Peak Oil is back with a Vengence

28 Comments on "Peak Oil is back with a Vengence"

forbin on Tue, 12th Aug 2014 6:10 am 



Peak Oil is the point of maximum production of oil – nothing more nothing less.

Regions and wells have expirenced it

and so will the world – after all its just another region ( of the Solar system )

defining what is oil just changes the date.

defining what you mean by cheap just changes the date.

And as Rockman states – its just a date – don’t get hung up on it

We’ll be worrying about other things at the time – I’d posit major war/s or economic recessions but people will say ” peak oil ? oh that…..”

Forbin

Davy on Tue, 12th Aug 2014 6:20 am 



Andrew said – Even more worryingly is that the unexploited reserves might never economically be exploited, with solar rapidly of the reaching past grid parity. That mean that oil company debts might be unpayable and their stock could be a huge bubble. According to the Trillion fund 20-30% of pension fund savings are in carbon fuel based stocks.

Yea, if any of you folks are invested in the Market I hope you are not doing what was told of you to do in the past namely have a diversified portfolio and sit on it through good times and bad and all will be well someday when you want to retire to Scottsdale AZ and pay 18 holes a few times a weak. Pensions are dead man walking. If you like the casino and have the money to wager and lose then please have fun at the rigged games of chance. In any case as the economy deteriorates and the costs of everything soar most pensions will be sucked dry by the vampire called “slow collapse”. Andrews mention of solar meeting grid parity is likewise a dead man walking relying completely on the fossil fuel economy. Solar has benefited from Chinese over capacity which is an example of the many huge mal-investment of the whole Chinese growth saga. It represents governments looking to de-carbonize in the name of CC mitigation subsidizing the industry. It represents a beneficiary of the huge influx of cheap capex liquidity that the CB’s unleashed post 2008 crisis. I say post but I mean the ongoing 2008 crisis. When solar can replicate itself with solar I will bow down to it. These solar freaks remind me of the artificial intelligence and robot freaks that claim robots are going to take over the world. Or the folks that talk about NASA Hiltons on the moon and Mars. Corny talk mainly from those people enraptured with technology, knowledge, and growth. PO is here to stay and no use me as a non-expert to elaborate. My feelings are the PO is the dull fever but the heart attack is a global BAU coming apart from a polarizing multipolar political world fracturing causing blood flow blockages to the hyper complex and globally integrated BAU. All countries have been denationalized and all locals de-localized in what is now an untenable global BAU at the limits of growth facing diminishing returns in overshoot to carrying capacity.

Poordogabone on Tue, 12th Aug 2014 10:06 am 



“Peak Oil is the point of maximum production of oil – nothing more nothing less.”

True and we are at that point. The “bumpy plateau” is a close-up shot of it. And if you’re talking “net oil” production, we are already in slight decline. Colin J. Campbell was right on the money.

Kenz300 on Tue, 12th Aug 2014 11:26 am 



Quote — “Even more worryingly is that the unexploited reserves might never economically be exploited, with solar rapidly of the reaching past grid parity.”
———————–

The price of oil, coal and nuclear keeps rising and causing environmental damage. People that do not care about the environment do care about price.

Wind and solar gets cheaper every year……… Increasing fossil fuel prices will cause a change to alternative energy sources.

karellan on Tue, 12th Aug 2014 11:53 am 



I get so confused about what to believe. The deniers always say production is fine now because fracking and other technologies have pushed the date of peak oil back by like a couple hundred years at a lower cost than what many feared, while the PO theorists claim that the costs associated with those new technologies are much higher than the deniers claim.

Is there a source somewhere that charts the costs of everything? Like a chart that shows the costs of oil production compared to the profit gained by it, both before and after the boom in fracking? Every report I see ends at around 2012, which doesn’t do me any good, since that’s around when fracking took off.

I mean, it seems like the key to the whole damn argument is the costs associated with production. The technologies have clearly freed up at least some new oil (whether it’s enough or of high enough quality is debatable), but when it comes to the costs, one side is saying “OMG, WE’RE ALL DOOMED” and the other side is saying “YOU’RE A BUNCH OF CRAZY-ASS NUTJOBS.” It doesn’t seem like this would be too difficult to determine. Can anyone help me out?

