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Recently we've heard from many U.S. media outlets that drill-baby-drill is the answer to our oil woes, and we've heard from Rick Santorum and Newt Gingrich an echo of this point of view.

Maybe it takes a non-U.S. media outlet---Al Jazeera---to do an in-depth investigation, then: Oil: In perpetuity no more:

Oil touches nearly every single aspect of the lives of those in the industrialised world. Most of our food, clothing, electronics, hygiene products and transportation simply would not exist without this resource.

There is a reason why oil giants such as ExxonMobile, BP, Total and Royal Dutch Shell, year in and year out, generate more profit than most other companies on the planet.

Our current global economy is based on continual growth, and that growth depends on cheap energy.

"Fossil fuels are roughly 84 per cent of what we use, and oil is 35 per cent of the world's primary consumption energy," says David Hughes, a geoscientist who studied Canada's energy resources for nearly four decades.

Given that oil plays such a critical role in the world's economy, one would deduce it would be important to know how much is left. Otherwise, the world's stock markets would be exposed to fossil fuels, which would pose a grave risk to investors facing down a so-called carbon bubble, which could potentially dwarf the housing bubble and current debt crisis.

First, let's look at the parade of denial and outright misinformation that's been thrown out there in our domestic media on energy issues, as Kurt Cobb explains:

Bloomberg Businessweek emitted a piece entitled "Everything You Know About Peak Oil Is Wrong" on the same day the Nature piece appeared--almost as if the writer knew it was coming. The Bloomberg piece trots out mostly tired, irrelevant arguments and a few that are relevant but factually wrong. Gail Tverberg does a good job of critiquing this very sloppy piece. Chris Nelder at Smartplanet takes on the Bloomberg piece as well as a number of poorly argued responses to the Nature article.

But the latest counterattack actually began last fall with Daniel Yergin, the smooth-talking and smooth-writing oil optimist that peak oil activists love to hate. Yergin felt compelled to push back in The Wall Street Journal at peak oil ideas in the course of promoting his new book. Thanks, Mr. Yergin, for bringing up the subject.

Many readers will no doubt be acquainted with the saying: "There is no such thing as bad publicity." This corresponds perfectly with Gandhi's phase three of a struggle. The opposition is now forced by obvious circumstances--i.e., no increase in oil supplies despite years of record prices--to explain away something that peak oil theory explains perfectly.

Going back to the Al Jazeera story, which is quite in depth and looks at the multifaceted nature of the situaiton:
"This is getting very close to the figure that some observers believe is the highest the world will ever produce," Whipple has written. He told Al Jazeera that peak oil could be reached at some point in the next month, or at the latest, within "a few years".

The global economic crisis is now another factor in the peak oil equation, as many nations that import oil can no longer afford to do so at previous rates.

Whipple sees the world possibly going into an economic depression that will cut oil demand.

"Peak oil production may come soon because nobody, outside of the oil exporting countries which subsidise the stuff, can afford what they are using now," he explained. "It may not be geological constraints that causes peak oil, but economic constraints."

To those who have been following the oil production situation as it has evolved over the past several years, this isn't news.  Production has been flat for seven years:

As the foundation of oil upon which we've built our industrial system crumbles, we will face direct economic impacts.  Hirsch, whose 2005 study for the Department of Energy on the peaking of world oil production is still the gold standard, conducted further studies to try to understand how oil connects to GDP.  He concluded that there's a 1-to-1 relationship: for every 1% oil production declines, world GDP declines 1%.  (This is a rough relationship, so it might be 0.5% or it might be 2%.)

How much does he expect world oil production to decline?  Here's what he says:

Best Case Scenario: Maximum world oil production is followed by a period of relatively flat production (a plateau) before the onset of a decline rate of 2–5% per year.

This indicates that in the best case scenario we should expect a yearly 2-5% decline in world GDP, which is roughly equivalent to having a recession nearly yearly (though it's unlikely to be that steady).

The trend break happened in 2005, when global oil production stopped increasing.  We've been on a plateau of sorts since then.  While the graph above is technically about oil, it maps directly to the economy: we've basically been on an economic plateau since soon after that.

Hirsch and other independent reports have concluded that the current oil plateau we're on is likely to end by or before 2015.


You'd think that a major turning point in the history of industrial nations---the decline of world oil production---would be a big deal in a presidential campaign.  Unfortunately, there's little to no accurate reporting on the issue and people can't see the forest for the trees and get lost in discussions about tar sands, North Dakota drilling, speculation, gas prices, etc.  The fundamental issue is that oil is finite and that its rate of production is about to begin declining.

This has major implications for our economy, since economic growth won't be a viable option when oil production is declining.  We need something else, and I've written what that might be in a previous diary on Steady-State Economics by the brilliant ecological economist Herman Daly.  (I'll be posting an interview with Daly at contraposition next week.)

Since this turning point is going to happen during the next presidential term, you'd think candidates wouldn't want to be blamed for it when it happens and would talk about it early.  Maybe it's time we bring it up for them?

