200,000 is a mere 0.23% of the daily "production" of 88,000,000 barrels.

That's just a drop in the bucket, nothing significant at all.

Its funny how the street never seems to run both ways...

The situation is not symmetrical. Post peak, production declines are permanent. Whereas, any increase in production is temporary and unsustainable when you are dealing with mature regions of the world that have been producing oil for many decades.
Secondly, demand generally rises with population and economic growth. So any decline in production in the face of rising demand is always serious. Any increase in production however may not be of much help unless exports increase at the same rate as demand.

A couple of questions for you:

Global exports have been declining at an accelerated rate since 2005.
Do you agree or disagree?
Global exports are unlikely to increase in the future.
Do you agree or disagree?

I think that within the context of the interview, to be more than a drop in the bucket a production increase (or consumption decrease) would be one that would make a significant move in the market price. The market reaction to the Saudi announcement (or pre-announcement, or whatever it was) was little more than daily volatility. Seems like a drop in the bucket to me. OTOH, a fire at a North Sea platform that produces 90,000 bpd was enough to spook the market by a couple of bucks, at least for a few hours.

We see various world-wide decline rate estimates. A 4.5% decline rate against 87 million bpd would mean 3.9 million bpd in new projects to maintain output (and thus market price). That comes to 75,000 bpd of new projects each week. So this was not quite three week's worth.

What's a "drop in the bucket"? Well, think of daily oil production as like daily income.

What's it now? 86.8 million barrels a day, something like that.

Well, imagine that you earned $86.80 a day, and you found that not enough to pay the bills. So you go to your boss and ask for a raise. He says, "We'll make it $87.00."

Would it help you much?

Going from 86.8 to 87 million barrels a day is like getting that extra 20 cents. It's a nice gesture, but so what?

It's an extra $27 million a day for the Saudis, though. Another $10 billion a year. That's bigger than a lot of national budgets. Not bad.

So - another 200,000bbl/day of oil benefits the Saudis a lot, and the world not at all.

Simmons sings the song of oil depletion to its conclusion. The problem is, at 4% of household income, the cost of fuel is breaking the back of many in the US. If oil were 95 cents a cup, gasoline would cost us $20 per gallon. That's $200 to fill up an economy car and $600 to fill up an SUV. More than most new car payments. How many people could afford that? I'd guess maybe 10-20 million.

In any case, the kind of demand destruction that would occur at that price would be massive. Furthermore, gasoline, which is already more expensive than electricity for an equivalent amount of energy, would become the dinosaur of fuel sources.

Finally, this guy is completely invested in the oil system. He does not support viable alternatives and those alternatives he mentions are red herrings.

Simmons plays a good poker game. But he's clearly interested in only the oil side of this equation. For my part, I think we'll see shortages and rationing before we see $300 oil, much less $600. People would rather have access to some oil than be entirely priced out. 95 cents a cup is far too rich for the survival of a civilized economy. These people are profiting from disaster.

Can someone with a bit more knowledge of Senate procedure tell me was it strange that the Senate Republicans all left (to go to a hastily arranged party meeting) during the part of the session where Pickens made all his peak oil comments? Or at least that's what I think happened. Someone correct me if I misinterpreted.

Simmons really rocked that "news reader" back on her heels a couple times. Was revealing to hear her stutter a couple times when receiving information she obviously didn't understand and wasn't part of her script. Great job Matt!

Oh, yes please! Feeling a bit lonely these days...

Yes, I too have greatest admiration for Matt's contribution, of course.

And he was "off", as was the interviewer.

kyop, what would you say he should say? What is the three or four word summary that he could use to get across the point of "peak oil"? and "peak oil is now"? And "here is what we should do now?"

Without listening again, it's hard to make a constructive comment.

She did have a couple of questions that practically begged for the answer "We are most likely at the beginning of a decline in supply that will not end. We need to undertake massive conservation measures immediately. We need to prepare ourselves for supply disruptions and severe economic downturn. We need a - (my current favorite proposal) - comprehensive study by the NAS to help guide our lawmakers on how to cope with the unprecedented change." Or, whatever Matt's recommendation is.