Northwest Resident on Tue, 12th Aug 2014 12:17 pm 



karellan — Just hang out on this forum for a while, visit daily, read the articles and the comments. You’ll learn all about this ultimately critical issue that you are inquiring about.

In the meantime, this might give you some of the answers you’re looking for:

telegraph dot co dotuk/finance/newsbysector/energy/oilandgas/11024845/Oil-and-gas-company-debt-soars-to-danger-levels-to-cover-shortfall-in-cash.html

And here is another link that will give you a lot of good info and perspective:

peakoilbarrel dot com/imminent-peak-us-oil-production/

My own POV on the subject, stated “a few” times on this forum, is: Fracking is a temporary, very short term phenomenon that generates very little excess energy for the American economy, if any, but does provide extremely useful propaganda value for those powers that have the goal of keeping the American people calm and reassured.

Northwest Resident on Tue, 12th Aug 2014 12:23 pm 



karellan — And one more link, that directly addresses your questions AND provides charts:

http://ourfiniteworld.com/2014/08/06/making-sense-of-the-us-oil-story/

JuanP on Tue, 12th Aug 2014 12:26 pm 



Solar PVs are a great buy at this time for preppers. They may get cheaper or better in the future, but they are good enough and very reasonably priced now. There is no certainty of future production, availability, or prices. I think this is a good time to purchase a PV system for those that have the money for this, and I suspect they won’t get much cheaper and will be priceless eventually.

Davy on Tue, 12th Aug 2014 1:00 pm 



Correct Juan, now is the time with AltE in a renaissance of good products, availability, prices, and government ownership promotions. IMO this renaissance will end along with the end of the petroleum renaissance which has lately been driven by CB cheap money and liquidity. So if you are a prepper get something going. If nothing else by a few components at a time and eventually put it together. If you are a prepper on a limited budget then think small, cheap and basic. You don’t need to run a modern household on solar. Get a system to run low power items that will make a difference if the grid goes unstable. Look into a small hot water system. It does not even have to be used just have it ready if the FF sources become unstable. If you are a prepper you want resilience with multiple systems. Stay on the grid but have a basic backup. If you are a prepper on a budget just stay small and inexpensive and cover the basics.

Pops on Tue, 12th Aug 2014 1:21 pm 



K, the only source you need is the sign at your local gasoline dealer. The inflation adjusted, yearly average price of oil has been higher, longer, than at any time in the history of oil – going on 3 years now.

Real gasoline prices rose from about $2 to $3.50 as a result of the artificial shortage imposed by OPEC. Recently, prices have risen similarly, from $1.50avg in ’99 to over $3.50, yet there is no embargo, and no more than the usual political unrest.

All the arguments down in the weeds are just passing the time, the only gauge that matters is the one on the pump, just to the right of the dollar sign.

When the price of unleaded is back to it’s long term, (post OPEC) average of perhaps US$1.5/gal then you can consider PO postponed

http://www.energytrendsinsider.com/wp-content/uploads/2012/02/gas-prices-inflation-adjusted.jpg?00cfb7

rockman on Tue, 12th Aug 2014 1:30 pm 



Karellan – First, I’ll hit you with what everyone here already knows: IMHO the date of global PO is of very little relevance. For 4 decades I’ve drilled for oil/NG and at no time has such a date influenced any of my activity or that of the rest of the oil patch. Further: “…because fracking and other technologies have pushed the date of peak oil back by like a couple hundred years at a lower cost than what many feared”. I don’t know who you’re reading but even the most ridiculously optimistic fool I’ve read hasn’t advanced the PO date that far into the future.

