Peak Oil

Starry - English.

Phono - 1. Fur. A little joke about the impending collapse of civilisation. 2. George Monbiot. Look him up.

(x-post with RJG)

Actually, what they've done is simply translate Green politics into a language that the American government and the right-wing portion of the American people can understand: power and money.

I say, well done the Pentagon.

(Phono - this isn't really a Pentagon thread, is it? I don't think the Pentagon have said anything about Peak Oil - it was a just a way of introducing the topic.)

Argh I am being dragged off to do some werk will post nightmares when I return!

Maybe I'm just looking for some soft quilt action in this thread wrt dwindling oil supplies.

I am not worried about oil. We have had remarkable foresight and have developed plenty of alternative ways of deriving energy and materiel, it's just that since we still have oil the current infrastructure has no reason to completely shift gears.

I am really excited to see that even the Pentagon is jumping on this. I fail to see what all the doom & gloom is about, but then again, I have been kind of daydreaming about something like this since I was 12.

Let's hope this is the moment they wake up Walt Disney.

I'm enough of a pansy to baulk at the notion of even the light, early penumbral effects of this - rolling blackouts, food shortages, general economic downturn, moving out of an easy life of plenty. I suspect you're made of sterner stuff ('daydreaming' vs 'waking up in cold sweat'.

The reason I thought I'd start a thread on this is that most of figures people are playing with to illustrate this issue seem fairly widely accepted and the notion of oil drying up is completely uncontroversial (as Starry says, we were covering this at primary school). Unlike, says, climate change which seems rife with dispute at the very core of the issue - the mechanisms, the degree, the evidence, etc.

There's still a fair amount of coal out there,so what's to worry?

The main problem with coal is that it comes in great gouty lumps that are easy to throw and make good doorstops and paperweights but, if you put them in a pipeline, they just sit there like the idiotic things they are. The same for trying to refine coal into distillates for making things like nylon, jet fuel or rubber.

In a word, the problem with coal, solar, wind power, wood, geothermal, bio-diesel, fuel cells or any of the other existing oil alternatives is loss of efficiency and efficiency is the name of the game in energy extraction. It takes X amount of energy to extract and deliver Y amount of energy to where you need it. The net efficiency is Y minus X. Oil gives you a big Y for a little X like nothing else.

Why worry about efficiency? Only because there are 6.5 billion people trying to stay alive. A whole lot of them are living on the margin between life and death and they all need an energy source to stay alive. If there is a drop in worldwide energy efficiency that margin is going to shift. In the western world, we'll get noticeably poorer. In the third world more people will die (they are already dying).

Then there's the carbon cycle and global warming to worry about, too. It will actually be a Good Thing for the Earth when humans wean themselves from cheap oil, natural gas, coal and wood and convert to cleaner, more sustainable energy sources, like solar, wind and fuel cells. You just have to wonder what kind of price we're going to pay on the way there. There will be a price.

That's the same as saying we've streamlined the process about as much as it's going to get. It has little or nothing to do with the price of oil or the length of time before your X vs Y scenario starts to have an impact.

This would be an incisive observation, except the price of oil wasn't the topic under discussion.

It is equally true that knowing a falling body of a certain weight, shape and size has reached terminal velocity says nothing about the moment it will stop falling. But it is enough to predict the kind of smash that will happen when it does.

Because of these facts, year over year "production" of oil is not a good measure of anything anyway. What is important is the rate at which new reserves are discovered in contrast to the rate at which known reserves are depleted. By this measure, we are also past the peak of "production".

This fact also 'has little or nothing to do with the price of oil or the length of time before my X vs Y scenario starts to have an impact'. But it is damned important fact nevertheless.

So, I'll cop to the pissy attitude, but I am still waiting for you to say something worthwhile that bears on the topic.

The world has not reached the point where the amount of oil extracted each year perpetually shrinks, in spite of all possible efforts to the contrary. The other situations that I identified as having already been reached (permanently rising extraction costs, shrinking reserves) are necessary precursors to reaching the oil peak, but not the peak itself.

At the moment, it appears we are flattening out along the top of the curve, where market forces (shrinking supply, rising price) are limiting demand below the theoretical limit of extraction. We're probably within five years of the actual peak (a WAG).

But when you get down to it, who gives a damn (other than traders) if the actual peak came in 2003, or will come in 2006, or 2008? We're there for all practical purposes.

Let's talk about what it means, or might mean - since the future is notorious for upsetting our predictions.

This type of thinking shits me.

Do you know how many barrels of oil it takes to produce one wind turbine or solar panel?

If the whole world suddenly shifted, right now, to alternate power sources, there wouldn't be enough fossil fuels to make enough alternate power sources that produce the amount of energy we do today. (sorry about the grammar)

The only solution there is for long-term sustainability for earth is for a sizeable amount of the population to die off. Earth can't support six a half billion people anyway, especially not living the way we do.

Check out this: http://www.fromthewilderness.org I recommend his second CD, which is exactly about what this thread is discussing.

Shasha's point about the petro-cost of alternative fuels is really interesting.

But really, we have no idea what the world will look like in 100 years. Who'd a thunk an iPod-sized thang could hold 40gigs. We just don't know.

If you have to ask, you'll never understand.

you should talk to Sebastien.

Is he giving out handguns?

Sorry, the correct link is

http://fromthewilderness.com

http://science.slashdot.org/science/06/02/16/0251210.shtml

Not so much:

http://www.princeton.edu/hubbert/images/cera-chart.gif

this is the one thing that persistently creeps into my brain and makes me want to stockpile grain or powerbars or whatever. on measure I guess I'm optimistic, I just had a kid after all.

I mean this in the grand sense. If there's plenty of shit going on that most folks agree can't continue, what's going to provoke the change? A small-scale nuclear war? another U.S. economy collapse? $6/gal gasoline?

Still, something I pondered about the alt.fuel movement lately is what it would actually change, aside from some bits of foreign policy or local environmental conditions. I mean, even if we've already past the peak oil bit, what if we just transitioned to another fuel? Would it not seem like nothing would change, urban sprawl/shitty suburbs/no mass transit would continue. Wal-mart has cheap prices due to being able to ship goods on diesel trucks? they just switch over to biodiesel, there ya go.

What's gunna be the thing that finally forces our culture to (evolve?

i heard brazil will be more than 90% energy independent very soon; for a country the size of the united states this is very impressive

I don't see why they have to be the same thing. Europe has had gas prices in the $6/gallon range for a while now, and its economy hasn't collapsed. I agree that an immediate shock to gas prices to that level would have repercussions, but a staggered series of gas tax increases over 10 years combined with income tax rebates to consumers would have minimal impact to the overall economy while reducing gas consumption. See this excellent article from today's NY Times for more on this proposal:

A Way to Cut Fuel Consumption That Everyone Likes, Except the Politicians

the preponderance of this price is tax, which is invested in a variety of ways to improve people's lives; this is not the same as "$6/gallon gas"

This is, in fact, a lie. Yes there is an energy cost in production, it does not have to be oil that supplies the energy and you get more energy in the fuel than you put into the production process.

The meaning of my post is that it would be better for the US to go to $6/gallon gas now through taxes before the price gets there on its own due to market pressures. This would allow us to control the rate of price increase thereby giving society time to adjust.

xpost: oh

Way i do the math, tho is that:

-my leased car gets about 20-21 mpg, so that's about $0.10/mile.
-if I switch to a diesel getting 40+ mpg, that kicks it down to $0.075/mile.

they're testing out B5(5% biodiesel) on the local busses right now, so hopefully that will be a success and they'll broaden the program(kicking it up to B20 or higher for the entire fleet).

I'm a third of the way through the "The Party's Over" book on peak oil that Cathy lent me and will possibly have more useful things to say on this thread when I've finished it.

Well, if you read the whole Times article, you'll see that's only half of the plan. The other half is that the full amount of money received by the tax will be directly refunded to individual taxpayers - therefore the net effect on consumer spending power is nil. If you want to keep buying the same amount of gas, the net impact on your spending would be zero. If you start buying less, you'll actually be net cashflow positive.

Well, not to be flip, but no shit! You've defined precisely the problem that this proposal is designed to address.

except that (and you force me to repeat myself from the State of The Union thread) TRUCKS also use GAS, and it is the net cost of charging 80% tax on every single material item that is bought and sold in America that makes that proposal impossible.

I find it amusing that people are all the time discussing how to affect the behavior and fuel consumption of individual commuters like themselves and everybody they know while not noticing the fact that, especially in the US, there is rarely an item you can point to that did not spend a great deal of time getting to where it is in the back of a diesel-driven truck.

So there's the rub, you can't encourage conservation even by using the proposal in the NYT until you've switched the national cargo transit system over to something relatively cheap. Otherwise you just instigate massive inflation. I don't see that being addressed anywhere at all.

