I noticed this very recently as well. Just thought most folks had caught it or discussed it already, and well, obviously not. Those that did, didn't care to share it here. Seems to be a pretty important change, one that received scant attention. No offense, but perhaps some folks are too busy debating things on side issues with fluff/vanity threads, to have noticed it or even cared to read the data on ASPO's newsletter. Important technical sections like Energy Technology and Depletion Modeling on this forum do not get near the attention as they should, nor does the "Ask the Experts" section. Lots of armchair analysis on economics here, but not a lot on the very basis of depletion.
My thoughts are thus:
ASPO makes a pretty important distinction between conventional oil and total hydrocarbons, for those that care to differentiate. What this means is that the price for conventional oil will remain high, and as the mad scramble for unconventionals like polar, deep water, NGL's, etc. goes forward, the price for conventional oil will spike before anything else. More specifically, the lighter fuel grades will spike before the heavier fuel grades, as we have already seen. The lighter, more desirable grades of oil (for gasoline primarily) will become scarcer and scarcer, while heavier grades will see more and more prevalence, and moderate the price spike for the lighter grades (we already saw this when OPEC cut prices on Arab Heavy by the greatest discount to the OPEC basket and Brent ever (over $11 differential). That will, for the time being at least (next 1-2 years), put the brakes on a price explosion for lighter grades (excluding some major disruption of supply). As the relative abundance of lighter grades decreases, more and more refiners will be forced to take more and more of the heavier grades, and re-configure their refinery mixes. While it is more expensive to process heavier grades, the short-term differential in prices between grades (which could even become more pronounced) is likely to offset any tremendous near-term price explosion (again, barring any major supply disruption.). That, coupled with a release from strategic reserves will moderate near-term price shocks (prices above $70-$80 barrel).
While the foregoing is good news for the near term, it is not so beyond 1-2 years, (3years and more from now) when even heavier grades start to peak. Then, because heavier grade production can not increase relatively enough to make up the difference between the decrease in lighter grades, both will start to rise more or less in tandem, and explosive price shocks are far more likely as the larger picture of depletion sets in.
The roller coster is about to reach the top of the hill and no one has their seat belts on. I have a bad feeling about this. If any Power Down future is gonna happen, it needs to happen right now. But, I don't see anything happening.
Coolman, I think you are right. I think peak oil will come sooner and hit harder than most people here predict. It is probably already too late for alternative technologies. Isn't going to happen. There is a good chance peak oil is already happening. All we can do is prepare, right now. Not tomorrow, but now. If we are wrong, so what.
Good points OilsNotWell. I'd like to add that ASPO attempts to base its predictions on the best facts it has available and is constantly updating its depletion model. As they state in the August Newsletter (No. 44)
Quote:
It will be readily understood that modelling depletion is far from an exact science, given the appallingly unreliable data, especially in the public domain. The model accordingly evolves all the time as new information and insights come in.
The peak date (2006 for all liquids) is what the model tells them and the model is imperfect.
IMHO, the facts (as imprecise as they are) are what we should be focusing on. It's far too easy to get carried away in speculation and that leads to panic. Not the best way to form a judgment or a plan of action.
Posted: Mon Sep 13, 2004 8:55 pm Post subject: i'm out of it
Last I heard, the peak was being moved from 2009 to 2008. And now 2006? My advice for swing state voters -- whatever party you don't like, vote for them in the next election, because whoever is in power when TSHTF is going to be thrown out on their ear. These two presidential candidates should be fighting for chance NOT to be president.
Important technical sections like Energy Technology and Depletion Modeling on this forum do not get near the attention as they should, nor does the "Ask the Experts" section.
We could use some fresh input in depletion modeling... We continue to push the ask forums... any help with submitting salient questions to individual experts is appreciated.
<working> _________________ "When you understand why you dismiss all the other possible gods, you will understand why I dismiss yours." - Stephen F Roberts.
