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Guest Post: What Peak Oil?
Submitted by John Aziz of Azizonomics
What Peak Oil?
Is peak oil imminent? Lots of people seem to think so.
The data (released by BP a company who have a vested interest in oil scarcity) don’t agree. Proved reserves keep increasing:
The oil in the ground will run out some day. But as the discovery of proven reserves continues to significantly outpace the rate of extraction, the claims that we’re facing immediate shortages looks trashy.
Some may try to cast doubt on these figures, saying that BP are counting inaccessible reserves, and that we must accept that while there are huge quantities of shale oil in the ground, the era of cheap and readily accessible oil is over. They might cite the idea that oil prices are much higher than they were ten years ago. Yet this is mostly a monetary phenomenon resulting from excessive money creation beyond the economy’s productive capacity. Priced in gold, oil is still very cheap — almost as cheap as it has ever been:
The argument that the vast majority of counted reserves are economically inaccessible is fundamentally flawed. In the long run there is only one equation that really matters in determining whether oil is extractable, and that is whether there is a net energy gain; whether energy-in exceeds energy-out. If there’s a net energy gain, it’s feasible. Certainly, we are moving toward a higher cost of energy extraction. Shale oil (for example) has a lower net energy gain than conventional oil, but still typically produces five times as much energy as is consumed in extraction.
But the Earth’s extractable hydrocarbons will eventually dry up, whether that’s in 500 years or 200 years. If we want humanity to have a long-term future on Earth, we need to move to renewables; solar, hydroelectric, thorium, synthetic hydrocarbons. And the market will ensure that, eventually — as the cost of renewable energy continues to fall, more and more of us will adopt it. I don’t buy the myth that markets are stupid — if humanity needs renewable energy (I believe we do) the market will see to it (I believe that is slowly happening). Markets are just the sum of human preferences.
According to the International Renewable Energy Institute:
Power from renewable energy sources is getting cheaper every year, according to a study released Wednesday, challenging long-standing myths that clean energy technology is too expensive to adopt. The costs associated with extracting power from solar panels has fallen as much as 60 percent in just the past few years.The price of generating power from other renewables, including wind, hydro power, concentrating solar power and biomass, was also falling.
So no. I’m not lying awake at night worrying about imminent peak oil. There’s plenty of extractable oil, and renewable energy will eventually supplement and replace it. But will politics get in the way of energy extraction? The United States has huge hydrocarbon reserves, yet regulation is preventing drilling and shipment, leaving America dependent on foreign oil. And the oil companies themselves are largely to blame — after Deepwater Horizon, should anyone be surprised that politicians and the public want to strangle the oil industry?
If there’s an imminent energy crisis, it will be man-made. It will come out of the United States’ dependency on foreign oil. Or out of an environmental catastrophe caused by mismanagement and graft (protected cartels like the energy industry always lead to mismanagement). Or out of excessive red tape. Or war.
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You can fuck your increase in reserves, if you compare it to the increase in consumption.
I'm no expert, but I seriously doubt that this provides an accurate, broad portrayal.
For some perspective, consider that if Deepwater Horizon (BP's well that blew up in the Gulf) had extracted every available barrel of oil, that total amount would have been able to supply the world's aggregate demand for no more than 24 hours!
Consider farmer Zed P. Winchester. Over the life of his entire farm, that total amount would have been able to supply the world's aggregate demand for no more than 24 hours!
What's your point?
Peak Oil will go down as one of the greatest investment theme frauds of all time.
- Colin Campbell
- Stephen Leeb
- Jim Puplava
- Chris Martenson
and many others totally disgraced and discredited with their forecasts.
Hands down, consumer stocks has been the place to invest the last three years.
Check out the comparison of XLY vs. XLE the last 10 years.
XLY has outperformend XLE by 200%!!
http://chart.finance.yahoo.com/z?s=XLY&t=my&q=l&l=on&z=l&c=XLE&a=v&p=s&l...
Using stock prices to "discredit" the belief in peak oil?
Brilliant!
I'd say Hubbert was pretty dead on
and gas is free in LA and not over 4 bucks a gallon. moron...
The extraction we've had so far is killing off the planet.
we're here because the planet wanted plastic everywhere...
and beer cans
and broken glass in our creeks and rivers...
we're here because the planet wanted plastic everywhere...
______________
Nope. The planet wanted nothing.
US citizens, they have wanted.
Most of the plastic is produced by Chinese citizenism's these days.
Just an idea guys,there's plenty of this stuff all over the planet.
http://coalandfuel.blogspot.co.uk/2008/03/oil-from-coal.html
Sorry, but Peak Oil is real. This text is pure BS. We find less oil year after year. We're at the bumpy plateau. Watch out when we get down the slope.
100 years ago : EROI 1/100
Today : 1/2-3
If you don't believe in Peak Oil, then you don't believe in reality.
Yes it's quite real... http://www.youtube.com/watch?feature=player_detailpage&v=4Z9WVZddH9w#t=8...
But you leave out the proven reserves of thorium, which are so large as to be functionally infinite. Too bad the government regulators have guns squarely pointed at the energy industry, who gladly accept the chains that have been forced upon them as they keep competition away.
A thorium mine covering ten acres will produce enough fissile material to last the Earth for a year. That doesn't take into account the existant nuclear waste that could be burned to within 3% of completion within the same reactors.
Let them eat thorium! -tmosley
Peak Oil to the exponent minus one or one over peak oil - that's what is really going on.
http://bullandbearmash.com/index/oil/weekly/
Gas is doing the same thing - $2.63 per gallon close on Friday. Too bad it's not reflected at the pump.
That chart does not even recognize Venezuelan reserves in full, just yesterday I was reading an article about how Venezuela just passed Saudi Arabian reserves at 296 billion bbls. Venezuela Passes Saudis to Hold World's Biggest Oil Reserves
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/06/14/bloomberg_articlesM5JZVG07SXKX01-M5M5C.DTL#ixzz1xyI6PxNp
It will be relatively more expensive to extract, but we are already paying more at retail than it will cost in my lifetime to get out of the ground. And there are trillions of barrels worth of energy in the form of methane clathrates frozen in the sea beds, just off the American coast alone in the continental shelf.
