Oil Price Touches $100 a Barrel; Signal of Pending Oil Shortages Ignored

This is a press release put out by The Oil Drum on Friday (this is our second, the first was put out a while back entitled The Discourse Must Change. The copy released on PRWeb (probably the one you should send around if you are so inclined) can be found here. We thank you for helping us spread this around to legislators, policy wonks, pundits, the media, friends, family, and others; we appreciate your support.

The price for West Texas Intermediate (WTI) oil touched $100 on January 2, 2008, a new milestone. According to TheOilDrum.com, WTI oil price has been giving a very clear signal of pending shortage for over five years now, and in breaching the symbolic $100 a barrel mark, continues to do so. Those driving the world economy have steadfastly ignored this red warning light. In doing so, they are steering the world toward an energy disaster characterized by shortages, high energy prices, inflation, growing inequity, civil unrest and famine.

Data for graph (PDF warning).

(PRWEB) January 4, 2008 -- A Signal Ignored

Coming as it does on the eve of the Iowa caucuses, the breaking of the $100 dollar barrier for oil prices will likely be treated by many as an almost imperceptible change in our world. By Friday it will likely be lost in the discussion of the political events unfolding.

The $100 a barrel price is a sign that times will never be the same again. According to TheOilDrum.com, the world is entering a new era, where the supply of energy will come to dominate the political landscape in a way that is currently not recognized by any of the leading candidates.

Over the past two years, citizens have been repeatedly assured that there is no problem with future oil supply. Because of a perceived need to present both sides of the argument, the public has heard false promises of lower future prices, and been beguiled by the possibility of a price collapse in the face of excess supply.

Recently, various qualifiers have started to appear in oil discussions. These qualifiers include the need for increased investment in exploration and improved production technologies. The media fails to mention that the needed investment will be at an increasingly diminished rate of return, to the point where it becomes economically unattractive to search harder and harder for very small quantities of oil and gas.

Both oil and natural gas resources around the world are found in underground reservoirs of a finite size. Many of these oil reservoirs have now been producing for over fifty years. In that time, the vast quantities of oil that were in place have been reduced. As the quantity of oil remaining in place falls, the rate at which oil can be recovered also falls. This makes it necessary to drill additional wells into the reservoir in order to maintain the level of output.

According to TheOilDrum.com, at some point enough oil will have been extracted that no matter how many more wells are drilled, overall production from the field will go into irreversible decline. And as field after field reaches this condition, the overall production of oil for the region will begin to fall. This happened to the United States in 1970 when oil production reached a peak. US production has since declined from a maximum of over 9.6 million barrels a day (mbd), to the current level of around 5 mbd. More recently, the oil fields of the North Sea, the Alaskan fields on the North Slope, and the huge Cantarell field in Mexico have entered irreversible decline.

As these fields deplete, smaller fields have been brought into production, but these small fields do not last as long. Drilling activity must be increased in order to find even smaller fields. These, in turn, deplete more and more rapidly, exacerbating the need for new wells.

According to TheOilDrum.com, the world is now reaching the point where all of the oil fields of the world are in aggregate coming to peak production. As peak world production draws near, the rate of increase in oil production can be expected to stall because of constrained resources. This can happen even with rising demand. Once production falls short of what is needed, oil prices can be expected to increase, so that demand is brought in line with available supply.

At this point, countries that still have a surplus of oil to export are seeing their economies boom. This growth brings an increase in their own demand for oil, which reduces the amount that can be made available for export. This higher oil use by exporting countries reduces the available supply to importing countries, further accelerating the rise in price. The countries least able to afford the increase are likely to be affected most.

The consequences of energy supply shortages can be surprisingly great. Energy shortages can lead to public unrest, such as occurred recently in Myanmar. In times of inclement weather, energy shortages can lead to a loss of export supply, if the supplier finds that domestic demand is consuming all that is available. Problems for importing nations then suddenly become worse. One such example is the Iranian gas import situation this past week, and the consequent cut in exports to Turkey.

According to TheOilDrum.com, the world has now entered a period of fragile balance between demand and available supply. Unfortunately the situation cannot be expected to improve. The increasingly limited ability of nations such as Saudi Arabia and Russia to increase oil production is already becoming evident, leading to a reduced potential for raising world production.

It now appears unlikely that the world will ever see a daily oil production rate of 90 mbd, even when natural gas liquids and condensate are included. Thus, future projections that speak glibly of numbers above this level are foisting a canard on the world's population that all will come to regret.

In the coming months, the $100 per barrel marker will be lost in the debate over other issues. According to TheOilDrum.com, limited oil supply is not an issue that will go away. Rather, it is an issue that will steadily increase in importance. Eventually, the cries for action, and for culprits to blame will become over-riding -- at a time well within the first term of the presidential candidates.

These candidates now pay little attention to energy policy, but that must and will change. Hopefully, greater concern for energy policy will occur before events force a change, but so far the grim markers along the way have largely been ignored.

About The Oil Drum
The Oil Drum is a web-based community that discusses all aspects of energy -- from science and technology to its societal and geopolitical impacts. The editors and readers are drawn from many disciplines in academia and industry. The Oil Drum has a staff of more than twenty including individuals from the United States, Canada, Europe, and Australia.

The Oil Drum's parent organization is the Institute for the Study of Energy and Our Future, a 501(c)3 corporation. The Institute is funded solely by private contributions and advertising revenue from The Oil Drum's website.

More information on peak oil and its impacts on energy security is available on The Oil Drum website (www.theoildrum.com).

Many thanks to Gail, Nate, Kyle and others who provided feedback for this press release.

