IEA Economist Warns about World Oil Supply

The UK newspaper the Independent today is featuring an article titled Warning: Oil supplies are running out fast. The article is based on an interview with Fatih Birol, Chief Economist of the International Energy Agency.

In a stark warning to Britain and the other Western powers, Dr Birol said that the market power of the very few oil-producing countries that hold substantial reserves of oil – mostly in the Middle East – would increase rapidly as the oil crisis begins to grip after 2010.

"One day we will run out of oil, it is not today or tomorrow, but one day we will run out of oil and we have to leave oil before oil leaves us, and we have to prepare ourselves for that day," Dr Birol said. "The earlier we start, the better, because all of our economic and social system is based on oil, so to change from that will take a lot of time and a lot of money and we should take this issue very seriously," he said.

"The market power of the very few oil-producing countries, mainly in the Middle East, will increase very quickly. They already have about 40 per cent share of the oil market and this will increase much more strongly in the future," he said.

There is now a real risk of a crunch in the oil supply after next year when demand picks up because not enough is being done to build up new supplies of oil to compensate for the rapid decline in existing fields.

The article goes on to say:

The IEA estimates that the decline in oil production in existing fields is now running at 6.7 per cent a year compared to the 3.7 per cent decline it had estimated in 2007, which it now acknowledges to be wrong.

A change in the decline rate on existing fields from 3.7% per year to 6.7% per year is a big change. If the IEA made such a big error in the past, how certain is it of its current decline rate estimate?

If demand stays at the current level, Dr. Birol indicates that the equivalent of four Saudi Arabias will be needed; if it increases to the level of forecast demand, the equivalent of six Saudi Arabias will be needed.

Dr. Birol indicates the future tightness in oil supply is expected to affect the economy. According to Dr. Birol:

Many people think there will be a recovery in a few years' time but it will be a slow recovery and a fragile recovery and we will have the risk that the recovery will be strangled with higher oil prices.

Many people assume we will have a V or U shaped recovery, or perhaps even a W shaped recovery. But if oil supply is in tight supply, it will limit the ability of the economy to recover. In fact, on The Oil Drum, some of us have been saying such tightness is likely to cause debt defaults, similar to what we have been seeing recently. This will definitely not be good for recovery.

The article also notes that the IEA is now saying:

Oil production has already peaked in non-Opec countries and the era of cheap oil has come to an end, it warned.

The article further mentions that the IEA thinks world oil production will peak "perhaps by 2020". The crunch in oil supply is expected to come before then because demand after 2010 is expected to exceed dwindling supplies.

do you know if the IEA is publishing a follow up to the 2008 study of the top 600 fields worldwide?

what Dr Birol is saying here is not politically correct for him, and I would think would irritate his masters at the IEA. I am surprised he is so blunt

Peak Oil "Perhaps by 2020" - Who are they trying to fool?
We are there now. The next 10 years will be fight to maintain the "plateau".
I guess its like the old country song - "Break it to me gently....."
With each coming year the forecast will predict 2 years sooner.
But we already know now that we are here.
The panic will begin when gas pumps run short (with no hurricanes).

The problem is that agencies such as this (and many energy consulting firms) are used to having specialists, particularly economists, provide the answers. But we are now in a multi-criteria, systems era. Predictive models using single variable (oil supply/demand) inputs, which were never great to begin with, is over. How many of these firms/agencies have systems analysts incorporating non-energy inputs, fiat-natural resource ratios, social equity measures (indicative of how much pressure will be on governments to spend), etc.? Few if none.

Side note: that is why economics has never been science - a)it doesn't try to falsify itself and b)it looks on the rolling lens of last 10-20 years and extrapolates that into the future - this 'seems' to work, until it doesn't.

It will take far too long for consensus policymakers and media to realize all this, some may be catching on...

What "problem"?

I live 25km (16mile) from Central Melbourne (Oz), in a nice, leafy suburb. My 10yo daughter's attending a birthday party this weekend, along with fifteen other girls, some 7km further out (one of those huge play centres). Of course, no-one has organised any car-pooling.

Last week, three streets away, a property (1/3acre, 35square home, prime stuff to be honest) sold in excess of $1million. As far as I can tell - at least in this neck of the woods - it's BAU.

Regards, Matt B

This could very well be a breakthrough, which could bring price raises in the coming weeks. The more the public know about why they're losing their jobs, the less likely we'll be to see another "drill baby drill" campaign. Now we just need people to move out of suburbs into sustainable farming.... Is there anyway an 18 year old such as myself can get involved educating? Where's the grass roots movement at?

This is your Vietnam War to oppose. YOU have to get involved with those that YOU know and make the positive choice to FIGHT for YOUR future.

YOUR future is in the trash can and soon that trash can will be on fire. YOUR children and your children's children will have NO FUTURE AT ALL and be living at the hands of blind fate and worse luck.

It takes YOU convincing ONE FRIEND and they ONE MORE and so on in a chain reaction. Only you can do this only the younger people. My Vietnam was ... Vietnam. The older generations can only understand the status quo, they have lost their idealism. It is young people like yourself who have the chance to remake the world into something that all life has a place in. You must fight or die ...

The establishment will be against you, you will be hated and attacked, you will be arrested and harassed, you will be assaulted and hurt. In the end, winning will not be what it has been. It will be less. This makes the task at hand that much harder.

Good luck to you. You have taken the first step. The second and third will reveal themselves. Be patient - but not too patient. Use the time to find that one friend.

Steve, I think you are too dismissive of older people there. They will anyway be stereotypically witch-hunted as supposedly those who caused the problems. Many older are indeed incapable of unthinking their assumptions sufficiently, but some, including some obvious names here, are clearly ahead of the curve instead. Young people are inevitably lacking in experience and length of view, and no less importantly, knowledge of the pre-corporate ways of doing things. Youth has no great substitute for these. So the generations need to combine together their differing assets.

I'd recommend avoiding getting into the whole "children" (and hence "children's children") thing altogether if you haven't already. Overpopulation is becoming a big issue, but there seems to be a general disconnect between the issue and how people see it being resolved, even here among the enlightened.

i enjoy your thoughtful comments, steve -- but i disagree with your notion of any political movement successfully piggybacking on peak oil. i agree 100% with technozombie that it's "game over." it's just a question of 'when', not 'if'.

there may be different individual 'solutions' for different people -- some in certain big cities, some in the country. for me, i've decided to stay where i'm at for now -- manhattan, new york city.

i've been lurking on TOD for about 3 years now and, having familiarized myself with the works of catton, tainter, hardin, kunstler, greer and explored such sites as die-off, etc. -- i'm definitely in the doomer camp.

the only reason i discuss peak oil with friends and family is to alert them of possibilities to help ensure their own survival in what's to come, and that it's important to have some terra firma on world outlook that allows real discussion. without such basic agreement on what makes the world tick from one's comrades it's easy to go insane in one's own intellectual isolation.

but i don't see any political upside to telling people about TEOTWAWKI. i do see the drudge link to such an expert and huge sphere of influence as fatih birol as significant, however. drudge has become the essential daily read for the journalistic profession: most mainstream journalists (whether or not they admit it) click on drudge several times a day. and over the past year or so -- despite the huge head fake of collapsing oil prices since the $147/b one year ago -- indicate that peak oil has become an increasingly significant meme -- to the degree that more and more journalists know about peak oil, but are simply censored from writing about it seriously.

similarly, the birol article uses that favorite "in 10 years..." because that is a sufficiently distant horizon for most people to put any real panic back in the box rather than panic.

what's most frightening about the drudge link are the comments that accompany the article. notice the RAGE that peak oil inspires. there's good reason to be scared sh**less that a right wing 'drill baby drill' nutcase (i.e., sarah palin) will be elected at some point in the future, probably not 2012, but all too likely in 2016.

similarly, i see as much denial about peak oil on the left, because peak oil means that all the wonderful cradle-to-grave fantasies of leftwingers are effectually made impossible and revealed for what they are -- fantasies -- by peak oil.

so, fasten your seatbelts and enjoy the ride down while doing what you can to ensure your own survival.

not a pretty picture. but an accurate one, as far as i can tell.

the corporate interests that run the big show will NEVER willingly acknowledge a post-peak oil as long as they can avoid doing so. as one corporate master said, it's simply more profitable to keep driving the truck of civilization into the wall -- over and over and over again. there's just no money to be made in 'contraction'. as they (and TODers) know, the need for incessant growth is baked into the cake of civilization: not only are we hard wired for 'more, more, more', and to seek constantly greater relative status, as nate hagens recently pointed out in his excellent presentation, but because the ever increasing debt requires growth just to pay interest on that debt. we must run faster and faster just to remain in place.

the only kind of 'managed contraction' (hat tip to kunstler) we're going to see is the attempted nonreporting of signal events -- famines, electrical grid failures, etc, as the inevitable die-off proceeds.

so, the most important questions are: 1)how messy will it all be; 2) how long will it take; 3) what kind of civilization will remain; and 4) how will it affect me and my loved ones.

i realize this must be almost impossible for most people with children and especially young people (like our 18-year old friend above) with their full lives and hopes and dreams ahead of them to wrap their heads around.

i'm very glad i've found TOD!


Your reflection on the 'Comments' section of the article are spot-on. If the member of TOD really want to see what we're up against, they need to read every single one of those comments. The people who write them use tones that range from dismissive to belligerent, citing statistics and 'facts' that are dubious at best and blatantly false at worst. I, for one, understand the desire to stick your head in the sand when things start to go bad.

In an answer to your questions you raised, I think the following:

1.) How messy? Very. If everything was perfect from this day forth, we would have a hell of a time. But, of course, we know that everything is not perfect; so we are going to have to live with the hand we are dealt. The indicators that I am looking at as the final few signs that the excrement is finally hitting the proverbial rotary air-movement device will be the decoupling of oil from the market. When oil continues to rise when the market heads south this time, it will probably be for good. That decoupling will be followed, in my opinion, by the decoupling of the dollar as the currency of preference for oil. It is at this point in time that we need to be ready to rock and roll, as the saying goes.

2.) How long will it take? Who the hell knows! This, of course, will depend on the aforementioned circumstances and how quickly and drastically they set things. What I can tell you is that regardless of the length of time it takes, we are going to be emerging into a completely different world afterwards. Which brings me to . . .

3.) What kind of civilization will remain? With caution, expedience, and true order, we can expect things to simply draw down, with a few major problems in the most populated urban areas. Take away the above things, and it's game on. Remember we live in a country where there are more guns than people. Also remember that a supermajority of our population have no earthly idea how to survive without electricity and fossil fuels. Tack onto that the fact that EVERYTHING, even our water treatment and basic sanitation, runs on oil, and being in a large city during a crash scenario is just about the scariest f'in thing I can imagine. Places that will be safe, in my opinion, is any place that is more than 3 days walking distance from a major metropolitan area (assuming walking distance at 10 miles per day). The further away from NY, LA, SF, CHI, DC, BOS, and HOU (among others) you are, the better off you'll be.

Finally, 4.) The better prepared you are, the less dramatically you and your loved ones will be affected. Pay attention to the news (especially on NPR and sites like TOD and and when you see things coming, get the hell out of dodge (especially if you live somewhere like Manhattan).

Hope this is a decent post and conversation piece for you.

those commenters' rage, who are mostly from the sticks themselves, scare me more than any local blackout. if the grid in the northeast u.s.a goes out, then of course, you are correct -- we're done within a few months, at best. i'm thinking mid-term, when there may be chaos in many places on earth and in the u.s.a, but the lights are still on in new york metropolitan area. after all, lots of rich people here (who, presumably, the police will be paid to protect), and because it is an island, it is very easy for the police to actually seal off manhattan and control who comes and goes.

generally speaking, most out-of-towners don't realize that manhattan is an extremely safe place to be -- as long as the police force is still operating.

even if the grid does go down in nyc, my own immediate survival strategy is to stock up on at least a year's worth of nonperishable foods and provision water. i live on the ground floor, so no worry about elevators, etc. i'm also going to be preparing a good survivor's pack that allows me to hike out of town if the need arises. not sure where i'd go, though!

at my stage in life, it's just unrealistic to be trying to build/find a fortress out in the boonies at this point.

and, legally speaking, owning guns is simply out of the question in nyc.

in the long term -- except for the committed survivalists with plenty of fire power -- we're all fooked.

We do not need to panic. The solution is simulated reality. We could connect everyone to a virtual reality computer system such that a lavish, or otherwise desirable, lifestyle could be experienced without real resources (apart from minimum amounts of simple foods) needing to be consumed.

Current virtual reality systems are quite basic, but at an exponential (Moore's law) rate of technological development it is not out of the question for large scale and believable simulated reality systems to be in place within 25 years. This would be an achievable and sustainable solution to our resource constraints. It would also be a lifestlye improvement for the vast majority of people.

This should not be viewed negatively as the manner in which simulated reality was shown in the movie 'The Matrix'. Instead everyone would be aware that they are living in a simulated environment and would be free to live outside it if they wished.

We are already living a large portion of our life interacting with a low form of simulated reality: the internet. We just need to bring it to the next level whereby we can live larger portions of our lives in a more complete simulated reality offering higher quality of life experiences and lower resource consumption than our "real world".

We could use simulated reality to replace almost all resource consuming activities and not just leisure activities: commuting to and from the office/school, attending work/classes, shopping for the latest disposable fashions and gadgets. We could log out of the simulation for some "real time", but that would soon become as arcane as writing and mailing a physical letter to thousands of people instead of a comment on theoildrum.

you will have to pedal your bicycle generator awful fast and hard to keep the internet -- the sine qua non of virtual reality -- going, dontcha think? nice response, though!

Of course. I forgot to mention that maybe we reached peak oil a hundred years ago and are simply re-running the experience via simulated reality at the moment in order to see if we can come up with another solution other than simulated reality.

My legs sure are getting tired pedaling this bicycle generator.

Well, humor is good -- but perhaps April 1 would have been a better day for this post.

If by humor, you mean the absurdist farce and delirium theoildrum descends into on days such as this. Then yes, humor is good.

Theoildrum debate, while most often enlightening, is unfortunately also occasionally like watching an online version of Waiting for Godot:

(giving up again). Nothing to be done."

(today's theoildrum debate on youtube)


If the grid goes down and the police seal off Manhattan ,how are you going to take a crap?

And if you have no gun,how are you going to keep the body builder on the third floor from just wringing your neck like a chicken?

If I were in your shoes and happy and elderly,etc, I would probably stay put as you intend to do.

But you nede to create a few strategic alliances if you can find them with like minded people.

And get a gun.If you need it and don't have it,the consequences are much worse than the small chance of getting prosecuted for having it if you are discreet.

all great points! i have followed your informed comments for several months now and always look forward to reading you, farmer mac. some form of 'community' -- good friends and local allies -- will likely be the most essential resource when TSHTF. i am very fortunate to live in a building of about a dozen closely associated, highly invested neighbors with whom my close and mutually supportive relations go back 30+ years, and a couple of good friends as well. it was a slum when i first moved in, but both the building and nabe (near columbia university) are quite sound.

i'm in my 50s -- not quite elderly. and i'm right on a park and the river. i could hightail it for at least a few days, in a pinch.

i certainly ponder the gun issue. your point is well taken.

i have a huge (but mostly shady) garden with a compost heap. believe it or not, i have to spread my cat litter just to keep the raccoons at bay.

yes, we have raccoons in manhattan.

my diggs in manhattan is almost like a country estate (fought for with blood, sweat, toil, broken bones ... and time - so much f*&^*&^*& wasted time!). i feel like both a property owner -- and a caretaker, since it seems i am constantly fixing things. i'm probably the only manhattan resident with a 24-foot ladder and a bow saw. and a wall of tools sufficient to build a house.

a thoughtful response!

5) the population will be 4-5 times the last time we lived in a world powered by hand (150 years ago -- h/t kunstler) with an environment that has been seriously defiled, depleted and degraded since that time i'm not sure about "NPR" as anything but a voice of the PTB. [that said, i listen to npr almost continuously.]


This is not very well thought out.

The grid is not going down anytime soon. We have plenty of coal and gas to power it. US oil production is still robust enough to keep the necessary machines oiled (though this would even be possible without it) to keep producing gas and mining coal. Grain production can be nationalized.

You may expect to see mobs of unemployed in the next few years. But the inability to power the US grid, for the next few decades at least, is the real fantasy.

i certainly hope you are right. i can see the grid remaining intact for another 10 or 15 years -- absent one or more black swann events, of course. and it will likely break down somewhere else in the undeveloped world -- africa, pakistan, mexico -- before in the u.s.

but those black swans are increasing in number by the day (see kunstler's rant, today "hunky dory"). (i wonder: what is richard duncan's latest olduvai projection, timewise, to major regional grid failure.)

hopefully you are right that the reasonably predicted future would be a gradual descent into a state like many latin american countries, with a highly concentrated wealthy few, with bodyguards, more and more gated communities, kidnappings, and a gradual breakdown in order -- while the lights remain on.

that's the optimistic scenario, of course. 20 years? given the population and environmental pressures building, i just don't see much more than that before huge regions collapse, due to grid failure or water shortages or ... whatever.

The grid in places like NYC will be among the last things to go down in a general collapse and while it is possible that things will get that bad, my opinion is that the odds are pretty high that they won't,at least in the next few years-barring a war.
In war all bets are off because war,like all most other large scale organized activities has evolved.
Asymetric warfare is the new buzz word,and globalzation and modern communications are what make it possible.

There may very well be a war in the cards,and there might very well be enough sleeper agents in this country to create some real problems.

You can't get very close to a big bank or office building with a truck without cops being on to you pdq but I would not be suprised if you couldn't easily drive a truck bomb to some place without being stopped that it could create a blackout.

And a half dozen special forces soldiers can burn down an unsuspecting city with a back pack load each of incedinary grenades.

Such grenades have timers, and they just start down a street and place one in a good spot every couple of hundred yards,each man heading in a dfferent direction.If they get stopped they just whip out a pistol and shoot a decent hard working cop who has probably never ever pulled his gun out of it's holster except to practice at a firing range.An officerdown,if he gets off an sos, would gaurantee that every cop in town would converge on the area-making the rest of the fire bombers jobs easy as pie.

six athletic men, fifty two pound fire bombs each,a couple of hours fast walk or a faster bike ride at three am,at five am three hundred fires scattered all over town.If the wind is up,and the weather is dry,it's all over for that town.The fire trucks couldn't even get to most of them as most towns don't have that kind of manpower.

I bought a training manual once that was full of such stuff,at a second hand bookstore.And even though I personally have zero training in such things,I believe I could buy everything I need to build the grenades at Radio Shack and Wal mart,with a stop somewhere along the way for a pint of gasolene for each one.

When I aked a relative who at the time was in the service about it,he got visibly upset-even more so than usual when he saw me in tose days- and wanted me to give it to him but at that time I wearing a chain around my neck and my hair long and running with shall we say an antiestablishment crowd.I told him I had read it and traded it back to the bookstore,which was true,more than likely,as that was my usual habit in the Vietnam days.

It seems so long ago now that it's just not REAL anymore.

I am no fan of Bush and company or the Patriot Act but such scenarios are militarily realistic and it's foolish to ignore reality simply because it's unpleasant.

I very much doubt that the grid is going to just suddenly shut off for good. But I do very much expect that it is going to become considerably and progressively more unreliable in the years ahead. Where I live, we already have power outages quite frequently (maybe once a month or so); we also had an extended, widespread outage after the remnants of Ivan passed through, leaving most of us without power for several days. Our society is now entering an era which could be called "chronic breakdown" or "catabolic collapse". More and more things are going to be working less and less well. In the case of electricity, I expect to see the outages become more and more frequent, and go on longer and longer in duration. There are third world countries where the electricity is on only a few hours each day - if you are lucky; some days it isn't on at all. Yes, their grid is still "up" - barely. I don't know if it will get that bad in my lifetime or not, but it might.

great post, SP! especially, "look for oil price decoupling from the market" as inflection point/precursor to TSHTF!

"but i disagree with your notion of any political movement successfully piggybacking on peak oil."

But in Britain this is what the far right BNP are trying to do. They have a page on their website about peak oil and energy independence for the country. The right have played on peoples fear before and it has got them seats.

"energy independence for the country...".

yes, of course sarah palin represents that constituency in the u.s. but for whatever reason, the far right wing (or any other wing, IMO) in the u.s. has not latched onto or even indicated they are aware of the reality of peak oil. most probably the leaders are aware of it, but have decided it is just not a "sale" item for the successful dissemination of their ideology.

ergo -- my original point.

i have seen on youtube a video of your bnp candidate discussing peak oil! and i had the same thought at the time as i mentioned above.

Oh, the USA will become energy-independent, all right, and it won't be thanks to any loony politician. The end of oil exports will take care of that quite nicely.

Of course, that isn't exactly what they mean when they talk about "energy independence". They want to have their cake AND eat it too. Reality is that the inevitable, soon-to-come energy independence will mean learning to live with LESS energy. That is all there is to it, and it will happen whether anyone likes it or not.


...but i disagree with your notion of any political movement successfully piggybacking on peak oil.

Distasteful as it is, there no choice but to build a political movement, and there's no choice about its putting its arms around peak oil. All the millions of jobs being lost are just a down payment. When will these people return to the workforce? Never. Millions more will be joining them.

There are tent cities springing up around the country. These tent cities need to be converted, and given help to convert to places where people can live, grow their own food, build communities, share facilities, learn to use their hands and minds to build a new way of life.

Steve is a hundred per cent right about this -- the gov't is totally hostile to all this -- it wants to warehouse people at best, not help them rebuild their lives outside the global market economy.

So in order to get the space and support for return-to-the-soil communities there will have to be a fight with the gov't and the corporate interests it represents. And that fight has to be political. Now of course there already exist middle-class experiments in this kind of thing. But people totally without assets can't do this without some initial support and help. It's far beyond criminal that trillions are committed to bailing out financial institution while not even the thought is entertained of giving ANY support such movements -- which could rescue the lives of tens of millions, and ultimately all of us.

What choice is there? Just wait for the whole thing to collapse? But it won't without an alternative. All of this is very hard to get our heads around, very hard to explain to friends and family. Those that weren't thinking about this last year, are now. Those that aren't now, will next year. I totally agree with Steve's general direction. There's got to be hope, and there is hope, but it can realistically only be in one general direction. Growth is over -- there can be no replay of the 40s and 50s that followed the 30s.

Will it be easy or soon? No. But that's irrelevant as things continue to disintegrate. There's just no choice.

great comment, davebygolly! i'd prefer to think you are right, although as matt savinar recently mentioned (in a video presentation), the expense of starting communities and maintaining them until they actually become essential to survival (and thus revenue neutral?) is exorbitant, and a great discouragement to their success.

are you suggesting that government will subsidize such communities? it sounds too sensible to work, frankly. and it represents a threat to those who want to keep driving the train into the wall. somehow i can't see the gov't helping such post-peak oil communities as long as there is reality tv and real estate inventory to sell.

I'm suggesting that the gov't OUGHT to, not that it will -- it will not. That's why a political movement that embraces a realistic view of the future is needed. The gov't can only be challenged and forced to do things it opposes by a political movement.

All of your points, and then some, about the difficulties ahead are entirely valid.

The American people are at present almost totally unrepresented in the halls of power. They'll get nothing, not even survival, without a political movement based a realistic view of the world. When there's no choice, things are very simple, despite all the complications and difficulties. The problem is getting everyone to see that there is no choice. But it's also important to stress that comfortable survival is ultimately possible and attainable, even though it won't be at all like middle class life for the last 100 years.

i agree 100% with technozombie that it's "game over." it's just a question of 'when', not 'if'.

It depends which game you speak of. The old consumption game is running down. A new game is starting and nobody has a clue of what kind of game it will be.

People always have some choices, and can find ways to work together. Right now there is no activism because there is no clear way seen ... to 'piggy-back political movement onto peak oil'. That doesn't mean there isn't a way, it's just that way isn't visible right now.

The call to the young is because they have the social engine. Social engines go along with youth, discovering new people is part of the adventure of life. Only the young people can come together both in numbers and in force ... to amplify the required changes. They voted - and worked - for Obama because they believed he would do something real - to measure up to their idealism.

They were duped, but they could not have known this because Obama was so new. Being duped gives them a reason to change their minds. Activism must come before enlightenment, for there is no other way to find enlightenment in our compromised electron environment! The next step of activism is to make Obama represent - to do his job, to actually reach the level of action that he himself promised. If he cannot do this then he and his cohort must step aside; like Nixon did and Johnson before him. This is the parallel with Vietnam; it wasn't the war itself that mattered as much as the activism that surrounded it.

Our American culture changed, the people as a whole changed ... then the establishment changed in order to keep up. Once the war was ended, the reason to act disappeared. Now ... organizing ourselves to gain control of the institutions that serve us cannot be short- circuited by anything ... there is nothing to end, only an impossible dream of four or five Saudi Arabias. From this perspective, activism is inevitable, even inescapable. Activism is the only reorganizing force capable of countering the ongoing entropy of the political system. Activism is the only means to change the system because all other alternatives = system failure.

Right now, too many Americans feel they have too much (left) to lose; they wait and hope with upturned hearts. Another year and this may not be so and more will feel desperate enough to become activists as well. Yes, the fascists are trying to mobilize, but they have nothing to sell -or piggyback from - the flip side of peak oil. Drilling is a lie. Depletion and deflation are the truth; the fascists cannot control the tides any more than can a King Canute ... or Obama.

'New' fascists cannot sell 'stuff' any more than the fascists who are in charge now! As far as it goes, that part of the new game is visible.

There is not much point in trying to build a political movement around "peak oil". By the time you've convinced a majority of people that "oil really has peaked, by golly!", we will be so far past the peak that it will be blatantly obvious and beyond dispute, political party or no political party. Pretty much the same thing applies with GCC.

No, what we need to do is think beyond that, to the next step: What are we going to do about it? To make things perfectly clear, I am not talking about reversing or deferring the inevitable, but rather about coping with its consequences. Any political political movement worth the effort needs to be focused around an action agenda of coping strategies that really will make a positive difference for people.

The advantage of thinking in terms of a coping strategy agenda is that it then becomes possible to somewhat cloak the motives behind it on the one hand, and to appeal to other constituencies that can support the agenda for other reasons, thus broadening your support base.

What are some of the things that should be in this agenda?

Obviously, one crucial element must be the promotion and build out of as much renewable energy production capacity as possible. This was one thing that Obama did include in his agenda, but he has been rather timid and half-hearted in following through on it since taking office; it needs to be a much higher priority, and much more is needed. Note, however, how he did bring in the "new economy, green jobs" angle in order to broaden its appeal. That is an example of the type of approach I am talking about.

