The Coming Oil Crisis
Posted by Gail the Actuary on August 18, 2009 - 10:15am
This is a guest post aimed at the person who is unaware of peak oil. Be sure to send links to your friends! It was written by Lionel Badal, Postgraduate Student, Department of Geography, King’s College London. He can be reached at blionel3 at yahoo dot fr
Oil is unique in that it is so strategic in nature… Energy is truly fundamental to the world’s economy. It is the basic, fundamental building block of the world’s economy. It is unlike any other commodity. -- Dick Cheney, 46th US Vice-President (speaking as the CEO of Halliburton in 1999)1
We almost certainly are at or near Peak Oil -- Al Gore, 45th US Vice-President, Nobel Peace Prize Laureate (June, 2004)2
Over the past decade a fierce debate has emerged amongst energy experts about whether global oil production was about to reach a peak, followed by an irreversible decline. This event, commonly known as “Peak Oil” far outreaches the sole discipline of geology. From transportation to modern agriculture, petrochemicals and even the pharmaceutical industry all of them rely on one commodity: cheap and abundant oil. In order to sustain the needs of an ever globalized world, oil demand should double by 2050.3 Nonetheless, geological limitations will disrupt this improbable scenario. In fact, a growing proportion of energy experts argue that Peak Oil is impending and warn about the extraordinary scale of the crisis.
42 years of oil left?
According to the 2009 BP Statistical Review, the world has precisely 42 years of oil left.4 Those numbers come from a very simple formula, the R/P ratio, which consists of dividing the official number of global oil reserves by the level of today’s production. Nevertheless, this methodology is dangerously defective on several key points as it ignores geological realities. Oil production does not consist of a plan level of production that brutally ends one day; it follows a bell-shaped curve.
Indeed, the important day occurs when production starts to decline, not when it ends. As it is a non-flexible commodity, even a small deficit in oil production can lead to a major price surge. Finally, the R/P ratio does not acknowledge that production costs increase over the time; the first oil fields to be developed were logically the easy ones and so the most profitable. It is well recognized that remaining oil fields consist of either poor quality oil or remotely located fields which need high technologies and expensive investments. Therefore, relying on the R/P ratio gives a false impression of security while the actual situation is critical.
Global oil reserves: lies and manipulations
Oil is a strategic resource; therefore having oil is a key political and economic advantage for a state. This is why politics interfere in the evaluation of oil reserves, especially in countries with poor accountability records; that is, the majority of OPEC countries. In fact, OPEC oil reserves dramatically increased during the 1980s and 1990s. However, they have not discovered major oil fields after the 1970s. At this juncture, the question of what lays behind these fluctuations needs to be asked.
The geologist Dr. Colin Campbell, founder of ASPO5, explains the hidden reasons that led to these changes: “In 1985, Kuwait, added 50% to its reserve. At that time, the OPEC quota was based on the reported reserves; the more you reported, the more you could produce”6. Fellow OPEC members who were unwilling to see the influence of Kuwait growing, simply raised their reserves soon after. Moreover, OPEC countries continue to present their reserves as flat despite having extracted huge amounts of oil during the past twenty years. At this point, we should not forget that oil reserves reported by these countries are not audited by independent experts.
In 2006, Petroleum Intelligence Weekly said it had access to confidential Kuwaiti reports which stated that reserves were half the official numbers7. In reaction, the Kuwaiti Oil Minister stated, “The Kuwait people are not concerned with numbers. This is related to national security”8. In 2006, Dr. Samsam Bakhtiari, a senior energy expert from the National Iranian Oil Company, declared that oil reserves in the Middle-East were “about half, or even less than what the respective national governments claim” and added “as for Iran, the usually accepted official 132 billion barrels is almost 100 billion barrels over any realistic assay”9.
In fact, importing countries are simply asked to trust OPEC nations. Strangely, but surely, this is done by importing countries who assume these numbers are true and use them in their projections. On a report to the US Congress on Peak Oil, the US Government Accountability Office justly noted these problematic estimations10.
The question of oil reserves is most relevant. As oil exporting countries have less oil in their ground, Peak Oil will arrive faster. Oil optimists who argue Peak Oil is still decades away rely on these same erroneous data. In addition, if importing countries assume oil reserves are abundant as they do, the crisis will be unexpected, unprepared and misunderstood; in one word: overwhelming. Similarly, once oil shortages occur, oil importing countries may assume that exporting countries are deliberately reducing their oil exports to harm their national interests. Such a flawed assumption from oil importing countries is likely to have serious repercussions, and eventually lead to new oil wars.
The imminent decline of global oil production
In 2008 the International Energy Agency (IEA) conducted for the first time11 a detailed field-by-field analysis of global oil production and its findings are bleak. Asked by a journalist on what the previous analysis relied on, the Chief-Economist of the IEA admitted, “It was mainly an assumption”12. In the 2008 World Energy Outlook (WEO), they have analysed about 800 fields, which account for ¾ of global reserves and more than 2/3 of global oil production13. They come to the conclusion that decline rates are far higher than previously thought, between 6.7 and 8.6% a year14. As result, they now estimate that to maintain the current levels of oil production by 2030 the world would need to develop and produce 45 MBD; as said by Dr. Birol, approximately four new Saudi-Arabias15.
Simultaneously, they have analysed all the projects that are financially sanctioned in all the countries in the world (about 230) up to 2015. As it takes five to ten years to produce oil from a new field, they have a clear image of the coming situation. When they add all the projects together (if all of them see the light of the day-–unlikely with the current credit crunch16--) they will bring about 25 millions barrels per day17. However, because of the important decline rates, the world will still be short of “at least” 12.5 MBD before 201518. Asked by a journalist if this means Peak Oil, Dr. Birol answered, “We are facing a serious threat”19.
In 2009, Merrill Lynch conducted a similar analysis and concluded that, “the world now needed to replace an amount of oil output equivalent to Saudi Arabia’s production every two years”20. Yet, oil production is already in an irreversible decline in at least 54 of the 65 most important producing countries and we nowadays consume three barrels of oil for a single one discovered21; an unsustainable situation. The latest annual report on geopolitical prospective from the US Joint Forces Command reached the stunning conclusion that:
“By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD… The implications for future conflict are ominous...”22
At this pace, global oil production could decline by 50% from its current level, as soon as 203023.
A contested reality: by whom and why?
For many years, Peak Oil was ignored by officials from oil companies and governmental agencies such as the IEA24. They negligently repeated that production was not at risk. However, over the recent years and in light of indisputable facts, we have seen a radical change in the discourse of the IEA25 and leading oil companies such as Chevron26 and Total27. In a recent video interview, Chevron’s Vice-Chairman, Peter Robertson, clearly expressed his fears:
“You know, it’s often times people will ask, ‘Why in the world would Chevron be encouraging its customers to use less energy?’ After all, we sell energy – that’s our product… In many ways, a lot of us are concerned about the ability of the world’s supply system to provide the energy that people need…”28
To the desolation of many, the debate has not been closed. Indeed, a few voices continue to sponsor, actively and loudly, the vision that oil production does not face any danger. Amongst them, we find three notorious voices, namely the CERA oil consultant, the OPEC cartel and not surprisingly in regard to its notorious poor record of scientific objectivity, the oil company, Exxon Mobil. At this juncture, we can picture the hidden motives for Exxon Mobil to do so. By telling the public that oil production will no longer be plentiful, the consequences for the company are numerous. They include the danger of diversification from oil and creating a context of mistrust regarding oil companies; all of them bad for short-term business.
Regarding the OPEC, we saw earlier how prone they were to manipulate their reserves. We should know by now not to expect much from official OPEC statements.
The following comment from Dr. Chalabi, the former OPEC Secretary-General, gives additional information about how the cartel really works:
“OPEC countries do not care about what might happen 20 years from now. They care about what they get today. Because these are politicians, they want more money, to spend rationally or not.”29
Furthermore, Dr. Sadad al-Huseini, former Head of Exploration and Production at the Saudi-Aramco, publicly contradicted his former bosses, by declaring that, “oil is likely to peak at a 95 MBD plateau by 2015”30. Besides, Dr. Shokri Ghanem, former Head of the Research Division at OPEC's Secretariat, head of the Libyan National Oil Company and a relative of OPEC’s current Secretary General, admitted in a 2006 report published by the OPEC Secretariat:
“All in all, most would appear to agree that peak oil output is not very far away for all of us. It could take place sometime within the next decade or so, which in fact means that there is not much time left for a world economy to be driven largely by oil.”31
The Cambridge Energy Research Associates is a well-known energy consultant group and a leading opponent to Peak Oil32. Yet, CERA has been accused of providing a biased vision of the situation as it is “close to the oil industry”33. The following declaration from Chris Holtom, former head of British military intelligence, currently a strategic consultant to the oil and gas industry, gives valuable information:
“There is a pack of deceit and economy with the truth here - some wilful, some born of ignorance, or fear of "group-think" related to stock price or employment. It needs careful and persuasive exposure of agendas, motives and possible consequences... Peak Oil is a potential Black Swan event, where the consequences are so great that after it we spend most of our time justifying why we didn’t anticipate it… It is a global issue and global bodies need the clout and courage to address them.”34
Any viable alternative energy?
There is no easy, present, solution to the crisis. Alternatives to oil are still far from being a feasible replacement; hydrogen for example would require 30 to 50 years to replace oil economies35. Meanwhile, the automobile industry is now planning to develop electric cars in the near future. While the first electric cars are expected to come on line in 2010-12, in order to replace 50% of the car fleet, the world would need between 10 to 20 years36. Besides, as manufacturing a single car requires at least 20 barrels of oil37. Once oil production starts to decline in 2011-201338, it will increasingly become difficult to develop the electric car on a massive scale.
