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US celebrations of the Go Forth with New Lie started off with a bang in Philadelphia, one eerily reminiscent of the Deepwater Horrorizons, the interwoven criminal network that has kept US energy prices ridiculously low start getting teased out, not by our famously locked down Corpornationalistic media, but as a result of Sharon Kelly of DeSmogBlog publishing an article highlighting Steve Schlotterbeck's presentation of what disastrous effects the shale gas revolution has had on investors.
Kelly takes an innovative approach to exposing the mindless exploitation, without mentioning once my two bête noires of flaring and suppression of electricity rates via unsustainable overproduction of the feedstock for electric production, Natural Gas. Which statement isn't meant to suggest that Kelly is remiss, but rather to point out that the rot that is eating away at this entire industry, as corrosive as that which Bush used to topple the housing sector, needn't even address the burning issues that will flare up specifically because they have, not ignored market forces, but deliberately, albeit temporarily, defeated them as though they were an invading army.
During the aughts, otherwise known as the years the criminal Bush enterprise and its associated Texas Mafia were busy skewering the entire global economy to enrich themselves and their cronies, there wasn't a peep about the coming financial imbroglio anywhere in any of the print media that I was hungrily digging through for even a crumb of information regarding the debacle staring us in the face. Like Kelly, I started to look at the only place I knew there would be some truthful reporting (it certainly wasn't in the pages of any Newspaper of record, which only printed articles encouraging citizens to keep up their mad borrowing/buying sprees, because the USA!USA! was the bestest, most resilient economy in the world! Nothing could stop the Tony Tiger economy: "We're GRRRRREAT!" And yes, housing prices really CAN keep going up and up and up ... and oh yeah, somehow that's a good thing! In other words, fuck your own kids' aspirations of ever owning a house of their own, they'll just have to wait until you're dead. That place was online where there were dozens of sites that were reporting not only on the shenanigans that were taking place half a world away in Iraq and Afghanistan, where the US was shoveling enormous piles of cash into any Bush-related enterprise that came up with even the flimsiest of business plans, but, as with the Oildrum.com website, reporting regularly on the disconnect between the need for ever-growing supplies of crude and the remarkably similar, albeit in the opposite direction, falling number of new oil discoveries: something had to give.
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| Oil Rigor Mortis |
But Oildrum.com was only one of the sites, Mike Shedlock, Doug Noland, Yves Smith, Agora Financial, the Testosterone Pit, and many more were all ringing alarm bells, and not in the manner that I do, but with reams of data and factual analysis the CorpoNational press chose to ignore to keep the "Party" going as Bernanke kept spiking the proverbial punchbowl with LSD.
The new LSD is Laughing Gas.
And Sharon Kelly uses the "blunt message about shale gas drilling and fracking" delivered by Steve Schlotterbeck to a petrochemical industry conference in Pittsburgh to report on just how ludicrous and bald-faced this new fossil fools rehypothecation really is.
Schlotterbeck starts his address by pointing out that "the shale gas revolution has frankly been an unmitigated disaster for any buy-and-hold investor", which, by the way, is all of us, as the main source of rehypohecated funds was the Federal Reserve that conjured up trillions of QE dollars in pseudo-cash to pump into the ground to make the so-called "shale revolution" appear like anything other than what Schlotterbeck calls a "disruptive technological change that has done so much harm to the industry" (Gresham's Law prevails again). And he should know. Schlotterbeck "led drilling company EQT as it expanded to become the nation’s largest producer of natural gas in 2017."
Claiming that, "The amount of shareholder value destruction registers in the hundreds of billions of dollars," Schlotterbeck states what no one else wants to hear, as, in case you're unfamiliar with Gresham's Law mentioned previously, bad money chases out good: The flood of QE dollars destroyed the investments of people cajoled into throwing their money into the "shale oil Play" (note how they love referring to the deadly serious business of investing as though it's just some kind of game, even as they use the word "Killing" to refer to that point in time when they step in and pull the rug out from under investors they've hoodwinked into surrendering their hard-earned dollars as if it were only so much Monopoly money ... "Are we having Fun yet?").
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| Bill Griffith's: A Nation of Pinheads. |
Drillers’ own numbers speak for themselves:
Spending outweighed income for a group of 29 large public shale gas companies by $6.7 billion in 2018, bringing the group’s 2010 to 2018 cash flow to a total of negative $181 billion, according to a March 2019 report by the Institute for Energy Economics and Financial Analysis.
‘Destroyed on Average 80 Percent of the Value of Their Companies’"
The response from the industry sounded more like it came from the ADA: "Drill moremoremore, Baby, Drill moremoremore" (How dya like it? How dya like it?).
"The at-the-wellhead price of natural gas in the Marcellus region was around $8/MMBtu back in 2008, and has plunged to less than $2/MMBtu today.
“And producing gas @ $2 does not make economic sense.” No. But it does make geopolitical sense.
