"Someone will think of something." If I had a nickel for everytime I heard someone say that in regards to Peak Oil.

Just because you don't own a car doesn't mean you wont be affected. If you don't understand that you're not seeing the big picture. As far as alternate technologies are concerned, even under the best case scenario where we discover a super technology tomorrow (like Zero Point energy or Nuclear Fusion) it would take decades to mass produce them and start the transition. We don't have that sort of time. It wont be a seamless transition. There will be a lot of chaos in the interim. And as I already mentioned earlier in the thread, we would still have a problem in the long run unless we deal with the psychology of exponential growth. And when we continue to think of peak oil as a problem that can just be solved with a new technology instead of addressing the real problem (our way of life) we're never going to address exponential growth.

It's not the end of the world. It's just the end of a way of life to which we have become acustomed to.

"Someone will think of something." If I had a nickel for everytime I heard someone say that in regards to Peak Oil.

Just because you don't own a car doesn't mean you wont be affected. If you don't understand that you're not seeing the big picture. As far as alternate technologies are concerned, even under the best case scenario where we discover a super technology tomorrow (like Zero Point energy or Nuclear Fusion) it would take decades to mass produce them and start the transition. We don't have that sort of time. It wont be a seamless transition. There will be a lot of chaos in the interim. And as I already mentioned earlier in the thread, we would still have a problem in the long run unless we deal with the psychology of exponential growth. And when we continue to think of peak oil as a problem that can just be solved with a new technology instead of addressing the real problem (our way of life) we're never going to address exponential growth.

It's not the end of the world. It's just the end of a way of life to which we have become acustomed to.


Today we have one thing going for us that all the others didn't. Along with exponential growth of the economy we have exponential growth of knowledge. They call this the information age for a reason. Information technology creates information. The ability to get more work out of the same amount of fuel is going to increase at an exponential rate. It could even be possible that the amount of work we can get per unit will increase faster than the pool of fossil fuel shrinks, that even as the amount gets smaller the work it does will increase at a faster rate.

http://www.accelerationwatch.com/spiral.html

Today we have one thing going for us that all the others didn't. Along with exponential growth of the economy we have exponential growth of knowledge.


So what? This is what makes our situation even more tragic. Knowledge means nothing unless lessons are learned from it and the lessons are applied. Scientists have been telling us for decades that we are headed for disaster with the way we are running the planet. There's an old chinese saying. "If you don't change where you're going, eventually you'll get there." Well, we're getting to disaster pretty darn soon. The arab oil embargo of 1973 was the wake up call we needed to let us know that we were too dependent on oil. And it woke us up! Everyone was concerned about oil, conservation, and alternative technologies. For about a minute. Then Ronald Reagon told them "Don't worry, be happy" when Jimmy Carter was giving it to us straight on oil. Of course the election was more complicated than that, but they voted for Reagon. Reagon tears down the solar panels on the roof of the White House, and the age of excess began in earnest. What kind of message does that send? It tells politicians that if they don't want to get elected, the surest thing they can do is give the voters bad news even if it's the truth. So they haven't talked about it. It's getting talked about a little bit now, but not nearly enough, and only because the problem has now become so enormous that a crisis of some kind can't be averted. An economic crisis on the order of a second great depression is something you can bet on. When the amount of available energy (oil) contracts every year, the economy has to contract as well because there isnt' enough energy to manufacture and transport goods. Keep that up for a few years, and you have yourself a depression.

You should check out Professor Bartlet's presentation on exponential growth that I linked to earlier in the thread. He gives a very simple example about growth with single celled organisms in a dish. They keep doubling every cycle, and in short order they fill up the dish. What happens then? The same thing that happens in nature when organisms run out of resources to consume. Population crash. Die off. You would think human beings are smarter, but our behavior collectively says otherwise. Very sad.




The ability to get more work out of the same amount of fuel is going to increase at an exponential rate. It could even be possible that the amount of work we can get per unit will increase faster than the pool of fossil fuel shrinks, that even as the amount gets smaller the work it does will increase at a faster rate.



This is a point that is often made by optimists, and it's a good point. We have become much more efficient at using oil over the years. I don't have the statistics on hand, but our economy right now uses a much smaller amount of oil as a percentage of GDP than it did 30 and 40 years ago. But that doesn't mean anything. Why?

Because increased efficiency is meaningless unless the total amount of oil being consumed decreases.

Thus far, everytime we increase efficiency, all we do is use increase our usage of oil. It's called Jevon's Paradox. By trying to fix the problem you actually make things worse. Here's an example often used with Jevon's paradox and peak oil.

Lets say you own a computer store, and you find out about peak oil. You want to help out with conservation, so you take a number of measures to decrease oil usage in your store. You switch to more efficient LED lights, you turn the thermostat down and have your employees start wearing sweaters, etc. etc. Lets say that your efforts produce a savings of $1000 a month. Pretty effective. Now what are you going to do with that money? Either one of two things. You are probably going to reinvest that money into the business and expand so you can sell more computers. The average computer takes ten times its weight in fossil fuels to produce. Or, let's say that you don't expand the business and decide to simply put the money into the bank. Because of fractional reserve banking, for every $1 you put into the bank, the bank loans out $10 to someone else. Because the loan has to be paid back at interest, this requires the economy to grow. In order for the economy to grow you need more oil. In both examples you have made the situation worse by trying to help. Or, lets say you save the money and because you know about fractional reserve banking, you decide to simply put the money under your mattress so the bank isn't creating more money via loans. What happens then? At the very least, you have created more spare capacity in the system and made the price of oil cheaper for someone else to buy.

Unless everyone is agreeing to conserve energy and increase efficiency, things are only going to get worse.

The US consumes the most oil by far. Lets say the US actually made an effort to conserve oil. What would that do? It would bring the price of oil down and make it cheaper for the Chinese to increase their consumption and their standard of living. How happy do you think the average American would be knowing that their savings is allowing millions of Chinese to begin enjoying a way of life that they are giving up? Not too happy. It wouldn't work.

A lot of cooperation is needed on a global level to address this problem, and right now it doesn't look forthcoming.

http://www.accelerationwatch.com/spiral.html


http://dieoff.org/page125.htm

Unless everyone is agreeing to conserve energy and increase efficiency, things are only going to get worse.

What everyone agreees to is a non-issue, it makes no difference whatsoever. Remember this is a thread about peak oil. Sometime within the next 5-20 years oil production is going to enter a phase of decline. No one has to agree to anything because the issue will be forced upon us. There will no be enough oil so those two things will happen by default.

Repeat after me, necessity is the mother of...
I'm sure there will be other newer technologies being developed as we speak. I'm not going to lose sleep over it.
I'm sure that's what they said at the start of the dark ages too. "Necessity" is a big word, and can be a synonym for "need", "want", "crisis", even "apocalypse". In other words it could get pretty bad before "they" fix it
The "newer technologies" already exist - bikes, buses, trains, feet.


I don't own a car anyways.Good.

What everyone agreees to is a non-issue, it makes no difference whatsoever. Remember this is a thread about peak oil. Sometime within the next 5-20 years oil production is going to enter a phase of decline. No one has to agree to anything because the issue will be forced upon us. There will no be enough oil so those two things will happen by default.

What everyone agrees to is a non issue? Are you crazy?

So if the price of oil increases dramatically, everyone is going to automatically agree that it's the result of Peak Oil and our way of life? I don't think so. People are going to be angry, and they are going to want someone to blame. And there will be no shortage of finger pointing. The politicians will be blamed. The oil companies will be blamed. The oil producing nations will be blamed. Really the people we should be blaming are in the mirror. We're all to blame. I was more or less a mindless consumer zombie myself until I found out about peak oil. We'll all agree there is a problem. No doubt. But I highly doubt people will agree about what the problem is. And when you have the right solution for the wrong problem, you have no solution at all.

Nature will win out in the end. I know that. Circumstances will compel individuals to make changes to their lives whether they like it or not. But when the crisis occurs, what everyone agrees on will be vitaly important. What we'll need at that point is a huge effort at conservation and making changes to our way of life before nature makes them for us more painfully. If we don't agree that the problem is not peak oil (instead of the oil companies, or some other scape goat) what we'll get are BS solutions like hydrogen, or solar panels, or invading another country or two in the middle east.

or invading another country or two in the middle east.