Energy efficiency is another key area, and transportation policy especially is crucial. We've talked a lot about that here, so I need only to repeat in summary: we need to get as many people as possible out of their cars and on to public transport, or maybe even on to bicycles or into walking shoes. To the extent that the cars are still needed, we need to transition to energy-efficient EVs. We need to move freight from trucks on to trains and barges. The essential public service, agricultural, and local haulage vehicles need to transition from gasoline and petrodiesel to biodiesel, which is the only biofuel application for which cropland can justifiably be spared. Ultimately, we do not just need to build out a different transport infrastructure and vehicles to move upon it, but we will also need to evolve the built environment into one that is more pedestrian and bicycle friendly, and that provides more people with nearby access to a public transport node. Where are the opportunities to broaden the appeal? Getting people out of their cars and into walking or bicycling will also make them healthier, which is good for its own sake; it also has a positive impact on health care costs, something people are especially concerned about right now. Many people have criticized the whole "American way of life", suburban sprawl, the automobile culture, etc. There are social and aesthetic reasons to support the agenda.

I could go on, talking about food and agriculture, for example, but this is already a long post and you should get my drift.

steve from virginia, "The American people are at present almost totally unrepresented in the halls of power."

it's certainly true that nonunion joe sixpack and small business have no seat at the table. and that huge segment of the populace represents 99% of the rage that is likely to be unleashed and unlikely to be successfully directed toward constructive action, imo.

WNC, your proposed coping strategy of QUICKLY, EFFECTIVELY and DRAMATICALLY reducing u.s. residential and commercial transportion gasoline is precisely on the mark.

the most efficient way to achieve such reductions would be to place a hefty $2 ... or $5! floor tax under every gallon of gasoline.

sadly, political realities have made that impossible. thus the current/recent soggy pretzel legislation to up cafe standards a few mpg by 2016 ... blah blah blah.

but the tax would do the job in a jiffy.

and its impossible for the same reason you won't have much success attracting activists: nobody's going to attend a rally to raise gasoline taxes!

but sooner or later the market is gonna get around to $6, $8 ... $20 gas! and then there will be "change you can believe in." but i'm a bit nervous about what form that "change" that will take.

Lets look at it from an engineer's perspective. When given a task the first thing and engineer see is whether it can be done. If it can't be done there is no need of going any step further. There is a hell lots of things impossible for humans. Looking at the peak oil scenario ok we all can live in a much lower life standard, we let go the electricity, the auto mobiles, the plastic, the nylon, the tv, the computer, the internet, we start working by hand. Ofcourse it would be hard and need may be years to fully adjust but the love of life should make us adapt. Now, what about the food? World food production was 5 times in 2000 than 1950, the reason was fossil fuels. Once the fossil fuels start getting really short, should not be right after peak or even cliff, there would be prioritization of fossil fuels usage at first allocating a higher and higher proportion of them to food production but then may be 10 or 15 or 20 years from now a time would come when per person food consumption have to be affected. First the meat consumption is reduced and then something big has to be happened to reduce world population. It could be a disease or a war. A large percentage of people today live on medicines they can't survive without, think for example diabetics patients who need refrigerated insulin twice daily. Long before the food production get affected the electricity for home users would be gone, resulting in lack of medicines which need cooling which means death for many people. This would be the natural selection. Only the young, strong and adaptive would survive. A lots of deaths have to be in children as they are the most weak and have to suffer most without early medicines and due to rapid shiftings of families. Today more than half of the world population live in cities, not due to lack of food but due to lack of jobs and businesses they have to shift near to farm. This has to happen. There is no way around. We can't live on fish alone, caught by city dwellers. There has to be atleast one and more likely many epidemics to reduce world population. This would be in addition of a war. May be, no major (world war like) war happen because of lack of resources and internal chaos in each country. There may be civil wars, agricultural provinces suddenly knowing their importance breaking themselves from national orders stopping external immigrations, may be even drawing physical walls. Nuclear war is very unlikely because there would be supposedly nothing left to fight for, only a depressed president may press the nuclear button but given humanity's fear for nukes that right may be taken away from the presidents early in the game. There could be medium and low level stealing, spreading of nukes from weapons' stockpile and power plants that may altogether result in 100 hiroshima like explosions killing may be 150 million but that would be negligible if an all-out nuclear war is avoided.

I would like to add to Steve's exlellent commemts that if you are a young person with plenty of hormones and energy that life as an activist can be a very good life,probably the best life of all.

What you miss in terms of material goods is far more than compensated by the sense of community that comes from being part of such a movement,and when you are old,you will realize that the best days of your lives were spent at some crowded low rent apartment or decrepit old farm house talking and smoking and listening to the music and actually MAKING history the next day and maybe getting a whiff of tear gas or two for your troubles.

And although some can't see it my way ,I say simply that you are free as long as you have a weapon and continue the fight.Right upon until the minute you either die or become a prisoner.

Even in jail you can remain free if you have read Thoreau and taken his work to heart.

If your are not a liberal when you are young,you have no heart.If you are not a conservative when you are old you have no brain.

The only problem with this is that old people are generally comfortable enough with the status quo that they pack thier brain away along with their memories of thier youth.

Making love ONCE with a woman (man) you truly love and who loves you in return is the most sublime experience possible,excepting only the love of your children.

One night with a woman I loved and who loved me was worth more than all the casual sex I ever managed to experinence-not that there is NECESSARILY anything WRONG with casual sex-every farm boy knows that there are only two kinds of sex.Good! and BETTER!

If you become an activist,you will experience real life,as opposed to casual life.

Or you can find a place and a way to live outside the rat race and enjoy a real life-unless you get steam rollered by "progress".

Fully agree, except I'd advise codgers to be activist as well. There's less energy, true, but also less wasted energy.

so, the most important questions are: 1)how messy will it all be; 2) how long will it take; 3) what kind of civilization will remain; and 4) how will it affect me and my loved ones.

A large part of present and future problems is that your item 4) does not include the entire population of the world. Read some philosophers, there was a good one teaching back about 2000 years ago. A guy from Nazareth.

"Read some philosophers, there was a good one teaching back about 2000 years ago. A guy from Nazareth."

your premise makes for a good country tune, but i'm not sure gw bush's favorite 'philosopher' is the be-all and end-all of how to survive what's coming. sure, there'll be plenty of room for kindness to strangers. but there'll also be plenty of sarah-palin rage-filled abiotic oil worshiping, gun toting marauders -- opposite the save-the-planet altruistic "what's mine is mine and what's yours is mine, too" types -- all citing jesus's greatness and leadership.

as they say, "the devil knows scripture like the back of his hand."

personally, i'll vote for the honest atheist if i have a choice. not saying there aren't plenty of great philosophers to learn from.

but in general ... how about aristotle? "a is always unequal to b."


Isn't it amazing how many people fail to realize that "a" CANNOT equal "b".

FOR THE OVER EDUCATED,this simply means a IS b and we mistake one thing for two.

The end of oil will probably spell the end of ICE vehicles, but I would be surprised if people don't continue to live in suburbs, using electric power from renewable energy, traveling in EV's. The movement from agriculture to urban and suburban living took 100 years these types of changes take generations. You only have to ask 18 year old women/men where they want to live if they decide to have a family. Not many are going to choose sustainable farming or urban high rises unless I am totally out of touch with the younger generation.

I am retired so I can live almost anywhere, I actually like the suburbs( without snow) and am waiting to be able to buy a PHEV, when the price drops below $50,000. I figure I will still be able to get small amounts of ethanol or gasoline for the next 30 years, but use electricity for most traveling.

We are clearly producing more suburban housing and less walkable urban housing than personal preferences on their own would result in, since we have to rely on cross-subsidies, development subsidies, and zoning restrictions to generate the current quantity of suburban car-only housing, and declines in property values in new outer suburban developments dropped more precipitously than property values in walkable urban neighborhoods.

That is not to say that the personal preferences for suburban style residences will vanish if we put it on a level playing field with walkable suburban villages centered on a dedicated transport corridor ... but since half of our housing stock is in suburban sprawl, a decline of demand from the level created by subsidies and zoning toward actual personal preference distributions could leave us without any need for substantial new construction in suburban housing for a decade or more.

yup; suburbia is STILL the american dream. and, in reality, if you have an acre or so in suburbia (only the most exclusive communities), to the degree that you are able to escape the grid with wind/solar, and plant a garden and have access to water -- you'll probably be ok. plenty of 'ifs', i guess, but at this point in time, plumbing the absolute advantages/disadvantages of ANYWHERE -- city, suburbs, boondocks -- is really just a guess until TS really HTF.

there are still too many unknowns about how things will play out, IMO. there will likely be established some types of feudal heirarchies in all of these settings, determined by wealth (i.e., firepower, food, provisions and access/control over remaining energy and other essential resources. one can certainly hope for some types of evolving local community governmental structures to prevail. but it's not a given by any means.

to the degree that you are able to escape the grid with wind/solar, and plant a garden and have access to water -- you'll probably be ok.
Why would we want to escape the grid, that's already linking up to hydro,nuclear , wind and solar, a lot cheaper than building your own in poor solar or poor wind locations. Where I live, the city is supplied by gravity fed water with a small amount of desal back-up ( using wind power). That seems secure to me, perhaps not enough to water lawns but plenty for washing, drinking, and watering a small vegie garden. Not much oil used for these services.

of course you are right! i'm talking about preparing for a grid that eventually goes down. i am gambling that the grid is most likely to be maintained for the longest period in the northeast, which includes 'prime' suburbia. nyc also has gravity fed water, a major plus. not sure about the suburbs, though.

Readers should refer back to Airdale's comments on the icestorm that his area suffered. Such an event in the North East region could result in millions of deaths.

It seems likely that this amendment of the IEA's position re: the timing of peak oil will set off alarm bells across the globe. They are acknowledging what most here have long expected, the Age of Oil is fast drawing to an end. Hopefully this will serve as a wake up call to governments and concentrate attention on how we can prepare for the inevitable. However, I fear that most governments, particularly members of the OECD, will waste time trying to downplay the possible ramifications of declining oil production and to assure the public that everything is under control. I also fear that we will waste precious time trying to figure out how to maintain economic growth. Growth is not the answer - it is the problem!

"This could very well be a breakthrough"
I very much doubt it. FB doesn't even set out the facts frankly. He suggests a peak 12 yrs ahead while just about everyone who's clued-up sees the end of the growth curve is already 4 years in the past.

And a key point to understand is that being informed of the facts is a long way short of having any understanding of what they mean. The doubters of Copernicus, of Wegener's continental drift theory, and so on, had exactly the same information at their disposal. The concept that economics and politics are the kings of subjects, commanding the obedience of lower-class subjects such as mere physics and chemistry, is hardwired into the brains of the "leaders". That's why none of them chose to be physicists! The idea that "growth is a good thing and it can always be restarted" can only be thrown out via a paradigm shift to a new perspective such as only happens "when its opponents eventually die and a new generation grows up that is familiar with it".

Within a few weeks most media voices will be back to the b.a.u. chants about when the recovery comes, after the recovery comes, when we successfully restore growth, blah. The peak oil ~theory~ will have been last month's story.

As for a grass-roots movement to join, I'm in the UK, but the situation is international and you are welcome to collaborate over there in my own beginning efforts at and I believe there's some "transition towns"-type thinking going on in Portland OR, but you'll see I am far from persuaded thereby.

Wow. Nice post. I like your way of weaving words.

How about the following word weaving? Anagram of "IEA Fatih Birol":

Oil Habit Afire

A Rife Oil Habit

is even better IMHO. ;-)

Yes (for ermyers), there is a Transition Town initiative in Portland. See, and for more info on the movement in general. We have just been going for about a year and will be having an Open Space day on Saturday Sept 26 which will be an opportunity for anyone to propose a topic they want to discuss and is expected to result in several new subgroups including one on food security. (I can explain more about all this, and what we have been up to, if you want to email me at lizbryant at yahoo dot com. I can get you on our email list if you don't see where to do it on the website.) There will be a keynote speaker, not yet confirmed, the night before. The local Transition initiative was started by people active in Portland Peak Oil, including one who was on the City's Peak Oil Task Force.

Also google Portland Permaculture Guild for permaculture education efforts and getting on their email list.

I haven't read up on RobinPC's concerns about Transition, nor what he is starting up in the UK, but I don't think it will do you much good to join up with folks over there when there is a lot going on in Portland on many fronts. I I hope you will check us out. It will help you link up with whatever else you are interested in in Portland, as Transition folks have many other connections.

My own son is 23 and he and his girlfriend are here in Portland and tuned into these issues. So I am very empathetic with your generation's concerns. Hope to meet you one of these days!

Liz Bryant

I haven't read up on RobinPC's concerns about Transition,

But I suggest that you should, as these concepts apply worldwide, and others have been joining in on the original TTers' website with some of the same heavy critiques I advanced, e.g.:
Just about all the pages on my (recently started) sites and are by definition relevant to the TT debate.

I am getting more convinced that the UK government is aware of the peak oil problem but do not want to make the public aware or make markets react by making public their concerns. They will be well aware of the North Seas declining output and some of the policy announcements in the last year seems to be aiming towards reducing dependency:

1) Electric car subsidies for consumers announced in last years government budget
2) Small car hydrid engines to be produced by Toyota in Deeside engine plant, of course with some government money.
3) Electric cars to be produced by Nissan in Sunderland again with government support
4) Electrification of rail line from London to Bristol, Cardiff and Swansea and Manchester to Liverpool line.

Most of these announcements are reported as reducing CO2 emissions and fighting climate change, which of course they also do but a pattern does emerge.

Hey ER;
Guess I'll join the chorus of advisers here for my two bits..

As Robin says, it can be a tough message to sell.. and given Steve from Virginia's intense version of it, you surely know just how even a well-intended message can go offtrack and probably lose more ears than it gains..

My approach has been to be very visible in my various projects for solving my energy needs, and just to make people know that this is one of MY beliefs and interests. I have a fairly UGLY homebuilt box and tower on my roof in a small Maine City, and I've told many neighbors about the Solar Hot Air Box, Solar Panels, Lighting and other house retrofits that are whittling away at my 'Imported Energy Habit'

I have "PEAK OIL! - coming soon to a highway near you. Got Options?" bumper sticker on our car, FWIW, and I don't approach it like I'm resigned to have people despise and shun me over it. I'm making preps for my family, and people who ask me about it, I'll explain to them that 'We're extremely vulnerable in our energy dependencies, and I'm looking for alternatives and retrofits' Many agree that there's a problem, some think it's overblown, but after supporting my position a bit, I don't insist on 'winning the argument', I agree to disagree without backing down and I just keep visibly doing what I can to devise retrofits and toss them into conversation and onto the roof when possible. They know who in the neighborhood to come to if they want to do more about it.

I think the most radical stuff you can do is get off the juice itself, and be visible and audible with your successes. There are places for yelling, but there's so much fear and anger blasting around right now, I think those messages will largely be ignored and avoided.

There are people out there who DO want to change, even if they're stuck in the cart-tracks right now. Help figure out ways they can wedge their wheels away from the ride. It might be like the Martial Arts idea of using the power of the opponent against itself, instead of thinking you can just butt up against it and beat it with your own muscle.


jokuhl, Your enterprise of persuasion-by-actually-doing-things principle has the potential to be (mis?!-)interpreted by neighbours as that you are just a nutcase too pigheaded to listen to the reason of others.

I'll explain to them that [....]. Many agree [...], but after supporting my position a bit, I don't insist on 'winning the argument', I agree to disagree without backing down [...] They know who in the neighborhood to come to if they want to do more about it.

All this potentially comes over as "I know better than you" (even though that may be true). Maybe you should instead express an interest in the perspectives of the doubters, ask them what they think, what their reasoning and so-on is. This makes them seem like equally respected partners in learning, and while you may learn something from them yourself, just as likely they may come to see the weakness of their own assumptions in the process. You can't disprove a question!

That's a good suggestion, while I think I do that already. By 'Agreeing to disagree', I will generally hear their thoughts and acknowledge them, but say that for Prudence sake, I'd rather have a somewhat more diversified supply. For heating a home in Maine, people seem pretty ready to let you take care of business however you see fit.. and they'll take notes to see if they can't tag along when a good proposal shows up.

I probably abbreviated my communications too much above. I meant to emphasize simply that I'm not drawing a line in the sand with 'disbelievers' .. Steve's equation with Vietnam Opposition reminds me that this struggle will really fall hard if it's made into repeated us/them iterations..

Even friends who think that the 'Oil Situation' is all Saudi Manipulation or Government Control or something have had no problem with my getting some free heat from some clever rooftop rigs. I haven't heard anyone suggest I'm getting imperious or arrogant, which has decidedly been my tack. They'll say 'How well's it work?', and I tell them that when it was 5 degrees F last February, it was blowing 120 degree air into the house most of the day, every day.. and this year, I'll add another one, etc, etc.. They hear that, no matter what they think is behind oil prices or the current economy.

I think I only get into stubborn spats when people are being obnoxious and cruel to each other.. still something I could stand to improve some.


Both ordinary people and power elites will change their minds once an iron bar called "reality" hits them over the head, and not a minute before. You will just burn yourself out in a futile effort to speed that along any sooner, so don't even try.

The things that could make a real difference for your (and everyone's) future are mass transit, inter-city passenger rail, and renewable energy. The more of these that we can build out, and the more quickly it can be done, the better your future is likely to be. I suggest that you focus your efforts on these. It is not necessary to convince everyone that the worst is coming in order to get support for these things; you just need to be clever and skillful enough to convince enough people - the right people - that it is in their interest to move forward on these things. It doesn't have to be a massive national program, either. Every little movement forward on these things in every little place does make a difference. It is a lot more feasible for the little people like us to achieve little things than it is to accomplish big things.

It is not necessary to convince everyone that the worst is coming in order to get support for these things; you just need to be clever and skillful enough to convince enough people - the right people - that it is in their interest to move forward on these things.

Best, most-thoughtful comment of the lot. I wholeheartedly agree.

constructive incrementalism is assuredly always the best way forward in an imperfect world -- if there is time for such incremental efforts to outrun catastrophe. and that 'if' seems to be essential nugget of debate among peak oilers. it's a race against time for every issue under discussion. no?

There is a reason in nature why everyone cannot be convinced. Given the long term carrying capacity of earth which is less than one-third of world population now, a lot of people alive today have to face a tragedic death. It could either be through a war or an epidemic or both or a series of them. This is the most logical outcome. This is why most people would not listen or understand what we at tod talk about. There have to be those kinds of people because there have to be reduction in population. Its like there have to be stupid and lazy deers in a herd to be eaten by the lion, since lion has to get its food all the herd cannot be intelligent and active. Existence of the many ignorants make survival easy for the few knowledge-ables.

""Is there anyway an 18 year old such as myself can get involved educating? Where's the grass roots movement at?""

The real answer to your question, and something not many here will say to your face, is.....

It's already too late.

Find a place to survive as best you can. Get away from the cities ASAP, find a small community that will keep you alive for as long as you can. Enjoy the ride to the bottom for all it's worth.

It's already too late.
Find a place to survive as best you can. Get away from the cities ASAP, find a small community

Well, I didn't say that lot above here but on the pages I linked to I certainly did!

Is there anyway an 18 year old such as myself can get involved educating? Where's the grass roots movement at?

The location of the grass roots movement depends on your location. Are you in U. S. A. or U. K.? Transition Towns is growing fast in my area (Colorado). ASPO-USA is also strong in Colorado, so we are fortunate in that regard. Good luck wherever you are.

I think that everybody is still educating themselves; this is a complex issue. It is hard enough to see the problem. But what is really hard is to find viable approaches. Even among the educated, there's only the most general ideas about a general direction for appropriate responses. Look at TOD: we've seem some posts by Herman Daly and some others, but there is nothing even close to a consensus on which direction we should take. It's hard to build a movement when you can't answer the question, "well, what should we do?" with more than a vague response. It's the end of the growth economy, but what will replace it? And what policies will the movement advocate? And then when you have these policies, how do you popularize them?

I know, this isn't that helpful: more questions than answers. But the problem is that even among the well informed, there are real questions for which we don't have answers. I'm working on it!


"I know, this isn't that helpful: more questions than answers."

This is actually something of a plus. Telling people that there is an enormous problem and they can have a role in forming solutions is a bit more inviting than just saying, "This is what you should be doing."

It depends on the urgency of the situation. When there is urgency, most people just want to be told what to do, in my experience. I'm not saying that is the best course of action or the only course of action, merely that that seems to be be how most people are wired. YMMV.

ER -- You will get a lot of advice, including sensible advice that is completely contradictory. In the spirit of Yogi Berra I would say: heed all of it. I have some thoughts:

This could very well be a breakthrough, which could bring price raises in the coming weeks.

Be careful here. Daily price ticks have little to do with supply pronouncements from shops like IEA. Oil is up pretty big today, for instance, but it is driven by the weakening dollar and the domestic financials-buzzed DJIA. I would not get too hooked on what prices do in the near term -- you can find posts on this site literally calling for $20/bbl and $200/bbl by the end of the year. Both are possible and neither is welcome.

Is there anyway an 18 year old such as myself can get involved educating?

Absolutely, take a position on oil supplies that you are comfortable defending based on strong evidence and let people know your beliefs. They will be impressed by your knowledge but expect a lot of pushback, including an insistence that 'drill baby drill' is indeed the answer. Make your case firmly and calmly. You may not convince your particular antagonist, but others around you will start to think....

At 18, your prime learning years are very much ahead of you. In addition to research, set aside a good chunk of time doing practical work. There are a great many skills that will be needed in the future, more than you can be expected to master, so pick what seems most at hand and attack it. These skills mostly relate to determining the best ways to manage food, water, and energy closer to the source.

Where's the grass roots movement at?

This is an interesting question. Awareness of the troubling signs ahead is broad but not at all deep. I'll bet you can find a committed group of activists nearby. But the emphasis these days on taking local action works a bit against national scale organization. I also happen to believe people, young people especially, are more alienated from national politics than in past times, as they sense, correctly, very little difference in the governing parties. The time is right to get involved locally, but I wouldn't expect a mass movement a la the Vietnam era in the near future.

Ermyers, I am a part of the grassroots movement of sustainable farming. I am saddened to see all of these disheartened people who dwell in the downtrodden mind, and now thrive on negativity. Statements like "your life is f*cked, it's all over, there's no hope" are unlikely to help anyone.

The sustainable farming movement is called Permaculture, which is a term I'm sure is familiar to many readers on this forum, and is important because it has the potential to feed people without farm machinery. Permaculture practices can be completely independent of the fossil fuel/economic system, and there are many examples of this all over the world. In fact it's so successful that many permaculture farms are overwhelmed with abundance. It yields such results in the best of conditions, but it also has proven to yield impressive crops in an area of Jordan that was previously considered a blasted unfarmable wasteland.

I see that you live in Portland; I myself live in Eugene, and have started a permaculture farm here on my 20 acres, with the intention of enlivening the community here. You see, Permaculture is more than just a system of farming, it is about generating your OWN economy, so you don't need the doomed national one. Portland is fortunate to have a very large permaculture following. You can take intensive permaculture training courses which will arm you with the core principles and a diversity of practical and design skills. What's more, you do not need a 20 acre farm to practice it on. Even a suburban yard can be made useful with conversion to an Edible Forest Garden.

If you have not already done so, I recommend that you partake of some of the Permaculture instruction available here in Oregon. You will meet people who I believe are the kind of activists for which you seek, because they are willing to face the paradigm shift with positive personal action, and not just lament the loss of their flying car that folds into a briefcase. Putting your foot forward as an example to others in your community as one who practices a new cultural form that is materially frugal yet totally rewarding socially, will do more good than any amount of howling at a moribund bureaucracy or delusional captains of industry.

If you have any questions, I will do my best to answer them to the best of my knowledge.

The sustainable farming movement is called Permaculture

Oooh--Perhaps: One sort of sustainable farming movement is called Permaculture. It's been the subject of quite a bit of debate but apparently little or no systematic research. And you won't want to base your survival on unsystematic non-research.

Before educating others, start educating yourself.

Here's a start:
- the global spare capacity for oil production is currently about 8mbd
- OPEC is running at about 70% of capacity
- the OIl storage (SPR, Cushing, Rotterdam, China's SPR) is full to the brim
- additional oil and oil product had to be stored on ships, about 100mb in total
- IEA has no clue what's the real global depletion rate...they admit they were off by more then 80% on their previous estimate only 2 years ago...the truth is, they have no clue...the concept of "depletion" is a complicated one...OPEC's data is a heavily guarded secret.
- despite IEA's "depletion"- whatever the number might be- world production capacity actually INCREASED since 2007!
- the world has huge and cheap reserves of Natural Gas. We just scratched the surface here in North America and we already have so much nat gas now, soon OIL WELLS will have to be shut down, as we'll soon have no place left to store the gas and flaring associated gas will not be allowed. Gas will soon replace oil in many of its applications.
- in the last few years the production of NGL (Natural Gas Liquids) increased considerably (OPEC alone 3mbd increase). NGL replaces oil in many applications, gasoline production included.

world production capacity actually INCREASED since 2007!

But to an extent so relatively negligible that it would be more accurate to say that it did not increase--as a continuation of the 2005-8 "bumpy plateau" that some were forecasting.'re so much smarter than me...I didn't think of it that way.
Let's go one negligible step farther...what bout we say the extent of the increase was "so relatively negligible", that it would be more accurate to say that it had actually decreased a bit...ROFTLMAO

The key datum was that the rate of growth had markedly fallen, precipitating a crisis of the credit/finance system that depends on that growth.
PS--not I'm smart, just been studying it all here and elsewhere for past zxy3 months.

Wait a minute. I recall in one of your previous posts you claimed the IQ of a genius.

I can't get the link to the Independents article to work?

Scary stuff all the same, the IEA figures were out by almost 100%? wow

Should be fixed now.

About the big uncertainty in determining decline rate, it is always there. The problem is that no one has a good model for dicoveries and reserve growth. You can estimate depletion of what we have pretty well, but to get decline we need the discovery/reserve compensation factor. So it is likely that they have started to correctly include this part.

Btw, when I said that 'no one' has a good model, that ignores the Dispersive Discovery model which has been discussed on TOD. Of course, this is not acknowledged by the FF establishment because it has a huge NIH factor. We have to keep chipping away to change this. Until that happens, the predictions, prognostications, and forecasts will remain opaque.

That's "no-one" as in no-one predicted peak oil, no-one predicted the collapse of the USSR, no-one predicted the limits to growth... (Yours sincerely,

Ok, show me a mathematical discovery model. An assertion is not a model, btw.

I think I may have misunderstood your post or vice-versa. Surely you were implying that "the Dispersive Discovery model which has been discussed on TOD" is a reasonable candidate? I vaguely recall some controversy about it, but it's a subject I've negligible expertise about (important though it is!).

Of course TOD is open to new ideas, but the rest of the establishment culture .. has nothing.

I'll stick my neck out here and just ASK IF anyone else THINKS they might remember Reagen having a plan that involved just simply running the soviets into the dirt via his arms race?

"Bankrupting" them was the term if I remember correctly.

Or maybe he was only ACCUSED of having such a plan.

(This question relates to predicting the demise of the USSR.)

