Given the flurry of heated discussion on the topic of ‘peak oil‘ on another BNC post, I invited one of the protagonists, Dave Lankshear (a.k.a. “Eclipse Now” — see here for his blog), to write up a summary piece which described his position on the topic. This is given below, and should provide a good context for discussion; I also hope that this thread will help corral comments on this topic to a central point.
For earlier posts on BNC regarding peak oil (all done, incidentally, prior to BNC’s nuclear awakening), see:
Olduvai theory – crackpot idea or dawning reality?
Beyond peak oil – will black gold turn green?
I made some comments on the other comments thread about my position. To paraphrase: a fundamental problem with arguing that authorities like the IEA, EIA and ABARE are overlooking the looming ‘peak oil crisis’ is that so far, they have been correct — at least in the sense that it hasn’t yet happened, just like they predicted (or at least if it has, its ramifications to date on oil prices and availability have been minimal). As such, their predictions which ignore peak oil are, on the bald face of it, justified. Peak oil HAS happened in limited jurisdictions (including the US), but has always, to date, been compensated for by imports, or gas substitutes, other technological improvements etc., such that no nation has so far gone from being an high oil consumer to a low oil consumer on the back of peak oil.
Now I’m not making the argument here that peak oil is an invalid concept — at least regionally — and I’m not even arguing that it’s not a potentially serious future issue for which we ought to be preparing to counter now. But as far as authoritative energy bodies have been concerned, they currently have nothing to hang their heads in shame over in that regard. They’ve got it right. If they are right by luck, and misfortune is about to strike Australia and other industrial nations any time soon, then we may well curse their lack of foresight. But that’s a big IF, and there are many eminent people, including Prof Richard Hillis at my own University, who argue that by the time rising oil prices is a really serious issue, alternatives and substitutes will have been found, as they always have before. Price, they argue, will always be the principal driver of innovation. (In passing I note that this is the reason I argue that full recycling of used nuclear fuel has not yet taken hold with any real enthusiasm — mined uranium is still too cheap).
Anyway, now on to EN’s comprehensive primer, from a ‘peakist’s’ perspective…
——————————-
On peak oil authorities
by David Lankshear (Eclipse Now), Peak oil activist since 2004
Background
Recent debate on BNC has focussed on the issue of the reliability of government energy authorities in regards to the global peak oil debate. As someone with a mere Social Sciences background and no technical training, I was asked to submit an article on why I have the audacity to hold certain ‘energy authorities’ with a high degree of suspicion. Was it all just paranoid conspiracy theories I absorbed from the net? Or is there something fundamentally wrong with the way our governments have been informed regarding our most important resource, oil?
Introduction to peak oil
In the last 5 years a handful of new government sponsored reports and agencies have suddenly sprung to address an urgent question. Are we suddenly facing the final oil crisis? Are we only years from the beginning of the end of the oil age? Has it already begun? With Scientific American just today predicting global peak oil by 2014 [1], how did we come to be asking such an important question so late in the picture?
But first a quick-catch up to newcomers not familiar with the term ‘peak oil’. Oil fields tend to ramp up in production as new wells are drilled and the full size of the field is confirmed. But after about half the oil has been pumped out, production stabilises… and eventually declines. It’s to do with oil pressure, which forces the first oil out at high speed. We’ve all seen iconic images of drills ‘striking oil’ where the gusher shoot high into the air. But once enough oil is pumped, the pressure goes down. The going gets tough. Think about sucking on an ice-cone slurry. The first half is fast and thick and juicy, the second half is hard work and slow and watery. The life of an oil field is just like that, but spread out over years or even decades. For a further introduction to peak oil the ABC has some brilliant free online movies to watch, starting with Catalyst [2], Crude [3], and Four Corners [4]. Or you can read the Peak Oil Primer at Energy Bulletin [5].
The history of peak oil in one minute
In 1956 M. King Hubbert (wiki) famously stood up at the American Petroleum Institute seminar, and predicted that within 14 or so years American oil would reach its maximum production or ‘peak’ and then begin to decline. Hubbert was laughed off the stage, as the American oil industry had pumped exponentially more oil every year for decades, with no end in site. As time rolled on and 1970 rolled around, the oil industry laughed at Hubbert and claimed “We’ve never pumped so much oil!” The irony was they never would again, as 1970 was the year they peaked.
How did he do it? In extremely simple terms, you have to find oil before you can pump it. Hubbert noticed that the discovery of oil in America had peaked and declined, and with a little math could plot when the exponentially growing consumption of oil would follow the same pattern. Watch this 2 minute youtube clip as an illustration.
Of course this was a vastly complex data management issue involving thousands of wells and production profiles, but that’s it in a nutshell. Hubbert then made a stab at world peak oil, which he predicted for 1995. But the world soon forgot. Other than Limits to Growth and a smattering of articles here and there, the world assumed we would all be flying “Mr Fusion” powered hover-cars with Marty McFly. This was all ‘in the future’, and something would turn up by then!
New authorities challenge the old
The peak oil discussion started up again in earnest when lifetime geologists Colin Campbell and Jean H. Laherrère wrote a 1998 article for Scientific American, The End of Cheap Oil. [6]. This article re-ignited the debate. It carries the weight of two grandfathers of the oil industry. Other geologists craved a clearer, more scientific approach than was currently being practised by the official government agencies. Colin Campbell eventually founded the Association for Peak Oil and Gas (ASPO) at Uppsala University, Sweden [7]. This university think tank receives papers from all the ‘good old boys’ of the oil industry, veterans with a lifetime on the front line of oil exploration and production. They have a range of publications [8] in everything from newspapers and magazines, academic theses, through to peer-reviewed works [9]. This coalition of oil professionals and professors is was the first Association to present peak oil as a scientific case unfettered by economic bias.
Joining ASPO is an act of rebellion against the status quo. These experts are taking a stand against the might of the USGS, and all those agencies the USGS advises. This includes the American Department of Energy (DOE) and their sub-agency, the Energy Information Agency (EIA).
Even international concerns depend on the USGS. The International Energy Agency (IEA) was set up by the OECD after the 1970’s oil crisis. The IEA advises Australia on the international oil situation as well. (ABARE focus on our domestic resource issues. Dr Brian Fisher indicated to Four Corners [4] that he felt ABARE had not been commissioned to report on the international oil scene, even though it advises the Australian government on the oil price.)
ASPO is even winning sceptics in this titanic battle. Lifetime oil professionals are shifting from trusting the USGS to battling them in the peer reviewed literature. One such person was Chris Skrebowski (wiki):
Chris has 38 years experience in the Oil Industry, starting work in 1970 as a long-term planner for BP. His career has been divided between industry planning/market analysis and oil journalism. He was Senior Analyst for the Saudi Oil Ministry in London (1985-1994) , Editor of Petroleum Economist (1994-97) [8] and Editor of Petroleum Review (1997-2008)[9]
Chris now questions the USGS methodology [10], writes extensively to the UK Parliament about the dangers of peak oil, and formed the All Party Parliamentary Group on Peak Oil and Gas (APPGOPO). As this coalition of geologists and energy experts grows and forms their own consensus that peak oil is imminent, the contrast with the established authorities could not be more profound. It is as if the world’s climatologists had reached a consensus on global warming with the IPCC all along rejecting it!