I think this site could and should raise an initiative for a new international meeting - the "Peak Oil Kyoto".

The TOD press release is very concise and to the point. However, it is all but inevitable that PO awareness will NOT enter the mainstream until 2009. At that point, the deafening Wurlitzer organ of the rightwing corporate media will be brought to bear on whichever hapless Democrat becomes the new president. That in turn will set us up for another 8-12 year cycle of inaction, denial and corruption.

It's every man for himself, and that goes for the ladies too!

And what was the GW awareness before the Kyoto summit?

.....when GW awareness finally forced its way into what passes for mainstream awareness, we had already selected a perfect moron for our president, and the rest is history....Kyoto blown off by the US!

And since then, the US has set a course for doom, following the trade winds of fear, ignorance and greed, driving ahead under sails woven out of Brittany Spear's bra and a zillion foreclosure notices......

See, you should give a speech! Tell them that the capitalist machine will not stop until it squeezes the last drop of oil from this planet, like from a lemon. Tell them that common folks don't deserve better fate but drowning in their own ignorance. And tell them that "Brittany Spear" is pathetic, dumb and disgusting, just as they are, as well as their new-born president. They go to heaven, they don't give a damn. Anyway..

Everyone would hate my speech. really, I am very impressed with the work done here. But today is one of those days where I just don't see much hope......

Hope for what?
This is just another mess, the world has seen many of them so far.

And when it comes to your president, listen to this:

...And in the debates, Bush tried his best to come off sounding smart and serious. He made references to complicated economic policies. Difficult as it may be to believe now, many voters in the 1978 campaign were turned off by George W. Bush's overt intelligence. They figured him for some kind of brainiac.


But George W. Bush is fully aware of how his enemies perceive him, and this is precisely how he wants them to react. His personality and mannerisms are actually the result of deliberate effort. This is not to say that it's all an act, but he does emphasize these elements of his personality for the benefit of the press and general public. And yet these affectations continue to be astonishingly effective; his act still manages to fool even his political opponents, who really ought to know better. After all, the basis of Bush's phenomenal political career has been people's underestimating him. As his political advisor Karl Rove said in 2002: "I can't explain why they underestimate him, but they do. Whatever the reason, I hope they keep doing it."


In other news, I hear the 'Round Britain Powerboat races are going swimmingly.

I get the statistics from PRWeb on what is happening with the press release, from their perspective.

Most of the people who have read it, read it because they subscribe to PRWeb's news feed. Those who have read in on search engines generally seem to find it by doing a search for "peak oil", either with or without quotes. It is currently on page 2 of Google News using "peak oil" as a search term. It will probably migrate back, as it gets farther and farther from January 4.


How does that work? Is it the number of links? The number of hits?

Would it have been better to post this the day the press released went out?

Yep, probably so...I didn't think about it from that perspective. Gah. Next time, I guess.

We're hoping to do more of these in the coming year with the various insights we generate, I am hoping for one every three or four weeks. But, it's a project in and of itself...

These people I work with: freaking amazing.

Would you like a mega MSM email list to send this PR to?

I shall not turn it down P.E. theoildrum@gmail.com.


The way we (GPUS) do press releases is to try to have most of the main points as quotes. Sometimes these will be candidates for office to get them some exposure, but mostly this is to make it easy for the press to make a story out of the release. They don't need to do any interviews, just check with the press contact if there are any questions. There are usually three of four poeple quoted. It works sometimes. Might want to give it a try. Here is a recent example.


Thanks, that's a great tip.

The PRWeb guidelines suggests that most of the main points be in quotes also, because of a feature PRWeb has that uses the quotes.

What PRweb does, if this feature is used, is show a box near the top of the post with one or another of the statements in quotes in large type. Over time, the statement in quotes is changed, to be one of the other statements in quotes. The intent is to make the press release look "new", as far as search engines are concerned. Thus the January 4 release date for search engines would change, so it would stay up longer.

We are fairly close in this press release to using quotes. We use "According to TheOilDrum.com" several times. The sentence after these statements are generally important points in the story. If we had put quotes around the sentences, this feature could have been used. I am fairly sure we could change the web version of the post at this time, to add the refreshing feature. It would take the post off line for a short time while the editors reviewed our changes, but it could be done.

I would suggest that this site stops sutomatically making 'no follow' default - most of us here use nom de plumes anyway, so it would hardly be intrusive, and would improve the ratings of this site on Google no end

"No follow" is not for privacy. It's to discourage spam in the comments. Most of the spam we get is not actually trying to sell us anything. It's "link spam" - trying to get higher in the Google ratings.

Like this:


How about using one of those things where you have to read weird letters and numbers to prevent spam?
It's just seems to be making life difficult in attaining more recognition for the subjects raised here not to get the highest possible Google ratings.

How about using one of those things where you have to read weird letters and numbers to prevent spam?

That prevents folks who are blind from posting comments. I myself know a blind person who uses this site.

I don't think it would work. These aren't spambots. They're human beings, cutting and pasting those blocks of links.

It's just seems to be making life difficult in attaining more recognition for the subjects raised here not to get the highest possible Google ratings.

Links in the comments don't increase Google ratings for us. They increase Google ratings for the sites linked to (if there's no "no follow" tag). So there's an incentive for people to post links to their sites in our comments, but no benefit for us to allow it. Google ratings-wise, anyway.

I am not sure how Google works, but I think the rating is based on how many high rated sites link to the post. Thus, a front page TOD link is important, or an Energy Bulletin link. Energy Bulletin linked to this press release the day it came out, and reprinted it in full, and I think that helped. Thanks, Bart!

