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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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It seems to me what's missing from this discussion is a recognition of the fact that even if there were unlimited supplies of easily accessible oil available, we can't keep burning fossil fuels at the present rate (never mind at the increased rate which growth in China and India might bring about) and deal with the issue of climate change.

 

In that respect, peak oil and oil prices at or above $200 could be seen as a good thing, if they encourage more efficient use of a dwindling resource and cause a decrease in CO2 emissions.

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Oil has hit $128, yet I read that "Saudi Arabia does not consider customer demand sufficient to raise production" and "speculators see oil as a hedge against inflation"?

 

Am I supposed to believe this crap?

 

Do you think the people who write it pour over their labours for hours to think of harmless reasons why something deeply alarming is happening? Or are they so used to writing dross it all comes easily?

 

What amases me is the absence of any sense of crisis. Life just goes on as normal, people make plans, the chat at work is stll the same old stuff about football and girls and cars. This is getting surreal.

 

Do you think the Fatted Masses secretly suspect something awful is going on, like someone who has begun to suspect they have cancer, but they think if they just ignore the symptoms and carry on exactly as normal, things will be OK? Is that what this is about?

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What amases me is the absence of any sense of crisis. Life just goes on as normal, people make plans, the chat at work is stll the same old stuff about football and girls and cars. This is getting surreal.

 

Do you think the Fatted Masses secretly suspect something awful is going on, like someone who has begun to suspect they have cancer, but they think if they just ignore the symptoms and carry on exactly as normal, things will be OK? Is that what this is about?

 

Most people seem to believe that high oil prices and maybe even, by that measure, 'inflation', is due to BIG OIL companies and BIG FOOD companies gouging prices and making record profits....This is a commonly put forward viewpoint. I hear it all the time, i've stopped expressing any opinion to the contrary in person now, as most people don't seem to get it, yet (maybe I don't fully get it either...).

 

It seems to break down like this:

1) You know what is going on and can do something about it

2) You know what is going on but can't do much about it

3) You know what is going on but are too lazy, stupid or ignorant to bother doing anything about it

4) You don't know what's going on and have no understanding of the situation

6) You don't give a shit

 

The question then is:

 

'If you (as in everyone reading this) know what is going on with regards to peak oil and the potential monetary 'problems' that our system is facing, what is your plan of action? What do you intend to do about it?'.

 

The girlfriend wants to trade in her Nissan Altima for a Range Rover. I don't have the heart to tell her.....

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Interesting article in The Scotsman:

 

http://thescotsman.scotsman.com/latestnews...-oil.4095858.jp

 

Bush saying that the Middle East is running out of oil. Is he calling their bluff? Or telling those who can listen the truth?

 

Note that the writer gets his facts spectacularly wrong:

 

"While the UK produces about 0.3 per cent of the world's supply of oil and uses about 2 per cent, the US produces 2.5 per cent but uses 24 per cent."

 

Utter tripe. Britain produces about 2% of the world's oil and uses 2%. The US produces 10% but uses 25%.

 

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The question then is:

 

'If you (as in everyone reading this) know what is going on with regards to peak oil and the potential monetary 'problems' that our system is facing, what is your plan of action? What do you intend to do about it?'.

 

The girlfriend wants to trade in her Nissan Altima for a Range Rover. I don't have the heart to tell her.....

 

Get carfree. Invest carfree. Talk carfree.

Think creatively about the future. Get ahead of the change.

 

Utter tripe. Britain produces about 2% of the world's oil and uses 2%. The US produces 10% but uses 25%.

 

True. But Britain has moved "into deficit", importing Oil.

And the 15% mismatch in the US is totally appalling, and totally inappropriate.

Those Americans who cannot see that, and act now to do sometime about it, deserve the firestorm

that is headed their way. The drum sound will get louder, until sleeping idiots hear it, and react.

 

Oil demand destruction in the USA is THE story of the next 5 -10 years

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Oil hits $134 per barrel:

 

http://www.bloomberg.com/apps/news?pid=206...yg&refer=us

 

I cannot believe how quickly this is happening.