I never thought I'd live to learn to love the coal dust
Never thought I'd pray to hear the tipples roar
But, Lord, how I wish that grass could change to money,
And greenbacks fill my pockets once more

xpost yeah, i posted that mainly because the L&N needs to make more stops, we need better rail, more stuff should be carried via rail - the coal aspect just adds an extra twist - energy and transport and livelihoods have all been intertwined for a long time in this country

basically, i see consumer transport 40 years from now breaking down like this

long-distance: aeroplanes and cars
medium to short distance: rail
intraurban: horses

TOMBOT is perfectly correct about massive inflation. But, of course, no one is addressing how to avoid this because there is no way to avoid it. It literally doesn't matter what we do about our energy needs, cheap oil kept prices down and cheap oil is over - and there isn't anything cheap enough (in real terms) to replace it without causing inflation.

The main point of an energy/oil tax is that by creating a price structure that makes oil artificially expensive, you create incentives to convert infrastructure away from oil, you recapture the price difference that the tax created and redirect it within the country so there is no net loss of wealth, and most importantly, you gain some control over the process and a cushion that can be manipulated in beneficial ways.

Free-market idealogues will point out that the market will create these incentives "naturally" and therefore no tax is required - all the tax does is to "warp" reality. The answers to this are that:

First, the market is a hair-trigger mechanism, sensitive only to immediate conditions, while large-scale capital expenditures are based on imperfect predictions of future conditions, often extending over 20 to 50 years. Investors can go broke in markets. Sometimes markets go on binges that misallocate vast sums and bankrupt millions of people. When a whole nation goes broke betting on a market, they lose. It's a gamble. We shouldn't gamble our national future on the oil market. That's how world wars start - when we try to recoup the losses we gambled but could't afford to lose.

Second, the oil market is anything but a free market. The oil economy has been vastly subsidized and our infrastructure doesn't reflect its true costs. Even eliminating all subsidies to all energy sources wouldn't magically turn the market "free", because the warping is frozen in place in the form of a trillion dollars worth of capital investments made under the twisted old regime. The only remedy for this inequity is "affirmative action". An oil tax would help to build a competing infrastructure and actually level the playing field.

Third, global warming is real. The cost of global warming is not reflected in the price of oil. Insurance companies are starting to understand that they have been burdened with heavy economic risks caused by oil, coal and gas burning, and they are pissed off. The problem with letting this cost shift continue is that it does nothing to connect the cost to the behavior and therefore is like punishing a puppy a few years late for pissing on the rug today. A tax is not a great mechanism for addressing this cost at the gas pump, but it far, far better than what we have now.

That's enough for now. Let us all resume fiddling - rather than investing in fire engines now, against Rome's shocking risk of burning up next year - or perhaps 'investing in better levees before New Orleans goes smash' might be the more topical reference.

This is, in fact, a lie. Yes there is an energy cost in production, it does not have to be oil that supplies the energy and you get more energy in the fuel than you put into the production process.

-- Ed (dal...), February 16th, 2006.

Well I don't know much about this, but wouldn't some of the energy input be the energy in the organic material itself? Isn't that the whole idea? Obviously no one would be excited about a fuel that took in more energy than it put out.

Absolutely.

I don't think that the gas-tax/payroll-rebate proposal does overlook this fact. No one's denying that gas is also used in transporting goods and that the cost of that gas is passed on to consumers. So when you raise the gas tax, the cost of any good that requires gas to be transported will also rise by some factor. (I don't have figures on what percentage of the price of an average product is transportation cost, but if, for instance, the cost of gas represents 5% of the cost of a dozen eggs in the supermarket, then if a gas tax raises the cost of gas 100%, then the cost of eggs would go up by 5%. I don't think this really qualifies as "massive" inflation, but it is inflation.) However, the important thing to remember is that all of the money raised by the gas tax is going to be given back to consumers in the form of tax rebates - this includes the amount of money raised by taxing gas used for transportation. So in other words, if the price of your eggs goes up by 10 cents because of this new tax, you will be getting 10 cents more in tax rebates. So it remains true that the initial net effect is a wash. Over time, of course, companies will have an incentive to be less reliant on gas for transportation, because that will allow them to lower their prices and be more competitive.

The concept of oil expresses perfectly the eternal human dream of wealth achieved through lucky accident, through a kiss of fortune and not by sweat, anguish, hard work. In this sense, oil is a fairy tale and, like every fairy tale, a bit of a lie. Oil fills us with such arrogance that we begin believing we can easily overcome such unyielding obstacles as time. With oil, the last Shah used to say, I will create a second America in a generation! He never created it. ...

For rulers, one of its more alluring qualities is that it strengthens authority. Oil produces great profits without putting a lot of people to work. Oil causes few social problems because it creates neither a numerous proletariat nor a sizeable bourgeosie. Thus the government, freed from the need of splitting the profits with anyone, can dispose of them according to its own ideas and desires. Look at the ministers from oil countries, how high they hold their heads, what a sense of power they have, they, the lords of energy, who decide whether we will be driving cars tomorrow or walking. And oil's relation to the mosque? What vigor, glory, and significance this new wealth has given to its religion, Islam, which is enjoying a period of accelerated expansion and attracting new crowds of the faithful.

-- from Shah of Shahs by Ryszard Kapuściński

wha?

http://img.photobucket.com/albums/v134/tracerhand/chinesecementproduction.jpg

Umm, this is CHINA we're talking about. If they don't want to sell gasoline to their citizens, they're not going to.

http://www.guardian.co.uk/commentisfree/story/0,,1760673,00.html

For one, the scary geologists' estimates of when peak oil will come are not based on pessimistic studies, they assume that more oil reserves will be found in the future, in quite optimistic amounts.

The notion of a sharp global peak in production does not withstand scrutiny, either. CERA's Peter Jackson points out that the price signals that would surely foreshadow any “peak” would encourage efficiency, promote new oil discoveries and speed investments in alternatives to oil.

Yes, that's right, because the world is a perfect market model where every problem stimulates its own solution. What is $75 a barrel if not a price signal? And has everyone rushed to pour money into alternatives? Not that I've noticed.

Incidentally, when we talk about "alternatives", it has to be said that they are all in different ways, rubbish. Coal will probably run out a long time after oil, but it's far less efficient. Fossil fuels all have the same problem, they are exhaustible. Everyone knows this and yet we're all in denial about what that actually means. Nuclear energy is not magic, it also depends on uranium which will run out (probably before coal does). Wind, solar, hydroelectric etc when compared to the crazily high energy efficiency of oil are peanuts. They are expensive, they yield very little energy. Biomass is also expensive and accelerates global warming.

So, it's no good saying "we've got plenty of time, by the time oil starts to get scarce we'll have developed really amazing alternative fuels that will last forever". It will need *massive* resources to develop alternatives to the point where they can supply us with energy at the level we currently consume it, and I doubt they will ever be able to provide as much as oil. And no one is putting massive resources into anything while we all stand here denying that there's a problem.

And if “unconventional” hydrocarbons such as tar sands and shale oil (which can be converted with greater effort to petrol) are included, the resource base grows dramatically—and the peak recedes much further into the future.

Yeah, the big point here is that greater effort to extract = much more expensive. The oil we've been using so far has mostly been the nice, easy to refine stuff near the surface. Once we run out of that, we'll have to spend lots more money extracting and refine crappier oil, which will push the price up higher and higher.

The world economy is so tied to oil that everyone should be worried about what will happen when that resource runs out. But the whole idea of Peak Oil is that the big problems don't just start when it runs out, they start when it begins to get scarce, as an economy based on cheap oil suddenly has to adjust to oil at $100 a barrel plus.

As oil production slows, prices will rise up and down the futures curve, stimulating new technology and conservation. We might be running low on $20 oil, but for $60 we have adequate oil supplies for decades to come.”

Ooh wow, decades. That's AGES. No need to worry. Seriously, you'd think from reading this that when prices of oil got too high, we'd all happily start riding our bicycles and putting on extra jumpers to keep warm and the problem would just go away. There are two ways that conservation will happen, either governments force people and businesses to stop using so much fuel or they become too poor to afford it. Neither of those is going to be much fun for anyone.

The geopolitics of oil have been pretty nasty so far, and that's been when we had loads of it. As it starts to get scarce, I really can't share The Economist's optimism.

Monbiot is a fool. We have a few decades tops before we will desperately need alternatives to oil. Whatever we move towards will require massive investment in infrastructure. It would be a serious mistake to waste all our time and money on something that will just postpone the inevitable for a few more years.

The efficiency of wind power in particular I seem to remember is fairly pathetic.

I'm not entirely sure what to make of this, but

1) Stopping deposits to the Strategic Petroleum Reserve because prices are a little high seems massively short-sighted

2) I doubt it will help much anyway, and

3) As much as I think rising prices are inevitable, the most recent spike has been awfully steep and that makes me very suspicious. There's been an awful lot of hype around peak oil lately, and I wonder if this isn't just the Exxons and BPs of the world taking advantage.