Even as each shale "play" (if it is indeed a play, it is surely a tragicomedy) flares off enough gas to meet the energy demands of entire States in order to keep its price from collapsing to below 0, (which it already has in the Permian), the rig count to produce that gas just kept rising as the USA abrogated its treaty with Iran: shipping its Permian fracktured fairy tale oil bonanza to India, to replace the Iranian oil they were burning, even as the LNG facilities built to ship the last natural gasp of the US energy resources overseas comes online to replace the shut-in-by-trumped-up-sanctions resources of the country with the largest stores of Natural Gas in the world: Iran.
Following the exact same scenario of the Reagan/Bush, Bush/Cheney strategy of cynically using the "Free Market" manipulation of energy resources to draw down in rapid order the remaining fossil
fuels of the US bounty, not to supply the energy needs of their own country, but in order to wreak
havoc on its enemy-of-the-month-club choice, the USA once again, and goes once again uncommented on by the Corponational press that has a stranglehold on independent reporting, is pretending that the country is in immediate danger from a foreign adversary so as to use this propaganda to fly in the face of reality, construct their own cartoonish sequence of events, and rally the USA!USA! enthusiasts to take part in the deliberate and cowardly destruction of yet another country using such a flimsy facade of a puerile moral superiority that is so transparent even a Comic Book publisher would laugh if not for its deadly serious and deplorably malignant nature.
“Nearly every American has benefited from shale gas", Mr. Schlotterbeck states. But like the wife of a Mafia Donald draping herself in furs and festooning herself with ostentatious baubles to parade around in egotistical splendor, the citizens of the USA could care less whence such fortune is derived, convinced as they are that nothing more than their exceptionalism could be the reason.
But the denouement from adopting the very same policy is hardly likely to be different than the previous Republican administration's: Failure resulting in a recession so deep, that there is no possible way to dig out of it other than the one currently in use: Deception and fraud on a continuing basis, fraud so intractable it can now not be rooted out, as it isn't fraud pulled by malefactors on legitimate enterprises, but the enterprises themselves that are fraudulent; as Schlotterbeck himself demonstrates, without ever saying the word, the entire Fracking industry is BASED on fraud, hence the entire recovery, one that would be non-existent without the phenomenon of fracking, is fraudulent ... necessarily so, otherwise, we would have Hoovervilles, such as the one depicted in the movie My Man Godfrey:
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| A "Great Recession" is Newspeak for a Depression. |
You won't see the partying rich slinking down to the homeless encampments in shimmering gowns to hunt down a derelict to drag back to soirees as scavenger-hunt trophies as though Celia Fête was the hostess.
Oh no. There are no "Bushvilles", despite the fact that the plunge in the economic fortunes of a huge swath of the American population can be directly laid at the doorstep of Bush family planning. Instead, because a "Recovery" is in full swing, all those homeless people thrown onto the streets of the country and propping up the tents of the OWS movement have been all-but forgotten and the new disease-ridden and rat-infested tent cities of desperation and unremitting poverty can now in good conscience be deemed their own fault. The idea of the economic system working for only a few is a nice slogan, but what that actually means, in the sense people understood it in the 30's, has evaporated. There is no compassion, no helping hand, only a desperate "blame-the-victim" mentality fostered by a trumped-up Recovery that leaves those with jobs and opportunities patting themselves on the back for their own superiority, ignoring the fact that the vast majority of those homeless people were doing the exact same thing during the Bush expansion ... an expansion just as ballyhooed, just as fraudulent, and just as doomed as the Trump boomlet.
And just as surely the Iraq War and the incipient Iran War have the same genesis: shut in the production of competitors to fuel the profits from the fracking "revolution" in the USA. It worked spectacularly for the Bush administration for oil, to the detriment of the citizens of the US, but their fate never really mattered, any more than it does now: Shoot them down on Fifth Avenue, and they'll still believe in Capitalism being the BEST way to run an economy (into the ground ... at least we can party 'til we drop). As the fuel used to generate electric power in the US continues to migrate to Natural Gas, the same strategy, this time being inflated by a Gas bag, is in full swing. The economic impact of the switch taking place, as America continues to swaddle itself in the worldwideweb of everything even as the glut of plastic being produced as a direct result is strangling the world in its hydrocarbon embrace, the inevitable rise of the cost of that resource is already baked into the cake, as you can see from Schlotterbeck's presentation. And this is occurring simultaneous with the push to transform the transportation sector to be dependent, not on gasoline, but on Electricity. Electricity whose price is set to rise, not gradually, but, in a replay of the oil price escalation that helped bring the economy of the entire globalized world to its knees in order to provide the opportunity for the Bush cadres to rake in their fortunes from the Midnight Massacre Bernanke foisted onto the country, cataclysmically.
That is the promise of Trump's second term. A second term that is all but assured. Something which, if you doubt, one must simply look at the slate of opposition candidates to read the future (remember, the Republican slate was of a similar size), and despite all the brouhaha about boorishness of the man the GOP decided best exemplified its values, they have no one to replace him (One of the reasons the Democrats will never impeach Trump must surely be because the VP is Pence. And a Pence presidency could easily be imagined as far worse than the current one: Better a Blowhard than an Ideologue).
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| CellMates |
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