Peak Oil is You
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Page added on May 7, 2016
Don’t let the low prices fool you: peak oil will be upon us soon
The end of the oil era has been predicted for so long that it has ceased to attract much interest. Critics rightly say it’s now difficult to know who to believe. Were not forecasters urging governments to go green not so long ago, because we had reached “peak oil” and the world was running out of crude? And yet now we are awash with the stuff, hence the collapse in oil prices.
But it still gives observers pause for thought when someone of the stature of Professor Paul Stephens, oil expert at Chatham House, states baldly that Shell, BP et al have 10 years to adapt or die, as he did last week.
Although he is seen as close to the industry, he nevertheless believes Big Oil should diversify into renewables, perform mega-mergers or slim down to cope with a brave new world where oil demand will fall, carbon regulations will grow and high-cost oil reserves will be stranded. His gloomy prognosis follows the annual general meeting season in which an increasing number of Big Oil shareholders questioned whether businesses were sufficiently prepared for the likely outcomes from the recent UN climate change agreement negotiated in Paris and signed in New York. And it comes just weeks after Saudi Arabia, the world’s biggest oil exporter, announced plans to sell off at least part of its hydrocarbon inheritance to reduce its dependency on oil revenue.
There is no doubt that volumes of oil – and, particularly, lower-carbon gas – will be needed well into the 2030s. The global transport system is still heavily dependent on black gold and full electrification is a long way off. But change is happening quickly too. The sale of electric cars in Norway last year grew by 71%. Almost one in five cars there is a plug-in despite the nation being a major crude producer. So the end of the oil era is not for the birds – or even the birdwatchers, the environmentalists, or the anti-oil obsessives. It is now becoming part of fund-manager and mainstream dialogue. Change is coming.
15 Comments on "Don’t let the low prices fool you: peak oil will be upon us soon"
dave thompson on Sat, 7th May 2016 8:39 pm
This is the type of article that makes me realize just how misled and ignorant the general public is.
makati1 on Sat, 7th May 2016 9:01 pm
“A sampling of Post and Courier headlines includes; “Putin’s 2015 risks pay off — for now”, “Putin’s aggression unchecked”, “Throngs protest Putin”, 2Stand together against Putin”, “Putin overplays his hand”, “Putin is set to bring back serfdom”, “Putin to sign bill barring Americans from adopting Russian children”, “Putin proves that conquest is not obsolete”, “Putin’s chance to push peace, A step-by-step guide on how to stop Putin”, “Putin’s poisonous record”, “U.S., Western Europe set the table for Putin’s aggression”, “Warn Putin: Hands off Baltic States”, “Putin needs serious scrutiny”…
What’s my rub against the Post and Courier? People in the low-country, they cannot believe a damn thing the paper prints, that’s what. It there is no dissenting view, if a two year old book can be reviewed with a “truth assessment” instead of a literary view, then a view of truth is impossible. If 1000 articles naming a world leader as the anti-Christ prevail, and all agents of an entity align with one “message”, then the community is “convinced” more than it is informed.”
http://journal-neo.org/2016/05/07/america-s-down-home-news-carrying-a-message-from-the-elite/
Typical MSM in the FSofA. Dumbed down, uneducated, bible thumping sheep.
Truth Has A Liberal Bias on Sat, 7th May 2016 9:44 pm
This article is great if you’re a retard, which is what most Americans are.
Davy on Sun, 8th May 2016 6:45 am
Let me know how oil prices and production are going to dismiss the below and continue to recover?
“According To Deutsche Bank, The “Worst Kind Of Recession” May Have Already Started”
http://www.zerohedge.com/news/2016-05-07/according-deutsche-bank-worst-kind-recession-may-have-already-started
“One week ago, Deutsche Bank’s Dominic Konstam unveiled, whether he likes it or not, what the next all too likely step will be as central bankers scramble to preserve order in a world in which monetary policy has all but lost effectiveness: “It is becoming increasingly clear to us that the level of yields at which credit expansion in Europe and Japan will pick up in earnest is probably negative, and substantially so. Therefore, the ECB and BoJ should move more strongly toward penalizing savings via negative retail deposit rates or perhaps wealth taxes.”
“the punchline:”
“An endogenous recession – not due to a negative demand shock or Fed policy tightening – is the worst because not only does it speak to policy impotence, but it also highlights the inherent contradiction in capitalism that has worried economists for over a century. That contradiction is that profits, savings or “surplus” must be continually plowed back into the economy to support growth, yet doing so runs the risk of undermining the next profit cycle through over supply. If profits are not plowed back, corporations run the risk of deficit demand. In simple terms, a line in the sand for profit share means that corporations end up firing workers who just happen to be consumers as well.”
Demand destruction can be a systematic thing that is built up like tectonic forces that later unleash dangerous destructive forces. We have mal-invested global economic activity for years now without adjustment and that mal-investment is going to become due soon in the form of a vicious cycle of demand and supply destruction that will not end until globalism self-destructs. We have used every trick in the magician’s library to create demand and supply. Unfortunately it has been the kind of demand and supply that is a bubble and it was created just like any Ponzi. It was created to show growth now with no concern for later. All Ponzi schemes end in tears. Bubbles always burst and usually spectacularly.
shortonoil on Sun, 8th May 2016 7:30 am
The oil age will end when oil producers can no longer make money producing oil. That day is here today. What is happening now is the cannibalization of existing reserves. When they can gone they can not be replaced; and when they are gone so also will be the civilization that was built upon them. The world will not be living in a utopia of plug in hybrids, and solar powered airplanes. The civilization that can build such things will no longer be there. The rantings of hysterical authors tied to the humans can overcome anything paradigm will succumb to the myths of history.
