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Peak Oil Day - July 11
Posted by Gail the Actuary on July 8, 2009 - 10:42am
This is a guest post by Richard Heinberg of the Post Carbon Institute. The original post can be found here. A petition to make July 11 Peak Oil Day can be found here. Please sign it.
On July 11, 2008, the price of a barrel of oil hit a record $147.27 in daily trading. That same month, world crude oil production achieved a record 74.8 million barrels per day.
For years prior to this, a growing legion of analysts had been arguing that world oil production would max out around the year 2010 and begin to decline for reasons having to do with geology (we have found and picked the world’s “low-hanging fruit” in terms of giant oilfields), as well as lack of drilling rigs and trained exploration geologists and engineers. “Peak Oil,” they insisted, would mark the end of the growth phase of industrial civilization, because economic expansion requires increasing amounts of high-quality energy.
During the period from 2005 to 2008, as oil’s price steadily rose, production remained stagnant. Though new sources of oil were coming on line, they barely made up for production declines in existing fields due to depletion. By mid-2008, as oil prices wafted to the stratosphere, every petroleum producer responded to the obvious incentive to pump every possible barrel. Production rates nudged upward for a couple of months, but then both prices and production fell as demand for oil collapsed.
Since then, with oil prices much lower, and with credit tight to unavailable, up to $150 billion of investments in the development of future petroleum production capacity have evaporated. This means that if a new record production level is to be achieved, further declines in production from existing fields have to be overcome, meaning that all of those canceled production projects, and many more in addition, will have to be quickly brought on-stream. It may not be physically possible to turn the tide at this point, given the fact that the new “plays” are technically demanding and therefore expensive to develop, and have limited productive potential.
On May 4 of this year, Raymond James Associates, a prominent brokerage specializing in energy investments, issued a report stating, “With OPEC oil production apparently having peaked in 1Q08, and non-OPEC even earlier in 2007, peak oil on a worldwide basis seems to have taken place in early 2008.” This conclusion is being echoed by a cadre of other analysts.
Maybe it’s a stretch to say that the production peak occurred at one identifiable moment, but attributing it to the day oil prices reached their high-water mark may be a useful way of fixing the event in our minds. So I suggest that we remember July 11, 2008 as Peak Oil Day.
We are now approaching the first-year anniversary of Peak Oil Day. Where are we now? The global economy is in tatters, yet oil prices have recovered somewhat (they’re now about half what they were in July 2008). World energy consumption is down, world trade is down, the airline industry is shrinking, and most of the world’s automakers are on life support.
It is too late to prepare for Peak Oil—a year too late, in fact. Now the name of the game is adaptation. We are in an entirely new economic environment, in which old assumptions about the inevitability of perpetual growth, and the usefulness of leveraging investments based on expectations of future growth, are crashing in flames. Even if economic activity picks up somewhat, this will occur in the context of an economy significantly smaller than the one that existed in July 2008, and energy scarcity will quickly cause most green shoots to wither.
It is impossible to say what will happen in the future with regard to oil prices. Clearly, very high prices kill demand by undercutting economic activity. Thus it is possible that the barrel price of petroleum may never break last year’s record. On the other hand, if the value of the dollar were to collapse, then the sky’s the limit for prices in dollars per barrel.
It is easier to forecast the oil supply trend: though we’ll see level-to-rising production temporarily from time to time, in general it’s down, down, downhill from now on.
Even though Peak Oil is now in the past, its annual commemoration on Peak Oil Day may serve an important purpose by reminding us why our economy is shrinking, and by focusing our thoughts on ways to facilitate the transition to a post-petroleum world.
What are some appropriate ways to commemorate Peak Oil Day? I’d suggest spending time in nature, engaging in a 24-hour oil fast, or organizing a neighborhood bicycle parade and solar-cooker bakeoff.
Mark your calendar. What will you be doing on July 11?
Help us "celebrate" Peak Oil Day by signing our petition.