In fact, the closer we get to Peak Oil, the more difficult a massive and costly emergency plan to develop alternative energies will become. To quote a report on Peak Oil, commissioned by the US Department of Energy, “Previous energy transitions (wood to coal, coal to oil, etc.) were gradual and evolutionary; oil peaking will be abrupt and revolutionary”39.
David Fridley, a scientist at the Lawrence Berkeley National Laboratory and a former colleague of the US Secretary of Energy, Steven Chu, told me the following:
“My own efforts have focused on the science of alternative energy. The deeper you go into this area, the less sanguine you become that there is any effective mitigation possible… The bottom line is that there is no thermodynamic match for petroleum.”40
Industrial Civilisation at a turning point
In the following declaration, Dr. Jeremy Leggett, former member of the UK Government Renewables advisory board and one of "the key players in putting climate change on the world agenda" according to Time Magazine41, described in 2006 how the crisis could unfold:
"The price of houses will collapse. Stock markets will crash. Within a short period, human wealth -- little more than a pile of paper at the best of times, even with the confidence about the future high among traders -- will shrivel. There will be emergency summits, diplomatic initiatives, urgent exploration efforts, but the turmoil will not subside. Thousands of companies will go bankrupt, and millions will be unemployed… The earth has always been a dangerous place, but now it will become a tinderbox."42
World leaders are debating on how we should manage the current economic crisis that none of them saw coming, but they shouldn’t be surprised by it. In a 2006 interview, Dr. Colin Campbell effectively forecasted the 2008 oil spike, which was to be followed by a recession and a subsequent fall in oil prices--a scenario that unfolded exactly as he said:
“I think we are facing an oil price shock, 100 or 200 dollars a barrel, an economic recession that cuts demand, and I will not be at all surprised if a fall in demand would make the price collapse again. So we might be back to 20 or 30 dollars a barrel next year perhaps. And so you have a price shock, a recession, a recovery, hits again the falling capacity limit, another price shock. And so I think that in the next few years, we have a sequence of vicious circles and gradually the reality of the situation will filtered through. We are on for a very volatile few years with enormous economic consequences”43
In fact, a former director at the IEA, who used to be the superior of Dr. Fatih Birol, told me during a discussion that, “The current (economic) crisis was caused by the insufficiency of (oil) supply from 2007 onwards, an avatar of Peak Oil”44. Similarly, a recent study on the 2008 oil shock45, from the economist Dr. James Hamilton –Brookings Institution- concludes that:
“The evidence to me is persuasive that, had there been no oil shock, we would have described the U.S. economy in 2007:Q4-2008:Q3 as growing slowly, but not in a recession.”46
This extract from the Energy Watch Group study on oil production provides useful additional information:
“The world is at the beginning of a structural change of its economic system. This change will be triggered by declining fossil fuel supplies and will influence almost all aspects of our daily life... The now beginning transition period probably has its own rules which are valid only during this phase. Things might happen which we never experienced before and which we may never experience again once this transition period has ended.”47
We are entering a new world with completely different characteristics from the one we have been growing with, the one where boundaries were crossable. It will be an unattractive world of “less far, less fast, less often, and more expensive”48; a radical and unexpected evolution. The transitory period we are entering now will be, to be sure, chaotic and fierce. While we don’t know cannot foretell its form completely, it might best be described as a regression.
“The end-of-the-fossil-hydrocarbons scenario is not a doom-and-gloom picture painted by pessimistic end-of-the-world prophets, but a view of scarcity in the coming years and decades that must be taken seriously.” Deutsche Bank (December, 2004)49
Notes
1Dick Cheney, “Speech at the British Institute of Petroleum”, (Institute of Petroleum, Autumn 1999), http://web.archive.org/web/20000414054656/http://www.petroleum.co.uk/spe...
2Al Gore, “CNN Larry King Live”, (CNN, 13 June 2006), http://transcripts.cnn.com/TRANSCRIPTS/0606/13/lkl.01.html
3Marvin Odum as quoted in NPR, "Shell Sees Global Oil Demand Doubling By 2050", (NPR, 27 February 2009), http://www.npr.org/templates/story/story.php?storyId=101234110&ft=1&f=1025
4British Petroleum, “2009 Statistical Review: Oil Reserves Table”, http://www.bp.com/productlanding.do?categoryId=6929&contentId=7044622
5Association for the Study of Peak Oil and Gas, http://www.peakoil.net/
6Colin Campbell, “A Crude Awakening: The Oil Crash”, (Lava Production, 2006), http://www.oilcrashmovie.com/film.html
7Petroleum Intelligence Weekly, “Oil Reserves Accounting: The Case of Kuwait”, (Energy Intelligence, 30 January 2006), http://www.energyintel.com/DocumentDetail.asp?document_id=167229
8Arab Times, “Kuwait oil reserves secret for national security; Shuwayib acting head of KPC”, (Arab Times, 13 May 2007), Web Edition No:12881, http://www.arabtimesonline.com/arabtimes/kuwait/Viewdet.asp?ID=10301&cat=a
9MoneyWeek, "Why we must take Peak Oil seriously", (MoneyWeek, 13 September 2006), http://www.moneyweek.com/investments/commodities/why-we-must-take-peak-o...
10GAO, “Crude Oil: Uncertainty about Future Oil Supply Makes it Important to Develop a Strategy for Addressing a Peak and Decline in Oil Production”, (US Government Accountability Office, Report to Congressional Requesters, February 2007), http://www.gao.gov/new.items/d07283.pdf
11George Monbiot, "When will the oil run out?" (The Guardian, 15 December 2008), http://www.guardian.co.uk/business/2008/dec/15/oil-peak-energy-iea
12Ibid
13Olivier Rech interviewed by the author, (Paris: IEA HQ, 18 December 2008).
14John Kemp, "Oil industry running faster just to keep up?: John Kemp", (Reuters, 19 November 2008), http://www.reuters.com/article/reutersComService4/idUSTRE4AI3TP20081119
15The Times, "World needs four new Saudi Arabias, warns IEA", (Times Online, 12 November 2008), http://business.timesonline.co.uk/tol/business/industry_sectors/natural_...
16Spencer Swartz, "OPEC Nations Delay Drilling Projects", (The Wall Street Journal, 10 February 2009), http://online.wsj.com/article/SB123421390528464971.html
17Fatih Birol interviewed by Andrew Evans, "Fatih Birol of the IEA talks the talk about peak oil", (Aceditor, January 2008), http://www.youtube.com/watch?v=BhXZzNaVLJw&feature=channel_page
18Ibid
19Ibid
20Tom Arnold, "Oil output could fall by 30m bpd by 2015 - Merrill", (Arabian Business, 4 February 2009), http://www.arabianbusiness.com/545723-oil-output-could-fall-by-30m-bpd-b...
21Royal Swedish Academy of Sciences, “Statements on Oil by the Energy Committee”, (KVA, 14 October 2005), http://www.kva.se/KVA_Root/publications/committees/energy_statements1.pdf
22USJFCOM, "Joint Operating Environment 2008", (Joint Forces Command, November 2008), page 17 and 19, http://www.jfcom.mil/newslink/storyarchive/2008/JOE2008.pdf
23Energy Watch Group, "Crude Oil - The Supply Outlook", (EWG, February 2008), http://www.energywatchgroup.org/fileadmin/global/pdf/2008-02_EWG_Oil_Rep...
24George Monbiot, "When will the oil run out?" (The Guardian, 15 December 2008), http://www.guardian.co.uk/business/2008/dec/15/oil-peak-energy-iea
25Javier Blas and Carola Hoyos, “Oil price to bounce back with recovery, IEA warns”, (Financial Times, 6 November 2008).
26David J. O'Reilly, “CEO, Chevron in their Real Issues Ad”, (Chevron Corporation, 12 July 2005), http://www.chevron.com/documents/pdf/realissuesadtrillionbarrels.pdf
27Carola Hoyos, "Falling oil poses threat to supplies", (Financial Times, 22 October 2008), http://www.ft.com/cms/s/0/a632bf5a-a05b-11dd-80a0-000077b07658.html
28Peter Robertson, "How Chevron Makes the Most of the Energy We Have", (Chevron, April 2009), http://www.willyoujoinus.com/assets/downloads/media/Chevron_Becoming%20M...
29Fadhil Chalabi, “A Crude Awakening: The Oil Crash”, (Lava Production, 2006), http://www.oilcrashmovie.com/film.html
30Sadad al Husseini interviewed by Steve Andrews, "Sadad al Husseini sees peak in 2015", (ASPO USA , 14 September 2005), http://www.energybulletin.net/node/9498
31Shokri Ghanem interviewed in the “OPEC Bulletin”, (OPEC, 11-12 2006), p. 60 to 63, http://www.opec.org/library/OPEC%20Bulletin/2006/OB11122006.htm
32CERA Press Release, "Peak Oil Theory – “World Running Out of Oil Soon” – Is Faulty; Could Distort Policy & Energy Debate", (CERA, 14 November 2006), http://www.cera.com/aspx/cda/public1/news/pressReleases/pressReleaseDeta...
33Energy Watch Group, "Peak Oil could trigger meltdown of society", (Press release, 22 October 2007) http://www.energywatchgroup.org/fileadmin/global/pdf/EWG_Press_Oilreport...
34Email discussion with the author, 14 May 2009.
35US National Academy of Engineering, “The Hydrogen Economy: Opportunities, Costs, Barriers, and R&D Needs”, (The National Academy Press, 2004).
36R. Hirsch, R. Bezdek and R. Wendling, “Peaking of World Oil Production: Impacts, Mitigation, & Risk Management”, (US Department of Energy, February 2005). http://www.netl.doe.gov/publications/others/pdf/oil_peaking_netl.pdf
37Belfast Telegraph, "Scientists warn that oil supplies will start to run in four years' time", http://www.belfasttelegraph.co.uk/news/world-news/scientists-warn-that-o...