The real problem for now is the problems that come from the actual use of these hydrocarbons. At this point we cannot use them the way we do for much longer without paying a high price in ecological damage. I am not saying that will always be the case, but for now we do not have the means to cleanse the atmosphere of the byproducts of combustion.
That could change one day if we ever get fusion perfected, clean and near limitless power, but had we that near limitless power with which we could in theory easily clean CO2 from the air and sequester it or even break it into carbon and oxygen, well then we would not need hydrocarbons for fuels. But then a lot of things will change if we ever get to the point where energy is essentially free and you only pay a flat monthly delivery fee for your energy. For example, by far the vast majority of the worlds gold is dissolved in seawater, it can be extracted but the cost in energy to do so is many times what the gold is worth. The cost of energy and not the technology is the barrier, free, limitless energy would mean gold that is cheaper than silver, and in fact almost every human activity that is priced has a component of energy cost, sometimes quite high, free energy will mean that component goes away.
In so many ways things will change. We speak of overpopulation, with free limitless energy we would not have a problem with that for a very long time, our problem now is lack of arable land, and clean water, and we have all the water we need if it were not salty, the high cost of energy to desalinate is the problem, get rid of energy costs and viola, no water issues. And it will happen one day, if mankind survives he will figure it out. So many possibilities become possible in a free energy world, almost unlimited. A true paradise. All we have to do is get rid of the greed.
By the way, gasoline retail here was $4.299 last week, yesterday it was $3.699, gas does not drop 60 cents in one week unless it was being artificially kept high for the purposes of gouging. A Washington senator decided last week to hold hearings on the west caost gouging to find out why fuel was so expensive, the hearings are not even set to happen for a month and already in one week we are down 60 cents. A-Fucking-MAZING! If refiners, wholesalers, and retailres cannot act in the publics best interests and still make a REASONABLE profit then the business of providing energy should be taken away from them.
Price controls?
what could go wrong?
Apparently nothing, at least not if you're a group of major oil companies doing the price controlling.
Whats wrong with that? They are passing savings down to you. Would you complain tomorrow if you went to the mcdonalds and a big mac was 60 cents less? Gas is already 5 6 dollars a gallon cheaper here than Europe. If anything we should be complaining about everything but oil. But we are pigs. All we do is drive. We are lazy and in a few years we will not even be able to mass produce a car.
What's wrong with that is that for almost two years we on the west coast have paid almost a full dollar more than what gasoline SHOULD cost given a REASONABLE markup by refiners, jobbers, and gas stations. And last week we were paying well above a profitable price, when it was $3.08 in South Carolina we were paying $4.30. That just would not even be possible without illegal price fixing. So, one refinery shutters for two weeks for routine scheduled maintenence at the same time there is a small fire at another (which did not shut down production for mor ethan 24 hours) and another closes a pipeline for inspection, and that is the excuse for gouging for 6 months? Oil and gas are not Gucci shoes, they are not a luxury item, they are a quasi utility, a vitally necessary part of the modern economy, and they are by and large not subject to competition from those who would like to compete with them because of high barrier to entry costs in the industry, as well as high standards for necessary regulation.
In industries that are vital to the overall economy as well as personal security business must be run with human needs as a high priority or it is the right of the people (via their government) to nationalize them. The companies have a right to a REASONABLE profit, but when tens of millions of consumers in a vast part of the nation are being ripped off for UNREASONABLE gouging using ILLEGAL pricing tactics and artificial shortages then it is time for those fuckers to go. They are no better than bankers or lawyers at this point.
I live in the midwest and we pay the same as you 4.30. Stop complaining.
Fuck you dude, you START complaining or do you LIKE taking it up the ass from greedy out of control capitalism?
Technology has a way of keeping its own schedule. We're far mor likely to get workable thorium reactors before fusion is workable.
Way to stomp on George Noury fans' favorite hobby horse!
Wait 'till Geo Worshington and the other neo-Malthusians hear about this. They'll throw another screaming Asperger fit.
Proved reserves. LOL.
I believe BP include LNG and other stuff in overall supply; not only oil :)
AND supply of oil is 2 mln barrels shy of demand; such a detail.
http://omrpublic.iea.org/
Tyrel my boy ;)
Gas prices in a total freefall the last 6 months, wow!!!
http://66.70.86.64/ChartServer/ch.gaschart?Country=Canada&Crude=f&Period...$/G
$2.87 in South Carolina right now.
http://www.southcarolinagasprices.com/
Prices here in L.A. have completely cratered the last two weeks, 30 cent drop just in my neighborhood.
http://66.70.86.64/ChartServer/ch.gaschart?Country=Canada&Crude=f&Period...$/G
"But any minute now, I swear! Gas shortages and rationing are coming!"
Good thing Matt Simmons didn't live long enough to see his theories exploded within 4 years.
http://www.youtube.com/watch?v=KKaqlmvJnSg
That's not nice to talk about Matt that way. He died a noble death, at the hands of the unnoble.
Look at gold - priced in gold, oil price has been flat.
________________
Has any of US citizen economics fan who peoples this site ever tried to know if oil price is flat or declining against a Picasso, a Pollock or a Van Gogh?
I dont know, maybe one of the heirs of the Enlightments might find out that oil is actually cheaper when prices in masterpieces?
Paintings are non-fungible. nice try though.
A Pollock is a Pollock.
Whether you like them or not, they aren't making any more.
So if you had one painting worth $1 million, you wouldn't mind if I took it and gave you one worth $100,000, as long as it was the same painter?
Each master piece is a substitute for itself.
When priced in a master piece, no matter who owns it, you can get an amount of oil against it.
Price of fancy artwork has been exploding lately.
Heh, gasoline priced in art, gold, classic cars, or the S & P 500 has really imploded.
Any wonder why Ford is now rolling out a 662 h.p. Mustang?
http://www.foxnews.com/leisure/2012/04/27/2013-ford-mustang-shelby-gt500...
Oh no, RobotTrader and AnAnonymous are feeding off each other. We just need some MDB collaboration for a perfect storm.