The readers digest predicted the demise of the USSR about once a year for 40 years!

That was what I did for a living in the 80s and early 90s.

The problem is that no one has a good model for dicoveries and reserve growth.

WHT, it doesn't $#@&%$# matter! What matters is flow rates. As Fatih Birol clearly states non-OPEC nations have already peaked. They peaked in 2004. They have been on a gradually downward sloping plateau since but with the peaking of Russia they are now about to be headed downward in earnest. Non-OPEC nations now produce 58 percent of the world's oil.

Last July, when oil prices were the highest in history, all nations, including all OPEC nations, were producing flat out. At that point only Saudi Arabia had any real prospects of increasing supply by any significant amount. But with their giant fields declining at 5 to 12 percent per year it will only take a couple of years before their decline catches up with new production from Khurais.

One challenge for the Saudis in achieving this objective is that their existing fields sustain 5 percent-12 percent annual "decline rates," (according to Aramco Senior Vice President Abdullah Saif, as reported in Petroleum Intelligence Weekly and the International Oil Daily) meaning that the country needs around 500,000-1 million bbl/d in new capacity each year just to compensate.

Bottom line, I believe that there is no doubt that we are already post peak. The only question now is how fast production will decline. We cannot know that until OPEC starts producing flat out again and I suspect that will be in about two years but that is only a guess.

Also, there is no such thing as reserve growth, there are only original bad estimates at URR. As time passes those estimates get better and historically estimates at URR have increased because original estimates have been too low. Lately however some of those estimates have proven to be too high as Shell's estimates of Oman's URR. Also, some original estimates of URR were deliberately low-balled. That was because strict SEC rules would have imposed stiff penalties if reserves were over-estimated, causing the stock price to rise.

Ron P.

Ok then, no one has a model for flow rates either. Really, no sense in getting all worked up. The fact is that having a model is more useful than not having a model. And barring that, using heuristics is better than not using heuristics.

The idea of applying flow rates alone misses the seminal idea that historically a proportional extraction model fits very well with the greedy dynamics of oil producers.

I will be curious to see an alternate flow rate model .. if one exists.

Ok then, no one has a model for flow rates either.

Really now? There have been dozens of models posted right here on TOD. Unless you mean something strange by using the word "alternate".

World Oil Production Peaked in 2008

The above is for all liquids. There are others that model C+C which I like much better but I cannot locate them right now.

Ron P.

Ace does a good job but I think that even he will admit that his is a heuristic fit.

Why not continue this path?

Then make the same mistake as the economists by forgetting the hard constraints. No 'top' and mainly heuristics means that we lack formality.

I know we can introduce formality, but you have to want to understand it. Insight through formality is an eye-opening experience. So the offer still stands to demonstrate a formal flow-rate model. As I commented a few weeks ago, $100 PayPal donation by me to anyone that comes up with one.

Ok then, no one has a model for flow rates either.

No wonder people are having trouble grokking my peak oil presentations...all this time I thought I was discussing flow rate models (many learned here) and only now I found out they aren't actually flow rate models. Dang, I wish you had said this a couple years ago, it would have saved me a lot of work...

Edited: The wink didn't show up, so here it is in different form.


Of course TOD has this covered and we discuss issues openly, but the rest of the establishment culture has essentially nothing to offer.

TOD has everything to offer, but we are still the fly in the soup.

To add to the flow rate models, we can't forget that economists always forget the hard constraints and the flow rate models, such as the oil shock model need the constraints as well.

Well ... there is a flow- rate wild card.

WE don't know what the rates are but the Saudis themselves do. Sometime (tomorrow?) the Saudis will balance between what they can gain by producing against what they can gain by 'storing'.

That is, leaving oil in the ground.

This is the real inflection point and it would certainly effect 'fat tail' effects. Applying technology doens't effect rates, but adminsistrative action would. The ability of OPEC's output reduction indicates that this inflection point is nearby if it hasn't been reached reached already.

Previously, flow 'discipline' by one or two producers would encourage other producers to fill the void with spare capacity and do so in the service of market share; USSR/North Sea/Prudhoe Bay/Cantarell. Now ... applied discipline - due to depletion - stimulates the opposite effect. I realize the Saudis and others have a stated macro interest in price stability, but now Chavez is a swing producer. He doesn't care, neither does Russia.

Since producers would now know that a spike price would collapse the economy - then drive down prices - and that technology cannot increase flows, they would not necessarily pump flat out but would hold off the market and wait for the decline, saving their reserves for 'later'.

Wasnt Canterelles decline rate at 20% one year? If the Saudis have been using the same extraction meothods would it be possible for them to have a similar steep drop???

What matters is flow rates.

Only if you are trying to predict the timing of peak oil. Otherwise, reserves are important too.

For example, one may want to not only know how fast the water flows out of their tap, but also how long it will continue to do so.

Peak Oil is the peak, not the end. Life will go on, in some form, and there will be a use for oil, even if it is less oil. Reserves are very important... you are just repeating something, which was true in its original context, out of context (flow rates are all important when you tally oil production and look for a peak, but rate or decline, the horizon of eroei, etc... are still important post peak).

It isn't stated whether production was reduced due to the capacity to produce, or to lower demand, prices or production quotas. Surely if global production is lower for one of these reasons, the majority of individual fields will also produce at lower levels.

What would be more interesting is the state of reserves and production capacity.

Breaking: Saudi Prince Bandar Under House Arrest.

Sun, 02 Aug 2009 17:03:54 GMT

Saudi Prince Bandar bin Sultan, the kingdom's former ambassador to the United States, is reportedly under house arrest over a conspiracy against the monarch.

Not sure what this is all about. Interesting week shaping up though with the IEA piece hitting the stands.


Link would appear to be to an Iranian state broadcaster - i.e. Tehran's answer to Al-Jazeera English.

So, this could mean any number of interesting things.

(cue Syria 'Fields of Oil' music)

It could:

A. be true....
B. be a propaganda attack against Bandar, the Saudi King, or both.
C. Both A and B

SA has generally been the voice of reason in OPEC and is, after Israel, the most important state so closely identified with US interests.

Intimating that there was a coup attempt could weaken the regime just enough to force it to trot out Bandar to show everything is ok - and so reinforce the notion that the Saudis, through Bandar, are as closely tied to the US as they ever have been.

Just finished reading 'The Shell Game';

Fiction but a good read nevertheless and who knows how close to reality some of the politics might be, esp in light of the recent breaking news mentioned above? Plus TOD is referenced at the end of the book :-)


The story was actually reported in the UK's Independent back in March.

Thanks for the link Leanan - very informative.

As I have pointed out many times, the really bad news is that net exports tend to: (1) decline at a faster rate than production declines; (2) show a long term accelerating decline rate and (3) be very much front-end loaded, with the bulk of post peak exports being shipped early in the decline phase.

I'm reminded of an article posted here a few years ago by Stuart:

4%, 11%, Who the Hell Cares?

He makes what is now looking to be a pretty good call of peak in 2008, but more interesting he posits that the difference between 4% and 11% depletion could be the difference between gradual economic decline and die-off.

The picture assumes a near-term 2.5% annual growth in all-source, quality weighted, liquid hydrocarbon supply. This culminates in a peak in 2008, for the sake of illustration, followed by various depletion regimes. The boundary between the green zone and the yellow zone is constant 4% depletion (my estimate of the US contraction threshold). The boundary between the yellow and the red is constant 11% depletion (my guess at the collapse threshold).

I may be confusing terms here between "depletion" and "decline" rates, but I think the analysis still stands. The estimate by Fatih Birol puts us well into the economic decline (yellow) zone as evidenced by the recent global economic contractions.

With the addition of likely faster and even accelerating declines in exports as described by Westexas we veer dangerously close to the red zone. Either way, the next few years should be interesting.


Yup - that was great post by Stuart.
It is all going to come down to decline rates and non-energy limiters post peak (meaning now). And financial system bubble extended production further than it would have without easy credit/rules/leverage etc. so decline rates will likely continue to be underestimated as energy analysts will build in historical assumptions that won't hold in more normalized fiat/resource paradigm.

Thanks Nate,

I'm re-reading Overshoot by Catton and I'm as struck now as I was when I first read it several years ago by his remarkable insights into our predicament. Especially the idea that, for fundamental ecological reasons, we have grown so "colossal" and have already so badly overshot the Earth's carrying capacity that some sort of crash is inevitable at this point.

Outbreaks of violence among American motorists waiting in long queues to buy gasoline, sputtering in stubborn non-recognition of the onset of the twilight of the petroleum era, suggest that the people of industrial societies who have learned to live in colossal fashion will not easily relinquish their seven-league boots, their heated homes, and their habit of living high on the food chain. As we said, re-adaptation hurts. It will be resisted.

Moreover, habits of thought persist. ...people continue to advocate further technological breakthroughs as the supposedly sure cure for carrying capacity deficits. The very idea that technology caused overshoot, and that it made us too colossal to endure, remains alien to too many minds for "de-colossalization" to be a really feasible alternative to literal die-off. There is a persistent drive to apply remedies that aggravate the problem.

If any substantial fraction of the more colossal segments of humanity did conscientiously give up part of their resource-devouring extensions out of humane concern for their less colossal brethren there is no guarantee that this would avert die-off. It might only postpone it, permitting human numbers to continue increasing a bit longer, or less colossal peoples to become a bit more colossal, before we crash all the more resoundingly.

Even more relevant now, fully twenty years after that book was first published, as we have indeed continued increasing our numbers, and less colossal peoples (especially in China) have indeed become a bit more colossal.


Couldn't agree more Jerry, I'm 2/3's thru on my first turn and its just amazing how he put all the pieces together in 1982. I am in awe of the man's insight and foresight into our future. Truly one of the best books I have ever read. Catton truly is THE MAN!

For the whole Western world the tradition of bestowing upon future generations advantages exceeding those received from the past was becoming inverted. We had become competitors with, rather than benefactors of, our descendents

Interesting that I have got the Birol article emailed to me by three of my grasshoppers they are listening and growing in awareness. To bad so many still think I'm nuts. LOL

The IEA/FB rate is the underlying field production decline rate whereas SS' depletion rate is an arbitary fixed % OVERALL decline in Production.

The difference is that the IEA/FB rate can be added to by improving production from existing fields (investment), finding new fields (exploration) and various alternatives like Tar Sands.

-I' hoping we can stay in the Green Zone but it probably won't be the fluffy BAU Economic Growth of the past -more like a hard slog as Business Models that worked OK in a cheaper energy environment die off... (An analogy might be City restaurant closures post-bank-bonus collapse!)

To be honest there is nothing really new in this article that I saw and I would second Westexes highlighting that the real kicker is likely to be declining global Net Oil availability to importing countries. These countries are currently seen as 'global drivers' -in particular the US. If this country experiances a series of shuddering Demand-Destruction cycles over the next decade the rest of the world is likely to suffer in tandem...


That makes sense, although they should have called it a depletion rate then.

I think of depletion as the hole in the bottom of the bucket. Yet as long as the bucket gets topped off, the decline is less.

This ambiguity in reportage drives me nuts.

As I see it, geological decline rates set an upper bound for what future production will be. If there is political upheaval, or the financial system doesn't work, or a major interruption of international trade, actual production could be a whole lot lower.

Like a lot of people, I think that Stuart at one time said that he also confused decline rates and depletion rates.

In any case, consider Texas and North Sea crude production from 1962-1982 and from 1989-2007 respectively. This is a graph of the production data points centered on their respective peaks (Texas, blue, in 1972 and North Sea, black, in 1999):

At the end of 1961, Texas had not yet produced the 1962-1982 oil volumes. Let’s pretend it is the end of 1961 and that the 1962-1982 area under the production curve is shaded green, and then as time advances by one year at at time, the depleted area under the curve is shaded red. So, as time goes on, the red area increases in size, while the green area shrinks in size, until the 1962-1982 area under the curve is 100% red, at the end of 1982. Regardless of whether production is increasing, at peak, or declining, depletion marches on. And of course, we see the same pattern for the North Sea.

Now, the question that Sam and I started addressing in early 2006 was what happens in exporting countries as their production declines. I proposed the Export Land Model (ELM) to help me understand net export math. What it showed was that: (1) Net Exports declined at a faster rate than production declined; (2) The Net Export decline rate accelerated with time and (3) Net Export declines are front-end loaded, with the bulk of net exports being shipped early in the decline phase.

One of the criticisms of the ELM is that many people expect exporters to curtail their domestic consumption in order to maintain their net export volumes, or in order to at least reduce their net export decline rate. However, after reviewing 16 net export declines from 1985 onward, I haven’t found a single example of a net exporter curtailing their consumption in order to keep their net export decline rate at the same level as, or less than their production decline rate (or rate of increase in production in the case of China). And the four former net oil exporters--China; Egypt; the UK and Indonesia--that I looked at all showed accelerating net export decline rates.

Finally, to illustrate production declines versus net export declines, once again consider Indonesia. Following are the simple percentage changes in production, relative to 1996, and the simple percentage changes in post-1996 cumulative net oil exports (CNOE), showing the stages of CNOE depletion at the end of each year in the decline phase (EIA):

1996: Final Production Peak & 100% of post-1996 CNOE in place
1997: Down 1.8% (Production) & 21% Depleted (CNOE)
1998: Down 1.2% & 44% Depleted
1999: Down 4.3% & 63% Depleted
2000: Down 6.7% & 79% Depleted
2001: Down 12.8% & 90% Depleted
2002: Down 18.3% & 97% Depleted
2003: Down 23.8% & 100% Depleted
2004: Down 28.0% & Net Oil Importer

Sam’s middle case is that the top five’s (Saudi Arabia; Russia; Norway; Iran & the UAE) post-2005 CNOE will be 50% depleted by the end of 2012; his best case is by the end of 2014, with the other 50% being shipped over the following 18-20 years or so.

BTW, I need to look at some more case histories, but I suspect that a rough rule of thumb may be that half of the CNOE are shipped in the first third of the decline phase, with the other half being shipped in the final two-thirds of the decline phase. This is what the Indonesian case history shows.

The length of the decline phase, in years, is a function of: (1) consumption as a percentage of production at final peak; (2) the rate of change in production and (3) the rate of change in consumption.

ELM is perfectly correct as it stands, yet it eventually derives to a zero-sum game tautology -- in the case of cumulative global depletion. The math is pretty obvious on that aspect and derives from game theory.

Yes, but it is only a model, and the real world is a complicated beast. There are a couple of factors that are also going to play a role, which will muddy the waters a bit. Here are a couple of the complicating factors that I have come up with:

Any nation that exports oil but does not have refining capacity for their own domestic consumption (I believe Iran and Mexico are in this category - maybe others) is going to get into a weird sort of bidding war with countries that do have spare refining capacity.

Countries that import food but export oil are going to have to bargain away more of their oil in order to ensure continued food supplies, and may have to strike bargains with countries that export food and import oil.

Countries that subsidize internal gasoline prices and pay for this with their exports are going to find great financial problems long before exports reach zero. And sharply higher gasoline prices in these countries will most likely lead to social unrest.

Depending on how much of their populace drive in the first place; Iran are doing the smart thing by attempting to shift some of their transportation fleet over to NG.

Here's a nifty graph from the Transportation Energy Data Book - which was one of Stuart's sources for his Auto Efficiency Wedge article:

China having a vehicle density equal to the US of 1916 is pretty striking. Not apt? OK, how about Brazil = US 1923? These are the stuff of a young Henry Ford's dreams, were he getting his start today.

Matt Mushalik sent me this projection of how much production can be expected from existing fields. In the graph, he has decomposed existing production into three groups--increasing, plateau, and decreasing, and forecasted each separately, based on decline rate analysis.

Based on his analysis, 27.5 million barrels a day of new capacity is needed by 2015 to offset declining production elsewhere.


2015-2009 = 6

27.5/6 = 4.58

4.58/12.0 = 380kbd per month.
Thats pretty danged close to what I'm estimating is happening.

Right now I'm estimating the world is losing about 200kbd of production every single month.
If you add in new fields being brought online and use this estimate I suspect my WAG is very close to the truth.

Next I don't agree with a 9% natural decline rate instead I'd argue that its increasing i.e we started at about 9% back in say 2004 and its increasing to 15% at say 0.5-1% a year.
I don't think its a constant. Also I suspect the rate at which fields move from increasing/plataue to decline is also increasing.

What this means is given the world hit a plataue in overall production we probably have signifcantly depleted our fields at our current production rate increasing the rate at which fields worldwide enter the decline phase.

I.e as oil prices rose we pushed the existing fields harder and harder and accelerated our infield drilling thus we now face a accelerated rate for fields going into decline.

My WAG is that compared to say 1990 the number of fields going from growing to decline has increased several hundred percent say 200-300%. So I obviously don't think this is a constant either but is accelerating.

Next you have to include export land so 200-300kbd with the preference towards the high side makes a lot of sense.

Now looking at whats happened globally its a fair guess that oil demand declined by say 6-8mpd with the recent economic collapse.

So at best the recent collapse bought us 48 months of breathing room. We have gone about 12 months and oil prices have already rebounded. Depending on demand changes going forward sometime within the next 12 months supply will again be tightly constrained.

Taking into account export land I'd argue we have less than 12 months probably closer to 4-6 months before oil supplies become a major issue again. Indeed price seems to be tracking much closer to 4 months as the limit vs 12.

If you also take into account the surplus that built up because of the rapid rate of economic collapse in the second half of 2008 we actually seem to be tracking my even more dire estimates of closer to 500kbd-1mbd of export declines per month. This is being covered to a large extent by the short term build up in storage. Right now globally we are probably drawing down storage to the tune of 100-200kbd at least. But this ends any day now its a one shot deal.

In any case the real situation going forward should become very clear within the next 4-6 months with my bet on 4 months. I'd argue we are already at the start of the next phase in post peak pricing and its just a matter of time before storage drawdowns fail to cover the underlying decline rate.

However I do think that this time around the world will try and keep a lot more oil stored vs what we did last time thus the price rise may be less sharp but more robust i.e as prices go up they should have less and less downside volatility as oil storage works to only prevent shortages not prevent price increases as its constantly being topped off.

This is actually my oil bank model.

Indeed we are actually seeing much higher prices vs stored oil levels now than we saw in 2008. This suggests much higher price increases as storage is forced down towards 2008 levels.

I would argue that the market incorrectly responded to the new higher persistent storage levels now vs the past. We fundamentally moved away fro just in time model to a store house model certainly a short term glut caused by the speed of collapse allowed the transition but the market simply overracted and it took time for it to become clear that larger inventory levels where probably going to persist as long as possible going forward.

Now I also happen to think inventory has been overstated primarily because this fundamental switch coupled with the hurricanes in late 2008 threw the reported numbers off.

The next big event will be how much people are willing to pay to maintain higher storage levels vs allowing them to decline and depend on a just in time delivery model.

Thus how much hoarding will we see ?

If real decline rates are as steep as I think then I also think the transition to hoarding becoming a issue with price will be fairly sharp. Once oil storage falls below the new comfort level prices will be very very firm.

What I don't think anyone really knows is where the new lines are drawn. I think this time around countries will do whatever they think is required to avert shortages we just don't know for sure what the new comfort zones are.

However looking further out if this scenario is correct then it makes sense that within 6-12 months in the future this hoarding will itself have failed and storage levels will be well below everyone's comfort zone with shortages becoming a issue.

So it looks to me like we will see a sort of two phase change in prices. First a robust increase through the comfort zone then a second stage where storage has fallen into the danger zone and the market become more desperate.

Now of course I have to take a stab at prices :)

So assuming the market overshot because of the fundamental change one has to guess that the new semi stable oil level is probably in the 80-100 range. I.e if the market remains in its new comfort zone then the natural price is probably in that range. If I'm right and we will basically blow through this range then one can guess that the next level i.e where in a sense economic warfare begins is the 100-200 range. Past that point your in a different world that effectively in a resource war.

On the time side if depletion is as bad as I think I really don't see any leveling off of prices I think the passage through the two stages is pretty smooth. Thus at some point within the next four months some part of the globe probably China will hit the bottom of its new comfort zone. As it refills it sends other nations below theirs and the new bidding war ignites. From here on out I think we are again locked into a whack-a-mole situation with some part of the world facing shortages.

And last but not least I'd argue that the recent price collapse plays a big role in setting up this new situation because it significantly slowed the rate of demand decline.

All we probably really achieved in the end was a chance to build up the base storage levels a bit. I really suspect within 12 months we will be back to a price level that would fit very well with and exponential increase with some smoothing.

This implies of course that we would need to see prices closer to 300-400 within 12 months to get back on curve. Thus the recent wild swings in prices should be entirely negated.

Time will tell of course but I think that this dire or doomer model is self consistent the only issue is if the underlying assumptions are true or false.

What I find interesting is it seems that the oscillations seem to accomplish nothing over the longer term as the price drops stifle demand declines. And as far as I can tell it really seems to be a one shot deal i.e contraction from growth can only occur faster than decline once on the way up. Future contraction seems to require economic collapse somewhere in the world it its not clear to me at all that this actually causes demand to decline fast enough. The problem seems to be that if fuel gets really expensive and a region becomes unstable then locale hoarding becomes ever more prevalent. Right now we see more generic hoarding by the big countries but one can imagine that as prices increase and the third world economies stumble we will see more and more micro-level hoarding develop making it difficult for further demand declines to keep pace with depletion and cap prices.

And of course the transition to hoarding vs just in time was simply awe inspiring.
Regardless of the fact the market probably misunderstood the event its impressive and I certainly learned something from it.

It seems that to successfully become a hoarder you actually strike after the first price shock during the initial demand decline or better during the start of the next runnup.

And last of all my opinion is that this concerted move to hoarding in and of itself implies that supply issues are real.

Your musings constantly make the hair on the back of my neck stand on end.

...I'm going to go looking for some semi-mature fruit and nut trees to plant...

Don't stop with the thinking out loud. Even if you're wrong, simply putting the possabilities out there to consider is highly valueable.

Couple things.

1. This is huge. I suppose I'm taking a risk saying that, but even the most feckless economist, if he or she takes the article to be accurate, should be able to see . . . 1) peak in 10 years, 2) 6.7% decline rate . . . means . . . world at 50% oil production in 20 years.
Most of us here understand that 1) is incorrect. Peak is behind us.
The fact that this is headlining Drudge is relevant.
The information provided by the IEA is always going to be a best-case, pie in the sky scenario. So right now the best case is - we're at 50% production in 2029.
That makes the worst-case scenario - mine - seem much more likely than it did a week ago - 8%-10% decline rate and peak behind us, putting us at 50% production between 2016 and 2020.
I only have one important peak oil thesis - the KSA is and has been lying for a long time. If they peaked recently and ghawar is coming apart at the seams, then we could very well have already entered hell and all that's left is to wait for the temperature to start ramping up.

2. The KSA prince thing is extremely interesting. How about this for a tinfoil theory - guy was going to go public with information that the KSA had peaked and they're in a 5%-10% decline right now? How about that? How about the guy had the ability to make a statement that would immediately and permanently change the course of the world. How about that?

3. Memmel is right. Just my hunch. But given the secrecy of the KSA, my hunch is as good as your hunch. Unless you're a Saudi Prince.

Of course at a -6.7 percent decline rate from existing wells, current production would be down by 50 percent in about 11 years.

Great point. It's very frightening how ignorant all but a few people are.

The story throws out that we'd need "3 Saudi Arabias" to replace what's lost. Very few have any idea of the scale of that.

We are, in effect, the professor in Back to the Future - "1.21 gigawatts???? We can't just go down to the corner store and buy plutonium like I'm sure you can in your world Alex."

Any person with any decent knowledge of oil production must cringe when he or she hears, "we need three more Saudi Arabias."

Man. I'm having a bad day.

Sam's best case is that the Saudis will have shipped half of their post-2005 cumulative net oil exports by the end of 2015.

I'm not sure I understand the measure.

Do you mean Sam's best case is this:

We add all oil that the KSA will ship after the date of 2005 and we call that amount Z.

The KSA will have shipped 0.5Z by 2015? And that's a BEST case?

Did I misunderstand the measure?

Decline rate includes current reserves and extrapolation of growth. Depletion rate is just from the current reserves. So decline is less than depletion due to the compensating factor of dicovery/reserve growth.

This makes the number even more daunting, unless they have the terminology wrong.

decline = depletion + growth

so if depletion and growth only differed in sign, we would hve no net decline.

You are correct. Our update to the top five paper will address both decline rates and cumulative net oil exports.

For example, Indonesia's 1999 production rate was only down by 4.3 percent versus 1996, but by the end 1999 they had shipped 63 percent of post-1996 cumulative net oil exports .

We can't just go down to the corner store and buy plutonium like I'm sure you can in your world Alex.

That's "Marty", not Alex.

The story throws out that we'd need "3 Saudi Arabias" to replace what's lost. Very few have any idea of the scale of that.

I went back and checked my world map. Try as I might, I could only find one place labeled "Saudi Arabia".

Seriously, I know that geology is different than political geography. Still, I suspect that the only Saudi Arabia that there is to be found just happens to have been - Saudi Arabia.


Although we have never met and probably never will,since I have gotten into this site you and a couple of other guys have become sort of like my family physician or lawyer in terms of energy.

Please ,please,say something,ANYTHING,to the effect of take this prescription for the biggest size zanax down to the drugstore tomorrow and they will give you the very biggest size biggest bottle full to the cap.

Seriously is this announcement coming from Biorol likely to fuel a major jump in oil prices over the next few weeks?

I have recently scrounged up a good sound thousand gallon diesel tank on skids that was used to fuel trucks on a big construction job.They're GIVING this sort of stuff away these days.The hand pump on the tank cost more four or five years ago than the whole rig.

I have alternately been amused,alarmed ,frustrated,and mystified by the comments made over the last few months by some pretty sharp people who seem to think that shrinking demand can outrun shrinking supply,thus holding the line on prices.

Maybe that could happen.If it does,we are most definitely in very deep do do of the unemployment-tent city- breadline/soup kitchen-molotov cocktail variety.

The way I see it is that they have been too busy too long staring at computer screens and selling and trading stocks. They not only have not been outdoors for a while, they haven't even bothered to look out the window,cause when they do there all those trees blocking thier view of the forest.

Living close to the land must make it a lot easier to accapt certain realities,one of them being that things can change radically from one year to the next.Even one day to the next.

Of course I have no expertise in the energy field, but my bullshit sniffer is state of the art
and it's almost dead silent when I read about the ELM and Hubberts curve.It goes off like a fire truck siren every time I click on the New York Times or any of the other American major papers,or if I turn on the radio in my old truck.The British and Aussie papers are much more credible.

Maybe I 've read so many sci fi and anti utoptain novels and history books that I'm getting sort of wacko myself-I never did live anywhere near the middle of the curve anyway,I'm definitely an outlier.