Close. Competition for oil will lead to war, it's already begun. Do you think we are trying to 'remake' the middle east into some model of democracy and kumbya out of the goodness of our hearts? The strategic interests of the United States revolve around being in a position to project our military power to not only protect our own energy supplies, but to deny them to competitors. (Look up 'Project for a New American Century', which is one of the drivers of the current US administration and their neocon cheerleaders foreign policy). Just as oil was one of the driving forces that led to war with Japan in the last century, it will probably lead to war with China sometime in the future. Bottom line, oil will be needed for driving our war machine and many of its current non-military uses will be rationed severely. The economy will tank and our mobile society will be forced to revert to self-sustaining communities. There will be an exodus from communities that cannot sustain themselves while those that can will resist allowing the refugees to overburden their own already strained population. All of the possible ramifications and effects would fill a War & Peace sized volume and I really don't feel like depressing myself or anyone else trying to outline the entire doomsday scenario.

Of course this is just my own perception and I ain't no prophet, but I don't see any other possible outcome unless people start acting NOW to get involved and change the direction we are moving in. That means not only identifying alternative, sustainable energy sources and bring them quicky into the mainstream, but also changing our entire culture. This is no small task and it can happen in two possible ways: in orderly small steps that make incremental change over many years, or as a result of a major event, war being the most likely. I'd prefer the former, but I am not optimistic that enough time, or will, exists to make it happen that way. I hope I'm wrong, but IMHO unless people wake up and pull together to speak with one loud voice to demand change, the America, and indeed the world, that we know today is on it's way to a lot of pain.

So who wants pie?

What everyone agrees to is a non issue? Are you crazy?

No. It does not matter. Right now, cars or eletricity, 95% of the energy created is wasted. Someone brought up how much energy it takes to create hydrogen, well, that is already factored into the equation. But we are building up the infrastructure to change that. The amount of time it takes to turn an idea into a product is getting shorter. The amount of time and money it takes to retool factories is getting smaller and smaller. They are even now building new plane models without even making a proto-type first due to the power of computer models. All we have to do is keep on doing what we are doing and we will have an infrastructure so powerfull that we will be able to rebuild the world faster than you would believe possible. There is going to be more change in the world in the next 15 years than there was in the last hundred.

Did you even read my comments about the hydrogen economy in my first post to the thread?

All we have to do is keep doing what we're doing? What we're doing now is consuming oil en masse. EVERYTHING is dependent on oil. We're so dependent on it, that is even has severe implications for our use and development of alternative technologies. The alternatives all run on advanced technologies, and the technology runs on oil.

For example (I have a lot of these with peak oil, don't I?) lets say we were running out of water because 3% of the water that evaporated every year was escaping the earth's atmosphere. What substitutes could we drink instead of water? Gatorade, apple juice, soda? Nope. None of them. Why? Because they are all made of water. So when the supply of water starts to run out, the supply of the alternatives is affected as well. For a real world example of this with oil, just look at the much touted coal. We're all going to turn to coal and it'll be great, right? Sure. Maybe. But how do we get that coal out of the ground? We have to mine it with big machines. What do those machines run on? I'll give you a hint. It's NOT magic pixie dust.

15 years more of doing what we're doing? What happens if oil production has peaked this year (it may well have, we wont know exactly until the peak is in hindsight), and then declines by a rate of 7% per year. That's entirely possible. Then what happens to all the advanced technology, increased efficiency, and the economic system they all depend on that you're looking forward to so much? They're screwed. That's what. The world certainly will be changing in the next 15 years more than it has been, ever. But I don't think it'll be nearly as positive as you beleive it will.

The best indicator we have of the supply of oil in the foreseeable future is the price. The market does not believe that we are facing any imminent scarcity. At least, the market doesn't believe we are facing any imminent shortage of energy, as it anticipates-- correctly-- that alternative sources will be substituted for oil in many ways should oil become scarce.

You could believe that the doom-and-gloom literature has got it right, contrary to the market. This would be a departure from the pattern of various scare stories that have seized people's imaginations over the past forty years. It would also be contrary to the most obvious facts about human development. Humankind will not sit by passively in response to oil scarcity. This fact is probably the most important one informing the market price of oil.

At any rate, if you believe otherwise, buying a bicycle is a bad idea compared to your alternatives. You should have invested heavily in oil stocks. You can make a killing when the price goes through the roof.

Of course, sophisticated investors are in the same position, and *they* are not investing heavily in oil or energy stocks. Why not?

Some part of the answer can be found here:

http://www.gasresources.net/Lynch(Hubbert-Deffeyes).htm

Another part of the answer is that the industrial age has demonstrated over and over again that it is a bad bet to bet against human ingenuity and determination to solve technical problems. The market is also well aware that predictions of scarcity have always underestimated the effect of price on reserve estimates. Of course, the so-called "peak oil" crowd claims they are avoiding this error this time. Whether they are right you can decide for yourselves, but bear in mind that the large majority of people who are in a position to know don't believe them.

The best indicator we have of the supply of oil in the foreseeable future is the price. The market does not believe that we are facing any imminent scarcity.

Oil this year has continually been priced at over 500% of it's year 2000 average, with spikes close to 700%. Do you really think that's indicative of market stability? :rolleyes:

The best indicator we have of the supply of oil in the foreseeable future is the price.

And why has the price of oil more than doubled in recent years? I think a good indicator of what future oil prices will be is the discovery rate of oil. Global oil discoveries peak in 1964. You can't pump it out of the ground if you haven't found it. Since the year 2000, discoveries of mega fields has dropped off to almost nothing. In 2003 and 2004 no mega fields were found at all. Chris Skrebowski of the UK Petroleum review has been following the mega projects, and his analysis shows that if the economy continues to grow at its present rate and oil consumption increases follow, it is a certainty that oil demand will surpass supply no later than the end of 2007. It takes at least 4 or 5 years to bring a megafield online after discovering it. So we could find a new Ghawar field (the largest field in the world, located in Saudi Arabia) tomorrow, and it wouldn't make a difference to the supply/demand situation before the end of the decade. So either one of two things will happen. Either there will be a recession large enough to curtail demand before then, or prices will shoot up dramatically to create demand destruction. You can check out an interview with Skrebowski here. (http://www.energybulletin.net/5266.html)



The market does not believe that we are facing any imminent scarcity. At least, the market doesn't believe we are facing any imminent shortage of energy, as it anticipates-- correctly-- that alternative sources will be substituted for oil in many ways should oil become scarce.




And what alternatives are you refering to exactly? Cornucopians always point to magic alternatives that will be able to replace oil perfectly. But a serious analysis of current alternatives to oil shows that there is no combination of alternative energy that will allow us to consume energy the way we are consuming it now. Hydrogen, solar, wind, nuclear, etc. etc. None of them have the same energy profit ratio that oil does. And a massive infrastructure of alternatives isn't going to simply spring up out of the ground when we need them. It takes many years and a lot of investment for that to happen. Will alternatives be substituted for oil when oil prices increase? Of course they will. But that doesn't mean that the alternatives will be enough to meet our energy needs, or that seemless transition to alternatives is a given. Far from it. We're going to run into a lot of problems. Michael Kane gave a great speech about the problems with alternatives at the Petrocollapse Conference, titled "Alternative Energy: Too little, too late." You can find it in the link to the conference I posted earlier.




Humankind will not sit by passively in response to oil scarcity.




There's not a doubt in my mind we will respond to the problem of high oil prices when the oil shocks really start to hit home. But as I've said more than once responding to xyz, just beacause oil prices increase doesn't mean we will recognize that it is due to geological reasons. We're very likely to get scape goats and address the wrong problem.





At any rate, if you believe otherwise, buying a bicycle is a bad idea compared to your alternatives. You should have invested heavily in oil stocks. You can make a killing when the price goes through the roof.




If I had the money, believe me, I would have. I would have been placing put options against the airlines as well. I saw the bankruptcies of airlines coming from a mile away. The airlines will be the first industry to get killed by peak oil.





Of course, sophisticated investors are in the same position, and *they* are not investing heavily in oil or energy stocks. Why not?

Some part of the answer can be found here:

http://www.gasresources.net/Lynch(Hubbert-Deffeyes).htm



Anyone here believe oil is an infinite resource created by geological processes deep in the earth? Lynch does.



Another part of the answer is that the industrial age has demonstrated over and over again that it is a bad bet to bet against human ingenuity and determination to solve technical problems.