What are the main arguments that are convincing the likes of Chris Skrebowksi to abandon the ‘IPCC’ of oil, the USGS?
1. The USGS uses incorrect categories
Campbell and Aleklett [11] explain how the term ‘Proved’ reserves evolved in the unique historical setting of early Texas drilling. In this chaotic environment back in the heyday of American oil exploration, it was not unreasonable to simply multiply annual production volumes by 10 to give a rough ‘Proved’ resource. But today we use seismic mapping technologies that give a far more accurate estimation in the first place, and so using this ‘Proved’ formula can artificially inflate reserve estimates.
Unfortunately the world also has a variety of definitions of ‘Proved’ and ‘Probable’ and ‘Possible’ reserves, which also confuse the real story. Half the battle for accuracy seems to focus on terminology alone.
Campbell shows some respect for decades of US Geological Survey work right up until the 2000 report. Then it all went horribly wrong. The USGS inappropriately extrapolated specifically American categories to the rest of the world. Not only that, but magical technological improvements were assumed to allow ‘reserve growth’ – getting more out of existing fields – by an astonishing 76%! Economic paradigms were forced over the data. As Campbell and Aleklett explain in their abstract:
…what may be called the Flat-Earth Approach, in which the resource is deemed to be virtually limitless, with extraction being treated as if it were controlled only by economic, political and technological factors.
The University of Reading study by Bentley also raises concerns about the categories used [12].
2. It doesn’t work
The USGS 2000 study doesn’t work in practice. The USGS have such a vastly inflated estimate of the oil on this planet that their projected discovery rates were double what actually occurred in the real world [11].
3. The Growing Gap: those ‘twin peaks’ appear again
As we saw above, Hubbert predicted American peak oil from the ‘twin peaks’ of the discovery bell curve forecasting the consumption bell curve. We can now clearly see the same pattern unfolding on the world stage, as modelled by ASPO from Exxon Mobil data [13].
Discovery peaked way back in 1965, 45 years ago. Also note that as production keeps climbing, discovery keeps dying. The last time we found more oil than we burned was in the early 1980’s. A whole generation has been born, educated, attended university and entered the workforce since we stopped even finding as much oil as we burn each year. We now burn 4 or 5 times more than we find, and are eating into the oil our grandparents discovered. The discovered volumes of oil look quite high compared to our current consumption peak, it is a tricky thing to judge visually. The experts have to mathematically ‘smooth out’ the already discovered oil to supply the world’s oil on the downside of the consumption bell curve, just as Hubbert did back in 1956 to predict the American peak of 1970. ASPO add their more grounded future discovery trends and come to an Ultimately Recoverable Reserve (URR) figure. Apply this to the bell curve, and we get the peak somewhere in this decade. I call this the ‘working from the end’ method.
4. Megaprojects — looking forward
This is in contrast to the forward estimates method of Chris Skrebowski. As his wiki says:
Initially sceptical about Peak Oil predictions,[4] he was persuaded by Colin Campbell of the unreliability of oil reserves data and the risks this posed to energy supply projections.[5] His insight was to recognise that future production flows, rather than oil reserves, were the key determinant of global oil supply. Consequently, he developed Peak Flow Analysis based on the future oil flows identified in his own Global Oil Megaprojects Database[6]. Using this methodology he concluded that major supply/demand imbalances would occur by 2007 with actual Peak Oil flows occurring no later than 2011[7].
The Megaprojects report is a database of the performance of every megaproject, or oil field that pumps over 100 thousand barrels a day [14]. The whole of Australia’s current production would only add up to about 4 of these fields. We are a drop in the ocean. The world needs the equivalent of 840 ‘megaprojects’, or 84 million barrels a day!
Aleklett claims we now live in a world where 54 out of the top 65 oil producing nations have already peaked [15]. These fields are now permanently producing less oil every year. Skrebowski’s concern is to look ahead, and forecast the ability of the new megaprojects that start each year to offset the oil we lose each year. Skrebowski published his Megaproject Reports in the prestigious Petroleum Review [16]. He is also responsible for variety of magazine articles, video conferences, and podcasts with his ODAC group in the UK. Dr Fredrik Robelius wrote his Phd thesis to also focus on how tracking trends in the world’s super-giant fields alone proves peak oil to be imminent. [17]
5. The consensus is growing — and grouping around this decade
The Australian Federal Senate Committee showed in Chapter 3.86 that many other significant geologists, energy companies, and even energy investment bankers have also disagreed with the USGS 2000 study [18]. A graph from the Peak Oil wiki also illustrates the point.
6. The USGS is under review
The word is spreading. The IEA now appears to be reviewing their practice of relying on the USGS for oil data [19]. A senior IEA official has even warned the Guardian of undue American influence in denying peak oil in the IEA [20]. And government’s are starting to hold their own independent inquiries, such as the American DOE’s Hirsch Report [21], the UK’s APPGOPO and of course Australia’s own Senate Committee [18].
7. OPEC hidden
ASPO and the other major peak oil agencies and authors doubt OPEC’s reporting. We had over 30 years of Western oil companies surveying Saudi Arabia before the oil industries were nationalised in 1970 and Western nations were banned. Since then, they want us to believe they have conveniently discovered exactly much oil as they have pumped over the last 40 years of production! Only they don’t let Western nations audit their fields. Robert Hirsch put it best when he told Four Corners [4]:
ROBERT HIRSCH, CONSULTANT US DEPT OF ENERGY: Basically, what they’re asking us to do is to trust them. And, frankly, on something that’s the lifeblood of our civilisation and the way we live, to trust somebody who won’t allow any audits is extremely risky. I personally don’t believe the numbers that are out there.
A difficult transition
The Australian Senate Committee [18] decided to remain agnostic towards a final peak oil date. But even the possibility of peak oil in the next few decades has them spooked. Chapter 3 states:
3.137 The committee cannot take sides with any particular suggested date for peak oil. However in the committee’s view the possibility of a peak of conventional oil production before 2030 should be a matter of concern. Exactly when it occurs (which is very uncertain) is not the important point. In view of the enormous changes that will be needed to move to a less oil dependent future, Australia should be planning for it now.
3.138 Most of the official publications mentioned in this report seem to regard the ‘long term’ as extending to 2030, and are silent about the future after that. The committee regards this as inadequate. Longer term planning is needed. Even the prospect of peak oil in the period 2030-2050 – well within the lifespan of today’s children – should be a concern. Hirsch suggests that mitigation measures to reduce oil dependence ‘will require an intense effort over decades…’
This inescapable conclusion is based on the time required to replace vast numbers of liquid fuel consuming vehicles and the time required to build a substantial number of substitute fuel production facilities… Initiating a mitigation crash program 20 years before peaking appears to offer the possibility of avoiding a world liquid fuels shortfall for the forecast period.
If the peak in global oil production is in fact this or next year, the implications for the world economy are profound, but beyond the scope of this article.
