"Why the "Peak Oil" Theory Falls Down -- Myths, Legends, and the Future of Oil Resources"

28 posts / 0 new
Last post
r's picture
r
Status: Gold Member (Offline)
Joined: Oct 2 2008
Posts: 262
"Why the "Peak Oil" Theory Falls Down -- Myths, Legends, and the Future of Oil Resources"

There is a link on the NPR article on Peak Oil to the CERA report: "Why the "Peak Oil" Theory Falls Down -- Myths, Legends, and the Future of Oil Resources." The report claims that oil production will not peak before 2030 and will eventually follow an undulating plateau for decades. Further, Hubbert was wrong:

"Despite his valuable contribution, M. King Hubbert's
methodology falls down because it does not consider likely resource
growth, application of new technology, basic commercial factors, or the
impact of geopolitics on production. His approach does not work in all
cases-including on the United States itself-and cannot reliably model a
global production outlook. Put more simply, the case for the imminent
peak is flawed. As it is, production in 2005 in the Lower 48 in the
United States was 66 percent higher than Hubbert projected."

Because the full report costs $499 I couldn't read it. Here are my questions:

Based on the analysis that it doesn't matter when peak oil will occur, could this report still provide an "outer bound" for the analysis that increased demand from within oil exporting countries produce a global shortage? Or is it possible that oil production can continue to satisfy demand, including within oil exporting countries, if this report is correct? Because there is no way of knowing whether production has peaked based on a drop in production from year to year? Was Hubbert's methodology wrong and does it matter?

Thanks,

Ray Hewitt's picture
Ray Hewitt
Status: Gold Member (Offline)
Joined: Apr 5 2008
Posts: 458
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...

The Peakers have in their mind that markets (people) are not sufficiently adaptive to environmental changs.
They assume population will continue to grow irregardless of the cost of energy resources.
They assume their numbers are the last count of all the available resources on earth.
They make straight line extrapolations.
They ignore the economic factors.
They ignore the political factors.

Once in a while, someone gets lucky. But on the whole, the record of predictions gets worse the farther into time they go.

pwoody82's picture
pwoody82
Status: Bronze Member (Offline)
Joined: Sep 26 2008
Posts: 51
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...

If the past foretells the future, then resource growth is going to continue to decline, and where there is growth the expense of extraction is going to continue to grow. Hence we cannot depend on enough growth to replace what is being lost. The oil companies have been experimenting with new technology to increase recovery since the US hit peak oil. I am doubtful that someone is going to come up with some kind of magic bullet to revive the old wells. There has been some increase in production of the old California wells, some of them producing hundreds or thousands of barrels a day but still a drop in the bucket. So I am not too hopeful that new technology in oil recovery is going to make much of a dent. I think that new discoveries of smaller fields may flatten out the decline to some extent but not enough to change the overall outcome. This means that some other source of energy must be found that has a production cost near that of crude oil and that is nowhere on the horizon at present.

 

Thinking that a decline in population growth is going to occur is also wishful thinking. The population decline is not going to happen until food shortages become so severe that starvation causes the decline. When that happens, we will probably have an accompanying series of wars that also contribute to the decline.

 

There is a lot of research on alternate oil sources going on, but here again progress is slow and what is on the horizon is a long way from meaningful production. There are some good possibilities like using alge to produce oil because it produces several crops a year unlike corn which produces only one.

 

As far as geopolitics are concerned, about the only contribution to the situation that can make is to decrease supply. I have never seen or heard of a political system that didn't make the situation whatever it was worse. Is the UN going to increase production by setting itself up to assign shares on a global basis, or OPEC or any other organization? Before a political entity can affect energy it first has to be produced since politics is not in the energy production business.

 

The world is currently in infinite expansion mode where energy is concerned and, until shortage gets everyone's attention, it is going to stay that way. The current recession/depression is going to cut demand in the short term, perhaps even for 5 to 10 years (I hope) but that is only going to flatten the curve of the decline, not stop it. As the price of fuel goes up, it will certainly have an effect in the business world, the effect will be to make everything more expensive and to increase shortage. This too will make the slope of the declining curve shallower, but it is still going to decline.

