[TheDude]

Nice list, kublikhan.

"8. Scaling up substitutes will take considerable time, after the need is recognized."

I'd prefer "substitutes for oil (i.e., electric cars)," to make things clearer, as transportation is the sector people will think of first when encountering the idea of peak oil. And indeed turnover can be swifter in other sectors, such as fuel switching from oil to gas in power generation; but in the case of vehicle fleets substitution will be a very drawn out process. As an example, for 2005 and 2006 the UK car fleet was 18,370,000 and 19,446,000 strong, respectively. New vehicle sales minus scrappage gives a rate of 1,076,000 vehicles per year; replacing all those cars would take at least 18 years at this rate. One could imagine government mandates or incentives that would speed things along at a faster rate, once the reality of ever-declining oil supplies would be made apparent; but that is far from a certainty.

[Pops]

$this->bbcode_second_pass_quote('meemoe_uk', '[')i]2. Discovery of new oil fields peaked 40 years ago and very large fields earlier still (?)
No, discovery is too ambiguous to be sure of the numbers. 1st, Most middle east supergiants discovered before 1970, the ones that make up the peak of discovery in doomer charts, would have run dry long ago if it wasn't for later much more oil being 'discovered' in those same reserviors.

[Pops]

I was going to argue the "wealth" part of ELM with that graph showing the US net exports shooting up after peak even though that was the exact same time income flatlined productivity decoupled from income, and oil use per GDP $ but my brain is getting tired...

10 Basic Facts of Peak Oil
1. "Peak Oil" is the point of maximum production followed by terminal decline.
2. Oil is a finite resource on a human time scale.
2. Discovery of new oil fields peaked 40 years ago and very large fields earlier still.
3. Easily extracted (inexpensive) oil will be depleted faster than difficult and expensive oil.
4. As oil production declines exporting nations become wealthier, consume more, and reduce exports.
5. Increasing oil prices can increase reserves by making once unprofitable oil profitable
6. Increasing oil prices decrease demand by reducing the amount consumers can purchase
7. Increasing oil prices reduce discretionary income available for other uses depressing the economy.
8. Scaling up substitutes for oil (i.e., electric cars), will take considerable time, after the need is recognized.
9. Significant amounts of national oil company data are unavailable, obscuring the true situation.
10. Increasing energy expended in finding and developing, and often in extracting and refining oil reduces the net energy produced.

[kublikhan]

$this->bbcode_second_pass_quote('meemoe_uk', 'T')he US is today pulling just below 1970\1 record amounts of crude.

[Pops]

$this->bbcode_second_pass_quote('pstarr', 'S')o his inclusion of futures trading in the same sentence as spot selling (as part of the new free-market mechanism) does not verify your speculation explanation.

[TheDude]

Nice chart, Pops. It isn't backdated but that is useful as well - it shows the status of fields at the present. Notice that Samotlor is almost at the end, despite being the 3rd large producer ever - at its late 70s peak it was providing almost half of FSU output, which would be ca. 5 mb/d - Wiki however states ca. 7 mb/d! It's the bulk of the peak of discovery in 1965, with 44 bbo. Samotlor Field - Wikipedia, the free encyclopedia

For contrast Brazil is planning to increased production about 2 mb/d, to be charitable. Maybe they will surpass expectations and produce much more, but that hasn't really been the case in UDW - read some of Darwinian's posts on ThunderHorse at TOD. All of the data he's dug up on this field shows it underproducing drastically.

[TheDude]

I locked horns with Meemoe here: Re: EIA reports a new peak in crude oil at 75.282 million bp

[kublikhan]

$this->bbcode_second_pass_quote('TheDude', 'I') locked horns with Meemoe here: Re: EIA reports a new peak in crude oil at 75.282 million bp

[sparky]

.
Pops , great curve for the oil fields

On the physical market and future market relationship for crude

the physical market is for users , they will need some crude and intend to obtain it
this , typically.....

