Peak Oil Is Coming, Courtesy of Political Incompetence

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Thu, 12/30/2010 - 18:00 | 838564 CEOoftheSOFA
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It's an interesting point that there will be an underinvestment in oil production capacity due to the fact that most oil comes from incompetent government entities.

But don't expect the Persian Gulf countries to bail us out.  Oil production has already peaked in the Middle East and will probably start declining soon at high rates, according to "Sunset In the Desert".  There has been only one oil discovery in Saudi Arabia in the last 40 years.  There currently is little, if any spare capacity in Saudi Arabia. 

Wed, 12/29/2010 - 18:31 | 836737 AchtungAffen
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The worst part of this post ain't that they come with those Alice in Wonderland fantasies of finite stuff suddenly becoming infinite. The worst part is attributing the logical belief of finite things being finite to the state... When Julius Caesar got the knife, the state was to blame-o; or when the Tunguska meteor fell, whose fault is it? The state, right? Those pimples in that teenage girl's face must also be marks of the evils of statism. Damn, everything under a new light.

Wed, 12/29/2010 - 13:51 | 835958 DosZap
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We are being used like puppets.

Natural Gas (USA is the, #1) reserve country on the planet, car,truck engines can be modified easily to run on CNG.

In the 1950's, the Lone Star Gas companies vehicles were Dual Fuel use vehicles then.( Gas to CNG).

The technology now, is light years ahead.

We are fools for not converting at light speed.

Nat Gas is cheap as hell, and conversons could be done for under a $1k per vehicle.

Wed, 12/29/2010 - 14:20 | 836050 Hulk
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and in many areas of the country the distribution infrastructure is already in place...

Wed, 12/29/2010 - 13:40 | 835929 topcallingtroll
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You can convert any gas powered vehicle to natgas for about 2000 or less. No big deal. I'm calling a top here in oil but got my natgas plans just in case.

Wed, 12/29/2010 - 13:25 | 835904 theprofromdover
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'Peak Oil' is defined as the day (year) you find less new reserves than you just extracted/used.

In other words, you start on the downward slope to running out of oil.

For example, when will you have 'Peak Salary' -and will you care?

Remember, in both scenarios you had a lot of years on the up-slope, even though consumption may be much higher now.

Also remember, there are a lot of variables that come into play. 'Peak Oil' is a complete distraction created by those with a vested interest in instability.

No.1 The higher the price goes, the more economic it is to go dig for inaccessible (expensive) oil.

No.2 The higher the price goes, the more attractive alternative energy sources become.

No.3 The higher the price goes, the more the speculators will catalyse us to crisis.

No.4 The higher the price goes, the worse predicament the non-producers will be in.

The wealthy now don't trust the financial markets, so they are going to speculate on food, oil, water (and military hardware I guess)

Until we stop the greedy and the short-sighted, we are heading for a world of pain.



Wed, 12/29/2010 - 13:26 | 835903 celticgold
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 abiotic oil is a fact , try telling the russians otherwise. It is produced at great depth from Methane , you know the carbon- benzene ring gas that spews from Volcanos, under great heat and pressure, and is extracted by drilling into deep continental fault/shear zones in fresh rock. Naturally , it replenishes itself as it is a naturally occuring process. The russkies are the 2nd largest oil producers in the world , mostly all achieved post WW2, courtesy of abiotic discoveries. How come we dont hear much about it? Gee, i dunno.

Wed, 12/29/2010 - 13:32 | 835916 absinthejo
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Like I said, go back to infowars and never look back

Wed, 12/29/2010 - 17:11 | 836577 AmericaRacket
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My opinion now is that absinpendejo is consciously lying.  What we see in Russia is oil production going up, peaking, going down, and then PEAKING AGAIN (what an asshole) and then dropping.  This is a graph that looks like price manipulation.


And he presents this scribbling as so authortative that it is all you ever need to see on the subject.  And it in fact calls his claim into question.  (What an asshole.)

