Peak Oil is You
Donate Bitcoins ;-) or Paypal :-)
Page added on May 15, 2015
What’s Max mad about? Peak oil
No matter how it does at the box office this weekend, “Mad Max: Fury Road” joins its three predecessors in the series in being a different kind of apocalyptic movie. Instead of nuclear war or pandemic illness, in the “Mad Max” universe, the End was brought about by — a bad economic theory.
It’s the doom of peak oil, and it was supposed to end life as we know it decades ago. According to the theory, we were supposed to run out of oil by now.
“‘Fury Road’ is otherwise true to the lean, elemental ‘Mad Max’ aesthetic,” the Associated Press notes. “Max, a Ford Falcon-driving loner, navigates a neo-Medieval wasteland where fuel and water are in scant supply.”
And that’s the origin of the “Mad Max” franchise — creator George Miller’s vision of a world after “peak oil” was reached. Miller, then a medical doctor, read about peak oil during the 1973 Arab oil embargo.
“George and I wrote the (Mad Max) script based on the thesis that people would do almost anything to keep vehicles moving and the assumption that nations would not consider the huge costs of providing infrastructure for alternative energy until it was too late,” said his co-writer, James McCausland, in 2006.
But the movie franchise has outlived the thesis.
“Peak oil proponents — the guys and gals who believe overconsumption combined with scarce resources will lead to stratospheric energy prices — are now clinging to the hope that the shale oil and gas boom will fizzle out as the cost of drilling climbs,” reports Business Insider. “For the most part, the boom has held up, though no one believes it will last forever. But there is a fifth-column phenomenon this group has completely overlooked that will once-and-for-all obliterate their arguments: energy consumption efficiency.”
Put simply, we won’t run out of oil and gas (and other fuels) because we’re using less and less of them.
Not because demand is down, but because efficiency is up. That applies not only to transportation, but more importantly, to electrical generation.
“Contained in Exxon’s (2014) Outlook for Energy report is the following damning statistic: Electricity generation will grow by 90 percent by 2040, but the amount of fuel needed to generate that electricity will only have to grow by 50 percent,” the magazine reports. “And the projected increase in energy demand is 20 percent less than the demand increase seen from 1980 to 2010. The IEA has previously projected that electricity will become more affordable over time in most regions as income levels increase faster than household electricity bills.”
In one sense, this is a victory for the conservationists. It’s difficult to quantify, but the EPA’s Energy Star program no doubt played a part. Consumers were encouraged — but not forced — to spend their money on more energy-efficient appliances. Consumers were rewarded for their purchases with tax credits — and lower electricity bills.
The big loser in all this? Peak oil.
Watching any movie requires a willing suspension of disbelief. With “Mad Max,” we’ll just have to be a little more willing.
30 Comments on "What’s Max mad about? Peak oil"
Mamma Gina on Fri, 15th May 2015 8:58 am
>>> Electricity generation will grow by 90 percent by 2040
followed by
>>> this is a victory for the conservationists
Priceless !!
Dredd on Fri, 15th May 2015 9:07 am
B.S.
Last time I checked, all the reservoirs of oil have a total quantity x.
They are being drained at a rate of y.
x-y = z
z ≠ x if y is >0 kiddies.
Dredd on Fri, 15th May 2015 9:11 am
Tyler is quite religious it would seem, which is fine, but leave the magic oil at home:
“So Elijah went to Zarephath, and as he came to the town gate, he saw a widow gathering firewood. “Please bring me a drink of water,” he said to her. And as she was going to get it, he called out, “And please bring me some bread, too.”
She answered, “By the living LORD your God I swear that I don’t have any bread. All I have is a handful of flour in a bowl and a bit of live oil in a jar. I came here to gather some firewood to take back home an d prepare what little I have for my son and me. That will be our last meal, and then we will starve to death.”
“Don’t worry, “Elijah said to her. “Go on and prepare your meal. But first make a small loaf from what you have and bring it to me, and then prepare the rest for you and your son. For this is what the LORD, the God of Israel, says; ‘The bowl will not run out of flour or the jar run out of oil before the day that I, the LORD, send rain.’”
The widow went and did as Elijah had told her, and all of them had enough food for many days. As the LORD had promised through Elijah, the bowl did not run out of flour nor did the jar run out of oil.”
