Three Nails in the Coffin of Peak Oil

This post is based on a talk I gave as an "undistinguished speaker" to the American Association of Petroleum Geologists (AAPG) oil finders lunch in Aberdeen a few weeks ago. This will be one of my last posts on The Oil Drum. There should be enough controversy below the fold to keep a hoard of Oil Drummers satiated for weeks;-)

Peak oil - what happened? Before answering "what happened" it is perhaps best to try and define what peak oil actually means. In its simplest formulation, "the theory" is that owing to geological constraints on flow rates from natural finite reservoirs, global oil production will one day reach a maximum point and thereafter inexorably decline. An extension to the theory is to contemplate the possible consequences of peak oil for society. The argument goes that since oil is the pinnacle fuel in terms of energy content, transportability and storability, crucial to the smooth running of modern transport systems, that a decline in crude oil availability may lead to social disruption. The chart top left, shows a typical peak oil profile from Colin Campbell, one of the key Peak Oil analysts of recent decades.

The chart top right shows the oil price for Brent and WTI. The phenomenal rise in price from 1999 to 2008 bore witness to growing scarcity, where demand growth outstripped supply growth. The chart bottom right is a cross plot of the monthly production and price data and shows how supply became inelastic to price from January 2004. Many "peak oilers" were convinced that the time had come.

(Click on slides to get a larger version that will open in a new window)

Nail 0 When I submitted the title to the AAPG many months ago I thought there were three main nails in the theory of Peak Oil, but when I came to write my talk I discovered there were four, hence the introduction of Nail 0. For the time being at least, it is an undeniable fact that oil production has continued to rise. Note that in this case, C+C includes conventional crude oil, condensate, shale oil and tar sands production but excludes biofuel and natural gas liquids. All scientists should update their views and theories when new facts come to light.

Nail 1 The first big nail is the ongoing exploration success of the international oil industry. Higher price has encouraged a resurgence in exploration activity that has resulted in tens of billions of barrels being found. Land locked Iraqi Kurdistan alone may hold >40 billion barrels in new reserves. We will of course one day run out of planet to explore but that day does not seem to have arrived yet.

Nail 2 The second big nail has been the expansion of unconventional oil and gas production, especially shale oil and shale gas in North America. Several years ago when I first engaged with this debate no one ever mentioned shale oil as a massive new resource just begging to be exploited. Shale, together with tar sands, biofuels and enhanced oil recovery has transformed the fortunes of US and N American liquid fuel production.

Nail 3 The third and final big nail may not seem significant but it is symbolic of what can be achieved with technology and the desire to succeed. Oil production in Oman had been in decline since the year 2000 to the disappointment of the Omani people and Shell Oil that operates much of the production in that country through a joint venture with the Omani government called Petroleum Development Oman (PDO). Oman would have been a classic case of a country peaking. But the fortunes were reversed by rolling out an array of enhanced oil recovery strategies. Increasing recovery factors across the globe will add billions more to reserves.

Points At this point many readers may think I have lost the plot, and indeed by the end of the post may still think so. It is important to set the preceding observations in context.

Not all liquids are born equal A careful dissection of global liquids production data shows that conventional crude oil + condensate has been on a bumpy plateau, just over 73 mmbpd, since 2005 - that is for 8 years. Despite record high oil prices, the international oil industry has not been able to grow production of this most lucrative resource that flows freely from the ground. Something is up! All of the meagre growth in liquids production has come from liquids that are very difficult to get, i.e. shale oil and syn crude form tar sand, or from inferior liquids that condense from natural gas production (NGL). Note that in this case conventional C+C excludes shale oil and tar sands. It remains a debatable point whether or not shale oil should be classified as conventional or unconventional oil.

The IOCs may already be past their peak If the world is awash with oil as many reporters now claim, it is curious that this oil seems out of reach of the biggest independent oil companies in the world. Some of the new supplies may of course be in the hands of the second tier independents but most of it lies in the hands of national governments out side of the OECD. This presents very serious threats to energy security and on-going trade imbalances that lie at the heart of on-going financial system stress.

Thanks to Matthieu Auzanneau for the splendid chart.

Oil field decline rates In the context of oil production, decline rate refers to the fall in annual production that invariably takes place owing to pressure depletion of the reservoir, the production of oil and the ingress of water or gas into the formerly oil bearing strata. Companies are continually battling decline with strategies like injecting water for pressure support, drilling new infill wells, doing well work overs etc. and the combined effect is to reduce declines from headline numbers that may be much greater than 10% to more manageable numbers in the range 4 to 7%. Therefore, absent new field developments, global oil production would decline every year by about 4.5% according to CERA or 6.7% according to the IEA. Given crude + condensate production of around 73 mmbpd, this means that new fields amounting to between 3.3 and 4.9 mmbpd are required every year to just maintain global production at 73 mmbpd. This is a mammoth task, finding and developing fields equivalent to a province like the North Sea, every year. The industry has been working flat out to achieve and maintain this. Tier one supergiants are being replaced with tier three assets like shale oil, that by comparison require enormous effort to develop and decline much more rapidly.

The world has changed The world changed in August 2008 with the onset of the financial crisis. This together with a range of other events, that all impinge on the global energy picture, has tended to take the media and public eye away from the energy crisis that was prominent before August 2008.

Financial crisis Eight years ago I would use images from movies to depict social unrest; now there is no shortage from the real world. There should be no doubt that the crash in oil price in 2008 was brought about by the financial crisis. The role of high oil and energy prices in triggering the financial crisis, however, remains less certain and mainly out of the public and political eye. The sharp recovery in oil prices following the crash is part of the new energy reality. Marginal supply is now much more expensive than in the past and to maintain supplies at current levels, a high price must be paid.

Financial crisis At a speech I made in Vienna last year I made the assertion that Capitalism was founded on growing supplies of cheap fossil fuels. The financial crisis bares many of the hallmarks to be expected with the end of cheap fossil fuels, and the end of capitalism, the loss of ability to pay rent on savings being one of them. The shale revolution is perhaps the best example of the end of capitalism as oil companies struggle to bring a vast but expensive resource to market and in so doing dump the price below which the resource can be produced. Rex Tillerson, CEO of ExxonMobil kindly affirmed the assertions made by Arthur Berman and others that the US gas industry is losing its shirt on shale. US natural gas prices seem to have bottomed, but are still below the price needed to turn a profit. US shale gas is expensive, and it is curious for me to observe that companies now seek to make it even more expensive by liquefying it and sending it half way around the world. This is curious behaviour for capitalists operating in a broken market.

Increasing effort required to procure energy I first produced this chart many years ago now, inspired by Nate Hagens and many others. I have grown to realise that low ERoEI energy sources are in fact energy conversions. When we use natural gas to make biofuel or to help procure syn crude from tar sands we are electing to convert "cheap" natural gas into these more prized liquids. ERoEI of the global energy mix will undoubtedly be falling, but on average still so high so as to not be a problem for now. Likely not a problem for many decades to come.

Increased effort = more drilling When it comes to N American oil and gas, increased effort simply means drilling more wells, more expensive wells, less productive wells. High resolution versions of the charts are given below. In this post I was astonished to see how the USA drilling statistics dwarf the rest of the world. Whilst Europe appears not to be trying, on reflection I am not convinced that covering our remaining countryside with drilling pads and service roads is a wise route to follow. North America has wide open spaces better suited to this type of resource exploitation than the densely populated rural landscape of Europe.



Regional gas

European energy security

Energy security has been a long-running and serious issue for Europe, one of the key factors leading to the expeditionary exploits of Germany in WWII. And yet, as discussed below, European energy policy is currently driven by a unilateral desire to reduce CO2 emissions which so far has achieved virtually nothing.

I sent the chart on UK primary energy to The UK Department of Energy and Climate Change (DECC) many years ago, asking, if confronted with nothing but this data, what should the UK do? It was and still is clear to me that we must do all we can to reduce our energy consumption (without harming the economy and the populace) whilst doing all we can to boost primary energy production. DECC did reply but did not give the glaringly simple answer I expected to get. In the interim, the government has implemented a totally botched tax raid on UK oil and gas production. And it continues to pursue (interminably) with its £1 billion carbon capture and storage competition that seems designed to give Britain the most expensive electricity on the planet. It should be blindingly obvious that if CO2 can be captured at power stations it should be used to enhance oil recovery from the North Sea. What has made our policy makers so blatantly dumb?

To be fair, the UK does have a raft of sensible measures such as progressive taxation on motor vehicles linked to energy efficiency (or is it linked to emissions?), tax breaks for home solar installations (though I'm still not convinced that solar is a great idea for a country where it is dark for most of the winter when demand is at a peak) and is rolling out smart meters at a snail's pace. We are still taking two small steps forward for every three large steps back.

European oil and gas production is in free fall, in sharp contrast to North America. We are becoming increasingly dependent upon Russia, Africa and The Middle East for our energy supplies with every day that passes. Covering Britain with wind turbines seems increasingly to me like a bad idea. There is, of course, interminable chatter about fracking in the UK and elsewhere in Europe. This excerpt from an email from Arthur Berman I believe places the great fracking hope in context:

So, most-likely reserves suggest that all of the Wrexham, Blackpool, Nottingham and Scarborough shale reserves may amount to a Barnett Shale-sized accumulation. Not nothing, but on balance, not terribly impressive for an entire country. I'm sure the Brits will love the 30,000 wells necessary to develop 43 Tcf!

Drill baby drill This final slide depicts the very different attitudes to energy policy on either side of the Atlantic pond. The USA, still dominated by free market policies, private ownership of mineral rights and the fossil fuel industries, has pursued a very different course to Europe that is pre-occupied with unilateral emissions reduction policies. So far, this unilateral EU action has achieved essentially zero on the emissions front, any savings made in Europe being wiped out by increased emissions else where. Europeans are being saddled with expensive and less reliable electricity supplies and increasingly loss making energy industries. Only time will tell if the European strategy bears fruit in the long run. The need to increase indigenous primary energy production in Europe does make expansion of renewable energy a sensible option, but I can't help feeling that 100 GW of new nuclear capacity may better serve the people of Europe.

The future When I first came to The Oil Drum over seven years ago I was looking for information to explain the steadily rising oil price. It has been some ride. In the vastly complex system that is industrial society it is impossible to make predictions about the future, but here, in any case, is my wag. $100+ oil has opened the door to exploitation of more expensive resources and reserves. Society is adapting to the new reality of higher energy prices. Some are becoming more energy efficient, some have installed renewable energy devices at home, some will forgo an expensive vacation they can no longer afford and some have been squeezed out of the labour market, perhaps forever, and will live out their lives on dwindling State handouts, in poverty. The new higher oil / energy prices are here to stay but I believe they will stay range-bound in $100 to $150 / bbl bracket, perhaps for decades as we munch our way through the $125±25 slab of resource. The tremendous uplift in price from 2002 to 2008 may have been a generational one-off investment opportunity where some made billions whilst society lost its shirt. The energy industries are still under-dimensioned for the new reality of harder to get at energy but scarcity of women and machines will gradually ease as the industry continues to upscale.

As for me, I may start my own blog on energy, climate, and policy - that will not be suitable reading for many existing TODers. For the 7+ years I have been involved with The Oil Drum I have not worked and so any new venture will need to be fully funded, somehow.

"perhaps for decades as we munch our way through the $125±25 slab of resource"

it this slab thats suprised some and lead to conclusions that a peak in resource , in this case oil, cannot happen.

Sadly in the minutae of everyday expirence this may look that way , but lets face it , if there was plentiful light sweet crude we wouldnt be even looking in the direction of these plays

still have fun ! there was apparently some good dancing on the Titanic before it sunk....


"... there was apparently some good dancing on the Titanic before it sunk..."

Suppose the Titanic had sunk much more slowly than it did? Would the Carpathia have gotten there in time to save all the passengers? Will some energy Carpathia come along as our oil-based systems struggle to remain afloat, or will we be disappointed as just a few dingies show up, far too small to rescue all the passengers? It seems to me that, as this drama unfolds, other storms are brewing just over the horizon that may make any rescue for all problematic. Meanwhile, the crew is desperately bailing for their grog, attempting to keep the gunwales above water, and little headway is possible.

What does this mean for a complex, growth-based global economy?

Pi, below:

Possibly the underlying human logic all along during the heavy growth years was (secretly, but for us all) "let the collapse be widespread and humongous and slow enough that I, personally, won't be badly affected". The personal bargaining went something like: "OK, the average lifespan may decline by 5 years. I may be able to afford fewer things. I will just rent an apartment.I will have one cat instead of three cats...I can live with these changes.""

Years ago, as I saw that our Titanic was doomed, I had no idea how our hyper-complex system of arrangements would fall apart, only that they were becoming more brittle over time. I decided that I wasn't going to be dragged into a more resource-constrained future kicking and screaming like so many are doing now. The fact that we are, and have been, in overshoot (The Titanic has far too many passengers, indeed is NOT unsinkable, and there aren't nearly enough lifeboats...) often gets lost as we focus on the current predicament du jour.

I don't know if "I can live with these changes". It's not really the point. If I can lighten the load and, perhaps, save a few souls in the process, it beats the crap out of partying on deck, allthewhile insisting that our ship is unsinkable. I never could dance so well anyway; usually didn't like their music.

The advice to "have fun" reminded me of a quote I read in an excellent TOD article called "The Seneca Effect" (about why the decline is faster than the way up) in human civilizations. I will quote the very last paragraph:

I don't know what Seneca would say if he could see this planet-wide effort we are making in order to put into practice the idea that he expressed in his letter to his friend, Lucilius. I can only imagine that he would take it with some stoicism. Or, maybe, he would comment with what he said in his "De Providentia" "Let Nature deal with matter, which is her own, as she pleases; let us be cheerful and brave in the face of everything, reflecting that it is nothing of our own that perishes."

(Ugo Bardi, thank you for bringing this quote before us and for an excellent article.)

"Cheerful and brave"----in other words, "have fun"?!?

I will miss, miss, miss TOD!!

Your text seems to suggest that this is less of a "nail in the coffin" situation (which implies the whole issue is dead and buried) and more of a "the expected arrival to rich western industrialised countries of peak oil's more disruptive aspects has been delayed for an indeterminable period, but not indefinitely"

I never bought that upsurge in oil prices a few years ago had any major causal relationship to the major financial upheaval immediately thereafter. However the financial upheaval has given producers time they might not otherwise have had to build capacity and also cheap money with which to finance it. If money printing hurts savers but finances energy projects then it amounts to burning capital for oil, sort of like burning your chairs for heat.

If I understand the point of the article, which appears to be some sort of rationalization, I can offer this:

I don't think it is a failure of peak oil theory as much as it is a failure of "Peak Oil theory", which is the old-fashioned heuristics epitomized by poor approximations such as Hubbert Linearization (HL). This forced many into a trick-box in which they could not explicate themselves. What we observe is that few of the depletion curves seem to fit HL any longer, and so the old heuristics are failing. The final stake in the coffin was the adoption of multi-Hubbert peak analysis, which adds nothing at all to a deeper understanding, other than to say one can fit any profile given enough parameters.

The way to keep going is to adopt the more modern approaches to analysis, as illustrated by the shock model convolution techniques that are being used on Bakken oil, for example. But The Oil Drum shot its wad, so to speak, on loyalty to the Hubbert logistic and that is why "Peak oil theory" is going away, but the general idea of oil depletion is here to stay.

Eaun said his post should stir up some controversy, so this is is offered as my own perhaps controversial opinion to stir the pot.

Your point (which you already made years ago) always sounded very sensible to me.

Indeed. Hubbert's calculations were always nothing but a 'back of the envelope' estimation of peak oil. He had very little data to work with and he relied upon the central limit theorem to have various things cancel each other out. Just as Darwin's work was revolutionary and set us on the right path, the early work of Darwin and Hubbert is crude, has flaws, and is outright dead wrong in parts. So when you see people refuting Hubbert it is just as silly and pointless as the creationists that refute parts of Darwin's work.

According to the late L. F. Buz Ivanhoe, Hubbert said very little about the details of the decline side of the curve. His prediction was for the lower 48 and did not include Alaska or deep offshore. Hubbert was aware that he did not have sufficient information to make valid predictions about world production. He did make sample projections using various estimates of world oil endowments.

I don't think it was Hubbert's fault, but the discovery of the quirky Hubbert Linearization which was named after him. This heuristic would only work in a very narrow class of profiles and that profile had to be precisely in the form of a logistic curve. If the oil production profile was not logistic, the line was not straight and then it was impossible to get a URR.

What is really amazing with the more appropriate mathematical models, is how well we can track the production profile of a region such as Bakken. Look at what Rune and DCoyne are doing in tracking that production. The projections actually start to make some sense in physical terms, not just as a heuristic approximating a bell curve.

The Oil Drum shot its wad, so to speak, on loyalty to the Hubbert logistic and that is why "Peak oil theory" is going away

Web, I think this is a little unfair. The very first comments I posted on this site were to Stuart Staniford questioning the veracity of HL. You may recall back then I was posting as "Cry Wolf". And later I wrote this post The Amazing Power of King Hubbert(...?), again questioning the simplistic logistic approach. Robert Rapier did much the same, but alas, in this world of unmoderated comments, those who may have won the argument on the day lost the war to those who had more stamina.

I've told you before, I'm crap at maths, and never fully grasped your shock model - forgive me! But please, post a 500 word summary here + charts or submit a farewell post to TOD - focussing on a layman's explanation.

I love this post... like the old days. Euan flings in another class trolling! ;-)

I think your predictions are in the ball park. Maybe a bit shorter in timescale than we may imagine because I get the feeling stuff is going to happen that is off the fairway when it comes to prediction. I think history calls them events.

