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"It's Really Bad" - Oil Supplies Intentionally Overstated

Monday, November 9, 2009, 9:39 PM

The Guardian published an explosive article today.  If true, it means that governments have been intentionally overstating the amount of oil that we have and could pump out of the ground. The implications are enormous.

This confirms the evidence that I saw at ASPO that had been painstakingly developed by independent researchers.  So we might want to incorporate this news into our personal and financial frameworks.

First, a snippet:

Key oil figures were distorted by US pressure, says whistleblower

The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.

The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.

The allegations raise serious questions about the accuracy of the organisation's latest World Energy Outlook on oil demand and supply to be published tomorrow – which is used by the British and many other governments to help guide their wider energy and climate change policies.

In particular they question the prediction in the last World Economic Outlook, believed to be repeated again this year, that oil production can be raised from its current level of 83m barrels a day to 105m barrels. External critics have frequently argued that this cannot be substantiated by firm evidence and say the world has already passed its peak in oil production.

Now the "peak oil" theory is gaining support at the heart of the global energy establishment. "The IEA in 2005 was predicting oil supplies could rise as high as 120m barrels a day by 2030 although it was forced to reduce this gradually to 116m and then 105m last year," said the IEA source, who was unwilling to be identified for fear of reprisals inside the industry. "The 120m figure always was nonsense but even today's number is much higher than can be justified and the IEA knows this.

"Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources," he added.

A second senior IEA source, who has now left but was also unwilling to give his name, said a key rule at the organisation was that it was "imperative not to anger the Americans" but the fact was that there was not as much oil in the world as had been admitted. "We have [already] entered the 'peak oil' zone. I think that the situation is really bad," he added.

If this is true, and if it needs to be confirmed, it means that all models of stocks and bonds that rely on long-term cash flow models are wrong.  It means that our primary assumption of petroleum fueled growth is wrong.

It means that we are several decades late in responding.  It means that we do not have time to slowly modify our fleet to carbon-fiber electric cars or any other fantasy technology.

It means that we've squandered (and continue to squander) our most valuable resource of them all - time.

I'll be honest, I would feel completely differently if there was even a glimmer that anybody in DC had the slightest inkling of the seriousness of the situation, but they display no public awareness.

To give one example of what I would be looking for, if we were on a crash program to convert cars to natural gas, mandating smaller and lighter vehicles going forward, and building the NG distribution pipelines and refueling stations necessary to make it all work, I'd have some reason to hope that we could manage the outcome somewhat favorably.

Instead, we have Cash4Clunkers as our most significant energy policy of the new millennium.  The gap between reality and policy dwarfs the Grand Canyon.

Given the complete lack of official leadership, and the presence of willful obfuscation of the public on the matter, I come to the conclusion that those who are working to secure the future of their own households and communities are the visionaries of our times.

The definition of a hero is someone who does something at risk to themselves because it needs to be done.  They see something that needs their efforts and they give it.  It is not easy to do something completely different from everybody else, and there's a distinct social risk involved when that requires telling people a difficult truth.

Yet most people in most communities get their news and information from sources that are steadily being revealed to be more than unreliable, but actually misdirective.  One of the most common things I hear from people is that most people in their community have no idea what is coming or what the main issues really are.

Most would have no idea what is implied by the possibility that governments have been systematically overstating oil reserves and future flows.

But you do.

I implore you to keep on attempting to educate your friends, neighbors, and community.  I honor you for taking on the heroic efforts that requires.

Because if what the Guardian reported is true, it means that the future will change profoundly, radically, and probably quite suddenly when the implications are more widely appreciated.

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87 Comments

Subprime JD's picture
Subprime JD
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Re: "It's Really Bad" - Oil Supplies Intentionally ...

The story will be largely suppressed in the US MSM. I am shocked that the guardian would actually release this story but koodos to them. This wont make headlines and even if it did most of the public is so dumbed down that they will say "oh, well we have plenty of il but those damn greenies wont let us drill". If only they knew.

I think awareness will become more widespread when we have the next oil crunch with prices 120+. Of course with economy in the tank it could be a while. Judging how slow the american public reacts to events such as PO it will take them a loooong time to get on board, buying us "doomers" more time to prepare.

