Is the Global Oil Tank Half-Full, Is It Half-Empty …or Are We Running on Fumes?

This is a guest post by Richard Heinberg. Heinberg is Senior Fellow with Post Carbon Institute and author of several books on resource depletion, including The Oil Depletion Protocol and Blackout: Coal, Climate and the Last Energy Crisis. He will be speaking at the ASPO-USA conference in Denver, October 12.

In his article in the New York Times September 24, "Oil Industry Sets a Brisk Pace of New Discoveries”, staff reporter Jad Mouawad cites oil discoveries totaling ten billion barrels for the first half of 2009. The Tiber field in the Gulf of Mexico alone accounts for four to six billion barrels of crude that may eventually find its way into the world oil system. Indeed, this year has seen discovery results that could end up being the best since 2000. But, the article notes, the new oil was expensive to find, it will be expensive to extract, and both exploration and production are only possible because of high levels of investment and sophisticated, expensive new technologies.

To justify the needed level of effort, the oil industry requires prices in excess of $60 per barrel, according to Mouawad; otherwise, the new projects will turn out to be money-losers. Some analysts believe the magic break-even number is closer to $70. In any case, the figure is much higher than was required only a few years ago, and still-higher prices may be necessary to make exploration and production profitable for future projects—prices perhaps close to $80.

According to Mouawad, “While recent years have featured speculation about a coming peak and subsequent decline in oil production, people in the industry say there is still plenty of oil in the ground, especially beneath the ocean floor, even if finding and extracting it is becoming harder.” So the new discoveries presumably indicate that peak oil has been delayed, and that our concerns about the event have been misplaced.

Yet this would be a strange conclusion to draw from the facts cited, for two reasons.

First: The ten billion barrels of new discoveries reported so far do initially sound encouraging: if the second half of 2009 is as productive, that means a total of 20 billion barrels of new oil will eventually be available to consumers as a result of discoveries this year. But how much oil does the world use annually? In recent years, that amount has hovered within the range of 29-31 billion barrels. Therefore (assuming continued good results throughout 2009), in its most successful recent year of exploration efforts, the oil industry will have found only two-thirds of the amount it extracted from previously discovered oilfields.

When the “ten billion barrels” figure is framed this way, its “gee whiz” shimmer quickly fades. (Yes, the article discusses the phenomenon of “reserve growth,” which is supposed to render the pace of new discoveries less important—but that red herring has been exposed plenty of times, including here.) The Times article hints that 2009’s high discovery rate may be the beginning of a new trend, so that we may see even better rates in future years; but remember, that hypothetical outcome hinges on a crucial factor—increasing investment in exploration and production—which leads us to a second critical thought.

The staggering levels of investment that enabled drilling in miles of ocean water, so as to achieve the 2009 finds, were occasioned by historic petroleum price run-ups from 2004 to 2008—with prices eventually spiking high enough to cripple the auto industry, the airlines, and global trade. As petroleum prices climbed ever higher, oil companies saw sense in drilling test wells in risky, inhospitable places. But in recent decades oil price spikes have repeatedly triggered recessions. And clearly, as we all discovered rather forcibly last year, the global economy cannot sustain an oil price of $147 a barrel: as the economy crashed in the latter months of 2008, so did oil demand and oil prices (which hit a low in December-January near $30).

So, what is a sustainable price? A review of recent economic history yields the observation that when petroleum sells above about $80 a barrel (in inflation-adjusted terms), the economy begins to stall. Oil industry wags have begun to speak of a “Goldilocks” price range of $60 to $80 a barrel (not too high, not too low—just right!) as the prerequisite for economic recovery. If prices are higher, the economy sputters, reducing oil demand and subsequently seriously undermining prices; if they drift lower, not enough investment will go toward exploration and production, so that oil shortages and price spikes will become inevitable a few years hence (indeed, since the oil price crash of late 2008 over $150 billion of investments in new oil projects have been cancelled). If the market can keep prices reliably within that charmed $60 to $80 range, all will be well. Too bad that petroleum prices have grown extremely volatile in recent years: we must hope and pray that trend is over (though there’s no apparent reason to assume that it is).

Let me summarize: the industry needs oil prices that are both stable and near economy-killing levels in order to justify investments necessary to possibly replace depleting reserves and overcome declining production in existing oilfields (I say “possibly” because we have insufficient evidence as yet to conclusively show that new discoveries enabled by expensive new exploration and production technologies can offset declines in the world’s aging giant oilfields).

Should this picture lead the viewer to come away with reassured thoughts of “No worries, happy motoring?” Or does this look more like a portrait of peak oil?

Several commentators (including analysts with financial services company Raymond James Associates and Macquarie, the Australian-headquartered investment bank) have concluded from recent petroleum statistics that global oil production peaked in 2008. Macquarie is saying that world production capacity is peaking this year, which is a nuanced way of saying the same thing, since currently production is constrained more by depressed demand than by immediate shortfalls in supply; in effect both organizations assert that the world will never see higher rates of extraction than the so-far record level of July 2008.

I see nothing in the recent discovery data that should call that conclusion into doubt.

At current usage of oil (not liquids) we will be at least 1 million BBL/day lower production than last year. The current calendar year average is currently running 2 million BPD less than last year and even if there was a miraculous recovery in demand/production, we will still be below last years very high production levels.

Does this mask a decline in overall production? Only time will tell.

I don't understand the fixation with new finds, we already know where a lot of oil is.

Peak oil is about affordable and profitable flow rates, just quoting the size of finds does not give any information about affordable flow rates sufficient to continue BAU growth, so IMO is completely irrelevent data.

Anybody quoting just the size of reserves to counter the notion of peak oil doesn't understand what peak oil is about.

They understand singing to the cows at night as the cowboys of the old west were reputed to do.

Keeps them from stampedeing-so they say -personally I've never seen cattle driven in herds except on tv but I can tell you from experience that getting even a half dozen escapees back into a pasture can be an onery and exhausting job.Even one loose cow can be enough to make a preacher cuss sometimes.

Getting a few billion calmed down again if they once stampede might very well be impossible.

That's a good visual. You could probably help a lot with my question below.


Where is the "Flag as appropriate" link?

Cowboys riding herd "Singing to the cows"

That's dynamite Mac, I don't think it can be put better than that.

On the way to an appointment yesterday I grabbed an unread book off the bookshelf: Whoever Tells the Best Story Wins.

The really important issues of this world are ultimately decided by the story that grabs the most attention and is repeated most often...Objective thinking is important, valuable, and unimpaired by subjective thinking...By adding subjective thinking to your repertoire you add another tool that increases your ability to assemble the many different interpretations that might be drawn from your objective data...The language of the subjective is story. Story is how humans interpret things as good or bad, important or irrelevant, safe or dangerous, and who is "one of us" or "one of them."

The cornucopians are telling the better stories. I would love to hear the stories and metaphors that TOD readers tell to motivate action and communicate the peak oil story.

..the stories and metaphors that TOD readers tell to motivate action..

When a problem is overwhelmingly complex and poorly understood, or simply has no solution, often the best policy is to simply do nothing, since taking action is as likely, if not more likely, to worsen the problem than to alleviate it.

It is possible to simply 'Look before you leap' .. and even then, you can and should Look AFTER your first leap, and to KEEP checking your progress to see whether your actions seem more helpful, more harmful, or what.

As we were saying yesterday, it's RELATIVE. Just condemming 'Action' altogether, because it might have downsides is not a helpful solution.. it sounds more like your personal hopelessness talking.

There surely ARE things we should not be doing, and we need to watchout for actions that overcorrect.. but to tell what is going to help or harm, we have to use our imaginations, fed by our past experiences, and we have to try things, and take risks.

Don't worry. You don't have to.. but I do.

The Myth of Inaction again :)

If you think about it doing nothing is a decision and in general its a decision to maybe do something when the situation becomes clearer. However its not a neutral decision despite the fact it looks neutral.
Any turn of events that supports the current status quo is seen as positive and enforcing the decision to do nothing while negative events are balanced against the local positive events. Thus the sum of positive events is considered to support the position while negative events are negated by single positive events in a 1:1 correspondence.

Peak Oil is not real since we found X oil fields. for example. The decision to do nothing is correct because we have found three large fields this year.

Also you notice the positive events are grossly overweighted. If you bring up average decline and the relative production of these fields vs usage and the fact we are using far more than we are finding this is quickly dismissed since we are finding fields and we just need to pick up the pace a bit.

You can see that people that wish to take the position of doing nothing have no reason to change their position. I may come as a shocker that thats true but by using the real logic of inaction you see they truely don't see any reason for change.

Whats really sad is we don't teach the logic of illogic anywhere in school. Common games like the above are obviously flawed yet rampant in the community of people in fact as far as I can tell only offsetting illogical positions serve as the proxy for the truth in general.

Read the posts on this thread.

I'd say that 90% of the posts are simply illogical many of the rest tend to not build a case for questionable assumptions. Most people obviously don't know how to think.

The above posts about herds of cattle and telling a good story are chilling accurate at least for Americans.
Its amazing that logic even wins some of the time !

"But,” he concluded, “we're still burning it faster than we're discovering it.”

Last line in your linked-to story kind of says it all.

Remember those three cows we lost last night Boss? Well I just found two newborns to replace 'em. So we're OK. Yippee Kie Yae.

And cows can reproduce ... Keep them dogies rollin' rawhide

I actually got into some back-and-forth on that site. The story was bad but the beligerant lack of understanding in the comments was really depressing. The post was from San Diego. I grew up there and what I know about it today apalls me. It is a hot-bed of ultra rightwing know-nothinness.

The mythical Cassandra story resonates, but it's pretty depressing.

Ultimately the myths that underlie society have to change. And ultimately they will do that to reflect the reality. But a couple of generations have to die first because they internalize the current myths - and they will take many with them. The writers telling the stories that appeal to me - YMMV - are Jensen, Berry, Kingsolver, Pelevin (odd choice that). See the Dark Mountain Manifesto for an artistic approach. Frank Bryan, "The Vermont Papers" for a more political science approach.

Consider the forces set in motion with the Powell Memo of the early 70s. And PNAC. Changing the stories and myths that underlie society is a generational task. One could argue that high rates of die-off will make it easier - or more rapid at least.

The sources of our crises are our own successes. Nevermind we cannot afford any more such successes; there are no stories you can tell to any "successful" person. The entirety of the political, developer and business classes - Joe Bageant's anklebiters and Naomi Klein's piranhas - have no way of comprehending the predicament. All they want is a more efficient way to mine more stuff out of a dying planet. Ecocide. The best you will get out of them is "smartgrowth" or increased "regulation". And bear in mind also, that the function of the state is to enable the privatization and appropriation we call business. [Back to the Powell memo again.]

Personally, when in such a situation, I tell stories deliberately designed to increase the cognitive dissonance. But it depends on who your audience(s) is and what your overall strategy is.

cfm, the growlery, gray, me

I had come to think I was the only one to know about "The Vermont Papers."

Blue, Why don't you tell us a bit about thes papers and where to find them ?

It's actually a book. You can find it on Amazon. I have a copy of it some place... maybe I should read it.

The Vermont Papers: Recreating Democracy on a Human Scale (

More than a utopian exercise in anti-bureaucratic thought, their detailed blueprint would divide Vermont into 45 shires, each larger than a town yet smaller than a county. The shires would foster human-scale community and self-sufficiency, with broad powers over education, welfare and local problems; the state government's functions would shrink, though it would serve as a protector of the environment and civil rights.

"the state government's functions would shrink, though it would serve as a protector of the environment..." Posted by Enzwell

Now if the state decided that it would rather permit some mining company to blast off mountaintops for coal, would the shire in question be able to prevent it? If this set-up can't protect the commons from predation, it doesn't seem of much use.

Antoinetta III

Realistically why have the concept of states ?

The concept of SIV's can readily be extended in a good way to government.

The only general form of government is at the shire level above this instead of government you create limited groups like companies with a charter and most importantly with a limited lifetime say 5-10 years or so.
Probably ten makes sense for a quasi government entity at most and part of the creation of the entity would be to determine when its usefulness expires up to a constitutional maximum.

In the past we had something similar in the form of minutemen or citizen soldier these days they are called terrorists :)

Thus any legal entity beyond the shire is created with a well crafted contract and limited in its abilities.