The entire "target price" line of questioning...kind of misses the boat. It might be nice to have in mind a way to use the question as a platform for what he really wants to say.

My suggestion to Matt would be to have three or four sentences - an additional "mantra", other than the price per cup thing (which isn't bad but doesn't really convey to anyone what the real problem is).

Eg. I've been working full-time at my own expense to help warn the world since 2004. This is how serious the problem is. It is a matter of life and death.

We need to prepare for economic downturn. We need to change how we feed, clothe and shelter ourselves if we want to preserve what we hold most dear about our civilization. We are facing the limits to growth - of energy resources and natural resources. We need to immediately stop some things - new roads, big cars, unnecessary military expenditures. And start doing other things: re-localize agriculture, car-pool and immediate measures to help with the day we see shortages. We need an agricultural policy that helps promote food self-sufficiency. We need a comprehensive policy towards a more sustainable economy.

Hmnn...or however one might say it. I'm sure Matt can do it best.

The old "x cents/cup" bargain price analogy is getting to be an old mantra

seriously, nobody fills up their car with coffee and almost nobody buys coffee by the gallons.

The interviewer has spent her whole career asking about price,price of stocks that is. The other favorite question, of course, is how can we make money on this. The purpose of these shows is not to illuminate the peak oil problem but to tell people how they can make money and when we reach the bubble point, when to get out. To expect more is not to understand that this is a financial network watched by people who are interested in making money, not saving the world.

Well, if Simmons is right, of course, making money for awhile will not be terribly difficult by just getting long oil.

So, the idea of a "target price" - does this mean a price that will make everything better?

yes because in the end it's all about price. that's how we allocate scarce resources.

Also Boone will need energy to pump, transport and purify that water.

he should build some windmills for that!

Quite seriously, though, they need to at least green up golf courses by going green by getting rid of the herbicides, pesticides, and artificial fertilizer. It can and has been done in Bandon, Oregon, for example. And then there is the outrageous water use, especially in places like Phoenix and San Diego.

But I guess we will have to wait a bit for Tiger to get it.

1. Tiger plans to tear down the main house and build new. Perhaps he will also plant a victory garden.
http://www.palmbeachpost.com/search/content/business/epaper/2006/01/26/a...
2. Peak Oil by twenty lengths.

"WHICH WILL END THE WORLD FIRST..."

Dead Heat on a Merry-Go-Round

Cornucopia ... isn't that the capital of the State of Denial?

You are completely out of line. It is time you removed yourself from this forum. Respond to what people say, not who you think they are.

This is simply more evidence of your lack of credibility. You have no ability to deal with counter arguments. You need to remove the people involved.

Reminds me of Saddam Hussein. No Person. No problem.

You, Sir, are a fraud.

Yes, we seem to have a whole new crop of disruptors all of a sudden--all about 3 weeks old here. I guess Jeffrey has been getting too much attention in the mainstream media.

Hothgor is a beserker, most probably trying to increase PO awareness and activity through inflammatory and supposedly thought provoking posts/comments.

Typically calmed by thoughtful direct communications. Has a strong tendency to outlandish posts/somments/claims in public forums.

Tends to drift away when ignored.

nor can the power grid be maintained without out oil

why not? we can use the grid's electricity to power cars.

Hello David_in_CT,

Uh, don't you think the rising global problem is insufficient diesel for heavy-duty trucking, mining, shipping, farm equipment, irrigation pumping, electrical generation [where the Grid goes down], etc?

Recall that I consider heavy-duty, short-haul, battery-electric delivery trucks to move vital goods from Alan's RR & TOD ideas more important than the rich driving around in Chevy Volts.

If I am correct, but they build the Volt and short-haul trucking collapses: I would anticipate that the angry mobs to quickly make most Volts undrivable. We will see.

