[Duende]

Fairly recently I learned about the nationalizing of oil in many "oil-rich" countries, such as Venezuela. The United States doesn't have great relationships with many of these big nationally-owned oil operations. In short, the multi-national companies such as BP and Exxon may not have access to the last remaining oil supplies. Therefore, in many ways, the onset of peak oil may be more political than anything else.

Can someone more-precisely illustrate this situation, and explain how Pemex, for example, is qualitatively different from BP or Exxon?

[LoneSnark]

Well, to put it bluntly, BP and Exxon are interested in only one thing: that is maximizing long-term profits for their shareholders. They do that by producing as much oil as possible as quickly as possible with as little cost as possible. This often means borrowing money from capital markets to expand production or investing in the latest technology from anywhere in the world in hopes of extracting more oil. If BP is incapable of raising the money or does not have access to the technology needed then it can sell the oil field to another company that does.

Nationals, like Pemex, do not care about profits, as they answer not to owners but to politicians which are only interested in staying in power. What this often means is taking investment capital away from the company to spend on their constituents instead of investing that money in upgrading or expanding oil production. Venezuela, for example, has forced its national oil company to borrow billions of dollars and spend the money on Chavez supporters. This is because politicians need to win re-election in only a few years, where-as it can take 10 years before an oil investment pays for itself, all of which goes to your rival if you lost the election for lack of pork barrel spending. But Nationals do not just starve their oil fields of investment, they also destroy them. This is because some behavior can dramatically increases oil production in the short term at the expense of damaging the oil field, rendering large reserves of oil unreachable. Such behavior would be rediculous for a business man but makes perfect sense to a politicians which only cares about funding current priorities, such as a war.

What this means is that Peak Oil is largely a political problem. If any large OPEC country openned its oil fields to private investment then oil prices would collapse to under $20 a barrel within a few years and stay there for decades. But I doubt that is going to happen.

[seldom_seen]

$this->bbcode_second_pass_quote('Duende', 'I')n short, the multi-national companies such as BP and Exxon may not have access to the last remaining oil supplies.

[jupiters_release]

$this->bbcode_second_pass_quote('seldom_seen', '
')$this->bbcode_second_pass_quote('LoneSnark', 'I')f any large OPEC country openned its oil fields to private investment then oil prices would collapse to under $20 a barrel within a few years and stay there for decades.

[big_rc]

$this->bbcode_second_pass_quote('Duende', 'F')airly recently I learned about the nationalizing of oil in many "oil-rich" countries, such as Venezuela. The United States doesn't have great relationships with many of these big nationally-owned oil operations. In short, the multi-national companies such as BP and Exxon may not have access to the last remaining oil supplies. Therefore, in many ways, the onset of peak oil may be more political than anything else.

Can someone more-precisely illustrate this situation, and explain how Pemex, for example, is qualitatively different from BP or Exxon?

[Duende]

seldom_seen wrote:
$this->bbcode_second_pass_quote('', '
')Duende wrote:
Therefore, in many ways, the onset of peak oil may be more [s]political[/s] military than anything else.

fixed that for ya.

[big_rc]

$this->bbcode_second_pass_quote('Duende', '
') I mean, why endlessly debate the amount of oil in the grounds in total, when the conversation likely will boil down to how much we'll have access to? In other words, an artificial peak will pop up long before a physical one does.

So, is an artificial peak the primary issue, instead of the physical peak?

[Twilight]

A peak by any other name smells as shit.

The timing and severity are influenced by many things. Geology, to be sure. Technical competence. Political involvement. Economic imperatives. Consumer demand. Greed. The unfolding of history itself. How much is natural and how much is artificial doesn't matter much. It's a multivariable mix that is what it is, and it is difficult to influence. You can't really seperate one element, work on it in isolation and produce globally meaningful results. We are stuck going forward with the system we have built.

[Duende]

Twilight wrote:
$this->bbcode_second_pass_quote('', 'T')he timing and severity are influenced by many things. Geology, to be sure. Technical competence. Political involvement. Economic imperatives. Consumer demand. Greed. The unfolding of history itself. How much is natural and how much is artificial doesn't matter much. It's a multivariable mix that is what it is, and it is difficult to influence. You can't really seperate one element, work on it in isolation and produce globally meaningful results.