Oil is priced in debt, not fancy artwork, gold, classic cars or the S n P 500. btw, I just chunked about 300 framed original pieces of artwork in a compactor/dumpster a couple weeks ago because the owner no longer had room for them. Had to make room for new shit. Guess who the, "owner" was?
There were some pieces I would have liked to have but would have been fired if caught.
I am becoming increasingly disinclined to post on this matter because it's counterproductive. That which is inevitable is inevitable.
Regardless of that, oil is priced in only one thing, BTUs. Everything else is imaginary value invented by man. Only BTUs were invented by nature and that's all that matters.
Peak oil has a very strict, narrow and precise definition. It is the curve of oil extraction rate from the ground. It is not about cheap oil. It's not about price. It's not about "all liquids". It's not about ANYTHING other than what the PEAK is, a maximum on the graph of extraction rate from the ground. You can discuss anything else you want to discuss, but you can't redefine what it is that PEAKS . . . it's just the line on the graph and nothing else.
We don't have accurate measure of output from the ground. All tracked numbers quoted by anyone -- at some point, for some countries, are taking that country's quote without audit. China jails reporters who travel to oil regions. Their extraction rate is a state secret. This is true of other countries, too. We don't have an accurate measure of this parameter.
We can't know to the last bbl what is produced but we have a damned good idea:
In 1990 we (world) produced 60,339 thousand bbls per day and in 2011 72,889 thousand bbls per day. http://www.indexmundi.com/energy.aspx?product=oil&graph=production
Twenty one years production has risen 20%, that is actually slower than the rate on increase in population and FAR slower than the rate of reserves, which is partly due to advancements in extraction technologies, and partly from much better fuel efficiency in modern cars. Chinese oil production might be a secret but it is now a very well kept secret, CIA Factbook says 4.073 million bbl/day (2011).
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2173rank.html?countryName=China&countryCode=ch®ionCode=eas&rank=5#ch
It is a secret.
That number was provided by the Chinese gov't. CIA did not audit it.
Independent audit of Saudi output is similarly unavailable. There are attempts to infer from shipments, but of course that doesn't measure domestic consumption. Analagously, Lukoil, Russia's major private oil firm (as opposed to Rosneft, one of their govt oil firms) produces oil from Russia fields, and also from leases they own in Africa. When Russia publishes oil production, they survey their oil companies. Lukoil submits their production in response to the survey, and they do not seperate out the Africa lease ouput. It's double counted, globally. There is talk of PetroChina and PetroBras doing this, too.
Have a look at EIA, BP and JODI data and look at how extensively they disagree on the same measurements. It's somewhat an outrage, too. It's the single more important parameter on earth, and we don't have a good measure of it.
TT
http://gregor.us/opec/the-cruel-math-of-the-marginal-barrel/
well said
I don't know anything about Peak Oil. But why does it cost me $300 dollars more to fly from the New York to Rome, then it costs to fly from Rome to New York?
http://www.skyscanner.com/flights/nyca/rome/120723/120730/airfares-from-...
http://www.volilowcost.it/VoliEconomici/flysearch.aspx?depcity=Roma&depI...
Why is everything so much more expensive int the USA except for oil?
Supply and Demand maybe?
No that wouldn't make any sense considering Italy pays 9 dollars a gallon for oil and USA pays around 3.7.
Doesn't add up for an industry that only gets 3 percent profit margin.
The costs are the same for USA Travel on Delta though between both sites.
And, even if the supply was skewed to more people going to Rome from New York than the other way around it shouldn't cost $400 dollars more because they could pick them up on the backhaul.
Plus look at this. How the hell does an Italian or Spanish or British Airways (which I used as a proxy) airline charge $400 dollars less with oil 5 dollars more a gallon.
http://www.wnyc.org/npr_articles/2012/jun/06/good-times-for-airlines-so-...
It is just nonsense to compare any European gasoline price with ANYTHING anywhere else, Italians do not pay a cent more for gas than we do, most of the price of a gallon of fuel in Europe is tax. Elf Aquitaine , Total, Royal Dutch Shell, BP, they manufacture and sell at about the same margins as US makers but we pay on average 36 cents per gallon tax while they pay on average more than $1.25 tax per liter. And don't forget they also pay a 22% VAT, more or less by a percent or two depending on the country. Jet fuel (gasoil/kerosene) is not produced, taxed, or priced the same way as gasoline or diesel, it is heavily hedged, and there are FAR larger costs in the airline industry that affect seat pricing than fuel, for example, nearly all europeans have national healthcare and government retirement schemes, their employers do not need to pay for their insurance or pensions, American carriers traditionally paid both, though employee cost cutting has reduced those a lot now. I also think Hub and Spoke air traffic in the US has added a lot to our costs.
You did not read what I wrote. The two sites publish prices.
1. The rate they publish from Europe to New York is 400 dollars less with the same carrier than it is from New York to Europe.
2. The rate they publish from LA to New York is the same.
And you are wrong about then not paying 9 dollars a gallon (taxes count). I can assure you this is reality for them.
One way goes with the jetstream, the other against it, hence using more fuel.
Except: The jetstream goes to the east in the northern hemisphere.
I tend believe these guys when it comes to peak oil... http://www.youtube.com/watch?feature=player_detailpage&v=4Z9WVZddH9w#t=8...
The whole presentation reeks of credibility.
Peak oil or no peak oil, it's a good thing we're stocking up all that unicorn shit, just in case.
More skittles!
Drill, baby.
Greg MacDonald will be pissed, but it s what it is.
With or without peak oil, zero growth and deindustialization is coming to a serf near you. All us useless eaters and all that jazz. And if a cheap n abundent new or existing energysource pops up, it would be mothballed due to the risk of peace breaking out.Can't make the dept and energy cartels obsolete now can we. But we live in volatile times so maybe the sucker blows up all by it self........or with a little help.
"The chain in those handcuffs is high-tensile steel. It'd take you ten minutes to hack through it with this. Now, if you're lucky, you could hack through your ankle in five minutes. Go."