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

This is certainly important, but IMHO, it hardly qualifies as "news". Ok, the comments from ex-IEA officials are newsworthy, but it's been common knowledge for years that governments have a strong financial incentive to overstate their petroleum reserves. The notion that they might actually have been responding to that incentive should surprise nobody.

IMHO, the key lies in the OPEC qouta system. The amount that each member nation is allowed to produce during a production quota is a function of their stated reserves. Saudi Arabia keeps selling zillions upon zillions of barrels, yet their reserves never seem to go down. It's not hard to connect the dots on this one...

I would contend that nobody knows now much oil is left in the ground. The incentives for the individual countries who know what their share really is to lie about it are too great.

I think that the heavy-sour/light-crude price spread is going to be the giveaway. The OPEC countries have had a strong incentive to sell off their light crude first during production cutbacks. When we see the spread blow out, it will be a sign that they are running out of the much more desirable light sweet variety of crude oil.

Erik

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

And what are our "politicians" working on this week? Health Care. This time the stone age may just end when there aren't anymore stones to rub together.

Subprime JD's picture
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Re: "It's Really Bad" - Oil Supplies Intentionally ...

But then there is Iraq:

If there is increased stability in Iraq then production from this country could provide a 20 year cushion to the left side of the peak curve. So even as production falls from existing fields, were the Iraqi fields to be developed the shortfall can be replaced. Iraqi production was driving higher in the late 70's and then plummeted as the oil embargo, war with Iran, the US, UN sanctions, and the current bloodbath essentially crushed investment and production. Thus, supply has been saved due to political factors.

Note the new deals coming out of Iraq.

http://www.bloomberg.com/apps/news?pid=20601072&sid=ar1BLZE3ylI8

http://online.wsj.com/article/SB125577347155891969.html

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

Eric,

What symbols or data can I track for the ratio of heavy to light  crude.  Futures contracts?

Thanks in advance.

mark

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

I don't know if its a function of my age, awareness, or both, but I have come to truly hate my country. More specifically, I hate my government and the corporations that govern it. Everywhere I turn I see blatant corruption....its infuriating!

Back to anger again....sorry....I fear I will never escape this cycle of consciousness....

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Re: "It's Really Bad" - Oil Supplies Intentionally ...
  1. Good program on CNBC now on Business Innovation.
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Re: "It's Really Bad" - Oil Supplies Intentionally ...

JAG wrote:

I don't know if its a function of my age, awareness, or both, but I have come to truly hate my country. More specifically, I hate my government and the corporations that govern it. Everywhere I turn I see blatant corruption....its infuriating!

Back to anger again....sorry....I fear I will never escape this cycle of consciousness....

I'm so disgusted with blue pill leadership and following that I spent the entire day googling dual citizenship and Argentina. North of 100 trillion in debt and what are these morons doing? Health Care and sending 40,000 troops to Afganistan. We are running out of oil and what are they doing? Cash for clunkers. Erik said it right about the reporters, I'd argue that these people should wear helmets to.

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

 "I implore you to keep on attempting to educate your friends, neighbors and community. I honor you for taking on the heroic efforts that requires."

Speaking as a jaded evangelist.....

I suggest selective proselytisation.. first those you care about, then who you think may understand..

after that.... we're into "pearls before swine"  territory..   lousy to negative ROI ..

cast them last... and lightly...

enlightenment triage... ?

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

Thanks, Jag, for saying what I have been thinking for a very long time.  It's the last taboo- saying you hate what your country, or at least those running it, has become.   The betrayal is all the worse for those of us who had hopes for Obama.

Today, out of economic necessity but also sheer frustration and livid anger, I defaulted on my mortgage and my credit cards.  If I have to spend the rest of my life hiding from the IRS, I'll do that too. I vacillate between just wanting to be dead and have it over with, and the sense of responsibility I feel for my children. 

I've long been an advocate of secessionism. Barring a vote by the masses on that, I think I'll just do it personally. I hereby secede from the United States of Sheep.  Bahhhhhh...

Ruppert was right. 

Pitchforks sharpened while you wait.

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

signalfire wrote:

...If I have to spend the rest of my life hiding from the IRS, I'll do that too...

I.R.S.Interest Retrieval Service... A wholly owned subsidiary of The Federal Reserve System.

Don't laugh it's true!

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

Sgnalfire, so sorry to hear about your situation!  Be strong; your loved ones need you. 