If wouldn't hurt to duplicate. A link in Drumbeat the first day would have been helpful. I put a link to it in the comments, but since it was only a comment, it had a "nofollow" attribute, so it didn't count as far as Google was concerned.

This press release moved into Google News right away, thanks to the links people made to it. We tried a press release relating to the Wall Street Journal peak oil article earlier, but it took five days to get into Google News. By that time it wasn't considered news any more. The earlier press release was only on Yahoo News, because Google didn't find it in time.

I was going to put it in the DrumBeat, but since you posted it, I didn't. :)

This press release moved into Google News right away, thanks to the links people made to it. We tried a press release relating to the Wall Street Journal peak oil article earlier, but it took five days to get into Google News.

Are you sure that's the reason? I could see the ranking of stories being affected by links and things, but whether Google finds it all? Could it be that the difference this time was using PRWeb, rather than trying to go it alone, and not incoming links?

We used PRWeb for the Wall Street Journal response post, so that wasn't the difference. This time I started asking about getting links to the press release, early on, because of the problems we had with the earlier press release.

I think we need as many high quality links the first day as possible, to make the process work well.

Wow, I didn't even realize we'd used PRWeb the first time. Or if I did, I didn't remember it. All the links went to TOD. PO.com, EB, AlterNet, dKos, etc.

Maybe that was the problem. Perhaps delaying posting it here was the right thing to do, to make sure the links go to PRWeb instead.

If people know $100 oil than they probably know, even if they don't realize it, that peak oil is here.

Most people seem to know that the oil will someday run out but nobody puts 2 and 2 together.

I think it is very important to explain that there is no real alternative to oil. If you just tell people about the peak oil situation, they will tend to think that if we don't have oil, we'll be burning something else.

The Big Media has not so far been of some great help, giving a false hope of all sorts of technical solutions like ethanol, hydrogen, batteries, biofuels, etc. None of these can replace oil in any significant proportion. Plus, they all use oil, this or other way, as their input.

I talk to people. These are the answers I usually hear:

- it's not a big deal, otherwise would be in media,
- our government will take care,
- we are going to drive less, problem solved,
- it's all just a financial speculation (i.e. oil price),
- you can run a car on water / paper / crap, there are inventions, it works, but the big oil companies do not allow it because they would lose their profits.

To me, PO is not really a geological or financial problem. It is more a psychological one. There we should try to find the solution.

I think it is very important to explain that there is no real alternative to oil. If you just tell people about the peak oil situation, they will tend to think that if we don't have oil, we'll be burning something else.

the question really is how much oil do we need, if at all?






some of these electric cars you can plug-in at night and you might not need much gas at all if you don't travel far to work every day.

"If at all"?

Do you mean that we can all drive cars that are as functional as the cars we drive today and that use no oil in their manufacture, delivery, operation or maintenance? Which of these cars can claim that?

However, in answer to your question, ultimately we need no oil.

Such a car could very very easily be designed today, it would just cost a lot more.

I doubt that, very much. Especially on a large scale.

Oh, sorry, it could probably be designed but probably not manufactured, delivered or maintained, in significant numbers - today.

Well, if John15 wasn't saying that, I'll say.

We can (that mean, it is possible to) build cars that are as functional as the ones we have today and use no oil or any kind of fossil fuels on any life stage (unless you consider ancient infrastructure used to bootstrap it) on sufficient numbers for the current Earth's population.

The real question is: Are we going to? I have no answer for that.

Why do they need no oil to produce today? we still have half the world's oil left.

There are a lot more people wanting the oil that is left - Tata in India is producing a car for around £1250 - and it won't go far.
It will also be darn expensive.

"and it won't go far."

today is won't go far. most PHEVs have an electric range that is right in line with the average daily commute.

john15 said:

Why do they need no oil to produce today? we still have half the world's oil left.

Fair enough. How about tomorrow?

the question really is how much oil do we need, if at all?






some of these electric cars you can plug-in at night and you might not need much gas at all if you don't travel far to work every day.

Except that none of these cars (except maybe the Tesla, I'm not sure) is actually on sale for someone to buy today, and the Tesla is $100K + As far as I know right now the EV's / PHEV cars on the road are all owner built customs or a few earlier ones that escaped the car co's attempts to crush them. (see "Who killed the electric car?" movie)

In terms of what has actually been made and sold this is the high point to date I think...

The "Detroit Electric" produced from 1907 to 1938. Up to 200 miles on a charge at about 20 miles per hour using "Edison cells" (Nickel Iron with an alkaline electrolyte, they last pretty much forever under deep discharge usage unlike Lead Acid)

How far have we not come in 70 years? :-<

milton- many of these cars will be on the road within 3 years. costs will come down. the chinese PHEV is supposed to cost only $25,000. My point is the technology is out there. the incentive to buy these cars is out there in the form of high gas prices and lower maintenance costs. there are so many other benefits. I read cars that use electricity have 80% less parts(or 80 less parts, I cannot remember which one). that's potentially hundreds of millions of parts not shipped thus using less oil.

Don't get me wrong, I support EV's, I'm just saying that right now they are "promise ware" not actual products available for purchase on a mass scale as they were in the past, and really until I see them being sold again I have little choice but to see these promises by the big car makers as "Greenwash".
The very points you make about reduced parts count etc are in my opinion some of the things that have up till now given car co's a big incentive NOT to bring them back to market, spare parts sales and short vehicle life are profit makers.

Whats good for General Motors is NOT good for America (or the rest of the world)

I agree milton. either the car companies are too stupid to make fuel efficient cars or they want to keep their spin-off auto parts businesses in business. I don't understand why they don't get it that they need to build fuel efficient cars to stay in business.

it would be a mistake if the domestic car companies got beaten again, as they did in the 70's, by imported more fuel efficient cars.