Mad Max
Proven reserves are not the same as what is eventually extracted or even the extraction rate, and net gain has to be high enough to meet increasing demand. And there's a contradiction between arguing that renewable energy will meet oil supply shortfalls and claims that there are no such shortfalls.
What is undervalued - at least in these comments - is ELM, Export Land Model.
http://en.wikipedia.org/wiki/Export_Land_Model
Countries exporting crude have a tendency of using more and more of the stuff themselves, over time.
Compounding the closing of nukes, lower EROEI and depletion, ELM will cause a dearth of market availability for oil-importing countries.
Soon we'll have people stating that the Earth is running out of Air and we have to introduce Air Ownership.
Al Gore tried it with CO2. Maybe charging for Oxygen to breath could be a great idea.
I thought he was working the wrong end of the exchange.
Well. He had the idea the since Humans produce CO2 that harms the universe, humans must be charged a fee to him who is Universe's archpriest on earth.
I'm sure somebody will have the idea to close that loop and charge for the Oxygen humans breath. It's not far fetched.
Humans produce CO2. Trees inhale CO2 and produce Oxygen that Humans breathe. If they want to charge for half of loop, why not charge for the whole loop?
Unfortunately, this issue is not yet mature for US citizens to apply their US citizen economics.
You need to be able to exclude people from consumption to force them into buying.
It is hard to exclude people from breathing air.
But it might come. US citizens might work at that.
Thx a lot.
My whole point is for the concept of SCARCITY to be understood.
Whether you and anybody else agrees or disagrees with me on different applications, it is totally a different story.
"And the oil companies themselves are largely to blame — after Deepwater Horizon, should anyone be surprised that politicians and the public want to strangle the oil industry?"
Umm....and <i>exactly why</i> are oil companies drilling in 1 mile of water vs. onland and in shore where the easier oil is?
Chicken->egg->Chicken->egg...usw.
"The oil in the ground will run out some day."
horseshit....oil, natural gas, and coal are abiotic fuels.....it is total bullshit to claim that oil is a fossil fuel....the earth constantly produces petroleum in vast quantities....the only trick is figuring out how and when it will replenish the reservoirs....and we have numerous examples of replenishment....
i would not be surprised if coal is a much more static phenomenon but you can bet your sweet bippy that petroleum will be around as long as the earth is.....my prayer is that god has established mechanisms which cause restockings to occur more rapidly than appears to be the case or that we can safely engineer such occurances
Tony tony,
You should steer clear of religious nut jobs who sell over-priced DVDs of themselves making up stupid bullshit. The end.
I'm guessing you don't work in the oil industry. Or the spelling industry.
'my prayer is that god has established mechanisms which cause restocking...'
Wouldn't it be easier for you to pray for there to be a full tank in your car every morning?
Wouldn't it be easier for you to pray for there to be a full tank in your car every morning?
That, he would have to "witness" every morning and hard to ignore.
Fusion is the future. Don't listen to the people that say man will never fly, reach the moon, travel faster than a horse can carry them, will hear voices from a box...or see them too, or even an IBM head in the 50's saying "THERE WILL NEVER BE A COMPUTER IN EVERY HOME", so on and so forth.
Wind/solar just won't cut it. They're green madness.
In the future, which is pretty close to now, mankind will NEED fusion, because the rest simply won't provide enough energy. Thorium and 4th gen reactors can get us through the next half century, maybe a bit longer, but fusion, if we actually tried we could have in a generation or so. This is one of the main reasons we NEED to take back the power to create money from the Federal Reserve, because private bankers will never fund (through debt, not credit mind you) a manhattan style project for it and leave us in peril. There's plenty of oil, some think it is abiotic, others know it's all over the universe, the hydrocarbon lakes some have mentioned are like those on Titan. But eventually oil won't be enough to power our needs, just like we couldn't hope to sustain our world on timber in the 1700's. Don't you see, Fusion is the new fire and the oligarch will be pissed if Prometheus gives us it.
It's always funny that people think of economics as money. There's not enough money. Bullshit. Credit creation can provide the money for whatever we actually need to create in the physical economy to produce wealth. No not golden toilet rolls, but real wealth creating projects. There are tons of ideas. But you see no one actually engages in them, so they don't even recognize them when it smacks them in the face. They are focused on fantasy wealth creation as the norm. Fusion is one. Space program is another. NAWAPA is another. Machine tools, mag-lev, etc.
There's plenty of wealth creation possible if someone would just create the money (actually CREDIT) for it. Funny enough we used to have that power. Since we have the federal reserve, suddenly there is no money to do anything that creates wealth, only debt created to gamble/bailout gamblers in fraudulent 'products' who hold deposits hostage. Monetarism is an ideology created to serve the oligarchy, by the oligarchy of yesteryear. Hamilton saw past this bullshit and created the foundation that the federal reserve and foreign ideology have been destroying since. The only reason there isn't 'enough money', is because we gave up our power to utter said money. Value is value, wealth creation is wealth creation. Plenty of wealth creation possibilities out there, but monetarism is holding us back. In America, a real America, if there is a wealth creating project capable of being devised that is workable, there is no reason the credit cannot be created to achieve the completion of that project and associated wealth created from it. In fake America, where WE live, the Federal Reserve/banksters/oligarch now has a barrier up preventing us from doing any of this.
Our physical economy minus inflation has been contracting EVERY YEAR since around the time the TET OFFENSIVE was launched during THAT imperial war. Isn't it funny when imperial wars and the ditching of the physical economy, coupled with a foreign leader demanding payment in gold due to the printing this resulted in, gave idiot Nixon the reason to take us off the gold/silver standard? Funny enough all these decades later it's the same song and dance. More imperial wars. More ditching of the physical economy. More printing for fraud/wars. Economy STILL collapsing.
Glass-Steagall
Dear author,
Read a book and get a fucking clue.
All you critics are missing the point. The article was not about Peak Oil as such, but "look how cheap oil still is when priced in Gold."
Ignore how expensive Gold has got over the same period.
Ignore Gold prices are manipulated and suppressed.
At Gold's real price of $10'000/TOz, you can get a gallon of gas for free!
