If I had to choose between those 4, i'd go b, followed closely by a.

You left one out:

e) All of the above and solar too.

Until we try out the various options, there's no way to make a choice.

I do think that (b) isn't likely to work out, since the mass of material other than the water/algae mix is going to be large. Growing "oil producing" algae in open ponds was shown to be a bad idea by the NREL, due to rapid contamination from wild type species which don't produce oil. That means the only way to grow "oil producing" algae is by building massive closed systems, which would be much more expensive than open ponds. Not to mention that algae doesn't grow when the temperature is below about 40F, so production will be seasonal, just like any other crop.

E. Swanson

d) None of the above.

A ridiculously large portion of our economic activity can be retooled to perform on less energy. That is the answer.

d) None of the above

The presumption in your poll question is essentially "how do we keep BAU going?"

The problem we face is not simply an energy issue. The problem is our worship of growth and material prosperity. Any energy source that allow that worship to continue is to be spurned. The solution is not what new energy source do we need, but how do we learn to live lives that are not based on the consumption of ever more resources.

I do think that (c) is underestimated and neglected at present. There are multiple possibilities: tidal, wave, thermal gradient, and currents. We certainly do need more R&D on these. These are more a matter of applied engineering rather than basic research; we've got time for applied engineering, but I'm afraid that we're already out of time when it comes to deploying something that hasn't even been discovered yet.

The big problem with oceanic power schemes is pretty much the same as with many other renewable megaproject schemes - the distance that the energy must be transmitted to end users. There is no point in considering any energy project unless the transport/distribution system is included in the analysis. There might also be environmental considerations. We've already gotten ourselves into enough problems by messing around with global GHG levels without knowing what we were doing; we had best exercise a lot more care before we start messing around with the oceans on a large scale.

Of course, what is now becoming obvious as the biggest problem of all is: money - as in "not enough of it". It might be pointless to talk about large scale technologies of any type if large scale financing is simply impossible. The future in energy may very well be low tech, small scale, and distributed, simply because that is the only possible energy future that anyone can afford.

I think that to be more realistic, for most people living in most places in the future, the answer is going to have to be (d).

How about oil palms? New hybrids promise much higher yields and plenty of land in the Amazon.
But, forget about alternative fuels for the next several years. Financing is gone; the public doesn't care. Oil headed for $10 a barrel. Nobody (outside energy mavens) is going to care poop about alternative fuels or energy for the next five years.
Worse, if this is an "L-shaped" recession (as forecast by gloomy-doomies at The Economist magazine) oil demand may not recover for 10-15 years. It could be 20 years before the Peak Oil movement gets traction again.
Kinda like the last time, at the end of the 1970s, and the "Limits to Growth" movement. I wonder if the price mechanism pushes off "Peak Oil" consequences in 20 year increments.

VK, forget the techno-scientific-voodoo. Soon the global middle-class is going to suffer a catastrophic structural collapse, throwing many into a world of poverty they didn't know existed. And, as many here are middle-class, why not poll them on what preparations they are personally making to ensure they survive it.

The future is less than what we have today. Anyone making plans on a future with what we have today or more (ie. Noddy electric cars, magical power production systems, etc.) is going down with all dependants.

Maybe its time for people to get serious and start dealing with reality, before it deals with them. Do the poll!

I would say first that whatever the source(s), the total amount supplied will be much less than it is today.

I would secondly say that it will need to be less and less dependent on underground resources (i.e. underground hydrocarbons, metals, many minerals) since these are either depeleting or will become increasingly inaccessible because of less energy.

This leaves biological sources of whatever form, plus hydro, plus solar, plus wind -- but increasingly without metals further down the road. 1491 by Mann has some very interesting material on pre-Columbian bio-technology in the Americas.

Parenthetically: I don't know how long the metals we've already extracted can be kept in play by recycling, but I'm sure it's an issue that will eventually get a lot more attention.

Very interesting and helpful. Thanks.

encoraged to see someone estimate the in-transit volume. and based upon you estimate, this inventory overshadows anything on the inventory report.

Interesting, but I suspect he left an important point out that would mute this impact in both directions.

He doesn't get paid by the day... but by the load.

You can only slow down so much before fuel savings are offset by fewer trips.

emanuel -

Very interesting, and something I've never given any thought to!