Obviously any such entity would be unable to enter into long term contracts or grant special intrest or right beyond the limit of its governing contract and its expiry time. Obviously and contract or special grants etc end at the end of the term of the entity.

Certainly you can simply roll the entity but your starting from scratch and its effectively a very deep and painful audit of every entity every ten years or sooner. Nothing is assured to last through the roll over by default.

At first it sounds somewhat inefficient but when you consider this vs current forms of government it should come out substantially better.

This periodic renewal is not inefficient in the real world.

Institutions that deserve to last will those that don't won't its trial by fire periodically to ensure that the system remains controlled.

And yes this includes environmental laws etc etc every ten years the shires are forced to reaffirm their lifestyle and decide what stays and what goes as effectively every ten years parts of the greater law are thrown out completely and redone.

The ones that work get a rubber stamp the ones that don't are debated.

Perhaps you increase the interval to 15 years instead of 10 but thats really debatable I'd start with 10. 15 is a touch to long it allows connections and graft to go to deep.

Five is burdensome and potentially to short a time to fully evaluate a mission.

Perhaps 12 vs 10 but thats about it.

And obviously you don't start all entities at the same time so they don't expire at the same date this gives the community a chance to really review each entity as it comes up for renewal.

Now as far as war and issues like that well I see no reason and effective defensive force cannot be maintained using the same system. Offensive operations are much harder but thats rather the point.

Again small and personal verses large and anonymous.
We have to sacrifice some "efficiency" for soundness.
Keep the decision makers at the level where they interact with and know the people whose lives are affected by the choices and things will be much more just.
We have to realize that improvement is much more than about money or stuff or what is physically is about what people feel toward one another and their is about trust and integrity and well is about feeling like we are on the same team and that you can count on others and you can be counted on with or without being compensated.
All this is old hat thoughts to everyone here...........we preach to the choir because no one else will listen I guess.

the state government's functions would shrink, though it would serve as a protector of the environment..."

If this set-up can't protect the commons from predation, it doesn't seem of much use.

Both comments clearly by those who have not read it. The book lays out an early "communitarian" pov.

cfm, the growlery, gray, me

First of all, to use a line from The Matrix, most of these people are not ready to be "unplugged," so telling people about the impossibility of forever growth goes against the story and life that they (and "we," since we participate in this global society) are attached to.

They don't want to give up that attachment because to do so is to realize a truth and to recognize a lie. The illusion of unlimited resources and the human ingenuity are constraints they really don't wish to contemplate.

I like to use a mixed metaphor about the Titanic. It's more than just steering clear of the icebergs ahead (will such things exist in the future of a very warm planet), but you can't keep putting more and more people onboard consuming all of the consumables (including the fuel). Eventually, you run out of critical supplies (ever wonder why shows like Survivor have made the recent ratings rounds? Are you ready to be voted "overboard?") and are literally dead in the water. Or you overload the ship and it swamps or sinks under the extra load.

We know how things on the Titanic turned out. And the metaphor is the need to change course (the positive aspect is that up to some point we have time, but if there truly are "points of no return," you can't unring a bell no matter hwo hard you try) and change (as in changing course) is not always a pleasant or easy thing to do.

Just giving them information is not enough, making them afraid of the BAU outcome may be a very necessary part of the story. Just look at how fast things unraveled last fall and remind them of that. We aren't done with that quite yet.

One piece of trivia that is almost unknown is that world life expectancy at the median, after increasing steadily and dramatically for decades, is decreasing. Currently, it is lower than in 1998 and just slightly higher than in 1995 (14 years ago). At the median, standard of living is starting to go backward, not forward. Also, all those who forecast a population die off should examine the population growth and average life expectancy figures for various countries. It appears that a median life expectancy of approximately (from memory) of 39 years (African levels) is necessary to stabilize global population-it is currently at 66 yrs. The vast majority of the planet will be a hell hole long before population growth even stabilizes, much less declines.

Tough to say this is our first extinction even in which we will be the active participants.

We should understand how the dinosaurs died out after this is over. The point is that the situation quickly turns into a natural extinction even they fact we are human is probably not relevant or makes it worse.

I think that in the past mass extinction seem to revolve around collapse of the biosphere or food chain.
Once can assume as things get worse in areas with high population that any local resources will be stripped bare in and effort to survive so one can expect a similar problem.
And of course the generic resource oil is effectively being stripped bare even though its not a local resource it behaves just like a local biosphere collapse.

This sort of thing is simply not something we understand well the closest example we have are collapse of ocean fisheries. But even here being able to count and see the collapse does not mean we understand it.

Its not something I dwell on because its beyond comprehension but suffice it to say if we do fall into and extinction event that once we come out of it the question won't be about population levels but if it was a total extinction of the species of human and many others or not. Thats obvious from the fossil record.

Somehow fertility has to come into play as well. Population growth or reduction has to do with the balance of how fast people die versus how fast they reproduce. Ultimately population growth or reduction must be purely a matter of fertility - changes in median age of death is just going to create some fluctuations and new levels, but the general trend is governed by fertility.

Of course, over the next 100 or 200 years, the game may be dominated by fluctuations more than any stable trend!

What I find more interesting about this unreported stat is that the trend of a rising standard of living at the global median (a trend in place for well over a hundred years) appears to be broken and beginning a reversal. That is a pretty big story to be ignored by pretty well the entire media IMO.

As far as I know famine conditions and the resulting lack of sanitation has a large effect on both birth rate and longer term survival of children. Periodic famine conditions either from things like war or climate probably where instrumental in keeping human populations relatively low throughout history. Of course epidemics fit right in since you generally have food supply problems during and epidemic plus the mortality from the disease.

So successful births i.e where the child reaches puberty and manages to reproduce tends to drop very quickly.

Also of course we have a substantial population of elderly and others with medical conditions that could die very quickly if modern support was withdrawn. Diabetics for example.

There are plenty of people alive today that would probably not have made it or been born at all under seriously stressful conditions.

So again supporting current population from current birth trends simply does not cross over to a world under serious stress.

Of course given demographics the situation of a rapid decline in the survival rate for new births and decline in overall births coupled with the aging of baby boomers makes the situation even more dire.
Not only are you losing your basic resource oil but the demographics get dramatically bad fast as you have a large older population thats generall incapable of taking care of itself to deal with.

And I'm not talking about the salty older people that post on the oil drum :) But your general baby boomer manager entering retirement and lacking a lot of survival skills and just plain getting old.

You can look at Russia and the serious problems the elderly faced when its economy collapsed to think about how bad things can get for older people in such a situation. And that situation is mild compared to what we are talking about.

It is a tragically sad commentary on humanity that the most promising form of population control will require countless hungry mothers watching their babies die.


It's so depressing that it makes me want to curl up in a lttle ball and suck my thumb but you're probably right.

Otoh,I live among the fundamentalist Christians who are the favorite targets of lots of morally superior(they think so anyway)liberals and have found that in the real world nearly all of them are pretty practical people when it comes to birth control,flu shots,and so forth.

The Pope may not be very enlightened concerning the Pill, but most of his followers seem to be these days.

Matbe if the effort were made properly , the women of the third world mught just take things into thier own hands.
A thoufght experiment:
Suppose we just used the b-52 fleet to dump all the pills we could manufacture ,with a little throwaway voice synthesizer gizmo attached to one out of every four at first, or a pictograph explaining thier use?

Certainly a few women would get sick or die as a result of using these pills-but surely many many more would live better and longer and fewer children would starve.

Your only hope is the young. I have talked with a good many minority (black) people, middle aged and older, who avoid medical care because of a deeply ingrained fear of the establishment.

They honestly believe that doctors will perform experiments on them (at worst), use eye checkups or claims of seizures to take their driver's licenses, and give them special medicines to make them sterile, sedate, ill, or otherwise. Many don't want shots of any sort, believing they'll either get the wrong dose, the wrong substance, or an experimental drug.

Of course this is because all of these things once happened for real to somebody in their extended conscience, but not anytime recently. It doesn't help when somebody does go to the hospital, as the inevitable mistakes and errors are always seen as purposeful.

Already there are rumors and odd beliefs about simple things like condom use (they're coated to cause male impotence and such), in some areas of Africa, and probably here in the US as well. It doesn't help that minorities realize (and are told at the pulpit) that reproduction is their long-term key to becoming a majority.

I fear it is hopeless to head things off, but a falling tide lowers all ships, so the eventual result is inevitable.


I find it interesting that an increase in available food since ca. 1950 correlates with a dropping birth rate worldwide:


If a causal relationship is inferred (e.g. the 'demographic transition' theory) one might infer that more food (wealth) causes women to have fewer children. The arithmetic, of course, has raw population increasing until the lower fertility/birth rates begin to hold sway and population actually decreases.

My guess would be that median calories per day are not increasing or are decreasing over the last 10 years while average calories per day are increasing. Africa does not have an obesity epidemic (neither does Afghanistan).

Actually I believed once upon a time that a rising tide of prosperity could solve the population problem but reading this site has driven the last nail in that fond delusion.

Te time frames just will not add up , given peak oil and fast increasing costs of other raw materials-not to mention the environmental issues.

TOD clearly attracts the "pocket protector" crowd. The echo in this chamber is sometimes quite deafening.

The illusion of unlimited resources and the human ingenuity are constraints they really don't wish to contemplate.

We are likewise guilty of the illusion of doom and gloom. It is equally an illusion that happiness is a large home with a TV in every room and 2 SUVs in the garage. Do any of us grin when we drive to the market? How about when we ride a bike to the market? Which makes us happier?

We are all guilty of processing information in line with our biases.

There was a good piece on that subject in the L.A. Times yesterday:,0,722749...

Truth is in the ear of the beholder.
Plenty of studies have shown that people don't process information in a neutral way. [We] tend to be constructed by our wants and needs. With all their might, our minds try to reduce cognitive dissonance--that queasy feeling you get when you are confronted by contradictory ideas simultaneously.

Isn't it possible to tell the depletion story without the visions of fire and brimstone? If you are good at doing that and feel like sharing your narrative, I am interested in listening.

Truth is in the ear of the beholder.

No, truth is what conforms to the reality of nature, irrespective of how anyone feels about it. Hypothesis testing & the scientific method are the only reliable ways of determining what conforms to the reality of nature. To my mind, myths & narratives & stories are beside the point. What matters is the reality of the situation as informed by a solid grounding in the physical & biological sciences. To someone who has spent a lifetime acquiring such a grounding, the prospects for the near future of the biosphere and for humanity appear quite grim. Dismiss this perspective as "the illusion of doom and gloom" or as "visions of fire and brimstone" if you will. But what is happening is the inevitable outcome of biophysical process being played out on this planet and played out they will be, however one may feel about it or chose to label it.

You are totally missing her point.

Thought exercise: Suppose I gave you a bouncy ball and another to a toddler. Then I take them both away. The toddler cries. You probably do not.

The physical reality is that both players have lost the bouncy ball. But who is having a harder time of it? Why? The physical realities are the same: no more bouncy ball. So what gives toddler?

Now true that if the bouncy ball were replaced with three meals a day, you'd both cry. But the world expends a lot more effort shipping around "bouncy balls" than it spends on necessities like food.

(Also, as an aside, many don't agree with your analysis of the current "physical realities"...)

The presence or absence of the ball is the pertinent factor, not how the toddler or I feel about having or not having it. Likewise, the physical realities of the situation will trump human sentiments about those realities. What will be, will be - regardless of how we feel about it or how we compose our "narratives" to describe the situation.

"Reality is that which remains when you stop believing in it" — Philip K Dick (approximately)

Hi darwinsdog,

No, truth is what conforms to the reality of nature, irrespective of how anyone feels about it. Hypothesis testing & the scientific method are the only reliable ways of determining what conforms to the reality of nature. To my mind, myths & narratives & stories are beside the point.

I checked "strongly agree with this statement".

It is hard for me to believe that a TOD commented would even make such a comment as "Truth is in the ear of the beholder". Once again, I assert that massive delusions, as promoted by "faith" folks, political parties, and corporate advertising, are at the heart of why most people cannot understand the concept of "truth".