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Comment Preferences

  •  Great diary, thanks for this. (3+ / 0-)
    Recommended by:
    barath, leevank, EthrDemon

    How can this other inconvenient truth (and a big part of the original one) be made more politically palatable and thus actionable?

    I've been fretting about this in the five years since I read Paul Roberts' book.  Aside from outright denial and fizzy optimism about a 'new energy economy' (which will take much more of the old energy economy to even create), there's been little meaningful policy in DC to address this.  

    Even on a progressive site such as this, the prevailing memes on energy usage seem to line up with Cheney's pronouncement that 'conservation is a personal virtue' and that any attempt to institutionalize reduced energy consumption smacks of 'austerity' and social deprivation.

    All I can see before us is inevitable environmental devastation and wars in which we emply our military superiority to wrest away fossil fuels from weaker nations by force.

    An investment in knowledge pays the best interest. -Benjamin Franklin

    by martinjedlicka on Wed Feb 22, 2012 at 09:04:57 AM PST

  •  Or... (0+ / 0-)

    the world oil system is a monopoly and production and storage are being very carefully controlled in order to maximize profits.

    OK. And now we begin the part of the show where we pull out individual words and phrases of the commenter to try to determine the "real" meaning of the comment.... let the games begin.

    by hillbrook green on Wed Feb 22, 2012 at 09:12:13 AM PST

    •  And has every oil field in history been the same? (4+ / 0-)
      Recommended by:
      ChadmanFL, leevank, adrianrf, G2geek

      A conspiracy on such a vast scale?

      Take for instance Texas and the North Sea:

      Figure One shows the 1972 Texas oil production peak lined up with the 1999 North Sea oil production peak (crude + condensate in both cases).   These two regions were developed by private companies, using the best available technology, with virtually no restrictions on drilling, yet both regions show clearly defined production peaks. Furthermore, the initial declines in both cases corresponded to sharply rising oil prices.  These two examples, which jointly accounted for about 9% of global cumulative crude oil production through 2005, show that, contrary to conventional wisdom, Peaks Happen, even in the best of circumstances.
      I'm allergic to conspiracy theories, especially ones that require the denial of geology and basic science.

      contraposition.org - thoughts on energy, the environment, and society.

      by barath on Wed Feb 22, 2012 at 09:23:01 AM PST

      [ Parent ]

      •  Most people on the left seem to think the ... (8+ / 0-)

        problem is a conspiracy by the evil oil companies and speculators, while most righties seem to think the problem is evil environmentalists.  It's almost like the possibility that we're reaching peak oil is too horrendous to contemplate, so we've got to come up with some "enemy" to blame the problem on.

        Bin Laden is dead. GM and Chrysler are alive.

        by leevank on Wed Feb 22, 2012 at 10:11:53 AM PST

        [ Parent ]

      •  OK, I'll bite. (0+ / 0-)

        The main problem with your argument is that you think that capitalism ensures that resources are being discovered and used at the maximum rate. That may have been true at some times in history, but it is certainly NOT true at the present time.

        Look, I'm not denying that there is a finite amount of oil. I'm not denying that at some point there will be significantly less oil produced in relation to demand because the amount of oil readily available for extraction does not match the demand.

        However, there will never be any kind of "hair on fire" scenario that is so often espoused by "peak oil" enthusiasts.

        When oil runs out or gets too expensive, humans will simply turn to another source of energy. It's already happening now due to better technology for producing renewable resources. That doesn't necessarily mean that the "peak oil apocalypse" is upon us.

        And nobody said anything about a "conspiracy". Do you consider rising airline ticket prices a "conspiracy"? Well you might if you look at the number of aircraft that are sitting in storage right now. But the amount of seats that COULD be available has ABSOLUTELY no relationship to the amount of seats that ARE available. Seats are made of aluminum and cloth, neither of which are in short supply. Airlines carefully control the number of seats available so as to maximize ticket prices. They make sure that seat capacity is closely matched to demand, with the most desirable situation being that demand is slightly higher than available seats. Is it a "conspiracy"? I don't know. But it most certainly is an unregulated monopoly. Of course, more airplanes and more seats could be manufactured, but that would increase the supply of seats which would inevitably reduce the purchase price of tickets and profits. It's called competition, a process that reduces profits and makes it significantly harder for a person to be richer than god.

        In the oil world, OPEC is the most recently recognized unregulated monopoly (in the future, the monopolies responsible for the present price escalation will be identified as well). Look at any chart of oil production and you will notice a drop in 1973 - the Arab oil embargo. And notice another drop in the 1980's - the oil glut of the 1980's which resulted from a bunch of greedy oil companies doing the "drill, baby, drill" to make up for withheld OPEC oil.

        These were important lessons for the oil industry.

        Of course, there are many other economic factors to consider, but let's just consider these two: monopolies and globalization.

