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Peak Oil, IHS Data and The Broken Clock
Posted by nate hagens on February 17, 2008 - 11:01am
We have been writing for almost 3 years on this site about the privatization of energy data by IHS Energy and the negative impact the lack of accuracy that CERA's historically optimistic claims are having on energy policy. The rebuttals and counteranalysis at TOD to CERAs assertions are too numerous to list. Today at the IHS Energy Conference in Houston, the CEO of IHS Energy, parent of CERA and other energy information agencies, asserted that Peak Oilers don't have the data to support their claims. This post is a brief rebuttal to this 'news' coming out of Houston, and a plea to refocus the questions to what is relevant and probable, not on what is irrelevant and unlikely.
Source - various - detailed here by G. Morton(Click to enlarge)
Well right off the bat I should point out, with a track record like the one above, I'm not sure we want the data that IHS refers to**, but here are some excerpts from the Bloomberg story this afternoon. I should also state that it's not CERA's fault that the traditional media still seems to fawn over their every assurance.
`Peak Oil' Backers Don't Have Data to Support Claims, IHS Says
By Edward Klump
Feb. 13 (Bloomberg) -- IHS Inc., owner of Cambridge Energy Research Associates, said those who espouse the theory that the world's oil production has already peaked lack evidence to support their claims. "The only thing that's relevant is our data," Jerre Stead, chief executive officer at Englewood, Colorado-based IHS, said today in an interview in Houston. Believers in the so-called Peal Oil theory "don't have our data".Stead made his comments at an industry conference hosted by Cambridge Energy Research Associates, which is headed by Daniel Yergin, the energy researcher whose Pulitzer Prize-winning book was touted as a bible of the petroleum industry. Yergin has said supposed oil shortages historically have eased as breakthroughs unlock new sources of crude.
U.S. oil futures jumped 57 percent last year on the way to topping $100 a barrel for the first time in January. Peak Oil supporters include billionaire hedge-fund manager Boone Pickens and Houston investment banker Matthew Simmons. Stead said some supporters of Peak Oil are interested in being consultants. IHS is standing by the facts, he said. "The Peak Oil discussion is useful in terms of trying to enlighten or shine a light on the discussion about where are the reserves today and what's the production capacity from them", Ron Mobed, IHS's co-president, said today in an interview.
`Above-Ground Issues'
He said political concerns in places such as Nigeria present larger problems than getting oil out of the ground. "The production capacity compared to actual production is moderated much more today by what we call above-ground issues than below-ground issues", Mobed said.
Cambridge Energy Research Associates last month said worldwide oil production from established fields was declining at a slower rate than estimated by Peak Oil proponents. Global production capacity for crude oil and condensate could climb from 91 million barrels a day in 2007 to as much as 112 million barrels a day by 2017, when demand will be 101 million barrels, the firm said.
As a former (and current) stock trader, this all strikes me as a stubborn adherence to a fundamental theme, while the technical signals are pointing to the fact that there are some new underlying drivers to the market dynamics that the old school analysts haven't figured out yet. I long ago gave up relying solely on fundamental analysis and now combine it with the 'trend is our friend'. The relevant trend in question is the 800%+ increase in oil prices over the past 8 years. Something fundamental has changed in this period in the relationship between oil supply to oil demand-perhaps we don't know precisely what is it is yet, but we do have some clues.
Our own government data, in an EIA release earlier this week, announced downward revisions in Crude + Condensate oil production for November 2007, confirming (for now) that 2005 is still the standing peak for oil production. World production through the first 11 months of 2007 averaged 73,223,000 bpd which is 594,000 bpd below the average for 2005. November 2007 production is still 582,000 bp/d below the record month of May 2005.
I do not know if this date will remain the peak for all time (because I am not privy to the IHS database, of course), but since the record of the analysts writing here at theoildrum has been quite accurate for the last couple years, I would put the odds considerably higher than zero that 2005-6 was the peak for conventional crude oil. Of course, it's quite possible we may continue to expand the definition of what is "oil" to include algal biodiesel, used french fry drippings, oil extracted from garbage dumps, etc. adding on to the already inclusive crude, condensate, ethanol, NGPL, coal-to-liquids, processed tar sand bitumen, etc. In any case, what is more important than the date of oils maximum production, is that neither the numbers by CERA, nor most data from the EIA show how much this oil costs to extract - the tone of the interview and comments is such that 112 million barrels in 2017 will still mean society can grow, function, etc. without diverting all its resources and natural capital to the endeavor. Though this graphic from the EIA (from the EIA report "Performance Profile of Major Energy Producers"), shows that finding and production costs, at least as of 2006, were increasing much faster than the price of oil. In short, what really matters is how much per barrel a globally interconnected complex society can afford.
Here is the actual (public/ free) data from EIA graphically represented:
Chart by Matt Mushalik using EIA data showing incremental world oil production since 2001 (thanks Gail)
Chart by Matt Mushalik using EIA data showing incremental OPEC oil production since 2001 (thanks Gail))
The above graphs take the minimum monthly production for each country for the period 2001-November 2007 and subtracts this minimum from each monthly production to arrive at an incremental production relative to the minimum. For example, for the United States, the incremental oil production is the area in dark red in the top graph. The advantage of this approach it gives a clearer view of how production has been changing recently. -Note recent peak is well below prior 2005 peak for OPEC.
A Broken Clock is Right Twice a Day
"One shouldn't be investing with the mindset that oil's going to be $100 forever...A recession could change that pretty quickly"
This same logic may have precluded nations, regions and individuals from investing in long duration energy assets 2,3..6 years ago when energy was still cheap - that's one of the biggest losses in all of this - the energy costs of lost opportunities. Regarding Mr. Yergin's recession comment, the one event that may finally make one of his price forecasts come true is a recession or depression in OECD nations, which will reduce demand and the ability to pay for oil, especially considering the leveraged - aka supercharged in both directions - nature of our monetary/financial system. While at that point the broken clock may appear to again be working, the disincentives to invest, potential lack of financing available to new energy projects, (both oil and alternative), and a retracement in revenues while costs remain high, brought about by the lower oil prices may cement 2005 as the global peak. In other words, be careful in wishing to be right.
Here are some questions I respectfully offer to IHS Energy and CERA:
IHS Energy and CERA and their other subsidiaries are undoubtedly experts on the worlds oil fields. But does field by field analysis of production capacity give us the answers that we need in todays complex and rapidly changing world? Here are some of the issues, from a birds eye view, that I believe the answers to which are very important:
1) At each tranche of predicted future oil production, how much will it cost to obtain those barrels? Please respond in:
*a) dollar units (2008 inflation adjusted)
*b) energy terms (dollars being limited by political will and paper but energy being finite and requiring energy to procure)
*c) environmental terms (the planet being a place we not only procure energy from but also need to live on)
2) What is the shortfall risk if your data continues to give erroneous predictions of oil price and supply, as it has generally done, at least via your CERA subsidiary so far this century? Is the risk losing clients and money, or is the risk something greater?
3) If below ground factors have informed us we have plenty of spare capacity, but we have plateaued for 2.5 years already in an environment of rapidly rising prices, at what point do you start to hire analysts who are experts on 'above ground factors'? (Said differently, do the rules that governed the first half of oil supply apply equally to the era we have now entered?)
4) What does the oil field data suggest the impact of a recession and credit contraction have on the future of supply? (e.g. since oil is priced at the marginal unit, some of the more expensive oil may not profitably come to market. Also, some marginal production players may have higher financing costs or find credit unavailable, thus highlighting a key difference between production capacity and actual production.) What impact will OECD's 'borrowing from the future' via 40 years in a row of debt increasing more than GDP have on the future affordability of oil (and everything else) and thus your forecasts?
5) How should society best invest its remaining high quality energy stocks so future generations, including many living today, have reliable flows of energy?
6) To best serve your clients interests (which would then trickle down to energy policy), would you be willing to add interdisciplinary systems analysts to your mensa research staff, and look deeper at the interplay of the many different variables impacting oil availability, beyond just productive capacity?
Here are some questions for long time theoildrum readers:
1) How can analysis and facts trump sound-bites and rhetoric about the urgency of the planetary energy and resource situation, before events themselves precipitate response?
2) Should there be something similar to Sarbanes-Oxley with respect to energy analysis companies charging fees? What is the shortfall if IHS/CERA are wrong, or wrong by an order of magnitude (e.g. peak is now as opposed to in 30 years+)?
3) If IHS forecasts for 100 mbpd+ somehow are correct, how can society shift from using this energy bounty on short term novelty that has become conspicuous consumption,to something more meaningful?
4) How do we get the traditional media, like Bloomberg and CNN, to start asking questions and writing more like scientists?
**Note regarding data: In all seriousness, the group of people I interact with at TOD are some smart cookies, and volunteer their time to work on thorny issues related to society's energy future because there has been little market incentive for others to do so- so any credible data sent our way is welcomed - especially the expensive kind). (A few of the TOD crew are currently working on an independent TOD megaprojects analysis).
It would be among my top wishes that the smart folks at IHS/CERA are correct in their oil production and price forecasts. I will gladly eat crow in exchange for a more stable progressive world that has more time to turn an energy crisis into an energy transition.
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I think that it is useful to look at the cumulative shortfall between what the world would have produced at the 5/05 rate and what we actually produced--on the order of 770 mb (EIA, C+C) through 11/07--despite oil prices trading in the highest nominal range in history, all while Daniel Yergin has constantly been assuring us that oil prices would be coming down, because of a flood of new oil production.
Also, insofar as I know the Yergin crowd is pretty much ignoring the Net Export aspect. Consider our "What If" scenario for Saudi Arabia. What if they maintained their 2005 production rate of about 11 mbpd (Total Liquids)? At their 2005 to 2006 rate of increase in consumption, their net exports would approach zero around 2036.
The costs to find and procure energy (liquids) are going up faster than the consumer demand for oil. A meaningful % of internal Saud oil and gas demand must go towards finding and developing oil projects. If this trend continues 2036 will be optimist. In other words, your Net Export theory doesn't explicitly address the continuing trend of depletion trumping technology.
Of course, Khebab's middle case is that Saudi Arabia approaches zero net exports in 2031, within a time frame from 2024 to 2037.
I estimate that if the Saudis wanted, and were able, to match their 2005 net export rate, they would have to kick their 2008 total liquids production up to about 11.7 mbpd in 2008, versus about 11 mbpd in 2005.
The flat line Saudi graph illustrates what could plausibly happen to net exports even under the Economist Magazine's assertion that Saudi Arabia could maintain their 2005 rate of production for 70 years.
Black Friday
March 7 2008 11:30 am ( NY time )
BOOM
You aren't being completely frank about the track record of both sides. I'm not going to do it today, but I too could trot out an extensive laundry list of bad predictions by Campbell, Simmons, Kunstler, Pickens, Deffeyes and others.
If you want to have a rational discussion, you have to come clean about the failures of peak oil advocates, as well as the failures of CERA. You're creating the impression that CERA is the only one who ever gets it wrong, and that's plainly deceitful.
I only referred to our group of analysts here at theoildrum. I said nothing about anyone else other than CERA and TOD - though Deffeyes thanksgiving 2005 prediction isn't looking too shabby at the moment. It is true that in the early days, pioneers like Colin Campbell made predictions of peak date, using incomplete data that have since been adjusted. But he has always been in the peak oil sooner than later camp and we better do something about it. Still others like Duncan and Youngquist performed analyses using 1999 data showing 2007 to be the peak year - whether that is ultimately right or not given the current circumstances its alot closer than the cornucopian camp was in 1998-9 when the IEA still used demand forecast for oil to create their supply estimates.....If you read back in the archives of this site, the general track record of our analysis, using free data for the most part, has been pretty darn accurate.
But thats not what this post is about. We are being told, specifically by an entity that has been very wrong for 7+years, why 'we' in the Peak Oil community are currently wrong about the Peak being 2005. Personally, I have never committed to May 05 being the peak - but I think its certainly possible. More to the point is Peak isn't that far off - if its within next 5-7 years we have huge problems. If its 2035, and all the oil from now until then can be pumped at a high energy gain (and therefore dollar gain), then we have time to party on for a while.
This isn't like a hedge fund having poor returns and giving their clients their remaining money back. The stakes are much higher. I suspect that Mr Yergin WILL be correct and oil prices will decline this year, but again, not because of increased capacity but due to decreased demand.
Still others like Duncan and Youngquist performed analyses using 1999 data showing 2007 to be the peak year - whether that is ultimately right or not given the current circumstances its alot closer than the cornucopian camp was in 1998-9 when the IEA still used demand forecast for oil to create their supply estimates...
At that same website, we find that Duncan also performed analyses showing worldwide permanent electric blackouts in 2007:
Source
I think the readers of this site deserve something better than filtered one-sided information. You're cherry picking the successes, and conveniently dumping the failures down the memory hole. It's a form of polemics/deceit, not a basis for honest discussion.
The people at CERA predict oil production for a living, Kunstler and the like do it as a hobby.
Two men make a prediction about my health at different times, and each turns out to be wrong. One is a doctor, the other is a former boy scout who took lots of first aid classes. Which one should I have the most scorn for?
you're kiddin, right? Kunstler is a teacher and teaches his ideology to his students. If that is not "professional", then I wonder how incompetent he is, daring to teach such "hobbyistic" stupiddity and horror to the kids as some kind of an atheist form of apocalypse, an atheist version of coming hell.
Can we distinguish between the predictions of Petroleum Geologists themselves and those who have taken one set of predictions or another to then make judgements about future practices?
Kunstler is a journalist, and a number of other PO figures mentioned are also not geologists. They have made a choice to believe the analysis of one set of geological predictions, much, for example, as those who run the US government have chosen to believe another (manifestly). In fact, nearly everyone in the rich world has chosen to believe one set of predictions or another, whether cornucopian (most) or depletionist (a growing number). We prove those beliefs when we live our lives as though the party is going to end or continue.
But saying that Kunstler, or George W. Bush or JimBob down at the Diner have chosen to make larger societal predictions based on geological analysis was inaccurate in their predictions about petroleum geology is ridiculous - they don't make any. The predicate their assumptions on one set of scientists or another, and postulate from there. But that's not the same thing as comparing two sets of scientists of similar qualifications and comparing *their* analysis.
So anyone who attempts to bring popular writers into the mix and point to them as "inaccurate" is simply raising a distracting red herring, and not a very compelling one.
Sharon
That's false. If Kunstler is a journalist, he is an incompetent one. He doesn't "predicate [his] assumptions on one set of scientists or another, and postulate from there", he simply has dictated that the end is nigh, and only thereafter he goes on to chose his preferred method of how it gonna happen, nitpicking the worst of the worst from his own set of choices...
But then again, who cares?
Wrong, luisdias. Kunstler is a muckraker, not an oil analyst, stock market analyst, or even a teacher. There is a long tradition of muckraking in the U.S., and he is brilliant at it. He has probably done more than anyone else to get info out to the masses about peak oil, and he's definitely more right than wrong on this issue.
Not only that, but he's an incredibly entertaining writer.
Exactly. He's an incredibly perceptive intellectual in the best tradition of American writing. I like to read his rants out loud to the family.
With respect to the Olduvai Gorge thing, the daily blog I put together does seem to suggest that there are some major energy issues throughout the world: systemic problems related to economic growth (China, South Africa), political problems, and tactical issues (like today's Aleutian islands story). Regardless of the reason, they suggest a world balanced on an energy "knife edge" (and that's taken from a story today from New Zealand where a dry spell has seriously compromised hydro power).
I don't think Duncan is too far off and I would suggest that there are, right now, sustained blackouts in many areas of the world.
So he is not a teacher. Who fired him? You?
And there's the obvious question hanging: why is a "muckraker" really needed?
If he is nothing than entertainment, though, then you've just put the sad fellow under the same bag as his long time nemesis, nascar and superbowl. How ironic!
Are you serious? Given the endless stream of happy talk from the Iron Triangle (not to mention people like you), we have a desperate need for people to rake through the muck to try to get a glimpse of what is really going on.
But what Kunstler really is is a prophet, in the old Biblical sense of the word. And the thing about prophets is that they only have to be right once to be vindicated. And it is waaaay to early to say Kunstler has been wrong. Whereas the anti-phrophets need to be right continually for years.
That's just the nature of the of predicting discontinuities. It is nearly impossible to predict the extact time of a discontinuity, even though it is possible to predict that a discontinuity will occur. People who predict them are basically right if the discontinuity occurs, even if they miss the exact date.
TPTB, the happy talkers, the optimists are always caught with their pants down when the discontinuities hit. It is because they can't imagine anything but BAU, or they are so invested in the status quo that they'll defend it to their (perhaps literal) dying days.
Kunstler is a catalyst that got many of us thinking about peak oil, its consequences, and the appropriate response to it.
Kunstler generally takes the view that it is a mistake to believe that all the variously touted technologies like hydrogen cars, etc. are going to get us out of this mess. He may be wrong but that view certainly must be respected and dealt with. Yes, he is entertaining but a little entertainment goes a long way to gets people's attention and makes things a bit more interesting. Entertainment is often a necesssary ingredient to invoke discussion, thought, and even action.
Regardless of one's view of Kunstler, most people here would acknowledge that a rational society should be planning and acting now based upon the reasonable conclusion that we will not be able simply carry on before. What outrages Kunstler and me, for that matter, is that people and governments won't at least plan based upon a scenario that says we are going to have a lot less oil in the future than we have now, hardly an outrageous assumption. And, instead of simply assuming technology will save us, a rational planning exercise would include the assumption that technology might help and other energy sources might help but maybe we ought to consider a change in our lifestyles, our housing patterns, and the way we get around.
Perhaps we won't see the end of suburbia but that doesn't mean that suburbs and cities shouldn't be planning how they are going to survive and prosper based on very different circumstances.
There is a town near me that is almost completely dependent upon tourists and long distance commuters for its existence. Almost every decision is about how they get more money from more tourists who must come a long way by automobile to get here. Their vision of the future doesn't even acknowledge the possibility that happy motoring will either end or be cut way back. I am part of a group that is trying to raise consciousness and cause change. Boring discussions about the future of peak oil doesn't really cut it. We need people like Kunstler to get people's attention. For various reasons, the grass roots are starting to get it even if the town politicos and real estate developers are still making their plans based upon $2.00 gasoline.
I've no idea what Kunstler does for a living, I just know that it's not forecasting oil production. But if you read what he writes you'll see that it's generally hysterical. After September 11th he wanted to drive the populations out of and destroy the cities of Damascus, Baghdad, Kabul, Tripoli and so on. When Pol Pot drove people out of the cities into the countryside we called it a "crime against humanity" and in fact "genocide". Now, everyone gets upset and says crazy things from time to time - but Kunstler has never recanted his advocacy for genocide.
So if you take him seriously then you really need to widen your range of reading.
The key issue is that when someone does something for a living, they're held to higher standards than when someone does not. I'm a chef these days - you expect decent food from me. If I kept giving you burned beans on toast you'd be more annoyed than if your buddy Joe the mechanic did it.
Kunstler majored in Theater at college and has no formal training in the fields in which he prognosticates.
Sometimes I wonder if Kunstler's rants are just that- theater.
Did you read Nate's response?
This post was a response to CERA's statement that Peak Oilers don't have the data to support their claims.
I'm happy to hear the other side of the argument - but we never seem to get evidence from the Cornucopians, just trolling.
Ya know, I would really like for CERA to be correct this time, as the predictions here from Nate have given me some nights of poor sleep. If wishing was profitable I would continue doing that.
