Guest Post: It's Official: The Economy Is Set To Starve

Tyler Durden's picture

Submitted by Chris Martenson

It's Official: The Economy Is Set To Starve

Once a year, the International Energy Agency (IEA) releases its World Energy Outlook (WEO), and it's our tradition here at to review it.  A lot of articles have already been written on the WEO 2010 report, and I don't wish to tread an already well-worn path, but the subject is just too important to leave relegate to a single week of attention. 

Because some people will only read the first two paragraphs, let me get a couple of conclusions out right up front.  You need to pay close attention to Peak Oil, and you need to begin adjusting, because it has already happened.  The first conclusion is mine; the second belongs to the IEA. 

Okay, it's not quite as simple as that; there are a few complexities involved that require us to dig a bit deeper and to be sure our terms and definitions are clear so that we are talking about the same things.

But if we can simply distinguish between two types of "oil" (you'll see why that term is in quotes in a second), the story becomes much easier to follow.

  • "Conventional oil" is the cheap and easy stuff.  A well is drilled, pipe is inserted and oil comes up out of the ground that can be shipped directly to a refinery.  Whether the oil is "sour" or "sweet" doesn't matter; it's still conventional oil.
  • "Unconventional oil" refers to things like tar sands, ultra-deep-water oil, coal-to-liquids, oil shale, and natural gas liquids.  In other words, oil that is much more difficult and expensive to produce.

The IEA has been producing annual reviews of the world energy situation for a long time and has not mentioned the term "Peak Oil" (as far as I know) until this year's report.  And not only did they mention it, they said that as far as conventional oil goes, it's in the rear view mirror:

Crude oil output reaches an undulating plateau of around 68-69 mb/d by 2020, but never regains its all-time peak of 70 mb/d reached in 2006, while production of natural gas liquids (NGL) and unconventional oil grows quickly.

WEO 2010 - Executive Summary

I might quibble that the all-time peak remains 2005 in the US Energy Information Agency data set, but the main point here is that the IEA has not only used the words "Peak Oil" (finally!) but they've done so in the past tense, at least with regard to conventional oil. 

The IEA now sees all forms of oil, conventional and unconventional, hitting a high of 99 million barrels per day (mbd) by 2035 (including 3 mbd of 'refinery gains').  Of course, we may wish to take even this tepid estimate of growth in oil supplies with a grain of salt, because in every annual report, like clockwork, the IEA has been ratcheting down its estimate of how much oil we'll have in the future: 

Assuming that this trend will continue, our prediction is that next year the estimate of future oil supplies will be ratcheted down one more notch.  Perhaps by another 6 mbd, to match the difference between the 2009 and 2010 reports? 

It's when we eyeball the graph that shows us the breakdown in petroleum sources by type that a few important details jump out at us: 

First, pay close attention to the legend for the chart.  Starting at the bottom, note that crude oil from "currently producing fields" (dark blue) is already in sharp decline and is expected to decline from a high of 70 mbd in 2006 to ~15 mbd in 2035; a loss of 55 mbd over 25 years, or 2.2 mbd per year.  The next band up (gray) is crude oil from "fields yet to be developed," which we largely know about but have not yet really started producing significantly. 

My only comment here is that these fields cannot overcome the expected rate of loss in the dark blue band below them.  All of the conventional oil that we know about is now past peak.  In order to keep conventional oil flat, we have to move up to the third band (light blue), which goes by the spine tingling name "fields yet to be found" - which will apparently be delivering a very hefty 22 mbd by 2035.  In other words, the IEA is projecting that in 25 years, more oil will be flowing from "fields yet to be found" than from all the fields ever found and put into production by the year 2010.    

Colin Campbell, one of the earliest analysts of peak oil who has decades of oil field experience, is on record as saying that the "fields yet to be developed" category, originally introduced to the world as unidentified Unconventional in 1998, is a "coded message for shortage" and was, off the record, confirmed as such by the IEA. That coded message is getting easier and clearer to receive by the day.  

But back to the main story line.  Even if the final assessment of future oil production isn't notched down even one more tick, we have all the information we need to spot an enormous problem in the global story of growth.  Assuming that we stick with the 99 mbd by 2035 estimate going forward, this represents a growth rate in oil of only around one-half of one percent (0.5%) per year between now and then.    

This means that over the next 25 years, the global economy will have to make do with less than half the rate of growth in oil that it enjoyed over the prior 25 years.  How will the economy grow with less oil available?  What will happen to the valuations of financial assets that explicitly assume that prior rates of growth stretch endlessly into the future? 