Here's the deal.  I want you either to give me a chemical argument as to why non-biotic hydrocarbons cannot be produced by non-biotic hydrocarbons, or shut up.  It is extremely plausible that oil is in fact abiotic. 

And by the way, Alex Jones was right on Global Warming and right on 9-11.  You can't use him as a bogeyman anymore.  The time when you could scare people by associating them with Alex Jones is gone.  In fact, Peak Oil is the last Big Lie that TPTB have in the cards. 9-11 is dying and Global Warming is dead.  So it makes sense that pendejo (what an puss-filled, smirched and bleeding asshole) would use every rhetorical bludgeon he has in an attempt to keep that alive that last red-herring.  It will be the last cult mania TPTB will engineer.  So enjoy it while you can.

It aint gonna work.  Fuck you pal.

Wed, 12/29/2010 - 13:25 | 835897 Eric The Red
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Peak Oil is the most important thing happening in the world today.  All else (including most topics on this site) is a sideshow.

Wed, 12/29/2010 - 13:39 | 835926 DaveyJones
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more spinoff than sideshow

Wed, 12/29/2010 - 13:10 | 835854 Drag Racer
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so where is peak oil? himalayas, rockys, where? will it evaporate due to global warming??

Hey, the fact is you don't know. All we are told is speculation, propaganda, or lies. All I know is every couple of years the story changes. This argument is a waste of YOUR energy.

Anyway, lets watch the USPO make the biggest bone head move ever...

Wed, 12/29/2010 - 13:04 | 835841 ejmoosa
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Peak oil:  Another tired theory.


If the earth were an apple, we have not even pierced the skin.  Yet the "experts" want to tell us that they already know all about what goes on beneath the skin.

So how do they explain the oil which comes from wells that is "newer" than the old crude oil that originally comes out of those very same wells.


And of all the nations in the world, the US will be one of the last that cannot afford fuel.  There are entire continents that will do without before we do.




Wed, 12/29/2010 - 13:33 | 835920 rumblefish
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tired based on what?

I think we can all agree there is a finite about of oil on earth. Just based on where we are drilling its pretty obvious we've passed the peak.

Wed, 12/29/2010 - 12:58 | 835831 TruthInSunshine
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Oh boy!

Yet another doomcult prognostication from the Church of Peak Oil, the crowd that LITERALLY once believed dinosaurs were the exclusive source of crude oil deposits.

Just what I was looking forward to; Peak Oil cultists from theoildrum swarming ZeroHedge!

I've yet to come across a more dogmatic, idiotic cult than Peak Oil-istas, and if you ever get a former cult member to come to their senses, they'll speak about their experience in the cult in near-militaristic terms.

Fact: Peak oil cultists have ZERO clue regarding how much oil exists, and more importantly, they have ZERO clue as to what drives the extraction/production cycles (as this is as much a matter of internal government and cartel policy as anything else in most of the world), yet they will gladly spew total fabrications about both of the aforementioned subject matters for eternity.

Wed, 12/29/2010 - 13:16 | 835869 absinthejo
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You quote CERA and the moron named Yergin which has been proven wrong so many times.

An interesting analogy, I remember the chess book by Kasparov in 1984 "the test of time". Most of the analysis in his games still prove to be right even with computers today.

Hubber was right in 1956. And for world oil Production, almost right.

Remember, when things start unraveling, it doesn't matter if you're looking for David Rockefeller, you'll still need food first. Before fighting the boogey man, a non oil-based food production is mandatory. Locally, of course. After that, you'll see the light about what is economic growth.

P.S.: the articles you quoted are full of idiotic statements that doesn't resist the test of time. No matter how you spin it, Hubbert will always be right. Plain and simple.

Wed, 12/29/2010 - 13:21 | 835879 TruthInSunshine
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What exactly in the first article (CERA) I cited, where Peter Jackson actually cites facts and real scientific research and one of the most comprehensive studies to date, is wrong?