Necessity is the mother of invention, and for the past 100 years oil has been the father of invention. Nothing has been mass produced without it.



The market is also well aware that predictions of scarcity have always underestimated the effect of price on reserve estimates.



That's a good point. As the price of oil rises, it will make new fields that were once unprofitable to produce profitable. But as far as reserve estimates themselves are concerned in general, most of the oil producing nations are lying through their teeth about how much oil they have. In the 1980's OPEC changed its rules so that the amount of oil a member nation could produce corrosponded with their reserves. Overnight they all doubled and tripled their reserve estimates. They have never been independently audited. Data transparacy on reserve information is something Matt Simons is pushing for. If we could have a neutral 3rd party go in and check out all the data and fields of the big oil producing nations, it would settle the peak oil debate overnight. We would know immediately if the producers will be able to meet demand for the forseeable future, or if we are in fact near peak. Thus far, nations like Saudi Arabia just keep increasing their reserve numbers when they are questioned on whether or not they will be able to increase supply. They keep saying "Trust us".



Of course, the so-called "peak oil" crowd claims they are avoiding this error this time. Whether they are right you can decide for yourselves, but bear in mind that the large majority of people who are in a position to know don't believe them.

Can't argue with you there. The peakers are certainly in the minority. I'm confident time will prove us right though. That there are limits to growth is common sense to me. But the economists with their PhD's say otherwise. We'll see who is correct eventually.

Only the government can fix the problem. The rest of us can get very rich in the post-oil world by building powerplants now...

(nuclear, wind, solar, biomass, coal)

A number of other business to prepare for the crisis can make sense as well:

Electric locomotives
Overhead electrification
Electric mining equipment
Trolley manufacturing
Standardized factory-produced apartment buildings (to rapidly rebuild the city)
the list goes on...

Humans are essentially self-serving parasites. We will continue to do what is easiest if possible. If we have some money, we will use the phone instead of walking to our friend’s house to ask a question. We will ride bikes instead of walking, even if fewer pedestrians die than cyclists. And as long as there are roads, and fuel many will be able to afford driving for years to come.

The projections from people who are smarter than me, project continued growth in car sales for years to come.

However I think that there is reason to rejoice. Conservative groups are now starting emotional appeals and, stupid arguments about the evil “car bashers”.

See http://www.bikeforums.net/showthread.php?t=155041

Maybe so, it all depends if they find a better sustainable way to run them.

Cars are such an ingrained part of North American culture, I think most people will drive them until it becomes infeasible (too expensive) or impossible (no more resources). Consequently, there is tremendous economic incentive to develop technology that will enable people to continue driving - improving fuel economy, new energy sources, etc.

Will it happen? People who are much smarter than me can't predict the future with certainty, so who knows. The sad thing is, if people used private vehicles more conscientiously, cars could be around almost indefinitely. There's no reason a person should have to drive everywhere for basic errands like shopping. Cars only need to be used occasionally for longer trips - not as an everyday means of transit.

Peak Oil is a symptom of a larger problem, and that larger problem is exponential growth. There is an EXCELLENT lecture on the subject by Professor Albert Bartlett. You can view it here (http://edison.ncssm.edu/programs/colloquia/bartlett.ram) or you can download it here. (http://edison.ncssm.edu/programs/colloquia/bartlett.rm)
Thanks for posting that, it was really interesting! I've forwarded it to many friends and family who are teachers or lecturers.. (he he, got to get the kids while their minds are young and impressionable, no? ;) )

(he he, got to get the kids while their minds are young and impressionable, no? ;) )
No. Got to get to them when they're open minded and not set in their ways.

I think that there will be fewer miles driven per car. But as the easy to get to gas runs out in the next 10-30 years, the price of gas will go up and so other more difficult to get at oil will be extracted. Still the price will go up more as demand increases and that oil becomes even harded to get. Right now there are electric cars. I've seen a car that does 0-60 in 5 seconds, and you can charge it while your at work. Right now that car, (probably not more than 10 exist) costs $500,000. Companies will continue to develop electric technologies and the price will slowly drop. Perhaps a new technology will appear, (or exxon will release one of the patents that it bought in the 70s for the super duper fuel cell), and that will displace the combustian engine from the market place, but unfurtunately I believe that cars will be with us until our planets last gasp, or some bug takes all the humans away.

Now if all of the raods where to turn to mud there'd be no cars.

I figure that cars are largely not needed. There are many ways that people can reduce thier dependantcy on oil and cars. Telecommuting might be a good option for many. I certainly think that we should all get behind laws that encourage a movement away from oil. Also laws and designs that make operating a motorized vehicle safer would be a positive change. I think that as the price goes up you will find people using the car when needed not for the heck of it. I have a friend who lives in Turkey. Her familly has a toyota. But since gas is about $10 a gal, they use it only only instead of buying bus tickets, when the whole family needs to vistit a realative, or if there is an emergency. But they still have and use a car.

As far as being car free I think that that is not too much of a problem, depending on where you live, your physical condition, age, desires and so on. However being oil free is a problem. Even bike tires are made from oil. How did the vegies get to the store where you walked or bike to buy them?

Certainly most wont starve when the oil runs out, so there will be a movement towards locally grown vegies and stuff and that will cost a bundle.

Right now there are electric cars.

Not a solution...the electricity has to be generated


Certainly most wont starve when the oil runs out, so there will be a movement towards locally grown vegies and stuff and that will cost a bundle.

Let's hope you're right. Current agriculture is heavily dependent on the oil industry both for fuel and fertilizer, so it may be a lot less productive in the future. And global fish stocks are depleted.

Certainly most wont starve when the oil runs out, so there will be a movement towards locally grown vegies and stuff and that will cost a bundle.

That's one of the scarier parts about Peak Oil. All of the pesticides are made from oil. All the fertilizer is made from natural gas. Natural gas is peaking in north america as we speak, and will actually be completely depleted by the year 2020 in North America. Worldwide there is actually a lot of natural gas, but it's not nearly as easy to transport as oil is. The percentage of oil and natural gas used to make pesticides and fertilizers is fairly small, and we can of course move towards locally grown organic food. It's a very sane, rational, simple response to the problem. We should be doing it now, but we're not...

Thanks for posting that, it was really interesting! I've forwarded it to many friends and family who are teachers or lecturers.. (he he, got to get the kids while their minds are young and impressionable, no? ;) )

You're welcome. I love that video. Anyone who can watch that video and still think we have no problems with oil and growth in the economy is absolutely nuts. There are more of them than you might think. They're called economists. :eek:

And why has the price of oil more than doubled in recent years? I think a good indicator of what future oil prices will be is the discovery rate of oil.

A much better indicator is the price of oil futures. As I said above, they are nowhere near where they would be if the market anticipated imminent scarcity. So, again, the point is that the large majority of those in a position to know-- sophisticated investors, large oil producers, and large consumers-- simply don't agree with the pessimistic "peak oil" predictions.

I think there's not much point in emphasizing this fact, though. It simply doesn't seem to impress you the way it should. Others can decide for themselves what to make of it. Whom should we believe? A small group of alarmists-- a group with a well-documented record of false predictions of scarcity? Or the large majority of professional investors, producers, and consumers whose vast fortunes depend on predicting the future price of oil accurately?


And what alternatives are you refering to exactly? Cornucopians always point to magic alternatives that will be able to replace oil perfectly. But a serious analysis of current alternatives to oil shows that there is no combination of alternative energy that will allow us to consume energy the way we are consuming it now.

You are obviously well informed on the pessimistic peak oil literature, but you are not very sophisticated in your assessment of the way the energy market functions, and thus how energy sources are found and developed. There are large amounts of coal, tar sands, and shale, all of which can yield fuels like gasoline at higher cost than light crude does now-- and for longer than a few decades, too. Canadian tar sands are now included in the known world reserves by the USGS, for example, as the technology for the cheap extraction of fuel from that source has improved. Non-light crude oil energy sources are only one aspect of the future fuels market, though. As prices rise, alternatives like electric batteries will also become more economical to research and refine, introducing other options for usable transportation energy.

It is the overall assessment of these and other possibilities-- undertaken by all of those with a financial interest in knowing-- that informs the price of oil.

Your emphasis on "energy profit ratios"-- a favorite buzz phrase of environmentalists now-- betrays the mistake. What will drive development is economic profit ratios. Fuels that are more or less energy dense will be more or less profitable depending on a range of factors.

