[Graeme]

What Happened to Peak Oil?

Now, the real point of peak oil here is not that oil supplies are running out, the sky is falling and the world is coming to an end. Rather, it is an understanding that there will come a time when the ever-increasing global demand for oil will permanently outstrip the supply. What does that mean? Well for starters, it means that oil shocks will not be the result of supplies being artificially constrained by some monopoly like the Seven Sisters, the Texas Railroad Commission or OPEC. Peak oil means that oil producers will simply not be able to cost-effectively pump enough oil out of the ground rapidly enough to meet the rising oil demand.

There are two things that can stop this train wreck:

seekingalpha

Interesting comments at end too.

[joewp]

What Happened to Peak Oil?

Now, the real point of peak oil here is not that oil supplies are running out, the sky is falling and the world is coming to an end. Rather, it is an understanding that there will come a time when the ever-increasing global demand for oil will permanently outstrip the supply.

seekingalpha Interesting comments at end too.

I hope one of the comments pointed out that peak oil isn't demand outstripping supply at all, but when oil extraction starts to inevitably decline. "Demand outstripping supply" is just a symptom of peak oil, not the cause. This guy seems to think that the supply will forever increase, just not fast enough for demand. He's in for a real shock when the oil extraction rate starts to decline.

[DantesPeak]

joewp is right, there is still some lack of understanding but the author otherwise is mostly on the right track.

What annoys me is that people like the author keep saying the fall from $147 oil to $110 represents something important. No it doesn't. Short term swings of up to 30% in the price of oil don't represent much of anything. I've been saying that for at least two years here.

So China did some extra pre-Olymipic buying and SemGroup was short 100 million barrels and had to cover when China called for their oil deliveries (to over-simplify). Yes these things are happening because we are at or near peak oil, but who said market swings were going to go away?

[Graeme]

Joewp, Thanks for pointing out that peak oil is not one-dimensional. However, there will be a host of other unpredictable factors besides supply and demand that will affect our collective fate.

[SILENTTODD]

Who the hell is Edward Harrison? Is he a petro-geologist or an engineer? What are his qualifications to comment on the subject?

[joeltrout]

Is he a petro-geologist or an engineer? What are his qualifications to comment on the subject?

You just eliminated 99% of peak oil members.
joeltrout

[threadbear]

joewp is right, there is still some lack of understanding but the author otherwise is mostly on the right track.

What annoys me is that people like the author keep saying the fall from $147 oil to $110 represents something important. No it doesn't. Short term swings of up to 30% in the price of oil don't represent much of anything. I've been saying that for at least two years here.

So China did some extra pre-Olymipic buying and SemGroup was short 100 million barrels and had to cover when China called for their oil deliveries (to over-simplify). Yes these things are happening because we are at or near peak oil, but who said market swings were going to away?

That was an unprecedented rise and fall, the dynamics of which are crucial to the understanding of the energy markets. I would hardly dismiss it as insignificant.

[mark]

GATA has it right, the gold market is manipulated.

The "plunge protection team" is charged with "stabilizing" the equity markets.

The FED and the Treasury have long coordinated action with other central banks in the currency markets.

At critical times all markets are subject to manipulation, but only in the short term. Do you imagine the oil market is different?

How high does oil have to go to shut off demand? Well, now they know.

Resources are responsible for our current civilization. The most important is oil. And now it's supply is constrained. Water too. Another post touts Brazil as the worlds new bread basket, able to support more and more billions of people. Simply not so.

Even us PO's can't quite imagine our whole world turned upside down due to resource scarcity. EVERYTHING is changing but our hubris and denial will keep the new great game going who knows how long.

Those few of us who see what's coming can do ought to alter our course, the lessons learned must be learned by all, not just the few.

[lorenzo]

So, when will Peak Oil arrive? Most experts put it between 2030 and 2040 somewhere, but in a scenario that doesn't take into account the rapid transition to renewables.

Does anyone have a study showing how the mass transition towards far more efficient electric vehicles running on non-oil generated electricity, will push the Peak Oil date back?

