He's talking about capacity growing - output capacity. Shortening the curve, basically. Not finding new oil, but increasing production capacity. And note the use of the word "could", not "will" or "soon will".

Also, he is trying to imply that reserves as they are calculated by the SEC are lower on paper than in reality. This is patently NOT true - oil companies have spent the last few decades INCREASING RESERVES because it was the only way to increase stock prices and company value in a low price, saturated market. Oil companies are not running around restating their reserves UPWARD, they are DOWNGRADING them because they were inflated to increase corporate value in the first place. OPEC has yet to retract the huge reserve increases they suddenly manufactured when they began production quotas...

If production capacity is increased without increasing reserves, we are just depleting what we have more rapidly. Again, Yergin gives forth with the "magic technology bullet", unnamed, undescribed but supposedly already here to help us.

Kunstler is right - alternative oil reserves are ALWAYS more expensive, as they require huge startup costs, more energy invested, and even then are not of similar quality as a feedstock to a gas refinery. This means that the refineries have to change their processing, not a cheap thing to do, and not something done quickly.

And he puts off the possible interruptions as "mainly political", as if the political situation is becoming more placid in the world with these shortages!

HumBug!

Yergin would have us believe that there will be so much new capacity (from tar sands, deep ocean drilling, natural gas liquids) by 2010 that a great deal of it will be excess capacity. The market will be flooded with new oil supplies. There will be more than enough new production (from these unconventional sources) to meet demand growth and therefore prices will drop.

So, in the Gospel According to Yergin, oil will be cheap again by 2010 and new golden age will ensue.

I think Kunstler and Yergin are bascally mirror images of each other. It's worth listening for their insights, but both requre a dose of critical thinking.

However, this paragragh from the cited Washington Post article seems demonstrably false. I think getting this much product from oil sands and gas to liquids in ten years would require a level of investment that is not in place yet, and so won't be able to produce that soon in any scenario. Thirty percent of capacity in five years? I can only think he is using a different definition of capacity than the one ianqui and I appear to favor.

"The share of "unconventional oil" -- Canadian oil sands, ultra-deep-water developments, "natural gas liquids" -- will rise from 10 percent of total capacity in 1990 to 30 percent by 2010. The "unconventional" will cease being frontier and will instead become "conventional." Over the next few years, new facilities will be transforming what are inaccessible natural gas reserves in different parts of the world into a quality, diesel-like fuel."

I agree with you, Jack. From the CERA website

Despite current fears that oil will soon “run out,” global oil production capacity is actually set to increase dramatically over the rest of this decade, according to a new report. As a result, supply could exceed demand by as much as 6 to 7.5 million barrels per day (mbd) later in the decade....

To my mind, this language couldn't be plainer. What do you think he means by production capacity? As opposed to what we mean at TOD?

So is the CERA field by field report actually out yet? I still haven't heard any counter analysis of their actual data, only the conclusions. I would love to hear Simmons,Cambell, or Heading out work through the actual report and tear it to shreds. Is it still only a press release, or the actual report out??

In what is a bizzare distortion of "information" they now list media coverage of their press release on the website:

http://www.cera.com/news/details/1,2318,7453,00.html

Where is the data!

-Ptone

I took great interest when I saw that this article had come out in one of the comments from the weekend.

The problem, as far as I can see, is not whether Yergin is correct in his predictions or whether Kunstler is correct in his.

The problem is that we have two stories out there that attempt to predict the near future, each with their attendant problems. But, never mind the technicalities. To the extent that people are anxious about the future, many will want to Good News and prefer it over the bad. Yergin is the source of Good News, as Dave says, a new Golden Age is on the horizon. Not very many peoiple really want to buy some land and learn to live like a survivalist.

So long as there are these two stories out there for people (policymakers included), most will go for the easy, happy ending. And a seriuous discussion of the crisis at hand (i.e., those technicalities) will remain in the margins.

I think Dave has it generally right - there are some large conventional and non-conventional projects soon to come on-stream. These MIGHT let the market catchup with both demand growth and depletion, putting us into surplus capacity again.

Most producers face a tradeoff as noted in Simmons' "Twilight in the Desert" - there is a maximum extraction RATE for a field and there is another rate to produce maximum TOTAL production which is much lower. Given a steady price and a constant discount rate, the micro-economics and geology usually drive producers to go for the former - maximum production rate.