I was terrified to discover that the BNP attended the Edinburgh peak oil conference. They're quite looking forward to an energy crisis. We've made a lot of the running for them by handily by making their bogeyman of choice seem much more powerful. Good work guys!

Yes. Sorry. There are lots of arguments about the right methodology for this sort of thing but:

http://www.eroei.com/eval/net_energy_list.html

Pro-nuclear activists make their point eloquently. Their problem is this: if there is no alternative to nuclear power, and if time is short, why is nobody in Britain ready to build one?

I put the question slightly differently to Tony White, of Climate Change Capital, a London firm that analyses energy issues for businesses and organisations. Supposing I was an entrepreneur and I wanted to get into the electricity generation business in Britain. Supposing I had deep pockets for investment up front. Supposing I wanted to build something that would generate 1,000 megawatts of electricity - about as much as a medium-sized conventional or nuclear power station. Supposing I didn't care what the technology was. What would he recommend?

His answer is surprising. Not gas, not nuclear, but coal - specifically, a new type of coal power station called an IGCC, where the coal is stripped of C02, which can be sold to the offshore oil industry or "sequestered" - injected underground. "It's much cheaper to take C02 out of coal in an IGCC than out of natural gas," he says.

http://www.guardian.co.uk/nuclear/article/0,2763,1584356,00.html

In the book Cathy lent me, in the chapter in which the author looks at the outlook for various fuels, his dismissal of coal seemed the least assured.

The EROI for Ethanol is terrible. So much for Bush's big plan.

(also, he wasn't writing from a UK perspective)

As in, "We have very little else to sell besides this one commodity, and there isn't a whole lot of it left, so would you all please not use it so quickly, so that we don't have to find new jobs."

Even if it's that, I'm torn because I think rising prices are the only thing that can change people's ways.

Nah, I think the oil majors will do well out of all this however it pans out. Rising prices, fingers in pies etc.

And yes, it seems much more sensible to me to use coal rather than nuclear as the stop-gap while we are building the renewables infrastructure, because as I said uranium will run out before coal, and also nuclear = terrifyingly dangerous.

I am trying to understand what a hydrogen economy would mean, but I've got in a muddle.

xpost - Cathy - I agree; given the way in which democracy has been hollowed out in th west, the residue of support for it is so much less than last time around; realising that was my tipping point, and the issue has become my number one most important thing in the world that something needs to be done about soon.

A fascist, tomorrow.

Especially when Peak Oil advocates are talking about things like this:

ASPO’s Oil Depletion Protocol (Campbell 2004) is a scenario that aims to persuade national governments to cope with declining oil production equitably and peacefully, on the world scale. An annual depletion rate (the percentage of remaining global oil reserves produced each year, currently about 2.5% per year) is calculated by experts, after which nations agree to reduce their consumption and/or production of oil year after year strictly in accordance with the depletion rate. How population reduction will be achieved in step with growing oil shortage is not spelt out. Some will see the Protocol as too idealistic for a Darwinian world, because it expects every nation to co-operate regardless of whether they are resource rich or poor, have a high or a low birth rate, or are responsibly or chaotically governed.

Probably the greatest obstacle to the scenario with the best chance of success (in my opinion) is the Western world’s unintelligent devotion to political correctness, human rights and the sanctity of human life. In the Darwinian world that preceded and will follow the fossil fuel era, these concepts were and will be meaningless. Survival in a Darwinian resource-poor world depends on the ruthless elimination of rivals, not the acquisition of moral kudos by cherishing them when they are weak. In fact, human civilization in the fossil fuel era has been totally anomalous, fuelled by the unthinking exploitation and exhaustion of all the world’s resources, not just fossil fuels. Sir Fred Hoyle pointed out, decades ago, that Western civilization was a “one-shot affair”, for this reason (Duncan 1997).

So the population reduction scenario with the best chance of success has to be Darwinian in all its aspects, with none of the sentimentality that shrouded the second half of the 20th Century in a dense fog of political correctness (Stanton 2003 page 193). It is best examined at the nation-state scale. The United Kingdom will serve as the model.

To those sentimentalists who cannot understand the need to reduce UK population from 60 million to about 2 million over 150 years, and who are outraged at the proposed replacement of human rights by cold logic, I would say “You have had your day, in which your woolly thinking has messed up not just the Western world but the whole planet, which could, if Homo sapiens had been truly intelligent, have supported a small population enjoying a wonderful quality of life almost for ever. You have thrown away that opportunity.”

The Darwinian approach, in this planned population reduction scenario, is to maximise the well-being of the UK as a nation-state. Individual citizens, and aliens, must expect to be seriously inconvenienced by the single-minded drive to reduce population ahead of resource shortage. The consolation is that the alternative, letting Nature take its course, would be so much worse.

The scenario is: Immigration is banned. Unauthorised arrives are treated as criminals. Every woman is entitled to raise one healthy child. No religious or cultural exceptions can be made, but entitlements can be traded. Abortion or infanticide is compulsory if the fetus or baby proves to be handicapped (Darwinian selection weeds out the unfit). When, through old age, accident or disease, an individual becomes more of a burden than a benefit to society, his or her life is humanely ended. Voluntary euthanasia is legal and made easy. Imprisonment is rare, replaced by corporal punishment for lesser offences and painless capital punishment for greater.

http://69.28.73.17/images/alternative3.jpg

In the case of the lower animals it seems much more appropriate of their social instincts, as having been developed for the general good rather than for the general happiness of the species. The term, general good, may be defined as the rearing of the greatest number of individuals in full vigour and health, with all their faculties perfect, under the conditions to which they are subjected. As the social instincts both of man and the lower animals have no doubt been developed by nearly the same steps, it would be advisable, if found practicable, to use the same definition in both cases, and to take as the standard of morality, the general good or welfare of the community, rather than the general happiness; but this definition would perhaps require some limitation on account of political ethics.

—Charles Darwin [1871] The Descent of Man, and Selection in Relation to Sex. Volumes 21-2 of The Works of Charles Darwin. Edited by Paul H. Barrett & R. B. Freeman. Washington Square, New York: New York University Press, 1989, p. 125.

that last clause = Darwin approaching the rim of "politics" (i.e. "humanity") and stepping back, afeart

SUP DOG

Soon you and Cozen will be the only ones left, fighting over my capo, which has turned up in a loch.

I totally forgot about this. I think we're going to be OK, actually

crosspost

you don't notice it, so much, in glasgow, though

if it was just me and cozen, he could live in the west end and I could live in the centre of town

Which is the problem of much of the Peak Oil discussions. There's peak oil as a impetus for crash courses in alternative energy development, which is what Hubbert was advocating before his death.

Then there's Peak Oil as a political buzzword of manipulation for resource-driven imperialism, price fixing, and civic fear.

The Coming Panic over the End of Oil - Coming to a Ballot Box Near You
Posted on Thu Dec 4th, 2003 at 12:17:58 PM EST
By Walt Contreras Sheasby

Psst! Hey, there. You believe that we are facing a crisis, an Imminent Peak of World Oil Production, right? Well, the insiders in the President's Energy Strategy Team would like you to join with them in solving this new sudden crisis.

In fact, you may already have been inducted. You panic at the idea of Western civilization collapsing as the engines and machines grind to a halt, uh-huh? You agree with Ron Swenson of Ecosystems that "The world is about to experience a real energy crisis, likely to be a calamity unparalleled in human history" (Swenson, 1996).

You think, as oil geologist Colin J. Campbell says, that "the very future of our subspecies 'Hydrocarbon Man' is at stake," right? You agree with Virginia Abernathy that there are too many immigrants using up our resources, I'm sure.

You probably realize, as many do not, that the Era of Cheap Oil and Gas is over. As Matthew E. Simmons, the CEO of the energy investment bankers of Simmons and Co. International, recently said: "I think basically that now, that peaking of oil will never be accurately predicted until after the fact. But the event will occur, and my analysis is leaning me more by the month, the worry that peaking is at hand; not years away. If it turns out I'm wrong, then I'm wrong. But if I'm right, the unforeseen consequences are devastating "

Well, guess what? Simmons is not only an oilionaire himself, but he has been a key advisor to the Bush Administration and to Vice President Cheney's 2001 Energy Task Force, as well as sitting on the Council on Foreign Relations. Simmons is a board member of Kerr-McGee Corp., a major oil and gas producer. He insists that the US government is very worried about oil depletion. However, Cheney's secretive National Energy Policy Development Group (NEPDG) refused to make its records of closed-door meetings with industry executives public. The Industry has taken a beating in public opinion since the Kyoto summit put the spotlight on global warming. And now Simmons apparently wants to make the public's fear of The End of Cheap Oil the drum beat of the 2004 Re-elect Bush and Cheney Campaign, although a more enlightened energy policy, he worries, "is going to take a while."