Unfortunately I see around me the raw facts that everything requires energy, and that the prices of everything that requires energy is going higher.
Let me know when I should expect the price of fertilizer to come down.
The Oil Drum has been pretty accurate in its predictions.
Well then, what's the current TOD prediction for supply and price over the next 5 years? We can't expect policy makers to make decisions based on the TOD forecast if TOD doesn't actually have an explicit forecast. You guys are bristling with confidence. Get off the pot, and post the TOD forecast on the sidebar, where policy makers can make use of it.
JD,
CERA is a mouthpiece for Oil companies. CERA will say whatever it takes to keep alternative sources from coming online. Peak oil is obviously here. We have had 3 years of record setting prices and conventional crude extraction has not increased. There have been plenty of forecasts published on this site but I am guessing you know that.
That has started to happen, according to Tom Whipple's Jan. 17 column in the Falls Church paper that goes out to Washington, D.C. bureaucrats:
The Peak Oil Crisis: We Are Starting To Dim
I would like to know if some satellites regularly measure the amount of artificial illumination generated on Earth, and if the measurements have started to show a net decline.
In one sense Duncan's prediction was right, he just got the flow of blackouts backward. Countries like Nepal, Tajikistan, Zimbabwe, etc are experiencing blackouts due to unaffordability of fuel. Many TOD posts have consistently predicted the worst aspects of Peak Oil will strike the poor first and as prices rise more and more nations will go down. It is also needs to be kept in mind that Duncan was writing at a time when rolling blackouts due to Enron's criminality was at its height in California.
Ummm: I don't mean to be rude, but I don't think the blackouts in Zimbabwe are peak-oil related.
Well, they're related to unaffordability of fuel, and presumably on the downside of the oil production curve fuel will become less affordable, so...
Peak oil means the end of cheap oil for 'net importing' countries - some people won't be able to afford it - for whatever reason.
Zimbabwe, as an extreme current example, would be able to afford more oil if it were still $10 a barrel.
The effects of peak oil won't be evenly felt, some countries will do very well out of it for quite some time to come.
The people with the most to fear economically from peak oil are those who import a lot of it and import ~100% of their needs - most European states are in this vunerable category (or very soon will be).
Most countrys of the world now fall into the category of net-importing.
In Australia we pay world parity pricing even for our own oil so it doesn't really make muh difference whether we are net importers or not.
No, you pay what the local market will bear - which may or may not be the 'world' price, and also which may or may not make a profit in the short term for the people supplying whatever part of a barrel of crude consumers actually buy.
Also, it does matter if you are importing most of the oil that you consume since you must export (a lot of) something else to pay for it.
92 Regions and Territories now experiencing energy challenges.
See: http://energyshortage.blogspot.com/
talk about moving goalposts - are you kidding with the blackout thing? Nate is discussing CERA's terrible record of predicting OIL prices based on their "top secret, the rest-of-you-don't-have-it" data - not electricity generation.
your point is useless - it's like saying that Duncan predicted peak oil just fine, but he blew it on his Superbowl pick - who cares (in the context of THIS thread) about Duncan's prediction of electrical blackouts?
and since you bring it up - have you noticed the problems South Africa's mines are having with blackouts? - and the effects on the worldwide cost of platinum? So Duncan didn't identify the location correctly, but interestingly enough, Africa IS experiencing blackouts increasingly - as are other nations around the world - but this is just an aside - let's come back to the point -which is, despite a huge increase in the price of oil, the peak of crude production so far is May 2005 - so either the market has completely stopped working or something else is going on - and CERA tells us everything is fine and the price will drop any day now with lots and lots of cheap oil on the way?
Sorry to be tardy, and I've only skimmed the comments, but there's one highly relevant fact that doesn't seem to be recognized: Actually we, the Peak Oil concerned, do have the IHS data!
Before referring to details, it may be useful to set this fact into relief by means of the following quotes from the discussion:
"The only thing that's relevant is our data," Jerre Stead, chief executive officer at Englewood, Colorado-based IHS, said today in an interview in Houston. Believers in the so-called Peal Oil theory "don't have our data". (Bloomberg 2/13/2007)
"Well right off the bat I should point out, with a track record like the one above, I'm not sure we want the data that IHS refers to" (Nate Hagens)
"Nate is discussing CERA's terrible record of predicting OIL prices based on their "top secret, the rest-of-you-don't-have-it" data" (MacDuff)
“Are Yergin, Russia, OPEC, et al, ready to open their databases to all interested parties?” (Bob Shaw)
“I am still to see a comprehensive data report about the state of oil fields around the world…” (Luis Dias)
“I imagine I am being very naive but if Cera can make this statement, Believers in the so-called Peal Oil theory "don't have our data" then they should make that data available, otherwise they could well be using chicken entrails in their auguries much as a former, collapsed, civilization made it's forecasts.”
(ChrystalRadio)
The fact is that an evidently very knowledgeable industry professional has done a Daniel Ellsberg-like service by putting much of the IHS data into the public domain - over at the InvestorVillage, Clayton Williams Energy Inc., Message Board - along with his critical evaluations.
In "OPEC reserves and revised estimates IMO," (Msg. # 56151, 5/7/2007) the source refers by number to twelve previous country-by-country posts, giving IHS field-by-field data on the 144 oil fields which have accounted for 75.5 percent of OPEC's cumulative production. An additional post referred to reviews specifically the case of Shaybah and how its alleged reserves have escalated enormously over the years.
Messages 74013 and 74021 (9/20/2007) review the data for the 50 largest natural gas fields, as ranked by IHS:
Very big gas field part 1
Very big gas fields part 2
Message # 71577 introduces the gas field posts and mentions his previous posts on IHS OPEC and Russian oil fields data. I have not been able to locate the Russian posts, however, since I don't know the subject heading or message numbers. Anyone out there able to come by them?
Take that, Jerre Stead!
Duncan updated his prediction since 2001.
http://moralequivalentofwar.wordpress.com/2007/02/10/olduvai-theory-update/
You are cherry picking the failures.
Given above ground economic conditions and other factors such as technical advances. A prediction of peak oil from anytime about the 1990's on is valid.
Given this and the uncertainties in the data we have been at peak production capacity for almost two decades now. Actual peak production could have happened as early as 1990-2000 if we had produced at maximum capacity and been more aggressive at applying new technology and political factors had not limited extraction in various regions.
Until recently we have had at least a 10mbpd cushion of production that could created and brought online within 10 years given demand.
Given this and the technical advances I don't see that any of the peak oil predictions are actually "wrong". In my opinion the combination of political/economic factors and technical advances has allowed us to keep production capacity and now actual production high well past the point we should have declined given a simple symmetric production profile.
Hello JD,
That is fair enough, I agree that both sides should display their dirty laundry so that the whole world can finally understand thru Universal Peak Outreach just how damn difficult it truly is to 'see' the remaining FFs underneath our feet and plan for optimum extraction for now and future generations with full ecologic costing of above & below ground factors.
Then the global cry would be overwhelming for CERA/IHS to freely share their proprietary database, and Matt Simmons' request for all global FF production to be audited would be a quickly done deal.
Are Yergin, Russia, OPEC, et al, ready to open their databases to all interested parties?
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
This post is not about Kunstler, Simmons, Campbell, etc. This post is about CERA and how wrong CERA is yet continues to claim that they are right and that others are wrong. Regardless of whether those others are right or wrong, CERA itself is clearly wrong, JD. Every time they claim they are right, they are perpetrating a lie, a flat out complete and utter lie.
Take the NFL, for example. It doesn't matter if the St. Louis Rams were 3-13. We're not discussing the St. Louis Rams. We are discussing the 1-15 Miami Dolphins of crude oil forecasting. We're discussing CERA. Now if you want to go post on your blog (from which you've repeatedly "retired" only to spring to life again like a bad zit on a teenager's face), then go for it, dude. But the topic here is CERA and CERA's continuing failures while calling everyone else around them worse than themselves. I've got news for you, CERA is the 2007 Miami Dolphins of the crude forecasting business over the last several years. And pointing at the failures of others does not detract one bit from the fact that CERA is a flop, a humiliating, disastrous, pathetic flop. And anyone who invested in oil futures based on CERA's advice would have lost huge amounts of money over this most recent several years.
I don't have to compare the Miami Dolphins to the New England Patriots or the New York Giants if I choose to write about them, do I? I can focus on Miami's failures, mistakes, and pathetic performance without having to drag in the St. Louis Rams, the Atlanta Falcons or the New York Jets. I don't have to compare the Miami Dolphins to the Pittsburgh Steelers, the Green Bay Packers, or the Dallas Cowboys. In fact, I don't have to compare them to anything else at all, do I?
So what the hell is this call for "balance" from you? It's obfuscation. It's an attempt to detract from Nate's work by implicitly discrediting Nate. It's an attempt to underhandedly defend CERA when CERA cannot be defended.
Now, do you want to return to the topic at hand, or should we all ignore you again?
That Put-Down is almost poetic GZ, I feel almost humiliated on behalf of the recipient.
I for one am massively fed up with the pronouncements that CERA produce. They make being wrong into some kind of art form and have the brass neck to continually ignore their on-going predictive failures. Post 2012 (my own specific time point beyond which the s___ will have hit the fan) I believe CERA will be seen as almost having had criminal intent in their inaccuracy.
andyh said,
"That Put-Down is almost poetic GZ, I feel almost humiliated on behalf of the recipient."
Now, now, don't feel too sorry for the "recipient". Almost anyone who has displayed the intellectual fortitude to dare and question the holy writ here at TOD has been the "recipient" of GZ's "poetic" put downs, with such scientific refutations as "reappear like a zit on the face of a teenager." Now who can argue with that level of rhetorical skill, I ask you?
Yet JD has contributed his little effort, and will cause those who are not yet prone to accept pronouncements as facts, but instead are still willing to ask, "how do you know?", are you certain you can prove that?", "can you compare one set of 'predictions' to another and prove one set more valid?" and "has this been seen before, and were mistaken conclusions drawn then?"
CERA seems to have a cluster of disciples that will accept the holy writ of CERA no matter what. As much as GZ may be off put by it, the readers and posters at TOD still retain a bit more intellectual independence that the "followers" of the CERA camp. And to use GZ's briliant rhetorical flourish, we will continue to reappear like a zit on the face of a teenager to strive to increase the rigor of the peak argument until is virtually airtight. It's close now. We want it even tighter.
RC
Most of us, I'm sure, would welcome the day when peak oil arguments are airtight. Unfortunately, we will probably have to wait about ten years until that is the case. Even then, there will probably be a few who are predicting oil production over the previous peak.
Unfortunately, decisions are being made, and policy is being made now which will determine what our society will look like in the future. What is a politician or a policy maker to do? I would suggest that it would be prudent to take an approach that plans for a case approaching the worst, as opposed to an approach which plans for the best, especially if that best is touted by the likes of CERA.
Even if CERA is correct, and who here is willing to bet on that being the case, it would be profitable and enhance security to invest in a more efficient, and less energy intense society.
You too are obfuscating. The discussion here is about CERA's failed prediction history. Are you going to deny that too even in the face of clear evidence to the contrary, Roger?
By the way, Roger, I keep waiting for KSA to flood the market and drop oil to $10 per barrel the way you used to predict. I haven't heard you issue that one lately, probably because it is so embarrassing that you would rather people forget you made it. And it's funny how JD forgets such failed predictions by people like yourself, or CERA's $38 per barrel oil prediction, for example.
Wonderful! I am thrilled at the prospect of you providing us with JD's many questions to CERA, XOM, etc.!! I can hardly wait! The fortitude for him to ask CERA, "Why are you always **so fucking wrong** on oil prices, etc? And how do you know what you know? You WILL be showing us your database, given how important this issue is to the survival of civilization!"
Right?
;)
Cheers
andyh: "I for one am massively fed up with the pronouncements that CERA produce. They make being wrong into some kind of art form..."
CERA is the Baghdad Bob of the oil crowd.
Jon.
CERA can only be deliberatly manipulating the oil prices with their constantly wrong predictions. They are probably not in the buisness of getting things right but keeping things stable.
I agree with you that just like the agencies who issued the AAA ratings to all sort of toxic crap and are only just now comming into the spotlight CERA wont have to answer on anything until after things realy start to screw up.
Grautr: Yes. In the financial economy, incompetence is always the fall back excuse whenever corruption appears.
Yeah, he's so Macho! Because that is what is important isn't it? Which set of chimps can beat their chest louder?
The slick media savvy and sound-bites are mastered by the likes of CERA, and unfortunately, when TOD strays from data analysis into this area, it just makes a fool of itself. Debates over who made the most wrong predictions, and who is a bona fide spokesman for Peak Oil, are particularly futile.
CERA is the Moodys of the oil world. They are paid by their big oil clients to keep nations hooked on gas.
Their AAA ratings for the future of oil production, will only be modified after the charade can no longer be maintained, in the face of real shortages.
The same conflict of interests, that fraudulently inflated valuations, and has lead to systemic financial failure, misleads with claims of abundance, and will undermine the worlds ability to mitigate a nett energy crash.
Kunstler's genius was to make the connection between Peak Oil and the End of Suburbia. The DVD by that name was built around an interview with JHK.
I have used the "Sixth Sense" analogy (some ghosts don't know they are dead and only see what they want to see). For most of us, the auto centric suburban way of life is dead, but most of us don't know it and we only see what we want to see. What Yergin, et al are doing is enabling most Americans to keep seeing only what they want to see.
We really don't have a choice. We are facing a relentless transformation from an economy focused on meeting wants to one focused on meeting needs, and Yergin, et al's pronouncements are serving to postpone this necessary transformation, thus making the transition all the more painful.
Yes. Well said. It's the corporate positive feedback loop that is the problem. CERA wants to make money. They don't 'see' that the externalities of their actions and comments are setting us up for a greater shock once events catch up. They are acting in their own self-interests, which I understand. Believe me, if it was CERA saying the end of cheap oil is over, and theoildrum asserting we have 'data' showing new highs in oil production for decades to come, I'm sure the media (mostly owned by corporations, and make money by advertising and subscriptions) would gravitate to what we write. But the content here is not profitable to the average readers current life (unless you trade oil futures or disinvest in the stock market), nor is it easy on the mental palate. But its a quest for the truth in a situation that has no precedent. Smart people will figure it out. Probably too late though.
Hmmm... which is more likely true:
CERA is to Peak Oil as ExxonMobile is to Climate Change.
CERA is to Peak Oil as Al Gore is to Climate Change.
CERA is to Peak Oil as Chicken Little is to skies falling.
CERA is to Peak Oil as Chicken Little's neighbors are to skies falling.
CERA is to Peak Oil as Noah was to The Flood.
CERA is to Peak Oil as rain was to The Flood.
Multiple answers acceptable.
Cheers
Hi Nate,
Thanks for this valuable article.
I like your question number 4 (to CERA) above, as it focuses on what "we" need to do, regardless of the effort to put the truth (as we see it) in front of them.
re: "They don't 'see' that the externalities of their actions and comments are setting us up for a greater shock once events catch up."
This is the real kicker.
This is also where the opportunity lies for perhaps some connection and collaboration.
Are there specifics you/we can propose as things they might be willing to sign on to?
The courts of every declining and collapsing kingdom have always been filled with well-regarded wise men, seers and prophets proclaiming that a miraculous turnaround in their fortunes was just around the corner - all the way up to the moment when the enemy smashed through their gates and commenced the final massacre.
Suburbia is alive and well. I don't fall for your ideas. I live in a country full of suburbia, and you know what? It all started well before people drove massively their cars to the city. It started with trains and buses.
People will just eventually car-pool and go with buses and trains. The end of Suburbia is a complete illusion. The resource wasted in "wasting" the housing and infrastructure of Suburbia is so much greater than any shortcomings of transport crisis that such ideas are just an intellectual pain in the ass to still hear these days. To where would people go instead? Sleep under bridges nearer to their jobs? Sleep in the gutters? Like hell. Kunstler has been wrong for decades, because he is so close-minded about his own agenda (which is to kill Suburbia), and just takes whatever doom bullshit and uses it as his weapon to spread his idea. He couldn't care less about the truth or half truth of Y2k, GW, Housing crisis, or PO, as long it is believable, scary enough and usable to his diatribes, let's go, full speed.
Of course, as a person said here about CERA, even a broken clock can go right twice a day. Perhaps Kunstler is right and some "day" we will see massive crisis in america, paralleling the depression of the thirties. But will it end the "end of suburbia"?
Where's the evidence? The study of it? In my opinion, it's not even wrong.
I'm sure that you would find some willing sellers if you want to buy into some prime auto dependent American suburban real estate.
Did I hear deal?
I'm looking for investors in my new suburban strip mall dipped donut and bare-ass bronzing drive-thru franchise chain. By offering group discounts - one ass per window - cashback on purchases of 50 or more donuts purchased with our web-exclusive credit card - , and by maintaining wal-smart pricing by employing our patent solar redirection panels (using proprietory technology involving nitrate of silver, ammonia and sand)for both the bronzing and boiling operations, we are assured that postpeak car pooled customers will flock to our franchised facilities. If Kunstler understood the free enterprise system, he'd have a different take on things. Contact me at PTBarnum@suckerpersixty.caca
Yes, you would surely find SELLERS and not BUYERS, which means that if everybody is to sell suburbia, who's gonna buy it? And if no one's gonna buy it, is the owner going to simply waste his house? Are the million of owners simply waste their homes?
Ridiculous.
If they can't afford to keep the house, owners will be forced out or just walk away. As an historical example of structures being abandoned despite the cost, look to castles. Technology and circumstances made them obsolete, so the owners abandoned them to the elements. A more recent example would be the ghost towns of the Southwest.
When circumstances change, people can and will move on despite what they've invested into their living place. Sometimes, the cost of staying is just too high.
Actually, Americana are abandoning expensive suburban homes in droves. A discussion of the phenomenon:
http://globaleconomicanalysis.blogspot.com/2008/02/moral-obligations-of-...
When food stops moving, I wouldn't want to live in a city for anything. I see riots and people eating their rhetorical young. NY city when cut off will be the 'horror' genre's peak entertainment. I place my money (and life) on a bet of rural community. Next up the food chain would be the suburbs the furtherest away from the 'city'.
Yeah, like in New Orleans when all the people at the Superdome were raping and murdering each-other... wait, no, that never happened, excitable journalists made it up.
FEAR the masses! Or, you know, maybe not.
Peak oil is not a zombie movie.
NYC is a Harbortown, bro.. and it's at the mouth of the Hudson, and the junction of some of America's most economically stable Rail-lines. Your disaster scenario might make a great Movie Poster, but the actual City could be a lot more supportable than you think.
Some might say they don't WANT to support a big stomach like NYC, but ask that to a Hudson Valley farmer or a Long Island fisherman.
Bob
True, at least the trains part. The doomed suburbs are not any that lie outside a town or city, its the ones where expending large amounts of energy are required for survival. I live in a former streetcar suburb. They typically had everything the residents needed within walking distance (usually on a small 'main-street'). For many jobs and cultural persuits you took the streetcar into the city. Some suburbs could be fixed perhaps, but many are physically just too messed up to easily be converted to walkable suburbs. On the other hand, they will have to make do so we may see some interesting adaptations.
you have to just use your imagination. nobody listens to the HOA people when peak oil really hits. suburban homes are bought for 25 cents on the dollar. those who are still in the neighborhood set up restaurants and stores in their living rooms because people don't want to drive. fewer cars make the suburbs more walkable. families plant a garden in the front and raise chickens and everything else in the back. empty homes are used to grow food. the power is out but I share my neighbors solar panels and pay him with eggs and food from my garden.