Energy markets usually have "hockey stick" price curves - once supply can't keep up with demand, the price soars - at $60/BOE, we're probably just starting up the steep part of the curve. Going into a surplus state could back us down again where Saudi Arabia can again set the price.

But maybe not and certainly not for long.

The report has been out for about 2 months. No one here has seen it to my knowledge. HO talks about the exorbitant cost of the CERA report here. I reported this commentary on it. As HO said, we can only "reverse engineer" it to infer what information the report contains. Unfortunately, outside the original press release (at CERA) and the often published summary articles written by Yergin (e.g the Washington Post article cited by Ianqui), there is little to go on.

lol, the difference between "capacity to produce oil" and "actual production" is ... imagine a bunch of pipes connected to empty reserves. We've got the "capacity to produce oil" ... if there was just more oil, darn it!

i actually don't want to dis yergin. it's probably more important to figure out what his gig is. does he just try to be the "appointed optimist?" if he's PR-ing for someone, who would actually benefit?
to benefit, an oil company would have to "fake" high production, while actually riding the price curve higher. they'd say "no problem," as they try to slow down and sit on their reserves. PR-ing "no-problem" while pumping at capacity would be self-defeating.

I know what J would say if he were here. (Of course, we had that discussion the last time we tore Yergin/CERA apart...)

But, I think it goes something like..."follow. the. money."

RE: Kuntsler

Can anyone point to or summarize the weaknesses of Kuntsler's theses?

The Oil Drum is a prime example of the possibility of info sharing. Alternative routes for information allow perspectives beyond the hyperbole of mass media...or should I say indoctrination. That said what is to be made of the fact that when purchasing a hybrid car today one is not entitled to the same low financing offered with traditional vehicles? And why again the big push towards V-8's ? The last time such a push was made with the "Hemi" it was in the mid 60's. Following the money will lead us right to the investors who demand grand returns thus the push toward more costly vehicles. Apparently vehicle manufacturers build regardless of the impact to the environs while appealing to the most basic of human interests...that of ego. The key is always profitable returns for investors.

and on another digression

Remembering that Japan attacked Pearl Harbour in an attempt to loosen the American grip on petrol production in the Philipines in the 1930's ... capacity to produce can only be met if reserves are maxed. Japanese capacity to produce fell because they coulden't secure oil supply. This definition seems to revolve around questions concerning worst case scenarios , for example in war. Actual production is what a nation needs to assure its economic and military interests are satisfied. The difference between the two then could mean the crucial difference between battling a war with the home fires alight or battling a war without home fires which coulden't happen because if the economic engine stalls during a war the war is lost. But what do I know......

Perhaps the Washington Post 'online' event with Simmons on the 4th is a direct challenge to the CERA folks. At any rate it will be interesting to see what Simmon's has to say these days - whether anything new has crept into his pitch.

Unfortunately Simmons is hawking a book as well as his business; CERA is as well. Neither can be considered truly independent.

... although CERA's conclusions and timelines are absurd as far as I am concerned. For example, alberta oil sands, even if capacity were raised to the levels CERA suggests, can't even make it to market due to pipeline constraints. There is however many billions of dollars being shoved into the Alberta economy right now - new fields, upgrades, pipelines, you name it. They will get there, eventually.

Gee, I wonder who Yergin works for?

Attention good people of The Island.
Do not pay attention to those lunatics ranting and running in your midst.
There is no "bug in the system".
Everything is as it was.
Go back to working on your part of the pipeline.
The system will take care of everything for you.
Keep exercising.
Keep eating system-provided food.
Keep thinking only of yourself.
Number one is number one.
You are guaranteed to win the lottery.
The bottom line is the bottom line.
The system will provide.
No need to ask questions.

Now we are all calm and at peace once again. Whew.

P.S.
Good people of The Island.
Do not pay attention to those pressure guages hitting "62" today.

It is normal
Everything is normal and will be normalized

Attention Islanders

Hirsch is a heathen. Do not read his report.
http://www.emptywells.com/Article321.htm
http://www.globalpublicmedia.com/articles/441

Yergin is one of us. He is fundamental and well grounded. Follow only in his word:
http://www.washingtonpost.com/wp-dyn/content/article/2005/07/29/AR200507...

Everything is "normal". Remain calm. Take your blue vitamin pills. Keep a healthy outlook on everything.