This 'stocking and de-stocking at sea' effect is something that appears to have been largely ignored by the people doing analyses on the various petroleum production, consumption, and inventory statistics.

When I see comments like, 'US imports were 14.375 million bpd for May as compared to 14.698 million bpd for April, a 323,000 bpd drop', followed by all sorts of conclusions drawn from such, I can't help feeling that many times these differences are mostly noise, rather than any meaningful trend. The stocking and de-stocking effect you described certainly doesn't make such analyses any easier, that's for sure.

Fascinating post.
Would you expand on this point?

I happen to think the destocking at sea is about to end

Yeah they tagged me hard on my timing with the slow sailing. Also understand if they don't have a new cargo they are not going to be in a hurry regardless of the price of bunker fuel.

Throws things off by a week or two. Also on the US gulf we had a bit of a traffic jam of ships waiting to unload caused by the hurricanes. A lot of oil we setting in the gulf or slowly enroute. It takes a bit to clear.

And last but not least while talking about ships the capacity of supertankers is rated in terms of the light oil it can carry the heavy grades way a lot more and thus a super tanker load of heavy may be a lot less oil by volume.

http://en.wikipedia.org/wiki/Heavy_crude_oil

You can play with the math but you can easily conclude that tankers of heavy crude would ship 10% less oil by volume vs ones filled with light crude. Thus a shift to heavy crudes or light crudes for that matter is not really caught by counting tankers.

emmanuel: that is a very interesting thesis, that any change in oil/fuel prices will be magnified, by the effects on the virtual storage of oil in transit. I do think you overestimate the degree of speed changes, however. Because of the other fixed costs -and the need to make contracted deliveries on time, I think the size of the effect will be considerably smaller than you postulate here. An additional factor is that tankers don't spend all of their time steaming, the loading and unloading also takes a good fraction of their time (and that is not affected by the speed change). So the bottom line, it could be a important effect, but your first pass probably overestimates the size of the effect.

This type of state space model started my development of the Oil Shock Model. At the micro-level, all flows are transfers from one port to the next. The model is still relevant but the macro aspects have since subsumed it.
http://mobjectivist.blogspot.com/2005/06/part-i-micro-peak-oil-model.html

Each transition follows a Markov rate, with the strength of the transition proportional to how quick we can "turnover" the amount in the previous state. In general, approximating the strength of extraction on the proportion left allows us to intuitively model such effects as the small amount taken from stripper wells and the infrequency of shipping small volumes of oil.

Extracting 0.2/year
Shipping 2/year
Refining 1/year
Transporting 1/year
Storing 5/year
Trucking 5/year
Pumping 5/year

The initial conditions place all states at 0.0 except the InGround state which we normalize to 1.0 representing the full capacity of the reservoir.

For the rate parameters chosen above, we can calculate the profile after 4 years of extraction (each state gets scaled by the rate going out of that state to capture the "in-the-pipeline" effect, something the consumer can most closely identify with):

What is most interesting about emanuel's post are the effects of latencies on the transfer functions. The variability of latencies on shipping times can wreak havoc on predictably on future supply availabilities.

Storage at sea is not affected by the speed of oil tankers, only by the number of laden tankers at sea.

If demand drops 10% and tankers slow 10% the same number of tankers will handle the reduced demand, and there will be no net change in storage. If demand drops 10% and tankers slow 20%, they will have to add 10% to the tanker fleet, which will increase storage at sea by 10%. (Ignoring one-off transitional effects.)

As someone pointed out, slowing the tankers slows the income stream, so it's an iffy calculation whether tankers will be brought into or taken out of the transport routes.

As a guideline, the minibus taxis we have here in South Africa face the same conundrum: Higher speeds mean higher costs but more revenue. The result: They drive like maniacs looking for fares, no matter what the price of petrol.

Then there's the effect of piracy. If tankers go round the Cape rather than through Suez, there will definitely be an increase in storage at sea.

Possibly... but it certainly strikes me as tacky.

We don't even keep our outside lights on; guess we're pissing in the wind with people like this on the planet. Would like to think there is a special place in hell for these people.

I remember things like this being outlawed in 1973. How soon before will we see that again - this time probably for good?

Here's an idea--let's all take pictures of the gaudiest display in our neighborhoods and post them here! Can we, Leanan? Something like Kunstler's "Eyesore of the Month" page... :)

I've never understood the way people in the USA feel the need to buy useless junk to "celebrate" holidays. And their more is better way of thinking.