38Industry Taskforce on Peak Oil & Energy Security, “The Oil Crunch Press Release”, 29 October 2008, http://peakoil.solarcentury.com/?page_id=13
39R. Hirsch, R. Bezdek and R. Wendling, “Peaking of World Oil Production: Impacts, Mitigation, & Risk Management”, (US Department of Energy, February 2005), p. 64. http://www.netl.doe.gov/publications/others/pdf/oil_peaking_netl.pdf
40Email discussion with the author, 11 July 2009
41Jonathon Gatehouse, "When the oil runs out", (Macleans, 9 February 2006), http://www.macleans.ca/article.jsp?content=20060213_121197_121197
42Ibid
43Dr. Colin Campbell as interviewed by Jonathan Holmes, "Peak Oil?", (ABC, 10 July 2006), http://www.abc.net.au/4corners/special_eds/20060710/default_full.htm
44Email discussion with the author (under the Chatham House Rule), 30 April 2009.
45James Hamilton, “Causes and Consequences of the Oil Shock of 2007-08”, (Brookings Institution, 23 March 2009), http://www.brookings.edu/economics/bpea/~/media/Files/Programs/ES/BPEA/2...
46Ibid, p. 40.
47Energy Watch Group, “Crude Oil the Supply Outlook“, (EWG, October 2007), p. 70, http://www.energywatchgroup.org/fileadmin/global/pdf/EWG_Oilreport_10-20...
48Yves Cochet, "Pétrole Apocalypse", (Fayard, 1 Septembre 2005).
49Deutsche Bank, “Energy Prospects after the Petroleum Age“, (DB: 2 December 2004), page. 10, http://www.dbresearch.de/PROD/DBR_INTERNET_DE-PROD/PROD0000000000181487.PDF
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Many thanks to Lionel Badal for sending us this! It is good to have a summary that brings a lot of quotes together in one place. Since Lionel is from Europe, he also has different perspectives.
And many thanks to you Gail for getting this onto TOD! Well done.
I'd also vote for a link to Thom Hartmann's new book: "Threshold" for those new to PO. It's Peak Oil AND runaway global warming AND economic meltdown AND population overflow. Quote from preface:
Somebody needs to create a website that shows the current (declining) reserves of countries that are lying (Saudi Arabia) on a real time basis. AS in the web sites that display the U.S. deficit in real time. Click click click....... Like a countdown clock.
Maybe that would pressure them to be honest for a change.
How do you get the input numbers for the decline-o-meter??
We need a body similar to the IPCC to cover oil production and/or energy. Government sponsored multi-national, large body of experts. Even then, as with the IPCC, you will have your deniers, but it would be a good start.
Simple math.
If you state reserves, the amount you have left, but continuously pump oil out of the ground, the reserves should DECLINE by the amount you pump out on a daily basis. Geological and mathematical FACT.
But - the Saudis have not updated their reserves since the mid 80's. That , in and of itself, is being dishonest to the world about your reserves.
That is my point. The arabs won't let anyone see under their skirts.
You don't need to. If they post a number for "Reserves" it SHOULD go down with every barrel that is extracted. The middle eastern players are not playing fair - they have not budged their stated reserves in 20 years.
You only need to know that they have a certain amount under the ground and that the number decreases based on production. Anything else is fraud and, in a world market, a factor that plays right into THEIR hands. If we had data transparency we could maybe figure out a way around the coming oil shock.
Excellent overview. Nice to have the key information in one concise article.
Reference 45 is by James Hamilton not John Hamilton.
I fixed reference 45. Thanks!
This is a terrific summary of the talking points on peak oil.
My sense is that peak oil is gathering momentum as a salient issue (if not the salient issue) of the next few years. It has been slow to gain acceptance because its consequences are tough to contemplate, but at the same time very little news out of OPEC, ExxonMobil, et al has been put forth to counter it. A bit of talk/cheerleading about spare capacity, subsea reserves, etc. but the facts on the ground don't match up. Reality will overtake the rhetoric of the supply optimists, perhaps very soon.
I think pretty much everyone in the oil industry is aware of the issue. A couple of years ago, the National Petroleum Council (representing most of the industry) put out a report, talking about how tight supply is and mentioning peak oil: Facing Hard Truths about Energy.
A big part of the problem is the Government and the EIA's stand on the issue. As long as they say there is no problem, it is difficult for an individual company (or the American Petroleum Institute) to say very much.
Thanks Gail (and everyone for your comments)
I agree with you. As long as the IEA and the EIA do not speak clearly about the problem, nothing will move. It won’t change anything about Peak Oil but at least the people will become (more) aware about it. In November 2008, I contacted Fatih Birol (Chief-Economist of the IEA) and I was able to meet one of his "senior colleagues", and he clearly recognised the reality and seriousness of Peak Oil...
I also sent my dissertation (this article is based on) to a senior official (one of the key directors..) at the EIA and in his answer, he admitted we may well be at global Peak Oil... I'm in contact with a journalist on that, and hopefully it will be published in the coming weeks/months. I'll let you know of course.
Originally this article is a summary of my dissertation, Corinne Lepage, a French MEP (Member of the European Parliament) asked me to send her. So it’s a short introduction to a very complex subject, but my objective was to be as convincing as possible.
Lionel
Steve,
This is as you say a "terrific summary".The thing that has me laughing the laughter of the condemned is that all the media supposedly so good at telling us what's going on and obviously good at finding the dirt on thier opponents have not even looked at this for the most part.
It will eventually catch the world mostly by suprise and the media will not be held to account at all,they will manage to excuse themselves as victims of bad information-professional investigatiors duped like the public.
"Against stupidity the God's themselves contend in vain."
But of course the msm have to dance on top of the fence between credibility and thier owners/advertisers.
Your guess is as good as mine, but I think the MSM will suddenly run with it as if it was a 'big scoop' and it will go something along the lines of: 'Forget climate change! Something even worse is afoot!'.
Then, to stoke the cycle, we'll have Peak Oil Backlash. 'While it may be surprising to many, the inevitability of resource decline is far from settled ...'
I can see that as being the main problem. When you look at how simple climate change is, yet climate change deniers get so much media time.
Peak Oil is a much more complex issue to explain. People do not understand what energy is, they do not understand thermodynamics. When they are being told there is not enough oil to go around because we have hit the half-way mark, you can see all the nonsense that will be raised, which the governments will use to procrastinate, just as they use the climate change deniers today to procrastinate on CO2 reduction.
We don't have enough time now, and we certainly have no time for procrastination.
Steve,
I'm sure you are right-but imo they will wait until they very last minute,and it will by then too late to have any serious public discussion.
Whatever gets done will be done in panic mode and w/o transparency,ala TARP,ETC.
"the media ... have not even looked at this for the most part."
- There's a (large!!) element of "A fish cannot see the water in which it swims" here, IMHO. The "water" being the near-universal cultural myth that "we are Man, made in God(s)'s image; it is our inevitable destiny to become as Gods."
Hi gregvp,
If you can get 85% of the US citizens to believe that they will go to "heaven" after they die and be united with "family and loved ones" and spend their time gazing "down" on living family....etc. - then I guess you can count on the average person to believe almost any kind of irrational nonsense.
If we want to have new government regulations to "fix" our problems, then I have a modest suggestion: life imprisonment for any parent that indoctrinates thier childen with religious teachings (and maybe a good horse whipping before being jailed).
There is only one god the universe and science is his prophet.
Religion based on rational thought would be the ideal solution.
Amen
You can use that mantra but you have to quote me!!! LOL
It all comes down to what we teach our children as you point out.
PO denial based on rational thought would be even a better solution, except for AGW
If You are right then what has your mockery gained you? If you are wrong then what has it cost you? If you can look in the mirror and see a freak accident of an unknown origin then so be it. I can not. Atheism is a religion. It requires much more faith than I have.
Pascal's wager
The other position you allude to is the teleological argument (watchmaker analogy) by William Paley.
Yours is the most well worn of the arguments for faith.
Also, I don't think that you can draw the conclusion that the poster is an Atheist only that he is criticizing the popular organized religions as out-dated and characterized by myth and parables.
Very few would condem the morality of most religions (in their original form) but in the current incarnations that morality has been obscured or distorted.
The only durable long lasting understandings that we have apprehended have come from a thoroughgoing investigation of nature otherwise known as science and I think that a greater understanding of anything called faith will also follow.
I see no reason that science and faith should be inconsistent and in fact they should be complimentary.
Maybe I missed it, but I think any intro to this topic should include the history of discovery numbers and graphs. We all have to admit that we can't know for sure what is under the Saudi sands, but we can clearly show that new large discoveries of easily recoverable oil are not being made and haven't been for some time. The match up with US discovery history and peak oil date is quite convincing.
Perhaps this is for graphics-challenged readers. One of the issues on any summary is keeping the length reasonable. I haven't seen such a good list of quotes together. Maybe one needs a multi-part analysis.
There's a lot of people on this side of the pond who will see the name "Al Gore" and stop right there.
Yes indeed, wisco. Sadly, those blinded by irrational hate, lead by their noses by their handlers to never deviate from the script laid down for them by their party (either party, mind you, though the repugs seem more often to stay in lock-goose-step, limbaughtomized, ditto-headed conformity than the un-herdable-cat-like dems.), will often miss important information.
Perhaps it's time to give up even trying to reach such a totally blinkered segment of the population?
Get a load of this guy, speaking of "irrational hate" and going on to refer to the GOP as "repugs." You gotta love clowns like this who can't imagine that those who differ with him aren't capable of original thought - 'repugs' who've been "limbaughtomized."
As for climate change, why is it no longer 'global warming'? Because we've been cooling for almost a decade now as CO2 levels are at their apex! Don't look now but 'climate change' comes in dead last among the top 20 twenty concerns of America citizens. This is sort of an 'ask the audience' type of thing. Folks aren't stupid.
But, you say, the very real threat of peak oil isn't among the concerns either? Well, we haven't been force fed peak oil info by the media like they've been screaming about global warming for 15-20 years.