Chris said:

"Most would have no idea what is implied by the possibility that governments have been systematically overstating oil reserves and future flows.

But you do.

I implore you to keep on attempting to educate your friends, neighbors and community. I honor you for taking on the heroic efforts that requires.

Because if what the Guardian reported is true, it means that the future will change profoundly, and radically and probably quite suddenly when the implications are more widely appreciated."

Thanks for the motivational nudge, Chris; you've got a good heart.

Thanks also to you and your family for your efforts on all of our behalfs!

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

Davos wrote:

I spent the entire day googling dual citizenship and Argentina. 

 

What did you find out??

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

The best way may be to prepare for the fact that the majority of people around you will not be prepared and before it's too late we could keep everything from completely collapsing after everything starts to fall apart. There is no running water, power is intermitten at best, what is everyone going to do? Your best chance at surviving may be to teach a bunch of people how to store rain water, have a composting toilet, grow food etc.

If I lived in an area that had no local resources I would get out of there fast. I'm betting being a bit north would be better as it's harder to live through a winter and many will likely head south.

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

it's probably not news to anyone following Peak Oil issues about manipulation of oil reserve figures, but perception is everything.  Once the perception gets out in the mainstream lookout because I'm guessing there could be huge swings in the markets.

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

FJ.. no need for panic.. it took 80 years to climb the peak.. the transition is inevitable but not instant.....

Realisation can occur instantly.. but the actual descent will be gradual......

Everything will not fall apart instantly... it will degrade.. and evolve..

Hopefully the evolve part of the equation has a higher exponent than the degrade part...

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

bearmarkettrader, there's only one thing wrong with this hopeful chart of yours.......  IF depletion starts next year, and runs at ~5% pa, then by 2020 when Iraq reaches maximum extraction rate of ~7Mbbls/day, the world oil production will have reduced by 30 Mbbls/day..... so now add Iraq, and we have 50Mbbls/day of production, STILL down 22 Mbbls/day (all fugures in conventional oil)

Unfortunately, reverse exponential (depletion) is just as staggering as the growth hockey stick is, only in reverse!

Mike

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

Dont despair, friend.  In a debt-based monetary system like ours, once deflation sets in there is not enough new money created to pay off the existing debt plus the interest.  Some people, through no fault of their own, won't be able to get their hands on the money necessary to pay their debt and interest.  Almost all of us took on debt to make up for falling real wages to maintain our standard of living for the past decade or so. You are in good company, this is happening to everyone.  I suggest you find a way to reach out to others in your situation.  Your family will be OK, you may be able to stay in your home for a long time to come the way foreclosures are progressing (or not progressing).  Look into the court cases where the foreclosee demands to see the note, and the MRS cant find it.  There are probably nice rentals in your area where you will be able to live if/when you have to move.

Everything will be OK.  Different, but OK.

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

signalfire wrote:

Thanks, Jag, for saying what I have been thinking for a very long time.  It's the last taboo- saying you hate what your country, or at least those running it, has become.   The betrayal is all the worse for those of us who had hopes for Obama.

Today, out of economic necessity but also sheer frustration and livid anger, I defaulted on my mortgage and my credit cards.  If I have to spend the rest of my life hiding from the IRS, I'll do that too. I vacillate between just wanting to be dead and have it over with, and the sense of responsibility I feel for my children. 

I've long been an advocate of secessionism. Barring a vote by the masses on that, I think I'll just do it personally. I hereby secede from the United States of Sheep.  Bahhhhhh...

Ruppert was right. 

Pitchforks sharpened while you wait.

Perhaps its an area where we can learn from first nation people?  You can love the land where you live/are from with the understanding that a country, state, county are just lines drawn by people/politicians

Back on thread.  Wow!  I have already forwarded on the article to folks

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

Here's the link to the IEA press release.

http://www.iea.org/speech/2009/Tanaka/WEO2009_Press_Conference.pdf

The format has been altered significantly from last years and it doesn't appear to have been done to aid readability.

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

I just saw this story on Fox News... just kidding.

Could it not be a good thing that oil is going to run out?  How much does it contribute to global warming and the destruction of the planet?  I don't know what the figures are, but I know if there was an endless supply of oil, that could not be good.  We have to look for cleaner alternative sources of energy.  This will force our hand.