...

Without a doubt, despite the talk of alternative fuels, the use of government to stimulate the exploration and discovery of new oil and gas fields is at the top of the agenda. Simmons believes that the reason oil reserves have fallen so far behind oil and gas consumption is that "we drill far less wells. We also stopped doing most genuine exploration." Higher oil prices are essential, since "The higher the cost, the more you can extend, recovering more and more of the harder and harder to get resources." Simmons funds the remaining wildcatters, handling an investment portfolio of approximately $56 billion, so he should know (Simmons, 2003a).

In fact the coalition that is pushing for a radical new energy policy is largely composed of those who stand to benefit from a revival, not a phase out, of oil and gas development. The intellectual and activist core of the coalition is made up of those veteran oil geologists and engineers who use the method of modeling the ratio of reserves to production developed by the maverick research geophysicist Marion King Hubbert, who died in 1989. He believed that the peak of production is reached when half of the estimated ultimately recoverable resource, determined by what has been discovered and logged cumulatively as actual reserves, has been pumped. In 1956 at the Shell Oil Lab in Houston, Hubbert startled his colleagues by predicting that the fossil fuel era would be over very quickly. He correctly predicted that US oil production would peak in the early 1970's.

Support for a remedial program of oil exploration and development versus switching to research and development of alternative energy sources tends to be found among oil experts who are consultants to the industry. While accepting some of the values of the New Age, they largely remain loyal to their calling as oil geologists and wildcatters. The leading trio of Jean H. Laherrere, Colin J. Campbell, and L.F. (Buz) Ivanhoe have worked for, or with, the leading firm modeling oil fields, Petroconsultants of Geneva. Since the 1950s, they have been fed data on oil exploration and production by just about all the major oil companies, as well as by a network of about 2000 oil industry consultants around the world. They use this data to produce reports on various matters pertinent to the oil industry, which they sell back to the industry. "This much is known, Kenneth Deffeyes writes, "the loudest warnings about the predicted peak of world oil production came from Petroconsultants" (Deffeyes, 2001: p. 7).

In a late 1998 merger Petroconsultants became IHS Energy Group, a subsidiary of Information Handling Services Group (IHS Group), a diversified conglomerate owned by Holland America Investment Corp., IHS Group's immediate parent company, for the Thyssen-Bornemisza Group (TBG, Inc.). In the 1920s George Herbert Walker and his son-in- law, Prescott Bush, had helped the Thyssen dynasty finance its acquisitions through Union Banking Corp. and Holland-American Trading Corp. (Wikipedia, 2003). Until his death last year, Hans Heinrich Thyssen-Bornemisza, the nephew of the Nazi steel and coal magnate, was one of the world's richest men. Some of the old Hubbertians would probably flinch at such an association.

That is true as far as it goes. But it leaves out an important distinction, which is usable vs. unusable forms of energy. Conservation of energy/matter is one of the basic principles of thermodynamics. But the other is that entropy increases - which means that energy tends to dissipate into unusable forms.

See http://en.wikipedia.org/wiki/Entropy

Oh, dear me. This is true, but irrelevant to the question. We are busily turning a fair lot of potential energy in the form of molecular chemical bonds into a lot of heat, light, atoms and other, different molcecules. This has consequences, you know.

All that potential energy was obligingly deposited for us in the form of fossils, which in turn received it from the sun long, long ago. Sunshine is what allows the earth to locally bypass the Second Law of Thermodynamics and create more organized systems rather than increased entropy. That'll continue until the sun succumbs to that law.

Thing is, the local source of sunlight is pretty constant (although decreasing over time) and a few million years' worth of it has gone kablooey lately in various human engines and consequently has spewed a whole lot of carbon dioxide into the atmosphere that used to be in a fixed and non-gaseous form like coal or oil or trees. Funny thing about all that heat, light and new molecules that we've exchanged for - they are hanging around and heating up the earth and fundamentally changing the local atmosphere - not that this means squat on the level of the universe, but it seems to be quite relevant to this particular planet during this epoch.

So, all this may be "basic physics" (and - yes - I am absolutely certain that life will go on, despite the greenhouse effect) but if you do not see this as posing a local problem for the human economy that calls for a better solution than folding your hands and continuing to do as you have always done before, then your brain has seized up IMO.

It's funny how not so many people are saying SCOTLAND'S FOR ME!

I agree that it is possible to imagine a much better way of doing almost everything we do now. A certain difficulty arises when you contemplate the means of implementing any utopian vision you care to imagine. There are only a few handles to grab for changing society and if you grab them too hard lots of people get hurt. Grab them gently and not much happens at all.

This reservation applies with especial force when you realize what a tremendous botch has always happened with every large-scale scheme for improvement or rectification or rationalization of whatever has grown up organically out of the compost pile of human culture.

at the same time in no way am I willing to give up on improving the current culture altogether, which is one of the reasons I currently have the job I do.

I mean last I checked running a statewide energy efficiency program was considerably more harmless and dare I say it, even more beneficial way to encourage change in our fossil fuel-centric culture than invading a foreign country and killing tens of thousands of people in an effort to better control the area's resources.

Democrats, meanwhile, were assembling their own package of measures, including a proposal offered by Sen. Bob Menendez, D-N.J., for a 60-day suspension of the 18.4 cent federal gasoline tax and the 24-cent a gallon diesel tax. He said it would provide immediate relief of $100 million a day for motorists.

http://news.yahoo.com/s/ap/20060427/ap_on_go_co/oil_taxes_24

I didn't really know what was going on with that audio problem bit. I liked the cycling guy powering the streetlamp.

Yeah, his Blair impression is maybe the best I've seen.

obviously this has been known since at least the 50s (hubbert etc), but this stuff (energy/resource worries) was mainstream in ths 70s, why do you think it went off peoples radar throughout the 80s and 90s, and is, only now in the last few years becoming of concern to people again

you can only really answer a question like that with big sweeping generalisations, so here are some:

in the 1970s, there were two major oil shocks, in 1973 and 1979. chaos and panic arose, and people started worrying about the scarcity of resources, particularly oil. this really affected the foreign policy priorities of governments, but in the public consciousness it gradually waned as the memory faded.

I suppose the ecology movement of the 70s was very tied into the broader peace movement which grew out of the vietnam war, the cold war more generally and opposition to nuclear weapons/power. this was very much linked to a particular generation, and it waned as that generation grew up.

the end of the USSR was the big thing in the 80s/90s, and radical critiques of capitalism such as ecologism weren't quite so popular when it appeared to be gaining ground all over the world as an economic system.

as for why it is gaining ground now, I don't really know. perhaps the increasing scientific consensus over global warming has resulted in new acceptance of environmental politics, although still far far fewer people have heard of peak oil than global warming. maybe the anti-globalisation movement that gained prominence after the seattle protests of 1999 has picked up and popularised peak oil theory on the back of broader discontent with the status quo. it's possible that the new interest in oil geopolitics due to the iraq war can go some way to explaining the recent rush of popular peak oil books that have been published.

there's also the fact that it's getting ever closer, but I'm sure it's renewed popularity has more to do with all these interconnected, hard-to-quantify cultural trends. ideas are subject to fashion as much as anything else.

In the '70s, the oil was predicted to have run out by now (or around now IIRC), people kept discovering new oil and it doesn't show any sign of drying up any time soon. I suspect it is climate change that's making people think about it; something that was a last item in the news thing in the '80s and still stuck in an 'is it really happening' thing in the '90s.

I think it's also because Peak Oil is more nuanced. The vibe in the 70s was 'OMG the oil will be gone!' when Peak Oil is more about the dynamics of the oil industry, its effect on the wide economy and the psychology of knowing we're past halfway of usable resources (and effect on prices that such psychology triggers).

<i>as for why it is gaining ground now, I don't really know.</i>

i believe it mostly has to do with rapidly rising demand in places like China and India (and the fact that that demand should grow). also the fact that oil prices (in today's dollars) are once again around historical, sky-high peaks, is seen as indirect confirmation of vanishing supply (i.e. if there weren't supply problems then production would just adjust to meet demand and we wouldn't have these kind of spikes

rapidly rising demand in places like China and India (and the fact that that demand should grow)

annoys me that back in 70s with Mao in charge ppl may have disapproved of China politically but were all like "ooh, isn't great they all ride bikes in Peking!" and now that China is some weird communist/capitalist hybrid there's a big growth in car production and ownership which is fuelling the increase in oil demand. Begs the question -- does economic growth and change to a capitalist system necessarily involve a change from bike use to car use.

Peak Oil is more about the dynamics of the oil industry

so OTM. Not just pricing but technology too -- there are wells being drilled in places now which just wouldn't have been feasible 10 years ago and the price of drilling in inhospitable places has fallen as a result of new technologies, esp wrt rigs and platforms.

does economic growth and change to a capitalist system necessarily involve a change from bike use to car use.

what do you think.

that was why I highlighted necessarily -- it does in that particular instance but why should it in *every* instance?

