Guest Post: Peak Oil - The Long & The Short

Tyler Durden's picture

Submitted by Jim Quinn of The Burning Platform

Peak Oil - The Long & The Short

Does it seem like we’ve been here before?

A barrel of Brent Crude (the truest indicator of worldwide oil
scarcity) sits at $118, up from $75 per barrel in July 2010 – a 57%
increase in eleven months. In the U.S., the average price of gasoline is
$3.69 per gallon this week, up 37% in the last year and up 100% in the
last 30 months.

The pundits and politicians are responding predictably. They blame
the Libyan revolution, the dreaded speculators and that old fallback –
Big Oil. When the Middle East turmoil began in earnest in January, gas
prices had already risen 15% in three months, spurred by increased
worldwide demand and by Ben Bernanke’s printing press. Congressmen have
reacted in their usual kneejerk politically motivated fashion by
demanding that supplies be released from the Strategic Oil Reserve.

Congress has a little trouble with the concept of “strategic.” They
also have difficulty dealing with a reality that has been staring them
in the face for decades. Politicians will always disregard prudent,
long-term planning for vote-generating talk and gestures.

The Long Term

Peak oil has been a mathematically predictable occurrence since
American geophysicist M. King Hubbert figured out the process in 1956.
His model predicted that oil production in the United States would peak
in 1970. He wasn’t far off. In 1971, when the U.S. was producing 88% of
its oil needs, domestic production approached 10 million barrels per day
and has been in decline ever since.

(Source: http://www.eia.doe.gov/energy_in_brief/images/charts/
Consumption_production_import_trends-large.gif
)

The Department of Energy was established in 1977 with a mandate to
lessen our dependence on foreign oil. At the time, the U.S. was
importing 6.5 million barrels per day. In 1985 the country was still
able to produce enough to cover 75% of its needs. Today, 34 years later,
the U.S. imports 10 million barrels per day, almost half of what it
uses.

President Obama’s 2011 Budget proposal included priorities for the DOE:

  • Positions the United States to be the global leader in the new
    energy economy by developing new ways to produce and use clean and
    renewable energy.
  • Expands the use of clean, renewable energy sources such as solar,
    wind and geothermal while supporting the Administration’s goal to
    develop a smart, strong and secure electricity grid.
  • Promotes innovation in the renewable energy sectors through the use of expanded loan guarantee authority.

That’s what goes on in talk space.

Back on planet Earth, not a single U.S. oil refinery or nuclear power
plant has been built  since 1977. Decades of inaction and denial have
left our energy infrastructure obsolescent and decaying. Pipelines,
tanks, drilling rigs, refineries and tankers have passed their original
design lives. The oil industry is manned by an aging workforce of
geologists, engineers and refinery hands. Many are nearing retirement,
and there are few skilled personnel to replace them.

Denial of peak oil becomes more dangerous by the day. The Obama
administration prattles about clean energy, solar, wind and ethanol,
when petroleum powers 96% of the transportation sector and 44% of the
industrial sector. Coal provides 51% of the country’s electricity, and
nuclear accounts for another 21%. Renewable energy contributes only 6.7%
of the country’s energy needs, mostly from hydroelectric facilities.

Ethanol works nicely as a slogan but poorly as a solution. The
ethanol boondoggle diverts 40% of the U.S. corn crop to fuel production.
The real cost to produce a gallon of ethanol (tariffs, lost energy,
higher food costs)  exceeds $7 and has contributed to the price of corn
rising 112% in the last year. The 107 million tons of grain that went to
U.S. ethanol distilleries in 2009 would have been enough to feed 330
million people for one year.

(Source: http://perotcharts.com/category/challenges/energy/)

The most worrisome aspect of peak oil is that our government leaders
have known of it  and have chosen to do nothing. The Department of
Energy requested a report from widely respected energy expert Robert
Hirsch in 2005. The report clearly laid out the dire situation:

    The peaking of world oil production presents the U.S. and the
    world with an unprecedented risk management problem. As peaking is
    approached, liquid fuel prices and price volatility will increase
    dramatically, and, without timely mitigation, the economic, social, and
    political costs will be unprecedented. Viable mitigation options exist
    on both the supply and demand sides, but to have substantial impact,
    they must be initiated more than a decade in advance of peaking.