        In the US in the late 1800's and early 1900's the price of shipping goods by railroad was tightly controlled by a handful of people. Railroads were the life blood of the nation. Grains were being produced in the vast American heartland. These goods had to be gotten to markets in the large American cities and exported to other countries or else they were worthless. All of the major industries, including railroads, were tightly controlled by a handful of people whose wealth dwarfed that of the rest of the population, just like today. These people owned everything, including the government, just like today.

        These people got together and manipulated the prices for transportation by railroad, steel, and all commodities, just like today.

        Why, because they could and it made them fabulously rich. The demand was there and by monopolizing the railroads they could charge any price they wanted.

        There was NO COMPETITION. It was a monopoly.

        For it's first hundred years, the oil industry was a wide open industry. True, there were periodic attempts in the US to form monopolies, but anti-trust laws hindered their efforts and the rest of the world was wide open for any plucky individual with a bit of money. After WWII previously unimaginable amounts of reserves were brought online overseas, beyond the control of would-be American monopolists. Those reserves plus the anti-monopoly policies of the US, the main producer and consumer, kept the price of oil ridiculously low for decades. But with the 70's that all began to change. OPEC showed the world and the American monopolies that the price of oil could be manipulated despite its relative abundance.

        How was this so? It was the rising tide of globalization which mostly lifted the ships of the wealthy and the rich. The world was entering a second gilded age.

        Monopolies began to grow again. Old money bought off governments to relax restrictions on monopolistic endeavors. The middle class in America grew complacent and let their guard down. The world oil industry gradually came under the control of a small enough group of people and they were able to control the industry so that disruptions in supply could be used to manipulate the price of oil; disruptions sometimes caused by the monopoly itself. They learned how to use OPEC gyrations and conflicts in oil-producing areas to maximize profits by using another new technology - computers.

        If you look at a graph of oil prices from 1861 to the present day in present day dollars, you will see that the highest price for oil EVER was right after it was discovered in the 1860's. As a matter of fact, the price of oil around 1876 was not matched again until one hundred years later - when OPEC finally got its act together.

        Even so, in the period of the late 80's to the late 90's the price of oil fell to levels similar to the period from 1880 to 1970! And this was after "peak oil" had been reached in the United States. During the period when the "peak oil" theory gained its greatest prominence!

        If you simply look at the price of oil in present day dollars, there is absolutely no indication of any sort of "peak oil". All that can be seen is a relatively constant price interrupted by periodic spikes, all within a very precisely confined range of values. Speculative bubbles followed by falling prices and relative stability.

        How is it possible that the price of oil over the 150 years of the existence of the industry could get near its lowest price in history in 1997, when "peak oil" was being predicted to happen less than a decade later????

        Instead of relying on production figures and reserve figures which are simply oil industry propaganda, I suggest you take a look at oil prices over the long term. When prices are consistently high for a period exceeding a decade or so, without any significant drops in prices, and then prices begin to steadily escalate, you can rest assured that "peak oil" has occurred.

        What you are doing right now is simply parroting oil industry propaganda that is designed to ensure obscene profits and minimize objective analysis.

        OK. And now we begin the part of the show where we pull out individual words and phrases of the commenter to try to determine the "real" meaning of the comment.... let the games begin.

        by hillbrook green on Wed Feb 22, 2012 at 11:37:38 AM PST

        [ Parent ]

        •  Ok, first a short response (1+ / 0-)
          Recommended by:
          G2geek
          However, there will never be any kind of "hair on fire" scenario that is so often espoused by "peak oil" enthusiasts.
          If you'd like to cite such enthusiasts, please be specific.  Otherwise it's a strawman.

          My hair is currently not burning...

          contraposition.org - thoughts on energy, the environment, and society.

          by barath on Wed Feb 22, 2012 at 12:21:09 PM PST

          [ Parent ]

          •  Oh, I agree (0+ / 0-)

            You don't go around showing pictures of yourself with your hair on fire.

            But then I didn't say that "you" did that. I was talking in generalities. There's plenty of other people going around doing the "hair on fire" bit.

            You're much different. You use graphs and figures and snippets of information the same way that oil industry pundits have been doing ever since oil was discovered.

            But of course, you're different than all those other folks because you have a computer and can use that to produce so many facts and figures and calculations that no one can ever refute you - exactly the same thing that oil industry media types use to justify periodic spikes in the price of oil.

            Oh, and thank you for picking out one phrase on which to base your entire rebuttal.

            It really warms the cockles of my heart when people read the tag that immediately succeeds my comments.

            OK. And now we begin the part of the show where we pull out individual words and phrases of the commenter to try to determine the "real" meaning of the comment.... let the games begin.

            by hillbrook green on Wed Feb 22, 2012 at 12:35:47 PM PST

            [ Parent ]

            •  You wrote too much. (1+ / 0-)
              Recommended by:
              G2geek

              I'm not going to comment on each paragraph you wrote.

              But again, you didn't cite anyone and at the same time used it as a strawman.  That's why I commented on that.