Footnotes
[1] Scientific American (September 2010) How much is Left? The Limits of Earth’s Resources.
http://www.scientificamerican.com/article.cfm?id=how-much-is-left
[2] ABC Science Catalyst (2005) The Real Oil Crisis (12 minutes)
http://www.abc.net.au/catalyst/stories/s1515141.htm
[3] ABC Science (2007) Crude – the incredible journey of oil
Part 2: Last hours of ancient sunlight (31 minutes)
http://www.abc.net.au/science/crude/resources/links.htm
[4] ABC Documentary 4 Corners (2006) Peak oil? (43 minutes)
http://www.abc.net.au/4corners/special_eds/20060710/
Transcript:
http://www.abc.net.au/4corners/content/2006/s1683060.htm
[5] Energy Bulletin — EnergyBulletin.net is a clearinghouse for information regarding the peak in global energy supply. We publish news, research and analysis concerning:
http://www.energybulletin.net/primer
[6] Scientific American (1998) THE END OF CHEAP OIL by Colin J. Campbell and Jean H. Laherrère,
http://www.hubbertpeak.com/_archive/ScientificAmerican199803/EndOfCheapOil.htm
[7] Association for Peak Oil and Gas
http://www.peakoil.net/about-aspo
[8] Range of published material
http://www.peakoil.net/publications
[9] Peer reviewed works from ASPO are generally behind paywalls
http://www.peakoil.net/publications/peer-reviewed-articles
However, Uppsala Universitet hosts a variety of their work for free.
http://www.tsl.uu.se/uhdsg/Publications.html
[10] Depletion – the missing demand element? by Chris Skrebowski — questions the IEA paradigms
http://www.energyinst.org.uk/index.cfm?PageID=952
[11] Minerals and Energy (2003) The Peak and Decline of World Oil and Gas Production by Kjell Aleklett and Colin J. Campbell
http://www.abc.net.au/4corners/content/2006/s1683060.htm
[12] University of Reading, Reading (2007) Assessing the date of the global oil peak: The need to use 2P reserves byR.W. Bentley, S.A. Mannan, S.J. Wheeler
http://eclipsenow.wordpress.com/why-now/bentley/
[13] World Energy Vol. 5 No.3 (2002) The future of the Oil and Gas Industry: Past Approaches, New Challenges by Harry J. Longwell, Exxon Mobil Corporation
http://www.aspo-australia.org.au/References/Exxon-WE-Longwell-dec-02.pdf
Longwell denies peak oil is imminent, but the data supplied by Exxon Mobil shows the 40 year trend in declining discoveries
[14] Heading For Peak: Skrebowski’s Oilfield Megaprojects Update (2005) Julian Darley interviews Chris Skrebowski
http://www.energybulletin.net/node/5266
[15] The oil supply tsunami alert (2005) by Kjell Aleklett
http://www.peakoil.net/Oil_tsunami.html
[16] Petroleum Review (2006) Prices holding steady, despite massive planned capacity additions: Petroleum Review regularly updates its listing of the upcoming so-called ‘megaprojects’. The aim of the listing is to attempt to answer the question as to whether sufficient oil is being developed to meet likely requirements going forward, writes Chris
Skrebowski.
[17] University of Uppsala, Sweden (2007) Giant Oil Fields – The Highway to Oil by Dr Fredrik Robelius
http://uu.diva-portal.org/smash/record.jsf?pid=diva2:169774
[18] Senate Rural and Regional Affairs and Transport Committee, Australia’s future oil supply and alternative transport fuels (2007), © Commonwealth of Australia 2007, ISBN 0 642 71726 5
http://www.aph.gov.au/senate/committee/rrat_ctte/completed_inquiries/2004-07/oil_supply/report/index.htm
[19] Journalist and author David Strahan (2007) IEA reviews reliance on USGS resource estimates
http://www.davidstrahan.com/blog/?p=69
[20] Guardian (November 2009) Key oil figures were distorted by US pressure, says whistleblower
http://www.guardian.co.uk/environment/2009/nov/09/peak-oil-international-energy-agency
[21] Download the entire Hirsch Report PDF from the wiki references and footnotes
http://en.wikipedia.org/wiki/Hirsch_report
Brave New Climate 
189 replies on “Peak Oil Discussion”
Hi Finrod,
That 100 thousand GW reactors paragraph boggles the imagination. Wow. So could you just unpack the cash-flow for the $2500 per person? From the way you described it, I’m assuming that’s not one’s electricity bill but is included in everything you buy from shoes, groceries, car servicing, through to movie tickets and trips to the zoo?
Hmm. Not precisely. That’s to cover the energy costs. Doubtless other costs will be imposed on manufactured goods. My back-of-the-envelope type calculations were simply intended to show that such a future is achieveable without grossly absurd assumptions about resources needed for it. No doubt there will be many complex issues surrounding the achievement of such an ambitious vision, and it won’t all be smooth sailing. I just wanted to demonstrate that industrial activity on our current first-world scale for all the future inhabitants of this planet is not an impossible dream if we use nuclear power.
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Hi David, that is a fascinating link!
Check this out.
http://www.seawatergreenhouse.com/
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The dark horse in all of this is gas, both natural and coal seam. The de facto alternative to new coal fired plant appears to be mid sized air cooled gas plant mixing open and combined cycle. They are springing up at a steady rate.. Tamar, Tallawarra, Darling Downs, Mortlake. OK so far but Australia needs to replace a million barrels of oil a day to make fuel, plastic and other petrochemicals. In domestic transport the gas could be chilled or compressed (LNG, CNG, ANG) or converted to petrol GTL. All up it could require another 50 Mt a year of gas.
Something’s gotta give. I don’t think we can use gas as replacement for both coal and oil yet still export large amounts plus meet the usual domestic demand for heating and ammonia production. Logically we should use NP for baseload electricity and use sparing amounts of gas for peaking. When gas is gone we might have to make hydrogen or synthetic methane to replace it. Can’t happen? That’s what the Brits with their North Sea reserves now Norway is starting to worry. Unbelievably even Saudi Arabia has thought of importing LNG for power generation to conserve oil.
I’d like whoever becomes Federal energy minister to make some noises about the long term issues with gas.
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I’ll say one more thing (I may have said this before) – yes we could technically fix things. But I don’t think we will. I think the world is too corrupt. It’s not a technical problem, it’s a socio-political problem. It’s the golden rule. He who has the gold makes the rules. The people who have the gold now are corrupt, and they’re making the rules.
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Well, they might be now. But what about after? What about when it hits? What about when society and politicians realise that this is not a game, and that energy security is *important*?
Then trite answers from renewable protagonists will not be enough. The false assurances from big oil will not be enough. Politically correct platitudes will not be enough. Our leaders will want answers that work. And that’s when we have to support Barry in whatever strategy Barry tries to use to get this message out there. So as well as linking to BNC all over the net, and as well as Barry’s book, his radio interviews and university lectures, some of which have become podcasts; as well as all of this WE need to do our bit. Simple activists that can print out a poster and let people know the technical truths that we discuss here.
Because by and large, Aussies are just not that interested. Yet. But they will be.
