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

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Tue, 11/23/2010 - 21:45 | 751089 DocLogo
DocLogo's picture

peak cheap oil is very much a reality.

Tue, 11/23/2010 - 21:49 | 751099 goldmiddelfinger
goldmiddelfinger's picture

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

Tue, 11/23/2010 - 22:14 | 751137 wake the roach
wake the roach's picture

Dinosaurs...

Bahaha....

Tue, 11/23/2010 - 23:01 | 751269 gwar5
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.

Wed, 11/24/2010 - 03:53 | 751802 Pondmaster
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 .

Tue, 11/23/2010 - 23:07 | 751281 Bob
Bob's picture

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

Tue, 11/23/2010 - 23:30 | 751334 hedgeless_horseman
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.

Tue, 11/23/2010 - 23:36 | 751348 Thanatos
Thanatos's picture

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

Wed, 11/24/2010 - 00:46 | 751525 Rotwang
Rotwang's picture

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

 

Tue, 11/23/2010 - 23:12 | 751287 Blindweb
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. 

Tue, 11/23/2010 - 23:47 | 751378 trav7777
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

Wed, 11/24/2010 - 00:03 | 751423 Dr. No
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.

Wed, 11/24/2010 - 00:34 | 751494 rocker
rocker's picture

Right on Finger

Wed, 11/24/2010 - 09:51 | 752048 MeTarzanUjane
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...

Wed, 11/24/2010 - 01:37 | 751641 Dirtt
Dirtt's picture

BINGO!

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.

Wed, 11/24/2010 - 09:50 | 752042 Jessica6
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.

Tue, 11/23/2010 - 23:48 | 751379 crazynutjob
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.

Wed, 11/24/2010 - 00:07 | 751429 tmosley
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: http://fofoa.blogspot.com/2010/10/its-flow-stupid.html

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.

 

Wed, 11/24/2010 - 00:24 | 751467 Dr. No
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?

Wed, 11/24/2010 - 00:49 | 751533 tmosley
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.

Wed, 11/24/2010 - 01:01 | 751543 Dr. No
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.

Wed, 11/24/2010 - 01:46 | 751653 tmosley
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.

Wed, 11/24/2010 - 10:50 | 752216 Almost Solvent
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.

Wed, 11/24/2010 - 11:04 | 752264 trav7777
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.

Wed, 11/24/2010 - 13:41 | 752775 tmosley
tmosley's picture

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

Wed, 11/24/2010 - 00:28 | 751481 wake the roach
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...

   

Wed, 11/24/2010 - 00:45 | 751522 tmosley
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.

Wed, 11/24/2010 - 02:16 | 751691 wake the roach
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...

NET ENERGY GAINS!!!

Is that an adequate argument for you? 

Or...

THE LAWS OF THERMODYNAMICS!!!

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

Part 1. http://www.youtube.com/watch?v=cwNgNyiXPLk

http://en.wikipedia.org/wiki/Thermodynamics

http://en.wikipedia.org/wiki/Net_energy_gain

Enjoy...

Wed, 11/24/2010 - 02:46 | 751738 tmosley
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: 

Coal

Natural gas

Uranium

Thorium

Geothermal

Hydroelectric

Wind

Photovoltaic

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?

Wed, 11/24/2010 - 09:17 | 751969 AnAnonymous
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.

 

Wed, 11/24/2010 - 00:52 | 751537 snowball777
snowball777's picture

Damn straight...as 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.

Wed, 11/24/2010 - 01:01 | 751549 tmosley
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?

Wed, 11/24/2010 - 01:48 | 751657 snowball777
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.

But...

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.

Wed, 11/24/2010 - 02:25 | 751714 tmosley
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.

Wed, 11/24/2010 - 01:03 | 751556 trav7777
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?

Wed, 11/24/2010 - 02:00 | 751669 tmosley
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.

*sigh*

Wed, 11/24/2010 - 11:19 | 752312 trav7777
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.

Thu, 11/25/2010 - 07:44 | 754402 kiwidor
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]

Wed, 11/24/2010 - 11:53 | 752441 donmindme
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.  

 

Wed, 11/24/2010 - 02:13 | 751692 tmosley
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: http://www.eia.doe.gov/cabs/Saudi_Arabia/Oil.html

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: http://www.eia.doe.gov/emeu/international/oilproduction.html

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.

Wed, 11/24/2010 - 02:22 | 751707 tmosley
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.

Wed, 11/24/2010 - 11:24 | 752326 trav7777
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.

Wed, 11/24/2010 - 14:43 | 753011 tmosley
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.

Wed, 11/24/2010 - 04:14 | 751811 chrisina
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.


Wed, 11/24/2010 - 13:44 | 752782 tmosley
tmosley's picture

Cheaper than the new higher price, Chrisina.

Please read arguments and understand them before replying.

Tue, 11/23/2010 - 23:51 | 751391 RafterManFMJ
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?

Wed, 11/24/2010 - 00:47 | 751529 Dr. No
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.

Wed, 11/24/2010 - 01:05 | 751563 trav7777
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 _______

Wed, 11/24/2010 - 01:11 | 751578 trav7777
trav7777's picture

dld dupe

Wed, 11/24/2010 - 00:50 | 751534 kinetik
kinetik's picture

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

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