“Why the “Peak Oil” Theory Falls Down — Myths, Legends, and the Future of Oil Resources”
Thanks Pandabonium for the article.
My intention was not to spark another debate but understand how this report relates to the analysis that increasing demand within oil exporting countries leads to less oil exported and eventual shortages within the US. The report is maybe inaccurate so it was not included in the analysis?
Oil demand has slowed because of a recession so for the time being peak oil is less of an immediate issue but the economic system built on debt requires we go back as soon as possible to increasing demand. This seems to be the bind we’re in.
Unfortunately for all of us we often have to make decisions on imperfect and missing data — and of course we don’t directly experience exponential curves or peak oil or increased levels CO2 or trillions of dollars of debt. This leaves us with a lot to speculate about and personal beliefs play a role. All I am trying to do is analyze the available data the best I can and go from there.
"The mind is alone the clear, the truth dwells in the deeps." — Goethe
If a doctor informs you that you have a 95% chance of having a heart
attack in three months, you might want to make a few changes to your
I would bet that the doctor would prescribe medicine that would destroy the patient’s liver within three months. Both don’t know what they don’t know. The lesson here is that to take action with the intention of effecting a certain outcome in a complex system has a high risk of producing worse consequences.
You know this as well as I do. There are natural processes going inside
our bodies too complex to model with computers. The best we can do is
give our bodies what they need to maintain health. Similarly, in a
market economy, each person is a data point that adapts to market
conditions autonomously. If we are truly running out of oil, they will
adjust accordingly. This adaption process has been going on since the
human race began.
Deflation will destroy demand for oil, but it won’t do anything to expand renewables and prepare us for peak.
So what? Deflation does nothing for oil exploration, nuclear technology as well as renewables for now. What deflation does do is weed out the misallocation of capital that has gone into consumption. When the market corrects itself, capital will go to where it yields the most profit which will be most likely be energy and natural resources. Your dream of proselytizing is a dud.
All I am trying to do is analyze the available data the best I can and go from there.
That’s all any of us can do and I just wanted to add information, especially since I am very skeptical of the work that CERA puts out.
There is a possibility that the economic slowdown will actually push the peak closer rather than further out. This is because of less drilling and exploration being done. Also, as producing countries use more of their own production and export less while existing wells go into decline (North Sea, Mexico, etc) there will be constrants on supply. In addition, at present prices, many alternatives are not economic and so projects are being set aside. This could be a double whammy in the not so distant future.
Whether we worry about it personally due to the uncertainty of the timing of peak, we as a civilization need to worry about it because to deal with it requires 20 years, and I don’t think even the optimists out there believe we have that long. Whether it comes next year or in 2025, it is urgent as far as mankind is concerned.
Just food for thought.
Peak Oil is an observable and historical fact. It is a fact that oil is geologically limited and will peak at some point globally, as it has done in many regions of the world already.
It is also a fact that above-ground factors have an effect. The curves and predictions made, say, on The Oil Drum, are extrapolations of known trends. But trends change unexpectedly (or in some cases, not so unexpectedly for those paying good attention). The reason we didn’t peak around 2000 was because the 1970s embargoes caused us to pull back significantly, as others have pointed out. In other words, that crisis bought us more time. (Not that we did anything useful with it.)
Similarly, this economic crisis, intertwined with the price of oil as well as so many other factors discussed on this website (such as exponential debt), has a beneficial side. It delays or even lessens the likelihood of a more severe crash later.
I don’t dispute that we may have passed the peak already. It’s what’s on the downside of the oil curve that concerns me. To hear a lot of "peakers" talk, we will suddenly run out and society will collapse in a smoking heap of ruins. I’m talking about the LATOC types. We all know (or should know) that peak oil is not going to cause oil to "run out", but many have talked themselves into believing the sudden collapse scenarios by theories such as the Export Land Model (useful to a degree, but also abused); by believing that there is no substitute for oil in many critical functions of modern society; and by believing that society is relatively unable to adapt and demand is relatively inelastic.