A question: the press release mentions the "Institute for the Study of Energy and Our Future"...what's that all about? First I've heard of it...

We are now an official non-profit organization. You probably won't notice much difference. What it means for us is that we can accept donations.

Where's the donation link?

Note in the 2nd chart Japan's numbers from 1990-2005.



Thanks for the fascinating charts and information.....

The myths about American oil consumption (that we have as a people increased our consumption by huge amounts over the last quarter century, that we are consuming oil faster and faster and faster, etc.) are amazing, and I am one who bought into many of them before I began actually studying the numbers...

In one way, we have already reached peak, and are coming down the downslope:
Per capita consumption of crude oil will probably never be higher in Japan, The United States, and Western Europe than it has already been. So much fuel in these nations was "recreational" or "aesthetic" consumption that it can drop very quickly in a high oil price environment (by "aesthetic" consumption, I mean oil used to maintain an "appearence" or as a style accessory. The biggest consumer in this segment is of course the SUV type vehicles, but also includes such things as massive power boats, private aircraft, etc., and very large unused areas of homes)

Here is the real news behind the news
If one considers "The Age of Oil" as a the period when increasing oil production drove increasing world growth and prosperity, in the Western world it is over. Oil is now in it's first stage of becoming obsolete.

The $100 "trade heard round the world" was a publicity stunt, a one trade only freak to be the one that would break the $100 nominal mark (the inflation adjusted mark of 1980 still remains to be broken. That too will occur at some point, probably soon, but beating a 27 year old mark seems non interesting). Tying predictions and reputation to that one trade is risky. The real news is not even making it into the press. We are entering a new age. But it will be an age much different than any predicted in the popular media or in the blogs and message boards. So much different, that confusion and lack of education/preparation for it will be the single great crisis of the coming decades.


Oil traded over $100 the next day after the single $100 trade, and two real world spot prices--Tapis and Louisiana Sweet remain solidly above $100.

Thanks for the correction and extra info, and I want to make it clear, I do not mean to imply that oil over $100 per barrel will not become a more frequent occurance, just that the $100 nominal price is more of a psychological milestone than anything else....I guess the next real "psychological" marker will be $110...and $150 would get some press attention...not an impossible number if news were to go badly or the U.S. dollar decline even further....


Someone dugg this already, it has five votes (as of now), get it to 50 and we get more than 10000 new views from it:


so, if you're in the mood...

and I threw it up on reddit too:


I did not really follow the debate about peak oil closely until recently, assuming that the situation was analogous to the 70's when mew sources of supply were found and prices went back down, and that coal liquification would sort out any residual difficulties.
Reading this blog has for me been persuasive, and oil seems to have peaked, with natural gas to follow fairly shortly.
The arguments for coal peaking by the mid-century also seem to me to be relatively well founded, although perhaps not conclusive.
So basically I would like to inform the people who have set up this blog that their mission works, and that at least one fairly sceptical observer has been persuaded.

welcome Dave, and thanks for the kind words.

I never know whether to apologize to or give a hug to people when they choose the red pill...

Enjoy the rabbit hole!

The arguments for coal peaking by the mid-century also seem to me to be relatively well founded, although perhaps not conclusive.

The peaking of coal supplies (resource side) is almost irrelevant. If we continue to burn all that coal until its peak whenever it is, we are going to have an uninhabitable planet. What has already peaked is the capacity of the atmosphere to absorb the waste product of burning coal, carbon dioxide (sink side). The year in which this peaking happened depends on what one defines as acceptable warming and sea level rise. With a strict definition of, say 320 ppm as elaborated in:

Lessons from the Arctic summer 2007

the CO2 absorption capacity was already exceeded 50 years ago as can be seen from the Keeling curve
With present CO2 concentrations hovering around 383 ppm and rising, we are living on borrowed time already, thanks to the delayed response of the climate system

All the models from the IPCC are based on estimates for hydrocarbon reserves of around 5 times that implied by those who think we are coming up to peak coal - they just used the various countries estimates for their reserves, which are not properly maintained and fluctuate wildly, and refuse to respond to requests to justify them.
So according to the IPCC's models if the lower estimate for reserves is correct, then not even the lowest of their estimates for global warming will occur.
So I don't see the basis for your statements.

Gail,Nate,Kyle,and others

For bringing this to our attention. It's hard watching oil companies reaching all time highs in profits.

In my opinion this will be a better country if all oil companies share there profits with the American people and lend a hand in helping out the international community.

To me oil is the blood of Mother Earth and its hard watching her get sucked dry for profits, greed, and revenue.

In my opinion this will be a better country if all oil companies share there profits with the American people and lend a hand in helping out the international community.

Well, this is a tricky suggestion. First of all, oil companies profit margins are not all that different than Gucci, Chuck-E-Cheese or Dell Computer, all of which also take resources from the earth, upgrade them with technology and labor, and sell them at a profit to people like you and I. And oil companies profits are going up much less than one might expect, given $100 oil. This is because they are working harder and harder and spending more and more money just to maintain the same amount of production - even tho prices have gone up 9 fold, profits have gone up less, and less each new rise in the commodity. (in math, the first derivative is still positive, the 2nd is negative)

In the end, we should be careful to blame the drug pushers, when we are not yet aware that we are addicted....

Pretty good review. Although I also have been throwing out 90mbd as the probable peak production, I wouldn't state the amount so definitely. That way if we reach 92mbd the whole concept of PO can't be so easily dismissed. I also doubt the consequences will "steadily increase in importance". Due to variations in gelogic production, waether, geopolitics, as well as economics, a graph of any relvant metric (say price) will likely show a lot of short term volatility. This would seem to be petty nitpicking, however my experience is that the denialist industry thrives on small inaccuracies.