I don't have very much money.If the deflation scenario is correct I need to spend it on more ammo and survival gear.If oil prices go thru the roof,second scenario, and the one that seems infinitely more likely to me-it's really pretty much the same thing but maybe the time scale plays out differently.The soup kitchens won't be needed quite as soon, as I see it,but they will be needed just as bad.

If prices are headed for the stratosphere within the next year or two,I need to go long on a thousand gallons of diesel.

Tell me Doc-what should I do?;-)

The way I see it is that they have been too busy too long staring at computer screens and selling and trading stocks. They not only have not been outdoors for a while, they haven't even bothered to look out the window,cause when they do there all those trees blocking thier view of the forest.

No Mac, that is not the problem. The problem is that too many oil price prognosticators completely forgot about the economy, including me. But I have learned my lesson where many have not. Bill Clinton's motto during his 92 presidential campaign was, "It's the economy stupid! (Nothing personal of course, just quoting Bill.)

The question is: Will the economy shrink faster than the oil supply! If the oil supply declines at 2.5% or less, then the economy will probably shrink faster. That means that the people's ability to pay will shrink faster than the oil supply.

We are teetering on the brink of a depression. To imagine oil prices in the $200 range in the midst of a great depression is the height of foolishness. What will be the demand for oil with the unemployment rate in all developed countries above 25%? Demand for everything will be down, not just oil.

Think about it Mac! How does it look to be advocating die-off in one breath while talking $200 oil in another. The two are contradictory. Some folks need to make up their minds. Do they believe in sky high oil prices, meaning a booming economy, or do they believe peak oil, and other things, will cause the economy to crash, meaning very low commodity prices, including oil. You cannot believe in both things at the same time.

Well hell, I suppose you can. Of course that means…..

Ron P.

Agree. But I also subscribe to the 'multiple steps down' theory: the economy contracts sharply, oil price down and less investment in oil infrastructure/exploration. Economy stabilises at a lower GDP. Price recovers slightly. After a few years the supply falls low enough that there is another shock. Price soars, economy crashes etc etc etc.

Of course all of the above is only possible if the masses and the governments just shrug their shoulders and accept 0% growth. This is unlikely from a monetary perspective as we need to grow in order to keep the interest flowing in to pay the debt. It is likely that the monetary system will (is?) collapse completely followed by large scale civil unrest. Therefore, the steps down might be steep and protracted. Certainly the future is one of less, not more.


I'm no oil expert and you notice that I asked for tranqilllizers.

Your decline rate may be WAY TOO LOW. others are talking three times that....

And I did say that if it happens your way we are in the really deep do do ,argreeing with you but maybe getting there by a slightly different route.

But I am not convinced that the economy will cintinue to shrink so fast ,and it might very well more or less "recover"-maybe for decades- like an accident victim who walks but never runs again.

And a life out there dealing with the REAL fundamentals puts the prices whgere the VALUE IS-spending on everything else is eliminated as necessary.I will draw up a contract,get a trustee to hold the money and bet you all I can raise that if the iea is still in business ten years fro now that the inflation adjusted price of oil is at least two hundred dollars by thier figutes for any rolling 365 day average contiaining our terminal date.The actual dollar price may well be twice or more that figure if the printing presses are kept well greased. But in the end,five years ten years next year twenty years unless there are positive energy Black Swans,it's die off either way for large parts of the population.

Either way thier economies can't earn enough to import thier food.Either no export earnings due to no business-depression model or not able to buy -can't compete with the still RELATIVELY rich for essentials.can't pay asking prices .

Either way.

Of course the difference between us may be that you are thinking this year/ next year but an apple farmers natural frame of reference is a decade.

Hang in there ,nonety eight opercent of te time I agrre with you ,wich OBVIOUSLY proves that you are pretty damn smart!;-)

Mac, if my estimates are way too low then the impact on the economy will be absolutely catastrophic. And it could happen. Suppose nations like Russia started hoarding oil and cut off exports completely. Then the world economy would collapse. If the world economy collapses then there would be no official price for oil. It could be $2000 a barrel in one country and $10 a barrel in another.

But that is not what we are talking about Mac. We are all, I think anyway, discussing what will happen before TEOTWAWKI! And we are talking about dollars adjuster for inflation. If a hamburger costs $1,000 then I will make no bets as to where oil would stand.

I am not going to make any bets with you because in ten years I will be 81 years old if I am still alive, which is doubtful. But obviously you do not believe that history is any guide. Oil prices got too high, the economy went into deep recession and prices dropped. I think it is pure folly to believe that it will be different next time.

Look again at history, look at the Great Depression. The price of everything was very low because no one had any money to buy anything. But this time around it will be different??? Don't bet on it. But all we can really do is wait. I was dead wrong last year, I thought prices would keep climbing. But in hindsight it is obvious why I was wrong.

Sure wish more people had more hindsight.

Ron P.

After hitting a low in 1931, oil prices rose at an average annual rate of +11%/year from the summer of 1931 to the summer of 1937.

Jeff, what's your point? That is a doubling of oil prices in six years. Hell we did a lot better than that from 07 to 08. In fact we are better than that right now. Six years ago, in 2003, oil prices averaged $32.47, adjusted for inflation. Right now they are $71.50. That is a greater than 11% per year increase.

The Politics of Oil

By 1931, with crude oil selling for 10 cents a barrel, domestic oil producers demanded restrictions on production in order to raise prices. Texas and Oklahoma passed state laws and stationed militia units at oil fields to prevent drillers from exceeding production quotas. Despite these measures, prices continued to fall.

You are saying that the price of oil reached 20 cents a barrel in 1937? Damn, how could anyone afford to drive at that price? ;-)

Ron P.

The guy that runs the Carpe Diem website sent me a list of nominal oil prices. I'll have to dig it out, but if memory serves the actual nationwide average in the summer of 1931 was something like 80¢. In any case, here is an inflation adjusted oil price chart from Carpe Diem in 2008 dollars:

I'm making three points: (1) After falling in 1930, it appears that worldwide demand rose throughout the Thirties; (2) Oil prices rose at 11%/year from the summer of 1931 to the summer of 1937 and (3) There were reportedly three million more cars on the road in 1937 in the US, than in 1929.

Two big differences today: (1) hundreds of millions of people worldwide want to drive a car for the first time and (2) I expect to see a long term accelerating rate of decline in net oil exports versus the expanding oil supply that we saw in the Thirties.

I'll have to dig it out, but if memory serves the actual nationwide average in the summer of 1931 was something like 80¢.

Damn, you are a lot older than I thought. My earliest memories are of the early 40s. ;-)

But I think you, and Mr. Perry of Carpe Diem, are a little off. I have been hearing since I was a child that oil reached ten cents a barrel during the great depression. Of course that is not adjusted for inflation. That would likely be several dollars a barrel in today's prices. But this guy says it went even lower.

interesting-people message

In early 1930, before the Kilgore Field was discovered, oil was selling for $1.30 per barrel. By August 1931, it was selling for as little as 3 cents. The problem was "hot oil" ? the name given to petroleum that was either produced illegally or stolen and then sold at a low price. Although the Texas Railroad Commission had, on paper, the authority to regulate the oil industry and prevent the waste of oil, it couldn't stem the flow of hot oil. And the courts hadn't allowed the agency to exercise the power needed to actually restrict production.

I suspect that in the early 1930s oil went for different prices in different parts of the country. And since Texas was where most of the oil was produced it was probably cheaper there than anywhere.

Ron P.

I'm older than I look, and my memory is faulty.

Found the file for monthly nationwide nominal US oil prices (source: Global Financial Data). They showed $4.00 in the summer of 1929, $1.39 in July, 1931 (the low point) and $2.82 in July, 1937. $1.39 to $2.83 in six years is +11%/year.

Here is their website:

I think that there are two reasons for the 10¢ per barrel prices: (1) It may have been "hot oil" prices, for oil that was illegally produced beyond the quotas at various times and (2) The very low prices were very localized, because of a limited ability to get East Texas oil to other markets.

Here is a very long term chart of annual oil prices:

EIA also has EIA - Short-Term Energy Outlook - Real Petroleum Prices, with gasoline prices back to 1919. GD followed a bell curve up to ca. $3/gal.

"(1) hundreds of millions of people worldwide want to drive a car for the first time ..."

you are 100% correct. IMO, with the scale up of population and the economy over the past 80 years, even a few percent change in DEMAND or SUPPLY can result in a HUGE shock to the economy.

Being a farmer I don't have much problem seeing the whole world as one big pasture.

Its the same size now as it was eighty years ago but now huge tracts of good land are gone for good-paved and built over,etc

We're the cows.

There are way too many of us and we graze on oil as well as water and grass.we eat the oil as corn.

The water and grass are obviously running short and so is corn.

We will pay any price for cor-er oil I meant to say.And if oil is depleting at effective rates approaching ten percent for importers,the only way we can continue to eat is to pay whatever is necessary for it.

I don't think we can double up in our houses and carpool and get rid of guzzlers and move closer to work FAST ENOUGH to make the decline in usage match decline in production.

Ergo we buy a product we simply must have that escalates wildly in price every time the supply is inadequate.Why should this change the next time aroound?

I saw nothing on CNBC this morning. They talked about the jobs report Friday. I doubt this is getting any real push.

well there's a surprise! CNBC report negative news, never! They are the epitomy of Business As Usual, Grow Baby, Grow!

I'm pretty sure that once the iron bar of reality has been firmly implanted into enough elite foreheads, we'll see one final, all-out push find as much new oil as they can, anywhere and anyhow. ("Drill, baby, drill!") It won't make very much difference from a long-term perspective, but could make a bit of a blip in the downward slide.

Prince Nasir Al-Subaai: What are they thinking, my brother and these American lawyers?

Bryan Woodman: What are they thinking? They're thinking that it's running out. It's running out... and ninety percent of what's left is in the Middle East. This is a fight to the death.

Awesome. Great movie.

I watched that movie from start to finish, turned it off, turn to my other half, and said "what the hell was that?" Couldn't follow it for love or money. Maybe I have to watch it again.

A Drudge headline is indeed relevant and huge. Drudge gets close to a million hits per hour. Of course many will treat that headline with skepticism, indifference or outright disbelief.

The usual stuff all passes by in the comments under this article: drill baby drill, abiotic oil, dire predictions are never true even in the face of solid evidence, technology will save us all, etc, etc.

The myth of progress is still powerful but reality is proving more powerful.

I visited relatives in Texas today. Both were ardent 'conservatives' whatever the hell that means nowadays. They liked Sarah Palin. Very religious. They don't like Obama because he's 'taking away our rights'. The husband cracked racist jokes. Fox News was on in the background constantly. The said Glen Beck was great and they had books by Rush Limbaugh on their bookshelf.

The husband was a believer in abiotic oil and said it was the fault of 'the environmentalists' that the US imports so much oil.

Fantasy land.

It baffles me that people like this can share the Earth with us and have such radically different view of the world from the rest of us in the "reality-based community".

I suppose if it were me, I would make the wise-crack suggestion that he dig for oil in the back yard - if he found any, then surely he would become rich. It would keep them busy and away from the radio and TV, where much of the kookiness seems to originate.

I have relatives in Texas too, and every word you said would describe them, except they're atheists. The put a radio in every room so they wouldn't miss a word of Rush's talking when then walk around the house. They think I'm silly for discussing peak oil with them; I'm a former oil geologist but also an environmentalist, so no need to pay attention to my ravings.

They make three trips to the store a day, whether they need to or not, and live to the limit of their resources. It's a good reality check on the way much of the country thinks.

Drudge gets close to a million hits per hour.

Nonsense. Drudge has a readership of about 2.5 million uniques. Period. Don't be fooled by his autorefresh script that logs up to 20 "visits" per person.

I could care less about his gayness or lack thereof.
See the wiki article on him - he's got 1/3 the readership of the Times. He's at about 3.5 to 4 million a month, unique.
In any event, figure a few million people are going to wake up to the headline, "world running out of oil."
We can disagree on what the implication of that will be.

I remember in summer 07 when the Fed took a very unexpected action and announced they were going to start pumping banks. I pontificated that a point of inflection had been reached. Another ridiculed me and said it was "normal." 12 months later it was clear that the panic of summer 08 first stirred in summer 07.

I am making another call. This is it. We are at or near a point of inflection.

Agreed. Don't see how we can get past October without it. But I'm terrible at picking games. Much better at seasons.

Regardless, I need to get my ass in gear.


I do think it means that new numbers are being plugged into countless forecasting models, even as I write this. It will take a few days for those models to be updated and run, and the reports to work their way up the chain to the top dogs. Since this is August and a lot of decision makers are on vacation, especially in Europe (very interesting, the timing of this), it may be September before we start seeing much in the way of ramifications.

"Nonsense. Drudge has a readership of about 2.5 million uniques. Period. Don't be fooled by his autorefresh script that logs up to 20 "visits" per person."

Mamba, you may be comparing apples and oranges. I don't believe that anyone claimed that hits and uniques were the same. Nor do I believe that many of his regulars visit 20 times a day. And even if 2.5 million uniques per day is accurate, that would be a few more than TOD.
--I first encountered references to Drudge during the 90's when I was a member of Prodigy, aka P*, learning to type and use the then primitive internet. Drudge was an obscure figure being used by Clinton haters to bash Bill, Hillary and associates about various matters under a blanket heading called 'Whitewater'. The old Prodigy was interesting but died a decade ago due to poor management and Y2K. Drudge was poor, still lived in California, and was threatened with multiple lawsuits. It was said that his move to Florida was in part due to an expectation of adverse judgments. The gay angle came out years ago but didn't seem to affect his growing popularity.
-- Hubbert and other energy matters were debated on Prodigy long before 'peak oil' became a standard phrase.

It will be interesting to see how the right-wing talk radio circuit views this. The list of cornucopians is endless: Limbaugh, Jason Lewis, Jim Quinn, Hugh Hewitt ... it goes on and on. They will have to spin this to not lose face. Curiously, Glenn Beck might be the only one to accept the news at face value. Its divided how many trust Drudge, and that may be part of the spin.

Conservativez like to see their media as AM radio talk and 90's style internet, along of course with Fox TV.

See my above post about my relatives in Texas.

These people are delusional.

3. Memmel is right. Just my hunch. But given the secrecy of the KSA, my hunch is as good as your hunch. Unless you're a Saudi Prince.

Things seem to be heading towards a rapid decline but the signal is still mixed so we will see.
Everything hinges on what reserve growth means. My position is most of the oil counted in reserve growth since the late 1980's is of questionable extractability given the generally low historic recovery rates of 30-50% of OIP you can pretty much pick any number you wish for reserve growth as long as you can barely justify it.

The fact that the "oil industry" has never hammered the ME on its blatant changes in reserves speaks volumes for how loose reserve growth accounting is.

We have the right models with the shock model and export land but do we have the right data ?

Still unpacking so not a lot of time for writing but I figure I should respond.

Turns out after carefully picking my peak oil induced move to Oregon I ended up 2.8 miles away from another oildrum participant.

I'm renting in Beaverton Oregon it turned out to be the best move for me with school age children. There are a LOT of factors you have to take into account when making a peak oil induced move most are unique to your own circumstances. I'm half a block from the elementry school for my kids right next to a bus line and a few miles from the train stop.

Also as far as food and farming goes many houses have large lots and there is a lot of open land and I can't imagine starvation in Oregon this has to be one of the top agricultural regions on the planet. I'm certainly looking towards having enough room for a large garden and I've rented a house on a large lot but if there is anyplace in the world where you can reasonably expect food supplies to remain ample its Oregon so for now at least I'm not aggresively looking to try and get a farm large enough to fully support my needs.

Sorry for mixing a lot of different things in one post but its increasingly looking like this sort of micro personal response to peak oil and the meta picture are becoming entangled.

So far my job has been safe and my employer supportive of my move but as many know that can change in a heartbeat. I think I've made the right move now all I can do is hope that I can hang in there financially and continue to reduce my expenses so I can take lower and lower wages if I have to. For me at least reducing my monthly expenses is far far more important than reducing my overall energy usage although often they are the same. Shaving a few hundred off your expenses in my opinion makes you far more resilient to peak oil. I can always ride a small motorcycle or bicycle if I need to reduce energy usage and I work at home already and have public transport. My problem would be if I had to take a job that resulted in a big daily commute. Enough ! Sorry again for the scattered post but obviously I'm hoping everything can work well for my family I've done the best I can and it looks like interesting times are fast approaching.

I can always ride a small motorcycle or bicycle if I need to reduce energy usage and I work at home already and have public transport. My problem would be if I had to take a job that resulted in a big daily commute.

If people stop panicking about peak oil and think, we could all travel by bicycle, motorcycle or public transport , even if doing a big daily commute. When gasoline is rationed we may come to everyone traveling that way, I am hoping that PHEV and EV's will be affordable long before it comes to that, but many people travel on motorcycles, scooters, public transport now without an oil shortage.

Best wishes for happy suburban living

All the best to you in your new locale, Memmel. Hope it works well for your kids too.

for now at least I'm not aggresively looking to try and get a farm large enough to fully support my needs.

Sorry for mixing a lot of different things in one post but its increasingly looking like this sort of micro personal response to peak oil and the meta picture are becoming entangled

What I find interesting is that you are doing this "alone." Any solution to all this is going to happen with large amounts of cooperativ e behavior, yet the rats are swimming away all for none and one for self.

Anyone else see a problem here?


PS. Leaving soon on a journey of exploration that will end in a new home and, hopefully, community.

What I find interesting is that you are doing this "alone." Any solution to all this is going to happen with large amounts of cooperative behavior, yet the rats are swimming away all for none and one for self.
Anyone else see a problem here?

Certainly do see a problem. Not all problems have solutions. In this case, any ~solution~ looks likely to involve deaths of billions via starvation, thirst, suicide, stress and violence.

I certainly agree about the importance of cooperation rather than doing it "alone". But just as important a factor as cooperation is non-cooperation. What I mean is that if you and your group of x colleagues are cooperating 100%, that will likely still be a waste of time if there's no way of coping with a thousand or million others in your settlement who are non-cooperating strangers.

While I hope Memm sees good fortune in Oregon, before he invests too heavily in his new neighbourhood I'd beg to raise some doubts. He says the locals have large plots on which they could grow their own food, along with lots of open land. But how many are so growing? Or will soon be? Food doesn't just appear on your land at the click of a few fingers. Where will they get the seeds from?, how will they get fit and experienced to do it successfully? How easy is it to dig up that land?--some land can be a huge effort to get started as others here can confirm. I bought the last bag of seed potatoes round here this year. The other million presumably had to starve, or else share mine so we all starve.

Is there a realistic prospect that the majority of locals will be sufficiently self-supplying anytime soon? My bets would be a definite no. In which case you might be even worse off than running for the hills instead. It's these considerations that lead me to advocate this particular solution (for some) to the problem posed.

Is there a realistic prospect that the majority of locals will be sufficiently self-supplying anytime soon? My bets would be a definite no. In which case you might be even worse off than running for the hills instead. It's these considerations that lead me to advocate this particular solution (for some) to the problem posed.

Thats certainly and issue however you also have the related problem of community. I'm not convinced the American style of isolated homesteads on their own plots is the right answer and for the most part we don't have European style villages which are known to have worked well before oil in good times and bad.

I agree it takes a community just right now that does not exist. Next life is a gamble and its about trade offs. I simply don't have enough money to purchase a large enough farm to be self sufficient and even more important produce excess for cash. I see no reason to take a large mortgage out on a farm in expectation of being able to pay it off post peak.
Basically none of the land pencils out as a decent investment for farming. If you have the cash and want to convert it into something that will retain value post peak that's a different issue. But for now esp for me I have to treat farming like any other potential investment and it simply does not come close to working at the moment.

And its important to understand that I'm saying at the moment. One of the biggest issues is a lot of the land esp in the Willamette valley in Oregon is owned by people speculating on the housing bubble. Everyone thinks their little plot is worth a million dollars for the next subdivision or its a perfect winery or horsie farm. However the prices for raw land are already dropping and as peak oil progresses one can expect land prices to continue to fall. Only after speculators give up do I think land in the area will come back down to earth. ( pun intended :)

If we crash so fast that this does not happen its hard to guess if ownership rights will be respected one would suspect that small landowners may well find themselves driven off the land. Historically during troubled times its very common for land grabs by the powerful to happen. To avoid this you would have to also move to a area that simply does not have the population to support this sort of land grab. For Oregon that would be in the eastern half and along parts of the coastal region.

In any case this plays a role in why I'm not buying right now and instead renting a house that allows me to reasonably continue working as a programmer even if I have to look for a job. I just don't like the options I have for making a more permanent move at the moment.

Given the current levels of waste for oil and the financial bubble one has to imagine that we will have a period of contraction at least for a few years before any real collapse starts. I personally don't see a sharp collapse in the sense that we go within months from a bubble economy to subsistence farming. There is no intrinsic reason for this to happen.

In fact one of the reasons I expect oil prices to go much higher then most people believe possible is simply because the system despite its flaws is resilient to a rapid collapse.
Highly inflated property values actually play a big role in this in a sort of paradox.

Property values can fall substantially freeing up cash flow for daily living and purchasing oil at ever higher prices for some time before we actually reach the point that the system is structurally collapsing. The same problem that prevents me from readily doing what I'd like to do post peak also works to ensure that collapse will be slowed down at first.
As a renter I've already taken advantage of this securing a much lower rent for a nicer place using just the current fall in housing prices. In my opinion there is plenty of room for prices to continue to fall.

This suggests there is a window of opportunity where I will have the cash for a decent amount of land and before property ownership gets murky. Certainly I would simply convert cash to farmland if I had the cash today but barring that I believe that the opportunity to purchase a decent amount of land for the money I do have will present itself as the system declines. If it doesn't then I'd argue that the system has not collapsed yet.

I'm just going to have to wait first and foremost because of my own personal financial situation but I don't think I'm waiting in vain. I'm fairly confident that a window of opportunity will open up as the situation progresses and I'll be able to make the next step.

At least I'm out of the insanity that's southern California. Even with the local heat wave I'm much happier already. In fact the heatwave made Oregon a perfect copy of August in Arkansas where I'm from originally and its been a long long time since I've experienced this sort of heat. I actually enjoyed it because of the memories it invoked from my childhood of swimming in the creek on a hot August afternoon.

One step at a time.

Sweet. I needed my Memmel fix - your move's been jonesing me.
I agree on the property rights issue. I'd say the greatest chance of losing your land is if you have large, farmable tracts. At some point TPTB simply say, "your land is our land." [maybe that's why it's in the song] They'll need it to feed your neighbors given the falling crop yields you can expect. In Summer 08 I talked to several farmers around here who had decided that they would not fertilize, for the first time ever, because the cost was too high.


Speaking of fertilizer I discovered that one of the things you never ever ever want to do when you move is pack your fish emulsion fertilizer in a box with sharp heavy objects.

Just throw it away or give it too a neighbor. A few busted bottles of fish emulsion in the garage in 100+ heat creates and aroma that's simply out of this world.

You would think I'd be smart enough not to do something that stupid :)

Well another smart one is to try packing your home grown honey in glass jars with shortbread cookies without excelsior and sending them by parcel post as Christmas gifts like I did this last year.

Now putting your experiences with fish fertilizer and mine with Christmas time, maybe there could be some fun in sending Tim Geithner and Larry Summers something to make their holidays more appropriate ones.

In regard to the "Clunkers" post on saturday's campfire, I suggested to another poster "Fish Emulsion for Clunkers" as a useful way of weeding them out of the fleet; but I didn't post it.

I agree it takes a community just right now that does not exist. Next life is a gamble and its about trade offs. I simply don't have enough money to purchase a large enough farm to be self sufficient and even more important produce excess for cash. I see no reason to take a large mortgage out on a farm in expectation of being able to pay it off post peak.
Basically none of the land pencils out as a decent investment for farming.

And its important to understand that I'm saying at the moment.

However the prices for raw land are already dropping and as peak oil progresses one can expect land prices to continue to fall.

I am not advocating you buy a farm, nor taking out a mortgage. I and my wife will be buying what we can with cash. The reason we are doing it now is the time it takes to get the land up to a productive enough level to feed ourselves, then others (whether for family/friends or for profit.) Nor am I advocating doing this alone, obviously. There are places where land is cheap now. (I could have bought two different parcels in NY and Maine of @10 acres for between 1 - $2k, but was not happy with the location as they were too far from population centers. With more people - and more money - the choices improve.) There is no need to wait as long as you are not married to a given area. Land in both Cali and Oregon are too expensive for us, so I'm not even looking in those places. Even if we had a group to go in with, the area/person would be smaller than would be wise. But, again, there is cheap land out there that can be built into good farmland.

My time line is some food production this next growing season. A definite learning/experimentation period. A productive garden within the following two years and fully sustainable food production in the 3 - 5 year range. I will be laying in at least one year's emergency supplies as our primary food supply as we start this. My preference is for three years, but we'll see how the budget goes.

At 1 - 2k/acre, we're looking at 5 to 20 acres for our little family with up to 50% wooded ideally. That 20 could support my entire clan of @ 50 if very, very intensively worked, but I'd hate to have to test that theory.

If we end up buying raw land and doing the above, it'll be soil building this fall and winter and first crops next spring. All that will be concurrent with construction of a natural home of whatever sort the land chosen will best support.

My problem I see with your plan is your time line. If you need five years for a fully sustainable "garden", then it's hard to see where you have time to wait and see what happens. The combination of PO going mainstream and the Arctic warming up should start the process of chaotic - and undeniable - events in fast motion. Economically the collapse may be slow, but the chaos will be here long before then.

As for this all being an investment? I guess. I just see it as prepping for change and helping that change move in the direction of sustainability. Income can come from outside now, so it would seem foolish to abandon that. My wife and I are planning to work outside of the farm as long as we can, but the type of systems we are hoping to create/build should allow us the freedom of time to do both. The wild card is building shelter.

Anywho... Anyone interested in this conversation should feel free to e-mail me. We have bought an old diesel pickup and start our search within the next 48 hours. First stop, Missouri.


Right I agree there are plenty of places with cheap land that will work out but for now at least these same places are ones where its difficult for me to find employment in my area of experience. Its your typical catch 22.

So for now at least Oregon is my best bet and I'm willing to wait and see how things go price wise.

On another note on the food issue side. You can actually buy several years supply of most foodstuffs for not a huge amount of money. I've not totaled it in detail but it looks like that for less than 5K you can readily set up 2-3 years worth of non-perishable foods. This gives you plenty of time to get a renewable supply going. Especially if you can refill your cache for at least 1-2 years as its used up.

This is basically the Mormon thing with storing food. It does in my opinion buy you the time you would need to supply your own food. Fresh garden stuff is very doable even the first year.

I'm not saying that what your doing is not the best approach just simply that there are reasonable work arounds that can lessen the impact if you make your moves late.