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Be prepared.
One way is to have a small, but growing, fossil carbon tax used to support growing alternatives, whichever appear most economic in the near future.
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A further thought on competition for gas; truckies will happily pay several times as much per unit as power companies. I’m told that heavy vehicle operators can get the cost of diesel down to around $1.05 a litre after bulk discounts and the fuel rebate. Let’s suppose in the near future truckers will pay $1.50 for a litre equivalent which is 35 MJ or 4.3c per MJ.
Contract prices for piped gas are a commercial secret but we can suspect new contracts will be between $4 and $8 per gigajoule (a million BTUs), call it $6. That’s 0.6c per MJ. Therefore other things being equal truckers could pay 7X as much for gas as electricity generators. Adjustments need to be made for fuel taxes, reselling margin and compression effort.
Thus we are heading for conflict over gas use. If Australia has a million trucks, buses, tradies utes and bulldozers on compressed natural gas CNG they will all happily pay over $40 per GJ. Operators of the currently favoured gas fired plants probably don’t want to pay more than $6. Truckies will win this one and power prices under a gas heavy mix will go up even more.
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You can propose whatever you like, but do you have the gold?
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And, at least on this thread, I note that Barry Brook has not answered my questions since 4 September 2010 19.02, nor did he ever provide a substantive answer with referential support. That’s a pretty shit stool for an academic to stand on.
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And I absolutely do not mean to provide support for the likes of the idiot Eclipsenow or his minions. I have provided some detail to support the question, for example Hirsch’s 2% decline rate assumption and the apparently different IEA’s 6.7% decline rate. I have never seen the likes of Eclipsenow or Sam Powrie actually reference anything worthwhile, or display any worthwhile logical facility, so I am not talking to them, I am specifically asking them to stand aside, until the thread owner, Barry Brook, says something with worthwhile support.
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Everyone, pay attention now, Lawrence is speaking!
Hirsch, Campbell, Skrebowski, ASPO, Phd works in oil depletion, none of these matter for LAWRENCE IS SPEAKING!
I forgot about your Phd in geology and lifetime of experience in the field. Everyone, Mr Right Royal Lawrence is speaking!
(You go ahead Lawrence, they’re all properly prepared now. They’ll give you the respect you deserve.)
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I apologise for my language Barry. I get carried away with my sense of doom. I fully expect a lot of suffering before we transition to whatever replaces fossil fuels, if we ever do.
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http://www.guardian.co.uk/environment/2010/may/25/electric-cars-carbon-emissions
has
“Switching all the UK’s petrol and diesel road transport vehicles to electric models will require 16% extra electricity capacity, equivalent to 10GW or around six new nuclear power stations, they said. The 30m vehicles on British roads are responsible for a quarter of the UK’s carbon emissions.”
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I think the plug-in approach will suit intracity delivery vans, not 18 wheelers travelling between cities. Really big trucks can accommodate cryogenic LNG tanks but they need to be filled at the depot, not on the highway.
Some claim that variable electricity pricing will allow greater wind penetration for electric vehicle charging but I think we have to see the outcome of US trials.
I note until yesterday the big end of town thought the global economy would improve. Peak Oil theory suggests it will be all downhill from now on. They can’t both be right. With time and money we can solve problems like low carbon baseload and petroleum free transport but not immediately. My hunch is that the world economy will be weaker in 2015 than in 2010 with China importing less of our iron ore. After that it is anybody’s guess.
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So, what do we all make of Peter Lang’s characteristically charitable comments below? ;-)
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I happen to agree that some of the Club of Rome projections were silly, such as Ehrlich famously losing his bet. But that does not disprove the general principles, just his application .
http://en.wikipedia.org/wiki/Simon%E2%80%93Ehrlich_wager
As far as I understand it, Limits to Growth was pretty much on track, although I haven’t read it. I’ve been too busy reading about the new geological consensus that oil IS about to peak, despite what Mr Right-Wing Lang happens to believe.
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PS: LTG gets kudos amongst futurists I know who regard it as one of the best examples of future extrapolation and modelling. We designed Craig Rispin’s book. At one point in Craig’s presentation he raves about the great modelling in LTG.
http://www.futuretrendsgroup.com/author/
For example, if Peter Lang had bothered to just look at the Limits to Growth WIKI he would have learned that their *modelling* of when oil would “run out” had a *range of dates* based on various resource estimates. These ranged from the oil they had discovered in the 1970s through to 5 TIMES that oil reserve! Growth in resource consumption was also based on an exponential growth pattern, which has more or less been true.
So based on their ‘5 times 1972 known oil reserves’, with oil “running out” in about 2020, when does it peak? ;-)
If you ask me, they are pretty much on track.
http://en.wikipedia.org/wiki/Limits_to_growth
No doubt having hurled the accusations in the other thread, Peter will just quietly wander off to sulk somewhere and not engage in this one.
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The sheer irony of all this is that just a few weeks ago Peter Lang posted an article defending ABARE’s reputation against attack by comparing their projections with real-world data and how the 2 compared. Yet because LTG doesn’t fit in Peter’s worldview, he just ignores a CSIRO work that did exactly the same thing for LTG’s 40 year forecasts for the GLOBE with real-world data, and comes up smelling roses.
Click to access plje.pdf
http://www.newscientist.com/article/dn16058-prophesy-of-economic-collapse-coming-true.html
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Eclipsenow,
You ask:
Well you may ask given your comments to someone above. I changed the name to yours so you might get the meaning:
edited from EclipseNow’s post here:
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(Sighs)
I encourage everyone to look at not only the post Peter linked to, but the context of the preceding 3 posts by Lawrence. If anything, I was reacting not just to Lawrences insult of “the idiot Eclipsenow or his minions” but also the way Lawrence dared to write to Barry Brook, “That’s a pretty shit stool for an academic to stand on.” I thought that was a bit rich to the owner of this blog, and reacted accordingly! However, to Lawrence’s credit, he later apologised to Barry. (But not to Sam or myself, but that’s Lawrence’s choice).
The reason I have business with you is that from the beginning you have misunderstood my argument with ABARE. You spent 20 or so posts unkindly attacking a deranged straw-man of your own construction — nothing to do with anything I ever said — and now not only attack the credibility of the entire Club of Rome, some of which has stood the test of time as well as any ABARE projections, but also attack the vast majority of independent oil geologists who bother to actually look at the *world* oil situation. Your post attempted to smear a growing consensus of geologists with the same tar-brush you used to attack the Club of Rome: which turns out to be yet another straw-man caricature of your own construction.
I don’t have to be a scientist to tell that you don’t read very broadly.
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Hi Finrod
Again Finrod, it is a huge group. One has to specify who and what one is disagreeing with. Some, like Ehrlich, raised important questions but came down too hard with suspect methodology for their answers. He may have deserved criticism for some of his modelling. But others like the Limits to Growth report has gained respect as their modelling is put to the test of 35 years of real-world history. If you have credible sources debunking the 2008 Graham Turner CSIRO report into LTG’s accuracy, I’d be happy to read it. But for now I’m sticking with the New Scientist review of his work:
http://www.newscientist.com/article/dn16058-prophesy-of-economic-collapse-coming-true.html
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Peter Lang has posted irrelevant attacks against peak oil and then run for cover. Come on Peter, you were in the business! Show us peakniks where the oil is going to come from. I’d love peak oil to just ‘go away’.
