Editore"s Note
Tilting at Windmills

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April 14, 2008
By: Kevin Drum

PEAK OIL WATCH....Over the past few years Russia has been a relative bright spot on the oil scene, expanding its production by over a million barrels per day between 2002 and 2007. But it looks like Russia is now due to join Norway, Mexico, and the UK as countries that have hit their peak and are about to go into decline:

Russian supply in the first three months of this year fell for the first time this decade, averaging 10 million barrels a day, a 1% drop from the year-earlier period...."There isn't a lot of supply coming on right now, so this [lack of non-OPEC growth] is framing the whole narrative of the market," said Roger Diwan, a financial energy adviser at PFC Energy in Washington.

Russia's production slump also highlights a troubling reality: Despite soaring oil prices in the past five years, crude output among non-OPEC countries has remained essentially flat since 2005, defying the normal link between high prices and increased production.

....Fading Russian production would put an even greater weight on projects elsewhere in the world, despite troubling signs even in the oil-rich Middle East. Most forecasts predict that liquid fuel demand world-wide will hit 100 million barrels a day by 2015, up from around 86 million barrels a day now.

But to get there, producers will first have to keep abreast of steep declines in existing fields. That decline rate now subtracts an estimated 4.5 million barrels a day from annual output. Many big producers like Saudi Arabia, however, are now looking to preserve some fields for longer-term gain, instead of pumping to meet rising world demand. Saudi news reports quoted King Abdullah over the weekend saying that new oil finds in the kingdom should be left in the ground. "With grace from God, our children need it," he said.

That's a change of tune from the Saudis. Until now, they've been telling analysts that they have loads of capacity and can put it on the market whenever they want. But I guess that's no longer operative. The new story is that they have plenty of great opportunities — honest! — but they're saving them for their grandkids.

Well — maybe. And it's true that both the Saudis and the Russians have megaprojects due to come online over the next year or two, so it's not as if they're just twiddling their thumbs. Overall, though, oil at $100 a barrel sure doesn't seem to be spurring the kind of additional production you'd think it would. It's almost as if there's no net additional production to be had.

Kevin Drum 8:48 PM Permalink | Trackbacks | Comments (93)

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Dick Cheney, as CEO of Halliburton, knew that oil production worldwide was heading down the crapper. Ths article, from 2006, suggests Dick Cheney also knew the American economy was headed down the toilet and was betting big money against it. Why isn’t this front page news and why isn’t Cheney being called a “traitor” the way that any Democrat who bet agsinst the country he was supposed to be governing would???

Posted by: The Conservative Deflator on April 14, 2008 at 8:56 PM | PERMALINK

> "... oil at $100 a barrel sure doesn't seem to be spurring the kind of additional production you'd think it would."

The oil producers (and oil companies) are not dummies and know full well that demand > supply = higher prices.

Why increase production today at $100 when you can defer extraction a few years and sell for $200+ ?

Posted by: Buford on April 14, 2008 at 8:59 PM | PERMALINK

But, hey, we could get a President with whom we could have a beer. Think about that! Sure, none of us will ever get to really do it. Sure, the gas will be $4.50 a gallon. But hey, we will have someone who respects our traditions! Hooray!!

Posted by: Ramki on April 14, 2008 at 8:59 PM | PERMALINK

It's doesn't necessarily make it true, but a looming worldwide peak oil crisis sure does seem to explain the motivations of people like Dick Cheney.

Posted by: Jeff on April 14, 2008 at 9:08 PM | PERMALINK

I also always thought it was asinine the whole idea of people voting for someone they would feel confortable having a beer with. The irony is that the dipsomaniac loser we have now can't even have a freaking beer and people still voted for him.

Posted by: Pat on April 14, 2008 at 9:11 PM | PERMALINK

Wait, this not supposed to happen! Where's my invisible hand?! It's supposed to make sure supply always matches demand!

I demand my invisible hand job!

Posted by: Dr. Morpheus on April 14, 2008 at 9:19 PM | PERMALINK

"It's almost as if there's no net additional production to be had." Duh. You know, Jim Kunstler is right...

Posted by: redterror on April 14, 2008 at 9:42 PM | PERMALINK

Let's add it all up:

* peak oil is here, and "peak copper" etc are showing up as well
* it seems there isn't as much coal as we thought
* global pollution levels (CO2) are reaching levels that may interfere with production within 1 generation
* declining per-capita agricultural production, crashing fisheries globally, and sharply increased prices of food, fuel, and minerals

Face up to it: we are living in one of the Club of Rome scenarios. People shouted their message down at the time, but the overall model was correct. From here on out, things are going to get much, much harder. We have been consuming at over carrying capacity for at least a few decades now, ignoring or silencing contrary signals and promoting "sustainable growth" instead.

Due to that, I'd say left/right approaches to resource and enviro problems are about to end. My take is a survival-oriented set of policies is going to be a hash of left/right:

* The end of the dream of global equality. It was never possible that everybody could one day live as we do now. It was never even possible that the first world could for more than a couple of generations. The best we can do now is triage, and a crash program to prevent a collapse.

* Greatly increased funding for all potential energy supplies: solar, energy storage, anaerobic coal, fusion, thorium fission, and new modern fission plants, wind. All at once. Each R&D program at most costs a few 10's of billions - they *all* deserve serious funding by the leading economies in parallel. Combined the cost is still a fraction of the gulf war, and there will otherwise be a lot more such wars.

* Recognizing that biofuels, and especially biofuels to fuel wasteful SUVs and personal trucks are what they are: burning food in cars. People are going to die because of it. Several people per car on the road. Just because you can't see it doesn't mean it isn't happening. Driving an SUV is becoming a literal act of murder, with the death merely far away.

* Greatly increased and differently-targeted military budgets in country's that don't expect to, like Canada, Australia, and the EU.

* Changing diets, by economic pressure, and not to "organic". I'd expect reality-based conservation economics to not look much like the neo-hippies daydreams.

* Global environmental and resource treaties will be backed with military enforcement, by necessity.

Posted by: Bruce the Canuck on April 14, 2008 at 9:43 PM | PERMALINK

Why increase production today at $100 when you can defer extraction a few years and sell for $200+ ?

Good point, but I think only the low population Gulf States like Saudi, Kuwait, Bahrain, UAE, etc., can really afford to do such a thing. I don't think others such as Iraq, Iran, Venezuela, Russia, Nigeria, etc., can really afford to cut back production because their populaces are wanting an improved standard of living NOW. I also wonder if the statement by Abdullah could be a clever cover to hide the fact that their output has went flat. That would tend to support Peak Oil is Here Now.

OTOH, however, from the linked article:

"In a bid to kick-start investment, Russia's government recently unveiled a $4.2 billion tax cut for the sector. It was broadly welcomed in the industry. "It's a very important point that the Russian government has realized that with cost growth and inflation, there needs to be additional relief for companies to develop fields," said Bob Dudley, chief executive of TNK-BP.

But it may not be enough. Lukoil's Mr. Fedun says Russia's oil industry needs $1 trillion of investment during the next 20 years just to maintain production of 10 million barrels a day. Analysts worry the tax cut is inadequate to achieve that. "We still do not see it generating enough free cash flow to the industry...to support higher investment levels," Citigroup wrote in a recent report.

Citi says it still expects Russian oil volumes to increase by 1.5 million barrels per day between now and 2012, largely thanks to the ramp-up of new projects in eastern Siberia. But it cautioned: "Russian oil production growth is no longer to be taken for granted."