In 1964, you could buy a gallon of gas in the US for less than 30 cents. Today, one of those 1964 dimes is worth $2.07. Most Americans can buy a gallon of gas for less than $4.14 at the moment, which means that you could buy it for TWO pre-1965 dimes today. Put another way, a gallon of gas is about 1/3 cheaper today than it was in 1964 when measured in a stable currency.
Agreed.
But I was just trying to be sarcastic about, attempting to bring in Oil's price relative to of Gold in an article about Peak Oil. Oil's price going down or staying stable in silver or gold dimes has no impact on its availability in nature.
Not another article on this "Peak Oil" bullshit! Never believed it, just like I don't believe that CO2 is a pollutant, causing global warming, tax the air we exhale, looting the masses fraud! Brought to you by pathological liars and bureaucratic thieves whose primary motive is to steal as much revenue as they can from the naive and ignorant.
Take a look at what that Tyrant Bloomberg is trying to do in NY. Forcing it's own citizenry to drink the way he wants them to drink. What person in their right mind would allow themselves to be controlled by these sick bastards?
They can stick all three of these notions up their ass and any other notions subjugating our freedoms!
Actually, moron, Peak Oil was brought to us by a geologist with Shell Oil named King Hubbert. Care to share your CV with the board? Until you do, I'm going to go with the geologist.
Doesn't matter who brought it up ass wipe, it has turned into propaganda which leads to looting schemes, pay-offs and money laundering associated with much of the so called, massive, green energy swindle.
All this fear that is marketed to the public, primary motive, is to loot the living shit out of the masses to create an endless revenue stream to be mismanaged by dumb as a fence post bureaucrats. There is no market for green energy. Unless someone creates an energy source that moves a plane, train, or automobile across the world cost effectively and is competitive with oil and gas then your living in an alternate reality.
So get your head out of your ass and produce something other than hot air and bullshit!
"There is no market for green energy"
there is a market for sustainable
I think you forgot he key word "affordable"
you mean, by a party with a vested interest in the appearance of scarcity?
indeed, and negative anticipatory induced fear has it's value especially if you have an apathetic, uncritical thinking and dumb ed down populace.
Effective programming of public schools at least in the U.S. has caused a dependent mind set on images that are complete and thorough bullshit, ergo, "Peak Oil", "CO2 as a pollutant changing atmospheric temperature change, and "Green Energy"!
Many people like their thinking done for them rather than taking the time and energy to investigate whether or not someone is telling them the truth.
Gosh,
are you saying Mr. Bloomberg doesn't love me and care about my health but only wants my money?
I'm shocked that you could think that way.
(Everyone sings)
Bloomberg loves the little children
All the children of the world
Be they yellow, black or brown
Ain't no big gulps goin round
Or you'll get a hosing that you will deserve.
LOL...nice one SH. I can hear Bloomberg now: "You will do it and you will like it", now vhere are yur papers!!!
Peak oil... shmeak oil...
http://viewzone.com/abioticoilx.html
yip - we are dependent on foriegn oil - but i hate this spin.
The world is dependent on our refining expertise; many countries, europe included, require fuel refined that is only produced to the quality needed in the US.
So, spin as you will, yip - we import a lot of oil. But we also export some of the most premium yale the world has ever seen.
And no, im no oil company shill or have anything to do with them - frankly, gasoline and diesel should be taxed so cost is double what it is currently to stimulate innovation in efficiency.
I have this sort of safety value regarding believeablility when it comes to Peak Oil. If the author mentions King Hubbert and Shell Oil, then he has my attention. If he doesn't. he's nothing more than another bigmouth spouting political BS. Try as I might, I can't find any reference to King Hubbert in this article, or in any of the comments except for Christletoe. The rest of it is simple nonsense, because King Hubbert is Peak Oil, and Peak Oil is King Hubbert.
Using BP and EIA data:
From 1991, peak oil would have arrived in 42 years in 2033
From 2001, peak oil would have arrived in 45 years in 2046 (+13years from 2033)
From 2011, peak oil would have arrived in 52 years in 2063 (+17years from 2046)
(http://www.eia.gov/countries/index.cfm?topL=con)
That's my oil needs sorted then.
Peak oil is not zero oil.
You don't understand the definitions.
There will still be lots of oil in the ground when there isn't enough to go around on any particular day.
I forgot about that. Being a numbers nerd I got caught up in the calculations.
Either way, following the curve, it potentially means that peak oil has been delayed.
Not a particularly well researched, or numerate article, but then the peak oil denial articles, coming out recently on an advertising schedule designed to maintain brand awareness, rarely include actual numbers. To get those, start here: http://en.wikipedia.org/wiki/Cubic_mile_of_oil
The bottom line, of course, is that the new oil being found sounds like a lot, until you understand that the world demands and uses 30 billion barrels a year. After you do the math and figure out that 1 trillion cubic feet of natural gas is energetically equivalent to only 166 million barrels of oil, you'll understand that natural gas, at best, extends supplies for 20 years.
The actual problem is worse than that. The invisible problem is diminishing energy return and increasing cost of what oil we do find, and the fact that high oil prices, if they go high enough, effect the price of everything, including the price of getting oil from ground to tank. At that point, oil price feedback kicks in where higher oil prices themselves cause higher oil prices.
At that point, we'r done with oil as a major energy source. We can put it off another 20 years or so with shale and natural gas. Maybe 30 if we're careful or the world economy crashes for a long time, but we still don't make it to 2100 with oil as a useful energy source. We probably don't make it to 2050, and the price increases all the way there.
You won't be alive much longer.
Relatively few will. About 1/6th the present population.
I think that may be optimistic. People still forget that there are a few thousand nuclear weapons in the world, not to mention long term threats like a few thousand nuclear power plants that gradually can't get fuel for their diesel generators when things go wrong and maintenance can no longer occur. Yes, a population bottleneck is coming. Unfortunately.
"If you don't join my church, you will burn for eternity in Hell."
lol
Is that a methane burn? Hell may run out before we will
We are still at peak production. It took 100 years to get here and it's going to take many years to fall off the peak.
Exponential function FAIL.
ITYM, Logistic function and it's first derivative.
