Peak Oil is You
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Page added on November 9, 2014
Peak Cheap Oil
Energy is the lifeblood of any economy. But when an economy is based on an exponential debt-based money system and that is based on exponentially increasing energy supplies, the supply of that energy therefore deserves our very highest attention.
But we need to be careful here because it’s a mistake to lump all types of energy together because they have very different uses in our economy and they are not interchangeable.
What we’re going to examine in this chapter on Peak Cheap Oil is transportation fuels. The liquids we put in our trucks and cars and airplanes. Why?
Because 95% of everything that moves from point A to point B across the globe does so based on petroleum derived liquid fuels. This makes petroleum quite special and unique.
And despite vastly increasing the global spend on oil operations, despite the shale oil “miracle” so loudly touted by the press — global production remains nearly unchanged. In just a few short years, it’s now costing us double to extract roughly the same amount of oil out of the ground.
What’s clearly at work here is that we’re finding more oil, but it’s expensive. Yet total global demand for oil will climb as developing countries expand their economies and world population continues to grow. Competition for hydrocarbons will become more fierce than it has ever been.
I’m soft-pedaling this to an enormous degree. Let me be blunt. If we are already at peak, as the data suggest is possible, then we are all in trouble.
6 Comments on "Peak Cheap Oil"
rockman on Sun, 9th Nov 2014 3:56 pm
I’m confused. Is he implying we are currently at “Peak Cheap Oil”? He ends with “If we are already at peak, as the data suggest is possible, then we are all in trouble”. So the economies weren’t slipping into trouble years ago when the price of oil increased 300%+?
According to the EIA since 1946 we hit the Peak Cheap Oil price in 1998 when prices fell to $17.10/bbl (adjusted for inflation). Or is he saying that when we reach global PO (if we haven’t already) we’ll look back and view the price at that time as being “cheap” even if that price is in the $80 to $100 per bbl range as it has been recently?
And:”…then we are all in trouble.” What do you mean “we”, white man? LOL. There was a significant portion of the global population in trouble when oil was just half its current price. And there where some economies, like China’s, booming even after oil climbed above $90/bbl. How much trouble any economy might be in isn’t just a function of the price oil but how well that economy handles what the price of oil is at that time.
All in all I’m not sure what exact point he’s trying to make.
MSN Fanboy on Sun, 9th Nov 2014 5:00 pm
This is what he means Rockman:
http://www.tonicmovies.com/en/popular/684/oil/1.html
Nony on Sun, 9th Nov 2014 11:28 pm
I think you have to look at the demand side, not just the price. IOW, how much oil is available at X price, to calculate “peak cheap oil”. If the price went up it could be increased demand or depletion.
GregT on Sun, 9th Nov 2014 11:50 pm
When the price really starts to ramp up, the demand side will get extremely ugly. Especially in North America, where so many people own guns.
Kenz300 on Mon, 10th Nov 2014 9:43 am
The long term trend of oil price is higher………
Saving energy saves money. Don’t let the short term drop in oil prices affect energy use decisions.
Dredd on Tue, 11th Nov 2014 1:43 pm
Why do we have to bring the aliens from Cygnus into an adult discussion?