You guys like to make fun of outsiders, who read Yergin's comments and those of other skeptics and consider that they might have a point. Yet you, who have the Divining Rod of Truth, can tell that Yergin is wrong without even reading his report! Who is really in denial here? Who is refusing to look at the evidence?

The truth is, with some experts saying one thing and some saying exactly the opposite, with the actual data unavailable to the lay person, the only reasonable response is to be uncertain; to say, I don't know.

I don't know if there will soon be a peak in oil production.

I do know that it's not obvious that it will happen, while the most vocal people in the PO community claim that it is in fact obvious. I think that those people are wrong - not wrong that PO will occur soon (because it might), but wrong that it is OBVIOUS that PO will happen in this time frame.

Why not accept the existence of uncertainty on this issue, and grant that those who disagree with you have a reasonable position as well?

DC Martin:

I'm not sure what you mean with regard to financing hybrids versus larger vehicles. I have a five-year, 4.9% loan on my Prius; the exact same financing would have been available if I had opted for a Land Cruiser. Further more, I am looking forward to taking my deduction when I file my taxes at the end of the year.

Halfin--I think the point about Yergin/CERA is that as long as the CERA report is not made available to the public, then we have the right to be skeptical about what Yergin says. At least people like Simmons, Deffeyes, and Campbell make their sources known. Why should Yergin hide his data? And if you tell me it's for financial reasons, then I'm just going to be even more wary.

And I for one am going to be skeptical until Yergin lets us read the whole report.

haflin, what if i made the same complaint about people who reject simmons? would that make simmons right?

Halfin,

Excuse me for missing the BIG PICTURE.

OK. So first we were somewhere out on flat land in Pennsylvania, drilling some easy holes into the ground and the oil just a gushed outta the ground for us. Yipee. And the supply demand "funda-mentals" for the petro markets were quite simple. There was zero demand and giga-trillions of barrels of this stuff everywhere.

Some time later, the funda-mentals indicated, Hello East Texas and Houston we got a peak situation here. (Otherwise known as a Hello Hubbert moment.)

No problemmo. We head East young man ... Middle East.

A short time later in history, we find ourselves out on the Thunder Horse rig as it "lists" out in the Gulf of Mexico waters due to "unusual" weather, but not to worry ... things can aways be put right again.

No worry about the fact that "we" are investing ever greater amounts of resources to move into ever more treachourous (sp?) locals, like freezing ANWR, to try and keep sucking up the fluids of our addiction and keep pumping CO2 into the air. Besides, once the poles melt, it will make drilling easier there too. It is a good thing.

The "fun-da-mentals" and the priesthood of fundamentalism keep saying everything is fundamentally A OK. We got no data. And that is a good thing because then we can inject "uncertainty" into the freak oil message. However, our fundamentalists are fundamentally correct despite the fact that they have no data either. No one should be questioning their fundamental conclusions. Everyone should be questioning only the suggestions of the freak oil fruit cakes.

Attention inhabitants of Earth Island. Go back to exercising. Everything is fundamentally A OK.

Ah, now we are at last stepping back and seeing the BIG PICTURE.

Attention space shuttle inhabitants. You too have no problemmos. Mission control is fully in control. We have all the data points. All tiles are in prime condition. Systems are "normal". CO2 levels are "normal". Everything is "normal".

Here is a post I made over at Arnold King's blog regarding the Yergin piece.

First an interesting history tidbit: A shell scientist, King Hubbert, predicted in 1956 that the U.S. would peak as an oil producer in the early 70’s. He was right, but off by a few years (people did made fun of him). Peak oil production happens. While U.S. production declined other countries took up the slack.

With that said, I don’t think world peak production is right around the corner (meaning in the next 10-15 years). There are ample reserves to be tapped at the right price (emphasis on the right price). Example, the Canadian tar sand have lots of oil, but it will not be cheap to extract.

From the article:

The share of "unconventional oil" -- Canadian oil sands, ultra-deep-water developments, "natural gas liquids" -- will rise from 10 percent of total capacity in 1990 to 30 percent by 2010. The "unconventional" will cease being frontier and will instead become "conventional." Over the next few years, new facilities will be transforming what are inaccessible natural gas reserves in different parts of the world into a quality, diesel-like fuel.

This oil will not be produced at $30 a barrel, becuase it simply costs more to extract. It will make oil more expensive.

