Peak Oil is You
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Page added on November 14, 2016
Peak globalisation?
“Peak oil” was always a myth. The notion that the world might eventually run out of it ignored how markets work. When demand of a commodity exceeds supply prices tend to rise, leading people to use less of it and to develop substitutes. Barely had the printer’s ink dried on “peak oil” stories when hydraulic fracturing unleashed vast quantities of shale oil and more importantly, the less polluting shale gas. Developments in photovoltaic solar power and battery technology make it more likely that oil will be left in the ground by mid-century, rather than disappearing altogether.
The notion of a “peak” is a useful one, however, if it is used like the phrase “high water mark” to denote that something which was once advancing is now diminishing from its highest advance. Globalization has been advancing across the world for decades. It has brought millions of people in poorer countries into the world economy, and has created wealth on a scale never before seen in human history. It has benefitted poor people most, advancing global GDP per head nearly as much in 25 years as was achieved in the previous 25,000 years. During that time global poverty was reduced from 37% of humanity to less than 10%, and world under-nourishment has been halved.
Yet there are signs that the advance of globalization might not continue as it has done. There seems to be increasing resistance at political and popular levels to free trade deals negotiated between groups of countries. The Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada took seven years of painstaking negotiation, and was even then nearly forestalled by the Belgian Wallonia Parliament. It took days of frantic dealing to finally clinch the deal. The Trans-Pacific Partnership (TPP) of 12 Pacific Rim Countries was signed in February 2016, but will not come into effect until it is ratified. As time passes it looks less likely that it will be.
Negotiations to secure the Transatlantic Trade and Investment Partnership (TTIP) to secure freer trade between the US and the EU seem to have run into the ground, with several European ministers describing the deal as dead. It seems unlikely that it will go ahead. If President-elect Trump meant what he said, even the North American Free Trade Agreement (NAFTA) will be up for renegotiation, and is likely to become less free.
Where once the prospect was of more and more countries committing themselves to free trade with each other, the agreements that would enable this are proving more elusive than expected, and resistance is mounting.
A similar effect can be seen with respect to the free movement of labour. Countries which once signed up to the practice of allowing foreigners entry to live and work within them are showing increasing reluctance to the idea. Some are limiting numbers, some are raising barriers. In many countries resistance among the domestic population has forced politicians to withdraw support for free movement and to advocate stricter border controls.
The vision of a world in which goods and peoples can move freely cross borders is looking very much less likely than it once did to come about. It may well be that the globalization of the world’s economy, a factor that has multiplied wealth in so many places, has reached its peak and is starting to recede. If true, this will present tough challenges for the UK as it leaves the protectionist bloc of the EU and moves to negotiate wider free trade for itself with non-EU countries. It may well find itself moving against a tide flowing the other way, but even if this is true, it should not weaken our resolve. We can become richer through free trade even if parts of the world retreat into a nationalistic protectionism.
22 Comments on "Peak globalisation?"
Davy on Mon, 14th Nov 2016 7:18 pm
Free trade for who?
shortonoil on Mon, 14th Nov 2016 7:36 pm
Mr. Soros;
Is that you??
FNORD on Mon, 14th Nov 2016 9:01 pm
Hope we reach peak homo real soon.
rockman on Mon, 14th Nov 2016 9:07 pm
“Peak oil” was always a myth.” Thank goodness…first line. Didn’t need to read anymore.
Harquebus on Tue, 15th Nov 2016 12:29 am
This is the comment that I posted on the source page. Did I get anything wrong? Any corrections will be appreciated.
Cheers.
Peak oil is not a theory, it is an observation.
Markets do not factor finite resources. Total oil production will peak.
Hydraulic fracturing uses different physics so, a separate Hubbert analysis is required. To not do so allows the tight oil production figures to piggy back on conventional oil’s higher EROEI.
This article also does not mention the exponential growth in debt which, is masking the effects of conventional oil’s peak production and which, is already behind us.
Overall, I rate this article as just more male bovine excrement.
Northwest Resident on Tue, 15th Nov 2016 1:13 am
“We can become richer…”
Somebody needs to get a grip and face reality.