(The Peak of The Oil Lies – 6).
rockman on Fri, 15th May 2015 9:18 am
“Put simply, we won’t run out of oil and gas (and other fuels) because we’re using less and less of them.” Put simply this cornie must not know about a country called China. And while he may be up on the latest trend in fuel economy of NEW VEHICLE he’s also appears to be ignorant of the glacially slow improvement of the fuel efficiency of the CURREN ROLLING FLEET measure in a fraction of 1 mpg per year.
Lawfish1964 on Fri, 15th May 2015 9:26 am
What Rock said. Plus, last time I checked, the world was using 90,000,000 barrels of oil per day, the highest amount in the history of the world.
steve on Fri, 15th May 2015 9:59 am
I think the mad max movies are way off….it will be a World War in the end…one has to look no further than WW1 to see the first fight over oil. The U.S has shown that it will fight and kill for oil and “the American way of life is non-negotiable” plus the two best selling vehicles in Canada and the U.S is the pick up truck…I know Davy says we have 5 to 10 years before it gets ugly and he may be right…but I think in 2 years we will see the full picture and their will be no denying it.
Mike989 on Fri, 15th May 2015 10:04 am
China is racing to get out of coal and oil too.
Their solar installs last year = All Current US Solar installed to date.
Solar now 5 cent per kWh in the 10 US southern states, and wind is now down to 3 cent per kWh.
Only a fool would:
1) Drill in the stupidest place on earth for oil: the Arctic.
2) Ignore the Geometric Growth of Solar.
Mike989 on Fri, 15th May 2015 10:05 am
Exxon is run by an idiot.
The growth rate for solar and wind are NOT Linear.
The dumb always lose.
BobInget on Fri, 15th May 2015 10:08 am
Too bad “peak Cheap oil’ is clumsy and awkward. PCO
How about ‘peak Affordable oil’? PAO
How about:
Peak Attainable OIL ?
Peak Sustainable Oil?
Peak Attainable Oil?
Peak Accessible ?
Peak Useable, Gettable, Obtainable, Feasible ?
BobInget on Fri, 15th May 2015 10:21 am
Swiped from Investor Village;
Msg 181440 of 181480 at 5/14/2015 10:36:57 PM by
ghmndod
report abuse
Bear case for oil versus bull case & cash burn.
Oil Bear Case
1)OPEC production +1.5mm
2)Iran ” + .5mm
3)Libya ” + .5mm
4)Russia
& Brazil ” + .5mm
6)ROW ” + .3mm
Total ” +3.3mm p/d
This is what WS sees along with little decline from shale.
Oil Bull Case
1)WW Demand +1.2mm
2)US production -.5mm
3)Canada ” -.2mm
4)Mexico ” -.3mm
5)North Sea ” -.3mm
6)ROW ” -.2mm
Total
Demand + and –
production 2.7mm
This is what the oil bulls see
Y/E 2015 Net .6mm of crude p/d
2016
Bear Case
1)Excess Production .6mm
2)OPEC new ” .5mm
3)Iran new ” .3mm
4)Libya new ” .3mm
5)Russia &
Brazil new ” .3mm
6)ROW new ” .2mm
Total new ” 2.2mm
Bull Case
1)WW Demand +1.0mm
2)US production -.4mm
3)Canada ” -.2mm
4)Mexico ” -.2mm
5)North Sea ” -.2mm
6)ROW ” -.2mm
Demand + & –
Production +2.2mm
If oil prices stay as predicted and do not go above $75 IMO the only crude
left will be SA heavy sour which they only can refine currently
In support of this thesis the big three shale producers have burned $1.924B
in cash in the 1st qtr. in a sub $50 CL world despite significant hedges.
1)PXD Sold 5.75mm new share on 11-5-14 for roughly $1B
12/31/14 Cash $1.025B
3/31/15 cash 383mm
Net $-642mm
Debt Increase + 3mm
Total Burn $645mm
2)CLR Debt Increase +789mm
3)EOG ” ” +490mm
Total Burn $1.924B
These companies had substantial hedges. Even with small amounts of new production,
hedges and significantly lower service costs these companies had significant
negative C/F’s. These are the best in the field.
The second qtr. reports will be very revealing with higher CL prices and further
reduced service costs.
The US and Canada was the source of well over 90% of the worlds increased oil
production over the last 5 yrs. Debt levels & C/F’s will not allow drilling
to increase but in a very minor amount until prices go substantially higher
for a prolonged period.