Ummm. I don't think she meant the TRUTH. I think she meant the person believed what they wanted to believe about what was said. If you go back and read it that way it makes sense.

edit: spelling for clarity

Exactly. Thank you. Another way to look at it is that there are three "truths", your truth, my truth, and THE truth.

This reminds me of the story of the three umpires one upping each other in describing their techniques:

First umpire: "I calls 'em as I sees 'em"
Second umpire: "I calls 'em as they is"
Third umpire: "They is as I calls 'em"


Traditional philosophy-I call'em like they are.
Modern philosophy -I call'em like I see'em.
Post modern-They don't exist till I call'em.

Fabulous, ofm, I think you nailed it quite nicely. :-)

If an oil field depletes underground,
And no one is there (underground) to see it,
Did it make a sound? (gurgle, gurgle)

Did the Public hear it?

The Public hears only what it wants to hear.
It is as "they" hears it.

Thanks Aangel but its not original-my mental lumber room is full of such goodies but I can seldom remember where I found them originally.

Or maybe because they've heard these "truths" before, and they weren't true.

The way I see it, myths and narratives are proto-science. A first step, if you will.

And everything is a story, meaning that it has relevant content which describes in human-accessible fashion a reliable abstraction of reality. The stories of science are heavily focused on being reliable. E=mc2 is a reliable story which explains a reliable relationship between energy, mass, and the speed of light.

I'm afraid, though, the solid grounding you speak of is simply not available to most people. I think you may suspect this, dd. How many intelligent people have you met, with however much education, experience, or letters after their names, who nonetheless don't seem to know how to think?

I think the problem may have to do with people not knowing how to be wrong.

Hi, Debbie. Yes, it's possible. As it happens just this morning I've finished the draft of the next version of my video, located here:

I had actually just sent you a link to it earlier.

When telling the story there are several tricky parts:
a) being straight with people so that they get the full picture (the tendency is to sugar coat it OR dwell too long on the bad bits; either way doesn't work well)
b) telling enough of the story that they "get it" (10 minute explanations rarely work; everyone thinks they are an expert on energy)
c) not scaring the bejeepers out of them so that they shut down

Unfortunately, I think it's impossible not to scare people if one is being straight. It's just not a very happy story to tell and there's no getting around that. If the person doesn't get scared, they just intellectually understand the issue, they don't "get it" so that the future they see alters. Action on their part only occurs when their future is altered.

So getting the person scared is actually necessary or you will have done nothing but have had an intellectually interesting conversation. They will walk away and generally go back to living their life. (This happened to me in 2005 when someone explained peak oil to me. I walked away and promptly forgot the evening's presentation.)

When the person is scared, it's best to be there with some proactive things they can do, a peaceful disposition and a calm head as they work through the "just been punched in the gut" feeling.

Everyone goes through that feeling and comes out the other side alive, so instead of avoiding it like many people do, let's get as many people through it as we can ahead of time. Due to the design of humans, we can take that feeling if we are surrounded by confident people who can assure us and point out some relevant responses. The problems really only start when too many people are experiencing the "uh-oh" moment at the same time — that's when it turns to panic.

P.S. To anyone reading this, feedback is invited on the video, but please provide it quickly. I'd like to complete the video and post it before going to the ASPO conference.
P.P.S. I acknowledge Richard in the video but I want to do so here again: thank you Richard for your tireless work waking people up (including me).

I like to use stories and metaphors to relate what is transpiring in peak oil. Going back a few years I related the physical situation to my neighbors using cashews:

I like cashews. I like them so much I've decided they should be one of the primary energy and financial resources of our national economy. Who doesn't like cashews? So the world's resource mix is a can of mixed nuts and we want the cashews from that global can of mixed nuts.

For the first while, its real easy. You just reach in and pull out the cashews laying on the top, or some are poking up from below. You have no problem keeping up the cashew intake to keep the national economy from going hungry. As you start to get into the can of mixed nuts you have to work harder and deeper to keep up the same rate of cashew eating. You find you are spending more time hunting and trying to extricate cashews.

Now, you find out cashews have become a popular ingredient in Chinese and Indian foods and there are more hands reaching into the global can of mixed nuts!

As you get past the half-way mark on the global can of mixed nuts it becomes very difficult to keep up the pace of cashew eating to satisfy your national appetite. All the replacement "diet" cashews don't seem to do much for the appetite either and we haven't found a suitable replacement that comes close to the energy and flavor of cashews. Some cashew resource expansion has occurred because we found a way to pick out the little broken pieces, but the large, whole nuts are preferred.

How do we keep the cashew economy going? Are we going to have to cut off a few hands reaching into the global can of mixed nuts? Do we voluntarily go on a cashew reduction diet? Whatever we do, we know there is not another global can of mixed nuts out there.

Perhaps as members of the "pocket protector" crowd we shy away from these simplistic analogies because we find them intellectually bereft. But that is exactly what is required at this time per the original point in Debbie's query. Outside of the TOD group, no one is impressed with our command of the facts, graphs, or erudite analysis.

Put people through some very simple thought exercises and they start to get it. Some think my tactics are over the top, but sometimes the heavy stick of absurd example is necessary.

This is exactly the kind of story that I was hoping people would share. It resonates on a personal level which has meaning to a potential listener. I particularly like your use of cashews because it reminded me of our closed session meetings when I was on the city council. There was always a large can of mixed nuts and most of us only wanted the cashews. Even faced with the "truth" about our preference, the provider of the nuts kept buying mixed nuts instead of just cashews.

**********The Depletion Story**********

Sure oil wells deplete, but new ones are constantly being discovered. So there really isn't a problem. Those that say there is a problem have been proved wrong over and over again. So consequently, no one listens to them anymore. And they all lived happily ever after. Except the Doomers, they're never happy :(

See my other comment above. This is the kind of comment that makes me go off the rails.

Conservatives have hijacked the word conservative to signify absolutely the opposite. It used to mean to practice stewardship over the land and to not squander resources, but now it is simply a euphemism for the term Dominionist, which essentially translates to "god's will".

And please Conservationist, try to find one post or comment where I have pushed a doom and gloom perspective. I have sincere hope as long as we continue on with a progressive outlook, and that there are like-minded people in the majority. Sir, You do not count.

Too bad we ate all the cake, but look, so many crumbs! Woohoo!

We're going on a diet, so we don't need that much cake anymore. Cake isn't really that good for you anyway.

I don't recall ever writing a "doom and gloom" post here or at my blog in the over 5 years I have been blogging. I will occasionally find a striking piece of data and sign off with a throat-clearing "gulp", but that is the extent of it. If I knew how things would turn out, I probably would do some panic writing -- but I don't, so I try to stay a bit more measured in tone.

Of course that puts me in the pocket protector crowd, trying to stay objective and all. On the other hand, if the topic is the Rethugs and the Losertarians, time for me to start ranting and raving. That is too much of a target-rich environment to pass up.

There is the diplomatic way of handling the fire and brimstone, in that when you tell someone they're going to hell, make them look forward to the trip.

As Scotty said:

"Captain, I cannot change the laws of physics"

and sometimes the "fire and brimstone" response is just that... the laws of physics....

and simple math.

Let's take population and the claim of one of the more famous cornicopians, Julian Simon, that the human population could grow unfettered for 7 million years (that what he claims his paper should have said, rather than the 7 billion that it actually contained in the paper...ignoring the remaining life of our little star which we call the Sun).

If you take the current growth rate of the human population, with a "standard human" of 70 kg, and do the math, you get a very large number. If you also assume that matter is constrained to sublight velocities (Star Trek not withstanding) and that we can only deal with the visible universe (some 13.67 light yrs in radius) we can calculate the available volume for humans to exist. Also taking the apparent overall average prevalence of matter in the universe (approximately 1 hydrogen atom for every cubic meter of space) you can calculate the approximate mass of the visible universe and compare that to the mass of humanity at the end of 7 million years. What answer do you get?

The mass of humanity outweighs the mass of the unvierse by some 30,000 orders of magnitude. That's not 30,000 times, thats 1 followed by nearly 31,000 zeros. You can also calculate the number of years it takes for humans to outweigh the mass of Earth and the mass of the Solar system, including the Sun.

Physics constrains the mass of the universe. And even if the mass is 100 times more dense you have a negligible effect on the difference. Some people more familiar with Simon's work will point out that he actually did not point out the growth rate. True, but the growth rate allowed to stay within the mass limits of the entire visble universe are so small that you could not say they were even statistically different from "zero." That's the problem with the "growth forever crowd." They don't know math (and they are the ones touting growth as the salvation) and don't care much about physical limits.

The problem is that any first year calculus student could figure this out.

Trooper ,don't go to hard on old Smon because he made a typo-you have the radius of the universe of bi a few orders of magnitude-but don't feel bad , I made a similar mistake myself here a few days back.;)

I like to use a mixed metaphor about the Titanic.

People misuse the Titanic metaphor. The metaphor does not include steering clear of the icebergs. The metaphor of the Titanic is about the inevitability of going down despite all assurances, prayers, technology and money.

When did the Titanic go down? When it vanished beneath the surface? When most people realized it would? When it started taking on water? When it was too late to avoid the iceberg? When the watch went out without binoculars? When the captain set the speed too high? When it left port? Or was it doomed to go down simply because it was too fast and too unsinkable? [After all, there would be no Titanic metaphor had it not gone down.]

The Titanic is already going down. Now, on the matter of lifeboats - oh, we don't have/need lifeboats on the Titanic do we? At least not ones that work. Which is to say there are no answers in the BAU paradigm.

cfm, the growlery, gray, me

The Titanic sinking was a combination of statistically unlikely probabilities which were able to align and increase in magnitude due to one very simple reason. The Titanic sank with great loss of life because a plethora of reasonable people involved believed it would not and could not. The natural human nature to discount future negatives in favor of immediate positives did the rest.

I think that the Titanic is such a compelling story because we sense the juxtaposition of decisions our own brains would want to make against the obviously unacceptable result. So many facets of human nature resonate in the series of poor decisions (or were they sound decisions that went awry?) that led to the tragedy.

I sit here today in my own little Titanic...a house that I captain, full of blissfully ignorant passengers, heading on a voyage through school, on to college, and then a picket-fence life that seems so reasonable. It's a maiden voyage -- and I'm only doing this once. I know I'm going too fast, and though I'm slowing down amid reports of icebergs the ship can't slow or steer quickly. My first mate says the good ship Jones is coming up behind, threatening to pass, and I feel the urge to keep up. Hesitating, I look at my savings and pantry contents and realize there aren't enough lifeboats for all should calamity arrive. Checking the locker the limited weaponry I possess to repel pirates is powerless against a 100,000 ton iceberg. I hear the engines (of my employment) begin to shake and wheeze and I find that I have no acceptable plan to complete the journey if they fail, and the distant promises of SS Unemployment Benefits and SS Self Sufficiency are too small and too far away. I gaze out across the bow, and where the figurehead should be I see a large black swan instead.

I am a good captain, successful and better than most, yet the risks I have mitigated did not include some I now face, and the course I have set takes me where I no longer wish to go. My only advantage over the poor chap who steered the Titanic is that I know how the movie ends. The question is, do I have the time and skills necessary to avoid disaster, or will it all come down to luck?

Love the imagery of the SS Jones coming up full steam behind you.
But shouldn't the SS Jones appear as a racer's yacht with helicopter perched on the back deck?

IMO, the best stories imagine a better future ahead. They identify our present cushy existence as the source of our alienation and discontent. Transition Culture, people coming together to grow food, create a vibrant local culture, help raise each others' kids, sing and dance together has certainly been a source of inspiration for me.

It is just too hard to be "against" something, like pushing water up a straw. Humans are pulled forward by the force of their vision - and the need to think ahead, then look back carefully (see upthread) should be a central part of what we imagine for ourselves. (In that vein, now that I have been commenting as "Paranoid" for a year, I would like to change that. How do I do that, editors?)

darwinsdog, reading the article yesterday about a 6 degree global warming in the next 50 years, I plainly saw that this is the future that is most likely at this time. Next year, the 50 years will become 30, then 12, then catastrophe will be upon us.

Then I had this thought: what if every action I and you, and my neighbors take today, whittle that 6 degrees just a tad, extend that timeline a decade or two. Wouldn't it matter, might we not get just that much more of a chance? What if we could find our way to the deity within us?