At the end of the article, the author does concede that there will be high demand, but leaves out much analysis on this part of the equation. Supply (I realize that the Yergin article is stressing capacity) can go up, but if demand keeps pace then prices stay high (I am in this camp). Over the next few years, demand will keep prices much higher than we have become accustomed to during the 90’s. China’s oil demand is increasing at a rate that it is pushing their country further into running a permanent global trade deficit. Based on recent trends, there is a possibility that Asia's demand will double over the next 7-15 years.

Yergin may be right on the capacity side, and I'll give the benefit of the doubt that this capacity will add to supply. But supply does not live in a vacuum, one must look at demand too.

Halfin ---
Sorry. There was nothing personal intended by that last missive.

I'm just asking people to Step Back and see the big picture.

We as a society are "investing" our current resources into a system that has no future, and no long term sustainability.

The reason we are investing all our time (a "limited" fundamental), our manpower (a "limited" fundamental including our noble children who go to war to fight & die), and energies into this enterprise of constructing oil rigs in ever more hostile hospitalities about Mother Earth is because the "fundamentals" of Mr. Smith's theology say that short term profits, on short sighted investments, can be "maximized" by pursuing such a "prudent" path.

I hope you are starting to "see" from here, at our momentary space shuttle heights, that something strange is going on down there. There are a lot of "fundamentalists" running around down there re-energizing parts of the world with their fundamentally sound theologies. It is sin to question any of them. We must just accept and "move forward" with the current paradigm. All will be well because they say so.

I think Tedman makes a great point - the Yergin piece gives the "optimists" (or deny-ers?) a story to grab on to - a lifeline, so to speak. It's good politics, allow the well-informed to go about their careful watching and thinking, while preventing any widespread pessimism from developing and harming the economy. Call me cynical.

Yergin says today's oil use is 85 MBD and in 2010 it will be 101 MBD with 30% non-conventional. I don't know today's non-conventional amount. If it's zero, then Yergin is saying conventional oil will drop from 85 MBD to 71 MBD by 2010. (71 being 101 less 30%).

"Why not accept the existence of uncertainty on this issue, and grant that those who disagree with you have a reasonable position as well?"

Because the uncertainty is the entire purpose of the CERA report.

Halfin---

I am sorry that you believe I am poking "fun" at "outsiders"
(aka PO nonbelievers)

I understand that this talk makes you uneasy

Now that I lured you into the silence of space,

Please float with me another moment.

Close your eyes.
LISTEN !!

Listen to what the pontificators of perpetual petroleum are trying to do.
Ignore the substance of their yak for a moment and listen only to the phonetic percussion of their "sound " logic.

They use siren songs to lure you into a cognitive cage.
Once you allow them to "frame" you into their mind-flipping dialogue about:
"futures" and
"fundamentals" and
"supply chain logistics",
you start feeling oh so proud of yourself.

You are able to follow their lead. Aha you are brilliant. At last you are one of them! They are leading you down a path of diversion with their phonic swan songs.

Now open your eyes.

Young men (and women) are dying.

Their blood soaks the grounds of inhospitable places like Iraq, Saudia Arabia, Sudan, etc. etc. Their cries are silenced by the distance we place between "us" and "them".

Everywhere that you find the fluids of addiction flowing, you will find blood and deceipt. Do you not see it? Do the mind manipulating machinations of the "fundamentalists" work so well on your sensibilities that you cannot break free? Are you so tied into feeling superior about yourself and your temporary membership in the club of market "experts" that the echoes of their economic eloccutions make you feel like you have levitated yourself above the little people? I mean for example, the people in Dafur who are "dying without dignity" because those who "love life" are conservatively compassionate about everything, especially the Greenspun linings of their pockets.

Do you not see it?
Do you not hear it?
Do you not feel "uneasy" about all of this?

Me too.

I feel very uneasy.
I am not poking "fun".
I am crying.

I am praying that other people open their eyes.
I am praying that other people open their ears.
I am hoping that other people open their minds to the possibility that something might not be quite right here on Island earth.

Halfin: "Why not accept the existence of uncertainty on this issue, and grant that those who disagree with you have a reasonable position as well?"

Ianqui is right. I can't read this proprietary report without forking over $2500. I can read other stuff which tells a more complex story. Try reading Saudis say OPEC will not meet projected oil demand in 10-15 years from the Finfacts Ireland business portal, just to get started. Go to Mike Watkins' website. Read the Hirsch report. Finally, look at the latest Simmons presentation Depletion and Peak Oil (July 25, pdf).

