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Page added on April 12, 2016
Peak Oil: Time To Get Serious
The truths, unpleasant though they may be, are the truths: inexpensive, readily available oil is slowly but surely becoming less readily available, more expensive, and harder to come by. Current conditions [ultra-low prices; curtailed/canceled oil production and exploration projects; over-supply; declining investments; high debt] only highlight that the problems of maintaining an adequate, affordable, accessible supply of fossil fuel needed to power modern society aren’t going away.
We can pay homage to and wish for all the magic technology in the world; ignore every single environmental consequence; disregard the fundamental differences and considerations regarding conventional crude oil production and tight oil production; ignore all the geopolitical and geological realities; pretend that oil will still be ours for the asking as often and for as much as we want; or hope that Someone Else is going to rescue us, but delusion and denial will only take us so far.
Those who know but have worked much too hard to mislead and misrepresent must now devote some of their prodigious efforts and considerable knowledge to not just truth-telling, but taking a vital leadership role in exploring how we plan for a future where fossil fuel resources will no longer serve as the primary energy supply for our society.
Recognizing the awesome complexity and widespread impact of that fact merits serious effort and honorable leadership. Are we going to find it? Soon?
The sooner we accept the evidence before us, the sooner we begin to plan intelligently for new methods of powering modern society. Anyone deluding themselves into thinking it won’t be all that difficult or will develop in anyone’s definition of a reasonably short period of time needs to step away from the conversation until the facts and realities settle in. We’ve had plenty of senseless denial as it is.
I’m no different than most, and have admitted that from my very first post that I don’t want to have to do without; I don’t want to give up ambitions or expectations; I don’t want to have to make do with less or different, and I have no great desire to devote time and effort and planning and doing to embrace changes to my lifestyle.
But I am also quite aware of just how much my cozy little life depends on fossil fuels for almost everything I need or own. I also am quite clear on the concepts of a finite resource, depletion of same, inadequate substitutes, and lack of planning—among other vital considerations.
Regardless of how much cognitive dissonance will result from a discussion of all of the facts—good and bad; pro and con; left and right—that discussion needs to begin. Our recent spike in fossil fuel production has been a wonderful turn of events, and kudos to the ingenuity and technology which made it all happen. But those efforts are colliding with unpleasant realities about production, costs, and supply. Pretending something is going to come to the rescue—or just hoping—can’t be part of the conversation.
We have some serious challenges ahead, and waiting until it’s really too late for meaningful discussions and solutions likewise cannot be part of the strategy. The sooner everyone is on board with a full appreciation for and understanding of the assets available to us and the challenges we’re going to be facing, how all-encompassing the issues already are, and recognizing what we need to do over an outrageously lengthy period of time, the better our chances of constructive adaptation.
Anything less than that kind of effort and cooperation is only going to contribute to the problems. We need to focus on contributing to the solutions. Peak oil’s impact is here regardless of the name attached to it, and it is not going away. That it is not yet the all-consuming catastrophe some falsely claim was the message and motivation is not an excuse to do nothing. That never was a consideration of ours, and it is less so now.
Peak Oil Matters by Rich Turcotte
28 Comments on "Peak Oil: Time To Get Serious"
yellowcanoe on Tue, 12th Apr 2016 10:34 am
Many of us believed peak oil was upon us when the price of oil spiked in 2008. It turned out though that high oil prices were able to drive up non-conventional oil production such as light tight oil and tar sand oil. I agree that this time is likely to be different and the factors that saved us subsequent to 2008 likely won’t save us this time. However, the people who still believe that peak oil is way off in the future do have a good point — at every time in the past when peak oil appeared imminent some new discoveries and/or technologies have added to our supply of oil. So of course these people are going to be cocky because they’ve been batting 1.000 for the last 100 years.
GregT on Tue, 12th Apr 2016 11:11 am
“It turned out though that high oil prices were able to drive up non-conventional oil production such as light tight oil and tar sand oil.”
As is so aptly pointed out in the above article; “inexpensive, readily available oil is slowly but surely becoming less readily available, more expensive, and harder to come by.”
It is not the amount of barrels available that matter. It is the affordability of that oil, and the energy available to our economies.