 

If peak oil does not occur until 2030 I would love it, but until China, India, Europe and the US cut consumption, or as long as consumption keeps increasing, the day is going to get here sooner than later. By 2030, I will be able to leave this all in someone elses' hands (I will be 98 or dead) but for now I am planning on peak oil having already passed. If I am wrong great, but I won't depend upon undiscovered technology, resources, science, and geopolitics to save my fanny.

 

As for Hubberts method, think about it. No oilfield can continue to produce forever since no field can contain infinite oil. The earth is finite, hence so is oil. If Hubbert had never existed and his method never espoused, the oil supply would still be finite. There will be oil produced for another hundred years or more, just not as much. Face it, there is no way to avoid it. As for a small jump in US production, that is to be expected. There are thousands of oil wells in the US that have been shut down because the expense of production exceeds the price in the market. When the price got up to where the owners could make a few bucks, they cranked them back up. With the price back down, they are shutting back down. For a while several years ago, foreign oil was selling at a premium over US production so US production shut down. US producers said that if outside oil was worth x dollars a barrel, so was internal oil. There is always some capacity which is off line for whatever reason. That is why production is never linear. A lot of US production was off line this year because of hurricanes, and I am not sure all of it is back even yet.

 

Just don't assume that because extrapolations of science, politics, population, economics and so on could be wrong that it will necessarily be a help. They could underestimate as easily as overestimate, and then where would you be? Peak oil could be past, science might not find an answer, politics may make it worse, economic factors might improve, and population growth could speed up even more. We simply have to work with the best guestimates that we have and start planning for the worst. If it turns out better than that, great.

 

pwoody

mred's picture
mred
Status: Bronze Member (Offline)
Joined: Apr 8 2008
Posts: 96
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...
redpoe wrote:

There is a link on the NPR article on Peak Oil to the CERA report: "Why the "Peak Oil" Theory Falls Down -- Myths, Legends, and the Future of Oil Resources." The report claims that oil production will not peak before 2030 and will eventually follow an undulating plateau for decades. Further, Hubbert was wrong:

OK, so they are saying that oil would not peak for decades after 2030. Effectively they say that all the data we have is wrong. But unless new data is presented, you know what that means.

Quote:

"Despite his valuable contribution, M. King Hubbert's
methodology falls down because it does not consider likely resource
growth,

likely resource growth? If that means that the amount of oil under ground actually increases with time, that is a preposterous claim. Effectively, peak production of oil happened about 150-500 million years ago (depending on how you count). What we are facing now is peak extraction. If what they mean is an increasing discovery rate of oil, then those discoveries peaked around 1965 if I remember correctly (that is in the CC). This is clearly considered in Hubbert's analysis. So the first accusation is wrong. I'll be glad to debate with anyone the issues of finiteness of oil resources, especially if the position espoused reflects J. Simon's absurd claim.

Quote:

application of new technology,

Whatever rate of discovery and extraction we have today reflects the application of new technologies. In terms of discoveries, none has reverted the declining trend. In terms of extraction, better technologies have only meant that the resource will be extracted faster and thus that the resource will run out sooner. Inded the technology factor is not within Hubbert's premises, but that doesn't matter as long as this new technology is unable to manufacture oil.

Quote:

basic commercial factors,

like what? the oil embargo of the 70's did affect consumption and may have postponed peak extraction for a couple of years, but that wasn't quite "commercial". The short run on prices that we had this year could have had a similar effect if it had continued. Developing countries have continued to increase their demand regardless. The effect of the oil embargo on the peak extraction date has been estimated as a couple of years, not decades. A huge economic contraction or depression like the one we face will no doubt postpone a liquid fuels crisis. So even if the monetary mess we are in is fixed then that is the light at the end of the tunnel: an incoming train.

Quote:

or the
impact of geopolitics on production.

if anything, geopolitics has caused countries like Saudi Arabia to force their production to meet the insatiable demand of the west for cheap gasoline.  The embargo helped, but people didn't like that solution.

Quote:

His approach does not work in all
cases-including on the United States itself-and cannot reliably model a
global production outlook.