 

Quote:

 

"What we have here is a situation where essentially higher prices aren't generating any more supply,'' Paul Sankey, an analyst at Deutsche Bank Securities in New York said in an interview with Bloomberg radio. ``What we have to do is keep pricing the commodity higher until demand starts falling,'' which ``is around $150 a barrel.''

 

Uh... yeah. AKA Peak Oil.

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"What we have here is a situation where essentially higher prices aren't generating any more supply,'' Paul Sankey, an analyst at Deutsche Bank Securities in New York said in an interview with Bloomberg radio. ``What we have to do is keep pricing the commodity higher until demand starts falling,'' which ``is around $150 a barrel.''

 

Uh... yeah. AKA Peak Oil.

 

Exactly.

We need to MANAGE demand destruction

 

- And no one (apart from GEI / Bubb-on-HPC) is talking about it!

 

Watch this, Get angry:

Sprawling From Grace, Driven To Madness

 

Think CarFree. Invest CarFree. Get CarFree.

 

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On the bear side wondering how various governments/people will cope.

 

Close to home here I think a major cat amongst the pigeons is Scottish independence, the referendum is slated for 2010 and circumstances seem to be really swinging towards the SNP without them doing much to push the matter. By then a Labour government may be on its knees being booed out, economy could be in tatters, inflation may have hit people, housing damaged confidence leaving the UK looking for a change and a conservative government which has little inroads in Scotland will be voted in. Oil is being talked about again http://news.bbc.co.uk/1/hi/scotland/7424475.stm as it was in the 70s when viable self sufficiency due to oil pushed the nationalists forward. Could rising oil and energy costs cause the destruction of the union?

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Oil has gone below $130, I think this means the masses will remain oblivious of peak oil until next spring at least.

 

Gasoline in the Uk has become quite a bit cheaper than diesel, the explanation I think is gasoline in the US is the fuel of nearly all cars, price rises of gasoline have caused some demand destruction.

 

Distillates on the other hand have not seen as much demand destruction and have consequently risen in price more.

 

Distillates are diesel, jet fuel and heating oil and are all really the same thing.

 

Diesel is the essential fuel - buses, trucks, ships and agriculture run on diesel.

 

Heating oil has a seasonal demand, stocks rise in summer and are consumed in winter, the US is the big consumer (as with all things).

 

The exhaustion of stocks next spring will be the next test IMO.

 

If I am right peak oil will become apparent to all in spring probably next year certainly in springtime in the next few years

 

Perhaps shorting airlines next spring could be a money maker.

 

I live in the UK we moan about the rain but then again it's free irrigation also we rarely have days below 0c or hotter than 30c; a much nicer prospect than the middle of the North American Continent after peak oil.

 

 

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Yesterday was the first time I tuned in to The Oil Drum and saw something that I genuinely could not believe. Oil had shot from about 127 to 139 per barrel in a single day. I had to Google Reuters before I could believe it. That was the moment it really sank in on me that we really are in the Peak Oil zone. The price then collapsed back to 130. The classic symptom of stress is of course volatility, in addition to a rising price trend.

 

Do other people increasingly get the feeling of living under corrupt government, like the Soviet regime? We despised the Soviet goverment for lying to its people to cover its incompetences. Eventually everybody despised it so much it fell apart. Now here in the West I find the same contempt for government that lives by lies. It lied about the debt culture being prosperity, it lies today about projections of oil price in order to defend its precious infrastructure plans, it lies about road safety to defend the road hauliers and because it lacks the guts to deal with dangerous driving, it lied about the housing market until reality called its bluff, it lies about North Sea oil depletion (with a little help from the BBC!), it lies about real inflation. Lies and lies and lies because it now it is in the position where it is failing and thus it must lie. Like the Soviet goverment, it must lie to defend its incompetences.

 

Bit of rant, it's just that I've never had this feeling before of living under such moral corruption. I suppose that reflects the teletubbie society around me. Yesterday oil proved beyond all dout that the price is out of control - and the Fatted Masses dream on of supercars and cheap holidays in the sun.