Wanna another idea about why we warm & cool over the ages? That big ball of fire up in the sky that can burn your skin.
JJM
Yes, and there's also a lot of people who will see the Dick Cheney quote and have the same reaction, even conservatives. I suspect that Cheney is considerably less popular than Gore, though I haven't seen a poll. A critical problem in an essay like this is establishing initial credibility. Quotes from well-known people are a good approach. But if they are themselves hot-button people, that can create a problem. It depends on your audience, and it may not be possible to have a single article that appeals to everyone in this way.
Maybe we should have two versions of the article: one adorned with quotes from Cheney, Roscoe Bartlett, and Matt Simmons, and the other with quotes from Al Gore and whoever else on the left that is aware of peak oil. Just a thought.
"Maybe we should have two versions of the article: one adorned with quotes from Cheney, Roscoe Bartlett, and Matt Simmons, and the other with quotes from Al Gore and whoever else on the left that is aware of peak oil. Just a thought."
Nice idea. And the religious right may need their own spin all to themselves.
I did something like this when I taught a class focused on this subject. I asked questions early on that would help me identify the interests and ideologies of the students. Then I placed those who seemed conservative and interested in finance...in the group that read Matt Simmons. The other conservatives I gave Kunstler. The liberals with particular interests in history or anthropology I assigned Diamond. The other liberals got Heinberg. Mostly it worked quite well. Some students from the class have gone on to devote their lives to energy issues (not that I was the sole influence, of course).
One guy in the Simmons group was sure that Matt was just in it to make money on the book. I assured him that authors with that level of distribution do not get rich. When I made it clear that he was free, of course, to be (coherently) criticize this or any source in the course, he got a bit more engaged in the class and wrote some interesting speculation that Simmons may have been partly trying to manipulate the market.
Hi Keith,
I've read Al Gore's book and watched his video. I guess I could find a couple of personality traits that annoy me, but I his technical argument for GW seems highly crediable. As far as I can tell, all the people who hate Al Gore have zero credibility from a scientific perspective.
From my POV, people who dismiss Al Gore as just a person with a "leftist agenda" are simply ignorant and not worth trying to convince of anything that is rational.
I agree, and part of me is tired of the endless quest for consensus with people unwilling to deal with reality.
On the other hand, there are probably at least some ignorant people who can be convinced. If I was ignorant, and the lead-off quote was from Dick Cheney, I'd be more than happy to dismiss it as oil-industry propaganda if I didn't read down a paragraph or two.
Part of the problem with the spread of peak oil ideas is that it's hard initially to place on the left-right spectrum. People on the left, and the right, tend to warm to arguments that echo things they are already familiar with. If you preface your peak oil talk with comments about debt, twisted government statistics, and inflation, they may think you're conservative. If you preface it with comments about the environment and corporate irresponsibility, they may think you're liberal.
Because peak oil is hard to "locate" ideologically, people already aligned one way or the other -- who are the most active politically to begin with -- treat it suspiciously. But on the plus side, further down the road this may make peak oil easier to deal with once we have reached a threshold of credibility.
Keith
Dave,
There are quite a lot of people like me who DETEST Gore personally but admit that he has his energy ducks pretty much in a row.Privately of course.I have commented here that we would have been better off with him in the Oval Office.
The conservatives who understand are mostly keeping thier mouth shut as they are not much interested in debateing the current long running little military dog and pony show in public on the real grounds,which they understand very well.
And I have yet to have a conservation with a liberal friend who is both savvy to the world and willing to say how much oil would cost if we WEREN'T willing to kick Saddam's butt,and keep men on the ground over there.It's obviuos to me that they believe the only answer they could give is one so high that it would mean we would have been destitute long ago,and that they are not willing to say so.
And while it is true that if we had ramped up renewables and conservation sooner that we would be in much better shape now,when the liberals have had the opportunity to do so they have been busy with other things.When Bill and Hillary owned the hill,they could have done something.
The liberals get one hell of a lot of political mileage out of bashing the conservatives on energy,but given the opportunity once again to get some real economy out of automobiles,they patched up Govt Motors so that they can keep building five or ten oversize pickups for each one that some farmer or tradesman needs.
They could have gotten at least five times the bang out of the clunker dollars,which might have made c4c a good deal for every body if c4c had been intended to conserve fuel as well as stimulate the economy-which won't work in the end because all that it accomplishes really is to increase sales now at the expense of future sales over the next year or two..The mileage fig leaf is not really anywhere near big enough to hide the bankers/dealers/manufacturers collective banana,but now we know at least that the liberals love the thier big biz sugar daddies at least as vehemenently as the conservatives,who are now out in the cold,ever did.
If you ever decide to get into my part of the world,please say so,we can drink some homemade cider,hard or soft, and eat some home grown ribs.The Blue Ridge Parkway is a superb scenic ride well suited to recreational riders on vacation.
And as to the percentage who believe in heaven and hell-having lived in intimate contact with the worst of them-I can say that not very many act like they believe any such thing.People rarely say what they actually think when questioned about such things.They give the answer that seems most expedient.Knowing that "every body else" believes in Jesus,the safe answer is to believe,when interviewed.And if questioned,then you redouble your faith,because you just don't reverse yourself on such basic questions.
Personally I believe pot should be sold at liquor stores,but I will always be a law and order guy if I'm interviewing for a job.
if we WEREN'T willing to kick Saddam's butt
hmm. Are you talking about Gulf War I or II? I'm not quite sure what your point is - I don't think "liberals" were objecting to GWI. GWII, on the other hand...how did it keep oil prices low?
while it is true that if we had ramped up renewables and conservation sooner that we would be in much better shape now,when the liberals have had the opportunity to do so they have been busy with other things.
What about Jimmy Carter?
When Bill and Hillary owned the hill,they could have done something.
1) not so much. They only owned the hill for the 1st two years, and the car and oil industries fought back pretty hard. They did get the PNGV program going, which was an enormous accomplishment.
The liberals get one hell of a lot of political mileage out of bashing the conservatives on energy,but given the opportunity once again to get some real economy out of automobiles,they patched up Govt Motors so that they can keep building five or ten oversize pickups for each one that some farmer or tradesman needs.
What do you think of the new CAFE requirements, the Volt, and the climate change bill now pending?
They could have gotten at least five times the bang out of the clunker dollars
Not really. The European program which was the model didn't have any efficiency requirements. The clunker program was primarily a stimulus, not an efficiency program, and as it was it got a lot of criticism for the efficiency requirements making it too narrow.
Hi Mac,
Might take you up on that some day - is that Blue Ridge Parkway the one near Roanoke, VA?
Keep in mind that I once saw a bumper sticker that I liked - it read: "I Think, Therefore I am a liberal".
Actually, I don't much care for labels as there are probably 10 or 20 of them that would partially fit my inclinations - and none that I would really identify with.
There is a saying in France that 95% of the (ethnic) French are christians and 5% go to church. I wish that were more the case here. Your point about polling is well taken, but around here there seems to be more churches than pubs - and these folks are dead serious about bible stuff. Many of them dismiss any issues of GW, PO, etc as irrelevant because the "end of times", "Tribulation", "rapture" and all that stuff will happen long before these environmental issues.
Please send me an email sometime - address in my profile.
I think it depends on the audience. For me as an engineer, I like the graphs etc as you say, but just reading this article will have someone like me looking for more, and there is plenty on the internet, particularly this site.
For others I know, I think the focus on the consequences ( which I think this is ) is good, it wakes them up, gets to the point.
It depends on who you are trying to convince and what it will take.
Peak Oil is a complex issue, to us on this site regularly, it is now easy to understand. I spend my days trying to introduce peak oil to engineers, and they have trouble grasping it.
I think this is a great introduction for a great many people.
It seems like the biggest factor in getting across the idea of Peak oil to people and their governments, is a realistic understanding of oil reserves in the Middle East. Yet those countries will not allow 3rd party assessments, so we are stuck with those that presume those numbers to be accurate vs. the peak oilers that insist they are overblown. The consequences to the world economy will be distinctly different depending on which scenario is accurate.
Could a strong enough international effort be made, say through a UN resolution, to diplomatically convince the ME oil producing countries to allow a team to come in and make an assessment of their reserves?
Reserves to me are becoming less and less meaningful--whether in oil or gas or uranium or coal. At a high enough price, and with a large enough amount of complementary resources (natural gas for heavy oil; water; diesel for most others), it is likely that we could extract a fairly large amount of all of these resources, over say the next 1,000 years. In doing all of this, a huge amount of investment $ and of complementary resources would be required.
The question is more what we can extract in a given one-year time period, given other resources available, and investment that society can afford. This may be much smaller than people expect--far lower than what current reserves suggest is available. Adding wind, solar PV. and biofuels investments may in fact make availability of fossil fuels and uranium lower, if they use resources ($, complementary resources) that might be needed by fossil fuel and uranium investments.
To some extent, the problem is falling EROEI. We are rapidly hitting a point where are return is too low to keep society going.
This is a concept that continues to tingle my spidey senses. The problem I'm having is that the reciprocal to this statement is that the money itself would simply contain less energy.
It's my own hare-brained model that money is made up of energy, raw materials, time and ideas. The accumulation of ideas has both been able to allow for the increase in the release of fossil fuel energy (up to 2005, at least), and has allowed for more efficient use of time, raw materials and energy. Peak oil -- as a proxy for fossil fuel energy production -- manifests as a kind of molecular change in the makeup of money itself.
I'd sleep better if someone with a background in economics could point out the flaw in my model.
P.S. There was an article last week predicting through some form of wave analysis that oil would drip to $10 - which is kind of like saying that the dollar bill here in my hand would suddenly have ~7x the energy content that it has today -- that's clearly absurd in the post peak era.
That's a pre-Peak perspective.