[PeakingAroundtheCorner]

So, when will Peak Oil arrive? Most experts put it between 2030 and 2040 somewhere, but in a scenario that doesn't take into account the rapid transition to renewables.

Does anyone have a study showing how the mass transition towards far more efficient electric vehicles running on non-oil generated electricity, will push the Peak Oil date back?

Good question. Because I'm beginning to think the "experts" are correct and PO won't happen until around 2036. And, since I've determined that, with any luck, that should be my last year on this planet, I should just continue partying like it's 1999 and stop wasting my time worrying about it now.

[Ludi]

I should just continue partying like it's 1999 and stop wasting my time worrying about it now.

Worrying about it won't change reality in any case.
Party on!

[Nano]

Good question. Because I'm beginning to think the "experts" are correct and PO won't happen until around 2036. And, since I've determined that, with any luck, that should be my last year on this planet, I should just continue partying like it's 1999 and stop wasting my time worrying about it now.

I agree. We should'nt jump the gun and think that we are the generation that has to clean up this mess. Most probably it will be the next one! It's a real load of my back. For a minute there I thought I had to get off my couch, when all the while the fact is we don't have to do anything much but keep things afloat for just a few decades more! In fact, we'd best shut up about PO, because if our offspring finds out we knew about it all along, they'll turn and wring our necks come 2036!

[Ayoob]

Good question. Because I'm beginning to think the "experts" are correct and PO won't happen until around 2036. And, since I've determined that, with any luck, that should be my last year on this planet, I should just continue partying like it's 1999 and stop wasting my time worrying about it now.

I agree. We should'nt jump the gun and think that we are the generation that has to clean up this mess. Most probably it will be the next one! It's a real load of my back. For a minute there I thought I had to get off my couch, when all the while the fact is we don't have to do anything much but keep things afloat for just a few decades more! In fact, we'd best shut up about PO, because if our offspring finds out we knew about it all along, they'll turn and wring our necks come 2036!

I'm going to go ahead and nominate this post for the Peak Oil Hall of Fame. Please, put this one in the Member Quotes thing on the left side of the page!

[DantesPeak]

joewp is right, there is still some lack of understanding but the author otherwise is mostly on the right track.
What annoys me is that people like the author keep saying the fall from $147 oil to $110 represents something important. No it doesn't. Short term swings of up to 30% in the price of oil don't represent much of anything. I've been saying that for at least two years here.
So China did some extra pre-Olymipic buying and SemGroup was short 100 million barrels and had to cover when China called for their oil deliveries (to over-simplify). Yes these things are happening because we are at or near peak oil, but who said market swings were going to away?

That was an unprecedented rise and fall, the dynamics of which are crucial to the understanding of the energy markets. I would hardly dismiss it as insignificant.

The oil market dropped 30% four times in the last four years. Did every time before mean the end of PO?

Also I didn't say it was insignificant.

[DefiledEngine]

So, when will Peak Oil arrive? Most experts put it between 2030 and 2040 somewhere, but in a scenario that doesn't take into account the rapid transition to renewables.

What experts? Most competent experts like Colin Campbell or Jean Laherrere and the ASPO believe it has already happened.

[Dreamtwister]

So, when will Peak Oil arrive? Most experts put it between 2030 and 2040 somewhere

What experts? Yergin? Unless there's some good data to the contrary that I have not seen, we already peaked back in 2005. What are your "experts" smoking, and where can I get some?

but in a scenario that doesn't take into account the rapid transition to renewables.

Yeah, how's that working out so far?

Does anyone have a study showing how the mass transition towards far more efficient electric vehicles running on non-oil generated electricity, will push the Peak Oil date back?

No, because nobody seems particularly interested in building those cars, not to mention the massive infrastructure that would have to accompany them. Our grid is already choking and sputtering under the strain, and you want to plug 250 million cars into it as well?