AN interview of Jim Rogers and Marc Faber telling Yergin that prices are going higher.


Thank Goodness for Homeland Security! We will be able to crush, incarcerate, and waterboard anyone who steps out of line... and we don't even need a warrent!

But what about solutions? I recommend nationalizing the FEDs. Let's take that private bank and nationalize it making the profits go to the American people rather than to the Chase, Rockefellar, and Rothchild cartel. Gates isn't rich enough to lick a Rothchild's boots, but we never hear of Rothchild wealth. Why is that? Better yet, let's outlaw fractional reserve banking. We don't need growth. We can't survive more growth, despite Catholic assertions. Finally let's default on our debts. We can't pay them anyway. It is impossible in a contracting economy. You may survive another year or so, but your debts will consume you. I am not talking just individually but nationally. We're bankrupt folks. Do we give everything American to banks and foreign nationals or do we make a stand?

Good luck in the coming year... it is going to be brutal.




Of course we're happy. We've consumed the energy resources of a planet in little more than 5 generations. And when it stops, we will be less happy. If it stops abruptly, we'll be miserable. I know you're a cornicopian, bless your heart (that's a southern phrase to cover for all sorts of evils), probably a banker too.


I am not a banker, (don't I wish), and don't consider myself a Cornucopian, though I know many here do read some of what I say that way, I accept the need for massive reduction in fossil fuel consumption NOW {I care little about what we call it, the actual need for continued reduction of fossil fuel consumption as my central goal, the holy grail of the cause}, and I accept the core ideas of "peak oil", I just don't accept the simplistic scenarios of assured catastropic collapse), and am Southern, so am well aware of the ironic use of "bless your heart". :-)

I posted the link I did not because I agree with it, but to indicate how tough a sell a somewhat "dark" view will be to sell to the public.

It reminds me of what Pat Buchanan once said about the Clinton years (and recall that Pat was no fan of Bill....). Pat correctly predicted the failure of the "Gingrich" revolution by saying "it's hard to start a revolution in what for many people has been the best years of their lives."


Excellent press release, summarizing the main concepts of PO. What about translating it in the main languages by foreign TOD readers, for a broader diffusion ?


I like the general form of the release but believe it assumes too much that everyone realises how crucial oil is to modern civilisation -in reality I don't think this is true. I think the vast majority probably just see $100 oil meaning their gas fillup will be getting a bit dearer or they will be paying a bit more for their winter heating oil -and to a certain extent in the early days this IS all they will probably see so the impact is muted. TOD offers a great -and sometime scary- glimpses at future scenarios. It is this joining of the dots that inspires the efforts of many contributors because they realise that unless something is done -and quick- we are in major trouble.

The causual relationships between events occuring could be explored further in subsequant releases. Perhaps a yearly or quarterly mass emailer could be setup -"The Yearly TOD Roundup" would provide a good basis for this with a TOD statement as summary of what has happened, why and some prediction until the next release. As events unfold over the subsequant critical half-decade these relationships should be strengthened by a periodic review of this kind and enable TOD to gain even more credibility for its insight, information and views.

Regards, Nick.

This is also a blow against many renewables.On the face of it, that sounds daft, but the intermittancy of most renewables mean that they are highly dependent on having other supplies which can be switched on and off readily.
For wind in particular the economics get rapidly worse as you go over 20% of installed capacity, and not every area is lucky enough to have the back-up Denmark have with the huge hydroelectric resources of Sweden and Norway.
The same applies to solar, as poor weather means that you have to fire up gas and so on in pretty short order to compensate.
Of course, better storage would cover it - but the amount needed would be huge, and hugely expensive.
Hot dry rock geothermal would be the exception to this, but we really have not developed the technology to play a major role anytime soon.
In addition to these problems the present surge in wind power actually means it is a lot more difficult to introduce geothermal or nuclear which could provide substantial amounts of baseload capacity, as the economics of wind are based on that being the first choice when available.
If you have invested hugely in a geothermal or nuclear baseload then your windpower resources are no longer the first choice, and the economics of them greatly worsen.
Anyone with insight into how France intends to integrate their large plans for windpower with their substantial nuclear fleet could inform us greatly.
I suspect they simply have not thought things through.
Another option would be to build something like the huge polders proposed for the North Sea, with windmills on a manmade lagoon pumping water up and down in the central lake. This sounds titanically expensive, and high fuel costs would raise the costs still more.
Of course, this is a somewhat Euro-centric perspective, with it's poor solar isolation, but solar too at present is largely based on the premise that there are large switchable resources from oil and gas available at short notice.
I would be interested in discussion here on this issue.


Indeed, variability is the bane of the renewables. Despite some effort on electric power storage research (frankly, not much, the capital given to this area is very small with the exception of battery research) a viable and economic electric power storage method has been slow in reaching the application stage, though there are some fascinating pilot programs.

It is in some ways unfortunate that Denmark was the first nation to apply windpower on a large scale. Given the tiny size of Denmark, the variability problem looms very large. This has given the anti-renewable forces great ammunition against wind, as they use Denmarks problems as a mis-applied example to wind or solar programs around the world.

The greatest way to overcome variability of renewables is to mix the types of production and spread them over a large area. The integrated but geographically widespread program as proposed for Europe is a great example, mixing solar, wind, hdro and biofuel:

In the U.S., such an integrated program seems unlikely, but the grid provides a way in which power could be provided from wind in the Midwest, Concentrating Mirror Solar in the Southwest , and existing hydro power of the West and the TVA facilities of the U.S. South into a semi-integrated program.