Social unrest arising out of these crunch times is the joker in the pack.

+1 on the shock model for dummies post from WHT

Euan, So you were also questioning Stuart Staniford in the early days of TOD?
I debated Stuart for pushing his fits to the Hubbert logistic, and I recall that he didn't appreciate that too much. I do remember Robert Rapier debunking HL with a top-level post or two. The killer argument against it was that it could not describe a plateau in production or a fat tail, which Robert noticed as well.

Thanks for the offer, I would like to post a short piece. The big issue in modeling has always been the lack of a comprehensive data set to draw from, even now with Bakken.

WHT if you do post something just pretend for moment we don't know anything about shock modeling and statistical modeling in general.

Ah, I made that request of WHT about...5 years ago? Dude, get a ghost writer! Amusing that Euan never figured out the Shock Model either. There were other models, too. Remember loglets?

I see that Sam will have an article here examining how the various forecasts of the past have played out so we can see how well they've worked, setting aside the matter of how they actually function. There have been so many papers over the years, that one out of Kuwait for instance.


Just to say thank you. You were one of the first to help get through my thick skull that there would be an extended plateau, and a 'fat tail.' At the time I didn't know what that meant.

TOD has been very helpful to me, in establishing a better train of logic in order to sort out, at least to me, probabilities for the future.

Sure will miss having easy access. Peak Oil is difficult to get around, at least for me. I will be surfing the various blogs and sites, so may still see you from time to time. At least I hope so.

Best always,


The problem with HL is that individual wells go through their growth / peak / decline phases over a constant economic environment, according to "peak oil theory". But when the whole world peaks, we get very disruptive economic effects from oil shortages that create feedback loops that change the environment in which future oil extraction occurs. Unfortunately, TOD never really delved into too much detail about those financial feedback loops, not to any significant extent at least. Gail has provided some analysis to this effect but I don't think it went into enough detail about how the monetary / financial system works and how this all relates to the real economy of resources that the financial system is supposed to represent, and which funds further resource extraction activities. Has there EVER been ANY post on here even MENTIONING how interest rates have gone from 17% in 1982 to basically 0% in 2012? How can anyone seriously attempt to analyse anything in the economy, especially something as fundamental as oil production, without incorporating an analysis of historical interest rates and monetary policy as the central theme? It just boggles me.

This is why the continuing plateau of oil production has dumbfounded peak oil "theorists" who used to be crash and burn doomers, as much as central economists are dumbfounded to explain why dropping interest rates and printing $2 trillion a year isn't kickstarting the economy like it always used to. Peak Oil is AN INTERPLAY OF GEOLOGICAL, FINANCIAL, ECONOMIC, POLITICAL, and TECHNOLOGICAL factors. This site has almost entirely (with the exception of some work from Gail) focused on geology and technology. No wonder the doomers failed in their predictions (well they didn't really fail, they were just about 8 years too early). Why did this site only post articles from technical junkies (not that there's anything wrong with being a techno-junkie, I am one myself...)? Where were the economist and financial types to explain the other side of the Peak Oil story? Finance and oil extraction are intimately related and you cannot understand one with out the other. So how can TOD call itself a peak oil site, when it really only ever analysed half of the factors involved in the phenomenon of peak oil?

I still cannot believe TOD is shutting down when we're only months, possibly weeks (and I'll hedge my bets, maybe up to a year) from total financial collapse. This decision will be seen as a monumental and short sighted blunder. I suggest the keepers of the archives have their computers set to re-activate because they are going to have to do that pretty soon if they stay true to their words of bringing TOD back if things significantly change. I can assure everyone that we will not have to wait "decades" for PO to be evident.

We are very close to PO, and it will be a shark fin, not a bell shaped peak. The West is now officially almost out of gold. The Dollar / Pound / Euro Ponzi scheme is basically finished. Gold has been in backwardation for an unprecedented month now, well beyond anytime in history, ever. This means that people are afraid to lend their gold out for leasing FOR JUST A MONTH, out of fear of not getting it back. This means that there is essentially no more gold left for Asia to scoop up. This means that China will soon start dumping Treasuries (virtually all of America's deficit is currently being funded by the Fed's debt monetization anyways, instead of China buying it like it used to; all that's left now is for the world to shift away from using dollars for international settlements and that will be the end). Even with $1 trillion a year of freshly printed confetti, the 10 year Treasury yield has risen 1% over the last few months. This is a VERY clear warning that we are on the brink. When this financial shift happens (we haven't had one for 30 years), the US is going to lose its trade deficit and the world of oil production will then tell a very different story ... virtually overnight.

Rune Likvern touched on the subject a couple of days ago.

To pay for these (more) expensive prospects out of cash flow became increasingly difficult so companies turned to debt financing. Recently some oil/gas companies have been approaching their maximum capacities to take on more debt. This has likely been fueled by expectations for a continued growth in demand and a tight supply/demand balance that would support structurally higher oil/energy prices.

As companies approach debt saturation this causes erosion of their resilience from modest declines in the oil price. Simulations for oil companies close to debt saturation reveal a disturbing prospect. A decline in the oil price (to say $70-80/Bbl) could require oil/energy companies, and their currently deployed strategies for growing supplies, to drastically reduce their capital expenditures (investments) in pursuit of debt service, cryptic presented in euphemisms like “targeting financial performance”.

If you can fund investments out of cash flow and not take on debt, as oil companies could in the past, interest rates are not so important, so maybe that's why they weren't mentioned in the past.

It could be that in the current low interest rate environment, oil companies have taken on cheap debt to increase profitability via leverage, rather than taking on debt because of a lack of adequate cash flow as Rune states.

For whatever reason, debt is now a part of the oil equation, and the ability of oil companies to service that debt going forward if interest rates rise must be considered.

Personally, I can predict interest rates with the same accuracy I can predict the oil price, i.e. not reliably.

Yes, it's good to incorporate interest rates on the micro scale but what about the macro scale? We need to bring all of this together in the long term trends analysis or it's nowhere near as useful as it could be for predicting the future. Debt isn't just debt, but all money is debt too, and lots of different kinds of debt. Where is the wider perspective bringing together debt, money (same thing), and the energy (i.e. fossil fuels ) that gives the whole system life? How about an analysis of the global monetary system over the last 50 years, a discussion of M2, M3, Federal Reserve holdings, etc. etc.? I find that here, "a dollar is a dollar" as far as oil market analysis goes, when a dollar is definitely not just a dollar, there are many different kind of dollars out there and they all are affected by money velocity in different ways, and of course it's all driven by energy. It's not very meaningful to just say that oil price spiked in dollars in 2007 and analyse the trends over the years surrounding that event using a two dimensional chart, because the proportions from different kinds of dollars in the system were shifting greatly over that period. How is it that M2 has quadrupled since 2008 (meaning 3 x more dollars were printed in the last 5 years than all of previous human history), yet prices haven't quadrupled, they've only maybe at most doubled? It's because of different types of dollars being created, and those dollars going to different places and doing different things, and having different impacts on the greater economy.

What about that age-old question that hardly anyone seems to be able to answer (or even think about asking): "What is money?" Well, it's fundamentally just a claim on energy. Since oil is the most important of our energy sources, then how specifically does money's claim on oil work? This question should be fundamental to TOD's focus.

The game of life is hard to play
I'm gonna lose it anyway
The losing card I'll someday lay
So this is all I have to say...

Johnny Mandel, Suicide is Painless

The "nails in the coffin" title is misleading because your article goes on, actually, to prove peak oil has occurred with the bumpy plateau for C+C that started in 2005. All of the finncial problems and other issues you mention seem only to underpin the basic logic of the peak oil theory.

The idea that there would be a rapid peak and then gas lines and economic collapse following within months of each other (it may be what you mean by "peak oil") was never the mainstream view of the issue. And most who had studied and observed PO saw complex interactions, with governments, especially, involved as support.

Possibly the underlying human logic all along during the heavy growth years was (secretly, but for us all) "let the collapse be widespread and humongous and slow enough that I, personally, won't be badly affected". The personal bargaining went something like: "OK, the average lifespan may decline by 5 years. I may be able to afford fewer things. I will just rent an apartment.I will have one cat instead of three cats...I can live with these changes."

System-wide, global-wide slow collapse may have been the goal from the start for several reasons. 1) It would just be judged as general economic malaise by most, not a consequences of choosing energy sources without regard for the future in a blind and passionate way (i.e. sparing leaders embarrassment)
2) The consequeces (closed shops, empty buildings, etc.) would appear slowly, way after the initial builders and owners had died of natural old age, again, sparing everyone embarrsassment.

People don't like to be shown the consequences of their mistakes. People have enough embarrassing things to deal with, like mortality, thinning hair, or not scoring as high on math tests as their friends. Life is full of embarrassing mistakes. Adding "paving over the planet" to the list would just be cruel and vindictive. People were out to use oil to enjoy themsleves and make life better, to improve access to health care and education and goods and services.

Peak oil doesn't make sense as a short-term phenomenon, which may have been an initial image it had, rather like Y2K, or a Hollywood disaster movie. It only makes sense as a slow, progressive series of smaller events and battles occurring all over the globe. All of these events and battles together constitute PO.

You did not put a nail in the PO coffin in this article. Quite the reverse, I think.

You did not put a nail in the PO coffin in this article. Quite the reverse, I think.

If many readers reach this conclusion I will be quite satisfied;-) However, the acute problem of 2002 - 2008 appears to have turned into a cancer that may fester for years / decades. The patient is sick but doesn't know what is wrong. Maybe human ingenuity will find a cure, maybe not.

Count me as one who saw your intent. I hope and believe there are many more like me. Regardless of the details of arguments presented in the past, the problem protended by peak oil has become real, thus the details of those old arguments are moot (which is legalese for 'who cares anymore').


I take this article to say that only 4 nails won't hold the coffin lid on for long.

Great! Now that TOD is shutting down and the final nails have been driven into the coffin of 'Peak Oil' we can all relax. Thank god for all the 'OIL' reserves in the tar sands and shales, let the kerogen flow. I'm sure if I join the right online blog I can also find confirmation that climate change is just one big hoax. Nothing more to worry about! So next I will be registering as a Republican, starting an MLM online business so I can milk those that don't understand the exponential function and will be looking for a new SUV! While I'm at it, maybe I'll get a big speedboat to tow behind it. Sailboats, kayaks, bicycles and solar panels are for those deeply misguided individuals who made the wrong bet that BAU could not continue forever and ever... of course it can. Amen!



P.S. Thanks, Euan, for letting us know that Peak Oil is really dead!

:-) "let the kerogen flow....."

things are going to have to get really hot for that to happen !

Peak Kerogen anyone ?


Hi Euan,

Long time, no see! I haven't said anything here at TOD for years.

Congratulations to you for writing this post. You've got balls, which is pretty rare in this world.

By far the most important thing you said is this --

All scientists should update their views and theories when new facts come to light.

And I might add, all non-scientists should do the same. Unfortunately, humans by and large are not capable of updating their belief systems, which are founded on other, more fundamental factors (e.g. social instincts like group membership & cohesion, etc.)

The other things you wrote -- the actual data and their reasonable interpretation -- are only footnotes to that one important statement.

My experience with humans is that they believe some story and then they stick with that story, no matter what. Thus, generally speaking, people learn nothing.

-- Dave Cohen

Hi Dave, good to hear from you and trust you are well. Global "oil" production will of course reach a peak one day and then decline, but I suspect we may see a "bumpy plateau" for some years accompanied by lots of adaptation on all scales. Individuals may of course adapt to a "new" lower norm. I was talking to a chap from CERA a couple of months ago and I think we agreed there was significant convergence of our views - it has to be a good thing when "the establishment" view converges with that of the fringe. He sees a bumpy plateau at a level higher than today whilst I think we will struggle to grow conventional C+C from current 73 mmbpd plateau.

In a comment I left on Phil Harts post a couple of days ago I pointed out that in any polarised controversy the reality often lies somewhere in the middle ground. I think The Oil Drum has played an important role defining one of these poles.

Cry Wolf ;-)


Well, I consider shale oil to be C+C, and these definitions are important because they define how we see things. And remarkably, that Bakken/Eagle Ford oil is high quality stuff, even if it only trickles out of the ground, depletes fast, and you've got to drill your brains out to get it.

But, anyway, I'm glad to say hello to you today.

Check out some of the additional comments below -- some of those people have no idea who we are!

But then again, memory and history is not a human strong point either (sigh).


-- Dave


We do know who you are. Just because everyone doe not agree.....


I think many don't see the forest for the trees. (Global) peaking - which started in 2005 - is a complex process which continues to do its damage.

Nail 0

Look under the crude oil curve

Except for US shale oil, the rest of the world is at peak.

Nail 1


The Iraq war was a peak oil war

Iraq war and its aftermath failed to stop the beginning of peak oil in 2005


Iraq crude oil exports stall amid pipeline attacks

Oil wars are one of the many feed-back loops of peak oil, discussed at nauseam in the oildrum

Nail 2

So when will US shale oil peak? 2017? 2020?

Nail 3

Oman shows an increase of just 200 kb/d. Where is your number crunching for all the other EOR schemes?

Not all liquids are equal

The graph labelled "Global conventional C&C production" contains unconventional oil

Not to mention that country or regional oil peaks can still bring down much larger supply systems, again feed-back loops. Just turn on your TV and look at what's happening in Egypt

Egypt's future crude oil import requirements for 3 population scenarios

2/3 of Egypt's oil is gone 20 years after its peak

And what is the consequence of Iran's 2nd peak?

Euan, the nails hit your foot.

"All scientists should update their views and theories when new facts come to light."

Who said: "The first duty of the true scientist is to prove himself wrong"

I would enjoy some discussion of the article that appeared in the Oil and Gas J. 08/12/2013 and began “The Spraberry Wolfcamp could possibly become the largest oil and gas discovery in the world,” said Pioneer Natural Resources Co. Chief Executive Officer Scott Sheffield while speaking Aug. 12 at the..." and compared this play to Ghawar. I posted a link to this article on the latest Tech Talk/

The material I have been able to read to date looks just like the Bakken spin before they began drilling there. It is a way to get investors excited about something that will play out the same way. Not that this means there won't be significant recovery from Spraberry. It is just that it is another shale play, requiring many horizontals, and playing out quickly with high depletion rates. In other words, more of the same.

This is not something that will drive down the price of oil. Though it could prolong what Euan anticipates to be a long plateau.


As you noted, an article comparing the Bakken to Ghawar:

Is Bakken set to rival Saudi supergiant Ghawar oilfield?

Humans are not 'rational'.

"Humans are not 'rational'."

Sure we are. We're so good at being rational, we rationalise our rationality :-0

"I think. Therefore, I think I think..."

Good one.

I've heard a similar statement:

I think, therefore I am, I think...

However, I view self awareness as an artifact of the monitoring routines that are genetically programmed into our neural network, that provide a narrative to the decisions our unconscious brain makes, enabling us to build an internal model of our world view. So...

I know for certain that "I" doesn't exist

You're definitely right buddy. We have the same exact point of view. Self awareness is something you know you possess and might be common as well to how others see you as an individual. You got my back on that!

buy twitter follower

Peak oil is just fine. As with this article, people simply changed the discussion by changing definitions. If you'll notice, production rates are ignored as the author rattles on with talk of "massive" reserves. Wonderful adjective but leads the discussion far, far from the concept of production and, certainly, is based on the assumption that technology will save us. Bit of faith based thinking there. The faith, of course, is the technology will arrive on time, in sufficient quantities to save us and cheap enough that we aren't all huddled in a shack trying to stay warm. Adding in the kitchen sink of carbon based energy is a clever one. The discussion started with oil and now includes gas, coal, etc. The addition of "changes in human behavior" is a very good one. Won't happen of course but makes nice words which certainly appeals to many right now. And increased efficiency is another one. With the population increasing at light speed, efficiency is already far behind. There's more, of course, but useless.

Actually, if one sits down with a hand held computer and takes a serious look at the increases in production versus global consumption, the increases are a pittance. But if one jiggers the figures enough, a very sensible sounding argument can be made. We're in a lull that will not last. Bit of rest before the next battle.

For me, the article is simply one more in the frantic "all is well" hype I see everyday.

Peak oil is dead? Oh thank God! We're saved!

"...some have been squeezed out of the labour market, perhaps forever, and will live out their lives on dwindling State handouts, in poverty. The new higher oil / energy prices are here to stay but I believe they will stay range-bound in $100 to $150 / bbl bracket, perhaps for decades as we munch our way through the $125±25 slab of resource."

Wait... what? Are you fricken joking? What sort of twisted psychotic sadist-pervert would write pages of text claiming peak oil was dead and then basically say "not really"? It's not fricken April Fool's Day you know.

I may not have the fancy math to support my observations, but it should be apparent that we (especially the USA) are now currently (and finally) converting

--remaining stored solar energy (hydrocarbon petrochemicals) and extracted concentrated minerals,

--an entropic industrial infrastructure,

--and the ability to maintain the above,

for a little wisp of energy in hopes of continuing our consumptive growth-based consumer economy. I believe don't believe Euan psychotic, just socratic.

I suppose these new discoveries around the world are not so costly. I look at the Bakken statistics, though, and wonder if shale oil is in Stage 4 cancer. I mean $1,000,000,000 in new wells in a month for 1.3 million barrels? I'll keep looking at the data.

The comments crack me up. Good job and good luck, EM.

The new higher oil / energy prices are here to stay but I believe they will stay range-bound in $100 to $150 / bbl bracket, perhaps for decades as we munch our way through the $125±25 slab of resource.