I have done a number of hopeless things in my life. I also have given up, at times, but the times I remember best are the times when I kept trying, in a steady, smart, connected way. And sometimes I even reached my goal.

I think a name change is in order. Sounds like you are breaking through the last stage of grief, beyond acceptance to empowerment and control over those things you can control. Welcome aboard.

Grief is painful but irrelevant. How could ultimate reality, i.e. the universe, come from ideas of mere earthling hairless apes?

You believe that? It's called idealism. Realism and materialism say the ultimate is external to us, based on the physical, and certainly predates us.

To me this isn't negative but less foolish, very comforting and even empowering. But a politician or anyone might have trouble floating such ideas because they are seen as scary and dis-empowering.

One way to challenge this: Why bother to post (or think thoughts) if it matters not? Maybe it's the dopamine.

Perhaps the book "When Things Fall Apart" by Pema Chodron should be required reading.

To paraphrase an old Zen saying: "Before I knew about peak oil men were men and mountains were mountains. While learning about peak oil men were not men and mountains were not mountains. Now that I understand peak oil men are men and mountains are mountains."

..what if every action I and you, and my neighbors take today, whittle that 6 degrees just a tad, extend that timeline a decade or two. Wouldn't it matter, might we not get just that much more of a chance?

No, it would not matter. Processes have already been set in motion that can't be undone. Positive feedbacks are already kicking in. Even if every human being suddenly dropped dead, the temperature would keep rising as permafrost thawed, glaciers melted and forests burned. Species would continue to go extinct; there is a backlog of inevitable extinction that must be worked thru with or without the continued influence of humans. It is going to take the Ocean Planet on the order of ten million years to recover from the impact of humans, once we are extinct - and that's the fact of the matter whether we go extinct within the lifetimes of those already born or persist for several more centuries. The damage is already sufficient to make these outcomes inevitable. So, do 'your part' to live a lower impact lifestyle if it makes you feel better but know full well that it will make not one bit of difference to the overall outcome.

Darwinsdog, I enjoy many of your posts, but you have no real basis for estimating that the planet will take ten million years (or "on the order of"). I have always felt that geologists have an advantage humans due to their time perspective. I wonder when people say that we must save the planet if they have any idea what they are talking about. I figure they mean "we must save humanity," or "civilization," or even "business as usual," when they say that. The planet doesn't need saving from us, unless you mean it as a metaphor. The planet will (eventually) be fine, it is we who may be toast...

Oh! is that not very hopeful?

How do you know the planet doesn't need saving from us? How do you know it will eventually be fine? Unless you mean that with a qualifier: "from a human's POV". If we humans reduce Gaia to hot rocks - as Lovelock thinks to be highly likely - no, the planet doesn't need saving from us, does it? Because we're already gone and it doesn't matter. Is that what you mean? That nothing matters except as it can be exploited by humans? What if there were no humans and a salmon jumped and a bear ate her? Would that matter?

It's pretty clear that we can't save civilization (esp if it is defined as business-as-usual - me, I'll stick with a definition built around cities and resource importation) AND save the planet. Whether or not the planet needs saving is a different question. Seems to me that frames it wrong; I'll ask instead by what authority you/we destroy it?

cfm, the growlery, gray, me

Well, what I mean is that a human timescale is too short to make a judgment about this. Even if we turn it to hot rocks, by which I assume a thermonuclear war is meant, then it might take 50 to 100 million years (maybe more) to recycle much of those hot rocks, but eventually it will happen. Life will survive and the malignant mutations will work their way out and at some point the planet will have a functioning biosphere... I don't believe we have the capability to "destroy the planet" and saying that we can is careless use of language, imo.

I don't believe we have the capability to "destroy the planet" and saying that we can is careless use of language, imo.

I'd argue instead destroying the planet is exactly what we are doing. Lovelock points out that even life won't necessarily continue. Yes, there will remain a pile of rock so the planet will survive. Ilargi takes up the same theme in his repost today at TAE:

To fully understand this, you need to shake off your dreams and illusions about preservation and doing good, and take a good hard open look at the numbers on species extinctions and environmental degradation. People have been talking about saving the planet for a long time, but all the planet does is deteriorates. And not just that, the deterioration accelerates.
As long as our world views emanate from an economic system based on perpetual growth, there is, after the short high we are now leaving, no way but down and worse.

So I return to my question, "by what authority" do we destroy? Or Authority if you will. It doesn't seem a question of economics, law or technology; those have evolved as they have to facilitate the destruction and to make it more efficient. Progress consists of building bigger and bigger hammers - a.k.a. stone heads.

It seems to me biological. We don't live symbiotically. We are rogue first time parasites and we will kill the host and ourselves. Because homo economicus is so efficient and monocultural, he is more likely to kill his host Gaia and take down every other fellow traveler than a less efficient and more diverse homo diversus.

cfm, the growlery, gray, me

And man is the center of the universe where all the cosmos revolves around the earth. Species come and all species go. We are not quite as powerful as you suggest.

How do you know that extinction is not part of the natural order? Is there something "wrong" with the planet Mars or with the Earth's moon because they're devoid of life? Since matter is indestructible, is there ever any real creation or destruction?

As to whether it matters, if you mean does it have an effect? Sure it does, there's one less salmon and the bear is less hungry. When the bear dies, then bacteria, parasites, scavengers, and plants are less hungry. Things like this were going on for billions of years before we showed up.

As to whether to planet will be "fine", no, it will coarse, in a fractal-like way. Like it's always been.

"The planet isn't going anywhere ... we are!" -- George Carlin

Darwinsdog, have no real basis for estimating that the planet will take ten million years (or "on the order of").

I wouldn't have made the assertion if I had "no real basis" for making it. In past first order mass extinction episodes - and Anthropogenic Mass Extinction (AGW) is indeed first order, e.g., as great in magnitude as the previous five great episodes of extinction - the fossil record reveals that it takes about 10 million years for biodiversity to recover to pre-extinction event levels. There's no reason to believe that AGW will be any different.

The Ocean Planet is a wet space rock infested with an organic redox slime we term "life." I have never asserted that the planet needs "saving." The lithosphere is in no danger from human activity. The biosphere, atmosphere & hydrosphere are being changed dramatically by human activity but will recover once humans are extinct. If anything needs "saving" it's humans who need saving from themselves. I doubt that the species responsible for such damage is capable of repairing the damage they've caused. After all, it's much easier to break something than to fix it. That's just the Second Law for ya.

OK, DD, I stand corrected about the 10 million years. Do you believe that when all is said and done the Anthropogenic Mass Extinction event will be as bad as, say, the Permian Mass Extinction?

No, I do not think that Anthropogenic Mass Extinction (AME)will rival the end-Permian extinction event. The end-Permian event was really in a class by itself. By rights, we should speak of the end-Permain event exclusively as "1st order," and the remaining "Big Five" (including AME) as "2nd order." This is not the convention, however. I fully expect AME to equal or exceed the end-Cretaceous extinction event, but not the end-Permian.

David Jablonski agrees with you (that the anthropocene extinction will not rival the Permian).

And I agree about the P/T. None of the rest really compare. Indeed, the 10 million years for recovery following a mass extinction that you allude to above refers to, if memory serves, when the peak of new speciation occurs; the biosphere will have actually long since recovered to what a long-lived marine invertebrate species would think of as "BAU". But the Permian extinction was different. The world was clearly impoverished for millions of years into the Triassic before any kind of recovery was evident. Disaster taxa like Lingula flourished in the total absence of competition for awhile. No chert deposited for millions of years, or coal. Nothing even remotely resembling a coral reef is found for 10 million years. Wild swings in carbon isotopes. Higher order (family) diversity didn't recover for 100 million years!

IIRC, Benton and Harper's terrific new Paleobiology textbook classifies mass extinctions as major (P/T), intermediate (the other "big four"), or minor (the rest). So maybe it will become the convention after all.

Hi darwinsdog,

So, do 'your part' to live a lower impact lifestyle if it makes you feel better but know full well that it will make not one bit of difference to the overall outcome.

I like reading your comments because I believe that, somehow, you avoided having your brain connected to the "Matrix" of delusional belief systems that plague most humans. However, if I totally agreed with the above quote, I would scrape together whatever funds I could lay my hands on and start flying to every exotic biking location on the planet and "ride and drink today for tommorrow we die" (or something like that).

I keep following TOD because I'm not totally sure which hypothesis is supported by the evidence. My inclination is to think that your conclusions are correct - but, I also think that there are potential ways to avoid the worst consequences of PO, GW, and the whole debt issue.

There is no doubt that natural resouces (air, water, FF, other species, etc) are finite and being damaged and wasted by humans. The question is whether or not the human population of the planet can take the steps necessary to reverse the damage and survive the damage that has already occurred?

My conclusion is that there is a possible scenario to mitigate the worst consequences of human behavior. But, I try to look at root causes such as population, consumerism, warefare, etc. Then we have to ask why it is so difficult for people to understand the relationship between something like GW and 7B humans; or FF depletion and warfare technology; or deforestation and 2 SUVs in one garage. The answer, of course, is the inability of people to reason rationally because they are taught from birth to believe in totally irrational myths.

I think this "postive thinking" stuff is pure nonsense and actually dangerous as it has no bearing on reality. The one thing that gives me some hope is the fact that something like 16% of US citizens now self identify as being Atheists. Carl Sagan used to say that our only hope was to get beyond our evolved aggressiveness - I think we must also replace our need for myths and stories with hard science.

I re-thought my thoughts on positive thinking after seeing "The Brain That Changes Itself" by Dr. Norman Doidge, and "Change Your Brain, Change Your Life" by Dr. Daniel Amen.

I'm currently listening to the unabridged audio book of "The Brain That Changes Itself", and the hard science says that just about everything most people think they know about the brain is wrong, including most therapists and shrinks.

Before looking into this, I had no idea how incredibly plastic and malleable our brains are.

we are story tellers--we remember the 'emotionally colored'
and we really don't like being alone

and there is little chance any of that will change
or at least I hope it won't

When I talk to friends or customers about peak oil, and feel that there is some receptivity there, I will present this exercise: wherever you are look around and name three things that have NO connection to petroleum. The thing cannot have been mined or processed or transported or harvested or fertilized or prepared or stored with energy derived from petroleum or natural gas. It cannot have been cut with a gas chainsaw or heated with an oil furnace or carried on a diesel ship, etc., etc. Even if you are in a 200 year old house (I live in New England) it has probably been heated with oil or gas, etc., etc. At least this gets people to recognize how completely their lives are penetrated with petroleum.

Funny, an old Wyoming cowboy who worked with us at a wilderness school in the Rockies used to pose the same sort of question to challenge complacency. However, his resource in question was cows and cow byproducts, and he was challenging the vegans and vegetarians amongst the staff. He eventually posted a list of everyday modern products derived from cows in the dining hall, a rather eye-opening and unappetizing compendium. Few were truly bovine-free consumers, they quickly learned. It did prompt some humility now and then when the cowboy didn't just get push-back. Many people started looking a lot closer at ingredient lists, at the very least.

the stories and metaphors that TOD readers tell to motivate action and communicate the peak oil story.

Preparing "lifeboats" and "Noah's Arks":

I just got done reading your book "Peak Everything" and really enjoyed it; thank you. My husband and best friend are reading it too. I read "$20 per gallon" first, which I liked for it's simplicity, but your book was much deeper and enlightening for me.

I wonder why the author of the NY Times article didn't frame the finds in terms of use. The NY Times is usually so good with nice graphs that put things in perspective. It almost seems like they have an agenda, which to me seems uncharacteristic. Maybe the real agenda is global warming; as you mentioned in your book that the global warmers like to look at the worst case scenario in terms of remaining oil to further their case.

Welcome, vonstern.

A few words of advice, if you're planning to stick around. You won't have an easy time here, but you will learn a lot. Some have likened the experience to that of Neo in the film "The Matrix": having your illusions about the world shattered.

Your comments about the New York Times indicates that cracks are starting to appear in your particular Matrix. It is still a useful source of information. It won't give you "the facts" any more, but reading it will tell you what you are expected to believe. You'll have to figure out the whys and wherefores for yourself.