It was precisely due to Hubbert's success in the prediction of the American peak extraction that his thesis received recognition, even though it was on solid methodological grounds already. The model has obvious uncertainties, so what was shocking was that the prediction for the US was so accurate. Global data on discovery rates and depletion rates of existing fields (recently measured at over 9% per year), are perfectly consistent with the view of declining resources. These are not predictions or extrapolations, these are measurements.

Quote:

Put more simply, the case for the imminent
peak is flawed. As it is, production in 2005 in the Lower 48 in the
United States was 66 percent higher than Hubbert projected."

I feel weird offering a defense of a paper published in the 50's when the data was much less than at present. The same methodology, perfected and with the newest data is what these guys ought to be attacking. But they want an easy target. In any case, I invite you to check for yourself the report by Hubbert that I mentioned above. Look at figure 21, where the US case is presented. Note the two scenarios, one with ultimate reserves of 150 billion barrels and the other of 200 billion barrels. The actual US production for 2005 was estimated at 2.8 billion barrels total. The figure suggests about 1.3 (eyeballed), for an error of a little over 50%. You can explain this in 3 ways: 1. the correct scenario had more than 200 billion barrels of ultimate reserves, 2. The extraction rates are higher in reality than in the figure. 3. A combination of 1 and 2. What the second reason would suggest, is that production can be forced, but then ultimate depletion would come in earlier. Just for kicks, one can calculate the error of this old paper not in 2005 but in 2008, for which there is data. For this year, the American production is estimated at 1.78 billion barrels. The high production scenario of Hubbert is at 1.2 (eyeballed again), for an error of a little over 30%. Not bad for a nonlinear extrapolation. So even the coarse estimate of over 50 years back is not too shabby and maybe even getting better if indeed the US is overproducing. 

But again, Hubbert was making an educated guess with the data he had at the time. The guy was not making a prophesy, so what should be appropriate would be a criticism of the methodology and not his old predictions. This is like criticising modern genetics by taking a stab at Mendel.

Quote:

Because the full report costs $499 I couldn't read it. Here are my questions:

Based on the analysis that it doesn't matter when peak oil will occur, could this report still provide an "outer bound" for the analysis that increased demand from within oil exporting countries produce a global shortage? Or is it possible that oil production can continue to satisfy demand, including within oil exporting countries, if this report is correct? Because there is no way of knowing whether production has peaked based on a drop in production from year to year? Was Hubbert's methodology wrong and does it matter?

Thanks,

It is all-important when peak oil happens. If it is 30 years from now, there is time for some kind of technological transformation. Otherwise, there is trouble. It is hypothetically possible for oil production to satisfy demand, it is just not what the data for discovery of fields and depletion rates will allow you to think, if you are rational. What increasing demand from oil producing countries will do is what we saw with Indonesia earlier this year: a withdrawal from the OPEC. They become net importers of oil. This is in the CC, so I shouldn't elaborate on this. Hubbert's methodology is based on the fact that oil resources are finite, and the observation that discovery and extraction patterns are bell-shape-like. You can read the report yourself and judge it for yourself.

switters's picture
switters
Status: Platinum Member (Offline)
Joined: Jul 19 2008
Posts: 744
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...

It's becoming abundantly clear to me that no amount of rational argument or statistical data supporting peak oil will convince  peak oil skeptics, because their skepticism isn't based on evidence.  It's based on philosophical dogma and beliefs.  

You can't fight faith with facts. 

That's why I've (for the most part) stopped trying.  

There is more than enough information about peak oil already on this site, and in many other places, for those who are truly open-minded about the issue and able to resopnd in a rational way to the evidence.

For the rest, it won't matter how many times we present this or that argument or scientific study.  They will be ignored if they don't fit with the skeptic's beliefs about the world and the way it works.

There's so little time, and so much to do.  What's the point of spending so much of our energy in a futile attempt to convince a few skeptics on this forum?  I think our resources would be so much better spent in other ways.

Just my 2 cents as a relative "veteran" of this forum.

xpatUSA's picture
xpatUSA
Status: Member (Offline)
Joined: Dec 8 2008
Posts: 12
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...