              And you're using ad hominem arguments - equating me to people from the oil industry again.  Doesn't say much for the argument you're making.

              contraposition.org - thoughts on energy, the environment, and society.

              by barath on Wed Feb 22, 2012 at 12:38:24 PM PST

              [ Parent ]

              •  I will stand by (0+ / 0-)

                the history of previous statements made by people associated with the oil industry that oil will be running out next year or the next year or the next year or the next year.....

                The whole point is that you make your counter-argument by picking out individual phrases and individual words of my comment. You refuse to confront the fact that the oil industry has repeatedly claimed over the entire life of the oil industry that the world was about to run out of oil. Originally, it was claimed that no oil existed outside of the state of Pennsylvania!!

                I'll tell you what. Pick any decade in the 20th century and I will find an oil industry source predicting the imminent end of the supply of oil in the world.

                As I said, the little boy who cried wolf.....

                It may be that it will happen, but not in my lifetime, nor in yours.

                OK. And now we begin the part of the show where we pull out individual words and phrases of the commenter to try to determine the "real" meaning of the comment.... let the games begin.

                by hillbrook green on Wed Feb 22, 2012 at 01:21:16 PM PST

                [ Parent ]

                •  I challenge you to find any such statement (1+ / 0-)
                  Recommended by:
                  G2geek

                  I've personally never seen a statement by anyone in the oil industry or elsewhere saying that oil will be running out in a few years.  There's a vast difference between saying it's running out (which it clearly isn't), and saying that humanity may be at or near the limit at which increasing amounts of it can be pumped at a reasonable cost.

                  Bin Laden is dead. GM and Chrysler are alive.

                  by leevank on Wed Feb 22, 2012 at 01:39:50 PM PST

                  [ Parent ]

                  •  OK (0+ / 0-)

                    From Pulitzer Prize winning The Prize: The epic quest for oil, money & power, 1991, Daniel Yergin - the first book I could find.

                    p 51-52:
                    [1880's]

                    But Standard had stayed out of one critical part of the business - the production of oil. It was too risky. too volatile, too speculative....

                    There was always the fear that the oil would run out.... Insofar as American oil production was concerned, Pennsylvania was the entire game, the only game.... In 1885, the State Geologist of Pennsylvania warned that "the amazing exhibition of oil" [since 1861 at that point] was only "a temporary and vanishing phenomenon - one which young men will live to see come to its natural end."

                    That same year, John Archibold, a top executive at Standard, was told by one of the company's specialists that decline in American production was almost inevitable and that the chances of finding another large field "at least one hundred to one against it.".... Around the same time, Archibold was also told about signs of oil in Oklahoma. "Are you crazy?" he replied. "why, I'll drink every gallon produced west of the Mississippi."

                    p. 218
                    [1920's]
                    There were many in America, at the beginning of the automotive age, who worried that supplies of the "new fuel" were about to give out. The years 1917-1920 had been generally disappointing in terms of new discoveries. Leading geologists prophesied gloomily that the limits on U.S. production were near.... Indeed, shortage was so much the dominant view in the industry that Walter Teagle of Standard Oil of New Jersey once remarked that pessimism over crude supplies had become a chronic malady in the oil business.
                    p. 330:
                    [discussion of Hitler's Germany push to develop synthetic fuels]
                    I.G. Farben became interested in synthetic fuels in the 1920's because of the same predictions of the imminent
                    exhaustion of the world's conventional petroleum supplies that were stimulating the great oil exploration drive around the world.
                    p. 395:
                    "The law of diminishing returns is becoming operative", said the Director of reserves for the Petroleum Administration for War in 1943 "As new oil fields are not being formed and as the number is ultimately finite, the time will come sooner or later when the supply is exhausted." For the United States, he added, "the bonanza days of oil discovery, for the most part, belong to history."
                    [This would have been before oil fields were found in Alaska, offshore, and places like Wyoming. etc].

                    Would this be enough or would you like more?

                    OK. And now we begin the part of the show where we pull out individual words and phrases of the commenter to try to determine the "real" meaning of the comment.... let the games begin.

                    by hillbrook green on Wed Feb 22, 2012 at 02:53:41 PM PST

                    [ Parent ]

                    •  Yergin? Really? (0+ / 0-)

                      When the original diary makes it clear that he's a shill for Big Oil and a paid disinformation peddler?

                      Try again. And try looking outside the clutches of Big Oil.

                      If it's
                      Not your body,
                      Then it's
                      Not your choice
                      And it's
                      None of your damn business!

                      by TheOtherMaven on Wed Feb 22, 2012 at 11:40:50 PM PST

                      [ Parent ]

                      •  is everybody a shill for Big Oil? (0+ / 0-)

                        OK, this is from last year.

                        http://www.rawstory.com/...

                        This is from treehugger.com - it certainly doesn't sound like a "shill for Big Oil" but I honestly don't know - from 4 years ago

                        http://www.treehugger.com/...

                        I simply googled "Shell oil peak oil". I got over 3,000,000 hits. Would you like me to enumerate them all? Is that what it will take to "prove" that big oil has been talking about "peak oil" forever?