The hardest thing of all is having to think for yourself. Don't just choose one fount of knowledge and drink there only. Exercise your Google muscle and read around. For example, you might like to check JD's website, "Peak Oil Debunked" for a contrary view (to the views expressed here). (Personally I find the arguments there thin and full of gaps, but don't listen to me.)

If it starts to seem a bit overwhelming, check Carolyn Baker's website for some help with the emotional aspects of your awakening.

Good luck with your journey.

I like JD's website because it acts as the official opposition to the doomer mindset. That is to say it does not disprove or negate it, but rather seeks out and pokes holes in doomer arguments, forcing doomers to make better arguments, thereby increasing the quality of discourse. I try and do the same thing here sometimes when I see a claim that I think is inaccurate or illogical. It doesn't happen much on TOD though.

The ten billion barrels of new discoveries reported so far do initially sound encouraging

I don't understand the message here. Why should new discoveries be encouraging?
Do we want more oxidized carbon holding heat in the atmosphere and dissolving as carbonic acid in the surface ocean? Why should we be encouraged by that outcome? Seems like we should be discouraged, if anything, by the prospects of increased carbon pollution coming eventually from these new petroleum discoveries. The tone of the article seems to be that new discoveries are a good thing, and the only problem is that they don't come often enough nor in sufficient quantity to offset future demand. It's as if the author wants coastal cities inundated by the sea & coral reefs worldwide decalcified. Is our being able to drive, haul freight, and engage in mechanized agriculture the most important consideration, and the health of ecosystems be damned? Is that the underlying message here?

Yes of course the sooner we lose the fossil fuels the better. But the basic premise of the Peak Oil debate is that running low on oil will result in economic contraction and maybe collapse, so we should make other plans as rapidly as possible. The mainstream media response (as from the Times) is to say, No, we're not really facing supply problems anytime soon, so we don't HAVE to do anything to transition away from fossil fuels, though we may wish to do so in order to avert climate impacts. I'm merely framing the article in the terms of the debate.

I suggest there's an additional consideration that DarwinsDog is overlooking in the "dis/encouraging" calculation. This is that a collapse of the oil-based system could lead to all or many of the world's trees being burnt for fuel, making the future worse in just about every respect you could choose.

Relating more generally to Richard's article (with which I wholly agree), I see what appears to be a remarkable degree of consensus among a varied crowd of some people about the facts of energy peaking and resulting economic effects. And only somewhat less consensus about what will happen next in consequence (system breakdown etc). Where there's still less consensus is what to do about it--I'm in the "abandon the doomed Titanic" camp myself.

Then in seeking to enlighten the unenlightened, I see a second level of denial. Level One = "There isn't going to be an energy decline". Level Two = "So what, it won't be a big deal anyway (as energy has never been important to myself)". Or to put it less categorically, people have difficulty getting their heads round the Mother of All Paradigm Shifts, that so many key assumptions are going to become invalid.

It's rather like saying, I'm not planning on getting sick or dying soon, so there's no need to buy insurance now.

Which is how many people actually behave, with catastrophic results.


Look at Debbie's post above. What Richard is trying to do is tell the story from the perspective of the reader who's mind he needs to change. If there is too much different about the story he is telling, it won't be accepted by the average reader's mind.

Just as you find the story flawed, because he speaks from a position of continued human consumption, the average reader would find the story flawed if he spoke from a human cancer on earth meme. I find that I can't really talk to people about these issues anymore because I'm in human cancer mode and they can't hear me speaking from that perspective.

One also has to remember that this writing is part of his job to convince people about peak issues. Compared to the crap that I have to spew for my salary, this smells great, and I could probably pull it off if my job depended on it.


Edit: Richard responded while I wrote, so I'll add that I think "framing in terms of the debate" is the wrong language to describe telling the culturally acceptable story.

In order to take your attitude, one must be dead certain that supplies will limit climate change to acceptable proportions. I'm personally not that convinced, there being a lot of coal and N Gas out there yet even if petroleum drops to zero.

The real problem in getting any sort of consistent story line across to the public as a consensus is the interconnecting points of "peak oil"<-->"climate change"<-->"neo-liberal economics (the only thing good is profits)". Until some group or other comes up with a single consistent long-term plan for transition beyond fossil fuels which includes an acceptable dose of worldwide social justice, this whole debate remains as so much shouting in a vacuum. Personally, I think the Club of Rome has had the answer for a long time, but no-one wants to listen.

Our ability to analyze issues from a single point of view, instead of always seeing the big picture, has been our greatest strength and our fatal weakness. Oil discoveries are encouraging only if you're "thinking" in the narrowest sense possible, a thinking mode which many of us here on TOD are no longer able to stay in.

For example: are new discoveries encouraging because it means you will be able to keep driving? Well you actually won't, because global warming will flood your town.
Are they encouraging because it means you can keep growing the economy? Well, no actually, it won't be growing because crops will fail and people will be spending all their money on potatoes.

Heinberg takes it one step before that: You think this is encouraging because it means you will have oil for a good long while? Actually you won't. It's not even enough. The point of the discoveries is exactly to confirm that the medium-term fate of oil dependent nations is sealed.

Get new dreams.

Hi darwinsdog,

Wouldn't it be great to see major media publish articles that decry the discovery of new oil finds! For the very reasons you cite, these discoveries should be cast in the light of being obscene, greedy, and perhaps even illegal activities.

We are running on hopes. According to the IEA's WEO 2008, 79% of the tank has a tap which allows only annual oil flows declining at 4% pa. Including the task of offsetting natural decline in post peak fields, 27 mb/d of additional capacity have to be developed until 2015 - relative to 2007 - from the other 21% of known reserves, just to stay flat. And the rest of this oil comes mainly from expensive offshore, the Former Sowiet Union and the Middle East.

Explained here:

This graph makes no sense.

50.3 mbpd in 2015?
Only if you assume a constant decline.

Right now there will be an oil surplus of 70000 bpd according to EIA;
150000 bpd in production growth with demand shrinking by 30000 bpd.
If demand shrinks, there should be no problem. US oil demand is down 4% but US production is rising(partly due to GOM).

Opec production(1/3rd of world) is down 10% over last year
Non-Opec production(2/3 of world) is up .6%.
Supply is down 2.7 mbpd and demand is down 3 mbpd, therefore there is a surplus this year.

It is probably easier to predict demand(based on price) than supply. Reduce demand by substitution and energy conservation.

Governments should respond by subsidizing (heavy)oil production until substitution by renewables make sense.

The graph has to do with what would happen, in the absence of additional new production. What we normally see is a blend of old declining production and rising production of new fields being brought on board. The amounts he is showing of needed new production to offset declines aren't all that high (compared to some estimates). According to my calculations, required new production is as follows:

2007 to 2015 (70.2- 50.3)/ 8 = 2.5 mbd new production per year

2015 to 2022 (50.3 - 37.6) / 7= 1.8 mbd new production per year

2022 to 2030 (37.6 - 27.0) / 8 = 1.3 mbd new production per year.

It seems like the world really needs more new production than I am calculating, since even that that is added will continue to decline.

The EIA shows crude production from the North Sea of about 6.0 mbpd in 1999, 4.7 mbpd in 2005 and 3.9 mbpd in 2008. The 1999 to 2008 production decline is a decline rate of 4.8%/year.

A question I asked is what is the peak production rate and peak year for North Sea oil fields whose first full year of production was 1999. Sam tentatively estimates it at about one mbpd in 2005. This would put the older production (fields who first full year of production was prior to 1999) at about 3.7 mbpd in 2005, a decline rate of about 7%/year to 8%/year, i.e., on track to fall by half about every 10 years or so.

Of course predominantly onshore producing regions would have a slower decline rate than the North Sea, but this gives you an idea of how even new fields with a combined peak production rate of one mbpd (17% of the 1999 peak rate) could not offset the underlying North Sea decline. Kind of puts one mbpd of new production worldwide in perspective--about 1.4% of the 2005 crude production rate.

Well Done, WT & Sam,

That closely follows my WAG answer to the question you posted a few days ago. I hope the terrific TOD data-freaks can continue to statistically narrow this down.

EDIT: I am disappointed that a lot more TODers didn't try to answer your question as it could possibly be helpful to your's & Sam's research with the TODer input of new ideas and data.

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

My UK graphs have disappeared from imageshack

These are thumbnails from the Google cache:

I modeled this at upwards of 20% extraction rate but this precludes any new discoveries entering the picture. Since the time I posted these in 2005, I have developed a better, i.e extrapolated, dispersive discovery model which will pull up the tail.

And for Norway

So the combination of UK plus Norway is about 3.5 in 2008 and 3 MB/day in 2010. That is pessimistic again because I stopped new discoveries according to the data.

Here are recovered UK graphs I dug off my hard disk.

I don't like the fact that imageshack occasionally loses these GIF images .. so much for that host as an archival site. I guess you get what you pay for.

The above graph shows what IS HAPPENING IN EXISTING FIELDS which are 79% of all reserves. I arrived at it by going through the decline rate analysis of the WEO 2008, disassembling it and putting it together again. It is the dark blue decline wedge in Fig 11.1. The shocking truth is that 55 mb/d in 2007 are from post peak fields.

Between 1950 and 1970 oil production increased by 2.5 mbpd every year. That was a world of 3 billion people.

Today there are 7 billion people, so a 1.5 mbpd per year heavy oil infrastructure would be born by a much larger population.

Oil fields do not deplete exponentially.
They produce in a trapazoid shape.

If we are at peak we will decline at a rate of about 1.5 mbpd every year(.5 Gb). The whole question is at what rate can heavy oil can increase.
Alberta oil sands is increasing at .15 mbpd. Ethanol is increasing at .04 mbpd(boe). So basically you would have to do about 7-10 times more than the world is doing now to keep the system in balance.

If ethanol,tar sands, etc. cost $30000 per daily barrel then
1.5 mbpd would cost ~$50-100 billion dollars per year.

Unfortunately you'd have to charge $100-200 per barrel of oil to pay for 500 million extra barrels per year of oil.

It is quite important to at least maintain the world export trade in oil which is ~18 Gb/yr because that supports a world economy of the current size.

OPEC cannot be relied on to support the world economy because they
reduce production as revenues drop due to economic contraction; for example when world demand dropped by 3 mbpd, OPEC just pumped 3 mbpd less despite them siting on most of the conventional oil. If
such behavior is allowed then you do get a compound negative interest rate.

A new anti-OPEC system is needed to boost production of heavy oil to maintain the 18 Gb/a of the world export trade in oil. Since
the the OECD and China uses most of world export oil trade maybe a tax of $5 should be charged on each barrel of oil to build the heavy oil infrastructure.

The USGS estimates there is +900 Gb of conventional oil, +400 Gb of heavy oil and +650 Gb of bitumen.

85% of conventional oil is in the Eastern Hemisphere while
75% of unconventional oil is in the Western Hemisphere mainly in
Canada and Venezuela.

Oil fields do not deplete exponentially.
They produce in a trapazoid shape.

Then why do most reservoir engineering textbooks describe both exponential and hyperbolic decline?

I suppose the one reason that trapezoid exists as a shape is that economic considerations will force oil producing areas to shut down. In that case the production is truncated and trapezoidal does work better than something with an infinite tail.

Yet, exponential or hyperbolic declines are easily explained statistically.

Yet, exponential or hyperbolic declines are easily explained statistically.

To a hammer, everything looks like a nail.

Not only that, statistics is based on random events and oil is geologically determined i.e. not random.

You're going to have to give up on your fancy math, WHT.

Conventional oil(for whatever reason) acts like a trapazoid and heavy oil acts even more like a trapazoid.

So start modeling based on a trapazoid, dude.

I assume that you are saying that production tends to hit a plateau and then decline. There are certainly cases of this, and I have described the 3/6 year rule, where we frequently see a slow three year exponential decline, followed by a more rapid exponential decline in the next six years or so, e.g., Texas & the North Sea. But this is just a slow exponential decline, followed by a faster exponential decline.

Also, we are finishing up a graph of 21 current and former net oil exporters comparing the rates of change in production, consumption and net exports, relative to their respective production peaks. There is only one word for the production declines: exponential.