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Do other people increasingly get the feeling of living under corrupt government, like the Soviet regime? We despised the Soviet goverment for lying to its people to cover its incompetences. Eventually everybody despised it so much it fell apart. Now here in the West I find the same contempt for government that lives by lies. It lied about the debt culture being prosperity, it lies today about projections of oil price in order to defend its precious infrastructure plans, it lies about road safety to defend the road hauliers and because it lacks the guts to deal with dangerous driving, it lied about the housing market until reality called its bluff, it lies about North Sea oil depletion (with a little help from the BBC!), it lies about real inflation. Lies and lies and lies because it now it is in the position where it is failing and thus it must lie. Like the Soviet goverment, it must lie to defend its incompetences.

 

I AGREE completely. In fact, I have written about it:

 

"The comfortable fantasies that have sustained the American Dream for several decades, are fading fast. 2007 was the year when we took a peek behind the curtain, and saw what financial machinations are sustaining the world's largest economy. American consumer spending represents 25-30% of global GNP, but the money that Americans are spending is not all their own, nor is much of the energy we are using. Keeping the oil and the money flowing relies on spin, financial manipulation, and statistical adjustments which are now being exposed as fiction. If the dollar loses its purchasing power, how will US energy consumers go on importing the oil they need to maintain an extravagant lifestyle?"

 

That's the opening paragraph of:

RESTRUCTURING AMERICA'S SUBURBAN DREAM:

The root cause of rising oil prices must be addressed

if we are to provide a Sustainable Future for Our Grandchildren

 

The same can be said for the UK and Sterling

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If the dollar loses its purchasing power, how will US energy consumers go on importing the oil they need to maintain an extravagant lifestyle?"

 

I am thinking this may not be silly speculation.

 

http://www.energybulletin.net/23259.html

 

"many of the problems that sunk the Soviet Union are now endangering the United States as well. Such as a huge, well-equipped, very expensive military, with no clear mission, bogged down in fighting Muslim insurgents. Such as energy shortfalls linked to peaking oil production. Such as a persistently unfavorable trade balance, resulting in runaway foreign debt. Add to that a delusional self-image, an inflexible ideology, and an unresponsive political system."

 

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...Now here in the West I find the same contempt for government that lives by lies.

...

Bit of rant, it's just that I've never had this feeling before of living under such moral corruption. I suppose that reflects the teletubbie society around me. Yesterday oil proved beyond all dout that the price is out of control - and the Fatted Masses dream on of supercars and cheap holidays in the sun.

 

Here's JHK's take : WE LIED TO OURSELVES - (ie the media's still full of dangerous wishul thinking )

 

There's another hugely important realm of inquiry that the "we were lied to" folks have never addressed: who lied to us about the way we live in this country? About the amount of oil we consume in the service of all our comforts and conveniences? About our extreme car dependence and what is required in our relations with the rest of the world to sustain it. All these years, Frank Rich and all his whining colleagues at the New York Times barely acknowledged the domestic fiasco of the suburban sprawl economy that placed us in such jeopardy to begin with. Even now, with the airlines disintegrating and gasoline over $4 (diesel over $5) I haven't heard any of these crybabies even raise the issue of restoring the US railroad system. How many of these crybabies live suburban lives themselves, in places like Louden County, Virginia, or Westchester, or Long Island, or the San Fernando Valley? Who lied to us about that?

 

For my money, the "we were lied to" chorus only represents the obdurately self-righteous cluelessness in every band of the American political spectrum. We lied to ourselves. We continue to lie to ourselves every day. The US public barely understands the first thing about the energy predicament we're in, and what it means for how we live in this country -- or how we get along with the rest of the world -- and the news media tragically reflects that ignorance

UNQUOTE

 

I think he nails it, in this quote from his ClusterF@ckNation blog: http://www.kunstler.com/

 

 

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JHK has a point. Before I became PO-aware, it was not that I lied to myself, it was the questions I never asked. I complacently assumed that oil and gas reserves grew over time as technology improved; thus there was no immediate cause for concern. This followed from a study of global fuel resources I carried out for work in the early 1990s. That was the line I got fed by the IEA and CERA: I had no reason to dispute such sources.