Getting back to the downside of the peak: it is now my observation that we will most likely have a longer decline than some in the die-off camp have seemed to predict. It won’t be a nice decline; it will be faster than most people like; it will cause a lot of destruction and disruption; but it won’t necessarily cause the end of society as we know it. The decline will likely be slow enough to allow for adjustments and substitutes to be put in place for the most critical things our civilization needs to survive. There’s no guarantee we will do what we need to do, but neither is there inevitably a sudden crash facing us.
So what to do? Get off our butts and get cracking at creating substitutes for oil. Create clean renewable energy sources. Revamp our infrastructure to run on electricity as much as possible. Conserve, conserve, conserve. And, do prepare for the scenario where things completely go crazy, because it’s still possible.
The market has a role to play in this. The price signal, as delayed as it has been in creating action, finally caused the needed demand destruction to begin. Now with it pulling back, it is in a way giving us a breather to collect our wits and invest the energy we have left to transition away from fossil fuels. The market is not magic. It cannot cause oil to appear where none exists. But it can indicate when oil is becoming too expensive to use so wastefully, and it can force more efficient use where governments have failed to do so or are unable or unwilling to do so. The fact is, we can live just fine on far less energy than we use, and the market is finally getting people to realize this. The market is a messy process, and I can’t say I believe it is leading us down the best path of energy transition. But I do see that it will lead us kicking and screaming, in fits and starts, down some path to a transition away from oil and to a more downsized lifestyle.
I just watched a special documentary on CNN last night talking about how the recent climb of oil prices up to $147 in less than a year was not based on traditional supply and demand economics, but rather was a speculative "bubble" not unlike the real estate, tech, and tulip bubbles. It was caused by investment firms such as Goldman Sacks buying futures contracts and artificially driving up the price of oil, all while demand was in fact actually decreasing while supply was in fact increasing (which should havce casued the opposite trend, and oil prices should have been dropping instead of rising). Now I’m not saying I necessarily believe the documentary was correct, as I’m always sceptical about mainstream media being skewed by private interests, but that was the spin of it, and that is why they say the speculative oil bubble burst, and is why oil prices are now very low.
So I wonder how the recent "bubble burst" in Oil Prices (dropping from $147 a barrel to now below $40 in a matter of months) may effect Chris Martenson’s Crash Course thoughts on oil. I mean, as he disclaims, he reserves the right to adjust his opinions based on new information, and his crash concepts was based on the big "hockey stick" graph shooting upward with oil prices exponentially climbing back in August. Now they are very low again; so maybe it just pushes the time line of peak oil out a bit further in the future? Any thoughts? (I don’t know what to think, my head is still spinning from all these concepts )
So I wonder how the recent "bubble burst" in Oil Prices (dropping from $147 a barrel to now below $40 in a matter of months) may effect Chris Martenson’s Crash Course thoughts on oil. I
If you’re wondering if the drop in oil prices means Peak Oil isn’t as serious as some say, I’m not sure price is a good indicator. That peak oil will hit sooner or later, if it already hasn’t, is indicated by declining production rates in existing oil fields and the lack of discovery of huge new fields since the 1960’s. Peak oil already occurred around 1970 in the US. Some people point out the drop in prices will actually hasten peak oil sooner since there will be less investment in new oil sources to replace the current declining onces, and the decline in supply will fall faster than the potential drop in demand due to economic conditions.
Global demand changes of 1-3% can affect massive price moves. Simply storage capacity is an issue. I saw nothing in LATOC that wasn’t thought out objectively. I did not walk away thinking there will be a crash, a sudden drying up of oil, and Mad Max. I dont know how the skeptics did.
Why did the US engage in a move to secure Iraqi oil if we have 20 more years of the same cheap oil availability? One only needs to see what is happening and not one wishes to see.