[Spanktron9]

First of all, thank you to this community for a reasoned (usually) discourse on this most important topic.

I have been reading, studying, lurking on this and other boards for some time, but have yet to come up with a clear answer when I explain the fundamentals of supply/demand to people with regards to peak oil. The question I get is- "If we are using 86 million barrels, and we are only producing 85 million, who is going without oil?"

Am I correct in answering a combination of:
1) Stockpile depletion
2) Demand destruction
3) Shortages and brownouts in various locales around the world

?

If that isn't the best answer, can someone enlighten me?

[jlw61]

$this->bbcode_second_pass_quote('Spanktron9', 'F')irst of all, thank you to this community for a reasoned (usually) discourse on this most important topic.

I have been reading, studying, lurking on this and other boards for some time, but have yet to come up with a clear answer when I explain the fundamentals of supply/demand to people with regards to peak oil. The question I get is- "If we are using 86 million barrels, and we are only producing 85 million, who is going without oil?"

Am I correct in answering a combination of:
1) Stockpile depletion
2) Demand destruction
3) Shortages and brownouts in various locales around the world

?

If that isn't the best answer, can someone enlighten me?

[pup55]

I will give you three answers, as to the question of "who is going without":

a. We've been drawing down our inventories, globally and in the US
b. The poor nations have been doing without oil
c. The really smart nations have been conserving

According to the recent BP review, the current "gap" between production and consumption is about 4 million barrels per day.

The obvious solution as to how this "gap" is being filled is to use up some of the stock we had on hand. I say "had" because globally, inventories have been drawn down over the last couple of years a lot. Obviously, this can only go on for so long before that little supply cushion runs out.

The second solution is: poor nations around the world, especially those in Africa, and in the underdeveloped nations of Asia such as the Phillipines and Bangladesh, have gone to a state of practically no oil at all. The "global shortage" thread is a good resource for this.

The third solution is, pretty big petroleum users, such as Germany and Japan, are busily retooling their economies to get along with less oil. According to the latest BP review, these two nations are down something like 5-8% in oil use, year-over-year. So, they are smarter than we are. They have convinced their business leaders and general population to cut back on oil usage, whereas we are looking for technical solutions that will mainly let us keep going like we have all along, without sacrificing.

So it is all pretty simple. The combination of these things above have roughly balanced out the gap between supply and demand, temporarily.

Of course, there is a limit to how long all of this will go on.

[Spanktron9]

Thanks for the cogent responses. So it basically as I thought. I didn't realize the daily shortfall was that large though!

[jlw61]

$this->bbcode_second_pass_quote('Spanktron9', 'T')hanks for the cogent responses. So it basically as I thought. I didn't realize the daily shortfall was that large though!

[SoylentGreen]

the countries with no natural resources and no large military force.

[thuja]

Man things have changed fast in the Peak Oil world since the economic meltdown. Gas prices plummeting. Demand Destruction. Silver and Gold down huge. Doomers like Rocc and Cashmere jumping ship.

So now a prolonged recession and the likelihood of ongoing demand destruction for a while, maybe years.

So whither Peak Oil...? We were so cool for 6 months. Remember 147$ barrel oil? The depletion continues but no one cares anymore...this subject is so dead out there right now...

[thuja]

I agree Shanny- this issue is not only relevant- it is the pivotal isue of our time. We may be able to prolong the plateau phase of Peak Oil (or not) through recessionary demand destruction...but the consumption and depletion continues unabated.

This still is the elephant i n the room that no one wants to talk about. But with the collapse in oil and commmodity prices, Peak Oil talk is dead.

[TheDude]

I'm busy documenting how production is getting socked. Bit like birdwatching, I suppose - used to grab every bit of info about fuel shortages worldwide. Is this it? Others like to Find Oil (2), we see. Your human magpies at work.

I haven't even tried tabulating how all the cuts in the last two months will impact production in a few years - bet one of the real brains over at TOD will have a detailed paper soon. Love that stuff, numbers and nuts and bolts. For me peak oil is still at the top of the list, rather than arguing about whether Barack is a CFR tool etc.

[thuja]

I agree- but we have moved back into the fringe for now. We aren't as pertinent in the international dialogue. I mean throw us a bone MainStreamMedia! We are still relevant...lol.

In my opinion, massive demand destruction willl be the nameof the game for the next couple years as industrial production is curtailed. Dude- do you really see oil production levels collapsing any time soon...i.e. do you see the end of the plateau?