That's kind of what I meant by 'interesting adaptations'. But still there is the period before people realize there is a permanent paradigm shift that requires drastic changes to or ignoring of HOA rules, zoning laws, building codes etc. The degree of angst over that shift in thinking will likely vary quite a bit from area to area.
yes. we might be surprised to find out what areas adapt well and which don't.
My guess is those "empty homes" WILL be our new businesses: restaurants, stores, churches, bed-n-breakfast, fix-it shops, etc.
I'll betcha restaurants will do well, given the labor intensivness - but economies of scale - of food preparation. My guess is the "meal of the day" where the chef will prepare a large quantity of several items like stews which can be served all day long.
Neighbors will gather around these homes for socials instead of going to some Starbucks or nightclub ten miles away. I expect to see the kids mingling in the bedrooms converted to game rooms - and having a ball.
The rest of the still occupied houses is where to get some sleep.
In a way, I look forward to it. I hope they don't serve alcohol in the neighborhoods.
Every experience I have had with that stuff has had bad endings.
Agree, there's a big difference between a streetcar suburb (8 to 15 housing units per acre) and automobile-based suburbs (1 to 4 units per acre). The former make much better use of land, reduce energy consumption, allow for a sense of community and keep mostly everything needed within walking distance. At least everything was within walking distance in these streetcar suburbs before the Walmartization of America, and hopefully someday this will be true again. I live in an old, small city of about 15000 that is still very walkable. Until WWII we had several streetcar lines as well as interurban lines. As recently as 60 years ago all children walked to school, almost all adults walked or took the streetcar to work and no one lived more than a mile and a half from downtown.
For anyone interested in the topic of urban vs. streetcar suburb vs. automobile suburbs, I'd recommend a book called "Crabgrass Frontier" by Kenneth Jackson.
US 26 barrels of oil per capita.
6.3 billion x 26 barrels = 163,800,000,000 barrels a year.
Remaining endowment: 1 - 4 trillion (all types and possibilites).
Time to total consumption: 6.1 to 24.4 years.
You're right. No problem.
"US 26 barrels of oil per capita.
6.3 billion x 26 barrels = 163,800,000,000 barrels a year.
Remaining endowment: 1 - 4 trillion (all types and possibilites).
Time to total consumption: 6.1 to 24.4 years.
You're right. No problem."
CCPO, that is a fantastic way to put it for illustrative purposes. The world uses 4.76 bbl/person/year. The most likely remaining reserves is 1 trillion meaning that we have 33 years. But, R/P is not the way to calculate when problems come. Problems come when production rates decline.
Illustrative, it was. Of an entire world like the U.S., it was. Your point understood and agreed with, it is. Props given, appreciated they are.
Cheers
Luisdias - I live in North County San diego and I am a Real estate Broker here (and I also have a license in Nevada and I own property there as well). In San Diego county we have seen drops in real values of homes over the last two years of 20 to 30%. In Las Vegas one in 20 homes are in foreclosure. The affordability index in San Diego is less than 8%.
People are not moving into dumpsters or under the freeway impasses but they are moving into the cities in mass numbers, buying up small condos and getting rid of a lot of "pack rat" garage clutter. The garage sales are truly amazing, showing that people in large are deciding to downsize for financial as well as practical reasons. Having more "keep up with the jones" stuff is so "not happening".
There is a recent article in the Atlantic Monthly detailing what the lifestyle wants of the new Gen-xer's are and the suburban model is out of fashion. What young people are looking for in Real Estate is places where they can catch a train to a job, walk to the movies or dinner and live in a upbeat cosmopolitan area. The sales in downtown areas and "walkable communities" are picking up while the areas in Poway and Escondido are being abandoned and the inventories continue to grow.
Who wants to live in a McMansion? is what you need to be asking rather than debating the sustainablilty of suburban estates. In Southern CA even the auctions for these "boxes" are generating very little interest. I daresay that 25 years from now we will be plowing a lot of these poorly thought out communities under.
I'm sorry that you might be upset because the loss in value has hurt you or people you know personally but guess what? We all bought into it.
But in the long run you really have to take a deep sigh and say:
Good riddance!
I would call that Kunstler's obsession, not genius.
He made much the same arguments about Y2K that he's making about peak oil; based on that, it seems likely that he has a pre-determined conclusion (suburbia will end) that he's trying desperately to find a rationale for.
It's like he's got a three step plan:
The details of step #2 are irrelevant so long as they let him plausibly argue his way to the conclusion he wants to reach. Y2K turned out to be a non-issue, so he latched onto something that would make his conclusion make sense. If peak oil turns out to be a non-issue, I'd bet he'll rapidly latch onto the next "crisis" as the "real" reason that suburbia is doomed.
It might be doomed. Peak oil might be the thing that dooms it. But Kunstler's arguments are too circular to be taken as any kind of support for that proposition.
Considering the rapidly increasing level of investment in oil (e.g., oil sands) and alternatives (e.g., wind, solar, batteries, electric cars), I'm not convinced that CERA's word carries an enormous amount of weight. I daresay the companies pouring tens of billions into the oil sands over the last several years didn't pay much attention to "oil prices will be in high 20s to low 30s through 2005".
You're quite right that they haven't done a good job predicting prices the last few years, no question about that; the question is whether their errors are actually causing substantial harm, or whether they're just as much background noise as, say, Pickens' errors, or even the errors here regarding a Nosedive Towards the Desert.
Basically, if nobody's paying much attention to him, I don't see why it's worth our time or stress to do so either.
It's interesting to see how the auto, housing and finance industries have fared since "End of Suburbia: Oil Depletion & the Collapse of the American Dream" came out, versus skyrocketing food & energy prices.
I was going to say the same thing. We have thousands of acres of suburbia in Vegas right now that are sitting completely empty. The prices for these houses are down 44% year over year (http://www.realtor.org/Research.nsf/files/STATES.pdf/$FILE/STATES.pdf).
The "garden suburbs" luisdias is talking about were developed around commuter train routes. The new suburbs were plunked down all over the place. There is no way to organize a viable system of commuter train routes for this mess in a time of increasing energy scarcity.
If you're living in one of the older garden suburbs built early in this century, you're probably okay. If you're living in one of the more recent plunked-down suburbs, things don't look so good.
things don't look good right now. 5 years or 10 years may be a different story.
"things don't look good right now. 5 years or 10 years may be a different story."
agreed - they will probably look a lot worse
The end of suburbia is a moot point, when the end of coastal cities is a forgone conclusion.
I've read probably a dozen books on climate change and the latest (With Speed and Violence, Why Scientists Fear Tipping Points In Climate Change: Fred Pearce 2007) has scared me the most.
There is so much I didn't realize about, frozen tundra, the Amazon, Borneo and the release of methane.
It's not that it might happen, it's happening now. Really I should say I was aware of the stored greenhouse gasses, I just didn't believe that the process of decay had already begun.
We are already heading down the slide.......and gathering speed.
Worrying about how much fossil fuel there is left to burn is not a concern, when compared with the many billions of tons of co2 and methane just waiting for more thawing and drought.
Reading this http://www.aip.org/history/climate/rapid.htm would have saved you the price of the book!
;)
Cheers
I live a couple of miles from the Pacific Ocean. But since mountains come out near to the coast I'd still be above water if the polar ice caps melted. What, me worry?
"Always look on the bright side of life" - Monty Python, Life of Brian.
Stratospheric sulphate particulates can compensate for global warming very cheaply and work quickly. There's a bunch of serious drawbacks, but if global warming turns out to be worse than expected we almost certainly will do it.
Things look great for prospective buyers.
Look, the declining real estate prices are not a crisis. When prices fall that is good for buyers. You can take the position of putting the interests of current owners first. But speaking as a non-owner this all sounds very good indeed.
I'm waiting for a mansion to cost $100k. Can we count on the news to get that "bad"? I hope so.
Unless there's a depression and the buyers have not much money because of job losses...
"Mansion! Only $100k!"
"Yes but I only earn $7k at Burger King..."
In Colorado, there was a guy with no income who bought and flipped three houses from freaking prison. America. What a great country.
The pundits and politicians tend to focus on the millions of homeowners who are being foreclosed upon and will have to move. It is proposed that we give them a grace period to work their financial problems out, as if they were United Airlines, or something. They are not going to work their problems out because they had a problem before they bought the house and will continue to have a problem, that problem being insufficient income.
The real crisis as perceived by the powers that be is that wealthy individuals in the financial community are being hurt by this and the problem has filtered over into the stock market.
For quite awhile now, many of us have wondered how house prices can be so high given the incomes in the communities in which these prices are high. The income to house price ratio simply does not compute and those outside the market simply have had no prayer of getting in the market. Well, as we have found out, those with insufficient incomes' prayers were answered by no income required subprime loans which defied all previous tenets of fiscal prudence.
Those who still cannot afford houses or refuse to get into a high debt to income situation will benefit if house prices come down to a level which they can afford. Those who are staying in cash and not in stocks will also benefit as this crisis further causes the deterioration of the stock market. There will be many losers but also some winners in the guise of those who want to buy a house in heretofore ridiculous markets like California.
But, do we simply prolong this crisis and perhaps make it even worse by continuing to pretend that we can make it possible for people to afford houses they had no business buying in the first place? Yes, there will be suffering. But aren't those currently outside the market suffering a bit by the fact that they cannot afford a house even with a median or higher income.
I still see real estate shows on TV where young couples are buying $500,000 houses without a clue as to how they will meet their zero down loans where they have two loans, one of which is to pay the down payment. I wonder how shiny and happy their faces will be in a few years where they find out they simply cannot go one paying their two mortgages.
I have always bought way less house than I can afford because of simple financial prudence. No doubt there are many who have been scammed but I have to believe that many of these people knew exactly what they were doing and chose to roll the dice. Some got lucky and had their incomes increase; others weren't so lucky.
The sooner we let this whole thing play out, the sooner we can get back to a rational, maybe even a more affordable real estate market. And, what is wrong with that?
The problem is that the "rapidly increasing level of investment" is not increasing at anywhere near the rate that the problem is increasing.
From 2005 to 2006 we added about 5% in renewable energy to our overall electricity production (http://www.eia.doe.gov/cneaf/solar.renewables/page/prelim_trends/rea_pre...). (I'm not counting biofuels as renewable, because I consider them basically a conversion of oil into another form without significant gain.) But that's 5% of a dinky amount, which means we added roughly 0.2% in renewables in terms of our overall energy needs. (We did virtually nothing to increase the energy efficiency of our transportation system.)
So, we have oil production declining at a minimum of about a 2% rate, and we have renewables increasing at roughly a 0.2% rate (and that is an optimistic figure--I think it's significantly less than that in reality).
Now we're trying to increase our investment in alternative energy at a time when we have much less energy to do so. The reason we're in this sorry state is, as Nate correctly points out, because of the influence of the bad predictions of organizations like the IHS and CERA.
Kunstler actually quotes Daniel Yergin extensively in The Long Emergency and gives Yergin credit where it is due.
CERA is funded by the oil business and it may be that CERA doesn't need to be right about oil prices, just right enough.
Not sure at what price oil sands become profitable but maybe low 30s from CERA was a strong enough signal to invest anyway. CERA may be ultra conservative on price which gives oil companies a margin of comfort.
On Kunstlers efforts to kill suburbia, I fail to see some sort of deluded conspiracy on his part. I work in real estate and I can gurantee you that towns with streets laid out pre automobiles are far more highly valued than tract suburban lots. The markets speaks pretty loudly. What is amazing is why developers and planning authorities only produce the crap that people don't want and refuse to build anymore of the 'old' style towns that peopale actually want to live in.
Kunstler is a social critic who is not content to stay within some narrow confine of journalistic constraints imposed by labels and qualifications. I have found his books, if not his blogs, well researched and considered, drawing in all the threads together and weaving the cloth to suit his message that I believe he has come to through his own journey of discovery, much like any of us here at TOD.
I would hardly call the end of suburbia a circular argument. Rather I think it is quite linear. Rise and Fall of the Suburban Empire. Not sure what his Y2K argument is but if you have some links to old quotes of his I'd be very interested.
BTW Y2K should be seen as a model for preparing for a coming, known event. The potential ramifications were indefinable but scary enough to prompt action on a large scale. The trigger point weas very well defined by nature. The preparation was huge and because many of the critical systems had been fixed years before, nothing happened when the trigger point came. But Y2K was never going to end suburbia (unless the nukes escaped). A right proper clusterfuck could have occurred if power went down for any significant period but that was recoverable, eventually. Peak Oil has no recovery and will not be a sudden, anticipated and well bookended emergency. It will be the Long Emergency that Kunstler has coined and it will kill the car suburbs very slowly but inexorably.
his genius was to move from Y2k to peak oil.
I personally did a lot of work to make sure Y2k wasn't a disaster - the reason things mostly continued to work was because we took hugely expensive remedial action.
There is little evidence that simmilar things are happening with regard to peak oil, and even less with Anthropogenic Dangerous Climate Change - CERA (just for one)is predicting massively more CO2, not less, it seems climate change is not a consideration as we must have growth!
Too true about Y2K. In the 18-24 months leading up to it it was the top priority for virtually every sizeable IT dept (I was working in IT for a major Oil Industry supply company at the time). Two years prior to Y2K most major companies systems really were nowhere near in shape to handle the transition but senior management understood just in time and virtually unlimited budgets were allocated to solve the problem. I wish I could say the same was happening with Peak Oil.
It is true that a lot of companies spent a lot of money on Y2K work, which was a bonanza for the IT industry and highly paid freelancers such as myself. However, a lot of that work was probably not necessary, given that some companies, and some countries, spent next to no money on Y2K and suffered no ill-effects. I think most of the "we prevented Y2k!" is merely self-justification by the IT sector.
Sure Y2k caused some bugs, but IT departments deal with dozens of bugs every week. There has never been an IT system without some bugs which the users workaround.
Certainly all the talk about embedded systems crashing (e.g traffic lights) was pure BS, I knew because I work in embedded systems. 95% of the Y2K scare was hype.
First off, I believe you are correct about embedded systems - they were the least of our problems. But do you honestly believe that Fortune 100 companies embarked on major upgrades blind? We knew exactly what we needed to fix and exactly what would happen if we didn't - simply because we tested and found things badly broken in many places. Where they weren't badly broken we often found that underlying software (databases mainly) could not be certified for Y2K and we couldn't take a chance (in one case the database ran fine but the backup/restore functions were broken post 2000). Yes there was a lot of small businesses conned into upgrading simple systems which were perfectly ok but that was most certainly not the case with large, complex and (mostly) ageing MRP/ERP business systems running most of the world's production.
Having worked in an IT department in a University, I can say that the amount of work invested in Y2K was justified. However, the media hype around ATM's spouting money and traffic lights going haywire was just that: media hype. To my knowledge no one in the IT industry said anything like that. Then, on 1/1/00, the media was disappointed that they didn't get their 100pt apocalyptic headline. Of course, then we got to hear about 'those IT people and their non event.'
Those who can, do. Those who can't, propagandize.
Jon.
Wrong, GZ. That's just wrong. This post is an attempt of a rebbutal to CERA's claims that "Peak oilers" don't have the data to support their analysis. Surprisingly enough, they aren't lying. I am still to see a comprehensive data report about the state of oil fields around the world, and the real failures and incapacities of TOD (despite some amnesia that seems to be spreading below JD's repply), where South Arabia doom-porn cliffing event were almost a settled truth, just to give a small example, are the direct result of the absence of such data.
I am not here to bash TOD. Given the small ammount of data available, I've seen incredible mathematical effort to try to understand and fill the huge data gaps. But this is an handicap and a correct criticism of Peak Oilers (Not only TOD, as some people suggested) by CERA.
Of course, it's all too easy to just repply:
Are you fooking joking with us, CERA? You, the utter failure are pin-pointing PO's handicaps?!?
But then again, isn't it all just politics? CERA is only a facade of society's cornucopianism. They will never tell the bad news, and they will always FUD the non-believers of their faith (it is a faith, they never tell us the evidences, we have to believe in them, cause you know, they have white suits and glasses, doesn't that count?) until, of course, the cartel decides to give up the game and just confess to us all their shortcomings.
Luis: One can criticize TOD for a doom-like tone, but the oil supply forecasts have been outstanding overall. I would hate to be your money manager if you feel that TOD has been incompetent in forecasting oil supply.
The oil supply forecasts?!? *What* oil *forecasts*? I only get to see reports, not *forecasts". It is too early to tell if the long-time forecasts are right or not. And like Campbell says, you only know it with precision in hindsight, which, btw, doesn't count as a "forecast". And if the oil megaprojects that are scheduled to come on stream do come on stream, we will hit new records of oil production.
Which puts an end to all the thousands of posts and comments concerning we-are-already-past-the-peak euphoria.
The only problem I see at it, is that it will only be put to rest until the next euphoria.
Funny, it reminds me a bit about the cyclical bubble and bust of capitalist societies.
Whatever.
Ah, so now those "scenarios" which happened to turn out close to the mark are now claimed as "forecasts".
Are we claiming TOD writers or other Peak Oil advocates are 100% correct? No. Because we understand that the data available is incomplete and sometimes incorrect (and obviously personal biases play a part in everyone's view of the world). CERA can point to the fact the some PO predictions have been wrong all they like. It is just obfuscation - misleading, pure-and-simple - considering PO advocates, on the whole, predict reality more closely than organisations like CERA and EXXON.
In jumping off the top of the mountain of peak oil, part of the problem is the way the prediction is stated. "We will hit the ground in 2 minutes."
Three minutes later, we're still sailing through the air. "See, you doomers! You were wrong, everything's peachy!"
The prediction is not that we will hit the ground at a certain time, the prediction is that we will hit the ground, period.
We don't need to know exactly when the blizzard hits next winter to start chopping wood now. We don't need to know exactly when we will get hungry to plant or buy food now. We don't need to know exactly when we will get thirsty to dig a well now.
The problem comes from the illusory belief that we will never hit the ground, and this is somehow acceptable.
But if someone were to say that we will never be cold, thirsty, or hungry, we would readily classify them as deeply disturbed or dysfunctionally neurotic.
We tend to be awed by a narcissistic fascination of our accomplishments that leads us to believe in immortality of the system that produces these works, our current system of civilization.
It was well put by someone here on TOD - I wish I could remember who - when they said, "if your doctor told you that continuing to drink booze and eat burgers would kill you, would you refuse to believe him unless he could give you the exact date of the heart attack?"
I would certainly demand some information. After all, no one lives forever. If the probable date were so far in the future that I would be certain to be dead of something else anyhow, then it might possibly be more productive to worry about that something else instead.
After all, if I panicked every time yet another hyperventilating yellow journalist breathlessly quoted yet another fearmonger with a "precautionary" ax to grind, there'd be absolutely zero time in which simply to live life. You use a medical metaphor, so, for example, the endless parade of statistically insignificant "studies" claiming coffee is bad for you, no it's not, yes it is, just makes the eyes roll. It boggles the mind how many people, even professionals, are supremely cocksure on opposite sides of a great variety of subjects, on the basis of nothing more than half a standard deviation of nearly pure noise. Like it or not, the skepticism that sort of thing invites is the societal background against which energy discussions occur.