 

JHK is being a bit hard on the average Joe lying to themselves. They never asked the questions, because they were fed messages by experts who could not read the truth in their own data. The data conflicted with private convictions so they were rejected. I have seen this in a number of subject fields in which I have acquired significant expertise as an outsider. This experience has made me highly suspicious of many supposedly objective scientists.

 

Incidentally, whilst I was waiting in my local curry house last night I was reading an article in I think the Scottish Daily Excess about Alex Salmond's predictions of renewable energy in Scotland. I could not believe my eyes. The man is spinning out the most absurd fantasy world scenario you can imagine. He was saying Scotland will generate 60GW of power and provide 25% of Europe's traded electricity within 20 years. 60GW is as much as the whole of UK generates - from all kinds of electric plant. The man is either truly a fool or else he's hyping for the sake of hyping. I recently attended a lecture on tidal power by a leading Scottish engineer (Prof. Iain Bryden) who was emphasising that although there was significant potential for tidal, it would take decades to install substantial capacity because it requires such large investment and the operation to install the plant is tricky.

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JHK is being a bit hard on the average Joe lying to themselves. They never asked the questions, because they were fed messages by experts who could not read the truth in their own data. The data conflicted with private convictions so they were rejected. I have seen this in a number of subject fields in which I have acquired significant expertise as an outsider. This experience has made me highly suspicious of many supposedly objective scientists.

 

Actually, I think JHK means something a bit different:

 

The media has been lying to us, and failing to inform us properly.

And the get away with it, because the average Joe is too lazy, and lacks sufficient

seriousness-of-purpose to insist on something better.

 

Only some alternative media (like Financial Sense & GEI) are doing a good job

of keeping people informed. Perhaps this is why the mainstream media is steadily

losing audience share

 

No wonder America voters want Obama, and "change they can count on."

They are fed of with lies and misleading spin in mainstream politics and mainstream

media

 

And here's more from Kunstler:

 

"Across the nation right now, a delusion reigns broadly that some mythical “they” will “come up with new technologies” that will allow us to run Wal-Mart, Disney World, and the interstate highway system by other means than oil. Ain’t gonna happen. The popular political war-cry for “oil independence” is a companion delusion. There’s a lot we can do to get our collective act together, but we’re not going to run Phoenix on ethanol, solar, wind, and used-french-fry-oil. There’s a lot of confusion out there aggravating the wishful thinking. People think that energy and technology are interchangeable, substitutable, — if you run out of one, just plug in the other. We’re about to find out the hard way that that isn’t so. There’s no question that oil is on the way out. On top of the sheer geological limits to a finite resource, there are new geopolitical sub-plots developing that will aggravate the situation hugely, for instance the only-recently-recognized oil export predicament and the new oil nationalism — topics perhaps too complex to get into here. The bottom line of all this is that the basis for civilized life as we’ve known — cruisin’ for burgers in the good ole USA — it is about to wobble. At the very least, we’d better prepare to live a lot more locally and self-sufficiently so — and by this I mean in the community sense."

 

/see: http://www.bookdwarf.com/?p=935

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Analysis

 

Listen (9mins)

 

Last Updated: Friday, 13 June 2008, 00:41 GMT

 

Date of first transmission: 2008-06-12T22:41:00-00:00 (audio available for approximately 1 week)

 

Record high oil prices have given a new edge to a debate in the industry - is the world at or close to the peak oil production?

 

Our Economics Correspondent Andrew Walker reports.

 

http://www.bbc.co.uk/worldservice/programmes/analysis.shtml

 

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http://www.cnbc.com/id/25179997

Saudis May Be Strapped for Oil, Close to Full Capacity

By CNBC.com | 16 Jun 2008 | 08:48 AM ET

 

Saudi Arabia's pledge to boost oil production by 500,000 barrels per day may not be achievable, a source close to the Saudi oil industry told CNBC.com.