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You’re the one who wrote a whole paper on why ABARE are so reliable. But now you’re backing out on the question of their pricing projections for oil, which is a question of *global* supply and demand. You dodged that completely in your ‘article’, and now want to pretend that it’s because you don’t want to hurt *my* feelings because *my* skill sets are not developed enough!
That is just silly. It’s the papers from your peers you’re hiding from Peter! If you actually have any ‘knock down’ arguments or references that debunk the many peer reviewed sources in my article, I’d be quite interested to check them out. But I sensed in the many comments to that thread that there are quite a few readers of BNC that are *far more* informed on the world oil situation than myself. That’s probably what you are refusing to engage.
The peer-reviewed consensus I’m reading says we have about 5 to 10 years at most before supply can never again meet expectations. When that happens, I’ll wonder how someone with *skill sets* like yours can be so blinkered.
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eclipsenow,
I am not “backing out of the question”. We discussed it to death. The point I made is clear and was not refuted. I believe it has been clearly demonstrated. You are on a different wavelength that is more about a passionately held belief of yours. You would not answer the questions I put to you and I see no point in taking the discussion any further with you.
By the way, you make lots of comments about me making directed personal comments: may I suggest you stop it yourself if you don’t like the responses.
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You asked me to match up ABARE’s projections of Australian resource production and demand against the actual history of Australian resource production and demand. In other words, you asked me to do something entirely irrelevant to the question of WORLD resources, especially oil.
I have asked you repeatedly to GET ON TOPIC and either show us which other Australian agency has the responsibility to present GLOBAL OIL scenarios to the government, OR I’ve asked you to simply come up with their peak oil report! You have done neither.
The irony is you JUST slagged off against the Club of Rome in the other thread, and the CSIRO has done *exactly what you asked me to do* but at the *global* level. It compared one institution’s projections against real world historical data. You just didn’t like the fact that the CSIRO confirmed the reliability of that institution, the Club of Rome’s “Limits to Growth” report.
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There’s that basic comprehension issue again! The point you made was irrelevant to the global situation, and was not refuted because there was nothing to refute. You confirmed that ABARE studies Australian resources. Great. Now do you want to catch up with the rest of us and get on the topic of who actually supplies our government with advice about the *global* situation?
I don’t know if I can be any clearer?
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Calling all peakniks. Do you have any other questions you might add to a “Top 10” list for peak oil sceptics? Here are my suggestions for people who care enough about proving peak oil wrong.
Would you put anything slightly different? What have I missed?
Peak oil Top 10
1. In which decade did we discover the most oil?
2. How has the discovery of conventional oil been going since then? Keep in mind that oil is probably only 2nd to the military in terms of the money and technology available to their enterprise. Big oil have BILLIONS at their disposal for the latest discovery and drilling technologies.
3. What is the ratio of discovery to consumption? Are we discovering more than we use, or less? How good or ‘bad’ is the ratio?
4. How long has the trend been in this direction?
5. How many oil producing countries have already peaked and are in irreversible decline? What are their decline rates?
6. Which countries are still able to increase production and have not reached their all time historical peak?
7. Is there an ‘international oil cop’ agency that audits the fields and confirms the books of various oil blocks? Who reports to who? What is the chain of command down which the oil data has to travel in the non-OPEC western world?
8. How do we know whether OPEC reports are legitimate? Who do they report to? Who can audit their books? Does the western world get access to their fields? How do we confirm what they know?
9. If domestic consumption of oil exporting nations rises too fast (because of a booming domestic economy), how quickly can domestic consumption outpace their ability to export oil once they themselves peak? (Hint: there are historical precedents — google “Export Land Model”).
10. If those few exporting nations that are left suddenly DO decide to keep the oil for their own economies, how relevant is a global depletion rate of 5% per annum if the OIL MARKET has collapsed because ‘sellers’ are becoming ‘buyers’?
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Great quote from Crikey!
http://www.crikey.com.au/2008/05/30/addressing-abares-serious-flaws/
Based on its record, however, ABARE continues to be one of the most seriously flawed institutions within the entire Public Service. Further evidence of this emerged during the week in Estimates hearings.
ABARE regularly forecasts the world price of oil. Tricky stuff, admittedly, and anyone who could forecast it accurately in recent years wouldn’t be working for ABARE but making billions on the stockmarket. But the extent to which ABARE has refused to accept the ongoing increase in the oil price is truly remarkable.
Here’s the comparison of the actual oil price – not even including the most recent spike — and ABARE’s predictions since 2004:
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EclipseNow, a tip; if you want your top 10 FAQ to have any impact on this particular skepticambivalent, at least one and probably more of them needs to address the scope for substitution, synthesis and demand fungibility.
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I was hoping just to confirm peak oil. The shock of realising for themselves that our most important resource was about to start declining usually propels newcomers (with half a brain) onto the search for the alternatives.
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I’ve given up searching: is anyone aware of *any* ABARE work into global peak oil?
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Excellent article on the Asia Times web site discussing the coming battle between US and China for access to the worlds available energy reserves – don’t miss it:
http://www.atimes.com/atimes/Global_Economy/LI21Dj05.html
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Peter Lang,
until you reply to the substance of my article above and address my reply to your last post in this thread, I’m afraid I can’t believe anything you say. Ever. Until then I’ll borrow this choice line from your last post here, and use it as my own.
“The point I made is clear and was not refuted.”
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“Maxwell, who has been involved in the oil industry for more than half a century, speaks with the slow cadence and easy charm of a man who has mastered his subject. The problem is that if you take his message seriously—and there are plenty of reasons to believe it unreservedly—it can pretty much ruin your day. From having to eat more root vegetables in winter instead of enjoying oranges from Chile, to watching oil prices spike to $300 a barrel by 2020, a world of slowly but steadily dwindling supplies of petroleum would be very different indeed.”
….
“Maxwell: Yes. Globally, I believe we’re quite close to the peak, simply because we’ve gone from 6 percent increases in production to 3 percent per year increases, to half a percent per year increases. I think peak will come between 2015 and 2017. So, we’re nearly on it.”
http://www.energybulletin.net/stories/2010-11-06/energy-nov-7
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Rename it at all costs!
http://cluborlov.blogspot.com/2010/11/peak-oil-is-history.html
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ABC Science Show…
http://www.abc.net.au/rn/scienceshow/stories/2010/3061272.htm
As Princess Lei say, “Help me ABARE, you’re our only hope!”
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Whoops, typo. But you knew who I meant
http://en.wikipedia.org/wiki/Princess_Leia
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It sounds like the ABC is going to feature a number of peak oil specials next year. We’ll see. Sadly, it’s all too little too late. The peak oil community have been laughed at for the last 5 years, but now it’s becoming mainstream… it’s too late.
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eclipsenow, on 18 November 2010 at 12:39 PM — Too late for what?