While some have predicted peak oil too soon, it is clear from my chart that CERA hasn't figured out that the game has changed in the energy markets. If I had listened to Yergin and cronies, I would have missed a very nice investment opportunity. But it is the why energy has been such an investment opportunity that is the important issue. Basically things which become scarce in relation to demand see their prices go up. Yergin and cronies seems not to understand this fundamental fact.
I am glad they don't have much to do with coal. I made a big coal investment about a year ago. A couple of days ago the Wall Street Journal had an interesting article on the impact CHina is about to have on coal. It too is now getting scarce in relation to demand. Some coal company stocks were up 7% yesterday. All of this shows that the game has changed in the energy markets. Yergin and cronies are still diddling in the 1990s.
And because of their influence on governmental policies and the huge downside risk if they are wrong, they should have a wee bit less hubris about their abilities. This is especially true in light of their past record
Note that China, faced with a sudden increase in domestic demand for coal, did the same thing that Iran did to Turkey (regarding natural gas)--the middle finger salute to energy importers, which caused coal prices to spike, i.e., it caused importers to bid for declining coal exports. The irony of course is that China is a huge oil importer.
Your sequence is wrong. It was Turkmenistan that gave Iran the middle finger first and Iran had no spare capacity of its own to feed to Turkey where the Turkmen gas was directed to in the first place. Focusing on Iran as if it was the instigator smacks of neocon propaganda (not that you are guilty of it).
Of course, as you go down the line, Turkey cut off gas exports to Greece.
Regardless of country or ideology, food and energy exporters tend to look after the home team first. Do you want to cut off food and energy from the guy across the street from you, or from the guy 5,000 miles away?
Whether or not the subject is coal or oil, it is in the interests of the oil and coal companies to continue business as usual. As long as coal or oil are perceived as plentiful for the foreseeable (what a joke) future, the defenders of the status quo will always argue that we should not be alarmed and there is no urgency is transferring our capital away from fossil fuels into renewables. This is the same reason why it is in the interest of the Saudis to continue to argue that they and OPEC can ramp up production when they feel it is necessary.
If somone has been shown to be consistently wrong and it is in their interest to distort the future, then we should be highly suspicious of their analysis.
When I was a director of technology for a mid-sized oil company I took a hard look at alterntive energy. It simply wasn't going to work until AFTER oil prices rise through the roof. Even today, I am looking for renewable energy for my ranch. To generate 1/4 of the electrical needs of a modern home, I would need to invest between $50-70,000 for solar. Wind is far more respectable at $15k. Price is the ultimate moderator of what people will do. When renewables are cheaper, everyone will do renewables. Until then, they will do oil.
It simply wasn't going to work until AFTER oil prices rise through the roof.
And the problem there, Glenn, is the receding horizons issue. At today’s price, alternative energy looks good at X + $30 (or whatever). But X is a moving target, and thus the break even for alternative energy (or GTL or CTL) is as well.
If someone built a GTL plant 10 years ago when oil prices were very low (but also labor, equipment, etc. was much lower) then they looked stupid. But they are probably making money now, because they locked in most of their investment at, say $20/bbl. Once oil rose above $50, they were making money. If an energy company knew for certain that oil prices over the next 5 years would average $150 or so, they would make a lot of investments they aren’t currently making.
You are absolutely correct about the receding horizon. My father was a reservoir engineer in the oil business. I remember him saying that if oil would get to $4/bbl oil shale would be profitable. The horizon has constantly receded.
The one thing I will disagree with you on (or think I do) is that investing in a GTL plant 10 years ago would have been stupid because the NPV clock would be working against them, and now they would have a 10 year old plant needing more maintenance and having a shorter future life. Would the full cycle economics have worked?
Shell's 'toaster' method requires a lot of Wyoming coal (+3.5 barrels of Green River shale oil per ton of subbituminous coal--beating out CTL in terms of barrels per ton of coal) but then there's a lot of nearby Wyoming and Montana coal(+100 billion tons). There's an estimated 400 billion barrels of oil with another 200 billion boe of natural gas. Like tar sands, it probably won't exceed a 3-4 mbpd, but still, that would be some petroleum for almost 277 years. Forget the EROEI for a second,
two hundred years of oil is TWO HUNDRED YEARS OF OIL( at 3-4 mbpd)!
Of course, the EROEI of in-situ could be vastly improved using hot air or CO2 instead of electric resistance heaters. Also Wyoming, the Great Plains has a huge standed wind capacity--747 GWh, if you prefer the 'toaster method).
http://www.awea.org/pubs/factsheets/Wind_Energy_An_Untapped_Resource.pdf
America has more unconventional oil than any other country in the world.
If you're worried about the excess CO2, the sequester it by all means.
This is the best we've got for the next 40 years.
They dont recede forever. Sasol is starting to make good money on new contracts.
But, Sasol sunk a lot of costs when oil prices were low. Were they to build new CTL plants today, they wouldn't make money (until oil averaged significantly more than the price at which they built).
They are building new CTL plants today...
Oh well.
Predictions of Peak date are like polishing a turd. No matter how much you rub it, it does not get any shinier. The central theme, regardless of accuracy points to one of two sides, either Peak is past, now or very soon, thus action is required, or, Nah, there is no problem, we have lots of time, nothing to worry about, it may not even happen in our life time... No action required. Take your pick
ej
estamos jodidos, exactly right.
Precisely. You have an enviable way with words :)
If you bet your own money on the predictions of Campbell, Simmons, Pickens, Deffeyes and even Kunstler (about peak oil), you're doing great.
If you bet your own money on the predictions of IHS, CERA, Yergin, and JD, you are going broke fast.
JD's propaganda technique is to endlessly harp on the trivial inaccuracies of the predictions of peak oil experts, while ignoring the horrendously bad predictions of his anti-peak heroes.
The question isn't who is perfect, because no model of the future can be perfect. The question is whose model is better and whose model is worse. JD, like CERA, IHS, and Yergin, has consistently been on the wrong side.
Quoted for truth. This is exactly JD's method of operation, over and over again. Pitt the Elder is a worthy debater, pedantically annoying at times, but well worth listening to almost always even if you disagree. Pitt's a good example of contrarian thought and his posts usually make you put on your thinking cap. There are others out there like Pitt too who are worthy of a good read. But JD? He's a troll, whose blog rises from the grave like some Freddy sequel each time oil prices spike.
Dunno if his blog will do that this time - it's now a placeholder advert page. The domain name must have expired. I suppose he can always restart with blogspot or something.
The blog's where it's always been:
http://peakoildebunked.blogspot.com/
Ah, good to see. Your blog's always been more interesting, well-backed and rational than your comments on TOD - but I guess that's just the nature of each of the things, when you have hours to write and it won't get lost in the mass of other comments on forgotten articles, what you write is going to be better put-together overall.
You really should call it "doomer debunked", since you're not saying there won't be peak oil, only that it won't turn all our societies into MadMaxLand.
You really should call it "doomer debunked", since you're not saying there won't be peak oil, only that it won't turn all our societies into MadMaxLand.
Yah, lots of people say that. I selected "Peak Oil Debunked" because it's catchy, and effective from a marketing standpoint. "peak oil debunked" is a hot search query. "doomer debunked" isn't.
Gotta say I'm a huge fan of your blog Kiashu. We're coming from very different parts of the PO spectrum, but I love your writing and attitude, and I think we have a lot in common. Weird world, huh? :)
Glad you like it, comment sometime and we'll start an entertaining argument - er, discussion ;)
jd, your blog claims that the largest fields are not discovered first.
so instead of drive by postings, would you consider posting that one here (with leanan's permission, of course)
JD got slapped around recently over on his blog. Sadly, there are people over there that buy his illogical posts. Like any good troll, he doesn't tend to address points raised in any meaningful manner. Like here. He has been asked, "What questions have you asked of CERA?"[sic] The answer is, and will be, "None."
JD "...failures of Peak Oil Advocates..." I think it is remarkable that you would find it necessary to call out singular critics for failure...to do what? I think anyone with an ounce of common sense can read between the lines of simple mathematical errors and industry propaganda.
The questions about peak oil theory are like arguments about the theory of gravity. Oil can only be observed from an historical perspective. We won't know the exact date of Peak Oil for perhaps five years after the actual date has passed.
What is interesting to me are the actions of the very oil companies that struggle to convince the happy motoring public about the notion of peak oil by shrugging their shoulders and exclaiming: "What energy crises?" Why are they buying back their stock? Why are they selling off their retail gas stations? Are they like the agnostic who denies the existence of God but never fails to say his prayers at night...just in case.
If we're going to divide into camps for CERA or the group such as "Campbell, Simmons, Kunstler, Pickens, Deffeyes and others", you can count me in the latter group.
Nate,
As to your last 4 questions, I don't expect oil depletion in particular to be treated any differently by the media and NGO's than has the problematique in general, over the past 36 years. This interview with Dennis Meadows is a pretty stark reminder of how long warnings can be ignored, debunked, and contradicted. Even LTGs most optimistic recent scenario (number 9) produces peak food 18 months from now, and the problem is scarcely mentioned.
I am working on a set of "foundation technologies", designed to be be implemented during or after the crash. It would work better if people started now of course, but that isn't likely to happen. The teachable moment will probably begin when shortages start in the industrialized world, so that's the situation to plan for. I'd recommend you don't waste your time arguing with people over the when, where, and why, and prepare for the what and how :)
I agree but when I saw this article on Bloomberg it triggered my emotional brain into responding. Consider it catharsis. And keep us posted on those foundation technologies.
Nate,
You need to retrain your emotional brain to see CERA's "above ground" code words as an "out of mind" frame. That should reduce the need for reactionary catharsis.
Picture CERA as an ostritch with its mouth and eyes stuck below ground while its true mind operates above ground and at the other end of the anatomy. Then you will understand what "above ground" means in CERA speak.
It's a waste of time and energy to keep reacting to the CERA ostritches and the flock of MSM reporter ostritches who run after them. They don't see you. They don't hear you. The only noise that's "relevant" to them is the underground cooing noises they make between themselves and via their below ground echo channels.
Coo coo.
Coo coo.
Does your emotional brain feel better now?
(You will not be billed for this emotional epiphany session. So relax over that one as well. Breathe deeply. You hold the hatred for CERA and its lies in your clenched tight fists. Open you fingers. Let the hatred float away. Relax your fingers. You are free of the floating away stuff. It has floated way. Relax. All is good. Relax. Just warm air leaving your hands. Purifying your body. Ahhhh. You are at peace now. Peace.)
Thanks, man... I feel better!
"Good. I can feel your anger. I am defenseless. Take your weapon! Strike me down with all your hatred, and your journey towards the dark side will be complete."
Let the hate flow through you! (Maniacal laugh)
Seriously though, the only problem I have with all this information on the TOD is what to do with it? I feel rather powerless. I suppose only someone with many resources (lots of money) to buy all the stuff required, and have the time for a self-sufficient setup. No, I'm relegated to fighting with my girlfriend over not buying a new car. Uggh.
In any case, I hope the real problems are a few years off at least, so I have some time to prepare.
I feel your pain and am in the same boat.
Talk is cheap and easy.
Doing takes a whole lot of money, time, resources, etc.
At minimum we are building new models in our heads for understanding the world.
Whether those models have any value for survivability is unknown.
You will have choice points in your life, i.e. take job A in location X or job B in location Z. Knowledge of Peak Oil may help you chose more wisely.
There are a lot of things you could be doing NOW, and there are various good resources that describe those. But to summarize:
1. Get in physical shape if you're not. For the millions of obese Americans, times are going to be tough.
2. Figure out how to replace transit by car with other alternatives (I have my family set up with electric assist bikes that are charged by solar panel, these are much less expensive than a car right now, plus provide exercise for point #1)
3. Start growing a garden. Get chickens and/or goats if your living situation allows.
4. Network with your neighbors and neighborhood. Establish working relationships with local farmers and craftspeople.
5. Gain a useful skill, that you could trade for food or other necessities. E.g. welding, generating electricity from small hydro, gardening, repairing chainsaws, etc.
6. Get out of debt.
There are many more.. but the point is, do everything you can to set yourself up in a community and living situation where you are not dependent on the continuance of cheap oil.
So what if PO theorists are wrong? Each of the above things will benefit your life even if PO is incorrect and we go on our merry way. However, it may be a matter of life and death if PO is correct. So there is potential for great reward, with minimal risk, to doing these things.
Morgan
Or alternatively you could just buy a house somewhere fairly central so that getting to work and the shops would be easier, and large enough so that it could be split into flats.
Buy a car, just make sure it is a relatively efficient one.
We are at peak oil, or thereabouts, but that does not mean peak energy, and the case of those who feel that everything will completely collapse is not made.
In any situation there are winners and loosers, and relative to many the steps I suggest would put you in the winning column.
There is ample energy, and what we have here is essentially a glich, not a show stopper.
That is not to say that there will not be problems adjusting, but the severity is unknown.
18 months? you mean 18 years (at least that is mentioned in the interview). That is not the most optimistic scenario as far as I remember.
The graphs in LTG 30 yr update show food plateau starting at 2010, and descending 2030-ish. The 'optimistic' scenarios show a gradual return to peak output over several decades, as a result of reforestation, reduced population pressure (due to 2 children per woman starting in 2002!) etc.. The pessimistic scenarios show permanent return to pre-green revolution levels.
It's worth remembering that total fertility rates are below two almost everywhere except Sub-Saharan Africa. The latest UN numbers, while showing an uptick in Western Europe, albeit to well below replacement levels, have sub 2.4 levels even in Mexico and Iran.
half full
very good, plan for the future, foundation technologies.
start a thread half full, now is a great time to start bouncing off each others brainspace.
I don't believe in Santa Claus
Why do we tell our children such lies, no wonder denial is so widespread.
Let's get rid of Santa Claus as a forerunner to the future.
I don't believe in Santa Claus either, but I'm happy my kids do. The world is far too ugly for a young child to handle. I don't think telling kids what might be in store for them is going to be helpful to them. They don't have the mental capacity to reason these things and prepare - all it would do is create a lot of anxiety and emotions that they wouldn't understand or know how to handle. Better to teach them skills that will be useful to them and make them valuable assets to society.
There's nothing wrong with fantasy in children. Unchecked fantasy in adults however is much more dangerous.
-Fab
Why not tell them the truth, and use it as a teaching moment?
The real St. Nicholas was renowned for his generosity, which is why his name has been remembered and honored to this day. His is a role model worth following, especially as doing some nice things to look out for our less fortunate neighbors in our communities will need to be something we do more of in the future. Suggest to the kids that they do something to help out the less fortunate, and help them follow through.
Discussing with them -- at an appropriate kid's level -- how our consumer culture has totally hijacked and twisted this whole thing into something grotesque, and maybe even evil, could also be a quite important learning experience in their lives.
Telling them the whole truth in this manner should do no harm, and might very well strengthen the parent-child relationship considerably.
The "real" St. Nicholas is a myth. If you want to tell the truth, you should start by teaching your kid the shortcomings of "History", the huge amount of false data spread around the world, documents, etc. You should also remember to teach the kid that "truth" is somewhat an illusion, as we all see things quite differently from one another, and what a document testifies may not be what I would have written at all if I was the writer of it. Perhaps, "truth" is simply unavailable to human beings.
Or, perhaps, you should just leave your kid and Santa alone.
Because that's not the truth either. The truth is that Christmas is the ancient celebration of the solstice, and gift giving is part of the point of the celebration. The whole Christian takeover happened around the 4th century, and had been rejected by the church before that, since the early Christians were celebrating Christ on a pagan holiday.
Say what you want about how much we give and get for presents, but the gift giving on the solstice predates Christianity.
[Edit: forgot a helpful Wikipedia link.
Don't forget that Coca Cola coloured Santa...
It's hard enough for my 7yo daughter to grasp the social dynamics at recess (I'm amazed at how vicious and sophisticated some of her peers are). I don't think that she could handle the "truth" yet.
We make a point of not mindlessly consuming, of limiting TV watching (no TV actually, just DVD movies), talking about why we should carpool, why we don't just buy crap toys all the time, why I drive a 28 year old car that takes on water whenever it rains and has no radio while all her friends ride in much newer fancy luxury cars. Some of the results have been wonderful, like being told that she didn't play with someone because "pokemon isn't my thing", followed up by "what's pokemon?", or proudly telling one of her friend's mom that "my dad has a real carpool" and scoffing at her new 7-series BMW.
So rather than tell her "You're doomed, your future is going to suck, and there's nothing you can do about it because you're just a kid", we try to instill in her values and knowledge that will hopefully help her handle the future better than her peers that have their every whim satisfied. It's hard, though.
I think as she gets older she'll be able to grasp more of these concepts, but at this point it's just going to make her more anxious than she already is. Worrying about the state of the world is something for the parents to do for their kids. The kids will have plenty of time to experience the "joys" of being an adult.
There is nothing wrong with telling kids the truth about most anything - just don't colour it with your emotional state (as far as that is possible). It is like a mother/father/sibling who says "yuck!" and squashes a spider in front of a young child. That child starts to associate spiders as something "yuck" and to be killed upon sight. If instead that person was to teach the child about spiders they would view them in an entirely different light... try not to colour the world for your kids, let them do that for themselves after some unflustered guidance.
The next generation is the future, always has been, always will be. Teach your children well.
Yep, telling the truth, and teaching by example.
Funny that you picked the spider example. We had a spider spin a web outside our kitchen window last year that we would watch catch bugs, wrap them up, etc. "Mr. Spidey" eventually was gone, and our daughter was quite distraught until she found another spider that looked somewhat alike in the next window over. The only bugs that we fight are mosquitos. Everything else I'll just bring outside if we don't want them inside.
Never the less, I'm a pretty firm believer in keeping my kids sheltered from the human world they live in. There's a lot of stuff we humans do that are tough for even adults to come to terms with, asking a young child to do so just isn't fair. Best to have them not know about it than to have to color it some way so that they can sleep soundly at night. They'll find out in due time, and hopefully by then will have the capacity to handle it.
I recall a statistic you told me Nate, that 1% of the U.S. population controls 51% of the wealth (which I assume is measured in $ financial assets of various kinds). If this is true, and if $ = power, then I don't see how the media pays attention until a good percentage of those 1% start telling the media to pay attention.
I don't believe I have any close friends or relatives in that 1%, but if I did I would try to get them deeply engaged in pretty radical conversations about resource limits, precautionary principle, ecological and climate thresholds, means of rapid social change, etc.
Since I don't have direct access to these wealthy folks, I guess another approach would be to get the ear of any good reporter you can, and start having the same conversations, seeing if they can shift their slants to news. This takes a lot of time and effort, but could pay off eventually.
Something that troubles me, however, is that I don't see any non-die-off, non perpetual warfare "solution" that doesn't involve a massive decline in consumption, especially among the very wealthy. Will they be able to accept this, or will they remain in total denial because they are always wanting more stuff, as you have explained in your addiction piece? Can society give the wealthy something else to strive for instead of greater accumulation of stuff?
We can, but its a marketing game. Are you happier, healthier and your skills more suitable to the next 30 years than Tom Cruise? In my opinion, yes, except for the unknown length of window we have ahead of us where abstract wealth can buy real wealth. But skills and social capital can't be as easily purchased. (Plus without doubt Scientology has got to be a hindrance). The special sauce here Jason is that people are not generally happy now/. The conspicuous consumption keeping up with the Joneses model has gotten people strung out and sick. IF someone were to market a better way and show a pathway to get there, I think a tipping point could be reached pretty quickly. As my Phd co-advisor Bob Costanza says, 'its not a sacrifice to change what we compete for -its a sacrifice not to'....
