Peak Oil is You
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Page added on September 2, 2012
Peak oil production prospect is frightening and controversial
Last week I tried to relate the prediction of the CEO of a company that has more global oil production data than any other I can find. Dave Demshur of Core Labs (NYSE: CLB $121) says we are now at the maximum possible oil output of the planet. And, it will not get higher — ever! The popular term is “peak oil,” and the concept is very controversial.
My emails reflected no concurrence, mostly denials and a couple in angry disagreement. Personal beliefs aside, can each of us ignore how our lives may change if the “peak oil is now” analysis is correct?
Give it a couple days of thought. What if the supply side of crude oil is not able to go up? What if the total crude oil available starts going down?
Memories of the early 1970s have faded, but that was temporary. If planetary peak oil is now, or becomes a reality, the ramifications will be long lived. Giving the idea more than casual thought, and how it could affect your investments, and personal consumption.
On day four, after 116 presentations, EnerCom energy conference participants are simply worn down and many headed for the airport. Call it information overload. However, speaker 117 had a message that affects virtually everyone.
Mike Smolinski, president of Energy Directions Inc., took us through 31 charts. Heavy stuff as some graphs were actually seven tracings — paying attention was mandatory. Smolinski included all aspects of our energy needs and it allows him to make some bold medium/longer-term predictions.
Among his bottom line statements on the economy were:
• We are doing much better than the consensus is thinking, and will need much more oil and natural gas.
• U.S. coal exports are at record highs.
• Energy demand tends to be the big source of surprise.
• We have just experienced a time when natural gas was the lowest the price will be for the rest of our lives.
• Smolinski expects $7/Mcf (thousand cubic feet) natural gas pricing within 12 months.
“Hundreds of millions of new consumers are striving to live like we do — they need much of everything, especially energy and especially oil and natural gas.”
10 Comments on "Peak oil production prospect is frightening and controversial"
Newfie on Sun, 2nd Sep 2012 12:57 pm
Never ending growth is a fairy tale.
keith on Sun, 2nd Sep 2012 2:20 pm
The thing is coal, NG, and all other energy sources we use today has some relation to oil. We could not pull out the quatuities of coal that we do today without the huge machinery that came from and runs on oil. Even hydro electric was constructed using oil and is maintained using oil. Solar, Wind, and Wave also needs oil in some manner. What does this hold for our future? Food for thought.(no pun intended)
SilentRunning on Sun, 2nd Sep 2012 3:16 pm
Any fool who thinks that geology, physics and mathematics limits the amount of oil that can be produced is a heretic and non-believer in the One True God: Economics. ALL WE NEED DO is pray to the Economics God, and He will, in His Infinite Power, provide us with infinite amounts of Oil.
I suggest that we start building bigger and bigger statues of Economics God (perhaps modeled after Ben Bernanke) and our oil production will increase forever more.
Amen.
Kenz300 on Sun, 2nd Sep 2012 3:46 pm
Quote — ” “Hundreds of millions of new consumers are striving to live like we do — they need much of everything, especially energy and especially oil and natural gas.”
———————
Resources are constrained yet the worlds population continues to grow adding more to demand every day. Another billion people were added in the last 12 years.
Endless population growth is not sustainable.
DMyers on Sun, 2nd Sep 2012 5:26 pm
SilentRunning, you’re on a roll. Praise Gawd! I’m going to speak to a rich patron I know about producing a large scale Bernanke Idol. The sooner we all start praying, the better.
Yes, there is now growing competition for OUR resources. Everyone wants to live as we do. What do they think gives them the right?
I liked it better without the competition. Maybe we should get rid of the competition. Well, no, I don’t want to go there.
I don’t think Smolinski led us anywhere new with his predictions. They boil down to one thing, a demand driven bull market in energy.
But when he says “We are doing better than the consensus is thinking…”, I’m thinking, does that we include me? It must. I’m surprised. I thought all the demand growth was coming from them and not us.
Arthur on Mon, 3rd Sep 2012 8:22 am
For people like Smolinski it is very hard to accept that there are limits to the exploitation of the planet.
SOS on Mon, 3rd Sep 2012 3:08 pm
Using resources is not exploitation. One well in ND produces say 1,000 b/day. There are over 300 wells complete but not able to produce because of slowdowns in final permits. Just another fact about peak oil and peak politics.
They have thousands of wells to drill yet. When all that is complete all of these wells will be reworked to harvest the reserves that lie under the Bakken. These reserveres are even bigger. 100 yr supply and counting.
The Bakken is only one of many huge fields now being opened up worl wide.
The worlds needs have now gone beyond the middle east reserves. Those huge reserves have no end in sight. At the same time many fields the world over are in development that will provide us with all the oil we need. Gas too.
Bloomer on Tue, 4th Sep 2012 2:47 am
The Bakkens are oily rocks. It takes more energy to produce a barrel of oil from a Shale Oil well then it produces.
Bloomer on Tue, 4th Sep 2012 2:48 am
The Bakkens are oily rocks. It takes more energy to produce a barrel of oil from a Shale Oil well, then it produces. The Shale Oil companies rely on government subsidies and accounting gimmicks to remain solvent.
BillT on Tue, 4th Sep 2012 1:22 pm
Bloomer, you are correct. SOS is so deep into the Balkan that he cannot think clearly. Reality is that the amount of energy in the US and everywhere else is shrinking, not growing. The per person energy available has been shrinking since the 70s.