I've been becoming increasingly suspicious about the rise of Corporate Welfare Handout Demand™ of late. These sorts of statements almost smell of extortion by big corporations to get the sweetest deal by scaring everybody AND manipulating the markets to that end..?

Posted by: Doc at the Radar Station on April 14, 2008 at 10:10 PM | PERMALINK

"> "... oil at $100 a barrel sure doesn't seem to be spurring the kind of additional production you'd think it would."

The oil producers (and oil companies) are not dummies and know full well that demand > supply = higher prices.

Why increase production today at $100 when you can defer extraction a few years and sell for $200+ ?"

Hmm, Buford. Care to explain why this is the first time in thirty five years that anyone has ever thought of this plan and successfully implemented it?
Last time I checked, things worked out rather differently in 1973 and 1980 from what is happening nowdays. It's almost as if what Kevin is saying happens to be correct.

Posted by: Maynard Handley on April 14, 2008 at 10:11 PM | PERMALINK

Sadly, I think that Bruce the Canuck is mostly correct. What I find most appalling is that we cannot get around to simple, easy steps, like driving smaller cars, or changing our diets to eat chicken instead of beef, and less of it anyhow.

Figuring out how to use less heating oil in the winter, that's going to look at lot more like "sacrifice" (we've already got the new windows, just waiting for good weather to install them).

Posted by: dr2chase on April 14, 2008 at 10:14 PM | PERMALINK

"Due to that, I'd say left/right approaches to resource and enviro problems are about to end. My take is a survival-oriented set of policies is going to be a hash of left/right:

[List of things that will have to change]
"

And yet not a single thing mentioned about reducing population growth, let alone reducing population.
This is why I, personally, have zero confidence that this will actually be resolved well. By refusing to limit the number of births, we're going to land up with billions of deaths one way or another --- starvation, resource wars, whatever.

Posted by: Maynard Handley on April 14, 2008 at 10:15 PM | PERMALINK

It aint gonna be pretty.

Posted by: via on April 14, 2008 at 10:16 PM | PERMALINK

Not surprise that the Saudis would not want to pump more oil even if they could. Even if the high cost now causes an economic downturn they probably figure that the oil price floor is somewhere in the $80 range but now lower.

Posted by: CarlP on April 14, 2008 at 10:16 PM | PERMALINK

Be like the Decider! Play the $3 Trillion Shopping Spree!

Posted by: The Conservative Deflator on April 14, 2008 at 10:22 PM | PERMALINK

Population growth probably declines as countries become more like Europe (stable, civil, wealthy). What explodes consumption much more quickly is economic progress -- there is no way (or so I read, somewhere) that you could bring India and China (or even half of India and China) up to our standard of living without completely outstripping our oil (and other resource) production ability, and without flooding the atmosphere with CO2. It's a huge consumption increase, something like 10x or 30x.

It also doesn't help US that if they instead come up the curve in cars like the Tata. A little car like that, used as hard as it can, will be worth driving even if gasoline costs $10 a gallon. That is, the Indians may well keep consuming as prices rise, if they are consuming efficiently.

Posted by: dr2chase on April 14, 2008 at 10:32 PM | PERMALINK

Check out Bakken oil formation in North Dakota. Appears US has been sitting on a potentially huge oil field waiting for prices to assure huge profits.

Posted by: sparky on April 14, 2008 at 10:44 PM | PERMALINK

Since mid-2001, the dollar has fallen 41% against the basket of other currencies used to calculate relative changes in its value.

If you look at the cost of oil in Euros, it's not that much different than it was 5 years ago. However, oil isn't priced in Euros, it's priced in US$. If you were an oil minister, you would have to keep raising the price of oil (in dollars), just to stay ahead of the falling valuation.

If the Federal Reserve would raise interest rates, the price of oil would fall dramatically. Yes, there are supply problems and they will get worse, but right now the primary driver of the inflated price of crude is the weak dollar.

Maybe it's better that this is the case, if it forces our government to do the right thing with regard to alternative energy development and, most importantly, adopting stronger conservation measures.

Posted by: DevilDog on April 14, 2008 at 10:51 PM | PERMALINK

That's unpossible. Jesus makes the oil for all Americans to have. The Bible tells me so.

Posted by: afferent input on April 14, 2008 at 10:52 PM | PERMALINK

I had heard of the Bakken field, just last week, thought I would wait to hear a little more about it. It-would-be-nice if we didn't waste it. It would also be nice to not do the lets-turn-the-CO2-up-to-11 experiment, just in case it turned out badly.

Posted by: dr2chase on April 14, 2008 at 10:54 PM | PERMALINK

What's with the McCain ad on your blog? Is this just a stab at the lefties who read your page or an actual attempt to peal of voters...

Posted by: jmAZ on April 14, 2008 at 10:56 PM | PERMALINK

That whole "beer" thing was a lie that the media catapulted in 2000 & 2004.

Americans DO NOT overwhelmingly want a beer with an obnoxious alcoholic/cocaine addict. It was a lie then and it is a lie now - it was just used to create a distraction and meme to cover the theft of 2 elections.

Posted by: on April 14, 2008 at 11:04 PM | PERMALINK

Here's what I do: make a series of bets about how oil will never again be in the double digits, or about how the oil currently producted is at the very peak of ultimate world production.

I'm gonna have lots of winning bets coming my way by 2009, and if I lose, well, there ain't nothing that cheap oil can fix for me.

And THAT's how you hedge a transaction.

Posted by: Undecided on April 14, 2008 at 11:10 PM | PERMALINK

Bruce the Canuck:
Look on the bright side - at least Americans will lose some weight.

Posted by: craigie on April 14, 2008 at 11:19 PM | PERMALINK

If the Federal Reserve would raise interest rates, the price of oil would fall dramatically. Yes, there are supply problems and they will get worse, but right now the primary driver of the inflated price of crude is the weak dollar.

Absolutely agree, also the Europeans could *lower* their interest rates and accomplish pretty much the same thing, and I think that they will:
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/04/15/nprices115.xml
House prices decline at record levels

"The widespread nature of the decline has eclipsed the house price crash of the early 1990s, when two thirds of surveyors registered drops, it said.

The RICS report blames the falls on the tightened lending conditions, a view echoed by economic commentators."

If we can *stop* cutting rates and let the Europeans *start* to cut them-we should see cheaper oil.

Posted by: Doc at the Radar Station on April 14, 2008 at 11:23 PM | PERMALINK

Oh but, Nah Nah Nah, some people predicted peak oil thirty years ago, and it didn't happen, therefore Nah Nah Nah! Go out and buy yourself another SUV, cause Nah, Nah, Nah....

Cause we can spread hype about the Bakken, Nah, Nah, Nah. Cause we can exaggerate about what Brazil might have Nah, Nah, Nah.

Cause we can turn all the food into ethanol. Only the poor will starve. And we need only drink some of the ethanol to distract ourselves from what we done.

SUVs for ever!

Posted by: bigTom on April 14, 2008 at 11:25 PM | PERMALINK

"Bright spot on the oil scene"? Yeah, it's been a jazzy redoubt on the carbon-based fuels lo-o-o-ve cruise. Who talks like that? "I'm a journalist, but I'm a hep cat, too. I'm so 'with it' and into and onto and up on everything, really 'plugged in,' geddit? I'm so knowledgeable about oil industry matters that I talk real casual-like. The oil business is second nature to Old Washington Hands like myself."