Aaron-Thanks for the suggestion, I will put some fresh input into these areas. Action, instead of observation changes things. Those who complain about something, when they have the power to change it....(a metaphor for society's approach to depletion, too, don't you think?)
I have a bit of an advanced mathematics and statistics bent (among other areas), so perhaps I could offer some insight. I had to dust off some of my books to refresh hyperbolic creaming curves and parabolic fractals and the like to see if the models made sense. Laherrere has the most advanced mathematical model out there it seems, but I like Deffeyes' greater understanding of production and reserve constraints. ASPO has the most extensive reserve, industry, and country data, though, too. [For example, Deffeyes was caught quite off guard with regards to Russia, as he considered the rise to 7mb/d quite an anomaly back in 2002.]
For the last month or so, I have immersed myself deeply into the depletion world.
I am fascinated by Dr. Bahktiari's depletion model (WOCAPS), as it reflects a real-world approach to the effect of politics, conflict, and price on supply depletion. Although some of us wish to dismiss economics (and economists in particular!) completely, it does have a pronounced effect on shape of the production curve (although the area under the curve remains the same), thus shifting peak back and forth a few years.
That is the one flaw in most of the other models that I have seen, particularly ASPO's. In addition, these non price-sensitive models have at least two fundamental underlying assumption that can be proved false:
1) Maximal production is assumed whenever possible
2) Alternative sources and transitional fuel transfer that occur as prices rise is not reflected.
These two assumptions can easily shown to be false by examining 1) Saudi Arabia's role in the last 30 years and for 2) The drastic decline in production following 1979 price shocks. While 1) will not hold true forever, and in fact, I think it's pretty much been acknowledged that NOW everybody is producing flat out. [Because of the special status of SA, and the large disagreement in even the true amounts of past production, let alone current production, I wouldn't give a whole lot of credence to the fact that they may have extra capacity. There is lot to protect in those production capacity numbers. I wouldn't even be surprised if SA declared a surplus, then cut production a bit. In fact, they've already done the first part. They have to give a reason for cutting back production, because otherwise they'd have to admit that 9.5 or 9.3 or exactly whatever it is mb/d is surge capicity, not sustained capacity. A look at their production pattern from 2003 suggested this to me...]. But I could be wrong on this point, and in fact, hope that I am.
I was impressed by APSO's attempt to study a real-world historical example of depletion with whale-oil depletion in the 1800's (although it scarcely mentioned the monumental beginning of hydrocarbon extraction that occurred, interestingly enough, just as the source of whale oil was being depleted out of existence.) It did, however, give an indication that there would be a cap to price increases - because it would just get too expensive for most people.
If you extrapolate that conclusion to hydrocarbon depletion one could assume that oil will be priced out of reach for many in order to manage diminishing production. In other words, the wealthy and powerful will still have and use their oil, and more and more of us won't. I fancifully imagine a world (for the U.S. at least) where one would have to get a permit for hydrocarbon burning, or be specially authorized for such use! Unlawful hydrocarbon burning or wastage would be criminally prosecuted of course....
On a side note, Dr. Bakhtiari seems to be an amazing man - humanist, philosopher, scientist, well-read and spoken, and pragmatic - almost mystical. I'm thinking of subscribing to his "Letter from Tehran." I worry about his country in light of what may seem to him as the looming militaristic U.S. policy and the decades-long interference there.
Back to the point: The thing about this forum is that we are all (from what I can tell) just armchair quarterbacks on this issue. We are the consumers. We are neither high-level policy analysts, nor oil company engineers. We are not intelligence agents, nor energy scientists. We are average everyday people, yet those whose lives are about to be forever changed. I have no doubt in my mind that high-level types lurk here for the latest thoughts and trends, but they do not post nor reveal their positions. The truly wealthy and powerful already have their high-priced analysts and inside contacts, we have this forum.