Some of his conclusions:

  • World oil peaking is going to happen, and will likely be abrupt.
    World production of conventional oil will reach a maximum and decline
    thereafter.
  • Oil peaking will adversely affect global economies, particularly
    the U.S. Over the past century, the U.S. economy has been shaped by the
    availability of low-cost oil. The economic loss to the United States
    could be measured on a trillion-dollar scale.
  • The problem is liquid fuels for transportation. The lifetimes of
    transportation equipment are measured in decades. Rapid changeover in
    transportation equipment is inherently impossible. Motor vehicles,
    aircraft, trains and ships have no ready alternative to liquid fuels.
  • Mitigation efforts will require substantial time. Waiting until
    production peaks would leave the world with a liquid fuel deficit for 20
    years. Initiating a crash program 10 years before peaking leaves a
    liquid fuels shortfall of a decade. Initiating a crash program 20 years
    before peaking could avoid a world liquid fuels shortfall.

World liquid oil production has never exceeded the level reached in
2005. It becomes more evident by the day that worldwide production has
peaked. Robert Hirsch was correct. The world will have a liquid fuel
deficit for decades.

The Short Term

The International Energy Agency has been increasing its estimates for
world oil consumption to over 90 million barrels per day by the 4th
quarter of 2011, led by strong demand from China, India and the rest of
the emerging world. World supply was already straining to keep up with
this demand before the recent tumult in the Middle East. The mayhem in
Tunisia, Egypt, Libya, Bahrain, Yemen and Iran has already taken 1.5
million barrels per day off the market, according to the IEA.

(Source: http://omrpublic.iea.org/)

The Obama administration and mainstream media continue to downplay
the economic impact of the conflagration spreading around the world. The
risk that oil prices gush toward the 2008 highs is much greater than
the likelihood that this turmoil will subside and oil prices fall back
to $80 per barrel. As the following chart shows, the daily oil supply
coming from countries already experiencing revolution or in danger of
uprisings is nearly 8 million barrels per day, or 9% of world supply. No
country can ramp up production to make up for that shortfall.

  Proven Oil Oil
Country
Reserves (billion barrels) Production Per Day
Saudi Arabia
265
9,000,000
Iran
137
3,700,000
Iraq
115
2,700,000
UAE
98
2,300,000
Kuwait
102
2,300,000
Libya
46
1,600,000
Algeria
12
1,300,000
Qatar
25
820,000
Oman
6
810,000
Egypt
4
742,000
Syria
3
376,000
Yemen
3
298,000

 

The Washington DC spin doctors are now assuring the American people
that Saudi Arabia can make up for any oil shortfall. Saudi Arabia has
declared it has already turned the spigot on and will produce 10.0
million bpd, up from 8.5 million bpd.

Is this replacement production real? A leading industry expert
revealed that the Saudis were already producing 8.9 million bpd in
January. Hype and misinformation won’t fill your SUV with cheap gas.
Saudi production peaked at 9.8 million bpd in 2005. When prices spiked
to $147 per barrel in early 2008, their production grew only to 9.5
million bpd. Saudi oil fields are 40 years old and are in terminal
decline. Their “spare capacity” doesn’t exist.

And the media ignore the quality difference between Libyan crude and
Saudi crude. Libya’s oil is a perfect feedstock for ultra-low-sulfur
diesel. The oil Saudi Arabia will supply to replace it is not. It takes
three barrels of Saudi crude to yield the same quantity of diesel fuel
as one Libyan barrel of crude, and only specially designed refineries
can process high-sulfur Saudi oil.

The problem isn’t just turmoil in the Middle East. The Persian Gulf
provides 17% of U.S. imports; 22% comes from Africa, 10% from Venezuela
and 15% from Mexico. Many of these countries hate us. Mexico, although a
relatively friendly country, will become a net importer of oil in the
next five years, as its Cantarell oil field is in rapid decline. They’ll
have nothing to sell to us.

The long and the short of it is that sunshine, corn and wind will not
keep Americans from paying $5 per gallon or more for gas in the near
future. The financial implications are that oil and energy investments
will produce solid returns over the coming years.

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Libertarians for Prosperity's picture

Peak oil doesn't matter if we have algae farms and the courage to hope for new technology. 

 

traderjoe's picture

"courage to hope"

You can do better troll. Btw, neither courage nor hope will run the food supply chain.

Quintus's picture

What about 'Hope and Change' then?  Apparently you can run an economy on that.

Bindar Dundat's picture

Hope is a very bad strategy...