Sadly, it's a mindset that is spreading (Dubai, Shanghai, Singapore, ...)

Things like this make me think that the coming energy crunch will not be a bad thing. There is so much waste in the world, we would have much better lives using less energy/stuff. With the advances in technology and automation, we could all work half as much, leaving plenty of time to walk in the forest and enjoy the stars.

But the produce/consume/reproduce dogma is quite strong.

We're heading into a future where the survival of the communist party depends on Nationalism, if the world does plunge into a depression (which I think it will by early 2010) than China will be sorely affected. Hence nationalistic fervor would be a ploy to keep their population from throwing out the communist party. The figures are really mind boggling in terms of the sheer number of people who've lost their jobs, been sent back to their villages, factory closures etc. For china there are 3 likely options.

1) Civil war before 2015, communist party dissolves and some other entity comes up.
2) Nationalism, possibly a war against some country which is "anti-chinese"
3) Pray that things recover and people start consuming (depleting the planet), miracle new oil substitute is found and world keeps partying like it's early 2007.

Like GM to Congress, is there a scenario where China asks the US to present a more detailed bailout plan with a clear path to sustainable profits? Would our leaders fly over in personal jets?

what do you make of the 13% drop in eia estimated dry gas production from august to september ?

If there really are a lot of little natural gas companies producing our natural gas, we could well have had the ramp up the EIA has said. The problem is that those same little companies are the ones likely to be hit hardest by the credit crunch, so production going forward could be hit quite a bit harder than if it were simply oil majors making investment decisions.

We will need to be watching closely what production numbers are saying. The hurricanes very much affected September and October production, so this will be part of the picture as well. It seems like by 2010 we will start seeing the impact of the credit crunch on production, but it could be even sooner than that.

My 2¢ worth (probably an accurate estimate for the objective value of price prognostications)--I think that a combination of involuntary + voluntary net export reductions will cause the average annual price in 2009 to exceed the average annual 2008 price (about $100).

Consider that three top 10 net exporters have been showing long term net export declines--Venezuela, Norway & Mexico--with Russia, IMO, joining the list of countries entering the terminal decline phase, and the Russian net export decline could be very sharp, and like the three examples shown, Russia will probably show an accelerating net export decline rate.

And it remains to be seen if Saudi Arabia will ever again exceed its 2005 annual production rate, while their 2008 net exports will probably be down by about 700,000 bpd, relative to 2005.

I had suspected that the surge in oil from KSA this summer consisted their lighter grades Arab Light and above most of it pulled from storage and the rest from temporary surges in production possible since they rotate wells.

I think the world is going to see our oil supply go distinctly heavy sour over the coming months. And if I'm right about the NG/Heavy Sour refining issues i.e complex refining of heavy sour crude takes a lot of extra NG then we are in a interesting situation since Oil is effectively at the same price as NG on a btu basis. Last winter we seemed to get into a sort of price spiral of NG and Oil in my opinion caused by a loss of light sweet ( perhaps because it was going into storage ? )

However the price spread was much wider then then it is now its practically zero. Assuming the surge was primarly light oil and further assuming that Saudia Arabia withdraws additional light oil off the market its a safe bet that we may see all hell break loose.

If the NG/Heavy Sour price spiral is real and we get into it again KSA will not flood the market with light crude to break the deadlock.

And last but not least the NG/Heavy spiral works as follows.

1.) Price of light sweet crude rises
2.) Producers prefer heavier grades and use more NG
3.) Price of NG rises producers prefers light sweet
4.) GOTO 1

This is really an important point and deserves more attention. The only real historical precedent we have is the late 70s and early 80s. That was an economic contraction caused by oil price spike, the same as now. The "officials" are now saying the current contraction started in December 07, which leads to my estimate that the American economy, as is, can't run on $80 a barrel plus.

Between 79 and 83, oil consumption contracted by 13%, which today based on 85 million barrels would be around 11 million barrels. Now if the Saudis cut half, thats about 4.5 million barrels, leaving the rest of OPEC to cut 6.5, neither of these are going to happen. OPEC has proven to be ineffectual in closing the spigots when economy is going down, and now you have a number of countries who became quite happy with all that oil money and they're going to be very reluctant to cut...count on it. You can add to that, this contraction looks like it will be even more severe than early 80s.