Ninety-one percent certain that this prediction will be wrong. It will be below $60 in the next few years as governments continue austerity measures and the money supply deflates OR it could be above $300 if Saudi Arabia has a revolution OR ...

Prediction is very difficult, especially if it's about the future;-) Niels Bohr

I thought that quote was from Yogi Berra. Oh well, I guess great minds think alike.

Thanks Euan, for this post and for all of your posts, many of which have been particularly memorable for me.

Almost the entire post is objective, empirical, well-argued and well supported. Most of these points are very hard to dispute, but...

...personally I was a little disappointed to see this comment:

"Capitalism was founded on growing supplies of cheap fossil fuels."

It's at this point that objectivity and empiricism have given way to outright proclamation.

Forgive me for starting with an absurdly literal objection, but most people consider capitalism was founded in Britain during the industrial revolution. As a fellow Brit you surely know that the major sources of power during the British industrial revolution were water, wind and muscle. The Watt engine was not invented until 1775, and steam engines did not really take off until the second decade of the 1800s.

More germanely, there is no reason given why capitalism should require fossil fuels to operate. Arguably capitalism does require growth, and ultimately that growth must be fuelled, but it could just as well come from nuclear power or renewables. Since energy has been used inefficiently there is actually a period where economic growth without growth in primary energy consumption is possible (by efficiency gains), although obviously this is limited.

You say that financial losses in shale gas prove that capitalism is unsustainable, but I find there to be no plausible link. Was the dot-com bust the end of capitalism? Was the South Sea Bubble? Capitalism admits failure - particularly of judgement. It always has, this is no different.

The bigger challenge to growth, and therefore capitalism, will come later this century when the global population will (inevitably now) peak. I would be much more interested in seeing arguments developed around that.

Personally I am satisfied that existing renewable energy technology can already achieve an annual rate of energy return of 20%(for PV) and upwards and still has huge potential for further gains. Considering this, limits to growth should not come from energy returns. I don't want to rehearse the arguments about storage and transmission yet again, I have never fully subscribed to those issues as show stoppers (except that the current high use of personal vehicles won't be able to continue indefinitely unless vehicle battery technology improves dramatically) load profiles can be managed by a combination of demand management and using biomass and reservoir hydro for load following.

None of this is to deny the drama or import of the transition that we as society now have to make as, for the first time, we are forced to confront the reality of slowly leaving fossil fuels behind us. But to stand here now and condemn elements of our functional society to failure is not only unnecessarily defeatist, but it pollutes the real message (the objective, empirical one) which you yourself have made so well - that the transition MUST soon begin, whether we like it or not.

Hoover and WHT - I gotta walk my dogs, I'll get back to you later.

Hi Hoover, my dogs are now exhausted;-)

From your comment I realise I must have expressed my point poorly. It is of course possible to run a capitalist economy on water wheels and slave labour, still component parts of today's system and so my expression is proven to be false:-( And so the point I was trying to make, albeit poorly, was that we have reached, or about reached, a pinnacle in the per capita FF slave labour output of our current capitalist cycle and that trying to replace the pinnacle FFs with the lesser substitutes on offer is causing distress to the system.

Was the dot-com bust the end of capitalism?

It may well have marked the beginning of the end of the current capitalist super-cycle as .com bubble was replaced by credit expansion bubble was replaced by QE bubble to be replaced by what? I don't want to venture too far into the economic argument, Nate, I believe will do that before the end of September. But my simplistic wag is that savings are the net energy surplus, which have been leveraged through the finance system, and are now being crushed as the lever pushes the other way (stock PEs going from 25 to 5). There is going to be a fight between public (i.e. market) ownership and state ownership of key industries. Most UK banking is already owned by the State - the British state or some foreign sovereign wealth fund, and at some point other key industries will go the same way as their capital fails. I, for example, as a capitalist would argue that the UK government should fund the rebuilding of our energy infrastructure with a view to selling back to the people at the right time. The value of money used to do this will be re-jigged many times in the process, but if at the end of the day we have reliable heat, light and a stable society, we will have done well.

I will miss The Oil Drum since exchanges such as this and the many other stimulating comments on this thread taught me an awful lot over the years.

Cry Wolf

Thanks for the reply. One of the real strengths of TOD in my opinion has been that the authors have always actively engaged in the discussion following the initial article. So many of those blogging about the demise of peak oil on big media websites never deign to reply to the comments, who knows if they even read them?

The discussion about capitalism is an interesting one in its own right; but I just don't see it as a black and white issue, unlike peak oil. Whether or not free markets, free enterprise and democracy survive peak oil is something that I like to believe remains within our own hands to determine, but peak oil does not. We have to transition away from fossil fuels, we have no influence in that matter, only on whether the transition is successful or not.

Regards, Ben

The bigger challenge to growth, and therefore capitalism, will come later this century when the global population will (inevitably now) peak. I would be much more interested in seeing arguments developed around that.

In graduate school in 1969, I went to a lecture by my supervisor on the limits to growth. Anticipating quite a bit of discussion here, he was, he said in despair for our future. The fog of his despair condensed around three dependent nuclei: population growth, rising pollution, and the consumption of resources. Winding up his rapt audience as his talk ended, he said: “This is our last chance to play this game.” It was 1969, and we had only a few years to act.

Maybe he was right. Regardless, our association left me with an abiding interest in the consumption of energy, the transformation of stored sunlight into a growing entropic cascade. A bit like the Oil Drum then.

I see I signed up almost eight years ago. I haven’t posted much, because those whose words I’ve wanted to read know so much more than me. Like other commenters here, I will really miss this site. Thanks for the memories.


The new higher oil / energy prices are here to stay but I believe they will stay range-bound in $100 to $150 / bbl bracket, perhaps for decades as we munch our way through the $125±25 slab of resource.

Decades? A mix of conventional and non-conventional will last that long in that price bracket? I liken peak oil to a fast spinning well oiled wheel. As we work our way through the light sweet crude to the tar sands the oil being applied to the wheel is getting thicker, gumming up the economy slowing the wheel. At some point the flow thickens enough to cause the wheel to begin heating up and once it starts smoking it's not long until it ceases up like our economy will. Decades for that to happen? I think it will more likely be in the 2015-2020 time period.

I see PO as being like an east Yorkshire caravan park, right on the coast.
When it was first built, the sea was at least 100 metres away from the caravans nearest the sea.

If you imagine that each of those caravans contains an aspect of our modern lives, then it's easy to see how some things are impacted more than others.
Over the years coastal erosion has gradually eroded away the sand until the caravans started toppling into the sea. The ones that contain supersonic passenger flight, "too cheap to meter", "don't care about fuel consumption" and "don't need insulation", have gone over the edge.

If you were in one of those nearest the sea, the affects would have been devestating while those furtherest away were totally unaware of the coastal disaster, these aspects of living have gone. The next to go will probably be "long distance lone commute in a low mpg car to a poorly paid job" and the like.

The current boost in production could be likened to a temporary sea wall being erected to delay the next phase of the erosion.

China could be said to have the same park but still a 100 metres or so from the sea, but their time will come.

Peak oil is simply a logical outcome of extracting a finite resource. It will therefore prove to be impossible to put a final nail in the peak oil coffin. No matter how hard anybody treis debunk (or redefine) peak oil, it will always resurrect itself.

As far as I can tell in my life, we are definitely at Peak Oil. This is what it is, a fine line in balance of production costs with what people can afford to pay....the undulating plateau often mentioned since 2005. I really don't think too many, (but correct me if I am wrong), expected that a certain date would arrive, then kaboom 3 and 4% decline right away until we are ensconced in some kind of Clan of the Cave Bear lifestyle.

The picture is muddled with economic decline, globilization, crooks in finance, inept Govt, and high prices of FF. Add to that renewables, unconventionals, changing demand regime, (Chindia), and improved efficiencies and conservation. Throw in some sanctions, Arab Springs, ME revolutions, and generally speeding up mahem based on instant communication.

There are many scientists, mathematicians, and engineers on this site trying to reduce this messy transition to a graph and numbers format. Yes, this can be done. Euan may be right with his new way of crunching events. WHT has certainly narrowed down and corrected many problems with past attempts to graph data and extrapolate the future on a foundation of error.

But I submit this Plateau, or Peak Oil manifestation is also a story of biology and sociology. Our socities are dynamic beings with a greater sum than that of explaining data and consumption/extraction rates. We are at PO now, and our lives have changed, are changing, and will be forever different because of it. Euan's explanation does not convince me that "oops, we were wrong, the numbers were off", because the cause and effect and dynamic relationships are impossible to narrow and quantify with numbers.

Oil at close to maximum production (not Peak, you readers because the numbers say so), coupled with population increases, and all of the above mentioned (and more) messy relationships paint a more human story that what can be passed about on in energy forums.

JHK talks about the end of suburbia and a future Long Emergency, and Jeff Rubin wrote about how his fly-in-fishing experience in Yukon would be a thing of the past because of Peak Oil, and they were right in many ways. I use those two examples because they are dear to my heart. I worked for many years flying out of Watson Lake, YT. (Rubin's fishing area). My company had 5 aircraft, and the competition had 7. That was in 1981. Missing it, in 1990 I decided to return. The competition was gone, and we were down to 3 aircraft and two pilots. By 2000 there were no more commercial aircraft operating out of the base except for one guide outfitter. I worked for years out of Campbell River BC. It used to be the busiest seaplane base in the world with 30-40 full-time operating aircraft. You could do all the work now with three in today's market. Living in Suburbia and the cost of commuting was never even a consideration until about 10 years ago. We all know what it is like now and can probably imagine what will unfold over time. A well paid workingman can no longer afford to run a pick-up truck around here. They still try, but the results are they are broke mindlessly adapting to Peak Oil with an out of date paradigm. It is gone. Kaput. These examples are a few events that I have experienced as a result of increasing ff energy costs. All of you will have your own stories, but in my case what was once a career of my dreams is simply no more. I had to move on.

People who once had lots and took it for granted are becoming poorer every year. Certainly, the system has been rigged for the few at the top, but it is wrong to discount the huge increase in costs of our energy sources that made our lives so easy. This is Peak Oil. The resources are now expensive and have to be shared with more people. The data is an unbelieveable compilation of observation, but it is missing the story. To back off from the obvious conclusion of what has happened to our lives because the energy to live them has become more dear is to trip over the details. To paraphrase my favourite exclamation made by Todd, "I get so pissed off with those writing to TOD about how many joules can fit on the head of a pin"!! Arguing about the timing of PO is simply that.

There might not be an exact unfolding of JHK's Long Emergency as he envisioned it. However, compounding growth has waned and might never return, (probably never return). If this is not a result of waning/expensive energy supplies, then what is it?

I submit to this forum that we will never return to the increasing riches of the past, and that year after year people will learn to do more with less simply because of the energy constraints inherent in all things and manner of production. For those who do not accept this reality and its cause will be become increasingly bitter. If our leaders and leading researchers/writers continue to obfuscate and fail to lead society forward with a vision of adaptation and change, then social upheavel and increasing violence will surely occur. Why wouldn't it? It always has in the past. Sorry, this is Peak Oil. It may unfold more slowly than once thought, but to call it something else and not face it head on with personal and group adaptations will make it worse in both short and long term.



What Peak Oil Looks Like

The point that has to be grasped just now, it seems to me, is that this is what peak oil looks like. Get past the fantasies of sudden collapse on the one hand, and the fantasies of limitless progress on the other, and what you get is what we’re getting—a long ragged slope of rising energy prices, economic contraction, and political failure, punctuated with a crisis here, a local or regional catastrophe there, a war somewhere else—all against a backdrop of disintegrating infrastructure, declining living standards, decreasing access to health care and similar services, and the like, which of course has been happening here in the United States for some years already.

Thanks. Arcdruid, who you linked, has said it best.

As far a the Oil Drum goes, I think it has been a victim of its own success. People collected data and analyzed them carefully. They described situations, projects, and operations. They made predictions. The predictions proved true. This was all done years ago. It is hard to just keep repeating oneself--few writers of integrity can manage it.

The current thrashings of the oil industry are of interest but are no longer strategic. The oil and oil-like substances that are currently produced--in whatever quantity--are too expensive in real and nominal terms to maintain our civilization. This, too, was predicted. This is the essential meaning of decline. That these expensive flows are themselves fated to max out and decline is just another nail in a somewhat different coffin than the "coffin of peak oil." The issues that matter now--what happens when a civilization resolutely ignores all warnings of ongoing failure--are issues for historians, sociologists, and, perhaps, systems theorists, but not ones for which engineers and technical people are at their best.

The idea that we might organize our lives in less energy-intensive ways is one that has been presented decades ago, but has never, ever gotten much traction. Most of us are so unaware of the thoughts underlying our everyday lives that deliberate change is pretty well impossible. Most of us our waiting--in various degrees of ignorance or panic--for physical circumstances to grind us down. Those who survive the grinding will perforce have minds oriented to surviving on less, less of everything, including on less energy. The thoughts that go with those minds will not be thoughts we can perceive--let alone entertain--now.


Some are becoming more energy efficient, some have installed renewable energy devices at home, some will forgo an expensive vacation they can no longer afford and some have been squeezed out of the labour market, perhaps forever, and will live out their lives on dwindling State handouts, in poverty.

The impact of what has happened the last decade is very unevenly spread and the causes of what has happened are not clearly defined. Oil and energy consumption is markedly down in the European periphery. Faced with inelastic supply and growing competition for supplies, European oil consumption had to fall but the fall has been very unevenly spread. Its just that the decline of the periphery is understood to be caused by the € zone crisis. I don't believe the Euro periphery will ever regain its share of global oil supplies and may therefore be doomed to wither. Replacing oil with renewables in these bankrupt countries is also proving to be hard if not impossible. But most Europeans are unaffected by the peripheral trauma, for so long as they hold the € together.

Similarly the chaos in the Arab world is attributed to bad leadership and not to declining oil revenues, rising food prices and falling food subsidies. It is being proven, I believe, that democracy cannot fix this problem.

I don't think one can conclude anything about 'democracy' specifically in all of this. We've got so many of the major democracies being tampered with and interbred into monied interests, at which point, what could the minor democratic states hope to do?

This problem of declining living standards being laid at the feet of failing democratic institutions to deal with is a recipe for a dystopian catastrophe. You are seeing the rise of some right headbanger ideas in the political space. My concern is the lack of understanding is going to translate into some right horribleness.

The whole resource constraint argument needs to be attached to some sort of coherent political-economic solution and in short order. Failing states on the periphery of a larger stagnating one is not a go getting 21st century model for geopolitical success.

You will never combine resource constraints with a economic-political solution, because there is no happy ending. The lack of happy ending is exactly why this has not occurred. There are plenty of unicorn ideas out there, but yet here we are.

Never seems to be a famous last word type of thinking when applied to human behaviour. Of all the variables behaviour change and social organisation seems to be an area either ignored or has unexplored potential. unlike the reality of physical limits to resources.

Stable adaptations of the social order in the face of resource constraints in the last century have precedents.

Very well said!

All of you will have your own stories, but in my case what was once a career of my dreams is simply no more. I had to move on.

I've been trying to keep this group abreast of some of the stories from my neck of the woods, a small tropical island that, has to import all of it's fossil fuel energy and as a result probably started feeling effects similar to those forecast for Peak Oil beginning with the 73 oil crisis and after that, every time the price of oil spiked. The whole world economy is structurally dependent on oil and most small island states even more so. We are stuck in a rut and the radical thinking required to cure our structural dependency is not finding favour with the opinion leaders in the media.

edit: Some of the stories I could link to don't even make it. The connections to Peak Oil are far too tenuous. Yet still, having been a member here for the past five plus years, I look at every story for a Peak Oil angle and invariably, there is one to be found.

I have tried and will keep trying to tell the other side of the story through any comments I can get past the mods in the local rags but, after August 31, I will just have to do so without the help of any fresh input from TOD. I will continue to speak loud and speak often, in the hope that I can get more people to start thinking about a different kind of future. It's really hard when it seems you can't get through to your closest friends and family but, the best I can hope to do, is to lead by example.

Alan from the islands

The whole world economy is structurally dependent on oil and most small island states even more so.

That dependency is temporary. Many small island states are even better situated than average to get rid of their oil consumption, given their very high quality solar and wind resources.

Tell that to the politicians, business leaders and opinion leaders around here.

If they agree with you, they certainly aren't making it known. The other thing is that transport can't be easily changed to run on solar and wind. The railway network on my island, the first one in this hemisphere outside of North America, has slowly deteriorated to the point where, only the lines from the alumina plants and the sea port that handles their inputs and their product, remain in service.

AFAIK the local minister (secretary) responsible for transport, is not on board with a near term peak, assuming he is Peak Oil aware. As long as that remains the case, the government will continue make long term investments in oil dependent transport infrastructure rather than try to wean the transport sector off it's almost total dependence on oil.

Alan from the islands

If they agree with you, they certainly aren't making it known.

That's a tragedy. You'd think they'd have gotten the idea that $100 oil is here to stay. That price level should be more than high enough to push generation away from oil, ASAP.

transport can't be easily changed to run on solar and wind.

Converting personal transport away from oil doesn't really depend on infrastructure. How are hybrids selling in your area? They're the first step in that direction...

As for freight: it's sad to hear that rail has deteriorated. Is that simply a matter of public policy, or do trucks have a relative advantage over rail on islands, do you think?

That's a tragedy.

