil Production and Consumption Records

By Robert Rapier. You can find me on TwitterLinkedIn, or Facebook.

  1. By Forrest on July 10, 2014 at 7:50 am

    Also, the growing production of biofuel has a good impact upon spiking oil prices. Back out the consumption side which is provided by 1.7 mbpd biofuel and realize global analysis expects 2x production increase by 2019 to 3.3 mbpd. This at time when transportation efficiencies steadily improving. The critical element of energy needs appear to target transportation. While oil is only responsible for one third of global energy need, oil is responsible for much cost of economies and angst of concern. This the zone whereupon the biofuel production can do heavy lifting to offset growing demands of transportation fuel per current technology fleet. Add into this the battery car and fuel cell technology that will have major impacts to fuel use in future. An advantage to U.S. economy is and was the burgeoning biofuel business. We set our selves up to benefit from international sales of this developing infrastructure. Also, very nice the non OPEC countries can gain home made domestic fuel supply to stabilize their transportation fuel costs and enjoy economic benefits of lower import costs. Some of the poorest nations expected to benefit the most. The continent of Africa has tremendous opportunity on the horizon. It’s not all bad news.

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    • By Forrest on July 10, 2014 at 8:39 am

      Btw, most of us will not correctly estimate the future. Population growth often times will surprise the prognosticators. Citizens of globe may very well decide to abandon child rearing desires and instead seek to enjoy less responsibility, freedom, and higher standard of living of being childless. Transportation technology has already set the stage for some formidable improvements of efficiency. Mercedes Benz is certain trucking fleets will be automated and driver-less starting in 2025. Improvement to sensor technology, computing power, and positioning technology will make driving optional. Vehicles could safety tailgate upon freeways and eliminate air drag. Accident insurance could become passe as technology would make it impossible per transportation fleet inter communications. Delivery trucks could lumber along at slow speeds to optimum fuel savings. Big heavy metal cars a thing of the past as accidents impossible. Ride share may overtake the need of expensive auto investments and in turn increase rider efficiency per energy use. The cost of roadwork and material may become prohibitive to cross country road travel. Slow speed low altitude car plane travel per auto pilot is expected to become popular per loss of rolling friction and possible huge improvements in ride, mileage, speed, and low cost of infrastructure. Nuclear energy is still expected to develop per future needs and technology. Solar and battery technology is expected to steadily improve. Mircro grids that empower CHIP efficiencies is expected to make huge gains. Same with smart grid empowering coordination of power use vs production. Fuel cell and hydrogen is expected to overtake petrol as fuel of need. Ocean mining of methane crystals and crude oil expected to be massive. Clean coal technology is expected to steadily improve. Mining of orbiting meteors and moon for precious metals and nuclear fuel will soon be attempted.

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      • By Mac on July 28, 2014 at 10:15 pm

        Same old R-squared double-talk. Fossil fuels will go on forever….

        The U.S. and Russia are “gas” giants. In other words, I need to cash in my Petrobas stock and invest in Gazprom.

        Barrrrf……….Wretchhhh…….

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        • By LWAPolitics on December 10, 2014 at 12:52 pm

          So let me guess….we are headed to the Wall-E view of the future earth? LOL

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      • By FrY10cK on October 11, 2014 at 2:21 pm

        Words easy. Work hard. Sunlight accumulated for 400 million years make work easy. Now hard to get accumulated sunlight. Must spend $1.50 for each dollar’s worth of Bakken crude.

        Words easy. Work hard.

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        • By LWAPolitics on December 10, 2014 at 12:52 pm

          Are you a caveman? LOL

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    • By Optimist on July 11, 2014 at 3:52 pm

      Oh STOP this pathetic argument already!

      If the ethanol-affected optimists are right, you get about a 30% return on the fuel you put into ethanol production. The pessimists argue it is more like -30%.

      Nonetheless, let’s run with the optimistic number. That would imply that the 1.7mbpd requires an input of 1.3mbpd for a net yield of 0.4mbpd.

      Not much for all that subsidy and noise…

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      • By Forrest on July 12, 2014 at 9:37 am

