Global Oil Production Is In Decline

Yesterday, the US Energy Information Administration released their estimates of oil production, International Petroleum Monthly, which covers production through November, 2006. World production of oil, including lease condensate, was 73,410,000 barrels per day, down from the high 74,151,000 bpd which was set in May, 2005. A look at the production chart indicates more of an undulating plateau, but the overall direction over time is down.

Let's look at OPEC crude production. According to the figures from the Middle East Economy Survey, OPEC production peaked in October, 2004 at 30,280,000 bpd. Their figures for December, 2006 show only 28,790,000 bpd.

Saudi Arabia, long the world's swing producer with an alleged 2,000,000 bpd cushion of overcapacity, may be in serious decline if the rumored peak of its Ghawar oil field -- the world's largest -- is found to be fact.

The North Sea oil field peaked in 1999. the UK has recently turned from an oil exporter into an oil importer. Norway dropped from third to fifth place amongst world oil exporters

Mexico's Cantarell oil field, one of the world's largest, is crashing at an alarming rate of 15% per year.

•  Tipping Point Jar

  This was also published on my languishing, crappy blog Sanat's World News

  by GW Chimpzilla on Thu Feb 08, 2007 at 01:16:37 PM PDT

  •  I Could Give You Tips

    just for being so self-deprecating--it's charming.

    by Nulwee on Thu Feb 08, 2007 at 02:07:27 PM PDT

•  world oil production is declining, so we're

  wasting more and more of it on waging oil-wars...

  by Lepanto on Thu Feb 08, 2007 at 01:24:21 PM PDT

  •  At an astonishing rate

    I've often wondered how much fuel is burned every day just flying supplies into Iraq or the nearby supply bases from which it goes by road. Cases of Coke and so on.

    Its a mindboggling amount of waste and the end result is just more destruction.

    by fly on Thu Feb 08, 2007 at 01:28:39 PM PDT

    •  $Billions Per Month

      from us, and thousands and thousands of lives so big oil can get Iraqi oil for next to nothing and sell it to us for list price.

      by GW Chimpzilla on Thu Feb 08, 2007 at 01:30:15 PM PDT

      •  IMHO, the intent is to

        keep Iraqi oil off the world market, that oil producers favored by Bush can profit from higher costs from lower supply.

        Iraq now imports oil.

        by alizard on Thu Feb 08, 2007 at 05:39:38 PM PDT

    •  I wonder how large our military reserve must

      be to cover us for the next 100 years.  Should it be the equivalent of 10 Iraqs?

      by hestal on Thu Feb 08, 2007 at 02:37:12 PM PDT

      •  no worries

        The neocons have it all figured out.  They're going to take over Iran and use their oil, which frankly is in much better shape than Iraq's.  Then they'll go to Nigeria and get some there.  And how long can Chavez really last?  Venezuela is not that far behind.

        by sunshineonthebay on Thu Feb 08, 2007 at 02:44:11 PM PDT

•  Recommended and tipped.

  I had heard someone say earlier this week that it looked like Peak Oil had hit sometime in mid-2005, but I hadn't known what statistics they were basing that off of.  Looks like it was these'uns here.

  by jfm on Thu Feb 08, 2007 at 01:31:43 PM PDT

•  Hang on to your hat: here we go!

  My husband works in the oil drilling business (indirectly) and he says they're drilling like never before.  Even so, you can see production's not keeping up. The drop won't be like Hubble's curve because that's based on roughly constant oil prices and we'll see them climb and climb. That will slow the drop somewhat. But still, prices should continue going up and up.

  by curtadams on Thu Feb 08, 2007 at 01:31:52 PM PDT

  •  My son works in the oil bidness also

    and he says the same thing.  He describes it as almost frantic.

    by deha on Thu Feb 08, 2007 at 02:11:48 PM PDT

    •  I've read

      about a shortage of rigs -- especially for offshore drilling.

      by GW Chimpzilla on Thu Feb 08, 2007 at 02:14:04 PM PDT

      •  Major shortage of rigs.

        Go to Oildrum.com and check out the banter there.  The shit is REALLY, I mean, INCONTROVERTABLY hitting the fan and the MSM whistles past the graveyard.

        by Orwell1984 on Thu Feb 08, 2007 at 02:22:20 PM PDT

        •  Saudis have tripled their drilling

          and even bought one cargo of crude.  But it's not because of decline in their existing fields.  Oh, no, they're doing just fine. These are just, um, efficiency measures. Oh, and that decline is because there's so much oil on the market they need to cut back production.  Honest.

          (I'm too lazy to find the links and I've snarked it up a bit but they are really saying this!)

          by curtadams on Thu Feb 08, 2007 at 02:28:20 PM PDT

          •  Yeah, I've read the same

            I'm sitting here shaking my head and thinking..."Oh....Shit....We have finally arrived."

            I've been studying this stuff since 911 (for obvious reasons).  And back in 2002 and 03 there was still much uncertainty as to whether it would be 2005, 2010, 2020 etc.  The numbers all started coalescing in 2005...

            We are really in for some dark times and my thoughts are filled with anguish for the poors souls parked on top of oil reserves and for my sorry self who is not positioned well to survive the petro collapse.

            We're in for a world of hurt as a species.