Allowing for a comeback of Iran & Libya production plus increases in several
areas of the world including OPEC the production declines in the areas of the
world (NA, North Sea and Mexico) with higher D&C costs and demand increases
overwhelm any “glut” that has existed. The GCC countries of OPEC are running
straight out in production and drilling. The loss of NA etc. IMO may very well
cause a spike in the price of oil in 2016.
GregT on Fri, 15th May 2015 10:56 am
“Exxon is run by an idiot.
The growth rate for solar and wind are NOT Linear.
The dumb always lose.”
Stop talking out of your ass Mikey. Solar and wind are both fossil fuel extenders. Nothing more.
Perk Earl on Fri, 15th May 2015 11:09 am
“Peak oil proponents — the guys and gals who believe overconsumption combined with scarce resources will lead to stratospheric energy prices — are now clinging to the hope that the shale oil and gas boom will fizzle out as the cost of drilling climbs.”
I didn’t know us peak oil proponents were so clingy – lol! Portrays us as insecure doomers, when actually we are just running the numbers and they aren’t panning out for infinite BAU growth. So it’s more of a numbers game but most people are innumerate so if they need to use emotional terms like ‘clinging’, then so be it, but at least let us have a good laugh over it.
The other thing I find funny about this article is the assertion that conservation somehow over-rides finite resource limits. Again, innumerate.
Davy on Fri, 15th May 2015 11:24 am
Steve, I am trying to give a range for optimism. I am saying 10 years tops more likely 5 years or less. I have said this for the last 10 years so I feel foolish at times but time is running out on so many fronts I feel this is a legitimate prediction. Even if the worst starts in 2 years the degree could vary IOW hard quick collapse or long emergency or something in between.
Greg, thanks for setting Mikey on the right path he is under the Green BAU spell with fantasy delusions of a shiny AltE world of happiness and progress. Poor guy wait until he gets his wakeup call.
Bob, I like your PAO. Peak attainable and affordable oil are good components of Peak Oil Dynamics.
steve on Fri, 15th May 2015 12:26 pm
Davy there is the saying I am sure you have heard the markets can stay irrational longer than you can stay solvent…Keynes. I too have been saying this will happen 10 years ago! People have been using that to discredit my Peak oil rants etc…I did however catch an interesting story on CBC (national corporate radio) To the Point with Warren Olney about artic oil one of the commentators said it is telling that we are in such dire straights and now are at the bottom of the barrel otherwise we would not be there and Obama would not be allowing the drilling there…so maybe it is starting to sink through…
Apneaman on Fri, 15th May 2015 12:37 pm
Conservation? Ya right. What was the first thing that happened when gas prices went down? Jevons Paradox anyone?
Rebound, Backfire, and the Jevons Paradox
http://www.inscc.utah.edu/~tgarrett/Economics/Jevons_Paradox.html
agramante on Fri, 15th May 2015 12:43 pm
Perk–that’s the nature of straw men. Their limitations are obvious at first glance, hence the name “straw”. Corny arguments make about as much sense as some of the arguments for creationism.
Sugar Seam on Fri, 15th May 2015 1:42 pm
link is broken…. or page has been taken down on original site
Apneaman on Fri, 15th May 2015 1:43 pm
Peak oil or not we are going to get mad max conditions and much sooner than most realize. It’s the water. Were at .85 degree Celsius above preindustrial average and look at what we are already getting. This is merely the opening round of our consequences.
…………………………………………
Thawing Arctic carbon threatens ‘runaway’ global warming
“Arctic warming is releasing ancient organic matter that’s been deep-frozen for millennia, writes Tim Radford. And now scientists have discovered its fate: within weeks it’s all digested by bacteria and released to the atmosphere as CO2 – with potentially catastrophic impacts on climate.”
http://www.theecologist.org/News/news_round_up/2869575/thawing_arctic_carbon_threatens_runaway_global_warming.html
green_achers on Fri, 15th May 2015 5:05 pm
Quote: “According to the theory, we were supposed to run out of oil by now.”
Strike one.
Quote: “Put simply, we won’t run out of oil and gas (and other fuels) because we’re using less and less of them.”
Strike two.
Quote (to support the thesis “we’re using less and less of them” ): “the amount of fuel needed to generate that electricity will only have to grow by 50 percent”
Yer out!
dave thompson on Fri, 15th May 2015 6:49 pm
It always killed me, how in the MAD MAX world there was nothing but car and motor cycle fights and chases. Once the gas stations shut down in a collapse, all car chases end the next day.