Added to this would be widespread individual and business PV rooftop installations. The geographic area of imput would be so large as to reduce the variabilty problem considerably, but it would still be there in periods of long term cloudiness and at night for solar production.

Thus, some standby power, either in the form of storage or in the form of "instant on" power would always be needed. Given that, what would be best?

Distributed Generation and CHP (Combined Heat and Power) at larger instituions (hospitals, hotels, prisons, military bases, universities, etc) is already a growth industry. These use combinations of solar, wind, natural gas or propane engines to provide electric power, and use the waste heat for water and space heating. These could provide further cushion.

The most overlooked source for instant on power is methane recapture. Methane from sewage, landfills and agricultural waste could be a great partner to wind/solar and require no conventional fossil fuel consumption (nat gas, coal, oil) as back up. A large wind or solar production facility of some 10 plus megawatts could have a backup large gas turbne engine system using methane for periods of cloudiness or no wind production.

Now, to storage. pumped hydro will work, but it is not cheap, and consumes valuable land. Right now, the storage of choice is battery, in particular the sodium sulfur battery. These are becoming operational at 1 to 10 megawatt scale.

Some very big investors are pouring money into the renewables. Given the rising power demands of the internet, Google and other Silicon Valley investors and technicians are beginning to realize that grid maintainence is of crucial importance.

While "variabilty" is a pain the neck for those integrating solar and wind into the grid, it will not stop this industry as many seem to hope. Those who would use the example of Denmark as an example for the world are either not well informed or have a motive in seeing wind and solar energy discredited.

If the U.S. would be willing to engage in the sort of widespread integrated program that Europe is discussing in the Trecers program linked above, renewables could play a huge role in increasing stability of the U.S. grid, reduction of use of coal and release of greenhouse gases, and reduction of waste of valuable natural gas reserves. The program could be structured much as the TVA (Tennessee Valley Authority) was created. It would rationalize Western and TVA hydro, Southwestern CSP (Concentrating Solar Power) and Midwestern wind into a widespread and greenhouse gas free production system, greatly reducing the need for coal.

What is keeping it from happening? Frankly, we just don't have the kind of leadership now that we had when the TVA was born.


The problem I've got if the issue of lack of oil and gas is as imminent as I am now persuaded it is, is that all the renewables rely on large breakthroughs in technology or costs, and usually both.
That might be OK if we had plenty of time, but it is incredibly risky to wager the whole economy on them
Take those Trec proposal of using solar thermal in the desert and shipping it north.
The difficulties include:
1. We have not as yet built even one utility scale solar thermal installations, and the smaller ones we have built have relied heavily on gas at night and so on, which is what we are saying will be more difficult.
2. No one has built the suggested storage systems in a large way, so the economics are unknown.
3. From being dependent on Middle-Eastern oil from an unstable region, we would move to being dependent on solar from the same area.
4. We have to build at great expense a new transmission system - at least we know how to do that.

Now all these difficulties may be possible to overcome at an economic rate, but the point is I don't know and neither does anyone else.
A sensible person is not going to bet the house on it.

Similar difficulties arise with all the other renewable resources, they are either too small to make a substantial difference or are something of a jump into the unknown.
Personally I favour high-altitude wind, as it is the only one of the suggested resources which if it works at all would come in at substantially below present prices and has few intermittency problems, but the technology is no more than a gleam in the eye at the moment.
The only exception to this is nuclear, which although some new extensions to present technology would be required needs no fundamental breakthroughs, and which can be confidently costed.
However this technology has been so run down over the years since the 1970's that ramping it up to the required scale would take years.

As I have argued above wind power may actually impede the adoption of renewables or nuclear which could provide baseload, and it already costs something like 25% more than the rest of the installed base to produce before putting any money into storage options.

I agree that a better grid will help, but it is difficult for me to see how great economic distress is likely to be avoided, and high fertiliser costs could leave to much graver results in food availability for the poor.

If you need storage just build it. There must be a way to build large lead-acid storage batteries or capacitors. Use a covered plastic-lined swimming pool with lead plates. Lead and sulfuric acid are still relatively cheap. Or the same swimming pool with a high dialectric oil and copper plates. Or a compressed-air system. Or a very large low-speed flywheel with a motor/generator.

Just think big, low-tech, cheap, and not made in a factory.

That's exactly what I mean when I say the renewables rely on technology which we need substantial breakthroughs to realise, and even greater assumptions on the cost of them.
Don't get me wrong, I have favoured renewables or nuclear for many years over dirty old coal, but wishing doesn't mean that things work out.
The relatively small amount of pumped storage we have in the UK needed one of the biggest works of engineering ever undertaken in this country.
Reducing nice ideas to hard engineering, especially in an environment where costs are up because of the high price of fossil fuels, is not just tough, it may be impossible at anything like economic rates within the apparent time-frames we have.
It's possible for instance to have a pretty high degree of confidence that the issues with, say, solar power are susceptible to solution in maybe 50 years time - but that is very different to claiming it is good to take a major portion of world generating capacity now.

"This is also a blow against many renewables.On the face of it, that sounds daft, but the intermittancy of most renewables mean that they are highly dependent on having other supplies which can be switched on and off readily."

my power bill has at least 3 different power systems.