“The technologies have clearly freed up at least some new oil”. Actually the last major tech breakthrough for developing a significant amount of new oil was drilling/producing in Deep Water. If by “new oil” you mean production from the Bakken, Eagle Ford and other shales there is nothing new about that oil: those resources have been known for many decades and most of the technology used to produce them today has changed very little in the last 20 years. I could have been horizontally drilling and producing the EFS in the 1990’s. I was doing so in another fractured formation at that time: the Austin chalk in Texas. But we weren’t doing it in the Bakken or EFS back then because oil was $30/bb or less…not $90+/bbl. That’s the primary difference between then and now.

But here’s a simple test: ask yourself: what do you care more about today: what you pay for the energy you consume (and the cost of the energy used to produce everything you buy) or when the world reaches that point when it will ever again produce that much oil per day? I’m going to guess cost is more important to you. With that in mind do you appreciate that in less than 10 years US consumers have increased the amount they pay for oil from $225 billion/year to well over $600 billion/year? And remember we have the current high price for oil at a time when we are producing more liquid hydrocarbons than ever before. Do you believe the US has spent over $2 trillion and thousands of American lives in the last decade to bring democracy to a region in the Middle East or to keep oil production secure?

The facts I just tossed out are just that: facts. You, like everyone else, are free to interpret those facts as you wish. But that doesn’t change the facts. As most here are tired of seeing me repeat it but your world isn’t now nor every will be very affected by the eventual date of PO to any great degree. But what you’re dealing with today and into the future is the POD: the Peak Oil Dynamic. The POD is all those factors surrounding energy consumption: oil/NG production rates, changes in consumption rates/patterns, military activity, geopolitics, technology development, oil/NG drilling activity, alternative energy advances, etc. etc. The POD controls much of your world today and into the future…not January 22, 20XX.

If you’re looking for a simple answer there is none IMHO. Energy consumption/cost is a complex system which is affected by numerous factors. And IMHO the least important of those factors is some date on a calendar.

Poordogabone on Tue, 12th Aug 2014 2:18 pm 



Each new barrel is increasingly more expensive to extract while each new pay check for the vast majority of people has increasingly less purchasing power. The consequence of this combination is that most of the oil left in the ground will remain in the ground for a long time. This episode of energy bonanza in the human saga is an anomaly, equivalent to a shot of super steroid in the arm of an athlete giving him a burst of incredible energy making him capable of lifting a 2000 pound weight for about 1 minute. we only had one shot and we kind of blew it all at once. yippee!!!!

MSN Fanboy on Tue, 12th Aug 2014 2:28 pm 



Rockman nails it, the question should be “how much ya willin to pay”???

sunweb on Tue, 12th Aug 2014 2:51 pm 



solar – robbing Peter (other uses for fossil fuels, natural resources, plus accompanying environmental assault) to pay Paul – having a source of electric energy that will not reproduce itself years to come, nor produce the products that you want the electricity for in the first place, and only very very slowly pay back the full accounting of the energy it used to make the devices and component parts.

Also from another post shortonoil has good information: http://www.thehillsgroup.org/

shortonoil on Tue, 12th Aug 2014 5:15 pm 



“I get so confused about what to believe.”

Hi karellan;

Welcome to the site. The best one on the web for all round discussion about petroleum. All opinions tolerated as long as you keep it clean. There are a few trolls here, but you will find that the regulars usually shut them up fairly quickly.

To help you answer your question, I’ll state a couple of facts for you to consider. The Bakken play is the best of the best in shale plays. The average cost of drilling the well over its five year productive life is $54/ barrel. The price they receive at the well is close to WTI less transportation costs to Cushing ($28/barrel by train, $14 by pipe), royalties of 15%, $2.50 to the state, $4.00 production costs. You do the math.

For the rest of the crew:

The Ebola epidemic in Central West Africa has gone exponential. Guinea, Nigeria, and Niger are now producing about 2.5 mb/d. This is the highest quality crude produced in the world, and is irreplaceable. If taken off line our calculations show that it would cost the world economy $4.5 trillion per year in lost GDP, which is about 6% of the world’s GDP. “Rumor” is that Dutch Royal Shell is making contingency plans to evacuate personnel if the epidemic continues.

http://www.thehillsgroup.org/

alokin on Tue, 12th Aug 2014 6:04 pm 



What happens if the personnel is taken out? Does someone take over? Could the oil fields then be nationalized (very unlikely there)…

JuanP on Tue, 12th Aug 2014 6:27 pm 



2014 Ebola Wiki
http://en.m.wikipedia.org/wiki/2014_West_Africa_Ebola_outbreak

rockman on Tue, 12th Aug 2014 7:21 pm 



alokin – “Could the oil fields then be nationalized”. Which fields are you referring to?