I've posted this a few times but my parents have a fairly nice farm in Arkansas and a large house so I have a good plan B. And there is quite a bit of land around them that could be bought for ok prices. 10-15K and acre which is high but its only nine miles outside of Little Rock. Probably would go for a bit cheaper esp if things get worse. So your plan A is my plan B :)

And before anyone scolds me for them having a large house its a log home with the second floor concrete a sort of daylight basement/bottom floor. I think its called a split level.
In anycase its very easy to keep comfortable with very minimal energy usage.

My experience is done correctly the size of the house is not a huge issue esp if you change your living patterns with the seasons with my parents house different parts of the house are best to live in at different times of the year so they tend to move around with the seasons.

This is of course getting well off topic but it illustrates how tough it is to make decisions even if your peak oil aware you have to make sacrifices it seems of one form or another it does not seem painless. Every decision has its good and bad points and nothing is clear cut.

I'm pretty sure that the decisions I've made to date will eventually pay off but it really makes you wonder whats going to happen to all the people that simply get blindsided by peak oil. My own mitigation efforts still leave a lot to be desired and I know what I'm doing.
Can you imagine how wrenching it will be for people that are hit by this issue with no preparation? It makes me think that some serious social issues are going to be a problem as we descend down the peak oil slope. There are going to be a lot of seriously pissed off people in a few years.

Remember - worry about calories - vitamins and such are worthless if you don't have enough calories to avoid starvation.

White bucket and lid - about 4 bucks. Mylar bag - about a buck each. O2 absorbers - minimal.
You can get about 6 six pound bags, or 36 pounds, of spaghetti (sam's) in, at about 5 bucks each.
About 10,000 calories per bag.

So you're looking at total price of about 36 bucks for a 5 gallon, mylar sealed bucket of pasta that has about 60,000 calories in it. Shelflife - longer than you will be alive. For one person at 2k calories per day, one bucket is a month's supply of calories. Total cost, about 35 bucks.

Therefore, one year for one person is 35x12, which is 420. Figure 500 to be sure.

You can do better or worse on price for the individual parts, depending on where and how you shop.

If you don't have a year's worth of food in the cupboard, rememdy that mistake now. As surreptitiously as possible.

I'd say 3 years for all members of your family. Figure 2 grand per year for a family of 4. 6k investment for a 3 year supply of calories is the best 6 grand you'll ever spend, assuming you already have your 9mm and 22LR.

Pasta is one of the best foods to store, but bourghul (cracked wheat) is even better, as it only requires 2 cups of boiling water/cup and can be mixed with parsley, tomato to make an excellent meal using very little energy in cooking.

You are illustrating just how inexpensive basic food is to buy and store. It also shows why food supply is not an issue in a post-peak oil world, it just doesn't take very much oil to grow or transport food.
The issue is going to be gasoline rationing and how people are going to manage in car pooling, replacing gas guzzlers with fuel efficient ICE vehicles, scooters or bicycles and using mass transport or private electric transport.

It also shows why food supply is not an issue in a post-peak oil world, it just doesn't take very much oil to grow or transport food.

I too think there will be a lot of food (in Western countries...and only if the whole mess doesn't come crashing down)...but many, many people will not be able to afford it. That's why I see the government as the food supplier of last resort (which they already are). Apparently the food stamp program is at an all-time high in usage.

If basic food for a month is less than one tank of gas, we are likely to keep eating long after we cannot afford to drive ICE vehicles. I see gasoline rationing long before food rationing so gasoline free transport would seem to be a higher priority for the future. City and suburban living with good electricity supply, rail access for food, piped water and sewerage, should be a safer place than in an isolated rural setting self-contained for food, but perhaps not much else.

That's what I'm thinking, too. In our preparation course we distinguish two scenarios. The first, a complete breakdown, we don't spend much time on. We spend time on the scenario in which some form of economy, exchanging goods and services with some sort of currency, emerges as the formal economy gives way to the informal economy. In that world, what brings prosperity is what has always brought prosperity — some form of industry or higher value societal functions. The exact industry and societal functions will of course be different than what we have now.

But people who aren't set up for this new economy will be dirt poor and hungry. To keep civil discord down, we will need to truck in food or give an astonishing number of people food stamps, just like we are doing now.

it just doesn't take very much oil to grow or transport food.

But infinitely more to the point is how much of a functioning corporatised system does it take to grow and transport food (prior to some great reskilling/reruralisation). That corporatised life-support system will have deceased long before we are down to the the last few percent of oil being carefully requisitioned for the food-supply.

The definition of a vitamin is something that if you don't have enough of it you die. Not somehow less important than calories as many have found to their cost.

Completely wrong.
The definition of vitamin is something you need but can't make yourself - much like an essential amino acid or fatty acid.

Vitamins are STAGGERINGLY less important than calories, because vitamins are relatively easy to get.

If you don't think this is the case, then I suggest you consider that a child starves to death every 3 seconds on Earth. How often does one die from vitamin deficiency.

I'm not going to get into it here - but to all those thinking about it - store calories first - worry about vitamins later - you can get vitamins easily from things you grow, small game, insects, whatever. Calories are much harder to come by in very hard times.

Sorry, it is you who is wrong. The very word originated in the vitalness of vitamins. Without them you die, for instance as sailors did from scurvy (c) or as the aussie explorers did from pellagra (b1), or rats from warfarin poisoning (k). And empty calories can massacre you faster than mere catabolism of your muscles and fats may.


Before you buy your property I strongly suggest you consider the south.Most of the people really are pretty nice and the religious nut cases are noy nearly as common as you might think from reading the net.

Your chances of farming successfully are greatly enhanced by the longer growing season and it's a lot cheaper and easier to strip to your shorts in the summer than it is to cut huge amounts of wood in the winter.

And although you are a regular I don't know if you read my ag related posts or not.
It is extremely unlikely that you can support yourself in Maine on a half acre.your twenty acres would probably be enough for a family of four or five if at least ten acres are reasonably level,cleared land with good soil.

You simply cannot believe how many things will go wrong until you are on the land and you need huge safety margins to protect yourself.

Hey, CCPO.
Didn't notice you'd arrived, Welcome back stateside!

Sorry Maine didn't pan out. Lots of pluses and minuses up here, to be sure.

Good luck on your search.


'When I first came to this land, I was not a wealthy man.
So I built myself a Farm, and I did what I could..
And I called my Farm, 'Muscle of my Arm'
and the Land was sweet and good, and I did what I could!' Oscar Brand

Memm, I can't see how this bit makes any sense:

the system despite its flaws is resilient to a rapid collapse.
Highly inflated property values actually play a big role in this in a sort of paradox.

Property values can fall substantially freeing up cash flow for daily living and purchasing oil at ever higher prices for some time before we actually reach the point that the system is structurally collapsing.

Firstly, others have suggested reasons why the system might not be resilient against a rapid collapse, including my own analysis thereof.
Secondly, I fail to see how falling property prices "free up cash flow for daily living". They have the effect that house buyers sometimes have more cash (unless they don't buy anyway, like you); but also have the equal effect that house sellers have less. And less credit-vapour to indulge in too. So you appear to be simply wrong.

Well first and foremost renters rent a house someone else bought. So falling property values also result in lower rents not just purchase prices.

Hmmm let me try to explain it this way. Huge amounts of money primarily in the form of debt is allocated to purchasing structures both houses and commercial real estate. Theoretically houses and buildings should decline in value as they age and need more repairs like any other durable good yet via the magic of mild inflation and ever lower lending standards buildings have in general increased in value overtime. Rising costs for new construction also play a role in pulling up the value of used buildings. This also effects land prices with urban sprawl playing a big role in driving up the price of land as land speculation for growth became the primary reason for owning land. This whole game is now starting to run in reverse and of course we have overbuilt esp if you consider the baby boomer population. And of course the aging of the baby boomer demographic also played a powerful role in allowing this decades long housing bubble.

Now this entire industry is for all practical purposes a pure ponzi scheme with any relationship between the need for buildings for shelter and business passed long ago.

Here is and example not that we need the malls but we are well beyond need.

I read a article about this I believe on calculatedrisk but it goes through the retail space per capita and the US blows away the rest of the world. Similar stats apply to housing.

So we have houses and commercial buildings coming out of our ears and the price is the highest its ever been in both real and inflation adjusted prices. And of course the baby boomer demographic is entering retirement and pulling back on spending for homes and shopping.

Even without peak oil this bubble has itself peaked the correlation between peak oil and peak housing is fascinating and probably tightly if opaquely coupled.

Now given the massive excess in real estate the real value of most of it is very low I argue effectively zero in many places.

This is a massive miss allocation of resources on its own throw in the the physical sprawl and peak oil and its obvious that the real value is quite low.

However this initially works to help soften the blow of peak oil given that the current valuations are way to high as they fall and the debt is defaulted on the rest of the economy need no longer grow to service this debt. As values fall rents fall for both housing and commercial real estate reducing the cost of shelter. Thus deflation in real estate equity works to buffer against rising energy costs.

For example assume that someones who rents finds that they can rent a better place for 400 a month vs 800 a month they are now paying. For them they suddenly gain 400 a month that can be used to offset rising gasoline prices. So a 50% reduction in housing costs can easily offset any projected short term increase in oil prices. given the situation in the housing and commercial real estate markets its not unreasonable to assume that values could easily fall back to 1980-1990 levels which is in general about a 50% drop nation wide depending on how you do the inflation adjustment I'd argue most of the inflation adjustment should be removed.

This is a huge boost to the daily economy and hopefully you can see how it works to buffer the rest of the economy against rising oil prices. We can go for some time with the only effect on the nations economy being falling home prices and collapse of housing related industries with the rest of the economy technically unaffected. Of course its not that simple but hopefully you see how devaluation in the housing industry can and I argue will offset rising energy costs over the short term.

Now of course this is not a free lunch. Many of the baby boomer age group approaching retirement counted on their home equity to fund a good bit of their retirement and of course a lot of people are invested in real estate. As equity vanishes these people are losing massive amounts of wealth that turns out to have not been real values.

So underlying my argument is the recognition that you can forcefully convert equity in buildings into cash flow for daily expenses if they are both overvalued and in excess.

Rising energy costs ensure that future generations have less to spend on housing and the large excess in actual housing coupled with its energy expensive geographical placement ensures that we can effectively strip this equity by redirecting cash flow to daily needs.

Similar arguments also apply to automobiles most Americans used to keep their cars less than ten years yet most cars can readily last 20 or more years with good maintenance. Without even considering peak oil issues we could easily cut the number of cars manufactured each year by 50% simply by keeping them longer. And of course most families own more than one car.

So without even considering other sources of cash simply cutting expenses for both cars and houses can easily cover rising fuel costs.

Now for those who have mortgages and the value drops to the point that they are underwater you can see that this often means a default on a debt followed by a foreclosure sale for a substantially lower price this cycle will probably be repeated several times until real estate investors are burned enough that they finally give up.

Thus this is sucking money out of not only paper equity gains but also the banking system and back into the real economy as oil prices increase. The banking system itself is not a huge energy user so losses in banking don't translate directly into large increases in efficiency. In fact as Gail often points out as banking gets hammered investment for the energy industry will probably suffer as collateral damage.

Given real estate is a big part of banking we should also expect the financial economy to shrink. In general one can expect the entire FIRE economy Financial, Insurance, Real Estate to shrink substantially as more money is diverted to energy. We can also add health care to the list as financially strapped retiring baby boomers increasingly forego expensive medical care. And last but not least this gets into pensions and retirement plans many will go bankrupt.

And then we finally get to federal, state and local government expenses. Real Estate losses will translate into lower net income for taxes at the federal level and falling values to lower tax revenue at the state and local levels. We can expect some pull back in spending outside of housing and cars esp for luxury items and eating out so sales tax revenue should fall. Eventually this will force the governments to cut back on expenses. Given a lot of government expenditures are really wasteful this should actually increase economic efficiency freeing more money for the daily oil using economy. Also you have the potential for direct decreases in fuel costs as governments spend less on energy even as prices increase.

Of course again its no free lunch as you get into this part your looking at at a lower level of government services we can expect schools, police and fire departments to get hit hard as the governments attempt to extort higher taxes from the populace.

Now of course people don't just disappear because the lose their jobs as the FIRE economy shrinks it will force people to work in more productive jobs. Instead of burning oil to change some numbers on a piece of paper more and more people will produce actual needed goods and services in exchange for their pay. Now this pay will probably be substantially lower than what they used to make but the bulk of their former salaries where spent on uneeded McMansions and SUV's in the first place. And of course all the way back to the start of the argument the costs of housing will be falling. So as wages drop housing costs drop.

For sure you have additional real declines in energy usage esp as people are forced into lower and lower paying jobs but this is against a backdrop of falling real estate prices so its not a simple case of unemployment and reduced wages translating directly into lower energy costs. Instead housing and automobile expenses will take a smaller part of the shrinking pie and energy and food costs will grow. But continued deflation in the FIRE economy in my opinion dwarfs and also cushions the effect of rising oil prices for several years.

It will take at least 2-3 years at the minimum for rising oil prices to strip a substantial amount of the equity and debt out of the FIRE economy. Probably more like five years. Only after we have substantially reduced this bubble until prices reflect supply and demand for structures do I think we finally reach the point where rising energy costs become difficult to bear. Only at this point do they begin to interfere with critical economic needs such as food.

Now as far as energy usage goes a Mortgage broker driving ten miles to work uses about the same amount of energy as the very same person sharing a 1 bedroom apt driving ten miles to flip burgers at McDonalds. Energy usage has a lot more to do with infrastructure not with wages. Now the same person working at McDonald's probably has a much cheaper car and probably less fuel efficient and he might share it with his/her roomate and take the bus more often. But your still looking at a order of magnitude change in salary vs say none to a 5-10% change in gasoline usage in particular. In fact gasoline usage could even increase.

Certainly at some point people will be forced to give up using auto's for daily transportation but hopefully you can see how this point should come only after the FIRE economy has collapsed. I simply don't see us moving off of oil before we have exhausted the paper wealth present in over expansion of real estate.

And last but not least one of the big reasons that some people believe that EV's will save the day is because they theoretically preserve the value present in our suburban infrastructure but even without peak oil the value of these structures is highly questionable this one has to question what EV's actually save. I argue nothing. And in general they look to be very expensive and thus not a practical purchase esp for cash starved former consumers with shaky job prospects. I just don't think many people will be able to afford the note on a 30-40k car regardless of its long term fuel savings.
In general most people are better off owning a paid off gasoline driven car and changing their lifestyles to reduce usage. Thus they have a car when they need it but are free to alter their gasoline usage according to their cash flow. It simply makes more sense vs going deeper into debt on a EV to drive to a house that's valued far less than you owe on the mortgage. And just to finish everything I'm arguing happens to be exactly whats happened so far. I'm arguing that at least for the next year or two and probably longer that what will happen is we will see oil prices rebound and housing prices fall until they are effectively zero. How long this takes is completely dependent on the rate of change of oil prices.

This time around we don't have a monolithic housing construction industry and general housing bubble to pop so rapid economic contraction is far less likely instead I argue that rising oil prices will be balanced for a time by falling property values.

Sorry for the long post but I think that the big thing over the next few years is the end of long term debt and housing makes up the majority of this debt only after we effectively eliminate long term debt from our economy will oil prices and basic economic stability become a major issue. The collapse of housing prices is not the end of the world and it has to happen before we can actually enter the end phase.

"And last but not least one of the big reasons that some people believe that EV's will save the day is because they theoretically preserve the value present in our suburban infrastructure but even without peak oil the value of these structures is highly questionable this one has to question what EV's actually save. I argue nothing."

The value of suburbia is that people want to live in suburbia. EV's are a way that people can have the luxury of a car and not pay 10% of their income on fuel when gasoline is >$10/gallon.

The idea of homes being ATM's is a bit overdone, 30% of homes have no mortgage. Only a relatively small portion of home owners were sinking under mortgage debt, especially those 10million with sub-prime mortgages. They will be back to renting as they did 20 years ago, helping someone else pay off the mortgage on an investment property.

"I just don't think many people will be able to afford the note on a 30-40k car regardless of its long term fuel savings."
You are correct, but many people cannot afford any new car, that's why they buy second or third hand. Those buying new cars may have a small mortgage, or a lot of assets in shares, and will be able to afford an additional $10,000 for an EV or PHEV. These people haven't been foreclosed, they didn't panic and sell out their K401's and as home prices rebound just as shares have, they will be in a good position no matter what the oil price. I think you will find a lot of baby boomers as they retire will be keen to buy a low operating cost EV.
The ones who will suffer will be the 2nd hand vehicle owners saddled with cheap but low mpg SUV's. They will have to car pool or use public transport or motor scooters or bicycles or walk, just as they did 50 years ago. This will be until good numbers of used PHEV and EV's come onto the market, then the lower income workers can return to low cost motoring and scrap car pooling.

As oil becomes a smaller part of the economy it's price becomes less relevant. I mean does anyone worry about the price of whale oil or candles anymore? Have we passed peak candles?

A nice way to put together all the things that have to go in the right direction to convert suburban living easily over to EV's as oil gets expensive.

I'll just pick out one factoid and leave the rest because any large error brings down the whole house of cards.

The idea of homes being ATM's is a bit overdone, 30% of homes have no mortgage. Only a relatively small portion of home owners were sinking under mortgage debt, especially those 10million with sub-prime mortgages. They will be back to renting as they did 20 years ago, helping someone else pay off the mortgage on an investment property.

Lets take this one. The fact that 30% of homes don't have a mortgage is irrelevant 70% do.
All you need is lets say 20% of the existing houses sold in distressed sales to drive down housing values.

You can look here for example

One can assume that the precentage of homes without mortgages is similar high in Florida for example since its a retirement state yet this has done nothing to prevent the rapid decline in house values. Next this precentage is a bit misleading given that most of the homes owned outright fall into three basic groups they are either rentals or homes bought 30 years ago or the houses of the wealthy. I'd argue the value of the homes that are 30 years old and the rental is much less than the homes with mortgages.

Given 30% of homes are owned outright and home equity is at 47% this implies only 17% equity exists in all homes with mortgages which would put them underwater with a further 20% drop in home prices. Its more reasonable to assume that the value of the homes owned outright is significantly lower than those with mortgages. And of course its a continuum between full ownership and 0% equity. I suspect that the 30% of homes owned outright only represents 20% of the overall equity or value of the total housing stock. It could even be slightly lower.

And of course HELOC's are not counted against homes without mortgages I know for a fact that many of the homes supposedly owned outright in California have huge HELOC credit lines that have been used with the house as collateral.

And some serious party mix of toxic brew in my old stomping grounds.

Of course playing games like this is only low life subprime former renters.

In the first quarter, almost half of the overall increase in the start of foreclosures was due to the increase in prime, fixed-rate loans, according to the Mortgage Bankers Association (MBA). At the end of the fourth quarter, 2.4% of prime mortgages were seriously delinquent, more than double the 1.1% at the end of March 2008, according to a report by the Office of the Comptroller of the Currency and the Office of Thrift Supervision.

"In the beginning, the higher-end (homes) were a bit isolated," says Kevin Marshall, president of Clear Capital, a provider of real estate asset valuation. "But in the last several months, we're seeing a significant erosion in the higher-end homes. It's reached into the prime loans."

I honestly can't see home values remaining anywhere near the current levels peak oil or no peak oil.

The amount of data which points to housing heading for a deep painful and prolonged slump is huge and this is without even factoring in peak oil.

In fact we have the most probable outcome well documented with Japan without peak oil.

Throw peak oil into the mix and I stand by what I said.

And most importantly your 100% correct that suburbia was driven by desire underlying that was of course a multi decade rise in home prices so for a long time its been a win win situation. Peak oil makes needs not wants important again. Desirability is not going to keep home prices high as people refocus on their needs.

Next I know I said I'll just pick one issue but any EV advocate must consider the uptake wedge.

Now this is assuming a 4% increase in efficiency which is in my opinion actually pretty optimistic and it still takes till 2030 to get the fleet average up to the level of the prius.

Now decline rates esp including export land result in exports declining much faster than 4% and we still have growth in China and India to deal with at least for a few years.

I went ahead and brought this up simply because it should be obvious that even a rosy picture view still results in a large gap between when EV's of various types become available and when they make up enough of the fleet to replace oil. Your talking at least 10-15 years where the contributions from EV's fail to cover falling oil production.

Just using export land alone makes the problem even grimer. And of course real EV's are not even on the market yet we have at least one probably even two years before they are even shipping then at least 1-2 years before production volumes are high enough to make up a larger portion of the fleet.

And back to housing as oil gets more and more expensive one has to at least imagine that the younger generations will increasingly seek more walkable living styles. It makes sense to question the desirability of suburban living going forward. Without the influx of new home buyers the whole pyramid/chain letter needed to support suburban housing gets cut off at its roots. Already we are seeing a backlash against the Hummer/McMansion its sensible to assume that as time goes on that this will extend to the wasteful suburban lifestyle as frugality becomes the new black.

I could write forever questioning your assumptions and provide reams of supporting data suggesting that they are probably false yet I doubt that it will do any good. I suspect instead that your probably not going to ever consider the case that your rosy outlook might not all fall into place as you wish. Far more likely is we are at the begining of a historic transition period from cheap oil/suburban life to a different one. I honestly don't see EV driving suburbia playing a large role in the future. This does not mean that things will be bad we could still transition with relatively little pain but even this becomes less likely every day. I think that despite the data America has come to the same conclusion you have and it seems to be the consensus the problem is that if I'm right and the bet on EV's and continuing suburbia turns out to be a bad one then we probably won't be able to easily make another decision. In fact one of my biggest problems with your arguments is if they fail we are out of the frying pan and into the fire so to speak. While proposals like Alan's which focus on electric rail and street cars offer a world which allows EV's but ensures that cheap transport is possible for all without suburbia. The evidence in my opinion points to this being a losing bet.

If every trip by every car in US was an essential trip, and each car carried 2-3 passengers commuting to work, and all cars traveled the same distance then it would be difficult to adapt to a sudden shortage of gasoline.
In actual fact half vehicle miles are covered by cars 0-6 years of age(according to Stuart Staniford) and only about 10% of trips have more than on passenger and more than half trips are not essential( commuting to work or picking up food and goods). Are you saying it would take 40 years to achieve 100mpg if we started building all new vehicles with this mileage in say 5 years?

From 1978 gasoline consumption took 15 years to return to this level and vehicle mpg increased by just 50%. Surely we can do better this time with vehicles that are going to get >100mpg replacing average of 25 mpg.

If we had a gasoline rationing situation, not really that dire, we could see 75% commutes with 1-3 passengers. A lot of non-essential trips could be eliminated, this may require the extreme steps of busing to school sporting events, or even canceling some events. Other measures that could be introduced would be free public transport, 4 day work weeks, car free Sundays. Even raise the gasoline tax to European levels( NO I guess that is too extreme).

In WWII the US auto industry moved from manufacturing cars to trucks and tanks, such as the M4 in less than 12 months. Surely GM and Toyota could convert all car platforms to PHEV vehicles in one year, which is a much smaller change than converting to manufacturing a Sherman tank. Within 7 years half of the VMT would be with EV and PHEV's. Could even up the rate to 15 million new vehicles per year with a cash for clunkers program.

Walkable suburbs and 100% mass transit is a great idea if we have 100 years to totally rebuild most homes,roads and transport infrastructure, but since we may only have 20 years, and most vehicles are replaced after 20 years this seems the place to start if the goal is a rapid transition away from oil. We know form Europe with $9/gallon prices and excellent mass-transit that most commutes(>80%) are by private car so reaching 100% mass transit is a very big stretch.

Your views on home prices seem to be at odds with data, after the worst recession in 80 years prime mortgage delinquencies have risen a whole 1.3%. Household savings rates have also risen to about 6% of income from negative last year and mortgage interest rates have declined so many households are actually better off now than last year. House prices have "collapsed" to what? where they were 8, 10 years ago?

I completely agree that just basic conservation measures would be a huge improvement within the existing infrastructure.
The problem is lack of will.
The first thing that needs to be done is to round up all the criminals between DC and Wall Street and throw them in prison.
We need a entirely new ethos. The same media that has created the over-consuming glutton could just as easily inculcate an attitude and awareness that is ecocentric. At the risk of sounding arrogant..............the average person doesn't know what is good for them and seems to need to be told what is good, bad, what to like, what to dislike etc.
That is the brainwashed uncritical society in which we live.

On another note. This article has the most comments I have seen in 1/2 year or so I have reading has to be in the top 10.

Mike, I've been watching the fabulous maps at the website below over the last year and it has been astonishing to see the number of rentals grow over time here in San Francisco.

What's astonishing is the prices the landlords are still asking for considering the number of units on the market. Take a look at the average price per room graph. It's only back to 2006 prices — with all that extra stock available, that number will continue to decline rapidly. A landlord should price $500 below "market" and get their unit filled.

Housing prices are going to continue to get hammered. The days of real estate as an investment for the wider populace are over...and it's difficult for me to see owning any real estate even if one is in the so-called investor class. The bubble is still popping.

One of the really nasty effects that seem true during real estate busts is that rents are initially stickier then prices on the down side. Certainly there is a lot of inertia in the rental market us renters generally don't just pack up and move on a whim :)

Next rents did not bubble as badly as housing prices. Instead what happened is speculators that rented tended to be cash flow negative and betting on appreciation. And last initially during the bubble collapse a lot of potential rentals remain off the market as they go through the slow foreclosure process.

And last but not least you get a initial investor feeding frenzy as properties cash flow at current rental rates and people are simply to stupid to factor in falling rents.

However this turns ugly fairly fast as units go unoccupied for six months people have no choice but to slash rents to cut the bleed.

If a region has and absolute oversupply of rentals it quickly turns into a bloodbath. So although rent declines are initially slower the accelerate rapidly if you have a absolute oversupply. In my opinion basically every market in the US has a glut of rentals and more coming online as the foreclosure backlog dwindles.

Thus we are going to see yet another large class of speculators get wiped out as their cash flow evaporates and rents fall by 75-50% over the next year.

A whole new bloodbath is developing. I watch the Sacramento and Detroit markets since I think these will be some of the first to enter the next downturn.

If you look at Sac the next downturn will be when the new little uptick in sales fail as investors are unable to rent properties.

Detroit is showing the same hook up.

And Las Vegas looks to be set up for a big drop.

Miami same.

This winter sales should drop steeply in all these markets as investors realize the market is flooded with rentals and they try to clear units. Other investors will see the falling rents and pull back on buying and the next big leg down starts.

Assuming I'm even close to right about future oil prices they should work to really accelerate the decline as these markets get hammered and word gets out that the rental markets are saturated and rents are falling fast more investors will wake up and look hard at their own local markets and realize that this is true pretty much everywhere.

Las Vegas looks to be the place that will probably show the strongest signal. It seems to have the biggest wave of false bottom feeders and will probably get burned the hardest.

If you look you also see it has the biggest volume increase in sales yet prices did not really stabilize just a small blip.

So I put the real start of the true market collapse starting in October as rents collapse.
I'd not be surprised in the least to see the largest declines in prices actually happen next spring. In 2011 prices will continue to decline of course but I think the rate will actually finally begin to slow primarily because a lot of housing will be getting close to 50-60k or lower.