Um. No. It took that long because demand and population increased gradually, and dependence on oil was not total. At current consumption rates, it will take 40-50 years, maximum to use up all conventional oil, after which 1/3 of the world's energy budget and over 90% of the transportation energy budget, is gone.
look at the population growth rate and the glogal oil demand growth rate and get back to us
John Aziz, Very well put. I don't care what the Fascist republicans and the decadent Corporate Fascist in the Oil and Financiial sector of our economy say.
Go get em!
Great post!
BTW - to establish some credentials - I have been the oil & gas industry for 15 years - albeit from the investment side. Im not claiming that makes me the best expert in the world, or even on ZH. But I'm not some kid that just read a few articles on the internet. Furthermore 6 of those years I worked for Matt Simmons - someone that is quite often quoted INCORRECTLY by the peak oil crowd.
I hate the term peak oil. There is NO SUCH THING AS OIL. There are hydrocarbons. Methane (CH4), Ethane (C2H6), Propane (C3H8), Butane (C4H10)... Terms like Natural Gas, Oil, Coal are popular terms - not scientific definitions. For example Natural Gas is TYPICALLY 80% Methane, 7% Ethane, 6% Propane, 4% butane and 3% Pentane. But depending on if its wet or dry - the formula changes. Oil refers to a heavier stream made up of natural gas (C1 to C4), natural gasoline (C6 to C8), Kerosene (C12 to C13) and lubricants / residules (>C20). Coal is made up of even heavier chains. While Methane has 1 carbon atom to 4 hydrogen atoms (20% carbon), natural gasoliene has approximately 1 carbon atom per 2.25 hydrogen atoms (30% carbon) and coal is approximately 60%-90% carbon.
So why is this important? Saying the world has peaked in terms of oil production is very scary. But the truth is much more specific. The world has peaked in its abillity to cheaply and easily produce high C6-C13 content, low sulphur, low acidity stream from traditional high pressure, low depth, onshore fields.
You have to go through each of those criteria individually.
1st the world has pleanty of low carbon (C1-C4) and high carbon (C20+) hydrocarbons left. A simpleton would say this means Natural Gas and Coal, but its more complex then that. Methane Hydrates at the bottom of the ocean contain multiple times more C1-C4 then all the conventional natural gas in the world. And shale oils, tar sands, pet coke etc... aren't exactly coal.
Low sulphur and low acidity is mainly a refining consideration. The world has pleanty of nasty high sulfur oil left, we just don't have the refineries to process it.
Traditional high pressure basins is another important consideration. A traditional basin refers essentially to a large pocket underground into which natural gas and oil have flowed over millions of years from surrounding source rocks. Turns out finding a big pocket, surrounded by pleantiful source rock, with sufficient porosity in the surrounding rocks to let the oil and gas pass through as well as enough pressure to produce it - is rather rare. This is the stick a straw in the ground oil that gave us $1 gasoliene for so long. But now we have the technology to directly produce the source rock - which exists everywhere in the world carbon based life forms have died. This is called Fracking and it will ultimately allow us to produced hundreds of times more natural gas and oil then the traditional basins contain.
Furthermore, most of the oil and natural gas we have produced has been onshore or in depths <100' of water. And most wells only go a few thousand feet under the crust of the earth. But we are developing technology that is allowing us to drill in 10,000' of water, 30,000' under the crust, and we are finding MASSIVE deposits of oil and natural gas.
The main pushback you get is the mythical EROEI math. Enrgy return on energy invested. The supplicants to this theory believe once you pass a certian threshold you use more energy then you get out and thus are screwed. But this assumes all forms of energy are the same. For example in the Canadian Tar Sands and soo in the US oil shales, hot gas is injected underground to melt the oil out of the surrounding rocks to produce it. It takes a lot of energy to heat the gas. Traditionally we have used natural gas to provide this energy. But we don't have to. Solar, nuclear fission and even tidal energy could be used to provide this energy.
In fact when Matt Simmons died he was working with an institue in Maine to convert tidal energy into an ammonia based liquid that could be easily transported and turned back into energy elsewhere. If MRS was working on it, it had substantial promise.
Hope this helps people understand - the question is peak energy, not peak oil. and we are hundreds of years away from exploiting all of the potential energy sources we know about. By the time that happens we will be exploiting astral energies, which are sufficient to power hundreds of thousands of our worlds.
Very informative, Thanks RK, but until an energy source is developed to compete with "hydrocarbons.....Methane (CH4), Ethane (C2H6), Propane (C3H8), Butane (C4H10)... Terms like Natural Gas, Oil, Coal are popular terms - not scientific definitions. For example Natural Gas is TYPICALLY 80% Methane, 7% Ethane, 6% Propane, 4% butane and 3% Pentane. But depending on if its wet or dry - the formula changes. Oil refers to a heavier stream made up of natural gas (C1 to C4), natural gasoline (C6 to C8), Kerosene (C12 to C13) and lubricants / residules (>C20). Coal is made up of even heavier chains. While Methane has 1 carbon atom to 4 hydrogen atoms (20% carbon), natural gasoliene has approximately 1 carbon atom per 2.25 hydrogen atoms (30% carbon) and coal is approximately 60%-90% carbon.", then it's all hot air!
Facts are always hot air to death worshippers, unless they happen to line up with their beliefs, of course. Then they are Gospel.
Matt died from a massive heart attack shortly after criticizing BP publicly over the Gulf Spill debacle.
Story line: Matt Simmon's: Peak Oil $500bbl. July 2008
thanks aziz
I regret that I have but one upvote to give for someone who can dispassionately put forth the facts on a heated topic such as this one.
I salute you!
100% sincerety.
Two problems.
One, we will NEVER run out of oil. What will happen is that the PRICE of oil will eventually be so high that BURNING oil in the quantities now being consumed will become inefficient. Our American-style modern economy is predicated on the abundance of CHEAP oil, not abundant EXPENSIVE oil. Which leads me into my second point.
Two, one of the primary reasons that our proven reserves are "increasing" is that the accounting rules don't allow companies to declare reserves below market prices. If it is not profitable to pump it out of the ground, it doesn't exist so to speak. A substantial share of those "discovered" new reserves are merely an accounting technicality. Ask anyone who owns a commodity-based royalty trust.