Former ExxonMobil CEO: "We make the point that it's all hands on deck. By that I mean all sources of energy that meet the competitive standard set by the market should be encouraged. That's coal, clean coal, nuclear, conventional oil and gas, nonconventional oil and gas, biofuels, solar. Anything that can clear the economic hurdle needs to be encouraged."

a little late.

clean coal and ethanol are both crocks of shit.

no, air conditioning is a crock of shit.

Putting golf courses in the desert is a crock of shit, too.

the american southwest is a crock of shit?

In the '70s, the oil was predicted to have run out by now (or around now IIRC), people kept discovering new oil and it doesn't show any sign of drying up any time soon. I suspect it is climate change that's making people think about it; something that was a last item in the news thing in the '80s and still stuck in an 'is it really happening' thing in the '90s.

What really saved our ass in the early 1980s was a combination of conservation resulting from the 1973 and 1979 oil shocks, and the discovery of a ton of oil in the North Sea. Also, at that time, the giant oil fields in Mexico (Cantarell) and Saudi Arabia (Ghawar, which has produced roughly 1/2 of Saudi Arabia's oil, among others) were still pumping oil at full capacity. Also, the United States, which back in the day used to be world's leading oil producer, was still pumping out a good amount, although peak oil production in the United States occurred around 1970-1971.

Presently, the production in Cantarell has peaked, and Ghawar has been rumored to have peaked for a few years now (Atlantic Story Here. To keep the oil coming out at high levels, they've been injecting water into the fields, which temporarily works for several years, but ultimately results in a faster depletion rate.

Oil production in the United States peaked (1970-ish) about 40 years after peak oil field discoveries. Worldwide oil field discoveries peaked about...wait for it...40 years ago.

The problem after peak oil production is reached isn't that there will be no oil left, it's that rising demand combined with a plateau or slight drop in production will result in much higher costs. Also, the oil that's left will not be the "low lying fruit" that the first 1/2 of oil production was made up of. It will be located in places that were not traditionally considered for drilling, like the ANWR and the deep Atlantic. Drilling there is possible, and of course no one would be drilling there if they couldn't make a profit. Someone will always be willing to pay for oil, somewhere, at nearly any price, no matter how high it gets. But the it will be much less cost-efficient to extract that oil, especially when you compare to the days when highly pressurized oil would literally spout out of the Texas fields.

It's a really important issue, especially when you consider that when the price of oil gets out of hand, we'll rely more than ever on coal, with terrible implications for climate change. But, speaking of climate change, I think people can only handle one overwhelmingly difficult and depressing problem at a time, so I'm a little worried about the likelihood of many people caring. I feel like people view it the same way they viewed the global warming problem in the early 1990s: a small clique of people deeply care, a small group care but not enough to do anything about it, a small group is aware that some people are complaining about a problem, but don't believe it will happen (these people believe that oil is an infinite resource, apparently?), and everyone else hasn't heard of it or don't want to hear about it.

it is true that i would kill you for cooler air

sorry, dude

"If The Heat Doesn't Kill The Elderly, I Will"

I think I should note a "bill" proposed by a girl in my high school "mock Senate" section of government class. It was called "Working November," and it proposed that drilling for oil in Alaska should be illegal because when the drill is going into the ground, the drill might accidentally drill through a polar bear they didn't see at first.

Think about that.

Why, that bill is a mockery!

We haven't even TOUCHED the massive reserves of so-called "dirty" oil, simply because it's slightly more expensive to process. Once we're into that to any degree, then I'll start worrying about "peak oil".

the american southwest is a crock of shit?

the cities, yeah

It hasn't even TOUCHED the furniture. Once it spreads to the sofa, then I'll start worrying about "house fire."

The point being that oil, per se, isn't quite the economic lubricant it's made out to be. There are plenty of slightly-more-expensive alternatives waiting in the wings for oil's curtain call.

let's make sure they are sustainable and renewable this time, OK.

let's talk about it libcrypt

http://mrspeaker.webeisteddfod.com/images/peakOilMovie.gif

leslie nielsen is dead.

That's why he plays "oil" in the movie.

I am still interested in which alternatives to oil you find promising and why you think it will not require much dislocation to the economy to replace oil with them. This would be good news, so don't be shy in sharing it.

Ah, you know, I'm probably totally misguided and wrong on this. How 'bout I just capitulate now before the troll-baiting gets outta hand, eh?

the wave hub!! this thing rules

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=allBreakingNews&storyID=2007-09-17T102740Z_01_L17199116_RTRIDST_0_BRITAIN-WAVEHUB-APPROVAL-UPDATE-1.XML

plus, lots of mirrors in the desert (seriously)

we will probably have lots more desert soon, so we'll be ROLLIN in volts

those desert mirrors in full:

http://business.guardian.co.uk/story/0,,1957692,00.html

There are plenty of slightly-more-expensive (and way less efficient) alternatives waiting in the wings for oil's curtain call.

inefficient in terms of EROEI (Energy returned over energy invested), and inefficent in terms of higher technological costs.

http://www.oilcrashmovie.com/

"A Crude Awakening". DO YOU SEE?!

There are plenty of slightly-more-expensive (and way less efficient) alternatives waiting in the wings for oil's curtain call.

-- Z S, Tuesday, 18 September 2007 21:17 (1 month ago) Link

inefficient in terms of EROEI (Energy returned over energy invested), and inefficent in terms of higher technological costs.

-- Z S, Tuesday, 18 September 2007 21:30 (1 month ago) Link

These are monumentally stupid and shortsighted arguments.

http://www.marketoracle.co.uk/Article3198.html

prediction of $150 nexzt year? hyperbole?

So long, and thanks for all the fish

the jevons paradox: increased efficiency leads to increased consumption

very good article and overview of american oil production here:

http://www.alternet.org/environment/84982/?page=1

$150/barrel this year pretty likely, possibly $200 next.

I got my Gazprom logo t-shirt in the mail today.

Hipster

It takes a lot of guts to send your billing information over the internet to the Ukraine. On purpose.

indeed, I have only ever got things through eBay and paypal.

mentally stupid and shortsighted arguments.

I missed this at the time! Internet brings the truth harder than any other medium.

Oops, somehow These are monu was left out of that, but same effect, I suppose.

I got my Gazprom logo t-shirt in the mail today.

*crazy jealous*

oh dude you probably don't want to hear about the baikonur cosmodrome shirt that came with it then

http://www.cccp-shirts.com/

I was so OTM two years ago.

http://www.cccp-shirts.com/product_info.php?products_id=1063

this is the classiest shirt ever and i should probably own it

Peak gas paranoia in Nashville

Call it a self-fulfilling prophecy: An estimated three-fourths of gas stations in the Nashville, Tennessee, area ran dry Friday, victim of an apparent rumor that the city was running out of gas.

Officials said panic regarding a rumor of a lack of gas caused customers to to rush to the pumps.

"Everybody has just gone nuts," said Mike Williams, executive director of the Tennessee Petroleum Council.

He said he has no idea about the origin of a rumor that there was going to be no gas in Nashville. One reporter called him, saying she had heard that Nashville would be without gas within the hour, he said.

Hearing the rumor, drivers rushed to fill their cars and trucks.

CNN called 13 Nashville gas stations at random. Only two reported having gas, and one said it was almost out. The stations said they were being told they would not get more until Monday or Tuesday. iReport.com: Nashville residents desperate for fuel

Katie Givens Kime, visiting from Atlanta, Georgia, was trying to fill up her tank for the trip home when she ran into trouble -- when she was already low on gas.

"We panicked and looked online," she said. "And holy cow, there is no gas in the city. ... It has definitely gripped the city, for sure."

One store clerk told her there was no way she could get gas to go back home, she said.

Williams said some drivers were following gas trucks to see where they were headed, and lines at some stations were a mile long. Fuel was continuing to enter the city, however, as pipelines were working and barges were coming in.

He likened it to Southerners rushing out to stock up on bread and milk when they hear it might snow. As stations began running low, the situation snowballed, he said.

Cambridge Energy Research Associates (CERA) admits that "peak oil is here"

Speaking at the Center for Strategic & International Studies (CSIS) in Washington DC on 8 June, CERA Global Oil Group Managing Director Jim Burkhard began and ended his talk by stating that “CERA acknowledges that peak oil is here, you heard it from a CERA person.”

Mr. Burkhard spoke at a CSIS session on “Transforming the Transportation Sector: Energy Security, Climate Change and Transportation”.

During his presentation, Mr. Burkhard explained that in acknowledging that peak oil is here, CERA’s interpretation is that US gasoline demand peaked in 2008 and is expected to decline in future years. He also stated that CERA maintains its position that the reasons for US liquid fuel demand having peaked are economic and geopolitical in their nature, rather than in any way driven by geologic factors.

