Peak Oil is You
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Page added on April 24, 2020
Is this the end of the oil era?
Is the concept of “peak oil” dead? Maybe, but not for long. What is happening now already occurred 25 years ago. We are living through a zombie oil market, a return of the oil era circa 1995, the last time demand was only 70 million barrels per day (bpd). Until this pandemic-induced crash, we were witnessing an energy transition from conventional oil to non-conventional fossil fuels such as bitumen and “shale oil”. Non-conventional firms are among the worst hit by “Black April” when the price of oil futures collapsed to unheard of, negative prices. Yet, unless the Covid-19 depression is followed by a rigorous transition to renewable energy, peak oil will return for a second time alongside its handmaiden, the non-conventional oil industry.
Much of the confusion over “peak oil” stems from the mistaken belief that the concept refers to scarcity. Rather, peak oil is the moment when conventional oil production can no longer be increased, regardless of price. There remain plenty of hydrocarbons, but the world oil market has changed over the past two decades as non-conventionals’ share has grown. “Conventional” oil conjures the 20th-century vision of free-flowing gushers and pump-jacks. Non-conventionals take novel hybrid industrial forms: bitumen strip-mines, “steam-assisted gravity drainage’’, and kilometre-long horizontal drilling to inject cocktails of water, sand, and unsavoury chemicals (ie hydraulic fracturing). Non-conventional technologies have opened up vast new reserves in areas far removed from the industry’s Middle Eastern heartland, but they are dirty, expensive and, as the recent crash shows, unstable. At the moment it is unclear whether the advance of non-conventionals has been merely temporarily halted or if there is a possibility they could be transcended by a renewable energy system.
The concept of “peak oil” originates with the work of Marion King Hubbert, a Shell geologist who 64 years ago predicted the climaxes of US and global conventional oil production. He noticed that fossil-fuel production tended to follow a pattern of exponential growth, peak and decline. “These curves,” he claimed, “embody just about all that is essential in our knowledge of the production of energy.” If the extent of a reserve could be estimated along with the rate of production, then it would be possible to know when the peak would occur. He argued that peak oil would occur in the US in 1970 – much earlier than his peers expected – with global production following in 2000. His first prediction was correct to the year, and there is good reason to think that the second forecast was only slightly off.
In 2016 David King, an emeritus professor in chemistry at Cambridge University and former chief scientific adviser to the government, and his assistant Oliver Inderwildi observed that the oil market’s behaviour up to 2005 “was attributed to normal elastic supply-demand factors, but crude oil then plateaued, with the rapid price rise clearly attributable to demand exceeding conventional supply capacity, with marginal supplies being met from unconventional sources”. This is what peak oil looks like.
Long before it had to engage in “greenwashing” to talk up its environmental credentials, capitalism ran on renewable energy. The first factory, Richard Arkwright’s cotton-spinning mill in the Derbyshire Dales, depended on the River Derwent for its power, and his imitators also exploited the cheap hydrology of the British countryside. Yet, investments in isolated valleys proved vulnerable to Luddite rage. In the late 19th century, working-class movements learned how to wrest control of the coal-based system by shutting down the railways from mines to cities. Petroleum systems, which moved by pipeline and tanker, needed fewer workers, thus creating an energy regime conducive to capital. Middle Eastern oil workers had trouble constricting the energy system, leading to democracy’s stillbirth in the region. In the Global North too, oil was essential for crushing working-class power. This was perhaps most manifest during the 1984-85 miners’ strike when dual oil-coal power plants proved crucial to keeping Britain’s lights on.
***
The shift to non-conventional oil was unusual because it was not spurred by labour unrest, but by the inability of the previous energy system to keep up with demand. The first tar sands mine opened in 1967, but non-conventional production only took off as Hubbert’s peak approached at the turn of the millennium. Total non-conventional production rose from 8 per cent of global output in 2000 to 19 per cent in 2019 – approximately 19 million bpd. Much of this was produced in North America, with US frackers pumping 9 million bpd and the Canadian tar sands industry 3 million bpd.
Just as we look back to the pastoral capitalism of the 18th century, we may come to see conventionals as relatively “green” compared to the destruction engendered by fracking and tar sands extraction. Non-conventionals produce more greenhouse gases, and their chemical properties aggravate spills. In a region as dry as Texas’ Permian Basin, nearly 20 Olympic-size swimming pools of water are used per well – and nearly 5,000 wells are drilled every year. Water used during non-conventional production is so polluted that it has to be removed from the hydrosphere. The First Nations in Alberta, home to Canada’s tar sands industry, have reported that rare cancers have increased in their communities, though the government and medical establishment deny there is a problem. Cleaning up the tar sands industry’s tailings ponds alone would cost C$130bn, but firms have paid only C$1.6bn into the provincial remediation fund. Given that the non-conventional industry often struggles to make a profit, it will never reconcile “the economy” with “the environment’.
Non-conventionals have features drawn from previous energy regimes. Like the rivers exploited by 18th-century textile mills, non-conventionals tend to be in remote locations. This isolation allows workers to extract significant concessions in their pay and other compensation, increasing pressure for automated production. Notably, non-conventionals require vast quantities of fresh water, which means that low water flows can threaten production. They also rely on rail and pipeline to get their product to market: the industry’s dependence on long-distance overland transport has been a vulnerability exploited by indigenous and environmentalist protesters, as opposition to the Keystone XL pipeline from Alberta into the US and the Dakota Access pipelines from Dakota to Illinois proved. Non-conventionals need fuel in order to extract fuel, which lowers their energy return on investment (EROI). The EROI for the tar sands industry is a miserable 4:1, far lower than the 100:1 achieved by mid-century US conventional oil producers. These traits add up to an expensive, environmentally destructive and volatile energy system.
The unusual hybridity of the non-conventional industry helps to explain why it has been harder hit by the crash compared to conventionals. Much of the news has focused on how the price for May’s oil futures collapsed into negative numbers for the first time ever, but this was a North American phenomenon. The world’s oil price, the “Brent” index set by North Sea producers, remained on the right side of zero, hovering near $20 a barrel. This is not the first time Brent and West Texas Intermediate (WTI) – the US standard measure – diverged, as when WTI traded at a discount to Brent during 2011-13.