To cut to the chase, the admission by the IEA that we will not be achieving past levels of energy growth should be the most gigantic red flag in history, at least to those who might care that their money or other paper-based forms of wealth be worth something in the future.  What if that future growth does not emerge?  What happens when the collateral for a loan goes sour?  The IEA report indicates an enormous set of risks for an over-leveraged world reliant on constant growth.

The bottom lines are these:

  • The IEA now admits that conventional crude oil peaked in 2006.  Permanently.  Any gains from here are due to contributions from unconventional oil and natural gas-to-liquids.
  • Under no scenario envisioned will future growth in fossil fuel supplies be equal prior rates of growth.
  • Energy from here on out is going to be (much) more expensive.

I cannot state this strongly enough:  The WEO 2010 report is an official admission that Peak Oil is not only real, but it's already here.  

Scouring the Globe for Fuel

"Tomorrow’s [economic] expansion was collateral for today’s debt."

~ Colin Campbell

The implications from this report are too important to preserve just
for the enrolled members who support this site's mission, people, and
goals.  We're going to open up most of this report to the general public
because we feel it's the right thing to do.  For those unfamiliar with
my work, the job I do most frequently is a combination of information
scout (I connect dots) and analyst (I dig deep). 

Okay, let's head deeper into the World Energy Outlook (WEO) 2010 report.  Here's my quick summary of the report.  

 By 2035:

  • Between 2008 and 2035, total energy demand grows by 36%, or 1.2%
    per year; far less than the 2% rate of growth seen over the prior 27
    years. (Note:  This comes from the "New Policies Scenario," which is
    the middle scenario of three in the report. We'll discuss this one
  • Renewables will be contributing very little to the overall energy landscape, just 14% of the total, and this includes hydro.
  • 93% of all the demand increase comes from non OECD countries (mainly China and India).
  • Oil remains the dominant fuel (although diminishing in total percentage).
  • The global economy will grow by an average of 3.2% per annum.
  • It's time to cut demand for oil by raising prices (they recommend ending energy subsidies for fossil fuels as the mechanism).
  • Conventional oil has peaked, and this is a permanent condition. 
    All oil gains from here forwards will come from non-conventional
    sources and gas and coal-to-liquids programs.

There are enormous implications to that series of bullet points, if
one stops to think about them in total.  One glaring difficulty in all
of this is that the IEA notes that China and India are going to consume
nearly every drop of any potential future increases in oil production. 
Yet overall production is only going to grow by a meager 0.5% per year.

So how does the IEA suppose that oil growth can slow down to a paltry
0.5%/year, see China and India increase their consumption massively,
and still have everything balance out?  We all know that China and India
(et al.) have been growing their oil consumption by massive percentages
in the recent past, and there's some evidence that we can expect more
of that behavior in the years to come.

In fact, this was what India's Premier told the world on November 1, 2010:

Premier Manmohan Singh told India's energy firms on Monday to scour
the globe for fuel supplies as he warned the country's demand for fossil
fuels was set to soar 40 percent over the next decade. 

The country of more than 1.1 billion people already imports nearly 80
percent of its crude oil to fuel an economy that is expected to grow
8.5 percent this year and at least nine percent next year.


So, yes, it's pretty much expected that China and India, et al., will be increasing their consumption by rates much (much)
higher than 0.5%, which means, logically, that some other countries
will have to consume at negative rates in order for the equation to

And this is exactly what the IEA has modeled and proposed:

I want to draw your attention to the green circles that I placed on
there.  Yes, you are reading that right.  To balance everything out, the
IEA has modeled the OECD as actually decreasing its consumption of coal and
oil by significant amounts (that's what a negative 'incremental demand'
requires:  a decrease in current consumption).  The difference is made
up from a mix of renewables, biomass, nuclear, and natural gas. 

Never has such a thing happened in the entire industrial history of
the OECD.  Never.  There are no models or examples to follow here.  No
guidance is offered to suggest how such a monumental feat will be
accomplished, beyond tossing a few more bucks at renewables, as if money
alone could correct for vast differences in energy quantity and

To suggest that the next 25 years for the OECD will be characterized
by a significant reduction in the use of the two primary industrial
fuels is an astonishing claim, and so it deserves to be carefully
examined.  But, speaking bluntly, this is not going to happen.