However this time, supply is even more limited, and to keep running in place, as even IEA now admits, means spending billions. Yet as oil price collapses, spending on new sources and technology has already dropped, so when the economy gets going again, the price of oil will rise along with it, there will not be the great lag there was in the 80s and 90s. Though how long this economy slows is an open question, and just as importantly every dollar spent trying to prime the status-quo pump, will only make the resulting recovery that much shorter.

A border fence does have the added benefit of serving as a WPA style economic stimulus.

Legalize drugs and tax them; end of drug cartels.

I found this article to be presenting an accurate picture but the scope of the problem is far greater than 'we' can imagine. It isn't just the head of this beast but the tentacles of corruption that go right to the roots of Mexican governance. Mexican society is generous and honest, indeed amazingly so, but the institutions - perhaps because they were imposed colonially - are rotten from top to bottom, large scale or small. Until you eradicate the corruption at the bottom, the top will just be the sum of the whole mess. The current attempted purge from the top down is amazing and probably an attempt by the PAN to create a secure and organized framework for legitimate business to integrate with the rest of NAFTA. While the election that delivered Calderon to power is one for coincidence theorists, I doubt that his opponent would be tackling this problem as sucessfully.

I'm not Forbes fan, but this article and this subject in general is required reading. If government revenues plunge with the oil exports the shift of power to the underworld will be potentially destabilizing. Not that there is much stability to maintain. Calderon will have no option but to open Pemex to foreign nationals which Obrador ideologically could not. And don't think the state department doesn't know the intimate details of the situation. ELM on the Rio Grande. Ringside seats.

And a Lear falling into an upperclass neighborhood? Small target. Nothing to see here folks.

In 1984, President Reagan's National Security Council expert on Latin America, Constantine Menges, told Casey that things in Mexico had gotten even worse. It was on the verge of chaos, if not revolution, he insisted. Mexico was strapped with a more than eighty-billion-dollar foreign debt, rampant corruption, and many other social problems. About the same time, an intelligence board that advises the president issued a top-secret report charging that the CIA wasn't paying enough attention to political instability in Mexico. This prompted Casey to order a CIA estimate of the Mexican situation. He picked his national intelligence officer for Latin America, John Horton, to head the project. Horton, who had been the CIA station chief in Mexico, picked another analyst, Brian Latell, to work up a draft report. Latell visited Mexico and wrote a report that listed the familiar items: urban and rural unrest, large foreign debt, enormous capital flight, and widespread corruption. Horton agreed with the facts in the draft but not with Latell's conclusions that Mexico was ripe to fall. Horton refashioned the report so that it concluded there was at best a 20 percent chance of a collapse in Mexico. A Horton footnote indicated that most U.S. intelligence didn't even support a number that high. Latell's mistake in making direr predictions, Horton told Casey, had been to assume that Mexicans would react the same way that Americans would to such conditions. Americans would revolt. Latell assumed Mexicans were about to do the same. It was an amateur's mistake...

Mexicans may complain vehemently and often about the ineptness and corruptness of their leaders. But that does not mean that Mexico will soon go the way of Iran, or even the Phillippines or Haiti. The glass may be half-empty in Mexico, but it is also half-full. There is joy and laughter and love of children. There is artistic talent and hard work. There is patience and, most of all, an ability to endure. Aguantar means to bear or endure, to put up with. That's what Mexicans do. They have suffered a lot through their Indian, colonial, and modern history. They have learned to put up with things that Americans and other foreigners have not.

--Patrick Oster, The Mexicans

What's being implied here is the idea of a generational class system. Let me explain:

1) You need to get a college degree to get a high paying job (common axiom)
2) In order to get a college degree, you need to pay big bucks (Tuition, books, etc.) to the tune of $9,000 - $35,000 per year.
3) Since one starts college when they are young (and hence before they can accumulate wealth), they either need to pay for it themselves by taking out loans OR they need to get the money from others (i.e. parents).
4) Since loans are becoming scarce due to the economy, the best option is to get the money from the parents
5) Because of the high cost of college, one needs to have a high paying job to afford to pay for it for their kids
6) See #1

It's a treadmill, really... One can't be better off unless your parents are better off. Things like aptitude, determination, drive, and hard work start getting thrown out the window when college is something only the rich can afford to get.