NPC reports that in the next 25 years 1 trillion barrels of oil will be used, more than all the oil consumed in the previous 200 years.
http://www.eia.doe.gov/conference/2009/session1/Greene.pdf
Watch those reserves carefully.
Unconventional oil is being developed extremely slowly due to
a lack of commitment.
A thousand years?
The export market for oil will implode in 20 years. Gas will remain tied up to gas producers and their pipeline fed dependents and coal is the exclusive province of six countries who will end up consuming the world's reserves which they own most of.
Uranium is too expensive and dangerous for world energy and fast breeders just don't work.
EROEI is not a significant factor.
This is going to be Wile E. Coyote going splat.
http://en.wikipedia.org/wiki/Wile_E._Coyote_and_Road_Runner
The export market for oil will implode in 20 years.
That would be a good thing for the US - the main problem oil causes for the US is the imports. The US has been frittering away it's wealth importing oil, and fighting oil wars to protect it's access to those imports (and protecting Cheney's livelihood).
It could run pretty well on domestic oil (even if domestic oil didn't grow much). We'd all have to carpool. The horror.
I just have to take exception to this comment just tossed out:
How can Uranium be too expensive when the cost of Uranium to generate electricity is approximately 0.5 cents / kwh in a horribly inefficient once-through fuel cycle?
If fast breeders don't work, then I guess the American Nuclear Society didn't get the memo and they should retract their Position Statement on fast reactors. What do nuclear engineers and physicists know, especially when they are all just shills for the industry. And the Russians, who have been successfully running a fast reactor (BN-600) continuously since 1980, also didn't get that memo.
Fission releases approximately 200 MeV per atom, and oxidation of one carbon atom releases just a few eV of energy. Per atom, the ratio of fission:combustion energy release is 40-50 MILLION TO ONE. Fast spectrum reactors and thermal thorium -> U233 breeders can fully tap into that millions-to-one energy density superiority. That kind of energy profit will be essential to tap into when confronted with energy decline at the same time as the need to re-engineer our energy systems to a non-carbon source. There are no other sources of energy that are remotely in the same class as this. To dismiss it on the basis of whatever myths would be the height of folly given the nature of the crisis that is approaching.
A decade or more? We've been trying to get the technology right for 50 years!
BTW, where is the cooperative international effort to build a fast breeder demonstration unit, huh?
Wake up from your nuclear cornucopian pipedream!
Nobody thinks it's going to work.
What is it about fast spectrum reactors or thermal breeders that makes them impossible to work? Can you reference anyone with a scrap of credibility in nuclear science that says why this is so? I doubt you'll find anyone because these reactors have been tested, demonstrated and proven over past DECADES, but not as commercial prototypes that are cost-competitive.
Regarding the talk about pushing the technology out into the future: it's not because of fundamental, intractable problems, its all about COST. To claim the technology is a pipedream and can never work is either being disingenuous or grossly misinformed.
Fast reactors are more costly. Pay the extra cost so they can continuously recycle fuel that doesn't cost much anyway? That doesn't make sense to the bean counters. The "decade or more" and "international cooperation" etc., is because there are no inherent short-term limitations to conventional nuclear power and hence no rush to get into more complex / expensive approaches if its not truly needed yet. The ANS position statement says we will need them eventually, so we need to start getting serious.
I think someone else needs to wake up from dystopian fantasies of energy collapse!
http://en.wikipedia.org/wiki/Monju_Nuclear_Power_Plant
Closed! (as of today, restart delayed a year)
http://en.wikipedia.org/wiki/Superph%C3%A9nix
Closed! To be entombed.
http://en.wikipedia.org/wiki/Dounreay_Fast_Reactor
Closed! To be entombed.
http://en.wikipedia.org/wiki/Enrico_Fermi_Nuclear_Generating_Station
Closed and decommissioned!
Then there is the only currently active commercial fast breeder power plant on planet Earth--Russia's BN-600. The other breeders have been closed but Moscow is pushing ahead with the BN-800 (yeah! Putin not afraid of enviros)!
In recent years there have been problems with leakage of liquid metal from the BN-600 cooling system. In December 1992 there was a leakage of radioactive contaminated water at the reactor. In October 1993 increased concentrations of radioactivity in the power plant fan system were found. A leakage the following month led to a shutdown. In January and May 1994 there was a fire at the power plant. In July 1995 another leakage of liquid metal from the cooling elements caused a two-week shutdown of the reactor.
There is an increasing concern about radioactive contamination around the power plant. Several hotspots were discovered in the region as the radiation monitoring effort was extended in recent years.
http://en.wikipedia.org/wiki/Beloyarsk_Nuclear_Power_Station
Operational failures of breeders don't count?
Gail, I think your last point is the key point, and something that just cannot be remedied. The problem with focusing on reserves is that they are accessible, especially unconventional reserves. I think we are going to get to the point where falling EROEI is going to hit us much faster than we expect.
Trying to explain falling EROEI in context of peak oil to most people, not easy.
Andrew,
Most successful approach to EROI introduction that I've seen really hit people starts with two pictures
#1 = Drake well
#2 = offshore oil rig
Ask them if 1 barrel of oil from each is equal. Saw this first in ppt from Prof. C. Hall @ ESF.
To show a symmetrical world production bell curve peaking at 50% URR as in this article and then showing people easy to find real world data that it isn't actually like that (due to EROEI or advanced extraction techniques or other above ground problems) is why people will disbelieve the peak oil explanation until it is waaaay too late.
World peak oil is too complicated for most to understand fully especially as nobody can predict the future accurately.
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When preaching the word of Peak Oil to your family and friends, try to include a graph of human population over time, and ask them what the huge spike in numbers at the onset of industrial civilization means to them. Ask them how we could possibly continue to grow our numbers and food supply in light of dwindling supplies of cheap energy.
Hi Rony,
A sensible country would redirect its R&D dollars from FF exploration to the development of thinner and stronger condums. A rational world would advocate a one child family - no tax deductions for kids. Humane, moral, people would set a goal of 2 billion humans by the end of the century. What odds do thing I would get in Las Vagas for these ideas being implemented?
Unfortunately it seems that the operating doctrine is still one of manifest destiny which again is a result of outdated religious beliefs.
Nice job.
In 2006 I started reading TOD and became "Peak Oil Aware". It took me a while to gather my thoughts on all the info I was taking in but I put it all down in this document that was completed towards the end of 2007 -just as something called "The Credit Crunch" was rearing its ugly head:
http://www.megatrends2020.com/Peak_Oil__Joining_The_Dots.doc
(or Google "Peak Oil Joining The Dots")
-I tried to make it as light hearted as the end-of-civilisation-as-we-know-it could be and it needs an update to include 'Post-Commodity-Crash' thinking, but all in all its not a bad effort to summarise a bunch of stuff related to PO IMO...
Nick Outram.
Hello Nick, I think you meant one rather than on.
>>They posses on of the world’s most valuable commodities: oil, and so they are to use a word ‘minted’.
It would be great to translate the article to other language, it is tough to write a good article about Peak oil
Good post by Lionel, it must have taken a lot of work, and it was carefully and cleverly assembled. 3 stars! (out of 3)
It relies very much on quotes from ‘authority’ which many ‘ordinary’ ppl distrust.
In Europe, Turkey, Iraq, Palestine, Africa, S. America, Iran, Asia, sk ppl about Cheney, and Al Gore...? At best known, fuzzily identified, at worst judged as imperialist scamming liars and murderers. OPEC statements are in any case not of interest or reliable - all them ‘Ayrabs’ ..or conversely ‘our people’...
Birol, Campbell and so on are unknown, why these experts instead of others?
To naive readers from anywhere it may read like the usual appeal to authority, the usual cherry picking of experts who support one or the other pov, the regular BS about catastrophe looming for pol advantage.
I fully realise the targeted audience was not International. Will US red state Xtian fundies pay attention?
"Will US red state Xtian fundies pay attention?"
Probably not. Time to cut losses?
Only someone inside that community would know how to hit (and avoid) all the right code words. You can never write in such a way as to reach all audience equally effectively.
This is a link to Lionel's dissertation, which provides a more complete story.
I think Lionel has gotten a pretty good international list. Perhaps we need subsets for different audiences.
It has been pointed out recently that this is a largely male (and I would wager white, middle- to upper-class, middle- to older-age) population here and on related sites.
I wonder if there could be an intro to PO that approaches this as a chance to further lower these gender, race, class and age barriers.
Certainly everyone will need to get more creative, both in how one approaches problems and how tasks are assigned. Other times of distress (WWII) have lead to re-allignments in work roles (Rosie the Riveter and all that).
If the most parasitic of the upper classes were...reassigned to more productive (if less remunerative) work, surely the chances of a less rocky transition for all would be improved.
When everything changes, youth have a relative advantage, since old certainties no longer hold...
Has anyone presented the issue in anything like this light?
Extreme Oil Forecasts Are "Ludicrous"
Goldman is forecasting crude prices again will surge, as they did in July last year. On the other side, bear Robert Prechter of Elliott Wave International forecasts oil plunging to $10/barrel during the next decade. So who's right?
Edward Morse, head of research for LCM Commodities and LCM, says both extreme forecasts are "ludicrous." Morse added there's just enough lack of transparency in the oil industry to allow for such diverging forecasts. The disagreement focuses on two key issues: (1) production capacity and (2) demand outlook.
http://finance.yahoo.com/tech-ticker/article/305544/Extreme-Oil-Forecast...
The $10/bbl estimate is especially ludicrous. Just judging the sensitivity of today's markets to spare capacity, I would say that demand levels of 70 mbpd (total liquids demand 15% lower than current levels) would drive prices a little under $30/bbl. Elliot Wave theory likely takes into account (in a technical sense) spot impact of high storage levels on the WTI price, but my guess is if you see WTI go to $10/bbl you will still see Brent trading above $30/bbl, and traders will dump WTI as a benchmark for good.