Any suggestion that the OECD is going to reduce its use of
coal for electricity and oil for liquid fuels has to be accompanied by
evidence of massive programs of investment towards energy transitioning
that, truth be told, have to have been started a decade or more before
the arrival of Peak Oil.  Hinting that it might possibly be a good idea
to move these renewable dreams to the drawing board after the advent of Peak Oil is akin to playing tunes on a sinking ship; at best, you are providing a captivating diversion.

Regardless, no such programs operating at appropriate scale are even remotely in sight.

A point that I try to make clear in my upcoming book
(due out in March 2011 from Wiley) is that such an energy transition
would be evident by such things as the trillions of dollars being
dedicated to it, by eminent domain actions to secure new land for
natural gas pipelines, and by vehicles that could run on electricity or
natural gas being churned out by the millions.  While we can debate
whether we might get there someday, there can be no doubt that we are
not there today.

So if one is a card-carrying member of the mainstream media, what
does one do with such a major event as the WEO 2010 report?  In the case
of the New York Times, the answer is to run a completely schizophrenic
pair of articles, but bury the supportive one deep in the "blogs"
section while placing the one that completely ignores the WEO 2010
report prominently in the business section.

The first of these two articles, separated by only a day
and centering firmly on the IEA report, is titled "Is ‘Peak Oil’ Behind
Us?" to which the article correctly answers "Yes":

Is ‘Peak Oil’ Behind Us?

Peak oil is not just here — it’s behind us already

That’s the conclusion of the International Energy Agency, the
Paris-based organization that provides energy analysis to 28
industrialized nations. According to a projection in the agency’s
latest annual report, released last week, production of conventional
crude oil — the black liquid stuff that rigs pump out of the ground —
probably topped out for good in 2006, at about 70 million barrels a day.
Production from currently producing oil fields will drop sharply in
coming decades, the report suggests.

That's pretty accurate.  You'd think that such a stunning admission
by the preeminent body responsible for preparing such reports for the
OECD would have sparked a fury of investigation and maybe even
self-investigation by the New York Times, which through the years has
pooh-poohed the entire idea of Peak Oil rather religiously.  But that
didn't happen.

The second article is entitled "There Will Be Fuel" and is chock full
of comforting anecdotes and quotes from oil industry executives: 

There Will Be Fuel

Just as it seemed that the world was running on fumes, giant oil
fields were discovered off the coasts of Brazil and Africa, and
Canadian oil sands projects expanded so fast, they now provide North
America with more oil than Saudi Arabia. In addition, the United States
has increased domestic oil production for the first time in a

“The estimates for how much oil there is in the world continue to
increase,” said William M. Colton, Exxon Mobil’s vice president for
corporate strategic planning. “There’s enough oil to supply the world’s needs as far as anyone can see.”

Somebody get that man a pair of glasses (!)

Seriously, any country or corporation that cannot foresee the end of
cheap and abundant oil is being run by dangerous people.  To suggest
that even the most optimistic assessment of oil, which has it peaking in
2030, is too far away to begin planning for today is just silly. 
Really, now...responsible planners considering major capital projects
with multi-decade life spans (which can be 30 years or more for many
things) should just ignore energy?    That's the message here? 
Goodness, gracious. 

In fact, there are so many problems with "There Will Be Fuel" that I
hardly know where to turn to next.  I suppose we could note that the
article quoted "100 years of natural gas" left in the US without
mentioning the all-important phrase "at current rates of consumption." 
To those who are familiar with exponential processes, and who know that
energy consumption has been increasing exponentially for decades, such
an oversight is an enormous red flag.  It betrays either ignorance or
deception on somebody's part (perhaps the editor?), and neither are
acceptable at this stage of the energy debate.  Once we increase
consumption at reasonable and prior rates, that 100 years can rapidly
shrink to mere decades in a hurry.

What's the difference between "100 years of gas" and "maybe a couple of decades"?  Night and day.

Next, we might note that the article goes out of its way to make the
case that "estimates for how much oil there is in the world continue to
increase," while somehow avoiding the essential point that it's not the amounts that matter, but the rates at which the oil can be coaxed to flow out of the ground.  Peak Oil is, has been, and always will be about flow rates, not amounts.

For example, if the very center of the earth were entirely filled
with oil, but we could only get to it through a single, very thin tube
(limiting how fast we could pull the oil out), it wouldn't really matter
how much was there - a hundred trillion barrels could be there -
because how much we could do with it would be limited by the rate of
extraction.  Exponential economic growth requires increases in fuel
consumption.  It always has and it always will, until and unless a brand
new model of economics is developed.

Again, the lack of awareness of this basic concept of the difference between rates and amounts leaves the New York Times piece very much in doubt. 