Even the creme de la creme are feeling the pain:

Harvard endowment loses 22%

In a sign of the economic times, Harvard has sent a letter to its deans saying that the university's $36.9 billion endowment fund lost 22 percent of its value in the last four months and could decline as much as 30 percent by the end of the fiscal year on June 30.

While there are many factors behind the rise in college costs I see the collapse in manufacturing and union busting have caused too many to give college a try when the odds of actually earning a degree are small. In times of high unemployment even more youngsters try to get that elusive degree. It is amazing how well off those without a degree were back in the 1960s. The percentage of the adult population with a degree has doubled since WWII and the income of working families has dropped. The illusion that a well educated work force is good is deeply entrenched in the psyche of Western countries. There is just too much demand for a college education and the sooner we give our youngsters a good alternative the better.

The companies are a mess, but these guys are asking for less than .4% of the taxpayers`money that has already been thrown away with very little discussion-where was the MSM outrage over the other 99.6% of the pie.

a) I'd ask them each 3 very good reasons why they should still remain CEOs. how can they continue after having run their respective companies to the ground?

b) They seem to have no clue on the state of their finances. Two weeks back they wanted 25B. Now 34B. If they have burned through an extra 9B in two weeks, no great maths needed to figure out how quickly they can run through even 100B. Otherwise what has changed since then to ask for 36% more money. 9B can fund good MRT systems for 2 cities in the US. These are all pretty big numbers.

c) why should they be rescued? none of the employment bs. they don't care if people are unemployed or if they are starving.

Srivathsa

Let's see, $1 per year in wages plus millions in bonuses and more millions in stock options --- Hummmmm Ya, they will starve on that $1 per year wages.
The only real way to wring the excesses out of management and labor at the "big Three" is to have them go through bankruptcy.
Strange how you don't see VW (who are building a 1 billion dollar new plant in the USA), Mecerdes (who can't make their Smart for Two car fast enough (1 1/2 year wait for a new one!), Toyota, Nissan and Honda (all of whom have manufacturing plants in the USA making cars and trucks with as many or more Made in the USA parts than the "Big Three") asking for bailouts?
Why do they still talk about the "Big Three" as "THE" American auto industry. If the "Big Three" all disappeared over night would the rest of the companies manufacturing cars and trucks in the USA somehow magically vanish with them?
But the below 10% public approval rated US Congress will probably hand over the 35 billion of our kids, grandkids and great grandkids tax dollars in an attempt to put a new coat of paint on a sinking ship.

"We can't consider Chapter 11, because then people wouldn't buy our cars."

Here's a little news flash: People are already not buying their cars. That is not going to change in a few months, that is a more or less permanent state of affairs.

A few people might be persuaded to buy a few small, energy-efficient vehicles, were they to be put on offer at a reasonable price. I doubt that any of these CEOs or their staffs have any idea how to make that happen. Maybe there is someone, somewhere, who does . . . and would do so, if they could acquire some automotive production facilities at a bargain (i.e., liquidation) price.

That is what will happen, sooner or later, whether we throw more or less money that we don't have down the black hole. IMHO, we are better off biting the bullet, throwing less money down the black hole, and seeing the change come sooner rather than later.

I do think its worth calling attention to the glaringly stark contrast between the insouciance with which banks are being handed hundreds of billions, practically no questions asked, and the harshness with which the auto executives are being made to grovel for mere tens of billions. I wonder whether this glaring contrast might not possibly strike some of the sheeple out there as odd too, and get them wondering about why the banks are making off scot-free with so much more.

A rumor from Japan---one of my students told me her friend who works for Mazda said that he and some other employees had stopped getting paid regularly because of the inability to sell enough cars. The company seems very sorry I got the impression. Here there is the idea that you look after your employees and it's painful when a company can't.

2000 men rallied in Tokyo yesterday because their welfare benefits will expire and they'll be left homeless. They can't find jobs as the electronics/construction/auto sectors continue to weaken.

John Robb has post up about the break up of Canada. I'm not going to comment on how likely that might be. What interests me is the rapidity with which something like that might happen. Think fall of the Soviet Union. Virtually overnight. And no one expected that, either.