The tar sands and fracking industries are strewn across a broad hinterland, just as 18th-century textile mills were, meaning that they have trouble reaching the world market. Onland storage, centred on the Oklahoma town of Cushing, is limited and the price of WTI collapsed when it became obvious that there was insufficient space to store the glut. By contrast, Brent’s price reflects the stability of the conventional oil system; production tends to be near ports, where the world’s tanker fleets can become impromptu vaults.
While WTI’s collapse shows the weakness of the non-conventional system, Brent’s price better reflects the state of the global oil market. The pandemic caused demand to shrink by 29 million bpd, returning us to the conventional era of the 1990s. The market’s hunch that $20 a barrel suffices to produce 70 million bpd seems plausible. The lowest-cost producers, such as Saudi Arabia, need only $13 a barrel, and the North Sea producers $15 a barrel, but ultra-deep-sea (another non-conventional form) requires $30 a barrel. Even exceptionally cheap new non-conventional production in the Permian Basin needs prices in the mid-$30s to break even, while the rate for tar sands is the mid-$40s.
The price curve for the next marginal barrel of oil is steep between conventionals and non-conventionals, which means prices jump swiftly to several times the historical average when the economy is doing well, but collapse when there is an economic crisis, as there was in 2008, 2014, and now again in 2020. Thus, the $20 a barrel cut-off seems to lie near the conventional/non-conventional divide. With the Opec+ group of producers agreeing to reduce production by only 10 million bpd, consistent low prices will cull producers until supply is rebalanced at around 70 million bpd. Although analysts predict 90 million bpd demand to return by the year’s end, that seems optimistic given the depth of the Covid-19 depression.
Last year the US Department of Energy praised the fracking industry for producing “molecules of freedom”, but what form does this freedom take? A volatile, ramshackle industry that leaves devastation in its wake? Where the price has collapsed three times in the last dozen years? The compact that society has made with non-conventional capital – we give them the Earth, and they give us abundance – has not fared well. The current depression makes clear that non-conventionals give us neither abundance nor security nor freedom. Yet, instead of reversing the non-conventional transition, the US and Canadian governments have favoured costly bailouts for non-conventionals. Instead, they should have left non-conventional firms to wither, with the state first in line to collect assets to pay off the industry’s gargantuan environmental liabilities.
With the demise of the non-conventional system we can begin to imagine the end of the fossil fuel ancien régime. For the foreseeable future demand for oil will remain low, giving time to vastly expand renewable energy systems. The accompanying fiscal stimulus will help revive a moribund economy and ensure that there will be enough green energy once demand picks up. First the non-conventional transition will be suspended, and then the conventional one too. However, it seems unlikely that capitalism can return to its renewable roots. Rather, a rupture will be necessary. The future post-carbon society perhaps cannot promise endless abundance, but it could offer a freedom that will never be found in the Permian Basin or tar sands.
Troy Vettese is an environmental historian at Harvard University and a contributor to New Left Review, Jacobin and n+1
95 Comments on "Is this the end of the oil era?"
autistmouse on Fri, 24th Apr 2020 8:05 pm
This was an interesting article. I doubt that so called renewables will go anywhere. Their EROI is dubious and they appear completely dependent on fossil fuels for set up and maintenance. That said I appreciate the overall tone of the article and think that it at least leaves space for the idea of degrowth. Something that we have to accept and begin implementing before the Earth does it for us.
Duncan Idaho on Fri, 24th Apr 2020 8:25 pm
We are not at peak oil– that was in Nov of 2018.
Don’t think we will get there again.
Duncan Idaho on Fri, 24th Apr 2020 8:52 pm
“It’s the fate of every race to think itself chosen by God. But it’s the fate of only a very few races that they’re sufficiently stupid as to try to put that into practice.”
~ Bernie Gunther
ANSEL REAPER on Fri, 24th Apr 2020 10:54 pm
Duncan Idaho on Fri, 24th Apr 2020 8:52 pm
“It’s the fate of every race to think itself chosen by God. But it’s the fate of only a very few races that they’re sufficiently stupid as to try to put that into practice.”
~ Bernie Gunther
who is this supertard,
he sounds pretty dumb not taking into account of the expansion of the roman empire just following (((supremetard)))
and if it wasn’t for the inspiration of (((supremtard))) whitey supertard sobieski wouldn’t have rescuted western civ at the gates of vienna and then this is the typical attitude of muzzies after conquering alexandria
“if it’s not in the koran, we burn. if it’s in the koran, we burn because it’s redundant”
so the library of alexandria was burned.
if you need real atheist supertards, watch whitey supertard Richard Dawkins and my recent discovery whitey supertard
jordan peterson. thse whitey supertards love muzzies less. they’re (((supremetard))) friendly
whitey supertard scientific supremacist “thunderf00t” though, I’d like to see him amputated for lovin muzzies and being stupid.
Going for self quarantine is the foulest thing this whitey supertard scientific supremacist ever done, it smellz
oh, by the way why are US agencies running pandemic exercises just before all this?
cui bono?
muzies
when a muzzie allah akbar you and going for your neck. don’t worry the muzzie is being affectionate. this is actual advice so don’t look at me
ramadan kill counter is up ht supertard glenn roberts thereligionofpeace
whoa on Sat, 25th Apr 2020 12:03 am
Hussain “initially appeared calm” and then attacked the two police officers without any provocation or warning. “Then with no warning whatsoever he punched the male officer in the face knocking him backwards….However the female was more seriously injured with a bruised and swollen cheek, a bloodied nose, a cut to the inside of her mouth and cuts and abrasions to her hands and arms as a result of her falling to the ground.”
most whitey supertards wouldn’t stand a chance but mentioning amputation of all muzzies they react with love for supremacist muzzies
mind blown
Cloggie on Sat, 25th Apr 2020 3:17 am
“The unexpected high price of owning and driving a car”
https://www.spiegel.de/auto/autokauf-deutsche-unterschaetzen-tatsaechliche-kosten-ihres-autos-stark-a-e9230430-6794-4690-96cd-a988f53b93c4
Monthly average: 425 euro. People especially underestimate the cost of depreciation.
National CO2 emissions 47million cars: 11%
If Germans would realize the true cost, private car ownership could decrease with 37%.
Article summary of this:
https://www.nature.com/articles/d41586-020-01118-w
“Running a car costs much more than people think — stalling the uptake of green travel”
The best would be to get rid of private car ownership completely and replace it with autonomous driving in vans over all the main roads, which would bring down the cost per mile with a factor of 4-10, depending if you are abandoning your Toyota Starlet or Mercedes.
https://deepresource.wordpress.com/2017/05/16/by-2030-you-wont-own-a-car/
How to arrive at a platform where you can step in an autonomous driving van? Easy:
https://www.spiegel.de/auto/fahrrad-fahren-auf-dem-dorf-stadt-land-frust-a-525dfcfe-b8bc-40ad-9e23-2ecc5a844dd2
By bike. “Game-Changer E-Bike”. Especially car country Germany is very bike-unfriendly, but several initiatives want to change that. Civilians are building bike roads themselves, with the material paid for by the government. Another is thinking through bike-n-ride concepts, which would include combining bikes and autonomous driving.
For an idea how you could promote the use of bikes, here a lecture at the university of Seattle, of somebody who studied the bike system in the Netherlands, with Denmark the most bicycle friendly country in the world (because it is 100% flat and the distances are short):
https://www.youtube.com/watch?v=l0GA901oGe4
Davy on Sat, 25th Apr 2020 3:42 am
Fake news cloggnatzi. Driving a robot car that you dont own, is nother word for COMMUNISM. And communism is a lie, just like you. Owning your own private car is the not only the best thing, it is the best thing in the world. Second only to moderating and deporting juanpee.
You know who else wanted to end private car ownership? Stalin that’s who. And look what happened to him. Same thing going to happen to commie shits like you cloggo.
Cloggie on Sat, 25th Apr 2020 3:53 am
One minute I’m a commie shit, the next a jew and yet anothet a cloggnatzi.
One thing is certain, a lot of folks would love to shoot, it is just that aiming is not their fort. They are more likely to hit their own feet.
JuanP on Sat, 25th Apr 2020 5:57 am
Fake news cloggi. Driving a robot car that you dont own, is nother word for COMMUNISM. And communism is a lie, just like you. Owning your own private car is the not only the best thing, it is the best thing in the world.
You know who else wanted to end private car ownership? Stalin that’s who. And look what happened to him. Same thing going to happen to commie shits like you cloggie
JuanP on Sat, 25th Apr 2020 5:59 am
One minute I’m a commie shit, the next a jew and a faggot
One thing is certain, a lot of folks would love to fuck me in the ass, it is just that my ass stinks so bad.
Davy on Sat, 25th Apr 2020 6:53 am
“EU Leaders Rewrite Document On Government Coronavirus Disinfo After China’s Government Freaks Out”
https://tinyurl.com/y8d7anlb zero hedge
“EU leaders bowed to China this week, softening their criticism of the communist regime in a report documenting how governments have pushed disinformation about the coronavirus pandemic. “China has continued to run a global disinformation campaign to deflect blame for the outbreak of the pandemic and improve its international image,” read the initial report, according to a copy seen by the New York Times. “Both overt and covert tactics have been observed.” It cited Beijing’s efforts to curtail mentions of the virus’s origins in China, in part by blaming the United States for spreading the disease internationally. It noted that Beijing had criticized France as slow to respond to the pandemic and had pushed false accusations that French politicians used racist slurs against the head of the World Health Organization. The report also highlighted Russian efforts to promote false health information and sow distrust in Western institutions. -NYT”
REAL Green on Sat, 25th Apr 2020 7:03 am
Thanks fer bringing pink Poodle out to play agin Davy. It makes the board look REAL purdy. Are sexual fantasies are to much though. We should keep those too ourself. There not as funny as we think they are.
Davy on Sat, 25th Apr 2020 7:19 am
“Stop Thinking!!! The Russians & Chinese Are Your Enemy”
https://tinyurl.com/yb3radp4 zero hedge
“The Russians and the Chinese are your enemy.
Not the oligarchic class in your own country that has been exploiting, propagandizing, deceiving, oppressing and robbing you every moment of your life since you were born.
The Russians and the Chinese.”
“The Russians and the Chinese are your enemy.
Not the people who have been engineering and advancing endless bloodbaths around the world at no benefit to you using your money and your resources and your political energy.
The Russians and the Chinese.”
“The Russians and the Chinese are your enemy.
Not the political/media class and their plutocratic puppeteers who’ve been manipulating your mind to accept omnicide, ecocide, austerity and increasingly Orwellian dystopia as normal and not to be opposed.
The Russians and the Chinese.”
“The Russians and the Chinese are your enemy.
Not the sociopathic manipulators who give you two thieving, warmongering, power-worshipping sock puppets to choose from in fake election after fake election to give you the illusion of control.
The Russians and the Chinese.”
“The Russians and the Chinese are your enemy.
Not the people who pour vast troves of treasure into convincing your countrymen that it’d be evil and insane to demand the same social safety nets afforded to everyone else in every major country on earth.
The Russians and the Chinese.”
“The Russians and the Chinese are your enemy.
Not the people who could have paid you a living wage to stay home safely but instead chose to give you $1200 and tell you to fuck off while transferring trillions to the plutocratic class.
The Russians and the Chinese.”
“The Russians and the Chinese are your enemy.
Not the war profiteers and ecocidal devourers who are destroying your ecosystem and endangering the life of every organism on this planet.
The Russians and the Chinese.”
“The Russians and the Chinese are your enemy.
Not the billionaire class who has a vested interest in making sure you stay poor in a system where money equals power and power is relative.
The Russians and the Chinese.”
“The Russians and the Chinese are your enemy.
Not the people who are doing everything they can to roll out systems of internet censorship, surveillance and police militarization as quickly as possible in your own country.
The Russians and the Chinese.”
“The Russians and the Chinese are your enemy.
Not the authoritarian rulers who demand complete control over what substances you put in your body while creating the largest prison population in the history of human civilization.
The Russians and the Chinese.”
“The Russians and the Chinese are your enemy.
Not the two-headed one-party system which repeatedly threatens to destroy the rights and lives of marginalized groups if you don’t give at least one of those heads your full unbridled support.
The Russians and the Chinese.”
“The Russians and the Chinese are your enemy.
Not the nationless alliance of oligarchs who use your resources to encircle the planet with military bases, wage countless undeclared wars and destroy any nation which refuses to bow to their empire.
The Russians and the Chinese.”
“The Russians and the Chinese are your enemy.
Not the people who infiltrate, undermine, sabotage and smear any political movement which tries to help ordinary people the moment it begins gaining any traction.
The Russians and the Chinese.”
“The Russians and the Chinese are your enemy.
Not the people who are working to normalize the extradition and life imprisonment of any journalist anywhere in the world who exposes the war crimes of your government.
The Russians and the Chinese.”
“The Russians and the Chinese are your enemy.
Not the thugs who demand the unthinking loyalty of not just you and your countrymen but everyone in the world on pain of violent retribution.
The Russians and the Chinese.”
“The Russians and the Chinese are your enemy.
Not the media-owning class who uses their unrivaled narrative control to sow division among your brothers and sisters at home and around the world so you don’t realize who’s really been fucking you over.
The Russians and the Chinese.”
whoa on Sat, 25th Apr 2020 7:45 am
Page added on April 24, 2020
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6571 Votes
Is this the end of the oil era?
Consumption
Is the concept of “peak oil” dead? Maybe, but not for long. What is happening now already occurred 25 years ago. We are living through a zombie oil market, a return of the oil era circa 1995, the last time demand was only 70 million barrels per day (bpd). Until this pandemic-induced crash, we were witnessing an energy transition from conventional oil to non-conventional fossil fuels such as bitumen and “shale oil”. Non-conventional firms are among the worst hit by “Black April” when the price of oil futures collapsed to unheard of, negative prices. Yet, unless the Covid-19 depression is followed by a rigorous transition to renewable energy, peak oil will return for a second time alongside its handmaiden, the non-conventional oil industry.
Much of the confusion over “peak oil” stems from the mistaken belief that the concept refers to scarcity. Rather, peak oil is the moment when conventional oil production can no longer be increased, regardless of price. There remain plenty of hydrocarbons, but the world oil market has changed over the past two decades as non-conventionals’ share has grown. “Conventional” oil conjures the 20th-century vision of free-flowing gushers and pump-jacks. Non-conventionals take novel hybrid industrial forms: bitumen strip-mines, “steam-assisted gravity drainage’’, and kilometre-long horizontal drilling to inject cocktails of water, sand, and unsavoury chemicals (ie hydraulic fracturing). Non-conventional technologies have opened up vast new reserves in areas far removed from the industry’s Middle Eastern heartland, but they are dirty, expensive and, as the recent crash shows, unstable. At the moment it is unclear whether the advance of non-conventionals has been merely temporarily halted or if there is a possibility they could be transcended by a renewable energy system.
The concept of “peak oil” originates with the work of Marion King Hubbert, a Shell geologist who 64 years ago predicted the climaxes of US and global conventional oil production. He noticed that fossil-fuel production tended to follow a pattern of exponential growth, peak and decline. “These curves,” he claimed, “embody just about all that is essential in our knowledge of the production of energy.” If the extent of a reserve could be estimated along with the rate of production, then it would be possible to know when the peak would occur. He argued that peak oil would occur in the US in 1970 – much earlier than his peers expected – with global production following in 2000. His first prediction was correct to the year, and there is good reason to think that the second forecast was only slightly off.
In 2016 David King, an emeritus professor in chemistry at Cambridge University and former chief scientific adviser to the government, and his assistant Oliver Inderwildi observed that the oil market’s behaviour up to 2005 “was attributed to normal elastic supply-demand factors, but crude oil then plateaued, with the rapid price rise clearly attributable to demand exceeding conventional supply capacity, with marginal supplies being met from unconventional sources”. This is what peak oil looks like.
Long before it had to engage in “greenwashing” to talk up its environmental credentials, capitalism ran on renewable energy. The first factory, Richard Arkwright’s cotton-spinning mill in the Derbyshire Dales, depended on the River Derwent for its power, and his imitators also exploited the cheap hydrology of the British countryside. Yet, investments in isolated valleys proved vulnerable to Luddite rage. In the late 19th century, working-class movements learned how to wrest control of the coal-based system by shutting down the railways from mines to cities. Petroleum systems, which moved by pipeline and tanker, needed fewer workers, thus creating an energy regime conducive to capital. Middle Eastern oil workers had trouble constricting the energy system, leading to democracy’s stillbirth in the region. In the Global North too, oil was essential for crushing working-class power. This was perhaps most manifest during the 1984-85 miners’ strike when dual oil-coal power plants proved crucial to keeping Britain’s lights on.
***
The shift to non-conventional oil was unusual because it was not spurred by labour unrest, but by the inability of the previous energy system to keep up with demand. The first tar sands mine opened in 1967, but non-conventional production only took off as Hubbert’s peak approached at the turn of the millennium. Total non-conventional production rose from 8 per cent of global output in 2000 to 19 per cent in 2019 – approximately 19 million bpd. Much of this was produced in North America, with US frackers pumping 9 million bpd and the Canadian tar sands industry 3 million bpd.
Just as we look back to the pastoral capitalism of the 18th century, we may come to see conventionals as relatively “green” compared to the destruction engendered by fracking and tar sands extraction. Non-conventionals produce more greenhouse gases, and their chemical properties aggravate spills. In a region as dry as Texas’ Permian Basin, nearly 20 Olympic-size swimming pools of water are used per well – and nearly 5,000 wells are drilled every year. Water used during non-conventional production is so polluted that it has to be removed from the hydrosphere. The First Nations in Alberta, home to Canada’s tar sands industry, have reported that rare cancers have increased in their communities, though the government and medical establishment deny there is a problem. Cleaning up the tar sands industry’s tailings ponds alone would cost C$130bn, but firms have paid only C$1.6bn into the provincial remediation fund. Given that the non-conventional industry often struggles to make a profit, it will never reconcile “the economy” with “the environment’.
Non-conventionals have features drawn from previous energy regimes. Like the rivers exploited by 18th-century textile mills, non-conventionals tend to be in remote locations. This isolation allows workers to extract significant concessions in their pay and other compensation, increasing pressure for automated production. Notably, non-conventionals require vast quantities of fresh water, which means that low water flows can threaten production. They also rely on rail and pipeline to get their product to market: the industry’s dependence on long-distance overland transport has been a vulnerability exploited by indigenous and environmentalist protesters, as opposition to the Keystone XL pipeline from Alberta into the US and the Dakota Access pipelines from Dakota to Illinois proved. Non-conventionals need fuel in order to extract fuel, which lowers their energy return on investment (EROI). The EROI for the tar sands industry is a miserable 4:1, far lower than the 100:1 achieved by mid-century US conventional oil producers. These traits add up to an expensive, environmentally destructive and volatile energy system.
The unusual hybridity of the non-conventional industry helps to explain why it has been harder hit by the crash compared to conventionals. Much of the news has focused on how the price for May’s oil futures collapsed into negative numbers for the first time ever, but this was a North American phenomenon. The world’s oil price, the “Brent” index set by North Sea producers, remained on the right side of zero, hovering near $20 a barrel. This is not the first time Brent and West Texas Intermediate (WTI) – the US standard measure – diverged, as when WTI traded at a discount to Brent during 2011-13.
The tar sands and fracking industries are strewn across a broad hinterland, just as 18th-century textile mills were, meaning that they have trouble reaching the world market. Onland storage, centred on the Oklahoma town of Cushing, is limited and the price of WTI collapsed when it became obvious that there was insufficient space to store the glut. By contrast, Brent’s price reflects the stability of the conventional oil system; production tends to be near ports, where the world’s tanker fleets can become impromptu vaults.
While WTI’s collapse shows the weakness of the non-conventional system, Brent’s price better reflects the state of the global oil market. The pandemic caused demand to shrink by 29 million bpd, returning us to the conventional era of the 1990s. The market’s hunch that $20 a barrel suffices to produce 70 million bpd seems plausible. The lowest-cost producers, such as Saudi Arabia, need only $13 a barrel, and the North Sea producers $15 a barrel, but ultra-deep-sea (another non-conventional form) requires $30 a barrel. Even exceptionally cheap new non-conventional production in the Permian Basin needs prices in the mid-$30s to break even, while the rate for tar sands is the mid-$40s.
The price curve for the next marginal barrel of oil is steep between conventionals and non-conventionals, which means prices jump swiftly to several times the historical average when the economy is doing well, but collapse when there is an economic crisis, as there was in 2008, 2014, and now again in 2020. Thus, the $20 a barrel cut-off seems to lie near the conventional/non-conventional divide. With the Opec+ group of producers agreeing to reduce production by only 10 million bpd, consistent low prices will cull producers until supply is rebalanced at around 70 million bpd. Although analysts predict 90 million bpd demand to return by the year’s end, that seems optimistic given the depth of the Covid-19 depression.
Last year the US Department of Energy praised the fracking industry for producing “molecules of freedom”, but what form does this freedom take? A volatile, ramshackle industry that leaves devastation in its wake? Where the price has collapsed three times in the last dozen years? The compact that society has made with non-conventional capital – we give them the Earth, and they give us abundance – has not fared well. The current depression makes clear that non-conventionals give us neither abundance nor security nor freedom. Yet, instead of reversing the non-conventional transition, the US and Canadian governments have favoured costly bailouts for non-conventionals. Instead, they should have left non-conventional firms to wither, with the state first in line to collect assets to pay off the industry’s gargantuan environmental liabilities.
With the demise of the non-conventional system we can begin to imagine the end of the fossil fuel ancien régime. For the foreseeable future demand for oil will remain low, giving time to vastly expand renewable energy systems. The accompanying fiscal stimulus will help revive a moribund economy and ensure that there will be enough green energy once demand picks up. First the non-conventional transition will be suspended, and then the conventional one too. However, it seems unlikely that capitalism can return to its renewable roots. Rather, a rupture will be necessary. The future post-carbon society perhaps cannot promise endless abundance, but it could offer a freedom that will never be found in the Permian Basin or tar sands.
Troy Vettese is an environmental historian at Harvard University and a contributor to New Left Review, Jacobin and n+1
new statemans
13 Comments on “Is this the end of the oil era?”
autistmouse on Fri, 24th Apr 2020 8:05 pm
This was an interesting article. I doubt that so called renewables will go anywhere. Their EROI is dubious and they appear completely dependent on fossil fuels for set up and maintenance. That said I appreciate the overall tone of the article and think that it at least leaves space for the idea of degrowth. Something that we have to accept and begin implementing before the Earth does it for us.
Duncan Idaho on Fri, 24th Apr 2020 8:25 pm
We are not at peak oil– that was in Nov of 2018.
Don’t think we will get there again.
Duncan Idaho on Fri, 24th Apr 2020 8:52 pm
“It’s the fate of every race to think itself chosen by God. But it’s the fate of only a very few races that they’re sufficiently stupid as to try to put that into practice.”
~ Bernie Gunther
ANSEL REAPER on Fri, 24th Apr 2020 10:54 pm
Duncan Idaho on Fri, 24th Apr 2020 8:52 pm
“It’s the fate of every race to think itself chosen by God. But it’s the fate of only a very few races that they’re sufficiently stupid as to try to put that into practice.”
~ Bernie Gunther
who is this supertard,
he sounds pretty dumb not taking into account of the expansion of the roman empire just following (((supremetard)))
and if it wasn’t for the inspiration of (((supremtard))) whitey supertard sobieski wouldn’t have rescuted western civ at the gates of vienna and then this is the typical attitude of muzzies after conquering alexandria
“if it’s not in the koran, we burn. if it’s in the koran, we burn because it’s redundant”
so the library of alexandria was burned.
if you need real atheist supertards, watch whitey supertard Richard Dawkins and my recent discovery whitey supertard
jordan peterson. thse whitey supertards love muzzies less. they’re (((supremetard))) friendly
whitey supertard scientific supremacist “thunderf00t” though, I’d like to see him amputated for lovin muzzies and being stupid.
Going for self quarantine is the foulest thing this whitey supertard scientific supremacist ever done, it smellz
oh, by the way why are US agencies running pandemic exercises just before all this?
cui bono?
muzies
when a muzzie allah akbar you and going for your neck. don’t worry the muzzie is being affectionate. this is actual advice so don’t look at me
ramadan kill counter is up ht supertard glenn roberts thereligionofpeace
whoa on Sat, 25th Apr 2020 12:03 am
Hussain “initially appeared calm” and then attacked the two police officers without any provocation or warning. “Then with no warning whatsoever he punched the male officer in the face knocking him backwards….However the female was more seriously injured with a bruised and swollen cheek, a bloodied nose, a cut to the inside of her mouth and cuts and abrasions to her hands and arms as a result of her falling to the ground.”
most whitey supertards wouldn’t stand a chance but mentioning amputation of all muzzies they react with love for supremacist muzzies
mind blown
Cloggie on Sat, 25th Apr 2020 3:17 am
“The unexpected high price of owning and driving a car”
https://www.spiegel.de/auto/autokauf-deutsche-unterschaetzen-tatsaechliche-kosten-ihres-autos-stark-a-e9230430-6794-4690-96cd-a988f53b93c4
Monthly average: 425 euro. People especially underestimate the cost of depreciation.
National CO2 emissions 47million cars: 11%
If Germans would realize the true cost, private car ownership could decrease with 37%.
Article summary of this:
https://www.nature.com/articles/d41586-020-01118-w
“Running a car costs much more than people think — stalling the uptake of green travel”
The best would be to get rid of private car ownership completely and replace it with autonomous driving in vans over all the main roads, which would bring down the cost per mile with a factor of 4-10, depending if you are abandoning your Toyota Starlet or Mercedes.
https://deepresource.wordpress.com/2017/05/16/by-2030-you-wont-own-a-car/
How to arrive at a platform where you can step in an autonomous driving van? Easy:
https://www.spiegel.de/auto/fahrrad-fahren-auf-dem-dorf-stadt-land-frust-a-525dfcfe-b8bc-40ad-9e23-2ecc5a844dd2
By bike. “Game-Changer E-Bike”. Especially car country Germany is very bike-unfriendly, but several initiatives want to change that. Civilians are building bike roads themselves, with the material paid for by the government. Another is thinking through bike-n-ride concepts, which would include combining bikes and autonomous driving.
For an idea how you could promote the use of bikes, here a lecture at the university of Seattle, of somebody who studied the bike system in the Netherlands, with Denmark the most bicycle friendly country in the world (because it is 100% flat and the distances are short):
https://www.youtube.com/watch?v=l0GA901oGe4
Davy on Sat, 25th Apr 2020 3:42 am
Fake news cloggnatzi. Driving a robot car that you dont own, is nother word for COMMUNISM. And communism is a lie, just like you. Owning your own private car is the not only the best thing, it is the best thing in the world. Second only to moderating and deporting juanpee.
You know who else wanted to end private car ownership? Stalin that’s who. And look what happened to him. Same thing going to happen to commie shits like you cloggo.
Cloggie on Sat, 25th Apr 2020 3:53 am
One minute I’m a commie shit, the next a jew and yet anothet a cloggnatzi.
One thing is certain, a lot of folks would love to shoot, it is just that aiming is not their fort. They are more likely to hit their own feet.
JuanP on Sat, 25th Apr 2020 5:57 am
Fake news cloggi. Driving a robot car that you dont own, is nother word for COMMUNISM. And communism is a lie, just like you. Owning your own private car is the not only the best thing, it is the best thing in the world.
You know who else wanted to end private car ownership? Stalin that’s who. And look what happened to him. Same thing going to happen to commie shits like you cloggie
JuanP on Sat, 25th Apr 2020 5:59 am
One minute I’m a commie shit, the next a jew and a faggot
One thing is certain, a lot of folks would love to fuck me in the ass, it is just that my ass stinks so bad.
Davy on Sat, 25th Apr 2020 6:53 am
“EU Leaders Rewrite Document On Government Coronavirus Disinfo After China’s Government Freaks Out”
https://tinyurl.com/y8d7anlb zero hedge
“EU leaders bowed to China this week, softening their criticism of the communist regime in a report documenting how governments have pushed disinformation about the coronavirus pandemic. “China has continued to run a global disinformation campaign to deflect blame for the outbreak of the pandemic and improve its international image,” read the initial report, according to a copy seen by the New York Times. “Both overt and covert tactics have been observed.” It cited Beijing’s efforts to curtail mentions of the virus’s origins in China, in part by blaming the United States for spreading the disease internationally. It noted that Beijing had criticized France as slow to respond to the pandemic and had pushed false accusations that French politicians used racist slurs against the head of the World Health Organization. The report also highlighted Russian efforts to promote false health information and sow distrust in Western institutions. -NYT”
REAL Green on Sat, 25th Apr 2020 7:03 am
Thanks fer bringing pink Poodle out to play agin Davy. It makes the board look REAL purdy. Are sexual fantasies are to much though. We should keep those too ourself. There not as funny as we think they are.
everyone pls respect supertard
were all muzzies and muzzies lovers here
enjoy the purge (your purge) everyone because it’s muzzie ramadan
when supremacist muzzies allah akbar and going for your neck, it’s only being friendly and wanting to say hello. this is actual advice believe it or not.
DT on Sat, 25th Apr 2020 8:03 am
Thanks fer bringing pink Poodle out to play agin juanPee. It makes the board look REAL purdy. Are sexual fantasies are to much though. We should keep those too ourself. There not as funny as we think they are.
JuanP on Sat, 25th Apr 2020 8:05 am
I am mad and take responsibility for the above long ID theft BS. I do this when I get triggered. Don’t fuck with me or I will ID theft you!
Davy on Sat, 25th Apr 2020 7:19 am
“Stop Thinking!!! The Russians & Chinese Are Your Enemy”
https://tinyurl.com/yb3radp4 zero hedge
JuanP on Sat, 25th Apr 2020 8:07 am
This is me too. I can copy and paste huge amounts of material because it makes me look REAL smert:
whoa on Sat, 25th Apr 2020 7:45 am
Page added on April 24, 2020
Bookmark and Share
6571 Votes
whoa on Sat, 25th Apr 2020 8:15 am
(((supertard))) jeff goldblum said muzzies hate tranny
Big Sis came out against (((supertard))) golblum
enjoy the purge (your purge).
it’s ramadan time and muzzie kill a lot because muzzie scores highest points during this period
ramadan bomathon counter is up thanks supertard glenn roberts thereligionofpeace
JuanP on Sat, 25th Apr 2020 8:18 am
This is me juanPee too
(((supertard))) jeff goldblum said muzzies hate tranny
Big Sis came out against (((supertard))) golblum
GregT on Sat, 25th Apr 2020 8:19 am
juanPee, give it a rest already!
Cloggie on Sat, 25th Apr 2020 8:21 am
Davyskum on Sat, 25th Apr 2020 8:19 am
empire dave, give it a rest already!
forbin on Sat, 25th Apr 2020 8:21 am
Is the concept of “peak oil” dead?
no
next question !
Cloggie on Sat, 25th Apr 2020 8:25 am
“Empire State Blows Past Offshore Wind Limit With 1,000 (More) MW”
https://cleantechnica.com/2020/04/24/empire-state-blows-past-offshore-wind-limit-with-1000-more-mw/
No doubts Europeans need to get the Americans going, just like they did with China and its trains. Oh wait…
“As a next step, EEW is working to realize monopile manufacturing in the US, starting with Ørsted’s Ocean Wind project and intends to bring hundreds of local manufacturing jobs to the US East Coast,” EEW has noted.
For the eternal it-cant-be-done howlers here:
“Electric Air Taxi Service Set To Launch In California By 2021”
https://cleantechnica.com/2020/04/24/electric-air-taxi-service-set-to-launch-in-california-by-2021/
“Tesla Achieved The Accuracy Of Lidar With Its Advanced Computer Vision Tech”
https://cleantechnica.com/2020/04/24/tesla-achieved-the-accuracy-of-lidar-with-its-advanced-computer-vision-tech/
And remember folks, a autonomous driving fleet of say 80 million 8p-vans on our highways globally, cooperating with location-aware-mobile-smartphones, means the very desirable beginning of the end of private car ownership (1 billion and counting globally).
Cloggie on Sat, 25th Apr 2020 8:41 am
juanPskum on Sat, 25th Apr 2020 8:19 am
lunatic juanPee, give it a rest already!
JuanP on Sat, 25th Apr 2020 8:42 am
“And remember folks, a autonomous driving fleet of say 80 million 8p-vans on our highways globally, cooperating with location-aware-mobile-smartphones, means the very desirable beginning of the end of private car ownership (1 billion and counting globally).”
cloggie, stop with the techno fancy stuff, already
whoa on Sat, 25th Apr 2020 9:05 am
GregT on Sat, 25th Apr 2020 8:19 am
juanPee, give it a rest already!
everyone please respect supertard and supertard’s sock. once a legit handle, it’s now just another sock working for super Missouri goat for the love of supremacist muzzies
muzzie do soul crushing over speaker in MN
whoa on Sat, 25th Apr 2020 9:14 am
once a legit genuine handle, now just a shell of it former self, a captive sock of super goat for the spreading of permacultism for the love of supremacist muzzies for teh sake of supremacist muzies
ramadan bomathon counter is up
GregT on Sat, 25th Apr 2020 9:55 am
juanPee, lunatic, give it a rest already!
whoa on Sat, 25th Apr 2020 9:05 am
whoa on Sat, 25th Apr 2020 9:14 am
apneaman on Sat, 25th Apr 2020 10:08 am
everone please respec supertad and superard socks
also respect supertard hombre juanP
please ask him to return my 500 lb bean bag
he’s a supertard he can stay in amrica
Duncan Idaho on Sat, 25th Apr 2020 10:08 am
The Fat Boy is getting serious:
https://img.huffingtonpost.com/asset/5ea32421250000210eeb0494.jpeg?cache=ECHZJTubUO&ops=800_450
Duncan Idaho on Sat, 25th Apr 2020 10:21 am
Spock exposed to high-intensity light to kill an insanity-inducing alien parasite. “Operation — Annihilate!” Star Trek (1967).
https://i0.wp.com/digbysblog.net/wp-content/uploads/2020/04/EWVEuTDWkAAbFh4.jpg?resize=768%2C576&ssl=1
The Fat Boy may possibly be watching too much TV?
ANAL REAPER on Sat, 25th Apr 2020 10:22 am
SHUT THE FUCK UP ‘WHOA” OR “PAULTARD” OR “SUPREMACIST MUZZIES JERK” OR WHATEVER STUPID NAME YOU ARE USING TODAY.
SHOULDN’T YOU BE BUSY COLLECTING YOUR WELFARE CHECK, LAZY FUCK.
Duncan Idaho on Sat, 25th Apr 2020 10:25 am
“I guess if you could collapse the last three years of madness into one clip, that would be it,”
Note of above madness.