ASPO-USA Advisory Board member Scott Pugh was present and provided this report.

Mr. Burkhard’s presentation should be available soon under “Events” at:

http://www.csis.org/researchfocus/energy/

Sheesh, CERA's board of trustees reads like Who's Who In Conspiracy

Hey everyone, raise your vodka high and sing along to the Gazprom song!

https://www.youtube.com/watch?v=xGbI87tyr_4

Gack! Meant to say CSIS' board of trustees reads like Who's Who In Conspiracy. CERA is run by Daniel Yergin (the guy who wrote "The Prize")

Still plenty of conspiracy fun.

Shell, not quite getting it. (By which I mean, enjoy the captions being submitted/trending before they figure out what's going on.)

Ah! Even better -- the Yes Men were behind it.

I wish such sterling efforts resulted in a bigger reaction from the public.

The deluge of oil

http://www.psmag.com/environment/oil-production-peak-oil-fracking-kern-river-north-dakota-brazil-energy-53395/

So this isn't directly related to peak oil, but I have been thinking about pipelines on account of receiving e-mails about the keystone pipeline, and I've also been reading Daniel Yergin's The Prize. Anyway, I'm wondering, can someone make a really strong argument for opposing pipelines? Because it seems to me like (1) it's a lot more energy efficient than transporting oil by rail or truck, and (2) the "toxic spill" risk might be overstated, especially since with other forms of transport you're just going to get more smaller spills instead of fewer larger spills.

I think it's more about the destruction of habitat especially in the construction phase

actually, well, there's stuff like this i guess D:

http://www.rawstory.com/rs/2013/03/30/arkansas-residents-evacuate-as-exxon-mobil-tar-sands-pipeline-ruptures/

re Hurting's post

yeah.

but still not sure why the answer isn't more regulation of pipelines rather than no pipelines. I mean, trucks carrying oil overturn too, and trains carrying oil can crash or derail. I have no idea which of these is the least safe. I'm just not convinced that pipelines are per se worse. Pipleines will, of course, lead to larger single, concentrated spills rather than (presumably) more frequent smaller spills.

a train carrying oil overturned a few days before that AR spill

There's no question (in the literature) that pipelines are both more energy efficient and less accident prone than rail, barge, or road transport.

Don't want a Keystone XL pipeline, well it costs about $20 barrel to ship by rail.

or we could just try not to use the oil so that we don't die

gl with that

Pretty much all the oil from the Bakken shale has shipped by rail, it hasn't really effected the land rush, just cut the profit margins.

If the endpoint we want is to cut oil co. profit margins, then why not eliminate all crude pipelines.

If the endpoint we want is to reduce carbon in the atmosphere, we have to change consumer behavior. The simplest, least coercive way is a broad carbon tax.

I think I understand the reasoning for the Keystone XL pipeline opposition.

If Athabasca oil sands are the "marginal barrel" required to satisfy demand, then increasing its price will hence increase the price of all oil, and act as a virtual carbon tax reducing consumption. Enriching oil companies in the process (many have no stakes in the Athabasca).

The problem I have with the idea is that oil sands aren't the most-expensive "marginal" barrel. For one, there's NO exploration expense finding them - the extent and deposit depth are well characterized. They're on dry land, and immune from icebergs or storms. Ie, its a good deal cheaper in both dollars and ancillary carbon expenditure to produce synthetic crude from tar sands than it would be from real frontier basins, like off the Falklands or offshore Arctic.

So, if one singles out the oil-sands oil as particularly onerous and cuts its margin, investment will simply flow to still more carbon intensive petroleum.

each barrel of oil produces about 0.43 metric tons of CO2. estimating the cost of each ton of CO2 emitted in terms of climate change is difficult, but $35/ton is a reasonable (probably very conservative) estimate that's been used before. So that means that each barrel of oil has a "climate change" cost of about $15.

that obviously doesn't factor in all the other environmental costs (occasional epic disasters like Exxon Valdez and the BP spill for example). and it doesn't factor in the enormous military expenditures that go into protecting the persian gulf, among other places (a cost that has been estimated at $90 billion/year, even if you don't include the Iraq War.

if all those things were accounted for, oil would extremely expensive, and all the other alternatives - including, most importantly, efficiency/not using the oil at all - would be much more attractive options.

but then rich people would make less money, so we can't do that

ZS otm - the pt isn't which way is safest to transport the oil, it's what we have to do to not use the oil at all

well the idea of the climate change cost is dependent on a carbon tax existing and you can't do the math using it when it doesn't exist yet, because its point is to shift preferences not just because anything has a 'real cost'

well the idea of the climate change cost is dependent on a carbon tax existing and you can't do the math using it when it doesn't exist yet

and the amount of the carbon tax (whether $20/ton CO2, $35/ton, $50/ton, etc) is supposed to reflect the costs of climate change, which is of course driven by the release of CO2 into the atmosphere. or more accurately, the amount of the carbon tax is supposed to reflect the benefit society will gain by AVOIDING the damage caused by each ton of CO2.

or are you saying that the costs can't be calculated because it hasn't happened yet? if that's the case, i mean, yeah, of course there's uncertainty regarding the monetary costs of climate change under a variety of scenarios, and which variables you'd include. but that doesn't mean that you can't create a range of estimates and try to choose a reasonable figure.

I'm not saying it can't be calculated I'm saying that the point is not really 'society lost $x because oil was too cheap' - thats always gonna be an imaginary figure - the real point of the tax is to actually shift peoples consumption habits - and it only does that when it exists. not as a theoretical value. it's a different subject than 'how do we produce and transport oil as efficiently as possible right now'.

and the arguments against the keystone pipeline are not about how efficiently to transport oil afaict

and the arguments against the keystone pipeline are not about how efficiently to transport oil afaict

right, and I'm saying maybe they should be, if pipelines = using less oil and spilling less oil than the alternatives (truck and rail). Whereas eliminating pipelines altogether would do absolutely nothing to alter the supply of or demand for oil (other than in the way iatee suggested, which is potentially increasing the cost of oil), and will even require MORE oil to transport the oil. I'm not arguing that we shouldn't ultimately move away from oil altogether (we should), I just think that (1) that's not happening tomorrow, and (2) blocking pipelines doesn't strike me as getting us any closer to that point

but if the goal is to make oil more expensive and thus discourage its use, I sort of get it, although I never hear the anti-pipeline argument made in those terms

generally the terms in which i hear anti-pipeline arguments being made:

https://www.youtube.com/watch?v=uXV6FW9Vg0I

if pipelines = using less oil and spilling less oil than the alternatives (truck and rail).

pipelines = using more oil.

with any source of oil, whether it's light sweet crude or heavy tar sands, there's always going to be a certain amount of oil that isn't extracted over the lifetime of the oil field. that's because at a certain point, the oil is too difficult to get to and it no longer becomes profitable. the profit margin for tar sands is a lot smaller then, say, the famous oil "gushers" in texas from a century ago.

as sanpaku mentioned above, it costs around $20/barrel to transport oil by rail, vs. $3-6 by pipeline. that means that the profit margin of extracting tar sands oil is about $14-17/barrel higher using a pipeline vs. using rail. bigger profit margin = more oil that can be extracted profitably.

also, pipelines = using more oil simply because pipelines can transport so much more oil than rail, more efficiently.

seems like it'd be a better and more effective means to that end to just tax oil more and/or subsidize other forms of energy more to make them more cost competitive (both of which we do to some extent but could obviously do more of)

also, pipelines = using more oil simply because pipelines can transport so much more oil than rail, more efficiently.

― your holiness, we have an official energy drink (Z S), Monday, April 1, 2013 8:13 PM Bookmark Flag Post Permalink

other than the cost argument I don't think there's any basis for this. It's not like right now our use of oil is limited by its availability -- we can all get access to as much oil-based product as we want (gasoline, heating oil, petroleum byproducts, foods grown with petroleum fertilizers, etc.) -- we're way beyond being limited by supply, only by cost.

the point of blocking the pipeline is not to make oil more expensive. (and the idea that preventing the keystone pipeline from being built would increase the global price of oil is just as false as the idea that building it would decrease the global price of oil)

stepping away from all this price/barrel, marginal profit stuff, the point is simply that we know that we cannot continue to use fossil fuels at the same increasing rate as we have until now. i mean, we can (and perhaps will), but if we do, we're fucked. the keystone pipeline is highly symbolic. that's something both supporters and critics of the pipeline protestors would agree on. blocking it would be a highly symbolic action that would be noticed across the world. and yes, there would be new pipelines built the next day by company X in country Y. and on the same day that the Obama administration blocked the pipeline (you can tell this is a fantasy now because he's not going to block it), he would quietly approve a bunch more drilling permits so that he can be in the perceived center, AKA Obama's Goldilocks zone. But blocking it would still re-energize efforts to fight climate change, and it would help give momentum of the green movement. and ultimately, it's that movement that's going to finally push congress to adopt a price on carbon.

yeah, that's a reasonable argument. I just prefer the primary policy tool of giving non-fossil-fuels unfair headstarts over fossil fuels until they become competitive. And since pipelines actually to an extent actually mean using less oil, I have a hard time with the opposition. Not like I'm going to go out and start a "build the pipeline" protest. I do get the symbolic value - you can't exactly build a protest around "stop the oil trucks!" whereas a pipeline is a nice big, singular, iconic sort of thing

I just prefer the primary policy tool of giving non-fossil-fuels unfair headstarts over fossil fuels until they become competitive.
i like that idea, too, but it only works in time to avoid hell on earth-scenario climate change if we would have done it a long time ago. there's a 30-year lag with CO2 emissions before their full impact is felt in the atmosphere. the climate change we're already seeing today is the result of CO2 emitted in the early 1980s. the CO2 we're emitting today will be felt in full force in 2043. we can't embark on a 20-30 year slow changeover to clean energy; it has to happen much more quickly to have any chance.