Wed, 12/29/2010 - 13:34 | 835909 DaveyJones
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Quibbling over when is idiotic and, as hulk points out, dangerous  

Wed, 12/29/2010 - 13:27 | 835908 absinthejo
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You don't seem to realize that conventional crude peaked in 2005. The flats lines in the graph from CERA are irrelevant. 100 mbd are coming, right. Look, believe what you want.

Wed, 12/29/2010 - 12:52 | 835823 The Pierogi King
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As oil pricies rise more cap ex will flow in, more drilling will occur, more permits to drill will be granted. Let's just hope the Hedge Fund and Vampire Squids do not bid up the financial paper and artificially stimulate pricing like they did back in the Prop trading $147 a barrel days. We need more refining also but NIMBY! Peace

Wed, 12/29/2010 - 12:50 | 835819 rwe2late
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Apparently some are still blind to the real nature of the skulduggery of which the oil scam is only a part.

“Peak oil” analyses are somewhat misleading.

There is a shortage (limitation) on available oil primarily due to the US forcing Iraq, Iran, and to a lesser extent Venezuela, off-line.

That may make the Saudis happy, it may make the oil cartel happy,

but it drives up oil prices, and world-wide food prices, and everything else.

Furthermore, the global military is the world’s biggest consumer of petroleum products.

That gives it a self-serving interest to “secure” resources in addition to the motives of its corporate sponsors.

There is still a window of opportunity whereby the world could be restructuring for more sustainable and beneficial uses of energy and other resources.

But none of the required investments are being made.

In the US, as depicted in “Crumbling America” on the History Channel.

Nation-wide the roads, rails, electrical grid, sewage systems, dams, levees, water pipelines, and bridges have not been maintained, repaired, or replaced as needed. Talk about politicians kicking the can down the road.

Trillions of dollars are needed just to bring the systems up to minimal standards. Trillions and trillions more to upgrade to world-class.

But instead:

We will continue to spend double the percentage GDP that others spend on healthcare in order to subsidize the insurance and health industries. We’ll allocate trillions more to keep financial speculators afloat. We’ll spend trillions more to kill illiterate peasants half-way around the world, prop up drug mobsters, and enrich warfare merchants. We’ll build more prisons, fewer schools. We’ll pay for more NSA, TSA, and Homeland policing of ourselves.

In short, dissent is seen as the only problem

Wed, 12/29/2010 - 12:46 | 835809 realitybiter
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For those that are convinced Peak oil is a scam understand a few facts:


The original thesis was stated in the 50's, predicting the US would peak production in the 70's and the world would in the 2000-2010's.  Check and check (so far looks like 2006 or so  ).  Look at every major oilfield.  A majority are in decline some more than 50%.  Our own North Slope peaked in about 10 years after production.  

The difference between AGW and Peak Oil is that there is actually some very good data supporting Peak Oil.  There is little more than theory to support AGW.  Which brings me to my next point.  If Peak Oil is a reality than we are also at peak carbon.  If we are at peak carbon we are pissing money away trying to fix a problem that does not need fixing.  WHat we need to do is figure out economical energy sources other than burning fossil fuels.  Not to "solve" AGW, but to power the planet.  The AGW believers are actually the biggest capital destroyers and fundamental cause of our energy problem.

Finally, the movie Collapse has nothing to do with this argument.  It was 50 years behind a thesis which (unlike AGW) has data to support it.  AGW conveniently changes its thesis when the data does not work out.  Peak oil data just keeps on supporting the thesis, no massaging required.

Wed, 12/29/2010 - 12:52 | 835821 spekulatn
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And we have also pointed out how Big Oil has funded Green environmental movements to ensure that much of the Western land-mass is now off-limits for drilling. The result is that drilling is done in third-world countries where the supply chain is extended and available for endless cost-elaborations and delivery-risk. It is also no coincidence in our view that off-shore drilling has become a popular alternative oil-drilling methodology.

