[Graeme]

Shortages: Is 'peak oil' idea dead?

Since humans found that oil was better than coal for shifting vehicles, people have fretted over oil wells running dry.

Bouts of anxiety are periodic. In the seventies a Shell geoscientist, M King Hubbert, sounded an alarm that supplies would peak by 1995 "if current trends continue."

They didn't peak. Fear is a powerful motivator and forecasting a shortage can be a good way of avoiding one.

Instead of seeing the 1970s oil crisis end in a long-term shortage, we responded by developing more fuel-efficient cars and burning less oil for heating. And what's more, oil production continued to grow.

The latest bout of worry over oil supplies was provoked by a series of events in the 2000s, including the 9/11 terrorist attacks on New York, the Iraq War and an unfortunate incident in which Shell's chairman resigned after the firm overstated its oil reserves by 250 million barrels.

It all disturbed President George W Bush. And his fears over energy security brought him into alignment with Tony Blair, who was pressing to combat climate change. The two agendas fortuitously converged - for a while - in the shape of home-grown energy sources like renewables and nuclear.

And by 2006 it looked as though the oil doomsters were being proved right.

Production actually fell, and by 2008 the UK Industry Taskforce on Peak Oil and Energy Security began warning that an oil shortage could destabilise economic, political and social activity potentially by 2015.

A new parliamentary committee on Peak Oil amplified their concerns. And the government-funded UK Energy Research Centre (UKERC) said forecasts suggesting oil production will not peak before 2030 were "at best optimistic and at worst implausible".

Fears over Peak Oil have been exacerbated by the extraordinary surge of car ownership in China - 14.5 million new cars shipped to dealers last year.

bbc

[SeaGypsy]

We've always found more, so we will always find more. Logic? Why bother, rhetoric is so much easier to ignore.

[SilentRunning]

We've always found more, so we will always find more. Logic? Why bother, rhetoric is so much easier to ignore.

Of course - oil peaking would mean society as currently structured is impossible. We don't want that to happen - ergo - it won't happen. Problem solved!!

[Lore]

Anything much lower then the current price means operators will be producing at a loss. Which should tell you something about what point we are at along the path of peak oil.

[Keith_McClary]

"If oil goes below $80, forget about looking for jobs in oil exploration."

I heard said.

[SeaGypsy]

Going there doesn't matter; staying there- forget looking for any job pretty soon, there won't be any.

[ralfy]

Hubbert stated 1995 + 10 years (or after 2005) in a 1976 interview:

http://www.youtube.com/watch?v=ImV1voi41YY

He adds that the peak may move or extend, but the principle is the same.

In April, 2011, ABC looked back at at a report about peak oil made in 2006:

http://video.google.com/videoplay?docid ... 3952854011

and noted that the IEA has acknowledged that world oil production has peaked:

http://www.youtube.com/watch?v=v0ujDVRIzGM

A few weeks later, BP released data showing energy consumption exceeding production from conventional sources from 2006 to the present, with the difference met by non-conventional sources:

"Running dry"

http://www.economist.com/node/21519035

The peak for global production, though, will look more like a plateau, probably with slight increases and decreases, before starting to drop, because it involves a larger data set. Move away from a chart illustrating that and look across more decades, and the peak will appear and look sharper.

Also important together with demand are production per capita (peaked in the late 1970s), the energy cost of non-conventional sources, the additional energy required each year to maintain a level of economic growth, and the various resources needed (fresh water, etc.).

[seenmostofit]

We've always found more, so we will always find more. Logic? Why bother, rhetoric is so much easier to ignore.

Perhaps we should be estimating peak predictions?

So have found more, we have always found more, but some day we will not. So how many more "findings" will we go through before the process stops? 3? 5?

[sunweb]

For those who support fracking, oil sands and the northern pipeline or for those who encourage investing in fracking, oil sands or the northern pipeline, I have this suggestion. Move your home next to a fracking well and put down your water well along side. Or better yet move your children there or better yet move your grandchildren there. Let the pipeline filled with toxic fluid come along the boundaries of your land here in lovely Northern Minnesota or wherever you live. The same for the oil sand works in Canada. Move your grandchildren up there in the poisonous air and next to the polluted rivers and environmental degradation.

Here is an interesting quote from a proponent of oil sands:
Oil Sands Could ‘Delay’ Peak Oil - Candice Beaumont
http://www.hardassetsinvestor.com/featu ... k-oil.html
** from a portion of the interview****

“Ludwig: Where else are oil sands located besides Canada?

Beaumont: There are some oil sands in the United States as well. In Utah there are some oil sands, and in West Texas. But it's harder to produce in the U.S., because it's still environmentally very difficult.

In Canada, it's in very remote places, it's 40 below zero, nobody is going to that neighborhood. In the U.S., in West Texas, people live where the oil reserves are and so you couldn't have the type of environmental impact that they are doing in Canada, where they are basically destroying the environment. If a bird flies over a river near the oil sands, the bird dies just from flying over the river. It's that toxic. They are just dumping all the waste into the waterways. If you did that in the U.S. you would be in jail.

Ludwig: Is that going to be an issue over the long term?

Beaumont: It's an issue. But because it's in remote areas and not inhabited, they aren't worrying about the pollution, because nobody lives in that area. So, they can do it.”

And I say, “We do live there, it is our earth.”
To be found in my essay: http://sunweber.blogspot.com/2011/02/cu ... eport.html

and http://sunweber.blogspot.com/2012/01/walk-walk.html

[ian807]

No, the peak oil idea isn't dead, assuming you can do arithmetic. Admittedly, this excludes both the inept and lazy which make up the majority.