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Preventing the economic catastrophe of $200 a barrel oil. If you want to fly somewhere, do it sooner rather than later.
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Michael Lardelli sent me this interesting link: http://aleklett.wordpress.com/2010/11/17/peak-coal-in-china/ and http://www.nature.com/nature/journal/v468/n7322/full/468367a.html
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eclipsenow, on 18 November 2010 at 12:58 PM — It is unpreventable, just a matter of when, not if.
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Hi Barry,
yeah, those articles are a slap in the face to many economists. It sounds like we need a new breed of economist & resource experts that understand both the market and scientific realities.
What do you make of the early peak coal argument? Is that a surprise to your colleagues at the Environment Institute?
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Nice quote:
http://www.aspo-australia.org.au/general/peak-oil-the-elephant-at-the-summit.html
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Review of new book by Robert Hirsch et al: http://www.consumerenergyreport.com/2010/12/04/book-review-the-impending-world-energy-mess/
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Hirsch is a brilliant guy who worked on fusion reactor prototypes, and was commissioned by the DOE to report on peak oil. So why oh why is he a climate sceptic?
I know from engineers and town planners that have contact with him that he tends to think proposals for increasing rail and New Urbanism are ‘communist’. Wow.
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Hi Barry,
I’ve just noticed that Kjell Aleklett spoke at the Environment Institute. Did you get a chance to go to his peak fossil fuels talk, and how was it received? What’s the word on the ground?
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en here’s an audio link to Aleklett
[audio src="http://media.theenvironmentinstitute.com/2010/kjellaleklett.mp3" /]
The EI seem to hold great faith in renewables, not sure where KA stands. He predicts that man made CO2 will max out earlier than most expect. I’m listening for his practical recommendations.
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Thanks for that link JN, that’s easier than me trying to explain it. I’m still sceptical that his forecasts are correct, mainly because I don’t think there’s been sufficient market pressure yet to increase production from non-conventional sources. For instance, Aramco are already talking about moving into new resources that would double their reserves (to date, in Arabia, there has been little point in going after the harder stuff – they still flare their gas after all): http://bit.ly/fU9prX
The most interesting thing that he said, in my opinion, is that oil will probably never get much above $100/barrel over the long-term, because the world economy can’t sustain it. He may be right – even if the ultimate price ends up higher. We’ll see. I think the picture will be much clearer in a few years time.
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“$100/barrel over the long-term, because the world economy can’t sustain it”
Wow Barry, that *is* an interesting perspective. It has long term ramifications. EG: What would you expect liquid fuels from nuclear power to cost?
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It depends on future capital costs of the nuclear power plants, but almost certainly <$100/barrel, especially if nuclear heat is used for hydrogen production (e.g. via Cu-Cl catalysis).
Also remember, what is non-conventional in Saudia Arabia may be conventional in most other places. It’s all relative (and the Aramco guy didn’t even talk about non-conventional in this context of getting an addition 2 trillion barrels – he was still talking about liquid crude).
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PS: Doubling the resource from non-conventional resources doesn’t necessarily delay the peak. It might slow the decline, but they are listed as ‘non-conventional’ resources for a reason. They are harder to extract, slower to access, and cost more. And with a $100 ceiling, they may not be able to double the *reserves* either! We must always remember that resource is one conversation, and reserves are a very different conversation all together, involving jittery markets that may not be willing to pay exorbitant prices.
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At around the 25 minute mark KA hinted he was working on something with the ABC, a Four Corners episode for next year perhaps?
For unconventional fuels I think we should henceforth think in terms of net energy which we already know is lousy from grain ethanol. If say 80% CCS and low sulphur are mandated then heavy oils and coal derived liquids will struggle and may not be financially viable. I think synfuels using biocarbon and nuclear hydrogen are probably the way to go. Heaven forbid what a litre of liquid synfuel could cost …$5, $10?There goes the Sunday afternoon drive.
That’s why I think battery and natural gas powered cars are coming soon. Aleklett didn’t touch on gas vs nuclear as a coal replacement but he evidently approves of nuclear from the brief mention of Swedish NP. He did stress the need for reduced fossil fuel input to food production and distribution. When expensive fuel combines with dry farming conditions I think things will move fast.
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“When expensive fuel combines with dry farming conditions I think things will move fast.”
Oh yeah, if you don’t have food you don’t have a viable society, let alone an economy.
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It is possible that negative income feedbacks may keep the price of oil under $100 a barrel til the last drop. Absent visuals I gather one of Aleklett’s slides showed oil volumes in lock step with global GDP. Now think of the converse.
With or without oil price rises we may already be heading to more expensive food. Drought in Russia and WA accompanied rain spoiled wheat harvests in eastern Australia. Thus bread prices may go up say 10% in 2011 while incomes go up no more than 5%. Then if petrol goes up, the power bill and maybe interest rates as well I’d say the grumblings will be loud.
Maybe 2011 will be a transitional year with 2012 the long winter of discontent. In real terms $100 oil will still be less affordable if people have less to spend. People will be in no mood for ZCA style dreaming.
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Robert Rapier nails (impales?) it again:
The rest at When Economic Recovery Collides with Flat Oil Production.
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oops, should of course be When Economic Recovery Collides with Flat Oil Production
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ABC’s Catalyst reports that the IEA have moved their position from one of peak oil Denialism to it being a real and present danger. But did anyone take notice?
The Sydney Morning Herald saw it.
///Whereas five years ago the IEA expected total production – including oil from deep-sea drilling and unconventional sources such as tar sands – could rise to 120 million barrels a day by 2030, the agency now expects production will reach only 96 million barrels. And Birol reckons there are no guarantees it can be brought out of the ground in a timely fashion.
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”Existing fields are declining so sharply that in order to stay where we are in terms of production levels, in the next 25 years we have to find and develop four new Saudi Arabias. That is a huge challenge.”
In the lucky country, of course, we’ll be fine. Rising income from coal and gas exports will help us pay higher oil prices, even as our oil trade deficit blows out and oil hits $US200 ($A183) a barrel, as is forecast often enough. Can we go back to sleep now?
Not when the climate implications are taken into account, says Ian Dunlop, a former Shell executive and deputy convenor of the Association for the Study of Peak Oil.
Dunlop says the manifestations of peak oil were temporarily masked by the financial crisis – itself partly triggered by high oil prices which hurt struggling homeowners in the US subprime mortgage belts – but are now confronting us as the developed world increases consumption. The world faces a 20-30 per cent reduction in oil availability by 2020, he says.
The problem with future oil production, Dunlop says, is the amount of energy you get out for the energy you expend – your return on investment – is dropping.
”Cheap oil is disappearing. A lot of major exporting countries in the Middle East are now finding they need more for domestic markets, and there’s not as much available for export.”///
http://www.smh.com.au/business/peak-oil-highlights-need-for-a-unified-policy-20110429-1e0of.html
The Brisbane Times saw it, and ran the same article. A dad I know at my kid’s school saw it. But the PM? Nah, she was getting ready for the Royal Wedding. So while the rest of the world and their dog knows about peak oil, we’ll just continue to spend 4 times as much money on roads as we do on public transport. Way to go Australia! ;-)
PS: It was interesting that this SMH plan automatically went to BZE for a renewable energy plan for Australia, not nukes.