Dude, you rock! You totally rock! OUTRAGEOUS!

Posted by: Anon on April 14, 2008 at 11:27 PM | PERMALINK

Check out Bakken oil formation in North Dakota. Appears US has been sitting on a potentially huge oil field waiting for prices to assure huge profits.

http://uk.reuters.com/article/oilRpt/idUKN1137293920080411

This article claims that the Bakken oil deposit holds a "phenomenal" 3.65 billion barrels of technically recoverable oil.

Well, since we use 21 million barrels of oil a day we can divide 3.65 billion by 21 million to get 173 days that the Bakken deposit could extend our SUV party.

Not even as good as ANWR which could postpone the end by a whopping eighteen months.

Posted by: Dave Howard on April 15, 2008 at 12:21 AM | PERMALINK

Um, I just read about a huge oil find in Brazil, apparently the biggest find in over a decade or so. Check it out:

http://news.yahoo.com/s/ap/20080415/ap_on_re_la_am_ca/brazil_oil

Posted by: KC on April 15, 2008 at 12:32 AM | PERMALINK

KC, as Brazil isn't a major oil producer, ANY find there would be huge for Brazil.

Devil Dog, even without our dollar in the crapper, oil would still be at $80/bbl and still rising. The Russian and Saudi news show the gig is up.

Bruce the Canuck: Thorium fission? We are grasping at straws. Fusion? It's been "just around the corner" for what, nearly 40 years? Anaerobic coal? Something that returns less than 40 hits on Google? I think you're grasping at camel-back-breaking straws.

Plus, let's not forget that mining a fairly rare heavy metal like thorium takes energy itself

Posted by: SocraticGadfly on April 15, 2008 at 1:33 AM | PERMALINK

It takes 5 to 10 years to bring a new discovery into production so it is no surprise that supply has not increased. And with the price at 20 dollars, every oil company cut exploration.

Add in the fact that supply is at least adequate and price appears to be driven by speculation it would be foolish for an oil company to believe that 100 dollar oil is here to stay.

The other fun fact is that 5 years ago, the price of oil appeared to be heading down to 10 dollars again. See http://www.wtrg.com/prices.htm. At this price most fields are running at a loss and oil companies responded by laying off thousands of people.

A good book on the oil industry is The Prize by Daniel Yergin. http://www.amazon.com/gp/product/0671799320/. It does a good job explaining how oil companies live in a world of fear, uncertainty and doubt.

Posted by: expat on April 15, 2008 at 1:45 AM | PERMALINK

Expat, Daniel Yergin is full of crap and is an apologist for Big Oil.

Back to the WSJ article, with two other things to note. To the degree that global warming is indeed making it harder to move drilling equipment in Siberia, this should be the final straw in Dick Cheney's wet dream of drilling for oil in ANWR, soon to face similar climactic conditions.

Second, the article notes that Alberta oil sands production costs are estimated at as high as $65/bbl. And, they ain't going down. Big Oil is getting desperate.

Posted by: SocraticGadfly on April 15, 2008 at 1:50 AM | PERMALINK

Oh, and all of you, rein in your Petrobras enthusiasm. The Brazilian national oil company just retracted its “massive oilfield” claims. Interesting that I found the retraction news on Xinhua.s

Posted by: SocraticGadfly on April 15, 2008 at 1:56 AM | PERMALINK

SocraticGadfly, You're right, but $80/barrel oil is a lot different from $110. After all, it wasn't that long ago that it was $30 a barrel. Also, don't forget the ECB has been increasing the supply of Euros, although at a slower rate.

If you want to see something interesting, look at oil versus an inflation proof commodity, like gold or silver -- virtually no change during the same time period (you'd actually be better off having bought silver than oil).

And, yes, Daniel Yergin IS full of crap. I saw a clip of him and Marc Faber and Jimmy Rogers from about 2002 in which Faber and Rogers predicted that oil would go through the ceiling. Yergin said it would actually go down! He's nothing more than a shill for the oil companies, as you point out.

Posted by: DevilDog on April 15, 2008 at 2:32 AM | PERMALINK

We may have reached Peak Oil but there are two other factors at work worth keeping in mind:
1) Economic development in China, India, etc. has meant an acceleration of demand for oil, minerals, grains, etc. This demand has arisen quicker than supplies could adjust.
2) Most of the world's oil is held by a few extremely large players. Partially by coincidence, most of them are either not motivated by market forces (the Saudis) or unable to respond (the Iranians due to their ostracization and economic incompetence and the Russians due to a deep lack of capital investment for a couple of decades).

It is _possible_ that we are experiencing a temporary (i.e. 5-10 year) bottleneck rather than the final Peak Oil (Peak Copper, Peak Corn, etc.)

About Bakken. It is oil _shale_. We may or may not be able to get at it most of it. It is very costly to convert into a usable form, so the price had to rise high and show that it would stay there. (Oil shale projects in the 1970s were wiped out when oil prices fell.)
Basically, oil shale (and oil sands as in Alberta) require huge amounts of energy for extraction (thus the high cost), so the net amount of oil extracted (after subtracting the energy required to do the extracting) is much less than the total amount of energy. If extraction technology is improved, this will raise the ratio of net energy.
There are many things that could increase the amount of prosperity we can get from the same amount of energy. I do not see how Peak Oil would make us unable to do these things. That is basically a social issue.

Posted by: Jessica on April 15, 2008 at 2:43 AM | PERMALINK

I think we should explode the population of the US by bringing in tens of millions of fecund immigrants and illegal aliens and use up natural resources--oil, water, farmland--as fast as possible. Let's get it over with so our children don't suffer the disappointment of expectations.

Hummer drivers are not the only ones unwilling to face reality.

Posted by: Luther on April 15, 2008 at 3:26 AM | PERMALINK

SocraticGadfly> Thorium fission? We are grasping at straws.

The ITER fusion project costs only $8 B over 30 years. For fission, thorium may be required to avoid breeders, if we have to scale up fission use globally. We're throwing $80B at the oil sands over the next 15 years, and who knows how much subsidy to date. America spends $10B on corn subsidies every year. The Iraq war has cost, what, $1500B so far?

Several solar technologies, energy storage, "clean coal", and modern nuclear plants could use pilot plants ASAP so they'd be proven when we need them. It's all pocket change, relatively speaking. It's worth it to get them all to pilot plant stage in parallel within 10 years. We don't have time to do it serially if a favorite doesn't work out.

Re "anaerobic coal", I just can't remember the correct term for the technology. It wasn't CO2 capture - it involved a closed cycle that output another solid.

Posted by: Bruce the Canuck on April 15, 2008 at 3:32 AM | PERMALINK

Jessica: I do not see how Peak Oil would make us unable to do these things.

I can see three:
- Absence of political will,
- A news media that rarely mentions Peak Oil, which creates
- An ignorant population that cares less about other human beings than who wins American Idol.

Posted by: DevilDog on April 15, 2008 at 3:32 AM | PERMALINK

Most people are short sighted idiots and a good chunk of the rest have major blindspots. This extends to supposedly smart Wall Street traders and lawyers who buy 10X their wage in an inflated NYC house market. It extends to people who cry peak oil but own SUVs. It extends to anyone using biodiesel and it damn well extends to anyone who gave birth to more than one kid in this crazy crowded world. We're distracting ourselves with American Idol or Left Behind or gay marriage (either thru support or active dissing).