Another point: Seeing the ASPO predicted peak move from 2010, to 2008, to 2006 is definitely not a good sign. I equate it with the forecasting of Hurricane Ivan, which I have been watching in earnest for a week. The National Hurricane Center keeps updating their models with ever-moving U.S. landfall predictions westward of Florida...and have been doing so even before it approached Venezuela. The models, though, do get become more accurate, the closer Ivan gets to the U.S...and soon we will see how right they are. The consequences for that prediction being wrong are tragic as well, but "pretty soon" it can be seen to be "pretty close" to correct. The analogy holds for oil as well.
What I would like to see in depletion analyses is a fresh meta-analysis of all current depletion curve predictions and scenarios, which to my knowledge hasn't been done before. This would probably give a more accurate prediction (throwing out outliers, of course....like the pie-in-the-sky one from the USGS). Picking just one you "believe in" doesn't seem to get the best picture.
Lots of armchair analysis on economics here, but not a lot on the very basis of depletion.
Since I am one of those "arm chair" analysts, your point is well taken. We all have our strengths and weaknesses. My observation was that many people don't understand the precarious nature of our economy, and its ability to foster in many of their ideas post-peak. i feel it is on of the most critical aspects of the whole debate to consider. I enjoy your posts by the way. :D
I will try to contribute more to those other forums if I feel I can be useful. _________________ A Saudi saying, "My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel."
Live in Arizona? Check out: http://sustainablearizona.org and read my blog.
Joined: Aug 22, 2004 Posts: 91 Location: Potsdam, Germany
Posted: Tue Sep 14, 2004 4:06 am Post subject:
Don't be fooled that PO will stop global warming. Reasons:
1. Global warming is already on the way.
2. Temperature will continue to rise for a long time after burning of fossil fuels will be reduced.
3. Alexander Wokaun, head of ETH Zurich Energy Department, says that the decline in oil will be compensated by coal liquefaction (to what extent this is possible remains to be seen). Coal is the dirtiest fuel around. So PO/PG will rather enhance Global Warming!
Joined: Aug 13, 2004 Posts: 115 Location: United Kingdom
Posted: Tue Sep 14, 2004 4:24 am Post subject:
Markos101 wrote:
Yeah, I've been thinking about this for a while. Hydrocarbons are the main source of carbon dioxide in the atmosphere, but others have been saying that cows produce more greenhouse gases than cars do.
Personally I doubt very much that climate change will be a problem in the long-term; by 2050, hydrocarbon production will have declined to a mere fraction of their levels today.
The other thing in this regard is that the oil produced from the thermal depolymerization process (discussed in other forums) supposedly leaves relatively less CO2 in the air and so if this process turns out to be a winner, the greenhouse thing would gradually be less serious. Problem is I can't find the link anymore where I read that.
I read the September Newsletter and I did not see them mention the peak moving to 2006. Can someone please point out were it says this. Thanks
Look at the table of estimated production to the year 2100, right below the Oil and Gas Liquids 2004 Scenario chart. It.s about 1/5 of the way down the document in Microsoft Word.
Oilsnot well, I too noticed the move, but take a diffrent view.
A) the very fact that these dates are variable, and influeced greatly by factors that are beyond Campbells/Alekett's control or even finite preception leads me to say...
WE SHALL SEE.
B) Not knowing even the year of the "Peak" leads one to the "precautionary principle"; that we should act as if the peak is upon us...
THUS
C) We plan, asess countries, look for ways to survive economicaly and physicaly, and generaly get off in to HUMAN tangents...
Constantly doding over an inevitable occurance will not help the majority of the posters here as much as understanding how it will affect them personaly. (To the best of our finite ability) In the mean time the Quest of the "Actual Peak Oil Date" remians a great "past time". _________________ With Love to all, and Malice to none.
"A people is conquered not when they lose a war, but when they adopt the song and customs of the enemy"
-Chacham S
Virginian, Great points, agree with them all. Peak is coming sooner or later, plan now at a personal level...yup.
Peak Prediction - "the great pasttime" - ha! Gives folks something to do and talk about maybe?
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