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

.

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

Peak Oil Closer Than IEA Forecasts Show: Report

http://www.cnbc.com/id/33818909

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

 

DAVOS  and SCBISSLER :

I can give you all the info about Argentina

Eduardo,   edupri@msn.com

Buenos Aires

ARGENTINA

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

alman777 wrote:

Could it not be a good thing that oil is going to run out?  How much does it contribute to global warming and the destruction of the planet?  I don't know what the figures are, but I know if there was an endless supply of oil, that could not be good.  We have to look for cleaner alternative sources of energy.  This will force our hand.

While I agree that there are many bad things that come with our consumption of oil, a steep and jarring drop in it's supply (we will never actually run out completely) would be devastating for mankind.  It is not just fuel we are talking about, it is much of your clothing, cookware, insulation, chemicals, lubrication, paint, tools, really it makes up a significant portion of what we call daily necessities.  IF we were talking only about fuel for personal vehicles, yes, I would almost agree with you that it would force us to ration the remaining reserves for only the vitals- but even that would trigger a world wide panic due to trickle down shortages.

I too, would love to see people "forced" to make this cutback now- as a rehearsal to the real thing.  But to be truly forced to play that hand would be ugly- it would be Mad Max here and now.

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

Signalfire

Somewhere in the annals of chris martenson.com, there was a report of people who had defaulted on their mortgages,but were able to keep their houses.  I think it was in the state of Massachussetts.  The bank either lost the appropriate documentation or it was not done properly in the first place, negating the banks claim on the property.  I would at least look into this... nothing venture nothing gained.

Brian

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

Quote:
I implore you to keep on attempting to educate your friends, neighbors, and community.  I honor you for taking on the heroic efforts that requires.

If you happen to be on a social networking site, this is a great blog posting to share with your friends and family who are not in tune to things. On the upper right portion of this window, click on share, and then choose your networking site. You can add a little note, such as "If you drive a car, or heat your home with oil, you may want to read this".

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

As noted, Peak Oil means substantially limited growth, but not the end of energy.  Decline rates are mitigated by continued supply increases, even if the increases don't keep up with decline.  Technology continues to improve our ability to find and produce oil...again, this can only be expected to mitigate the decline of availability.  However, once we fully realize there is a critical problem, I'm thinking things will be substantially stabilized by about 5-10 years later.  When we adjust our energy availability expectations and demands, the new situation will become "normal" but getting there will be pretty bumpy, especially in the beginning years as peoples' perceived world adjusts to the real world.

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

I'm a little surprised that this has hit the US MSM so rapidly, but I'm sure there will be a "counter story" coming out soon that helps reflate expectations and serves to confuse so that many people won't take this IEA story seriously. That's the way our media works here.

In my understanding of this, the most immediate and even severe problems that we face are not truly oil. The issue at hand would be a loss of confidence, a financial panic, civil unrest, and war. These are the sorts of things that can turn one's life upside down in weeks and months, whereas the oil decline will take decades to fully play out. Of course, the panics that could ensue from the realization that the oil situation is strained could feed back and cause oil supply shortages, it is true. But if trust is justifiably re-established and prudence reigns, we've got a great opportunity to restructure things in a positive way, just as Chris implied.

Thus, in my opinion, the most immediate necessity is not even dealing with oil and alternatives directly. First, I believe we need political acknowledgement of the issue and a level of honesty and communication that fosters understanding and cooperation rather than panic. Absent this, we could have all the oil we want and still possibly have a panic for one reason or another.

It is just a sad state of affairs that we need to rely on the gang of 535 to "guide" us in this challenging time. A major component of the solution is simply an open acknowledgement of the severity of the problem - but I believe trust would be misplaced in hoping that DC will rectify the situation.

History indicates that bread and circus are very nearly as fundamental to a human's "needs" as food and water and shelter - sad though it may be. I don't honestly expect signficant political improvement until most people in this country feel those very fundamental needs are severely threatened. By that point, they may not even be able to demand a redress as readily.

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

Puts the Iraq War in perspective, doesn't it?

BTW Chris et. al.--this article is why I read The Guardian.

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

The passed two years a huge pipeline company has been running multilevel pipes through here .  Supposed to move several different gasses . It  is linked from Louisiana to  North Dakota  and now they are heading to Florida.  Maybe they have a plan of some sort in the works  ? ??