Jimbo Jones's picture

Hope is not an executable strategy.

TwoShortPlanks's picture

Only Extend and Pretend technology has been tested and proven to be a true Free Energy/Perpetual Motion Machine. If it's not E.P. based technology, you're dreamin!!!

TwoShortPlanks's picture

A shift I have noticed is that less and less people care about Peak Oil or, people who are concerned about it care less each passing day. I think there's something in the subconscious awareness of the average person which is placing more emphasis on the global economic Time Bomb than Peak Oil. I'm guessing that emphasis is based upon which issue presents a more immanent threat....and 'The Herd' is.....what?

DaveyJones's picture

as if the two are not intimately connected?

robobbob's picture

No, no, no

"Hope and change" runs politics.

The economy runs on "print and pretend"

Citxmech's picture

Don't you mean "Smoke and Mirrors?"

TheFantasticMonkey's picture

I think he fat-fingered it. Should read 'the courage to hype'...

francis_sawyer's picture

"The Audacity of Hype"... From what I understand, it burns at 451 degrees Fahrenheit

Bicycle Repairman's picture

Peak energy is BS.  This is from Salon, no less.

http://www.salon.com/news/politics/war_room/2011/05/31/linbd_fossil_fuel...

Everything you've heard about fossil fuels may be wrong
The future of energy is not what you think it is
By Michael Lind

Are we living at the beginning of the Age of Fossil Fuels, not its final decades? The very thought goes against everything that politicians and the educated public have been taught to believe in the past generation. According to the conventional wisdom, the U.S. and other industrial nations must undertake a rapid and expensive transition from fossil fuels to renewable energy for three reasons: The imminent depletion of fossil fuels, national security and the danger of global warming.

What if the conventional wisdom about the energy future of America and the world has been completely wrong?

As everyone who follows news about energy knows by now, in the last decade the technique of hydraulic fracturing or "fracking," long used in the oil industry, has evolved to permit energy companies to access reserves of previously-unrecoverable “shale gas” or unconventional natural gas. According to the U.S. Energy Information Administration, these advances mean there is at least six times as much recoverable natural gas today as there was a decade ago.

Natural gas, which emits less carbon dioxide than coal, can be used in both electricity generation and as a fuel for automobiles.

The implications for energy security are startling. Natural gas may be only the beginning. Fracking also permits the extraction of previously-unrecoverable “tight oil,” thereby postponing the day when the world runs out of petroleum. There is enough coal to produce energy for centuries. And governments, universities and corporations in the U.S., Canada, Japan and other countries are studying ways to obtain energy from gas hydrates, which mix methane with ice in high-density formations under the seafloor. The potential energy in gas hydrates may equal that of all other fossils, including other forms of natural gas, combined.

If gas hydrates as well as shale gas, tight oil, oil sands and other unconventional sources can be tapped at reasonable cost, then the global energy picture looks radically different than it did only a few years ago. Suddenly it appears that there may be enough accessible hydrocarbons to power industrial civilization for centuries, if not millennia, to come.

So much for the specter of depletion, as a reason to adopt renewable energy technologies like solar power and wind power. Whatever may be the case with Peak Oil in particular, the date of Peak Fossil Fuels has been pushed indefinitely into the future. What about national security as a reason to switch to renewable energy?

The U.S., Canada and Mexico, it turns out, are sitting on oceans of recoverable natural gas. Shale gas is combined with recoverable oil in the Bakken "play" along the U.S.-Canadian border and the Eagle Ford play in Texas. The shale gas reserves of China turn out to be enormous, too. Other countries with now-accessible natural gas reserves, according to the U.S. government, include Australia, South Africa, Argentina, Chile, France, Poland and India.

Because shale gas reserves are so widespread, the potential for blackmail by Middle Eastern producers and Russia will diminish over time. Unless opponents of fracking shut down gas production in Europe, a European Union with its own natural gas reserves will be far less subject to blackmail by Russia (whose state monopoly Gazprom has opportunistically echoed western Greens in warning of the dangers of fracking).

The U.S. may become a major exporter of natural gas to China -- at least until China borrows the technology to extract its own vast gas reserves.

Two arguments for switching to renewable energy -- the depletion of fossil fuels and national security -- are no longer plausible. What about the claim that a rapid transition to wind and solar energy is necessary, to avert catastrophic global warming?