What is bewildering is how the simple, realistic, and sober extension of the past century of the development of energy is dismissed as "miraculous" or "cornucopian". It is nothing of the kind. What would be the most radical departure from the past would be if this latest round of oil scarcity predictions-- a feature of American life every fifteen years or so for the past hundred years-- turned out to be right.

Just consider that the overwhelming consensus among public scientific-- as opposed to economic-- experts in 1980 was that oil prices in 2000 would be well over $100 a barrel, that proposals to extract oil from deep sea beds were "cornucopian fantasies", that assumptions that we would produce much more per unit of fuel expended in the future were far too hopeful, etc., etc., etc. Yet even with the price of oil today much lower than was predicted twenty-five years ago, extraction technology has improved well beyond what the doom-and-gloom crowd thought possible. Oil has been found and extracted from a range of locations thought unrealistic, including deep sea beds and freezing seas. We produce more GDP per unit of fuel than every before. And in 2000, known reserves of oil were larger than they had ever been, as opposed to being on the verge of "running out".

The question for the future is not just a question about new sources of light crude oil. The question is whether the prospects for future extraction of light crude, and the development of fuels from alternative sources, are dim, bright, or somewhere in between.

Given our imperfect knowledge, it is possible we will discover there is very little usable energy left on earth, and that the market has seriously underbid the price.

It is possible, but we have to make judgments on the basis of the best evidence that we have. The market provides precisely that best evidence. Passages from alarmist books and speeches are not very persuasive in comparison.


Anyone here believe oil is an infinite resource created by geological processes deep in the earth? Lynch does.


Your enthusiasm is outpacing your knowledge here, again. Lynch does not make this claim, or anything resembling it. You're confusing him with someone else.


That's a good point. As the price of oil rises, it will make new fields that were once unprofitable to produce profitable. But as far as reserve estimates themselves are concerned in general, most of the oil producing nations are lying through their teeth about how much oil they have.

Again, the matter is not so simple as finding more underground reservoirs of light crude oil. If it were, the price of oil would be much higher than now. Present developed light crude reservoirs compete not just against future light crude reservoirs, but against a range of alternative sources of portable fuels, including fully electric systems, as well as against the prospect of reduced use-- i.e., conservation measures. Again, the market reflects the expert assessment of all of these possibilities.

Merriwether,

I have a question about those sophisticated experts you mentioned who are in a position to know the future of oil production and consumption. What special methods and information sources do they have that are inaccessible to, or beyond the comprehension of, the interested citizen?

A much better indicator is the price of oil futures. As I said above, they are nowhere near where they would be if the market anticipated imminent scarcity.The markets aren't thinking a generation into the future, or even 5 years. As well, markets have a certain degree of herd mentality, and the market bubbles they create and believe in sometimes burst; so even though "the experts" think there's no imminent fuel shortage, they can either be wrong, or more likely, they only care about what's going to happen in a few weeks or months, while people who expect to live few years and leave children and grandchldren behind have a longer view.

A much better indicator is the price of oil futures. As I said above, they are nowhere near where they would be if the market anticipated imminent scarcity. So, again, the point is that the large majority of those in a position to know-- sophisticated investors, large oil producers, and large consumers-- simply don't agree with the pessimistic "peak oil" predictions.




I don't disagree with you. The moment the market recognizes peak oil is a reality there will likely be a panic, and there's no telling how high the price of oil will be then.




I think there's not much point in emphasizing this fact, though. It simply doesn't seem to impress you the way it should. Others can decide for themselves what to make of it. Whom should we believe? A small group of alarmists-- a group with a well-documented record of false predictions of scarcity? Or the large majority of professional investors, producers, and consumers whose vast fortunes depend on predicting the future price of oil accurately?



It's true that the end of oil has been predicted many times. But every prediction should be examined on its own merits. Predictions passed would generally look at the amount of oil we had in reserve, divide by annual consumption, and presto, instant timetable for the complete depletion of oil. But it never happened. Why? Because we found more oil. So where's the new oil reserves we're to find to replace current consumption? They are no where to be found. Discoveries of new mega fields have fallen off to practically nothing since the year 2000. Worldwide, discovery of new oil fields peaked in the mid 1960's.

Optimists love to point out how inaccurate predictions of oil scarcity have been, but they conveniently forget to mention the one person who was dead accurate - M. King Hubbert. In 1956 he predicted domestic peak for the lower 48 states, and he was completely ridiculed. At the time the US was the world's largest oil exporter and no one could conceive of us even starting to peak. But Hubbert saw that discoveries of new oil fields in the US had peaked decades before, and that virtually every sqaure inch of land that was likely to contain oil in the US had already been explored. He then took current rates of consumption, factored in for demand growth, and calculated when we would approximately reach the half way mark. He noted that in individual fields production tended to peak when half the field was depleted. So his once great reputation was tarnished and everyone laughed at him right up until (and even for a few years after) 1970 when we peaked, just as he predicted he would. It's been falling every year ever since.

Peak Oil theory is nothing more than Hubbert's method extrapolated to the world as a whole. Discoveries of new fields peaked decades ago, and rates of consumption continue to increase every year. So there will be enough oil for everyone how exactly....?



You are obviously well informed on the pessimistic peak oil literature, but you are not very sophisticated in your assessment of the way the energy market functions,

drum roll please....

and thus how energy sources are found and developed.



You're right. I'm not very sophisticated in examining the market. Frankly though, I don't think I have to be. I don't think the market is all powerful. Highly efficient, yes. But you seem to believe that if the market wishes it, new supplies will be there. Throw enough money at holes in the ground, or in development of alternatives and all will be well. As demonstrated by this....




There are large amounts of coal, tar sands, and shale, all of which can yield fuels like gasoline at higher cost than light crude does now-- and for longer than a few decades, too. Canadian tar sands are now included in the known world reserves by the USGS, for example, as the technology for the cheap extraction of fuel from that source has improved. Non-light crude oil energy sources are only one aspect of the future fuels market, though. As prices rise, alternatives like electric batteries will also become more economical to research and refine, introducing other options for usable transportation energy.

Coal - is there a lot of it? Yes. But if you factor in increased rates of consumption to compensate for a peak in oil production, there's not quite as much as you think. Have you seen the lecture I linked to from Professor Bartlet?

Tar sands and shale - these are an absolute JOKE. They are NOT the same as oil. They are not as easy to produce. Oil you pull out of the ground with a giant straw basically. Oil sands have to be mined more like coal. And after that, you have to heat it to liquify it. That decreases its energy profit significantly. It simply is not the energy rich resource oil is. And even if it were, it's a moot point. Why? Scalability. It's not a resource you can extract at any arbitrary rate. Currently the alberta tar sands are producing (I think) 1 million barrels of oil per day. I've heard it mentioned that if they put a huge effort into it, they could increase production to (at most) 5 million barrels per day, after years and billions and billions of dollars of investment. Current oil consumption is aproximately 83 million barrels per day. 5 million out of 83 per day hardly seems like a resource that will solve all our problems. It's even worse when you consider that the economy and rates of consumption have to increase every year under our current economic system, which you seem to have so much faith in.

Optimists love to point out that the oil sands have enough reserves for soooo many years of consumption. If you can't get as much as you want when you want it, what does it matter? If you have a trillion dollars in the bank, but can only withdraw $2 a day, how rich are you really?



Your emphasis on "energy profit ratios"-- a favorite buzz phrase of environmentalists now-- betrays the mistake. What will drive development is economic profit ratios.


Without the proper energy profit ratios, economic profit ratios wont exist. I could actually go on and on about this one setence, but I'll save it for another post.



What is bewildering is how the simple, realistic, and sober extension of the past century of the development of energy is dismissed as "miraculous" or "cornucopian". It is nothing of the kind. What would be the most radical departure from the past would be if this latest round of oil scarcity predictions-- a feature of American life every fifteen years or so for the past hundred years-- turned out to be right.



Right now our entire civilization's dependence on oil cannot be overstated. It runs on oil. Development of energy over the previous century? What development of energy over the previous century? All we've been doing is using up non renewable resources at ever increasing rates of consumption. What real alternatives have we developed to fossil fuels? None. We've developed alternative energy sources that compliment oil and other fossil fuels, but none of them are really ready for prime time. Solar? Wind? Does anyone here think we'd be able to run our society on resources like these alone? The only notable alternative we've developed in the whole century was Nuclear Fission, and even that is riddled with problems. On the horizon, what do we have? Hydrogen? I've already discussed the problems with that.