I'm a Peaker, as testified to by my Jeep CRD and the mostly E85 sloshing around in the tank of my 1994 V8 Chevy pickup.

The heavyweight opinions from governments, oil-sponsored bodies and so forth have about the same value as promises by Obama to make us "energy-independent by" 20-something.

Recently, CLR (not the kitchen stuff) shot up by $20/share on the basis of bringing in a well in the Bakken field. Upon investigation I found that the rate was 450 bpd! Yep, 450 barrels per day folks. I poked fun at this, remembering commissioning gas turbines for the Endicott, Alaska project in 1987 with an intial, limited rate of 115 thousand barrels per day.  I was told that 450 bpd is pretty good for oil shale and that 50 bpd is considered quite acceptable! This from a company capitalized at about $8bn at the time.

 That, by itself, proves nothing but is an indication that we humans are down to scratching around to find more black gold. Up until1960 or so, oil shale and tar sands were not even worth messing with. Like PM's we humans grab all the easy stuff first and then turn to creating giant open-cast mines - preferably in someone else's country Wink

 Ted

 

 

 

 

Pandabonium's picture
Pandabonium
Status: Bronze Member (Offline)
Joined: Aug 30 2008
Posts: 87
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...

A rebbutal to the CERA article appeared on The Oil Drum two years ago and was subsequently reposted.  It is lengthy, so I'll just post the introduction here:

Does the Peak Oil "Myth" Just Fall Down? -- Our Response to CERA

Posted by Dave Cohen on February 4, 2007 - 9:00am
Topic: Supply/Production
Tags: cera, daniel yergin, peter jackson [list all tags]

ED by PG: This article was originally posted
November 16th, 2006. Note that it has been resubmitted to reddit and
digg this morning, so do help spread the word and give Dave some more
readers if you are so inclined. Send the link to someone today.

With the release of Why the "Peak Oil" Theory Falls Down — Myths, Legends and the Future of Oil Resources
by Peter M. Jackson, Cambridge Energy Research Associates (CERA)
attempts to cast doubt on the credibility of those with imminent,
empirically-based concerns about our future oil supply.

CERA's "Decision Brief" requires a response because since 1870,
the health of the world's economies have hinged on a secure, dependable
and growing flow of "conventional" oil. Their forecast, shown in Figure 1, predicts that the oil supply will continue to grow and sustain economic growth.

 

Figure - 1

 

We shall have much more to say about CERA's forecast later. For now, it
is sufficient to note that CERA's analysis is lacking. The world's oil
supply will not continue to grow to meet ever-rising global demand, and
worse, the consequences could irrevocably damage global economies. Such
an outcome would have harmful effects on people's lives. So, this
debate is not "academic" — much depends on a correct analysis of the
future oil supply.

Article continues here: http://www.theoildrum.com/story/2006/11/15/83857/186

 

 

 

switters's picture
switters
Status: Platinum Member (Offline)
Joined: Jul 19 2008
Posts: 744
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...

There you guys go, fighting faith with facts. Smile

Let's see how the skeptics respond.

Ray Hewitt's picture
Ray Hewitt
Status: Gold Member (Offline)
Joined: Apr 5 2008
Posts: 458
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...

Get over it Chris. Facts need to be put in context, which is what my point was above. You're looking at the data mechanically, you can't be sure if there are facts you have missed and you're making linear extrapolations in a non-linear world.

The fact is, because of the crashing economy, energy consumption has dropped everwhere and producers have had to cut back. You can't put a timeline on Peak Oil. That's a fact.

If you want to worry about it, be my guest. What good it will do you, is beyond my imagination. That's all I wanted to say.

switters's picture
switters
Status: Platinum Member (Offline)
Joined: Jul 19 2008
Posts: 744
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...

Ray,

Worrying about it PO and working to raise awareness of its reality and its consequence are two different things.  I know that you trust "the market" to take care of these problems, but I do not.  We don't need to get into that again as we've already been through it ad nauseum.

But to answer your question about why it matters, I'll quote the article on The Oil Drum:

"So, this
debate is not "academic" — much depends on a correct analysis of the
future oil supply."

One could argue that the future of human civilization depends to some degree on a correct analysis of the oil supply and how we respond to that analysis.