It is not expensive to drill on land but to drill at sea and at depth is monumentally costly and dangerous. This sort of barrier-to-entry favors Big Oil considerably. Finally, all who wish to can go onto YouTube and see for themselves the various energy alternatives developed by clever entrepreneurs. Curiously these never seem to be reported on by the mainstream media, which is continually concerned with the false, fear-based promotion of "conservation" and reduced energy consumption.

Wed, 12/29/2010 - 12:44 | 835804 Internet Tough Guy
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Oil goes to 150, economy crashes, oil price crashes. Oil climbs again, economy crashes, oil price crashes. Does this allow for economic growth? Stability? No. And this is the 'no peak oil' rosy scenario. The truth is that production is dropping so one day the price will rise, economy crashes, price does not crash back down.

The end. Of stupid 'infinite growth just in time' economic model.

Wed, 12/29/2010 - 13:52 | 835971 downrodeo
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Well stated

part of me is going to be relieved, part of me is going to be (already is) terrified...


ahhh, uncertainty abounds...

Wed, 12/29/2010 - 13:22 | 835888 economessed
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Agreed.  Let's quit junking one another based on what you think about the "Peak Oil" concept.

The country and its economy crave cheap energy to grow sustainably at high (4.0%+) rates.  If oil isn't cheap, better hope something is, else we are in a box.

Wed, 12/29/2010 - 12:19 | 835745 cmalbatros
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we are running out of Peak (cheap, easy to get, high profit) Oil , there are probably lots still left, but at a higher price lower profit level.

Wed, 12/29/2010 - 12:08 | 835725 SheepDog-One
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Peak evil.

Wed, 12/29/2010 - 12:11 | 835730 Mr Lennon Hendrix
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Up from the depths of the earth bubbles...Ben S. Bernanke.

Wed, 12/29/2010 - 12:06 | 835721 Clapham Junction
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Yup, we are hearing the peak oil argument again as oil stock prices are at new recent highs. 

Just remember $140 to $40 oil in a few weeks in '08.

It's all spec driven, and the talk gets scarier the higher the price.

Wed, 12/29/2010 - 12:31 | 835776 Bill Lumbergh
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I have mixed feelings on peak oil from a variety of fronts.  From one angle with populations growing over time that places a strain on existing supplies.  From another angle with technology improving there always seems to be another find (Brazil) that alleviates supply concerns.  Either way with depreciating fiat currencies the price is bound to go higher up to a point.  However, I am afraid that $150/barrel oil and $4/gallon in this current economic environment will plunge us right back into recession/depression.  Our "recovery" is way too fragile to be able to withstand that type of price shock.

Wed, 12/29/2010 - 12:35 | 835786 absinthejo
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6 billions barrels in recoverables is not that much. Furthermore, it's in deep water. The trouble is when conventional crude oil decline rate is too steep to be offset by non conventional oil. 2 to 5 years ahead seems to be the norm.

Wed, 12/29/2010 - 12:17 | 835742 absinthejo
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It's called demand destruction. Nothing conspiratorial about it

Wed, 12/29/2010 - 12:10 | 835727 Mr Lennon Hendrix
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The definition of 'finite' please?

Wed, 12/29/2010 - 11:58 | 835689 Dr. Porkchop
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It will be dealt with at the last possible moment, when it's no longer possible to deny. No politician would build a campaign platform on stagnation or declining growth. Peak Oil has become more mainstream lately. Even the Pentagon is looking at it seriously, and are probably further ahead on the issue than anyone in Government.

Wed, 12/29/2010 - 12:08 | 835722 Mr Lennon Hendrix
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The Pentagon released documents that said peak oil was bound to happen soon, in the '90's.  Billy Clinton was asked about the documentation after he had stepped down from office.  He replied, 'No one showed me the evidence.'  That is how dumb founded our politicos are; they can not even tie their own shoes.