So when I make a realistic, sober extension of our energy development over the previous century into the next one, what do I see? I see the depletion of non renewable resources that will create a lot of problems.



Just consider that the overwhelming consensus among public scientific-- as opposed to economic-- experts in 1980 was that oil prices in 2000 would be well over $100 a barrel, that proposals to extract oil from deep sea beds were "cornucopian fantasies", that assumptions that we would produce much more per unit of fuel expended in the future were far too hopeful, etc., etc., etc. Yet even with the price of oil today much lower than was predicted twenty-five years ago, extraction technology has improved well beyond what the doom-and-gloom crowd thought possible. Oil has been found and extracted from a range of locations thought unrealistic, including deep sea beds and freezing seas. We produce more GDP per unit of fuel than every before. And in 2000, known reserves of oil were larger than they had ever been, as opposed to being on the verge of "running out".


Technology has made some great gains, but I think you're putting too much faith in it. I bet you were shocked by that last sentence coming from me, weren't you? :p

Matt Simons loves to tell this story about an encounter he had with other big oil people (the kind of people you put so much faith into telling us where the market will go). At the time he predicted that the North Sea would peak around the year 2000, and he was dead on. The result? The UK is now producing 34% less oil in 2005 than it was 1999. That's from a BBC article. (http://news.bbc.co.uk/1/hi/business/4402448.stm) I may come across as a doomer to people not initiated to peak oil, but in the peak oil community I don't think I am. But if we experience those kinds of depletion rates worldwide after we peak...then yeah, you can put me into the Mad Max camp. New technologies have allowed us to extract oil from hard to reach places that we couldn't access before, but more than that they've just allowed us to suck out the reserves we do have at an even faster rate.

And as far as less energy use per GDP growth, that's true, but not as important as it appears on its face. Why? Because we're still using much, much more oil than we were 25 years ago. Increased efficiency is meaningless unless rates of consumption decrease as well.




The question for the future is not just a question about new sources of light crude oil. The question is whether the prospects for future extraction of light crude, and the development of fuels from alternative sources, are dim, bright, or somewhere in between.

Given our imperfect knowledge, it is possible we will discover there is very little usable energy left on earth, and that the market has seriously underbid the price.

It is possible, but we have to make judgments on the basis of the best evidence that we have. The market provides precisely that best evidence. Passages from alarmist books and speeches are not very persuasive in comparison.



I completely agreed with everything you said up until "The market." I'm curious, what do you think of the dot com bust of 5 years ago? I would think that if the market was half as intelligent and all knowing as you make it out to be, such irrational exuberance wouldn't occur.


Your enthusiasm is outpacing your knowledge here, again. Lynch does not make this claim, or anything resembling it. You're confusing him with someone else.




I think you might be right. But after a while all the cornucopians seem the same to me. Their message is always the same - there are no limits to growth, and we can go on increasing our rates of consumption along with the economy indefinitly.



Again, the matter is not so simple as finding more underground reservoirs of light crude oil. If it were, the price of oil would be much higher than now. Present developed light crude reservoirs compete not just against future light crude reservoirs, but against a range of alternative sources of portable fuels, including fully electric systems, as well as against the prospect of reduced use-- i.e., conservation measures. Again, the market reflects the expert assessment of all of these possibilities.



I don't put much faith in the alternatives. And as far as conservation goes, the way our economy is currently set up any serious efforts at conservation are akin to asking for a recession. And no, I don't think the markets offer the best assessment.

Current growth in the US is about 3.5%, that means doubling every 20 years..........anybody really think the world will be able to supply the US with an extra 8 million bpd of gasoline or 16 million bpd of crude oil and do it in less than 20 years? I sure as hell dont. Especially when other countries are faced with the same issues. World oil production for all practical purposes has peaked or will have very shortly. I think the Saudi's are lying thru their teeth when they say they can provide the increases they claim yet have FAILED to do so thus far. Companies like BP are already sounding alarms about the world oil situation. There is lots of oil available, heavy sour crude is $35/barrel right now on the open market. The world is almost swimming in heavy crude, problem is, the profit margin and pollution of refining it makes it an ugly proposition, thats going to progressively worse.

China's growth has been red hot. I think it's been 8% for the past 10 years? That means they have more than doubled.

Weren't futures traders bullish on Enron right up until that bubble burst? And similarly with tech stocks circa 2000?

As for the previous "false" predictions of oil crises, that seems to me like driving toward a cliff in dense fog. A person in the back seat has said "We're about to go over the cliff!" several times. Just because we haven't gone over the cliff yet doesn't mean much. We need to stop the car, or at least slow down enough to see where we're going.

I sincerely hope this doesn't turn out as badly as it seems likely to. I do want to believe in our ability to find a solution. What about nuclear fusion?

That's a good analagy. It's kind of like the story of the boy who cried wolf. Eventually someone will make a dire prediction about oil and be absolutely right.

Nuclear fusion is a no good. It's been 40 years away for the past 50 years. As I've said in previous posts though, even if we did discover a dream technology like Nuclear Fusion, that still wouldn't solve our problem. Nuclear Fusion would allow us to meet our current energy needs and then some. But if the economy and our rates of consumption keep growing, eventually we would hit a ceiling in some other resource that we can't find a substitute for. The real problem is exponential growth.

Is there no model for sustainable, no-growth prosperity?

To my knowledge, no there is not. That doesn't mean one isn't possible though! Reforming our financial system would be a great start.

It occurs to me I keep talking about a financial system that requires growth without fully explaining it. There is a great post explaining our debt based monetary system that you can find on PeakOil.com here. (http://peakoil.com/fortopic1362-0-asc-0.html)

A much better indicator is the price of oil futures. As I said above, they are nowhere near where they would be if the market anticipated imminent scarcity. So, again, the point is that the large majority of those in a position to know-- sophisticated investors, large oil producers, and large consumers-- simply don't agree with the pessimistic "peak oil" predictions.
...

NYMEX Light sweet crude is trading around $58 a barrel right now. How did the futures market price December 2005 crude in the past?

Dec 1998 - $18
Dec 1999 - $18
Dec 2000 - $21
Dec 2001 - $21
Dec 2002 - $23
Dec 2003 - $26
Dec 2004 - $43

This poor record does not support the idea that oil futures prices can be used to make meaningful long term predictions about oil prices.

There are several items raised by several posters, and I cannot respond to them all. In particular, to those who doubt that the commodities markets are rational, I am not interested in debating the question. It has nothing to do with oil in particular, but is a skepticism about market trading more broadly. This kind of skepticism is best addressed by Econ 101 rather than by anything I can post here.

One thing worth noting, though, for those indulging in class-discussion rhetoric about the "all knowing" market and the rest, is that all that I am claiming is that the futures prices are better evidence of the scarcity of oil than alarmist literature. That is, to say the least, a much lower hurdle that than the market is "all knowing" or any other such overheated silliness. Since it seems even this obvious point needs to be said aloud, this view is also consistent with the possibility that the market is underpricing oil, and that the market has made mistakes in pricing of other goods and services in the past.

The view that the market is radically underpricing oil today is one that has to be supported, and substantially, in the face of the counter evidence of the price, however. That the real price of oil doesn't reflect a belief in the immediate drop-off of oil production is not a recent development. So, why should we believe that the market has been continually, and radically, underpricing oil?

The evidence advanced is not very compelling. We have the worries of a few geologists-- experts, granted-- all of whom are making pessimistic predictions about the possibility of solving technical problems in energy extraction of exactly the kind that have been spectacularly refuted in the past thirty years. We're told, for example, that the whole earth has been well enough explored for inferences appropriate to the lower 48 United States thirty years ago to be appropriate now. We're also told that the technical problems in making gasoline from coal, shale, or tar sands in quantity are insurmountable. And here I'm talking about what those experts are actually saying, as opposed to the half-remembered and not well informed comments of some_guy282. The technologies involved in either of these cases are not speculative, however, unlike something like nuclear fusion, and the prospect that they will get significantly more efficient in the face of a higher price for oil is about as certain as predictions of this kind get. For example, the world is not nearly so well explored, and drilled, as was the continental U.S. thirty years ago. There are promising avenues for improving the efficiency of extracting gasoline from other sources, too. That such improvements have been precisely the pattern in the past-- and for more than just the few years of futures prices that so impress Platy-- really ought to weigh heavily with all of you. Indeed, not only have such improvements been the pattern, but such improvements falsifying the predictions of skeptics has been the pattern.