There are certainly cases of this, and I have described the 3/6 year rule, where we frequently see a slow three year exponential decline, followed by a more rapid exponential decline in the next six years or so, e.g., Texas & the North Sea. But this is just a slow exponential decline, followed by a faster exponential decline.

Hehe...can't have it both ways--a slow exponential, then a fast exponential.

The magic of an exponential curve is that it is continuous.
It is an abstraction.
I would guess that most producers do cap production per market conditions.
I think a trapezoid is more accurate( see The Coming Oil Crisis by C. Campbell pg 69 Oilfield depletion graph).

If you add up an infinite number of trapezoids you might get a bell curve per the Central Limit Theorem but if we are passed peak there are only a finite number of trapezoids to add, so forget the bell curve/ exponential decline.


Well, here are the year over year rates of change for crude oil production from the North Sea (EIA). The overall rate of change is -4.8%/year, from 1999 to 2008. How would you characterize this production decline?

2000: -2.1%/year
2001: +0.05%/year
2002: -5.2%/year
2003: -4.8%/year
2004: -5.9%/year
2005: -9.4%/year
2006: -8.7%/year
2007: -5.4%/year
2008: -5.8%/year

Incidentally, based on the logistic models, the world, in 2005, was at about the same stage of depletion, in regard to conventional production, that the North Sea was at in 1999. So, 2009 worldwide would be comparable to 2003 in the North Sea.

Actually, a geometric decline is more scientific.
(.979 x 1.0005 x .948 x .952 x .941 x .906 x .913 x .946 x .942)=.613^1/9 or -5.3% per year
But based on your 4.8% arithmetic decline a year that field should last 20 more years past peak or another 20 Gb as a triangle
(2 Gb/yrx 20/2).

But I'm not sure if you mean Norway, Denmark, UK, Germany, or all of them. Campbell gave ~50 Gb URR for the North Sea in his book.

But the UK actually peaked in 1985 and produced about ~90% of that on average(1.8 Gb per year) for 15 years before falling off in 1999.
1.8 Gb/yr x 15 years + 20 Gb = 47 Gb.

I'm not saying the oil fields don't decline only that they don't decline continuously and that they are usually capped.

It looks like a lot more like trapezoid than a logistic curve, doesn't it?

OTH, Norway is finding more oil while the UK has stopped looking
according to the industry leaving up to 25 Gb under the North Sea.

The above numbers are the year over year exponential rates of change for total North Sea crude + condensate (EIA), and the EIA shows that the UK peaked in 1999.

Here are the initial exponential Rates of Change in Texas & North Sea C+C Oil Production, Relative to Their Respective Production Peaks (1972 for Texas & 1999 for the North Sea)

Yr. Texas North Sea
1 -0.2 -2.1
2 -1.4 -1.0
3 -2.0 -0.8
4 -2.3 -1.8
5 -2.7 -2.6
6 -3.2 -3.8
7 -3.6 -4.5
8 -3.8 -4.6
9 -3.8 -4.7

The Texas decline rate in year 9 (1981) is the same decline rate that we see over a 35 year period, from 1972 to 2007. If these are not exponential production declines, what are they?

The UK had a double peak in 1985 and 1999 with a slight dip in between them as my link shows.

Texas does show only a single peak in 1972 of 3.5 mbpd with a exponential(geometric) decline of 2.6% per year for the first 10 years and a 3.2% decline for the next 25 years ending in 2007 and an overall 35 year decline of 3.2% per year.

It could be a modeled as two rates instead.

Here's how Alaska's North Slope looks with two linear decline rates declining at 90000 bpd each year for 10 years, followed by 45000 bpd each year for the next 10 years versus a 5% continuous exponential decline.

It could be a modeled as two rates instead.

Hyperbolic decline is caused by a dispersion of exponential rates. Dude, you have been owned by your own words. Welcome to the wonderful world of stochastic mathematics.

Dude, you have been owned by your own words.

Simmer down, WHT.

I'm not suggesting random continuous statisical processes
but the exact opposite--discontinuous, deterministic processes.

Why is it that the plateaus are never modeled but ignored as inconveniences even though in many oil field it is the time when most of the oil is produced?

Campbell describes the oil field as a rapid rise, a flat plateau and a steep or exponential decline, yet the impulse to see it as a smooth logistic curve is irresistible even though the curve is completely discontinuous.

It's like those optical illusions that force you to see things that aren't there.

This is a picture of the average depletion profile for a North Sea oil field. This data is available because the UK requires operators to release the data, BTW. Note that the average curve is asymmetric to the left and does not feature a strong plateau.

We call this a kernel function in statistical signal processing and it is useful for constructing an expected envelope.

The simplest way to consider this shape is a convolution of a hyperbolic maturation profile with an exponential decline curve. So there you have two slopes.

Discontinuous, deterministic processes never exist in oil production because it is at its core a Bayesian system. The operators are continuously updating their current knowledge and making continuous updates. So discontinuities do not really occur, and the trapezoid is at best an abstraction of a real field.

Whats interesting with that graph is if you go with my assumptions about remaining reserves.

I assume we have around say 250GB of what I call fast oil remaining this is oil that can be produced at a high production rate relative to reserves i.e 10%.

If all the worlds production was totally from "fast oil" then we would have 25GB/year /.10 = 250GB of this oil left. or enough for about 10 years at a flat production rate then it goes to zero.

Now of course not all the worlds oil is produced from our remaining fast oil fields for example most of the US production is from high water cut fields say 2-3mbd or so the production decline rates in these fields is low so its in the slow oil category and lasts quite a bit longer. Of course for oil the key is which group are the super giants in ? Well Cantarell was obviously in the fast group ooops.

Next of course the fast oil concept does a good job of giving a nice plateau at peak or even slowly rising production at the expense of a eventual sharp decline aka shark fin production profile.

Thus even though the overall concept indicates something like 250GB of easily accesible rapidly produced oil remaining it does not say when exactly we started using this last 250GB or so. To figure this out you have to find when production started to plateau. This is not easy because the world did have shutin production capacity for quite some time i.e a significant amount of productive capacity was not actually produced for political or economic or even technical reasons. Thus you have a peak in produced oil but its hidden by bringing online reserved capacity and all that really happened is spare capacity dwindles.

Whats important is to note that once this starts the new capacity brought online is a fraction of the total and that capacity that has been in production for some time is declining now even as unused capacity is brought online.

This is important since despite the smearing effects on the total amounts caused by excess capacity being brought online the real underlying situation is not doing well at all.

Thus to time when we started entering into depleting the last 250GB or so of oil you have to look back into the past given the nature of the situation with ample spare capacity the signal of peak is a minima in price its when we had the most online production capacity and the most spare capacity.

The signal is very similar to a lamb shift in spectroscopy.

Thus knowning what to look for we simply have to read the answer of the price charts.

You have to also account for known reserves i.e obviously its not 1950 regardless of the price so it has to be at some point after the growth in production slowed and you have to account for obvious above ground events.

Regardless we actually get a very nice signal putting 1998 as the most probable true peak date.

No its 2009-1998 = 11 years.

So we should obviously be in the start of TSHTF stage who knows what happens for sure at that point maybe we have price spikes and economic collapse or something like that. But its just the start.

And now give the rate we are depleting our fast oil nominal increases from bringing on spare capacity can be seen to have only a short term effect before they are swamped but the underlying depletion. Something like 10mbd of spare capacity over 10 years might buy you and extra six months or year or so on average if that. It obscures the headline number i.e total production but does not really change the situation.

And of course the coolest thing about this theory is it fails fast assuming my timing is right then collapsing oil production will quickly outstrip the rate that the economy can contract as oil demand hits structual limits and we enter the period of permanent scarcity. Thats not to say if economic collapse is rapid enough that you cant get a very brief period where demand and supply are in balance but its brief and quickly overwhelmed. The timescale is in months not years.

And even being off by a year in my estimates eventually does not matter as we go over the cliff it becomes easier to refine the exact situation looking back in the rearview mirror so the errors are quickly reduced.

In general it suggest that the price of oil doubles about every six months or so even after economic collapse the system should rapidly return to the price doubling situation albeit from a new lower price point. Obviously it does not take long for the reset from fast economic collapse to evaporate.

Now a long period of steady say slightly increasing or declining or flat oil prices lasting at least a year after I've pegged collapse does a fantastic job of invalidating the theory since that situation is impossible. If we say continue to see 60-70 dollar or cheaper oil for the next six months then the chances my theory is wrong increases dramatically !

However prices are not controlled by my theory it just says that they will be forced eventually to snap to the curve if you will in the interm as long as your not back into scarcity even as it is approaching prices will reflect market sentiment. The market is obviously not expecting any major changes in prices thus is the theory is right then the market will only respond as scarcity becomes obvious i.e it will wait to the last minute to snap back on curve :(

That sucks rocks because it makes it hard for me to call my theory wrong. From the market perspective I really need to see steadily falling oil prices to really call off collapse. Flat and even sligthly rising prices from the time of surplus from economic collapse to the time of scarcity don't tell me anything one way or the other they are neutral and devoid of any information about the future. Indeed the futures market is effectively flat taking into account inflation expectations and the market itself says it expects and also knows nothing about the future.

I just have to use my six month moving window to discern where the trends lie. This suggests that oil prices will need to start rising aggressively at some point within the next six months however it does not say when.
It does say that if at the end of six months if oil prices are close to todays then we are at least say 70% certain the theory is false. If they remain flat for and additional six months then 100% certain.

But I'm looking for the end point and given the nature no reason to rush invalidating the theory as each additional six months of data really smashes it. So far at least its still a draw some indicators support it some don't.

The signal is very similar to a lamb shift in spectroscopy.

I am afraid the two are not similar. Oil production has nothing to do with the mathematical theory of quantum electrodynamics.

I just meant graphically similar i.e a peak with a notch in the top.

I don't know any other even remotely common graph that has this sort of thing.
Well double tops are very very common in markets and probably actually for similar reasons
but its just one pattern amongst many.

Outside of markets I'm simply not aware of other examples of a notched peak or double peak
where for a variety of reasons you get a bit of a glut right at the peak.

In the cases of oil its the combination of maximum production from producing fields along with spare capacity being at a maximum. Right at the peak oil became dirt cheap. Later as production declines and prices increase more spare capacity is brought online in general up to the peak the spare capacity was generally marginally or non profitable. But as normal production declines more as brought online.

Whats interesting is the total production pretty much has no real physical meaning. Its a mix of spare capacity price demand and "normal supply". Assuming demand is still increasing and that the decline of existing production is fairly slow for quite a while additional spare capacity brought online will actually result in increased production. Even as the gap or decline of existing production or fields in full production before peak grows you literally don't see anything. At least until you run out of spare capacity then the price starts increasing to quell demand and production no longer follows.

Whats interesting is that the existance of substantial spare capacity in the past is well documented and generally not something people disagree about I see no reason why it did not exist. The exact magnitude is probably a question but a good amount had to have been around pretty much as documented.

I think this would be a simple shock in your shock model however given that I don't know any trustworthy source for the total capacity not when it was brought online its tough to say what its values where.

One part you might have missed is it implies that real production never jumped in 2003 i.e once spare capacity was gone total production went in decline.

From the links you reference, I don't see a peak with a notch in it.

Upthread I do show the UK North Sea data, and this does have two production peaks of about equal amplitude, yet there are two discovery peaks underlying this.

Hmm its a price signal not a production signal spare capacity is going to hide the production signal of peak.

Model a system with spare capacity and you should see the "peak" is something you can only deduce from the math it does not show up in the production.

Think about it this way what would have happened if Ghawar was brought online right as the rest of the world peaked ? Well everywhere but Ghawar would enter decline however the overall production profile would depend on the decline rate of all the non-Ghawar source plus Ghawar.

We actually almost have a case of this with Alaskan oil and the US it caused a plateau for a few years then overall decline set in. In some sense spare capacity works like a very late big field coming online.

Now of course we don't know how to split this out however right at peak production you have the most oil produced for the cheapest price if you have substantial spare capacity thats not been brought online therefore in this case I'd argue we should have a price signal for peak everything but spare capacity in the form of a low in price late in the production profile. Indeed we actually have it and it makes sense that we would have it. As prices rebounded post peak non spare capacity more and more was brought online.
Eventually of course we ran out of it.