The scenarios with the most catastrophic outcomes of global warming are low probability outcomes -- a fact that explains why the world’s governments in practice treat reducing CO2 emissions as a low priority, despite paying lip service to it. But even if the worst outcomes were likely, the rational response would not be a conversion to wind and solar power but a massive build-out of nuclear power. Nuclear energy already provides around 13-14 percent of the world’s electricity and nearly 3 percent of global final energy consumption, while wind, solar and geothermal power combined account for less than one percent of global final energy consumption.

(The majority of renewable energy consists of CO2-emitting biomass -- wood and dung used for fires by the world’s poor, plus crops used to make fuel; most of the remainder comes from hydropower dams denounced by Greens.)

The disasters at Chernobyl and Fukushima have dramatized the real but limited and localized dangers of nuclear energy. While their initial costs are high, nuclear power plants generate vast amounts of cheap electricity -- and no greenhouse gases. If runaway global warming were a clear and present danger rather than a low probability, then the problems of nuclear waste disposal and occasional local disasters would be minor compared to the benefits to the climate of switching from coal to nuclear power.

The arguments for converting the U.S. economy to wind, solar and biomass energy have collapsed. The date of depletion of fossil fuels has been pushed back into the future by centuries -- or millennia. The abundance and geographic diversity of fossil fuels made possible by technology in time will reduce the dependence of the U.S. on particular foreign energy exporters, eliminating the national security argument for renewable energy. And if the worst-case scenarios for climate change were plausible, then the most effective way to avert catastrophic global warming would be the rapid expansion of nuclear power, not over-complicated schemes worthy of Rube Goldberg or Wile E. Coyote to carpet the world’s deserts and prairies with solar panels and wind farms that would provide only intermittent energy from weak and diffuse sources.

The mainstream environmental lobby has yet to acknowledge the challenge that the new energy realities pose to their assumptions about the future. Some environmentalists have welcomed natural gas because it is cleaner than coal and can supplement intermittent solar power and wind power, at times when the sun isn’t shining or the wind isn’t blowing. But if natural gas is permanently cheaper than solar and wind, then there is no reason, other than ideology, to combine it with renewables, instead of simply using natural gas to replace coal in electricity generation.

Without massive, permanent government subsidies or equally massive penalty taxes imposed on inexpensive fossil fuels like shale gas, wind power and solar power may never be able to compete. For that reason, some Greens hope to shut down shale gas and gas hydrate production in advance. In their haste, however, many Greens have hyped studies that turned out to be erroneous.

In 2010 a Cornell University ecology professor and anti-fracking activist named Robert Howarth published a paper making the sensational claim that natural gas is a greater threat to the climate than coal. Howarth admitted, "A lot of the data we use are really low quality..."

Howarth’s error-ridden study was debunked by Michael Levi of the Council on Foreign Relations and criticized even by the Worldwatch Institute, a leading environmentalist organization, which wrote: "While we share Dr. Howarth’s urgency about the need to transition to a renewable-based economy, we believe based on our research that natural gas, not coal, affords the cleanest pathway to such a future."

A few years ago, many Green alarmists seized upon a theory that an ice age 600 million years ago came to an abrupt end because of massive global warming caused by methane bubbling up from the ocean floor. They warned that the melting of the ice caps or drilling for methane hydrates might suddenly release enough methane to cook the earth. But before it could be turned into a Hollywood blockbuster, the methane apocalypse theory was debunked recently by a team of Caltech scientists in a report for the science journal Nature.

All energy sources have potentially harmful side effects. The genuine problems caused by fracking and possible large-scale future drilling of methane hydrates should be carefully monitored and dealt with by government regulation. But the Green lobby’s alarm about the environmental side-effects of energy sources is highly selective. The environmental movement since the 1970s has been fixated religiously on a few "soft energy" panaceas -- wind, solar, and biofuels -- and can be counted on to exaggerate or invent problems caused by alternatives. Many of the same Greens who oppose fracking because it might contaminate some underground aquifers favor wind turbines and high-voltage power lines that slaughter eagles and other birds and support blanketing huge desert areas with solar panels, at the cost of exterminating much of the local wildlife and vegetation. Wilderness preservation, the original goal of environmentalism, has been sacrificed to the giant metallic idols of the sun and the wind.

The renewable energy movement is not the only campaign that will be marginalized in the future by the global abundance of fossil fuels produced by advancing technology. Champions of small-scale organic farming can no longer claim that shortages of fossil fuel feedstocks will force a return to pre-industrial agriculture.