Furthermore, we also have other evidence that peak predictions are too pessimistic. In some cases, such as Scientific American's Campbell, we have individuals who have been wrongly predicting an immediate peak in world oil output constantly since the late 80's. Then there is the fact that, again contrary to what some_guy282 claims, Hubbert's analysis of U.S. oil production a half-century ago has been discussed thoroughly by many commentators and found less than "dead accurate". The article I linked to above, and that some_guy282 either didn't read or didn't understand, is a case in point. There you can read what has been well understood for some time by both critics and supporters of a near-term peak in world production: Hubbert's bell curve has not described most of the world's oil fields very well, and Hubbert's own predictions about natural gas production were not very accurate. Most of the peak oil crowd now doesn't even predict a simple bell curve drop-off in world production now. Then again, some_guy282 has shown himself more than once to be quick to comment authoritatively on things he obviously is not well informed about: Lynch is not a proponent of the abiotic theory of oil, and he doesn't claim that oil is practically "infinite". (Nor, contrary to what he says, is some_guy282's willingness to dismiss material he's obviously ignorant the fault of the authors', either. It is his own.)

If the doesn't inspire skepticism about the "models" on which near term scarcity is predicted, then you are simply not interested in evidence.

The lame comment that if people keep repeating the predictions of oil scarcity they will be right someday is of no use. Whether the platitude that there is a finite amount of oil in the earth is true is not the question. The question is whether we are facing immediate, or near-term, scarcity. A favorite tack of environmentalists, and of some of you, is to switch back and forth unselfconsciously between these two topics. This is presumably because of the rhetorical hope of coloring the controversial claim of near-term scarcity with the confidence we all have in the physical platitude.

All of the above said, it has to be conceded that it *could be* that we're about to face a catastrophic drop-off in oil supplies. No one knows for sure. We are all betting. The point is a level-headed assessment of the situation calls for less doom-and-gloom than some of you are bringing here.

One thing worth noting, though, for those indulging in class-discussion rhetoric about the "all knowing" market and the rest, is that all that I am claiming is that the futures prices are better evidence of the scarcity of oil than alarmist literature.

That is your opinion.


For example, the world is not nearly so well explored, and drilled, as was the continental U.S. thirty years ago.


The number of wells drilled is something often pointed out by those who believe there are still significant amounts of oil left to find. What they don't take into account is that the same technological advances you're praising. The US was the first major oil producing nation, and when the oil industry was in its infancy here many many dry wells were drilled. With advances in technology geologists have a much better handle on where to drill for oil, so less wells have to be drilled. And as far as exploration goes, to my knowledge (which I know wont impress you) there are relatively few places left unexplored in the world. Here I think the behavior of the oil companies and oil producing nations is illustrative. If there is so much more oil left to find then why are they going through so much trouble to produce expensive reserves like deep water? Right now we are consuming approximately four barrels of oil for every one barrel that we discover. That figure may actually be out of date because as I've said repeatedly in this thread discoveries in recent years have fallen off to practically nothing.

Chevron by the way is one oil company that is openly discussing a near term peak.


http://www.willyoujoinus.com/


Then there is the fact that, again contrary to what some_guy282 claims, Hubbert's analysis of U.S. oil production a half-century ago has been discussed thoroughly by many commentators and found less than "dead accurate".

He predicted a time frame for US domestic production to peak, and the actual peak fell within his prediction. What more do you want? His prediction for world peak has turned out to be incorrect, but if the increase in demand for oil hadn't been slowed down due to the oil shocks of the 70's he may well have been correct.


I made one factual error in stating Lynch believed in the abiotic theory, and you seem to be taking particular delight in reminding everyone of my error. To save you from having to do it again in your next reply, let me do it for you.

I said Lynch was a proponent of the abiotic theory of oil. I WAS WRONG.

There. Happy now?

Hubbert's method hasn't applied exactly to all oil fields? So what? That doesn't mean that the fields aren't peaking. Things on the downside would be better if they actually did. Instead of the smooth curve on the downslope, we instead get very steep declines like the one the North Sea is going through. Here's a list of oil producing nations that we know have already peaked.

Venezuela (1970) (conventional)
USA (1970/1985)
Romania (1985)
Indonesia (1991)
Tunisia (1992)
Egypt (1993)
Peru (1994)
Syria (1995)
Papua new Guinea (before 1996)
Gabon (1996)
Cameroon (1997)
Argentina (1998)
Colombia (1999)
UK (1999)
Uzbekistan (1999)
Australia (2000)
Oman (2001)
Norway (2001)
Yemen (2001)
Canada (2003) (conventional)

Indonesia was a founding member of OPEC and it has now become a net oil importer! That's the power of depletion. Kuwait recently announced their Burgan oil field has peaked and gone into terminal decline. Mexico's Cantarell field also peaked this year and has gone into terminal decline. Those two fields are the second and third largest oil fields in the world.

One thing that Lynch is fond of saying (I checked!) is that we can count on a lot of reserve growth due to increases in technology. And reserves have been growing. But how much faith can we really put in the reserve numbers? I think I've stated previously that OPEC changed its produciton rules in the 80's and all the member nations but one immediately increased their "proven" reserves without any corresponding discoveries of new fields or increases in technology. If they were to be independently audited perhaps the result would lead to a significant downgrade of reserves, similar to Shell's downgrading of their "proven" reserves by more than 20%. (http://thescotsman.scotsman.com/business.cfm?id=315432004)

For the record, let me restate and clarify the points I'm trying to make since you think I'm oh so quick to say things incorrectly.

Exponential growth of the the economy is not possible. - This to me is obvious, and really my central point. You have yet to dispute this point, or even address it. I'll admit to not reading the Lynch article you posted. Have you watched the Professor Bartlet lecture? If not, let me give you the quick version. This is the power of growth.

http://img512.imageshack.us/img512/9277/18sr.gif


The Peak in world oil production will occur in our lifetimes. - Even if the most optimistic estimates of our oil reserves are correct, we will peak in production in the relative near future because of increases in demand. Production can only double so many times before we hit a peak. In the grand scope of human history it doesn't matter much if the peak is tomorrow or 20 years from now. It's going to happen. I personally believe that it will occur before the end of this decade. Why? Take a look at the mega project information I linked to earlier.

No combination of alternative energy sources will allow us to consume energy the way we are consuming it now. Energy returned on energy invested. Energy makes money. Not the other way around. A serious look at the alternatives reveals they aren't quite ready for prime time. Getting back to the origin of this thread, this means the way we currently use cars is unsustainable.

Consequently, the way we live our lives is going to change. Things will be very different here in the states when gasoline goes to $4 or $5 a gallon gas, or beyond, and stays there.

The longer we wait to address this problem, the worse off we are. But don't take my word for it. Take the word of a report prepared for the Department of Energy (http://www.energybulletin.net/4638.html)


Waiting until world conventional oil production peaks before implementing crash program mitigation leaves the world with a significant liquid fuel deficit for two decades or longer," according to a report prepared for the Department of Energy's National Energy Technology Laboratory (NETL) by Science Applications International Coporation (SAIC).

Even if the peak is one or two decades away, we should still be preparing for it madly at this very moment.

I don't have a crystal ball and I don't claim to know the future. I'm not nearly as doomerish as others in the peak oil camp. I think the way things will play out depend largely on two unknown factors: how we react to the peak, and what the decline rate is. If the decline rate is low and we react rationally to powerdown, develop alternatives, fix our monetary system, etc. then the future isn't so bleak. But if the politicians give us scapegoats instead of pointing out the real problem, and we have large decline rates (on par with the North Sea), then we are in big, big trouble.