On the other hand, we only need about a 5% jump in demand to jack prices back into the $80-85/bbl range. In today's economy that's a stretch but it seems like less of a stretch than the $10/bbl scenario.
OPEC only proposed adopting this system of allocating quota based on the size of reserves, Dr. Campbell's statement to the contrary. It was never put into practice, and to this day quotas are set via horse trading. This is an oft-repeated misapprehension.
I have been under this apprehension for at least the last 8 years. This is the first comment in that time questioning the validity of the quota allocation process. We all know that actual production levels were a game of cheating and horse trading, which is why OPEC was largely irrelevant for 20 years, but the underlying quota allocation was paid more than enough lip service to generate the quoted reserve inflation seen in official OPEC figures.
Do you have any documentation to back up your assertion?
Lionel Badal sent me a PDF copy of his 84 page dissertation named HOW THE IMMINENT DECLINE OF GLOBAL OIL PRODUCTION WILL AFFECT INTERNATIONAL RELATIONS , which I have uploaded.
He mentioned that he has original quotes from several people in this paper, including
- Dr. Pushker Kharecha- climate scientist at NASA (p.46)
- Dr. F. Jeffrey Martin- Senior Advisor and Program Manager the Los Alamos national Laboratory (p.47)
- Olivier Rech (a “senior colleague” of Fatih Birol at the IEA- Rech wrote a good part of the 2008 WEO…) p. 19, 38 and 41 -42
Thanks Gail.
Very worthy posting a little dry and wide eyed in presentation.
Putting Dick Cheney and Al Gore in prime position seems to indicate a lack of awareness of how dumb and intellectually compromised these geezers are.
Consequently I lost interest at first scan.
Reference number 37 says: "manufacturing a single car requires at least 20 barrels of oil"
The reference is just a newspaper article, and (as you'd expect with a newspaper article) gives no references. Does anyone know where this number comes from?
Edit:
Well, I think I figured out where this came from:
First, Matt Savinar found two sources for the energy used during manufacturing. The first is an organization (Institute for Lifecycle Environmental Assesment) that claimed "The average car will consume during its construction 10% of the energy used during its lifetime. " He says this here: http://www.lifeaftertheoilcrash.net/Research.html#anchor_72 . Unfortunately, the link he gives is broken, and their website is abandoned. The second is Mike Ruppert, who asserts the same thing, but gives no source.
2nd, Matt estimated that the average vehicle used 1,593,750,000 BTU’s consumed during the median lifetime of an American car. Unfortunately, that's about 50% higher than it should be.
3rd, he converted BTU's into "equivalent" barrels of oil.
Well, that's pretty unrealistic: manufacturing items like cars mostly uses electricity.
So, reference 37 is incorrect. It doesn't take anything like 20 barrels of oil to manufacture a car.
The article also makes several other embarrassingly incorrect assertions, such as "Nearly all pesticides and many fertilisers are made from oil." (they're made with natural gas); and ) "Metal production - particularly aluminium ...all rely on oil." (they use electricity).
Lionel, I suggest you drop that reference.
Further, I'd avoid an attempt to show that electric cars and alternative energy sources can't be developed. I think this is incorrect, and it's mostly irrelevant to your thesis that oil shortages will create international conflict in the next several decades.
Nick,
This link has some data for the industry in US.
http://www.epa.gov/ispd/pdf/energy/ch3-9.pdf
Electricity accounts for 40% of energy used,NG48% and gasoline and fuel oil 10%
The link states energy accounts for 1% of the total cost of vehicle production. If that's say $200 per vehicle and 10% is for oil that would be $20 worth of oil(<10gallons gasoline), or 1/4 barrel oil/vehicle.
The big oil ( and energy) cost of making cars or any other manufacturing activity in US is the gasoline used by workers driving cars and the diesel used by truck transport industry supplying goods to the families of auto workers. Switching to electric car manufacture is going to dramatically reduce these cost, without adding any significant increase in oil consumption due to EV manufacture.
You seem to have been correct in distrusting a newspaper reference, probably pulled the 20barrels/vehicle from thin air or used an energy conversion to barrels of oil. Valid if discussing peak energy but not relevant to peak oil.
Thanks.
Only .1% is oil, and .5% is natural gas, for a total for oil & gas of .6%. So, if oil & gas were to go up in price by 5x, the price of cars would go up by 3%.
Doesn't seem like a problem.
Nick, it is not that simple.
In a car factory most work is assembling. Parts are made in other factories and transported over long distances. F.i. a Toyota factory in Brazil gets a lot of parts from Japan. Problably this is also true for a lot of Japanese car factories in the U.S. That is, in the chain of car manufactoring goes a lot of oil/car. Then there is the problem that gas peaks not long after oil. I don't think shale gas will provide 40 years of gas with high flow rates. Maybe when the price is 5x higher, but like with high oilprices: the economy cannot take it.
Parts are made in other factories and transported over long distances. ... That is, in the chain of car manufactoring goes a lot of oil/car.
There's a lot of transportation, but most of it is by water in very large container ships, which is very fuel efficient. Also, it doesn't require oil. See http://energyfaq.blogspot.com/2008/09/can-shipping-survive-peak-oil.html
Then there is the problem that gas peaks not long after oil.
That's what they used to think - we've been finding a lot more gas lately.
I don't think shale gas will provide 40 years of gas with high flow rates.
hmm. At least in the US, that doesn't sound right based on the latest info. Besides, 30 years is long enough.
Maybe when the price is 5x higher, but like with high oilprices: the economy cannot take it.
Oil is different from gas (in North America and the US at least): gas is a domestic product, so high prices don't create a trade deficit. That makes all the difference.
"The Auriga Leader, operated by NYK Line, was launched in December 2008 and can transport up to 6200 vehicles. NYK Line has set a goal to reduce car carrier energy consumption by 50 percent by 2010 through solar power generation, ship operation improvement, redesigned hull form, propulsion systems energy savings and improved cargo handling."
http://behindthewheelnews.toyota.com/?id=229&by=&fTrk=
Neil,
I can't find it again but a while back I had a link to a steel industry website about an industry program to get the amount of oil used in the manufacture of a ton of steel DOWN to a barrel from around two or two and a quarter barrels for all the steel available.The figure was a lot less for recycled steel but still well over over a barrell iirc.
Most cars have well over a ton of steel in them.
I have never been able to find satisfactory answers for such questions relating to energy.There is apparently no agreement whatsoever on what should or should not be included in the total figure.
Ten gallons of oil may not be enough just for pro rating the fuel used by the trucks that DELIVER CARS!a THOUSAND MILES round trip,TWO HUNDRED GALLONS,ten cars or so on the trailer......
Of course "manufacturing" may be parsed to mean "while being assembled " and not include the big old pile of seat covers,foam cushions,floor mats,carpets,dash,electrical insulation ,insulation for sound deadening,heat proofing ,cold proofing,spray on under coat,plastic trim , taillights,turn signals,a couple of gallons at least of lubricating fliuds in the engine and transmission,rubber door gaskets,adhesives, at least a hundred pounds of synthetic rubber rubber in the tires alone of a not too small car.allthe little enclosures for all the electrical components,the thinners and solvents used to make the paint and wax,......and any engineer can probably point out a few more,I'm just a layman who fixes a car from time to time and happened to notice all this stuff in the course of my day to day work purely by accident.
100 percent oil for all practical purposes,maybe a little natural gas is used for some items.
It's too bad you really don't have to know anything to become an authority these days.
A lot of plastics are made from natural gas not oil, 40% of all rubber is grown on plantations, the rest made from NG, may be a different mix in auto tires.
99% of auto steel is recycled but not necessarily going back to auto steel( only about 25% scrap is used in sheet steel, higher for castings)
The manufacturing includes inputs of materials but would not include transport to dealerships. Few vehicles would travel thousands of miles by road transport, just look at the population distribution of US.
For some reason it's very difficult for people to grasp that most oil consumption is used driving cars and light trucks and flying in planes, and a small amount for heating, not growing food or making medicines or plastics or the million of items that all have a small amount of oil used in their manufacture. Its DRIVING those big gas guzzlers and light trucks every day.
Neil,
UR right about the ng used,at 3am I can forgert some things I do actually know,but my point still stands.
The ridiculously low figure of ten gallons is a fantasy unless I am badly mistaken.
My remark about the transportation of the cars to dealers is well refuted,but my intention was to be sarcastic in part,I should have made that clear.I intended for the reader to think about GETTING the inputs to the factory as well as getting the car to the dealer.A half dozen or more trucks leave the little town near where I live every day headed to Detroit loaded with carpet and carpet pad.
But if you think car haulers don't make some thousand mile round trips as a matter of course,just ask any driver of such a truck the next time you're at a rest stop on the interstate.(I used to eat a lot at a truck stop as it was the only handy choice,except a Mc Donalds and Burger King,and a couple of old friends are former otr truckers,so by circumstance I have spent a lot of time talking to truckers.)
Getting the cars onto the train,getting the train cars where the cars are going,getting them off loaded, and payiny the railroad is an expensive and time consuming proposition.When someone has the fever for his new Mustang or Camaro with the special combination of features dear to his heart,the dealer and salesman aren't much interested (to any greater extent than absolutely necessary) in diddleing around with a train.
And the energy that goes in to steel is fungible as is money as is the steel is itself,to a large extent.
The only intellectually honest comparision therefore in my opinion is to use the oil per ton figure for all steel combined,not just recycled steel or virgin steel.
I knew that natural rubber is still commonly used,but that forty percent suprised me greatly.I would have guessed less than five percent.
Growing food is only one link in the chain of the food industry. Needed is also a lot of transportation.
Making medicines, plastics and millions of other items every day, need billions of small amounts of oil every day. Without transportation they are useless. To make all these items, raw materials from all over the world have to be mined or recycled and transported.
Yes, transportation is important. That's why electrification of transportation is important.
This conversation started because the Original Post suggested that electrification of transportation wasn't feasible, and I replied that it was.
You know that a very important link in the transportation chain is plane and ship transport. Last week there was a post on TOD about collapse with an example of all the elements needed to make a cellular phone and where they come from. Well, from a lot of different countries all over the world. Distribution of products by trucks and trains is a small part (in the end) of the chain. Apart from the importance of air- and seatransport there is the factor speed: 'just in time deliveries'. Of course ship engins can be converted to coal or even electricity, but how long will it take before a good amount of ships have this. And most of the changes starting past-oilpeak make things much more difficult to prevent the economy from collapsing.
a very important link in the transportation chain is plane and ship transport.
What % of plane transport is represented by the kind of small industrial components that go by air? I would guess 2%. What's the ratio of fuel cost to product cost - .1%? If Fedex fuel costs were to go up by 10x, would it have any significant effect on the affordability of sending such a part by air?
Of course ship engins can be converted to coal or even electricity, but how long will it take before a good amount of ships have this.
"Can we replace oil for shipping?
Sure - long distance land shipping can go by electrified rail, local can go by plug-in hybrid truck, and water shipping can find substitutes for oil.
Substitutes for oil for water shipping? Pshaw, you say.
No, really. Substitutes include greater efficiency, wind, solar, battery power and renewably generated hydrogen.
Efficiency: Fuel consumption per mile is roughly the square of speed, so slowing down saves fuel: in 2008, with high fuel costs, most container shipping lowed down 20%, and reduced fuel consumption by roughly a third. For example..."
For the rest, read this: http://energyfaq.blogspot.com/2008/09/can-shipping-survive-peak-oil.html
Maybe, but what happens with air companies if oilprices stay around $100/barrel or more and much less people travel.
Yes, fuel costs killed allready many air companies last year and even now many are still suffering big losses. Anyway, it will make parts more expensive and in economic downturn with a lot of unemployment this will be even a bigger problem.
If peak-oil was the 2005-2008 period, then substitutes have started way too late. Too late to maintain BAU.
Yes, but with oil prices one third higher it doesn't help.
what happens with air companies if oilprices stay around $100/barrel or more and much less people travel.
Some air passenger companies will suffer. Some, like Southwest, will do fine. After all, ticket prices would still be lower than 30 years ago.
fuel costs killed allready many air companies last year
Not freight companies. You're thinking of passenger companies.
it will make parts more expensive
Not much. Oil costs don't affect manufacturing much.
If peak-oil was the 2005-2008 period, then substitutes have started way too late.
Buy a Prius, and get ahead of the line. Then, if oil prices double, your costs are as low as the average person's now. If they double again, convert it to a plug-in.
Too late to maintain BAU.
Who wants BAU? I'm looking forward to an electric future.
with oil prices one third higher it doesn't help.
Sure it does - it returns your fuel costs to the status quo ante.
A lot of passenger companies do freight also.
Who pays the extra transport-costs to make an endproduct from the parts ? I think, like with the price of food, transportcosts go through the chain to end up at the consumer.
Most people still don't want electric cars. Because they don't like silent cars. Besides the price is too high for most. Without BAU, more people are going to lose their job. This could lead to collapse of industrialisation with a lot of bad consequences.
Right, but this is when oilprices are only one third higher.
A lot of passenger companies do freight also.
True. They'll be affected to a lesser extent.
transportcosts go through the chain to end up at the consumer.
Sure. But the kind of industrial parts that go by air tend to be small and expensive (at least as measured by cost/weight). A one pound item probably only takes .05 gallons of fuel to ship 1,000 miles. Even if fuel goes to $20/lb that will only require $1 of fuel. If the item costs $100, that only raises it's cost by 1%. So, fuel costs will never stop that item from being shipped by air: it will outbid other uses for fuel.
Most people still don't want electric cars. Because they don't like silent cars.
Really? I've never heard of that. I think their silence is a really big selling point. Do you have a source for that?
Besides the price is too high for most.
They'll be no more expensive than ICE vehicles, with large production volume - which will happen.
Without BAU, more people are going to lose their job.
I don't think EVs are going to cause the collapse of industrialisation. A few repair shops will go out of business, and some people will have to move from one industry to another. Painful, but not a collapse.
Convincing.
I read several articles about EV's with comments. There are people who love the motor sound, like it pumps more adrenalin and make them feel alive. Must be true especially when accelerating fast. I have no percentages but I guess at least 20% don't want to buy an EV because of that. Also I read that some people find it strange 'starting' a car without hearing anything. Like they miss something that makes sure that it is functioning. This is a matter of getting used to, but it is a threshold. Then there are some comments that show that some people are uncomfortable with the uncertainties and duration (has to come down) of the charging process. All this together and the high price I think that at least 70-80% (maybe about 95%) don't consider buying an EV the coming years.
Of course the problem is that to have large production volumes, first you need a lot of (potential) buyers. If a company starts with 100.000 cars/year and they have to make every effort to sell these, they think twice before expanding.
I mean that high unemployment can cause a collapse. An economy needs to grow to stay healthy and for this it needs growing amounts of cheap energy. Fossil fuels, mainly oil and gas, made possible an explosion of industrialisation and population growth. In economic downturn it will be very difficult to move people from one industry to another. For this you need a population who can spend money, more than basic spending for residence, energy, water and food.
There are people who love the motor sound, like it pumps more adrenalin and make them feel alive...Also I read that some people find it strange 'starting' a car without hearing anything.
Wouldn't a good sound system solve this?
some people are uncomfortable with the uncertainties and duration (has to come down) of the charging process.
Absolutely - I would be. That's why ErEVs and PHEVs will dominate the market for quite some time.
to have large production volumes, first you need a lot of (potential) buyers. If a company starts with 100.000 cars/year and they have to make every effort to sell these, they think twice before expanding.
100,000 per year will be more than enough to get most of the needed economies of scale.
An economy needs to grow to stay healthy and for this it needs growing amounts of cheap energy.
Not really. The amount of energy doesn't need to grow, and it doesn't need to be cheap. We saw that recently: from 2004 to 2008 world oil output was pretty much flat and increasingly expensive, but world GDP kept right on growing until the credit crunch of 2008. The credit crunch had nothing to do with a shortage of BTU's: it was all about a chronic US trade deficit, which was in turn caused in part by oil imports.
Don't confuse the US's problems paying for oil with a more fundamental need for growing quantities of cheap oil.
In economic downturn it will be very difficult to move people from one industry to another.
Actually, it may make it easier. Our main problem is resistance from people afraid of job & career loss - crisis will break through that.
See reference below for fairly comprehensive look at energy used in manufacture of various transportation modes.
Life-cycle Environmental Inventory of Passenger Transportation in the United States
Mikhail V. Chester, Institute of Transportation Studies, Berkeley
Link to abstract follows. From there you can get to 7.4MB pdf for source.
http://repositories.cdlib.org/its/ds/UCB-ITS-DS-2008-1/
BKelly,
Chester states:"We find that life-cycle energy inputs and emission outputs increase significantly compared to the vehicle operational phase. Life-cycle energy consumption is 39-56% larger than vehicle operation for autos,"
This conclusion doesn't pass the sensible test. The US economy uses 6MJ/$GDP. A $20,000 motor vehicle would have inputs of 6X20,000=120,000 MJ( manufacturing is less energy intensive than oil industry but about average energy intensity)
A vehicle uses 500 gallons/year or 7,500 gallons in 15 years(average life). Each gallon of gasoline has 130MJ plus another 30-40 MJ for refining and losses; 160Mj x7,500=1,200,000MJ
Hence would expect operating to account for 90% of energy. Since oil accounts of 40% of US energy, that would mean that at most 4% of the oil use would be in manufacturing( including auto workers, suppliers domestic use, their wives energy use, the energy used to feed them the entire $20,000 spending in the economy ).
Neil,
you may be right... but as a critique of Chester, your comment misses the mark.
Read the sentence following the one you quoted: The energy and greenhouse gas increases are primarily due to vehicle manufacturing and maintenance, infrastructure construction, and fuel production.
Chester is not talking about oil -- he is talking about energy in general.
Nor is he talking about manufacture alone, but the entire lifecycle cost.
To me, a lifecycle cost of 50% more than operation cost seems not unreasonable? A bit low, even? That would imply 2/3 of energy use is fuel spent driving.
Downloaded the PDF, will look at it later... thanks for the link BKelly.
Chester is not talking about oil -- he is talking about energy in general.
Well, that makes Chester interesting for some other discussion, but not this one - here we're talking about the claim of "20 barrels of oil to manufacture a car".
We should also note that he includes maintenance, infrastructure construction, and fuel production, but 1) the claim above is just about manufacturing, and 2) EVs have much less maintenance, and no liquid fuel.
Yes?
If one is truly convinced of the reality of the shitstorm that's coming, why compromise whatever competitive advantage prescience of the situation may bestow by alerting unrelated others of the impending danger?
Yeah, don't drive up the price of EVs before I buy one.
You don't even need to wait for an EV. Just buy a Prius - it can be converted to a plugin very easily later, when you need it.
Yeah, if you don't mind being limited to 25mph in EV mode.
I think it's 34MPH.
Well, that's faster than most city traffic. And, there's software fix that can raise that limit to 70: http://blogs.edmunds.com/greencaradvisor/2009/06/software-upgrade-to-pri... .
Hello darwinsdog,
I'm curious what advantage you believe prescience might bestow?
Maybe I missed the sarcasm. (Probably.)
Anyway, the life you save might be your own.
That is, I suppose it depends on what assumptions underlie one's view of the odds of survival of any particular individual or group living in the context of today's interconnected global industrial economy.
Another assumption involves the degree of functionality of the relation "related others" (or unrelated others). No guarantee there, unfortunately.
darwinsdog,
Well, many of us probably have related others who need some education...