Energystorage is one way to solve the problems with wind, the other solution is a flexible load.
I see both realized with the introduction of PHEV's.
The cost of storage is virtually free if you use the batteries paid for by the car. People will be willing to pay for batteries that gives their car a 200 miles range, but they will mostly only use 50 miles a day.
If these cars could give just half of their stored energy in peak hours we will get lots of new powergenerating capacity.
With the price on electricity between 5 PM and 8 PM typically being many times greater than the price at night (excluding taxes) I see real incentives for people to sell any surplus electricity at these times. Especially since most of the days driving is finished by this time.
Here is the current price in Denmark:

The danish wind society has made a plan to get Denmark to 50% windenergy, and I believe this is realistic.
Read it here: http://minurl.dk/?DQ3SE

Now we just need to get people talking about how many percent wind is contributing to our ENERGY use... Not Electricity use... In Denmark Wind is about 3% of our energy use...
This is something people need to understand!

For years the wind industry has convinced everybody that wind is a major contribution to our energysystem.
But if we could just save 3% in energyuse, we didn't need the windturbines... (don't get me wrong, I cant wait for more WT)

Storing energy is not just storing electricity.
Lots of power is used for cooling and heating, and this is sooo much easier to store.
How many cubicmeters of ice would it take to move cooling requirements to nighttime for a large officebuilding?
And similarly with heating.

Regarding the incentive to build hot rock thermal powerplants it is not limited by windmills. The hot rocks have a limited capacity set by the rocks, not the above ground plant.
If they were forced to lower production on windy days, they would see the underground rocks heating up, allowing them to run more later.
The big use of nighttime electricity by EV's would also increase the demand at night and would mean a more constant demand around the clock. This is surely in the interest of anybody wanting to build new capacity.
If you build new capacity today, it is only needed a few hours every day.

Can hardly wait to get thermal energy as a part of the danish grid.

My conclusion is that the solution is smaller and more flexible use of energy

This is a fairly good press release, but I would suggest the following improvements in future ones:

(1) Make it shorter
(2) Make it tighter
(3) Avoid clumsy "double negative" phrases like these
"the needed investment will be at an increasingly diminished rate of return, to the point where it becomes economically unattractive"
"The increasingly limited ability of nations such as Saudi Arabia"
"investments will yield a rate of return that plunges to the point where it becomes uneconomical"
" The steadily diminishing ability of nations such as Saudi Arabia"

You're probably right. I've heard the ideal length is one page. Kind of hard to boil down a topic like peak oil that short, but we should probably try. People have awfully short attention spans these days.

I have often pondered the energy storage question and in terms of mega projects wondered about the feasibility (forgeting economics and greeny objections) of daming a large sea loch such as those off the west coasts of Scotland, Ireland and Norway and then using them as a pump storage facility.

I have no idea whether any consideration has been given to such a project?

Tidal lagoons in the Severn come nearest to having been studied for feasibility.
There would be far less damage form them than from a barrage>
Here's a scheme for artificial tidal lagoons in the ocean:
Sounds expensive to me!

I know of early plans for a 1000 MW pumped storage facility in southern Norway. The water will be raised 500 m, and I think the efficiency is better with larger elevation. The total efficiency numbers I have seen are 80-85%. This will work very good together with windpower in Denmark or offshore Norway.