            But of course, the Oscar's are coming up so, lets not rain on our parade.

            by Orwell1984 on Thu Feb 08, 2007 at 02:50:37 PM PDT

    •  Your "bidness" reminds me of the time I

      taught German in Texas more than 40 years ago.  The text books told beginning students that the correct way to pronounce the "eu" vowel combination in German words was "oy" as in "oil."  Didn't work, because we Texans at that time said "awl" not "oyl."

      by hestal on Thu Feb 08, 2007 at 02:40:41 PM PDT

•  Just a few questions

  I'm not an energy expert, but there's a few questions I have:

  1. Doesn't Saudi Arabia choose how much oil they produce? In other words, don't they turn back the spigots when the price gets a little low in order to make some cashola? If that's true, then are production figures reliable indicators of remaining supplies?

  2. I would think that the fact that the Iraqi fields have gone under or untapped over the past 15 years or so would mean that there's a big supply out there. If I remember correctly, Iraq is top five in overall reserves (not that we'll ever be able to use that anytime soon).

  This isn't to discount the idea of peak oil or to say that we shouldn't immediately begin preparing for it. Any answers would be appreciated!

  by zenbowl on Thu Feb 08, 2007 at 01:38:10 PM PDT

  •  answers

    1.  Yes, Saudi Arabia can increase productions a little, but not by much.  

    2.  Iraq has the second-largest proven oil reserves in the world.

    Side note, guess who has the third-largest?  Yessirrybob, it's Iran.

    by sunshineonthebay on Thu Feb 08, 2007 at 01:40:03 PM PDT

    •  Thanks!

      I was more hinting about them decreasing production, rather than increasing, since the decline seems to be of note, but their total ability to produce is something worth knowing.

      by zenbowl on Thu Feb 08, 2007 at 01:48:59 PM PDT

      •  I have seen a lot of references

        cite Canada as the new second largest oil reserve country because of the oil sands. This, of course, doesn't take into account the fact that producing oil from oil sand requires far more energy than Middle East crude.

        by Olds88 on Thu Feb 08, 2007 at 01:58:00 PM PDT

        •  yeah not the same

          For example, there is a lot of oil in the North Sea, but it costs exponentially more to extract than ME oil.

          by sunshineonthebay on Thu Feb 08, 2007 at 01:59:18 PM PDT

        •  That's probably what the "North American Union"

          is about ... at least in part.

          by tovan on Thu Feb 08, 2007 at 02:00:35 PM PDT

        •  It'd be nice to have a metric

          to judge reserves against the ease of extraction. I mean, just as you spend money to make money, you have to spend energy to get energy. That would give you a better measure of peak oil, I think.

          by zenbowl on Thu Feb 08, 2007 at 02:01:40 PM PDT

          •  I saw such a measure a few years ago

            It was probably accessible through eia.doe.gov (although who knows now).

            Anyways, it pointed out how ridiculously easy it was to make a gallon of gasoline from Saudi crude relative to other sources. Both extraction and refining was much cheaper.

            Oil sand production is a Frankenstein-like process in comparison.

            by Olds88 on Thu Feb 08, 2007 at 02:16:31 PM PDT

            •  Natural gas inputs

              Oil sands' largest problem is their dependence on natural gas.  I'm not sure of the technical specifics, but I think it is used as the heat source necessary to separate the oil from the rocks.

              The problem is that we no longer have abundant natural gas in North America, even while considering Alaska's 35 tcf.

              by Brudaimonia on Thu Feb 08, 2007 at 10:22:57 PM PDT

          •  EROEI

            Energy Returned On Energy Invested.

            It's not a great economic metric, but it gives you a decent measure of the energy cost of extracting similar resources.  

            An EROEI greater than 1 is realistically required.  You need to get more energy out than you put into extraction.  Less than 1 and you'd better have a really cheap source of energy to supplement the extraction enegy cost.

            The EROEI for Canadian tar sands is high compared to light crude from Saudi Arabia.  Which is why the companies involved are considering using CANDU nuclear reactors to produce steam for extraction.

            EROEI

            by OtherDoug on Thu Feb 08, 2007 at 03:08:10 PM PDT

        •  far more energy. . .

          apparently, they are going with new coal plants instead of the nuclear previously discussed, and where they'll get the water is an open question.

          The fun part is that one gets greenhouse gases from energy required for the extraction process as well as burning the resulting fuel in SUVs.

          Who's going to pay to fix the massive environmental damage extraction from tar sands requires is also an open question.

          by alizard on Thu Feb 08, 2007 at 05:42:52 PM PDT

      •  Concise Explanation Of Iran's Role

        it really makes the warpath and the massive propaganda effort (whose memes are infecting dkos this very day) against Iran come into focus.

        by Nulwee on Thu Feb 08, 2007 at 02:05:50 PM PDT

        •  what memes?

          Is a pro-war-with-Iran viewpoint being advanced here? I haven't seen it.

          by Olds88 on Thu Feb 08, 2007 at 02:19:07 PM PDT

    •  Not 2nd

      Iraq is fourth, from what I've heard. It might be even lower if you want to include difficult to extract resources in Venezuela and Canada

      by Ben P on Thu Feb 08, 2007 at 01:58:14 PM PDT

      •  you're right

        I looked it up and looks like Venezuela and Canada come in higher if you include "non-conventional reserves", whatever that means.
        Looks like if you count only conventional Iran is higher the Iraq.  I could have sworn it was the other way around.  Maybe Iran discovered more oil fields.

        by sunshineonthebay on Thu Feb 08, 2007 at 02:02:51 PM PDT

        •  I also think Russia might be higher

          by Ben P on Thu Feb 08, 2007 at 02:13:46 PM PDT

          •  for gas only

            Russia is 8th with respect to oil, but first for natural gas.  