Pay attention to overall depletion rates--about 5%/year. Overall demand increases--2%/year. Types of oil--is it sweet crude, sour oil or heavy oil? Simmon's concerns over Saudi production--90% of it is from old fields including the biggest production from Ghawar. Consider models of how mature fields deplete as reported here on Wednesday, June 1st by HO.

Simmons believes that "Key oil suppliers unwilling to adopt data [reporting] reform need to be labeled 'unreliable suppliers'". I think that if CERA is unwilling to disclose their data to the public, they should be labeled an 'unreliable information source'.

There is uncertainty. But if you think we're all unreasonable here, tell us why. Don't appeal to some mainstream authority (CERA) that doesn't disclose its data publicly and feels compelled to constantly tell us in the mainstream press, "Its All Good"--because all that is is somebody trying to sell me something. Caveat Emptor.

Well if Yergin is so optimistic and was to turn out to be right then our leaders would see little point in changing and we would be worse off in terms of addressing global warming. Why only one of the intelligent people who post here has mentioned this is slightly worrying...if you chaps can't immediately see the bigger picture then what chance the rest of your fellow men and women???
There seem to be so many converging problems out there that it is hard to keep them in mind all the time but we need to stop economic growth ASAP.

Response from DC concerning financing a hybrid

JLA....darling your wrong....let us compare apples to apples....to purcahse a Prius the financing rate is 6% while to purchase a Echo it is just over 2%. Enjoy your deduction for your leased vehicle....that's off the Canadian Toyota site....I image Honda is simular.

Until someone shows me that the CERA calculation that shows 15 million barrels of new production (capability) per day in five years also takes into account the known depletion rate for existing fields, we are only prudent to be highly skeptical of the claim. It is as if a book keeper were to just keep track of the deposits in an account without subtracting the withdrawals. We would all look considerably better off under those rules. It appears that this is the game that they are playing, and if it is, it isn't just negligent, it is intentionally misleading. No one is that stupid.

stepback, clear perspective is nice on these tired old eyes.(I am 30) Out of curiosity, do you think we are doomed, or do you think our leaders(who are knee deep in short term profit fundamentalism if i get you) will respond in a superficial way,(more energy bills, more milage per gallon) or is it already too late? Are there solutions from the top down, or bottom up, and who will get us there?

Philip Martin writes: "...we need to stop economic growth ASAP."

Dear Philip,
we should all step back and analyze things from basics

what is "economic growth" that you want to stop so badly?

Let's say I go to the doctor and he gives me an antibiotic because he has correctly diagnosed that I have an infection. He has given me something of "value" and I give him something of "value" in return. Our econmic transaction has helped stop the spread of disease and reduced suffereing in the world. That's not something to stop.

Case number 2
I drive into a gas station. The owner sells me gasoline at $5/gallon. He says, "Go out there and burn this stuff into the air. Dump CO2 and other contaminants. we can do whatever we want with our properties. we are not hurting anybody." well you can see that a number of things are not quite right in example #2

So we do not want to stop all economic growth. We want to redirect the thinking of people about certain kinds of activities. They are not bad people. They have just been miseducated somewhat.

It's hard hard work to step back and see the basics.

Mike

There's a fellow Jeff Golden I saw on C-SPAN the other day (Ashland Oregon USA). I think he is on to something. He says we need to stop treating politicians as if they are our parents, as if we are their children and as if they will make everything good for us. We are all involved. we all have to take responsibility as adults. Thank you for your kind words.

Fellow Islanders,

This just in:
http://www.cnn.com/2005/WORLD/meast/08/01/us.saudi/index.html

The leader of our Island has held hands with the new Emperor. He has felt out that which needs to be felt.

The clothes of the new Emperor are of the finest threads as anyone who is wise and loyal can see. There is nothing to worry about. A word of reassurance is sufficient to those who have faith based understanding in how the universe moves.

"U.S. officials said Fahd's death would have little effect on U.S. relations with Saudi Arabia because Abdullah already has close ties to Bush and his family.

"

Very interesting exchange going on here.

For those of you that seem a little uncertain about Daniel Yergin's funding and background - he has been an energy industry analyst for more than 20 years. His 1991 book titled "The Prize: The Epic Quest for Oil, Money, and Power" is one of the most dogeared books on my shelf. I have corresponded with several members of his consulting firm a number of times over the years; it became quite apparent to me that they have become part of the epic quest for money. Right now, in the energy consulting business, the major source of money is the oil industry. Who do you think buys those $2,500 reports?