Boat on Tue, 15th Nov 2016 1:47 am
Harquebus,
A refinery doesn’t care about about all that crap. They will pay for oil, refine, resell as products. They test the input wanting close to 32 api. Do you think a refiner cares where the oil comes from, how it was extracted or how much operator debt it took to extract it?
geopressure on Tue, 15th Nov 2016 1:49 am
Shortonoil;
Check out the chart on the bottom of the 3rd page of this .pdf file, courtesy of Schlumberger:
https://www.slb.com/~/media/Files/resources/oilfield_review/ors00/spr00/p30_51.pdf
This is why you have a difficulties convincing oil & gas professionals that the amount of energy required to lift water that’s associated with oil production is so great (& so costly) that oil is no longer profitable (or barely profitable).
The Average Cost for Lifting, Separating, De-Oiling, Pumping, & Injecting produced water amounts to only $0.578 / BBL…
That kinda throws a ratchet in The Hill’s Group’s way of thinking…
yoananda on Tue, 15th Nov 2016 1:56 am
Yeah, poverty disminish according to the mondialists, we are now more than 7 billions consuming everything, more than ever.
Hopefully humanity will continue to destroy all lifeforms it cannot exploit and exploit the rest for eternity without having to worry about anything thanks the new market god.
brough on Tue, 15th Nov 2016 3:38 am
Comparing ‘peak oil’ to ‘peak globalisation’ is stupid.
In order to measure peak anything it needs to be measured in a unit thats commonly accepted and a graph drawn. If nothing else the oil and gas industry produces mountains of data in units that we understand and draws graphs in large quantities. Adam Smith, where are your graphs ??
joe on Tue, 15th Nov 2016 5:26 am
Are we talking about world trade, global immigration crisis and global banking integration? Even if the UK leaves the EU fully, that process will be very hard to stop as long as planes fly cheaply enough to permit millions traveling each day and boats to carry masses of migrants and hopes of jobs or handouts at the end of the line. Globalisation means cheaply making all the crap we can make as a result of cheap fossil fuel. Peak Easy Oil happened in 2005 (precceded by the Iraq invasion based on lies), follwed shortly by the Great Recession, followed by almost 9 years now of the bailing out of the rich, low inflation, low interest rates and the impoverishment of the west leading to Brexit and Trump. The path of decline is obvious, just gotta see. Peak Globalisation happend in 05, because its demand led, not supply led.
Cloud9 on Tue, 15th Nov 2016 7:12 am
Like Rome, or Persia or Greece or any other empire, we have reached the end of growth. What must be successfully managed is the devolution into a simpler system.
There is no solution to the entitlement system. There is no way to fund it except by an exponential printing of the currency. Turn it off and the streets fill with blood. Continue to print and the currency becomes toilet paper. We are damned if we do and damned if we don’t.
The mega cities have no choice but to ratchet up the debt and ratchet up the taxes. The only thing holding them together is the entitlement structure that provides food, housing and medical subsidies for their dependent populations. The dependent populations migrate to the city centers for more free food and housing while the producers flee the tax zones. Detroit is the model for this ongoing process. We will witness the depopulation of these unsustainable structures over the coming decades.
Look at the failed economies of Venezuela and Cuba. The central planners in both socialist systems called on their populations to grow their own food. During the troubles, the average Cuban lost 20 pounds as the population grappled with food shortages. There is going to be a concentrated effort to move populations back to the land. Resiliency movements have been developing for decades. The tiny house movement will make it easier for many to migrate.
I do not wish to derail your understanding of this ongoing process by pointing out this video to you. Some of you will trip over the concept of peak oil production because current relatively cheap gasoline prices run counter to the theories put forth by many in the peak oil movement. Forget about peak oil for a moment and simply look at the local response the Cubans made to a failing economic system. In the coming decade, we will mimic many of these responses. Watch and learn: https://www.youtube.com/watch?v=Vs6xoKmnYq8
rockman on Tue, 15th Nov 2016 9:14 am
H – All reasonable. But some tweaking.
“Peak oil is not a theory, it is an observation.” True but global PO is a statistical fact whenever it might occur.
“Hydraulic fracturing uses different physics so, a separate Hubbert analysis is required.” Frac’ng was being done in Hubbert’s time. Though not a big component some of the fields he built his model around were tite oil reservoirs that were frac’d. It wasn’t a change in physics that caused the recent US oil boom…it was the price of oil. Consider that the physics of frac’ng hasn’t changed at all in the last two years. What caused a 75% drop in the rig count was the drop in oil prices.