The fact that demand destruction is contributing to lower production now doesn't take away from all of the data indicating we were headed for peak - or had reached it already - when oil was still at $140/barrell.  The facts have been put into context, analyzed by independent experts who don't have the vested interests of government or industry, and conclusions have been reached. 

There are always "facts that may have been missed".  We can only operate from the facts we know and the facts that are knowable.  We live in a world with contraints and finite limits.  One of those constraints is information.  Right now, an overwhelmingly large and solid body of evidence suggests peak is imminent.  Whether it's already happened or it happens in one, two or five years is immaterial in the long run.  We should have started adapting decades ago if we wanted to avoid energy shortages.

The CERA article was effectively rebutted and discredited after it was published.  If someone wants to throw that out as "evidence" that PO is 30 year away, they better be prepared to convince us that the data and arguments presented in the rebuttals aren't as convincing as they appare to be.

But, as usual, when the data is presented the skeptics mysteriously disappear or rely on ambiguous theoretical statements like "you're making linear extrapolations in a non-linear world" or "you can't be sure there aren't facts you have missed".  There is never any reliable evidence offered that contradicts the data supporting PO.  Just videos of preachers who believe it's a conspiracy, old reports that no credible analysts take seriously, and unsupported statements of faith.

Xanb's picture
Xanb
Status: Member (Offline)
Joined: Sep 8 2008
Posts: 18
Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...
redpoe wrote:

"Despite his valuable contribution, M. King Hubbert's
methodology falls down because it does not consider likely resource
growth, application of new technology, basic commercial factors, or the
impact of geopolitics on production. His approach does not work in all
cases-including on the United States itself-and cannot reliably model a
global production outlook. Put more simply, the case for the imminent
peak is flawed. As it is, production in 2005 in the Lower 48 in the
United States was 66 percent higher than Hubbert projected."

No, Hubbert could never have predicted way back in 1960 that the 1980 oil embargo would occur.  But his mathematical 'theory' (there's very little in calculus that is theoretical!) is 100% accurate.  If you are familiar with the concept of 'area under the curve' then you would see that if the amount of oil that was not produced during the shocks of the 70s/80s  had been produced, then Hubbert's prediction of a peak in 2000 would have in fact occured....

There's no such thing as resource growth.  We are using oil at FIVE TIMES the rate of discovery....!  Just let THAT sink in...

The reason the US is not depleting as fast as Hubbert had predicted is because you lot are raping and pillaging the rest of the world's oil fields!  Not a stupid idea really, I mean why would you deplete your own fields when you can deplete someone else's?

Technology will not help, at all.  Hi Tech oil extraction depletes fields faster.  The oil volume under the curve is determined by GEOLOGY...  I don't know how many times this has to be said.  You can get more out faster with horizontal drilling and multiple heads, but all you're doing is speeding up the depletion rate.  You can use technology to drill in ultra deep water, but the nett energy content gets ridiculously low....  clutching at straws I call it.

Technology, BTW, was used to map the Earth with radar (NASA).  One of the things they were looking for was oil, and yes they found the odd puddle.  NOTHING will alter the fact that peak discovery was 1964, because there is NOTHING left on the planet of the size that was discovered way back then.  It's simply easier to find the huge fields first, so easy they were all discovered very quickly.  Get used to it, I have.... 

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...
Ray Hewitt wrote:

Get over it Chris. Facts need to be put in context, which is what my point was above. You're looking at the data mechanically, you can't be sure if there are facts you have missed and you're making linear extrapolations in a non-linear world.

The fact is, because of the crashing economy, energy consumption has dropped everwhere and producers have had to cut back. You can't put a timeline on Peak Oil. That's a fact.

If you want to worry about it, be my guest. What good it will do you, is beyond my imagination. That's all I wanted to say.

So Ray, you look at data romantically?  With rose colored glasses?

The fact is, because of the crashing economy, the oil industry is doomed....  even before this crash started, Matt Simmons was bemoaning the fact that much of the gear the oil industry is old and rusting and needs replacing.  The cost was (from memory) in the trillions.....  This spending on infrastructure will now never happen, especially with oil at $43.  I read last month that the majors removed 600 oil rigs from service, three times as many as they had originally anticipated.