May I also point out to this Deutsche Bank report, just to show that there also are some financial market and mainstream entities that take the peak issue seriously:

http://www.dbresearch.de/PROD/DBR_INTERNET_DE-PROD/PROD0000000000181487.PDF

Another timely article:

http://www.techcentralstation.com/120205A.html

One thing that Lynch is fond of saying (I checked!) is that we can count on a lot of reserve growth due to increases in technology. And reserves have been growing. But how much faith can we really put in the reserve numbers? I think I've stated previously that OPEC changed its produciton rules in the 80's and all the member nations but one immediately increased their "proven" reserves without any corresponding discoveries of new fields or increases in technology. If they were to be independently audited perhaps the result would lead to a significant downgrade of reserves, similar to Shell's downgrading of their "proven" reserves by more than 20%.
If one can't put faith in reserve numbers, how can one prognosticate with certainty about the future of the oil market--one way or another? Noone has a clue how much oil the OPEC members have in terms of reserves or resources--not the peak oil advocists nor otherwise.

Why are companies going through troubles producing "expensive reserves like deep water"? Simply because it is not expensive for them to do so... seems simplistic and obvious an answer, but it makes sense. Market needs and prices drive the discovery and production. More demand and higher prices allows for such deep-water activity. You won't find anyone in the industry unhappy with the current situation...try it. When the petroleum and reservoir engineers come up with new break-through fracturing techniques, old wells will be further exploited and become profitable again....60-70% of the oil in ALL of those fields are still present. Companies like Apache love to brag about how they take existing wells given up for dead, remodel and recharacterize them, and then make a killing with "new" discoveries (ie Forties field).

Under light of all the corporate scam and fraud--including Enron debacle--it would be unwise for any company to overstate their reserves. The P&E industry is a conservative one. What's more impressive to stockholders: producing more than is expected, or to blow smoke up everyone's ***es and come up disappointingly short? There is way too much at stake for companies to do the latter.

Lastly, on a personal level, you seem steadfast of your stance... which is completely fine, but are simultaneously condescending and dismissive of anyone that disagrees. Pray-tell: how is your speculation any more credible than others'? The peak oil scaremongers have lots of wonderful books they want everyone to purchase... when will yours be published?

Another timely article:

http://www.techcentralstation.com/120205A.html


I didn't find that one very enlightening. Every peak-oil trasher admits oil depletion is inevitable...they're just quibbling on the accuracy of the forecast timeline, and the precipitousness of the downward slope of oil production. They all also predict a mysterious alternate fuel source will be found by human ingenuity. I like the author's throway line: "difficulties of this transition should not be discounted". That is a potentially huge understatement.

If one can't put faith in reserve numbers, how can one prognosticate with certainty about the future of the oil market--one way or another? Noone has a clue how much oil the OPEC members have in terms of reserves or resources--not the peak oil advocists nor otherwise.

This is exactly why data transparacy is needed. Like I've said earlier it's the one thing that can be done immediately to settle the debate for the long term outlook on oil production. For the short term though, there are more accurate indicators and they don't look good. We just have to look at Chris Skrebowski and the megafield update (http://www.globalpublicmedia.com/interviews/378) for that. Oil fields usually take 4 or 5 years at least to start producing oil once you find them. Less if there is a lot of infrastructure nearby that you can use. The last of the fields that were discovered from 2000 to 2003 will be coming online in 2007 and 2008. We know how much those fields will produce approximately. We know what the depletion rate of existing fields are. We also know what demand for oil will be if it continues to grow at its current rate. The new fields coming online wont be enough to meet demand when you factor in depletion from current fields if demand continues to grow. So either one of two things will happen before the end of this decade. Increases in demand for oil will slow down, stop, or even decline - the most likely way this will be acheived is through a recession. Or, demand continues to grow at its present rate and outstrips supply sometime in 2006 or 2007. Unless of course the oil producing nations really have been holding out on us. The Saudis have consistently failed to increase production this year and last year despite many promises to do so. It will be put up or shut up time in a couple of years though, and then we'll really find out if the Saudi's have been lying or telling the truth about their reserve growth.



Why are companies going through troubles producing "expensive reserves like deep water"? Simply because it is not expensive for them to do so... seems simplistic and obvious an answer, but it makes sense.


Or, it's because they aren't finding oil in other places that are easier to produce.



Market needs and prices drive the discovery and production.


I take issue with this. When you say market needs drive discovery, you say it with the implicit assumption that there is something there to discovery. When you say market needs drive production, it assumes that there are no obsticles that might stand in the way of increasing production. Market needs and prices drive the demand for increased discovery and increased production. But in the end, physical realities determine the actual discovery and production. The market can demand more oil, and the oil companies can increase their discovery budgets to find more oil by leaps and bounds, but if there isn't more oil for them to find - they aren't going to find any. The market can demand a nation like Saudi Arabia or Kuwait increase their production because the market needs the oil - but if their largest fields go into decline and they aren't able to do so because of geological reasons, there wont be more oil for the market.


Discovery of new oil fields peaked 40 years ago. We are currently useing at least four barrels of oil for every one we discover. How long can this situation go on before we run into problems with supply? Is it possible that this 40 year trend will reverse itself and we will suddenly start discovering many new large oil fields? Possible, maybe. But I highly doubt it.


More demand and higher prices allows for such deep-water activity.


This is in direct contrast to your statement that deep-water activity was inexpensive. First you say that, and now you say high prices allows for the activity. Which is it?




You won't find anyone in the industry unhappy with the current situation...try it.


Sure they are happy with the current prices. How could they not be? They're making record profits.




When the petroleum and reservoir engineers come up with new break-through fracturing techniques, old wells will be further exploited and become profitable again....60-70% of the oil in ALL of those fields are still present. Companies like Apache love to brag about how they take existing wells given up for dead, remodel and recharacterize them, and then make a killing with "new" discoveries (ie Forties field).


This is very promising, and exactly what Saudi Arabia is doing. But there are two messages that can be gleaned from this bit of information. On the one hand you can say it's great because we're getting so much oil out of these old reserves. On the other hand, one has to wonder why it's necessary to go through so much trouble with these advanced technologies to produce from old fields if there are really so many new fields left to be discovered.


Under light of all the corporate scam and fraud--including Enron debacle--it would be unwise for any company to overstate their reserves. The P&E industry is a conservative one. What's more impressive to stockholders: producing more than is expected, or to blow smoke up everyone's ***es and come up disappointingly short? There is way too much at stake for companies to do the latter.


I'm curious then how you explain Shell's recent reduction of their reserves? Why did they overstate them in the first place? Your reasoning assumes that the companies always have the best interests of the stockholders at heart. In theory they should, but in reality that's not always the case. And on top of that, not all oil producers are companys. There are also the oil producing nations like the OPEC member nations, and as of right now 60% of the world's remaining oil reserves are in the middle east. The Saudi's in particular have huge incentives for lying to the world about their reserves.

Lastly, on a personal level, you seem steadfast of your stance... which is completely fine, but are simultaneously condescending and dismissive of anyone that disagrees. Pray-tell: how is your speculation any more credible than others'? The peak oil scaremongers have lots of wonderful books they want everyone to purchase... when will yours be published?


I'm sorry if I come off as condescending. Dismissive, yeah. Condescending, don't mean to be. I can't help be anything but dismissive when someone casually says something like alternatives will replace oil and everything will be fine. I've tried to address all of the points you and Merriwether have been made, and when you say something I agree with (even up to a point) I'll say so. On the other hand, those who disagree with me seem bent on disagreeing with everything I've said. The fact that exponential growth can't go on forever is really my central point. We can quible about specific dates and reserve data and the viability of alternatives all day long. But if we continue to try and increase the size of the economy and our rates of consumption exponentially we're going to run into problems sooner or later. Even the optimists should agree with this, but I never hear them doing so.

We should all be fighting to end our monetary system's insane need for growth. Do you agree or disagree with that statement?

More information and commentary:

http://www.radford.edu/~wkovarik/oil/index.html

I think there may indeed be lots of oil still to be found in some of the smaller, remote sedimentary basins. On the other hand, it could be expensive to find it, bring new infrastructure to where it is needed, and get production underway. The existing exploration and production resources could be stretched thin. Competition for new oil resources may be quite intense.

Yeah, there's still plenty of oil left in the ground here in Texas. It just won't come out. If there were really a way to get it out, you'd think we would be doing it already, with all the expertise and infrastructure already in place. But Texas oil production keeps declining relentlessly year after year. Look at the numbers:

TEXAS CRUDE OIL PRODUCTION
1981 - 932 million barrels
1991 - 683
2001 - 424
2004 - 393

So okay, Texas is all played out. What about Alaska?

ALASKA CRUDE OIL PRODUCTION (NORTH SLOPE)
1981 - 556 million barrels
1991 - 641
2001 - 340
2004 - 324

If you take the hard headed approach and concentrate on the numbers, where ever you look, it doesn't look good.