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

Mike Pilat wrote:

war. 

In my honest and blunt estimation if we don't find alternative sources and batteries capable of storing them - war will be the outcome.

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

Chris thanks again for all you do. I have had a knawing question that I would like some input on from all. I believe in the Peak Oil and agree it is closer than we think and that once the realization is there oil will forever be well over the $100/bbl mark. I also don't believe in what the US govt is doing and thus think the dollar will have a continual decline. I have believed that for several years. I don't own US stocks anymore so I looked for something that could prosper with a falling dollar and post peak oil. I am heavily invested in Canadian and to a minor degree international oil companies with growing production on both ends.

Chris keeps talking about the collapse of the stock market. I have done the PM's but feel in a post oil peak realization and weakening dollar this is the best place for me for a while. I would then cash out and start investing in farmland. Chris would love to hear your thoughts but please anyone shoot holes in my theory. It might give others a chance to learn as well as myself.

Many Thanks.

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

I’m really puzzled by the reference to electric cars and carbon fiber as “fantasy technology”.  No doubt, these technologies are not currently optimized for true mass production, but they are real and they are available. Today.

Here in California at the local mall, there are half a dozen electric car recharging stations, installed, operational-and totally vacant. I personally know people who have advance ordered electric cars (Tesla) and others that have converted gasoline vehicles to fully electric. A review of the automotive trade journals will show that about a dozen fully electric (not hybrid) vehicles are coming on line in the next 12-24 months from the major manufacturers.

Regarding the use of carbon fiber in transportation, the airline industry is involved in a multi-billion dollar effort to replace metals in primary airframe with composite construction. The current 787 Boeing airliner is 65% composite, when it used to be aluminum. Fantasy technology? I think they would be surprised to hear this.  The sole reason for this conversion is for fuel savings-no other reason.

I am investigating adding solar panels to my roof to support not only my personal power needs, but to replace my need for gasoline at least for my daily driver ( 12 mile commute round trip)

I have “done the math” on net energy required to manufacture, install and use PV cells, and the energy cross over is around 3 years.

While I applaud (and agree with) the macro look at these key issues such as peak oil, I find missing the “grass roots” tactical outlook which might focus on what we can do today.

The rate and magnitude which this country can mobilize resources, particularly manufacturing resources in the face of a crisis is truly remarkable. Don’t discount the ability of American manufacturing to rapidly convert to a predominantly electric transportation infrastructure very quickly.

Moving back to oil consumption, I believe approximately 70% of the oil utilized in the US goes to transportation. Now clearly, converting large scale trucking, air travel and other high load/long distance applications to electric power is not practical, and to that end, electric cars are no panacea as many cannot afford to switch technologies nor are the current range values useful for many Americans.

But this does not ovveride the point that such a conversion will work to attenuate our immediate and future oil needs, and will slow the transition from peak oil  to a crisis that can be managed in a reasonable time scale.

To not account for and anticipate this possibility is a major mistake in my view.

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

darbikrash wrote:

I’m really puzzled by the reference to electric cars and carbon fiber as “fantasy technology”.  No doubt, these technologies are not currently optimized for true mass production, but they are real and they are available. Today.

Here in California at the local mall, there are half a dozen electric car recharging stations, installed, operational-and totally vacant. I personally know people who have advance ordered electric cars (Tesla) and others that have converted gasoline vehicles to fully electric. A review of the automotive trade journals will show that about a dozen fully electric (not hybrid) vehicles are coming on line in the next 12-24 months from the major manufacturers.

Regarding the use of carbon fiber in transportation, the airline industry is involved in a multi-billion dollar effort to replace metals in primary airframe with composite construction. The current 787 Boeing airliner is 65% composite, when it used to be aluminum. Fantasy technology? I think they would be surprised to hear this.  The sole reason for this conversion is for fuel savings-no other reason.

I am investigating adding solar panels to my roof to support not only my personal power needs, but to replace my need for gasoline at least for my daily driver ( 12 mile commute round trip)

I have “done the math” on net energy required to manufacture, install and use PV cells, and the energy cross over is around 3 years.

While I applaud (and agree with) the macro look at these key issues such as peak oil, I find missing the “grass roots” tactical outlook which might focus on what we can do today.