If we are all buying our next car as a Volt type with 50mpg 5 years from now and this would represent say half of all the cars on the road, then the change in mileage from an average of 25 mpg now to the 50 mpg, assuming that cars and trucks are about 80% of our 20 mbpd U.S. oil habit, would equate to a reduced demand of 4 mbpd over 5 years. That's about 4% per year. Right now, the net exports to the U.S. are dropping by about 6% per year and accelerating! We're probably going to have to do better than this type of big car switchover just to stay even with the net export decline rate in 5 years.

"Demand for liquid motor fuels is going to collapse and with it peak oil."

If you know anything about the subject of "Peak Oil", you would not make this statement. Peak oil will not collapse. If demand for oil does decline and with it the price, the oil that cost more to produce will not be produced (like the tar sands at $70 to 80 per barrel). This will cause production to decline and therefore Peak Oil will be more evident. Peak Oil means peak production; get it?

Even if EV's become common place, it won't make peak oil disappear. Huge demand reductions of oil will actually bring on Peak Oil by definition as the supply will decrease rapidly from its high point, never to return to it as there is no longer any need. Even if we have huge supply capacity for centuries afterwards, there will come a point, which no one may bother recording, at which we lose completley the capacity to ever produce oil above the peak.

Peak Oil is not a problem if there is an alternative to it. Until the alternatives are proven, I'm going to err on the conservative side. We should proabably think about how we use this stuff and take it seriously that right now, we don't have any alternatives that is going to allow us to power even a fraction of the current motor vehicles on the roads.

Drive less, Use Less, Grow More

Don't forget CJ, that all those unemployed people will be part of a cheap labor force, eager to learn new skills so they can eat.. and then there will be all those scads of abandoned 737's, ATVs and Escalades waiting to be stripped and turned into umpteen-brazillian Wheelbarrows, Chowderpots and Ebikes. I bet a lot of those Pete Seeger songs will be getting sung again, too!

I'll trade you some Maple Syrup for some Macadamia nuts though!

Best,
Bob

peak coal is way way in the future and peak nuke so far in the future as to not be worth talking about

I think you are mistaken about coal. I think the worldwide peak is about 2022 and the US (the Saudi Arabia of coal) has already peaked in terms of energy content produced. Fortunately peak nuke is at least in the millions of years.

As you suggest, battery powered cars are already nearly competitive today while we still have cheap oil. With the clearly available nuclear, wind and solar generation sources it is hard to understand why so many people even here at TOD do not get that this is obviously the future of transportation.

Don't even try to tell me your going to run a semi-truck with batteries, This is one of the most naive things I've heard in a while. I don't think you have enough of a scientific/engineering perspective to realize batteries have too low of an energy density to practically be used in heavy vehicles.

First, why don't you learn to use the icon in the lower left of the comment box so others can follow your arguement.

Second, Peak Oil is peak production for whatever reason. My point is that a production peak will occur soon (two to five years IMO) even if caused by a drop in demand and thus drop in price and drop in production. The remaining oil may last longer than originally predicted, but the world will never again produce approx. 77 mbpd crude plus condensate.

Now about that shift to electric cars and plug in Hybrids. Back in 1982 the consumption/production of oil was falling and by 1985 it had dropped nearly 20% from 1979. This was due to two things: industry using oil had declined/went out of business or shifted to more efficient methods. Second, some people became unemployed (1981 and 1982) and nearly stopped using oil, while by 1985 many people that kept jobs shifted to more efficient cars which often cost less than the inefficient cars of the 1970's.

On the contrary today most of the middle class have not seen their real income rise for several years and unemployment is currently rising. Since the new electric cars will cost more (Volt likely around $28K), and cost of replacing batteries being very high ($6 or $8K every five years?), I question how many people will shift to these new cars in the next five years when their current vehicle has little trade in value. My point is that an economic down turn will not allow such a quick fleet conversion to more efficient cars as you predict. And as industry sees business drop it will also have a hard time converting to more efficent trucks and equipment.

