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

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.