Another casualty of energy abundance is the new urbanism. Because cars and trucks and buses can run on natural gas as well as gasoline and diesel fuel, the proposition that peak oil will soon force people around the world to abandon automobile-centered suburbs and office parks for dense downtowns connected by light rail and inter-city trains can no longer be taken seriously. Deprived of the arguments from depletion, national security and global warming, the campaign to increase urban density and mass transit rests on nothing but a personal taste for expensive downtown living, a taste which the suburban working-class majorities in most developed nations manifestly do not share.

Eventually civilization may well run out of natural gas and other fossil fuels that are recoverable at a reasonable cost, and may be forced to switch permanently to other sources of energy. These are more likely to be nuclear fission or nuclear fusion than solar or wind power, which will be as weak, diffuse and intermittent a thousand years from now as they are today. But that is a problem for the inhabitants of the world of 2500 or 3000 A.D.

In the meantime, it appears that the prophets of an age of renewable energy following Peak Oil got things backwards. We may be living in the era of Peak Renewables, which will be followed by a very long Age of Fossil Fuels that has only just begun.

 

I_ate_the_crow's picture

Two arguments for switching to renewable energy -- the depletion of fossil fuels and national security -- are no longer plausible. What about the claim that a rapid transition to wind and solar energy is necessary, to avert catastrophic global warming?

 

This isn’t the argument. The argument is that fossil fuel extraction destroys ecology, that is, pollutes and destroys habitats. Coal companies are blowing up the tops of mountains, destroying the surrounding habitat, and when their sludge dams break like in Tennessee, it does the same thing to the surrounding area. Fracking uses chemicals that seep into the water table. The fact that all the easily recoverable oil fields are running dry leads to accidents like the BP oil spill in the gulf, the habitat of which is then ruined for the next couple hundred years with Corexit.

 

The scenarios with the most catastrophic outcomes of global warming are low probability outcomes -- a fact that explains why the world’s governments in practice treat reducing CO2 emissions as a low priority, despite paying lip service to it.

 

There is no doubt amongst scientists that humans have increased CO2 emissions, though whether this is having any significant impact on climate change is debatable, at least to me - - we could be entering a cyclical ice age, or, more likely, we could be enduring a rare cycle in the sun’s activity with the magnetosphere, which is having a significant effect on the world’s climate and weather (thus all the tornadoes, droughts, increasing seasonal oddities, etc.). This writer’s audience must be high school sophomores.

 

But even if the worst outcomes were likely, the rational response would not be a conversion to wind and solar power but a massive build-out of nuclear power.

 

According to who, you? Germany stated its intention to decommission all of its nuclear power plants after Fukishima.

 

Nuclear energy already provides around 13-14 percent of the world’s electricity and nearly 3 percent of global final energy consumption, while wind, solar and geothermal power combined account for less than one percent of global final energy consumption.

 

Again, this is short-sighted. It’s only this way because that is the status quo, and many powerful people have had interests in nuclear power companies (like George Soros). However those interests are being trumped by Fukishima fall-out.

 

The arguments for converting the U.S. economy to wind, solar and biomass energy have collapsed.

 

According to your disinformation, yes.

 

Howarth’s error-ridden study was debunked by Michael Levi of the Council on Foreign Relations

 

Haha. The banker-gangster NWO’s foreign policy “think-tank” tells us that fracking doesn’t destroy the surrounding habitat. I take it all back, you’re right!

 

and criticized even by the Worldwatch Institute, a leading environmentalist organization, which wrote: "While we share Dr. Howarth’s urgency about the need to transition to a renewable-based economy, we believe based on our research that natural gas, not coal, affords the cleanest pathway to such a future."

 

What? I thought we were talking about fracking for natural gas v solar and wind power, what does a comment about coal v natural gas have to do with this?

 

The genuine problems caused by fracking and possible large-scale future drilling of methane hydrates should be carefully monitored and dealt with by government regulation.

 

Ha!!!!!! That’s rich. The wholly owned federal regulatory institutions have our best interests in mind when it comes to fracking, I’m sure!!! That’s why they were able to successfully lobby to not disclose the chemicals they use ALREADY!!! You, sir, are an IDIOT, and worse, a pseudo-intellectual.