"In fact we have the most probable outcome well documented with Japan without peak oil."
At which you immediately show a graph of property prices bursting just on cue after the 2005 start of oil peaking!
Further up you argue that falling rents will put more cash in people's pockets. But the falling rents mean exactly the same amount less cash in the landlords' pockets. Meanwhile because everyone's worried they hold on to their cash and spend less.
Your ideas may be sound but if so you're doing a fine job of failing to show their soundness here.

I can see people driving an NEV to the nearest mass transit node, which may be a few miles away. Driving an EV 20-40 miles or more to work? No, except for only the most well-to-do perhaps. One can buy an NEV today for under $10k, or convert a subcompact into a serviceable short-range EV for about that. That I can see. I can't see a huge number of $30-40K EVs on the road, I just don't think that is going to happen.

I can see the same thing. Basically a spider web of progressively higher capacity nodes as you move toward the population center. Sounds an awful lot like the park and ride concept only more organized and higher scaled. The only problem is by the time the bulk of the population relents to the needed changes no one will have any money left. The only way that we have any shot at a smooth transition is with new leadership that is oriented to these inevitable changes.

it's a privilege to read your profound and astute observations on the economic reallocation of $ to come, the misallocation of $ past*, deflation as a cushion to rising energy prices, etc.

i expect the vast majority of residential real estate to continue down at another step or two, until all the bottom of the exurban potemkin villages are ready for the bulldozer, the next layer of 'communities' turn into meth-infested mad max lite scenarios, barely livable and worth 20% of their bubble value, and the next layer up of surviving working class areas that might retain 40%, right on up to the most exclusive suburbs and city residences that might retain up to 70% or 80% -- especially if they gain a premium value in safety and low energy access to jobs, culture, etc.

it might take another 5+ years to reach the bottom of the real estate bust. the ratio 1:666 bust:bubble has been used to guage past r.e. cycle durations, with a 4-year run up followed by a 6-year bust. this one, of course is different and worse, in that there's no real expectation of an economic recovery in the foreseeable future at all. but at a certain point, there will, of course be a bottom for residential real estate. only when the bottom rung goes to a value of zero will it be over.

* "money is not lost in a market crash, but in the preceeding bubble; it represents and indicates the misallocation of resources during the boom times." [paraphrase] john stuart mill

Memmel you say "...I can always ride a small motorcycle or bicycle if I need to reduce energy usage and I work at home already and have public transport."

My van blew it's clutch a couple of months ago and we have been meaning to look for something to replace it. But we are lazy and so in the meantime we have been using our tandem bike. That has worked so well that I don't think we would buy a FF burner if we didn't get that thing called winter rain (coastal B.C.).

You then say ". My problem would be if I had to take a job that resulted in a big daily commute. "

Just in the couple of months we have not had the van we have saved the cost of having a vehicle by that two month amount (less cost of a patch kit for one flat tire ), so if you were to cycle for a year one could bank the costs of a years worth of auto ownership, right? And we haven't even got into the thought of levering that saved cash, maybe put it in oil ETF's bear and bull, do a bunch of trading and, who knows, you could end up just Hummering away on that commute were it unhappily to occur.

BTW, you would not know my legs now if you had known them a couple months ago:) Who would have thought peak oil and peak credit could do so much for ones health and well being!

Yep things can actually work out well if you remain peak oil aware.

The key is to not become dependent on a car for your daily bread if you will.

The problem is at the moment employers are simply not interested in working with you to minimize your use of a car. One problem I see is with high unemployment employers will not become flexible even as gasoline prices rise. My worry is that my situation will change such that I'll effectively be forced into a long commute regardless of my own wishes.

Moving works but its not something you want to do often and if your forced to travel by and employer you probably are going to be looking aggressively for other work.

As some point I think employers will cave in and actually work with people who want to minimize their fuel usage but I'm concerned that over the short term high unemployment and competition for jobs will allow them to be as inflexible.

I'd not be surprised to see this become a real social issue as peak oil progresses. I think we will increasingly see companies fall into two camps those that take advantage of the desperate labor pool and those that try to change and adjust to a new and different world.

Obviously being self employed can become a big win esp if transport costs get high so hopefully self employment which very often goes along with localization will grow to offset more traditional forms of employment. If your spending all your money on gasoline then I suspect in many cases some sort of self employment for much lower wages but larger net income will become viable for many.

I've certainly realized that if I ever want to really develop a safe post peak life then I'll need to ensure I can control my commute requirements which means that figuring out a way to become self employed is probably my best option.

The nirvana is probably to have a cash flow positive small farm and a sort of second job for the off season that brings in additional cash. This sort of lifestyle was actually very common before oil. Many people engaged in farming and some other business to support themselves. Many of the founding fathers of the US were farmer/lawyers. Not that I want to be a lawyer :)

The wealthy classes in England also often had dual businesses a landed estate and some sort of mercantile or banking business. It makes sense that variants of this sort of approach to staying alive will become important as oil becomes scarce.

I think all of us are trying to figure out how best to thread the needle as it were.

The car-dependent thing should improve for us in a few years when/if they complete the subway extension that will have a new station that is walking distance from home. That opens up tons of possibilities for me no matter who I end up working for. Car-free could be an option for one or even both of us.

The thing we won't have however is any kind of garden where we could grow an appreciable amount of food - that's the dilemma that I am faced with.

Hi ericy,

You say: The thing we won't have however is any kind of garden where we could grow an appreciable amount of food - that's the dilemma that I am faced with.

First I would ask what you consider an appreciable amount of food? I won't wait for that answer but say that we have a home built greenhouse 160 sq ft and are less than half done caning tomatoes ( to be honest my wife is half done). So far we have 47 pints out of it besides what we will eat during the season. AS well I am growing 4 cantaloupe, 2 cucumber plants and this spring a crop of spinach. As well there is new zealand spinach that self seeds and will be there after the tomatoes are finished. Oh yes and some dill in there, also self seeding, for dill pickles.

Now you can't make it through the year out of a small greenhouse like that but if one adds a couple bags of brown rice, a neighbourhood cat or two, along with a tight belt then who knows?:)

Seriously, I think knowing that you can grow stuff is more important than having some place to grow at this moment in time. If you can grow stuff, you can find places to grow it ... heh, I have grown stuff out in the public woods, for personal as well as trade purposes, so I am pretty sure one could grow tomatoes there as well, eh?

Even more seriously, There is a couple here that I know who have no land but are growing on other peoples property and sharing the produce. They have several gardens they work and that seems to do well for them and for the owners of the gardens.

BTW My place is a quarter of an acre and the way it is set up, other than rice and flour produce all the fruit and vegetables we use. I used the greenhouse example as it is about the size of some of the suburban front yards I have seen (don't know if they have back yards ... the houses are too big to see around).

Memmel, welcome to Oregon! I live in east PDX. Are you anywhere near a MAX station? Maybe we could get together sometime.

I'm in Beaverton and its not far to a Max station. Send me a email mine is in my sig.

There used to be a TOD local section I just checked it looks like its gone now.

One of the reasons for my move is there are enough concerned people in Oregon to support local awareness of peak oil. Its on my todo list. Obviously organic/permaculture is important but I think that a lot more needs to be talked about and acted upon foods not the only thing people want and need. My own interests are actually in a machine shop and light manufacturing. But this gets more into ELP ( Economize localize produce ) which is bigger than just agriculture.
What does it really take to re-localize and economy and how do you do it ? Whats after food ?

Do send me a email !

Hey Memmel, welcome to Beaver Town. I'm 20 miles away, due SW. Something called the Washington County Peak Oil Reading Group meets at the Powell's Books outlet in the Cedar Hills Crossing mall, where Kunstler appeared, via the MAX. Didn't realize he wasn't in Portland anymore, or that he was standing on countless acres of ex-farmland that had been paved over with the asphalt and McHouses he loathes so. This Powell's has a stand dedicated to Lindsay publishing's output, if you're interested in reprints of slim tomes on things like sand casting.

Check out the reading group - haven't myself. Had an entertaining enough Meet and Greet with some of the crew at the big Powell's in Portland downtown a while ago.

Thanks for the link I'll try and make a meeting.

Glad I didn't skip the IEA story, I would have missed "memmel moves". Always worth checking the comments string for nuggets.

And best of luck, memmel! I hope you'll keep us posted with your progress.

Oregon sounds nice, it's on my short list. Problem is, I find that - given any two locations - I can argue the case for one being better than the other with equal facility. It feels like I should move since the odds are against my being in a perfect place by accident, but I can imagine someone moving from wherever I'd be going to, to where I now am, for equally good peak oil reasons.

It brings to mind a roulette board and where you decide to place your chips.

Now if I was moving to be near saner neighbors, that'd make the board look less random. I have high hopes that we'll start seeing some "TOD clusters" as condensation nuclei for semi-enlightened superorganisms.

Anyhow, great to see memmel posting. And not to tweak the erudite Ron P, but I tend to agree that whatever the future price of oil is, it will NOT bounce off the same $147. Nonlinear is nonlinear, and a forest doesn't burn the same way twice.


Sounds like you don't miss LA at all. I am seriously considering a move out of LA myself, but it's very hard to actually make the definitive decision to do it. (But the window of opportunity may be closing fast.)

Start the process now. I mean now. Waiting is a mistake. We can go from unstable to out-of-control extremely quickly.

No doubt I'm sure your well aware that LA has for all intents and purposes become a third world city with a wealthy elite and large slum. Parts of it are impossible to distinguish from the typical third world ghetto. I can't say what the best answer is but I see LA as the least stable post peak city in the US. San Francisco is probably a lot better choice if your desperate for the city life style. If you want funky New Orleans has a lot to offer and probably a even better choice. New York despite its blemishes is arguably better.

Phoenix and Atlanta or two others that I have my doubts about both more because of the combination of water and peak oil and air conditioning. LA,Phoenix and Atlanta all face a potentially nasty problem which is some combination of loss of electric power, and water shortage coupled with the stress from high prices triggering riots. Who knows in what order but all three are intrinsically susceptible to a summer riot with low water supplies and the potential for uncontrolled fires erupting. Other cities also are susceptible but in my opinion these three stand out with LA being the most likely city in the US to suffer both extensive rioting and uncontrolled fires. And of course a earthquake at the wrong time could easily work as a trigger. Also of course its the largest population area near the Mexican border and the drug war down there which is steadily turning into a full blown civil war could easily spill over into Southern California. Phoenix is also to some extent at risk along with other border cities but not nearly to the extent that LA is.

Longer term if we do see serious problems in Southern California it would not be surprising to see the split widen between the northern half of the state and the southern half with the north keeping the water.

And to top it all off the state and local governments will continue to have serious financial issues which will erode the ability of the police force to respond to problems and eventually this alone could easily allow any disturbance to mushroom as the police may simply not be able to respond and getting federal troops in place may take too long.
And of course the unemployment rate will probably continue to increase.
If you get the feeling that I think the region is a ticking time bomb then your on the mark.

From another Southern Californian, those are all good points. We have a few Transition and Permaculture groups and a lot of environmental groups even if they're not all Peak Oil-aware. Realistically, our chances here are slim to none, and I consider Transition here mostly useful for training and educational purposes, not for practical survival.

With the movie studios here, we are still are the fashion trendsetters, and hopefully our activism will have more influence short term because of the connections to Hollywood. Bug-out plans are always in the back of my mind, though.

I think this was the news that was supposed to come out last November but was scared into hiding when the market collapsed.

Only 6 Saudi Arabias? No problem! The tar sands are 1 (minus the flow rate) and.. Um.. A couple of drops from ANWR and Bakken.... Uh oh.

Here is a link to the original TOD coverage of the IEA WEO 2008 when it was finally released in November.

'The article further mentions that the IEA thinks world oil production will peak "perhaps by 2020". The crunch in oil supply is expected to come before then because demand after 2010 is expected to exceed dwindling supplies.'

Did you catch the contradiction there? Demand after 2010 is expected to exceed supply, but peak production will not occur until 2020? Hello!

Typical SNAFU.

Yes, peak in 2020, and a spike in 2010.. The article also says that they assessed more than 800 fields:

But the first detailed assessment of more than 800 oil fields in the world, covering three quarters of global reserves, has found that most of the biggest fields have already peaked and that the rate of decline in oil production is now running at nearly twice the pace as calculated just two years ago. On top of this, there is a problem of chronic under-investment by oil-producing countries, a feature that is set to result in an "oil crunch" within the next five years which will jeopardise any hope of a recovery from the present global economic recession, he said.

If most of the biggest fields have already peaked, what makes him say that oil production peak will happen in 2020??

To save a little bit of face.

It was my understanding that the IEA analysis covered primarily non-OPEC fields as access to a lot of OPEC (e.g. KSA) was restricted. So I'm a bit puzzled when they say their analysis covered 'three quarters' of global reserves given 60-70% reserves are supposed to be within OPEC.

My interpretation of the Birol statement was that, from their field-by-field analysis, non-OPEC has peaked but, from what they have been told, OPEC will be able to ramp up production sufficiently to make up for this (and more) such that the global peak is still 10 years away. The assumption being that OPEC (primarily KSA and Iraq?)really do have this capability. So still a pretty optimistic forcast IMO.

Anyone know what percentage of OPEC fields, if any, are covered in the IEA analysis? If none then the overall prediction surely devolves to a belief in what OPEC are saying is possible?


If most of the biggest fields have already peaked, what makes him say that oil production peak will happen in 2020??

If you believe Matt Simmons on this it's because his political masters force him to tone the message down. Simmons says he knows Birol well and that he knows for a fact that Birol believes we are post-peak. At least one ME country is covering up a very large decline (with help from their "friends") according to Simmons. But then Simmons now claims that even the US is faking recent Natural Gas production figures.

I see WTI just now approaching $72

Yes, I've also heard that his official public pronouncements are much softer than what he is saying in professional meetings.

Does anyone think any of the recent rise in oil prices has anything to do with this story (old though it seems to be)?

Did you catch the contradiction there? Demand after 2010 is expected to exceed supply, but peak production will not occur until 2020? Hello!

Yes, that's possible. Think it through.

Yes, Birol's forcast for 2010 would be what Robert Rapier has called 'peak lite' if I'm not mistaken. Production may still be increasing but not fast enough to avoid being outrun by demand.

I'm skeptical about Birol's timeline, but there is no contradiction.

The IEA have been quite consistent with their predictions. They regularly revise them downwards.

This is the 'sky-is-falling' crazy talk.

Get a grip, folks.

Birol is just complaining about low oil prices discouraging investment.

There were low oil prices in the 1980s when the oil price fell 66% from $60 to $20 and world production fell from 63 mbpd (1979) to 53 mbpd (1983)20%(also a 6% y-t-y drop) and then just stopped. And even though prices stabilized at $20 production turned around so by 1990 world oil production was at 70 mbpd.

I'm not saying that we haven't hit peak but the idea of NO stabilization is nutty.

Let's hope the Big Brains at TOD can come up with some more cogent reasoning.

So the idea of stabilization is correct (i.e. not nutty) ?

I don't know what you are trying to imply here. Could you restate your case w/o including double negatives?

Imply, WHT?

I am CATEGORICALLY stating that the idea that a 6-7% y-t-y decline in existing fields will continue over time is NUTTY.
We've been here before--in 1979 thru 1990 when there was a recession and prices collapsed.

Look at the flow rates for draining a tank. Under Bernoulii's law
you get the equation,

flowrate = area* sqrt(64.4*(h2-h1)).

By analogy, you could say that 'long term' price is like the difference in height. So a price drop of 50%, would reduce production by 30%.
A 'long term price' drop from $60 to $20 would reduce production by 42%.

The recent price drop from $100 to $40(reducing for speculators) would reduce production by 22.5%, which in a short term cycle of 4 years would be 6% y-t-y!

Let's say the long term price of oil(what the market can bear) is $100 per barrel and today the price of oil is $71 per barrel so the best the world can hope for is a 19% increase in production off this low.

So I would say that world production will not fall exponentially as long as the super giants are with us. This is worse news IMO because they will just get drained at close to our present super-fast rate(not an exponential decay rate).

6-7% yoy decline is "nutty"?
I'm a nut.

I am CATEGORICALLY stating that the idea that a 6-7% y-t-y decline in existing fields will continue over time is NUTTY.
We've been here before--in 1979 thru 1990 when there was a recession and prices collapsed.

No, we haven't been there before. You are talking apples and oranges. The decline from 1979 thru 1983 was entirely political, not geological! The OPEC decline from last year until now was also political. No one has ever claimed that either of those declines were because of geology.

The decline Fatih Birol is talking about are entirely because of geology. And those declines will likely continue. If you look at North Sea fields such decline rates are quite common and they have held these decline rates for many years.

The Impact of Declining Major North Sea Oil Fields Upon Norwegian and United Kingdom Oil Production

The total area under the curve represents 30 bbo and the decline rate after the peak is
7.2 %/year.

Actually this is Norway's decline rate overall. New fields coming on line subtract from the decline rate therefore the decline rate of their individual fields are much greater. Of course this is because the fields are all offshore. Offshore fields have a much higher decline rate than onshore fields.

Ron P.

Let's not go overboard.

Norway peaked in 2000 at 3.4 mbpd, in 2006 it was 2.8 mbpd with 2.6 in 2007 and 2.4 in 2008.

(3.4-2.4)/3.4= 29% in 8 years (past peak) or 4.2% y-t-y. Only
between 2007 and 2008 (2.6-2.4/2.6) it did decline 7.7% overall.

Norway isn't developing the Barent Sea area and I don't see them doing much new oil development at all(Stat oil is operating overseas instead).

Norway's OLF(oil industry) thinks oil production will drop to 1.6 mbpd in 2030 which is a decline of 2.2% y-t-y from peak.

Count me in with the nuts too please!

Is it inappropriate to suggest you are rejecting the idea of a fast collapse and are cherry-picking out-of-context data to support your underlying unquestioned belief?

Geological or political? How about 'mathematical'? Go ahead and keep throwing around generalities (which likely do have some intuitive basis) yet it still does not account for a formal set of conventions. The shock model includes both geological and political considerations, via perturbations.

Geological or political? How about 'mathematical'?-WHT

Obviously not geological or political.

It is continuously asserted at TOD that production declines are constant and exponential. No reasoning is ever given for this other than Hubbert Linearization which is derived from the logistic curve = ~ exp(-x)/(exp(-x)+1)^2.

The slope of the logistic curve looks like sigmoid function centered on 0 with a maximum slope--something like exp(-x)/(exp(-x)+1)^2 - 2*exp(-x)^2/(exp(-x)+1)^3.

It's not a simple exponential decay function and it isn't constant but gradually increases to a maximum rate of decline from 0. Now this is from mathematical abstraction, the logistic curve but it suggests that figuring the rate of production from a fixed depletion rate would not be right.

So looking for decline rates immediately post peak when mathematics indicates a low decline rate makes less sense than looking at demand effects as in the comparison of decreased oil investment on account of price with a tank draindown rates.

The logistic curve can be derived from the dispersive discovery model. It has nothing to do with decline rates.

Syriana's! Damn typo.

This is the last line from the article:

"If we are not adequately prepared for peak oil, global warming could become far worse than expected."

That is presuming the economy is viable enough to support the high price needed for extracting oil from tar sands and coal, and we burn every possible ounce of fossil fuels, while the climate warms to unprecedented levels. The reality is probably more like: As oil price rises to the point of causing another eonomic collapse, followed by debt default on a mass scale, the last thing on anyone's mind will be global warming, as they hoard food and hunker down to stave off the hoodlums trying to steal their cache.

Completely agree. Hungry people aren't going to want to have academic conversations about what the weather will be 20 years from now.

Well, how about the weather today? Have you followed what has been happening in the Pacific NW, in Australia, in south Texas? Those are just some of the current hot extremes. The monsoon was off this year, with dire consequences for farmers in South Asia. The total melt of the Arctic polar ice cap is just a weather anomaly away, which itself will disrupt weather patterns across the Northern Hemisphere...

The dire effects of GW are with us now.

But I agree that people are easily distracted, even by less dire things than starvation.

Equally plausible is high prices stimulate more renewable energy, and improved energy efficiency,reducing CO2 emissions. As I don't accept that oil had any influence on the sub-prime mortgage reset rates and banking failures in 2008, we have to see how high oil will go before GDP stops growing again. I am guessing oil will have to be >9% of GDP( $200-250/barrel depending upon how much people drive), certainly more than $147/barrel.

GDP has been declining since the 147 oil price.

the last thing on anyone's mind will be global warming, as they hoard food and hunker down to stave off the hoodlums[...]

... and burn all the trees for fuel, setting off vast numbers of forest fires in the process. q.e.d.

I came across this article earlier this evening and it struck me that it seemed very close in word if not in direct quote to Mr. Birol to the November 2008 press release from the IEA about the WEO.

Is this really "new" news, or is this just Mr. Birol repeating (perhaps emphasising?) what was in the PR in November.

This is also not the first time the Iranians have tried to "announce" a failed coup in Saudi Arabia.

"September 3, 2008 | 1912 GMT

AFP/Getty Images
Saudi Crown Prince Sultan bin Abdel-Aziz (L) and King Abdullah
Iranian media reported a failed coup attempt in Saudi Arabia on Sept. 3, citing an Arab publication. The details of the reports suggest, however, that they are unfounded. Tehran’s move to pick up the story is likely Iranian psyops against Saudi Arabia, designed to undermine global confidence in the stability of the world’s largest oil producer."

As I wrote, above, the headline being on Drudge is a critical part of why this is "news."

I notice Upstream Online is carrying the story too:

IEA says taps running dry fast


Thanks for making a separate post for this Birol interview!

Steve Connor, the author of the Birol interview article said the following:

The IEA estimates that the decline in oil production in existing fields is now running at 6.7 per cent a year compared to the 3.7 per cent decline it had estimated in 2007, which it now acknowledges to be wrong.

Some references by Connor would have been good here but I will try to provide them adding some clarification.

First, here is the probable source for the 3.7 per cent decline from 2007. The IEA WEO 2007, page 84, stated the following which supports Connor's statement.

Worldwide, we estimate that a weighted average observed decline rate from fields currently in production of around 3.7% per year would result in a match between global oil-supply capacity and demand in the Reference Scenario to 2012, based on current estimates of new gross capacity additions.

The 6.7% number lacks clarity. Birol, in his presentation of the IEA WEO 2008, stated on slide 7 that "the production weighted average decline rate worldwide is projected to rise from 6.7% in 2007 to 8.6% in 2030 as production shifts to smaller oilfields, which tend to decline faster."

At first glance, this 6.7% appears to be a true weighted average decline rate. However, the executive summary of the IEA WEO 2008, page 7, says that "the average production-weighted observed decline rate worldwide is currently 6.7% for fields that have passed their production peak. In our Reference Scenario, this rate increases to 8.6% in 2030."

Furthermore, page 236 of the IEA WEO 2008 state that the "observed post-peak decline rate averaged across all fields on a production-weighted basis is 5.1% using raw data. That is equal to 3.6 mb/d per year, based on the 2007 level of global crude production". 2007 world conventional crude production was 70 mbd and 5.1% of that equals 3.6 mbd.

I believe the right comparable average decline rate comparison should be 3.7% in 2007 to 5.1% now. Applying 5.1% to the 2008 level of global conventional crude and condensate production of 72 mbd (EIA) gives 3.7 mbd per year just to offset decline. My chart below shows that gross capacity additions, after this year, from all sources of crude, condensate, oil sands, NGL, GTL and CTL fall short of 3.7 mbd. In 2010, gross capacity additions are only about 3.2 mbd, 0.5 mbd below the required amount. Biofuels should add just over 0.1 mbd in 2010 but that won't be enough to stop world liquids production from continued decline.

The other statement by Connor "that oil production has already peaked in non-OPEC countries". I'm not sure what Birol exactly told Connor but if this quote is true then it's the first time that the IEA has publicly admitted non-OPEC passing peak. In the middle of 2008, Birol warned that non OPEC oil could peak in two years but he referred to this oil as conventional in the article so he probably included conventional crude and NGLs.

What isn't clear is whether Connor's quote of Birol's non-OPEC peak is only conventional crude oil or total liquids. The IEA OMR July 2009 shows a current non-OPEC total liquids peak of 50.9 mbd in 2007 and is forecasting a greater peak of 51.2 mbd in 2010, so perhaps Connor's quote refers only to conventional oil.

My chart below, based on EIA rather than IEA data, shows various non-OPEC peaks for various definitions of oil but it is highly likely that non OPEC conventional crude passed its peak five years ago in 2004 as 2009 production has dropped by 1 mbd.

Maybe it's time that journalists such as Connor used hyperlinks for critical information.

Thank you for the analysis.

Did you say that this would be the first public admission of non-OPEC post peak by the IEA?

To the naysayers, would that suffice as "newsworthy"?

The decline rate discussion has been more than a little confusing.

My impression is that the IEA reports have thrown out a lot of non-comparable numbers, and not really tried in their reports to match up which ones corresponded to which other ones in previous reports. It is not clear to me that whoever is speaking in the article (Birol, or reporters interpretation of Birol) necessarily has an apples-to-apples comparison.

Thanks, Tony, for your interpretation.

Oh dear the old - 'add all the oil wells together and this is the forecast model'. Sticking to my view that global oil production, actually due to restrictions in new fields/finds rather than despite them, will peak around 2030. Nice graphs by the way.

Getting mainstream press coverage in Australia anyway...

Note that the "Independent" is not a hugely prominent newpaper of the UK. Quite a lot less circulation than the Guardian, Telegraph, and Times (not to mention the popular 'tabloids'.
The Indy did a front page thing about peak oil more than 2 yrs ago. I pointed it out to other shoppers in the store and they expressed lack of interest.
The BBC radio 4 mentioned it on their evening news (=low listenership time). No mention on this morning's Today (=high listenership). So don't get your metaphors raised too highly over this.
PS:- the "Independent" was originally in accordance with its name, but after some years it ran out of cash and had to compromise its independence though of course it made no change to its name which li[v]es on.

The Indie story was mentioned on Today this morning, but only as part of the newspaper review.

Before reading this on TOD I went to the local supermarket, there were queues down the road for petrol so I suspected something was up, when I went inside and saw the newspaper headlines I knew what it was!

It's a panic reponse to the headline "Warning, oil supplies running out fast" - all those cretins just read the large print, we are definitely doomed, in the UK anyway. Presumably they feel rushing to fill up today will last them forever?

Really? Large queues? Which part of Blighty are you?

Matt Simmons warned (in a you-tube video, date unkown but I think 2007ish) that it is precisely this sort of panic buying or 'toping up the tank' which could bleed the US petroleum system dry. He made the point that if enough people all top up at once then it would be hard to keep the system flowing even if there was loads of capacity at the refinery. Interesting.

East Anglia, it was a Sainsbury's supermarket - the road was impassable for quite a while as we tried to get through.