Hello Nate,
Since I want to help keep this thread on topic, I will merely refer you to my latest post near the bottom of today's Drumbeat that speculates on Peak Outreach as a cultural method to alter brain wiring.
Bob - I will go read it, though 'brain wiring' at least indirectly, isn't off topic for this post...;-)
Jason -
The "wealthy" are learning about the limits we are faceing but the only reaction I see is "how do I profit from this info?"
This is true on an individual level as well as on national level.
None will address the mitigation issues as long as there are PROFITS to be made.
or
Mitigation will only be addressed if there are PROFITS involved.
or
CERA mis-information will continue to keep the other 99% ignorant enough for the top 1% to continue to PROFIT off them.
PROFIT = end of humanity.
Book it!
Jason -
Not to worry. Boone Pickens, Matt Simmons and Richard Rainwater are clearly in that 1%, as is GW Bush. They are doing a lot to convince people. There probably has been 100's of millions of dollars spent showing that Oswald killed Kennedy, with the latest computer models down to the inch placing Kennedy and Connely in their exact positions in the car (Connoly in a lower, offset "jump seat) which show that the single bullet went in a straight line. [An hour later, when police officer Tippet approached Oswald, he shot him dead and ran into a theater to hide - why???] But, I would bet that less than half the people on this site believe that. So, we will be down to 50 million barrels/day, and the majority of the people will think that it is all a conspiracy.
Jbunt: In the land of the free, theoretically one gets a criminal trial. As in: Oswald claims he didn't shoot a cop, Jbunt claims he was there and saw the whole thing. I agree with your premise that letting a strip club owner/petty mobster walk right up to the alleged assassin of the leader of the country (and execute him as planned) sounds reasonable. Putin might have used more subtlety.
You would need to make them see that their offspring's survival depends on a radical downshift AND make them feel responsible for the plight of the masses. That's the only way I can see to get them to graze milk goats and grow potatoes on their favorite country club and turn their mansions into mini-farms with spare rooms offered to the starving masses in exchange for farm labor. Otherwise we're headed for nuclear war.
But seriously, we're only talking about possible mitigations here, there are no non-dieoff solutions at this point.
Jason,
As an avid observer of society and human nature, I believe this is a key issue. I have concluded that once peoples expectations or actual circumstances are at a given level, they DO NOT RESET downwards. If you start with young kids, they can be very content, happy, successful with very little 'wealth' or consumption. But once a person has tasted materialism, very few will come back.
So all the wealthy and strivers will have to live out their lives before we have a population that's "OK" with less stuff. And we've discussed the Formerly Well-Off's here (FWO's), who will not only strive, but be really pissed-off and resentful.
My experience with kids is that by about 10 years old, they're set in their expectations. And it's the worst it's ever been. This latest batch is the most damaged, highest-expectation bunch ever.
Finally, whatever else the media pays attention to, it is also free to promote consumption in a free society. And (wealthy) people are free to consume. And we're all free to breed. It's the paradox of freedom - we're free to do stupid things and nobody can stop us (until it's too late).
This is called the 'ratchet effect' and I wrote a bit about it last week. Another concept is 'set-point' theory, that posits that people mainain more or less the same level of happiness throughout life, despite circumstances like winning the lottery or becoming handicapped - those are short term deviations that gradually mean revert (though more from the upside down, data not as strong from downside back up). But your point is a good one.
Nate
Sorry for a late comment here, but as it is mid term break, I had to be off picking up my son who, in opposition but I think germane to your discussion with got2surf, does have a happy facility of moving, in good spirits, up and down the material consumption ladder, as most students do. I have put in bold below two points of got2surf I find somewhat contradictory:
I agree that there is difficulty reseting downward but I think this is not simply because, to repharse: they have tasted materialism but because of diminishing resources, particularly energy. The increasing complexity necessary to hold-to-the-center our civilization requires makes upward striving absolute. That is, that it is external and imposed rather than simply an internal, to the human being, driven process. When you describe this as a 'ratcheting effect', it does not describe what is possible but hides it in a mysterious process without explanation. In ratcheting there can be no redemption and I don't think you look at what might be in store for us quite so negatively.
------------------
I took a look for set point in wiki and if this is what you meant by 'set point' then why don't you just simply say it that way?
I think the word here starts with an F:)
Thats not the setpoint theory I meant.
I meant the one linked to happiness
Looks like not only the wiki bridge is out for me but so is your link to happiness ... gee and the day augured so well ... damn lying chicken!:(
sorry crystal-chicken-radio
it's fixed now.
What, you got those entrails back in that chicken? She'll be happy to know that she lives to auger another day ... hmmm well maybe happy :)
got2surf wrote:
"As an avid observer of society and human nature, I believe this is a key issue. I have concluded that once peoples expectations or actual circumstances are at a given level, they DO NOT RESET downwards. If you start with young kids, they can be very content, happy, successful with very little 'wealth' or consumption. But once a person has tasted materialism, very few will come back.
So all the wealthy and strivers will have to live out their lives before we have a population that's "OK" with less stuff. And we've discussed the Formerly Well-Off's here (FWO's), who will not only strive, but be really pissed-off and resentful."
From the sounds of this, I would bet you have never lived in a poor country. I spent a year and a half living in China. I have seen what life without 'stuff' is really like. that stuff isn't about stuff. It is about having the means to avoid being the street vendor who stands outside in the middle of a Beijing winter selling jin bin gua dza for 2 ren min bi. That 'stuff' is about the ability to avoid being the guy riding the bicycle with sticks or other trash piled 10 feet high on the back, and doing it in the heat of the summer and the cold of the winter. That 'stuff' is about avoiding having to live without running water.
In Tibet, I met my first nomads. They live in tents year round at 12,000+ altitude and get to patty-cake yak turds for suitably sized chunks that can be used to cook the evening meal. They would love to have that 'stuff'.
Those Tibetan nomads live a totally renewable lifestyle. I don't think you would be a good parent to wish that kind of life on your children.
What you've got here is what in fancy-talk they call "the fallacy of the excluded middle". You get that a lot in internet talk for some reason.
"I'm against the death penalty."
"What? So we should just let them all go?!"
"I'm in favour of the death penalty."
"What? So we should execute people for jaywalking?!"
Between (say) the life of someone in a hotel in Vegas, and some guy burning yak shit to heat his dinner, there's a wide range of lifestyles. Some will be wasteful, some will be impoverished; some will be neither wasteful nor impoverished. That's the "middle" you're excluding.
In some sense I do stand convicted of the excluded middle fallacy. But what I was trying to illustrate is that stuff is quite relative. Those Tibetans think that the guy with the bicycle has a great life and lots of stuff. The guy with the bicycle thinks a Beijing office worker making $1000/month has too much stuff and lives too high on the hog. That office worker thinks an American welfare mom is wildly rich (tv, airconditioning kids in school for free). That mom thinks the factory worker is has too much stuff and is extravagent. The factory worker thinks the boss has too much stuff and the boss thinks those guys on Wall Street are greedy.
I lived a very simple life in China and while I had a nice apartment, I didn't have much stuff--I didn't take it with me. I lived quite nicely without all my books, my ability to drive etc. When someone wishes for the changes which are coming upon the world and thinks they will all be wonderful, that is Rousseauian Rosy Glasses. Farms are hard; nomadism is harder. Without energy or with greatly reduced quantities of energy the world will be different--quite different. I suspect we will let a few nukes fly all in the effort to kill of the other guy before he gets the energy we are entitled to.
On the whole, Seismobob, I do not disagree.
I have lived the entirety of my days embedded in the richest society in the history of the world. An easy choice for me has been not to breed. I fully agree that raising my children as turd-polishers or turd patty-cakers would not be the greatest thing for them. Driving them around in an SUV to buy shiny crap would kill my spirit.
In my pursuit of waves/pleasure, I have passed significant time in very very poor places. One distinguishes one's self from others by who has the option of leaving, and who must stay.
I reiterate my point: 7 billion people can not fulfill the current ideal of being 'good parents'. Very few people wish for anything less. And that's the rub: collectively, we all would love to have that stuff.
Expectations, I have come to learn, are the killer.
That is the trap. Americans are too many generations from the farm fields. People in China are like people in 1890 America. There, if you have a doorman job you know it is much better than hauling human manure to the plants in the field. Americans today don't want to be doorman. They aspire to be more
I agree that 7 or 8 billion people can't be good parents because there isn't enough stuff to go around. A year ago I looked up what it took to be in the top half of world wealth. It was something like $2600 US. The top 10% of US net worth is $1.4 million (this is not earnings). The top 1% is $4.2 million. Someone in the top 1% can help only 1600 people get to the top half of world wealth. In reality wealth is so relative.
If you have more than $2600, you are a rich greedy bastard taking more than your share from the world! (And I am really a rich greedy bastard
If 7 billion people can not be 'good parents' then how about them not becoming parents at all?
In a nutshell: the world is overpopulated with humans.
Lots of people say this sort of thing. Unfortunately, none of them shoot themselves.
I believe addictions can be beaten but this is much easier in a supportive social context, such as AA meetings.
I used to love to travel a lot (mostly as part of my work) but now I try to as little as possible. This is not easy, however, because there are countless "pushers" around me. This year for example the temptations include: relatives going to Hawaii and wishing I'd come along, friends off to Vegas or Baja, Cajun dance cruises, parents to Europe (wanna see our pictures!)..."I know you don't like to fly anymore but we'd love to have you come with us...we could buy offsets." And my family has the income level to do these things right now too. Only incredible will power holds me back....cold sweats, thrashing among sheets.....
So, we need a new set of social norms that makes it "sexy" "patriotic" "honorable" and even "fun" to reduce ones ecological footprint. And perhaps we need cattle prods for those who don't?
I never desired travel thru age 30 or so. I just liked 'home' too much. I ridiculed the idea of going to some far-off spot to get what I was getting at home.
But then *something* changed.
Upon traveling, I came to realize that if *home* sucked, travel was certainly a great idea. The more one dislikes home, the longer one wishes to stay away. And as the world degrades, more people have more incentive to stay away from home.
I see travel as a way to achieve experiential novelty, which feeds dopamine receptors. Like you say, it is also a form of escapism. What is interesting is how much people will spend to get away rather than make it more pleasant where they are. What if an entire neighborhood decided they would allocate their annual vacation budget towards making their home turf spectacular and fun? Block parties, community gardens, shared infrastructure and tools, pot lucks galore...then people might really like home too much to leave and they would be creating the novelty they desire without going anywhere at all.
An illustration the media might pick up on would be to hypothsise a fund of $1,000,0000 and show what would have happened if it had been invested over the last few years following CERA's advice.
Be very careful to pick the MOST favourable time frame for CERA, as the usual method of attacking this sort of analysis is to make accusations of cherry picking.
Show how the $1million varied over the time and how much you would have left today.
Ask the question: 'Can you afford CERA?' Is this a useful forecasting tool for your business or a sure-fire way to loose money?'
Funds and advisors are two very different animals. CERA is unlikely to directly advise a large number of funds, not do I expect much money moves on their words.
Many funds will listen to several different opinions before making their own. If they have two people saying energy prices will go up, they don't have any interest in finding a third. Likewise, if they think energy prices will go up, they don't read others who agree as this would not add much value.
Also in an investment scenario, consumers of information are looking to develop their own position on an issue and need to understand market drivers, etc. CERA has put forward a logical case that technology and pricing can bring more oil to market.
It seemed to work in the past and I don''t suspect any malfeasance on their part. But I am sure a lot less people believe now than did a year ago.
Yes, CERA have been wrong almost unfailingly, but do you think their customers don't know this? Do you think they don't get angry phone calls from customers?
The market place of ideas is made up of people disagreeing. In many cases one is "wrong" and one is "right". But, you can't legislate correct forecasts.
Of course funds and advisors are different animals.
What I am suggesting is simply a way of graphically illustrating just how wrong they have been in the past.
Suppose you had followed their advice over the past five years, and bought one year futures based on them ( I assume there is such a thing in the oil market?)
How much money would you have lost?
Yes. Point taken. It would be very hard to measure, but by the looks of it, if you sold oil future of the same duration as CERA's forecasts, you would have lost more than half your money.
I use "sold futures" because if you followed CERA, you would want to be short the market. If you followed TOD, you would have wanted to be long the oil market and would have bought futures.
I am not denying that CERA has been embarassingly wrong.
I'm suggesting some sort of model where you bought, say 5 year futures on CERA's forecasts, and after one year sold them at their then market value, and bought new again based on CERA's latest forecast.
I reckon you would have lost at least 90% of your money that way over a period of five years.
This is a way of graphically illustrating just how far out they have been, and what a worse than useless tool they are for anyone using their forecasts as part of their business plan.
I think you have a really good point here. It is the financial community that is "getting it" on peak oil. WSJ instead of the Washington Post etc.
There was an article critiquing the EIA predictions for fuel prices. And it said the Pentagon has abandoned using them because they were far too low.
http://www.worldoil.com/magazine/MAGAZINE_DETAIL.asp?ART_ID=3266&MONTH_Y...
The oil report put out by the energy watch group www.energywatchgroup.org has a great chart showing the IEA price predictions. Despite 10 years of increasing oil prices, they still forecast prices will be flat or fall. It takes a "special" kind of stubborn to be wrong 10 years in a row without changing!
Personally, I think it is a forest for the trees problem. On the flat part of the oil production bell curve, it was above ground factors that made all the difference in successful predictions of price because production and demand moved together so smoothly. The most important variable, oil depletion, was hidden. But now it is showing up full force, and they do not have it factored in. They are still staring at the little picture, while the big picture is changing.
Their report has, unfortunately, enormous errors in it. The first one I noticed was how simply incorrect they were regarding tarsands:
"Today, about 10,000 barrels of bitumen per day are produced with “in-situ” processes in pilot plants. (for more details on on-situ production processes see [Busby 2004]. In-situ production is expected to have a maximum share of about 10 percent of total bitumen production from tar sands even by 2015. The following analyses up to the year 2015 are therefore limited to open pit mining." (p.93)
I have no idea where they got that information, but it's completely false. In-situ processes - primarily SAGD and CSS - represent about 45% of tar sands production as of 2005, or more than 400,000b/d, more than a year before their report came out. In situ methods have been more than ten times the production rate they claim since the 80s.
With errors of that size and such obvious gaps in their research, it's hard to give too much credence to the rest of their report.
Pitt I think your 45% number is a bit mis-stated for In-Situ tarsands production. While there maybe 400,000 of In-Situ production in Canada a lot of it is outside the tarsands production base. In-Situ is also being used in a lot on heavy oil production (non-conventional) It appears for the sake of brevity CAPPS is lumping all this into Oilsands In-Situ production. Last May they were estimating 4.0 million barrels a day of production from the tarsands from Mining/In-situ by 2020. I don't think that is the current estimate as delays, cost overruns, and environmental issues are downsizing their expectations. Will be interesting to see what they forecast this May.
I think they were just talking about the THAI process - which may or may not be economic.
They are not talking about 'SAGD and CSS' they are talking about pilot shemes.
Pitt, I'm sure you are intelligent/educated enough to know what they meant - you are just being deliberately difficult - just like chosing data points elsewhere on this discussion that deliberately choses specific data points to contradict the peak oil generalisation - that is not a meaningful or helpful discussion. Try and help the people who don't fully understand what is meant by 'peak oil'.
From Wikipedia on in situ extraction of bitumen from the tar sands:
http://en.wikipedia.org/wiki/Athabasca_Tar_Sands
Pitt, I find you to be consistently careless with your facts as posted here. By your own standards, you ought not to find your opinions credible.
There are numerous in-situ projects currently producing and numerous others under construction.
Imperial Oil is probably the largest steam generated in-situ bitumen producer in Canada. Their Cold Lake production pads were producing 144,000 barrels of bitumen per day in the first quarter of 2007.
http://sec.edgar-online.com/2007/05/02/0000909567-07-000641/Section9.asp
Much of the in-situ production was blended with syncrude or diluents in order for it to be piped to refineries with capacity for processing the extra-heavy oil.
The THAI process failed to satisfactorily upgrade bitumen in-situ. Other aspects of the project are yet under evaluation. Petrobank stated that CAPRI tests might cost about $225 million dollars for three well pairs. Well pairs were capable of producing about 600 barrels of bitumen per day thus far. A 225 million dollar price tag for what might be 1800 barrels per day of bitumen. Factor in operating expenses and a 20 year project life for each set of well pairs. If Petrobank's CAPRI will succeed it might match lab tests of 6 degrees of upgrading. THAI performance was unable to match the lab and computer generated models. The upgrading added about 4 degrees API instead of the 10 degrees API possible under certain lab conditions. The 11 degree API THAI bitumen reported in Nov. 2007 was similar in weight to the 11 degree API oil generated by SAGD pairs in Suncor's Firebag SAGD project.
You might learn more about Canadian projects by going to oil company websites and reading their investor presentations and annual reports. Most major Canadian based oil companies and some of the largest multi-national oil companies had tar sands projects in Canada.
Hi Pitt,
Thanks for pointing that out. Are there other major errors? I would like to put an errata sheet together and mail it off to them so fixes can be included when they update the document.
An even more wicked twist on this idea might be to hypothesise an additional $1M, and work out the consequences of investing it in the same pattern by doing the opposite of what CERA said - if they said oil prices were going to fall, make the opposite assumption and invest to profit if they rose, and when they said they were to rise, invest on the assumption they would fall.
My guess that doe on a similar basis to my first suggestion you might get a similar pattern, so that your $1million becomes $10 million, whilst following their suggestions would have resulted in only having 10% of your original money left!
A one hundred to one difference!
If the money men don't take notice of that, I don't know what would wake them from their sleep!
But then you miss the point of CERA. Every one of those hypothetical losing trades
has a winning trade on the other side of the deal. And the people who pay CERA would
certainly get their money's worth to keep the suckers coming. It's even better for
them than just that narrow goal- CERA and other cheerleaders are one more channel for
the soothing 'everything is OK, go back to sleep' message that those higher up the pyramid
need to keep telling the masses - and which largely the masses want to hear, regardless
of how true it might be (or not).
Think- what good would _more_ peak aware people do for _your_ plans to survive?
Short answer: none at all. it would mean more competition and a tougher time for you.
Let them drive SUVs, right up to the end. Let them keep building stone heads - there
is an inertia in large power structures that holds them together almost as important
as the energy and raw materials they need to feed themselves, and as idiotic as it
might seem from a strict efficiency point of view, those artefacts are part of the
mechanism that holds civilization and its complex structures together.
Those structures are _deep_ into overshoot now, and at least some of the people high
up the pyramid know it. Not only are they driven by the dynamics of the game to try
to keep it together to the very last minute, the escape plan for any individual depends
largely on as _few_ as possible other people catching on.
So, let them keep building stone heads. Let CERA tell them it's all OK. Let them
go out and buy another big screen TV and watch soothing rubbish on it. Focus on those
close to you and let the rest of them go on building stone heads. If they were trying
the same thing you are, you would hardly have a chance.
I just think that producing graphs to show that here, based on a theoretical past investment, would be something that newspapers would pick up on, and illustrate CERA's incompetence in terms the business community will understand.