 

The environmental movement since the 1970s has been fixated religiously on a few "soft energy" panaceas -- wind, solar, and biofuels -- and can be counted on to exaggerate or invent problems caused by alternatives. Many of the same Greens who oppose fracking because it might contaminate some underground aquifers favor wind turbines and high-voltage power lines that slaughter eagles and other birds and support blanketing huge desert areas with solar panels, at the cost of exterminating much of the local wildlife and vegetation. Wilderness preservation, the original goal of environmentalism, has been sacrificed to the giant metallic idols of the sun and the wind.

 

I’m not a part of any Green movement, I’m a part of the common sense movement. First of all, yes, I would rather have eagles die in wind farms than my children die of cancer from chemically polluted water. Second, you are correct, destroying all that vegetation and life IN THE FUCKING DESERT in favor of solar farms is much worse than the human costs of fracking, coal removal or oil drilling. Your logic is flawless! Jesus christ.

 

Eventually civilization may well run out of natural gas and other fossil fuels that are recoverable at a reasonable cost, and may be forced to switch permanently to other sources of energy. These are more likely to be nuclear fission or nuclear fusion than solar or wind power, which will be as weak, diffuse and intermittent a thousand years from now as they are today. But that is a problem for the inhabitants of the world of 2500 or 3000 A.D.

 

Get real douchebag. This of course is the entire issue we are dealing with regarding oil, and it’s going to be a problem in the next 20 years, not the next 500!!!! Holy shit what a disingenuous asshole you are. Your pompous, arrogant tone and foolish “analysis” is enough to make my blood boil. If I ever see you on the street, I will beat the shit out of you. If it’s 40 years from now, I hope they have figured out a way to frack natural gas and run an ambulance on it.

 

ping's picture

You're beautiful when you're angry.

Bicycle Repairman's picture

"If I ever see you on the street, I will beat the shit out of you."

LOL.  Another internet tough guy.  The green energy revolution is dead.  Climate change has been debunked.  Al Gore is a douchebag and so are you.

It's over.  Go cry in your white wine.

I_ate_the_crow's picture

Haha, you douchebag troll. Internet tough guy? Al Gore? White whine? Give me a break you unoriginal cockgobbler.

Bicycle Repairman's picture

LOL.  Go back to the Oil Drum where they'll give you a rub on the head, little boy.  Everywhere else you guys are finished.

Cpl Hicks's picture

lol!!....uh, you are just being funny, right?

Greyzone's picture

"Courage to hope"??? Is this like "Hope and Change"?

People like you assume that technology will always achieve a breakthrough. It might and it might not. Dozens of collapsed civilizations are testament to humanity's failures in the past to account for a changing future that changed in ways for which they were not prepared.

Ans besides, we don't even need a technology breakthrough. What we need is the political and social willpower to decide to change, to decide to stop funding madmen in the Middle East, and to enable our own energy systems like thorium reactors and large increases in high speed electric rail for intercity travel. The technology to build a civilization that is energy independent of religious zealots already exists. It just doesn't look like what most Americans assume is their "birthright" so they reject it. That sort of hubris is what will condemn us all to a hard landing.

granolageek's picture

But we don't have algae farms or oil shale extraction, or know how to actually do either on a prduction basis. John Galt, Howard Roark and Dagny Taggart working together with a $100 billion slush fund could not get a million barrels a day from either in less than 10 years. Ditto for thorium reactors.

 

Coal to liquid and gas to liquid could probably be done with government emergency powers, but unless you externalize the environmental costs, which even libertarians agree is a bad thing, it would still be $5-7/gallon vehicle fuel. If the energy operation has to honestly compensate those who get hit with contaminated groundwater and acid rain, nobody is filling up for $2.00/gallon.

Libertarians for Prosperity's picture

working together with a $100 billion slush fund could not get a million barrels a day from either in less than 10 years....

Well, if a $100B doesn't work, then we need to try $200B.  Eventually, with the right amount of money, the Earth will burp more oil.  It's all about capital flows and the courage to look at new technologies like algae farms and graphene plated solar panels.   

Spastica Rex's picture

Right. And if we need to build a fleet of space tankers and mine hydrocarbons all over the solar system, we'll do that. No matter what it costs. No limits. Just Do It.

falak pema's picture

We should appoint Nike and Branson joint project managers! "Just do it" & "I'm floating in heaven". 

francis_sawyer's picture

x2...

As soon as we discover a few dinosaur remains off the moons of Saturn the problem will be solved...