Secondly, for Martin who complains that cars with waiting lists and lengthy delivery waits like the Prius have higher financing rates than econoboxes like the Echo, I suggest a return to Economics 101. People WANT to buy the Prius, so they will pay a higher price than they will for a less attractive car that requires more incentives.

Finally, I am a believer in peak oil and peak natural gas. In addition, I recognize that there are serious limits to the rate at which coal can be produced and serious environmental consequences for even maintaining our current burn rate of that most dirty of fossil fuels. I am only able to sleep at night without TOO much concern for my future enjoyment of a moderately comfortable American lifestyle because I know that there is an alternative source whose properties are not well understood.

As a former nuclear submarine engineer officer, I learned a lot about how to safely operate extremely reliable, emissions free nuclear engines. My partners and I have developed some designs for systems that we believe address many of the cost issues that have limited the development of uranium fueled large engines to replace diesel and gas turbine based power plants. Shameless plug here - www.atomicengines.com

Of course, we realize that the inertia for existing technologies and ways of thinking is huge. That is why I do lose some sleep each night and wake up early enough to participate in forums like this before heading off to the day job that pays for my atomic infatuation.

"Can anyone point to or summarize the weaknesses of Kuntsler's theses?"

Well here's a start:

U.S. petroleum consumption (http://www.eia.doe.gov/neic/quickfacts/quickoil.html): 20,731,000 bbl/day.

U.S. GDP (http://www.bea.gov/bea/newsrel/gdpnewsrelease.htm): $12,376,200,000,000

Petroleum consumption as percentage of GDP at $20/bbl (cheap oi): 1.22%

Petroleum consumption as percentage of GDP at $60/bbl (today's oil): 3.67%

Petroleum consumption as percentage of GDP at $80/bbl (alternative oil): 4.89%

As the U.S. economy at this moment is humming right along, having gone from cheap oil prices most of the way to alternative oil prices without falling apart, it's pretty clear that Kunstler is wrong when he claims, "it is cheap oil that enables America's 'non-negotiable' easy motoring way of life, and the debt-fueled suburban sprawl-building economy that has evolved to serve it".

Kunstler hates suburban sprawl. Fine. Can't say I'm much of a fan, myself. However, he's hijacked peak oil to serve his agenda, and doesn't have any math or rationality to back it up.

Thanks stepback for your words of wisdom...I have just exposed myself to the Ebola virus because it is good for economic growth and I hope our national health service will name a ward after me for my capitalist esprit de corps. Actually perhaps your non-existent patient is part of the economic system which produces so much pointless stuff and gets everyone stressed so much in the process that they become more prone to infection. So where is that value coming from? Oooops..looks like everything is more interlinked than I imagined...I stepped back...and wow....what a view!!!
Philip Martin...currently available for extreme patronisation if you have nothing better to do.

Actually, that previous post made me curious. So, I went and collected the historical data for petroleum product production ( http://www.eia.doe.gov/emeu/aer/txt/ptb0511.html ), crude prices ( http://www.eia.doe.gov/emeu/aer/txt/ptb0511.html ), and GDP ( http://www.bea.gov/bea/dn/nipaweb/index.asp ). I put it in a spreadsheet, did the math, and made a chart, "U.S. Crude Oil Costs as %GDP":

http://photos21.flickr.com/30587059_43604a8322_o.png

This should demonstrate that spending 5% of GDP on long-chain hydrocarbons may not be healthy for economic growth, but it's certainly a long way from the end of "the debt-fueled suburban sprawl-building economy".

Would percentage of GDP being spent on long chain hydrocarbons _would_ spell the end of "the debt-fueled suburban sprawl-building economy"? 15%? 30%? 60%?

Michael Robinson --

Oil is stll relatively cheap. Kunstler's "thesis" does not kick in until oil prices surpass those of the early 80's adjusted for inflation. Oil would need to be in excess of $100/barrel. That is when major disruptions will begin. As the prices rise, there will be a point at which GDP will start to decline and we will once again see that 6% crude oil cost as percent GDP that your own graph shows in 1982. This could happen sooner than think.