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I said on the petition that I am going for a final joyride in my hummer. I don't have a hummer, but if I did, that is what I would do. Then I would enjoy an avocado from Chile, and subsequently get on I-95 and drive to New York City (2 hours away) for a peak oil birthday bash. We would sip champagne from france, wine from Italy, and eat tons of other tasty delights from around the world on styrofoam plates. Then the next day I would leave it all behind and go back to tending my veggie garden which has some nice tomatoes and carrots coming in right now.
Happy Peak Oil Day!
Actually, if you live in the midwest, wine from CA is more energy intensive than wine from Italy or France.
The exact timing of the global peak in petroleum production is irrelevant, and can only be identified in retrospect after production has declined steeply and the probability of it spiking again is low. Consensus opinion doesn't signify the peak. Signing this petition is stupid.
Picking a single day for "the peak" destroys the credibility of the discussion around oil supply. "Peak oil day" relegates the important discussion of oil supply challenges to the same realm as the cults wearing all the same white sneakers and predicting a particular day when they will all be beamed up to a spacecraft. If the previous peak is surpassed by a single barrel, for whatever reason, then prepare to be ridiculed and for all efforts to be debased. Thanks.
I'm an admirer of Heinberg, but this is a valid point when you stop to think about it. There's a lesson in what's happened to parts of the green and climate change movements. Slogans [edit: and hoopla] are perhaps necessary, but we need to be very careful not to start actually thinking in slogans.
I signed myself up. Yahoo!!!!
Just my little contribution to global warming.
Brilliant. I love it. Sure, if the peak is passed the day will look stupid but I don't really believe it will be passed.
In a similar vein to what Drake suggested, making a day for Peak Oil holds two other problems.
First, raising awareness may bring about some panic, and increased traffic of deniers and the uninformed.
Second, Peak Oil Day is like Earth Day in that it promotes assigning responsibility for energy or the environment to a single day. Earth Day, ok, plant a tree. Next week after the party, throw all the plastic in the garbage. Peak Oil Day, ok, leave the Hummer here and let's take our bikes to the solar cookout. Next week, back to shopping at the national grocery chain.
Peak Oil Day would need to be about something more substantive with direct, measurable goals in mind, and the event would need things, skills, or understandings which are immediate, practical, useful, and directly related to peak oil for the impacts last more than a day.
The difference between practical and useful? An understanding of thermodynamics is useful, but it's not practical to teach science theory at a picnic.
Hi 710,
This is an interesting point:
re: "...understandings which are immediate, practical, useful, and directly related to peak oil for the impacts last more than a day."
I agree that the impacts definitely last into the foreseeable future.
A request to have the President and Congress direct an immediate, scientific investigation into "peak oil," including the effects, was discussed on TOD previously here: http://www.theoildrum.com/node/5373
And you can also find it here:
http://www.thepetitionsite.com/1/Understanding-Peak-Oil
Hi All, as a "believer" of PO, I had trouble reading this article
http://www.canadafreepress.com/index.php/article/3952
Hmmmmmmm !!!
P.S July 11th 2011 works for me!! That will be when the price is $247 a barrel !!
More abiotic oil!
Only problem with $247 oil is that the economy collapses first. We spend more and more of our income on fossil fuels and electricity. Also, the price of food goes up with the price of oil. This leaves too little of our salaries for everything else, demand for things like houses and cars drops greatly, and oil prices drop.
IMO the first part of the article isn't that far off, but the author fails to explain how inaccessible oil of non-biologic origin will be cheaply obtained. There will always be LOTS of expensive oil for processes and uses that can exist with EXPENSIVE oil-peak CHEAP oil is far in the past and the decline of CHEAP oil is the real issue. The entire global economy was built up with CHEAP FF as an energy source.
Nicely put. I think even when EROEI is below one there will be a market for oil, just as there is for other materials that don't supply net energy. It will just stop being a net energy source.
If you're using oil as a feedstock for polymer production, say, rather than as an energy source, then it has no ER and EROEI analysis doesn't apply.
Good point. But even if you are using it to power your hummer or war jet, it won't be extracted because it gets you net energy, but because it provides energy in a dense, liquid, easily transported form that suits certain functions, wasteful or not. Essentially it will be a handy carrier, rather than a source, of energy, like electricity.
Yeah, I agree. The military will undoubtedly want liquid petroleum based fuels regardless of how expensive they are.