        Return on energy calcs very inaccurate. Ethanol industry not happy with accounting of non energy co-products of feed. Last I reviewed no allowance. Can you image the poor return on energy if gasoline could not include crude oil co-products or natural gas production? The highly prized protein and nutritious germ of corn kernel all left overs of ethanol process. In fact protein and nutrition amp up per distillery yeast and fermentation improvement. Corn endosperm part is starch. This food element actually unhealthy to bovine grass eating creatures. With the advent of 2.5 gen ethanol the leftover feed is good for all livestock, much like corn gluten. It’s not actually feed, but more akin to supplement. Ethanol process now at 3.12 g/bushel as bushels/acre steadily increase. A university just lately determined the future improvement to argonomics, seed, processing will quickly lower land mass per RFS to 15% of tillable land. They could double corn ethanol production upon present day acres. Also, all trends for energy out are trending up for ethanol and down for petrol products. Just a few ethanol processing plants utilize waste heat of power generators, farmers just starting to utilize anaerobic digestors, co-processing of cellulosic will greatly improve the ratio. Not much utilization of valuable pure CO2 coproduct per fermentation. Biodiesel production is set to triple per the 2.5 gen process, so much so that ethanol is expected to coprocess the corn oil directly to biodisel. Auto industry is hardly exploiting ethanol fuel benefits for mpg. The trend does look good upon auto technology to do so. Older flex vehicles designed to burn E85 per CAFE perks. The result, low teck gas guzzlers converted to flex fuel to double CAFE benefits. EPA has pulled the plug on such abuse. It may result in auto manufactures producing E85 only vehicles. E85 has low vapor pressure (high vapor pressure a major pollution contributor) and does not need boutique blending per regional specs of country. The fuel also can accept a array of gasoline formulations. Note: a good safety trick to lower explosion risk per fuel pump replacement….make sure the last fill was E85.

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        • By Forrest on July 15, 2014 at 7:30 am

          “The result, low teck gas guzzlers converted to flex fuel to double CAFE benefits. EPA has pulled the plug on such abuse. It may result in auto manufactures producing E85 only vehicles.”

          E85 engines already in the process.

          “The Cummins ETHOS 2.8L is designed specifically to use E-85, a clean-burning blend of 85 percent ethanol and 15 percent gasoline. To take full advantage of the favorable combustion attributes and potential of E-85, the engine operates at diesel-like cylinder pressures and incorporates advanced spark-ignition technology. It delivers the power (up to 250 hp) and peak torque (up to 450 lb-ft) of gasoline and diesel engines nearly twice its 2.8-liter displacement.” Cummins PR release.

          Note, the CO2 emissions drop 50%-58% with corn ethanol vs traditional fuel and drops up to 80% per cellulosic based E85. This should be the wheel to well greenest power source available to transportation to date?

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  2. By Edward Kerr on July 10, 2014 at 7:51 am

    Robert,
    This development of shale oil is certainly going to be a relatively short term phenomenon which is only delaying the inevitable decline in world oil production. It can be argued that the ‘fracking boom’ is also delaying the development of the alternatives that will be necessary if we are to maintain and semblance of an industrial society. (I won’t go into the argument over whether industrial civilization is a good or bad thing).
    Apparently, “where the Sun don’t shine” has a lot of residents these days and that portends poorly for all of us.

    Best regards,
    Ed

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    • By OD on July 12, 2014 at 1:31 am

      I agree with your overall point, but there are a lot of countries that have not even started to tap their shale reserves. So “short term” could end up being quite a bit longer than anyone is predicting. I think Robert has briefly touched on this before.

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      • By marvinmcconoughey on July 14, 2014 at 3:46 am

        Concur. I’ve been greatly surprised by the shale revolution and as a result am now a bit more open to claims of future energy developments.

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  3. By Maggie Hanna on July 10, 2014 at 9:21 am

    Fracing bust is on its way…. if oil companies do not invest in the technologies that are going to back fossil liquid hydrocarbon fuel out of the transport market then they will not be around long term. When a disruptive technology rolls over you, you can be part of the steam roller or part of the road. It is only by early investing in new battery tech, hydrogen, Gen IV nuclear thorium molten salt reactors, bio fuels capability, distributed smart grids and forsaking some of the value of the hydrocarbon resources in the ground, that oil companies will continue into the future as energy companies. It is going to happen anyway.

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    • By FC on July 11, 2014 at 2:36 pm

      Agreed, it is LIKELY to happen–but there are not any absolutes. The issue is that no one person (or group of persons) can accurately predict the “when” part of the equation, nor which technologies will evolve to fill any void due to failure, or the poor economics, of another technology. In the meantime, we have to go with the known resources and technology we have. In the near term, shale oil/ng is that swing resource.

      I always suggest that individuals read “A Cubic Mile of Oil”, not because I agree with every idea they promote, but to reinforce the fact the solution is extremely complex. It is only with a comprehensive energy strategy (including coal, hydrocarbons, nuclear, renewable/alternative, etal AND conservation) does the world have a reasonable opportunity to meet its energy requirements in 2050 without impacting standards of living. And, I won’t even go down the path of attempting to predict what the cost of that “unit” of energy will be–a critical determinant.

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    • By Donough on July 16, 2014 at 4:11 am

      The probem though is that for your idea to happen, at least three new disruptive technologies are needed in batteries, Gen 4 nukes and smart grids. Having been the engineer breaking and scaling up potential technologies, this is a lot to get right.