            by sunshineonthebay on Thu Feb 08, 2007 at 02:15:49 PM PDT

            •  gas reserves by country

              http://www.infoplease.com/...

              by sunshineonthebay on Thu Feb 08, 2007 at 02:18:44 PM PDT

            •  Funny Thing About Russia

              Their actual oil production is higher than Saudia Arabia right now, they increased by 2.2% in 2006, but net exports decreased by .5% because of their growing domestic economy.

              by GW Chimpzilla on Thu Feb 08, 2007 at 02:19:43 PM PDT

              •  And that is only going to deepen

                Russia is, in a most ironic manner, going to supersede the US in supremacy at the end of 2100. That's my call at least.  US power is sunsetting, with Global warming and peak oil, Russia is uniquely positioned with its resource base to regain its mantle as a polar super-power...imagine Russia with ice free northern ports, more arable land, and access to domestic nat gas and oil that is unavailable to ANY other western power, save Canada.  We're in for some crazy times.  Makes for a interesting story in the history books...but living it is going to be a bitch.

                by Orwell1984 on Thu Feb 08, 2007 at 02:27:17 PM PDT

                •  2100?

                  the shape the US economy is in, I think you should advance that by at the very least 50 years

                  by Lepanto on Thu Feb 08, 2007 at 03:33:41 PM PDT

                  •  I agree

                    Just chose 2100 as a nice round number.  I agree that 2050 is closer...I'm guessing it will probably be around 2020.  It won't take long for the differential of energy access to play itself out on the power meter.  But, of course, there are many, many things that will have to happen for such a reallignment in world to occur.  

                    Its that reallignment part that is going to be horrendously ugly for those sitting on top of energy reserves.  Its going to be ugly for all of us, but raising a family in the Niger delta or in ancient Babylon is a horrible prospect right now.  I'll take my line working a field from the Grapes of Wrath before I'd take a deed to a Palace in Iran.

                    by Orwell1984 on Thu Feb 08, 2007 at 03:49:36 PM PDT

                    •  2020?

                      Man, just when my mortgage will be finally paid off!  lol!

                      by sunshineonthebay on Thu Feb 08, 2007 at 04:15:40 PM PDT

        •  Non Conventional mean

          Oil/Tar Sands primarily.  Canada's Oil Sands production is a hellish proposition however as they're going to divert Nat Gas to allow them to boil the oil out the sand.  If they built some nuke plants to do it, then you have the nat gas back in your stove, but with nat gas already peaked...we're in for some world of hurt here.

          by Orwell1984 on Thu Feb 08, 2007 at 02:20:52 PM PDT

          •  peaked?

            I didn't know natural gas was already peaked.  I thought Russia and Iran had more natural gas than they knew what to do with it.

            by sunshineonthebay on Thu Feb 08, 2007 at 02:24:33 PM PDT

            •  Iran and Russia do

              But North American Natural Gas production has PEAKED.  That's why there is this sudden rush to build nat gas terminals to import nat gas from overseas.  Schwarzeneggar proposed one off the coast of CA.  There was one proposed in the northeast, another in New Brunswick (CA) and further south in the Carolinas I think.

              Anyway, that's the story.  Check out Europe's hand wringing over the last two winters. North sea production is plummeting and Russia has a gun to their head...that's what all that rangling with Ukraine was about.

              by Orwell1984 on Thu Feb 08, 2007 at 02:53:55 PM PDT

              •  ah yes

                And Iran has been trying to build a pipeline, but you know, we can't let them have it because they're "terrarists."

                by sunshineonthebay on Thu Feb 08, 2007 at 02:59:00 PM PDT

              •  Aren't they drilling the living f*ck...

                ...out of the American West? I seem to remember a National Geographic article from several months ago that described natural gas operations sprouting like weeds. I'll never forget the anecdotes how the gas companies promised not to wreck peoples' wells but wound up wrecking them so badly they had to truck bottled water into several communities.

                by bluewolverine on Thu Feb 08, 2007 at 03:53:48 PM PDT

          •  I just don't understand why ...

            ... Canada doesn't use nuke power to extract the oil sands.  We have the nuke technology.  We have the uranium (big mine in Saskatchewan, yes?)  And there are virtually no people living where the plants would be built.

            by scientist on Thu Feb 08, 2007 at 02:34:55 PM PDT

            •  They have been proposed but they take time.

              I imagine in the long term this is the direction they will go (unless coal liquification can be done cheaper).  Its a sorry, sorry situation.  We had an opportunity, 30 years ago, to avoid this shit, but we didn't do it.  Shame on us as a species, but more specifically, shame on the greedy sons of bitches that controled the direction of our civilization.  Those fuckers have fucked us, there is no two ways about it.  They are willing to see millions, perhaps billions, killed off in a petro collapse that could have been handled with less suffering.  But they couldn't trust one another, and they didn't trust us.  They were too hungry for money and control and so they sold those 30 years away for the status quo.

              The icing on the cake is that when the nuclear dust settles, they'll still be living exactly like they were in '99, there'll just be less of us crowding their view of the horizon.

              Fucking Nobles...

              by Orwell1984 on Thu Feb 08, 2007 at 03:00:54 PM PDT

              •  I think we're going to have a...

                ...Children of Men (fantastic film, go see it if you haven't!) type scenario coupled with the oil collapse. All the chemicals in our air, water, and food seem to be reducing male sperm density. Shouldn't be long before that density falls below some critical level required for fertilization.