                        The book I cited won a Pulitzer Prize. Usually Pulitzer Prize winning books are not filled with lies.

                        Instead of believing what you read on partisan websites, try reading a few books on the subject.

                        As I correctly stated, Big Oil has been talking about the end of oil ever since oil was "discovered" in Pennsylvania in 1861.

                        OK. And now we begin the part of the show where we pull out individual words and phrases of the commenter to try to determine the "real" meaning of the comment.... let the games begin.

                        by hillbrook green on Thu Feb 23, 2012 at 10:45:48 AM PST

                        [ Parent ]

        •  You need to look at production curves (3+ / 0-)
          Recommended by:
          leevank, G2geek, martinjedlicka
          How is it possible that the price of oil over the 150 years of the existence of the industry could get near its lowest price in history in 1997, when "peak oil" was being predicted to happen less than a decade later????
          Because Alaska and the North Sea were pumping at prodigious rates (the latter hadn't even peaked yet) and demand from China and India were still negligible.  (China didn't even need to import oil until the mid 1990s.)
          What you are doing right now is simply parroting oil industry propaganda that is designed to ensure obscene profits and minimize objective analysis.
          Really?  The oil industry is one of the most vocal against peak oil.  They have said in various ways either that peak oil is to be ignored or that it's not real or that it's a long way off so don't worry about it.

          The idea that oil production will peak is basic fact, as you concede.  The only question is the timing.  And all I'm saying is that people have looked at the data and concluded that the timing is near rather than far.

          contraposition.org - thoughts on energy, the environment, and society.

          by barath on Wed Feb 22, 2012 at 12:26:37 PM PST

          [ Parent ]

          •  You mean the production curves (0+ / 0-)

            and reported reserves that are based on self-reporting by the industries themselves???

            Look, I don't begrudge you your opinions, but I've been around the extractive industries long enough to know that virtually all of their reporting is tainted in one way or another.

            Maybe your opinion is that the oil industries are not exploiting the "peak oil" meme for their own benefit, but what implication is to be drawn when the industry says it is getting harder and more expensive to find oil, harder and more expensive to transport oil, harder and more expensive to fulfill demand from China and India? And on and on and on.

            They are saying that there is not enough oil to go around and using it as a justification to extract ever greater profits - the same thing they have been doing for 150 years now.

            In other words, it's "peak oil" and you must be very very afraid.

            So now we're supposed to believe them unlike all the other times they have run around yelling that the sky is falling? Because an oil industry analyst predicted that eventually the US and the North Sea finite resources would be "exhausted"? Wow, that was a real surprise! I thought the supply of oil was infinite and constantly being replenished by the almighty.

            Maybe this time the little boy will get eaten by the wolf because he was always lying about it before and no one will come to his rescue this time. Who is to say?

            I've read a LOT of historical articles put out by the extractive industries and if I had a nickel for each time just the demise of the oil industry has been predicted using "statistical" analysis based on self-reported figures... why I would be as rich as Mr. 5% himself.

            I'm assuming you know who Mr. 5% was, right?

            OK. And now we begin the part of the show where we pull out individual words and phrases of the commenter to try to determine the "real" meaning of the comment.... let the games begin.

            by hillbrook green on Wed Feb 22, 2012 at 12:57:58 PM PST

            [ Parent ]

            •  Um... (3+ / 0-)
              Recommended by:
              leevank, G2geek, martinjedlicka

              It seems your argument is getting circular.

              I say the data isn't coming from oil companies.  And that different data sources all roughly match, and are independently checked.  Then you say that the data is from oil companies, ignoring what I said, and that since oil companies are bad (no argument there) that means that the whole idea is bunk.

              The oil industry isn't saying peak oil is real.  They're saying it's not real.  Or at least nothing that anyone should worry or think about.  You're getting it backwards.

              And in any case, once again we're back at not looking at data rather than who or what is making what argument.  Something about what you said above disturbed me:

              You're much different. You use graphs and figures and snippets of information the same way that oil industry pundits have been doing ever since oil was discovered.

              But of course, you're different than all those other folks because you have a computer and can use that to produce so many facts and figures and calculations that no one can ever refute you

              One of the things I like about this site is that it's supposed to be a reality-based community.  The idea is that looking at data and figures and graphs is a good thing.

              All of what I've written is falsifiable.  If you have data or arguments that call into question what I've written, I'm happy to see it.  However, the argument that using data is a bad thing in and of itself, because the oil industry uses data (along with, I dunno, basically every scientist in the world) - that's where we part ways.

              contraposition.org - thoughts on energy, the environment, and society.

              by barath on Wed Feb 22, 2012 at 01:10:41 PM PST

              [ Parent ]

              •  It's real simple (0+ / 0-)

                the point actually is that you can't prove that you are right.

                You are taking other people's opinions and questionable statistical analyses and, indirectly of course, propping up a story that is designed to increase profits to oil companies.