Also, interestingly, their price for petrol and diesel has been the same, 101.9 p/litre, for a couple of weeks now - that strange fact alone should tell people something is up, if they took a couple of microseconds to think about it!

Our Sainsbuy's get their fuel from BP in unmarked tankers - but the driver wears a BP uniform! The BP garage within 200 metres of Sainsbury has fuel that is 3 or 4 p a litre more expensive - go figure!

This is a good point. These articles tend not to go very far.

A couple of years ago, there were stories of this type all over. Somehow, people could read them, and say they agreed there was a problem. But two hours later, they would forget about the problem, and think that the local airport needed expanding, without ever considering that the article they had just read about peak oil might have a bearing.

Hah! When I moved to my permanent doomstead the first thing I read in the local sheet was, "airport expansion measure being debated." Laugh my buttocks off.

Equally importantly, newspapers (and media in general) aren't organisations that "take views" on issues (other than maybe broad politicial themes -- like immigration into the UK is always unequivocally bad, etc). If there was, say, a story on page 5 that discussed fossil fuel avaialability every week then it might become something readers bear in mind to a reasonable extent. But there'll be this big front page headline in one paper and then probably no significant mention at all for a couple of years.

And in Norway. But the coverage is only for already informed people.
No TV mainstream coverage with comments. I am struggeling to get any attention in the political environment, being one at a modest county level myself.

I'm not sure when that interview with the Independent took place. It is plausible that this article was prepared long ago, but it was decided with credit crisis and plunging stock markets, that an energy crisis article would have been viewed as either too crazy or too alarmist. Might also be possible that article was written but Birol had some say on when it was ok to post it? Who knows?

But one of the contentions with the IEA WEO 2008 (that TOD did a 2 week analysis series on last November) was the distinction between natural decline rate of existing fields and observed decline rate (which included infield drilling and tertiary recovery). Obviously, lower prices, difficulty in credit markets etc., will make observed closer to natural decline, which might explain the discrepancy Connor points out.

And, as WHT mentioned above, there is considerable media confusion between decline rate and depletion rate.

Also, here is a reply to the Guardian piece by Jeremy Leggett, pointing out it takes 6.5 years on average to bring on new oil production and 10 years for major fields, and that the same ideological immunity surrounding awareness of financial derivatives has occurred in oil industry.

Rest assured that one day (probably not today), there will be Peak Oil announcements that will be news to the world, but will not be news to readers here. The mere supposition that IEA was that wrong on decline rates should alert conventional media they have been asleep at the wheel.

Nate, it's not the Guardian, rather it is the Independent, which has much lower circulation (about 1/4 last time I checked).

Rest assured that one day (probably not today), there will be Peak Oil announcements that will be news to the world, but will not be news to readers here.

Really? Quite what announcements are they going to make? Four/five years on, have any mentioned yet that oil-supply ceased its growth back in 2004-5? Have any of them front-paged the Hirsch report yet? Or even hinted at the thesis that the current economic downturn is due to the oil downturn? In my experience the msm are the last people to catch on to what is already old news, with the world's "leaders" trailing alongside them.

The way these things work is by just happening to mention what "everyone already knew", as per the way this Guardian review of the Prius ended the other day with "The question it poses, though, is whether sensible, unobtrusive, intelligent measures can save us as we plunge down the steep slope the other side of peak oil. As for me, I've seen the future, and it walks."

Thanks for the Guardian link.

The question it poses, though, is whether sensible, unobtrusive, intelligent measures can save us as we plunge down the steep slope the other side of peak oil. As for me, I've seen the future, and it walks.

It is probably a combination of these little things that get through, plus the bigger articles, the get into the minds of the people who read most first, Eventually, they will even trickle down to the minds of TV watchers--but that will take a long time.

Typically MSM in the UK don't tell you about bad things that might happen to you the reader/viewer in the future.

Because they want you to come back, so they can make a living, they will only tell you about bad things happening to others.

Hence, I don't think the 'man in the street' will ever really get the bad news he needs to act sensibly, and I plan my strategy on that basis!

My take on the story in Australia is that it is meant to convey the idea of plenty of time left to adjust, not alarm. To back it up economists have been interviewed and they assure us that new forms of energy will replace oil. My questions to those economists are
1) have you heard of declining net energy?
2) how come you didn't predict the GFC?

Oil up a buck twenty-three before pit open.

Supply and demand are of course always in balance, that balance being struck by price. The OECD is in a vice with supply swinging away from OECD towards OPEC and others and demand increasing in non-OECD countries.

Decline rates are a very tricky beast to get a handle on. The price crash of 2008 will I believe undoubtedly have an impact on observed decline rates as OECD oil cos have gone into contraction mode. The 6.7% figure is likely good for non ME OPEC supply. Much of the ME OPEC supply (KSA and UAE at least) is not in decline at all. But one day of course Ghawar will start to decline and that will be felt the world over.

Regarding KSA, the observed total liquids decline rate for Saudi Arabia from 2005 to 2008 was -1.0%/year. With rising consumption, this resulted in a -2.7%/year net export decline rate (EIA). If Saudi Arabia had maintained their 2005 net export rate, they would have (net) exported 10.0 Gb in the 2006-2008 time frame, inclusive. They actually (net) exported 9.1 Gb over this time frame, in response to an annual oil price rate of increase of almost 20%/year.

Reasonable people can disagree over why the Saudis have shown three years of production and net exports below their 2005 rate, in response to higher oil prices, but if we see: (1) higher oil prices in 2010, versus 2009, and (2) the Saudis have still not exceeded their 2005 annual production rate, i.e., we would have seen five years of annual production below their 2005 rate, then I would think that the "It's almost all voluntary" assertion will be getting a little hard to support.

In any case, I think that it is extremely unlikely that Saudi Arabia will ever again exceed their 2005 net export rate. Sam's most optimistic outlook for Saudi Arabia is that they will have shipped about half of their post-2005 cumulative net oil exports by the end of 2015.

wt, I'm a bit dubious about this "voluntary" concept. Surely the Sauds are smart enough to see that the end is in sight, even if 30 yrs away (though surely less). And they are well aware how overproduction damages later output. So they would apply a certain amount of Arabian wisdom and choose less than a max sprint even in response to last year's peak prices? (Notwithstanding that this is not exactly equivalent to voluntarily turning down the tap on a beer-barrel.)

The 6.7% p/a decline rate in WEO 2008 referred to oil fields that are already post-peak. The estimate of the current rate of decline across all existing fields was 5.1% p/a.

Dr. Birol fails to mention that the world oilproduction of July 2008 will probably never be surpassed. In other words, peakoil has already occurred.

It has already been pointed out on this website that replacing light sweet crude (from Mexico or West Texas) with tarsandoil or biofuels will significantly decrease the net energy yield. It will take al lot more lowgrade crude oil to manufacture the same amount of gasoline or diesel fuels. This means that the price at the pump will rise faster than the price of crude oil.

OK, a few years ago I wrote to My Government & asked them to send me their pamphlet on Peak Oil. I received a nice reply about "there is no need to panic, return to your homes".

There is only one 2006 "Peak Oil" reference in the Canadian Federal Government search engine.

Now I know that generally writing to the government is pissing into the wind, but I think it keeps them a little nervous, especially when they get a wave of interest. Who do you suggest we casually write: "I just read this information from the IEA, do you have any more Peak Oil information you can send me?"

I suspect the Aussies, Canucks and 'Murricans would be most relevant but I'm sure the Pommes & Kiwis would be interested too.

If 12 unemployment in California and 72 dollar oil doesn't get the message across, perhaps 15% unemployment in CA and 100 dollar oil will. And that's using the conservative measure of unemployment, not U-6. Southern California has about 22 million of CA's 31+ million residents. It's also perhaps the mega-region in the US that is most leveraged to the price of oil. If SoCal, currently experiencing a witches brew (not to be confused with Mile Davis' Bitches Brew) of unemployment, commercial and residential real estate gotterdamerung, and increased social problems--in addition to collapsed state revenues now about to drive another round of job losses--gets hit with higher gasoline again, it won't be pretty. I actually think SoCal starts to buckle at 5 dollar petrol.


I have faith that Southern Cal will drive until there simply is no more gasoline :)

The poison punch bowl is still full in the region. Its the culture. Your typical Californian is simply not going to give up his/her car until they have no other choice.

I'd not be surprised to see variants of EV's make big sales in southern Cali to keep the suburban commuting lifestyle going for a bit longer but other than that I don't see much changing. Certainly they will progressively get more fuel efficient but I just don't see fundamental changes.

As far as how high gasoline prices go before you start seeing Cali buckle I'd suspect much higher than 5 a gallon. I'd guess closer to eight before they even get serious about car pooling much less any other changes.

One thing your forgetting is that the highways in the region are heavily congested and a significant portion of the population actually earns a good income. As rising prices force the large poor population to resort to car pooling driving less etc the congestion should ease considerably this will make driving even easier.

I've posted here and there about congestion and its a huge issue that's not talked about but basically what happens is as congestion eases overall efficiency of the system increases but it makes driving even better for those that can afford it making them even less likely to not drive until forced.

Back when gas hit four dollars a gallon and housing started to collapse I noticed that congestion eased considerably and the remaining cars simply drove faster. Traffic was still very heavy but the massive traffic jams became a lot rarer. A lot of this was of course because of the rapid decline in housing construction related traffic not just the high price of gasoline.

So I really think that as congestion declines in the large metropolitan areas we will actually see gasoline usage become increasingly price insensitive as people who can afford to drive enjoy the luxury of driving without snarled traffic jams.

My bet is for $10 per gallon. The human mind fixates on round numbers.

I bet for US$100 - including inflation ;-)

Back when gas hit four dollars a gallon and housing started to collapse I noticed that congestion eased considerably and the remaining cars simply drove faster. Traffic was still very heavy but the massive traffic jams became a lot rarer.

excellent point. As a former UPS guy, i can attest to the fact that even a small percentage drop in VMT results in huge gains in efficiency...just imagine that every big brown truck on the road gains 20 min to 1/2 hour per day...expand that to every courier company that uses main arterials at peak hours...then factor in marginal savings by all delivery companies...
the result is that the first, say, 5-10% reduction in VMT nets you a jump in productivity in the service sector that is not just negligible or background noise...after all, that extra half hour that delivery vehicles spend stuck in traffic is often as not paid at the premium overtime rate.
But the thing is a one-off event...after congestion lifts and the big brown truck can get from hub to first stop unimpeded, further drops in traffic volumes won't result in any further gains in efficiency.

Exactly !

Good and expert on the subject. Yes its a one shot gain but the point is its a pretty strong driving force in making remaining demand less elastic. Especially in cases like you point out where time is also a factor. One or two extra trips because of lack of congestion can cover a fairly significant further increase in oil prices. This congestion factor is one shot and has its limits but its a good example of how falling demand can result in decreasing elasticity of the remaining demand simply from the effects of falling demand.

Long distance trucking should get a similar boost albeit smaller. Even for your ordinary worker say a sales guy. Getting in the office a bit earlier and less stressed from traffic should boost productivity bringing in a bit of extra money that can be spent on more expensive gasoline so its not just direct efficiency gains but indirect ones that can also cause remaining demand to become less elastic.

Personally I think falling congestion will play a big role in keeping remaining demand robust until the gains from congestion declines fade.

This is just one of the interesting issues you can discover when you really dig into the nature of oil demand its by no means a simple clear cut issue of demand falling as prices increase.

I have just read the many, many comments added to the Independent's article. It is a solid reminder of what an up-hill struggle it is to educate people to the situation. I would estimate that fully 90% of the comments were rubbishing Peak Oil, not with any data-driven arguments mind. They seem to be from people who have absolutely no idea how much trouble we are in. These people - who are representative of the vast majority of the populations of the 'developed world' - are so utterly brainwashed in the cosy reassurance that oil will never run out. God, it really frightens me. Those of us who are enlightened/educated to the issues will have a hard enough time adapting to the next few decades but these people - the vast masses - will be totally unprepared. Given that 'democratic' governments will do anything to go along with public opinion rather than lead I can see the populace jumping up and down and urging the government/military to find a scapegoat. We live in interesting times, but not particularly safe times.

The problem is that things are so bad yet that Peak Oil's reality can't be denied, so the nay-sayers still have some space to argue their point of view.

Once the reality can't be denied -- and it will happen with awful suddenness, in my book -- then survival will be the order of the day. It won't take decades, either.

Yes, the comments were quite distressing. I couldn't believe how many abiotic oil posts there were.

It's really just a manifestation of the denialism. People easily recognize how serious it would be if oil production started to decline - if this were not the case, then people wouldn't even pay attention. So they grab a hold of any theories that might be out there that would invalidate peak oil and hold onto them with a death grip. I suppose in a way it gives them comfort to believe that in the end everything will be alright and we will have a few more centuries of BAU..

I've been a member of TOD now for 2 years and 37 weeks wow!

In general I feel more and more like a passenger on the front deck of the Titanic who sees the iceberg approaching but feels unable to raise an alarm...

One poster above suggests writting to the Govt. I would suggest this is akin to the deck person throwing pebbles at the Captains Window while he sleeps.

No, the answer for me -and I know it's not to everyones taste here- is to make myself comfortably well off (within the bounds of a possible collapse!) At the same time I am gradually increasing my real-life skillset (learning how to grow stuff, etc.)

It seems clear to me that within a framework of a continously eroding fiat currency there are a bunch of real-world assets that will continue to be in high demand. An example would be POTash (investment clue!) -even as the oil declines the mouths will still exist. Other things like Molybdenum -used in repairs of and new pipelines and as a cracking catalyst for the remaining heavy oils.

-So ask yourself in 5-10 years do you just want to be saying "I told you so" or do you want to have profited from your beliefs and be a bit more ready for the world that probably lies ahead?


Primer for new Peak Oilers (needs and update as was written end 2007 -but plenty of the stuff is still valid):
GOOGLE "Peak Oil Joining The Dots"

Nick, I reckon the most important assets will be knowledge, skills, being able to make yourself useful to your potential murderers. The value of these things to others depends on your being left unmurdered, whereas physical possessions give motive for killing you instead.

physical possessions give motive for killing you

So, would you want to live in a 'net exporter' country with large reserves of affordable oil on the post-peak 'net exports' downslope?

If agriculture is treated as a special case post-peak, would you want to have stocks of fuel or food on your self-sufficient homestead?

In a 'survival-of-the-fittest' world, who survives, the guy with the gun or the guy with a field of food?

the guy who has both guns and fields will survive if he has a few trustworthy friends to take turns standing gaurd .Nobody else survives for very long.Pillagers will inevitably be ambushed rather than ambushing at some point and looters can't just take over running farms villages due to lack of necessary skills.But they might be able to keep farmers as slaves.

A farmer like me would figure out a way to get rid of them pdq.Or they would get rid of me pdq.

If only it was as simple as good guys vs the bad guys.

I'm more worried about the guy down the hill when his kids start going hungry. Can I help him? Maybe for a while, but what then? What do you do when the word gets out you have supplies and solar electricity and everybody else in the county didn't prepare?

That's one of the thoughts that haunts me. I don't want to be the only one in my neck of the woods that's prepared. I don't like guns and violence so the thought of herds of marauding ex laborers is not very comforting. I'm thinking of moving to my Dads place where many of the locals are involved in agriculture but, on a small island you're still not out of reach of the marauding herds.

Alan from the islands


The kid that will show up for dinner is one of the reasons I insist that most published data on the amount of land,etc, needed to survive post collapse is several times greater than commonly stated.

If you are seriously interested in this topic, I beg you,read all my comments,it won't take that long.The evening it may take could be worth your life.

I've explained this previously. The gunman has the power of death. The "farmer" who knows how to produce food (etc etc) has the priceless power of life. The farmer has no need of the power of death. But even the gunman needs the power of life, so will value the life of the "farmers" assisting him. It's not worthwhile getting into guns unless you are firmly committed to expertise in that sort of thing. And mounting a permanent look-out such as OFM suggests above seems to me rather unrealistic except for a town with a professional militia. Seriously? - looking out in all directions, for week after week, month after month, trigger at the ready, without going bonkers?

That is the price that will have to be paid.A formally organized militia along the lines of a fire dept or sheriffs office might be organized. And if a roving patrol is sent out to wander around the country side ,quietly ,every few days,you could probably relax somewhat.

Farmers have stayed out in thier fields more or less contstantly for millienia gaurding livestock in many times and places.

Standing gaurd is not hard work.

An old woman with a bell or whistle or a shotgun(noise maker) can sit up in a church steeple or on a hill top or even climb a tree if there is a ladder and a chair at the top.

And the gaurd need not be continious ,insofar as crops are concerned.Only when wheat is ripe enough to harvest will it have to be watched.And stealing it out if the field by hand is damn slow hard work.

Livestock will be brought into close proximity of residence overnight.

Three or for men working together can do it-unless attacked by a large and well organized party.

After a year or two things are apt to calm down.

And news of roving marauders who have to travel on foot mostly may well precede thier arrival in the general area.

My first inclination would be in the local vernacular "to lay for them"-meaning waiting in the woods along thier likely path of travel and if they proved hostile,well......if you kids and women are at stake,you do what you must do.

xeroid: The guy with the gun AND toe field of food, maybe?

"even as the oil declines the mouths will still exist."

I wouldn't count on it... War, famine and pestilence (H1N1?) are waiting in the wings. Much as economic collapse is moderating oil price, (ultimately) human population collapse will moderate agricultural prices.

"We don't miss big things like that," says Lawrence Rudnick...If there was any possibility, even wildly possible that this stuff were true, he says, "there would be all kinds of conferences, there would be articles. There would be a feeding frenzy, and that frenzy just doesn't exist."

The above quote is from a NPR story, Mayan Calendar Spurs End-Of-The-World Debate, a matter of dubious authenticity, but the tenor of the disclaimer is both fitting and striking as applied to Peak Energy, don't you think?


I think it's interesting that there may be a lot more worry in the general population about the Mayan calendar than peak oil.

That one baffles me too. I suspect it is sort of like a ghost story - easy to get scared, but in the back of your mind you know it isn't real and that's sort of comforting.

With Peak Oil, there is no such voice in the back of the head..

Everyone relax, there is no need for hysterical reactions to peak oil, even if peak oil is true.

If there is not enough oil to meet our energy needs, than obviously we shall use coal, if there is not enough coal to meet our energy needs, than we shall use nuclear, if there is not enough uranium, than we can use renewable energy. Have faith in the market, and the market will have faith in you. Failing that, we can always use Obama's ego - that could power everything. Do you really seriously think the system will let the first African American president go down as a failure - he is making all the right sounds and moves.

Nice troll. You touched on just about every hot button topic in 5 sentences.

Everyone relax, there is no need for hysterical reactions to peak oil, even if peak oil is true.

If there is not enough oil to meet our energy needs, than obviously we shall use coal, if there is not enough coal to meet our energy needs, than we shall use nuclear, if there is not enough uranium, than we can use renewable energy. Have faith in the market, and the market will have faith in you. Failing that, we can always use Obama's ego - that could power everything. Do you really seriously think the system will let the first African American president go down as a failure - he is making all the right sounds and moves.

Ok, so you are either having a giraffe or you clearly don't understand the topic. The free market is a nonsense! The free market can neither change geology nor the laws of thermodynamics. In fact, I would argue that the 'free market' has only achieved staggering wealth for a very tiny few while back on main street real wages have been stagnant at best for many years. Real jobs have disappeared to be replaced by minimum-wage slave labour and it now takes on average two full time incomes to maintain a standard of living today as one full time income did a generation ago. And no, I do not judge one's standard of living by how many gadgets like iPhones and electric tooth brushes one has. The middle classes all across the 'developed world' are having to run faster and faster just to stand still, meanwhile the Elite have gathered mind-boggling wealth.

The 'elite' as you put it are doing a fine job generating wealth which helps pay taxes for government spending, and therefore should be awarded for their excellence and the risks they take. The whinging here sounds too much like the politics of envy to me - it's so easy isn't it to blame 'the elite' than make a go of it itself.

Are you being wilfully dense? Your ability to totally miss the point deserves an accolade.

Sure, faith in a system that produced the very problems in the first place is an excellent way to go. Here's a noose and a sturdy ceiling rafter. I think you know what else to do.

EDIT: Also, "even IF peak oil is true", (emphasis mine)? Just wow.


You sound just plain damn senile.I had a prof like you once who refused to resign,so they made him a course advisor and let him do phony research in the library mostly.

But you are most likely not a prof.

But if you are you are most certainly delusional.

Well, even though this is way off topic, let me respond.

1) I am not whinging, merely pointing out a fact. The gap between the 'haves' and the 'have nots' in western democracies has increased hugely over the last generation. This can not be contended. The top 1% are now so staggeringly wealthy, and hold so much of the physical wealth of the country, that serious civil instabilities are arising

2) These same top 1% don't pay anything like as much tax - on a marginal, percent basis - as the bottom 50%. It is absurd to assume they do. For instance, here in the UK the government has announced a new 50% tax band for income over GBP150,000. I actually think this is a crazy idea. Even without a rush by these top earners to hire clever accountants to limit their liability this tax will bring in bugger all to the Treasury. My point here is that the vast, vast, vast amount of government revenue collected comes from the middle and lower classes. This is true all over the western world.

3) The middle and lower classes are starting to hurt badly. This has been exacerbated by the current recession/depression but actually started some time ago. After WW2 the average American middle class couple certainly did see a real, prolonged, increase in their living standard. By and large this was echoed on this side of the Pond too. However over the last 20 odd years standards of living – as measured by savings, affordability of land and property, long-term employment in a full-filling job, space, and recreational time and the assurance of a good pension – actually started to stagnate and then fall. Slowly at first, but accelerating through the 90s and the first decade of this century. The effects of this were cunningly masked by access to credit however it can not be denied that on all the metrics which would reasonably go into calculated the ‘Happiness Quotient’ (as in, The Pursuit of Happiness) living standards have not increased. As a consequence, social mobility has all-but stopped.

4) This is not the 'politics of envy'; it is the 'politics of reality and concern'. Concern for the fabric of society. It is impossible for any society to remain docile whilst such enormous disparities in wealth are in place. Quite how it will play out once the full ravages of PO are upon us is anyone’s guess, but I would assume that those with huge wealth should be wary and may need to keep looking over their shoulder.

5) Finally, the debt-based monetary system we are all swimming around in has one very ugly fact. You can't participate in the wonders of the capitalist 'free market' party unless you have capital in the first place. It is now extrordinary difficult to build up capital, ie savings. They will be eroded very quickly. And the net-effect of the monetary system is that, slowly but surely, the wealth perculates UP the social ladder, and not down.


I have no problem at all with the person who works hard and smart and manages to move a product or service that manages to enrich him or her.

Your problem is assuming that everyone at the top of the heap has made it there this way. That is the old American myth, but it is in fact a myth, a fantasy. Some indeed have made it that way, and as I said I have no problem with that. Unfortunately, the reality is that far too many have made it to the top rung by other means. Those are the ones with whom I have a problem.

Please don't insult our intelligence by claiming that such leaches do not exist. We have all just witnessed an unprecedented potlatch of unfathomable government largess being bestowed, at the behest of an elite Wall Street clique, upon an affiliated elite Wall Street clique. It is all too obvious to most of us here who actually runs the economy and its major components, who runs the government, and for whose benefit.

The real trouble is: these people are not excellent, but atrocious. Our government is not being run by wise people who know what they are doing and are motivated by doing what is in the best long term interests of the country. Corporations are mostly being run to enrich the CEO and his executive team, not the shareholders, and most are in the process of being transformed from ongoing productive businesses into nothing but financial shells; we no longer have corporate managements who know how to make products here in the US that compete in the marketplace. We have seen how the entire financial services sector has become little more than a combined gambling den, shell game, and ponzi scheme; there is little real added value to be discerned in the midst of all the activity and money, just a massive transfer scheme from the less-wealthy and less-well-connected to the more-wealthy and more-connected. They are risk takers, yes - but with other people's money, not their own. They reward themselves handsomely when they make a good bet, but when the risks go against them (as they have recently), then suddenly it becomes someone else's fault, and they demand government bailouts.

Envy? No, not so much that as DISGUST!

Well said WNC. I could add that the "wealth" they are amassing has no reality outside of people's belief systems, and in due course these "wealthy" people will find themselves destitute of the only real wealth which is skills, knowledge, judgement, and reputation for honesty, trustworthiness and competence.

I have no problem at all with the person who works hard and smart and manages to move a product or service that manages to enrich him or her.

Sounds like a good description of most banksters....

They may be leaches, but it's a serious mistake to assume they don't have to compete hard with smart people to get to be *successful* leeches. They, of course, believe their hard work justifies their wealth.

The central logic used by the peak oil/doomers can be summarized as follows:

1) Each oil well's production follows a bell curve - production increases, peaks, and then falls off at variable rates of decline. As proven by historic data/information - US oil production, North Sea Oil.

2) We are using more oil than is been discovered over the last 40 years

Therefore, the result of the above two logical axioms is that the global production of oil will peak QED.

However, my problem is with the first statement (1), specifically on historic rates of depletion. Obviously in the past when all the easy oil was removed from a well, it made more economic sense not to invest in the well, but to switch to newer wells in the same oil field - so the observed rates of production decline per well would be high. But when you take into account the second statement (2), it makes increasing sense to apply new technology and investment to older fields, hence reducing the rate of production decline. Obviously this doesn't effect overall depletion of the field, but it is in my opinion wrong to apply old historic information on well production figures on a global scale in a world of limited new fields/discoveries. Based on that argument, I am sticking to my view that global oil production (as a net) will peak around 2030, and we are nowhere near peak oil today.

We therefore have plenty of time for the wisdom of the market to find solutions, and not to rely on government picking winners through the taxation system.

This tripe used to be funny.

Now it's just boring.

..and he'll keep going as long as we feed him.

We therefore have plenty of time for the wisdom of the market to find solutions

But the "market" has no wisdom, it's a mere mindless automaton driven by human greed and not the laws of physics.

We therefore have plenty of time for the wisdom of the market to find solutions

Real world data says exactly the opposite is true, it's too late, the world peaked for C+C four years or so ago!

Clearly, up until that comment all that you say is true to some extent.

Sadly, timing of peak oil is about affordability of the oil that has been produced at a profit, and has nothing to do with how much oil has been discovered in the last 40 years - that information tells you is that there will be a world peak, but not when.

I have no idea what the future will bring, but if we can't find a way to make oil more affordable than now then we won't be using more than we are using now - this is the final peak.

If you live in a country that needs to import lots of oil and you have no way of paying for it other than borrowing the money from other countries, then I'm afraid you won't be importing for very long - at some stage you will reach your borrowing limit.


That would be fine if unlimited investment capital was available to implement enhanced recovery techniques at each and every well.