Edit: Alaska production figures are for North Slope.

The numbers are similar in most pllaces where oil production has been done, the North Sea for example has shown decline rates much much higher because of technology.........technology is great, but the side effect in this case is it may make oil come out of the ground faster, but it also sometimes sacrifices the long term production of a field and in some cases even reduces the total amount recovered.

I suspect that Matt Simmons is correct in diagnosing whats going on with Saudi Arabia and Ghawar, and if he's correct, we are in for a rude awakening soon. When OPEC went to a quota system all but Saudi Arabia added an awful ot to their reserves overnight, and they followed suit awhile later, and this was done w/o any hard numbers or research.........

http://www.lifeaftertheoilcrash.net/peakoildebunked.html

More information and commentary:

http://www.radford.edu/~wkovarik/oil/index.html

I liked that one a lot better. Very informative and balanced. Mind you there are some quibbles. He states that there is a lot of unconventional oil out there...enough to last for decades, then mentions casually that only 15% might be recoverable...so was he discounting that when he predicted, for example, that Venezualan oil could power the world for 44 years, or should we take away the message that it might only last 6-7 years at 15% recovery? Same for the Athabaska tar-sands oil...sure there's a lot there but no comment on how usable it is. He also lists Hubbert's prediction on his time line of (mostly wrong) world oil reserve estimates, but doesn't specifically comment on whether or not it was on the money, or if off, by how much.

Just a bit to chime in here -

I would place most of my agreement with the Linux man..... However, I dont think he explained himself perfectly..... So obviously peak oil is a fact, there is not really a debate about that, but.....

Peak Oil, in regards for production hit the US in the late 1970s, however our consumption continued to grow past this. Aside from the oil scares, there was very little slow of consumption, which in theory proves the idea of Peak Oil wrong, but what actually happened was an artificial adaptation that allowed our consumption to rise while our production began to decline, i.e. IMPORTS!

Now, we are beginning to see that we are reaching, or have already reached the top of the Hubbert's Curve for world oil production. However, it would be extremely disasterous to our economy to have a shortage of oil.

The US consumes somewhere around 26 million barrels a day, which is FAR less than the entire world output, and we would easily be able to keep the world output above that level for decades..... So what is the problem??

We are not the only ones. There are others out there who are competing with us for this commodity, and they consume too. So in order to make sure that the US still has oil, we will need to artificially do something to make sure that the oil keeps coming to us, which some people would argue has already started......

And that would be the US kicking some arse and taking some names in order to make sure that we get that oil, and as it gets even more scarce, there will be more arse kicking to make sure it comes this way. Up to now we have used economics to compete with the world for the oil, but when that starts becoming too cumbersome....

So with this artificial intervention, we here in the US have little to worry about. Prices will continue to climb, but our lifestyles as we know it will not change so drastically as people climb during our lifetimes.

As for car culture.... Peak oil will not change car culture in the sense of reducing or eliminating cars. It might change peoples behavior over time as fuel becomes more expensive, but as stated above, it will not become scarce, just more expensive. And people will continue to shell out money to have a status symbol or not have to ride the bike in the rain. We might see changes in types of cars, the fuels they run on, their efficiency, and their price, but we will not see a change in the culture of reliance on cars.

And that would be the US kicking some arse and taking some names in order to make sure that we get that oil, and as it gets even more scarce, there will be more arse kicking to make sure it comes this way. Up to now we have used economics to compete with the world for the oil, but when that starts becoming too cumbersome.....
Velotimbe: not sure if you're presenting this as your preferred solution...that the US maintain its citizens' standard of living through worldwide military aggression, or whether you were being sarcastic. If you're serious, remember it's the remote border towns that will be most vulnerable to the inevitable backlash!! Maybe yours is now on the list :)
Regards
RGC

Thanks for chiming in! I mostly agree with everything you said. You seem to have a good handle on the situation. I was surprised when you ended your post with this....



As for car culture.... Peak oil will not change car culture in the sense of reducing or eliminating cars. It might change peoples behavior over time as fuel becomes more expensive, but as stated above, it will not become scarce, just more expensive. And people will continue to shell out money to have a status symbol or not have to ride the bike in the rain. We might see changes in types of cars, the fuels they run on, their efficiency, and their price, but we will not see a change in the culture of reliance on cars.

Respectfully, I have to disagree. I think you are greatly underestimating the implications of the problem. I think looking back to 1973 is sort of a good example. The price of gasoline soared. There was forced rationing, and the mile long gasoline lines. Waiting for hours on one of those lines was no guarantee you'd get the gas you wanted, which led to many a fist fight. If you imagine what would have happened to the US if the arab oil embargo had never ended, you start to get an idea of what Peak Oil will be like.

For all the problems that it caused, the arab oil embargo created something like, what, a 10% shortfall in supply? Don't quote me on that, not 100% sure it was exactly 10%, but I'm fairly certain it wasn't greater than that. When we hit the peak, for the first year or so we can expect production to remain flat. Due to increases in demand (approximately 3% every year at least) we would be looking at a 3% shortfall. Then production starts to fall. Conservative estimates say production will fall by at least 3%, but possibly as much as 7% or more per year. So the first year we would have at least a 3% shortfall from increased demand. Then you add another 3% shortfall from falling supply. Then the next year you add at least another 3% shortfall from even more decreased supply. I'm saying 3%, but it could be even more than that every single year.

As has been discussed previously, if the market perceives a permanent shortage there could be a panic which sends the price of oil far higher than typical supply/demand dynamics would put it at. In a recent interview energy investment banker Matt Simons said a shortfall of only 4 or 5% in supply could send prices rising by 5-10 times. That puts the price of gasoline at somewhere between $12 and $25 or so. The last link I posted has a link to his interview. How will the typical suburban commuter afford to drive their car then? The situation was bad in '73, but we are even more dependent on oil and gasoline for commutes now than we were then. This is a large part of the problem here in America that James Kunstler talks about. There is a documentary about peak oil appropriately titled "The End of Suburbia." I think I linked to it earlier in this thread. The thing with suburbia and the car culture that goes along with it, is that it's not merely dependent on travel in the form of cars. It's dependent on cheap travel from cars. And that gets to the heart of the real issue here. Many people mistakenly say that Peak Oil is the end of oil. It's not. There will still be oil. Just less of it. But, it is the end of cheap oil. Bear in mind that everything around us is connected to oil in some way. Many people don't know where plastics come from, or even think about it. Plastics are made from oil. Think of all the consumer products we buy that are made of oil. The things that aren't made from oil directly usually have oil used somewhere in their manufacture. And of course, just about all products are transported with oil in the United States, by way of large trucks and our interstate highway system (trains would be much more efficient, and thats one of many things in a long list of rational responses to this problem). When the price of oil goes up, the cost of raw materials used to manufacture finished products goes up. The cost of transporting those goods also goes up. In short, when the price of oil goes up, the price of everything goes up. Inflation will be very high. At the same time consumers are having to deal with higher and higher gasoline prices to drive their cars, the price of everything else they need will be increasing as well.

When the price of gasoline continues to rise, it makes the suburban way of life unsustainable. There have been stories in the press recently about current prices creating problems, and the large percentage of gasoline bills being put on credit cards. What's going to happen when the price of gasoline goes even further? Just as you alluded to, people are going to adapt because they will be forced to. Since most suburbs in America don't have mass transit as an alternative means of transportation, and commuting on a bike from a suburb 30, 40, or even 50 miles from work isn't realistic. So in a sense you are correct that our dependence on cars wont be reduced. But people wont be able to afford to make their commute alone. Assuming they still have a job to commute to (economic disruption is a certainty) they will be forced to carpool. This is something that I think ties into the question of car culture specifically. I'm sure we all have the general idea of what car culture is and what it entails, but if we were all asked to define car culture I'm sure we'd all give different answers exactly. But when I think of car culture, I think a large part of it has to do with the freedom of movement cars provide people with. For the small price of a gallon of gasoline, they can hop in their car and go pretty much where ever they want to go. But when gasoline is very expensive, and they are forced to make arrangements with other people just to make their daily and necessary trips to work/school (the horror! :eek: ) the freedom aspect of car culture is going to be gone. Yes, the types of cars will change and efficiency will increase. But ultimately, there will simply have to be less cars.