More than that, I think it's idiocy to believe that having all this information is going to be useful if you can't organize your community - or at least your friends and family - to prepare for changes. Good luck going full solo. For the substantial plurality, perhaps majority of us here on TOD who spend more time talking about peak-oil with folks here than with anyone else in our lives, it could all be useless one day when the internet stops working. Knowing how to reach out to those who actually live next to us may mean the difference between survival or the lack thereof.
Group selection. Cultural evolution. I prefer the default trajectory of Mad Max not transpire. But there are risks in both directions. And despite what biologists might say, my genes from the moment I was born are irrelevant as a goal. I will never have children - I'd rather be a cultural 'father' to some loftier enterprise than the fast thermodynamic garbage machine that our modern society has evolved to. We can compete for other, more benign pursuits - unlikely but possible -I'll trade my 'advantage' in for the chance of a better future, for all, broadly defined.
Perhaps you underate insatity bro.
Agreed with fireworks,Nate!
Somehow I think the only explaination for all the people who are glibly talking about the END is that they are so young intellectually if not physically that they are "ten foot tall and bullet proof" and that they simply do not believe that THEY are going to be PERSONALLY involved,that they personally are going to be cold,hungry,miserable,sick, and that probably the only way out for nearly all of them is to partake of the kool aid if Mad Max shows up.
I can't remember the name of the actors or the movie but there was this suicidal cop why got out onto a ledge with this potential jumper and tried to talk him into HOLDING HANDS AND JUMPING TOGETHER.
Once the jumpers gaze was forcibly directed to someplace other than his own navel,he started screaming for the other cops to save him from the maniac.
If they would still make at least one movie out of a hundred that good I might try my luck on a ticket once in a while.
That was "Lethal Weapon" starring Mel (Mad Max) Gibson.
Damn right Darwinsdog. Ha! Fact that
Because there will be no separate peace. This shitstorm is going to reacquaint Americans with the me verses we.
David Fridley, a scientist at the Lawrence Berkeley National Laboratory and a former colleague of the US Secretary of Energy, Steven Chu, told me the following: “My own efforts have focused on the science of alternative energy. The deeper you go into this area, the less sanguine you become that there is any effective mitigation possible… The bottom line is that there is no thermodynamic match for petroleum.”
I researched Fridley's work: it appears to be entirely focused on bio-fuels. You might want to clarify that, as the quote appears to be is misleadingly general. In particular, it doesn't tell us anything about wind and solar power, or electric vehicles.
Nick, you are correct that my publicly available research is primarily in the area of biofuels, since I find that one of the most irrational areas of public discourse; my research, however, spans the gamut of alternatives. An upcoming chapter in a book from the Post Carbon Institute will delve into the issue in more depth and breadth.
With regard to electric vehicles, there seems to be a sense that somehow replacing gasoline as one product out of the barrel will somehow mitigate a crude oil shortage. At the most basic, replacing gasoline would simply create a gasoline surplus with no outlet for export (since all but three major markets are diesel-dominant in transport), and thus destroy US refinery economics, leading to even more severe shortages in other refined products, from propane to asphalt. Absent policies addressing all petroleum products, a high penetration of electric vehicles perversely could exacerbate the problem.
But that's a transitional problem, not a basic one, right? In the long run, refineries can change their mix of products, diesel users can switch to gasoline or electric rail, etc.
More importantly, given that we have plenty of renewable resources (wind, solar (and nuclear, if you like nuclear)) which have high E-ROI, how do theoretical concerns like thermodynamics come into the conversation about electrification of transportation and HVAC?
The X15 was able to reach Mach 6.7 without it.
Now there is a practical commuter vehicle for you.
I don't have any real comments on the article. It's good, although I think it's lack of graphics is a bit of a weakness. Andre Angelantoni (aangel here on TOD) has a Powerpoint presentation on Peak Oil which is better, in my opinion. He's shared a few slides from it on a couple posts here.
What I really want to say is that I think we have probably reached something of a plateau of peak oil awareness, with most of those folks like us who are interested by nature in the subject having tuned in online and found out what's up. Getting the attention of people who are not interested by nature is a far different animal, and requires talking to people in person, and organizing speaking and discussion events on peak oil. It requires being ready to organize those talks on short notice when the next price spike occurs, too.
Point is, Lionel's essay is a great outline for a talk, if you organize a talk. Send it to your friends, by all means. But just writing a great essay on peak oil isn't going to change the world at this point. Colin Campbell did that a while ago and started this movement going, but widening peak oil awareness nowadays requires an additional level of activity.
Graphics will definitely be needed for such talks. I'm reminded of the following from the Guardian earlier today
"On the desk in front of me is a set of graphs. The horizontal axis of each represents the years 1750 to 2000. The graphs show, variously, population levels, CO2 concentration in the atmosphere, exploitation of fisheries, destruction of tropical forests, paper consumption, number of motor vehicles, water use, the rate of species extinction and the totality of the human economy's gross domestic product.
What grips me about these graphs (and graphs don't usually grip me) is that though they all show very different things, they have an almost identical shape. A line begins on the left of the page, rising gradually as it moves to the right. Then, in the last inch or so – around 1950 – it veers steeply upwards, like a pilot banking after a cliff has suddenly appeared from what he thought was an empty bank of cloud.
The root cause of all these trends is the same: a rapacious human economy bringing the world swiftly to the brink of chaos. We know this; some of us even attempt to stop it happening. Yet all of these trends continue to get rapidly worse, and there is no sign of that changing soon. What these graphs make clear better than anything else is the cold reality: there is a serious crash on the way."
http://www.guardian.co.uk/commentisfree/cif-green/2009/aug/17/environmen...
In the 2008 World Energy Outlook (WEO), they have analysed about 800 fields, which account for ¾ of global reserves and more than 2/3 of global oil production
A question I've asked before but not recieved a satisfatory answer for is if 3/4 global reserves are within OPEC how have the IEA been able to analyse what must be a large proportion of those fields?
Anyone understand what this field-by-field analysis actually entailed with respect to the OPEC fields?
Thanks
TW
watcher --If I recall the comments of others correctly the analysis preformed by the IEA was done for the most part using data provided by the exxporting countries. Thus the basic (and foolish IMO)assumption: if the data received is correct then so is the IEA conclusions. In reality even the daily production figures from the exporters is rather questionable and that's a very easy number to determine if it were allowed. Estimating reserves in the ground and their future recovery rate isn't an easy task even when you have all the support data. Without the details any such conclusions are, at the least, meaningless and, at worst, an intentional lie IMO.
Rockman - thx, that's sort of what I'd assumed. Just a bit misleading then for the IEA to say they have carried out a field-by-field analysis when what they've actually done, for the OPEC fields at least, is to simply relay third party information.
Does seem it all comes down to whatever OPEC want to tell us and whether we wish to believe them or not.
TW
Which is why we relied on the logistic method to warn, starting in early 2006, that the world was facing the probability of a decline in net oil exports--and the model, and several case histories, suggest that we are facing a long term accelerating decline rate.
Which is why we relied on the logistic method
But isn't this model dependent on past production profiles? If production is under constant voluntary restraint then it could correspond to just about any reserve level above a certain minimum amount. Which means you are down to either taking OPEC at their word wrt reserves, or estimating from old data held in the West. IMO neither approach is satisfactory.
TW
But I suspect that the logistic (HL) method gives us the best answer we can get as outsiders, and regarding Saudi Arabia the fact remains that they have shown three years of lower oil production at about the same stage of depletion, based on the HL models, at which the prior swing producer, Texas, peaked--despite US oil prices rising from an average of $57 in 2005 to $100 in 2008. The Saudis are arguing that they (net) exported almost a billion barrels less oil in the 2006 to 2008 time frame than if they had just maintained their 2005 rate, because of "lower demand," despite a 75% increase in annual oil prices. (If the Saudis had maintained their 2005 net export rate, they would have net exported 10 Gb from 2006 to 2008; the EIA shows cumulative net oil exports of 9.1 Gb.) Technically speaking, I guess that the Saudis can continue to argue that they are meeting current demand, with a continued long term decline in their net oil exports, as oil prices rise.
If 2010 oil prices are higher than 2009, and if the Saudis have still not exceeded their 2005 annual production rate, they would have shown five straight years of production below their 2005 rate, and I think that the "It's all voluntary" story will be getting increasingly hard to support.
In any case, I think that it is extremely unlikely that the Saudis will ever again exceed their 2005 annual net export rate.
That is the big question.
The only thing I can think to ask is...............Is there any reason at all the the Arabs would understate their reserves?
There seem to be reasons to overstate them so maybe the numbers that they present could be considered the high side of guesses?
Your question was answered in the article posted. OPEC quotas were based on reserves. Reserves were overstated because each individual country in OPEC wanted to pump more oil.
Above, "The Dude" said: "OPEC only proposed adopting this system of allocating quota based on the size of reserves, Dr. Campbell's statement to the contrary. It was never put into practice, and to this day quotas are set via horse trading. This is an oft-repeated misapprehension."
He didn't provide any support, but it's an interesting claim.
Have you seen any data to support the claim that it was used?
Even if it was only a proposal, that may have been enough to cause OPEC countries to overstate reserves. If you look at the IEA reserve data, it doesn't look right. The fact that they keep data secret makes it even more suspect. I wouldn't trust their reserve numbers unless there was an independent analysis done.
I for one don't think there will be that big of a crisis. As oil production goes into decline, the price will go higher. As the price gets higher, consumers will use less, and oil producers will have more capital for offshore rigs etc. Also, alternatives to oil will become more competitive. The vast majority of oil reserves are likely under the oceans and haven't even been discovered yet. The more probable scenario is that oil is replaced with cleaner, cheaper, more reliable, and easier to produce electricity. Oil will still be produced in the future, but on a much smaller scale.
I suggest you read Catton's Overshoot, stat.
How do you know he hasn't?
If you feel Catton has something particularly relevant, why not provide us with a quote and a source?