 

Cast Iron Skillet's picture

I understand that there are lakes of hydrocarbons on Saturn's moon Titan.

DaveyJones's picture

how much DOES a rabbit out of hat cost? 

Quintus's picture

Remember though that money is (or should be in a non-corrupted monetary system) essentially just another representation of energy.  If you get to the point where you're putting more money (energy) in than you're getting out, then the process is pointless.  EROEI is the kicker for most alternative sources of energy.

CrashisOptimistic's picture

Yes, a miracle must be bought.  Perhaps some of those billions should go to a few churches so they can pray for the invention.

The result will be the same.

EscapeKey's picture

Don't bother - in his next post he will explain how the FRB should just print a solution.

AnAnonymous's picture

Peak oil doesn't matter if we have algae farms and the courage to hope for new technology. 

 

It reminds me of the story, you know, those typical US citizens who  put out studies on the feasibility of alternative energy sources.

They start with oil price steadily higher than $50 then alternates are introduced.

It does not happen so they rise up:

if steady $80 then introduced.

It does not happen so they rise up:

if steady $110 then introduced.

It does not happen.

 

As they are your typical US citizens, they think they deserve every single cent they make.

carbonmutant's picture

PS. You better genetically modify that algae cause Botryococcus braunii isn't gonna cut it.

ian807's picture

Algae is just an inefficient solar collector. It can convert about 11% of the energy that falls on it to lipids and it may be tweakable to excrete hydrocarbons (and god help us if it ever escapes into the environment).

If only it mattered.

Oil currently adds 160 exajoules of energy to civilization. Compared to that, algae is a rounding error. You might scale it up a bit, but every square inch of sunlight falling on algae is sunlight not falling on food crops or much more efficient solar panels. In addition, algae requires fresh water, and energy to make the infrastructure that makes growing it possible. While algae would be great for running a small village in a 3rd world country, don't expect it to replace the oil uses by our current civilization - oil which makes your comfortable, well-fed, well-cooled and heated, life possible.

 

 

 

 

ddtuttle's picture

Sorry, but biofuels are not viable. The best algae is less than 2% efficient; that is, less than 2% of the solar energy falling on it is converted to fuel energy. Then you have to convert a soup of organic compounds to fuel which require complex energy intensive refineries. Worse, you end up throwing most of the algae by-products away (or burning it).
The WORST solar cell is about 10% efficient and produces electricity that only has to be 'inverted (converted from DC to 60Hz AC) to be used. Solar farms require almost no maintenance; whereas high productivity algae must be grown in tanks with circulating water, and nutrients. Labor intensive and expensive. We already have solar cells that much more efficient than 10%, whereas, algae MIGHT be improved incrementally through genetic engineering someday.
Clearly we need to make some kind of fuel out the surplus electrical energy, but there are many ways to do this and still be MUCH more efficient than algae. Hydrogen, is not ideal but illustrates the point.

I_ate_the_crow's picture

This is something I feel pretty strongly about. Seriously, the sun is a ball of energy that will last for another billion years or so. Common sense dictates that we find a way to derive all our power from it. Develop all cars and rigs into electric vehicles, and convert our electric grid into solar power. Doesn't mean oil has to go away, but we need to start planning now and wean off of it.

From 2001-2010 the top 5 oil companies (Exxon, Chevron, Conoco, BP, Shell) made $952 billion dollars in profits. There is no incentive for these companies to be looking to the future and planning for a post-oil society. They make way too much fucking money with the status quo.

Whether you like government in your life or not, developing a post-oil alternative energy contingency is something that the government will have to fund with our tax dollars. If a private company could raise the necessary capital I'd be all for it, but I doubt a private company could raise the trillions of dollars necessary. And even if they could, the big oil companies would do everything in their power to prevent it until they extract as much profit as possible from oil. I disagree with Quinn there, Big Oil's regulatory capture is definitely part of the problem.

People who say "solar isn't an option" are totally full of shit, whether they are purposely spreading disinfo or just an idiot. It's not viable, YET. That doesn't mean it couldn't easily become viable with the proper R&D. How about we close all our bases, bring all our troops home, take that money and tell world "hey, we are going to develop a grid that is 100% powered by the sun within the next 30 years. We suggest you do the same, and we will help you do so."

We don't live in this world, of course.

