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RobertPaulson

Peak Oil - Bull or Bear?

Peak Oil - Bull or Bear?  

104 members have voted

  1. 1. Peak Oil - Overhyped alarmism

    • I'm a Peak Oil bull. It's over-hyped alarmism
      5
    • I'm a Peak Oil bear. This has the potential to take down our civilisation
      55
    • Undecided. It will hurt a but, but ultimately technology will resolve the issue
      34
    • Undecided. I don't really know much about it, thats why I am looking around this board
      10


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Steve,

 

I think you may be being a bit pessimistic. I think I am right in saying that there has been no case of European civilization "collapsing" in the written record. The "collapse" of the Roman Empire did not mean that a load of Mad Maxes ran the show. Life still went on, and in fact studies show that the end of the Roman Empire benefited most of the population, because the yoke of slavery was lifted from them and their diet improved. Italy was still orderly after the last Roman emperor in the West, it's just that it was orderly in a different, less organised way, under a different boss class.

 

Not even the Black Death caused European civilization to collapse into chaos. Things were nasty, but there was no widespread disintigration into anarchy. Even when smashed utterly, people get themselves organised again quite quickly.

 

Oraganised society offers the vast majority of people so many comforts and so much security that there is great resistence to allow it to fade away even under duress.

 

My main concern about PO is that the sheeple will not understand what is going on as they are not being told. This could lead to disillusion with "feeble" mainstream government and the rise of nasty governments like the BNP (which quite openly sees PO as a "once in 200 year opportunity" to gain power). I am not sure it really offers them the opportunity they think it does. They underestimate the extent to which various ethinc groups have been genuinely accepted into British society by most people, even if not by them. For instance, my boss at work is a black man from Nigeria. He is highly respected in the company. PO is not going to make everyone suddenly want him booted out... (well I hope not anyway).

 

Maybe I am underestimating the change of mood that comes over the herd when it gets scared. I may look at my colleagues one day and no longer recognise them...

 

We shall see. I had always been dismayed that I had missed the exiting bits of history like WW2. Now I realise that I am going to live through "The Big One" in my mature years, having enjoyed a misspent youth in the heyday of the cheap oil play-pen (thrashing around to my heart's content on a big motorbike). I had the awareness to anticipate it and watch it happening, unlike 90+% of others. I seem to have been quite fortunate.

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Malco,

 

To your comment on the fall of the Roman Empire, I just read The Fall of Rome: And the End of Civilization by Ward-Perkins, and he would disagree with your assessment of no fall in living standards, based on the architectural evidence. It's an interesting and short read.

 

A quote from an interviewwith him:

 

My book, and this is its major novelty, concentrates on the impact of the fall of the West on daily life, as revealed by a mass of new archaeological research over the last few decades (which I hope is presented in a readable and approachable manner). I argue what is currently an unfashionable view (though, in my opinion, it is blindingly obvious) – that the Roman world brought remarkable levels of sophistication and comfort, and spread them widely in society (and not just to a tiny elite); and that the fall of Rome saw the dismantling of this complexity, and a return to what can reasonably be termed ‘prehistoric’ levels of material comfort. Furthermore, I believe that this change was not just at the level of pots and pans, important though these are, but also affected sophisticated skills like reading and writing. Pompeii, with its ubiquitous inscriptions, painted signs, and graffiti, was a city that revolved around writing – after the fall of the empire, the same cannot be said for any settlement in the West for many centuries to come.

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I imagine the perspective on the Roman Empire depends on where you are looking. I can't recall where I read my reference about diet improving for most ordinary people after the fall of the empire. Most studies I have come across indicate that towards the end at least, Rome was producing nothing much and consuming a great deal, debasing its currency and burdening the populace dictatorially with high taxes. The empire in its heyday was a different matter, obviously.

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I imagine the perspective on the Roman Empire depends on where you are looking. I can't recall where I read my reference about diet improving for most ordinary people after the fall of the empire. Most studies I have come across indicate that towards the end at least, Rome was producing nothing much and consuming a great deal, debasing its currency and burdening the populace dictatorially with high taxes. The empire in its heyday was a different matter, obviously.
Just what I was thinking as I read the quote in the post above yours. IMO the surprising question about the Western Roman Empire is not so much why it collapsed, but how did it manage to last as long as it did?