Wed, 12/29/2010 - 12:16 | 835738 absinthejo
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They all know about it [remember they asked for the Hirsch Report] but they can't do anything publicly. Now, the real conspiracy is as followed : Jean Laherrère who wrote in 98 "the end of cheap oil" with Colin Campbell also mention global warming in many of his presentations. He explicitely says that we don't know how much much reserves is left and "oh by the way, the graphs about CO2 "hockey stick" being the cause of global warming are falsified". I've long thought global warming a pretext for peak oil and a way to help mitigate the effects. It pretty much means doing the same thing locally.

If they acknowledged the real trouble ahead, Dow 1,000 tomorrow is a certainty

Wed, 12/29/2010 - 12:36 | 835783 Mr Lennon Hendrix
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Yes, the Hirsch Report, it was when the Hirsch Report was released that Bill Clinton claimed he had not recieved the CIA information detailed in the Hirsch Report.  If it is beuracracy that defiles democracy then we have some major issues.  Maintaining proper corporate equity will be the least of them.

Wed, 12/29/2010 - 12:04 | 835711 LFMayor
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+1.   Nothing that could topple the PTB from their enjoyable perch is going to go unaddressed, at the very least it's being discussed and measures taken in secret.

Wed, 12/29/2010 - 12:03 | 835709 DaveyJones
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well said. the pentagon has been openly talking about peak oil for at least a decade

Wed, 12/29/2010 - 12:47 | 835810 spekulatn
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CNN reported back in September that peak oil is dead. It must be true. No wait....the pentagon has been talking about peak oil for many years now. It must be real.

I'm so damn confuzed.

Wed, 12/29/2010 - 13:23 | 835855 DaveyJones
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The Pentagon's been putting our money and bodies where their mouth is

Wed, 12/29/2010 - 11:58 | 835683 Mr Lennon Hendrix
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Great insight, but I was a little confused by this quote:

the view that the world is running out of oil (false)

Peak oil is not about a 'last drop of oil', but about a peak in worldwide production.

And if we are counting on the House of Saud, who are now pumping saltwater into their reserves to maintain production levels, we are in for the worst.

Wed, 12/29/2010 - 13:36 | 835922 CrazyCooter
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As discussed here:


Wed, 12/29/2010 - 14:10 | 836022 Mr Lennon Hendrix
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Thanks for the link Cooter.  The Oil Drum is the best on the subject that I have seen.

Wed, 12/29/2010 - 14:10 | 836017 Mr Lennon Hendrix
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Thanks for the link Cooter.  The Oil Drum is the best  on the subject, in my opinion.

Wed, 12/29/2010 - 13:26 | 835883 akak
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Good point, and I caught that egregiously incorrect line in the article as well.

Really, we are NOT running out of oil?  Then I guess the world's supply of oil is INFINITE.  Since the earth is not in fact infinitely large, then the supply of oil within it must also be finite.  And since it is finite, and we are using it up, with effectively very little or no natural replenishment on any practical human timescale, then yes, we are running out of oil.

When given even a modest amount of thought, the inherent reality of Peak Oil, whether it is today or 50 years from now, is so self-evident that any deniers of it are just demonstrating the ultimate in head-in-the-sand doublethink.

Wed, 12/29/2010 - 11:55 | 835676 AnAnonymous
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Oil is extracted. Not produced.


This said, the capacity to produce looks like being more impaired when you run out of oil to produce rather than lagging on reinvestment.


As to reinvesting, it might be better for any oil producer not to reinvest massively on its production capacities which might mean for the oil producer an earlier game over.

Wed, 12/29/2010 - 12:39 | 835793 Mr Lennon Hendrix
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People produce oil.

Wed, 12/29/2010 - 14:11 | 836024 downrodeo
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So if guns kill people, and people produce oil, does that mean that guns kill oil production?

Take down a letter for me:

Dear Senator Kyl, .... no scratch that

To my malevolent overlord,

I have found the solution to peak oil and gun control legislation. We must institute a 'horses-and-guns-for-clunkers' program.

tax id: 8234-92-0000-niner

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