Apparently the guys behind NaftoGaz Ukrainy need to be educated about the Russian-Ukrainian theory of deep, abiotic petroleum.
The author of that article needs to carefully wrapped in a white jacket with strong leather straps and placed in a well padded room for his own protection.
Making petroleum by dissolving steel in strong acid?! The acid must be strong indeed but he really should stop ingesting it...
I'm not saying the guy is just a bit off his rocker I'm saying he is batshit insane!
First, an explanation: My login was chosen because it was my 50th birthday and a bump in the peaking process. What great timing to be born, unless you have any concern about the future. 50 years of unbridled consumption with little or nothing to show for it in terms of sustainability. Energy is concentrated capital.
I am from Canada and have some familiarity with the "journal" you linked. Canada Free Press is a highly suspect, intentionally provocative right wing e-tabloid associated with a gaggle of rather pathetic scientific heretics, most of which have some religious cross they want society to bear on their behalf. They specialize in ad hominem attacks and claims of persecution.
Meaningful terrestrial reserves of abiotic oil have not only been thoroughly refuted, but biological and geological origins have been positively traced for many, many types of crude and gas. Now, it is probably true there is some abiotic methane - it's an organic chemical after all - but it just too scarce until you get to deep space - or should we call it Heaven?
The "Free Press" response would be to recommend star wars style technology, bigger prisons and a few global wars to ensure we can all drive clean fusion cars to one of Saturn's moons to fill up. In other words, science fiction dressed up with impressive words. Note the guy's credentials. There are better spokesmen for this marginal POV, but few less polemic. They are all, however, angry and share the cornucopian's lament: How did our oil get under their sand?
At the end of the day, these folks use their own biggest weakness to malign everybody else: All knowledge is faith-based and scientific method is always biased - in their case against the Biblical and BAU POV. I think it's fair to lump this marginal pseudo-scientific diatribe in with Creationists and other religious fundamentalists.
Interesting that these guys have quite a hold on government policy here in Canada via the National Post and other mouthy mouthpieces. They are loud, quick to condemn and blind to their own failings, just a step or two away from the Brown Shirts and street bullies of the 1930's. They are closely aligned with anti-abortion crusaders.
Nothing wrong with being mouthy, but to do things like claim that RW Christians never hurt anyone (in contrast with you-know-who's) as one of their senior spokesmen once did in print is to do a great disservice to freedom and legal dissent. To call all AGW and Kyoto skeptics and critics "deniers" is another more subtle form of misinformation, designed to monkey-wrench any and all carbon controls.
The article should really be flagged as inappropriate, but it's a good example of pseudo-science being used to baffle the uninformed. We are all keen to show off a casual sort of certainty. Persecution, personal politics, and old time religious science seem to the formula for the future of the Far Right. Whaddya know? The same themes we hear in good ol' Sarah Palin's speeches. You betcha!
The National Post is a rag, but to label it as a mouthpiece for right wing Christians is ridiculous.
I hedge.
It does risk credibility to declare PO in July 2008. Personally, I'd like to be a few years down the road looking up hill over my shoulder. For my own sanity I assign an arbitrary % probability based on things I read. In reality there is a range of possibilities that only suggest the truth and they are influenced by my "beliefs." (see S. Foucher's post yesterday..all those lines :-O)
That said, I believe there is an 85% chance that PO was reached in July of 2008.
It was 5 years before the early 80's peak was eclipsed. It appears to me that both above ground and below ground circumstances are much differernt now but it is certainly not hard to visualize a scenario of higher production. 15% chance peak will be eclipsed in 2011...
Is there a way to forcast PO with some accurate mathematical probability like predicting the weather? 70% chance of rain? That would be extremely useful I think.
But 85% is a good bet. Taking action should begin yesterday. I signed the petition. There's a 95% probability that we'll be able to celebrate again next year. Good reason for a party ringing in the new post-peak era of A. Hope and opportunity B. Collapse C. Sustainablity D. All of the above E. None of the above.