By Yehuda Draiman, Energy Development Specialist

As you know, many serious problems are associated with our insatiable thirst for energy. The reason is simple: To gain the energy we must burn the fuels. The combustion, by the way quite inefficient, causes huge gaseous emissions polluting the air and forming an invisible screen responsible for the famous “ green house effect ”, i.e., blocking the dissipation of heat and thus causing the feared warming up of our planet, with deadly consequences for nature and man.
There is only a finite amount of oil in the world. Everybody knows this.
Someday, we'll run out. It will be gone.
Meanwhile, our insatiable thirst for oil -- which we burn -- has put enormous sums of money into the hands of fanatics who hate us and everything we stand for, and who use that oil money to fund the terrorists who murder Jews and Americans wherever they can.
We can't burn oil forever.
And it's bad strategy to base our economy on cheap oil when we have to buy at least some of it from our enemies.
Optimists tell us that the free market will eventually deal with the problem. Their theory is that as oil gets harder to extract cheaply, the price will go up; then other forms of energy will become economically attractive and we'll switch over to them.
Here's why their optimism is nothing short of suicidal.
First, there's no guarantee that without intense government-funded research and financial incentives now, the new energy sources will be available in quantities large enough to replace oil when it does run out.
In other words, if we wait until it's an emergency, our economy could easily crash and burn for lack of energy sources sufficient to drive it.
It's easy to supply energy for an economy that's only a tenth the size of the world's economy today. The question is how many people will die in the resulting chaos and famine, before new free-market equilibrium is established?
Second, how stupid do we have to be to wait until we run out of oil before acting to prevent its waste as a fuel? Petroleum is a vital source of plastics. We could use it for that purpose for hundreds of generations -- if we didn't burn any more of it. But if we wait till we've burned all the cheap petroleum, it won't be just fuel that we have to replace.
Third, market forces don't do anything for our national defense, our national security. We had a clear warning back in the 1970s with the first oil embargo. What if terrorism in the Middle East specifically targets all oil exports, from many countries?
And even if they keep the oil flowing, why are we pumping money into the pockets of militant extremists who want to destroy us? Why are we subsidizing our enemies, when instead we could be subsidizing the research that might set us free from our addiction to oil?
You notice that I haven't said anything about polluting the environment. Because this is not an environmental issue.
In the long run, it's an issue of whether we wish to provide for our children the same kind of prosperity that we've luxuriated in as a nation since World War II.
It is foolish optimism bordering on criminal neglect that we continue to think that our future will be all right as long as we find new ways to extract oil from proven reserves.
Instead of extracting it, we ought to be preserving it.
Congress ought to be giving greater incentives and then creating mandates that require hybrid vehicles to predominate within the next five years.
Within the next fifteen years, we must move beyond hybrids to means of transportation that don't burn oil at all.
Within thirty years, we must handle our transportation needs without burning anything at all.
Predicting the exact moment when our dependence on petroleum will destroy us is pointless.
What is certain is this: We will run out of oil that is cheap enough to burn. We don't know when, but we do know it will happen.
And on that day, our children will curse their forebears who burned this precious resource, and therefore their future, just because they didn't want the government to interfere with the free market, or some other such nonsense.
The government interferes with the free market constantly. By its very existence, government distorts the market. So let's turn that distortion to our benefit. Let's enforce a savings program. But instead of putting money in the bank, let's put oil there.
Oil in the bank ... so our children and grandchildren for a hundred generations can slowly draw it out to build with it instead of burn it.
Oil in the bank ... so we'll be free of the threat of fanatics who seek to murder their enemies -- including us -- with weapons paid for at our gas pumps.
Do you want to know who funded Osama bin Laden? We did. And we continue to do it every time we fill up.
You don't have to be an environmental fanatic to demand that we control our greed for oil.
In fact, you have to be dumb and a fool not to insist on it.
But ... foresight just isn't the American way. We always seem to wait until our own house is burning before we notice there's a wildfire.
Oh, it won't reach us here, we tell ourselves. We'll be safe.
Talk about foolish optimism.
Fair Threat to World Economy But Oil Boycott Improbable
Energy Efficiency Must Be North America’s Priority but Canada and
U.S. Fail on Energy Efficiency Policies
“The despots of the moderate Middle East are non-players save for
their oil in the ground… My concern is that my grand kids might see parts of the
Middle East turned into a nuclear waste land, and Ali Baba and The Forty
Thieves. The world community needs to see a checkmate within the next 60 -
90 days. Failing that, Iran and Syria will be emboldened.” Reiterating an almost
universal view on the panel, this CEO emphasized that the world’s seemingly
The Chinese contribution to the energy crisis
The quest for resources. The dynamic Chinese economy, which has averaged 9 percent growth per annum over the last two decades, nearly tripled the country's GDP, has also resulted in the country having an almost insatiable thirst for oil as well as a need for other natural resources to sustain it. The PRC has been a net importer of petroleum since 1993, and has increasingly relied on African countries as suppliers. As of last year, China was importing approximately 2.6 million barrels per day (bbl/d), which accounts for about half of its consumption; more than 765,000 bbl/d – roughly a third of its imports – came from African sources, especially Sudan, Angola, and Congo (Brazzaville).
To get some perspective on these numbers, consider that one respected energy analyst has calculated that while China's share of the world oil market is about 8 percent, its share of total growth in demand for oil since 2000 has been 30 percent. The much publicized purchase, in January of this year, of a 45 percent stake in an offshore Nigerian oilfield for $2.27 billion by the state-controlled China National Offshore Oil Corporation (CNOOC) was just the latest in a series of acquisitions dating back to 1993 whereby the three largest Chinese national oil companies – China National Petroleum Corporation (CNPC), China Petroleum and Chemical Corporation (Sinopec), and CNOOC, respectively – have acquired stakes in established African operations.
Our insatiable thirst for Middle East energy is “the oil [that] feeds the fire.”
This idea that we can live in a homogenous cul-de-sac suburban development in our plastic homes driving 50 to 100 miles to work in a 4700lb SUV to our middle management job at Bed Bath and Beyond and expect this way of life to just continue on indefinitely with no consequences represents mind boggling ignorance and negligence towards our future. The "American Dream" is a relic of the Baby Boomer generation and will die with our parents and grandparents. To quote author James Kunstler: "Suburban development in this country represents the single largest misallocation of wealth and resources in the history of the planet."

So could a 900 acre photo voltaic array power a major metropolitan grid. No, probably not. But the question isn't how do we squeeze enough energy out of the technology to accommodate our seemingly insatiable thirst for electricity and fuel but rather how do we cut the fat and waste out of our civilization and our lives and actually live WITHIN our environment with some sort of sustainability. There is no one technology that will provide all our solutions. It will have to be a combination of wind turbines, solar and hydroelectric excluding the remote possibility that some new form of energy production (i.e. cold fusion or something equally fantastical) is unleashed on the world by CERN or ET. These power plants will operate primarily at a local level servicing on a much smaller scale than what we here in North America have been so used to in the last 70 or so years.
New Solar Electric Cells - 80% efficient
Mr. Marks says solar panels made with Lepcon or Lumeloid, the materials he patented, ... Most photovoltaic cells are only about 15 percent efficient. ...
If the American public's insatiable appetite for automobiles continues, uncurbed by any sense of responsibility, someone must, like a parent with a selfish child, at least start slapping wrists.
Perhaps we should ration gasoline, and insist that all cars meet a miles-per-gallon minimum -- one higher than many sport utility vehicles, for example, achieve now. The rationing would not be a wartime figure, of course, but a reasonable amount allowed for business and pleasure.
Americans consume the largest portion of gas in the world and cry the loudest about the price.
The government should repeatedly increase the price of gasoline in an effort to slow our country's insatiable thirst for oil. Utilize the excess profits and taxes to fund research and rebates for renewable efficiency and renewable energy.
Yehuda Draiman, Energy Analyst – 1/1/2008 – renewableenergy2@msn.com
PS. but they will keep pumping more in the years ahead to quench our insatiable thirst for energy.
A new source of energy storage is in the works using ULTRACAPCITORS.
A California firm “Nanosolar of San Jose” says it is producing solar panels for 30 cents per watt. If true, then a power plant made from these solar panels should produce electricity cheaper