                Great screen name, BTW. 1984 is the single greatest book ever written.

                by bluewolverine on Thu Feb 08, 2007 at 03:58:05 PM PDT

                •  let's not get carried away

                  We're nowhere close distinction of humankind due to low sperm counts.  Plus there is always the petri dish.  You could use the sperm of a teenager to impregnant an adult woman.  

                  by sunshineonthebay on Thu Feb 08, 2007 at 04:14:24 PM PDT

                  •  Sorry...

                    ...I'm definitely not a very hopeful person these days. I'm trying to plan for the future, but I'm not sure what direction I should take that planning.

                    by bluewolverine on Thu Feb 08, 2007 at 04:32:47 PM PDT

                    •  focus on low-hanging fruit

                      First we have to stop this war and prevent another one.  Once we actually stop going out of way to kill people, we can think of way to improve life for those alive.

                      by sunshineonthebay on Thu Feb 08, 2007 at 04:34:22 PM PDT

                    •  Reproduction

                      will be the last of our concerns...keeping alive those that make it out of the womb will be the hard part.

                      by Orwell1984 on Thu Feb 08, 2007 at 04:34:48 PM PDT

            •  Surface mining

              produces bitumen mixed with sand. After the sand is removed, the bitumen is still too heavy to pump to refineries. The solution has been to mix it with lighter petroleum in order to make it into a slurry that will pump. Traditionally, Canada used natural gas (in fact, a sizable percentage of their output goes to this industry).

              I know there are newer methods that might not require other forms of petroleum to manufacture. I think surface mining is still the cheapest though.

              by Olds88 on Thu Feb 08, 2007 at 03:07:06 PM PDT

              •  weren't they steaming it out?

                Doesn't this method require vast amounts of fresh water? And what about the by-product? I know coal refraction plants produce huge amounts of seriously nasty byproduct, I would think Canada would want to have a national dialog on becoming a toxic waste dump in order to maintain American appetites. I realize they have an enormous investment in the industrial infrastructure in Alberta now, but to think of doubling or tripling that in a decade ...hmmm...can't see it.

                by sldulin on Thu Feb 08, 2007 at 03:39:18 PM PDT

                •  There are lots of different

                  extraction and refining techniques. Some use pumped steam, yes.

                  The surface mining method does use hot water and shaking to mechanically separate the bitumen from the sand if I remember correctly.

                  by Olds88 on Thu Feb 08, 2007 at 04:25:16 PM PDT

  •  On point one

    Well they do and they don't.  really the oil feild itself tells you how much you extract - there isnt really a spigot to turn back.

    In 1991 SA cached a great deal of Oil, decreasing production, then flooded it back in the market during the Gulf war to offset the Kuait and Iraq decline in production to balance the market.

    Thing is - we really have no idea what SA is doing.  They may be in decline - or they may be reserving in advance of possible war with Iran or SA itself entering Iraq.

    by BWasikIUgrad on Thu Feb 08, 2007 at 01:57:36 PM PDT

    •  Yes, no one knows

      what the situation is in Saudi Arabia. Their stated reserves were unchanged for years, which could only be true if new additions exactly equalled production. They certainly have no incentive to give the world accurate numbers.

      by Olds88 on Thu Feb 08, 2007 at 02:04:52 PM PDT

      •  Twilight in the Desert

        The most solid publicly available analysis of Saudi Arabia's oilfields is the book Twilight in the Desert.  The author basically concludes that Saudi Arabia is almost certainly at or near its production peak now, and may decline precipitously once it passes peak, due to how hard they've worked their fields over the years.

        One interesting point he made is that if we found another oil field the size and quality of Gawhar today, it would only delay peak oil by two years.  That's how high our consumption rate is, and how little Saudi Arabia's theoretical reserves matter in the end.  And the fact is, it's 99.99% unlikely there IS another Gawhar-sized field out there, anywhere.  The wonders of high technology are only a little better at finding oil than the old-fashioned eyeball techniques of a half-century ago.  

        by Leggy Starlitz on Thu Feb 08, 2007 at 02:22:36 PM PDT

        •  I'm very close to wishing a decline

          on the Sauds and the Bushes - if only we would change energy sources.

          by madgranny on Thu Feb 08, 2007 at 02:29:20 PM PDT

          •  it'll happen

            Peak oil is inevitable.  It's one of the two biggest problems humanity faces in the 21st century (the other is climate change, wrought by burning all that oil we're running out of).  Peak oil actually scares me a LOT more, because the potential for social breakdown is so much higher.

            by Leggy Starlitz on Thu Feb 08, 2007 at 02:38:48 PM PDT

            •  scares me too

              I'm all for alternative energy, but alternative energy will be a lot more expensive to produce than oil, which is of course why it hasn't taken off yet.  The impact of this change on the cost of everything from transportation to food to medical supplies will be great.  I think we're heading for a major restructuring in global economics.

              by sunshineonthebay on Thu Feb 08, 2007 at 02:41:52 PM PDT

  •  And where does Nigerian oil

    get charted here? Is it affected by the fighting going on at the Niger Delta? The Nigerian oil is the 4th or 5th largest provider and is loved by BigOil because it's thin and esily refined. An article in the Feb Vanity Fair suggests Nigeria may be the next target of our government. We're already interfering with the fighting there.

    by madgranny on Thu Feb 08, 2007 at 02:27:11 PM PDT

    •  10th

      Nigeria is 10th.

      by sunshineonthebay on Thu Feb 08, 2007 at 02:31:06 PM PDT

    •  Two days ago

      The Pentagon established US Africa Command. That should tell you quite a bit.

      by Olds88 on Thu Feb 08, 2007 at 02:44:38 PM PDT

      •  indeed

        Most of the countries on the top ten list are also accused of breeding terrorism.  Coincidence?  I think profiteering opportunity is more like it.

        by sunshineonthebay on Thu Feb 08, 2007 at 02:52:57 PM PDT

    •  Nigeria is about to blow wide open as well

      We are in the resource wars that have been predicted for decades.  I know to many of us on this thread this comes as no surprise, but it is still shocking to me the level of ignorance about this issue the general public demonstrates.  