Again the important thing is that this would mean the next inflection point in prices around 2003 was when overall production began to fall i.e we where out of spare capacity and total production now fell.
Again the same as what happened in the US Alaskan oil managed to halt the decline in overall US production but eventually within a few years we were back declining.

This forces me to call all the production numbers after 2003 a bunch of manure. However something else was also occuring that obscured the decline in real oil. NGL production continued to increase and I have no reason to believe the NGL numbers are not reasonable.

All thats really required is a bit of double reporting of condensates or maybe not even double as oil and condensates are reported together. Also of course this implies a significant increase in internal use of NG or flaring with extraction of the NGL's. All of that basically happened as traditional crude declined.
And last but not least exports of crude can be maintained by shifting to NG and even NGL's internally for the countries that export crude and also burn it for electricity and desalination plants.

Since all liquids had not peaked any change in the composition is really just and accounting issue.

The key is this does not help distillates which are a product of real crude i.e diesel while gasoline can be made using some of the condensate fractions.

Again a price signal develops if this is the truth with diesel prices rising more strongly than gasoline.
Now of course these also have a coupling as refiners do have significant control so if they turn the knob all the way to distillate then you starve gasoline demand so there is a price balance between the two.

And last but not least the current huge build in distillates is VERY interesting given the above.
Gasoline has not built up to anything like what distillates has as even now although it looks like all liquids is starting to decline gasoline is relatively abundant vs distillates.

Assuming of course real crude is now in steep decline. I expect overtime for refiners to focus on distillates and starve the gasoline market unless it becomes very competitively priced.
But again it gets interesting since distillates are generally used in business and business will pass on at least some of the rising costs for diesel to their customers. However gasoline is generally not used to directly generate revenue so you have no easy way to pass on costs. In short the distillate market has deeper pockets than the gasoline market and can out compete it for refinery output.

Life gets interesting if I'm right.

(indeed, since the oil price crash of late 2008 over $150 billion of investments in new oil projects have been cancelled)

Where can such statistics be found and referenced? It would be extremely usefull to get a source.

Tbe $150 billion figure is very conservative. The IEA in a May report estimated $170 billion in investments had been canceled (referenced here:

(indeed, since the oil price crash of late 2008 over $150 billion of investments in new oil projects have been cancelled)

Where can such statistics be found and referenced? It would be extremely usefull to get a source.

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So, what is a sustainable price? A review of recent economic history yields the observation that when petroleum sells above about $80 a barrel (in inflation-adjusted terms), the economy begins to stall. Oil industry wags have begun to speak of a “Goldilocks” price range of $60 to $80 a barrel (not too high, not too low—just right!) as the prerequisite for economic recovery. If prices are higher, the economy sputters, reducing oil demand and subsequently seriously undermining prices; if they drift lower, not enough investment will go toward exploration and production, so that oil shortages and price spikes will become inevitable a few years hence

This is the $64 trillion question. What is the sustainable price.

Adjusting for inflation is pointless because people use the dollars in hand, rather than 'inflation adjusted' dollars. The legacy pricing structures that provide legacy returns are useless to service 'inflated' nominal prices. Nominal prices matter; $69 dollar oil does indeed cost more than $25 oil.

The '(high dollar price) for crude being sustainable' is a rationalization. Anything over $25 a barrel means rapid, long term (forget sustainable!) growth is impossible. The entire economic system of the world has been erected around cheap petroleum inputs. Raise the energy input cost and the difference has to be a) allocated away from some other input, or b) added to the final price of the good or service produced.

If it's a), the result is a loss of high- wage jobs to low wage countries. Oops, there go the customers.

If it's b), the resulting increase in price shrinks the available market for the product or service. Both alternatives lead to long term - and quite sustainable - growth in business bankruptcies. Maybe this is the 'growth' that economists and politicians are referring to.

Our costs are tres 2009, our returns are quelle 1986! Something has to give and it has, already!

This arbitrage between current and past costs/returns is what has been happening world wide for the past ten years. The shift of jobs from Union shops in the USA to low wage China allows that country to export its cheap coal, cheap labor and lack of environmental protection back to the US. The Chinese cannot afford to purchase the goods they make, so the shift only buys a little time. Eventually, $69 oil catches up with China, too. The ex- union workers who are the intended customers for the Chinese goods are broke and cannot afford anything, either.

You can lend workers ten times the cash to afford the higher oil price but you cannot command ten times the productivity from them. Productivity is trapped in thermodynamics and the increase in the cost of energy inputs feeds on itself. Hello! Substituting debt for income failed for this reason. Trying to 'inflation- adjust' earnings and asset values does nothing to improve the earning power that is constrained by the real high energy price.

The oil industry - and the financial economy - will continue to make claims against production. These claims will be couched in soothing bromides like Mouawad's, with the 'acceptible, sustainable' price constantly racheting upward. Time is long past to disregard this fiction and turn to the program that is guaranteed to work.


Cutting oil consumption 50% would be hard - it would destroy the auto industry - but there is no other choice. The current oil price level has pushed the 'recovery' to the edge of the abyss. Only a drop of price to below $40 will steer it from disaster.

There is no sustainable price. The whole activity of fossil energy is unsustainable. The "price" and global trade merely allows the shifting of the exploitation onto someone else's back. The terms of trade are of a piece with technology - time and time again I hear people talk of how sustainably they live because they do not see what their money does elsewhere.

cfm, the growlery, gray, me

I buy this completely : only a high growth rate enables the status quo in the richer countries (the USA and EU in particular). Low positive growth equals increasing unemployment and lower overall household incomes. Zero growth or economic contraction means panic stations.

And the correlation with cheap energy is indisputable.

However, if the oil price could be engineered back down to $25, you get a spurt of economic growth to be sure, plus the collapse of oil exploration and development, followed rapidly by a supply crunch and oil price spike.

The least worst solution is a managed oil price at the upper end of what is bearable, to accompany retooling of social and economic systems for zero or negative growth, long term.

Already the USA is approaching European rates of unemployment. Those are manageable, but expensive to manage, because you have to keep your long-term unemployed from falling out of both the economy and society. Not sure the USA is capable of making the adaptations, but I sure hope so. (You're surely better off with Obama than with anyone else I can think of; the problem is the rest of the political class.)

How the EU copes with ever-higher unemployment remains to be seen, too. Redistributing wealth/poverty and recalibrating expectations are at least as important as pursuing economic growth, which is likely to be illusory.


I'm with you on the move towads conservation as a possible way to save some semblence of bau-personally I am not interested in cooking all my meals on a woodstove and never goig more than ten miles from home again.

This is a little off topic but I have been watching my nieghbors driving habits and they are changing in ways probably not yet obvious to the average observer.

I know of a dozen or more full size older trucks in my nieghborhood that were driven regularly as primary vehicles as little as three or four years ago.All these trucks are still registered and used occasionally for farm work , hauling firewood,building materials ,etc, but the owners are mostly driving small to midsize cars as a rule now.The number of local guys driving a full size picku as thier only vehicle has probably fell by close to a third over the last few years.

Insulation seems to be in relatively short supply at the local building supply stores-the clerk who waited on me when I bought some a few days ago says it's selling faster than usual and that the store will probably have to start increasing the size of thier own wholesale order.

He also said he sales of small electric heaters are brisk and that his customers are using them to keep a small area comfortable and lowering thier thermostats a little.

Nearly everybody around here has switched to cfl lights.

Maybe the public will embrace conservation faster than we think- or this could just be a temporary response that will fade out if the economy picks up again.

alistairC sez:

However, if the oil price could be engineered back down to $25, you get a spurt of economic growth to be sure, plus the collapse of oil exploration and development, followed rapidly by a supply crunch and oil price spike.

You've described peak oil. It's a financial as well as a physical phenomenon. The rate of availability to users is what matters and that is determined by finance flows on one hand and other non- production factors such as energy productivity. Before the peak, neither high nor low prices constrain oil production. After the peak ... what you describe and what everyone now sees is oil production constrained regardless of price, either high or low.

When oil output decouples from 'investment' inputs ... that's peak oil. When comparative pricing power shifts from buyer to seller, that is peak oil.

Let's look at energy productivity. or unit of output of any good per unit of energy. Peak energy productivity in the US took place alongside the point where the US started importing large amounts of crude; in the 1960's.

There were more American farmers with little industrial agriculture, more train travel and transit, little air travel; the suburbs had were just being developed along with the nascent Interstate Highway system; there were far fewer cars. Most US energy consumption took place in manufacturing and basic industries, there was no energy- gobbling 'high technology'. A lot of output took place for a proportionately small amount of energy. This energy was cheap because it was abundantly available relative to demand.

Since then, energy use has multiplied by orders of maginitude. On a dollar basis, peak oil took place in 1998; on an energy productivity basis, peak oil took place around 1965! Since then, the workforce (more people, period) has expanded, there are more autos, which are larger and less efficient vehicles, more places to drive, more energy- gobbling high tech, more commercial automation (which requres more energy per unit output than a human worker does); there is more extemsoe goods transport, more redundancy, more waste. Energy input per worker has accelerated; energy productivity has declined.

Currently, the energy demand of the workforce expands whether the force itself expands or not; people drive whether they have a job or not. The decline in energy productivity has cost millions of Americans their jobs. At the same time, the decline has left worldwide less and less able to service his/her energy costs and certainly not the aggregated debt floated to pay for energy to date.

Nevertheless, the bias is tilted administratively toward consumption which is obviously self- defeating! China attempts to replicate for itself America's consumption capacity at the same time expanding production. America's consumption increase is amplified by debt and efforts by governments to stimulate more and more of it. Attempts to improve energy productivity backfire.

Instead of making washing machines or other hard goods that use a certain amount of energy per pound of product to make, the US concetrates on technology and services which require fifteen or more times as much energy per pound to make. At the same time, the Chinese use antiquated shop methods to make the same hard goods using far more energy per pound than did the original US manufacturers. Any energy productivity gained by more efficent production tools is lost by inefficient processes.

As more countries 'develope' (following the Victorian- era Chinese development model) while demands on fuel production increase as a result ofeclining energy productivity elsewhere; the ability to conserve without staggering financial losses falls to nil.

All development activity represents 'sunk capital'. None of the capital cost can be recovered unless there is energy available to 'finance' it; conservation has the same effect as constraint on lending. Unless there is rapid financial growth, there is insufficient return to service capital expenditures already committed,

10% conservation cuts off GDP at the knees. See what 5% has done, already!

Now, Mac ...

My Father used to tell me all the time that, "The public is always ahead of the government". What you describe is exactly that. The average citizen lives in the raal world, he/she listens to the lies of politicians and quietly adjusts. Will the adjustment be enough? Probably not, there is a leadership vacuum. Somebody needs to inform the public what is expected of them.

Some adjustment is better than zero! How will all this play out?

In five years there will be much less oil to import. Maybe Jeffrey Brown can help out: Mexico net exports will fall to zero, Canada (with sharply depleted conventional reserves) will deplete down to 20% of current, Russia will be 40% depleted, Saudi Arabia will be done as a major exporter 30% depleted, Venezuela 50% depleted and Brazil, Nigeria, Angola and the rest will not be selling oil to us. US oil companies will be threatened with nationalization to compel them to market crude they control. Domestic wells will be shut down, for the first time ever, oil will have real value while in the ground!

There will be no gas, not at any price. You can have a thousand dollars in your pants and there will be no gas stations with gas in your state, in your region ... maybe for a long time or forever. Forget about cost/price. This issue will be ... availability!

People will be upset when this happens. They will become very resentful of the auto/housebuilding/retail industries which have first compelled them into then marooned them within suburbia. The love affair with the car will turn to hate. People will use their newly acquired tens of thousands of rounds of ammo to pump collectively billions of holes in the now- uselss vehicles. Car dealerships will be torched, cars themselves will be blown up, buried, crushed, ripped apart ... and eventually sold as scrap steel and plastic. In ten years there will be very few cars and those in private hands will be 'for hire', only.

If you want to go more than ten miles outside of your house, you will have to take a streetcar or interurban. Fifty years ago, during peak energy productivity, there were tens of thousands of miles of these passenger railroads. The were cheap and no hassle, unlike today where some idiot texting while driving collects you into a ditch with a semi upside down on top of you.