I could go on, but it's not all that helpful to once again catch the
New York Times playing fast and loose with the facts in order to advance
an agenda; for now, let's just observe that Peak Oil refers to a
condition where the rate of extraction cannot be increased.  If
it were about amounts, then I suppose we would call it "Peak Reserves,"
but it's not, and for a reason:  We care about the flow rates.

It is on this matter of flow rates that the IEA report was especially jarring and succinct:  Peak Oil has happened.

At this point, it may be good to remind ourselves that last year an
IEA whistleblower said that the organization had willfully underplayed
looming shortages due to political pressures from the US.

Please read the following very carefully; it represents very
important context for what we are about to discuss next.  (I'm quoting
at length because it's all essential): 

The world is much closer to running out of oil than official
estimates admit, according to a whistleblower at the
International Energy Agency who claims it has been deliberately
underplaying a looming shortage for fear of triggering panic buying.

The senior official claims the US has played an influential role in
encouraging the watchdog to underplay the rate of decline from existing
oil fields while overplaying the chances of finding new reserves.

The allegations raise serious questions about the accuracy of the
organisation's latest World Energy Outlook on oil demand and supply to
be published tomorrow – which is used by the British and many other
governments to help guide their wider energy and climate change

Now the "peak oil" theory is gaining support at the heart of the
global energy establishment. "The IEA in 2005 was predicting oil
supplies could rise as high as 120m barrels a day by 2030 although it
was forced to reduce this gradually to 116m and then 105m last year,"
said the IEA source, who was unwilling to be identified for fear of
reprisals inside the industry. "The 120m figure always was nonsense but
even today's number is much higher than can be justified and the IEA
knows this.

"Many inside the organisation believe that maintaining oil supplies
at even 90m to 95m barrels a day would be impossible but there are fears
that panic could spread on the financial markets if the figures were
brought down further. And the Americans fear the end of oil supremacy
because it would threaten their power over access to oil resources," he

A second senior IEA source, who has now left but was also unwilling
to give his name, said a key rule at the organisation was that it was
"imperative not to anger the Americans" but the fact was that there was
not as much oil in the world as had been admitted. "We have [already]
entered the 'peak oil' zone. I think that the situation is really bad,"
he added.


The idea expressed above is simple enough:  The oil data has been
fudged to the upside by the IEA.  Pressure has allegedly been applied
upon the IEA to paint a rosier picture than a strict interpretation of
the data would warrant.  To speculate, the reason why is that there are a
host of interlocking vested interests in the financial but especially
political spheres that would find the public recognition of Peak Oil to
be disruptive and therefore unwelcome. 

This is just another example of Fuzzy Numbers,
but the consequences of fibbing to ourselves about oil are far more
dire than when we lie about employment.  If it weren't so serious, it
would be just another somewhat regrettable obfuscation of reality
created to serve narrow and temporal political purposes.

Note: There is a well-recorded history, going back at
least 13 years, of the IEA being fully aware of Peak Oil but bowing to
political pressure to soften the message.  Read paragraphs 4 & 5 of
this piece by Colin Campbell for some more essential background.


Here's where we are:

  • The IEA has known about looming Peak Oil issues for more than a
    decade and is only now explicitly recognizing the idea in their public
  • People inside and outside of the IEA say that the organization
    has downplayed both the timing and potential severity of Peak Oil.
  • Peak Conventional Oil has already happened.
  • Any possible growth in future oil that the IEA can envision --
    and we might suspect that even this is fudged to the upside and will
    retreat in subsequent reports -- is going to be almost entirely eaten up
    by China and India.

What this means is very, very simple.  There will be an energy crisis
in the near future that will make anything we've experienced so far
seem like a pleasant memory. 

The very best personal investments you can make at this stage will
involve increasing your energy resilience.  Make your house require less
heating and cooling, use the sun wherever and whenever possible, and
increase your personal storage of the fuels you use (if and when

The potential knock-on effects of less energy to the complex system
known as our economy are unpredictable in their exact details and
timing, but are thoroughly knowable via their broad, topographical
outlines.  The economy will become simpler and less ordered.


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
DocLogo's picture

peak cheap oil is very much a reality.

goldmiddelfinger's picture

Abiotic oil. Listen, do you really think there were THAT many dinosaurs?

gwar5's picture

I'm with you on abiotic oil.

It needs to be deeply explored. Pun intended.

The Russians are doing it and they're exporters.