The rate and magnitude which this country can mobilize resources, particularly manufacturing resources in the face of a crisis is truly remarkable. Don’t discount the ability of American manufacturing to rapidly convert to a predominantly electric transportation infrastructure very quickly.

Moving back to oil consumption, I believe approximately 70% of the oil utilized in the US goes to transportation. Now clearly, converting large scale trucking, air travel and other high load/long distance applications to electric power is not practical, and to that end, electric cars are no panacea as many cannot afford to switch technologies nor are the current range values useful for many Americans.

But this does not ovveride the point that such a conversion will work to attenuate our immediate and future oil needs, and will slow the transition from peak oil  to a crisis that can be managed in a reasonable time scale.

To not account for and anticipate this possibility is a major mistake in my view.

I'm reading "Understanding Aircraft Composite Construction" on carbon fiber now. I'm reading on other battery technology. I'm optimistic. But, the sad reality is that the should be wearing helmet brigade is digging the debt hole concentrating on health care instead of solutions. The point that resonates from CM with me is that this is the time we should be spending our remaining oil wisely. If it goes before we transition we won't have any stones to rub together. 

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

i'm not sure if you can trust those reserve numbers. i was in the region during the iran/iraq war. while fighting a war, somehow iraq managed to increase their reserves in 1987 by 28 billion barrels from 1986 levels, with no new reserves found. most likely quota manipulation. with all the turmoil in iraq, the political instability, underinvestment, no doubt poor management of their oil production. i don't know how their reserve numbers keep increasing.  according to i believe it was bp statistics, iraq has come into about 77 billion barrels since 1995. which is amazing considering that the rest of the world is struggling to find 7 billion barrels a year. 

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

make it work and take care of your family, sir. 

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

Thanks everyone, for your encouragement RE my last post. I know about 'demand the note' and will do so when the time arrives. For now, a holding pattern. I'm considering whether to max out my credit cards on necessities before they wise up that I'm not gonna pay them anymore or...?  It seems immoral, but I see very little in the way of 'moral' behavior from them. (Got an offer today from BOA- 3% cash back on christmas shopping!!! AND another from Chase- Here's a 3.9% check!!! Spend it on something you always wanted!!! (If only they knew... ) Anyone have a number on the sheer magnitude of the happy-happy-joy-joy credit card offers that were sent over the years to We the Sheeple?   The volume of paper and ink alone overwhelms...

So, I'm hoping this post does not get lost in the shuffle of an 'end of comment' area but it's quite important:

About 9 months ago, I ran across a research paper by someone who very much apparently knew what they were talking about: that a major pipeline out of Iraq had been opened and was siphoning off oil from a large Iraq field and delivering it to Saudi Arabia. The gist of this was that SA production was declining and the Iraqi oil was being used to serepitiously make up the difference.  Anyone else see this?  I'd love to get my hands on that report again and I'm not sure how it would be possible to verify the information. If so, that's a truly devastating commentary on both the SA oil situation and the reason we went into Iraq (hint: it wasn't about terrorism, it was because 'the american way of life is not negotiable...') 

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

Quote:
The rate and magnitude which this country can mobilize resources, particularly manufacturing resources in the face of a crisis is truly remarkable. Don’t discount the ability of American manufacturing to rapidly convert to a predominantly electric transportation infrastructure very quickly.

Darbikrash - while I applaud your enthusiasm, I'd have to disagree with this statement above. Just some examples from my state of CT - they ordered new rail cars to replace the existing rail cars(which are 30+ years old, about 10-15 years past the life expectancy) about 3 years ago. They were supposed to have arrived during this summer. They have been delayed getting here until next Spring, and then they have to do testing, so without any unexpected problems, we're looking at up to a year delay.

To build new train stations, they are currently building 2 more on the main line, it's taking 3-4 years to get the 2 up and running. The amount of regulation, red tape, and trying to find money for these projects is incredible.

There's another line, that is used by Amtrak. Years ago, it was double-track. The bone heads ripped out one of the tracks because of the extra maintenance involved. Now the state wants to put the 2nd track back again so they can run commuter trains both ways. A laudable idea, but they are talking about the mid 2010's before that is ready.

What did it take, 10 years to get the Prius to market? We have a finite amount of lithium ion for batteries. Local, local, local. That's where we need to be thinking. And unfortunately, we're already 30 years behind in our thinking.