“a separate Hubbert analysis is required.” A great point that few appreciate. If one reads his original work Hubbert specifically says his model predicted the peak of production of only the major oil trends that were the basis of his work. He notes that his model does not take into account the offshore plays or any other undeveloped trends. IOW one can do a Hubbert style analysis for the Deep Water GOM, Eagle Ford Shale and any other trend that developed since his original report. Hubbert’s model was based upon the rather mature oil trends developed in the US at that time.
But there’s one factor making it more difficult to do so: volatile oil prices. They were relatively stable during Hubbert’s time so also was field development. But consider the huge drop off in shale development in the last two years. That was not a result of a decline of shale opportunities. It was a result of a dramatic decrease in ECONOMICALLY viable shale prospects. And if prices stay low long enough we’ll see the same impact on the Deep Water GOM. In both cases one might see what could be characterized as APO (Artificial Peak Oil) as opposed to a “natural” PO which would result of fewer reservoirs left to dervelop.
And speaking of EROEI have you read and understand my posts highlighting that the EROEI of current oil drilling (including the shales) has significantly increased in the last two years as a result of lower oil prices?
rockman on Tue, 15th Nov 2016 9:30 am
geo – “This is why you have a difficulties convincing oil & gas professionals that the amount of energy required to lift water that’s associated with oil production is so great”. Rather difficult to tell the folks, like the Rockman, who actually pays ever bill associated with producing a well. Difficult to imagine the arrogance to think that one who has never approved an LOE invoice knows better those costs then those that actually pay the bills. And not just pays them but are responsible to constantly monitor such costs in an effort to minimize those costs.
Apneaman on Tue, 15th Nov 2016 1:56 pm
brough, good catch. After the obvious false statement that “Peak oil” was always a myth” the entire argument is one lame assed false comparison.
Faulty Comparison
“(also known as: bad comparison, false comparison, incomplete comparison, inconsistent comparison)
Description: Comparing one thing to another that is really not related, in order to make one thing look more or less desirable than it really is.”
more
https://www.logicallyfallacious.com/tools/lp/Bo/LogicalFallacies/97/Faulty-Comparison
rockman on Tue, 15th Nov 2016 2:34 pm
Apneaman – Wow! I can hardly believe you and Boat are finally on the same page. That will certainly bother both your supporters.
Apneaman on Tue, 15th Nov 2016 5:29 pm
rockman, I actually agree with boat on a few of matters, but don’t let him know that or it’ll spoil the fun. Actually, boat is the only semi climate denier/minimizer around here who fessed up that he was wrong and things are worse than he was lead to believe. That’s some big time manning up in my book because I know how hard it is to bump heads with the tribes beliefs. I think one of the hardest thing to do is admit you were wrong. That’s probably why it’s so rare. Funny though because when someone does it, and it’s genuine, more often than not folks appreciate it and tend to respect them for it. Of course they do – they all know how hard it is.
rockman on Tue, 15th Nov 2016 6:14 pm
Apneaman – Glad you understand it was a tease. Not sure if Boat will get the joke about misrepresentations. Sometimes he and I are on the same side of the fence…sometimes not. But he usually represents his opinions clearly. Not always the case with everyone here.
shortonoil on Tue, 15th Nov 2016 7:38 pm
“The Average Cost for Lifting, Separating, De-Oiling, Pumping, & Injecting produced water amounts to only $0.578 / BBL…”
To lift one barrel with a 50% water cut (661 lbs) 4000 feet takes 2.644 million ft*lbf, 3398 BTU or 11.6 KwHrs. All of that for 57.8 ¢. Who’s paying the power bill Santa Clause?
Hubbert on Wed, 16th Nov 2016 11:27 am
State of denial.
“The five stages, denial, anger, bargaining, depression and acceptance are a part of the framework that makes up our learning to live with the one we lost. They are tools to help us frame and identify what we may be feeling. But they are not stops on some linear timeline in grief. … We are in a state of shock and denial.”
http://grief.com/the-five-stages-of-grief/
Joe D on Wed, 16th Nov 2016 12:32 pm
“The Average Cost for Lifting, Separating, De-Oiling, Pumping, & Injecting produced water amounts to only $0.578 / BBL…”
With lifting costs so cheap the oil majors should be making tons of money. But they aren’t. Are they really bad at business?
If I’m really stupid, I can believe anything.
Harquebus on Wed, 16th Nov 2016 3:54 pm
Thanks to those who responded to my previous comment.
Very much appreciated.
Cheers.