So should the price of oil decline further, many of those "discoveries" will be "re-undiscovered". Near the top of the list are those shale oil and oil sands reserves.
Two problems.
One, we will NEVER run out of oil
Why is that a problem???
not abundant EXPENSIVE oil
If its abundant, why is it expensive???
Ask anyone who owns a commodity-based royalty trust.
So basically, ask everyone except a Geologist?
MORON ALERT!! MORON ALERT!!
I'm more concerned about peak windmills.
What happens when we run out of windmills to tilt at?
Will we have to return to carbon-free religion?
Have you ever noticed the people who yell the loudest about the new whatever 'crisis' always have a tax handy for the solution. You can watch the programming at work.
Gots ta give dat Gubbmint mo money so's dey can fix er up. Yessirry. Dat il do it.
Thank you Mr. John Aziz!
This is much more in line with the discourse I wished to provoke here
http://www.elliottwavetechnology.com/2012/06/quandary-of-finite-resources.html
Apart from a scant few, the comments and discourse on this topic are highly commendable.
"However imbalanced as it may be, amid conditions of a largely developed world with scarce and diminishing resources, it becomes more difficult for me to understand the praxeological tenets that would regulate time preferences (immediate/medium-term/long-term) relative to potential distortions in effectual perception of productive vs. nonproductive development to fit the resource constraints faced in kind."
Thanks, I needed that ... Wave-Tech, I am really impressed that you can understand this crap
Extracting bitumen from sands. This came out last year and was never heard from ever again:
http://phys.org/news/2011-03-cleanly-oil-tar-sands-fouled.html
You ever notice that Socialist/communist countries experience shortages of everything?
But the Earth’s extractable hydrocarbons will eventually dry up, whether that’s in 500 years or 200 years. If we want humanity to have a long-term future on Earth, we need to move to renewables; solar, hydroelectric, thorium, synthetic hydrocarbons. And the market will ensure that, eventually — as the cost of renewable energy continues to fall, more and more of us will adopt it. I don’t buy the myth that markets are stupid — if humanity needs renewable energy (I believe we do) the market will see to it (I believe that is slowly happening). Markets are just the sum of human preferences."
The question is whether the markets will stop discounting future risk of burning hydrocarbons before we create a runaway global warming. If you are one of the last proponents of efficient market theory I suggest you buy this book:
http://www.amazon.com/Manias-Panics-Crashes-Financial-Investment/dp/0471...
BULLSHIT! Take a look at the eastern quadrant of Saudi Arabia. See it? Get an satellite view. See any terrain? Neither do I. Go to CLOSE UP.... ok... now look... look around the edges towards Riyadh, try south... do you see it?
OF COURSE NOT, IT'S A BLURR. They don't show the topography of this region. Do you know why?
BECAUSE IT'S A FUCKING OCEAN OF OIL, DUMBSHIT!
Think of what would happen if the world found out. Prices crash, Big Oil hurt, Saudi's hurt, Wahhabi's hurt, Brotherhood hurt....
But on the other hand.... economy rally's, peace breaks out, Islam remains a pluralmontheistic society from Africa to Indonesia.
Peak Oil.... My fucking aching ass peak oil. It's an illusion, just like the central banking as practiced by the Federal Reserve and the war on terror.
When do quit believing this shit?
Anyone interested in reading this ought to be following http://thearchdruidreport.blogspot.com/. (Tyler, I'd appreciate it if you'd consider putting this up on the sidebar.)
It's really hard to understand why this author above wrote this piece at all. There is no complimentary investment insight in it, no unique insight to disspell the arguments of the other side. He's like a climate-change denier, and the logic is the same: I don't believe the lies the other side is telling about it.
The fact is that people aren't rational, but animal. If you believe in the market, you know already from reading here that a) market principles don't apply to the "markets" because there are central planners involved, and b) that if there were a market, it wouldn't be rational -- so why rationally wait for the so-called market of either stripe to provide a solution?
Science, if you are to listen to Thomas Kuhn, is not empirical, but consensual and societal. Today's science could not depend on many suppositions whcih were held true at one point in the past. That said, large groups of people are very capable of being very wrong. (See "The Authoritarians" at http://home.cc.umanitoba.ca/~altemey/ )
Comfort in teams of people making the right decision at the right time does not require unbridled faith in groups, but groups capable of following esteemable leaders. Unfortunately due to the dirth of education and mirth of mass media, authoritarians are disposed to follow those who are more likely to ostrasize truth-sayers who are willing to threaten group-unity in favor of truth, rather than follow a bad plan.
Unfortunately, Greer's assessment of field mice overfeeding themselves when nature or accident allows follows the pattern of obsesity Americans suffer: if you think there is no correlation between obesity, what we eat, how it gets to us and what's in it, you simply haven't watched any of the documentaries about Big Food in America and how we got that way.
The peak oil discussions ought not focus on "whether", but "now what". And if you think the major families that control oil are not going to do everything they can to bilk every last dollar out of every last 99% by the extremely complex dependency every American has on petroleum and its products, just keep writing in the same vein, a lot, so that much of your life will be obviated by facts as they continue to unfold.
I don't want to be hurtful in my drunkin reply but many of you deserve a red dwn arrow. Yet I refraine out of awesome respect 4U because on other days you post great stuff that stimulates my drunkin brain . . .
Peak Oil?
Well(sic) the days are long gone from when a Jed Clampit could dig a post hole, accidentally find a gusher and make an instant fortune, from little capital expenditure.
Western and many other economies, such as China, are built on cheap/easy oil. Texas crude ceased being cheap and easy around 1971.
The law of diminishing returns has set in.
Yes there is plenty of oil still available, but only with increasingly expensive and risky technology (ditto natural gas).
Risky? Gulf oil 'spill? No problem for those asserting that endless supplies of oil are somewhere to be found.
Let this be a lesson.
I was still living in England during the 1960s, when off-shore natural gas and oil were found in the N Sea.