Break up of these large nation states - US included - seems to me a fairly likely outcome of energy depletion. The periphery is less and less well-served by the core and it gets sick of supporting the parasites in the core. Control of money. Control of resources. Ultimately it goes back to "legitimacy" of the state, which depends on the state's ability to meet the needs of its people. [Where in the US the state is facilitating the rip off of its own people, the issue of legitimacy is right in our faces.] How delaying a vote of confidence - is that what it would have come to? - in CA for a month helps the situation is beyond me. "Painfully obvious" by end of January, comes to mind.

The hierarchy is unsupportable in a lower energy regime.

cfm in Gray, ME

For those of you who want to see it from the street...

Street View

I hope he doesn't have to deal with foreclosed homes around him... Although I think it would be fitting if homeless squatters set up shop next door...

Just a few months ago the plan was to hide in Paraguay. The cost of this home will probably be less than the first "speaking fee" he gets from Bejing or New Dehli on Jan 22, 2009.

Main question: Now everyone knows, that the world is falling apart. Why is Bernanke not printing more money? They are discussing 500 billions or 700 billions bailouts....
Why not to take a 50 Trillion ticket? Why not just to print 50 trillion? They could it! So, go ahead moneymakers! Otherwise the world will enter another world war.

A big problem the rest of the world has, at least those 'voluntarily' supplying the United States with loans and credit, or 'tribute' if you prefer; is how long do they go on 'subsidising' the US economy? Obviously the US isn't just the world's biggest borrower, it's also the biggest market, sucking in products, services and resources from the entire planet, and it cynically uses this position as a form of 'blackmail' in relation to the rest of the world.

But now this system of 'imperial tribute' is breaking down before our very eyes. A new world order is coming into view. We are rapidly reaching the end of this line of unlimited credit for a form of 'parasite' empire that's squeezing the planet dry. How the American ruling elite, history's richest and most powerful, will react to this unpleasant new reality is anyone's guess. I doubt they'll be particularly pleased and could lash out in any direction in a fit of colossal pique, mixed with desparation.

Before Settlement, Iceland was about 22% forested. This declined to a low of 1% 1800-1900, with an estimated release of 6 billion tonnes of carbon.

Replanting trees in Iceland, on land denuded for a millennium, is clearly carbon capture.

I am, BTW, the only non-Icelandic member of their Tree Growing Club (searching for new, hopefully invasive, species of trees).

Best Hopes for Bigger and more trees in Iceland,

Alan

Well, inflation adjusted, we've never seen $1/gallon gas...

While he said he believes global warming is a danger, Petrowski is not sure there is as much of a correlation between carbon and global warming as some environmentalists claim.

“Carbon is our greatest threat – there’s another myth,” he said. “I do think economic devastation and reliance on foreign supplies of oil (are).”

He might be right on this (with respect to foreign supplies of oil), only if carbon burning is set to peak shortly. If we stop burning carbon, GW might not be as bad as we think (emphasis on might). However, that will eventually mean he's out of a job.

³He supposedly facilitates a next generation "clear" fusion power.

That would be quite an accomplishment, but likely not as great as "mining" the moon by 2020.

A gram of the stuff would equal about 150 megawatt-hours at 100% efficiency (which, of course, you'll never get close to). That's just a few minutes of output from a large power plant. So let's say that you need 250 or so grams of ³He per day to opperate your plant. The concentration on the Moon's surface is about one part per hundred million.

So to fuel one day's operation at a single power plant, you would need to mine/process about 25,000 tons of lunar material.

Now how likely are the Russians to get such an operation up and running on the Moon by 2020 when they haven't even visited yet?

To obtain 3He:
- build and operate a CANDU reactor
- sell the electricity. Profit.
- Separate the 3H produced from deuterium in the heavy water primary coolant
- Wait 12 years. Half will have decayed to 3He. Better yet, operate a beta-voltaic battery for 12 years, sell the electricity, profit.

That way you get a working nuclear plant (probably several) for less than the price of a scheme that may not work, and will require lots of invested energy

Maybe the Masters of the Universe accidentaly stumbled on TOD while doing a Google search, and were scared you-know-what-less.

Not me, and it's still fundamentals -- supply and demand, willing buyers and willing sellers, and all that. I suggested to my family and friends that they work toward high-efficiency paid-for cars, reducing debt and consumption wherever possible. I taught them what I could, with a lot of YMMV disclaimers, and especially pointed to "volatility" in all things. They seem to generally get the notion that cheap gas is expensive for those without jobs or with negative cash-flows and no more credit, and that low prices reducing investment are setting us up for a whip-saw the other way before too long.