Refineries , their main concern is stability of prices and delivery of the most advantageous grades to process ,they enter the future market as a stabilizing factor
if the price goes up too fast they will sell a portion of their deliveries and make profits
the net result is that their storage will be run at a lower level .
ultimately they will have to purchase enough crude to make up the difference but the critical factor for them is the rate of increase , a slow long term increase is not a problem
If the price drop too fast , they buy some futures , at worst they will have plenty of crude in storage

That's management at the margin , they never loose

Airlines companies , their operating cost is strongly influenced by the oil price
they buy more that they need , selling the excess
if the price goes up they make a profit but loose on their jet fuel bill
if the price goes down they loose some but are singing with glee because the jet fuel is cheaper
anyway they lose a little but gain a lot more , like an insurance

That's management by mitigation , they cover their loses

another ( small ) player is the government(s) purchase for their strategic reserve
the goal is to keep the reserve full at the cheaper price .
they can sell small amounts when price explode and buy when they crash
Their purchase policy is of course secret ,
a good guess is that they use oil companies to hide their trading

That's management by "inertia " ( like a fly wheel ) can't loose , except taxpayer money

But then there is another type of players
the greater bulk of future trading is by people who have no intention or means of handling physical deliveries , thus they are in a zero trade game , all the contracts will have to balance
they have no particular interest if the price goes up or down ,
their only concern is that it change , providing a differential , the greater the better

That's management by gambling opportunism

As gamblers they provide the bulk of the losers


P.S. What I just said could be nonsense , but it's a good rule of thumb

[Expatriot]

$this->bbcode_second_pass_quote('Pops', '5'). Scaling up substitutes will take considerable time, once the need becomes generally accepted.

[Pops]

$this->bbcode_second_pass_quote('sparky', '.')
Pops , great curve for the oil fields

On the physical market and future market relationship for crude

[Pops]

$this->bbcode_second_pass_quote('Expatriot', '')$this->bbcode_second_pass_quote('Pops', '5'). Scaling up substitutes will take considerable time, once the need becomes generally accepted.

[Pops]

$this->bbcode_second_pass_quote('dolanbaker', 'I') would slightly amend point one, to reflect the availability of oil to individual consumers.

$this->bbcode_second_pass_quote('', 'T')op 10 peak oil facts:
1. "Peak Oil" is the point of maximum availability per consumer followed by long term decline.

[Pops]

$this->bbcode_second_pass_quote('Pops', 'W')e've also neglected Mr. Jevons...
Anyone pay attention to him any more?

An interesting article...

[Pops]

And before I forget how about this?

$this->bbcode_second_pass_quote('', '&')quot;2. Modern society depends on plentiful, cheap oil. In America, when oil costs exceed 4% of real GDP the economy goes into recession."

My point was that what an oil-importer sees as a problem, an oil-exporter may view as a bounty, and the other way round. And the oil pricing at a specific point in time does not have to be necessarily peak-oil related.

[Expatriot]

$this->bbcode_second_pass_quote('Pops', 'H')mm, still, there are substitutes even if they aren't perfect replacements - like it says in my sig... What do you suggest?

[dolanbaker]

$this->bbcode_second_pass_quote('Expatriot', ' ')
The second type see the PO problem, but like the cornucopians who don't want to understand PO, they suffer from a tremendous normalcy bias. These POers go on and on about substitutes, alternatives, electric cars, high speed rail, battery technology, and so on. They use words like "soft landing" and discuss how people, gee whiz, will come together when, finally, after all of our waiting, Peak Oil is understood by the masses. They will come together and "work on solutions" and so on.

[Expatriot]

$this->bbcode_second_pass_quote('dolanbaker', 'Y')ou're making the classic mistake in thinking that oil is the only fossil fuel currently available, in the near term 30-50 years other fuels can indeed fill the gap left by declining oil supplies.
Of course these substitutes are inferior and will cost consumers more, but they will be available to those who can afford them.

[Pops]

[

10 Basic Facts of Peak Oil
1. "Peak Oil" is the point of maximum production followed by terminal decline.
2. Oil is a finite resource on a human time scale.
2. Discovery of new oil fields peaked 40 years ago and very large fields earlier still.
3. Easily extracted (inexpensive) oil will be depleted faster than difficult and expensive oil.
4. As oil production declines exporting nations become wealthier, consume more, and reduce exports.
5. Increasing oil prices can increase reserves by making once unprofitable oil profitable
6. Increasing oil prices decrease demand by reducing the amount consumers can purchase
7. Increasing oil prices reduce discretionary income available for other uses depressing the economy.
8. Scaling up substitutes for oil (i.e., electric cars), will take considerable time, after the need is recognized.
9. Significant amounts of national oil company data are unavailable, obscuring the true situation.
10. Increasing energy expended in finding and developing, and often in extracting and refining oil reduces the net energy produced.

[Pops]

$this->bbcode_second_pass_quote('Expatriot', 'T')he first type understand that, given human propensity for war and aggression and resource monopolization, carnage must result from PO.