In the same vein and reason that I do not celebrate Earth Day, I also will not
celebratemourn "Peak Oil Day". Every day is Earth day and every day is Peak Oil day. Either you permanently incorporate it into your world view or you don't. I don't need a special day to celebrate...Aw come on; Earth Day isn't so bad. I was in the crowd at Drexel University that Isaac Asimov addressed on the first Earth Day and it made quite an impression. Just having an Earth Day sort of keeps in peoples' minds that we need to take care of this place. If there was the same sort of even background general awareness of peak oil, it would be a big improvement over the almost universal obliviousness of today.
- Walt
Agreed;
I like Earth Day, and it doesn't make me or others I know pretend we can ignore our responsibility for our home the rest of the year.. it is a good day to put a bit MORE attention on the things we can be doing, and it's a time to celebrate and drop other daily distractions to give Mother Earth a kiss.
But Peak Oil day.. I'm afraid it's not resonating with me. I don't think it makes sense as a 'Day', like a holiday. It's counterintuitive pushing the Absence of something.. I think you have to push the Presence of a counterpart to it. Which seems to leave me with 'Earth Day'..
Bob
Just for the record it's not that I don't think protecting the earth or being aware of peak oil aren't important. Last Earth Day I was doing 24 miles on my kayak supporting a swim team in the Tampa bay swim. It's just that I feel that picking a single day for awareness of either or both of these issues (at least for me) trivializes the importance. I live earth day and peak oil day every. If a specific day happens to be picked as a reminder for the general public I will take advantage and use it as a chance to spread the word.
"It is too late to prepare for Peak Oil—a year too late, in fact."
Doesn't Hirsch say that we needed twenty years to prepare adequately for peak oil. So even this is a vast understatement.
Forget it, Heinberg! You're late, as usual!
Dohboi and BrianT are right! What The price is important and nothing else. Cheap matters, expensive becomes too expensive for consumer economies to operate. As Gail points out, money spent on fuel is 'None-y' that cannot be spent on other things.
According to 'Steve's Law of Cheapness' there can be no cheap goods and services without cheap oil. Increasing the production price of stuff makes it more expensive ...! Ever diminishing few can afford the more expensive stuff; the cost of producing goods exceeds the diminishing return ... this has be the case for awhile, btw. Not just starting July 11, 2008.
Matt Simmons sez the only way to determine Peak Oil is by looking into the past, when it is too late to do anything about it.
I would suggest the date March 17, 1998 as Peak Oil Day.
This is from the study: "The Oil Price Crisis of 1998" by Robert Mabro:
According to this document Arabian heavy, sour crude was selling (spot) for $6.95 and Mexican for $6.31.
Measured by the Illinois Oil and Gas Association the 1998 price adjusted for inflation was lower than the 1946 price. Keep in mind the Texas Railroad Commission set US oil prices by mandate until the end of 1973.
View the nice table on that page!
Price measures availability relative to the intensity of demand. The peak can be seen by noting that prices - and demand - have steadily increased since 1998. It is reasonable to presume that prices will never be lower than $12 a barrel. The factored- in inflation that the establishment is attempting to stoke would keep nominal prices higher.
The price of crude measured in other goods and services will always be higher, too.
Deflated prices less than $12 would mean a totally collapsed, post- depression world economy with very little demand for oil and a highly valuable US dollar.
Having Peak Oil ten years in the past explains some of the extraordinary characteristics of our current 'economic' crisis. One is its timing; with the crisis manifesting itself in credit and residential real estate beginning in 2005, when oil prices jumped from $41 to $56. Another is its world- wide and economic policy- straddling character. Another is the crisis' great resistance to monetary and fiscal stimulus. Another is the epicenter of bankruptcy in oil- dependent sectors such as real estate/housing and autos. And while credit defects played a great role in the finance disruptions in banking up to the end of last year, the ongoing worldwide nationalization of credit has denatured much of debt's toxicity. In other words, a government can carry large debts easier than can an individual with mortgages and credit cards. Something else is having a ruinous effect on business and production besides credit difficulties.
Placing Peak Oil ten years in the past puts the complete lie to the idea that something 'can be done' about it 'in the future' - which actually means ignoring the problem and going back to having fun. What people say about peak oil now, that the results of it will be higher and higher prices and diminished availability ... are already upon us and have been for quite some time!