Barring major technology breakthroughs soon combined with a period of currently unfathomable good global governance, we'll get to complete FUBAR soon.

I suggest those that can - don't have kids, find some low carbon footprint hobbies and learn to enjoy our crazy ride to oblivion. Misanthropy and fatalism will be helpful in dealing with what lies ahead.

Posted by: anon on April 15, 2008 at 4:14 AM | PERMALINK

Algae is for the most part not food. Promising developments on that front re: biofuel. Of course corn based ethanol is a wasteful boondoggle. Doesn't mean biofuels and other alternative energy pursuits aren't a darn skippy good idea.

When the resource wars begin, I would think it'll be hard for the military to operate when there's no more JP5 to be had.

Posted by: Sebastian-PGP on April 15, 2008 at 6:34 AM | PERMALINK

But, hey, we could get a President with whom we could have a beer. Think about that! Sure, none of us will ever get to really do it. Sure, the gas will be $4.50 a gallon. But hey, we will have someone who respects our traditions! Hooray!!

Drinking beer isn't on the list of American traditions that we have to spend a lot of money and effort electing somebody to make sure it gets observed. It will take care of itself.

Shipping food in refrigerated trains and trucks, apparently, is one of the traditions we need to worry about, though.

Well, you know the Republicans are going to handle it terribly if they happen to have the White House when the oil is almost gone- they'll almost certainly panic and just send us to take over some nation on a pretext, and probably cause a disastrous war (which will require mountains of additional oil) in the process. Make sure these people are not involved in the process, anymore, people- make sure everyone you know votes 'em out!!

Posted by: Swan on April 15, 2008 at 7:17 AM | PERMALINK

The world is going to hell. The world is going to hell. The world is going to hell. Woe is us. Woe is us. Woe is us. The world is going to hell.

What is missing is a willingness to tackle the real issues with hard work. What is wrong is the assumption that "resource wars" are inevitable. What is tragic with all of you is the assumption that nothing will be done. The horror of the Club of Rome is the assumption that human beings are incapable of growth and utterly unwilling to learn. The future will be different. It will probably be better than it is now.

Posted by: Ron Byers on April 15, 2008 at 7:40 AM | PERMALINK

The carbon calamity continues to wag the dog...I parked my vehicle an few years ago, I only use it for the bare necessities, I strictly monitor my driving, insist on car pooling or what ever other way I can to cut back. That being where Carter started 30 years ago pushing conservation, and just think where we might be if we had followed up (seriously) on any of the energy issues that were targeted by his administration, all soundly thumped and discarded during the Reagan era. As explained to me many years ago by a senior resident: "If you are going to be stupid, you had better be strong"

We will be fighting for oil from here on out because that is all we know how to do (or...our leadership will allow), not to mention many corrupt people also make or secure their fortunes doing so. I have not given up on the green movement, but it still remains relatively underfunded and not much more then a pumped up version of being nothing more then a convenient popular political buzz word, as in one of it's prior lives during the 90's.

Posted by: on April 15, 2008 at 7:47 AM | PERMALINK

I read a long WSJ article (not editorial) five years ago about how Western technology was doubling the capacity of Russia's played-out wells. I guess they're played out again.

Posted by: Noumenon on April 15, 2008 at 7:49 AM | PERMALINK

me above, getting old is hell.

Posted by: benmerc on April 15, 2008 at 7:51 AM | PERMALINK

McCain has the solution - lower gas taxes. Heh.

Posted by: q on April 15, 2008 at 8:08 AM | PERMALINK

"It's almost as if there's no net additional production to be had."

It's almost as if with oil at $100 you don't need to produce any more. You're already making more money than you can spend. The Saudis have seen oil go from $25 a barrel to $100 and they didn't have to lift a finger. Why should they want the price to go down?

Posted by: Alan Vanneman on April 15, 2008 at 8:11 AM | PERMALINK

Oil should be 1000/barrel. At least.
Why?
Because of all the things we can make from petroleum, and which we will miss when we're through burning gas to pick up six packs of beer with our Hummers.

Posted by: SteinL on April 15, 2008 at 8:14 AM | PERMALINK

I hope oil hits 200 a barrel. This is the only thing that will wake us up and make us start getting serious about alternative energy.

Posted by: spyder on April 15, 2008 at 8:30 AM | PERMALINK

We are not at peak oil. Global demand for oil grew by 2% last year, global production rose by 2.5%. The US has an excess supply of 3 million barrels a day, about a 20% surplus to our daily oil usage.

How much money was in oil futures in 2000? 9 Billion

How much money was in oil futures in 2008? 250 Billion

In eight years the 'market cap' of oil has risen 27 times its original number. That's going to have a remarkable effect on the price. Since 2002, the dollar has depreciated 30%, gas prices have risen 500%.

We're not at peak oil, and we're not going to drill our way out of this problem. Valero just canceled plans for a refinerly that would have put 500,000 barrels a day into the US enconomy. Why would they do something so dumb? Slowing demand.

The price of oil is high and will stay high because people are betting that no one will look at the numbers, and even if they did, they'd be shouted down as anti-environmental apolgoists. Win-win.

Posted by: Mark R. on April 15, 2008 at 8:44 AM | PERMALINK

Algae is for the most part not food

No, but biofuels use up insane amounts of water. Where are you going to put these bio-solar reactors to create algae-derived diesel? The desert.

Posted by: ChrisS on April 15, 2008 at 9:01 AM | PERMALINK

Where are you getting your numbers Mark?

Posted by: ChrisS on April 15, 2008 at 9:03 AM | PERMALINK

OFF TOPIC:

Hey! I'm just reading the blogs at telegraph.co.uk! I'm reading the one about television and it's rilly, rilly interesting! I didn't know that a newspaper could have interesting blogs!

Posted by: Anon on April 15, 2008 at 9:04 AM | PERMALINK

Maynard asks... "Buford. Care to explain why... things worked out rather differently in 1973 and 1980 from what is happening nowdays" [this refers to increased price driving increased supply]

Sure. In a nutshell, the world has changed since 1980.

Oil demand has increased wildly since the previous crisis years of 1973 and 1980. Oil supplies are (2008) pretty well 'fixed'.

In 1980 China consumed about 600 billion barrels of oil annually. In 2005 that has risen to 2.5 trillion. Developing nation and pacific rim demands have risen on a similar scale.

For at least the next 50 years oil is a SELLERS MARKET and the price of oil will continue to inflate wildly. [barring worldwide depressions or war]

If you were a seller of a fixed-supply commodity entering an era of massive price inflation why would you be in a hurry to liquidate your remaining stock?

Of course, if you're a smaller, defenseless [read no nukes] country like Iraq, Iran, Venezuela, Nigeria etc. you'd have to be very worried about an agressor nation (like the USA) invading and taking your oil at the point of a gun. :>)

Posted by: Buford on April 15, 2008 at 9:28 AM | PERMALINK

"We are not at peak oil. Global demand for oil grew by 2% last year, global production rose by 2.5%."

If accurate this indicates a net increase in strategic petroleum reserves (public and private) of ~4%. That would seem to indicate some supply fears. Am I missing something?

Posted by: B on April 15, 2008 at 9:39 AM | PERMALINK

In 1980 China consumed about 600 billion barrels of oil annually. In 2005 that has risen to 2.5 trillion. Developing nation and pacific rim demands have risen on a similar scale.

I think these numbers are, shall we say a tad, off, as well.