Davy on Tue, 12th Apr 2016 11:59 am
It really was more than high prices that brought on the oil supply surge of the past few years. It was also markets driven by low cost money and a huge yield seek environment promoted by central bank policy. It was driven by a China that did a massive physical growth stimulus post 08 crisis. High prices were part of the feeding frenzy not the reason for the feeding frenzy. We are now in the aftermath phase post bubble deflation that most noticeably came post fed taper. IMA a post bubble deflation at multiple levels and all interconnected. We have physical deflation as well as financial deflation converging in a demand and supply shock. People point to the so called glut and the huge oil resource out there but they fail to understand the decaying and deflating economy that is unable to economically grow and consume oil.
Plantagenet on Tue, 12th Apr 2016 12:13 pm
Davy make good points in most of his post, but goes off the beam in his discussion of the oil glut. His claim that the world is “unable to …. consume oil” is off the mark..
The world is consuming oil just fine, thank you. Last year alone the world consumed over 90 billion barrels of oil, and that enormous level of oil consumption is likely to go even higher this year.
Cheers!
Boat on Tue, 12th Apr 2016 12:36 pm
yellowcanoe,
Tk’s for pointing out our batting average.
twocats on Tue, 12th Apr 2016 12:47 pm
the distortions throughout the global economy are so obvious you’d really have to be in complete denial to not see them.
https://mishtalk.com/2016/04/10/beyond-bubble-9-million-vancouver-teardown-ordinary-houses-sell-for-millions-over-asking-price/
whether any of this funny money will really destabilize things in the US, who knows. It is true that while the world seems to continue consuming oil, all is not “fine” on an economic level in countries like Argentina, Brazil, and several others. Brazil is the 8th largest economy in the world, and it is seriously struggling.
twocats on Tue, 12th Apr 2016 12:50 pm
as many have pointed out, the big risks right now are all deflationary. and ironically, in deflationary environments money movements can become pretty extreme as capital “runs away from” areas of devaluation towards “safe havens”. (this is why the oil price spike of 2008, from $100 to $149, really occurred.) people are just trying to preserve their capital, even if its into negative yield bonds and multi-million vancouver shacks.
shortonoil on Tue, 12th Apr 2016 3:10 pm
Output from ETPPro-Production
from the EIA data set – conventional crude:
1960-2005
Total Years = 46
Average Yearly Change = 5.46%
Total Production = 897.16 Gb
2005-2014
Total Years = 10
Average Yearly Change = 0.43%
Total Production = 270.10 Gb
Anyone who doesn’t believe that the world is not way pasted Peak is unequivocally, flatly delusional!
Keep your distance before they start frothing at the mouth!
Speculawyer on Tue, 12th Apr 2016 4:19 pm
“It turned out though that high oil prices were able to drive up non-conventional oil production such as light tight oil and tar sand oil.”
And that is exactly what will happen again if demand starts to outstrip supply. There is still a lot of oil out there available for extraction through fracking, tar sands processing, heavy oil extraction, and deepwater drilling.
But I don’t think that is direction that things will really go. It seems that in a few years, we will have affordable long-range electric cars. And a lot of people will move over to electric cars instead of remaining addicted to oil. With an EV, you can always “grow your own” fuel with a few solar PV panels.
geek on Tue, 12th Apr 2016 4:39 pm
Iran has only recently returned to the market and is still ramping up.. Iraq production has been slowed because of internal turmoil. Russia will continue to pump since they need the cash. Fracking has slowed for now but the technology is proven. The talk that oil has peeked is an effort to talk up the price and nothing more. Oh by the way there are major oil finds that have not gone into production because of slumping prices. Just stating facts. BTW OPEC needs the cash
Chris on Tue, 12th Apr 2016 4:41 pm
I think by now we can all agree peak oil (Conventional Oil) has past us, but we still have a few more gluts of unconventional oil upon us and ahead of us. All the techniques that has provided the boom in American oil can be deployed worldwide in many countries, not all but many. Also deep water has only just started across the globe, many countries have yet to fully embrace what deep sea has to offer if they really put their minds to it like America has.
We’ll still see some spikes in oil prices in between the supply booms and with each one all the peak oil mongers will say see we told ya and eventually they will be right.