[threadbear]

joewp is right, there is still some lack of understanding but the author otherwise is mostly on the right track.
What annoys me is that people like the author keep saying the fall from $147 oil to $110 represents something important. No it doesn't. Short term swings of up to 30% in the price of oil don't represent much of anything. I've been saying that for at least two years here.
So China did some extra pre-Olymipic buying and SemGroup was short 100 million barrels and had to cover when China called for their oil deliveries (to over-simplify). Yes these things are happening because we are at or near peak oil, but who said market swings were going to away?

That was an unprecedented rise and fall, the dynamics of which are crucial to the understanding of the energy markets. I would hardly dismiss it as insignificant.

The oil market dropped 30% four times in the last four years. Did every time before mean the end of PO? Also I didn't say it was insignificant.

The price per barrel ROSE from $55.00 to 147.00 in a year and a half. It came close to tripling in price, and people here were arguing it was all due to a shortage of supply. Now a 30.00 drop from 147.00 may not appear to be much, but it is HUGE, taken that a barrel was only 55.00, last year. These are huge swings, and though the peak oil theory is playing out over time, it fails to fully explain the recent run up and run down. You seem to be emotionally attached to an idea and are unable to let go of it.

[peripato]

The price per barrel ROSE from $55.00 to 147.00 in a year and a half. It came close to tripling in price, and people here were arguing it was all due to a shortage of supply. Now a 30.00 drop from 147.00 may not appear to be much, but it is HUGE, taken that a barrel was only 55.00, last year. These are huge swings, and though the peak oil theory is playing out over time, it fails to fully explain the recent run up and run down. You seem to be emotionally attached to an idea and are unable to let go of it.

For the naysayers you need to ask yourself a few questions before giving the latest oscillations in the oil price any lasting significance:
1. What big new fields have come online as a result of the price run up during the past 2 years? After all, plenty of incentive find and pump. If none, then how many do you foresee coming on stream as the price continues to drop?
2. Has a ready substitute for oil been made during the same period sufficient to affect demand for the product?
3. In a world were there are no ready substitutes for oil, how long do you think low prices will last without new sources of supply (new giant fields) becoming available?
4. How long do you think demand destruction, either because of high prices or conservation, would continue to make an impact on price and supply in a global economic environment, where oil consumption has shown an upwards trend for the past nearly 40 years?

[threadbear]

The price per barrel ROSE from $55.00 to 147.00 in a year and a half. It came close to tripling in price, and people here were arguing it was all due to a shortage of supply. Now a 30.00 drop from 147.00 may not appear to be much, but it is HUGE, taken that a barrel was only 55.00, last year. These are huge swings, and though the peak oil theory is playing out over time, it fails to fully explain the recent run up and run down. You seem to be emotionally attached to an idea and are unable to let go of it.

For the naysayers you need to ask yourself a few questions before giving the latest oscillations in the oil price any lasting significance:
1. What big new fields have come online as a result of the price run up during the past 2 years? After all, plenty of incentive find and pump. If none, then how many do you foresee coming on stream as the price continues to drop?
2. Has a ready substitute for oil been made during the same period sufficient to affect demand for the product?
3. In a world were there are no ready substitutes for oil, how long do you think low prices will last without new sources of supply (new giant fields) becoming available?
4. How long do you think demand destruction, either because of high prices or conservation, would continue to make an impact on price and supply in a global economic environment, where oil consumption has shown an upwards trend for the past nearly 40 years?

Who's a naysayer? Peak oil is a reality that simply doesn't fully explain the recent run up. Why should anyone run a gauntlet of questions that ask them to predict the future by people who can't analyze the present or recent past?

[the48thronin]

How long do you think demand destruction, either because of high prices or conservation, would continue to make an impact on price and supply in a global economic environment, where oil consumption has shown an upwards trend for the past nearly 40 years?

what does the historical growth of consumption of cheap oil have to do with the future?

With the run up in oil price, the future changed.

Peak oil does not mean the end of life only the end of life as we knew it. The future does not have to be howling mobs of starving zombies.. Humans thought oil would always be cheap, but then Humans used to think the world was flat!

200 years ago electricity was lightening in the sky, land transportation was animal powered, and gun powder was the weapon of mass destruction.