[Twilight]

Ironically, while political interruptions of supply create a great deal of short term pain, they do extend the bell curve. Geologically, the world oil production curve would have peaked by 2000 and declined at a rate that matched its rise, 7% or more. The supply shocks and recessions of the 1970s and 1980s chopped off the top of the curve and delayed peak by many years, and likely softened the eventual decline rate too.

Were oil exporting nations to cut back exports and produce at below maximum capacity to save oil for future domestic consumption, the effect would likely be similar - steep production decline to a much lower plateau, widespread economic damage, but over the long term, a lengthening and shallowing of the downslope.

It is difficult to model, as politics are a wildcard. You can take a standard model, pick any oil exporting country you want, remove their exports and see how it looks. The reason there are no well-known models is the possibilites are bounded only by your imagination. Unlike a projection with mostly geological constraints, it is difficult for anyone to agree on a standard.

[LoneSnark]

$this->bbcode_second_pass_quote('', 'I')ronically, while political interruptions of supply create a great deal of short term pain, they do extend the bell curve

[cube]

$this->bbcode_second_pass_quote('LoneSnark', '.')..
What this means is that Peak Oil is largely a political problem. If any large OPEC country openned its oil fields to private investment then oil prices would collapse to under $20 a barrel within a few years and stay there for decades. But I doubt that is going to happen.

[LoneSnark]

*turns head sideways in puzzlement*
Did I suggest that anything would prevent PO? Are you purposefully being daft for some nefarious purpose? Maybe you enjoy twisting the words of others?

I said investment money, technology, and efficient management would dramatically increase production for decades, not forever. It would dramatically increase the amount of oil produced both today and in the long run.

Now, go sit in the corner.

[Duende]

LoneSnark wrote:
$this->bbcode_second_pass_quote('', ' ')I said investment money, technology, and efficient management would dramatically increase production for decades, not forever. It would dramatically increase the amount of oil produced both today and in the long run.

[cube]

$this->bbcode_second_pass_quote('LoneSnark', '*')turns head sideways in puzzlement*
Did I suggest that anything would prevent PO? Are you purposefully being daft for some nefarious purpose? Maybe you enjoy twisting the words of others?

I said investment money, technology, and efficient management would dramatically increase production for decades, not forever. It would dramatically increase the amount of oil produced both today and in the long run.

Now, go sit in the corner.

[LoneSnark]

*again with a puzzled face, as if he had been asked to explain why water is wet*

First, there is always self interest, I really like my current SUV.

But more to the point, there is an aspect of forever to be found here. There are dozens of OPEC countries. If each one allowed private investment then the decades each one allowed would quickly add up to over a century.

In that time, technological advancement in other sectors will advance mightily, enabling us to drill ever deeper wells, squeezing ever more oil out of old wells, postponing the peak for several more decades.

With enough postponement of the peak we quickly find ourselves in the far off years of 2100+, of whose technology we will know nothing about. Perhaps they have perfected fusion technology, perhaps they have found a way to tap the sun directly. For all we know, oil will seem as antiquated to them as whale oil seems to us.

There is a real question as to the living standards that can be sustained given today's technological prowess without oil. We are on the virge of genetically engineering plants that excrete gasoline, but it is clearly not ready yet. However, 100 years from now I have no question that they will not need oil. How they will do it I do not know, I have only an idea of how we would attempt to do it today. The problems I see in an oil-free world today are fixable, all they take is time.

[cube]

$this->bbcode_second_pass_quote('LoneSnark', '*')again with a puzzled face, as if he had been asked to explain why water is wet*

First, there is always self interest, I really like my current SUV.

But more to the point, there is an aspect of forever to be found here. There are dozens of OPEC countries. If each one allowed private investment then the decades each one allowed would quickly add up to over a century.

In that time, technological advancement in other sectors will advance mightily, enabling us to drill ever deeper wells, squeezing ever more oil out of old wells, postponing the peak for several more decades.

With enough postponement of the peak we quickly find ourselves in the far off years of 2100+, of whose technology we will know nothing about. Perhaps they have perfected fusion technology, perhaps they have found a way to tap the sun directly. For all we know, oil will seem as antiquated to them as whale oil seems to us.

There is a real question as to the living standards that can be sustained given today's technological prowess without oil. We are on the virge of genetically engineering plants that excrete gasoline, but it is clearly not ready yet. However, 100 years from now I have no question that they will not need oil. How they will do it I do not know, I have only an idea of how we would attempt to do it today. The problems I see in an oil-free world today are fixable, all they take is time.