                Oil people guaranteed that oil would never be found anywhere else than Pennsylvania in spite of the fact that humans had known of the existence of oil since prehistoric times.

                Oil people guaranteed that there would never be another oil discovery like Texas, but then Saudi Arabia came along.

                Oil people guaranteed that the oil deposits in Saudi Arabia were so vast that they could never be exhausted.

                I believe that you believe what you are writing, but that doesn't make it correct. But you present it as the absolute truth and ask us to petition the people in charge to address this issue right away because it is very important.

                It's just a theory that has been applied (somewhat) successfully to a very minor portion of the entire globe. In theory, the Texas oil people were correct when they said it wasn't possible for any oil field to be bigger than Texas, and yet there was.

                And the ultimate result of all this "peak oil" stuff is that people accept obscene profits for the oil industry as being somehow justified.

                Just as they have been for 150 years....

                Ask yourself this: Saudi Arabia constitutes .16% of the total area of the world. Can you say with confidence that in the other 99.84% there is definitely NOT another oil field the size of that in Saudi Arabia?

                Because if you can't, your statistics are nothing more than a pointless exercise in mathematics.

                with that degree of uncertainty, I would be wary of making any sort of absolute statements and I would also be wary of people who make absolute statements like "peak oil has come" or "peak oil is about to come" or "peak oil will be here in 5 years" or whatever.

                OK. And now we begin the part of the show where we pull out individual words and phrases of the commenter to try to determine the "real" meaning of the comment.... let the games begin.

                by hillbrook green on Wed Feb 22, 2012 at 01:51:26 PM PST

                [ Parent ]

        •  I'd recommend reading Deffeyes (1+ / 0-)
          Recommended by:
          G2geek

          As a geologist, he explains how it's possible for oil production to be projected, and how the things you describe as being somewhat strange or mysterious aren't really.

          contraposition.org - thoughts on energy, the environment, and society.

          by barath on Wed Feb 22, 2012 at 12:34:20 PM PST

          [ Parent ]

          •  You mean Kenneth Deffeyes (0+ / 0-)

            who worked with M. King Hubbert for Shell Oil?

            Let's see, Hubbert and Duffeyes were working for Shell Oil when Hubbert originally proposed the concept of peak oil for the United States, yet you say that oil companies deny the concept of peak oil. Funny way to deny a concept.

            And Deffeyes originally stated that peak oil for the world occurred in December of 2005, yet now people are confidently predicting that peak oil will actually occur in 2015 or 2020 or 2025 or sometime....

            yawn, I am feeling so sleepy....

            could you wake me up when peak oil actually occurs?

            OK. And now we begin the part of the show where we pull out individual words and phrases of the commenter to try to determine the "real" meaning of the comment.... let the games begin.

            by hillbrook green on Wed Feb 22, 2012 at 01:12:23 PM PST

            [ Parent ]

      •  well, by that reasoning (0+ / 0-)

        once the gold fields in California and Colorado were "exhausted" in the 19th century, there would never have been any more gold ever found anywhere else in the world. In fact, gold is still being mined in California and is still being found all over the world.

        Of course individual deposits decline in production. Oil doesn't fall from heaven. It is produced in a fairly well-understood process that occurs in geological time frames, not human time frames.

        On the other hand, however, new oil fields are being discovered all the time. New technology is being developed all the time. Old supposedly "exhausted" oil fields are continuously being re-evaluated and redeveloped.

        And "facts" can be manipulated.

        And I never used the word "conspiracy". I used the word "monopoly", a very real and very efficient way of making loads of money. Businesses, especially global-scale businesses, collude with each other all the time. They do it to maximize profits.

        And don't forget, all the "facts" you use are self-reported by the very industry who stands to gain the most from manipulation of said "facts".

        I've participated in compiling production figures from the mining industry. Industry self-reporting is an extremely dubious way of gathering information. Many so-called "facts" about production are not much better than rank speculation or outright lies.

        OK. And now we begin the part of the show where we pull out individual words and phrases of the commenter to try to determine the "real" meaning of the comment.... let the games begin.

        by hillbrook green on Wed Feb 22, 2012 at 12:18:41 PM PST

        [ Parent ]

        •  Um... (4+ / 0-)
          And I never used the word "conspiracy". I used the word "monopoly", a very real and very efficient way of making loads of money. Businesses, especially global-scale businesses, collude with each other all the time. They do it to maximize profits.
          Sure, but you implied a conspiracy.  But fine, if you don't like the word, ok.

          In any case, to have the effect you describe, you'd have to have all the oil companies in the world and all oil exporting nations - those in OPEC and those not in OPEC - all colluding.  That seems unlikely.