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

[quote=darbikrash]

I’m really puzzled by the reference to electric cars and carbon fiber as “fantasy technology”.  No doubt, these technologies are not currently optimized for true mass production, but they are real and they are available. Today.

(...)

To not account for and anticipate this possibility is a major mistake in my view.[/quote]

These are fantasy technologies because they do not exist at scale today.  There are over 100,000,000 cars in America today and there are 700 delivered Teslas as of Sept 2009.  It is too far for me to leap from the fact that Teslas exist to thinking that they represent a realistic replacement alternative for a hundred million vehicles.

I understand the allure of technology but I insist on running the numbers for time, scale and cost.

1) Time:  How long would it take to replace existing technology with new technology?  How much time do we have?  Are these numbers at all aligned?

2) Scale:  Do the rare earth metals even exist to support the magnet requirements of these modern technological miracles?  How many factories will we need?  What sorts of manufacturing skill sets?  If we lack any of the above, how long will it take to build/train what we need (see "time" above)?

4) Cost:  Given all the other things we need to spend money on, will we be able to afford a complete overhaul of our manufacturing base to create enough cars to allow us to continue our car centric way of life?  What about the energy cost of replacement?  Is the best use of our remaining energy surplus essentially building a new vehicle to replace existing units?

Given everything I've studied, it is a complete fantasy to propose that we'll make a smooth transition into carbon-fiber electric vehicles.  We're out of time, haven't even started on the scale issues and most likely cannot afford to make the transition to any meaningful extent.  Instead we'd do better coming to grips with the notion that the car-centric way of life is due for a big change and with it our operating assumptions about how life works.

If we'd started in earnest 20 years ago I would have a completely different outlook.  I've yet to notice that we officially started at all outside of entirely too few underfunded private enterprise efforts.

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

cmartenson wrote:

I've yet to notice that we officially started at all outside of entirely too few underfunded private enterprise efforts.

...while we work on health care

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

Here's an important response to the Guardian article by Kjell Aleklett.  he also claims personal first-hand contact with IEA officials telling him the same story.

Comments on Guardian article: “Key oil figures were distorted by US pressure, says whistleblower”

I am not surprised that some within the IEA have leaked this news. Rather, it is astonishing that this has not become known earlier. (See the article in the Guardian: Key oil figures were distorted by US pressure, says whistleblower.)

The article ”The Peak and Decline of World Oil and Gas Production” was published as long ago as 2003 in the scientific journal Minerals and Energy – Raw Materials Report by Kjell Aleklett and Colin C. Campbell (Volume 18, Number 1, 2003 , pp. 5-20[16].) It was the first “peer reviewed” article to discuss Peak Oil.

That article was read in 2007 by representatives of the “Global Transport Forum” of the OECD and they gave me the task of writing the report, ”Peak Oil and the Evolving Strategies of Oil Importing and Exporting Countries”. This report was one of those discussed at a round table meeting that was held in the IEA’s conference room in Paris. At that opportunity, in November 2007, I had a number of private conversations with officers of the IEA. The revelations now reported in the Guardian were revealed to me then under the promise that I not name the source. I had earlier heard the same thing from another officer from Norway who, at the time he spoke of the pressure being applied by the USA, was working for the IEA. Since these anecdotes were not scientific evidence I never made use of the information other than as inspiration to continue our own research.

Earlier, following a suggestion by Colin Campbell, I had communicated to Sweden’s delegate at the IEA that Sweden should leave the IEA since it was deceiving the world and this would have serious consequences globally. I also asked how they could approve of something like the World Energy Outlook that was so in error. I had previously posted an analysis of World Outlook 2004 on ASPO’s homepage. In the discussion that followed it was revealed that the USA was applying pressure. The pressure was that the IEA should consider the prognoses that USA’s Energy Information Agency releases half a year earlier as guidelines for the IEA report. In connection with this I can mention that, in 2003, we received financial support from [Sweden’s] Energy Authority to begin the research that has now resulted in our publication “Peak of the Oil Age” and that Sweden’s Energy Authority also financed the first Peak Oil conference (ASPO) that we held in Uppsala in 2002.