Unfortunately, we do not have unlimited funds. Indeed, given the decline and stagnation in the economy and the expansion of federal and state budget deficits, it is questionable whether we even have as much investment capital available as we did when times were good. Whatever amount of investment capital we do have, the demands upon it are multitudinous and growing. It is not at all clear to me that the money is going to be there to implement enhanced recovery on anything close to the scale that you anticipate.

Add to that the observation by M. Simmons that the oil infrastructure is rusting away and will soon need to be rebuilt, at a huge cost, and we have, if not geological peak, another reason for an economically forced production peak/decline.

Faith, yep, faith. There's the answer. I was worried (Sarconol off)

The IEA estimates that the decline in oil production in existing fields is now running at 6.7 per cent a year compared to the 3.7 per cent decline it had estimated in 2007

3.7% is strange because in their last report they seemed to assume something around 4.35% for the total resource base decline rate, 6.7% corresponds to the decline rate from post-peak fields in the resource base according to the same report:

I was wondering if there was a disconnect somewhere. Either Birol doesn't understand the numbers, or the reporter didn't understand Birol.

I can't say the IEA made the comparison crystal clear in its reports.

My Theory of Abiotic Oil

I have been trying to work out how some people (usually in the United States) hold the notion of abiotic oil in an all most religious zeal. Is it because they are actually petrified of Peak Oil and the end of BAU? Well it might be. Is it because they are just dumb? Well, maybe. And then it struck me. As a European, I have always found it slightly bemusing that certain (but not all) Evangelical Christians in the US fervently believe that the world is no more than 4000 years old. I believe they are referred to as 'creationists' or 'young Earthers'. Now, in order to accept the widely recognised 'theory' that oil was formed millions of years ago from algae etc etc one would first need to acccept that the Earth was old enough to contain this theory. Plainly if you are convinced that the Earth is only 4000 years old this will not be possible. But, obviously there is this wonderful stuff called oil, so there must be an explaination to fit the young Earth theory. Viola! Abiotic oil. Is there any evidence that I might be on to something here?

(FWIIW, I actually do believe in 'creation'; I believe in God and Intelligent Design, but I don't put it in any time-frame. I also am broad minded enough to realise that a belief in God is not a barrier to believing in geology and evolution.)

That's an interesting point - one that I had not yet considered.

A different angle to the whole thing is that the fundamentalists are accustomed to ignoring anything that scientists come up with on account of their rejection of evolution. Rejection of climate change, peak oil, or anything else for that matter that doesn't suit their fancy becomes relatively easy...

It really doesn't matter all that much how the oil was formed. The fact is, it needs to pool in formations under pressure in order to extract it. There are only a limited number of places on earth where the conditions are right for this to happen. After a century and a half of research and exploration, we have a pretty good handle at this point as to what those places look like and where they likely are. There are not many places left where any might be.

This is very strange...the IEA story was on the front page of the Huffington Post this morning but it is now gone. There are older stories still up from yesterday. There are the stories about electric cars and running engines on Mountain Dew. But Fatih Birol is nowhere to be found.

I keep checking is GONE.

Perhaps Raymond Learsy objected.

That was a belly laugh WT, is he still banging that drum? I haven't noticed many story links to him in the past few months but didn't know if he had exited the Huff or was just waiting for prices to go stratospheric again before once again bellicosely expressing his ignorance.

I think he has a column on there now about the oil price conspiracy being exposed.

Here it is. One can see how the IEA story doesn't fit his worldview.
The Huffington Post Outs The Oil Price Speculators

"Supply and demand." For months -- no, for years -- it has been the constant refrain, explaining away the gyrations and steep trajectory of oil prices. There has been little else from the press, other than oil flack handouts propagating this line or the endless parade of talking heads on such "expert" freighted TV boregrams as are offered by CNBC on matters oil. There's also oil industry- influenced government spokesmen and Nobel Prize laureates who should certainly have known better. And then, of course, the avalanche of oil industry propaganda trying to paper over the steep rise in oil prices.

In the face of these "received truths," the Huffington Post has been unflinching in providing a platform for another point of view, one now borne out by the CFTC itself. This was the opinion that was both highly incredulous and seriously suspicious of the so-called facts from seemingly "authoritative" sources that were forever rationalizing events to the public, as well as oil price movements glossing over the distorting and negative impact on the economy and on consumers worldwide (although brilliantly profitable to a powerful and influential few).

Over the past few years, while the mainstream media was hiding behind their comfortable and shallow reportage on such a vital issue, a series of commentaries were posted on the Huffington Post discussing the impact of speculation.

If Learsy would ever mention something as fundamentally sound as ELM, I would take everything back that I have said bad about him.

The Independent article is a fine example of propaganda. The fact that all fail to see it as such makes my point!
It deceives not with what it includes (the true fact of the rubbish from Birol) but with what it omits. If the article had quoted the graphs by ace on this site, and explained how they were derived, and some reasons for why Birol's forecasts were not in line with them, and why the abiotic theory is unsound, then it would be a powerful honest non-propaganda article. But you aren't going to find that anywhere in the msm anytime this century.

The article surreptitiously invites people to feel comfortable about dismissing peak oil as mere theoretical speculation with little basis in reasoning or evidence, because that is how the article itself presents it. Just some revelation from a dubious authority instead.

Admittedly, Birol puts off peak oil to later than it is likely to be. It says as much as it reasonably can say. I don't think it invites people to feel comfortable about peak oil. There is only so much you can hit people over the head with.

Sorry, I didn't mean to say it presents a comforting scenario. Rather that it invites dismissive scepticism, by presenting p.o. as just an assertion by Birol rather than laying out any evidence and reasoning towards that conclusion such as we tend to see here. Such propaganda articles are designed in such a way that opposing camps both see it as supporting their opposing views. We see it as Birol is too complacent. But most readers (non-tod) read it as yet another load of scaremongering lies with no evidential or rational basis behind them. Most readers don't have the background knowledge to perceive this deception in the article. We meanwhile tend to overlook its absence, being distracted by the faults of inclusion instead.

One of the concerns voiced by Dr. Birol, is that the percentage of world oil available from OPEC will increase from its current 40% to something much higher, as oil continues to deplete from non-opec countries. Yes, that seems clear it will happen, but why is that so worrisome? Are we presuming the ME will hold us to ransom? Will they restrict supply to set the price they want? Just recently they restricted flow to increase price, so I suppose it could happen in the future. However, it is probably more likely that as oil price is driven up by diminishing supply to meet demand, the ME will simply sit back and reap huge rewards. Maybe the Saudi's will finish construction on their massive playground for the super wealthy.

Wars such as the Pacific part of WWII were fought for oil. Oil wars will be fought in this century too. IMO, at this time, India, Russia, China, and the USA can figure out how to get sizeable forces to the region within a year. (For USA, i mean more forces). I seriously doubt the ME will benefit once people panic.

Bolivia did not benefit from the silver mines, Spain did. It will be much the same this time.

yes, i agree that war will continue and escalate AS NECESSARY to protect remaining oil/resource supplies, and that escalation becomes increasingly likely as the effects of peak oil become more and more visible and upsetting of the social order in the oecd -- particularly the u.s.

The Germans were out for oil too, and the lack of it was a truly major factor in thier defeat.

As far as any one else moving trops into the ME goes,maybe so, maybe no.

Some one or another of the officers who rose thru the ranks of the confederate army(American Civil War) without the benefit of a formal education kicked union butt all over the place for quite some time ,until he ran short of men and supplies.Asked about the secret of his success he said"jis git thar fustest with tha mostest".

Given the quality and quantity of hardware we have in place,it is considered unlikely that anyone can dislodge us.

Most people just don't have any idea how incredibly powerful we are,technically.Just one modern bomber can do more damage in a week that a whole air force could do in WW2,and at little risk to the crew.

But its useless when you can't figure out who the enemy is.

Do you think the other countries are just going to print money to pay for the oil? Our problem (and that of European countries) is that we have been paying huge amounts for oil, and our balance of payments are terrible. We really don't have enough other exports to pay for what we are importing. The increase in the OPEC percentage will just make it worse.

That money spent on oil has to go somewhere and eventually will be spent either on consumer products, gold or weapons. It all works back into economies. The issue is availability of oil not availability of money to buy it.

The issue is availability of oil not availability of money to buy it.

I think that's too simple. The connection between money and energy is not easy to pin down with any precision but I think that Jeffrey's question points to the essential issue:
What is the value of the ten largest banks without the ten largest oil fields?

To my thinking, it's clear that money is currently "floating" on a wave of energy. Take away the energy and the money loses its value.

The financial crisis is going to cripple the world economy much faster then peak oil. Peak credit is past and by this time next year we are going to be facing the ruins of what was formerly known as the global economy. In your adverse credit shock scenario you have written about the possibility of a credit crunch related oil supply collapse. In less then 2 years we could face 80% cuts in oil output, our food system is entirely based on oil. Global collapse is going to occur much faster then we think.

Countries are not going to accept electronic digits for their physical, natural resources. Already the US Government has committed 23.7 Trillion dollars in supporting failed institutions, namely the FIRE economy. This is to be found in an official 226 page report by the US Government's Senior Inspector General on TARP. We are stuck between a rock and a hard place. On the one hand there is quite literally not enough money in the world to save us from a gut wrenching financial crisis and we have no money left over to prepare for peak oil. If the US even tried to raise a third of the money it has guaranteed the markets with, then the yield curve would shoot up leading to a hyperdeflationary environment. Think 50% unemployment almost overnight.

Bleak does not even begin to describe the situation anymore.


Basically what you are saying is that there will soon be a crisis of confidence in the credit worthiness of the big importers and then the exporters will refuse to play ball with them - us- anymore.

Obvious as the sun at noon.

Why do so many people who savvy bisiness refuse to see this steam roller coming?

I was glad to see the frankness from Birol, especially since:

US oil output below year-ago levels last week, and Mexico output down 10+% in June. See details at:

Onwards in the Sustainable Energy Transition-


Good to remember the community, that oil output in Mexico is further plummeting and in the US further decreasing.

Nice website, you presented.

Do you remember? Today's oil price is around 72$!!
Is this a recipe for recovery? I doubt it.

FB tells us nothing new.

I am surprised however by the lack of comments re. oil investing, in particular oil companies on the Canada TSX and TSX.V exchanges.

If you have some spare money (say 10K or better) you can be sure to double or triple that over the coming 2-3 years by buying producing, debt-free oil medium and juniors.

Before we get into a collapse scenario we will see a massive run-up in crude prices, and subsequently a similar increase in the share price of oil companies, especially juniors like BNK, IAE, PRE, PMG, GTE etc.

Of course, there are no guarantees, but this one is almost a sure thing if you are a peak oiler and have the ability to invest.

Just be careful to cash out prior to the next collapse (when crude hits $200 or so) and convert the paper gains into hard assets like land, housing, food, gold/silver etc.

This is one method for survival into the rocky future, and capital can help with that in a big way.

Don't be surprised if these news will be completely IGNORED and regarded as a typical summer slump story by other media as well as by the general public.

This is mainly the IEA's own fault as they kept too long their ambivalent style of Delphi's oracle.
And we can be sure that this won't change as long as Birol is in office, as he still is keeping this style, for example in a recent Article for the Financial Times Deutschland (and available for many other papers as well:

Interestingly, the Independent's article refers to an interview with Birol but this interview as such cannot be read. So I suspect that it was mainly the Independent's Science Editor Steve Connor who really got to the point with a much clear message.
Anyway, it would be interesting to see Birol's original wording, as this might have been due to a misunderstanding: The announced peak oil date around 2020 is about the same timing of the peak of conventional the IEA had announced in its WEO 2008 last year.
If this still refers to "cheap oil" only Birol wouldn't have changed his mind at all.

To get an idea about the public's reaction just read the comments below the article. Most are like: "The pessimism of FEAR", "Complete Poppycock", "There is enough oil in the ground to last 1000s of years.", "Two newly-discovered oil fields in Iran", "Seek oil and ye shall find!" and "Please stop the crap"...
Even if some of these comments are launched by the oil (and car) industry's PR agencies this makes me fear that most people won't accept that PO is true before they see, hear and feel it themselves.

Above I wrote:
Don't be surprised if these news will be completely IGNORED and regarded as a typical summer slump story by other media as well as by the general public.

But this is not really true: Germany's largest (tabloid) newspaper Bild has a major story about it, including quite a good overview about the consequences of PO, referring to the Energy Watch Group.
I just hope that the (normally quite conservative) Bild won't forget this story as soon as the summer slump is over.

Maybe that a few German papers will pick up the subject now. But I am still very worried about the IEA's communication policy. If Birol continues to reveal the truth cautiously step by step he might save his face - but but with the same tactics he (unwillingly) will end up in boiling the frog (i.e. mankind): Humans have difficulties to notice slow changes - including slow changes in risk communication.
I don't think that Birol will ever be the right guy to wake up mankind with a shocking message.

Who will be the one to cast the first stone?

100 years ago we had no oil and horses. 100 years from now we will have no oil or horses. The transistion to the future will be a mess but we must look back to a time before oil. We may have some electrisity generated without fire but life will return to the past like it or not. The question is who will be left to enjoy it? Only those willing to be self efficient and able to fend off the environmental refugees. Government I'm afraid will be of little help. It insists on helping the greedy few.

If you live in the US, 33% of electricity is already "generated without fire", and very little oil is used to generate the other 67%.
Once we have transitioned to electric vehicles we will wonder how people managed, just like I think what it was like heating a home with coal, "you mean you had to go out and fill-up your car with smelly toxic gasoline every few days and pay oil companies $50 or $100 every fill-up" sounds as bad as getting up at night shoveling coal into the furnace, or using dangerous kerosene lamps for light- how primitive the 20th century must have been !

Why didn't they use all that sunshine and wind power?

Yes I believe gas shares fell quite a bit after Edison invented the light bulb. Electric cars could be just as big. We've seen these transitions before many times. It's really amazing that there are so many who think it's the end of the world.

Nissan's new EV unveiled yesterday:

Science trumps opinion. Electric cars are glorified golf carts. Why would someone want to fuel cars from our mountain tops, plug them in for 6 hours to go 30 miles? Oil fired cars have been around so long because all the other choices, electric, steam, hydrogen are not viable. We would all be beter served if we spent our time saving what oil we have and use "clean diesels" that already are over 100% more efficient then electric and cleaner than the global warming coal fired smoke stack.

"Why would someone want to fuel cars from our mountain tops, plug them in for 6 hours to go 30 miles?"

Well, most trips are less than 30 miles, most cars are parked 22 hours a day, so a 6 hour charge time is not a problem except for those who have driving insomnia. A glorified electric golf cart sounds better and smells better than a glorified ICE go-cart.

I thought we were talking about mountain top wind power rather than mountain top coal, I guess I am looking to the future and you are looking back at the past.

Diesel engines may be twice as efficient as gasoline engines, but they only have half the efficiency of electric motors. Electric motors can also recapture kinetic energy during braking, making the car's operation even more efficient. Also, the range and recharge in the article posted were 100 miles and 30 minutes. Gasoline vehicles still outperform electric in all but 1 category - cost per mile for fuel. This difference will increase as oil gets more expensive, and IMO will be the key factor in future purchase decisions. Coal is not the only source of electricity BTW. You also have fision, hydro, wind, CSP, PV, ethanol, natural gas, and at some point in time - fusion.

And global warming is so "last century" lol.

According to Cal Tech faculty-we won't see fusion in our lifetimes.

I believe electrics are the wave of the future,and whatever the range is ,we will learn to live with it.

There was an interesting BBC documentary a while back about fusion. Including predictions by several scientists working in the field. It's at the very end of the program.

Uhhh, I could sure use one of these 'glorified golf carts' to commute to and from work (~ 12 miles each way) in Albuquerque. I and others have no need to go more than ~303-5 mph down even the most mainline city streets. Even a 30MPH range with an over-night (and/or at-work) plug-in would allow me to commute and make side stops at the Wal-Mo, gym, Trader Joes, etc. Add mass-produced PV panels on our roof-tops and some batteries, and how does this not fill the bill for most city slickers? A nice, simple, light-weight EV to go to and fro around town. Add in a robust bus system (which ABQ has) and you are set. lighter, slower cars and some more bike paths = more biking...ABQ has great weather for both PV and bike riding. If you are wealthy enough to travel out of town, then you could occasionally rent a car, take a bus (think greyhound), or ride the Rail Runner (or whatever your local inter-city passenger train service is called). If you are wealthy enough, buy a hybrid for out-of-town trips. Even if you must use coal-fired trons, it is much more feasible to control emissions at a central plant than in thousands of diesel engines. Besides, ABQ gets some of its trons from Palo Verde in Phoenix. The science in my area favors EVs, solar PV, solar concentrating power, and wind power (East of the Sandias towards the TX border.

Oil still remains the only inexpensive portable fuel we have, and to consider using coal to charge car batteries is not logical at all. A car battery over its entire lifetime produces as much energy as 1/2 cup of gas. 100 million golf carts will turn Appalachia to a desert, only we wont find oil under it. Personal transportation and air travel will become too expensive. The government will control the supply of food, goods and mass transit with electric generation and diesel. Electricity produced without fire will run some things but certainly can't be expected to charge millions of car batteries. It's the transistion that will make the difference. Personal electric vehicles will shurly be the kiss of death if coal and oil are wasted charging batteries rather then powering vehicles directly.

Hello all!

I'm probably not well liked here, but I'd like to add something that I feel is missing from the whole "Life-After-the-Peak" discussion. I really find the two often brought up concepts amusing;

1) There was some sort of economic expansion between 1915 and 2005.

2) Folks need to start up new towns out in the rural farming areas for sustainable living.

The pinnacle of economic achievement as far as your standard farming village is concerned occurred in 1915, when the American farmer harvested 36 million acres of oats and 75 million acres of hay to feed horses. That huge market for ag production was 95% wiped out with the advent of widespread petro use.

Every year between 1915 and 2005 (except war years and the 1970's oil crunches) saw the following happen in farming villages; population fall, bankruptcy, economic decline, falling home values adjusted for inflation.

Why start new communities in farming areas when the old ones are already empty?

What so many consider a calamity, tiny towns in rural farming communities call a boon.

Look, a lot of silly folks moved to the worst place imaginable, cities. They decided to stack themselves on top of one another, crowding themselves and conjesting themselves so that no happiness could occur. Whole generations were grown to adulthood without learning to properly shoot, or to track. They never learned any skills. Like sheep, they became afraid to leave the heart of the pack.

I recently bought a house in a 22 person town in a farming area for $19,000. It would have brought $9,00 in 2005 when the these towns bottomed. The taxes on it are $50/year. Its tax assessed at $4,000. It has great insulation, new windows, new roof, new basement, and has a woodburner. New Bathroom, and all new carpets and kitchen. 2 acres of super soil, 20 feet to swell groundwater, a catfish-filled river nearby, and lots of trees nearby. I rent it out. (No sense living in a town that big when one owns 12,000 acres)

This town had a pop of 500 in 1915. It steadily faded until 2005.

The best part is, everyone will band together to fight off marauders when the collapse hits. The only fear is grain embargoes, land reform, and other gov't confiscation. This is why we all are continually building personal arsenals each and every month.

We have it made, the only issue will be protecting it from the crazy people.

Judging by the number of murders every day, I'd say that city slickers are quite a bit better at shooting people than you country folk. You all only do it by accident, lol.

What's really amusing is when you hear a few farmers talking about how they're going to fend of millions of well armed marauders from the city when society collapses. All I can say is good luck. Or don't worry about it because like the "Great Pumpkin", the collapse will never arrive.

Hi, highplainsfarmer! Good to hear from you again. Say, IIRC, some time ago, you made a comment to the effect that if you had to choose between using draft animals (and devoting some of your farm to pasture) and using some of your acreage to grow soybeans for biodiesel for your farm equipment, you would go the latter route. An article on that kind of tradeoff would probably interest a lot of us.

There are lots of small communities and many near ghost towns in North Dakota. I have taken adventure drives through many of them...I love the 'big sky' country (yea, it's Montana's moniker, but it applies to all these states such as WY, SD, ND, MN,etc).

The land has rich soil. As long as you can adapt to the rural, small town life, the wind, and the cold.

Absolutely no shortage of wind in the plains. No good reason farmsteads and small towns (big towns, for that matter) couldn't be (in a large fraction) powered by wind.

I have walked around many of these properties/lands. It is like being an amateur archeologist. I highly recommend this to any who get the opportunity. Well worth burning some dinosaurs (yea, yea, vegetable matter, I know...) Take seven people in your Honda Odyssey and the collective fuel mileage on the highway isn't too shabby. Recommend the Fall if you can swing it.

welcome back. I was thinking just the other day of a point you made in a thread long the effect that as FF rise in price that you and other ag users will still be able to outbid other users because you will still be able to add value and find customers- I'm paraphrasing obviously to capture the meaning i got from it- if you get an opportunity to elaborate on the theme sometime in the near future I'd appreciate it, I thought it was an interesting point.

"I recently bought a house in a 22 person ..This town had a pop of 500 in 1915. It steadily faded until 2005...The best part is, everyone will band together to fight off marauders when the collapse hits....This is why we all are continually building personal arsenals each and every month....We have it made, the only issue will be protecting it from the crazy people."

"Well," the Stranger replies, "it’s what people know about themselves inside that makes 'em afraid."

Yeah, all those crazy people went to the city leaving 22 sane, happy folks in a utopia obsessed with building up their personal arsenals.

For those of you with TVs:

Has anyone seen this show?

Is it entertaining? I imagine that everyone is playing to the camera, but it might give a little peek of insight into drilling ops?

Ok so the sleeping watch dog, the IEA, has gotten awake from its sleep by a kick on its stomach and saw the reality and started barking. Alas, the alert people are already awake and the B type materialistics do not want to awake. There are only two types of people, one who focus on fundamentals and the bulk and ignore the teritiaries, the noise, the fluctuations, they never lose grip of reality. The other type cherry pick the facts they want to see and live a life of dreams and rat race. The A type talk with reasons, figures and graphs; the B type get too bored too soon. The A type is objective and not let personal defects of the writers of theories hide the crust of theories from them; the B type is subjective and focus more on the writers' personal life than the writings.

So, its official that the end of fossil fuels especially oil is near. What is the fundamental thing we should be doing? Lets see what the fossil fuels are good for. They are not directly usable by humans, we can't eat or wear them, they are the food of machines and we are the users of machines. So, when fossil fuels go scarce so do machines and lots of work has to be done directly by ourselves. How should we be preparing? The main, strategic point in this is to prepare yourself, that is your mind, heart and very importantly your body. You may have to do a lot of manual work very soon and for the rest of your life. You may have to live without AC in summer and even without a fan, and without a heater in winter. Make your body hard enough now to sustain that in future. In years to come, when 95% of people around you would be having hard time getting adapted to the new realities you being tod reader should be already ready. You are already ready mentally if you are a regular reader of tod for more than 3 months but you should also be physically ready. You can't store all the food and water you need for the rest of your life, at time you may have to fight for it, at time you may have to search for it, at times you may have to find new ways to use existing resources so they last longer.

If you are of working age, that is, not retired, that is, not over 60 years of age and not extremely affected by a disease, you should quit taking a lift to upper floors right now, try stairs atleast for first ten floors. Learn to cook meals directly on fire even if it is a stove fire, instead of using any electronic device for it such as an oven. Try washing clothes by hand, mopping floors by hand and shaving by hand. Learn to read a map, know your city, understand how far you are from major resources such as river, canal, or stream for water, farm or city food ware house or an orchard, try to memorize the entire city map if you live in a medium or small city or a part of city if you are in a major city, so that you know which road to take if you have to walk all the way. Learn how to kill insects without using any insect-killer from market.

You not really have to learn jungle skills because some level of social organization would still be there but you should atleast know how to live in a low level of living. Since when you have wrote a 1000 letter writing by hand or added five random three digits numbers without using a calculator? Since when you have actually killed a bird or animal by your hand for eating? When was the last time you actually sew a cloth to wear?

Constructive critisism

I haven't had time to read through all of the posts on this topic but a clear picture is emmmmmmmerging, many are in agreement that oil is running out and when it does, we will no longer be in control of our immediate enviornment and things will most definately have to change, what we do and how we make those changes is simply down to the individual, If we reley on governments to do it for us we will all starve sooner or later.

We now have several generations that have largely never know a hard time, the glut of wealth and surplace that the wealthy used to gain their riches will eventually dry up too, leaving a huge gap where the middle class used to be, who themselves will be emalgamated with the rest of the lower classes, leaving only a small percentage of the very richest who have hidden away what many others have worked for next to nothing for.

This is why I say, start learning a new/old skills today that will help those in times of shortage, our nations are fast becomming a collection of office workers and managers siting at their computers, who are all vouching for position of the few remaining jobs, I like to call them the "Jobs for the boys".

Our real jobs for our own boys have slowly but surely been taken away from us and given to others in parts forein, who have also been working for nothing while the rest of us get something for nothing, IE The Dole in our own country and the poorest of workers abroad and bang goes another huge amount of the planets resorces in the process.

One place in the world who have already gone through their own end of oil scenario is Cuba, they are the very people who we should be looking for information for when it happens to us, many of the old skills were reintroduced in order of making ends met, oxen for ploughing, roof top gardens became the T***o's of their world, and working together is still the norm.

The acedemics wants us to be like them, but I like to do things my way, knowing the whole encyclopedia will not feed one self or their family, hopefully you don't have a large one, what I say is, do what ever your best at whatever it may be, and now is the time to learn a new skill for your tomorrow's.

As I have done over the years, we can get this information from the remaining old craftsmen before they expire, the modern way of doing things is a six month course and they call them trained, my Grandfather would turn in his grave if he saw boys learning how to bake a cake at school, industries were born by our men doing the hard work, with frugal wives at home keeping everything else together.

The "White Man's Burden" by "Rudyard Kipling" sums a lot of it up, if we are not preparing ourselves today for what may come to pass, neither God or any of his followers will be able to help you.

Our main problem won't be what kind of fuel we have for what car we drive to get to work, it will be food, food today which is forced along by ammonia and oil, food that costs today around 10 calories to get one calorie back, ever heard the saying that civilisation is only three meals away, then think back to the last fuel crisis and how much food was left on the supermarket shelves.

Weather we want to hear it or not, the world population is now far in excess of what she has to feed everyone with the aid of oil, for the sake of our young, less can most definately be more, are you listening Sir Alan and others like you, if they put their moneies where their mouths are, they sould foot the bill for training our school leavers.

Making people work for nothing and training a nation which has nothing whilst giving others something for nothing does not work for the long term, if we continue to grow we will become a victims of our own sucess and we will eventually loose the greater part of our population because of this.

As the oil really starts to dwindle there will be more and more wars throughout the world, and we will waste what is left of the black stuff fighting each other for it, and it will all end in tears.

For those who live in countries without any large energy sources, could be some of the safest places to live, Newzeland and many other islands where an oil based economy doesn't rule the daily lives would suffice, at the end of the day the day is coming, what we do in the mean time could make a difference, a diference that our government will not make happen without everyones help.