It personally means that the Peak Oil discussions are finished. It's time for other business.
Good post. I would offer the friendly amendment to make your date "Peak Available Energy From Oil Day." But I'll admit, it's a bit long and clumsy, and it doesn't make a snappy acronym.
I frequently point out that the recent increase in oil prices really started in 1999. In 1998, the average US spot price was $14, and oil prices rose for nine of the next ten years, hitting an average of $100 in 2008. And the fastest rate of increase was 2000, not 2008.
Pretty interesting to look at the 10 year performance of the auto, housing and finance sectors versus this 10 year oil price increase. GM stock went from about $87 in early 1999 to less than a dollar in 2009.
WT, I would be very interested in hearing what you think is the price level of crude that starts general economic deterioration.
I suspect it is a lot lower than most economists would suggest, my view would be less than $50 a barrel.
I see opinions that $150 oil and $200 oil and I cannot see anyone staying in business at that price, except maybe bicycle shops.
Isn't it around 8-10% of GDP? -I think it got to something like this in the early 70s and 2008... It's also better thinking of it in terms of %'s as this will stay consistent as the $ falls in value...
Nick.
I am of course the guy that suggested that oil prices would show a series of doublings, without picking any specific price targets. And in fact, even at the $60 range, we have seen two doublings from the average annual price in 1998, but what I didn't anticipate was the scale of the decline in demand.
Airline pilots talk about the "Coffin Corner," which is an altitude at which there is a very thin margin between stall speed and mach buffet, e.g., the U-2 often operated with a 5 to 10 knot margin between stall speed and mach buffet. At an airplane's maximum ceiling, an airplane can't go any higher. In looking at the following graph of average annual US oil prices versus top five net oil exports, I wonder if the US economy has its own "Coffin Corner," in that we have a hard boundary of about 24 mbpd in total net oil exports from the top five, versus a price that constrains any attempts at economic expansion:
http://www.theoildrum.com/files/slide1.png
An analogy that I have used is a dog on a chain that keeps testing the length of the chain and then being jerked back. After each attempt, the chain is shortened. Constrained oil exports are the chain in this analogy, and the dog is the US economy. So, I think that we are facing a continued long term economic contraction, but I think that we will see a pattern of a smaller number of consumers paying a higher unit price for a smaller volume of exported oil. Stoneleigh, who has been pretty accurate so far, is predicting a strong rebound in oil prices, after a period of weakness. She predicted that in five years or so, most ordinary Americans won't be able to afford to buy refined petroleum products in anything like their current volume.
Hi Jeffrey,
re: "I think that we are facing a continued long term economic contraction, but I think that we will see a pattern of a smaller number of consumers paying a higher unit price for a smaller volume of exported oil."
This is the type of analysis we want the Academies to see when they do their study of "peak oil" impacts and policy advice. I'd give the link again, but don't know want to be in etiquette violation. (See my posts.)
More people having access to this information may result in some of our favorite "prevent-the-worst" policies. (We all know what they are.)
Come on folks, let's not be an_l about it!! 7-11-08 is a good day for it and I have been using it for quite a while now and as the day the world changed.
Nor do I see it as a bad thing as it really just signals a new age of RE is starting where one can make their own energy so not have to buy it, be slaves to big oil, coal ever again.
The article was very good on why oil will 98% likely never reach that again. Another way I look at it is we use 4bbls for every new bbl we find. It doesn't take a genius to figure out we have problems to solve fast.
I do have a problem with it that oil won't likely hit $149 again as after it drops back to $45-50/bbl or so over the next few months, it will start back up in winter if it is a cold one or spring if not back to $150/bbl by the end of next yr. Of course the economy may dive again because of it but again it will bounce back even higher, etc until about 10 yrs from now when RE, NG, EV's, plug in hybrids will replace oil
in most cases, driving it back to about $5/gal in todays $.
What will I do on 7-11-09, I'll drive pass all the gas stations like I always do as I haven't used oil in a couple yrs in my car as my transport is my EV's getting, at $2.50/gal, 250 and 600mpg equivalent. So cheap I don't even notice it on my electric bill.