CERA's forecasting record has been horrible and I don't understand why they are regarded as a credible source by the media, particularly when there are other forecasters who seem to do much better (Goldman has been pretty good).
However, I am not sure I understand or remotely agree with your implication that private entities should not be allowed to compile or disseminate information without some kind of government approval. What specifically do you mean? CERA should have to turn over all of their data to the government? If that is so, TOD should have to as well. TOD does get compensated through advertising. Are you proposing an Office to Monitor Information Disseminated on a Fee Basis? Fortunately, I don't think the constitution would allow it.
Your claim that information is "privatized" in this case, seems way off base. The government collects information on energy and billions of other topics, health, agriculture, etc. For people who want to pay for more detailed or value added data, there are hundred of providers. Their credibility is their lifeblood. I've got to think CERA's is not very good about now. However, limiting the ability of private entities to collect data beyond that provided by the government, forcing governmnet monitoring of the data, or otherwise undermining the incentive of the private sector is like using a sledge hammer to cure an imaginary problem.
If you are implying that CERA is actually a PR agency for the Saudis and that their figures are intentionally distorted, that is a different story. However, i don't think it is accurate and if they want to reduce a huge multinational consulting firm to a one client PR agency, let them.
Finally, I am not sure that CERA is nearly as influential as the TOD thinks it is. It would be interesting to document energy price forecasts in the most influential publication and breakdown which sources appear the most frequently. I bet you would find that CERA is less than 25%. In the financial industry, I see Wood Mckenzie more often, although they aren't perfect either.
I know we all see CERA behind every bush. However, I don't think they really come close to dominating the energy forcecasting space. Neither do I think their misinformation is really doing much harm.
My advice, forget about CERA for a while.
Sometimes so called experts, like CERA, have different motivations than simply reporting accurate information. I'm not saying they do, yet their predictions obviously have a disconnect with reality over an extended period of time. Their projections ignore the fact that oil exporting countries are not cashing in on 90+ per barrel oil to the degree one would expect.
So we must look closer to discern their political affiliation to affirm it's a factor or rule it out. Are there certain members of Congress they're connected with that might hint at a willingness to adjust their viewpoint from reality? Sometimes groups that have political afiliations will simply be in denial about something in an effort to influence others into that same skewed belief. In this case into a belief that a barrel of oil is not worth as much as the market dictates.
I recall a posting about Daniel Yergin's greenie college days. He’s probably smarter than me and realized he could make a lot more money working with the evil empire than breaking lances against them. Now to do this one would have to prove their conversion to the dark side – which D.Y. seems to have done.
Exxon & their ilk see his forecasts and like them, pay him money & everyone is happy.
But as these sorts of “Oil Drum” analysis point out there are no predictions that have happened. This makes no sense. Nobody would keep saying “A” and getting “B” over and over; unless he was either stupid or had a secret agenda.
Someone else mentioned that he invests contrary to CERA forecasts. I can’t believe that nobody has noticed this –Daniel Yergin is a plant, a splinter cell, a double agent.
If he’s lying to Exxon who cares? He’s making a good living off a company with no redeeming characteristics. But if you’re paying attention you know if he says “UP” you can bet on “DOWN”, so he’s feeding the greenies & the Peakists all the information he has.
I may have removed the emerald glasses here but I suspect that nobody at Exxon is going to pay attention to a rant from Darwin. But don’t pick on CERA – they are giving everybody all the information one can ask for.
Three years ago I reversed CERA’s forecasts, invested in Vestas & have made about 100% per year.
Markets are binary. It's not any easier to be wrong all the time than right all the time.
Jack wins the quote of the day! :-)
"Markets are binary. It's not any easier to be wrong all the time than right all the time."
That should be hanging on my broker's wall! Brilliant!
RC
Shows how clever he is. Rather than snipe at them he makes a fortune telling them rubbish they want to hear. Beats working.
seriously, makes me wish I had thought of it...
I'd be living high on the hog and laughing at all you peak oilers from my Mogambo Command Bunker/Off Grid rancho....
Presumably, people pay big bucks for CERA's advice and predictions in order to make business decisions, right? So, where are the disgruntled customers ? If I had based a business plan on CERA telling me Oil was going to be $10 and its $100 I would not be referring them to friends. I'm just wondering - does anyone know of any public complaints (people whose businesses were affected) from CERA's customers?
The fact that they are still in business tells me they make the predictions their clients want them to make. The fact that the MSM even talks to them would imply that the MSM can't be trusted either. The main meme the powers that be agree on is happy talk. I doubt that the people paying the big bucks are making business decisions based upon what CERA says because I doubt that they are that stupid. The non paying customers are the real suckers because they don't know any better.
So, basically you are saying that CERA is a paid PR agency, rather than a consulting group ? It's sounding pretty right.
By that reasoning, all the banks going arse-up over the subprime mortgage crisis would be suing Merril-Lynch for rating the CDOs as AAA.
Nobody will ever complain if you tell them what they want to hear. CERA tells people what they want to hear, that we'll have cheap oil forever.
Actually some players are getting publicly testy with the ratings agencies. A sign that TSHTF is nearby. (And Springfield, Mass did just successfully sue Merrill Lynch.)
And CERA is meeting skepticism not only on this page.
For that matter I can remember being bashed on this page for calling out a CERA troll. Times change.
But its not just Yergin. He works for CERA which is owned by IHS Energy, which to my knowledge is the largest private energy 'analysis' empire out there. I know that I had friends at John S Herold and Co who would send me charts and data upon request because they know how important this issue is. But IHS Energy just bought them out - the same people no longer reply to my emails (the one that does now works elsewhere). This is a sample size of 1 of course but I have received the same cold shoulder from talks with Woods Mackenzie. These firms are in business to make money. Its like going to college to be a banker or an engineer. You go to work at a bank or an engineering firm and anything that threatens your paycheck you avoid.
The problem, underneath the surface is that the 'free' data that the world community uses from EIA and IEA supposedly comes from an aggregation of private forecasts and internal analysis (I'm not sure of the precise formula). But I am suspicious that IHS 'data', which has been overly optimistic for 7 years running, may hold disproportionate weight in the calculation of EIA future forecasts, which trickle down to middle managers in corporate america, who then dismiss analysis (like on this site) that we may be facing an energy train wreck within a decade. So they go on with profligate energy use because $90 oil is only pricing out other countries, not corporate America. At least not yet.
I fully expect Yergin will be right this time and a recession will cause lower prices. But I'm very concerned about what that implies about the upcoming "Hirsch gap" in liquids shortfall. A depression here will accelerate the post peak decline rate. (but on a bright note, perhaps leave more oil in the ground for 20-30 years from now...)
You might want to take a peak at world oil production/consumption in 1939 versus 1929.
WT: Also, the USA had a strong currency in the 1930s. If the USA enters a depression, I cannot foresee anything less than a historic collapse of the US dollar. Oil prices in US dollars, IMO, are limited on the downside for this reason.
Hi Nate,
You know all those stock letters out there, the expensive ones and the cheap ones. It just some people's opinion. Like the Templeton advertisements of the fundamental analyst who goes to the pork factory and sees a hidden opportunity for cold fusion. It's all conjecture. No one knows what's going to happen in the short term.
Or the research firm that "counts" the number of oil tankers leaving the harbour. Or CERA or TOD or the Mogambo Guru. Again, the data is incomplete. Gold might go up or down. Oil might go up or down.
Data is a four letter word.
The only thing we can be sure about is that oil is a finite resource and it's currently expensive. Therefore, it makes sense to husband the resource.
Nate - one of the most important projects we have going here at TOD is the Megaprojects. This shows around 8 mmbpd new capacity scheduled to come on line in 2008. If that does happen then we will have built around 3 mmbpd new spare capacity and oil prices will fall.
My feeling is that this will not happen and I wonder if it has not been the case for several years now that the front year has large new capacity anticipation that never materialises - project delays resulting in this new capacity bulge rolling in front of us tantalising but never reached - and wonder if this is what CERA observe that makes them optimistic but don't realise that the forecast riches never materialise.
A note on prices:
Tapis today back up to $99.24
Brent today up to $94.66
and the big one, UK nat gas 49.1p / therm - compared with 18.9p 1 year ago - and its not been that cold in western europe this winter
http://www.upstreamonline.com/market_data/
What is/are the reasons that the large new capacity never seems to come online? That is the special sauce of what has changed. I expect its a combination of pesky geopolitics and higher costs (which is part and parcel of declining net energy). Again - 8 mbpd new capacity, or even 50 mbpd, doesn't tell us much unless its accompanied by a spreadsheet showing the costs involved, how many resources were used in procuring it and maintaining it and how society fares as a result. (which of course is next to impossible in the current system - best we can hope for is a dollar estimate)
The UK gas prices are certainly not the result of any geopolitics.
My main suspicion is that this is project delays and optimistic bias. Companies want to talk their prospects up, but inevitably in todays environment their are delays and often projects underperform. The quality of assets being developed today is way poorer than than a decade ago. So the engineering complexity and cost is rising and the reward risk is increasing with poor quality reservoirs etc. Some crap reservoirs will never produce even though they may have a billion bbl + STOIP. But companies are desperate. Its called the bottom of the barrel.
Its possible, just possible, that net energy is beginning to play a roll. At least in the sense that the world is building a fleet of nat gas tankers and heavy oil refineries that are stealing steel and manpower from making rigs etc.
Never before in the history of the oil industry have we had so much steel tied up producing ever reducing amounts of oil. In the North Sea, many rigs should have been decommissioned years ago - and should be feeding scrap metal into the construction sector - but no one can afford to shut em down. Its like S Africa's coal mines having to shut cos of energy shortages.
Certainly true in absolute terms, but I have frequently pointed out in that post-peak Texas and the overall Lower 48, circa 1970-1980, we observed the following:
Higher oil prices + increased drilling = lower crude oil production
As you know, in post-peak regions we don't stop finding oil, we just can't offset the declines from the old, larger oil fields.
Euans main point, which I agree with, is that to continue production or even stem its fall, the energy companies need to borrow resources from other parts of the economy.
That's a good way of putting it. The energy companies are there to provide resource to the rest of the economy - but right now they are placing a huge burden on it. No doubt that more energy is being used in energy production today than ever before.
Its like when an oil exporter turns importer - think USA, UK or Indonesia. Before hand they are part of the solution and then overnight they become part of the problem.
Brent on $96.76 - close to its all time high
Tapis on $99.26
Or need to stop using their billions of dollars in cash to buy back shares. I think it would be extremely difficult to assemble any kind of case the CERA forecasts have limted the availability of cash to exploration.
Beyond that, without proposing a solution, this is really just complaining. It seems like another version of "why can't we predict the future better?". We just can't.
Hi Jack,
I'm interested in your take on things.
Here's my question:
re: "without proposing a solution, this is really just complaining."
What are your ideas? And...
re: "It seems like another version of "why can't we predict the future better?". We just can't."
We know if we continue BAU, we'll be in serious trouble. Or do you think differently? (Or, do you see some "automatic mechanism" that will ensure some best case transition-type scenario?)
So, that's not exactly predicting the future, its predicting a general outline of a case, one which seems rather obvious.
What to do in the face of this obvious case?
8 mmbpd of crude and condensate ? any idea of when you might publish this ?
Its on Wikipedia. Work done by Stuart, Ace and Khebab.
http://en.wikipedia.org/wiki/Oil_Megaprojects/2008
I just double checked - either it has been edited or my memory was wrong but the current tally for 2008 mega projects is 6.9 mmbpd.
Whether or not that comes to pass will be one of the main "discoveries" we make on TOD this year.
Euan,
That seems to be all liquids, and maybe .8M of that seems to be NGL. Plus, the Saudi projects were supposed to be done in 2007.
JB
I wish someone would do a "megaprojects" type list for the decline of existing oil fields.
Knowing whether we have 8.0 or 6.9 mmbd coming into production would be a lot more meaningful if we knew what the total decline of existing fields is so we can see if we are going to have a positive or negative production year.
A 7mmbd drop would mean 9% drop of world production. Nope. I expect a rise of production, if such number comes to pass.
That would mean 2008 would surpass 2005 and 2006, destroying the we-are-post-peak-already scenario.
The CERA study indicates that the aggregate decline of existing fields is 4.5%. So we need 3.8 mmbpd new capacity to compensate for that.
Jon, that's what Matt Simmons and others keep pressing for, and what Saudi Arabia and others keep refusing to disclose.
De Margerie of Total has estimated the decline rate from current fields over the past two years as 5-6 million barrels per day annually.
Schlumberger has mentioned 8%.
Even Yergin has stated recently that CERA estimates the rate to be 4.5%
According to Matt Simmons latest presentation, slide 22, dated Feb 4, 2008, the IEA is making your wish come true.
http://www.simmonsco-intl.com/research.aspx?Type=msspeeches
From slide 22: For the first time (I think), the IEA is conducting a rigorous review of all available data on 250 of the world's largest oil and gas fields, which probably meet 60-70% of global energy supply. By year-end, the IEA hopes to finally have reliable data on decline rates by field and remaining light sweet crude. This review will also reveal extent to which NO reliable data exists.
My world forecast update http://www.theoildrum.com/node/3623 is an attempt to forecast using both existing fields and the megaprojects' new capacity as on wikipedia megaprojects.
Using 2008 wiki megaprojects as an example. http://en.wikipedia.org/wiki/Oil_Megaprojects/2008
The gross liquids capacity is calculated by adding the capacities listed in the peak columm for each megaproject which was about 8 mbd. As of now it's 6,900 kbd. The peak does not always occur in the year of first oil. Thus this capacity of 6,900 kbd does not represent the gross additions for 2008. Adjustments are required on a country/megaproject basis.
Using Mexico, the biggest project is Amatitlan with a peak of 393 kbd in 2029, so this field might add about 17 kbd for 2008, not 393 kbd. The other Mexican projects add about 110 kbd for 2008 to give a total of about 130 kbd, not 500 kbd, so a downwards adjustment of 370 kbd needs to be made to the 6900 kbd 2008 gross capacity to get 6530 kbd.
Similar adjustments have to be made for all the other 2008 megaprojects. Iran downwards by about 100 kbd. Kuwait down 40 kbd. Nigeria down 150 kbd. Saudi Arabia down 200 kbd (NGL). Azerbaijan down 100 kbd. Brazil down 100 kbd. Canada down 400 kbd. Kazakhstan down 50 kbd. Norway down 50 kbd. Russia down 300 kbd. USA down 200 kbd. This gives a rough total of 1,690 kbd.
Now the 6530 kbd becomes 4,840 kbd gross additions for 2008, not 6,900 kbd. If somewhere between 4,000 - 6,000 kbd of new gross liquids capacity is needed to offset existing declines, then 2008 total liquids production is likely to stay flat or maybe a small increase as shown by Fig 1 in http://www.theoildrum.com/node/3623
Please note that the Wiki megaprojects list does not contain ethanol projects which could contribute 100-200 kbd new capacity for 2008. The megaprojects list does contain gas to liquids and coal to liquids projects. Ethanol is included in Fig 1.
That is good news - hopefully we will all have better data to work from.
In this connection I would like to thank you for the terrific work you have done - it is invaluable.
The Wikipedia Megaprojects page dropped to 7 mmbpd from 8 mmbpd by the end of January. We already knew 1 month into the year that we were going to see at least 12.5% less production than predicted a month earlier.
The Megaprojects have never come in as predicted. We'll be lucky to see 4 mmbpd in 2008.
China's exports peaked during the 1980's. In 2002 the rate of Chinese oil imports increased. If recent trends continue...the world would like to have more oil rather than less.
Wait until domestic Chinese oil production peaks!
Now there's a statement of Yergin's I can actually agree with.
Much of what CERA says you can't argue with - they just never seem to appologise or refund money when they are wrong or telling outright lies, which you could maybe argue is immoral.
But, the CERA quote above says we haven't peaked and that is just a simple lie if you believe EIA data - at the moment it HAS but the MSM don't even check the simplest facts it seems. Several countries have already peaked in consumption of oil.
Peak oil will have dire effects on some countries and be a bonanza for others.
Peak oil means the END OF CHEAP OIL and historical price data (which is accurate and undeniable) indicates that, in relative terms, that has indeed been the case for a number of years now in importing countries.
Peak oil is about adequate flow of oil to ensure BAU economic growth in every country, not just the USA. The flow is affected by below ground (the need to make a profit) and above ground (political and economic) factors, both are of importance not just the geologic - I don't think CERA (or the oil industry in general) fully understand what peak oil is about or the huge damage to peoples lives that can be caused by incorrect propaganda.
Oil companies and CERA are about one thing MAKING A PROFIT for their shareholders and will do whatever it takes - that is not directly linked to whether the world in total has enough oil to continue BAU economic growth.
Nobody knows what the future will be in detail and CERA is just a classic example of that fact. If CERA and the MSM were to admit to peak oil and it's consequences their profits are probably over - so, they must encourage the party to continue for as long as possible, they have no option as they are required by law to try and grow their business (preferably by lawful means.)
Oil reserves no problem. I came across this story on the JPL website. This should push off solar system peak oil for quite awhile.
http://www.jpl.nasa.gov/news/news.cfm?release=2008-025
In related news the American SUV association is demanding congress to build a pipeline to Titan. They were heard chanting their mantra, One worlds resources is not enough.
Have a nice day.
I'm glad to read Nate gave up fundamental analysis years ago. It is almost worthless in market trading. I do not trade except cash corn and soybeans which are still in firm up trends on the charts. I'm too old and can't stand the stress anymore. I do follow the charts though, and think the NYMEX weekly gasoline chart looks very bullish.
http://futures.tradingcharts.com/chart/RB/W
Why does anyone take CERA seriously? It is obvious they are the self appointed propaganda arm of oil depletion non-coverage (not a conspiracy, simply a silently agreed upon agenda by corporate media to keep the consumer economy rolling) and their efforts have been to distract, obfuscate and generally impede any preparatory efforts. They are best ignored.
Kevin
Chicago Peak Oil
That's a good question but the same could be said of a lot of "energy analysts". I spend a lot of time watching CNBC and it seems that nearly every analyst when asked to make a prediction of where the price of oil is going responds with a price range of $5, plus or minus whatever the current price is. Watch for it, it's amazing how often they come up with that figure.
As for Yergin, I put up video on YouTube of an appearance on CNBC back in August of last year as a Hurricane was working it's way towards the Gulf. In it he predicts this years price of mid $60's. He also stumbles + bumbles his way through an answer to the question of why haven't we seen increasing production with the price so high.
Check it out:
http://www.youtube.com/watch?v=J7KPWF6Tvkc
There you have it.
CERA are in the business of business. Railing against them is railing against the wrong target.
If CERA peddle snake-oil, it is not the business of CERA to retract, confess or otherwise admit error or guilt. Far from it. They will peddle BS as long as there is money in it. (That is their job...)
THIS IS THE BIT THAT IS MISSING:
It is the job of mainstream media to say 'hang on, you say no problem, but the PO crowd say problem now. What gives?'
The media is the problem. They take every good-news line thrown. They are gullible, inumerate, supine, bought and sold; and lazy.
Good news, Good hair, Good teeth - The principle qualifications of a modern telly - journalist.
Or worse: MSM are Co-Conspirators.
CERA will get away with it as long as MSM are asleep at the wheel.
The death of independent, investigative journalism, preferably by cynics : ( 'Why is this lying bastard politician lying to me?')is the real problem. This failure means democracy is vulnerable to assasination.