 

I once read a report on complexity which compared the Eastern and Western Empires. It suggested that the Eastern one did better by decentralizing successfully, while the Western one took the opposite tack of ever more centralization, loss of efficiency and finally collapse. In fact it was taken over by more competent rulers with less centralized political structures. I think many ordinary people, especially rural people who were the real economic mainstay, after the initial shock of invasion were in practice better off.

 

About the implication in the quote that the "barbarians" were really quite backward: this is highly disputable. Modern evidence indicates that the Celts and Germans were excellent craftsmen. However, they built in wood (even roads as found in Ireland) so they left no legacy of impressive stone edifices. Also they remained politically decentralised which often limited grand schemes. Ultimately these "barbarians" took over because Rome had become rotten from the core.

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Please take the time to review this TV clip of Peter Schiff on Fox Business news. About half way through Peter warns them on the demise of the dollar and everyone starts to laugh like a pack of hyenas. The bearers of truth are being ridiculed in the press.

And immediately he had said "there are no safe investments here in the United States", they put up a table on the screen to obscure his face as he talked. Media manipulators. :angry: But they're getting desperate; that was nervous laughter.

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The Gorecal is back !

 

Al Gore: New thinking on the climate crisis

 

"How dare we be optimsitic!"

"We have work to do. Political will needs to be mobilised!"

 

Ladies, and gentlemen, If Barak Obama has enough sense, Al Gore will be Vice President again.

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David Smith taking issue with the Peak Oil arguments doing the rounds in the Sunday Times.

 

Stating "International Energy Agency figures show that output is up by 2m barrels a day on two years ago and by 4m on four years ago"

 

Is this easily refutable?

 

I am not upto speed on the details of the peak oil argument...

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David Smith taking issue with the Peak Oil arguments doing the rounds in the Sunday Times.

 

Stating "International Energy Agency figures show that output is up by 2m barrels a day on two years ago and by 4m on four years ago"

 

Is this easily refutable?

 

I am not upto speed on the details of the peak oil argument...

 

Chazza stop being a mug and get off your arse and do some reading...

 

 

ah, now i see...... :rolleyes:

 

Do we have a David Smith thread yet, think I might have to start one, he is a legend

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Thanks for posting that link

 

(My Summary):

 

GROWING OIL DEMAND

 

+ Oil demand was thought to peak in 1988-1994 at 66- 68 Mn Bpd

+ Instead, it grew to over 88 Mn Bpd by early 2008

+ This unplanned growth used up 99% of the world's spare capacity

+ Demand growth came despite ten fold rise in oil prices

+ China and India are on the march to prosperity

+ Their 2.4 billion people want to drive cars too:

- China is now buying 6- 8 million vehicles per year

- India's current rate (average motorbike) is only 1.8 million/year

 

== ==

 

THE WORLD WILL TURN UPSIDE DOWN

 

+ 13 Oil Producers with one billion people

- Their average per capita GDP: $7,100

- Compare with more prosperous

: Australia............. $30,600

: Westen Europe... $33,000

: Canada............... $32,200

: Greece............... $23,600

: Portugal.............. $19,700

: Poland................ $13,400

 

+ More of those OECD dollars will go towards Oil,

+ The oil producers will buy more goods & services

+ What will OECD countries export, to buy their oil?

 

== ==

 

WINNERS IN PEAK OIL

 

+ Co's & People who implement massive "efficiency plans"

+ The Oil service and equipment industry

+ Engineering & construction companies

+ Those that adapt quickly to high oil prices

+ Consumer goods sold to oil producing world

 

== ==

 

PUT YOURSELF in the Winners Circle by:

Keep The Dream By Ditching The Car, & The Suburbs

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WITH FRIENDLY JOURNOS like this - who needs enemies?

===========

 

http://www.marketwatch.com/news/story/oil-...F7E0101E7DDD%7D

 

Commentary:

Oil prices will come down

But the politicians may muck it up with fuel-tax suspension

By Dr. Irwin Kellner, MarketWatch

 

PORT WASHINGTON, N.Y. (MarketWatch) --The more the price of oil goes up, the faster it will come down.

For the moment, however, it's up, up and away. Oil prices continue to rise -- if not for one reason, than for another.

On Monday, oil shot up on Nigerian supply concerns. On Friday, it was the weak dollar. And not long before that, it was the weather, the blowing up of a pipeline, or some other supply-constraining event.

The demand side is hardly mentioned. This is because demand for oil and gasoline is presumed to be inelastic with respect to price. In other words -- because of imperfect substitutes, consumers and business are expected to keep buying oil no matter how high its price goes.