IF we ever get over this depression (and I think we won't) oil will need to get back up to $120+ to make any rebuilding viable. Just what do you think oil rebounding to these levels do?  Restart the next collapse maybe?

As far as the timeline's concerned, we're past PO now.  This is as good as it gets, and it's not very good is it.....

Yes Ray, the neo-Malthusians got it wrong.  It's all happening faster and worse than any of them ever predicted.  But I'm ready, are you?

Mike 

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...
xpatUSA wrote:

I'm a Peaker, as testified to by my Jeep CRD and the mostly E85 sloshing around in the tank of my 1994 V8 Chevy pickup.

With all due respect Ted, a "real peaker" would get rid of his car, especially a V8 pick up!  I no longer own a car.  My wife drives a 20 year old 40MPG 1.6L Ford.  She's a Nurse, and it's the only way she can get to work at the weird hours demanded of her.

Ethanol is a total con, using as much fossil energy as you get out of it.  Might make you feel good, but I wouldn't touch it with a 40 foot barge pole.  All you're doing is stealing someone else's food. 

switters's picture
switters
Status: Platinum Member (Offline)
Joined: Jul 19 2008
Posts: 744
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...
Damnthematrix wrote:
Ray Hewitt wrote:

Get over it Chris. Facts need to be put in context, which is what my point was above. You're looking at the data mechanically, you can't be sure if there are facts you have missed and you're making linear extrapolations in a non-linear world.

The fact is, because of the crashing economy, energy consumption has dropped everwhere and producers have had to cut back. You can't put a timeline on Peak Oil. That's a fact.

If you want to worry about it, be my guest. What good it will do you, is beyond my imagination. That's all I wanted to say.

The fact is, because of the crashing economy, the oil industry is doomed....  even before this crash started, Matt Simmons was bemoaning the fact that much of the gear the oil industry is old and rusting and needs replacing.  The cost was (from memory) in the trillions.....  This spending on infrastructure will now never happen, especially with oil at $43.  I read last month that the majors removed 600 oil rigs from service, three times as many as they had originally anticipated.

Exactly, Mike.  I just listened to an interview with Simmons the other day and he said the needed investment in rig infrastructure is $2 trillion +.

Where is that going to come from?  The TARP?

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...

Not even industry believes PO is a hoax anymore.... 

http://planetark.org:80/wen/50934

Peak Oil Warning
Date: 16-Dec-08
Country: US
Author: Michelle Carlile-Alkhouri

A recent report from the Industry Taskforce on Peak Oil and Energy Security
warns that supplies of cheap, easily accessible oil will start to diminish by
2013.

The industry lobby group, which includes Virgin, Yahoo, Solarcentury and
transport operator Stagecoach, wants the Government to dramatically increase
investment in clean energy and renewables to avoid an energy crisis.

Ray Hewitt's picture
Ray Hewitt
Status: Gold Member (Offline)
Joined: Apr 5 2008
Posts: 458
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...

Chris

One could argue that the future of human civilization depends to some
degree on a correct analysis of the oil supply and how we respond to
that analysis.

If I had a nickel for every movement whose mission was to save human civilization, I'd be a millionare. This Depression just set back your calculations twenty years minimum. People are conserving. Isn't that what you want?

We can only operate from the facts we know and the facts that are
knowable.  We live in a world with contraints and finite limits.

Right out of the gate, you missed the big drop in oil  prices and the production cutbacks. You're using "finite" to imply measurable limits when there are none.

There is never any reliable evidence offered that contradicts the data supporting PO. 

There is no reliable evidence on anything.

People don't react to data; they react to prices. Whether they believe or not is immaterial.

 

 

Ray Hewitt's picture
Ray Hewitt
Status: Gold Member (Offline)
Joined: Apr 5 2008
Posts: 458
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...

Matrix

So Ray, you look at data romantically?  With rose colored glasses? 

Are you trying to be annoying? I have better ways to spend my time. No data can predict human behavior.