Notice I said if they agree with you. The real tragedy is that, I doubt that they agree with you. Most people have been delighted by the performance of their liquid energy slaves and would really like things to continue they way they've "always" been. I suppose the hope is that all this nonsense will stop and fuel prices will return to normal!

How are hybrids selling in your area?

Not that well. It seems to me that most people still think a real car has to have a ICE of some sort. These hybrids (or hybreds as some peole call them) are thought of sort of like spacecraft, science fiction in the flesh. Heaven forbid it should ever need repairs! Where are you gonna find an alien to fix that? I have seen one Nissan Leaf,despite the fact that the local Nissan dealer has no plans to sell or support them.

On the other hand an awful lot of US style (full size) pickup trucks seem to have "For Sale" signs on them. Tiny cars, think Honda Fit, Toyota Yaris, Suzuki Swift (Geo Metro) seem to be all the rage, that is, making up an increasing proportion of the cars on the roads. Adjusting to higher fuel prices but, sill dependent on oil.

Is that simply a matter of public policy, or do trucks have a relative advantage over rail on islands, do you think?

The rail network did not real cover the island all that well and being a fairly hilly island, did not access some of the more hilly inland areas. Even in my old home town, the journey from the capital city to my town was frequently held up by the on last very steep hill. If it was raining the locomotives would often skid going up the steeper parts of the grade and if there was anything wrong with the locomotive, it would usually show up on that last hill. Trucks can go into almost every nook and cranny and while fuel was relatively inexpensive well, you know the rest. As a result, the value proposition of railway transport was eroded by trucking and the railway did not adapt to handled containerised freight in time to stay alive. The bauxite/alumina industry knows full well, the advantage of rail transport over road transport and has kept the parts of the network that they use alive.

Alan from the islands

People take a long time to adopt new ideas.

Reminds me of a company that spent billions in the US a few years ago to offer online food shopping and delivery - Webvan. It was a great idea, but people took too long to get used to such a novel idea, and they went bankrupt before they could generate enough cash to pay for the expensive automated warehouses.

That's just the way it is - it takes time to absorb new things...

Very well put, Paulo.

It irks me to no end that the bones of several viable adaptation measures are already in place, but they remain invisible to all. In our backyard (south coast of BC) one is staring at us right in the face: the disused E&N Railway on Vancouver Island. The land is there, and consists of about 250 km of rail bed in a right-of-way averaging 30m wide joining all the major towns from Victoria to Courtney, with branch lines to Cowichan Lake and Port Alberni. It doesn't take a nuclear physisist to see the potential of a 21st Century electrified passenger and freight rail service incrementally outcompeting the Island Highway as time goes by, especially if extended to Campbell River.

My guess is it would be hugely successful financially if linked directly to the critical mass of a decent passenger ferry service to the Mainland, specifically to the Waterfront Station in the downtown Vancouver harbour. A passenger ferry service would not assume the energy and cost penalty of moving thousands of tonnes of trucks, buses and cars, just a few thousand kg of human flesh. Commercial trucking ferries need not provide the same services, staffing and frequencies as currently offered on the BC Ferries main routes that cater mostly to the private car ... they're not called floating traffic jams for nothing. BC Ferries currently burns B5 biodiesel (5% lower grade canola oil) in a lot of its ships, and that could be pushed to B20 without penalty. New, lighter ferries could be made from BC smelted aluminum that uses mostly hydro power for the smelting process, and burn BC CNG -- if that resource isn't devoted entirely to export -- or B100 biodiesel (this, admittedly, will be a challenge because it doesn't store well in varying temps and being organic, tends to grow algae and fungus). If tied to certain urban land use measures and sound planning and urban design, and also with new energy efficiency provisions in the National and BC Building Codes, a ferry-linked commuter rail line could result in very pleasant pearl-necklace of human-scaled communities linked by clean, efficient and affordable transport alternatives to liquid fossil-fueled private vehicles and the whims of asphalt politics.

The essential railway components exist: Land already zoned for this industrial purpose; relatively clean hydro power -- and much potential with baseload geothermal and intermittent tidal and wind to power new industries along the line; local knowledge and expertise in design and engineering; a significant chunk of the populace already motivated to accept well-thought out ideas; a triple A financing rating for public agencies willing to take on the challenge (and accept the returns); a Canadian-owned transport company highly rated for its railway projects worldwide, and who would probably jump at the opportunity to provide deep bulk order discounts on livery just to kickstart a major expansion of rail in Canada. The only thing lacking seems to be leadership. Our new premier appears to be rooked by the hype dished out on LNG in northeast BC and is willing to gamble our future on a 'gold rush' rather than sound long term planning. Our prime minister is too busy working to secure his sseven-figure post-politics seat at the Suncor board table to bother.

A number of the old Interurban streetcar lines that wove through the Fraser Valley a century ago are still there in legal easements, and the old BC Rail route from Vancouver to Prince George via Whistler, Pemberton and the upper Fraser River watershed could also be electrified and provide a committed passenger service.

The E&N land grant basically removed 80 square km of land from First Nations traditional territory and handed it over to lumber and coal barons in return for building a railway and opening up the Island to resource extraction. The RR operation is still partially intact, though lack of maintenance and demand has resulted in the decline and elimination of the diesel dayliner service between Victoria and Courtney. The land grant area has been largely logged over, in many areas twice, and the coal mines of Nanaimo were well-serviced by the RR and a rail barge service that still operates today in Nanaimo harbour, mostly with lumber products from Port Alberni. The logging companies that eventually bought the land from the the original grantees (Dunsmuir was the big guy back then) are now selling off big chunks in the form of unsustainable rural residential subdivisions, and they're making a killing on the radical land lift from a change in zoning from an old forestry tenure to residential on top of the minute fraction of taxes they paid for decades as lumber operations. Take a flyover on Google Earth near Duncan, Ladysmith, Nanaimo and Sooke and you'll see a patchwork of old and new clearcuts -- some obviously not done well (within 30m of the river banks, on mountainsides too steep to hold the soil once logged). In my opinion, there is a better way to practice land use planning for a sustainable Island economy near towns serviced by and Island-wide rail operation , one that could bring justice through the full economic participation/inclusion of First Nations who were never compensated, let alone protected with legal representation, when 800,000 hectares of their land was confiscated in the 1860s.

This is a current research project, and it has shown me that there is much potential for a better future, or should I say a more stable future, considering it will be more localized and have troubling financial peaks and valleys for individuals, families and businesses. Not planning for diminishing fossil fuels will result in these same people getting stuck on the highway to nowhere.


I grew up to the sound of the 11:00 freight rumbling through the Cowichan Valley. Logs were hauled from lake Cowichan daily. There is a move afoot to bring the En back online, a good thing because it will still preserve the rail bed from destruction or further giveaway.

I don't know offhand the exact land grant size for the EN, but following is a synopsis. CP had the land up Island for most of my life through Pacific Logging. I believe it is now mostly owned by Timberwest as it was parcelled off over the years to many forest companies.

Read it and weep. Govt larceny and under the table dealing has been a hallmark of British Columbia history. This might be interesting to others as a picture of insider oligarchs running Govt. for themselves.


"The controversy surrounding the E&N land grant still haunts decision making today. In late October, the Hul’qumi’num Treaty Group, representing six Coast Salish First Nations, asked the Inter-American Commission on Human Rights in Washington to hear its complaint that 300,000 hectares of land converted to private property in the E&N land grant was “an act of egregious piracy.”

In the 1870s as part of its commitment to “connect the seaboard of BC with the railway system of Canada,” Canada agreed to contribute $100,000 annually towards the construction of a railway. BC later agreed to grant about two million acres plus $750,000 to the company that constructed a railroad on Vancouver Island.

Only a select few well-connected people reaped the bulk of the windfall. The man behind the E&N deal was coal baron Robert Dunsmuir. Dunsmuir was both the richest man in BC and, with a seat in the provincial legislature, influential in political circles.

Dunsmuir had little interest in railroads; what he wanted was the land, and with it control of the great reserves of coal and other minerals. He used his economic and political influence to secure the contract to build the railway.

The Esquimalt & Nanaimo Railway Company immediately began subdividing the grant into parcels and selling it off, making Dunsmuir and his colleagues millions. In 1905, the Canadian Pacific Railway Company (CPR) paid just over $1 million for the E&N and $1.25 million for the remaining 566,580 hectares of land not yet sold. In 1910, Dunsmuir sold his coal mining interests in the granted lands for $11 million."

The E&N Railway line on Vancouver has always struck me as a good candidate for conversion to light rail, running as it does through the suburbs of Victoria (metro pop. 360,000). If you want to see examples of LRT built in freight railway ROW's, you can go to Calgary or Edmonton. Neither Calgary nor Edmonton had a lot more people than Victoria does now when they started building their LRT systems. Nowadays, of course, they're MUCH bigger (1.2 million or so). LRT works really well when you get to that size. It would have worked back then in Vancouver, given the number of unused and underused RR ROW's weaving around the city and its suburbs, but instead Vancouver decided to concentrate on high-profile and high-priced solutions like the SkyTrain, which achieved much the same results as LRT in Vancouver for several times as much money as Calgary, and is unaffordable in the far flung suburbs whereas Calgary built LRT to its distant suburbs right from the start.

The main constraint on rail is that even light rail, although cheap by rapid transit standards, is not dirt cheap. Even with an existing ROW, a basic system might cost $10 million per kilometre. 250 km might cost $2.5 billion. That would be much cheaper than freeways and have a lot more commuter capacity, however. Governments unfortunately get obsessed with the low incremental costs of building roads, and by the time the costs of keeping the roads from gridlocking start to rise into the tens of billions, they're too committed to back away from the concept of solving traffic congestion by building more freeways.

Freight railways don't make a lot of sense on islands like Vancouver, though. Ocean transport is cheaper than rail transport. You can always load a few thousand tons of coal or wood on a barge in Nanaimo and have a tugboat pull it to Victoria cheaper than you can haul it by rail. However, fast rail will always beat fast ferries for speed and cost of commuter travel - BC has already had its own really bad experience with fast ferries, since sold for salvage value, I believe.

Rocky, you correctly point out the advantages of using old rail beds and easements for modern urban transit. But I envision a little more complexity with any rehabilitation of the E&N on Vancouver Island. Because it joins every major town on the Island's eastern shore, except Campbell River, it is best in my opinion to eventually serve these communities by a high quality, limited stop regional commuter rail service. Transit service would then be broken down to a finer grain at the town level with tram lines and/or decent bus service linking to the commuter rail stations. The E&N corridor is wide enough in most of its urban locations to accommodate two sets of tracks to separate these different levels of service, one fast and regional, the other slower and local. Trams can also leave the r/w and enter the street network. It's very flexible.

With respect to freight, you are absolutely correct that moving bulk cargo by sea is cheaper. But I don't see a new Vancouver Island Railway competing with sea barges and truck ferries. It would compete primarily with the parallel Island Highway. There is no reason why goods shipped by trucks on the highway couldn't eventually be shipped by rail. With adequate intermodal facilities adjacent to each regional commuter rail station, freight could be transferred again to light rail freight (LRF) using the electrified tram line trackage instead of diesel trucks when the peak oil crunch really manifests itself. You have to toss the old town planning paradigm and think in terms of concentrating new development, including commercial/retail/office near tram stations, which could have a secondary freight/warehouse function on branchlines.

You compared Calgary's C-Train (LRT) with Vancouver's SkyTrain without acknowledging their differences (except cost) and unique advantages. The light rail vs SkyTrain debate is old hat here in Vancouver. Both are relevant and beneficial in their separate ways, but there are strong camps and opinions either way. With grade separation and driverless control, SkyTrain can achieve very high frequencies (therein higher quality service -- I timed four six-car trains in five minutes (75 seconds between them) per direction at afternoon rush hour at the Burrard Station) with very reasonable operating expenditures, something impossible with driver-operated light rail with an army of union-scale drivers waiting in the wings each rush hour, and being subject to traffic congestion at each crossing. Moreover, most of the drivers work very annoying, unhealthy split shifts which, coupled with the stress of the inevitable accidents at crossings and suicides at stations, results in a high turnover in Calgary's C-Train driver roster. C-Train is also getting more expensive as it learns from the disadvantages and tragedies at level crossings; the new West Leg is riven with long stretches either on a guideway remarkably similar to Vancouver, or underground. With this leg, C-Train is finally -- after a generation -- learning that building a regional rapid transit system is best realized when you take it into the heart of communities with a decent density of residential, commercial and institutional development because it achieves its service goals far better than the cheaper alternative of placing a vital transit service in unpopulated industrial areas where the easy heavy freight rail corridors are. In that light, they should move the South Leg into the heart of Chinook Centre (preferably underground) and work with the owners to create a transit-oriented regional town centre.

Calgary's per capita expenditures on the already massive infrastructure for the private car still exceeds any other major city despite decent ridership on its generation-old LRT system. There is something perverse about that, and it has everything to do with the other half of the transit equation: land use.

My idea of a passenger ferry service has nothing to do with the fast ferry fiasco under Glen Clark's government. One benefit of that doomed project was that hundreds of workers were trained in welding with aluminum. Many are still around in the shipyards. One of several mistakes they made was spending the majority of the budget on moving cars (and trucks and buses and SUVs) instead of moving human beings. A passenger ferry with 1,500 people on board would comprise a fraction of the materials, weight and energy required to move the equivalent in vehicles. It is, as I previously noted, a difference of thousands of tonnes. The mainland-to-Vancouver Island sailing time hovers around 90 minutes dock-to-dock per direction on both major runs, but you need to add about 20 minutes waiting at either end for docking and for vehicles to load and unload. There is no need for passenger ferries here to assume Ferrari-like speeds with specialized powerful and fuel-inefficient engines needing large water intakes that immediately foul up in our debris-choked waters (another major fast ferry mistake). Considering there will probably be 15 minutes of savings per direction just by eliminating the cumbersome vehicle loading procedures, standard marine diesel engines could be used, perhaps combined with an upscaled Volvo Penta IPS drive that uses contra-rotating, forward-facing propellers that reportedly achieve 30% more fuel efficiency and greater speed, albeit on smaller craft. Floating debris is deflected by skegs mounted just ahead of each propeller array. Perhaps another five minutes in savings would also be realized by travelling just slightly faster than the existing much larger Coastal or Spirit class vessels. The quality of service is what would attract people out of their cars along with the ever rising cost of operating them. This would include frequent and comfortable downtown-to-downtown ferry service across the Salish Sea with direct links to high quality rail service at both ends.

The reason why most goods are delivered to the end-point by truck and not train is that the roads run everywhere, and the rails don't. Railroads excel at delivering heavy goods on fixed routes over long distances, but they are not good at doing short-haul, multipoint light cargo deliveries. That is why light rail freight has never really worked. The optimum solution is containerized shipping, with the containers going from ship to rail to truck. On a long narrow island like Vancouver where not many people live inland, you can skip the rail step. OTOH, here in the Canadian Rockies we see numerous 100-car unit trains of double-stacked containers roll by every day hauling cargo from Chinese ships to Eastern Canada and the US. In a post-peak-oil world, the concept would be the same but the railways would be electrified and the trucks run on natural gas.

As far as LRT goes, I rode both the Vancouver SkyTrain and the Calgary C-Train during their early days, and one of the things that struck me was that the SkyTrain vehicles were much smaller than the C-Train vehicles. The C-Train vehicles were twice as long as the SkyTrain vehicles, were somewhat wider, and carried over twice as many passengers - 200 versus 80 per vehicle. The SkyTrain vehicles could run in 6-car trains, giving 480 passengers per train, but the C-Train vehicles could run in 3-car trains with 600 passengers per train. The C-Train vehicles could drive down ordinary streets like a streetcar because their power wires were overhead, but the SkyTrain vehicles couldn't because of their "hot rail" surface-level power supply.

The fully-automated SkyTrains could run on 75 second headways on their grade-separated tracks carrying a maximum of 23,040 passengers per hour per track, but the driver-operated C-Trains could run on 120 second (2 minute) headways mixed with buses on a transit mall, giving 18,000 passengers per hour per track. The result was that the SkyTrain had the commuter capacity of a 20-lane freeway, the C-Train had the capacity of a 16-lane freeway, and neither was running anywhere near capacity.

The main difference was that the SkyTrain was several times as expensive to build per track-km, so Calgary built several times as much track as Vancouver for the same money. The Vancouver system was nice for the people who lived near it, but really didn't go very far, whereas the Calgary system ran far into the suburbs, and most of its riders came from the farthest-flung suburbs. For years, the Calgary system had more riders than the Vancouver one.

That was then, this is now. Both cities are probably twice the size they were then. The Vancouver SkyTrain has finally hit its stride and is carrying 450,000 passengers per day, but the Calgary C-Train is carrying 300,000 passengers per day and approaching its design limits. Vancouver, being a much bigger and much denser city, has a lot of opportunity for SkyTrain expansion. Calgary has a problem in that expanding its system is going to be much more expensive than the original construction, requiring elevated and underground sections, which can be done but at SkyTrain costs. The city is lengthening all the LRT platforms to accommodate 4-car trains and buying new vehicles giving a capacity of 900 passengers per train rather than 600, but that is taking longer and costing more money than expected. Adding the next line to the system, for which there is a lot of demand, will probably be too much for the existing transit mall, so they will likely have to bite the bullet and dig a subway for the trains.

BTW, there is actually a short segment of LRT subway under downtown Calgary, and a subway station under the Municipal building. They were built and then mothballed when the Municipal Building was built. They are now bricked off because people (such as me) were sneaking into them and wandering around. The city built this because the original plans included a subway, but to save money they deferred completing it until it was needed. Once they started running the system, they discovered that they could run 600-passenger trains on 2-minute headways at grade, mixed with police cars, taxis, and buses, and they didn't need the subway. Maybe sometime in future when ridership gets into the 500,000 passenger per day range they might finish it.