Pondmaster's picture

Where did shale gas come from ? US will be major exporters within 2-3 years . Russians always have a tendency to boast and lie alot . i.e. Lunar program , i.e. Invention of short wave , invention of light bulb  . Historically daft people .

Bob's picture

Do you really believe anyone except the lunatic fringe has ever posited that oil is primarily a product of dinosaurs?

hedgeless_horseman's picture

Not dinosaurs, but plant life and carbon life forms that inhabit the ocean, from the age when the land was covered with plants, and the ocean teamed with life.  It died and was composted in sedimentary rock and under pressure became petroleum.  Only fuck- tard politicos play the dinosaur game.

Thanatos's picture

I liked the concept of "Dino-Squeezin's" and I'm stickin with it despite all FACTS to the contrary!

Rotwang's picture

And after a while, enormous concentrations of this squeezed biota got mangled and concentrated in extremely rich pockets for later discovery. :)


Blindweb's picture

and a billion years of plants.  Carbon is carbon.


Considering the consequences of peak oil, if it is true, you would think the abiotic pushers would have beyond a doubt proof.  Basic Risk management here.  The consequences of peak oil are so severe you better be damn sure it's a myth. 

trav7777's picture

Did you fucking READ the article?

Do it again, and this time for comprehension.

Right there, as I have said FIFTY TIMES, it does NOT MATTER WHERE OIL COMES FROM.

RESERVES DO NOT MATTER.  Production rates are ALL that matter

Dr. No's picture

I can appreciate your passion on the subject.  It is obvious you have a grasp of the facts where many do not.  People like Robo dismiss peak oil becasue of two days price action.

MeTarzanUjane's picture

Right on. I might argue that Production and Consumption rates are ALL that matter. But I would not argue with the Finger. I'd argue with Miles he seems clueless enough.

Also may I add if we really want to add to reserves there is always India. I bet you could get a barrel of crude from about 100 Indians...

Dirtt's picture


Another manufactured crisis.  If the BP Deepwater catastrophe happened in 2008 OIL would have traded at $300 per barrel.  It barely mustered $90

Take your Peak Oil theory and shove it.  Manufactured Peak Production is an entirely different subject.

Hey! Let's put ocean-based windmills in the paths of hurricanes. YEAH!! That's the ticket.  And let's give non-documented LA housekkeepers a $50K cash out on a East LA track slum.

Jessica6's picture

And yet the oilpatch in Alberta has seen layoffs the past couple of years. There's no way with $80 oil they're not profitable right now.

crazynutjob's picture

Abiotic oil? Fantastic. So the amount of oil left will not go to zero. However, given that we appear to be draining our oil fields, the fact is that whatever abiotic process produces oil, it isn't doing it fast enough. And we aren't discovering more of it in easy enough locations to continue growing our oil consumption. Interestingly, nothing in the above article was based on the assumption that oil comes from dinosaurs. It is strictly based on exploration, consumption, and production.

tmosley's picture

Abiotic oil implies that there will be more oil at ever deeper stratums, not that the oil will be replaced as fast or faster than we are using it (currently).

What people don't seem to understand is that even if peak oil IS fact, then all that means is that we will slowly run out of oil.  It will get progressively more expensive until a cheaper substitute is found.  That substitute is highly unlikely to be more than twice as expensive as oil.

Given that, why all the fearmongering?  All it does is give big government a free pass when it comes to regulating oil production and our economy.

We're not all going to die next Thursday when oil production peaks.  At worst, we have to live a more basic lifestyle, which we are going to have to do ANYWAYS due to the chickens coming home to roost.  Why must we work ourselves into a frenzy over peak oil?

Also, a homework assignment for anyone who beleives in peak oil, read this:

Answer the following question:  if oil production in a few countries is subsidized by payment by secret payment of gold, and those countries which receive said subsidy have yet to reach peak oil production, what does that tell you?

What it tells me is that said subsidy has allowed the Saudis to underbid everyone else on oil, and that the decline in oil production in countries like the US is a direct result of their inability to compete.  As such, oil production would not stop, but rather would act like a Hubbert peak, because there is not as much effort being directed toward production as there should be in a free market.


Dr. No's picture

"What people don't seem to understand is that even if peak oil IS fact, then all that means is that we will slowly run out of oil.  It will get progressively more expensive until a cheaper substitute is found.  That substitute is highly unlikely to be more than twice as expensive as oil." 

That is the trick.  Per the chart, crude production is about 60mb/d.  BOE energy is about 1.7Mwatts (wiki article).  Quick math, if production drops off 10 mb/d per the chart above, that means the short fall is 10E6*1.7Mwatts= 17terawatts of power shortfall.  Who is going to generate 17terawatts?  Three Gorges Hydro produces 16Gwatts?

tmosley's picture

1.7Mwatt*hours, not megawatts.  Power and energy are different.  

To generate 17 terwatt hours per year, you would need about 1/8th of a 3 gorges dam.  That is easily doable.

Dr. No's picture

I understand power/energy difference.  the numbers are per DAY.  The shortfall will be 17terrawatts per day due to 10mb/d lack of production (17Tw/24hours)=.708 TWh due to oil.  Three Gorges produced 80TWh in 2009.  Thats an average of .3 TWh per day at 3 Gorges.

tmosley's picture

If you understand the difference, then please use the appropriate units.  This subject is difficult enough with a dozen foul mouthed children running around screaming about the end of the world next Thursday for me to write a dissertation on the problems with your math.

that said, let's dig in.  Assuming a 10,000,000 barrel/day reduction in production, 1.7 MW*hrs/barrel, and 1 day in 24 hours, you get 708,333 megawatts, or 708 gigawatts, which is about 31 Three Gorges dams, spread across the globe.  That means about 7 in the US, and that is without any reduction in consumption, which is coming anyways due to economics.

This is a tall, but fillable order.  Of course, it would be filled a lot quicker if we didn't have a Byzantine system of taxes, regulations, and subsidies in this country.

Almost Solvent's picture

As long as BRIC is not adding to the global demand, then I agree the decent can be controlled.

If BRIC starts running up demand at a rate similar to the last 10 years over the next 10 years, then we are in for a huge fight to keep the ships and trucks rolling to WalMart.

trav7777's picture

HAHAHAHAHA...what rivers do you propose to dam to generate that type of power?

I mean, I am ALL EARS for this; this ought to be good. Only just 7 copies here of the largest dam ever constructed. Should be NO PROBLEMO. And 24 elsewhere. On WHAT rivers?

Then, please account for the next 10mbpd of lost production.

tmosley's picture

No-one said it all had to come from hydroelectric.  What is your malfunction?

wake the roach's picture

What people don't seem to understand is that even if peak oil IS fact, then all that means is that we will slowly run out of oil.  It will get progressively more expensive until a cheaper substitute is found.  That substitute is highly unlikely to be more than twice as expensive as oil.


You are the definition of a moron and a fine example of why expectant mothers should not consume alcohol...


tmosley's picture

You are the definition of a person who who should make an argument instead of simply insulting someone whom they disagree with.

wake the roach's picture

Make an argument you say?

I do not know how many times, and in how many ways others have attempted to explain the fundamentals of energy to you so why the fuck should we bother now.

ZH obviously needs the equivelent of MS paint in the comment tool bar so we can draw you science retards a picture. 

But hey, one more time couldn't hurt right so here it goes, in a nutshell...


Is that an adequate argument for you? 



If not, here are some "primer" links to CM's excellent crash course vids and that other quick source, wikipedia...

Part 1.


tmosley's picture

I see, so your argument is that entropy increases, therefore we will all die, probably next Thursday.  This is not a good argument, I'm sad to tell you.  The jist of this argument is that certain people on this board have been falsely claiming that oil production has already peaked in numerous countries, including Saudi Arabia and the UAE, something that I have shown from primary sources to be FALSE.  Further arguments are purely speculative, much like those by similar Malthusians from 1909 that claimed oil would run out in 1939.  They were obviously proven wrong, and have made the EXCT same claim others here are making.  They have taken trends and extrapolated them to infinite, which is just stupid.  This shows zero understanding of how markets work.

FYI, currently available sources of energy: 


Natural gas







These are alternatives that we know of now.  There are other sources of energy that may become useful in the future with increasing technology.  Fusion is the old stand-by.  Another out there one is information, which can be used to pump heat via a Maxwell's demon.  Who are you to say what the future holds?

AnAnonymous's picture

The survivalist framework is a useless framework because it always finishes with a win. Always.

Either one person at least survives, and therefore it is a win. Either nobody survives and this is a win too because issues are attached to people. No more people, no more issues.

Peak oil is presented in the survival framework (id est it is about humanity survival, all people are going to die) by people who refuse to discuss peak oil issue.

In all human history, every new successful energy source has outcompeted the previous one. Not a single one came as a substitution because the previous one was on the depletion side. They all supercede the previous because they were more efficient.