          The facts I'm talking about aren't just self-reported from industry.  There are many sources, some government, some industry, some third-party and they all agree within some margin of error.  Many people in the blogosphere analyze how and why those numbers don't match, but they're not very different.  So again unless all the numbers from all sources even with independent verification are being manipulated, it seems likely that the numbers are what they are.

          contraposition.org - thoughts on energy, the environment, and society.

          by barath on Wed Feb 22, 2012 at 12:30:38 PM PST

          [ Parent ]

        •  This is just nonsense! (1+ / 0-)
          Recommended by:
          martinjedlicka

          You write:

          well, by that reasoning once the gold fields in California and Colorado were "exhausted" in the 19th century, there would never have been any more gold ever found anywhere else in the world. In fact, gold is still being mined in California and is still being found all over the world.
          In fact, if gold were still being sold for less than $19 per ounce, as it was from the 19th Century right up to 1918, there would in fact be almost no gold being produced anywhere in the world today.  But with gold prices currently at more than 90 times those levels, it's possible to keep producing it.

          The same is true of oil, but the economic consequences of a 90 fold increase in oil prices would be catastrophic

          Bin Laden is dead. GM and Chrysler are alive.

          by leevank on Wed Feb 22, 2012 at 01:54:49 PM PST

          [ Parent ]

          •  except for one thing: EROEI. (2+ / 0-)
            Recommended by:
            martinjedlicka, jam

            Energy returned on energy invested.

            If it takes more than a barrel of oil's worth of energy to get a barrel of oil out of the ground, it's no longer economically viable to get oil out of the ground.  At that point the other energy source becomes more economical to use directly, and oil becomes worthwhile only as an industrial chemistry feedstock.

            "Minus two votes for the Democrat" equals "plus one vote for the Republican." Arithmetic doesn't care about your feelings.

            by G2geek on Wed Feb 22, 2012 at 04:52:15 PM PST

            [ Parent ]

      •  herd behavior. flocking. (0+ / 0-)

        Oil companies, oil speculators, the whole social ecosystem around the oil economy: they all know about peak oil theory, and they all know what's been happening (e.g. extraction plateau, Saudi using water injection to try to keep up their extraction rate, etc.).

        So they're all going to seek out whatever advantages they can get from the situation: think "dissipative structures forming across an entropy gradient."   In doing so they exhibit basic herd/flocking behavior, no conspiracies needed.  And the result from our perspective looks as if they're actively conspiring, when in fact they aren't.  

        "Minus two votes for the Democrat" equals "plus one vote for the Republican." Arithmetic doesn't care about your feelings.

        by G2geek on Wed Feb 22, 2012 at 04:37:35 PM PST

        [ Parent ]

  •  Alternative Energy (1+ / 0-)
    Recommended by:
    G2geek

    What keeps us from totally replacing oil as a source of energy today is the comparative cost of other forms of energy, such as solar.  It is axiomatic that all the world's energy needs could be supplied by 100 square miles of solar panels in the Sahara Desert.  The only problem is the cost of producing such energy.  As solar development continues, the comparative cost of solar versus oil declines.  At some point, they will reach parity.  The world economy is currently adjusting to the balancing of those costs and funding investment in oil replacement technologies.  I think the decline in oil will not be as apocalyptic as is predicted by the most attention-grabbing studies.

    •  There are a number of challenges (3+ / 0-)
      Recommended by:
      martinjedlicka, leevank, G2geek

      I surveyed a great article by David Fridley a while back on the challenges faced by alternative energy schemes:

      http://contraposition.org/...

      I also tried to crunch the numbers to see what was a plausible (even optimistic) amount of renewable power we could generate, ignoring issues like infrastructure and substitutability.  We will come up short, it seems.

      I think the decline in oil will not be as apocalyptic as is predicted by the most attention-grabbing studies.
      I guess I don't know what this means.  I don't buy this apocalypse notion any more than I buy that perpetual growth is possible.

      What I'm seeing is a slow cycle of recession and partial recovery, where each partial recovery doesn't get us back to above where we were before each recession.  That goes on for a couple of decades as we try all sorts of increasingly harebrained options to make up for declining oil production.

      contraposition.org - thoughts on energy, the environment, and society.

      by barath on Wed Feb 22, 2012 at 09:29:28 AM PST

      [ Parent ]

      •  um, OT, but you brought it up (0+ / 0-)
        Let’s start with Solar PV, with this blurb that says we’ll be at 28 GW / year of (nameplate) production by 2012.  Let’s round that up to 30 GW / year and use a capacity factor of 15% (considering the 200 W / m2 that’s available in most temperate zones).  That yields about 4.5 GW / year of production.  Let’s allow for a steady 20% yearly increase in production over the next two decades.  Combined production over 20 years will thus produce about 745 GW of PV capacity.
        Interesting that you quote a link (28 GW/year) for one number then ignore the link for a second number (20% yearly increase in production). The link shows a 34% compound annual growth rate from 2007-2012. Using that number gets you almost 6 TW. 30% works out to 3.5 TW and 25% is 1.8 TW.