After meeting with the Swedish delegate I have, at various times, communicated my view that Guy Caruso (who was then responsible for the EIA and its prognoses) was one of the world’s most dangerous people. Today a great deal of the responsibility for this situation rests with him. I have also asserted that I did not think that the level of competence within the IEA could be so low that all of its officers believed in what they have been presenting. What these faulty analyses will cost the world in the future is difficult to estimate but all the crisis packages that are currently in place are presumably a smaller part of that cost. In our publication ”How reasonable are oil production scenarios from public agencies?” we have shown that the IEA’s future prognoses are erroneous.

I truly wonder what advantage the US EIA saw in promoting an overly rosy view of world oil supplies?  Was this simply really poor thinking?  Was it reflective of short-term political desires?  Is there a larger game afoot?

Whatever the reason, we were very poorly served by these efforts.

I think any reasonable scenario that covers the next 5 years has to include not only very high oil prices ($250+/bbl) but actual shortages as well.  I wonder how many companies have a plan in place for such an outcome?

 

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

Chris,

In response to your last comment.  How much of this is political short termism given the reaction that Carter faced in trying to awaken people.  Ultimately, from what I can see every politician fails in the end, do these things then become a propoganda tool in order to hold onto the reins of power for as long as possible??? 

I agree with what you are saying by the way, I'm just fascinated and frustrated by all this at the same time.  I just wonder when we will see meaningful debate and if we do, who will be blamed.

Greetings from Brussels

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

Re: Carbon Fiber

In preparation for a third career, I just completed a two-week course on bicycle repair (United Bicycle Institute).  When discussing carbon fiber, one of the instructors mentioned that there is more carbon fiber used in a single airplane than all the bikes manufactured (w/ carbon fiber) each year.  From a health perspective, it certainly makes sense to get people on carbon fiber bikes rather than finding a way to get them into carbon fiber cars.  

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

@Davos,

Is there a benefit to DC in Argentina as opposed to Costa Rica or Panama?  Spend some time on the subject myslef and wondered if you can comment.  One of my close non-family members was killed in Guatemala last year so I have ruled that out.

Thanks for the input!

Cheers!

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

BuzzTatom,

Financial Sense Newshour (Ned Schmidt) discussed farmland as an investment.

http://www.financialsense.com/fsn/main.html

Nate

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

Chris,

     Thanks so much for this post, I've been agitated all day since coming across this article.  Thanks as well for pointing out the importance of looking at the multiple factors required when assessing any of the proposed technological solutions; time, scale and cost/resources.

     As to another item you raised in a comment, I've also been wondering what the point of suppressing information would be.  I could certainly understand downplaying the situation while working like crazy to make and start to implement contingency plans build out electric transport/ infrastructure etc. Good to prevent panic while working on adaptation.  What reason would there be to keep it from the larger public otherwise?  Your question about whether there is a larger game afoot makes me shudder.

                                    Kevin

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

Anyone else see the parallels between the financial mess and the energy one.. ?

Replace IEA with the Ratings Agencies... - "lets hope we're retired before this house of cards comes down" ..

Just speculating.. but I wouldn't be that suprised to see a sudden energy panic, some time next year..

Peak oil going mainstream, saturation coverage..   followed up with unpopular measures rammed through a reluctant congress..

... what would be the oil equivalent of TARP etc ?  Rationing ? Higher fuel taxes ?

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Re: "It's Really Bad" - Oil Supplies Intentionally ...

Is biodiesel  still to expensive to produce  or not an option?

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From the sublime to the ridiculous.......

Whoa! Colorado residents get $42G refund on Tesla Roadster

Friday, October 23rd 2009, 3:44 PM

Tesla Roadster

Talk about a bargain.

The 2009 Tesla Roadster, a high-performance electric sports car that retails for more than $100,000, can be yours for nearly 40% off.  There's one catch. You have to be a Colorado resident.

Those in the Rocky Mountain state qualify for a whopping $42,083 discount when they buy a Tesla Roadster before Dec. 31.

How is this possible?  A new tax regulation gives Colorado residents a credit on their 2009 income tax for up to 85% of the difference between the cost of a vehicle that runs on alternative fuel and one that runs on regular liquid fuel, Fox News reported. 

Colorado residents can also use this credit for other alternative fuel cars like the 2009 Lexus LS 600h - on which they'll get a $20,000 rebate - the Honda Insight of Toyota Prius.

Time to move, folks?

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