I've had several say "I should have sold my 401K to cash this Spring like you suggested" too. Most are just happy for some days of cheap gas and added time to hunker down.

Mmmm, yes -where are all those pundits who insisted it wasn't speculation? There hasn't really been that huge a demand drop but now the hedge funds are liquidating the price is dropping like a stone...

Nick.

I'm feeling the most heat from myself for not selling at peak price. I knew a severe downturn was coming and advised many people not to buy a house and certainly not stocks other than energy. And I thought there might even be a downturn in energy, maybe at worst down to a $100/bbl but nothing like what has happened. And I was also worried that a war would break out and that there'd be a spike. So I stayed in. But even so, I bought below what it is now, so it's not so hard for me to stay in.

I think the fundamentals haven't changed. What's unknown is how much more demand destruction will take place. It could be a lot. Still, there are several factors conspiring to bring supply down: natural decline, project cancellations and cutbacks, and finally producer cutbacks. How soon the lines cross again know one knows.

The deeper problem is not investment losses, one is lucky to have something to lose, but the havoc all this is bringing down upon society. I have children and grandchildren. What will they have?

The Nobel laureate, I forget his name, who says that the current crisis is nothing compared to the others that are coming due is entirely right. Not that this removes the sting (or worse) the people are suffering now.

Anybody else feeling the heat? ... oil prices are falling like a rock, close to 40 dollars now and could head for 25 ... People on this site insisted that it was all about fundamentals 6 months ago ...

Maybe you should ask if anyone is feeling the cold yet, and when does the Iceman Cometh? And the heating oil delivery guy arrive?

As for the "fundamentals", I feel your pain. You had a certain model in your head about how the "economy" works today and how it will/must work tomorrow. The model was wrong. Don't be embarrassed. Alan Greenspan had a model in his head about how the fiscally prudent Wall Street crowds and the "free [fall] markets" would deal with default swaps.

The Peak Oil model (i.e. the Hubbert curve model) does not directly include "price" as one of its input or output parameters. The output of the model is purely in terms of average barrels per day extracted assuming a free [for-all] market situation where everybody is drilling as fast as they can to maximize their current profits. At some point, after the easy-to-extract-and-ship oil is gone, cost of production invariably goes up and, well, if current market prices don't justify the drill-baby-drill paradigm anymore, rate of production goes down.

"Anybody else who are feeling the heat from friends and acquaintances having invested in your advise regarding peak oil? "

hell no, they dont pay any attention. except my brother-in-law we had a discussion about chk a few months back and i told him i wasnt impressed. he had to admit i was right(by default really).

I never give anyone investment advice, especially with regard to oil. If anyone asks, I remind them that oil is a commodity, and like all commodities its price goes up and down. True, the long term trend will likely be toward more scarcity, which implies an upward long term price trend. However, this only means that there will be more ups than downs, and the the ups will generally be up more than the downs will be down. If you speculate/gamble in the commodities market, you need to understand that you can be absolutely right about the long term trend, yet absolutely lose your shirt in the short term. That's not a game for me.

Very interesting.

Without all those gigantic cargo ships scurrying about, I wonder how much this factors in to the perceived drop in demand for oil.

Gotta keep the lies strait.

I hope someone is keeping an archive of all these things. They will make for very humorous reading some day.

The next stable price point is 30.

That should kill the tar sands. Even with the current price give they way funding for projects work I think its a safe bet that peak production is in the bag. We don't need a rear view mirror.

And NG just broke 6 so its heading for 4 this will wipe out the North American shale plays so future North American NG production is probably toast although its still to early to call it.

Now if our nation actually understood peak oil the bean counters would hang in there and keep the funding going but I think we all know that most oil/NG projects are probably toast with whats happening now. And by the time price moves high enough to convince people we need to invest it will be to late to arrest the decline.

I really hope I'm right and the market wakes up and oil/ng prices rebound fast but I'm becoming afraid that the market is not going to move till obvious shortages start occuring.
By then the damage to future investment is done not that its not probably already trashed.

Or drone ships?

Like the traindriver, ship crews appear to be fairly redundant with modern technology. A company with a few ships could control them remotely saving labour time wasted travelling.