Must confess: I like the way CERA smeared PO as a 'belief' ..... If I were CERA, I would try and smear Peakists as 'believers'...
(believers = nutters)
What can you do?
Not a lot in my experience: Politicians ignore it, Journalists such as David Smith - the Times Economic / business editor are in denial and believe (there is that word again...) that Economics is a science governed by 'laws' which will solve everthing.
Simmons and Bartlett. They are the best chance. They wear suits and ties.
Dont worry. A couple more years of Yerginomics will make them a laughing stock.
The Saudis want to discourage the development of renewables, because they think this might leave them slightly less able to stick it to their customers in the future. Thus, they keep dropping broad hints that production is likely to increase, and prices go down "soon".
IHS/CERA keep projecting big increases in production and declines in prices, on the basis of "secret" data, provided to "secret" customers, paid for by "secret" revenues, all with the effect of discouraging investment in renewables.
Amazing coincidence.
(As a general rule, when something happens that appears to be a coincidence, and there is no money involved, I tend to accept that it is indeed just a random coincidence. When something happens that appears to be a coincidence, but there is money involved -- especially a LOT of money -- I tend to suspect that it is very much NOT a coincidence. This rule has proven to be a pretty reliable guide thus far. As the old saying goes, Cui Bono?)
So how about sending out a press release to all the media with the above graph every time CERA makes a prediction?
Where's the best place to find a one page description of PO? I am looking for something like an "elevator pitch" that I can use to quickly tell people about PO.
Keep up the great work.
By the way the comment "because $90 oil is only pricing out other countries, not corporate America...". Maybe you Americans haven't noticed but look at your balance of trade. Another way to visualise it is to think of ships coming from China loaded with plastic dancing toys and other consumer needs(?) and sailing back empty apart from a small container of gold.
About the post from zurisee "let them keep building stone heads" "you would hardly have a chance" surely the point is that we all need to work together to create a sustainable future (aka powerdown, permaculture...) rather than sitting in your bunker trying to fight off the starving hordes. You will not fight off the hordes for long and then we are in the dark ages forever.
No, there's no gold anymore, we've gone FIAT currency and debt now ... the boat just carries a piece of paper that says we will pay you at some time way in the future + a bit of interest (if you are very lucky!)... and amazingly they keep saying OK we'll send the boat back with some more stuff.
If it seems too good to be true, it probably is! Make the most of it while it lasts.
tonyw wrote:
"So how about sending out a press release to all the media with the above graph every time CERA makes a prediction?"
I sent that graph to CNBC and Larry Kudlow and to his producer several times (long before it was published here at The Oil Drum. I never, ever got a response. I have also sent it to other press people. I never got a response from them either. I don't think the job of the Press is to tell us the truth. I think it is for them to tell us what they want to tell us. Nothing more.
Glenn Morton AKA seismobob
Right, we don't have their data. And what would that data show that proves that observers like Skrebowski, Al-Husseini or me are wrong? Stead doesn't say, does he?
Re: interested in being consultants
Yes, where do I sign up for the consulting money? One would think that consultants who are in touch with reality are more valuable than those who simply make self-serving statements. But that's not how it works, apparently.
Have a good day
That is why their previous predictions were so accurate - they just had better data! :-)
CERA uses bottom-up approaches but just looking at past and future mega-projects:
we should be swimming in oil despite the usual geopolitical turmoils (Iraq, Nigeria, etc.) so something must be wrong somewhere either in the methodology or the data itself.
Or in your conclusion that we should be swimming in oil.
From the end of 2002 to the end of 2007, world oil supply has increased by about 8Mb/d, which is quite a substantial amount (indeed, at over 10% growth, it's faster than most of the 5-year relative increases since 1980). So rather a lot of oil has been added.
One of the problems, though, is that rather a lot of oil has been demanded; China's demand alone went up by almost 3Mb/d in that period, plus another 1Mb/d from the US, almost half a Mb/d from Russia recovering, and half a Mb/d from India's booming economy. 5Mb/d, most of the total, of the increase used by just four countries, with the overwhelming story being China's boom.
Oil supply has been increasing; it's just that sources of demand have been increasing faster, at least when looking at the last five years as a whole. We're not "swimming in oil" in large part because of the extremely rapid economic development taking place in many parts of the world, particularly China. It's possible that there's a supply constraint making this worse as of the last year or two, but over the last five years there's been a great deal of additional supply; there's just been even more additional demand.
(Aside: from the megaprojects table, about 15.5Mb/d was added over the last five years, resulting in an observed increase of 8Mb/d. Taking the remainder - 7.5Mb/d - as the amount existing wells declined by gives us a decline rate of about 10% over 5 years, or an underlying world decline rate of about 2%/yr.
Only a rough approximation, of course, but it's probably a reasonable guess as to the near-term behaviour of the projects that currently exist and are under production.)
Your 5 year number looks a lot more impressive than the last 3 year number. I think they call that Peak Oil.
There has been a clear supply constraint since July 2004, over 3.5 years, Pitt. Thus 7.5 mbpd of your 8mbpd increase actually occurred in less than 2 years. Let's look at the EIA historical data to get a clearer picture of the actual production increases and price increases.
If we review the recent total oil supply per day (warning Excel spreadsheet) we see that the period of growth is far shorter than 5 years.
Over the last 10 years we see these production numbers:
1998 75.654 mbpd
1999 74.839 mbpd
2000 77.762 mbpd
2001 77.684 mbpd
2002 76.994 mbpd
2003 79.615 mbpd
2004 83.124 mbpd
2005 84.631 mbpd
2006 84.597 mbpd
In fact, almost all of that growth came essentially in two years. And from 2000 to now we've seen a steady increase in prices of crude oil as well. In fact, crude oil prices globally hovered around $18-$19 per barrel in January of 2002. From this EIA spreadsheet we see that prices roughly doubled from $18 per barrel to roughly $35 per barrel in July 2004 which was the first month we came into the 84+ mbpd range of production. From July 2004, we see that price almost triples to nearly $90 per barrel despite essentially no increase in production over the following 3.5 years.
So I find your argument curious as you seem to be implying that demand growth is the sole problem. Yet oil supply has not been increasing over the last 3 years. Almost all of the increase that you cite occurred over a 2 year period yet you keep harping on 5 year periods. Why?
Clearly, the first 2 years of this most recent 5 year period showed that the oil producers (IOCs and NOCs alike) were capable of bringing more oil production online rapidly to maintain growth in supplies. Then it stopped. It just completely stopped. Now we know from the megaprojects research that new fields did come online, that EOR techniques were applied to rejuvenate old fields, but production failed to increase despite a near trebling of price!! Production jumped by about 7 mbpd in 2 years due to a doubling of price, Pitt. Why shouldn't production increase yet again in the face of a trebling in price?
Your post appears to me to be saying that China's demand particularly and growing Asian generally account for the absorption of the 8 mbpd. But you do not address the fact that Chinese demand grew from 5.58 million barrels per day at the end of 2003 to 7.69 mbpd in 2007. That is to say, 2.11 mbpd of your claimed 3 mbpd increase in Chinese demand occurred mostly during this period of flat production after the 8 mbpd increase. China's demand increased after the 8 mbpd increase was already done. The rest of the world had already absorbed about 7 mbpd of that 8mpbd you keep touting. Thus China's demand could only be satisfied by (a) further increases, which did not occur, or (b) rising prices causing demand destruction elsewhere to allow China to continue to increase its own consumption.
So what actually happened? The latter, of course - demand destruction and increasing prices. And this occurred while new megaprojects of equal size to those in 2002 and 2003 came online.
Clearly there is something else at work here. And thus I come back to Khebab's statement - we ought to be swimming in oil but we are not. Look at the graph. The size of the new production each year is pretty consistent from 2003 forward yet from mid-2004 forward production just stays flat where before it was increasing.
If the same amount of oil annually was added in 2004-2007 as was added in 2002-2003 but in 2004-2007 that same addition resulted in flat total production rather than increasing production, what does that suggest? The most reasonable hypothesis to me appears to be that decline in existing fields is accelerating, thus eating up the new production rather than allowing it to stack on top of older production. Clearly, the new production stopped stacking in mid-2004 so something changed. What are you suggesting as an alternative if not accelerating declines (and possibly a global peak in oil production)?
Oil megaprojects are large oil field projects to bring a significant amount of new oil production CAPACITY to market.
The undeniable price rises indicate we are not 'swimming' in oil at all - so, the 'capacity' isn't being used - it's called hoarding and is the normal human behaviour we should expect once peak is no longer deniable.
Expect exporters to act in their own best interests - normal economic theory breaks down when there aren't adequate alternatives.
Nonsense. You have to consider that world has been demanding 2mmbd more each year and that declines of oil fields are surely in such numbers or even more. In that graph we clearly see that megaprojects haven't been able to go further than 3/4mbds each year the last few years, therefore the current plateau. Prospects for 2008 and 2009 seem better though, as we see a 200% jump of new projects coming on stream.
Perhaps this is the main reason why oil hasn't been going up like hell since it reached 100 dollars.
And hoarding? At 100 dollars? Not any significant amount.
Ha Ha!
If it looks like a peak, smells like a peak, barks like a peak, It is probably a peak...
Khebab - this chart and a time series of such charts is extremely important. From memory, when I totaled the 2008 MP a couple of months ago they were over 8 mmbpd and the front year (2009) was much lower. Now, we have less than 7 mmbpd in 2008 and the front year has grown. Are we already seeing projects spilling over from current to front year?
You look at this chart and can't help drawing a CERA like conclusion. So I wonder if this is the grounds for their eternal optimism? Only snag is that the bounty never materialises - always spilling over into the front year?
Other things - there's a lot of ethane in those OPEC figures. And with global eroei for oil production falling, every year that passes we use more oil to produce the oil.
My version (parody alert):
Need I point out that any scientist making a research claim based upon "secret data" that was not made available to other scientists would never make it into any peer reviewed journal, anywhere?
Yes. Now how do we go about teaching this to Journalists?
WNC Observer -
I don't know if this is too far-fetched a line of thought, but here goes.
For years CERA has been making inaccurate projections and dubious claims about both future oil production capacity, oil prices, and the general denial of Peak Oil (as we understand the notion here at TOD).
It is also no secret that CERA's most important clients include major oil companies and oil producing countries. It may be a coincidence that CERA's prognistications jibe very well with what the major oil companies would like the general public to believe. However, a growing body of knowledgable people no longer believe CERA is operating as an impartial party.
If CERA is being held up as the last word on energy supply expertise, and if our government leaders are depending on CERA's supposed expertise and unbiased analysis in making vital energy policy decisions, then does not Congress have a right (nay, a duty) to hold CERA's famous secret data base and methodology up to close scrutiny?
And by 'close scrutiny' I mean formal congressional hearings, with Yergin, et al, under oath, and with CERA's entire data base and methodology critically audited by a team of outside energy experts. (The argument that to do so would disclose valuable trade secrets doesn't hold much water simply because the hearings could be held behind closed doors.)
Of course such hearings would be highly uncomfortable (and probably downright embarrassing) for CERA, as such hearings might reveal that CERA is less of a true consultant and impartial expert and more of an advocate and PR arm (or to be less kind, a shill) for the oil industry.
Congress holds all sorts of other hearings on an assortment of things that are orders of magnitude less vital, and what could be more vital to our national security than getting straight, unbaised answers regarding our energy situation?
Think this idea has merit?
Yeah, but don't hold your breath. They'll probably get around to it right after they finish impeaching GW Bush.
Great idea! But we can't find time, what with all the importance of steroids in baseball, spying in football, and the like. Besides, the CERA thing is so much like the poor intelligence debacle that is just too much last year.
Keeping Up Appearances is what CERA does I believe.
The data regarding actual production of oil since 2005 seems relatively transparent. The data regarding projected, claimed increases in production going forward are murkey, hidden, and not transparent. The key issue is what is the policy prescription. Policy prescriptions going forward that rely on secret data given out by people who are consistently wrong based upon their prior data, seems rather irresponsible, to put it mildly.
On a personal level, I won't be planning based upon optimistic projections of low cost energy availability. If, after having invested in a lower energy lifestyle, I am shown to be wrong, there will not be a lot of harm done. If, however, I just wait for TSTHTF, I will be in deep trouble.
new reddit bomb:
http://reddit.com/info/68r7b/comments/
thanks.
What about this?
10 September 2007 (AFP)
Iraq is aiming to raise its oil output to three million barrels per day (bpd) next year and to six million bpd within a decade, Oil Minister Hussein Shahristani said on Saturday.
The plan is to hike production "from just under 2.5 million bpd to three million bpd by 2008 and 3.5 million bpd by the end of 2009," Shahristani told the opening session of an "Iraq Petroleum 2007" conference in the United Arab Emirates.
Iraq then hopes to boost output to six million bpd 10 years from now, Shahristani said.
http://www.iraqupdate.info/p_articles.php/article/21585
Is this even physically possible in the best of all possible worlds?
What do you think is going to happen when the next American president pulls the troops from Iraq?
Their oil production will probably go up as the conflict settles down, and insurgents move more to swiping the oil from pipeliness for revenue, MEND-style, rather than blowing the lines up. The presence of US troops makes them more inclined to blow up than steal, as it's hard for them to hang around long enough - US troops come and jump on them fairly quickly - or more recently, US airstrikes kill them.
But the next US President won't withdraw troops from Iraq. Hell, if McCain gets in the troop numbers will go up, and thus the oil production down.
How long have IHS and CERA been in business? Were their predictions in the 80s and 90s just as off base? Have they fallen into market manipulation? How many geologists, if any, are on their staff?
The peakists are starting to have an impact otherwise Yergin and company wouldn't be responding to questions so often. They have gone from the ignoring phase to the ridicule phase and possibly the fighting phase. When IHS goes into Chapter 13 we can declare victory.
Good point.
I have a question. When TOD puts out press releases, where do you send them. Do you send them to Bloomberg?
Is anyone putting out press releases on things like the recent research by Joules Burn?
How about issuing TOD production and price predictions and putting them out to the media?
we submit them to PRweb and use our advertising revenue to pay for them. They also have to be 'newsworthy' and can't just be rants.
As to why we dont issue TOD production and price predictions it's because there are 25 of us, many of which who have never met, let alone agree on price predictions....;)
"How about issuing TOD production and price predictions and putting them out to the media?"
To what end? And at what cost to the people who would have to commit to such an effort?
TOD is an excellent blog with high quality 'keyposts' and informative, often thought-provoking, discussions. I learn something here everyday, often from your comments. I think there are hundreds, if not thousands of others benefitting in the same way. I carry the discussions here into my living room, into the community groups where I volunteer, to my neighbours and into my professional life. I'm sure many others do as well.
I began to clip peak oil related articles in the media around 2000. For several years there were almost none to be had. Now there are so many, I don't bother. There is an awakening occurring and I have no doubt that TOD in its current form is contributing to it.
Let Jeffery Rubin and other lurkers make the predictions. Let's continue to hash out the issues here.
Well said!!
Nate, here's a quote I stumbled upon that seem appropriate:
"In times of change, the learners will inherit the earth, while the knowers will find themselves beautifully equipped to deal with a world that no longer exists."
-- Eric Hoffer
But at what point does learning morph into knowing???
After internalizing the info in my addiction post, I would like to permanently ride the 'learning curve' just before the second derivative turns negative...;-)
Distant future oil rocketed to settle at a new record all-time high today.
i.e. The Nymex contract for delivery December 2016 settled at 93.14
Now that has to be embarrassing to CERA et al.
ADDENDUM
Link to the contract in case folks want to track it:
http://www.nymex.com/lsco_fut_condet.aspx?product=CL&month=Dec&cmonth=Z&...
The question WHY dominates my response to IHS' intellectual arrogance. In this case, there appears to be some scientific dishonesty as well. Access to unique and "secret" data is a well known smokescreen. You make it by burning old chestnuts.
CERA's much-referenced (dare I say beloved) "above-ground factors" can theoretically be controlled by military deployments to protect the whole supply chain. This makes as much sense as conventional military tactics against terrorists. But it's a really great fallacy to keep military budgets growing and growing fast.
Is there any recourse in the legal system to this kind of disinformation? There would seem to be some basis for claim by at least some of CERA's clients that liquidated or otherwise sold reserves (yes, some to Western interests!) based on all those phony, expensive and materially erroneous predictions. Malpractice?
In the absence of legal recourse, sovereign nations choose their own set of responses, some of them a little hard to figure out. Can CERA's BS (a technical term) help explain some of the actions of Hugo Chavez? I'd be interested in what other posters might think. By the way, the IHS post was among the best ever. Great questions!
It is not illegal to make inaccurate forecasts. If it was the only result would be to stop people from forecasting forever. I am sure the reports are carefully couched in language that says, "We expect", or "in our view". They are doubtlessly littered with disclaimers and otherwise vetted by lawyers to ensure that readers are not so stupid as to assume that CERA knows the future. Anyone who has been a producer or consumer of forecasts should be aware of the success rate.
Frankly, I don't think there is any evidence that TOD has a track record of more accurate forecasting. In part, that is because performance over part of a single cycle can not be distinguished from luck. It is also because people here make 100 forecasts then pick the two or three right ones and remind us constantly that they were right.
But at the end of the day, unless you are an idiot, you know that CEA does not know the future and may be wrong.
Frankly, I don't think there is any evidence that TOD has a track record of more accurate forecasting. In part, that is because performance over part of a single cycle can not be distinguished from luck. It is also because people here make 100 forecasts then pick the two or three right ones and remind us constantly that they were right.
Bingo. That's the modus operandi in a nutshell.
As I said upthread, what we need here is the official TOD supply and price forecast, on the sidebar, with a snappy flashing border. Let's get cracking TODers. You've shown that policy makers can't trust CERA, so they're going to have to trust the only people who really know the future, i.e. you. When they come here looking for your supply/price forecast, where is it? I don't see it. Where's the link?
Are policymakers going to have to wade through reams of anti-capitalist bullshit and smarmy doomer posturing to find those all-important TOD forecasts they need to set realistic policy?
I predict the price will go up,
Then down
Then up again.
got 2: You are good! You are already right.
Do you have secret information which would help us know what future production that you are not willing to share with us except in the case where we pay you outrageous and exhorbitant sums of cash (even if it will soon be worth far less than today?
Just one thing, though, is that, if you don't mind, if we buy your very valuable services and they are clearly and inarguably wrong, would you be willing to admit to that, and (while keeping our money) tell us how sorry you are that your errors caused the world to lose its last opportunity to deal with devastating hunger, loss of economic opportunity and absolute ruination of our domestic economy?
It would be so nice to hear from an honest and principled person/company, something like the above, for a change.
A median forecast from those here would probably be simply to predict that any high reached would be just as high or higher at the end of the following year, instead of falling as CERA usually predicts.
Even looking at things as crudely as that would have done a better job over the last few years than CERA.
Suppose I create two websites: Oil Up and Oil Down. Oil up always predicts rising prices and oil down always predicts falling prices. In any given cycle, one of the two is likely to do better than other forecasters, over a few years. It doesn't mean much.
It does if you are selling your projections.
A near 100% inaccurate record is not good, however you dress it up.
You also entirely fail to note that TOD has noted a trend for rising prices, which CERA has not.
Over an infinite time span you would have a point, but for the purposes of the last few years the consensus at TOD has clearly been more accurate than CERA's continual, and continually falsified, projections of 'falling prices real soon'
I am not trying to claim that CERA is better than TOD, or even that it has been any good at all. I think if you read what i have written, I have never said anything good about CERA or bad about TOD.