 

Naturally, this encourages producers, traders and others to jack up oil prices whenever the urge strikes them, since they are not afraid that demand will tumble in response.

But the demand for oil in particular and energy in general is actually very elastic. Just look at the facts.

Energy use per capita stopped growing in the early 1970s. We're using the same amount of energy (mainly oil) per capita today as we did back in 1970, according to calculations made by the Federal Reserve Bank of St. Louis.

True, total energy used in the U.S. is about 50% greater today than it was 38 years ago. However, that's because our population has grown and so as our economy.

 

The important thing to note is that we use energy much more efficiently today than we did nearly four decades ago, so the amount of energy we use to generate each unit of real gross domestic product is actually 50% less.

And we have barely scratched the surface of energy efficiency.

For example, $4-per-gallon gasoline appears to be the tipping point. People are driving less and switching to vehicles that get greater gas mileage.

 

The result is that gasoline consumption in the U.S. is actually down some 2% compared with last year, instead of rising by about the same amount as it has done year after year.

 

In the early 1970s, the average car and light truck on the road squeezed out only 13.2 miles from every gallon of gas. After the first round of oil price hikes in 1973-74, fuel economy began to rise, topping out at 20 miles per gallon in 2001, before falling back to about 19.5 mpg today.

Don't be surprised if the average fuel economy for all cars and light trucks on the road resumes rising this year and in the years to come, even before the motor vehicle manufacturers are forced to increase the average for all new cars they sell.

 

Of course, this won't happen if political considerations get in the way.

One example would be Washington releasing oil from its strategic petroleum reserve in an effort to drive oil prices down. Another would be a suspension of federal and-or state and local gasoline taxes for the summer driving season.

By lowering prices, these steps would only encourage more driving and other uses of energy at a time when we should be opting for the opposite.

Any short-term gain would come at the expense of long-term pain.

Irwin Kellner is chief economist for MarketWatch and for Capital One Bank

= = = =

 

Irwin,

What makes you think Oil will come down (you clown!)

Ever heard of rising demand in China and India, and how a falling dollar makes their rising currencies

a stronger bid in the oil market??

 

One reason oil use per unit of GNP has declined, is because the energy using industries are now

overseas, and the US imports the manufactured produst with energy costs imbedded. The "Big Mouth" economy of the US is now a consumption economy, where too much of the US GNP consists of distribution networks to get product into the mouth, with the manufacturing overseas. The US will need to restructure its economy: wasting less energy on transport to and from uburban homes, and putting more energy into manufacturing products that gthe rest of the world wants, so the US can downsize the massive debts that its consumption habit has built up.

 

When is the average Clown economist in the US going to accept reality? How much more US wealth needs to get wiped out first? Wake up, please!

 

== ==

 

Warren Buffett "gets it", even if Irwin doesnt:

 

"We are happy to invest in businesses that earn their money in euros in France or Italy or sterling in the UK, because I don't have a feeling that those currencies are likely to depreciate against the dollar," said Buffett. "Overall I think that the U.S. continues to follow policies that will make the dollar weaken against other major currencies.... I feel no need to hedge purchases of companies that earn profits in other currencies."

 

/see: http://money.cnn.com/2008/05/03/news/compa...sion=2008050505

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And i thought America's myopia was in my head!!

Quick Anecdote: I was in a bar in Detroit when a girl noticed my accent, she asked where was i from and i replied Ireland, she asked me what State that was in... i said Texas for a laugh.

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And i thought America's myopia was in my head!!

Quick Anecdote: I was in a bar in Detroit when a girl noticed my accent, she asked where was i from and i replied Ireland, she asked me what State that was in... i said Texas for a laugh.

 

Have you seen the video: Name a country which starts with a "U"?

http://video.google.com/videoplay?docid=-5...186060574&q

 

The big "whack on the side of the head" that Doug Casey said America needs will come through

oil prices, once they discover how poor they have become, they may start to take a greater interest

in what happened in the world (and their own country), to take away the wonderful living standard

that they once enjoyed.

 

Obama grew up overseas, and definitely gets it. Bush and McCain seem clueless,

while Hillary is out to empower herself and her friends, and gets it, but cares not IMHO

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Have you seen the video: Name a country which starts with a "U"?

http://video.google.com/videoplay?docid=-5...186060574&q

 

The big "whack on the side of the head" that Doug Casey said America needs will come through

oil prices, once they discover how poor they have become, they may start to take a greater interest

in what happened in the world (and their own country), to take away the wonderful living standard

that they once enjoyed.

 

Obama grew up overseas, and definitely gets it. Bush and McCain seem clueless,

while Hillary is out to empower herself and her friends, and gets it, but cares not IMHO

That is hilarious (slighty unfair though) I can see past the average American not knowing or even caring about the rest of the world, but when economists such as

Mr Kellner release articles like that is it really any wonder.

Am i correct in thinking America is a net importer of oil?

"One example would be Washington releasing oil from its strategic petroleum reserve in an effort to drive oil prices down" Where is he referring to here? I often hear Puplava mentioning the abundance of oil off the coast of California....

Its a beautiful sunny day here in Ireland, I drive a black Diesel car. You want to see inflation in action when you hit the a/c button :(

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That is hilarious (slighty unfair though) I can see past the average American not knowing or even caring about the rest of the world, but when economists such as Mr Kellner release articles like that is it really any wonder.

 

Am i correct in thinking America is a net importer of oil?

 

Indeed. America imports over half of its oil requirements,

So Americans have a huge exposure to the global oil market, and really need to have a better understanding

of how it works, or they will be doomed to learn "the hard way."

 

Many Americans in that video will only learn from painful experience, since they lack sufficient knowledge

or curiousity to learn any other way. Keller ought to know better, so I consider him an incompetent clown

 

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The wiki article is an interesting piece and source of good info on peak oil

http://en.wikipedia.org/wiki/Peak_oil#Plateau_oil

 

See also list of oilfields http://en.wikipedia.org/wiki/List_of_oil_fields

 

Plus canadian oil sands / http://en.wikipedia.org/wiki/Athabasca_tar_sands - which apparently have a huge supply of oil - but maybe a questionable/heavy enviromental cost (and less??? questionable $cost) of accessing/converting to gasoline and a less questionable $cost of

 

But sadly no entry for greenenergyinvestors, nor Dr Bubb, nor minesite. Although we do have a Michael Hampton (rock guitarist)!

 

Ps I sometimes worry about the enviromental impact of the activities of some of my mining stocks, am I alone? Maybe I should just buy bullion......

 

Anyway the summary/end note of the wiki piece on peak oil goes like this:

Historical understanding of world oil supply limits

Although the earth's finite oil supply means that peak oil is inevitable, technological innovations in finding and drilling for oil have at times changed the understanding of the total oil supply on Earth.[157]

 

In 1855, people could only access whatever oil happened to seep to the surface, and an advertisement for Kier's Rock Oil stated, "Hurry, before this wonderful product is depleted from Nature’s laboratory."

In 1874, the state geologist of Pennsylvania, the United States' leading oil-producing state, said that all the oil would be gone by 1878.

In 1920, the U.S. Geological Survey stated that the world only had 60 billion barrels (9,500,000,000 m³) of oil left.

In 1950, geologists estimated that the world had 600 billion barrels (95,000,000,000 m³) of oil.

Since the 1960s, major oil surveys have shown P95 EUR of close to 2,000 billion barrels (320,000,000,000 m³) (see below).

In 1970, scientists estimated that the world had 1,500 billion barrels (240,000,000,000 m³) of oil.

In 1994, the U.S. Geological Survey estimated that the world had 2,400 billion barrels (380,000,000,000 m³) of oil.

In 2000, the U.S. Geological Survey estimated that the world had 3,000 billion barrels (480,000,000,000 m³) of oil (P95 EUR of 2,300 billion barrels (370,000,000,000 m³)—see below).

The 95% confidence Estimated Ultimate Retrieval (EUR) of a little under 2,000 billion barrels (320,000,000,000 m³) has been the average finding of major oil surveys since 1965. The 2000 USGS survey assumed a discovery trend over the next 20 years which would completely and dramatically reverse the observed trend of the past 40 years. Their 95% confidence EUR of 2,300 billion barrels (370,000,000,000 m³) assumed that discovery levels would stay steady, despite discovery levels having fallen quickly and steadily since the 1960s. That trend of falling discoveries has continued in the 7 years since the USGS made their assumption.[6]

 

None of this means that new oil is forming, or that peak oil will never happen, but it implies that technological advances have allowed the discovery and recovery of more oil than was historically expected. As oil estimates have remained steady since the 1960s this appears to no longer be the case, as can be seen above. Nevertheless, one significant source of uncertainty is the continuing inability to independently audit stated reserves from many of the world's biggest oil producers.