Sadly I had to build my own but that just meant they were a lot cheaper, more eff as a scratch built as an EV vs much less eff though still worthwhile light car conversions. VW Bugs make great 50mph town EV's at very low costs to convert because they are so light but not very aero. They'll go faster but that drains the batts.
Soon EV's will be available and in 3 yrs even at a reasonable cost.
But oil is now on the downslope of the bell curve and those using it soon will be paying big time so get a very high mileage car now, new or used while they are cheap or get stuck paying $60-90/tank of gas!!
Or join an EV club or online group and do your own. Yahoo EV Club, EV racing for some exciting EV's. EV's don't have to be slow, in fact some are quite fast like 7.9sec 1/4mile at 168mph!! We don't need no stinking pistons!!
And 7-eleven has such a nice ring to it. Maybe I'll copyright it and open a chain of roadside stores that sell bad food to drivers of gas guzzlers using that name just to be ironic. Oops.
http://1.bp.blogspot.com/_K_3jgRj_Rj4/SABV3p-kMXI/AAAAAAAAAac/MDz3yY8cSj...
On July 11th, 2009 I will be riding my bicycle 200 miles in one day from Seattle to Portland in the annual STP ride. Hope to see you on the route next year if not this weekend.
Hi Rate Crimes,
I did a double century (miles) when I was a kid in my mid forties. Many big hills in the mix. I walked around like a zombie for 3 days afterwards.
Now, having passed that 70 mark, the MS 150 (150 miles in 2 days) is my grand feat of the year.
Watch out for those other 10,000 riders as the day wears on people get a bit tired.
My understanding is that "Peak Oil" is a point in time where production can no longer meet demand because of an inability to increase supply. Obviously that has not happened. The "Peak Oil" doomsayers seem to have underestimated price as a feedback mechanism. We may have reached "Peak Production" but we may never reach "Peak Oil".
Good one-better not let Obama hear this one-pretty soon he will repeat this clever reframing of reality. By the way, "we" will never reach Peak Food either-the higher price takes away the hunger of those poor schmucks.
Peak production is peak oil. It doesn't matter why production peaks.
I think it's dumb to try and proclaim a peak less than 2 years into the Great Depression II, though. Give it 10 years. Exports are the real story, anyway.
Peak Oil is not about meeting demand. It IS about producing fewer barrels of oil.
Remeber that price last summer? Your feedback mechanism has handily dropped millions of people off of the Labor Lists who are now no longer paying daily commuter tolls and gas, they're buying fewer widgits and happy meals, so THOSE servers will soon be commuting less and will start creating handmade Birthday presents from old mudflaps instead of going for the free shipping at Amazon.com.
You think the doomsayers have been wrong so far? Do you have any windows to look out of?
According to
http://blogs.ft.com/energy-source/2009/07/08/opecs-demand-forecasts-in-f...
Looking at OPEC's demand forcast and its own production, it shows 'capacity' growing up to nearly 40mb/day in 2013 but production remaining around the 30mb mark.
http://www.bp.com/sectiongenericarticle.do?categoryId=9023770&contentId=...
Shows that Non OPEC production is falling.
Assuming Non OPEC falls at 4% a year, OPEC must produce at its full available 'capacity' as projected just to maintain oil production at current levels.
Considering, further declines in North Sea, Russian & Mexican production, the decline rate could increase and consider that an increasing proportion of the production is going to be in the form on unconventional oils and natural gas liquids with lower net energy.
http://netenergy.theoildrum.com/node/5500
I sold my 4-cylinder car and ordered an electric assist (which can be solar charged!) for my utility bike. That's my way to acknowledge our transition to the nether side of the peak, whether it happened last year or is yet to arrive next year. At some point in our human history, the year oil peaked will live in infamy and we won't need a petition to have it remembered.
Hi Richard,
And thanks for your many efforts to promote awareness.
Re: “The name of the game is adaptation.”
A recent petition asks for Congress and the President to undertake an immediate, scientific investigation of “peak oil” – including *impacts* and *policy* advice.
Our Nation deserves the work of our premier scientists – the National Academy of Sciences (NAS).