David,

Keep in mind the average lifespan of a car in the US is 16 years, and demand destruction also means people will be losing jobs so they will flat out not be able to buy a car, so the idea we can all just buy Chevy volts in 5 years is quite unrealistic.

Also, do not forget as Gail has been adamantly pointing out lately that the grid is in precarious shape already, trying to double the electricity consumption of every household would be more than a straw on the camels back.

We can be certain? Really? I am not a gambling man, and I would prefer those in higher positions not gamble with peoples livelihoods.

So I guess infrastructure change doesn't require oil? I think it is a little naive to believe that we can drastically cut demand while rebuilding our entire economy.

Solving accelerating problems with increased complexity is not a solution at all, more of a band-aid for a shark attack victim.

At $4 a gallon there are an awful lot of things that work better than oil for transport fuel.

Well over here in old fashioned Europe, gas is more like $9 a gallon and - guess what? - oil is still easily the numero uno transport fuel. Gas here has been 2-4 times more expensive than in the US for decades and, while Europe's public transport infrastructure is in better shape than the US, it's still largely dependent on fossil fuels. Until oil prices really start rising towards to the actual value of the thousands of years of stored solar energy in every barrel, people will find ways to afford to waste it in private cars.

The thing about Peak Oil is that it's not about cars. They're the icing on the cake of a world economy currently predicated heavily on a continuing growth in the supply of cheap energy. Take out either word in bold and the economy threatens to go pop. As several other commentators have already said today, when Peak Oil kicks in, fewer and fewer people each year will be able to afford new vehicles of any kind. Only those wealthy enough to be completely immune to gas prices will even contemplate buying private ICE vehicles. But they are the folk who will buy the latest electricals anyway.

Where will that leave mass car manufacturing? Investment will only flow into large-scale electric vehicle production if it sees a return - and that in turn will only happen if electricity is affordable, readily available and in growing supply per capita. None of those things will be the case for several years post peak, making a profitable and easy transition to electric cars highly problematical.

Result: possibly electric cars for the wealthy; oil-fired vehicles for food production and distribution and the military; and walking/cycling/public transport for the masses.

The electricity grid is sized for peak demand, if people charge their cars at night, which is likely, there shouldn't be a problem. This could be encouraged by reflecting the actual spot market price of electricity in peoples bills rather than a flat rate.

new power lines?? don't power lines use aluminum cables. that's gonna be spensive!

Towers for support of the lines are made of wood (as-grown or laminated), steel (either lattice structures or tubular poles), concrete, aluminum, and occasionally reinforced plastics. The bare wire conductors on the line are generally made of aluminum (

A very large part of that $4 is speculative in nature and could disappear very quickly.

Can I have some of what you are smoking?

That is true, but still the net effect overall is going to be a lot more stress on the grid, which it is not ready for.

The economy is not collapsing because of 4$ gasoline, but higher oil prices are putting huge inflationary pressures on the economy, stagflation basically. How do you figure most of the price of oil is speculation? Care to back that up, or is that just your opinion like every other person I have seen argue speculation is a more than negligible part of oil prices.

Simmons uses the price of cups to demonstrate how cheap oil is. As the price of cups gets really high, perhaps he will switch to ounces, then grams, etc. I guess his point is that the cheap price of oil/gas has caused us to squander our heritage, which indeed it has. He is making the point that we need to conserve. Virtually everyone here would agree. But that still won't make declining oil supplies go away. He needs to do a better job of answering the question, "what's next?". Anyway, he is to be congratulated for doing a great job of showing the world there is a problem. He, or someone else, will have to show the world what they need to do in response to the problem. He also does a good job of explaining that drilling in place like ANWR, while not necessarily disastrous, are not a solution to the problem. They just slightly delay the peak and do nothing in the short term.