All the quoted energy sources already exist and can compete with oil. The result is known: oil wins. Oil still wins and through depletion, the switch will be made toward inferior energy sources.


snowball777's picture

Damn if skyrocketing petrol prices wouldn't cripple the economy without breaking a sweat.

We couldn't even handle $5/gallon gas in the summer of '08 and you tweedles think that a carbon tax will usher in economic armageddon; it's the same fucking problem only with an order of magnitude higher severity if the price of oil goes parabolic, nimrods.

tmosley's picture

I never said we wouldn't break a sweat.  I said it wouldn't be the end of the world.  Do YOU think it will be the end of the world?  You don't think there is any source of energy other than oil?  That we can't produce the oil or equivalent compact energy source for car travel?  That we can't produce the oil needed for plastics manufacture from agricultural sources?  Do you really think that?

Or do you just not like me, and you let that color your thinking?

snowball777's picture

I'm all for replacing oil. It's poison, hard to get at (these days anyway), and gives people I actually do hate political leverage without which they'd be on the dustbin of history.


How long do the alternatives take to come online? (hint: measured in decades)

We'd need to make millions of turbines and billions of PV arrays to go WWS at current consumption.


How much energy will those alternatives need to displace? (hint: measure in terawatts)

12Tw of WWS power to displace 17Tw of conventional.


How many of the alternative sources are nowhere near the load demand?

Local PV helps if you live where it's sunny (like me) and you're good if you live off the Cape and want to use wind, but what if you live in Timbuktu?

And then there's the materials problem...all those rare earths the ChiComs are sitting on.


I have great faith that we can use something other than oil. I have very little faith that we will do what is necessary to allow those plans to come to fruition because of entrenched interests and people who are simply unwilling to see what is necessary for long-term survival.

It won't take much of an "interruption in service" for the world, as we know and love it, to come to an abrupt and painful intermission, if not end.

tmosley's picture

Demolish the government that preserves them, and their entrenchments will fall away as though they were never there.

Then and only then can real economic calculations begin, including on the subject of energy.

trav7777's picture

All the nations in OPEC except Iraq and MAYBE KSA have already peaked, doofus.

JFC, can you get a fact straight.

"IF" peak is true?  If peak is NOT true, moron, oil production will continue to grow FOREVER.  Does that sound plausible to you?

As far as "deep" oil goes, you expose your total ignorance when you cannot IMMEDIATELY cite, as I can, the incredibly REDUCED ratio of flow/URR of deepwater reserves versus old conventionals fields.

I mean, hell, it's in the goddamned world oil outlook.  I guess you prefer the abuse huh?

tmosley's picture

Just accept the premise when it is given to you, and follow the argument from there.  Since you failed to do that, you have failed to use your mind, have failed to understand the problem, and have failed to produce any form of solution.  Congratulations, you are a petulant (that word means "easily annoyed", a disclaimer that I don't think you can deny) person.

The reason that peak oil might not happen is that we transfer to a new technology, rendering said peak as moot as peak firewood, or peak whale oil (both of which have been screamed about by proto Malthusians for centuries or millennia).

If you can cite it, do so.  Instead, you seem to feel the need to simply continue insulting someone who is attempting to have an intelligent conversation with you.  If you talked to people in person in this manner, you'd get your ass kicked every time, and would probably end up in jail.  Try using the civility you use when you are talking to a real human being.

No, I don't like the abuse.  I just can't stand it when people run around screaming the world is going to end next Thursday while totally ignoring the much larger much more pressing problem of government taking over our lives.  We agree on so much, yet you feel the need to call me an idiot because I disagree with you on this single issue which is NOT MATERIAL to the current situation.  Call me back in two years and we can see if the world has fallen apart due to economic collapse brought on by government control, or due to economic collapse brought on by peak oil.

The energy problem can be solved through reduced consumption until we find a new source of power.  No government intervention required.  Consumption does not follow a straight line until everything is gone, as your ravings seem to suggest.  And neither does production.  If that were the case, oil would have peaked in 1925, and been gone in 1939, and the US would have starved by 1950, and humanity would have been extinct by 1970, because apparently in the mind of the Malthusian, people just reproduce to the maximum extent possible until they all starve to death, something that simply does not have precedent in history.


trav7777's picture

sigh...even if we transition to fusion power, Peak will still happen in oil.

Peak is defined as the production maximum for all time.

Look; if you cannot grasp the basic definitions of the issues, don't speak to me about them.  You are all over this thread with magical thinking, the notion of 31 Three Gorges Dams needing to be built every time we lose 10mbpd in production capacity, which is an absurd proposition, utterly absurd.

