{"id":6832,"date":"2015-03-26T05:36:22","date_gmt":"2015-03-26T10:36:22","guid":{"rendered":"http:\/\/olduvai.ca\/?p=6832"},"modified":"2015-03-26T05:36:22","modified_gmt":"2015-03-26T10:36:22","slug":"goldilocks-is-dead","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=6832","title":{"rendered":"Goldilocks Is Dead"},"content":{"rendered":"<h3><a href=\"http:\/\/www.postcarbon.org\/goldilocks-is-dead\/\" target=\"_blank\">Goldilocks Is Dead<\/a><\/h3>\n<p>Five years ago I wrote an article for Reuters titled \u201c<a href=\"http:\/\/blogs.reuters.com\/environment\/2010\/02\/18\/goldilocks-and-the-three-fuels\/\">Goldilocks and the Three Fuels<\/a>.\u201d In it, I discussed what I call the Goldilocks price zone for oil, natural gas, and coal, a zone in which prices are \u201cjust right\u201d\u2014high enough to reward producers but low enough to entice consumers. Ever since the start of the fossil fuel era, such a zone has existed. Sometimes price boundaries were transgressed on the upside, sometimes the downside, but it was always possible to revert to the zone.<\/p>\n<p>But now, for oil, the Goldilocks zone has ceased to exist. This will have staggering consequences throughout the economy for the foreseeable future.<\/p>\n<p>During the past dozen years, the Goldilocks zone for oil steadily migrated higher. As conventional crude reservoirs depleted and production rates leveled off, drillers had to spend proportionally more to develop the capacity to pump the next marginal barrel. Oil prices soared from $30 in 2003 to nearly $150 in 2008, collapsed during the economic crisis, then clawed their way back to roughly $100\u2014a price that was maintained through mid-2014. But the economy did not do well with oil prices at elevated levels. Despite massive bailouts, stimulus spending, and low interest rates, the recovery following the 2008 crash was anemic.<\/p>\n<p><span class=\"Apple-style-span\">However, at $100 a barrel, the oil price was high enough to incentivize fracking. Small, risk-friendly companies leased land and used expensive drilling techniques to free oil from rocks that geologists had previously described as too impermeable to bother with. This entailed a tenuous business model that required not only high oil prices but easy money as well, as low interest rates enabled producers to pile on enormous amounts of debt.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Goldilocks Is Dead Five years ago I wrote an article for Reuters titled \u201cGoldilocks and the Three Fuels.\u201d In it, I discussed what I call the Goldilocks price zone for oil, natural gas, and coal, a zone in which prices are \u201cjust right\u201d\u2014high enough to reward producers but low enough to entice consumers. Ever since [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3],"tags":[195,328,331,412,592,1775,1081],"class_list":["post-6832","post","type-post","status-publish","format-standard","hentry","category-energy-2","tag-debt","tag-fossil-fuels","tag-fracking","tag-hydraulic-fracturing","tag-oil-price","tag-oil-price-collapse","tag-richard-heinberg"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6832","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6832"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6832\/revisions"}],"predecessor-version":[{"id":6833,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/6832\/revisions\/6833"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6832"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6832"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6832"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}