Containerized shipping is the packet-switching of the physical world. It is amazing that the technology was popularized in digital electronics long before it popularized in shipping considering that we've been doing shipping for thousands of years. Well . . . I guess we've been doing boxes & pallets . . . containers just went to a larger unit.

Actually, containerization dates back to the 1950's. The person who did the most to introduce it was a trucker named Malcom McLean who got sick of the amount of time it took to unload a ship and load the goods on his trucks, so he bought an old oil tanker and converted it into a container ship to move containers to and from his trucks. The rest is history.

There was a lot of resistance at first because old ports like New York and London were too small and congested to handle the bigger container ships unloading/loading thousands of containers per day, and unions didn't like the loss of jobs (dozens of stevedores working for a week to unload a ship and another week to load it again vs. half a dozen crane operators and lift truck drivers unloading/reloading a ship 10 or 20 times as big in a few hours). The loss of opportunities for organized crime to steal cargo was also a factor. But, the cost advantages were overwhelming, everybody adjusted, retired, or died, and nowadays 90% of non-bulk cargo moves by container ship.

It also led to the rise of China as a manufacturer. Factories in China now load all their products into standard 40-foot containers, Chinese railroads move them double-stacked, 200 per train pulled by electric locomotives to port, and quay cranes load them, one every 2 or 3 minutes, on giant container ships bound for North America. At the other end, cranes unload them, one every few minutes, and put them on unit trains heading to the West, Midwest, or East of the US or Canada. At the other end of the haul, at an inland terminal, cranes put them on trucks which take them 1 or 2 at a time to their destinations. It's hugely efficient, particularly as regards energy use. The trucks are the only inefficient part, and the railroads are eating more and more of their share of the transportation market.

When I passed through there a couple of years ago, Hongkong Harbour looked like an exact mirror image of Vancouver Harbour. In addition to the same mountains, ocean, weather, skyscrapers, and Chinese businessmen talking on mobile phones, they had the same quay cranes, dock workers, and container ships in the harbour. The main difference was they were mostly loading ships in Hongkong and unloading them in Vancouver. No wonder the Chinese feel so at home in Vancouver, especially Richmond, or "Lichmond" as we now call it. I always like to stop there for the excellent Chinese food. The CP, CN, and BNSF Railroads stop at the nearby Metro Vancouver Superport for the containers.

It used to be the norm for any sort of manufacturing or warehouse type facility to have rail access but the switch to trucks resulted in much of this track being removed. Newer industrial parks generally lack rail access. You used to see truck trailers being carried on railway flat cars but this has been replaced with the use of shipping containers which are easily transferable from truck to train. I still think that in the long run, facilities which still have rail access or where rail access can be easily restored, will have a cost advantage over facilities that are entirely dependent on truck transport. It should also become the norm for rail access to be provided in new industrial parks.

Excellent review and comments, Rocky.

It has to be noted that the original SkyTrain cars (which were designed and made in Ontario in the 70s and early 80s) are still rolling along well into their third decade, but their limitations are painfully obvious when compared to the newer Mark II cars made by Bombardier, and especially the latest Rotem trains on the Canada Line. The latter two have conjoined pairs of cars which proffer a greater sense of interior space, and the Rotems are half a metre wider and hold 300 people each.

The Metro Vancouver rapid system system took a giant leap forward once the Canada Line was completed, and with the essential support of a large bus fleet, public transit proved its huge potential here during the 2010 Winter Olympics when the transit system moved close to the equivalent of the entire Metro population of 2.5 million every day for two weeks, then about half that during the subsequent Paralympics. This experience opened many eyes (with the exception of the provincial government who promptly forgot about it and continued the well-worn path of starving transit in favour of increasing road capacity) and I believe made the new, but heavily criticized Canada Line subway, more acceptable to the people, and resulted in the ridership exceeding the estimates years early. One of my most memorable Olympic moments was riding in a Canada Line train at near capacity with four beautiful young Russian women singing in wonderful harmony sandwiched next to me.

The Canada Line, though very successful, isn't without its flaws. It was designed with 45 metre underground station platforms instead of 100m, therein accommodating future growth is limited to adding one small 'spacer' car in the middle of the two-car train sets, and increasing the frequency. Making the ideological choice to swing over to the public-private partership (P3) contractional arrangement gave too much control to the contractor whose modi operandi included: Self-interested cuts and reductions to the design which resulted in the constrained future system capacity mentioned above; the excrutiating 22-month open trench warfare imposed on the densely populated community by the cut-and-cover tunneling method that originated in the Dark Ages; in the much higher long-term financing costs imposed by the private sector as opposed to leveraging the lower AAA credit ratings of public agencies; being handcuffed by a 35-year private operating contract; and relatively bland architecture. These things aside, it is a very important asset and it helped lead the Vancouver engineering dept. to start lobbying for a 12 km fully-appointed subway in the Broadway corridor to UBC, hopefully designed, built and managed without similar mistakes.

The reaction from the provincial government was to call for referenda on major public transit projects in the Metro starting with the next round of municipal elections in 2014. This is in the context of no referenda and exceedingly poor public consultation and highly flawed environmental review processes pertaining to, for example, their pet local Can$6 billion freeway project and several more local highways, either completed or in the planning stages. One great concern is not just the future cost of debt to the public treasury from this large increase in asphalt, but the cost relative to the decline in fossil fuels and therein the likely decline of toll-paying traffic well before the interest charges on the amortized debt are noticeably whittled down. High dependency on cheap oil has so blatantly saturated our culture and cities that it has become invisible. It is so big that when its finite qualities really manifest themselves, people will likely become confused for years before the light bulb finally snaps on in their collective consciousness and they realize what an untenable predicament we have gotten ourselves into. By then the public debt may be too high to bring major transit and renewable energy investments forward. The time to start planing occurred yesterday.

Perhaps my biggest hope rests with an increasingly aware population (especially the younger generations) who see the value and necessity to move away from the car and cheap energy culture and to redesign our cities incrementally and rationally toward a more sustainable model. In many respects the people are ahead of the politicians. Some have made their personal choices accordingly (condo complexes planned adjacent to rapid transit stations sell out in hours months before construction begins here; car co-ops are increasingly numerous; controversial separated bike lanes are now appearing and are strongly supported by council; mixed-use zoning is moving forward noteably on arterials and in "town centres"; more housing and businesses are utilizing geothermal heating and cooling ...). Having said that, I have less hope the referendum mentioned above on transit will pass given the possibility well-funded propaganda and lobbying efforts of vested interests attached to roads, cars, suburban real estate and oil will organize quickly. But it does inspire hope that local mayors are vocally opposed to the imposition of referenda on one mode while letting the more dominant one off scott free, as though trams and buses are trinkets or items of luxury.

Regarding light rail freight, one has to bin the old urbanism and start from scratch. Well, I prefer the incremental approach, but the vision of the final destination of a better future must be clear. I don't see why small cranes and small or medium containers could not work on train decks as well as they work on truck decks. The Port of Vancouver has invested billions in in several very large intermodal yards all designed for transferring containers between ships, trains and trucks. Providing scaled down versions with heavy-to-light rail freight transfers to service neighbourhoods isn't constrained by one's imagination. Where you can build a two-lane road with gradients at 6% or less, you can build a two-way track bed -- and use less land and move more people + freight at that. You can also build cog-assisted drives on light rail lines greater than 6% slope. Where you have 6m-wide commercial and residential lanes to deliver and haul away goods and solid waste by truck, you can have light rail freight branch lines that would last a century if built stoutly and properly maintained in the context of higher density neighbourhoods. Where you have 50m-wide, 6-lane arterials penetrating deep into the suburbs, you can eventually have light rail passenger and freight services with hundreds of hectares of parallel boulevard parkland ... fingers of green punching to the periphery, and possibly beyond serving arrays of small farms growing produce for rail-oriented farmers markets the adjacent city. Where you now have malls placed in oceans of parking you can have concentrated mid-rise residential/commercial/retail/institutional/light industrial nodes (i.e, real towns and villages with a more complete array of amenities and more diverse economy) with a passenger rail station and rail-based freight branch lines, loading docks and warehouses servicing them. And it is possible to assert the highest quality urban design and architecture on all of this.

Emergency vehicles and other first responders as well as passenger ferries cannot be attached to a grid, necessarily, so they will require liquid fuels into the foreseeable future. But that doesn't mean the fuel has to be 100% based on fossil fuels.

In summary, I believe the vast transport infrastructure that currently underpins our North American urban fabric and economies, older inner city neighbourhoods and historic Atlantic and St Lawrence cities excepted, with roads and fossil-fueled cars, vans and trucks can be replaced in stages with grid-based transport powered primarily by clean electricity, and use a helluva lot less valuable resources, like land and energy. Most newer cities have devoted over 1/3 of their entire land base to roads, and the single occupant car, with its massive energy waste and associated unsustainable byproducts (e.g. single-use subdivisions, public utilties and services stretched to the horizon ...), has occupied the top niche in this "resource chain" for decades. With peak oil thumping at the door, the waste and fragility this paradigm has imposed on society is finally being revealed. I remain optimistic that we can do better.

Like Vancouver's original SkyTrain vehicles, almost all of Calgary's original batch of LRV's is still in operation 3 decades later. Of the original batch of 83 LRV's, 80 are still running and the other 3 had major accidents. They figure they will get another decade out of the original LRV's before they have to start replacing them. Electric rail vehicles last a long, long time.

Unfortunately, production of the original Vancouver SkyTrain vehicles was abandoned because of poor sales after Ontario sold the plants to Bombardier. The only other buyer, Toronto, has real problems because no other manufacturer can meet the tight curve requirements of their experimental Scarborough system, so Toronto basically has to abandon the line and rebuild it as a subway or something. Fortunately, Vancouver didn't put such tight curves in the SkyTrain line so they can still buy newer, better vehicles for it.

When you compare the original SkyTrain vehicles against the Calgary LRT vehicles, you can see why the SkyTrain vehicles didn't sell. The ones Calgary bought are much bigger, but are generic German off the shelf units which are more or less standard in the international market. When Calgary wants a new batch of LRV's, it just calls the manufacturer and orders 50 or so of whatever their latest model is. Like the Rotem trains on the Canada Line, they are wider, double-length articulated units that carry many more passengers and give much more value for the money.

The main thing Calgary would do if it was building a new system today is use the newer, low floor LRV's. These would save money on platform costs by allowing the trains to load from what are basically high sidewalks. They could avoid all the problems with stairs, elevators, and wheelchair ramps. However, for compatibility reasons they are locked into the high platforms it currently has.

I'm surprised that Vancouver used short 45-metre platforms on the Canada Line. Calgary built its system with 80 m platforms capable of handling 75 m 3-car trains, and is having more difficulty and expense than expected to lengthen them to 110 m for 4-car trains. They have to shut down the stations for months to rebuild them. If they had to do it again, they might build the whole thing with 110 m platforms right from the start to save the extra costs and troubles.

Building a downtown subway, though, is something they would avoid. Because of interesting subsurface conditions - underground rivers - which preclude tunneling, Calgary would have to use a cut-and-cover method and that would shut down the middle of downtown for a couple of years, just like in Vancouver.

Unlike Calgary, Edmonton had ideal tunneling conditions and used tunneling machines to dig their subway, but after they built it, they discovered they had made a serious mistake. The subway was unnecessary and it would have been much better from an accessibility and marketing standpoint to build a surface line. The subway also caused huge problems in getting the trains to the surface when they extended the line outside the downtown core - the motors and brakes on their trains couldn't handle the grades.

OTOH, Calgary saved a lot of money by not using a subway, but did specify bigger motors and brakes so the trains could go under or over impediments as required. LRV's can climb a wicked grade with the right equipment on them, much steeper than you would expect a train to do.

Emergency vehicles and other first responders as well as passenger ferries cannot be attached to a grid, necessarily, so they will require liquid fuels into the foreseeable future. But that doesn't mean the fuel has to be 100% based on fossil fuels.

I would have assumed so too . . . but the Norwegians are building an electric one.

Siemens Norway is also working to put an all-electric ferry into service in Norway in 2015. The full size car ferry, 80 meters long, is powered by two 450 kilowatt electric motors, and carries a 1,000 kilowatt-hour battery pack. (Not a typo.) That's enough for a few trips across the fjord, each trip taking 20 minutes for a six-kilometer crossing. Carrying capacity is 360 passengers and 120 vehicles. To avoid swamping the local power grid when the ship docks to recharge, a 260 kilowatt-hour energy storage unit located on shore is used to recharge the ferry boat.

Don't get high on your own supply.

With abundant hydroelectricity, this makes perfect sense.

The duty has to be compatible with batteries:
Like electric cars, the range is very limited, so no good for a transatlantic crossing.

My BOE calculation indicates a battery cost in the region of $750K for the cells (Lithium Iron Phosphate) and a weight in the region of 10 tonnes on-board the ship.
The on-shore buffering battery would reduce the shore time considerably. It sounds like the ship battery is sized so that it can be charged in the region of 20 minutes without undue stress.

A chapter in "the forty knot sailboat" discussed novel propulsion concepts back in the 1970s. It was suggested that a wind turbine could be used to propel the boat by driving the underwater propeller. In this way, the boat could be driven directly into the wind.

Perhaps there will be a return to sailing ships some time in the future.

Speaking of land grants, I suppose this was what the voters in BC could have expected when they elected a Premier named "Amor De Cosmos", meaning, "Love of the Universe". For more information about this colorful character, google him.

De Cosmos, in addition to granting millions of acres of land to the railways, also had a large part in screwing the BC Indians out of their lands and keeping Chinese out of BC. The former has come back to haunt BC because under the Canadian Constitution, BC couldn't legally screw the Indians out of their rights, and the Canadian courts have ruled so. It would have been a lot cheaper for BC to buy them off with blankets, horses, guns, money, and big reservations back in the 1800s, which is what governments did on the Prairies. Until the BC government settles with them, there is what amounts to a "Title Defect" on all BC government-owned land. This is not something you want on your title if you want to do something with your land.

Back to land grants, back in the late 1800s, the Canadian government granted about 30 million acres of land to the railways to build their TransCanada lines, an area about the size of England. However, since many of the railway tracks ran through areas of marginal fertility (e.g. the mountains of BC, the granite of Northern Ontario), the railways were allowed to substitute land in the "fertile belt" of the Prairies for land in those areas. The result was that the land they got was not only the size of England, it was of higher soil fertility than most of England. It also had more coal and other mineral resources than England. It was a good time to be railroading in Canada, and many Canadians not to mention Brits made a fortune in the Canadian railroad and mining industries.

It's still a good time to be railroading in Canada because, although they sold the land, it still produces much more grain, coal, and other minerals than England does and somebody has to haul them to one ocean (Atlantic) or the other (Pacific). Or the Arctic or the Gulf of Mexico if you want - they have tracks leading to all of them.

Thank you for the quotations, Paulo. Do you have a link or two to share?

I discovered when trying to reconcile map scales with the numbers that I was out by two orders of magnitude. The total Esquimalt & Nanaimo Railway land grant was ~8,000 square kilometres. The politics you alluded to behind the deal and the historic injustices performed on First Nations is recorded in The Great Land Grab in Hul’qumi’num Territory by Robert Morales (research and writing by Brian Egan) in their own often bitter words. Who can blame them?

A rough map of the land grant is located on page 5 of the above document. For a more detailed topographical map of the grant click on "Vancouver Island Assessment Areas" in the link below to a compendium of maps of private forest lands in BC. Here you get a sense of the truly massive scale of the land grant (green area). Part of Metro Vancouver is at the lower right margin. The total area of the Metro is about 2,500 km2, and it is noted that the large regional watersheds and parks occupy the majority of this land. The Urban Containment Boundary, where 2.5 million people live in 21 municipalities, rings in at about 850 km2, or a little less than 10% of the E&NRR land grant over on the Island. Put another way, the land grant is almost 60 times the area of the City of Vancouver.

In Canada and especially in BC, First Nations stated that they are not willing as a matter of principle to initiate land claim suits on privately-owned land that exists within their ancient traditional territories. With 94% of the land in BC being publicly-owned, that leaves a lot of room for negotiation for mainland First Nation communities in this vast province. However, the situation on Vancouver Island is a lot different due to the enormous size of this private land grant in a geographically-constrained area, an area that has undergone further fragmentation with predominantly European settlement and farming over the past 140 years.

Urban First Nations communities on the mainland, like the Squamish, Musqueam and Tsawwassen, have benefitted greatly by urban and industrial development even on the fragments of land left to them (reserves) by taking advantage of their close proximity to Metro Vancouver. However, with the possible exception of the Songhees in Victoria, the Hul’qumi’num communities further north on Vancouver Island have not had the same opportunities. I note that even the towns of Duncan, Chemainus, Ladysmith and Nanaimo are themselves constrained by the BC Agricultural Land Reserve and the private forest lands.

When today's forestry companies sell their private lands it's usually to developers of sprawling rural residential subdivisions not within current town boundaries. As you are no doubt aware, the first sales of private lands formerly used for forestry were done in Jordan River after a secret deal with a provincial government minister (who, by the way, was recently re-elected) to change the land use without consultation with regional planning authorities. The forestry company, which also donated to the ruling party, benefitted greatly. A certain waste product hit the fan once this was brought to light, and even though regional planning bodies are now brought into the discussion on today's land sales, there hasn't been a lot of control over the form of development. Some Island developers are noted to be belligerent and bellicose in their demands to weak-kneed local councillors who don't understand anything about sustainability. Their parochial ability to cave under development pressure is especially grievous to long term planning at a regional scale.