      Why oh why can't the masses see how obvious Bush and Cheney's takeover of our government has been driven by this single issue?  

      Two oil barons steal the election in 2000 at the onset of peak oil.  They rewrite domestic rights to deal with the inevitable plunge of our society into economic chaos, and militarize the society and government to create a perennial war footing for the "long war" as Cheney calls it.  The WOT is simply a cover story that sells well to the US public that can't handle the guilt of realizing that 655,000 Iraqis must die in order for us to have popsicles in the summer, pineapple in Ohio, and 12 MPG Dodge Ram Pickup trucks to drive 50 miles to the office job.

      When we hit Iran...You'll know when the markets will start to correct based upon the reality of peak oil.  They will wait to hit Iran until production drops can no longer be explained away and the markets start to panic.  By then, nailing Iran won't make much of a difference for the market will already be in a tailspin.  Give it 3-6 months...If I'm wrong, and I hope that I'm wrong, we might have a couple more years...but no further past 2010.

      Oh, and be ready for nukes to be used in Iran.  Bush and his crew are ready to prove to the world that in this period of peak oil and oil collapse, the US will be using everything it has and will stop at nothing.  The level of evil and pathology this act demonstrates will make it easier for the US to bluster elsewhere like Latin America without actually dropping one.

      Sounds dark...but it seems inevitable given the direction of the past 6 years and the fact that there is almost a comlete blackout of MSM coverage of peak oil.  The story has been burried because it is so damning of the Bush years, and so dangerous to the world markets, that it cannot be allowed to be sincerely and comprehensively discussed or even planned for.

      by Orwell1984 on Thu Feb 08, 2007 at 02:45:20 PM PDT

      •  sadly true

        I always knew this empire would fall as the ones before it have, just didn't think it would happen in my lifetime.

        by sunshineonthebay on Thu Feb 08, 2007 at 02:54:55 PM PDT

        •  Me neither

          And I certainly don't wish it to happen.  Not trying to be selfish, but I admit that my life has been a MASSIVE bit easier having been born in the US, during an era of unprecedented cheap energy.

          Now the question is the fall out.

          I have faith that we will find a solution(s), but those are years away.  Between now and then, there is a horrible bridge the is going to have to be crossed and it won't have enough room for everyone.  6+ Billion people suffering through 10 years of resource wars, famine and ?  Will make for a very dangerous and deadly world.  

          How will China handle its domestic population with reduced energy and contracting manufacturing?

          How will the middle east sort out?

          What happens to the EU?

          What happens to the US? Canada?  Mexico?

          OR...

          Do we just start mining the shit out of coal and exacerbate global warming? (coal produces something like 3x the CO2 that oil does)

          Perhaps they will hold off on the thermonuclear microwave winter in preference for a slow baked, coal fired convection oven?

          Well...that puts me in a shiny mood...

          by Orwell1984 on Thu Feb 08, 2007 at 03:11:53 PM PDT

          •  my prediction is bit different

            I actually predict an elite international class, with everyone else living in poverty, not just in the US, but everywhere.

            by sunshineonthebay on Thu Feb 08, 2007 at 03:20:19 PM PDT

            •  That's my view as well...

              It is clear from the trends of the last 30 years...hell, its true of the last 3,000 years.  The ruling class will remain the ruling class, the only major change will be the disolution of the middle class.  Both in the US and abroad.

              So yeah...

              ....

              ....

              hmmm..

              ....

              want a Snickers bar?  Or perhaps we should talk about the oscars.

              by Orwell1984 on Thu Feb 08, 2007 at 03:30:03 PM PDT

              •  don't follow the oscars

                But I think I will hit happy hour to get these bad thoughts out of my head :)

                by sunshineonthebay on Thu Feb 08, 2007 at 03:32:53 PM PDT

                •  I don't follow the Oscars either

                  Just a feeble attempt at a snark.

                  Have a good time at happy hour, because thinking about hypothetical bad ones is no way to spend a sweet Thursday afternoon.

                  Thursday's are my favorite really:  The weekend hasn't started yet, so it hasn't started to be over.  But we pretend its the weekend and stumble through Friday with a smile on our faces...Thursdays are great!

                  : )

                  Take care sunshineonthebay...at least we got some rain this week.  (I'm assuming you're from the greater SF Bay Area).

                  by Orwell1984 on Thu Feb 08, 2007 at 03:42:45 PM PDT

                  •  yes

                    Thank you.  I'm glad we got some rain too, although I never thought I would say that in February in SF.

                    by sunshineonthebay on Thu Feb 08, 2007 at 03:45:29 PM PDT

          •  We need a total 180 in leadership...

            ...to even get started on a large-scale effort that will soften the blow of Peak Oil. Someone like, I dunno, maybe Al Gore?