        Causation was, is, and ever shall be a slippery bitch, so we're best sticking with noting the facts

        by jam on Wed Feb 22, 2012 at 02:15:41 PM PST

        [ Parent ]

      •  now wind (1+ / 0-)
        Recommended by:
        G2geek

        There were 42 GW installed world wide in 2011. 2500 GW of nameplate by 2032 is 9.5% annual growth. At a 20% growth rate (2011 was 21%) you end up with 2.8 TW of capacity.

        Causation was, is, and ever shall be a slippery bitch, so we're best sticking with noting the facts

        by jam on Wed Feb 22, 2012 at 02:36:50 PM PST

        [ Parent ]

  •  This is a very important diary (4+ / 0-)

    Unfortunately, it won't make the rec. list, much less the Front Page, where I think it belongs.  But thank you for bringing it to the attention of those of us who'll see it before it scrolls off the list.

    Bin Laden is dead. GM and Chrysler are alive.

    by leevank on Wed Feb 22, 2012 at 10:08:06 AM PST

  •  Is this actually Hirsch's view? (5+ / 0-)

    A couple of observations on an excellent diary ...

    barath writes that "Hirsch and other independent reports have concluded that the current oil plateau we're on is likely to end by or before 2015." According to Wikipedia, "Hirsch developed a projection for global peak production by 2015." - that is, a plateau beginning, not ending, by 2015. However, there's no citation for this claim.

    Kurt Cobb makes a common error: "The opposition is now forced by obvious circumstances--i.e., no increase in oil supplies despite years of record prices--to explain away something that peak oil theory explains perfectly." Of course, conventional economics also explains this perfectly: Rising prices decrease demand. It's easy to see the error if you just change the terms - "despite raising prices, BMW sales have remained flat."

    Of course, the economic explanation is also flawed. If oil were widgets, somebody would sell their oil for less in order to undercut their competitors and gain market share, even though their marginal profit decreased.

    The fact is, neither geology nor economics can fully explain peak oil. Production is flat not because supply has peaked, but because inexpensive supply has peaked. Although this makes me sound like some sort of dysfunctional Pollyanna, we're currently dealing with peak oil in almost the best way possible (absent some governmental spine, which can scarcely be hoped for in an issue that's so ripe for demagoguery). As oil production costs rise, alternatives will become more competitive. Eventually oil will be priced out of everyday use and be confined to industries where even $300 a barrel oil will be useful. But the transition won't be pretty, and as usual the poor will bear most of the pain.

    The 800-pound gorilla in the peak oil story isn't catastrophic decline. It's the constraint it puts on economic growth. An improving economy uses more oil, which causes the price to spike, which causes economic growth to slow. It's a major - and largely ignored - reason that growth has been so sluggish since the end of the last recession.

    •  Hmm... (2+ / 0-)
      Recommended by:
      leevank, G2geek

      I think we're talking past each other a little.

      barath writes that "Hirsch and other independent reports have concluded that the current oil plateau we're on is likely to end by or before 2015." According to Wikipedia, "Hirsch developed a projection for global peak production by 2015." - that is, a plateau beginning, not ending, by 2015. However, there's no citation for this claim.
      It's funny - I actually wrote that in wikipedia (a while back), but forgot to add the citation.  Check out his recent talk for more:

      http://vimeo.com/...

      I don't think Cobb's point was what you were referring to - his was a response to the notion, advanced by Yergin among many others, that we won't reach peak oil for a long time because as prices rise more oil will become available, increasing production at that higher price point.  He's pointing out that prices have risen, but production hasn't, disproving Yergin's claim.

      The geology of peak oil is fairly well understood for fields, as I linked to above from Jeffrey Brown's analysis.  (See his blog for lots more, and books by Ken Deffeyes.)  Peaks happen.  The global peak is sort of a central limit theorem extension of individual fields.  You're right that at the peak / plateau economic effects come into play, as we're seeing.

      The 800-pound gorilla in the peak oil story isn't catastrophic decline. It's the constraint it puts on economic growth. An improving economy uses more oil, which causes the price to spike, which causes economic growth to slow. It's a major - and largely ignored - reason that growth has been so sluggish since the end of the last recession.
      I really scratch my head why everyone jumps to words like "catastrophic" (see someone else's comment for "apocalypse").  I think what I described as my expectation is roughly in line with what you're saying: peak oil puts a cap on economic activity, and as oil declines we'll see the standard cycle of recession and recovery except that recoveries will be more and more anemic.

      contraposition.org - thoughts on energy, the environment, and society.

      by barath on Wed Feb 22, 2012 at 10:48:36 AM PST

      [ Parent ]

    •  The diary asserts that "for every 1% oil (0+ / 0-)

      production declines, world GDP declines 1%. "  Doesn't that suggest that to improve its economic situation, the world should require an increase in oil production of, say, 3% per year?

  •  Apparently Shell oil has changed their mind (0+ / 0-)

    about "peak oil"

    Shell oil and peak oil

    OK. And now we begin the part of the show where we pull out individual words and phrases of the commenter to try to determine the "real" meaning of the comment.... let the games begin.

    by hillbrook green on Wed Feb 22, 2012 at 03:44:05 PM PST

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