Fucking wonderful. All our coal gas appliances (with government subsidies) got converted to natural gas and the London government got revenue from exporting both natural gas and oil, meanwhile closing most coal mines amidst massive social unrest, as Thatcher pursued her histrionic, Ayn Rand-inspired policies.
Guess what? Well N Sea gas and oil went into decline, so Britain now imports gas and oil.
Peak oil/gas hit Britain at least five years ago.
Since 1971 I have lived in Australia and it is worse ... EVERY natural resource is exported, with NO regard for the future.
Oil, gas, iron ore, alumina, coal, timber, etc. all exported in raw form. We are just a hole in the ground. Even the vast deposits of iron ore will one day "peak".
I doubt that even the "abiotic oil" advocates can come up with a way that this planet can replenish ore deposits quickly.
In similar vein: the gold fields of Coolgardie and Kalgoorlie had gold nuggets on the surface about a century ago, but now Kalgoorlie is a vast open-cut mine which is not worth running unless the gold price exceeds the costs of production.
Same with oil, only worse, because oil production is not just a matter of labour input (more or less). Oil production is also tied to input energy, such that it takes about 4 barrels of gas-equivalent (of oil) to produce 5 barrels of oil ... and that is only 'economic' because natural gas is so cheap. That will not last, so sleep easy with your hopium that something will turn up.
"But as the discovery of proven reserves continues to significantly outpace the rate of extraction, the claims that we’re facing immediate shortages looks trashy."
---
One potentially pretty big problem with that is that the SEC changed the rules on how oil companies could book their reserves. They have an incentive to maximize the reserves on their books, of course, as it maximizes their value in the market. That of course can translate into bonuses etc.
See Alan van Altendorf's article (3 parts but you can get a quick feel for what's going on early) on the topic, The Oil Casino: SEC Heading for Monte Carlo, Part I
We may not face "immediate shortages" in the sense of long lines at the pump and gas rationing, but rationing via rising prices seems to be a reasonably high probability.
Yesterday, ZH ran a Burning Platform guest post, IT ONLY TOOK A GLOBAL DEPRESSION TO REDUCE GAS PRICES BY 40 CENTS which stated:
"since 1998 the trend has been relentlessly higher. The average inflation adjusted price of gasoline in 1998 was $1.41 per gallon, versus $3.55 today, a 152% increase in fourteen years. Over this same time frame the BLS manipulated CPI was up only 44%."
Before the global prices alluded to in the title we certainly had a run up in the gas prices, which likely played a key role in pulling the trigger on setting off the economic crisis.
See Steve Kopits' article, "Peak Oil, Not Speculation"
"...After many years of solid growth, oil production plateaued in October 2004. Regardless of the price level, the oil supply simply stopped responding, and from then on, the world had to make do with broadly flat supplies. Ordinarily, the expansion of the world’s economy would be accompanied by increased energy consumption and an inelastic oil supply might have been expected to hinder economic development. It didn’t. In the four years to mid-2008, the world economy expanded by 18%. The global economy boomed, even without new oil.
However, this came at a price. In the absence of oil supply growth, demand accommodation was required. This was achieved by secular prices rises averaging 25% per annum from 2003 to the end of 2007. In other words, the price of oil went up, and this constrained consumption by causing the marginal consumer to drop out of the market. This proved a workable solution for a time, but the global economy could not sustain 25% annual price increases indefinitely, and by second half 2007, the situation was becoming critical. Consumption was being maintained by continuing draws on inventories averaging 1.4 million b/d, and virtually every producer, with the possible exception of the Saudis, was running flat out. By early 2008, even the Saudis were throwing the kitchen sink at the market – all to no avail. On paper, it looked like a peak oil nightmare.
Of course, consumers were responding. From 2005, the EU and Japan began to shed consumption and, from late 2007, US consumption also began to decline as the US consumer sought to escape high oil prices. Notwithstanding, developed economy consumers were not abandoning the market as fast as Chinese consumers were entering it, and prices continued to rise. In early 2008, prices took off and some argue that speculation took over. Still, as inventories continued to fall until May 2008 and all the oil producers were running at full output, the case for market manipulation at that time is hard to make. Indeed, the market was in backwardation most of this time. In backwardation, futures prices are lower than spot prices, the equivalent of the market saying, “Well, prices are high now, but they’ll be lower later.” The market – those very speculators – believed that oil was over-priced but was continually surprised as demand kept pushing up prices.
Prices did ultimately fall, but not because the supply situation eased, nor because speculators fled the market, and not because inventories were released. Prices fell because the global economy collapsed. ..."
"Saudi Arabia's Prince Nayef, Next In Line To Throne, Dies; Saudi Shares Plunge" ... Our oil problems may come sooner than later
John Aziz's conclusions are "piff poff"
Rally warning continues...
SPX bullish daily chart strengthened further on Friday & more rally expected.
DOW initial target approx 13,170 & more upside after that.
MORE:
http://www.zerohedge.com/news/2012-12-24/market-analysis
So, this chart shows the value of the dollar versus gold does matter-even to those of us that seldom leave the Country. The chart shows an appropriate increase in the cost of oil in currency not gold. The increase in cost is only in the currency and shows in increased energy costs and everything that follows-food, production, even the cost of war.
Ah, war the largest export from our U.S! If and when the longest logistics lines in the history of the war are shut down the price of oil will fall another $25 a barrel easily. Peak oil may exist or not. The one thing that is certain is that when the US government sets up a logistics line that extends halfway around the world for wars that last 10+ years with troop and equipment rotations, demand for oil and price in terms of the US currency will go up.
Note, that none of the US Air Lines could match the military bid for oil and therefore all went bankrupt at least once.
It just astounds me that no talking heads or politicians have ever mentioned this massive drain on the worlds oil resources.
Is he claiming peak oil is a myth, since alternative energy is becoming more viable? Am I the only one who fails to see the logic in that? Peak oil is peak oil. It's the production of oil peaking, what does that have to do with the amount of alternative energy? We could be fully on alternative energy and use 0 oil. Then production of oil will be zero, hence production has defenitely peaked.
someone should publish a graph showing the number of "peak oil is a myth" articles published per month. We can assume the inverse is true - lol.