            If we double down and get moving on massive wind, solar, innovative hydro projects, start revitalizing long distance sail and rail transport there is a chance we can avoid the complete collapse of civilization.

            by bluewolverine on Thu Feb 08, 2007 at 04:05:28 PM PDT

            •  Yes

              That is possible.  

              Our society is capable of it, heaven's knows we have the tech and the resources to do it.  It would take time and discipline (i.e. reducinc corruption), and some luck, but we could make it.

              I just don't see that the ruling class preparing for such a scenario...they're busy making war profits.  If the rest of the market class is able to kick the oil kids out of the driver's seat, then we may have a chance.  I'm sure that the rest of the market doesn't want to see its consumer class go the way of Mad max...can't sell pampers to women who have babies die from malnutrition after all.

              So, there are many people who we could group in the "ruling class" in some situations, but they are idealistically distinct from the "dead enders" and "doomsdayer cultists of the christofascists".  That's our one hope really.  Our society won't be able to make this transition without leadership.  There is too great a potential for disorganized chaos and corruption to siphon off the energy needed to shift over our civilization.  And pulling a trigger on Venezuela or our own population, is too easy for the fascists to contemplate.  

              We need to reign those guys in right quick or its going to get very ugly around here.

              Yes, a person like Gore can help, but we need to reign in the bastards currently in power first.  Nothing will happen as long as that block of bastards are in charge.  They don't believe in democracy, middle class, or egalitarianism.  They are old school Marie Antionettes, they don't give a shit for anyone making less than 50 million a year.

              by Orwell1984 on Thu Feb 08, 2007 at 04:28:24 PM PDT

              •  more than ruling class

                The problem is not limited to the rich ruling class.  I find the average American apathetic.  Sure, everyone likes to sit around and complain about cost of living increases, stagnant wages, the environment, war, etc, but at the end of the day most people would rather sink into their couches and watch American Idol than to participate in the democractic process.

                by sunshineonthebay on Thu Feb 08, 2007 at 04:33:06 PM PDT

                •  Yes, but

                  Not all Americans...and many behave as they do from ignorance, confusion, or incapacity (too busy changing diapers and working 12 hour shifts at Walmart), but yes, there is a mountain of apathy mixed with elitism, racism, and selfish-"fuck them *#$# in the middle east" yahoos.  They'd rather bomb 1,000 babies then turn off their plasma screen during the big game.

                  but not everyone...alas...not everyone...

                  by Orwell1984 on Thu Feb 08, 2007 at 04:43:41 PM PDT

                  •  agreed n/t

                    by sunshineonthebay on Thu Feb 08, 2007 at 04:46:56 PM PDT

              •  The only thing that 50 million or more will buy..

                ...is the right to starve to death last, just like the chieftains on Easter Island or the clergy in Norse Greenland.

                by bluewolverine on Thu Feb 08, 2007 at 04:34:48 PM PDT

                •  the retrogression scenario

                  It takes a pretty large bunch of customers to provide the consumer base required to provide the economies of scale required for high-tech products and services that anybody can afford.

                  In this case, "anybody" includes the wealthy.

                  Low-cost high-tech groups depends on an incredibly intricate vendor network... operated by the middle class. No middle class, no vendor network. If the public educational institutions are taken out because "they're too expensive", where do the technicians and professionals needed to provide every important good and service come from?

                  If the only university-level education that exists is for the wealthy, who's going to be going into the "not fun" professions needed to keep the network running?

                  Greedy, stupid, and wealthy means that in a century, their descendants wiil be sqautting among the ruins of a technological civilization, talking about the legends where men like gods flew through the air and people never went hungry.

                  The few who didn't get eaten by people who didn't descend from trust-fund babies, I mean.

                  by alizard on Thu Feb 08, 2007 at 06:28:02 PM PDT

      •  that sounds too dark and not dark enough

        I expect that as the reality of peak oil starts to sink in, even the Republicans will move from a pathology of militarism and world hegemony to a pathology of clinical depression. It will be profoundly disturbing and demoralizing to affluent Americans to go to the supermarket and see empty  shelves and blocked off aisles. Deserted parking lots and wide open freeway lanes at rush hour. Depressed people become lethargic and indecisive. I expect that to be the dominant zeitgeist...anyway, my take on things.

        by sldulin on Thu Feb 08, 2007 at 03:19:32 PM PDT

        •  I could see it going that way...

          but what happens when the shelves are empty for months and the poor get hungry?  Or perhaps I should say, hungrier?  Once they start marching up the hill to the rich neighborhoods, the society will stratify out the way it always was Pre-oil.  Those that are indisposable to the ruling class will survive and be included on Bush's Ark (a la the bailiffs and aparatchiks, the yacht builders and nannies), but everyone else will be cannon fodder or slave labor.  

          Or maybe not...

          Lets hope not...

          by Orwell1984 on Thu Feb 08, 2007 at 03:34:15 PM PDT

        •  remember. . .

          At any one time, America is 3 days from hunger. That's based on supermarket inventories.

          by alizard on Thu Feb 08, 2007 at 06:29:19 PM PDT

•  Well, look out

  Pennsylvania, birthplace of our oil addiction. Our Allegheny plateau will wind up looking like this, just so we can drive our SUVs a bit longer.

  by Halcyon on Thu Feb 08, 2007 at 01:51:23 PM PDT

  •  Oh, that area is beautiful

    I hope things don't turn out like that picture.  I used to live in Western Penn; it's lovely.  

    by Deadicated Marxist on Thu Feb 08, 2007 at 02:23:50 PM PDT

  •  I don't understand ... why such density in the

    National Forest? In Texas anyway, we've got pooled-production laws - you aren't allowed to put up a drill/pump every fifty feet. Now that you can efficiently drill down and then  go sideways and even curve around corners, and suck oil out of all of it or just whichever parts of the hole that you want to (you block off the porous rock that doesn't have oil in it), the pool-required areas are going to get even bigger.

    by mskitty on Thu Feb 08, 2007 at 02:31:49 PM PDT

    •  I asked this same question on the diary.

      Excellent diary paprog. I guess this is what's happening everywhere on public lands out west too. Those photos are unbelievable. Why do they need to drill so many wells so close together?  How can it be cost-effective? The spillage must be permanently toxifying the soil, not to mention erosion from all of the roads, will probably leave behind a moonscape.

      by Halcyon on Fri Dec 29, 2006 at 08:03:09 PM EST

         *
            The wells they drill (3+ / 0-)

           are typically quite shallow - 1,000-2,000 feet.  The oil and gas companies claim that because of the shallowness, directional drilling is not feasible in the region.  So wherever there's a field of oil/gas, they just start sinking wells every 600 feet or so in a grid.

           It's cost-effective because they get the road material for free from the Forest Service (ie, taxpayers).  The Forest Service provides the oil companies with stone pits in the Allegheny.  Basically, they just stripmine sandstone to build their roads, which are not built to a very high standard, thus they erode easily.  They're moving into more sensitive areas all the time.

           by paprog on Fri Dec 29, 2006 at 08:24:36 PM EST

      by Halcyon on Thu Feb 08, 2007 at 03:49:53 PM PDT

•  another interesting note

  is that while worldwide production hasd declined over the past five months, so has the price of crude.  I'd be very suprised if either demand or predicted future demand dropped by any appreciable amount.  Makes you wonder about the whole "supply vs. demand" theory as described by oil company execs.

  by eparrot on Thu Feb 08, 2007 at 02:31:18 PM PDT

  •  supply and demand

    Supply and demand is real, but it's only part of the equation.  Two other things affect prices.  One is price-fixing by OPEC.  Second is perceived or predicted changes in either supply or demand.  For example, the beginning of summer or a cold winter shoots up prices, because there is expectation that demand will go up.  Also, political instability in oil-producing countries impacts prices because supply might get choked.

    by sunshineonthebay on Thu Feb 08, 2007 at 02:35:08 PM PDT

  •  While I'm not exonerating those execs ...

    ... it may just be that there's a global economic slowdown starting.

    by scientist on Thu Feb 08, 2007 at 02:40:02 PM PDT

    •  Indeed

      There's also some fuel shortages in Nepal, South Africa, Nigeria, natural gas shortage in Bangladesh, total fuel meltdown in Zimbabwe. Some of them are being priced out of the market.

      by GW Chimpzilla on Thu Feb 08, 2007 at 02:45:12 PM PDT

  •  prices were dropping last fall

    well before onset of milder than expected winter demand surge. Cynics attributed it to crude election year manipulation, but I think the markets are far too large and dispersed for that. I think there was just an unsustainable run-up in prices post-Katrina, and it took a while for that to get worked out. They are starting to rebound again here lately, and that is what I am going to keep my eye on. Futures markets can tell you a lot. If the serious players think that this production plateau is indicative of systemic failure, you should start to see some big movements in the capital markets. It could still be a statistical anomaly.  

    by sldulin on Thu Feb 08, 2007 at 03:10:00 PM PDT

•  Simple explanation.

  OK, I'm not an expert, so I could be wrong, but . . .

  Doesn't simple economics dictate that production would drop BECAUSE the price is low?

  And the price is low, if I follow the news closely enough, because we had a warmer than expected winter, resulting in low (seasonally adjusted) demand.

  Understand, I have no doubt Peak Oil is bound to happen sooner or later. And I don't rule out the possibility it may already have happened. But let's see what happens to production when the price goes back up. In theory, OPEC could stay in lockstep and keep production artificially low to drive prices sky-high, but in practice they've never been able to do that for very long, and I don't expect that to change. So if prices go high and stay high for an extended period, and production STILL doesn't rise, then I'll believe we've passed Hubbert's Peak.

  by HeyMikey on Thu Feb 08, 2007 at 02:52:35 PM PDT

  •  no

    "Doesn't simple economics dictate that production would drop BECAUSE the price is low?"

    No, because OPEC countries depend on oil for their economy, so cannot just lower production because prices are low, because that would mean a recession for them.

    by sunshineonthebay on Thu Feb 08, 2007 at 02:57:11 PM PDT

    •  Recession either way.

      Low demand, oil seller increases production, causing price to drop yet more = same gross revenues with higher production costs. Not the way out of a recession.

      by HeyMikey on Thu Feb 08, 2007 at 03:15:17 PM PDT

      •  it's not that simple

        OPEC doesn't cut slash prices or shoot them through the roof.  They carefully tweak it to maintain the balance between revenues and maintaining demand.

        by sunshineonthebay on Thu Feb 08, 2007 at 03:18:24 PM PDT

        •  Is OPEC price makers, or price takers?