So ... it's coming, whether we like it or not.


I'm afraid I agree with you , in regard to the long term picture-I'm focused right now on just how fast things will decline.Sometimes it seems reasinable to think things will stabilize for a few years-the next day it seems perfectly reasonable to assume that the final decline is well started and will continue.

In terms of looking after my self and helping my family and friends there is a huge difference between two or three more reasonably secure years,energy wise, which seems to be a safe guess today,and five or ten years-which seems like a very risky guess.

If things don't go down hill too fast I can accomplish a lot(at the family level) by gradually selling the idea of a wood stove(which will require an expensive chimney) here, a raised bed garden(easy on arthritic knees)there and maybe a subcompact car instead of a pickup truck somewhere else.

I might also be able to influence a few career decisions.Local educational options are rather limited but the community colleges do have some programs that are promising.

OFM, email me.

Hi Steve,

If you want to go more than ten miles outside of your house, you will have to take a streetcar or interurban

I'm over 70, have one totally replace knee and another that should be replaced. Yet, I consider a 10 mile bicycle ride as "hardly worth the effort" to get the bike out and properly dressed for cycling.

It is either amusing or disgusting to consider how people in the US have come to think about the way they should move their bodies about on the face of the earth.

This is also what I am waiting to see........all the gas stations shut down.

I see one or two or three now shut down here and there and I always feel happy. When they are ALL shut down, now that will be the cosmos speaking its cool cosmic language.......

I won`t see them, I suppose, from mt seat on a bus as I do now. I will have to walk around to see them.

If you cook with propane and that is all you use the propane for I bet one 250 gallon tank would last the rest of your life and it is cheap right now.
The big energy using activities are not essential activities. Americans have an enormous amount of fat that can be trimmed before feeling any reduction in life quality.
I think 50 % could be done with minimal effort really.
We just simply live like gluttons right now.

Cutting oil consumption 50% would be hard

Hmmm .... I don't think so. Real world data says the world has peaked, if this is the final peak (which I think is quite likely because crude has been getting ever less affordable for eleven years now), then ELM says a 50% fall in available imports will occur within another 10 years or so.

I guess that means if you live in a country importing a lot of oil expect a hard time - I bet there won't be a 'cash for clunkers' to keep industry going a second time - giving people cheap cars is actually the last thing required but thay have to try since that's what they were voted in to do!

"destroy the auto industry".....

This is something I am waiting for, the end of automobiles.

I think it will happen. But before we all starve first? That is the question!!!

There is a poem by Wordsworth........"My Heart Leaps Up/When I behold a rainbow in the sky"

(I don`t have the text here now to quote exactly).

But my heart leaped up when I read your words "it would destroy the auto industry". :)

Thank you for framing this so well.

also, a StumbleUpon link: (no account required...)

I'm intrigued by the relative stability of oil prices over the past few months.

If the market is driven by supply and demand, then the price is way too high.

If the market is driven by speculation, then it's far too stable.

So what's going on? I buy the theory that last year's price spike, though driven by tight supply, was amplified by a vast influx of speculative money into oil trading. A huge amount was funnelled through only a few actors : Goldman Sachs in particular.

I'm just wondering if there isn't some sort of stability pact in place now, designed precisely to keep oil in the Goldilocks price range. The US administration holds the investment bankers by the short and curlies, and they manage speculation to meet certain goals.

I'm not paranoid, mind. I'm an optimist. I think this would be a good plan, if achievable.

Last year's spike in prices was also the result of an incredibly weak dollar agains other major currencies. If you convert the WTI price of oil to €, for example, you still get a spike and a fall in prices but it is not nearly as dramatic as pricing oil in dollars.

Looking backward in time at prices, it looks like several trends can be teased out of the data (but I'm eyeballing the data with some relatively simple transforms and haven't dropped the data into SAS to play with serious time-series analysis). Relative to previous trends, current price conditions don't look too far out of whack.

Another point worth considering has been the strong contango position of the futures market looking well beyond the near-term time horizon. The front month futures prices are not likely to drop significantly under those conditions.

You're right, it sure looks like a managed market now, but I can't imagine how that would be managed. Would non-OPEC sellers refuse orders at prices above a threshold? Not likely managed. Simply that demand has fallen enough that S Arabia, who is still willing to manage supply, has the reserve production capacity to do so and the incentive to employ that reserve that way. As soon as the combination of S. Arabia reserve capacity drops + market demand increases make that situation not in place again, hold onto your hat.

Most people don't realize what a valuable asset KSA is to the world petroleum market, being willing to accept financial penalties (reduced production) in order to maintain a sufficient production capacity reserve to stabilize the world market. Of course the solution is to set up a new worldwide cartel consisting of every producer worldwide, who simply set the price arbitrarily every three months with few swings and no speculation.

"If the market is driven by supply and demand, then the price is way too high."

I have heard this comment before. As far as I can tell it is based on the wishfull thinking of BAU optimists. The data is simply not available to justify making this comment in the short term.

Please correct me if you have some data.

I'd not worry to much about the stability for a bit. This is a seasonal period of weak demand and despite what happens the seasonal signal will still be overlayed on top of the overall situation.

So from the most basic fundamental POV if we had enough oil to balance supply at price X this summer then right now the demand is less than X. If supply has not changed dramatically in the interm or storage levels are still adequate than fundamental upward pressure on prices is weak.

However whats REALLY interesting is not this but despite reports that all is well with the world that prices have not yet declined dramatically which is what one would expect if the previous prices where high for purely speculative reasons the real glut building now should force prices down.

Thats not to say thats not already happening just a bit delayed for some reason prices are certainly off their peak and overall the market is very bearish. It may just be responding a bit slower than expected however the market sentiment is for prices to heads towards 60 if not lower and the technical floor is around 65 about where we are at.

At this moment ignoring my own assumptions I'd say we are seeing just a bit of a stall for technical reasons and once prices break through the 65 support level they should fall to 60 and if that happens which is the next support level a further fall on to 50 is very possible.

Theoretically we should be seeing 50 dollar oil or lower by Jan if all reported public facts are correct and the recent highs where simply purely speculative based in general on expectations of a V shaped recovery thats fading.

Short answer lets wait and see anything can happen now it all depends on what the real truth is and eventually the Oil Markets given their nature tend to not diverge from the fundamentals for more than six months if that. In that sense it behaves like any commodity where speculative bubbles are short lived.
Many of course tend to vary dramatically around their true price and be highly volatile but even the most volatile commodity markets are corrected fairly quickly by the underlying true supply and demand situation via the spot markets. Thus the divergence between spot markets which are true physical trades and futures is intrinsically short term.

Its possible to lie but the lie adds volatility and sharp corrections back to the true price.

Now with that said its still not clear how much of the price spike in 2008 was purely speculative in nature since a real demand collapse pricked the price bubble so who knows for sure right now. The problem is of course physical demand collapse collapses prices regardless of if they are speculative or real.

Only the future will tell the truth and its coming on rapidly.

Written by AlistairC:
I'm intrigued by the relative stability of oil prices over the past few months.

If the market is driven by supply and demand, then the price is way too high.

If the market is driven by speculation, then it's far too stable.

So what's going on?

OPEC is acting as a swing producer to keep the price where they want it, as high as they think possible without crashing the world economy. This state will persist while they have spare capacity.

One thing to note is that if a system is getting closer to a 'flip' into another state, certain things tend to happen. One of them is less day-to-day volatility and more 'wandering'. Its symptomatic of the old feedback loops that controlled the system breaking down and therefore not 'forcing' the controlling function.

No idea if that's what's happening, but as I've mentioned before, the market in a net decline world is very different to that of rising production. At some point we should expect the market to change controlling drivers.

The uncomfortable hardness of reality is not where the human mind dwells when more comfortable accommodations are easily at hand. I think sometimes we assume that people have well modeled mind landscapes, achieved through a lifetime of exploration, reading and thought and that they should be amenable to new information, especially critical information concerning exponential growth and resource exhaustion. Disturbingly, you will find minds most persuaded by pseudo authorities whose rapturous pronouncements substitute for clean reasoning by a well-developed mind. These high priests of the BAU, supported by those whose capital has been invested in continuity will denounce any change that harms the return on investment of their overlords.

The point at which we reach "Peak Oil", is in many ways is a straw man for the much larger issue of exponential population and industrial growth. It can easily be moved this way or that or be described as an insoluble conundrum. In the meantime, the greater issues are seen a spurious or irrelevant because our inability to pin-down peak oil provides cover for having to think about the other issues.

I wish things were different, but it seems that most people will follow the pied piper playing the sweetest tune. Even a modest worldwide economic growth rate of 2% will result in a doubling of our resource requirements within 35 years. Does anyone here think that is going to happen and that we'll consume as much energy during that period as had been consumed from the dawn of history up to the year 2010.

Perhaps those most hurt will be the investors who were encouraged to put their money in the front door while certain others were removing it through the back door. In this game of musical chairs there are way too many players and far too few chairs and the music is about to stop. Those who reside in a house of mirrors where the chairs seem infinite will have their dreams shattered. There is a consolation prize though. Someone wearing a suit and tie and with a sly smile, sitting in what you thought was your chair, will give you free tickets for a truly exciting and permanent Easter Island vacation.

You could of course, sell cheap money - there will likely be a lot of it around. I'm encouraging people I don't like to buy it up right now.

The real problem where I live is that people are keen to 'do something'. If I give a talk on Peak Oil and exponential growth, there always comes at some point the question "what can we do?"
It's a fair enough query. Those of us here get off on the oil thing, but the average punter just wants to be told what to do. I tell them to stop having kids, clear their debt, and clear out.....
The problem is that the vast majority think they only have to recycle some more plastic, drive a smaller car and buy fair-trade. We have a problem with reality, then...
The best use of the brains here, would be a concise book - even a TOD e-book - which we all contributed to, cross-audited/edited, and which stated what they can do, categorised by suburbia, rural, city, old house new house, etc. A reference manual. It's not a matter of 'if' it will be needed, it's a 'when'.
I know much of it has been covered, whole or part, elsewhere and by others, but a good compilation of the best would not go amiss. What better qualified bunch of writers is there?

Written by Richard Heinberg:
The Tiber field in the Gulf of Mexico alone accounts for four to six billion barrels of crude that may eventually find its way into the world oil system.

The estimates I have read have varied widely and seldom state the category of the oil. I have read that Tiber contains a minimum of 500,000 barrels of technically recoverable crude oil. The most common number is 4 billion barrels of crude oil but stated without qualifying it. Is 4 to 6 billion barrels the amount of oil in place or the technically recoverable oil? British Petroleum's press release on September 2, 2009, states:

Appraisal will be required to determine the size and commerciality of the discovery.

I have also read that the estimate is in boe meaning that some unstated fraction is natural gas.

If 4 billion to 6 billion barrels is a combination of crude oil and natural gas and is an estimate of OIP, then these high numbers should not be added to the discoveries of crude oil in 2009.

Can anyone here separate hype from fact?

The 4-6 boe is an estimate of Oil In Place, guesses are that recoverable could be 500m (not 500,000) to 1b. Note that nothing is clear yet and the Kaskida field found in 2006 is still under appraisal.

I can add a little Blue but there are no clear details offered. The 4-6 billion bbl (in-place)is just a very rough "possibility". Even BP says more drilling needs to be done to get a better guess. Recovery in these reservoirs will be in the order of 20 to 30% of the in-place. I can't find any information of test rates. I suspect the well hasn't been flow tested yet. This number wouldn't really help in quantifying the reserve number anyway. As to boe vs. bo no mention of the exact split is given. Typically 6 or 7 thousand cubic feet of NG is equated to 1 bbl of oil. More importantly the logging information can usually distinguish between oil and NG. Half the pay in the hole might be identified as NG. Thus half the volumetric estimate of 4-6 billion bbl could be only 2-3 billion bbl. But until BP offers more detail there's no point in speculating. All the boe NG could just that which is disolved in the oil so the yield may be predominantly oil. Just have to wait and see. But I would be surprised if it proved to be a lot less then the stated numbers.

Thank-you for the clarification, tonyw and ROCKMAN.