Posted by: ChrisS on April 15, 2008 at 9:48 AM | PERMALINK

Too bad Republicans don't have as much concern for their grandchildren as the Saudis. They postponed recognition of the human link to global warming as long as possible, still fight against limits on pollution and standards for fuel efficiency, lobby for oil drilling in every remaining wilderness area that might yield fossile fuel, give old growth forests to corporate buddies and claim that Americans should continue to embrace mindless, excessive, media-driven consumption as a God-given American right and tradition.

Even the Saudis seem to recognize there is a tomorrow. But not most Republicans. They don't believe in delaying gratification past next month.

Posted by: cowalker on April 15, 2008 at 10:01 AM | PERMALINK

Saudi news reports quoted King Abdullah over the weekend saying that new oil finds in the kingdom should be left in the ground. "With grace from God, our children need it," he said.

I hope I live long enough to see mankind master fusion. Between that and global warming, it will be nice to see these conveniently-located parasites revert back to the camel and become meaningless in the world again.
.

Posted by: Grand Moff Texan on April 15, 2008 at 10:10 AM | PERMALINK

Hi

The important thing to realise about the quote from a Russian oil executive above is that he is arguing Russia needs lower oil taxes to increase production.

He's not calling for Peak Oil, he's calling for lower taxation to encourage investment and exploration.

Russia may be peaking, but that is not the agenda of the guy being interviewed.

On thorium fission, the Indians are way down the track on this one, partly using Canadian reactor technology.

http://en.wikipedia.org/wiki/Thorium#Thorium_as_a_nuclear_fuel

India is rich in Thorium.

Posted by: Valuethinker on April 15, 2008 at 10:22 AM | PERMALINK

It's almost as if.... Kevin really wishes Russian hadn't expanding its production by over a million barrels per day between 2002 and 2007?

Cause, you know, it kind of puts a dent in the peak oil theory.

I figure, the Russians most likely saw how OPEC's controlled of the oil spigot was truly a lucrative idea worth sharing, and so as NOT to flood the market with a glut of oil. But a recession or depression can and will change all that. I just wondering if or when Americans will start finding ways to buy sources of enegry in the blackmarket. Perhaps it's right around the corner, when our US banks go belly up, like the way the US Savings and Loans went belly up.

This kind of greed ends badly, but sometimes it produces a need filled with a new invention, or a new way of doing business, that hopely goes around big oil.

Posted by: me-again on April 15, 2008 at 10:22 AM | PERMALINK

A plot I would like to see:
Use dates going back to 1960, or so, as the abscissa.
Use the ratio of cost of new technology Tn to cost of oil/gas as the ordinate.
T1 = solar, T2 = wind, T3 = geothermal, T4 = nuclear, etc.
Gather data from various sources and label them.
Note that the ratios never seem to improve as much as they should considering oil prices go up faster than inflation and e.g. solar cell tech keeps getting better. Is Peak Oil where these ratios actually start getting

Posted by: Hubble on April 15, 2008 at 10:37 AM | PERMALINK

On thorium fission, the Indians are way down the track on this one, partly using Canadian reactor technology.

http://en.wikipedia.org/wiki/Thorium#Thorium_as_a_nuclear_fuel

India is rich in Thorium.

If you're talking about sub-critical reactors, they have some interesting advantages (like eating radioactive waste and even weapons-grade fissionable materials, leaving less half-life), but they are not very energy efficient. They can amplify a power input, but not by a hell of a lot.
.

Posted by: Grand Moff Texan on April 15, 2008 at 10:47 AM | PERMALINK

Cause, you know, it kind of puts a dent in the peak oil theory.

Uh, no. It means that the Russians know to sell high. Once the price of oil went up high enough, it became profitable to develop their oil fields because their oil is a poorer grade and takes more money to refine.

So, lower oil prices wouldn't just hurt Russians in their pocketbook, it would take their production offline because people wouldn't want to fuck with it.

But that's not going to happen.
.

Posted by: Grand Moff Texan on April 15, 2008 at 10:50 AM | PERMALINK

Ron Beyers,

What is missing is a willingness to tackle the real issues with hard work. What is wrong is the assumption that "resource wars" are inevitable. What is tragic with all of you is the assumption that nothing will be done. The horror of the Club of Rome is the assumption that human beings are incapable of growth and utterly unwilling to learn. The future will be different. It will probably be better than it is now.

God you are a fool. I know I shouldn't be so blunt but you are a fool!

For starters hard work cannot fix an energy crisis. My God man, do you know nothing about entropy? Hard work, being inherently inefficient, will simply accelerate the energy loss. If you have a battery with a finite amount of energy do you try to consume that as fast as you can?

Resource wars are NOT inevitable? When in the entire know history of mankind have resource wars been avoided when resources become scarce? Never. So why is this time different? Do you detect any fundamental difference in people now?

Nothing will be done? Who claims that? Plenty will be done. For starters I expect the US will claim that oil producing countries are holding back on production - hoarding - and we must force them to 'share' their oil for the public (meaning our) good.

Our food exports will decrease as we feed our own citizens first. Food importing countries will be SOL. Soon we'll be back to the 60's with wide-spread starvation in India and Africa. Maybe you are too young to have experienced the 'eat your beans, kids are starving in India' admonition from your parents. That was so common in the 60's it was a cliche.

Fools like you who insist "this time it will be different" are why we made the stupid mistake of invading Iraq.

Cassandra was blessed with the gift of predicting the future and cursed with the fact that she would not be believed. There has been an abundance of Cassandra's lately.

Posted by: Tripp on April 15, 2008 at 11:04 AM | PERMALINK

Peak Oil isn't "looming". We passed the peak back in 2005.

Posted by: Jeffrey Davis on April 15, 2008 at 11:22 AM | PERMALINK

Hubble,

Is Peak Oil where these ratios actually start getting (improving)?

I assume that is what you meant to say. If not please correct me.

The simple answer is "no." As you have noticed the trend, even as oil prices have increased, has been fixed. The simple explanation for this is that the invention and production of new energy gathering devices requires energy. Simply put if more than 50% of your cost is energy then when energy prices rise so will your costs and you will never catch up. If less than 50% of your cost is energy then you might slowly catch up, but so far we have not caught up.

You are hoping that as energy prices increase they will become less of a percentage of your total cost but actually if all other costs are fixed and energy prices rise then they will become MORE of your costs, not LESS.

Your model is correct but your conclusion is backwards.

Posted by: Tripp on April 15, 2008 at 11:29 AM | PERMALINK

Correction, I should have said:

If less than 50% of your cost is energy and energy costs remain constant then you might slowly catch up, but so far we have not caught up.

Posted by: Tripp on April 15, 2008 at 11:34 AM | PERMALINK

Business Week Article

This is the article where I'm pulling the figures from.

Posted by: Mark R. on April 15, 2008 at 11:58 AM | PERMALINK

"This article claims that the Bakken oil deposit holds a "phenomenal" 3.65 billion barrels of technically recoverable oil.

Well, since we use 21 million barrels of oil a day we can divide 3.65 billion by 21 million to get 173 days that the Bakken deposit could extend our SUV party."

This is a favorite tactic of the peak oil chicken littles - claim that one field would have to supply the entire demand, then point out how quickly that field would be depleted by such demand. It's not factually true, of course. No one field would ever have to supply the entire demand. Supposedly oil peak something like three years ago. Now granted, oil prices have risen dramatically, but a big chunk of it is due to the falling dollar, speculators, and international tensions. Food prices are also up dramitically, but that is mostly attributable to the increase in the cost of inputs, the drought in Australia, and crops being converted into biofuels. Our current situation is more a result of economic mismanagement than it is a result of the oil supply.