[TheDude]

Fringe? No way, for some real "doomer wood" here's a new piece from TOD, hot off the wires: Industry Taskforce Sounds Alarm on Peak Oil

Which of course refers to the UK consortium formed by Richard Branson etc. "Not exactly a lightweight," as they say in the movies.

$this->bbcode_second_pass_quote('', 'U')K Industry Taskforce Sounds Alarm on Peak Oil

Posted by Chris Vernon on November 5, 2008 - 7:59pm in The Oil Drum: Europe
On Wednesday 29th October 2008 I attended a press conference at the London Stock Exchange. The meeting was convened by the "Industry Taskforce on Peak Oil & Energy Security" (www.peakoiltaskforce.net) to introduce a new report: The Oil Crunch, securing the UK’s energy future.

September last year, former US Energy Secretary Dr James Schlesinger addressed the ASPO6 conference in Cork, Ireland with these words:

The peakists have won ... to the peakists I say, you can declare victory. You are no longer the beleaguered small minority of voices crying in the wilderness. You are now mainstream. You must learn to take yes for an answer and be gracious in victory.

The taskforce behind this report formed around 18 months ago.
Click to download .pdf
Wednesday's meeting proved Schlesinger right. A group of serious, respectable organisations, had just published a serious and respectable report, in a serious and respectable venue stating:

The effects of peak oil will be felt in the next five years.

The risks to UK society from peak oil are far greater than those that tend to occupy the Government's risk-thinking, including terrorism.

The UK Government needs to re-prioritise peak oil – as the impacts are more likely to arrive first – before climate change.

The Taskforce
"no longer the beleaguered small minority of voices crying in the wilderness".

FirstGroup plc – the world’s leading transport company. Annual revenue of over $5bn, 137,000 employees and carry more than 2.5bn passengers per year.

Scottish and Southern Energy (SSE) – one of the UK’s big six electricity companies.

Solarcentury – one of Europe's leading solar energy companies, specialising in design and supply of building integrated solar thermal and electric technology.

Stagecoach Group – public transport group operating bus, coach, rail and tram services. Employs around 30,000 people with extensive operations in UK, US and Canada.

Virgin – a leading branded venture capital organisation, has created more than 250 branded companies, employs approximately 50,000 people in 29 countries. 2007 revenue exceeded $22bn.

Arup – a global firm of designers, engineers and business consultants with over 10,000 staff working in 37 countries.

Foster + Partners – an international studio for architecture, planning and design.

Yahoo - a leading Internet services company.

[TonyPrep]

It's not clear that demand destruction has been enough to get production and consumption back in line. The next STEO estimates, from the EIA, will be interesting since the previous one estimated consumption ahead of production for August and September, with production falling, along with consumption.

If the new STEO, next week, continues that imbalance, then oil prices will have become disconnected from market realities and stocks will be wittled away, almost unnoticed, to leave an oil shock in the brewing, even whilst our economies are contracting.

[Micki]

$this->bbcode_second_pass_quote('thuja', 'M')an things have changed fast in the Peak Oil world since the economic meltdown. Gas prices plummeting. Demand Destruction. Silver and Gold down huge. Doomers like Rocc and Cashmere jumping ship.

So now a prolonged recession and the likelihood of ongoing demand destruction for a while, maybe years.

So whither Peak Oil...? We were so cool for 6 months. Remember 147$ barrel oil? The depletion continues but no one cares anymore...this subject is so dead out there right now...

[vtsnowedin]

Well the President elect did repeatedly stated that he wants to move to energy independance. Now that he has got the job will he put someone on it that is peak oil aware and might push forward something that is usefull? For that matter is there consensus here about what the government should be doing in light of peak oil? I don't think filling bunkers with mylar packed food is a workable national strategy.

[Tanada]

My big concern is it appears at this point the new Administration is going to go after fossil fuel reductions in a big way. Given Peak Oil that is going to happen no matter what they do, but a side effect of this is they will be blamed for the effects of Peak Oil despite the fact that nothing they can do will keep it from happening.

[waegari]

$this->bbcode_second_pass_quote('vtsnowedin', 'F')or that matter is there consensus here about what the government should be doing in light of peak oil?

[waegari]

$this->bbcode_second_pass_quote('Tanada', 'M')y big concern is it appears at this point the new Administration is going to go after fossil fuel reductions in a big way. Given Peak Oil that is going to happen no matter what they do, but a side effect of this is they will be blamed for the effects of Peak Oil despite the fact that nothing they can do will keep it from happening.