          What percentage of total world oil production do they account for anymore? According to your graphs, maybe 1/3. The theory that they set prices was based on the Saudi production cushion, but like ya say, no-one outside of an elite fraternity of Aramco field geologists really know the state of their tired old fields.

          by sldulin on Thu Feb 08, 2007 at 03:27:40 PM PDT

          •  i agree

            OPEC doesn't control the market per se, but they have a great deal of influence on prices.  Of course, ultimately demand and geoplitics impacts prices more than the cartel does.

            by sunshineonthebay on Thu Feb 08, 2007 at 03:34:37 PM PDT

            •  Cash reserves of oil producing countries?

              I don't know what they are, but I suspect they're huge. At least for the politically stable mideast producers. If I'm right about this, then it's further reason to think oil producers would cut production in response to low prices, and rely on cash reserves until prices go back up.

              by HeyMikey on Thu Feb 08, 2007 at 03:47:28 PM PDT

              •  that makes sense, but

                Saudia Arabia tends to increase production when another country decreases production just to keep the flow going.  I suspect the White House has a lot to do with that.

                by sunshineonthebay on Thu Feb 08, 2007 at 04:11:57 PM PDT

                •  No mystery. Saudia Arabia has traditionally . . .

                  . . . been the designated OPEC "swing producer," which means they increase or decrease production to try to keep the market price relatively close to OPEC's target. (Which is not "as high as possible," because that would put the world economy into decline, provoking a steep drop in demand -- killing the goose that's laying the golden eggs.) Google "saudi arabia opec swing producer" and you get varying opinions on the extent to which S.A. still fulfills this role, but the general OPEC aim has been to vary output to try to keep prices relatively stable and relatively close to the OPEC target. Internal OPEC discipline has hindered them in meeting this aim as much as they'd like.

                  by HeyMikey on Fri Feb 09, 2007 at 11:35:09 AM PDT

          •  Price makers.

            One third of global production is more than enough to set the price.

            In fact, in very tight commodities markets, you can set the price with just two or three percent of total production - the trick is, as one commenter noted, finding the sweet spot between profit taking and demand destruction.

            OPEC is, however, losing its ability to control the price downward because it's struggling to increase production, as this diarist notes. At the same time, weather and technology play a significant role in demand - warm weather and efficient cars can levelize the demand curve pretty rapidly.

            For this reason peak oil and oil depletion isn't that big a deal, because it's a very high-functioning market - consumers can adapt pretty quickly to rising prices by reducing consumption, which in turn tempers prices.

            The future of oil will be extended to a very long time horizon as advanced hybrid gas/electric engines, biodiesel and long-range batteries become standard equipment in transportation systems; if oil is $50 a barrel today and cars get 25 mpg, then that's essentially the same as oil at $100 a barrel tomorrow in cars that get 50 mpg, and so on.

            We never will "run out" of oil; we will, however, phase it out as superior technologies enter the market, driven by the slowly escalating price of a dwindling resource base.

            by mateosf on Fri Feb 09, 2007 at 06:53:39 AM PDT

•  It's about time!

  Two things that'll make the world a better place:

  1. Stop buying oil from despotic governments specifically ones in the Middle East.

  2. Stop buying goods from the Chinese.

  With no money in the Middle East they can't keep funding terrorists. Witn no money in China they can't keep growing their economy and burning all that coal.

  Did I say it would be easy, or even realistic? No, but it would work. Oh, and we in the US need to stop cut our fossil fuel usage in half.

  by londubh on Thu Feb 08, 2007 at 03:32:18 PM PDT

  •  is this a snark?

    First of all, ME countries are the way they are BECAUSE they have oil, not the other way around.  It's because of our constant meddling, along with our good friends the British, that despotic governments are propped up.  I'm tired of hearing people say how we should stop buying oil from "dangerous" countries.  They're dangerous because we can't just buy the damn oil on the open market, we have to make back-door deal with their dictators.
    Secondly, what does China have to do with any of this?  If we don't buy stuff from China we just have to buy it from somewhere else.  What do you think other countries use to fuel their industries, beer?

    by sunshineonthebay on Thu Feb 08, 2007 at 03:38:05 PM PDT

    •  true enough. . .

      does anybody think that the oil monarchies in the Middle East won't get out of Dodge as soon as the bottom falls out of the oil market? They'll follow their money into the West.

      While the replacement regimes may be equally bad, they'll also be irrelevant to anyone but their citizens and their immediate neighbors.

      We can wait for this to happen in the "normal course of events". . . i.e. after Middle East oil is no longer cost-effective for transportion.

      We can accelerate this process in a constructive way by replacing petroleum with alternatlve / renewable fuels.

      by alizard on Thu Feb 08, 2007 at 07:02:17 PM PDT

    •  Sort of a snark. It's about greenhouse gases

      Secondly, what does China have to do with any of this?

      China is one of the other factors for the increase in oil prices, though their per capita consumption is far less than ours, they have so many more people the total oil they consume plus the coal they burn is rapidly approaching the amount America uses. So even if America went away China would replace us as a leading global greenhouse gas producer.

      If we don't buy goods from China or any other growing economy their economies won't grow, and they won't consume more and more resources especially coal and oil.

      I'm tired of hearing people say how we should stop buying oil from "dangerous" countries.

      I think the only "non-dangerous" country we buy oil from is Canada unless we get some from the North Sea. No, we should just stop buying oil from all foreign countries.

      So, yes it's a snark. We are too addicted to oil (and cheap labor) to stop consuming them. And America's behavior is increasingly like a junkie who needs more heroin to get his fix. It involves itself in increasingly dangerous enterprises and thinks nothing of the consequences except for getting that next fix.

      by londubh on Fri Feb 09, 2007 at 05:41:59 AM PDT