 

My reading suggests when Saudi peaks then world oil peaks.

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Latest oil and all liquids production from the IEA as posted on The Oil Drum Europe (TODE):

 

http://europe.theoildrum.com/node/4152#more

 

It shows all liquids sluggishly rising in the last eight months or so, due to an increase in Crude production of 2m b/d. This increase allowed a slight topping of the previous peak in 2005, but hardly beyond statistical significance and the increase seems to have petered out. About 1/3rd of the increase came from Saudi Arabia, which managed to lift its output by about 700,000 barrels/day during Autumn 2007, although again that increase has tailed off. The article does not identify what other countries have increased output. Many major suppliers like Russia and Mexico reduced output. So where did the extra oil come from?

 

In the comments, there is increasing awareness of the need to measure net energy production, now that an increasing proportion of global production is coming from sources with very low EROEI - ethanol, tar sands and the like. I suspect that the world has in fact passed the real peak of net energy production. Unfortunately there just are not the data to come up with any meaningful measure.

 

It is a bit like expecting pilot to fly safely without telling him how much fuel is in the tanks or how much power the engines develop. Some rather basic information is lacking. It really is astonishing there is not more political pressure on the ME to come clean about actual reserves. Or is it that TPTB do in fact know and they are quite happy to keep quiet about it so as not to alarm the sheeple? I do not personally believe that the CIA is unaware of the true condition of Saudi's oil fields.

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Thanks for posting this, Bubb. I watched the whole film with my wife during breakfast.

Although she's pretty fed up with my fixation to the economic collapse & gold, she found this piece highly interesting.

If The Oil Runs Out : 5 of 6

http://uk.youtube.com/watch?v=ajFNlEdRzGw

Yes,

I think it brings the message home in a watchable sort of way.

It's great to see this sort of message finally appearing in the media.

Maybe the great mass of people will start to "get it" now!

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For my 2p worth, I think peak oil and the coming energy crisis will be the defining issue of the next half century, most likely resulting in large or full scale resource wars and a radically different world once played out.

 

Someone else thinking along similar lines. Started a separate thread if anyone wants to comment in main section.

 

http://www.simmonsco-intl.com/files/Orlean...%20Investor.pdf

 

Riggers

 

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Oil now at $144. Only six more dollars to go. I wonder how high it has to go before something cracks in a major way?

 

Alistair Darling was today making noise that depositors should get compensation faster when their bank fails, also that the guaranteed cover should be increased.

 

What do they know?

 

The shape of things to come?

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He dos not grasp the effect of Peak Oil. He does not even really appear to grasp the fundamentals of why oil prices are so high, nor how this is feeding into the escalation of wheat/corn prices. If mainstream thinking really anticipates a commodity price collapse, as global energy supply begins to decline.......

 

Plus, you have the effects of money supply inflation also raising nominal prices.

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It seems to me that as oil gets more expensive then there will be money to be made out of alternative energy sources. So they will be developed. It hasn't happened a lot to date because oil has been readily available and hasn't cost enough to make a business out of alternatives - or at least enough of one. This will change going forward and there may be some short term economic fallout as the adjustment is made. I don't think oil running out will bring our western civilisation crashing down however, we'll just use something else or change our behaviour as appropriate.

 

Society may change along the way. Working from home rather than commuting may well become the norm for office workers. Commuting becoming too expensive will just change the way we do things for example. The work and hence the economic activity will still continue.

 

If travel becomes too expensive we'll just do less of it, and spend more time in our local communites. This was normal a 100 years ago.

 

 

What most people fail to appreciate is the scale of the problem.

 

Check out sites like theoildrum and lifeafterthecrash and chrismartenson.com.

 

The scariest aspect for densely populated counties is of the problem is food.

 

Without cheap oil, ( and hence also cheap fertilizer) farm productivity will drop.

The obesity epidemic will become a thing of the past !!!!!!!

 

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