On Vancouver Island the only alternative to fossil fuel dependent highway-based transport is rail or by sea. I believe it is possible to displace the Island Highway liquid-fueled traffic with a new electric rail service on the existing E&N right-of-way without breaking the bank. It is an ideally-located, near-perfect parallel alternative. Selling off chunks of the E&NRR land now would be so tragically short-sighted, and this folly will surely become too obvious to all when the undulating peak in world oil production starts to taper off in earnest in a few short years, and the highway infrastructure becomes irrelevant over time.

One option that may help to address both creating sustainable towns and First Nations' land and socio-economic predicament could be for enlightened senior governments (federal and provincial) to purchase private forest lands close to existing towns and, of course, the railway, and move the land incrementally, lot-by lot over the decades into public ownership, thereby making them subject to native land claims. This may be the most direct way to address the old injustices, but maybe there is a better way: To develop a few of them as fully-self contained transit-based compact towns and villages (instead of subdivisions) designed for slopes using only sites damaged by industrial logging (some of the cutblocks are huge and interlinked); to reforest perhaps half as community forests managed by local towns and First Nations; to add to the Agricultural Land Reserve on upland, formerly forested sites with appropriate soil amendments and conservation tillage practices; and to rehabilitate eroded stream banks and establish 200m Riparian setbacks to salmonid habitat.

If a government agency invests in new town infrastructure, then in my view it is entitled to revenue to recoup all or part of its investment, perhaps in the form of leases on the land. If the rates are reasonable, then this could help create a large supply of affordable private housing where mortgages pertain only to structures, not the land. First Nations and the town councils would be entitled to a portion of the lease revenue, and First Nations could be enccouraged to form their own contracting firms and participate on equal footing with other private contractors. In addition, the agency would be in the position to dictate the form of development, and I would hope this would be human-scaled, energy-efficent urbanism and architecture, and establishing market garden agriculture within, say, 15 km of these new and existing towns.

In my view it is fair that aboriginal people would have equal training and employment opportunities in rebuilding and operating the railroad, and occupy seats at the board table to manage it into the future, notably in fostering resilient commumnities and in linking to more efficient forms of human transport by sea. Transit-oriented development can be a powerful tool to help transition to a future of diminishing fossil fuels, and in this case would help realize a modicum of social justice too.

Sorry Salish,

I thought I had put in the link. This came up right after the Wiki link, but was much easier to follow.


Thank you, Paulo. I'll add this article to my list.

I am already a subscriber to the Dogwood Initiative's regular emails and signed their petition against the Enbridge Gateway pipeline project. But I think the DI will have a hard time with my second option, to develop a minority portion of the land grant in highly selective areas. They may even misinterpret this as a "giveaway" to real estate developers, so I now feel I need to address this when I post related essays on some blog in 2014 (still doing the research ...).

The differences between the status quo and the above idea are that selected parcels of the land grant (for example, to focus on only those that are within 10 km of existing towns) are moved out of private hands and into public ownership, that forestry continues on the majority these new public lands but in a more sustainable fashion, perhaps with accompanying deep research with the UBC Forestry Dept on developing mixed forest types that can best withstand climate change, and that maximum of about 20% is eventually developed as new towns built with sustainable urbanism principles and deep conservation measures. This would occur over the long-term, so in the meantime the existing towns would be under gentle but firm pressure to apply greater densities, predominantly the gentle kind with low rise, mixed use development in mall parking lots, that kind of thing, if they are to be served by high quality regional commuter rail local transit systems. Public transit and public land ownership can be powerful negotiating tools to foster land use taylor-made for the human scale and designed to meet the challenges ahead, namely depleting fossil energy resources in the context of deep-seated dependency, and climate change.

Maintaining the status quo would likely trigger the construction of auto-dependent, single-zoned sprawling suburban and rural residential subdivisions right up the mountainsides on the old grant lands and, with the early readings of the new government's intentions, perhaps a more serious erosion of the Agricultural Land Reserve for the same kind of real estate development, which to me would be the height of stupidity in a mountainous province with only about 5% of its land classified as arable.

The world needs intelligent land use planning now more than ever, and BC is no exception.

Thx for this good post Paulo.

And to Euan M. for the top post, though it not my pov, reasoned discussion as takes (took?) place here on TOD is maybe not always fruitful yet there are no alternatives.

Good postmortem, I think a broad production plateau is likely with lots of prices volatility. After all those years, I still feel that we are navigating in the dark, how long can the shale oil boom last? the default forecast seems to be "+10% a year forever", really? nobody seems to have the answer.


Speaking of 10%/year, at a (IMO, conservative) estimate of a 10%/year decline rate for existing US crude oil production, in order to maintain the 2013 annual US crude oil production rate for 10 years, the industry would have to replace the productive equivalent of every current US oil field over the next 10 years.

... the industry would have to replace the productive equivalent of every current US oil field over the next 10 years.

Of course you and I know that 10% per year is less than 100% in 10 years. Having said that, what is less obvious, but more important is that we would have to replace it every year thereafter, because those new replacement wells would be declining at the same rate!

Wow! Imagine the shear amount of steel and concrete and mud required, plus fracking fluids!!!!

As my teenaged grand daughter might say, OMG!


Well 10% per year is less than 100% in 10 years if you are NOT replacing it. If it goes down the first year to 90% you replace it by adding 10% of the total, back to square one, i.e. 100%.
Year two is the same, so you replace again 10% of total and back to 100%. So after ten years you have replaced exactly 10 * 10% of total = 100% of the total. This already takes into account the declining of the new replacements, assuming a constant rate of depletion.

Correct. We are assuming constant production, and at a conservative 10%/year decline rate, the industry would have to replace the productive equvalent of every current US oil field over the next 10 years, in order to maintain current production for 10 years--everything from the Gulf, to the Eagle Ford, to the Permian Basin, to the Bakken to Alaska, the productive equivalent of every single oil well currently producing in the United States of America.

Not all US production is fracking, and not all US production is in decline. Of the production that is actually in decline, some pretty well accepted figures range between 4.5-7%, as I understand it, about half of current production ex tight oil, is from wells that are in decline. Otherwise Leornado Maguire was right when he disputed that decline rates are 8% because an 8% decline does mean you have to replace 8% of total production every year just to stand still. That is not what is happening. If it was a 10% decline and overall production stayed static for 10 years, then yes in theory you have replaced 100% of production in 10 years.

I disagree. IMO, a 10%/year overall decline rate from existing US oil production is probably conservative. Note that Citi Research puts the underlying US natural gas decline rate at about 24%/year.

In any case, what we are talking about is a hypothetical, to-wit, by what percentage would US oil & gas production decline from 2013 to 2014, if no new wells were completed in the US in 2014?

As I have noted before, the wells that Chesapeake drilled in 2007 on the DFW Airport Lease, in the Barnett Shale Play, were supposed to produce--according to Cheseapeake--for "at least 50 years." At least 50 months may have been more accurate. As of early 2013, 10 of the 21 wells that Chesapeake completed on the lease in 2007 had already been plugged and abandoned, and production from those original 21 wells had fallen by 95% in five years, an exponential (monthly production) decline rate of 60%/year.

Hey Sam, an editorial in my local newspaper yesterday, commenting on the handling of the local energy scene by the current administration, had me searching for an analysis of the various forecasts. I found your December 2007 "Peak Oil Update" but it was a little out of date to be really helpful now. I didn't do any further searching until just now and the most recent post in that series that I found was July 2009. I'm just wondering if you had any more up to date work, analysing the current status of the various forecasts?

I'm really interested in how far off the mark the various forecasts have been as well as how they have been modified over time, as the actual production figures became available. It has to do with recent discussions about how wrong "peak oilers" have been, with the counterpoint being that, the usual optimistic suspects have been even more wrong. Don't know if I'm the only one who would love to see a 2013 "Peak Oil Update" before august 31.

Thanks for all the great work you've put in over the years!

Alan from the islands

Hi Alan,
Thank you, I do have one last post about forecasts, under review right now, it should come out in the next few days. One can argue that optimists have been consistently wrong about prices since 2004, where is is my $40/barrel oil?

Glad to hear you're going to chime in once more, Sam. Always enjoyed your roundups. Last time I checked up on Freddy Hutter's work he was giving Laherrère the brass ring for accuracy. That was, er, 4 years ago...can't imagine how frenzied he's become over shale oil. It's all a mug's game, though; 1st quarter of this century for absolute peak is accurate enough for me.

Prices peaked in 1981, slowly deflated, and crashed in 1986; we just passed the equivalent milestone for 2008, notice. OPEC were completely up against the boards. Where's my 10 mb/d spare capacity?

It might be more of how long can Saudi Arabia keep its oil production up than how long can the U.S. shale oil boom last.

Peak oil is not dead and therefore should not be buried. Rather, PO is a wakeup call.

Here are a couple of data points:

The moment you start depleting a non-renewable resource, no matter what the rate of extraction is, there is less then there was.

There is the issue of the chronic mismatch between human's horizon of analysis and human lifespan. We can look at millions of years worth of data and use that to create certain theories and then wonder why it doesn't pan out in the next decade.

We also don't have a sense of time which has passed. It took 100's of years for the roman empire to melt away but in a history book it covers 5 minutes worth of reading. My guess is that the people who lived during those days were not very aware that the empire was on the way out. We think we have the ability to take the long view but who here knows the names of their great grand parents?

We're don’t process extremes. What is 230 billion light years? How much is 88 million barrels per day? It is something we don't relate to and therefore not truly incorporate into our thinking or actions. Large numbers are intellectual and won't trigger action - we can't truly process it.

Underestimating rates of change. Unlike lots of other process in nature humans don't act or develop randomly along multiple dimensions. We have the ability to selectively breed, a process which significantly speeds up natural selection. That is probably the main attribute which sets us apart from the rest of nature. We are able to build on knowledge exponentially, and it is very easy to underestimate the rate of change.

We're ok with setbacks. When a millions of people die we barely pause - we keep moving.

Energy to a significant extend is a societal choice. We choose to use resources to make SUVs and cruise ships rather than say PV. From a pure energy capturing POV PV is a vast improvement over the efficiency found in nature - compare it to a plant. Should we choose to do so we could use PV to make ammonia/methanol and use that as either a fuel or an input. But we don't. We build cruise ships instead. And no, EROEI has almost nothing to do with it because it is an allocation of resources decision, not a presence of resources question.

PO is not dead but, if we play our cards right, pretty much irrelevant.


Some largely self-explanatory charts, mostly from my recent article on what I call the Export Capacity Index (ECI):

GNE & ANE, as defined above, were at 96% and 86% respectively, of 2005 values (EIA).

The Six Country Case History consists of combined production, consumption and net exports from the UK, Egypt, Indonesia, Vietnam, Argentina and Malaysia, which, insofar as I know, are the six major net exporters that have hit or approached zero net oil exports since 1980 (except for China).

Link to article:

I define the ECI ratio as the ratio of total petroleum liquids + other liquids production to liquids consumption. So, production of 2.0 mbpd and consumption of 1.0 mbpd would result in an ECI ratio of 2.0 (or they were consuming half of production). Mathematically of course, a declining ECI ratio means that a net exporter is trending toward zero net oil exports (and an ECI ratio of 1.0).

Note that some countries with flat net exports, e.g., Russia, which had net exports of 7.2 mbpd in 2007 and in 2012, showed significant declines in their ECI ratios. Russia's ECI Ratio fell from 3.7 in 2007 to 3.3 in 2012.

If we look at 2005 to 2012 data, as annual Brent prices increased from $55 to $112, only seven countries (of the top 33 net oil exporters in 2005) showed increases in their ECI ratios--Canada, Colombia, Iraq, Libya, Kazakhstan, Azerbaijan and Nigeria. If we look at the last three years of data, 2010 to 2012, as annual Brent prices were respectively $80, $111 and $112, only four of these seven countries still showed increases in their ECI ratios--Canada, Colombia, Iraq and Libya. The other three--Kazakhstan, Azerbaijan and Nigeria--showed declining ECI ratios from 2010 to 2012. And of course, Libya comes with an asterisk, because of political unrest.

Incidentally, some countries did show increases in their ECI ratios from 2010 to 2012, but they remained below their 2005 levels, e.g., the UAE's ECI ratio increased from 4.6 in 2010 to 5.1 in 2012, but they remained well below their 2005 ECI ratio of 7.6. At the 2005 to 2012 rate of decline in the UAE's ECI ratio, they were on track to approach zero net oil exports in less than 30 years.

Having been a long time TOD lurker and occasionally poster I figure it is time to throw a few zinc coins of dubious value into the ring...

I have seen many debates play out here, e.g. the famous HL debate. Where I think that TOD went astray is the same place that Hirsch went wrong. There was no fast peak, the plateau has been a drawn out affair. It is also clear that when the plateau has runs it course, the drop will be even faster because of the transition to lower quality reserves. While it does seem to some to be a painful drawn out affair, a plateau of 15-20 years is still a blip in the grand scheme of things. Pulling out a cliche, Rome didn't fail in a day...

I think the real tell is that on a net BTU basis we have basically gone nowhere in 8 years despite trillions in new CAPEX... How long is that really sustainable? The world was saved by the Bernank in 2008, but that trick can only be played once. Despite historically cheap cost of capital, no significant (at the global level) source of supply has emerged... At other sites I have referred to the Bakken and shales as the equivalent of scraping a hash pipe for resin; the first few scrapes seen great but it soon becomes pointless..

As a final note I would like to thank Euan for all his work and posts here at TOD. He has contributed greatly to my understanding of the oil trade and I look forward to reading his future missives....

Hi Flakmeister, whilst much of what you say resonates, if you see my reply to WHT it was not necessarily the whole of TOD that went astray. But the diversity of informed opinion has been a major strength.

This seems a good place to post this link that Nate circulated earlier toady "entire history of world in one graph"... I spent ages looking at it, really thought provoking...

Neat link... I wonder if Syd Meier was aware of the chart when he developed the graphic score display in CIV III.....

Excellent post, Euan. I have to assume that 'nails in the coffin' is meant sarcastically though because as important as these developments are all they do is delay peak oil. Peak oil is a fact like gravity, the only issue is when and it is certainly very very true that the date of peak oil has been pushed years away by the three things that you mention.

The real issue is and always has been price. Even if we completely ran out of oil (which will never really happen), we will be able to chemically synthesize it if we really want it. What truly matters is the price of oil since that determines how much we can really benefit from it. I am completely persuaded that the current sluggishness of the world economy is largely due to the higher price of oil. People have less money to spend on food, housing, entertainment, and other things because a larger percentage of their budget has been consumed by the need to pay for oil. We pay for that higher priced oil both directly (in the form of higher gas prices) and indirectly (in the form of higher food prices, higher material costs, higher shipping costs, etc.).

And the peak oil deniers can deny peak oil they want by pointing to the higher C&C production. However, they cannot deny that since 2000, the price of oil has risen steeply and at a rate that is much higher than the base rate of inflation. And that higher price has very significant consequences.

First attempts to arrange newly discovered elements into some form of orderly manner that *must* exist based on the little knowledge that early chemists had were incomplete and unsuccessful, but good enough to drive new discoveries (new elements predicted to exist)...

This series of discoveries of new elements led to ever more successful arrangements (Mendeleev's table based on weight and chemical properties)...

... which led to the discoveries of radiation and of the distinctions between protons and neutrons in the nucleus, and the importance of the difference between atomic weight (P+N; i.e. isotopes) and atomic number (P only)...

... which ultimately led to the ability to completely and accurately predict the atomic number, valency, and chemical behavior of "missing" elements constituting gaps in the periodic table (e.g. Hafnium).

This is the apotheosis of the scientific method.

The evolution of "Peak Oil" hypotheses (NOT THEORY, GOD DAMMIT!!!) follows a similarly winding path with many dead ends. The basic science underlying the original hypothesis remains sound, but it was incomplete then, and our knowledge remains incomplete. The addition of distinctly non-linear, non-deterministic, "irrational" behavior (i.e. markets, economics, politics) makes the delineation and description of an all-encompassing, predictive, testable set of linked hypotheses very, very difficult.

As such, the original work, the following work with different schema designed to address holes or questions raised by and about the original hypothesis, and the current work are all part and parcel of the development of a successful scientific paradigm.

Peak Oil is dead... Long live Peak Oil.

Resources remain finite. Energy required to extract, process and distribute those resources will continue to eat larger and larger bites of those lesser and lesser resources.

Humans are clever and our technological abilities are staggering... (which is good and bad), and we will continue to find ways to try to test and disprove the predictions of a set of hypotheses that present fairly dire choices, out of basic stubbornness, necessity, greed, desire, and survival instinct.

That said, most of the data presented indicates that the original predictions of peaks in conventional oil, costs and consequences of "alternative" hydrocarbon fuels... were not so far off, time wise, and not so far off slope/sharpness wise.

Remember, what we call "The Hundred Years War," to which a section of a chapter of most history books is devoted... was NOT called that back then, and was NOT studied the same way then... history is a large compression filter. 200 years from now, what we agonize over on a month by month basis... will be called "the era of peak energy output" or something.

RedDan, I see you have been here longer than I! Your protestation about theory versus hypothesis is well made. We have a hypothesis that is still being tested and evolving as new insights come to light. At some point on this thread I need to make the point that I never declared "Peak Oil is Dead" but there is a view in "the media" that it is and the 4 nails I give explains why this view exists. The points I make are the counter arguments which I hope influence the thinking of other media commentators. Peak Oil is lying in a coffin, the lid hammered half shut, either buried alive or about to explode back to the surface with a vengeance ...