Posted by: Pocket Rocket on April 15, 2008 at 12:14 PM | PERMALINK

Several comments:

1. Re Peak Oil, look at the WSJ graphic. Russia had been plateauing a full year before the 1Q2008 decline.

2. Re oil v. gold, there is no such thing as an "inflation-proof" commodity, Devil Dog. It's just that an ancient yellow metal with relatively little practical value has become sociologically invested with enough freight to make people think it's inflation-proof.
When gold zoomed to $800 in the 1980s, was it "inflation-proof"? I think not.

3. Grand Moff is right on thorium. Just like oil sands, it has a low EROEI.

4. Bruce -- the Google hits for actual anaerobic coal detail a very experimental process where anaerobic bacteria are used to to dissolve the lignin in low-quality lignite coal. Texas coal mines might welcome that news, but, as I said, it's very experimental.

5. I'll repeat what I said about mining something like thorium, or the copper of Peak Copper for that example. Those dump trucks, etc., run on petroleum.

Posted by: SocraticGadfly on April 15, 2008 at 12:44 PM | PERMALINK

Tripp (to Ron Beyers): For starters hard work cannot fix an energy crisis.

Right. We've invented all the technologies we can, and refined them as much as we can. And their current allocation is ideal under all circumstances. Time to give up.

My God man, do you know nothing about entropy?

I can't speak for Ron Byers, but I know a little about it. Remind me though, how many billion years before the entropy of the universe increases to where we can't do anything useful?

Hard work, being inherently inefficient, will simply accelerate the energy loss.

Hard work is not necessarily inefficient (if you're going to use thermodynamic terminology you should use it correctly).

I suspect though that Ron was using the term "hard work" in the colloquial sense, and as such implies some diversion of currently used resources to find schemes for energy production and consumption which will be more economical (including externalities) in the face of changing resource availability.

If you have a battery with a finite amount of energy do you try to consume that as fast as you can?

Last time I checked the fusion reactor that provides most of the energy to run this humble planet still has a few billion years left, even at the current production rate. Therefore I suggest we explore strategies which directly or indirectly use this source, without relying on fossilized energy storage.

There are some technical challenges involved in this. Fortunately some of our species are willing to explore and experiment, which explains why we survived the food crisis of the Younger Dryas. That was a big triumph, and in the ensuing 11,500 years we've overcome a few other problems too.

Posted by: alex on April 15, 2008 at 12:46 PM | PERMALINK

"I think these numbers are, shall we say a tad, off, as well."

Heh... sorry... my bad math early in the morning.

Thousands of millions are billions. So make the current annual oil consumption of China about 2.5 billion bbls.

Net effect is the same on the supply/demand equation. Chinese/pacific rim oil consumption has exploded.

Posted by: Buford on April 15, 2008 at 12:47 PM | PERMALINK

Expat: "It does a good job explaining how oil companies live in a world of fear, uncertainty and doubt."

Poor oil companies. The rest of us don't live in that world, do we?

Posted by: Speed on April 15, 2008 at 12:51 PM | PERMALINK

Somewhat off topic and most likely rambling -

I've been aware of Peak Oil for about three years now and it absolutely terrifies me at times. What is an average 47 year old male to do? Do I quit saving for a retirement, because there will be no retirement? How do I look at my just born nephew, who may not even make it out of elementary school, if he even makes it to elementary school at all? Will the collapse be catastrophically sudden or will it be drawn out over years or decades? What does one do if you have no space to grow food? Do I even bother to still pay for my mortgage? I assume the elites care about their childrens' futures, so why isn't there more publicity and campaign for serious adjustments in all aspects of our society to lessen the impact of Peak Oil (assuming it can ultimately be lessened)? Do I even bother of adopting a pet, if there is suddenly no pet food available, two to five years from now....

But, yet, today is beautiful here in Boston, and I am just back from a walk and it appears to me that the vast majority of people don't even know or have heard about Peak Oil.

Again, sorry for the ADD rambliness. Just some thoughts I had to get out.

Posted by: John on April 15, 2008 at 1:28 PM | PERMALINK

Recommended listening on peak oil:

www.financialsense.com/Experts/roundtable/2008/0202.html

This is the latest FSN "expert roundtable" interview with Matt Simmons (and others) on energy.

Posted by: Elvis on April 15, 2008 at 1:54 PM | PERMALINK

John,

The first thing to do is to not listen to the commenters above- almost none of them are even rational. Also, don't fall for any "The World is Ending, Let's Grow the Government to Take Care of the Problem" solutions- they are a sure way to kill billions while solving nothing.

If the era of cheap and increasing supplies of oil is actually over, the decline will happen in fits and starts spread out over decades, and the price of oil will rise in the overall trend as a percentage of income. As this price rises, alternatives to oil will become economically viable. There are no free lunches, however- cheap oil has meant we didn't have to spend as much on oil products, and the end of cheap oil will mean that we will have to spend more on such products and their alternatives. Anyone that tells you differently, especially those statist fools that claim only the government can address this problem, are not to be trusted with anything.

Posted by: Yancey Ward on April 15, 2008 at 1:56 PM | PERMALINK

Yancey, your "free market MBA Preznit" sure has encouraged "the market" to address this problem, hasn't he?

That's the same market where two of the "Big Three" are now behind Toyota and will probably continue to lose ground, in part over fuel economy?

Alex, we MAY overcome this, and we may not.

In either case, I deplore what I will call "salvific technologism." First, technology isn't god. Second, salvific technologism is usually a subset of American exceptionalism, which is a large part of how we got in this situation in the first place.

Posted by: SocraticGadfly on April 15, 2008 at 2:31 PM | PERMALINK

What is missing is a willingness to tackle the real issues with hard work.

Clearly this is missing from the Bush administration on any issue.

What is wrong is the assumption that "resource wars" are inevitable.

Iraq was a preemptive resource war. In fact the latest explicit justification from the administration for remaining there is the laughable but nonetheless official justification that we have to PROTECT THE IRAQI OIL RESOURCES from "Al Qaeda."

Many wars are wars over resources of one kind or another, though they're often packaged differently in order to rally a populace. Future resource wars may not be inevitable but they are very, very likely.

Which is why the Pentagon has been planning for them.

What is tragic with all of you is the assumption that nothing will be done.

So far nothing, truly nothing has been done to address climate change, water shortages, the economic crisis, healthcare, or any other critical issue, save for Sonny Perdue praying on the steps of the Georgia capitol for rain.

If that's your idea of "doing something" then we're in good hands. Otherwise there is no reason to believe that "something will be done" when governments are in the pocket of oil companies who have always had a vested interesting in squelching new energy technologies and aided by religious nutjobs trying to forestall solutions and wreck the world so that some divine figure will return more quickly to remove them from it and punish the rest of us for having the temerity to want to live in it unmolested.

I think part of the reason for the pessimistic outlook here is that those of us who have been involved in environmental issues and indeed issues of social justice in general have been seeing diminishing returns on our efforts.

Posted by: trex on April 15, 2008 at 2:33 PM | PERMALINK

Alex,

Right. We've invented all the technologies we can, and refined them as much as we can. And their current allocation is ideal under all circumstances. Time to give up.

When we are talking about energy the only invention that would 'save us' is the discovery of a new, hugely plentiful, cheap source of energy. That is what fossil fuels provide and that is what we would have to replace. Adding up all the replacements we know of today won't be nearly enough.

I can't speak for Ron Byers, but I know a little about it. Remind me though, how many billion years before the entropy of the universe increases to where we can't do anything useful?

Ah such a universal perspective. Unfortunately we don't have access to the universe. Our 'system' is the Earth and while it is not closed, the only energy arriving here is solar energy. We can't get to the abundant resources in the rest of the universe.

Hard work is not necessarily inefficient (if you're going to use thermodynamic terminology you should use it correctly).

Quibbling. Any work is less than 100% efficient. You get less energy out than was put in. If you like you may call a process efficient if it performs the best it can but that is not what I meant.

Last time I checked the fusion reactor that provides most of the energy to run this humble planet still has a few billion years left, even at the current production rate. Therefore I suggest we explore strategies which directly or indirectly use this source, without relying on fossilized energy storage.

Well duh. The battery we've been currently using is a large battery with a teeny tiny trickle charge. Most of the battery capacity is energy stored in the form of chemical energy produced by millions of years of solar power.

Of course the trickle charge will continue. What people cannot grasp is how enormous and fortuitous it was for us to discover and use oil. When the stored energy of oil is gone then of course some of us will continue to be able to live off the trickle charge.

The problem is that without oil the carrying capacity of the Earth will fall dramatically. Billions of people will die because of this.

We are already seeing food riots in some of the food importing poor countries. How can you deny this?

When do we begin shipping them the amazing new inventions you imagine we'll produce by hard work? You know, the inventions that will feed the poor on a massive scale?

Posted by: Tripp on April 15, 2008 at 2:41 PM | PERMALINK

MUST READ:

The End of the World As You Know It ... and the Rise of the New Energy World Order
by Michael T. Klare
Tuesday, April 15, 2008
TomDispatch.com

Posted by: SecularAnimist on April 15, 2008 at 2:43 PM | PERMALINK

Yancey Ward,

I'm really sorry you build the straw man of "some people think we need the government will solve this." That is really falling back on a crutch and I didn't think you'd do that anymore.

I agree that the price of oil will rise. Absolutely. Oil will never disappear, it will simply become so expensive it will not be useful any more.

In economic terms there is NOTHING that will ever come close to being a source of energy as cheap as oil was. You know this. Alternatives only become economical as the price of oil rises.

As an American it is easy for you to wave your hand as food becomes a bigger part of our budget. After all, food prices now are incredibly low compared to US historical values.

But - for the Indonesian who is now paying 60% of his income for food he does not have nearly the cushion we have. Indonesians are already starting to starve because the price of wheat went up 70%, corn and soybeans doubled or more, and rice went up as well.

I think you mis-underestimate the number of people who are near the line and who will starve when food prices double, triple, or quadruple.

Obviously as more people starve then the demand for food will decrease and the price will plateau. My back-of-the-envelope guess is that the carrying capacity of the Earth will be about 2 billion. what is your guess?

Posted by: Tripp on April 15, 2008 at 2:52 PM | PERMALINK

John

First thing DON'T PANIC.

Second thing: make sensible preparations:

1. move as close as you can to work, and evolve methods of commuting and shopping that are low oil intensive (bicycling, walking, public transport, driving a very fuel efficient car, perhaps owning a wood stove). On fuel efficient cars, a Prius may not be worth it: in 3-4 years there will be even more economical diesels and plug-in hybrids out there-- keep an eye on Green Car Congress website. But be careful of buying the first diesel off the block (a VW Jetta, most likely) as reliability will be key.

Note in an emergency you can run a diesel car off cooking oil : it's illegal to do so (tax evasion) but it is possible with a couple of tweaks.

2. learn more about growing your own food, and cooking. If the economy tanks, as it did in Russi a in the early 90s (GDP per capita dropped 50%) and in Cuba at the same time (when the Russian oil subsidy got cut off) people survived literally months without being paid, in the Russian climate, by their babushka-taught skills as gardeners, by trading various luxuries (razor blades, batteries, cigarettes, toilet paper, lightbulbs-- other high value small items).

You could decide, as the 7th Day Adventists do, to store 1 year's supply of food. This is extreme, however a good outdoors store can advise you on what foods will actually last that long (or longer).

3. save money now. Most of us waste 5-10% of our income a year on complete frills.

Hyperinflation is not likely. In a depression, cash is king.

You can store that money in US government inflation indexed securities (TIPS) and also in i-Bonds (you can buy up to $10k a year). In a high inflation scenario, these instruments have their value increased by that inflation.

4. invest some of that money in the stocks of oil producing companies. I am thinking companies like Encana, Canadian Natural Resources, Chevron, that have large oil and gas reserves. These are just examples of such stocks-- you might want to diversify by a broadly based energy fund.

If you invest your money in a mixture of energy producing companies, i-Bonds and Total Stock Market index funds, you are well protected against most financial eventualities. I recommend the book 'A Bogglehead's Guide to Investing' (google it) as a great place to start.

5. if you want to get trained to shoot, and buy yourself a gun, by all means. Just focus on a weapon you can actually handle, and training that actually trains you to shoot people-shaped targets. It's no good having a gun if you can't use it. And pick a make and calibre that is common, as a broken gun or one with no ammo is not a gun.

On the Sci Fi blog 'Making Light' there was a posting, perhaps as much as 12 months back (perhaps related to VA tech, perhaps not) by a US Marine (ex) about owning a gun and what that means-- the point about being willing and able to use it. Search for it-- it was an internet classic.

Never wave a gun in someone's face unless you are willing and able to use it. Escalation is unpredictable.

6. I'm not a big fan of investing in gold. In the situations where gold is useful, I can think of so many other things (like razor blades, or a 12 gauge with shells for shooting birds and varmints) that would be more useful. Otherwise I just think it is a dead loss of an investment. Many disagree.

Just whatever you do, don't put all your eggs in one investment basket or one scenario.

7. But most of all don't panic. New England in particular has a long history of community responses to problems, dating back to the original wars with the Indians and the French. I suspect New England will survive, on fire wood, hard scrabble and New England pragmatism-- like it always has.

Try to build up local ties in your community.

Posted by: Valuethinker on April 15, 2008 at 3:36 PM | PERMALINK

SocraticGadfly: Alex, we MAY overcome this, and we may not.

Death and taxes are guaranteed - everything else is a crap shoot.

I deplore what I will call "salvific technologism."

I deplore what I will call "self indulgent doom saying." Some posters remind me of fundamentalists, in that both will be upset if their preferred vision of the apocalypse doesn't occur in their lifetimes.

First, technology isn't god.

Who said that it was?

Second, salvific technologism is usually a subset of American exceptionalism

Well, don't tell that to the Europeans, the Japanese, or any of those other foreigners busily working on technological improvements to augment their conservation efforts.

which is a large part of how we got in this situation in the first place

It is? And here I thought it was lack of prudence and foresight.

Posted by: alex on April 15, 2008 at 4:04 PM | PERMALINK

Tripp: When we are talking about energy the only invention that would 'save us' is the discovery of a new, hugely plentiful, cheap source of energy.

Ok, so let's forget any attempt at conservation, or the rapid utilization of solar, wind, and possibly nuclear and algae based biofuels, and the technological improvements that accompany the widespread deployment of any technology.

Far better to say "repent sibling, the end is nigh!"