However, we are starting to see many countries reach their population peaks, with their current population aging and slowly starting to decline, by the time oil peaks population will have peaked as well and with any luck our population will dwindle at some rate along with the production of fossil fuels, all in all I don’t believe it will be the world changing event that was predicted using past data..
Who could have predicted America would add 5 million barrels of oil to the world market back in 08 when everyone was worried or that we would be using almost 2 million barrels of oil less in 2016 than we did in 2006, these are things you can’t extrapolate using todays data. Small changes in things change the outcome of peak oil tremendously..
Jeremy on Tue, 12th Apr 2016 4:53 pm
@Speculawyer – I will agree that someday we’ll see more EV’s, and some of them may even be powered by solar energy (most will likely be powered by our utilities, utilizing natural gas powered power plants).
However, the numbers aren’t all that realistic for a while. We sell/lease 15-20 million new vehicles in the U.S. annually. Tesla has a very optimistic target in 2018 of producing 500,000 vehicles. That’s less than 5% of supply. Even if the other automakers are able to ramp up production to similar levels (above the ~30K-40K EV vehicles made currently), it will take a long time to make a dent in those numbers. It will happen, eventually, but it may be 10-20 years before you’re seeing significant numbers. So there’s still a long ways to go.
jaime on Tue, 12th Apr 2016 5:26 pm
there is no reason for oil to go up.Iraq and iran have more that 100 billion of untapped oil reserves.both countries together can produce same volume as Saudi arabia,Also at $40 bl offshore brazil is profitable in private hands withouth paying royalties to brazil.there are huge untapped reserves there too.And finally Lybia has Africa ‘s biggest oil reserves and top quality and is producing low volumes now
shortonoil on Tue, 12th Apr 2016 6:19 pm
“It turned out though that high oil prices were able to drive up non-conventional oil production such as light tight oil and tar sand oil.”
More than half of the difference between the 93.5 mb/d reported, and 2014’s production of conventional crude, 76.89 mb/d, was NGL’s. They don’t make liquid fuels. Also between 1960 and 2005 when production was growing by 5.46% annually the average 55 year weighted price of crude was $16.09/ barrel. Between 2005 and 2014 it was $77.27. During 2013, the last year that we have records for, the industry replaced 1 barrel for every 8 consumed. The world is past peak, and is on its way to the end of the oil age.
Any other conclusion can only be an attempt at wishful thinking.
shortonoil on Tue, 12th Apr 2016 6:40 pm
The world’s economy has followed the production of conventional crude for more than half a century. It has been petroleum that has powered the world’s economic growth. Recent growth has come at the cost of the world’s total debt increasing by 40% over the last six years.
http://www.thehillsgroup.org/depletion2_012.htm
When the present debt explosion comes to an end, so also will any growth. No new EV’s, no new solar panels, no new wind farms. The end of oil will be the end of the modern economy.
makati1 on Tue, 12th Apr 2016 8:19 pm
“… inexpensive, readily available oil is slowly but surely becoming less readily available…”
BINGO!
It does not matter how much oil is still in the ground. Oil availability is controlled by the ability of consumers to afford it. THAT peak has been reached and we are beginning the slide down the far side of the consumer mountain. Been saying that for years.
marmico on Tue, 12th Apr 2016 8:41 pm
Also between 1960 and 2005 when production was growing by 5.46% annually
You are an arithmetic fuctard. Production grew from ~20 mb/d to ~74 mb/d or ~3.0% per year. What’s of more significance is the growth rate post 1970s OPEC supply shocks. Between 1979 and 2015 production grew from ~63 mb/d to ~80mb/d or ~0.70% annually.
In 1960 [2015] it took ~16,000 [~6,000] total BTUs to generate $1 dollar of real GDP in the U.S.. It’s called declining energy intensity.
On a petroleum (crude + NGPLs) basis the energy intensity declined from ~7,100 to ~2,100 BTUs between 1960 and 2015.
Petroleum energy intensity declined faster than the non-petroleum intensity.
Apneaman on Tue, 12th Apr 2016 8:54 pm
marmi, no links – doesn’t count – you lose…..again.
Sissyfuss on Tue, 12th Apr 2016 9:10 pm
Short, please rebut mam I’m Coocoo’s abstruse,obfuscating gibberish for the rest of us. He seems to be attacking your cogent and insightful observations while at the same time backtracking on his corny bs cranial flatulence. Methinks he be a tad bipolar.