 

 

[edit] Criticisms

Some do not agree with the "Peak Oil" theory, at least as it has been presented by Matthew Simmons. The president of Royal Dutch Shell's US operations John Hofmeister, while agreeing that conventional oil production will soon start to decline, has criticized Simmons's analysis for being "overly focused on a single country: Saudi Arabia, the world's largest exporter and OPEC swing producer." He also points to the large reserves at the "US Outer Continental Shelf, which holds an estimated 100 billion barrels (16,000,000,000 m³) of oil and natural gas. As things stand, however, only 15 percent of those reserves are currently exploitable, a good part of that off the coasts of Louisiana, Alabama, Mississippi and Texas. Simmons is also off the mark, Hofmeister contends, because he excludes unconventional sources of oil such as the oil sands of Canada, where Shell is already active. The Canadian oil sands — a natural combination of sand, water and oil found largely in Alberta — is believed to contain one trillion barrels of oil. Another one trillion barrels are also trapped in rocks in Colorado, Utah and Wyoming."[158] Hofmeister also claims that if oil companies were allowed to drill more in the United States enough to produce another 2 million barrels per day (320,000 m³/d), oil and gas prices would not be as high as they are in the later part of the 2000 to 2010 decade. He thinks that high energy prices are causing social unrest similar to levels surrounding the Rodney King riots.[159]

 

 

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What matters is how fast we can increase, or even just sustain, net energy production, rather than estimates of oil that may or may not be produced in the far future.

 

The problem is knowing what net energy we are actually producing. Both the IEA and EIA produce monthly reports of "all liquids" production. This is where the figure of 86 million barrels per day oil-equivalent come from. What these reports cannot tell us is how much of that energy had to be ploughed back into producing liquid fuels. For instance, biofuels and unconventional oils are now being added into the "all liquids" total, but these require large energy inputs to produce.

 

As an illustration, let us say that Country A produces 100 barrels of mineral oil and uses all of it to produce 130 barrels of biofuel. The net energy production is 130, not 230. The "all liquids" total is telling us the 230 figure, but not how much we must reduce that by to get the fair net energy delivered to the world's economy.

 

I think there is ample reason to believe that net liquid energy is now in decline. That must be the case, since the "all liquids" total has stalled for the last three years and the net quality of oil sources is in constant decline. I personally think this is a hidden driver of increasing oil prices. Unfortunately I have not seen any reliable data to calculate a trend of what net energy actually looks like at present.

 

Another point is that oil available for export is already shrinking, because oil consumption in the major producing countries is increasing, leaving leess to export. This internal consumption is often subsidised for political reasons, so these markets are somewhat insulated from rising international energy prices.

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The Association for the study of Peak Oil and Gas (ASPO) has just issued its May newsletter. This is the pdf of the newsletter:

http://www.aspo-ireland.org/contentFiles/n...er89_200805.pdf

 

Page 2 has their updated general depletion picture. The current estimate for peak is 2007. Owing to poor sources of data, which are continually being updated, this estimate moves back and forth quite a bit (the last estimate for peak was 2009).

 

I think for practical purposes we can say we are at peak now (give or take a couple of years).

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As an illustration, let us say that Country A produces 100 barrels of mineral oil and uses all of it to produce 130 barrels of biofuel. The net energy production is 130, not 230. The "all liquids" total is telling us the 230 figure, but not how much we must reduce that by to get the fair net energy delivered to the world's economy.

 

I think there is ample reason to believe that net liquid energy is now in decline. That must be the case, since the "all liquids" total has stalled for the last three years and the net quality of oil sources is in constant decline. I personally think this is a hidden driver of increasing oil prices. Unfortunately I have not seen any reliable data to calculate a trend of what net energy actually looks like at present.

A very nice explanation. Energy returned on energy invested (ERoEI) is centrally important.

Another point is that oil available for export is already shrinking, because oil consumption in the major producing countries is increasing, leaving leess to export. This internal consumption is often subsidised for political reasons, so these markets are somewhat insulated from rising international energy prices.

They talk of the "Export Land Model" whereby many exporters will reduce exports to feed their domestic markets first. So importers will suffer earlier, maybe even before peak.

 

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This is a classic of naivety in the coverage of the oil supply crunch. What astonishes me is that this is appearing in the current issue of Engineering & Technology, the magazine of the IET. You would think that a reasonably prestigious engineering institution would be able to do a better job than this whitewash:

 

http://www2.theiet.org/oncomms/sector/maga...873E68F58CAE5EC

 

 

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