And since pipelines actually to an extent actually mean using less oil
i'm still not sure where you're getting this from!

What do you think trucks and trains run on?

How will we define competitive?

by price duh fucking shit

magic farts! haha, sorry.

i was trying to explain this earlier - over the lifetime of an oil play, more oil will be extracted if pipelines are used rather than rail transport, because more of the oil in a particular play can be profitably extracted.

imagine that you've been extracting oil for a few years. it's starting to get more difficult. it's costing you $80 to extract a barrel of oil. and let's say the going rate of a barrel of oil is $100. if you have a pipeline that costs $5/barrel to transport oil, you'll go ahead and extract it. your costs are $80 + $5, you sell for $100, you make $15. if your only option is rail, which costs $20/barrel to transport, you won't extract the oil, because your costs are $80 + $20, you sell at $100, you make no profit.

that's a very simplistic example, but the point is that cheaper transportation enables more oil to be extracted profitably. if you're looking at the options - pipelines vs. rail - over the course of a day, then sure, using pipelines uses up less oil, because trucks and trains run on magic farts, i mean, oil. but if you're looking at the exploitation of the oil play as a whole, more oil is going to be extracted when a pipeline is connected.

yeah I understand

actually I wonder how the actual economics work out of directly making production/distribution more expensive (and less profitable) versus making it more expensive on the consumer end (e.g. a tax) and thereby reducing demand. I would assume that added transportation costs --> diminished profit margins --> less production --> higher prices anyway, but idk how it works out exactly.

Price of what? Does price include cost? You're throwing out vagaries against a very entrenched, rich incumbent.

I really don't see why we don't use our very easy instrument--taxes--to curb energy usage.

your po-faced pretending not to understand what I mean by economically competitive posts are boring

and while I'm not totally against energy taxes, they're regressive

Sounds like a great argument ("Let's finance alternative fuels until they're competitive with oil") except it's been pimped for forty years and it's not getting us very far. So be realistic and define what victory is or we'll be funding wind farms and Priuses for another 30 years while the Middle East pumps oil to everyone else and they continue to pollute.

Energy taxes don't have to be regressive. And wouldn't you love the idea of the biggest users paying more in taxes?

actually I wonder how the actual economics work out of directly making production/distribution more expensive (and less profitable) versus making it more expensive on the consumer end (e.g. a tax) and thereby reducing demand.

i would guess that if producers incurred added costs, they'd just pass those extra costs on to consumers. so the consumer gets hit either way. a direct tax on the consumption of oil could potentially be made more fair, though, because you could go the "tax and dividend" route and give some of that money back to the least wealthy.

They will absolutely pass that cost on. They already do.

It's time we get serious about taxing energy on a much, much higher level if we want to at all curb usage.

or you could use the tax proceeds to help pay down our out of control, apocalypse-bringing national debt. seriously folks, if we don't balance the budget in the next 3 years the world will explode. it's even more serious than climate change

i would guess that if producers incurred added costs, they'd just pass those extra costs on to consumers.

Conservatives love saying "they'll just pass the cost on" but this is only possible to a limited extent. Price responds to supply and demand, not cost.

Liberals say that the cost will get passed on, too. And that's because there are so many examples of it.

We already have plenty of regressive consumption taxes. The dire consequences of global warming and polar bears dying doesn't warrant regressive taxes?

Can't we just add energy consumption taxes to heavy industry, the oil companies, and other Bad Guy polluters?

sometimes it gets "passed on" to the shareholders, in the form of reduced profits

and your trolling is too predictable to be effective

I have no good reason to believe that you seriously think a) Congress will ever pass a carbon tax and b) that we can prop up the alternative fuel industry long enough for it to catch the "price" of fossil fuels. And you think it's trolling to point that out.

Those pipelines will likely still be there after the "easy" bitumen is extracted. Their tolls will be regulated. Athabasca can be drained 4mb/d over 40 years (with Keystone XL + Gateway), or 2mb/d over 80 years (with present lines). The area under the curve is the same, as are the effects over the next 100,000 years.

Given what I know about actual extraction methods, the actual amount that can be extracted is fairly price inelastic. The central area of mineable bitumen is limited by overburden and was leased decades ago. The deep stuff extracted by steam assisted gravity drainage etc. is presently economic down to a 6 m thick layer IIRC, which takes the total area nearly to the edge of the Athabasca basin. The real energy cost for SAGD is about 2 mcf natural gas/bbl oil, so its all economic at $97.23 Cushing, or for that matter $67.23 at a railhead. The shareholders get less, but managment and employees still get paid. So long as Calgary wants a paycheck and someone on the planet is willing to buy, it all gets burnt, eventually.

H2: as I mentioned elsewhere, there are fixes for the regressive nature of consumption taxes. Send out dividend checks (per James Hansen), or reduce/eliminate other regressive taxes (like payroll).

Is there any hope that price elasticity will come with greater efficiencies in, say, 20 years? I assume that's what the oil companies would say.

I'm not much of a fan of polling, but Pew just released this:

Keystone XL Pipeline Draws Broad Support
http://www.people-press.org/2013/04/02/keystone-xl-pipeline-draws-broad-support/

Also @hurting2, you might want to look at this guy's post describing the size of the oil industry vis a vis your comments about alternative energy scaling to compete on price.
http://www.quora.com/Oil-Exploration/What-are-the-top-five-facts-everyone-should-know-about-oil-exploration

http://www.wired.com/magazine/2012/01/ff_solyndra/all/1

Nice sidebar on the progress and outlook of alternatives to fossil fuels.

Yergin seems a little too enthralled with the oil pioneers at times, and has a bit too little psychic distance from them, to the point that he seems to take the oil baron's view of little people as things to be manipulated or pushed out of the way, even referring to "chinese coolies" and "local headhunters" (as in "natives")

http://www.theatlantic.com/magazine/print/2013/05/what-if-we-never-run-out-of-oil/309294/

http://www.theatlantic.com/magazine/print/2013/05/what-if-we-never-run-out-of-oil/309294/

― The Great Natterer (dandydonweiner), Thursday, April 25, 2013 4:36 PM Bookmark Flag Post Permalink

right now I don't see why this is much past the same BEYOND 2000 speculative stage as the biofuels you people like to mock

that was a great article, thanks for linking to it.

this is also worth a read for a slightly different perspective: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/13/peak-oil-isnt-dead-an-interview-with-chris-nelder/. i thought this was particularly interesting:

Brad Plumer: It seems like one of the implications of peak oil is that prices will bounce around a narrow window. They can’t go too low, because then all those tight oil wells in North Dakota will be unprofitable. But they can’t go too high, because that will crush the global economy.

Chris Nelder: A number of analysts have argued that the floor on oil prices is now around $85 per barrel. It might vary from place to place. An existing well in the Bakken might be profitable when oil’s at $70 or $75. For Arctic drilling, prices might have to rise to $110 per barrel. But the floor is around $85.

But there’s also a price ceiling for what consumers are able to pay. I think that’s probably around $105 for West Texas Intermediate and $125 for Brent. This is why world prices have been bouncing around this narrow ledge between floor and ceiling since 2007. We have to keep prices in that range, not too high to kill demand, but not too low to kill supply. Again, that’s very consistent with the concept of what peak oil has always been.

share your thoughts - will natural gas continue to be so cheap? Will oil continue to be to expensive? Or will both move closer together - tryign to my home heating choices here

Natural gas will stay cheap for as long as fracking remains very lightly regulated and the environmental damage that fracking is doing remains largely hidden from public view. I expect that at some point in the future a public scandal will erupt over fracking and greater regulation be imposed. Hard to say how much that will drive up the price of natural gas. Right now both the economics and the politics favor natural gas staying cheap, imo.