And Barry should ask for a right of reply to the ABC Catalyst episode which basically condemned nukes for Australia on the grounds that we:
1/ Don’t know what to do with the waste! (Slaps hand to forehead… to think I used to believe that a year ago)
2/ Couldn’t build it fast enough
(Slaps hand to head as they somehow think we’re gong to build solar thermal plants faster? ;-)
http://www.abc.net.au/catalyst/oilcrunch/
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When we get $2/L petrol and 45 C summer temps Fukushima will be a distant memory, even if it’s only by 2013 or so. I think reduced oil supply will take coal demand with it which is why I favour a CO2 cap not a fixed price. I think total emissions will reduce more than 5% yr 2020 over yr 2000 simply because crude oil production will probably have declined ~30% in that time. The suits can’t see it.
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[…] we have politicians, businesses and other decision makers with their head’s in the sand (peak oil is another issue where this is starkly apparent). This must change, and we — the citizenry […]
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[…] a few, geographically favoured hotspots, such as the Middle East. Most credible analysts agree that we are close to, or have passed, the point of maximum oil extraction (often termed ‘peak oil’), thanks to a century of rising demand. We’ve tapped less of the […]
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[…] Instead, we have politicians, businesses and other decision makers with their heads in the sand (peak oil is another issue where this is starkly apparent). This must change, and we — the citizenry — […]
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As requested by Eclipse Now, an update in The Economist on developments in the Santos Basin, in deep water off Brazil:
http://www.economist.com/node/21536570
“Conservative estimates for the total recoverable pré-sal oil now come in at 50 billion barrels: a little less than everything in the North Sea, all in the waters of one country. Optimists expect three times as much…By 2020 Petrobras expects to be pumping 4.9m barrels each day from Brazilian fields”
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MD several points to be made
– suddenly the hype has gone about cane ethanol and flex fuel cars
– 4.9 beats 3.7 m max barrels for Canadian tar sands
– it will replace just 5.5 % of current world production.
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@JN yes, a certain irony that all this oil should turn up in the country that hitherto had far and away the world’s largest biofuels industry.
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There have been a couple of new reports on peak oil appear in the last week or so that I wanted to point people to. Eclipse Now has just mentioned the first – an article in Nature by James Murray and David King – on the Open Thread, but its proper home is probably here.
The article in this week’s Nature reports that we hit peak production capacity in 2005. Prior to 2005, production was rising. After 2005, production has been steady, despite increasing demand – the implication being we’ve topped out.
The oil price vs. production shows a very clear break point. Before 2005, increasing demand was met by increasing production and prices did not greatly rise with demand. After 2005 the oil price is both extremely sensitive to demand, and highly volatile. We are now in a period of inelastic production – increases in demand are not being met by production increases, so the price becomes very sensitive to demand.
Murray and King make the point that climate change will not force a change in energy policy that drives a shift to less greenhouse intensive energy – it will be peak oil, and indeed peak coal, which they suggest may be as early as 2025 (as EN noted).
The article can be found here, behind Nature’s paywall if you have access, or for free here. There is an excellent commentary at Ars Technica that EN linked to.
Murray and King observe that
Which brings me to the second report. The Australian government’s Bureau of Infrastructure, Transport, and Regional Economics has just released a huge and comprehensive report on world oil supply.
Transport energy futures: Long term oil supply trends and projections.
Oh wait, it didn’t. That link is from a French site that somehow got a hold of this report. It was published in 2009, but seems it was never made public and is not available from the BITRE website.
The report is nothing if not comprehensive – two years of research and 436 pages of oil supply analysis. All significant global oil production regions are examined. The history of discovery and production is used to determine the time lag, so future production can be forecast from current discovery. The methodology gives accurate results in hindcasting, giving confidence in the forecast behavior. This is a huge piece of work and appears well validated.
The cumulative result from this analysis is Figure 13.11 on page 351. Take a look. This shows a sharp drop in world oil production in 2016, then
It concludes
Given current policy settings we appear to have chosen to go with number 3.
This conclusion is the result of directly examining, at considerable expense and effort, the question of our oil supply, by government researchers using the best available data and methodologies, to inform policy. And it appears to have been buried. Piers Ackerman picked this up in The Telegraph last week and went ballistic:
All evidence of this treachery went down the memory hole
I don’t normally have a lot of time for Piers but he’s nailed the perfidy. (He then uses it to whip his hobby horses till they bleed but thats beside the point.)
There is a detailed review of the BITRE report by Matt Mushalik here, as part of a very comprehensive critique of the Australian Draft Energy White Paper. Mushalik focusses on the disconnect between the White Paper and the energy picture painted by the BITRE report.
So the question posed earlier by Eclipse Now, still stands, and is rather more pointed: if coal peaks around 2025, and we are now at a peak oil plateau where supply is inelastic, and a sharp drop in production is forecast for the vicinity of 2017, what can be done to massively ramp clean energy, principally nuclear, in the next 5 years?
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John Morgan — Well reasoned. I suggest the term plateau petroleum (and probably coal as well) when measured in physical units.
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John Morgan, 28Jan,2012…..there are really 3 options
Why not a bit of all three options, ie (1)some oil replaced by alternatives such as electric powered vehicles (2) improved efficiency of oil use; lots of room for improvements here(3) some GDP declines. I think we would all prefer options 1 and 2.
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Why not indeed. But from where I sit it looks like option 3 will be doing the heavy lifting. Options 1 & 2 require an active choice to change from current policy, but so long as the government buries reports like this we’ll keep doing what we’re already doing, leading to option 3.
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Option 3 will remove the need for carbon tax as emissions will plummet regardless. No point in burning coal if stuff can’t be delivered far and wide. A case of a problem solving itself but not in a nice way.
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Here are the things that keep me busy wrt peak oil.
Individual oil fields produce less as more is produced from them. Resevoir pressure just drops. Simple geology. All the unconventional oil resources are low productivity.
Plateau petroleum may be a good description, the question is how long will it plateau. It must eventually decline. So far technological improvements such as enhanced oil recovery (EOR) with CO2 injection, and new field developments, have helped to keep production steady. But future tech developments aren’t expected to be as useful as EOR, and we’re finding fewer newer fields as time goes by.
If we have a 50+ year plateau on a global level then there’s nothing to be worried about. We’ll all be driving electric cars by 2050 anyway, and will have phased out oil in many thermal and electric markets too. If it the plateau period is much less then we are in big trouble.
One major uncertainty is what I call the local versus global effect. Locally, peak has occurred such as it has in the USA but it got covered up by more imports from other regions. So the question is, can we generalize this observation to the world at large? If no imports are available to cover the gap, then what happens? I guess you can ask whether peak oil was allowed to happen in the USA and other countries due to import alternatives being available. What happens when such alternatives are not available, simply because global production is in decline?
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Cyril R., on 28 January 2012 at 11:52 PM said:
What happens when such alternatives are not available, simply because global production is in decline?