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    • By FrY10cK on October 11, 2014 at 1:07 pm

      Investment in molten salt LFTR tech should have commenced long ago, no?

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  4. By Benjamin Cole on July 11, 2014 at 11:09 pm

    “Arguably the only thing preventing the world from experiencing oil prices in the $150-$200/bbl range is the continuing shale oil boom in the US.”-RR.

    Yes, it is arguable. One might also say only oil-state thuggery is preventing the world from having $40 a barrel oil. Libya, Iran, Iraq, Syria–sheesh, there might be 25 mbd there, not exploited due to political reasons.

    But add in Mexico, Venezuela, Nigeria, Russia, where huge amounts of oil are not pumped through sheer boobery or corruption. Another 10 mbd there not exploited?

    Even the stable states, such as Saudi Arabia, operate under crony capitalism and a desire to keep oil prices up. Comparing the number of wells drilled in Saudi Arabia versus the United States is illustrative. Hundreds to one.

    I hope fracking has longer legs than many are saying. The oil-thug states appear to be devolving, if anything. The USA should have been taxing gasoline all along, but we have never had an energy policy. Note Europe has been decreasing its demand of roil since the 1980s. They had Peak Demand 30 years ago. Japan too.

    The good news is that huge increases in MPGs are possible with PHEVs, or even by driving a more-efficient car and living closer to work, Demand for oil in the USA can also fall for decades, if we had any policy sense.

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    • By marvinmcconoughey on July 14, 2014 at 3:45 am

      The world should someday begin action to curb population increases as a wide range of natural resources come under growing consumption rates. Nothing radical should be necessary: give women information and access to modern birth control will result in lower birth rates, healthier children, and possibly better education outcomes.

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      • By Calamity_Jean on October 11, 2014 at 12:43 pm

        “The world should someday begin action to curb population increases….”

        It’s already happening. In Bangladesh women have on average just over two children. All over the world, as health care improves, people become more confident that their children will survive to adulthood and modern contraception becomes more available so people are willing and able to have fewer children. The world’s population will continue to rise for a while because there are many children and young adults already in existence, but families of many children are now unusual almost everywhere. Some parts of Africa are the only exception.

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      • By LWAPolitics on December 10, 2014 at 12:48 pm

        Dumb

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    • By T-Wizzle on August 1, 2014 at 12:25 pm

      I don’t think OPEC will ever allow oil prices < $80/barrel again. They'll cut production and with surging Asian demand for a generation to come, $150+ will be the new normal.

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      • By mateo on October 17, 2014 at 3:34 pm

        We’re close to $80/barrel right now. OPEC countries are fighting for market share instead of colluding to keep prices high, so they won’t be able to stop oil from dropping below $80/barrel.

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      • By Scipio on December 9, 2014 at 4:28 pm

        Great prediction, 65 today

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      • By T-Wizzle on December 10, 2014 at 10:33 am

        I’m glad I didn’t go long on Oil futures. Let’s see what the 5 year average for crude oil is in a couple of years.

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    • By mateo on October 17, 2014 at 3:26 pm

      Most of the shale oil is only profitable when oil prices are high. If Mexico, Nigeria, and Russia increased production enough to drive prices down to $60/barrel or so, unconventional oil production in US and Canada would decline sharply and cancel out a lot of the increase.

      I agree that the US should have much higher gasoline taxes.

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  5. By Jacob David Tannenbaum on July 16, 2014 at 9:42 am

    Robert, how standard are these measurements over time? Did the 1965 data include NGLs and other detritus?

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    • By Robert Rapier on July 17, 2014 at 8:51 am

      Yes, they have been consistent over time. Apples to apples. The apples to oranges comparison where you really have to note differing composition is when you compare oil production and oil consumption.

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  6. By Gary Anderson on November 6, 2014 at 10:51 pm

    So, now the price is going down and this article is proven to be wrong in the end? Why do we now have 80 dollar oil?

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    • By Robert Rapier on November 6, 2014 at 11:17 pm

      What? What exactly was wrong about it? Please be specific.

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      • By Gary Anderson on November 6, 2014 at 11:49 pm

        Hi Robert. I don’t know what is wrong with it. But something is fishy about the whole system. Peak oil is a joke now. Consumption growth may be slowing in Asia. I think the demand estimates in Asia that were used to keep oil artificially high may have been fake. Then add to it the problem with Saudi Arabia flooding the market and our investment banks backing off trying to corner oil and we have lower prices. I think it is all a phony crock and market manipulation is real.

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        • By Gary Anderson on November 6, 2014 at 11:51 pm

          Then add the political desire to hurt Russia, which appears to be real, and you wonder about any numbers being real or manipulated.