GregT on Fri, 15th May 2015 7:21 pm
Not ALL car chases Dave. Don’t forget the Strategic Petroleum Reserves.
Boat on Sat, 16th May 2015 6:41 am
Fact is we have been adding over 1 million in population for decades. Since 1997 our fuel use has remained flat. Pretty impressive I would say. Go efficiency.
Davy on Sat, 16th May 2015 6:47 am
PLeeeese Boat, spare me the glowing BAU praise. Efficiency is suffering the same diminishing returns all other efforts are facing. In many cases it cost more to increase efficiency than the energy saved. How’s that for feel good BAUtopianism? Use more energy to feel like you are using less. What a feeling!
joe on Sat, 16th May 2015 7:47 am
The greatest bull market in oil history produced the story of fraking and tough oil. After the last oil emergency we found lots of easy oil. The same should have happened. But didn’t. How far is peak oil? From emergency to bull market was you guessed it 40 years. Right in line with Hubbert theory. The peak for tough oil is very steep. This isn’t hard math guys.
Boat on Sat, 16th May 2015 8:27 am
davy.
For years I have been showing you examples of efficiency in action. This is rapid change in a good way not BAU. Have you read about the new engine from Cummings yet?
GregT on Sat, 16th May 2015 8:55 am
Fact is, we are adding 1 million in population every 5 days. Most of whom will live their lives in abject poverty, including here in North America. You may call hunger efficient Boat, but most would call it a tragedy.
Davy on Sat, 16th May 2015 9:15 am
Boat, the new engine from Cummins can’t even begin to make a difference in the type of efficiency level increases that are needed. I applaud Cummins but too little too late is not good enough. The scale is so large as to be impossible to overcome. Efficiency has hit diminishing returns just like debt in the financial system. Game is over soon once entropy is winning the majority of the battles.
rockman on Sat, 16th May 2015 9:53 am
Been waiting for someone to point out the obvious but I guess I’ll have to do it: go back to the pic at the top and squint at it a little. Can you see the ISIS black flag flying over the group? Of the flag of one of the Libyan separatist groups? Or even easier: rent the first MM sequel and imagine the refinery they are fighting over is sitting in current day N Iraq. Funny side bar: about 6 months ago there was a photo of an ISIS heavy weapon mounted in the back of a pickup truck. And you can clearly read the name of the Texas plumbing (?) company on the side of the truck. Obvious shipped half way around the world as salvage but captured by ISIS. Even funnier: the Texas company got hate mail by some fools who thought the company was supporting ISIS. How Mad Max is that? LOL.
Just because Mas Max isn’t roaming your neighborhood (yet, anyway) doesn’t mean the potential isn’t there. For the US that day, if it ever does come, would be many decades away. For other countries…not that long. And for some…it has already arrived. Some groups might hide there efforts behind religious motivation but notice how such efforts seem to be concentrated in oil producing regions.
p1herlo on Sun, 17th May 2015 9:45 am
Peak-oil happened as predicted. It’s just that people mispredicted the consequences. Some thought it would be mad-max, but it turned out to be an unaffordable unconventional oil push, financialization and debt used to inflate bubbles to hide the fast-declining EROI, and international manuvering to deflate the petrodollar, combined with US attempts to prop it up by calling in favours, all while the non-bubble sectors of the economy have consistently declined.
Northwest Resident on Sun, 17th May 2015 11:20 am
p1herlo — That’s the way I see it too. But you perhaps forgot to mention one other major — monumental! — result of hitting peak oil. The Propaganda Blitz!! Along with ZIRP, QE (“financialization and debt”), and along with all the other things you mention, came a huge propaganda campaign designed to create the illusion of “all is well”. None of the other things would have worked on their own without the lies and the spin and the half-truths and the pure B.S. designed to hide the real truth.
We all know that the Archdruid talks about a long decline punctuated by major steps (crashes) downward. I’m sure that someday, looking back at the long history of decline and collapse (assuming someone is around to do that), that the introduction of ZIRP, QE and the fracking “revolution” will all be seen as significant steps on the path downward toward total collapse.
But for now, living in this brief slice of time, with the propaganda blaring like rock and roll over all mass media channels, the ignorant masses party on as if there were no tomorrow, not even remotely aware that there is in fact NO tomorrow, at least, not the one they’re expecting.