Being old enough to remember the Arab Oil Embargo what happens in the vehicle fleet sheds weight in a hurry.
The average weight of a passenger car sold in the US in 1975 was 4,000+ pounds, within 5 years that dropped to 3,000 pounds.
http://www1.eere.energy.gov/vehiclesandfuels/facts/2007_fcvt_fotw475.html
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You can double the existing car fleet efficiency overnight by doing what Cuba did: make driving into the city a P2 or P3 thing. (Have to be taking a passenger!) With mobile phones and social networking, it would be easy to rig up quick car-sharing clubs. Cut’s traffic, and makes even ugly great hummer’s more energy efficient.
Mind you, I think motor-bikes will make a big comeback. And don’t forget pushbikes!
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One of my favourite quotes for a change of pace and mood, for any who might be utterly floored by the reality of peak oil and the possibility of a Greater Depression starting soon. (If it hasn’t already started!)
***
“But real apocalypses are sordid, banal, insane. If things do come unraveled, they present not a golden opportunity for lone wolves and well-armed geeks, but a reality of babies with diarrhea, of bugs and weird weather and dust everywhere, of never enough to eat, of famine and starving, hollow-eyed people, of drunken soldiers full of boredom and self-hate, of random murder and rape and wars which accomplish nothing, of many fine things lost for no reason and nothing of any value gained. And survivalists, if they actually manage to avoid becoming the prey of larger groups, sitting bitter and cold and hungry and paranoid, watching their supplies run low and wishing they had a clean bed and some friends. Of all the lies we tell ourselves, this is the biggest: that there is any world worth living in that involves the breakdown of society.”
http://www.worldchanging.com/archives//001413.html
Today I read this wondering if there was more I could have done to save the life of a young guy in a peak oil forum I used to belong to. A young 19 year old guy, bright as could be, studying engineering. Who committed suicide because he couldn’t face the *inevitable* collapse of the world and everything he loved. If only he’d met some of you guys online, back then, before his last few months of darkness? If only he’d known there really was hope.
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EN, that’s so very sad, on so many levels. I’m reminded of all those abortions that took place in Europe in the aftermath of Chernobyl because mothers were convinced their unborn children would be horribly deformed by radiation. This sort of thing is one reason why I get so angry with those who seem to positively and blithely look forward to the collapse of civilisation because it would be ‘good for the planet’, or who effectively counsel despair.
But my main reason for posting was to take issue with John Morgan back on 28 January: “Options 1 & 2 require an active choice to change from current policy…”. Rather, I’d argue that given clear price signals from increasing oil scarcity and demand, market forces will exert quite powerfully in both those directions, at least as framed by Neil Howes (substitution of oil with electric vehicles for Option 1). Admittedly, however, a significant alternative energy source is closed to us (at least in Australia) under current settings.
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What worries me is that oil will stay at $100 a barrel while its output and world GDP shrinks. Thus the price rise will be relative not absolute as required by ‘the market’ as a spur to action. An analogy is a person suffering hypothermia who doesn’t know he or she needs more warmth.
Some will interpret the power down as a necessary belt tightening of energy demand but it could easily slip into global energy poverty. Australia’s defacto policy on liquid fuels seems to be to export more coal to pay for more oil imports. A policy that involves neither seems to be beyond the grasp of our politicians.
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Hi Mark,
while I’m no doomer, market forces will be far too little, too late. As the Australian Senate taskforce into peak oil said:
http://tinyurl.com/6tl3ule
By the time the price signals kick in, we’re already on the downward slope! Let the bidding wars and rationing begin!
This is why so many are so ‘doomer’. We’ve simply left it too late. Sure the market signal WILL be strong. But that’s the problem, not the solution. It will be too strong. Letting the market ‘solve’ peak oil for you is inviting a Greater Depression.
Regards
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Hi John,
//An analogy is a person suffering hypothermia who doesn’t know he or she needs more warmth.//
This is a fairly good analogy, but I’d stretch it by saying the person is on a train, in a T-Shirt, heading over the Arctic circle. If they don’t take action too soon, it might be too late to avoid a *major* hospital stay.
So while I don’t see Mad Max as inevitable, I do think we’re in for a Greater Depression. I imagine airlines going bankrupt, tourism collapsing, and unemployment skyrocketing. Interest rates will have to rise to fight inflation as oil climbs higher. Or not. Your hypothermia analogy does justice to the fact that inflation might not be our most serious issue. Access to oil and oil-related-employment might be. Oil prices might not skyrocket after all, but might just reach a point where they slow the economy, slowing demand on new money. Interesting times.
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EN my understanding is that the RBA tries to increase interest rates when consumers are going crazy with their credit cards and loans causing higher prices. These price rises (relative or absolute) are quite different because the commodity (oil) is physically running out.
Several credible authors on The Oil Drum attribute the global economic slowdown to the combination of high debt and the non-increase in liquid fuels. They make more sense to me than the suits in the business media who mostly failed to see it coming. If this interpretation is right it gets tougher from now on i.e. this is not a temporary glitch but the start of the slippery slope. In all likelihood any CO2 reductions will be attributable to the economic slowdown not to carbon tax which I suspect will be weakened further.
I see no easy way out. I don’t think electric cars or biofuels are the large scale answer. I’m sure however we should not be squandering natural gas like there’s no tomorrow as that’s our last truly flexible hydrocarbon fuel.
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JN, Peter Newman did an Ockham’s Razor on the 2008 crash suggesting it was a combination of peak oil and high housing debt in the outer surburbia in the US – where generally lower income households live and are forced to drive (same as here)
http://www.abc.net.au/radionational/programs/ockhamsrazor/resilient-cities-and-the-crash/3165684
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In the interests of maintaining this thread as a record of developments on all sides of this debate, I submit the following:
http://www.foreignpolicy.com/articles/2012/06/05/can_we_survive_the_new_golden_age_of_oil?page=0,0
“A flurry of new finds has analysts giddy over a new age of energy abundance. Just don’t ask about global warming.”
While the evidence that “the world is moving into a period of petroleum abundance, and not the scarcity that most industry hands embraced just months ago” is somewhat thin, there are enough new contributions to daily production rates to suggest the downward slope will be much more gentle than cliff-like.
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New techniques are being developed to extract oil/gas and they add to the cost of production. It is time to re-categorize the fossil fuels from energy minerals to carbon minerals. Development of DME as a synthetic fuel is a step in the right direction. More and more of nuclear heat must be utilized in its production.
To reduce the loss of lives in coal mining, in-situ gasification has to be used. Nuclear steam must be used where possible to reduce carbon consumption.
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Hi Mark,
yes, peak oil seems to have been pushed back a generation! Barry told me his peers had some special new insights into the new technologies that were coming. Fracking is an old technology but with the higher prices and newer fracking methods, gas supply has *exploded* in the USA.
Thomas Friedman is wondering if America should join OPEC!
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America and China the big two energy users should best be self sufficient. They should use everything to achieve that, including conversion. America should use the “Fracked” gas as starting point and China its coal.Both should have nuclear energy in the kitty for balancing any shortfall.
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