I think TOD, particularly the editorial portion, is one of the most valuable source of information on energy markets. I do not think CERA is. I also think TOD has had a far, far better track record explaining the underlying drivers of the energy market.
I have been involved in TOD for three years (about 20 times longer than you, although that is not really importnat) because I think it is the best energy resource available. I broadly believe in peak oil and myself think energy prices will continue to head up.
I just think that the demonization of CERA and the chest pounding of those who claim they are smarter is equally foolish.
I am making two main points:
1) Forecasting needs to be done under controlled parameters or it is worthless. Many people pointing to their accurate forecasts are doing some version of my two websites trick. They make many forecasts, but only point to the ones that were right. It is also fairly common for forecasters to pick a direction for a giivenn market and be right for an extended period, until the direction changes, then never be right again.
2) All forecasters are wrong a lot and in any scenario with a lot of forecasters, some will be horrible. CERA has been horrible. Their clients should abandon them in mass as they have failed. But that only means they are a bad forecaster, not that they are criminal, should be investigated by the government or bear any responsibility for lack of investment.
I go along with most of that, Jack - I was just trying to think of ways which would adequately illustrate just how far off track CERA has been, and their inaccurate forecasts seem to have been doing positive harm
- forecasting is tricky though, as Yogi Berra noted 'Never make predictions, especially about the future!' ;-)
Jack wrote:
"Frankly, I don't think there is any evidence that TOD has a track record of more accurate forecasting. In part, that is because performance over part of a single cycle can not be distinguished from luck. It is also because people here make 100 forecasts then pick the two or three right ones and remind us constantly that they were right."
For my part, I pubished my first item on peak oil in 1999 on the web and in print in 2000. That print article said this:
"Sometime between 2004 and 2020 the world oil production will peak around thirty billion barrels of oil per year." http://www.asa3.org/ASA/PSCF/2000/PSCF12-00Morton.html#The%20Coming%20En...
In 2003, I invested 40% of my net worth in energy. I put my money where my mouth was. So, while no one can defend each prediction made by a huge number of people, the only prediction I care about is how my portfolio is doing. It is doing quite well. Thanks for asking.
World consumption is going to hold up for a long time, but personally I think that the 2010-2014 time period will be the tipping point for US consumption.
1) In 2007 2% of cars were hybrids, and the number of hybrids sold has been growing in excess of 30% per year, plus more diesel cars are comming on line, and SUV's/trucks have been declining as a percentage of sales. Also, around 2010, plug-in hybrids will come on line, and be at a more advanced position than hybrids were around 2000.
2) Wal-mart has since 2005 increased their trucks energy efficency by 25% and plans on doubling it by 2015. Wal-mart is the single largest buyer of heavy freight trucks, so those increased efficency trucks will likely become industry standards.
3) Airlines have dropped oil consumption considerably through various techniqes, including reducing idling and removing excess weight, and increasing average loads (which is being helped by airline mergers). New planes are also considerably more efficent than older planes.
4) Railroads have been increasing efficency mostly through reduced idling and improving other logistics, new locomotives are much more efficent, and GE is making a hybrid locomotive, which will be 15% more efficent as existing locomotives.
5) Cities are inreasingly purchasing hybrid buses, which are considerably more efficent, especially in city driving where the advantage is highest for hybrids.
Also, major new fields in the gulf of mexico and Brazil are comming online, Canada's oil sands production should be ramping up even more, and many minor fields that have now become economical should be coming online.
The main problem with your predicting that these new transportation technologies will solve the peak oil problem for the US is the cost of capital versus the savings from said technology.
Each additional inovation cost more to develop and implement, and often produces smaller return for the buyer. Look at hybrid cars that take five to six years to recover the added capital from lower fuel consumtion. And with high oil prices sapping available capital from the economy, fewer individuals and companies will be able to implement the oil saving technologies.
I am a mechanical engineer that has worked in the transporation supply industry for over 28 years and have seen these problems starting back in 1980 when I worked in the railroad industry. In the past 25 years over the road trucks have increased fuel efficiency as much as 40%, with railroads doing even better (roadrailers versus standard TOFC have double fuel economy).
The low hanging fruit has been picked by the transporation equipment suppliers. Additional gains by the trucks and aircraft makers will come with a very high price, just look at Boeing's 787 dreamliner that is supposed to get 15 to 20% better fuel economy. It's way over budget and way late in production, having not even made its test flights (scheduled for about a year ago). The only huge possibilities for reducing oil usage in transporation is electrified railways and that requires huge investment too. With long term recession coming you will never see the RR's having the capital for such projects.
The most likely way US oil consumption will decline significantly in a few years time is the way it did in 1974 and 1980: by massive loss of jobs and contraction of industry.
Re the question:
1) How can analysis and facts trump sound-bites and rhetoric about the urgency of the planetary energy and resource situation, before events themselves precipitate response?
I think this is almost a rhetorical question -- analysis and facts rarely trump sound-bites and rhetoric by themselves -- they need shiny objects to attract the attention of an overworked, understaffed, and often uneducated media, and an overwhelmed, exhausted, underinformed public. That's why we've presented an overview of the subject in an entertaining way at www.howtoboilafrog.com/peakoil.html. It's video-based for all the non-readers out there, but there's plenty of depth in movies, books and links when people are ready. We have to reach out beyond our own circle of peak oil geeks if we want to reach the general public in the time we have.
Having read through most comments on this posting, I realized that a number of the issues I raised in a TOD posting in Nov 2006 do not appear to have been addressed. I remain convinced that that the better we understand CERA's motivations, the more sense we can make of their public utterances.
Consequently I have cut and pasted the 26 Nov 2006 posting below.
Hans Noeldner
(1) What is the primary mission of CERA? To fully and accurately report the facts to its clients? To act as a public propaganda arm for them? Some combination?
(2) If CERA's primary mission is to provide factual information, which is likely to be more profitable - to make that information available to the public at large (i.e. by selling it to anyone willing to shell out $1000), or to withhold the most crucial information from all but its most important clients?
(3) If CERA's primary mission is to discredit peak oil arguments even though CERA knows better, what will happen to CERA's credibility over time? Would it be better for CERA to mount a full-scale assault right now against the notion of an imminent peak and cash in before the peak unmistakably manifests itself, or to carefully spin its message, allay fears, and thus be able to bill its clients over a longer period of time?
(4) What is known about CERA's major clients? Which is better for CERA - that the full list be known to the public, or that the names of some clients remain confidential? Logically, who would number among them?
(5) Does CERA offer different levels of information and services to its clients? If so, what is publicly known about these levels? Given what is known and presumed about CERA's clients, what might characterize the various flavors of CERA's products?
(6) What are the credentials of CERA experts? Are there good reasons to believe that all of its experts are known to the public?
(7) If CERA has close links with exporters, is it possible that CERA actually DOES have solid data to back its claims that a peak is far in the future?
(8) Might CERA have more accurate information about reserves and production potential than is generally known to agencies like the EIA, USGS, etc? What about oil giants like Exxon and BP?
(9) Are there good reasons to believe oil exporters are withholding specific information about economically recoverable oil reserves in order to establish and maintain high prices?
(10) Are there good reasons to believe oil producers are withholding specific information about economically viable new technologies that will boost yields from existing reserves in order to maintain higher prices?
(11) If oil exporters and producers actually can deliver significantly more oil than they let on, how would they go about maximizing prices? Over time, how would they balance price-boosting fears of scarcity and depletion with demand-boosting assurances of adequate supply?
(12) Given the relatively unpromising EROEIs for oil alternatives like ethanol, biodiesel, and shale; given the improbability that any combination of them will substitute for conventional oil barrel-for-barrel; is it reasonable to believe that oil exporters and producers would nonetheless try to discredit and quash alternatives?
(13) Suppose for a moment that CERA really does hold key, non-publicized information about recoverable oil and new developments in technology. Why advertise it? Won't their clients already know where to go for the inside dope? And won't their clients be willing to pay REAL money for it rather than a mere $1000? If so, why publicize the $1000 report? Could it be a teaser? A ruse?
I don't think CERA is ignorant of "Peak Oil". Nor do I think they are mistaken. Afterall, who are their clients? I imagine that long term contracts are being struck all the time, maybe every time a field is put into production. Who benefits if the contract price of oil is less than the fair market value?
Actually there is a certain amount of artistry using the numbers provided by the nations you get oil from to help drive the price down. Essentially they screw themselves, and all you have to do to take advantage of them is believe their inflated numbers.
I imagine I am being very naive but if Cera can make this statement, Believers in the so-called Peal Oil theory "don't have our data then they should make that data available, otherwise they could well be using chicken entrails in their auguries much as a former, collapsed, civilization made it's forecasts.
If Cera's methods of scouring out a living are along the lines of most corperate entities, I would imagine that it would be in their interest to put out Dr Feel Good prescriptions and propagandize with that intent. How far back do Cera's predictions go and how well have they stood the time test?
Oops! spunkledevil, I missed your excellent points just above:)
I still get a kick out of Baghdad Bob. I think he is working for Hillary's campaign now. Check out the following to see what happened to him. http://www.davidstuff.com/bagdadbob.mpg
Found out a little more. I guess he is alive and well and living in Abu Dhabi.
http://news.ncmonline.com/news/view_article.html?article_id=636c80690cf7...
Indonesia experienced a decline in exports steeper than its decline in production. The rising price of oil allowed them to maintain economic growth and allowed for increased oil consumption until they stopped exporting oil, then their demand for oil decreased.
Source ==> EIA (USA Govt.) Country Energy Profiles: http://tonto.eia.doe.gov/country/index.cfm
Nate asks:
"Here are some questions for long time theoildrum readers:
1) How can analysis and facts trump sound-bites and rhetoric about the urgency of the planetary energy and resource situation, before events themselves precipitate response?"
This came my way this AM. It's from The Kiplinger Letter - (Feb. 15, 2008).
"Development of a mammoth new offshore oil find in Brazil
means that by 2015 or so, Brazil’s production will top those
of Kuwait, Nigeria, Venezuela and the United Arab Emirates. But the jump
won’t ease tight global supplies, only help offset declines elsewhere.
Most of the oil will head to the U.S. The long trek via the Suez
or Panama canals will make shipping it to Asian buyers too costly."
Lots of sturdy "Captains of Biz" read this thing and, since they keep subscribing to it I impute that they believe it.
Now, What are we going to do about this?
It seems there's this, uh, you know, expert on Rain Forests, and he says that, uh, the Rain Forests are like, probably, reforesting faster than the humans are deforesting them.
http://www.eurekalert.org/pub_releases/2008-01/uol-nce010708.php
Just one small problem. He doesn't say that.
University of Leeds - In the News
Well, having read what he said for myself, I think the Reporter's synopsis of what he said was, maybe, a little incomplete.
I guess that's why it's good to have the original statement (the one I posted.)
From Bloomberg article on CERA:
"Global production capacity for crude oil and condensate could climb from 91 million barrels a day in 2007 to as much as 112 million barrels a day by 2017, when demand will be 101 million barrels, the firm said."
EIA data:
"Our own government data, in an EIA release earlier this week, announced downward revisions in Crude + Condensate oil production for November 2007, confirming (for now) that May 2005 is still the standing peak for oil production. World production through the first 11 months of 2007 averaged 73,223,000 bpd which is 594,000 bpd below the average for 2005."
What explains the difference in CERA and EIA (91 million bpd vs 73 Mbpd) figures? Does CERA assume that 18 Mbpd of capacity was not utilized in 2007.
I created an oil price forecast based on Gail's -0.06 price elasticty and growth in demand of 1.5%, plus Stuart's logistic fit of world production (recentered around 2005). I start the prediction in 1997 and we get these values in adjusted year 2000 dollars. As oil is trading in the $90.00 range, not adjusted for inflation, the prediction comes out a bit low. But it is quite close for a prediction back casted 10 years (1997).
Here is the price data I used:
http://www.eia.doe.gov/emeu/aer/txt/ptb0521.html
And here is a contrasting set of price predictions made by the IEA starting in 1998. As you can see, no matter how much prices rose, the IEA just kept predicting prices would remain flat (or decline). Real prices have left the top of the graph. This graph was taken from the Energy Watch Groups report on oil production. www.energywatchgroup.org
My reason for doing this was to learn if a better forecast could have been made if you had been expecting a logistic bend in the supply curve. And it turns out to be true. I do expect that such a curve will be far more accurate 30 years out than the flat line that is predicted here.
CERA and some government agencies say 130 million barrels a day by 2030. The Energy Watch Group and others say something like 55 million a day by 2030. These figures are unbelievably far apart. How is that possible??? There can't be that much hidden data!
~55 mbpd is roughly where everyone using a logistic is putting oil supply in 2030. You can read a whole thread about it here posted by Stuart Staniford.
http://www.theoildrum.com/story/2006/1/22/04219/1102
Ace is showing a drop to ~40 mbpd (two topics back now).
It is possible if you believe that there are another 2 trillion barrels of oil waiting to be discovered tomorrow. And if you believe that tar sands can flow oil as fast as Ghawar. I don't see the data supporting either of those positions.
Interesting calculation: low estimate (ace): 40 M b/d
high estimate (cera): 130 M b/d
AVERAGE: 85 M b/d
This would mean that the current plateau will last a few decades. The "average" prediction says that:
- there is no peak, but a plateau (Cera right, Deffeyes wrong)
- the plateau started in 2005 (Cera wrong, Deffeyes right about importance of 2005)
It's a draw! Well, we will know in about one year whether it's a peak or a plateau...
Great plateau... now if only demand will be at 85 Mb/d for a few decades, we'll be set!
Black Friday
March 7 2008 11:30 am ( NY time )
BOOM
Do you care to elaborate -- or should one of us be contacting the FBI?
Although I've studied TOD almost daily for the past year and a half this is my first posted comment, so please tolerate a humble beginner who is more than a little nervous speaking up in a conversation where everyone knows way more than I do.
The negative impact on energy policy from the stubbornly inaccurate data, analyses and predictions by IHS Energy/CERA is so probably on purpose that I'm going to risk saying that it is straight up intentional.
Let's say you have an enormous vested interest in the status quo. Policy change in response to Peak Oil is not something you want on the agenda, yet if Peak Oil is true then that's exactly what's going to happen. Obviously, since the empirical facts are not favorable to your position, you've got to hire some tame experts, and they better be really top drawer. That's IHS Energy/CERA. Their ownership is as top drawer as it gets (it reads like the guest list for the Habsburg High class reunion.)
In other words, the situation is not one of not bad data leading to bad policy. It is the decision to stick with bad policy necessitating the generation of bad supportive data.
Trying to change their minds would be a wasted effort, but calmly and authoritatively dismantling their stone-wall of misinformation, rock by rock, is very beneficial because others are listening, too.
As for getting your message out to the traditional media like Bloomberg and CNN, you are already doing the best thing, under the circumstances, by being exactly who you are and doing exactly what you do, because it is obvious to all (even the bad hats) that you are the ones doing it best. Not only is publishing independently verifiable facts the best strategy in the struggle to create broad public awareness, there is a moral high ground to that position that will only grow stronger as the energy situation gets worse. Mother Nature delivers a pretty convincing argument.
A bright point is that the big shots (like IHS Energy) seem to feel compelled to respond, and to do so in a respectful manner. Like Gandhi said, "First they ignore you, then they laugh at you, then they fight you. Then you win."
'.. and then you win.'
While I really like the Gandhi quote as a point of encouragement for anyone who has a difficult goal to pursue, it does sometimes happen that the other guys win.. or even that nobody does.
It's hard to really know what CERA and IHS are up to, what are their real philosophies or motives. There's a lot of conjecture about that on this thread. It becomes more germane for me to get away from the sparring and these PR Games, and try to focus on 'knowing what we actually need', either personally, as communities, regions or nations.
Whatever the character of this plateau, the 'timing of the peak' or whatever other metrics people want to assign, it is clear enough that we would be better off by 'Reducing our own Flow-rates', and by having alternative methods, sources and tools available to us to increase our resiliency even in terms of present-day energy dependencies.
Thanks for speaking up!
Bob
(Just another guy, who's probably not as smart as 'everyone else' here. Democracy is Dead, Long live Democracy!)
Hi D,
Well said. Thank you for saying it.
Dear Nate,
Please accept the compliment CERA has paid you and the other
Oil Drum contributors.
In vilifying you... they acknowledged your influence...
I am in the Deffeyes camp. May 2005.
I only think Peak Oil applies to crude and condensate.
MKH did not think, and the traditional oil companies did not produce GTL, ethanol from corn, BioDiesel and many of the other liquids now being added to the mix to confuse things.
Complaining about Duncan's revised forecast from 2012 to 2007, given power shortages here in RSA, Namibia, Zambia, Angola, Zimbabwe, Mozambique, etal. seems specious.
Complaining about errors of a year or so in Campbell & Laherre's original SA article in 98 misquotes the original, and I did read the original.
It is akin to misquoting Limits to Growth, the report to the club of Rome, which never predicted world collapse by 2000, but instead investigated various scenarios and how to mitigate the deleterous effects. And it could be argued that their model's pollution variable corresponds to greenhouse gas emissions.
I don't care what label you put on Kunstler... he speaks plainly.. doesn't mince words.. and regarding PO and the consequential effects on suburbia is substantially correct.
Luis and most other Europeans have a much better public transit system than the US. Both Russia and China have very much better systems, and both of those countries are investing heavily in upgrading them, witness the recent opening of the world's highest rail line to Lhasa in Tibet.
In 2000 the US had a superb cadre of experienced engineers and reservoir scientists, who had just fixed Y2K, solidified the Internet, and found a whole lot of oil in very difficult places.
Rather than turning this talent loose on the taak of developing a balanced renewable power system for the US, they were consigned to the scrap heap, and a black op was used as the excuse to seize the reserves of the middle east and central asia. Only something went wrong along the way, and neither objective was achieved.
Kosovo was severed from Serbia to make a corridor free of Russian influence for a pipeline from the Black Sea to the Adriatic as part of a system originating at the Kashagan field in Kazahstan. Only, Exxon etal couldn't deal with the sulphur, and the Kazachs got wind of color revolutions and thier danger to your health if you were a leader of an oil rich state ala Azerbijan.. So, the Russians made a better deal, the Chinese did the impossible and built a pipeline to the Caspian(almost finished) and the oil will flow east.
To the point...
CERA is a mouthpiece.... period..
They don't have anything you can't get... period...
Exports are declining... period...
The market price action is screaming this at anyone who cares to look.... period....
It is the nature of market makers to obfuscate the true dynamics of market forces, otherwise they would go bankrupt taking the opposite side of your trades....
But price action tells all.... period...
KEEP UP THE GOOD WORK !!!!!!!!!!!!!
INDY
Hi Nate and thanks Goprisko,
I'd like to add -
1) "They don't have anything you can't get..." - we (CERA and TOD) both know this.
2) They (CERA) know - i.e., at least some members of CERA read TOD, have studied the data and most likely take it seriously. (I'm now convinced of this.) Perhaps more seriously than they admit to their colleagues, etc.
3) One idea, Nate, might be to engage them on a hypothetical "what should we do when...". In other words, given that declines/shortfalls will impact the US and the world at some point (if they do not agree we already see this) - what do they see as the most responsible actions leaders in business, science, and government can take?
What are positive mitigation actions? (Or some questions along these lines.) Your question #4 to CERA.
(Edited for clarification.)