Unlike 1982, there will not be any magic bullet vis-a-vis new energy production coming online thereafter to pull us out of the economic doldrums. This would be a permanent and declining condition which, in Kunstler's view and my own, would have devastating affects on the suburban sprawl lifestyle people now have.

I don't think Kunstler "hijacked" PO. I think he did a little connecting of the dots and came up with cheap oil as the root cause of most every thing bad. If we hadn't found oil, then coal would have been developed along more aggressive lines, yet the problem would still be here, and maybe at about right now anyway. In that case, Kunstler would have used Peak Coal as his scourge.

In my digging, I come up with money lending with interest as the root cause, but then I tend to diig waay too deep sometimes. Changing the money system would require a complete fall back to a dark age, a total rebuild.

Peaking Oil will hammer the planet until we switch to something else. If we switch to something else that has a depletion curve, then we just remain on the same hamster wheel. The nature of what we are facing is that we will simply be forced to behave ourselves sooner (and keep society and civilization) or later (when there isn't any more easy energy and technology cannot sustain itself). Sooner means we grab the bull by the horns and switch to sustainable activities and energies. Later means we switch to another depletion prone resource, then another, until we got nothing left. When the resources run out, then so does society as a whole.

Welcome to Easter Island 101. Please suspend your disbelief.

If our kids happen to eke their way out of this without a total collapse of civility, they may turn to coal. Then THEIR kids will have to face Peak Coal. If our kids go nuclear, the peak will happen in their lifetimes, and coal can be for my grandkids to figure out. It all depends on whether they are any smarter than us, and avoid the sweet smelling black stuff in the middle of that pretty flower with the big jaws......

Problem is, current economics will not work without constant growth, which isn't possible without depleting some resource, somewhere, to concentrate wealth.

Jump in Grinzo, anytime...

Dave: "Oil is stll relatively cheap. Kunstler's 'thesis' does not kick in until oil prices surpass those of the early 80's adjusted for inflation. Oil would need to be in excess of $100/barrel."

Let's look again at what Kustler said: "he does not mention that unconventional oil tends to be very uncheap".

So, then we need to look at the price of unconventional oil--tar sands, biodiesel, syncrude from coal, etc.--and see exactly how uncheap it is. Well, none of it costs more than $100/bbl, so if that's the threshold for Kunstler's thesis to kick in, then it just won't happen.

Spooky: "I don't think Kunstler "hijacked" PO. I think he did a little connecting of the dots and came up with cheap oil as the root cause of most every thing bad."

No, he's a virulent luddite, and he'll latch on to anything he think will deliver his dystopic "huddle in the dark" fantasy. Before peak oil, it was the Y2K bug. Read this essay, which he wrote after Y2K proved to be a non-event, but before he "discovered" peak oil:

http://www.kunstler.com/mags_farewell.html

All his parasitic premises are there, crawling along in search of a new apocalyptic host phenomenon to feed on (which, ultimately, turned out to be peak oil). And, after peak oil is no longer viable, they'll drop off and crawl along in search of yet another host.

BUT, Mr. Robinson, there is nothing to replace oil in terms of worldwide production volume. Synfuels, biodiesel, tar sands, coal oil, etc. are not capable of meeting world demand anywhere near what it is today. Thus the $100 barrel you see as something that "just won't happen" is, in fact, something that is inevitable unless world energy demand drops by a very significant amount, or is replaced by something without a depletion curve.

I agree, he is at heart the quintessential Luddite and techno-spoiler, and he is one seriously negative person. His glass isn't half-full, it is shattered and in a thousand pieces. I hope he runs over a piece on his bicycle rides, because he isn't helping things.

But thinking that $100 barrels are not going to happen is ostrich-like in the face of prices tripling AT THE FIRST BURP OF PEAK OIL! This is the very beginning of Peak Oil, not the middle of the book, and certainly nowhere near the final chapter.

Kunstler's surly scribblings do not affect Peak Oil and the world energy situation. This will not be wished away or magically overcome with technology. Technology will be sidetracked until the last minute, and then it will be too late (this is already a decades old fact). And the reason is that corporations and governments run things, and are, to a man, corrupt. It is the system that is broken, and that is what has to be fixed before logic can succeed greed.

My personal belief is that we will survive, but not at curent population levels, with current monetary systems and not with any current type of government. It will take something new under the sun for things to go in an alternative direction, that will free us from ourselves. Otherwise, we will just pick another "low hanging" resource and get back on the depletion track.