The peak oil denial stories are coming out at just the right intervals to create brand awareness, and ever more frequently on sits that don't allow user comments. Pretty obvious and blatant to anyone who's paying attention, but that's not too many.

[AgentR11]

Shortages: Is 'peak oil' idea dead?

Not dead, but the idea that a peak in oil production would cause a huge crash has obviously been eliminated. As long as the price is allowed to float, it will mitigate the balance between demand and supply. As supply is somewhat less elastic on the down side than demand, when demand drops as a result of price, the price vs supply balance will slosh around widely (price is now "low" as I type) because there is really a limited amount of storage to put oil as you extract it, and as you get close to your tank farm's limit, you aren't willing to bid on oil, even if it is much, much cheaper than the oil you already have. In addition, demand, once destroyed, is very slow to recover on any particular use, Bob parks the SUV and buys a little car, or maybe even a hybrid; for the next FIVE+ years Bob is using less fuel, even if the price drops below what caused him to change vehicles, demand gone.

So what does 'peak oil' really do? Well, it is a hard cap on growth, all the policy jibberish aside; its a real limit, and we've basically hit it, and slumped because it hurt. Every time going forward that we bang against that limit, we'll slump more, more will be driven into poverty, more high end service work will disappear, more transportation challenges will arise. And we're going to bang that limit dozens and dozens of times before its done with us.

[Keith_McClary]

They are just dumping all the waste into the waterways. If you did that in the U.S. you would be in jail.

Is Minnesota in the US?

[Plantagenet]

They are just dumping all the waste into the waterways. If you did that in the U.S. you would be in jail.

Is Minnesota in the US?

Yes, of course, but in the USA you first have to get an official government permit giving you permission to dump waste in waterways.

[ian807]

Shortages: Is 'peak oil' idea dead?

Not dead, but the idea that a peak in oil production would cause a huge crash has obviously been eliminated.

A bit more complicated than that, I think. The invisible problem is the proportion of energy return to production price.

It takes a certain amount of energy to keep civilization going at its current pace. As the remaining energy return decreases, it takes more money and activity to generate the same amount of energy from oil to move around cars, people, etc.

When the energy return goes down enough to where you can't maintain civilization AND the energy needed to get oil, prices start to go up quickly. Worse, we have a society built on interdependent supply chains dependent on cheap oil. As supply chains are priced out, it's like taking pieces out of a very complex machine.

Bottom line? When this happens, it happens quickly, but everything will look fine, just fine, until very soon before the supply chain decay starts. I'd guesstimate a 5 year time frame from normal to having oil that's too expensive for a non-millionaire, non-military person to acquire. While the feedback processes you describe exist, this process isn't going to be linear.

[FarQ3]

Agent R11 wrote:

Not dead, but the idea that a peak in oil production would cause a huge crash has obviously been eliminated.

AgentR11, I'm not seeing it quite that way. From my perspective we are in the oscillation phase where demand oscillations coupled with production restrictions cause distinct oil price oscillations, I'm sure that you can see this. My observation is that these oscillations are being tempered by 'alternative oil' in that this low EROEI oil is presently subduing the crests of this oscillation. We are now seeing some shale/Tar sands projects getting put on hold as WTI oil is $80US/bbl thus curtailing future production. With the lower oil price will come greater demand and soon the prices will rise again. Presently each oscillation cycle seems to bring a higher 'low' However these oscillations also damage short/medium term prospects for tight oil production additions as investors increasingly see the oil market as too volatile and sit on the sidelines. As this situation continues, tight oil producers will be struggling to increase production and finance will be more difficult to obtain. When this happens oil price oscillations will become much greater only with much higher 'lows' and unsubdued 'highs'. Producers of low EROEI oil will rely heavily on government subsidies, many will go bankrupt (if the govt doesn't go bankrupt first!) .... this will then lead to a fast crash.

[SeaGypsy]

I think that's what's happening now with the Saudis planning to curtail production in July (when the could have done so at $90). A bit of a grind at the bottom ensures a stronger spike, when it does come, because of this mothballing of tight oil projects.

[sunweb]

Keith_McClary - Your reply seemed inane to me. No matter where we destroy our nest (earth) we or our future generations will pay for it.
However, our oil wells, tar sands and fracking are rather limited in Minnesota (Dakatos are making up for it). I suggest the book Willful Blindness by M. Hallernan

Willful Blindness, Willful Hypocrisy,
What’s your spin?

Here’s the deal. Research reveals that we lie to ourselves. Not you and I of course, but others do prolifically. Willful Blindness is one of various books and research papers that verify this. We seem to fool ourselves for a variety of reasons. Two of the main reasons, one is self protective and the other is social protective.
From:
http://sunweber.blogspot.com/2012/06/wi ... y-you.html

[Heineken]

The PO idea may not be dead, but it certainly doesn't capture my imagination the way it once did.

For now, the economy still leads and oil follows. When that situation turns around, we'll be at the peak. Who knows how long it will take. Decades.

[SeaGypsy]

Someone else captures that these days Heini!

[ralfy]

The PO idea may not be dead, but it certainly doesn't capture my imagination the way it once did.

For now, the economy still leads and oil follows. When that situation turns around, we'll be at the peak. Who knows how long it will take. Decades.

It's only been oil price that's following. According to BP, energy demand has been higher than conventional oil production since 2006. See my previous message for details.