Right now, unfortunately, the politicians are back to the same old arguments about drilling with the Republicans screaming for drilling as if that is going to make a nickel's worth of difference in our short or long term problems. If the politicians could get on the same sheet of music with respect to peak oil, they would realize that these environment versus supply arguments are a dead end. Whether you care about the pristine nature of ANWR or not, you shouldn't be arguing that this a path to salvation. And that includes off shore drilling , too. No doubt oil men like Pickens and Simmons make the Republicans very uncomfortable. Pickens couldn't care less about the environment, but he is also smart enough and honest enough to say that drilling in these pristine areas is a short sighted and misleading approach. Screaming about the need for more drilling is just taking a dishonest stand that more supply will solve the problem.

We are in a box and there is no short term solution and there may not be a long term solution. But can the American people handle the truth. The evidence to date says otherwise.

Why? Half of 7 is only 3.5... that's less than we lose to decline each year. And taht is only of decline is only 4.5 percent.

Cheers

Thanks for this good work!!

And how does this compare to Tony Eriksen's www.theoildrum.com/node/4001#more post?? When do you predict the crude production decline will start? Also, I should have included your name for to whom I was directing comments at
http://europe.theoildrum.com/node/4152#more

@WestTexas, Rembrandt, Ace, David Cohen, and others,

It would be interesting to graph Peak Oil for the USA, factoring in the following: (1) the zero net energy production of biofuels, (2) the Land Export Model, (3) increasing energy inputs to extract oil, and (4) declining U.S. oil production. This would be difficult, but it would be "instructive," as there are no significant alternatives to oil (according to my Wirth Peak Oil Report which researches the best scientific and government studies). Add to that U.S. hyperinflation and the monetary collapse in the dollar. Also, this has to be considered in thinking about Peak Oil: As oil depletion progresses, more and more oil is used to produce oil. When the amount of oil used to produce a barrel of oil equals the amount of oil produced, it is pointless to continue oil production. In addition to the oil used on site to produce and refine oil, energy is used in all of the processes for the machinery, equipment, and personnel used in the extraction, transport, and refining processes. For deepwater oil production, this would include all of the ships, platforms, steel piping (many kilometers of pipes on-site and to onshore locations), and their employees, including the energy used in making the hundreds of thousands of parts, the energy used in the factories that make the parts, the energy used in transportation of all of the parts and employees, as well as the energy that is consumed when employees and stockholders spend their salaries or dividends on goods and services (food, automobiles, yachts, airplanes, recreation vehicles, vacations, consumer purchases, etc.). Because there are a number of confounded energy input variables, it is difficult to measure all of this consumption of energy, but it is an economic reality that is shown in corporate decisions about the profitability of deepwater oil projects. For deepwater, heavy oil, tar sands, and extraction where special techniques are used, the point at which energy consumed equals the energy produced will be reached rapidly. For this reason, some oil that is classified as recoverable (for example deepwater oil, heavy oil, and the Bakken formation) may never be recovered.

With little oil, it will not be possible to maintain the Interstate highways and the power grid. And when they go out, that's it. Nothing coming in on the Interstate and no communications. Soon housing prices will hit the skids making it difficult to sell and move. That is why I got out of NH quickly. Anyone want to retire in a quiet, safe, and sustainable place in Mexico? Call 603-668-4207 my old NH phone number, and the same here with Vongage telly, or clifford dot wirth at yahoo dot com

Cliff Wirth

An oil field called "Blind Faith"? Wonder how Chevron thought up the name!

http://biz.yahoo.com/ap/080619/nigeria_oil_unrest.html

Shell halts production at 200,000-barrel-per-day oil field in Nigeria after militant attack

I guess that wipes out the SA increase.

Various press releases, reports, etc., see the column Ref for specific references.

Kudos to Ace and others for maintaining this database.

Good luck with that.

Hey, if Aaron Spelling gets to be a producer, then dammit, so does Rex Tillerson!

BULLWINKLE: Now watch, as I produce a Rabbit out of my hat!

Just funnin'..

I agree, it is like saying "mature oil fields," instead of "depleted oil fields." These lies brain wash all of us.