This whole issue just depresses the shit out of me. Why do we always have to be so short-sighted? Where is the sense of responsibility to future generations? Can't everyone see how fucked the USA is when oil runs out or is too expensive? Rhetorical questions, of course, just like why can't our government see how huge of a problem the debt is? We all know the answer: the people don't control the god damn government anymore!

Our world is pathetic. Our leaders soulless with no sense of purpose or obligation to something bigger than themselves. We are the bastard civilization of the universe.

ibjamming's picture

The sun doesn't put out THAT much energy per square foot.  Oil is MILLIONS of years of "sun energy" concentrated 1000X.  Think about the low voltage needed to light a bulb to produce light...now imagine how little usable energy is found in light.

I_ate_the_crow's picture

I disagree, in that I just think we haven't found a way to preserve the sun's energy in high concentrations. Maybe this isn't possible, I don't know. Maybe a unified grid isn't possible either. I'm no scientist. But wouldn't something as simple as a bunch of regional, state or local systems be viable? What if the technology was developed such that every home could be made entirely self-sufficient, including powering their vehicles?

Shit, we are making nanobots and one scientist thinks we will have them the size of blood cells in our body down the road. If we can do that, why can't we find a way to make solar power our primary energy source?

ping's picture

I hear ya, but there are tech limits. I blew a bomb on solar and it's done nothing but gobble up batteries that are full of nasty dick-eating chemicals, plus the rare minerals used in its original construction (no, not silicon). I can run my lights on it, but if everyone wanted it we'd run out of raw materials like silver. That's after a half century of research into solar cells, and a century plus of research into batteries. Scares the willies out of me. We are foooked.

ddtuttle's picture

I didn't say solar wasn't an option, I said biofuels are a bad way to harness solar energy, and the even poor quality solar cells are much better. I am a big supporter of one biofuel: methane. It is produced spontaneously by certain bacteria, and currently powers some sewage treatment plants, and dairy farms. All good stuff.

Running vehicles is a different story. Our best batteries have 1/40th of the energy density of gasoline. That means a battery that replaces the energy in a gas tank will be 40 times bigger. Don't believe me? The battery pack in the Tesla weighs 1000 lbs! that 30% of the weight of the car. Don't get me wrong, the Tesla is very cool, but its a $120,000 toy.

So while electric motors are awesome, batteries are awful. Fuel cells or ultra capacitors would have to improve just to be better than batteries. The answer is simple: convert electrical energy of all kinds into a reasonable fuel that can power vehicles autonomously (no extension chord; i.e. no pantograph or third rail). This solves the energy storage problem, and the energy density problem.

My choice is methane, which can be made form electricity, agricultural waste, or straight from coal if necessary. All these sources of methane could be intermixed and used any way you want: heating, vehicle fuel, cooking, or localized electrical generation. The best thing is we can use our existing natural gas infrastructure to store and transport it to wherever and whenever its needed.

I_ate_the_crow's picture

I wasn't disagreeing with you, was agreeing with your comments about solar. The battery issue is a good point, I've read different theories on the deficiencies of lithium batteries, but like I said above, I'm no scientist. I'll have to look into methane.

tmosley's picture

False.  Metal air batteries have the same energy density as gas.

ibjamming's picture

You seriously think you're going to replace 26 MILLION barrels a day consumption with "algae farms"?

tmosley's picture

I can't believe that no-one has noticed that he is just trolling.  This is RNR, regurgitating my words in a facetious manner.

But he is a lying sack of shit.  I never said I like algae.  I said it is a technology that exists.  

And I am highly disappointed in the rest of you.  I have posted article after article showing technological advances in renewable energy, but you are all still sitting around circlejerking to  the death worship cult.

You don't need to replace 26 million barrels in a day with algae farms.  You need to produce 500,000 with genetically engineered fuel producing bugs.  Then a million.  Then two million.

You need to get rid of oil burning power plants, and buy solar panels that are mass produced from graphene, cost as much as a newspaper, and last for 100,000 years, and are totally indestructible.

You don't need to accept death.  You need to gather capital, and apply it to whatever problems you are confronted with, and overcome them.  Unlike Red Neck Repugnicunt here, who thinks you should just seize all the money, and pay the Dems to save us all from ourselves SOMEHOW.

MonsterZero's picture

We have to subsidize ethanol production because it would cost too much to make corn in gas versus straight oil. I think I'm more worried about peak corn at this point.

carbonmutant's picture

Japanese Supercane will grow in the Southern US and Puerto Rico.