Introductory article with link to the NAS request petition is here:
http://www.energybulletin.net/node/49061
And it's also here, on TOD, with some discussion that you may enjoy - (or, maybe not):
http://www.theoildrum.com/node/5373
*DIRECT* link to the petition is here:
http://www.thepetitionsite.com/1/Understanding-Peak-Oil
The success of the NAS study proposal most directly depends on how many people pick up the phone and call the President or their Congresspersons.
https://writerep.house.gov/writerep/welcome.shtml.
Which is probably the case for “peak oil day” as well.
I don't believe that the day oil hit $147 was the day that oil production peaked. In fact, I don't think the commodities markets price oil on the basis of what's left in the ground which can be economically recovered. They also don't know about oil whose existence hasn't been made public, i.e. ongoing exploration and discovery. They don't have that information. What they do know about is the amount of oil which has been extracted and is stored, but which has not yet been refined or used, and they also know about the demand from refineries for crude of various sorts. In addition, from time to time, new discoveries of oil (Petrobras, Jack) are made public, and this will have an immediate effect on the prices of the various grades of oil.
If peak oil is a function of the amount currently being extracted at a certain price level, then the price of that extraction as measured against some stable currency (say, constant 2007 US Dollars) should be used in talking about that "peak", i.e. "peak" $40 oil, "peak" $80 oil, "peak" $100 oil, and so on. Of course, you have to measure price in constant dollars and figure in the effect of Helicopter Ben's inflation of the dollar. But I doubt that the commodities pricing will tell all that much about the oil still left in the ground, simply because no one in the markets besides the Saudis (or the other producing nations) knows to within any degree of accuracy how much oil is still left. If the actual amount of oil still left in the ground, and recoverable for $40, $80, or $120 were known, it'd be easy to calculate an ideal commodities price for oil, and the game would be over for the Saudis et al.
So in my opinion, we can't call July 11, 2008 "Peak Oil Day" unless we could be able to say how much oil was still left in the ground, and recoverable for certain amounts as expressed in constant US Dollars, and then figure out an amount at which oil extraction becomes economically unviable, at least in the amounts required to power transportation and agriculture, which appear to be the two major users.
Frankly, I think the $147 price spike was more in the nature of a "pump-and-dump" scheme, where a certain class of traders drove up the price of oil by taking various sorts of speculative positions which may not have required great expenditure or commitment of funds, and then "pulled the rug out", but not before taking short positions. Of course, I don't have any proof of this, but it's exactly what it looked like in comparison to other "pump-and-dump" schemes. It was a pretty quick, abrupt run-up, going from $80 to $147 in a matter of months. Because of this, I don't believe that in the current market, commodities prices are a good indicator for the occurrence of "peak oil"
I think CERA would take exception to the idea of July 11th, 2008 as the date of Peak Oil. It wasn't very long ago they thought peak oil wouldn't occur until 2950 at 689 mbd. Now I'm just getting plain sarcastic. Actually it was 107-115 mbd in 2030.
I don't agree with them of course, but I'm just wondering if peak oil day should be an averaged date, using the IEA's projection and other sources as well.
I like 7/11 as Peak Oil day. It goes well with 9/11 and 7/11 will be remembered long after 9/11 is forgotten. Seems to me it will be the bigger disaster.
The country was totally unprepared for both and reacted to both with panic. 9/11 with an unnecessary war and 7/11 with economic collapse.
You guys just aren't getting it. If oil did peak in July 2008, its because we don't need it, not because we can't produce it.
Hi shale,
Seems more like...
1) can't produce it
2) then, don't "need" it. (Or, *can't* use it, even though need it.)
I just wanted to respond briefly to some of the comments. First, in the piece Richard himself says that it's hard to come up with a hard and fast date. If people want to debate it, that's their prerogative. But that's really not the point of the article. And the point isn't to create another earth day, something that's unfortunately become a little trite.
The point is to fix a time in our minds that can serve as a marker. Richard believes, as I do, that 2008 was a seminal year. We have entered a new era. And so it's important to recognize that, and to have a fixed point in our minds with which to look back and gauge our "progress."