It has taken years to build ONE of those.  WTF are we going to do, build 31 of these dams every 5 years?  There aren't enough rivers in the world to meet the substitution for oil, not even close.

As for the world oil outlook, it's available on the web, as are credible production figures for KSA.  I would recommend against using EIA as a reference as they are US Gov't statistics.

kiwidor's picture

 I thought I'd dabble in some magical thinking just for sake of being irrational.

So out came the pendulum;

here is what it revealed:

* Peak Oil production occured in 1978

* We have about 20 to 30 years of 'normality' before 'the system' falls to bits.

* big population reduction over next 30 years. (potentially 5 to 6 billion)

* rapid decentralisation is required to survive.

* there is no long emergency, only a short one.  OOPS

Even magical-thinking-mosely can't get it right.  a simple divinatory process yields the same results as a sensible analysis.  OOPS.

[and it saved me a lot of reading]

donmindme's picture

tm has a point here. I lived in Asia. Gasoline is extremely expensive there, relative to the average peon's salary. People simply adapt by driving tiny little cars. 40mpg is easy. 60mpg on the freeway.  

People will adapt in America as well. Change is coming alright. Sorry. No hope.

The first huddle that I see, suburb Americans must lose weight first otherwise those tiny cars will probably burn its transmission in 1 day.

btw trav finger.. love your posts.  


tmosley's picture

Also, please post your sources on the oil production figures.  This site says that Saudi oil production was up yoy last year, though it doesn't give figures before 2008:

And this site has spreadsheets, which combined with the above data, fail to show a real production peak, but rather a noisy plateau, with the last years 11 million barrels per day being at the high end of the noise:

So maybe this isn't as clear an issue as you seem to think?  Man up and post your sources.  Right now, it's looking a lot more like you are talking out of your ass.

tmosley's picture

It's funny, the closer I look at these figures, the less it looks like ANY of these fucking countries has peaked!

Qatar: 2005: 1.1mbbl/day, 2006, 1.1mbbl/day, 2007, 1.1mbbl/day, 2009, 1.2mbbl/day

UAE: 2005: 2.8mbbl/day, 2006, 2.9mbbl/day, 2007, 2.95mbbl/day, 2009, 3.0mbbl/day

I have got to get to bed, but you sure do look like a fucking liar at this point, boy.

trav7777's picture

you should be careful of the data you reference.  If you're going to take rosy figures, use the USGS, just a piece of advice.

I should have said only KSA and UAE have any slack capacity, but the incremental growth of production in nations other than UAE is what a peak looks like.

tmosley's picture

That's past data.  Unless you think they are all lying about everything and yet the world is able to continue.

You have to get past the peak to see it.  It is clear that we are not past it yet, despite your continuous table pounding claiming that we are.

chrisina's picture

What people don't seem to understand is that even if peak oil IS fact, then all that means is that we will slowly run out of oil.  It will get progressively more expensive until a cheaper substitute is found.  That substitute is highly unlikely to be more than twice as expensive as oil.

How do you know a cheaper substitute will be found? Sorry but assuming something with zero evidence to support it is akin to religious thinking.

So where's the evidence?

Also, if a cheaper substitute is found, it seems obvious it won't be twice as expensive. 

(Hint : cheaper means less expensive)


Your dogmatic thinking is equivallent to saying : 

I assume everything will be fine, therefore, everything will be fine.

tmosley's picture

Cheaper than the new higher price, Chrisina.

Please read arguments and understand them before replying.

RafterManFMJ's picture

Yup read The Deep Hot Biosphere by Thomas Gold. Great read, but just one point from it - how is it they are finding evidence of hydrocarbons on other planets, and their moons? Just how many Dinosaurs and weeds were on Titan?

Dr. No's picture

What is the point arguing about where oil comes from when the important fact is falling production?  If you are looking for a Phd thesis subject, great.  But in the real world who cares? Oil could be a result of god's diahrria for all I care.  The important point is production is falling.

trav7777's picture

Titan has exafeet worth of NG.

Just may as well say Titan's reserves, as it's almost the size of earth, are "limitless" for all intents and purposes.

Now, class, what would be the expected PRODUCTION rate for Titan's NG reserves?

A. 0

B. 0

C. 0

D. something other than zero (aka, I'm a fucking idiot).

Answer _______

kinetik's picture

Abiotic oil is a fallacy.  It requires the same belief system as D&D or Christianity.