The exploitation of tar sands and shale oil is having the effect of stabilizing oil prices somewhat for now. But the extraction process for these ain't cheap, so $100/bbl is probably just the floor on oil prices for the near future. Big price spikes in oil are still a very real possibility each time the politics of the Mideast get sticky.

If you think it has to be one or the other, go with natural gas. My own personal choice would be a heat pump, using the subsoil as a heat source (20 feet down it's about 11 centigrade all year around). They're expensive to install, but cheap as hell to run.

decisions, decisions

I like air source heatpumps are neat btu I question how well they work in the northern climates

heat pump for domestic hot water too - then solar panels on the roof - the dream!!!

btu is a nice typo in this context.

Air source heat pumps work best at temps above 5C and their efficiency tails off rapidly as it approaches 1C. You need a backup heat source, but that could be a natural gas furnace, so you'd still be able to ride the coattails of the fracking boom, while using heat pump part time.

We recently tried to install a ground source heat pump, but got ambushed by nasty subsurface boulders that inhibited drilling, so we fell back to an air source heat pump with electric backup. We have a maritime climate here with temps above freezing about 98% of the time, so we could get away with it.

I an very hesitant to go with natural gas - I cant see how this bubble will remain - no energy source can be cheap for long! and converting to oil would be a big upfront investment

why cant they just make 99% efficiency oil burners

why cant they just make 99% efficiency oil burners

Sulfur in the oil, when the oil is burned at the higher efficiencies, creates large amounts of sulfuric acid, which tends to have corrosive effects on the heating system. If they took all the sulfur out of the oil, you could have much higher efficiency burners.

^^ at least this was the explanation given me when I asked my oil heating repairman the same question.

Natural gas <i>will</i> rise to $6/million BTU. That's the breakeven price for the producers in the marginal tight gas fields - they've been selling at a discount since 2008 due to the neccessity of locking in mineral rights contracts they paid dearly for in 2005-8, and have been kept afloat by hedging during that period and asset sales to the majors. The shareholders of the producers haven't benefited from the fracking boom, though it hasn't been a bad time to be in drilling services.

$6/million BTU is equivalent to $36/bbl oil.

I haven't followed Peak Everything as closely as I did last decade, but the analyst whose projections I respected most, Chris Skrebowski and his Global Oil Megaprojects Database, said in 2012 that the world should have spare oil capacity through 2015, which will form the right shoulder of the global production plateau we've been on since 2005. After that there simply aren't enough long lead projects in the pipeline to maintain a surplus. I anticipate 2016-20 will see a resumption of the price climb from 1998-2008.

95% efficient oil boilers exist. That last 4% of efficiency won't make the difference between $6-8/million BTU gas ($36-48/bbl equivalent) and $120+/bbl oil.

Natural gas all the way, unless you live in a rural area with warmer summers, where I'd suggest looking into geothermal heat pumps for both AC and heating (big upfront costs, though).

Oops, that should have been 90% efficient oil boilers, above. I still think that after the coming gas and oil price rises, oil will remain twice the cost (and rising) per BTU compared to North American natural gas.

but with the investment of converting the system from oil to gas is it still a wise financial move?
what if in 5 years the prices are even? Will oil start to slide as people stop using it becuase everyone is using gas instead?

I have natural gas at my sterrt - I have oil burner and steam heating - I would lookto convert to natural gas and somethign like forced hot water for heating. But I fear spending liek 13$k and then in 5 year gas is not cheap anymore

I would calculate your annual savings at a few different Natural Gas price points and see if it's likely to save you significantly more than $13k over, IDK, 5-10 years. Sounds unlikely.

I think the best long term strategy is to invest in solar power , like via a solar share farm , and then convert heating to electric air source heat pumps with a backup like wood

How long is sub-$65-per-barrel oil likely to last for? OPEC doesn't seem particularly concerned but that's approx 50% of the mid-summer price and that has to have an effect on economic planning, even outside the more fragile countries like Russia and Venezuela.

Mid 2015 or so.

Chris Skrebowski and other observers have been predicting a last bonanza of production growth from long-lead time projects in 2013-2014 since 05, and for short-lived U.S. shale well, permits dropped 40%. Both of which mean that ex-OPEC production will drop a few MMBPD over the year. 2015 is perhaps the long-awaited (in some circles) end to the production plateau that began in 2005.

OPEC has only a little leverage here (they've been running within a MMBPD of capacity since 2010), so I'd guess a lot of this is a concerted jawboning and financial/futures effort to punish Russia, while perhaps transferring some indebted U.S. shale producers from shareholders to bond holders.

Thanks!

With all the money I am saving with all this cheap gas, I am going to buy a second house and use it to store cheap gas. And then when prices spike I will sell the gas to pay for my second house.

http://www.star-telegram.com/news/business/article114931993.html

"One portion of the giant field, known as the Wolfcamp formation, was found to hold 20 billion barrels of oil trapped in four layers of shale beneath West Texas. That’s almost three times larger than North Dakota’s Bakken play and the single largest U.S. unconventional crude accumulation ever assessed, according to the U.S. Geological Survey. At current prices, that oil is worth almost $900 billion."

"Unconventional" being the key term here (=dirty, dirty oil).

Damn that article didn't even mention climate change, or offer any further clarification at all of what "intensive drilling and fracturing techniques" entails.

Respect and solidarity to Mark Rylance. https://t.co/8gulALJSsA

— susan abulhawa (@sjabulhawa) June 22, 2019

https://www.nytimes.com/2019/11/03/business/energy-environment/oil-supply.html

Has anyone written anything interesting on what Saudi is up to?

sticking it to the Russians, Iran

but specifically the Russians. the Russians didn't agree with the saudis on a deal to lower production last week. the Russians are supposed to have not done the deal because the over-production was hitting US shale oil producers. they're even going to sell at a discount in Europe, to directly hit the Russians.

treating MBS like a rational actor is kind of fraught also

Ok so the crisis here is one of overproduction as shale oil now is competing more and more, but then how long can the Saudis go on like this for, is the question..

This is the explainer, linking to the coronavirus.

https://slate.com/business/2020/03/markets-coronavirus-oil-opec.amp?

https://www.theglobeandmail.com/business/industry-news/energy-and-resources/article-saudi-arabia-russia-price-war-sends-oil-crashing-spooks-equity/

this seemed a decent enough piece. Saudi Arabia needs oil to be in the circa $80 a barrel to balance their budget while Russian needs only $32 so it would seem like Russia should have more staying power

how’s peak oil doing these days

More like plateau oil innit. Seems like it's been that way for about ~ten years now?

What about the claim that Saudi Arabia is limiting production to stick it to Biden? I've only seen that notion pushed by Ken Klippenstein tbh, no idea how valid it may be.

covid lockdowns did very strange things to oil production. there was about a month in early 2020 where oil futures went into negative values because demand had crashed and worldwide oil storage capacity was 100% full.

i was so dumb and adamant about peak oil. peak hubris for me

lol me too. everything i read was so convincing!

then along came fracking

It totally makes sense to me now why the theory doesn't work -- whether oil is considered recoverable depends heavily on oil price, technological changes, new "discoveries" (which are related to technology) etc. There's no way to pinpoint a "peak" because everything is elastic - there might be one, but we don't have the ability to identify it in advance afaict.

Judging by upthread (1) I am pretty embarrassed by the tone of my old posts and (2) at times I bought into the idea while at other times I suspected it was made up to justify a runup in oil prices (which I now don't think is true either)

The current Eagle Ford Shale play in South Texas being drilled has another shale slightly deeper than currently being explored. Rigs are underdevelopment to be able to withstand the pressure and heat. Also coming up in the next 5 years will be the Austin Chalk shale play, across East Texas and Louisiana. Leases were purchased years ago and not much was successfully drilled. The technology has finally caught up to being able to reach the shale formation.

I'm more embarrassed that I didn't spend more time finding out that M. King Hubbert himself was a huge backer of nuclear energy and that the entire peak oil concept, as he devised it, was a big piece of statistical propaganda to get people to support nuclear breeder reactors.

Maybe not the entire story but still.

Saudi Arabia is working with Russia to drive up gas prices, worsening the Ukraine crisis. The partnership dates back to 2015 when MBS opted to meet with Putin after Obama declined to meet with him, sources tell me:https://t.co/CFMWQxFFMX

— Ken Klippenstein (@kenklippenstein) February 23, 2022

https://bylinetimes.com/2022/03/30/weak-oil-the-looming-collapse-of-putins-petro-dictatorship/

A bit heavy on the speculative aspect. Some interesting data included tho.

This predicament will continue deteriorating over the next decade. Last year, a team of French scientists who work for the government-backed National Institute for Research in Digital Science and Technology found that the world is already using a tenth of the energy produced globally to keep producing oil. By 2024 – in just two years – this will increase to a quarter, a predicament verging on being economically unsustainable. By 2050, fully half of the energy extracted from global oil reserves will need to be put back into new extraction to keep producing oil: equivalent to total collapse.