Ah such a universal perspective ... Quibbling

Ironic criticism from someone who uses "entropy" as though chanting a philosophically popular term from thermodynamics proves that there are no practical solutions to the predicament.

Our 'system' is the Earth and while it is not closed, the only energy arriving here is solar energy.

Damn, only 1.74e17 W. We better shut off our computers now.

The battery we've been currently using is a large battery with a teeny tiny trickle charge.

Probably a good reason to start switching to new batteries.

Of course the trickle charge will continue.

Not as fast as it used to. Ever since cellulose digesting bacteria evolved, fossil fuel creation hasn't been the same.

The problem is that without oil the carrying capacity of the Earth will fall dramatically. Billions of people will die because of this.

If you're so certain of that, perhaps we should offer them a human alternative, like neutron bombs. Surely that's better than a slow and lingering death.

Posted by: alex on April 15, 2008 at 4:41 PM | PERMALINK

ValueThinker,

Note in an emergency you can run a diesel car off cooking oil : it's illegal to do so (tax evasion) but it is possible with a couple of tweaks.

Of course corn oil is over $12/gallon and vegetable oil is over $10/gallon but I'm sure things like that don't bother the biofuels people.

As more food is burned for fuel the price will simply rise higher. Unless you propose what some simpletons do - as demand increases more suppliers will come online prices will drop. This ignores the fact we've already overbuilt the biodiesel from soybeans facilities and they still can't compete with fossil diesel.

But maybe we can all use the waste from Chinese restaurants - yeah, that should do it.

Posted by: on April 15, 2008 at 4:55 PM | PERMALINK

Alex,

Ok, so let's forget any attempt at conservation, or the rapid utilization of solar, wind, and possibly nuclear and algae based biofuels, and the technological improvements that accompany the widespread deployment of any technology.

I acknowledged that there are alternatives and I said taken altogether they will not be enough to replace fossil fuel.

Conservation helps a little but not enough. Solar and wind help a little. For one thing they generate electricity which currently cannot be stored at high efficiency and in great quantities.

Nuclear - fission means Uranium which is finite. Fusion isn't ready yet. Breeder reactors make more fuel but they also make the material for nuclear bombs - aka terrorist WMDs. Algae biofuels - not ready in time and may not massively scale. You forgot cellulostic ethanol - no practical way to do it and none foreseeable.

You can insult me and put words in my mouth and make stupid comments like using neutron bombs but that doesn't change the fact that the age of cheap incredibly plentiful energy is rapidly nearing an end.

I didn't say "give up" and I won't say that but I'm also going to be realistic about what is happening.

But don't believe me. Open your eyes and study things and be skeptical about rosy marketing literature trying to sell something. Use the internet and see for yourself.

Posted by: on April 15, 2008 at 5:06 PM | PERMALINK

Tripp

If you believe the world is doomed why don't you make an invaluable contribution to your brothers and sisters by blowing your brains out.

Seriously I don't want you to harm yourself. I don't want anybody to suffer including zero sum game monsters who believe an oil based civilization is the highest and best possible. Imagination, when combined with sweat, is far more important to civilization than oil is for us or slaves won in conquest was for the Romans.

Of course you might be right. Our civilization might collapse and billions might die. Have you listened to Dick Cheney and the other neo-con oil imperialists. Their devotion to resource war and the imperial zero sum game demonstrates that imagination is in short supply in the highest reaches of our government, but we have known that for a long time.

Posted by: Ron Byers on April 15, 2008 at 5:25 PM | PERMALINK

:

in an emergency, waste cooking oil is an option. So are other hydrogenated oils.

I agree with you it is not conventionally scalable to the size, say, of the US vehicle fleet.

I'm certainly no friend of biofuels, from an environmental point of view. Maybe second generation biofuels, as and when they actually occur.

But one was talking about personal Peak Oil preparations.

Remember in WWII cars were powered by charcoal (not likely to be a solution generally available in a Peak Oil world, where people will be burning wood).

FWIW I don't necessarily believe in Peak Oil. I was trying to outline a set of sensible things one could do, at not overwhelming personal cost.

Posted by: Valuethinker on April 15, 2008 at 6:10 PM | PERMALINK

Pocket Rocket: This is a favorite tactic of the peak oil chicken littles - claim that one field would have to supply the entire demand, then point out how quickly that field would be depleted by such demand. It's not factually true, of course.

It *is* a fact that 3.65 billion additional Bbls of crude would only extend the resources of the US by an estimated 173 days whether we use it all in the first 173 days or dribble it out to, say, 2033. If we dribble it out to the bitter end, the end will come 173 days later than it would have otherwise. Why can't people do arithmetic?

Posted by: Dave Howard on April 15, 2008 at 8:58 PM | PERMALINK

"No, but biofuels use up insane amounts of water. Where are you going to put these bio-solar reactors to create algae-derived diesel? The desert."

Use up? When they're done with it the water isn't "gone". It's consumed but then released as vapor (H2O being a by product of the internal combustion motor). Sure fresh water is an expensive resource, but not necessarily a finite one.

Posted by: Sebastian-PGP on April 15, 2008 at 11:09 PM | PERMALINK

the petrobras oil find still is not official, it first was leaked by World Oil (USA publication), later sort of confirmed by the director of the brazilian oil agency, and it is having some impacts in the stock market, which means governmental investigation in the way, hence the fast backpedal :P

anyway, rumor is that it is in the order of 33 billion barrels of oil, close to another new field announced last year (of 5 to 8 bi barrels). both are in the atlantic sea. this new one supposedly will become official soon. we will see.

Posted by: Alves on April 15, 2008 at 11:35 PM | PERMALINK

@valuethinker

You have your values mixed up.

Your list should begin with: Make certain the work you do is relevant in a post hydrocarbon scenario. There will be little need for the services industry and a great need for laborers and tradesmen.

And if you're going to grow your own food, you want to make certain that where you move to, in order to be close to work, allows you to grow anything.

This thread is amusing. Either we're headed for Armageddon, or there's nothing to worry about. That's wide latitude periodicity in decision making for you!

Posted by: SteinL on April 16, 2008 at 4:03 AM | PERMALINK

Ron Beyers,

If you believe the world is doomed why don't you make an invaluable contribution to your brothers and sisters by blowing your brains out.

If my grandma had balls she'd be my gramps.

Really, though, you turn once again to building straw men by putting words in my mouth? Then you claim I am the irrational one? Get a grip on yourself. Grow up and start thinking clearly.

Armageddon is not upon us. Civilization is not ending. I never said either of those.

But - what will the world look like in the next fifty years?

People under stress become irrational and cling to their traditional values. Authoritarian thinking, currently used by 25% of our population, will rise. Civil unrest, wars, famine, blah blah blah.

Skipping past that I imagine a world population similar to that before we started using "rock oil", plus some additional population because of technological advances. I assume that the political powers the oil producing countries are getting now, during the decline, will also decline. I'm betting Russia and the middle east will squander their wealth and piss it all away.

I've already mentioned where most of the dying will occur - food importing countries that have no military or political power. Essentially the world's poor.

What do I say we should do? Invest in wind, solar, and any other technology that does not burn food and looks promising. We'll need those just for the US to survive, and those technologies will give us political power in the future.

So please stop claiming that I predict armageddon. It may feel good to you but this is not the time for feeling good, this is the time for thinking rationally.

Posted by: Tripp on April 16, 2008 at 10:11 AM | PERMALINK




 

 

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