[ralfy]

The link to the report is given in the article.

http://www.ft.com/intl/cms/s/0/d026f6a0 ... abdc0.html

[dorlomin]

Its going to crush the miles driven in the developed world.

Thank god we are building a genuine high speed rail backbone and expanding rail capacity here in the UK. About the only thing our blundering political system is getting right.

[dorlomin]

$this->bbcode_second_pass_quote('', 'T')he price increase would be associated with a rise in total oil supply by around
14 million barrels per day. The additional supply is likely to come from unconventional
resources such as Canadian oil sands and US oil shale. If oil supply were to increase by
respectively 1.3 and 2 million barrels per day less than in the baseline (which
corresponds to the growth of the Canadian production of oil sands or the US production
of shale oil between now and 2020), the oil price would increase by respectively
10 USD and 15 USD more.

[dorlomin]

$this->bbcode_second_pass_quote('', 'T')he total volume of oil that will eventually become available for production is crucial to
long-run oil prices but also highly uncertain. First, the volume of oil that is still in the ground is
known only vaguely. Second, how much of that volume will eventually prove to be commercially
producible is unclear; it depends on technology, which will improve, and the price of oil, which will
most likely rise. The International Energy Agency estimates remaining recoverable conventional
resources (i.e. crude oil and natural gas liquids that are likely to be commercially producible at some
point in the future) at 2.7 trillion barrels worldwide, or about 80 years of current production. The size
of unconventional recoverable resources may amount to another 3.2 trillion barrels (IEA, 2012a).
These include extra-heavy oil and bitumen from oil sands (59% of all unconventional recoverable
resources), kerogen oil produced by industrial heat treatment of shale (34%) and light tight oil
produced from shale or other very low permeability rocks through hydraulic fracturing (7%).

[dorlomin]

$this->bbcode_second_pass_quote('', 'C')onclusion
The figure below shows the supply scenario for all fossil and nuclear fuels. Fuel supply for all fuels is measured in energy units (1Mtoe = 1 million tons of oil equivalent).

According to our study, coal and gas production will reach their respective production peaks around 2020. The combined peak of all fossil fuels will occur a few years earlier than the peaking of coal and gas and will almost coincide with the beginning decline of oil production.

Therefore, the decline of oil production – which is expected to start soon – will lead to a rising energy gap which will become too large to be filled by natural gas and/or coal. Substituting oil by other fossil fuels will also not be possible in case gas and coal production would continue to grow at the present rate. Moreover, a further rise of gas and coal production soon will deplete these resources in a way similar to oil.

The energy contribution of nuclear fuels is too low in order to have any significant influence at global level, though this might be different for some countries. Moreover, like with fossil fuels, easy and cheap to develop mines are also being depleted in uranium production and production effort and cost will continuously increase as a consequence.

Total world fossil fuel supply is close to peak, driven by the peak of oil production. Declining oil production in the coming years will create a rising gap which other fossil fuels will be unable to compensate for.

[ralfy]

Thanks, Dorlomin!

[RepublicanfromEngland]

I read The Last Oil shock in the autumn of 2007, I don't remember the investment bank's name, but one French bank claimed that one barrel of crude oil could get as high as $300 by 2015. I believe it was that amount of money...my mind is sketchy on that now.

[Pops]

Thanks, I've only skimmed but the thing that stands out to me so far is on pg 6 regarding price elasticity. Apparently low price elasticity short term has seemed the norm historically and lately with modest drops in OECD consumption offset by continuing increases in the 2nd world. But at some point, the paper suggests maybe $140/bbl brent, there could be a higher elasticity effect leading oil to a rise to only $160/bbl on declining demand. This is really nice to see since I have been tracking this for a while and have guessed $120 or even $100 as the ceiling based on NO equations but just my evil eye on the charts.

The Pioneering Peakers overlooked price elasticity when forecasting $300, $500, $1,000 a barrel oil. They thought that oil was so central to our way of life that we simply would pay anything for it and demand would not fall with increasing price.

But Demand = Desire + Ability to pay. There is no direct substitute for unleaded, so drivers in the US especially cannot change their "desire" for oil overnight, the Early Peakers were right about that part, those commuters gotta commute. But they are forced to maintain their "ability to pay" by cutting back elsewhere in their budget. Drivers consume less of everything else in order to be able to afford driving and the result is the economy as a whole goes into recession, only then does demand for oil fall. That is the bump plateau that peakers forecast, they just got the price points wrong.

[ralfy]

$this->bbcode_second_pass_quote('RepublicanfromEngland', 'I') read The Last Oil shock in the autumn of 2007, I don't remember the investment bank's name, but one French bank claimed that one barrel of crude oil could get as high as $300 by 2015. I believe it was that amount of money...my mind is sketchy on that now.