Apneaman on Tue, 12th Aug 2014 9:11 pm 



@karellan
If you read enough peak oil people you will find that a majority of them have been advocating to prepare ourselves for a new reality and conserve or at least stop squandering our oil. Many realistic peak people who have a strong environmental bent do not advocate giving it up tomorrow, but rather cut emissions in other areas so we can still use some of the stuff. What the deniers do is find the minority of people with the most extreme views and paint anyone who mentions peak oil with the same brush. Very effective strategy so far. I agree with an earlier comment, that you should do the research for yourself…for everything.
In addition to some of the fine sources others have suggested, I recommend Richard Heinberg. Very experienced and level headed guy with plenty of advice for what you could do on a personal level as well.
http://www.postcarbon.org/

Chris Martenson is another rational person with a wealth of information.
http://www.peakprosperity.com/

Alice Friedemann has a ton of stuff on energy and more.
http://energyskeptic.com/

Personally I think were fucked big time on every front, but that’s just me. Happy hunting.

karellan on Tue, 12th Aug 2014 9:18 pm 



Thanks so much guys. This has all been really helpful, especially the links NW Resident posted. Some of the charts on that ourfiniteworld.com article do a great job of explaining both sides of the argument at the same time (i.e. what reality is as well as why/how someone could believe the opposite, despite being demonstrably wrong), in a way anybody with half a brain could figure it out. I can’t say I’m happy I agree with you, but at least I feel like I got some actual answers this time around.

I’ve been following the peak oil arguments for a while now (maybe a year and a half?), but I think a lot of this stuff is just considered common knowledge by a lot of you by now, so it doesn’t come up regularly except in off-hand remarks. It took me ages just to figure out what the actual argument was because the deniers mischaracterize the proponents’ stance by such a huge degree. They act like we all think in five to ten years the whole world is going to instantly turn into Road Warrior because we “ran out of oil.” That’s like how Foghorn Leghorn would describe the situation to that little chicken hawk that’s always following him around.

alokin on Wed, 13th Aug 2014 4:01 am 



I refer to the African ebola endangered fields. And what would happen to these fields once the personnel is taken out.

Davy on Wed, 13th Aug 2014 5:39 am 



Kar, once you understand the PO (Peak Oil) debate then it becomes a study of the dynamics that result from it or the arguments against PO and the supposed dynamics. It becomes a battle between the Cornies and the doomers. A corny is a cornucopian who feels optimistic that resources will maintain BAU (business as usual) and growth. Cornies generally will offer augments that the market and democracy through technology, knowledge, and substitution will solve the many problems we have. Notice I said problems instead of predicaments. I am a doomer (mild). The word speaks for itself. I see the world at the limits of growth facing diminishing returns with a population in overshoot to carrying capacity in an environment of ecological destruction. The above description is one of predicaments. In fact we are in a mega predicament of multiple, converging and inclusive predicaments. I am an optimistic doomer that all is not damned. I am a passionate prepper and believe if we are lucky we can see a collapse that is mild in duration and degree allowing a reboot at and economic level that is adequate for civilization. I see this happening maybe in stair steps over time. I also see this as a long term paradigm shift away from modern industrial man to a postindustrial man. I am hoping the decent in economic activity will participate a spiritual period and a period of reorientation to our natural world in resilience and sustainability. We will have less materially but more spiritually. I am also fully aware that CC (climate change) may be our doom but I am optimistic if BAU ends soon enough with a corresponding population crash then the resulting world will have a climate adjustment instead of a climate induced extinction or bottleneck. You will find here many articles that deal with PO above ground and below ground. We have experts on the geology here for bellow ground ideas. The above ground which deals with the social, political, and economic variables affecting production is also covered. We know here PO is about flows not about “how much”. We are also concerned with other energies and their dynamics and relationship to oil. We are also concerned with the FF (fossil Fuel) extenders mainly AltE (alternative energy) and within AltE mainly solar and wind.