Yes Ray, the neo-Malthusians got it wrong.  It's all happening faster
and worse than any of them ever predicted.  But I'm ready, are you? 

What? My once busy commute is like a drive on Sunday morning. Prices are dropping like a stone, and producers are cutting back. The neo-Malthusians will have to push back their calculations - again.

IF we ever get over this depression (and I think we won't) oil will
need to get back up to $120+ to make any rebuilding viable. Just what
do you think oil rebounding to these levels do?  Restart the next
collapse maybe? 

You'll be wrong..

switters's picture
switters
Status: Platinum Member (Offline)
Joined: Jul 19 2008
Posts: 744
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...

Ray,

The claim that "there is no reliable evidence on anything" is a completely missing the point.  It's ridiculous to suggest that we need 100% certainty on an issue before we should respond.  

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 lifestyle.  Or you could say, "sorry doc, there's no reliable evidence" that I'm going to have a heart attack so I'll just keep doing what I'm doing thanks very much.  I wonder how long you'd last with that attitude.  Probably not long.

Deflation will destroy demand for oil, but it won't do anything to expand renewables and prepare us for peak.  Oil at $40 or below is also stopping investment in tar sands, heavy oil and new crude exploration and development - all of which was expected to offset peak.  A decrease in demand isn't necessarily going to push back peak; in fact, it could accelerate it.

 

Ray Hewitt's picture
Ray Hewitt
Status: Gold Member (Offline)
Joined: Apr 5 2008
Posts: 458
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...

Chris

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
lifestyle. 

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.

 

xpatUSA's picture
xpatUSA
Status: Member (Offline)
Joined: Dec 8 2008
Posts: 12
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...
Damnthematrix wrote:
xpatUSA wrote:

I'm a Peaker, as testified to by my Jeep CRD and the mostly E85 sloshing around in the tank of my 1994 V8 Chevy pickup.

With all due respect Ted, a "real peaker" would get rid of his car, especially a V8 pick up!  I no longer own a car.  My wife drives a 20 year old 40MPG 1.6L Ford.  She's a Nurse, and it's the only way she can get to work at the weird hours demanded of her.

Ethanol is a total con, using as much fossil energy as you get out of it.  Might make you feel good, but I wouldn't touch it with a 40 foot barge pole.  All you're doing is stealing someone else's food. 

By "I'm a peaker", I guess I meant that I concur the material presented in that book "The View from Hubbert's Peak" .

Actually, the Jeep was bought with the intent to buy or make bio-diesel in the future.

The pick-up is pretty much a "farm truck" which occasionally makes a trip to town. Sounds like your Ford lives in UK? If so, it does about 33 mpg (US gal) not too different from the Jeep.

You're right that ethanol is not the answer, perhaps the later processes are better e.g. cellulosic.

My gut feeling is for algaeic diesel fuel but I don't understand why the producers are still penny stocks, or jokers like PetroSun.

cheers,

Ted

r's picture
r
Status: Gold Member (Offline)
Joined: Oct 2 2008
Posts: 262
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...

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.

Thanks, 

"The mind is alone the clear, the truth dwells in the deeps." -- Goethe

 

 

 

 

 

 

 

 

Pandabonium's picture
Pandabonium
Status: Bronze Member (Offline)
Joined: Aug 30 2008
Posts: 87
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...
redpoe wrote:

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.

Regards,

Pandabonium

scientastic's picture
scientastic
Status: Member (Offline)
Joined: Aug 29 2008
Posts: 1
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...

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.

 

Bridgeboy's picture
Bridgeboy
Status: Member (Offline)
Joined: Jan 2 2009
Posts: 3
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...

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 SurprisedUndecided)

 

 

Woodman's picture
Woodman
Status: Diamond Member (Offline)
Joined: Sep 26 2008
Posts: 1028
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...
Bridgeboy wrote:

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. 

 

plantguy90's picture
plantguy90
Status: Gold Member (Offline)
Joined: Jan 26 2009
Posts: 271
Re: "Why the "Peak Oil" Theory Falls Down -- Myths, ...

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.

solvetek's picture
solvetek
Status: Member (Offline)
Joined: Feb 19 2015
Posts: 1
my bad

my bad

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments