[OilsNotWell]

I came across this interesting chart somewhere...has anyone else seen this? Is that date correct? The hash marks seem like this was made in 2003. These numbers must be excluding NGL's, etc. At the moment I don't recall having seen this elsewhere. Thoughts? jpg

[OilsNotWell]

Right, it says April 2005 in bottom right, but was part of an oil co. dog and pony show for something else in April 2005, so not sure if the chart was actually dated that, or it just reflects the presentation date?

[I was trying to find out a better idea of EROEI for Canadian Oil Sands and stumbled across this]

[reggieUK]

$this->bbcode_second_pass_quote('OilsNotWell', 'I') came across this interesting chart somewhere...has anyone else seen this? Is that date correct? The hash marks seem like this was made in 2003. These numbers must be excluding NGL's, etc. At the moment I don't recall having seen this elsewhere.

Thoughts?

[linlithgowoil]

must have been made in 2003, as it gives the line with the data on 2003. it must also just be conventional oil, and im pretty sure the figures are actually wrong. isnt conventional oil pumping at around 70 odd million a day?

also, there should be a bigger spike after 2003 in supplies - there was a big jump insupplies in 2004/2005, and likely a 3-4 year plateau until 2008-9. the peak might look more like a rough tabletop.

[Colorado-Valley]

At the Denver ASPO conference, Henry Groppe proposed we had a PO buffer because energy can be substituted.

"He believes that something like 20mbpd of the current 84mbpd of oil demand is going for heat and power generation primarily in developing countries. He thinks that with oil in the $50-$60 range, all of this will get converted to coal or natural gas ..."

Does anyone know if there are any hard figures on this, or is it merely one of those "conceptual" reserves that look good on paper but aren't real?

[agmart]

It could put the initial impact of peak oil on the developing countries, acting as a buffer for for the wealthier nations. It creates both a danger of countries being destablized as they get priced out of the market and an opportunity for oil exporting countries to expand their influence. Chavez is trying this already in the Caribbean.

[peripato]

$this->bbcode_second_pass_quote('Colorado-Valley', 'A')t the Denver ASPO conference, Henry Groppe proposed we had a PO buffer because energy can be substituted.

"He believes that something like 20mbpd of the current 84mbpd of oil demand is going for heat and power generation primarily in developing countries. He thinks that with oil in the $50-$60 range, all of this will get converted to coal or natural gas ..."

Does anyone know if there are any hard figures on this, or is it merely one of those "conceptual" reserves that look good on paper but aren't real?

[Colorado-Valley]

It's sort of like the U.S. spending huge amounts of money over the last 10 years building natural-gas-powered electric plants.

Now suddenly natural gas is spiking. As a utility, do you eat the cost of the new plant and turn around and build an expensive coal-fired plant?

Gas would have to get awfully expensive to make that worth doing ...

[Ancien_Opus]

Henry Groppe has a very long track record of correctly predicting oil price movements. He correctly called the price bust in 1980 and again in 1991.
I would find it difficult to discount anything he says about the price of oil. This time around the fundamentals are reversed and he's going long on oil price.

Substitution by "price" rationing is a fact. Many third world countries will do what they must. Already resources are being diverted to those that can afford to pay while others simply do without. The initial effects of peak oil are here. Coal, if it's available and cheap enough, will fill the void where possible. Is it not substitution when it becomes practical to harvest nonconventional liquid fuels like tar sand (Alberta Canada ,Syncrude) or coal to liquid (Dubuque Iowa, Rentech)? Buying a little time is what Mr. Groppe is saying to us.

It will be most interesting to observe the multiplicity effect on agriculture with peak oil. Low Crop Price - (Long Distance Rural Life > 20 miles to anywhere + Fuel price + fertilizer + herbicide/pesticide + barge/rail transportation + grain drying). I wonder how many farmers will decide to call it quits next Spring? If a large number do, then this will ripple through the economy. North American natural gas prices are already raising havoc through the chemical and aluminum manufacturing industries.

The ball is rolling.

Richard Hirsch's paper has a good graphic on substitution. This shows that after the oil crisis of 1974 static energy uses in industry, electrical generation and home heating switched to alternatives afterwards. You
can find similar information at www.policypete.com

[Grimnir]

Globe And Mail

$this->bbcode_second_pass_quote('', '
')Henry Groppe has been tracking the ups and downs of oil through 60 years, 11 U.S. presidents and five full cycles in the commodity. So he knows what he's talking about when he says that this time, it's different.
...
"We think this is new territory," Mr. Groppe said in an interview this week in Toronto. "We call this new era 'The Era of Price Rationing.' We think that total world production is levelling out and will be declining, and prices are going to have to be high enough to restrain consumption to match a supply that's no longer growing."
...
Unlike many peak-oil proponents, Mr. Groppe does not believe the topping-out of production inevitably leads to "the end of the economic world as we know it," as he put it. Rather, he believes other petroleum liquids stemming from natural-gas production, as well as synthetic fuels, will be stepped up to offset the decline of crude output over the next 10 years or so, and that sustained high prices will again change consumption patterns.
...
"We think most of the surprises are likely to come on the consumption side," he said. "It's a complex set of adjustments. We're going to have to restrain consumption in every different consuming part of the world. But ultimately, we'll change the manner in which we live and do things."

[seahorse]

Grimnir,

Interesting and nice article, thanks. Interesting that he sees a peak right about now. Interesting also his view that its not the end of the world as we know it. Boone Pickens said the same thing on NPR a few months ago.

I don't know what the end of cheap energy will mean. Everyone should read Mr. Bill's post here:

$this->bbcode_second_pass_quote('', 'S')o unfortunately the status quo practically guarantees that the imbalances will continue to grow, but I am not sanguine about the consequences. As far as I am concerned the bigger the bubble the more likely it is to violently burst. I have seen the Tequila, Asian, Russian crises, the Argentine debt default and Turkey flirt with disaster as well as watched the ERM come apart at its hinges. Sure the system survived, but only because there were strong economic pillars elsewhere to take the strain. When the US current account blows-up where is that external stability going to come from? Who is going to come to America's aid and who is going to pick-up the economic slack? China?

[Ludi]

I think we've mentioned many times here on the boards that alternatives need to be in place BEFORE peak, otherwise they won't get built. The new infrastructure needs to be built with cheap energy. Fat chance, huh?

[Cynus]

Hmm, he sees no crisis "But ultimately, we'll change the manner in which we live and do things."
Isn't that basically the very definition of TEOTWAWKI?

[IslandCrow]

$this->bbcode_second_pass_quote('Cynus', 'H')mm, he sees no crisis "But ultimately, we'll change the manner in which we live and do things."
Isn't that basically the very definition of TEOTWAWKI?

[Battle_Scarred_Galactico]

11 U.S. presidents and five full cycles in the commodity and his thinking is still about as deep as a puddle.

Get your ass out of the office and into the real world Groppey.

[mark]

Wow, I was just thinking of posting a new topic when I see a similar discussion is already underway.

Anecdotal data is hardly reliable as it’s impossible to affirm national trends from a few examples. It is, however, how most of us judge what’s happening in the world because these personal stories impact us the most.

It’s real estate that is my current concern as my brothers have taken on large, new, mortgages even while one has not yet sold his previous house (a move necessitated by a new job). So it’s personal in that regard but also my friends are agents whose living depends on turnover.

I also read a lot since becoming peak aware, especially on energy, economics, lifestyle, culture, and religion. It’s comforting to come across articles like Groppe’s as it reaffirms one’s placid and complacent mindset. Yea, things will change, we’ll adjust, life goes on, yadda, yadda, yadda.

But, could it really be different this time! We’re warned in the financial markets to avoid this kind of thinking because it’s detrimental to our financial health. However, I can think of at least 5 things that are different this time – peak oil, massive debt, globalization, overpopulation, resource depletion (water, topsoil, marine life, forest,), etc.

But the biggest difference this time is the rapid change that the age of oil has brought. In 200 years we’ve gone from agrarian life to the moon. It’s only my opinion, but I think that is too fast. I believe our technology has outpaced human ability to adjust – which has caused all sorts of deviant behavior we blithely pass off as anomalies’. The radical reaction of Islamist may reflect the too rapid adjustment required of people worldwide by our oil based lifestyle.

[gego]

So paraphrasing what he said, during this first phase post peak we will attempt to deal with less oil by substitution and conservation, which is what many of us here have been saying.

The problem is that substitution puts pressure on the next domino in the fosil fuel heirachy, and conservation as it progresses becomes deprivation. During the time of this initial stage, oil production continues to decline, so during the next phase of post peak substitution and conservation are no longer mitigating factors and deprivation will be the only way to deal with less oil.

He calls what I see as deprivation as a change in life style. How much deprivation can the economy stand before it breaks (such as the electric grid failing)? How much deprivation can people stand before they weaken and die? How much less farm production before starvation becomes commonplace?

[gego]

$this->bbcode_second_pass_quote('Ludi', 'I') think we've mentioned many times here on the boards that alternatives need to be in place BEFORE peak, otherwise they won't get built. The new infrastructure needs to be built with cheap energy. Fat chance, huh?

[Dezakin]

$this->bbcode_second_pass_quote('Ludi', 'I') think we've mentioned many times here on the boards that alternatives need to be in place BEFORE peak, otherwise they won't get built. The new infrastructure needs to be built with cheap energy. Fat chance, huh?