Davy on Wed, 13th Aug 2014 5:44 am 



Kar, IMA, my big complaint about this site is the above ground posting that are focused on American issues and are bent in the direction of unbalance and unfair American criticism. I am not saying that some of the posting that are critical are not correct or partially correct. I am saying these postings and comments create a feel that America is “The” problem and either a destruction of the American influence will result in a better world. The articles either focus on articles of supporters of the power structures in Washington and the corresponding financial power structures on Wall Street who often sound ridiculous and are ridiculous. Rare to almost never are there good, balanced, and fair postings of strengths in the above ground issues in the US. The posting on the above ground US topics are excessively anti American. The other poor editing on this site is the failure to include all the other worldwide issues with Bric nations and the third world. For example posting are given that are positive China and Russia economically or few posting covering China’s ecological Armageddon. Consequently the comments have a significant amount of follow up by anti-Americans many being non Americans or expats who salivate at the chance to criticize America. If you can wade through this pig manure (propaganda ideologue) then the site is excellent.

rockman on Wed, 13th Aug 2014 7:34 am 



alokin – “And what would happen to these fields once the personnel is taken out.”. Two part answer. First, it doesn’t take significant skill to keep wells on production and to pump oil to export facilities. Second, to handle repairs and drill new wells requires experienced hands…both locals and expanse.

The reality, given that Ebola isn’t airborne, it wouldn’t be too difficult to keep production camps isolated from the disease. Most camps tend to be isolated/stand alone facilities anyway. So as long as they can keep the hands from swapping body fluids there shouldn’t be much disruption.

OTOH one can’t discount the potential panic of the less informed. And I’m not sure what “nationalizing” the fields would accomplish: you still need the same light/heavily skilled hands to keep the oil flowing regardless of who’s in charge.

shortonoil on Wed, 13th Aug 2014 8:19 am 



“The reality, given that Ebola isn’t airborne, it wouldn’t be too difficult to keep production camps isolated from the disease.”

CDC disagrees with you. They say its transmission capability is 3 feet in open air, as to 6 feet for the flue. They also indicate that it is highly contagious in inclosed areas, like rooms. This virus has shown to be very contagious, and is not well understood. It has been reported that this may be a mutated form of the Zaire strain. Underestimating this monster is likely to be detrimental to your health. Detrimental, as in dead!

Davy on Wed, 13th Aug 2014 8:57 am 



Short, I tend to agree with you on the airborne nature of the infections. Well prepared and covered medical services folks are becoming infected. I am afraid this Ebola virus could turn into a marginally managed pandemic. My concerns are systematic. Just as a small liquid fuel crisis could cause financial collapse so to a loss of experts and specialist whether infected or offline out of fear. I am talking a global pandemic leaving a loss of global expertise in all vital professions. It only takes a 10% disruption. Please read David Korowicz on the systematic risks of pandemics.

Pops on Wed, 13th Aug 2014 10:34 am 



Pretty sad that no one here recommended the PeakOil.com forums, the oldest, highest rated PO forum on the ‘net.

http://peakoil.com/forums/active-topics.html

MKohnen on Thu, 14th Aug 2014 1:30 am 



Kar,

I have become way more informed about the global oil situation thanks to this irreplaceable site. But sometimes you really don’t need a lot of charts and statistics to make sense of something: all you need do is apply some logic.

If the cornucopians are right and oil is as limitless as they say it is, why do we need to frack for oil? Would a Texas oilmen in the 40’s have said, “Wow, that fracking technology is amazing, we gotta start using that right away!”, or would he have said, “Why in hell would you go to all that effort to drill a well?” Obviously, by promoting shale oil as the thing that has saved us, the industry is admitting that conventional oil has peaked. This is something they said would never happen! But now they are telling us that it will never happen … again.