Dredd on Sun, 8th May 2016 8:01 am
It is difficult to tell which will happen first, peak ignorance or peak oil
Ice is an example (Arctic Sea Ice & Antarctic Sea Ice Are Different Types).
Bob Owens on Sun, 8th May 2016 10:04 am
Peak oil is already here. It occurred in 2005 for the legacy wells. They are now declining at 4-6% a year. Project this forward 20 years and tell me where we will be then? Hint: It will not be an all-the-oil-you-want world.This, combined with the crushed world of fracking and deep water drilling, is all anyone really needs to understand.
pat on Sun, 8th May 2016 11:13 am
the world is in post peak era and fast spiraling down the slope. really see the geological limits to show its face soon,2020 is year world start seeing the crisis of oil..
Boat on Sun, 8th May 2016 11:53 am
pat on Sun, 8th May 2016 11:13 am
“the world is in post peak era and fast spiraling down the slope. really see the geological limits to show its face soon,2020 is year world start seeing the crisis of oil”
I would argue there was a small percentage of global undersupply for 6 years. Then
fracking and tar sands growth over shot production by 2 mbpd.
Riding that fine line of consumption and production is extremely unlikely.
When the next shortage hits look for frackers to fill the void short term and Iraq, Iran long term.
GregT on Sun, 8th May 2016 12:50 pm
“I would argue there was a small percentage of global undersupply for 6 years.”
That would have been the Peak of conventional oil production.
“Then fracking and tar sands growth over shot production by 2 mbps.”
Fraking and tar sands were ramped up due to high oil prices. Those high oil prices caused global economic recession and a slowing of global economic growth. The oil that came online would not be overproduction if it was affordable to our economies. There is a big difference between $20/bbl oil, and $100+/bbl oil. It is not the volume of oil produced that matters. It is the cost to produce that oil, and the energy available to our economies that matter. Oil is not like any other commodity, it is the source of energy that fuels modern industrial society.
Anonymous on Sun, 8th May 2016 11:44 pm
Peak oil was never about price. If oil goes back to $100 a barrel and no one can (really) afford it, then we’ve hit peak. If the price falls to $20.00 and no one can really afford to pay that either, then we’ve still hit a peak.
In either scenario production wont rise because demand is stagnant, or declining. Consumption, will gradually taper off at the same time, as more and more end-users gradually get priced out of the fast and furious oil fueled lifestyle.
The uS oil cartel has been using public subsidies, aka corporate welfare to mask the underlying problem in the ‘oil patch’. This process has been going on since the begging of the oil age, but will likely accelerate as oil corps demand more and more overt and covert subsidies in a futile attempt to make oil artificially cheap for end-users. And its not hard to see why they want to keep doing this. The strategy worked well in the past when oil actually was cheap(ish) and plentiful. And welfare for oil corporations was an immensely profitable racket, for them of course.
There will come a moment when it because clear to even the most dimwitted pol or observer that printing dollars to give to for-profit oil corporations to prop them up, cant work.
Either way, cheap oil or expensive oil, the peaks are coming, if they haven’t already.
makati1 on Mon, 9th May 2016 12:10 am
Anonymous, when China goes down, we will see what is real and what was bullshit. Most Americans are going to die when it happens as they have no idea how much their lives depend on Asia.
Personally, I hope they do not go down. Maybe they can cash in their worthless USTs and USBs and keep the show going for a while longer, at the expense of the Us economy.
We live in interesting times. Another Chinese saying that fits.
Davy on Mon, 9th May 2016 6:48 am
You mean like this Makati Bill? Going down into a hole of no return with 1.4BIL people.
“China’s Crashing – Stocks, Commodities Plunge After “Top Authority” Implies “Abandoning Loose Policy”
http://www.zerohedge.com/news/2016-05-09/chinas-crashing-stocks-commodities-plunge-after-top-authority-implies-abandoning-loo
“After comprehensive judgment, our economic recovery cannot be U-shaped, cannot be V-shaped, but will be L-shaped,” warns an ‘authoritative’ person according to a shocking report published by Government mouthpiece People’s Daily. The report, explaining why investors should not expect growth to pick up soon or expect more stimulus to come soon further sets expectations for China to “face the issue of rising non-performing loans” and not continue to create zombie companies. The result – a bloodbath in stocks and commodities…Chinese stocks are down 4.5 to 7% in the last 2 days… as turmoil returns…”
MinorityOfOne on Mon, 9th May 2016 10:36 am
Sometime this century, we will have zero oil, zero coal and zero gas. Plenty left in the ground, but none above. The only interesting question left is, how many people can survive in a zero fossil-fuel world? Not a lot, probably zero here in the UK. As many others have posted, we are probably at the beginning of the end. On a brighter note, just maybe rhinos and tigers can avoid extinction.
Boat on Mon, 9th May 2016 11:46 am
“Fraking and tar sands were ramped up due to high oil prices. Those high oil prices caused global economic recession and a slowing of global economic growth. The oil that came online would not be overproduction if it was affordable to our economies. There is a big difference between $20/bbl oil, and $100+/bbl oil. It is not the volume of oil produced that matters. It is the cost to produce that oil, and the energy available to our economies that matter. Oil is not like any other commodity, it is the source of energy that fuels modern industrial society.”
I don’t disagree with much of that. But, how much of the conventional oil drop was due to political unrest war and sanctions. Some of that oil is now finding it’s way too the market. There will be more to come.
In Iraq for example there are over $25 pd in costs for security or they could have ramped up much quicker and be produing much more.
When it comes to global growth a steady state or very little growth is a good outcome.