I know that you were doing so, and appreciated it while reading. And Lisbeth Salander is a goddess!

TOD: The site that kicked the hornets' nest.

The essence of this article is:

1. Conventional oil production has peaked
2. High oil prices are bringing new unconventional sources on line.
3. Private credit markets have not yet collapsed in spite of the doomster’s predictions.
4. There might me enough high priced non-conventional oil to last for a few decades and therefore see me comfortably into my grave.

I think that your hope that the collapse of private credit markets can be delayed for decades is likely to be disappointed, but, what the heck? The future is hard to predict, and you can convince yourself that there is chance that you will avoid the personal inconvenience of a major social discontinuity. In the long term it appears that humanity will be extremely inconvenienced (Can you say climate change? Can you say resources wasted in propping up private credit markets that should have been used to build a sustainable infrastructure?), but that is apparently no concern of yours. I realize that you are not actively indifferent to humanity’s fate. You just have blinkers on: Extract more oil, be more energy efficient, keep private credit markets healthy for a few more decades. Anything outside of this field of vision is unimportant.

"I think that your hope that the collapse of private credit markets can be delayed for decades is likely to be disappointed, but, what the heck?"

What we are, and have been, seeing is the onset of the age of triage; "Robbing Peter to pay Paul". Our small, local school system had the State's portion of its funding cut dramatically this month:

County Commissioners have voted an emergency allocation of $250,000 to the County schools to help offset the pain of sliced and diced budget totals for education coming from this year’s N.C. General Assembly.

School Superintendent Leek told the commissioners at their regular Thursday night meeting, “I’m at the eleventh hour. Teachers report on the 19th, and we have not filled four needed positions we’re advertising.

“When they (the General Assembly) cut specific line items and positions it’s handcuffed us. We’ll probably have to send people home.”

See "NC General Assembly cuts school funding".

"Death by a thousand cuts" may be overly dramatic, as, IMO, "decline by a million cuts" seems more accurate as we (they) squeeze economies to extend our oil addiction. How long this can continue is anyone's guess, but it's clearly a case of too many claims on too few real resources. At what point will demand destruction mean the Golden Goose can't be fed? How many times has history seen societies reach a point where they simply walk away from what was, as the combined costs overwhelm effort and trust that things will be better again?

Credit markets are being held together largely by (declining) trust and a lack of viable alternatives. This could end quite suddenly.

It seems to me that "peak oil", climate change, health of the oceans, availability of fresh water, etc. are not so much environmental, geologic, or even scientific problems (or predicaments if you prefer). In reality, they are problems of human behavior. Unfortunately, that makes them much harder to deal with.

I have yet to see a problem of human behavior that is positively affected over the long term by more of the same human behavior that originally caused the problem. Yes, sometimes more of the same may put the worst consequences off for some time, or it may simply raise other problems to the fore, allowing us to forget about the old problem for a time while we face a new, more imminent crisis. Over the long term though, the same type of behavior will tend to get us the same type of results, although, generally speaking, often trending worse with time.

So, the question that probably needs to be answered (perhaps the only question) is can humans really change their fundamental behavior permanently, especially if such change requires any meaningful sacrifice on the part of those same human beings (as opposed to future generations or some other set of human beings)? I think the situations that we all face over the next number of decades will require this type of change in human behavior if we are to have any chance of navigating these challenges without enduring really harsh consequences. Personally, I see little evidence of such an ability for behavioral change in human history. And this is what worries me because I think it matters not at all whether we hit resource limits first or climate limits first or water limits first or see the oceans essentially collapse first. Either we manage to change our behavior in time to prevent any of these from happening, or we don't and the first one that happens will likely render the discussion of the others largely moot.

Can we do that? Again, I really hope so, but I see little in the way of evidence. Hopefully, some new facts will come to light that will force us all to change our views, and then our behaviors.... if we can.

I'll answer that question with the obvious answer backed up by thousands of years of history and say NO.

True. Maybe evolution still occurs though. If the only ones who survive are the ones who sacrifice and deny immediate gratification, then they will inherit the earth (what's left). Even this possibility is remote however, I suspect, given an unequal distribution of resources and power.


Am I the only one who feels that Euan is being a little tongue in cheek, ever so slightly sarcastic, at least with the title of this post? He outlines the three nails in the coffin and then under the heading "Points" goes on to expand on why the three nails aren't really nails. Nice!

Of course, there are those who see what they want to see and that goes for both sides of the coin. I am on the side of those who believe that the decline in the shale plays is going to overwhelm the new production within the next couple of years. If I'm right, the "peak oil is dead" crowd will not know what hit them when TSHTF. If I'm wrong, I'll have missed a whole lot of opportunities to enjoy the party!

Alan from the islands

Yes, I am also of the opinion that he was being a bit sarcastic and/or intentionally provocative with that title. The "nails" merely delay the ultimate reckoning.

The only way one can believe it is 'dead' is if you take this attitude:

4. There might me enough high priced non-conventional oil to last for a few decades and therefore see me comfortably into my grave.

The "it won't happen in my lifetime so I don't care" attitude. Of course that is not very nice to yout descendents.

I thought so too. I also thought the picture of 'rusty' nails was a clue.

The fact that he didn't use screws is an even bigger giveaway! ;)

Am I the only one who feels that Euan is being a little tongue in cheek, ever so slightly sarcastic, at least with the title of this post?

Nah! I detected not even the slightest trace of sarcasm in his post!

Nor in your replies, Fred!



Quote: "Oman would have been a classic case of a country peaking. But the fortunes were reversed by rolling out an array of enhanced oil recovery strategies."

Why using an oil-irrelevant country to proof that technology will save us?
How about using oil-relevant Mexico as a counter-example that production is declining since years despite new technology?

Actually, Oman's net oil exports in 2012 slightly exceeded Mexico's (EIA data), but despite a rebound in production, Oman, like Mexico, is trending toward zero net oil exports, based on their respective post-2002 and post-2004 declining ECI ratios (ratio of total petroleum liquds production to consumption).

The question not addressed in this, or any other analysis I've seen is, "How high can oil prices climb before the the world's interdependent web of supply chains (including those involved in oil production), which are based on cheap transportation fuel, are no longer economically viable.

Even assuming that the activities necessary for petroleum location, extraction, refining and distribution are the last economic activities to go, there will be a limit, after which, industrial activity based on cheap, petroleum based transportation fuel is no longer possible.

There is no fixed number where things just blow up. It is a gradual process where the least profitable and least necessary things die off and people will rearrange the allocation of their resources. People will reduce expensive frivolous vacation travel but they'll pay more money to ensure that food is delivered to them.

No, there's not a fixed number, but in this case, breakdown *type* matters. For instance, the absence of pens is not as significant as the absence of pipe for drilling, coal for power plants, transportation to lay pipe from gas fields, turbine repair parts from Asia or Germany and so on.

The world's supply chain web is like a complex machine which depends on the smooth operation of many critical parts. Taking out pieces will produce breakdowns that will NOT be gradual. Breakdowns in specific areas will produce cascade effects, and as such, be distinctly non-linear and to some degree, unpredictable.

The price of oil becomes too high when it becomes cheaper to hire someone to cut firewood by hand, rather then use a chainsaw. The price of oil can go much much higher, and the least necessary things get cut first. Case in point, the US uses far more oil per capita then nearly every other country in the world, so there is plenty of fat to cut. Which shows up as a reduction in CO2 emissions.

That's Checkers, not chess Smeagol.

Another step out, and you see how many jobs are lost from those few simple economizations.. and then the lost revenues from the reduction in the pool of consumers..

Compared to Greece, or Egypt the US still has plenty of fat to cut, it will be a hard grind down, and it's possible that the vast natural resources of the US will sustain it far better then Egypt or Greece. Sure it's not all roses and chocolates, but an apocalypse tipping point crash seems a very slim possibility.

The erstwhile OldFarmerMac, dearly missed by me and others I hope, would often talk of the utility of fuel in farming. It was he who got me thinking of what feeds the world - diesel. One of my favorite sayings of his was how many square feet of sod a pint of gasoline could turn whereas, without that precious pint, the work to accomplish the same will require one to work his head off. OldFarmerMac would drive it home that were a barrel of oil to cost several times what it costs today, nearly whatever the cost, it beats the alternative: Draft animals and manual labor which absolutely cannot achieve the same no matter how many slaves are employed!

Similarly - it's so much easier to cut wood with a chainsaw than it is by hand, its inconceivable that we'd go back to the ways of old - but that's exactly where things are going if the world doesn't wise up and realize that our happy motoring is what's going to kick every human remaining back to the iron age! If it could be made so by the governments of the world motoring for jollies is proscribed, the human race could see its eventual demise (due to scarcity of oil) extended several centuries - time enough to develop a truly workable solution to feeding the human race. Of course, Joe Six-Pack ain't gonna hear nothin' of it.

There are alternatives besides diesel and human/animal labor.

Electric motors are powerful, quiet, efficient, and they're here now.

Enough Already! What facts have changed? Have you guys completely forgot about declining world oil exports. They are declining because producing nations are consuming more and more of their oil. Export nations are growing their economy. Import nations are importing less and less oil.

Below is import data from the EIA. The EIA labels it "Net World Exports" but it is really only all OECD nations. That is largely the developed world. It is in kb/d with the last data point March 2013.

 photo NetWorldImports_zps3b60d531.png

Oil imports by OECD nations are down almost 8 million barrels per day since 2005 and 2006. And in case no one has noticed Europe is getting mighty sick and the cause just might be found in that chart above. I think some folks are just giving up the battle way too soon. Peak Oil is alive and well.

Ron Patterson
Peak Oil Barrel

Ron, Thanks for the reminder, its a really nice chart. Did you read my post?

The pendulum is swinging away from Europe

The export market can shrink even if worldwide production continues to rise slightly or remains flat. From everything written here, I don't foresee any dramatic rise in the worldwide production of oil. Intensive investment has produced a significant amount of oil in certain areas, but that level of investment could not be maintained broadly. The way things are playing out is different than many expected on all sides. Certainly, predictions of $40 oil did not happen in the expected time frame. The price of oil rose dramatically over a 15+ year period. Those who expected a sharp peak and decline have not seen their expectations met. Exports can decline even with a slight rise in production because populations, especially in oil exporting nations (Middle Eastern and African nations), continue to grow with increased revenues. Per Wikipedia charts, most of the oil exporting nations have populations rising at rates faster than the world as a whole.

Euan's thinking seems to be "it's not as bad as some of us thought, but we are treading water." Darwinian is a little more pessimistic given oil export trends. There has been a spectrum of opinion on The Oil Drum. What some have predicted has been flat wrong, but many of the predictions of rising prices, shrinking oil markets, and increased expenditure for less return have been borne out, more right than wrong. A fast collapse appears less likely, but a world economy hampered and dampened by high oil prices and increasing poverty seems likely. If we plateau for the next 15 years, that gives us more time than many thought to adapt. Unfortunately there are few signs of adaptation either to oil depletion or climate change.

I have been a reader, valuing the contributions of many on this site. I understand WHT's concepts only in outlines, but still value the ideas he presents. Westexas is dogged about presenting export data which I don't tire of seeing. AlanofBigEasy has kept my eye on some strategies for addressing oil depletion, especially in transporting goods and people by rail. I will miss this community of mixed expertise, some economics, some geology, some chemistry. I look forward to seeing whatever comes to fill the gap this site's retirement creates.

My take its worse than we thought because the fact it looks not as bad as we thought obscures fact it still is as bad as many think when looked at from the perspective of gross utility. I think.
The problem is the market response is keep burning anything and everything. If anything this fracking hype is exactly what you would expect if the cheap stuff starts peaking.

Yeah, this is my read of the situation. The truth of what happened fell between the Cornucopians and the Peakists. (Although closer to the peakists, IMHO.) However, considering that the Cornucopians were the well-funded and well-respect establishment analysts and the peakists were merely self-funded concerned people, this represents a major failing of the establishment analysts.

But what are the predictions from both sides going forward at this point? They seem to have come closer to agreeing with each other.

Correction! The above chart of mine is labeled "Net World Imports". That is correct. That is how the EIA labeled the data even though it is only imports for all OECD nations. But in the text I say: "Net World Exports". That is incorrect. The chart represents imports not exports. My apologies for the error.

Ron Patterson


Are you willing to make your PP available?

At 6MB can't do this on TOD server but I'm working on it. Will try to add download link at end of post.

I hope you can, the technicality of this report were poor, I cant see the pixelated images properly, and if I click them, they just become very small. Good message in the post though.

thank you

Thanks for a nice summary.

Those 4 nails came with a price tag.
One interesting exercise would have been to look into how world C + C supplies would have developed with some price trajectories, say $30, $60, $90/bbl.

Chart from

Europe looks to me like it has hit peak oil and is on the downslope, together with the predicted social unrest, crumbling infrastructure etc.

It's not a neat peak, more like a 40-year undulating plateau. But unless some unimaginably huge oilfield is discovered in Europe, I don't see consumption ever getting back to its former peak.

We must remember, peak oil won't be the same for everyone, everywhere. I estimate Europe is over the peak, America on the peak, Chindia approaching the peak, and Africa and South America still ramping up to the peak.

As long as imports are possible and the price is acceptable, its not an immediate crisis. If however the entire Midleeast and Russia should collapse some how, Europe will have a problem. Norway and the UK, the two largest oil and gas producers in Europe (exl. Russia) are taking two different approaches. The UK is neglecting its North Sea oil production completely, having huge tax demands on the oil industry while theres hardly any investments made. Norway, however, is investing billions every year and is building new platforms to replace the old ones. Both government and companies are working hard to keep production as high as possible, and EOR is at maximum effort. New oil fields has also been found, the 2010 discovery of Johan Sverdup has over 2 billion barrels of oil and is likely to start production in early 2019 with up to 250 000 barrels per day of production within a few years. This might keep Norway over 1 million barrels per day for some time, while the UK is closer to zero than ever before. Norway is today at 1.5 mbpd while the UK is at 0.9 mbpd.

We need a crowbar to get rid of these ridiculous nails and keep the site open.

"Europeans are being saddled with expensive and less reliable electricity supplies and increasingly loss making energy industries. Only time will tell if the European strategy bears fruit in the long run. The need to increase indigenous primary energy production in Europe does make expansion of renewable energy a sensible option, but I can't help feeling that 100 GW of new nuclear capacity may better serve the people of Europe."

I can only speak for my own country, which is Switzerland. We are not trying for the new renewables at all, due in part to having the Alps and 60%+ of hydro. We are, on the other hand, having a public debate about nuclear energy. The current plan is to replace our old nuclear power plants by - gas. Yes, gas. This would seem to confirm Euan Mearns' observations about European CO2 emissions. It also confirms something else, though: People neither know nor care. The problem is not cost. It is information and willingness to look at the problem. If any country in Europe could afford to push for better solutions, it should be ours. Yet Germany's percentage of electricity generated from the sun is ten times higher than ours. Those "expensive" electricity supplies probably refer to the German law about renewables, the EEG or Erneuerbare-Energien-Gesetz. If we had to pay as much for our electricity as our German neighbours, it would cost our household of three about a hundred euros more a year. A YEAR, for goodness' sake. That is the price of one family dinner at a decent restaurant in these parts, or health insurance for an adult for just a few days a year. Stuff almost all of us can afford without thinking twice about it. And yet it would be political suicide to suggest what John Doe considers... well, "expensive electricity supplies." I put it to you that most folks in Central and Northern Europe could invest their money better. As somebody here has already said, we choose to buy SUVs and build airports instead.

As I've understood it, there's never been anything wrong with Peak Oil theory -- as modified by the realization that an arbitrarily-long plateau can extend the bell curve's decline further to the right -- since M. King Hubbert first proposed it.

Peak Oil theory never claimed to be able to predict when the peak would occur. As Matt Simmons and others said repeatedly (as in "over and over and over") we can't and won't know that the peak has occurred until we've quite clearly ID'd it in the "rear view mirror." All Mr. Hubbert's theory can tell us now is that an irreversible peak in global crude oil extraction will happen at some point in the future. Nothing has happened yet that disproves this.

The tragedy, of course, is that by the time the theory has routed the deniers and proven itself beyond any reasonable doubt, we will have collectively forfeited the chance to prepare for the consequences of that peak. Whoever's still around will have to pay for that failure, deniers and believers alike.

But when people are united in the experience of seeing these consequences, they they can avoid that most human of horrors: humiliation. It is humiliating to see someone with "more".

But if everyone experiences the situation together: "The President has declared a national emergency in response to gasoline shortages", etc. then humiliation does not rear its ugly head.

As you said, the curve moves to the right. Also, expands a bit, and very probably will be steeper on the back end, though who can be certain about that? Economic problems may draw it out enough that it looks quite long.

Of course there is also the question about, what is it that is peaking? NGL's, production gains and the like make total liquids extend as Crude production remains level or drops. Not that it will matter in the long run. I can't say I am entirely sad that things are prolonged beyond where they might have been... again, decrying the drop in economics, lowered income levels and so forth.

As for preparing for the consequences, I don't know that all of the consequences are yet known, making that difficult. Plus, we are a species that seems to wait until after disaster strikes to figure out how to deal with it.

Best hopes for future blogs.


Excellent post. Well worth the read. Thank you.

I am heading to Aberdeen on Saturday - it's a quick trip but I will wave toward the University as the plane approaches Dyce.