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        • By Robert Rapier on November 7, 2014 at 12:07 am

          I don’t think peak oil is an imminent concern, but I think supply in the US has been outstripping demand growth for a few years now. I am surprised it took this long for prices to fall. Lower oil prices this year was one of the predictions I made back in January.

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    • By LWAPolitics on December 10, 2014 at 12:50 pm

      Headed toward $50 oil! Once the U.S. produced more than it consumes (coming soon) the world oil market will plummet.

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  7. By Forrest on December 11, 2014 at 7:31 am

    So, international oil consumption is at 90 MBPD of crude oil. U.S. consumes 18.5 almost 2x as much as nearest country, China at 10.

    OPEC produces 30, while U.S. is steadily increasing producing, currently at 10 and rated highest producer of the crude oil producing countries.
    Frame the above with dropping demand. Vehicle companies have come to the rescue with steadily increasing mpg models per regulated timeline of government. All things being equal the petrol fuel use should be halved within a time frame. Add to this the alternative fuel of grid power, ethanol, and natural gas. U.S. production of ethanol is 1 and international total sits at 1.6.
    Add to the above, the increasing value of petro dollar. It takes less dollars now to purchase the same barrel. Think about the fact of lower petrol consumption that may be an indicator of economic health. The economies of world appear to be stagnant and real income continues to fade. Were entering into life of stagnation as the future has been lost to government printing press operations such as Japan’s, Europe, and U.S. attempt to stimulate populace to spend their savings. Keynesian economic folly per attempting to wag the dog with cheap printing press money, compared to ushering real economic improvement to private economy that is magnitudes larger. Cheap oil is supposed to help growing economies. If the stock market tanks, it may be taken by the investor crowd as yet another indicator of international malaise of following U.S. lead to artificially manipulate economy. Were chiding other countries to not act like Germany, instead to deficit spend per printing press. Some think the short term gain from such action while positive comes at a tremendous risk cost to future. Better to suck it up and reorganize economy to the task of adjusting to new market conditions. Better to make it easier for business to make such adjustments, for example lowering regulation burden. Take the shackles off, for maximum latitude to adjust. Good to keep efficient and foundation regs, but we have strayed way to much to statism and fascism, losing our economic flexibility to big government and big business forces no compete forces of crony capitalism.

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    • By Forresst on December 11, 2014 at 7:59 am

      While crude oil is behaving in rational economics to foil OPEC control of market, what’s up with our electric power? Were attempting to likewise supply alternative energy production and efficiency regulations to lower consumption, all the while expert analysis continues to predict rapidly increasing power cost. May the comparison fail per heavy handed government intervention to our power grid? Meaning government regulators have been beaten back within the petrol sector, thus we experience gain in production as compared to the government beast raising its ugly head upon our power production and supply. We have little international market to stall dopey government control as compared. No cost competition to thwart expensive regulation. The market is captive to demands of regulators. Politicians empower regulators to have at it with business of supplying power. We artificially chosen winners within this sector. If we like the outcome of petrol, we should do likewise within our electric power. Establish a government time line to increase efficiency that is attainable and cost effective. Take the shackles off of business to invest and invent low cost power supply. Purge inefficient regs that are merely attempts to pick winners. Award low pollution solutions, but don’t attempt to control the market.

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    • By Forrest on December 12, 2014 at 7:55 am

      Examples of economic shift within the U.S. that affect real world economics. We have a population bulge aka Baby Boomers whom have accomplished most all the necessary life time purchases and currently in mode to divest themselves of toys, big houses, and investments to enjoy retirement. This change up of population character will deflate consumer spending. Same with online and smart phone apps that efficiently resell and distribute services and consumer goods. Our retail sector is within the throngs of change to become more efficient. International trading is becoming normal, easy, and most efficient. Smart phone apps such as Uber make car ownership within city optional. Marginal employees have increasingly come to the conclusion that quality of life is met with low incomes per cash economy and societal rewards. Compared low income sympathy now popular with hatred of wealthy. Why, would one improve their resume, if one looks pathetic enough to voter public to be awarded living wage. Were in the current political movement/empowerment to punish achievement and productivity and award bad or minimal good behavior, at least with low income and increasingly middle income citizens. Conversely, the rich can run the maze and usher in new invented ways to win financial gain, such as to act compassionate, send protection money to “causes”, and political operations. If they communicate correctly per the maze requirements and pay to play within political marketplace the government will award winner status for wealth creation. This is a distortion to open market competition that handicaps standard of living for average citizens. This is how South American economies tanked.

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  8. By MC_PEACE on December 14, 2014 at 6:14 pm

    oil can be found in potatoes

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