[Palpatine]

pstarr,

[Palpatine]

$this->bbcode_second_pass_quote('pstarr', '
')Okay. Let me rephrase it. You assertion the multiple peaks suggests you believe the entire idea of a single peak is unreasonable. The implication being that we will alway find new substitutes (i refer to butane, propane, refinery gains, tar sands, tight shale, ultra deep water, thermodepolymerized monkey shit, space methane as "alternative liquid fuels") with new technologies making heretofore uneconomic fuels suddenly economic. My question is this: "if economics/technology trump planetary limits, then is endless energy a form of perpetual motion?" Yes. Or No.

[AirlinePilot]

Ahhh another post about multiple peaks, but more importantly we have another winner in the "I dont understand total liquids" contest.

Congratulations and welcome to the grand illusion.

[dolanbaker]

I've always preferred to think of peak oil as being like an easy Yorkshire caravan park (an area suffering from coastal erosion), back in the 1960s the entire park was far away from the coast.

In the 1970s a few storms exposed some of the caravans to the sea and they had to be abandoned before they washed into the sea, that could be equated to the 1973 oil supply crisis that put an end to the period of when people believed that oil was cheap and unlimited!

The affects were dramatic, and oil consumption dived as people adapted to being less wasteful and development of stuff that guzzled fuel was stopped dead, for example airlines stopped working on supersonic flight (Concorde excepted) and cars that did silly mileage were scrapped.

The 1980 & 90s were calmer after the sea defences were reinforced when the oil fields in Alaska, North sea & others were developed.
the mid 2000s saw this sea defence eroded and a few more caravans washed into the sea, the financial crisis being the result.

We are currently in a period of relative calm as the next row of caravans are a few metres away from the cliff, but the coast is still being eaten away despite the new sea defences, (Frac'ing is nothing like as effective as several giant oil fields.

Each and every oil shock will result in sufficient energy saving to allow normal life to resume but at a lower energy level than was the case below. It appears that the gaps between shocks in the future will just get shorter & shorter until eventually they'll happen too quickly in succession to adapt (i.e. have a period of growth before the next one.

[dsula]

$this->bbcode_second_pass_quote('Palpatine', '')$this->bbcode_second_pass_quote('dsula', '')$this->bbcode_second_pass_quote('Palpatine', '
')But I thought after peak it doesn't matter what we do. Supply was never supposed to rise again.... EVER !!!

[ROCKMAN]

P – IMHO there are never weak memes…just weak posts.

To touch on the subject one more time: what defines a “plateau”? Folks can pick any metric they want. I follow the definition like that of pornography offered by a SCOTUS jurist long ago: I can’t define it but I know it when I see it. I always like a lot of fudge room. Just the geologist in me. What’s 2+2=? Geologist: somewhere between 3 and 5. LOL

And back to Tanada’s point: It occurs to me we have some very well documented models of economic responses post-peak. First, in case folks missed it: we’re talking about GPO…global PO. Obvious very different than USPO, NorthSeaPO, KSAPO, IndonesianPO, etc.

Obviously for much of the post-peak period in the US after 1971 we’ve done OK. Highs and lows, of course, but no Mad Max events. And for an obvious reason: our PO didn’t equate to PC…Peak Consumption. What we couldn’t produce we could acquire thanks to our ability to outbid other consumers.

So, granted a simplistic model, but when we reach GPO should we expect life to change significantly in the US? IOW will USPC curve be significantly different then when we passed by USPO? I won’t offer a guess but I’m sure others will. And what about Canada in the GPO days? Alberta will probably do just fine…actually prosper. Eastern Canada…we’ll see. And China after GPO? Maybe not too different than the US after GPO. But what about England after GPO? Tougher question IMHO. Obviously the answers becomes a bit uglier as we go done the list of economies with lower oil purchasing powers. Our friends in Greece are having a lot of problems today for a variety of reasons. Easy to imagine matters getting much worse for them in the eventual GPO world whenever it happens. Same sad forecast for all the PIGGS I suspect.

Again, at the risk of wearing it out: it’s how fast the other guys run…not how fast the bear runs. Sure: our legs will hurt and we might lose our breath. But we won’t end up as a pile of bear poop…at least not right away. But someone will.

[John_A]

$this->bbcode_second_pass_quote('pstarr', ' ')Your assertion (of multiple peaks) suggests you believe the entire idea of a single peak is unreasonable.

[John_A]

$this->bbcode_second_pass_quote('AirlinePilot', 'A')hhh another post about multiple peaks, but more importantly we have another winner in the "I dont understand total liquids" contest.

Congratulations and welcome to the grand illusion.

[Pops]

I wanted to repost the original question since it was posed - going on 10 years ago:
$this->bbcode_second_pass_quote('Oilgood', 'I')'ve often heard that oil demand grows at 2% per year, while supply after the peak will drop at 3% per year. But it occurs to me that this may not always be the case. Sure, supply will drop more and more each year after the peak, but due to recession, stagflation, depression, and substitution as a result of high oil prices, won't demand growth decrease and maybe even become negative after a while? Won't this mean that the market will at least allow for a "soft landing" after the peak? How much of a time lag should we expect between the peak and significant changes in people's demand and consumption of oil, and will that be enough? It seems the fall after the peak may be severe at first, but then won't things smoothe out in the long run despite oil's demand inelasticity?

[Subjectivist]

$this->bbcode_second_pass_quote('Pops', 'I') wanted to repost the original question since it was posed - going on 10 years ago:
$this->bbcode_second_pass_quote('Oilgood', 'I')'ve often heard that oil demand grows at 2% per year, while supply after the peak will drop at 3% per year. But it occurs to me that this may not always be the case. Sure, supply will drop more and more each year after the peak, but due to recession, stagflation, depression, and substitution as a result of high oil prices, won't demand growth decrease and maybe even become negative after a while? Won't this mean that the market will at least allow for a "soft landing" after the peak? How much of a time lag should we expect between the peak and significant changes in people's demand and consumption of oil, and will that be enough? It seems the fall after the peak may be severe at first, but then won't things smoothe out in the long run despite oil's demand inelasticity?

[ROCKMAN]

Pops - "supply will drop more and more each year after the peak". And thus the problem from excluding pricing from the model…among other factors. That theory can work to some degree only in a mature province with a fairly constant price. By mature it means the major geologic components have been identified. Typically the easier prospects will be found early and will also tend to define the largest percentile. Thus, with a constant price, the remaining targets have decreasing economic value and will be pursued less vigorously. But jump prices up significantly and the hunt will be back on. This could lower the decline rate and even raise the gross production rate. But this is the dynamic for an individual trend. And not all trends go through such a phase at the same time. When looking at an entire country let alone the entire planet those small bumps might not be obvious.

Another complication to the model: technology changes. And I won’t use the recent uptick in US oil production since that’s tied to price changes more than tech. We were drilling and frac’ng long horizontal wells in fractured reservoirs many years before the current boom. Let’s use changes in seismic tech that greatly changed NG exploration onshore in the mid 80’s. Under good conditions and in certain trends one can see the direct evidence of the presence of a NG reservoir. Called amplitude anomalies or “bright spots”. Not always a NG reservoir but often. In 1985 I began using bright spots to chase NG reservoirs formed by small stratigraphic traps along the Texas coast. Historical success rate was 10% to 20% max. But using bright spots (new tech to the trend) I hit 23 out of 25 wells. And this was during a time of cripplingly low NG prices: less than $1/mcf.

As news of the tech got out thousands of wells were successfully drilled in a number of trends that had gone somewhat dormant. But the gains in those trends were lost in the big picture of US NG production. A similar story could be told about the development of offshore drilling tech. First, movement onto the relatively shallow shelf and then eventually to the Deep Water trends.

Consider the nice bump in US oil production thanks to the oily shales. Now step back and look at global oil production rates: do you see the bump? Nope: as good as it’s been for the US the gain has been lost in the global noise. Sorta like the shooting philosophy: aim small…miss small. Except in reverse, of course. The smaller the population you apply Hubbert’s methods to the more likely the curve will diverge. Choose a very large population, like all the oil plays on the planet, and the trend aberrations will become less impactful.

[ralfy]

$this->bbcode_second_pass_quote('Palpatine', '
')
So 2005 at 85 million bpd wasn't the peak?

Are we calling it now in 2013 at 88-90 million bpd? Or do we still have to wait a few years for that rear view mirror test?

Everyone seems to be calling the past 7-8 years a plateau. Is 85 to 90 close enough to still be within a range to even call a plateau? At what point will we have to say that 85 million bpd in 2005 was not the peak? 92 million bpd? 95 million bpd?

I don't really think any of this matters. The entire meme is weak.

[AirlinePilot]

$this->bbcode_second_pass_quote('John_A', '')$this->bbcode_second_pass_quote('AirlinePilot', 'A')hhh another post about multiple peaks, but more importantly we have another winner in the "I dont understand total liquids" contest.

Congratulations and welcome to the grand illusion.

[Pops]

Thanks ROCK. I'm limited in my ability to make complex models in my head and especially handicapped at divining the future, LOL. I have to break the problem down into manageable pieces – what is actually possible for supply to do, demand, price. That way as I read the morning pixels I can try to plug the random events of the day into my little matrix of possibilities and convince myself I understand what's going on.

You may remember my tortuous route to a Grand Theory of Price, which wound up being simply use less to pay more: ever increasing utility means a lower lower volume of consumption at an ever increasing unit price allows continued production of ever more expensive to extract resources.

Going a little further and kind of mangling Kurt Cobb's idea around a little, price changes will happen in stages. Each stage correlating with a particular technology that may stabilize production for a moment. And, at the same time, each higher pricing level kills a little more demand somewhere for uses with less utility. We're at the horiz frack and barista-kids-living-in-the-basement stage now.


subjectivist, no doubt we'll come up with substitutes, I don't think we'll all just roll over. But by the same token, I don't think we'll come up with a replacement.

.