Duncan Idaho on Sat, 25th Apr 2020 10:32 am
Will the Corruption of Trump’s America End on a Ventilator or in a Mushroom Cloud?
https://www.juancole.com/2020/04/corruption-ventilator-mushroom.html
DerHundistLos on Sat, 25th Apr 2020 10:46 am
A powerful article, Duncan, and scary.
ANSEL REAPER aka goatse on Sat, 25th Apr 2020 11:07 am
thereligionofpeace.com/pow/Ramadan-Bombathon-2020.jpg?1169
joe on Sat, 25th Apr 2020 11:25 am
As I mentioned at the begining of this farce, the coronavirus is nothing more than a flu or cold, in its first wave it will it’s most damage, then it will taper off and vanish in a couple of years.
That said the real concern is the power grab attempt from the left to a physical grip on society through ‘passport’ apps and social distancing (alienation/demoralising) policies. Trump has failed to recognise the danger. His first instinct was correct, it is a mild flu to the vast majority of people who get it. He should have stood his ground and not followed the spread of the Chinese Twitter/facebook Flu.
Boris Johnson also caved into the mass hysteria generated by millennials on Twitter who shared fake videos of images coming out of China as ‘truth’ of a cover up of a new black death that only a lockdown and personal tracking app can solve. Enter Bill Gates to the rescue. Even the WHO in the fa e of mounting scientific evidence wont admit that people are generating effective antibodies to this, instead parsing their opinions that you cant be 100% immune (100% immunity is rare for any virus) which goes against what we know is true for all the other coronavirus that we have beaten. China is quietly taking over the South China sea while the left and proBush/neocon msm try to eat their own and burn Trump at the stake. Enjoy you time in the warm sun lefties. It will be the death of America.
ANSEL REAPER aka goatse on Sat, 25th Apr 2020 11:38 am
oe on Sat, 25th Apr 2020 11:25 am
As I mentioned at the begining of this farce, the coronavirus is nothing more than a flu or cold, in its first wave it will it’s most damage, then it will t
greetings little small big brother joe supertard. please join me in calling for whitey supertard scientific supremacist “thunderf00t” to be amputated.
my BS detector went crazy when this whitey supertard went on self imposed quarantine. i said it smellz
thank you little small big brother joe supertard. i hope you’re well
The Panty sniffer on Sat, 25th Apr 2020 11:45 am
This is all so very very true, I have been saying this for decades even! , the oil is the issue but Bill Gates in an alien sent to fight the liquid farts. This is a major problem as the alien invasion from creatures like Bill Gates planned on the WTI / Brent spread being closer to less globalism in case of toilet paper catastrophic code orange warning system failure!!!
9/11 was a 767 and gravity outside to inside very quickly job!
Captain Barbossa of The Black Pearl on Sat, 25th Apr 2020 11:51 am
Bill Gates is no alien ya landlubber deckswab! , but I am one!
The liquid fart is a curse I tell thee!
I dance with the farts a full four nights from Hispaniola to Port George and by the curses of the mermaids I thought I was a gonner I tell thee!
Pieces of eight to ya all and I bid ye fair tidings! !
The Sharter Farter on Sat, 25th Apr 2020 11:58 am
THE WORLD HAS REACHED PEAK TOILET PAPER!
I have been sharting for days and the Bill Gates alien invasion corvid viruses have got me!
I injected disinfectant into my vein and oversized lumpy bum earlier and that has improved things, I fell less dirty !
The Dissinfectant Injector Genaral! on Sat, 25th Apr 2020 12:03 pm
Dont joke about the disinfectin’ injectin’ mother licker!
Or yu’ll get it big time ya sunovabastard!
Davy on Sat, 25th Apr 2020 12:10 pm
Not sure about oil but it could be the end of me!, I have had the liquid sharts all morning.
The end is near and I wont get to see my hero Truuump annointed Lord Protector of amurka and the orange people of Orangeland.
JuanP on Sat, 25th Apr 2020 12:32 pm
Not sure about oil but it could be the end of me!, I have had the liquid sharts all eek.
The end is near and I wont get to see my hero Truuump annointed Lord Protector of amurka and the orange people of Orangeland.
Duncan Idaho on Sat, 25th Apr 2020 12:48 pm
1886 — US: The New York Times declares the movement for an eight-hour workday “un-American” & its public demonstrations “labor disturbances brought about by foreigners.” Other publications said the eight-hour day would induce “loafing & gambling, rioting, debauchery & drunkenness.” Boy, were they ever right…
ANSEL REAPER aka panty sniffer goatse on Sat, 25th Apr 2020 1:52 pm
i obv engaraged muzzies and muzzies lovers
but i have failed. enraging them is not the goal. i wish supertards would smarten up and organize a people’s trial of global muzzies for crimes against humanity and amputate all muzies starting with muzzie imams
Abraham van Helsing on Sat, 25th Apr 2020 2:21 pm
“China is quietly taking over the South China sea while the left and proBush/neocon msm try to eat their own and burn Trump at the stake. Enjoy you time in the warm sun lefties. It will be the death of America.”
That would require Britain to formulate a new grand strategy. An alliance with the Ukraine? Turkey? The possibilities are endless.
Cloggie on Sat, 25th Apr 2020 4:32 pm
“Is this the end of the oil era?”
The Dutch corporate umbrella organisation FME, on request of the Dutch government, has just issued a report with a very detailed blueprint for the coming hydrogen economy in the Netherlands (in Dutch):
https://deepresource.wordpress.com/2020/04/25/waterstof-kansen-voor-de-nederlandse-industrie/
makati1 on Sat, 25th Apr 2020 5:26 pm
joe, yes, it is no worse than any other flu, but is being used to blow up the world economy and train the sheeple to enjoy/accept house arrest/lock-down. I see it as a desperate attempt of the elite to get their one world government and kill off a percentage of us eaters. Nothing more.
Duncan Idaho on Sat, 25th Apr 2020 5:59 pm
Trump has become Jim Jones?
The sad part is he probably doesn’t know– Jones was obviously smarter than the Fat Boy.