Lee Grove on Tue, 12th Apr 2016 11:38 pm
Imagine if Hubbert had just called it: Peak Affordable Oil…
marmico on Wed, 13th Apr 2016 2:03 am
Oil availability is controlled by the ability of consumers to afford it.
No links. You lose.
https://research.stlouisfed.org/fred2/graph/fredgraph.png?g=3c3h
Davy on Wed, 13th Apr 2016 6:34 am
It looks like demand destruction. It feels like demand destruction. It sounds like demand destruction.
“OPEC Warns of Deeper Cuts to Oil Demand Forecast on Slowdown”
http://www.bloomberg.com/news/articles/2016-04-13/opec-warns-of-deeper-cuts-to-oil-demand-forecast-on-slowdown
“The Organization of Petroleum Exporting Countries trimmed estimates for demand growth in 2016 by 50,000 barrels a day because of a slowdown in Latin America, projecting worldwide growth of 1.2 million barrels a day. Weakness in Brazil’s economy, the removal of fuel subsidies in the Middle East and milder winter temperatures in the northern hemisphere could prompt further cutbacks, the group said.”
“Current negative factors seem to outweigh positive ones and possibly imply downward revisions in oil demand growth, should existing signs persist going forward,” the organization’s Vienna-based secretariat said in its monthly market report. “Economic developments in Latin America and China are of concern.”
shortonoil on Wed, 13th Apr 2016 8:01 am
“Short, please rebut mam I’m Coocoo’s abstruse,obfuscating gibberish for the rest of us.”
Obviously, a short circuit somewhere in the works. It could be a “bot” that has gone haywire, or some poor individual in a nut house locked in a padded cell. After his daily shock therapy they probably come in and work him over with a baseball bat twice a day. A CAT scan of this head would probably look like a plate of scrambled eggs. All we can do is hope that it crawls off somewhere, and expires!
shortonoil on Wed, 13th Apr 2016 8:38 am
“It looks like demand destruction. It feels like demand destruction. It sounds like demand destruction.”
Demand destruction has certainly begun, just like the Etp Model projected. It seems likely that the production figures we are getting may be worse than reported? As previously stated, oil producing nations are going to be very reluctant to report declines in production because it could seriously affect their credit ratings; which would reduce their ability to float bonds. The IEA, EIA, and JODI summaries are all dependent on reports from individual nations. If they are messaging their data, for political purposes, we may not know for some time?
As it requires energy to produce oil, as production declines so also will the demand for energy, visa, visa oil. The Etp Model indicates that should be about half; that is, a half barrel decline in demand for every barrel of reduced production, with a lag time of about eight months. That is why market balancing will be much more difficult, and slower than generally estimated. When oil production is reduced, so also will be the demand for oil. Prices are not likely to recover significantly, and are bound by our affordability curve even if they do start upward!
http://www.thehillsgroup.org/
Davy on Wed, 13th Apr 2016 12:49 pm
Floating glut jam
http://www.zerohedge.com/news/2016-04-13/stunning-photos-huge-oil-supertanker-lines-forming-worlds-biggest-traffic-jam
PracticalMaina on Wed, 13th Apr 2016 2:36 pm
Now if only that oil could be drank or used to water plants, I mean it can convert salt water to fresh water, but in a process that will make droughts worst globally.
marmico on Thu, 14th Apr 2016 5:43 am
Sissypussy, that’s called a rebuttal. The quart shy of oil’s latest and greatest ETPPRO model is a double crock of shit. ROTFLMFAO.
Kenz300 on Sat, 16th Apr 2016 10:20 am
Climate Change is real….. we will all be impacted by it.
Oil Giants Spend $115 Million A Year To Oppose Climate Policy
http://www.huffingtonpost.com/entry/oil-companies-climate-policy_us_570bb841e4b0142232496d97
Wind and solar are safer, cleaner and cheaper forms of energy…………..
Electric cars, bikes and mass transit are the
future…..fossil fuel ICE cars are the past…………..
Think teen agers vs your grand father………………….
cell phones vs land lines…….
NO EMISSIONS……..climate change is real………