I hardly ever post as I often don't have the time and when I think of something good to say and come back - some other very smart poster has beat me to the point. But I spend a great deal of time reading.

This sight (site) will be sorely missed. All the best and thanks again.


Friends, ‘Muricans, countrymen, lend me your ears;
I come to refute Peak Oil, not to confirm it.
The wrongs that models predict lives after them;
The good is oft ignored by all.
So let it be with Peak Oil. The noble Yergin
Hath told you Peak Oil was fictitious:
If it were so, it was a grievous fault,
And grievously hath Peak Oil answer'd it.
Here, under leave of Yergin and the rest--
For Yergin is an honourable man;
So are they all, all honourable men--
Come I to speak at Peak Oil's funeral.
The basis was self-evident, intuitive and clear to me:
But Yergin says it was heuristic;
And Yergin is an honourable man.
The model predicted rising prices
Whose ransoms did the general coffers empty:
Did this in Peak Oil seem mistaken?
When that the poor have cried, Peak Oilers have wept:
Schadenfreude should be made of sterner stuff:
Yet Yergin says recessions are temporary;
And Yergin is an honourable man.
You all did see that with nuclear, wind, and solar
Were thrice presented renewable options,
Which could postpone a peak: was this replacement?
Yet Yergin says still demand will fall;
And, sure, he is an honourable man.
I speak not to disprove what Yergin spoke,
But here I am to speak what I do know.
You all did waste oil once, with mindless inefficiency:
What cause compels you then, to demand it cheaply now?
O judgment! thou art fled to brutish beasts,
And men have lost their reason. Bear with me;
Climate change is in the archives there with Peak Oil,
And I must pause till it too fades from memory.

Thanks, Paleobard >;-)

Alas, poor Oil Drum,
I knew it well.

Well it ls all winters of discontent now.

A horse, my kingdom for a horse! (Now that I can't afford to buy gas.)

Whether 'tis nobler in the mind to suffer the slings and arrows of outrageous oil prices...

Who would Oil consume,
To grunt and sweat under ever increasing prices,
But that the dread of something after Oil,
The undiscovered Electric Vehicles, from whose bourn
No Traveller may ever go more than 60 miles, Puzzles the will,
And makes us rather use that Oil we have,
Than install technology that we know not of.

Great essay, Euans. I just want to make a comment about this:

To be fair, the UK does have a raft of sensible measures such as...and is rolling out smart meters at a snail's pace.

I am personally unpersuaded that "smart meters" are a brilliant idea. I assume we are talking about the smart meters that make it possible to charge higher rates for power consumed during peak hours, as distinguished from smart meters that just make it possible for the power company to save labor on meter readers (by having the meter phone home).

To the average home owner, a smart meter will probably just result in paying higher prices, and will save little or nothing. If I had a smart meter, I can't imagine that it would change my power consumption pattern by one iota. For example, I am not going to use my electric lights from midnight to 8 am (rather than 6 pm to midnight) just because power is cheaper at that time. I am not going to use my electric fan in summer from midnight to 8 am (when it is relatively cool) rather than in the daytime when it is hot. Possibly I could put off doing the laundry until bedtime, but that would save a drop in the bucket - I only do laundry once a week, and I dry clothes on the line. My refrigerator will remain plugged-in 24 hours, not just plugged-in late at night even if power is cheaper then. If I want to run my toaster oven to make breakfast, I'm not going to wait until midnight.

Some commercial users might be able to shift production to graveyard shift, but more likely they will just move the operation to China if power rates are too high at home. I can't imagine companies only opening their offices from midnight to 8 am because it will save them on their electric bills - I bet the electric company itself will not do that.

In short, I think that the "savings" from smart meters will prove to be illusory.

Possibly I could put off doing the laundry until bedtime, but that would save a drop in the bucket

But a few thousand drops in a bucket and you have a bucketful. If everyone delays their dishwasher until off-peak and delays laundry/drying until off-peak, that right there would be a huge amount of savings at peak that could prevent a new power plant from having to be built.

Ozone, you may be right. I have presumed that the powers at be (DECC) have done their homework. From my own perspective, i would like to see how much power I'm using and the impact of shifting behaviour on price and bills. As Speculawyer points out, reducing peak demand (6pm every day in the UK) can reduce the amount of generating capacity required. Shifting consumption is one thing, reducing it another.

I agree that smart meters by themselves are not going to significantly shift the load. To reduce peak loads, there needs to be a way for power hungry equipment such as air conditioners and electric water heaters to be told to temporarily shutdown. We do have a program here in Ontario where you can get a special thermastat that can be remotely instructed by the power utility to shut off the air conditioning. Obviously there is a cost and additional complexity in doing this.

Kudos, appreciation, and an invitation to help build on this fine synopsis

While much of the data and concepts are familiar and scattered about The Oil Drum and elsewhere, much appreciation to Euan for "tying it all together" so well at a pivotal point in the history of the issue. I especially appreciate the artifice of the title and coffin/nail theme which makes it unclear which way his thesis is heading (as evidenced by many responses) and focuses attention on the finer details.

In efforts to educate more and more influential people--not just about peak oil but its broader implications, it is critically important to be able to step back and retrace the story, linking the past, present, and future as Euan has skillfully done here.

ASPO-USA, as part of its efforts to ramp up and strategically focus its outreach to key decision-makers, has been working toward a synthesisized and relatively standardized presentation that reviews the "big picture" of oil, energy, the economy, environment etc. Of course, there are already many such presentations that attempt this task. Our goal is weave together the best of them and represent the different perspectives and people that have characterized the history of scholarship and discourse on these issues.

This is a tall order any way you look at it, but we think it will be an essential and valuable tool in bringing along partner organizations and engaging mainstream audiences. The challenge has seemed overwhelming at times, but Euan's presentation is a timely and darn good baseline to work from.

Once we have the presentation we are aiming for, our plan is to coordinate and support people who are willing and able to deliver the presentation to different audiences. Naturally, some people are more qualified than others, or more knowledgeable in some aspects of the issue than others, but those issues can be addressed as needed.

If you would be interested in learning more or being part of an informal network of presenters, please feel to contact ASPO-USA at

Also, if you are wondering about ASPO-USA's plans for a website to succeed The Oil Drum, an update with more details is pending to be posted this week. We certainly hope to have a live site before the end of the month and doing the best we can to make that happen.

Thanks, Jan

Also, if you are wondering about ASPO-USA's plans for a website to succeed The Oil Drum, an update with more details is pending to be posted this week. We certainly hope to have a live site before the end of the month and doing the best we can to make that happen.

I await with bated breath. I really hope something can be organized. I lurk far more than participate, but I can't imagine life without TOD or an equivalent.


Be sure that it is posted on TOD before the final day; also on the final day. Several times!

That way, as I sadly cull the archived site, I will be able to locate and read...

Thanks, Jan.


Hi Euan, I haven't submitted a proper comment in years, but this post woke up that urge again. This is perhaps a brilliant post, but most importantly, explains to a great extent why you have decided to close down the site.

TOD has shown how detached science has become from common people, but bringing both together requires some backing by formal science. This is where TOD/ASPO clearly failed, after all these years peer reviewed publications are still dominated by the flat-earth economics of the likes of IIASA and the IPCC. And it is precisely that lack of formal scientific foundations that lead you to the pitfalls in this post, or allow for nonsense such as "peak demand" and "peak supply".

In any event, after this post I'm pretty sure institutions like the IIASA, CERA or Harvard University will be avid to hire you. Take care.

I am curious, baffled even by this comment. I can see how a casual, less discerning reading of Euan's post might give the impression that he has somehow thrown in the towel or joined the "what, me worry?" crowd when that seems far from the case. But Luis, I have gathered you are a careful and long-time student of these issues. It makes me wonder what forces--besides a dedication to understand the truth--have shaped discussion and thinking within the TOD community, and where discourse will proceed from here.

Has there been anyone more dedicated and intellectually rigorous/honest about our collective quest than Mr. Mearns? Perhaps I have in turn misinterpreted your comment about his post, but I would just like to understand how it might help move the discussion forward from an apparent impasse.

I agree - that comment by Luis is a bit perplexing - perhaps he was attempting a joke?

If world was dependent on liquid fuels, and it cost $500 a barrel to extract and $600 to the public, would there be such a thing as 'peak demand'? This whole circus focused on the wrong metric (production) in early arguments when the marginal cost to an ever broker society is/will be the real story. (and yes of course 'peak demand' is BECAUSE supply is getting more costly...anyways stone age didn't end for lack of...

Hi Luis, first of all the decision to archive the site was a joint decision and I was actually at the "keep things going at a lower level" end of the spectrum. I don't think either TOD or ASPO have failed, and as i pointed out in my comment Dave Cohen up the thread, we have argued one pole of a polarised debate and I do believe helped move the discussion to a middle ground that is likely closer to reality than either pole. I also believe we have educated thousands of people and provided a forum for community debate. This is not failure.

As for scientific foundations, there are a couple of kind comments on this thread likening us to early scientific pioneers who had notions about reality but could not formulate exact answers at the time - that came later, and I dare say someone will draw threads together from the millions of words printed here and draft some formulations linking energy, mankind, the economy and the environment together.

for scientific foundations, there are a couple of kind comments on this thread likening us to early scientific pioneers who had notions about reality but could not formulate exact answers at the time - that came later, and I dare say someone will draw threads together from the millions of words printed here and draft some formulations linking energy, mankind, the economy and the environment together

This is the crux of the whole thing. The multi-disciplinary nature of issue. Its called politics or at least some new form of it. It was never purely an exercise in raising scientific awareness

Argue and simultaneously analysing the case. It had this real time vibe [an internet thing] that conjured up an addictive presence. I was struck by the comment that someone made on another post [rembrandt?]that they where leaving ToD with a sense of unease if not failure because even the inner circle never managed to reach a consensus.

Human affairs running into physical limits is a real toughie.

I suspect the peak oil perception/interest thing will be back with a real vengeance sooner than we think

With respect the above misses the point.

1/What matters is the flow of useful energy from oil and oil related activity.

2/The key concept in Energy is EROI. The new developments, shale, tar-sands etc have a much lower EROI. This means there must be much more activity to get the same flow. That is as unconventional sources replace crude oil a larger proportion of investment must be diverted to oil production, and correspondingly a lesser proportion to consumption whether or not the flow is increasing or decreasing.

3/My understanding is that the marginal cost (USD) of production for companies like Shell is increasing at 12% a year. If true of other companies the EROI must be falling.

4/An estimate of this EROI change could be made by taking the approximate EROI's of the components in the fuel mix,sweet crude, heavy sour crude, shale condensates..., working out the ratio for the mix and also the rate the EROI is rising/falling for the individual components weighted by the (changing) proportions used.

5/Assuming the 12% rate of increase in marginal cost is standard and assuming this is a fixed percentage and does not change then in 6 years the cost of a barrel of crude equivalent is USD$ 200

6/ An electrified economy using nuclear or alternative sources such as hydro is possible but the conversion will take decades. (Electric within city trolley freight, intercity electric rail, etc)
Let alone the building of nuclear or windpowered ships etc

7/Many alternative technologies rely on the mining of rare earths, low concentration minerals. The question is there enough readily mine-able over the next decade to say allow a 30% replacement of current production.

8/Whilst there are alternatives such as destructive distillation of wood etc These would need to be at scale.

I'll miss it all. It was great while it lasted, but nothing lasts forever. Thank you.

Is Europe not helping itself via its gradually declining birthrates? For all the breast-beating about the need for "more workers" - where would they work, in light of increasing automation and Europe's increasing costs of fuel. How are young workers receiving small unemployment benefits going to be paid enough to support both themselves and those pensioners that seem to be the chief worry?

Europeans have done amazingly well lowering their overall rate of energy draw even while incorporating half the continent into a more capitalist economy.

A gradually falling population in Europe, with a higher employment rate and a lighter draw on resources - and allowing once again an increased role for natural processes to work their slow magic - that seems like such a good thing to me!

In a comment I left on Phil Harts post a couple of days ago I pointed out that in any polarised controversy the reality often lies somewhere in the middle ground. I think The Oil Drum has played an important role defining one of these poles.

I agree, TOD has been a beacon of sanity sandwiched between screaming Cornucopians and Gloom and Doomers. TOD will be sorely missed, but fortunately I have learned to be realistic about the future of energy and not listen to the loud rhetoric spewing from poorly informed pundits. As to the content of this post, I don't necessarily feel that PO is dead but it's definition has surely changed. Indeed we cannot predict future oil output from simple linearization with much accuracy, nor can we really predict demand with much accuracy either. However, developing new tools and methods for predicting energy futures will be an important endeavor that we as a species should engage in if we plan on surviving on a geological timeframe. I feel that as the definition of oil has changed in the past decade the definition of PO has also been changing commensurately, and this is in large part due to the frank discussions that have happened at TOD. Where production and consumption will be in 10 years is difficult to predict. What we can predict is the big picture outcome; that non-renewable energy sources will ultimately decline in availability and quality resulting in significant impacts on social and economic structures and activities. Sometimes I feel like we lose sight of the big picture around here. Thanks for the great post!

I never thought the oildrum would formally hammer nails into its own coffin

I wouldn't say that.

I think it was always clear that "the cheap half's gone" was the main import of Peak theory,and as we've been seeing from our front-row seats the ongoing outcome is a story of stumbling economic growth, reduced ERoEI, money-printing-or-austerity, and unsubtle tectonic shifts in geopolitics.

Granted, the more alarmist predictions seem absurd now, but only after it has slowly become clear that there was an awful lot more slack in the system than many of us supposed.

>We will of course one day run out of planet to explore but that day does not seem to have arrived yet.

That day is already dawning.

Drilling is taking place off-shore Greenland and the Falkland Islands. The maximum water depth that is being drilled is very near the deepest known sedimentary basins. In the Gulf of Mexico, surprisingly cool geological strata are the only reason oil, and not natural gas, is being found at such depths. Similar depths elsewhere will likely be gas discoveries - or dry holes.

Outside Antarctica, I have difficulty imaging more physically challenging sedimentary basins to drill in.

Canada drilled their Arctic and found very little. They ran out of prospects before they ran out of budget to drill. Russia has a major natural gas find in the Arctic Ocean and more may follow.

Iraqi Kurdistan was off-limits for political reasons Libya has just recently been freed of political constraints to drilling so something that Occidental Oil missed may show up..

Today, political constraints hinder exploratory drilling in Iran (China still drills there though), North Korea (a poor prospect), the Yellow and South China Seas (excellent prospects), Myanmar (middling prospect) and Antarctica (a middling prospect).

Brazil has found substantial reserves at the extremes of it's sedimentary basins (Angola et al may find comparable), but they cannot produce enough to meet their own domestic demand.

So we humans are at the bottom of the barrel when looking for new frontiers for petroleum exploration. We have run out of planet.

Best Hopes for Reality,


So far, this unilateral EU action has achieved essentially zero on the emissions front, any savings made in Europe being wiped out by increased emissions else where.

This is a fallacy.

If Denmark has not cut their per capita emissions by -26.5% in five years, and France by -14.8% in the same five years (2007-2012), then China, India and the United States would have emitted just about as much as they did.

EU carbon emission reductions did not create new carbon emissions elsewhere, with the exception of supply constrained oil.

The increasing speed of Climate Chaos would just have been accelerated a bit more with a larger EU contribution.

Although I think new nuclear has a limited place in the future of Europe, renewables and efficiency are simply cheaper.

ATM, the UK government and EDF are haggling over the guaranteed price for two new British nukes, Reports are that the wholesale price (before transmission & distribution) will be between £93 and £97 per MWh, inflation adjusted, for 40 years. And nuclear power brings with it inherent unreliability, contingent liabilities and risks that "wind all over the countryside" simply does not have.

Offer the same price through a Feed In Tariff for wind (and other renewables) and see renewable generation bloom across Britain - and efficiency take hold at the higher prices for power.

The UK faces a shortfall in electrical capacity. Start a new nuke tomorrow and one cannot know when it will come on-line, and for how long before it is forced off-line. Just ask the Finns. New wind farms have excellent records for on time, on budget completion in marked contrast to new nukes.

Best Hopes for Keeping the Lights On in Britain,


Sorry to see The Oil Drum call its own time, but a great source of inspiration spawning great individuals such as Nicole Foss (Stoneleigh) to carry on and expand the message of sustainability to other forums such as TAE or via its readers such as Gallinazo onwards to the doomsteaddiner and beyond.

So the TOD has acted as a cradle of inspiration to a much wider public than it might appear, with each of us contributing what they can to what may turn out to be a gentle energy descent if we're lucky. Here at Advance Heating it often feels surreal to be creating Wood Safety Kits and designs for the UK domestic wood-burning stove boilers (that heat radiators and hot water even during power black outs) when the normal press would make you think there is no demand for them.

But it surprises me over and over when I meet strangers, how an increasing number really are becoming aware, dimly or acutely, that not all is well and that there is a need for a new economy and for new services to rise to tomorrow's challenges. Even better, many people are already abandoning any impulses to go out and compete for unrealistic roles within the American Dream.

George Robinson.

I am clearly just a layman, and might get carpetbombed for this, but I noticed a conspicuous lack of the words, "depletion rates" here, especially in light of the fact that uncoventionals are what's driving the growth of current exploration. Doesn't this mean a much higher amount of capital investment to get the oil out? How long can this be sustained, if at all, past the depletion of this first round of really intense drilling? I mean, our entire growth as a global economy is really based on an energy return much higher than what we're getting here. Returning to even modest growth requires exponentially more energy than that same rate required even 10 years ago. This Christian Science Monitor piece sums this up pretty well, I think: