WSJ Reports, "The Next Crisis: Prepare for Peak Oil"
Posted by Gail the Actuary on February 11, 2010 - 10:08am
The Wall Street Journal today has an article about the work of Britain's Industry Taskforce on Peak Oil and Energy Security that goes well beyond summarizing what the task force said in its report. The article starts out:
The Next Crisis: Prepare for Peak Oil
As Europe's leaders gather in Brussels today, they have only one crisis in mind: the debts that threaten the stability of the European Union. They are unlikely to be in any mood to listen to warnings about a different crisis that is looming and that could cause massive disruption.
A shortage of oil could be a real problem for the world within a fairly short period of time. It was unfortunate for the group which chose to point this out yesterday that they should have chosen to do so on the day the Organization of Petroleum Exporting Countries, or OPEC, reported that the effects of the financial downturn had led to a slight downgrade in its forecast for oil consumption this year. [Emphasis added]
The article says that the concerns raised by the report of the task force are well-founded:
But the work of the Industry Taskforce on Peak Oil and Energy Security shouldn't be disparagingly dismissed. Its arguments are well founded and lead it to the conclusion that, while the global downturn may have delayed it by a couple of years, peak oil—the point at which global production reaches its maximum—is no more than five years away. Governments and corporations need to use the intervening years to speed up the development of and move toward other energy sources and increased energy efficiency.
The WSJ article also points out how much modern economies depend on oil, and that a likely mismatch between supply and demand is ahead:
The latest report from the Taskforce points out how much modern economies depend on oil, whether for transport, heating or even fertilizer. Demand may have peaked in the developed world but any shrinkage there, is likely to be more than outweighed by the developing countries, with their rapidly expanding appetite for energy to fuel industry needs and consumer aspirations. The International Energy Agency, in its World Energy Outlook report last year, estimated global oil demand, currently running at just over 85 million barrels a day, could reach 105 million barrels a day by 2030. The Taskforce, assimilating various opinions, believes 92 million barrels a day will be the most that global supplies will be able to generate, "unless some unforeseen giant, and easily accessible, finds are reported very soon."
It may be that the oil companies are keeping some giant secrets from us but that seems unlikely. So what lies ahead is a mismatch between supply and demand. According to Chris Skrebowski, of the Peak Oil Consulting firm, mid-2015 is when the crunch hits. "This is when capacity starts to be overwhelmed by depletion and lack of new capacity additions."
The article points out that prices have been volatile, and are likely to continue to be volatile, but high prices won't necessarily solve the problem. They can destablize economies:
But a higher oil price brings with it dangerous knock-on effects for oil-dependent economies with little in the way of their own oil resources. Europe has reason to be concerned. According to Philip Dilley, the chairman of Arup, the consulting engineers: "We must plan for a world in which oil prices are likely to be both higher and more volatile and where oil prices have the potential to destabilize economic, political and social activity."
The article concludes by pointing out the need for alternatives, not only because of the supply issue, but because of the question of energy security. Climate may also be an issue, although e-mails have recently cast an unflattering light on the climate change debate. The closing words of the article are
But whatever the risk to the climate, scarce and expensive oil would be a threat to established economies.
We need alternatives.
Contact
- Content: editors at theoildrum dot com
- Tech support: support at theoildrum dot com
License
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
"We need alternatives."
Like not driving 15km for a latte and bite of apple strudel? Oh wait, that might be OK.
mmm... Apple strudel...
I do believe we need to implement a program to save the apple strudel industry, which is critical to not only our national security but also our right to the pursuit of happiness and obesity.
I am composing an email at this very minute to my congress critter instructing him that if he can attacha rider ensuring that only apples grown in my zip code are eligible for the subsidy,I will drop him off a few cases of experimental apple scented alternative motor fuel, which he can expect to burn in his car just as strongly as it burns it the gullet of the quality control tast... I meant tester.
I believe that the article only appears in the Journal's Europe Edition, however.
I was fairly certain that was the case, but wasn't certain whether I should include it in the article. I didn't see the article in my copy of the US print edition.
Perhaps they don't want to create a panic among their US readers. We wouldn't want the well-off to begin hoarding all of the fuel.
sarcoff: It's going to be interesting to see the effects of PO finally going main-stream, if in fact it has. How "burried" was this article?
Not in the US but there was lots of coverage in the UK press, this is mainly because of Richard Branson rather than anything else. Many of the posts to the articles were of the sort that there's plenty of oil if we only, it's a scam to tax us more.... Here's one
"Well, Branson, when you - and your ilk - make changes to your oil-extragavant lifestyles, then I'll start considering making changes in mine. Until then, I'll use up as much petrol and oil, and other forms of energy, as I can reasonably afford - just so it isn't left for you to use."
I tried to join this taskforce when it was set up but they were only interested in very large organisations:-(
The report can be downloaded at
http://peakoiltaskforce.net/
I have a print out and am going over it now.
It is lengthy, at least. Most criticism seems to be that there are so few people on the "task force." Also, whether there is an ulterior motive. Though I am having trouble understanding why being an energy user makes participation in this report suspect. It would seem to me that Branson would want to keep it quiet so he could continue his "wasteful ways." This would make me want to rate the article more believable, not less so.
Continue his wasrteful ways or else more likely unload his dead man walking investments inan airline.
I believe if looking after thier own interests were the thing MOST on thier minds , they would simply keep thier mouths shut and unload thier holdings.
Strange as it may seem to some with a strong anti big biz bias(and I am myself such a person )it is not all that uncommon for the interests of big biz and the general public to be one and the same in certain cases.
I could have booked a 7 day all inclusive trip in Cancun, MX for under $700 the other day. Didn't last long...should have pulled the trigger. Amazing how cheap you can travel for if you shop around. Got to wonder what all those huge resorts are going to do when the planes stop coming south?
I guess they can be converted from five hundred a night and up suites into five hundred dollar a month apartments or cheap condos for the retired.
My guess is that ten cents on the dollar will get you a waterfront hotel dependent upon air travel within ten years.
Once tshtf, the commoners who cannot fly will put a stop to most flights by insisting on a truly hefty luxury tax on flying.
"insisting on a truly hefty luxury tax on flying."
Um, ANY tax on flying (that is, on jet fuel) would be a nice start.
I have suggested that very thing several times here.
I have not read the paper, but the UK is in serious problems. Far, far worse than the US. I expect the UK to be one of the first (the first?) western nation to collapse due to peak oil.
1) the population of the UK is very high.
2) we don't have much farm land left.
3) we cant feed the nation without food imports. We could barely feed the nation during ww2.
4) we don't get much sun.
5) we have very little natural resources left.
6) we are in very serious debt.
7) we have the most dysfunctional media in the West.
8) all our politicians are more interested in expenses claims than serving our country
The only PO planning so far, is removal of civil liberties and total lock down of the UK in preparation for the civil unrest when people start getting hungry.
Oh, don't worry....be happy...
From CNN..CNN) -- ""One outcome of global warming could be a dramatic cooling of Britain and northern Europe.
Scientists now have evidence that changes are occurring in the Gulf Stream, the warm and powerful ocean current that tempers the western European climate.
Without the influence of the Gulf Stream and its two northern branches, the North Atlantic Drift and the Canary Current, the weather in Britain could be more like that of Siberia, which shares the same latitude.""
Lots of evidence it's started already. Hope you have an extra sweater...
Hmmm; the UK as disfunctional. Not all in the UK could be placed in the discfunctional category. Japan is a small islands nation with few resources. They are one of the largest economies in the world. They are larger than Russia with all its resources. Japan does not have to support a large army, this is a plus. They also had invested much in technological achievement, another plus. Japan tried to serve people better. Even the farmers tried to do better than other farmers. Farming as a job for stupid people does not apply to the elite Japanese farming community. They developed a hybrid apple that is larger than most others in the world. They grew hothouse tomatoes. The fishermen cultured pearls rather than dive for them. Now if you yet feel sorry for yourself because you are a Brit, I suggest you study Taiwan. They are a small island with a higher standard of living than China. They did not succomb to atheist communism and yet they thrive by their achievements.
Hmmm; the UK as disfunctional. Not all in the UK could be placed in the discfunctional category. Japan is a small islands nation with few resources. They are one of the largest economies in the world. They are larger than Russia with all its resources. Japan does not have to support a large army, this is a plus. They also had invested much in technological achievement, another plus. Japan tried to serve people better. Even the farmers tried to do better than other farmers. Farming as a job for stupid people does not apply to the elite Japanese farming community. They developed a hybrid apple that is larger than most others in the world. They grew hothouse tomatoes. The fishermen cultured pearls rather than dive for them. Now if you yet feel sorry for yourself because you are a Brit, I suggest you study Taiwan. They are a small island with a higher standard of living than China. They did not succomb to atheist communism and yet they thrive by their achievements.
Rainsing,
Do you have the FOGGIEST idea why Japan does not have , or have to have, a large army?
And if You want to sing the praises of high tech in one breath and then denigrate farmers as stupid in the next, well.... perhaps you should stop to think about the productivity of American farmers, who are per man among the most productive people, and last I checked, the most automated and mechanized industry in the world by some measures, such as horsepower per worker.
Japanese farms survive only because they are protected by very high and very formidable food importation tariffs disguised as safety regulations.
What has "atheim" got to do with your rant ? FYI some 65% of Japanese are atheists, while only 10-15% of Chinese are atheists.
Hey, it's rainsong, what else do you expect?
Maybe they are so successful because spelling is so easy in kanji, katakana and hiragana compared to English.
UK should be the first country to collapse due to peak fossil fuels, it was the first to expand.
I said peak fossil fuels because this time there is no fossil fuel that is able to cover the decline in flow of other fossil fuels. Its not 1920s when oil could have replace coal. Gas today can't replace oil for many reasons, it can slow the decline but cannot prevent or reverse it.
Its not just peak fossil fuels, its peak energy. 85% of world's energy supplies comes from fossil fuels (40% from oil, 30% from gas, 15% from coal). Rest is hydro and a bit of nuclear. Hydro at most places can't be increased further. Whether nuclear is energy positive in the complete cycle (from mining to plant decommissioning) is debatable. It becomes more debatable because no nuclear power plant ever got built anywhere on planet without public money. I know this, I had worked in a nuclear power plant and I had studied nuclear power engineering for sometime.
GROWTH IS EXCEPTION NOT RULE
Yea, which makes the UK's ~45% drop in energy production since 1999 (eyeballing it) massively disturbing. Not to mention that the UK is becoming ever more dependent on gas, meanwhile it's replacing the marginal drop in gas with LNG.
Better start building windmills and fast!
http://mazamascience.com/OilExport/output_en/Sources_BP_2009_production_...
When you are listing an inventory of world energy supply possibilities, don't forget the sun. There is enough potential CSP opportunity in the pacific southwest to power current US electricity use 4 to 6 times over. The same in north africa, and in a few other countries. Not that it would be easy to ramp up this technology in a timely manner.
Jim, Last i checked, I couldn't easily store electricity, which would be necessary for the transportation industry, to run on solar. Be tough at night. The problem is not that there are not feasible alternatives. The problem is the infrastructure they require. Converting to other forms of energy requires public support, political will, and financial capability. Seen any of those in abundant supply lately?
Good points. I will say that some CSP plants currently have thermal storage for about 7 hours after dark and I think this could be expanded. Andasol 1 in Spain is an example of this. Your last sentence is the zinger as we all know here at TOD. Just wanted to keep the sun's energy on this list in case we might eventually be able to address some of these other issues.
High Price could manage to herd in the public support and political will parts--unfortunately high fossil fuel prices don't do much for the financial capability part of the equation.
I've been wondering for a while if it should follow that the UK to industrialise and the first to exit the oil era. There was resistance at the dawn of industrialisation, e.g. in the textile industry, and I guess it's inevitable that it will be repeated at its end.
I'd like to think that Prime Minister Brown would seek all-party consensus on mitigation strategies. However, the current situation reminds me more of the episode of Blackadder where Captain Blackadder stumbles on the British strategy for World War 1.
i.e. BAU
This is my first post here and i've learnt a huge amount from the many fantastic posters. My background is in geology and physical geography and I have a natural aversion to the excesses of consumer society, so I suppose that puts me a few steps ahead of the average man in the street!
I watched a show on extreme cave diving on PBS last night. They had some divers drill in and take a cutting from a big stalagmite (this was in the Bahamas, fresh water hole). Under a microscope they found out extreme changes in climate in short periods of time... what they found interesting was a layer of iron right before these climatic changes. The theory was the this was Saharan dust... Very interesting stuff, lots of signs point to climate making big changes, fast. Mother nature will "thin the herd" one way or another me thinks.
And you did not include tabbycat:
9) Almost all the people think the government will save them at a time of any genuine crisis.
Not only do they think the government will save them but they are far more prepared to ask for/demand "help".
The nine most terrifying words in the English language, Ronald Reagan is held to have said, “are: ‘I’m from the government and I’m here to help."
Politicians trying to help rescue their domestic economies aren’t making choices with the global economy in mind. They’re primarily interested in bolstering their personal stores of political capital by serving and protecting their most powerful constituents—be they local voters, political benefactors, or powerful industries and interest groups.
A government big enough to give you everything you want, is strong enough to take everything you have. Thomas Jefferson
A government which robs Peter to pay Paul can always depend on the support of Paul. George Bernard Shaw
Hey, Mr. Congressman, is that your suitcase full of cash under the table? Must be, it’s not mine! More champagne?
Well it certainly describes the results of his tenure even if he didn't actually say it.
On a related note we hear Sarah Palin had to tear down her extensive Reagan altar (think MJ Fox's 'Family Ties' altar on steroids) to make room for her new in home Fox TV studio ?= )
Cargill , Tony,
The one key reason I remain a philosophical conservative is fear of govt so big that it can not only help you-it can help itself TO YOU.
We will bitterly regret someday (we should have already but most of us are not wise enough)turning too many jobs over to the govt that we should have taken care of ourselves at the local , community, or state level.
Once the buercracies are in place, it is not possible to eliminate them , and they all too often are soon captured by the very people they were put into place to regulate or to help, and become social parasites, or worse, cancers.
We find ourselves locked in a blindered and straight jacketed course of action, and there is no reverse gear or stop button provided.
The first principle of conservatism is that only those things that must be done by the govt should be .
Unfortunately we have gotten into such a screwed up situation that there are more "govt only sized problems " thse days than govt can handle.
An old hillbilly standing by his mail box in front of his two room shack sees a nice motor pool Buick pull up ,the well dressed driver hits the window button , and asks for directions.No hillbilly will give a stranger good directions un til he knows who he is , and he bueracrat replies with a satisfied sigh that he is with "the war on poverty".
Old hillbilly gives the car and the suit a long sour looking over and sez "looks like you winning."
I have a good friend a life long friend , who is a "housing advocate" and has collected a very finme salary for forty years from the Richmond , Va city govt.In all that time he has never sawed a board, or driven ONE STINKING NAIL.
I myself, working for half the money w/o benefits , have probably worked on Richmond housing units for probably a year altogether, a few weeks or a month at a time over the years.The poor people of Richmond got a hundred to one better return at least from me.
Having a list to get on, and a housing advocate, may get you a place in an apartment, but it does nothing whatsover to CREATE apartments, and does absolutely nothing to reduce the number of people in need of apartments.It just means that the people on the list may get one a little quicker-meaning someone else waits longer.This is WORSE than a zero sum game by a long shot.
We've been LIVING with peak oil gone mainstream for the past several years! Note that our incredible finance crisis continues unabated despite the tender application of tens of trillions of dollars and other currencies' worth of credit.
This 'medicine' has always worked in the past during other crises. Not now: we don't have a credit crisis, but an energy crisis instead.
The Wall Street Journal and the rest of the Establishment will have egg all over their faces when it becomes clear that Peak Oil is long in the past along with the time for conventional 'remediations'. We are in an immediate emergency and the only solution is conservation.
Chosen by the users as a policy alternative or not chosen and imposed by the circumstance of depletion.
The (pitiless) markets are calling the shots while Saudi Arabia is making monetary policy for the developed world. The Super Hard Dollar is the biggest reason for the Euro debacle, which will not get better regardless of what the ECB, EMU, Germany or the IMF do. The rosy scenario is the Euro ringleaders buy some time. If they don't use that time to cut energy use dramatically they will simply spiral into deflation as the bailout funds are exhausted.
If they bail for effort, they will have an energy price crisis as cheap euros will not be favored by the oil producers. Euro customers of Middle East oil will have to buy dollars first. Regardless of what happens with the euro the dollar will become relatively harder either from deflationary panic in individual European countries or from generalized inflation.
Inflation - even asset price inflation - and dollar- buying does not amount to a fair or equitable conservation policy.
The dollar is hard today way gold was in 1931. Greece, today, is CreditAnstalt in drag. Greece was not bailed out promptly and the verdict is out as to whether the Eurozone can avoid a massive deleveraging event and a bank- killing panic. CreditAnstalt was bailed out too late and the consequence was ... Adolf Hitler's rise to power in Germany and World War Two!
The WSJ understates how dangerous the entire Euro situation is and does not make the connections between the current crisis, the value of the dollar and the price peak that took place ten years ago.
If there was an economist nearby I would hit him with a bat! I swear!
Peak oil will never be widely recognized as the truth. All past resource peaks remain outside common knowledge today. People simply aren't equipped to believe in depletion stories.
English coal peaked in 1913 and American oil peaked in 1970. These facts won't ever enter common knowledge, because they don't tell a story that gratifies the ego.
I bet you'd have trouble finding consensus among New Englanders that cod peaked decades ago, or among Europeans that wood peaked centuries ago.
I would never have seen the article had it not been for Gail's mention of it. I generally read only the US section of the WSJ online. My search (using the WSJ search system) turned up the article and only in the European edition.
I was surprised even to see it there, given how dismissive the WSJ is about the notion of peak oil.
-Bob, digging out from under the DC blizzard.
P.S. Here was a thought-experiment to my various email buddies with pictures of the blizzard and encouraging them to consider it as a metaphor for peak oil (empty store shelves, for example). Not one of the 50 or so addresses picked up on the subject, only the pictures.
http://livingwithoutoil.blogspot.com/2010/02/historic-blizzards-in-dc-20...
A series of blizzards was an eye openner for me.
Back Christmas eve day in '04 I had to collect my daughter from the mothballed pump station she and a bunch of other blizzard stranded travellers had be brought to after their rescue. There had been a very unusual set of weather systems that snowed shut all the routes into our little interior Alaska city. Our highways are slender and sparse arteries the radiate north, east and south hundreds of miles before reaching anywhere else. Rarely do storms manage to close all the directions at once.
At first light I headed east on my couple hundred mile drive knowing that some roads hadn't been open for a couple days and I might not be able make it to where I was headed. The highway was cleared, had almost no traffic and had absolutely no oncoming traffic. Then about forty minutes out of town a rig passed me coming back toward town. Five minutes or so later a couple more rigs came my way. A little later another. It took a bit to sink in but after the best part of a dozen rigs came my way I realized they were all the same kind of rigs, EMPTY OIL TANKERS headed for the lone regional refinery. The roads east had only been closed a couple days, but people were running out of fuel. Temps were quickly dropping to minus forty and beyond as the low pressures systems moved out. Heating fuel tanks were getting dry. I immediately projected our isolated interior Alaska situation to a global disruption of oil transport. The picture wasn't pretty.
On a happier note, I made it to the little town just north of the pipeline pump station I was headed to just as the plow/loader carravan broke through from the other direction. My daughter was both surprised and happy to see me (communications had all been severed to the station many before) and we made it home on time for Christmas eve dinner.
If the article only was in the European edition, the queston arises: Who owns WSJ?
What is their agenda? The issue is just as (or much more) serious for the US as it is for Europe.
The big story over here in the Old World (where history was made) is that new investments in gas drilling is postponed (Schtokman, for example), since the US is full of shale gas that solves the problem, and will supply the US for 70 years, at least. Maybe this is why it was not worth mentioning?
Any news on shale gas progress? Is it, or is it not snake oil? Thanks for an aswer.
Tor -- I don't follow SG too close but some plays, like the Marcellus, are holding there own. The less productive ones not so much. The SG play isn't snake oil by any means. But the way some folks present the story it might as well be. There are many, many trillions of cu ft of proven NG in the SG reservoirs. A undeniable fact. And we have the technology today to produce at lot of it. But that's not the critical factor. I don't know the exact relationship but here's the simple answer: if NG is selling for $13/mcf we can recover X trillion cu ft of NG. But at $5/mcf we can likely recover only 15% of X. There's no way to prove my numbers but I just offer them as a matter of scaling. It's pointless to debate how much SG we have in place IMHO. NG sitting in a rock 10,000' below ground level isn't going to heat your house or run your car. Only what is produced is of any value. And how much is produced will be determined by the profit margin. When NG prices collpased at the end of '08 much of the profit margin disappeared. And, not too surprising, so did many of the drill rigs. As profit margins rise so will new SG production. It really is that simple in the end.
Doesn't an Australian own the WSJ these days? Seems Murdoch's buy out of the old family owned business was big new not too long ago.
Although he was born here (to great wealth), Murdoch had to renounce his Australian citizenship and turn American ... in order to own the Fox Network there. And yes - News Corp did buy the WSJ last year.
Thanks for the update, must of missed a few years of news before I got on the web a dozen plus years ago. Murdoch now being a US citizen is seldom if ever mentioned any more. One of the first news sources I glommed unto when I first went online was the original MSNBC.com where you had to download the entire 'paper' and got articles of your preference from many other papers included in your copy (slow in dialup days, so it generally loaded while I slept). It was a neat throwback to journalism of an older time in some ways. The long detailed MSNBC feature articles suffered much when it went to its more or less current format. Back then some of the writers got really into slinging it around when it came to Murdoch, I made the mistake of saying how much I enjoyed the apparent Gates/Murdoch rivalry in an email and all those entertaining articles ceased immediately. Always wondered if that was just a coincidence, but I sure missed the fun.
Deleted - double post.
I am wondering if the rising debate on climate change will leave more room for the peak oil story in public discussions.
It seems to me that especially in Europe, the issue of the need to act has been presented solely as an issue of climate change (with a small overlay of energy security). If the voting population is less convinced of this issue, then a more complete discussion of what our problems are, including peak oil, needs to be placed on the table, if any action is to be taken.
Hi Gail,
I'm pretty sure my fellow Joes and Janes will see PO as just another "doom and gloom story", and switch off pretty quickly. Unless of course, the oil supply really does begin to wain.
Regards, Matt B
I doubt that Joe and Jane will pay any attention to the PO doom and gloom story as long as the price of gasoline stays below $3.50 a gallon (give or take) and as long as there's plenty of fuel in stock at the corner gas station to enable them to fill up whenever they need to fill up. If gas prices hit them too hard in the wallet, and/or gas lines form, then and only then, will most of them start to pay attention to the story. However, although they might then pay attention to the story, they might still, at first, refuse to believe it, blaming instead greedy speculators, greedy oil companies, OPEC, environmentalists, Obama, or some other scapegoat du jour, possibly up to and including Beelzebub.
Even then. if gas spikes again, they'll go back to blaming speculators.
Coyle - I fear you are very right.
P. Coyle: you nailed it; couldn't have said it better even if I tried.
I can't find one example of a resource peak in history that became common knowledge. I suppose that our brains are wired to ignore stories about resource decline.
Check out whale oil.
Well, I am sort of serious here (if this was a response to me).
Snake oil or shale gas, that is the question.
http://www.energybulletin.net/node/49342
Quote:
Tor -- see my answer above. But let me point out in particular how totally dishonest the highlighted text is. Note they say "potential resources". What exactly is a potential resource? Methane deposits on one of the moons orbiting a distant planet would qualify as "potential". Here's the other totally misrepesentative phrase: "the total resources are 2,074 Tcf in the Lower 48 and Alaska". So if gas is selling for $3/mcf and it cost $5/mcf to produce much of that 2+ TCF the companies will drill all those wells and lose billions of $'s in the process? "Technnically recoverable"? Hell yes it is. Just like we have the technology to recover millions of tons of gold from sea water. We really do...no kidding. Want to buy some stock in my gold recovery company? BTW, did I mention it will only cost 10X as much to do so as gold is selling for today.
Anyone who offers a volume of recoverable reserves of oil/NG that isn't indexed to a specific price for that commodity is, at best, lying by ommission. As I pointed out in my previous answer the amount of NG in a SG reservoir is not relevent. How much you produce is very relevent. And that volume will vary with the profit margin. And that will always be dependent upon what NG is selling for.
And, BTW, I have no idea what "Traditional Gas Resources" means. Granted I've only been a petreoleum geologist for 34 years so maybe I was napping when that announcement was made. I do know conventional and unconventional (SG an CBM) reserves. I suppose I need someone to clue me in on the definition.
ROCKMAN, thanks.
Even the technical press here has been fooled, then.
The entire kernel of the planet boasts with energy, the only trouble being the cost of extracting it. I'll keep chopping wood, then,
Whale oil? Is that a new investment strategy?
Where do I get some? I collect antiques..
The common knowledge is that whale oil became obsolete when we discovered kerosene. The fact that whales were hunted to near-extinction was widely denied at the time, and is denied even today by perhaps a majority of Americans, who see it as environmentalist propaganda.
My argument here is not that *nobody* remembers depletion events. But they don't remain in the popular imagination, because they're sad stories that don't flatter us.
"...does begin to wain..."
Was that a Freudian slip?
Possibly...
...nah!
I'm just your Joe Average :)
Gail, my guess is that with Climategate (that's lazy journalism) and the economic issues people will care less about "global warming" and consider it yet another scam to justify increased taxes. I am totally dismayed that scientists should try to "hide the decline" rather than being upfront about it and trying to explain the data.
tonyw,
I don't understand -- I'm a scientist and among my many colleagues there is not one who wants or is trying to 'hide the decline'. ?
"hide the decline" is a popular parody on Tommy James' "Draggin' the Line", see youtube http://www.youtube.com/watch?v=nEiLgbBGKVk
Now i know that youtube is not the definitive source for scientific information:-) however I understood there were recent disclosures that some data had been deliberately ignored since it did not fit the usual data and the scientists at UEL did not want to try to explain it. Also i read something yesterday where one of the climate scientists "confessed" there had been no warming over the last decade. The point i was making was that it is very bad for any ascientist to try and hide or not disclose something that does not fit with their desires. Four years ago a South Korean cloning scientist who faked his stem cell research was been charged with fraud and embezzlement. Hwang Woo-suk was also charged with using millions of dollars in grants for private purposes, as well as violating laws on bio-ethics.
FWIW i am not a scientist and haven't chosen to try and read and understand all the information but am trying to seriously reduce my and my company's CO2 output because I think if there is a possibility we are changing the climate then we should err on the side of caution.
I wouldn't get my panties in bunch over anything any media labels a 'confession.' That would be the headline I'd expect to see in the check out line at the supermarket but the subject would be an extramarital affair by some Hollywood airhead.
Here is a global temp graph Roy Spencer and John Christy keep updated. The data is pieced together from eleven different flying instruments that have been on eleven different satellites over the years. The last decade does average pretty flat with a big El Nino spike around 1998 and another big one right now (make sure you can see the graph all the way through 2010)
The thing is that flat average for the last decade plus is significantly above the entire satellite data average for the period.
Then when you look at the average monthly arctic sea ice extent for the same period
you see a graph that would have had you dumping a stock years ago if it described its price history. You do well to error on the side of caution. Too bad our satellite data only goes back to 1979, other records are just so much harder to deal with. It is very hard for us poor duffers to sort out the media noise, that is certain.
Spot on Gail ..
The "solutions" to AGW and PO are the same ..
Lately, the "weather" hasn't been co-operating for AGW ..
People are tuning off and out to that message ..
Add in the "climategates" etc ..
TPTB need something new to scare the "sheeple" ..
PO will do ..
Expect more MSM coverage ..
Triff ..
My view on AGW has always been the same. It was to be used to force the masses into using less energy, through higher taxes, fees, etc. Too bad it failed, because i'm all for cutting consumption, even if i think the science of AGW is not very solid. Where i'm sitting right now, a 2 mile thick ice sheet use to sit about 10,000 years ago. In the time span of the planet, that isn't very long. My point is climate goes through cycles, up and down, wet and dry. Too think that our current climate is going to stay the same for eternity is just ridiculous. Change is inevitable.
The point is that even though 10,000 years is not very long in the time span of the planet, it is incredibly long in the time span of our civilisation. Natural cycles may be a long time, but what humans are doing to the climate by pumping a huge shot of CO2 into the atmosphere is to cause an almost instantaneous - compared to the time span of the planet - change to the climate. That is going to be bad for the natural ecosystems that can't respond well to "instantaneous" change, and bad for human civilisation that is already incredibly stressed by peak energy and peak credit (and peak population?) issues.
As for the idea commonly stated that AGW is some plot by TPTB, don't forget that the science linking human CO2 emissions to global warming has been around for 100 years. Until the 50s it was only of academic interest because the emissions were so small, but scientists beginning in the 1950s made calculations based on continued exponential growth of carbon burning that predicted pretty much what we are beginning to see today. I think it is a bit far fetched to be accusing scientists over such a long time span to be engaged in some kind of conspiracy.
The science for increased atmospheric CO2 levels leading to a warmer atmosphere has been established since the 1930s. An earth without a year round arctic ice cap is a warmer earth. That part of the science is rock solid, so the GW part is rock solid. There have been other carbon release catalysts in the past, and there is no good reason doubt we are an accelerant in the process this time, I wouldn't get to huffy about the A not being significant in the current GW. Earth climate cycles with or without us, but there is a very good chance we are hurrying it along a bit right now.
Read here:
http://en.wikipedia.org/wiki/Milankovitch_cycles
We are now in a warm period. There is so much CO2 in the atmosphere, that any orbital changes which would normally bring about another ice age will not be enough to cool planet Earth.
I did, in fact:
James Hansen: Storms of My Grandchildren
http://www.crudeoilpeak.com/?p=767
[quote]Lately, the "weather" hasn't been co-operating for AGW ..[/quote]
Well, it depends on where you live. Here in Vancouver they've had to truck in snow from over 200 km away to supply the local ski runs with snow for the olympics.
Too warm and rainy for this time of year.
Been toasty up here in the subarctic as well. I tend to keep a weather eye on this site http://nsidc.org/arcticseaicenews/ to see how what is going up up there gells with what is happening outside my door.
Looking forward to watching events near your town the next couple weeks but decided my living room will be my vantage point.
Global warming coverage by media is a tool to make ordinary people ready for peak energy without breaking their million years old optimism and struggle for better economy. Human beings have never experienced a permanent decline, its hard for us to understand it. All through history from the first man till now humans have seen rise in people, resources, technology etc. This time its an entirely reverse thing. Its too big for ordinary people to understand.
The informed minds, including many on tod knows that the projected damages due to global warming would never happen. There is simply not enough fossil fuels to do that kind of damage. The computer models and mathematical equations that project severe global warming disasters like rise in sea levels either use a stable fossil fuels burning for 25, 50, even 100 years in future or use a rising fossil fuels burning for these time periods. That not to say that global warming is not happening. Global warming is happening, just that its damages would not be that severe, they would be severe but not very severe.
I believe we have experienced permanent declines in forest and biodiversity, ongoing for thousands of years. In that time, great civilizations have come and gone, sometimes followed by hundreds of years of decline.
But humans are blind to decline, because it happens too slowly for anectodal evidence to stick, and because competing theories flatter the ego. Likely a majority of Americans would disagree with peak oil as a matter of principle, though America peaked in 1970.
"There is simply not enough fossil fuels to do that kind of damage." - Unfortunately this is not true. Hansen in particular has looked at the problem specifically in terms of how much carbon is left to burn. His conclusion is that conventional oil on its own is not a real problem (ie we can grow enough trees to cancel that out) even with some of the more optimistic forecasts of available oil. However, there is more than enough coal and shale/oil sands to really screw the atmosphere. The question of whether it would all be burnt is another issue altogether, but given the uncertainty in those kind of projections I would think that without some kind of positive action to avoid doing so, it is reasonably likely that someone somewhere will use every last bit they can. After all that is how almost all other resources have ended up.
"Assuming that proven oil and gas reserves do not greatly exceed estimates of the Energy Information Administration, and recent trends are toward lower estimates, we show that it is feasible to keep atmospheric CO2 from exceeding about 450 ppm by 2100, provided that emissions from coal, unconventional fossil fuels, and land use are constrained. Coal-fired power plants without sequestration must be phased out before mid- century to achieve this CO2 limit"
http://pubs.giss.nasa.gov/abstracts/2008/Kharecha_Hansen.html
In the meantime, the target is down to 350 ppm so our job will be to EXTRACT CO2 from the atmosphere.
“Target Atmospheric CO2: Where Should Humanity Aim?”
http://www.columbia.edu/~jeh1/mailings/2008/20081030_Target.pdf
I am not optimistic that a serious national discussion will occur on this any time soon. The reasons are well outlined in Gustav Le Bon's "The Crowd: A Study of the Popular Mind."
http://etext.virginia.edu/etcbin/toccer-new2?id=BonCrow.sgm&images=image...
We have been on a remarkably flat plateau since 2004. 72 - 73 MBD, give or take.
There have been no trends either way in the supply production, despite massive economic turmoil, and extreme volatility in price.
This in itself is very significant.
While we are on this plateau, we can talk and speculate all we want, the world rolls on, and seems to accomodate quite well.
We are now in the seventh year.
IMO it will take a significant and sustained decline - lets say to below 70 MBD - to get people's attention.
The thing I find surprising, is that we had a big spike in 08, and there seems to be very little debate or discussion as to the cause, now that things are "back to normal"
Based on no expertise beyond what I read on TOD, i am fully qualified to make a prediction :-)
i.e. we will see that significant sustained decline below 70 mbd within the next 12 months
Stories, or alternative perspectives, ideas, criticism, potential problems... that require us to focus our attention on "structural weaknesses" in our socio/economic system, are subject to "filtering." That is, they are not exactly buried, all of the time, but they are downplayed and moved sideways, out of view. This doesn't mean that highly educated people are kept in blissful ignorance, but that the great mass of the population, are. Peak Oil is one of those kind of stories.
Another is the economic crisis we are mired in. It was obvious a crash was coming and the bubble economy was going to burst, with devastating consequences for ordinary people. But in the mass media the crisis came as an almost total surprise, like a bolt from the blue; not as a logical consequence of the clear structural flaws in what still call "capitalism." The "credit crunch" is presented almost like it was a form of natural phenomenon like the earthquake in Haiti, rather than as a consequence of how society is organized. This means that most of us cannot learn anything from what's happening, which I suppose is the whole point. We are meant to live in an eternal present, no past memories and no uncomfortable future to worry about, only an eternal present.
If we are to deal with "peak oil" which, surely, is a big, structural problem; we need to apply a big dose of democracy to the problem, and the solutions we need to employ. We have to organize society in a different way. No more business as usual. No more casino capitalism. More sustainable, farmyard, economics.
Yet, this approach, far more social and economic democracy, runs up against a really big problem, like a wall made of granite, protected by razor-wire and armed guards. The people at the top of the social and economic pyramid, the people behind the fortified wall, are having the time of their lives, and have been for the last thirty years! They and the politicians, who they own, rolled back social and economic democracy, and have absolutely no intention of letting these dangerous ideas rise up again. Democracy has been replaced by an oligarchy. We are ruled by the rich and they own the system, lock, stock, and barrel.
Of course, the oligarchs can do an incredible ammount of damage, still. Especially as there is no opposition to their rule. The will of the people simply doesn't count. One can always just hire another president when the old one has outlived his usefulness. Presidents are two a penny, and about as important. They can be knocked down as easily as they can be lifted up.
Obviously, I'm not describing a democratic system here, that's because it isn't a democractic system, where the people rule. The people are allowed to have influence, up to a point, but they certainly aren't allowed to have political power, that would be far to dangerous and radical.
So the old system of "gentleman's democracy" or "elite democracy" has been superceeded by "corporate democracy" which is, if anything, even worse, even less democratic, and even more dangerous. As a greedy, selfish, narrow-minded, all-powerful, corporate/financial elite; subject to no checks and balances, can lead society towards total disaster, which is of course what they are doing.
The big question is, how do we re-organize society, which we have to, if we are to have a hope in hell of dealing with our myriad problems, which Peak Oil is only symptom of, without challenging the power and vested interests of the oligarchy that rule and own society?
How far down the road to collapse does one have to go before people are roused from their slumber, awaken, open their eyes, see the reality of the world around them, and take action? History shows that this process of oligarchic misrule, of decline, leading towards collapse, can take an awfully long time, as the great mass of people are simply way too peaceful and reasonable and don't react in time to the signals of decay, and perhaps don't even see them before it's too late.
Reversing the decline and fall of an empire or a civilization, isn't easy, even when people are aware of what's happening. There seem to be social mechanisms at work that are highly complex, and seemingly inexorable, like turning a super-tanker heading towards the rocks, or the Titanic steaming towards its meeting with the iceberg.
Sorry about all this. It isn't what people want to hear. But, Peak Oil is a symptom of a far deeper crisis. There is no techological solution to the muliple crises we face. We cannot just conjure more worlds, and their virgin resources, just because we need them. Our current economic paradigm has reached the end of the road. We need an alternative way to organize our civilization. Unpleasant as it sounds, we need to address our Politics, our lack of democracy and participation in politics; and at the heart of everything is the struggle to break the stranglehold the oligarchs have over society. We can live without them, but they cannot live without the rest of us, so I suppose that's a cause for a sliver of optimism?
A "Writerman, indeed. One of the best summations of our predicament i have read. Clearly the bread and circus and soma have rendered the common man almost helpless. But as Huxley says, "Happiness is a hard master,--particularly others people's happiness." The corporation have so far diverted our attention but it seems like lots of folks are becoming unhappy and i guess we will just have to wait until a critical mass is reached. One thing is certain, our current political system is totally dysfunctional.
The dysfunctionality of the political system is one manifestation of peak resources. The political system we have works by promising and giving people what they want.
And people want “more”
When there is no more “more” to give the people get unhappy. As Herman Daly has pointed out so succinctly the reason why western economies need growth is because of the unwillingness to redistribute.
The sum of individual interests is not the same as the common interest, and no politician will be elected on a platform of a decrease of income and more taxes.
So the political system is just a reflection of human nature. As that great philosopher Michael Jackson said, “It’s the man in the mirror”.
Rgds
WeekendPeak
Don't worry. Peak energy is a door to freedom. Once growth stop the existing financial and political system would have to go. Once the growth stop and is become clear to everybody the patience of the working class would exist no more. You would not be fooled by a "bright future" by your employer, bank and govt. Seeing the whole thing coming down ordinary people would rise and loyalists of the elite would flee. That is how revolutions come. See what happened in tsar russia in first world war and how the communists who were confined to outskirts of society suddenly became powerful. See what happened in 1920s germany. The same thing is now happening in usa and europe and the rest of world, though its in its early stage. It would take may be 10 more years for a general wave of political revolutions through out the globe by the ordinary people to take power back in their hands. Once a popular revolution start in a country its hard to be kept contained in that country and sooner or later revolutions occur in neighbouring countries. See what happened in europe after the popular french revolution of 1789. It couldn't be pressed even though all the kings of europe invaded france. It was france that succeed, though at a very high loss of lives but for a short period of time france ruled entire europe leaving only UK uncontrolled.
As a general rule, whenever any kind of growth happen, be it economic, territorial or technological, the elites grow far more rapidly than the masses. On the downward slope the elites must fall faster than the masses. Thats how it should be. Its natural. For example, your multi-billionaire boss would see a faster decline in his wealth due to lost sales and property devaluation than you a medium wage employee. You can always work for another company if you have skills. For you a loss of a multi billion company is lost of a job, not lost of any money, not lost of career. You, the working class person knowing how to work can always work elsewhere.
Something in tune of "How I stopped hating the bomb and started loving it", "How I stopped hating peak energy and started loving it", the good news are "freedom", "justice" and "equality".
Great stuff, writerman!
From what you say, it sounds like we have only two choices at this point:
Accept humble servitude or storm the castle.
Was this just a dream? Have we lost the courage and capacity to do this:
What about the oath that many here took:
It's getting hard to take all of this seriously. I better just go get some more firewood.
I think that is the case because of the way oil/energy is generated, the oligarchy that relies on this infrastructure will have to try to maintain it. Once it is debased there is really no place left for them "all" to hide. They are locked together and have been hoping for a way out and maintain the comforts of an oligarchic life, but it cannot be done. So one would hope that they come to this conclusion and decide to "give up some" in order to maintain enough, so that is hope for optimism.
Now what they could do is decide to lower demand sufficiently by lowering population dramatically and probably would sacrifice the Asian Population through limited Nuclear exchange and then pick up the pieces with a "new paradigm".
I'll attempt to be more concrete and direct. Over the last thirty years, in the developed world, we've witnessed a truly massive transfer of society's wealth upwards into the hands of the ruling elite. Whilst the American Dream has stopped, been reversed, and has turned into a nightmare for the great American middle-class, not to mention the poor, who have been more or less pushed outside society; the richest fraction of Americans have seen a collosal rise in their share of national wealth on an unprecedented scale. The top 5% now live in a fabulously wealthy, close to a dreamlike, virtual paradise; far removed from the lives of the majority.
This tendency, far from slowing down, is accelerating. The oligarchy now control almost all of society, and what was once held in common, the common wealth, has been sold off for the benefit of a tiny minority.
The oligarchy now owns and controls the state and the political system, as well as the economy and the financial sector. It's a concentration of wealth and power which one would be hard-pressed to find a parallel for, at least in the modern period.
What we are seeing today, with the financial crisis, and the massive transfer of wealth towards the financial aristocracy, is the beginning of a new form of fuedalism. A tiny elite, which owns all the wealth, and the media, controls the state, is protected by its military wing, and is determined to hang on to its lavish lifestyle at all costs. This requires the forced impoverishment of the American middle class, who can no longer be afforded. Their jobs are moving overseas, followed by their wealth, and consumption. But this doesn't, over the short term, matter to the elite. Even when they lose in the casino, the state steps in to cover their debts. A form of inverted socialism that supports the lavish lifestyles of the richest fraction of society at the expense of the poor. What a system. Marx must be turning in his grave!
What this means is that the aristocracy in the developed world no longer need the working, or even the middle classes; they have richer pickings and lower wages in the developing nations. The paracites are leaving the old host and moving off towards a new one, only leaving the empty husk behind.
Yes, that seems to be the plot line. Ouch.
Hi writerman,
I think you are a thoughtful and elegant writer - IMHO, you have earned your handle.
I submit that this is the symptom of the problem that we are observing - my question is: what is the underlying cause? What is the mechanism(s) that enables these folks to gain this control? For a hundred thousand years of our pre-agricultural history, it is doubtful that a band of hunters would allow a few folks over the mountains to take half of their game kills. So, why do we allow this now?
If you have read some of my comments, you know that I suspect that most people were infected with a kind of mental virus in their early childhood - right along with learning their native language. Just as it would be very hard to suddenly (or even slowly) replace their native (for example) English language with the Chinese Language - so also is the difficulty with trying to replace beliefs about an all knowing deity in a supernatural world who will determine your personal disposition for all eternity after you die - with an evidence based, rational system for understanding our place in the universe.
It seems to me that most of us have been mentally crippled in our early years to accept delusion over reality. To defer to godly authority. To worry more about personal "salvation" than the common good of the biosphere. To permit your oligarchy to control us.
I live in India and I can see the same story playing out; that ultimately the rich can only use so much wealth and it will finally reach the masses who would otherwise have lived in extreme poverty. And that before you can distribute wealth you have to create it and so on.
Interesting that you start 30 years back. Did you consciously or unconsciously have the election of Ronald Reagan in mind? What other events or policies come to your mind as those that are causal factors in this unfolding of events? I can think of the Glass Steagall Act, the WTO and free trade, union busting. But are these sufficient to bring things to such a state? What are your thoughts on this?
According to you the system has been gamed (and I tend to agree) but how does one prove it? Our representatives who are supposed to work in our interests and dig the skeletons out have also been bought off or coerced into favouring the elites. Each time a bail out happens it is said that things would be worse if the bail out did not. Each time jobs get shipped out to China it is said that corporations would not survive if they were not competitive and that would lead to even more job losses. None of this is provable and therein lies the beauty. The consuming public is only too happy to get the best deal today not understanding that there will be no tomorrow if this continues on.
From the elites point of view - they have a very compelling story to tell as well. Something on the lines of "This is the beauty of capitalism and America. Many of us were not born into wealth (Bill Gates, Steve Jobs, Buffet) but through our enterprise and hard work we made billions. So if you work hard, you can too. Why grudge us our paradise when we have earned it?" How would you counter this? And then there will be the inevitable question of what the alternative is?
I love your narrative and tend to agree. I just don't want it to be a case of confirmation bias.
Srivathsa
And someone always wins the lottery.
How about the graveyard of "entrepreneurs" that make up 99.99999% of all that "work hard".
The individuals that make it are invariably ruthless uncaring selfish, psychopaths and the bounty that trickles down to the masses is simply a side effect.
We could do so so much better if the focus was to improve the quality of life for all humans.
Calling them names is fine, but does not answer the question of how they gamed the system in their favour. Did e.g. Bill Gates change some laws to favour Microsoft? If so did he use his wealth to do so? How did they engineer this transfer of wealth?
(I live in India and it jars when Mr.Mukesh Ambani of Reliance Industries builds a $2billion apartment block for just his family when there are 350 million Indians who don't see a dollar a day. But poor sensibility is not a crime in itself.)
In India it is a bit more straight forward because corruption is rampant. In my state there are mine owners (one family) who have made so much money on the China boom that they must be worth a few billion dollars. A lot of their activity is illegal. So what have they done. They have funded one of the political parties and have become cabinet ministers in the state government. They are now virtually immune and continue plundering and accumulating even more money. I am assuming this sort of thing is not possible in the US.
So how did it happen in the US?
Srivathsa
My point is that much of the success is luck and timing that is unforeseen until after the fact.
You can't win if you don't play and those that play dirty with the right people at the right time are the ones that win.
Why do you think that the US is not corrupt?
Don't you watch the news? Even the main stream media is giving out enough information to see that corruption is rampant here as well.
The reality of the US is not what you believe.
Microsoft was sued for violations of the Sherman Act. The judge broke the case into two parts, a findings of fact and remedies.
The Findings of fact show clear violations of the law.
Microsoft settled this case (After Bush II took office) with a document that essentially said: We did nothing wrong, and we promise to never do it again.
In the meantime the damage to competitors was done. (Including Be, Inc. - Separate case and settlement - I worked for Be so I followed this VERY closely. Some of the money Gates is passing around was diverted from coming to ME.)
Microsoft was essentially able to strangle competitors, then tie it up in court for years while their competition suffocated, and in the end they simply stiff-armed the government (i.e. We The People).
Back in the day the business press spoke frequently about how costly this case was. Tens of millions of dollars, which to most of us is a lot of money. I once did the calculation, and the cost to Microsoft of the case was equal to a single large deluxe Pizza to someone making minimum wage in Redmond.
What doesn't make sense to me is that a "poor" man and a "rich" man havs such a wide gap in their income.
One may "earn" himself more money in a single day than the other can make in a a whole year or even his lifetime.
I think it is good in principle to earn rewards for ones labour based on merit of some kind. But it simply doesn't make sense that gap can be so wide. Does the billionaire really work that much harder or better that he really earns to make that much more?
To me the answer is no. The only way to make that much more money must in some fundamental way be unfair, essentially they are making money because the system is letting them amass power to be able to extract wealth from society which bares absolutely no relation to the amount of work they personally do.
You underestimate the disparity. A billion dollars is more than the dollar a day earner makes in 2.7 million years, so a guy making say a billion a year is making over 2.7 million a day which is a mere 7500 or so years' earnings for the dollar a day worker. Seventy-five hundred years is a lot of lifetimes.
Thanks for clearing that up :-)
Now I'm even more convinced that there is something seriously wrong. One simply cannot use the argument that "they earned it by hard work".
Nobody can plausibly claim that they really work that much harder so hard that they "earn" to get more money in one day what another man must work 7500 years to "earn" the same.
The difference is just too extreme.
Mind you I'm not campaigning here. A good many westerners make more a day than the poorest workers earn a year (not accounting for relative local costs of living of course) and I've found a niche where a mere several weeks a year of truely hard work can game myself around the edge of this system for now. I wouldn't call that fair, but I'm not giving it up without a fight. That is what changing BAU is up against. It won't happen voluntarily.
They don't work they own (Gordon Gecko).
The other problem is compound interest.
There is a very small group of billionaires/millionaires who started in the middle class (Bill Gates was hardly born on struggle street), and through intelligence, hard work, and determination, and luck, made a product that could make them rich.
But the vast majority of all that wealth concentrated in the top 5-10% - and particularly the top 1% - has been inherited - those people snacking high on the food chain were clever in picking rich parents. It is old money - the accumulation of wealth over generations (often ruthlessly, violently, and corruptly), and of course if you have a ten million dollars, or a daddy who is a senior partner on Wall St, you can make another million easily enough. If you have nothing to start with, getting to one million is much harder.
The root of the problem is that money is the only thing in the system that doesn't follow the 2nd law of thermodynamics and increases exponentially with time ( time based interest) while everything else decays with time.
It is a rigged system and it is failing now.
Money only increases over time if there is growth in the system, but in real terms it also decays because of inflation. As the old example says - in 1913 you could buy a reasonable suit for an ounce of Gold (priced at $US20). Today you can still buy a reasonable suit for an ounce of Gold, but not for $US20.
Debts grow on paper regardless of what is happening in the real world.
That is THE problem.
Money should exist as a medium of exchange only.
The best way to do it is to link it to energy flow rates and monitor the energy flow rates to adjust the "money" supply.
This method would link human activity to the ecological reality that we absolutely must become re-acquainted with.
Our monetary system has no basis in natural process and upon examination it is obvious that it has developed at the hands of the few with money to keep and increase their share while holding down the masses.
It is a rigged system and debts are the heart of the rigged system.
One last thing is that increasing the money supply is not all bad as long ads it represents previous production and preferably production of capital that can again produce in turn. But that is not the best way to handle this mess.
It does not decay it becomes diluted..........there is a huge difference.
The aggregate amount of money is always increasing........this is the huge disconnect.
There is a post from late 2008 by Big Gav on TOD NZ that is about an Austrian town during the early 20th century that issued a time decay local scrip and it took off gang busters.
I will try to find the link but don't have time right now. Maybe you could find it?
Thanks to all of you for having replied to my comment. Good to get some perspective on how so much wealth is now in the hands of so few in the US which is supposed to be that great bastion of meritocracy and how anyone with will and hard work can make it big there.
Agree that once there is money - ill gotten or otherwise, it gives the next generation a massive headstart. Going to an Ivy League school, connections to the old boys' club and so on.
I guess it is almost inevitable in capitalism that this disparity will increase. It is after all a winner takes all system. Add to that the fact that economic power makes acquiring political power easier and vice-versa the man on the street becomes more and more a pawn in a chess game played between the politicians and the capitalists.
Thanks again.
Srivathsa
Writerman,
"How far down the road to collapse" is the question of the day, without a doubt.
My wild guess is that we have at least three to five more years before tshtf in a way capable of forcing the average man on the street to the realization that the good times are finished, and that the hard times are here to stay.
Whether this realization can force a new political alignment which is noticeably different from the present one is an open question in the short term,but my guess is that the 2012 elections are going to produce a lot of new faces in Washington, and that thw 2016 elections will be a real game changer.We might see a viable third party by then, perhaps several of them caapable of winning a few seats in places like Texas, Alaska, and the Dakotas, where the establishment parties are as small as the electorates there.This might make them vulnerable to upsets.
This is barring any Black Swan event in international politics, or the outbreak of a war that spreads-this is not a Black Swan except to people who can't imagine aircraft being used as missiles, even after millions of copies of very popular novels are based on such a screnario.
First I heard that the Texas electorate was small--when did everyone move out?
Last time we had a viable third party in Alaska wasn't that long ago. The Alaska Indepedence Party won the governor's mansion in 1990 and with that all but vanished.
The all volunteer military, heavily stocked from small town and small city America, is rapidly becoming a permanent seperate military class.
What I'm saying is don't get your hopes up for meaningfull positive change just because belts tighten up some.
Read:
Oil crunch delayed by 11 days since Oilympic peak in July 2008
http://www.crudeoilpeak.com/?p=812
my other thought is that we are in the 30's
i.e. we are in a replay of a decade that historians will look back on and call something like "The Gathering Storm"
the 08 oil spike, the 08 economic crash, the bail out of the banks, and now cascading soverign default.
what happens when countries have too much debt, and are forced into too onerous terms by the international community?
the population revolts, and elects a "strongman" who will defy the authorities and renege on the debt, and "make (enter country name here) strong again"
UK, Germany, US, Japan, you name it
Then the strongman increases military spending and the command economy to raise national pride, and "put the country back to work". This is all under the guise of a new philosophy.
we all know how the movie ends
hmm , yes ,this is the one where hitler wins ...
or mussolini
no good guys left......
Forbin
one of the sheeple TOD is trying to convince
( westtexas succeeded )
There are more reserves in the United States that are restricted because of the EPA to enviromentalist groups keeping energy companies from developing new reserves. Technology in mining and drilling can only grow so far or fast enough with these restrictions. Somebody needs to recognize this and carry the torch and there will be a different number on "Peek Oil".
I see that you are new to TOD. I strongly encourage you to continue visiting and reading all the material for four to six months. I eagerly await witnessing a change in your viewpoint.
I am an oil and gas producer and disagree with your position. The EPA is reasonable to deal with on oil production. Their regulation of salt water disposal with limits on formations, depths, well "construction" and surface water protection are all necessary and reasonable. Their limits on the release of toxic gasses and other materials into the air are also necessary and allow for reasonable solutions to hazardous situations. Exploration efforts are not regulated by EPA. Environmentalist groups have particular concerns, and some of their proposals are targeted to restrict development in particular areas, some in excess and some not. They are all being dealt with by the industry on a one by one basis. It is easier to work with the folks who are concerned in such cases and try to see their points than just bullhead through their entire organizations.
If you have particular examples of what your concerns are, I would love to hear about them.
Hollis -- I hope you don't feel like we're ganging up on you. But I've been petroleum geologist for 34 years. As I type I'm on a drilling barge in S La. in a canal off of the Intercoastal Waterway. Sure, restricting some Fed offshore areas from drilling didn't make much sense given a rather successful history drilling in waters off the Texas and La coasts. But they may be changing a little soon. I'm drilling in a very sensitive environment with a ton of restrictions, permits, insurance and safety requirements. But I am drilling. And we're looking for a potential reserve value of $1.5 billion of oil/NG. All the extra costs are just that: the cost of doing business. We'll leave the past behind us for the moment. Today there are hundreds of viable (at current oil/NG prices) prospects available to drill in Texas and S La. alone. This is how my company functions: we buy ready-to-drill projects from the prospect generators. But we are one of the few buyers out there with drilling money. We could have another few hundred rigs running now if the companies had the capital. Drilling costs are almost half of what they were a year ago. We're drilling a well in fed waters off La. right now that had a cost estimate of $23 million a year ago. Current cost estimate: $13 million. This is a better economic effort now then when oil/NG prices were higher. I'm know many of the PR folks with the big public companies might whine about lack of access to drilling prospects. Simply put, it's all BS they serve to shareholders to explain their lack of performance IMHO. Every company I deal with would be drilling like crazy right now IF THEY HAD THE CAPITAL. It's the lack of capex holding back drilling...not the Feds, not the environmental regs, etc. Starting today in Houston is NAPE (North American Prospect Expo). Over 300 prospect generating companies will be offering there projects for sale. My partners will report to me soon what the market looks like. At the previous NAPE last August we were one of only a half dozen or so buyers looking at the 100's of prospects being offered. In the last 6 months we committed over $125 million to drilling some of those projects. And we only select high quality projects with relatively low risk and high potential returns at current oil/NG prices (6 to 1 or better).
Hang around. You’ll get a wide range of opinions on all aspects. They all be worth evaluating (except perhaps some from memmel and maj). Also, some of us like to tease folks so keep a good sense of humor about you.
Hey buddy I caught that.
I've been very busy lately so I've not had a lot of chance to post.
However what you just said is interesting as I've been rethinking what happens post peak when you have advanced extraction technologies.
Financial constraints like your talking about play a big role in post peak oil production on the regional and thence on the financial aspect. However on the flip side they also serve to cherry pick the best prospects in the sense that when financing is constrained only the best prospects are produced. And this with advanced technology. I'm trying to get my head around what underlies a fairly shallow linear decline post peak.
Now I'd argue that technology continues to work its magic if you will for a bit post peak even though overall production is now in decline.
Basically there is a window between relentless geology driven declines and peak where the oil industry has both capitol and technology to effectively clean out the cupboards if you will developing the last set of good prospects and also aggressively maintaining production in existing fields. The initial surge of post peak cash from rising oil prices drives this echo boom if you will.
Its not a fundamental situation far more financial and of course it dies out fairly relatively quickly as it suggests that future opportunities become even less viable over time since I think your right that it becomes inverted if you will with to little money chasing to many prospects with a sort of steady cherry picking process.
In another area I think a similar sort of follow on echo boom has happened. If you look at housing obviously given its a ponzi scheme a few made out very well not everyone lost thus this cash from the bubble peak becomes the money used by knife catchers expecting a turn around. And of course some of the pent up demand from people smart enough to not buy at the peak of insanity but not smart enough to wait when house fall within affordability. For oil the example is of course drilling costs once they have fallen like they have prospects become affordable that where not viable before.
If one looks at the stock market plenty of examples of large bear market rallies retracing a lot of the previous drop before the final sell off.
Thus between the time when geologic peak hits and when absolute decline becomes a issue you have this window where traditional market forces work to offset overall decline. It a financial phenomena and not really related to peak oil directly.
Back to the housing market eventually of course in this case there are simply to many houses for sale and not enough buyers at prices even close to the current levels. Thus no matter what happens on the financial side eventually the fundamental situation of oversupply cannot be ignored and the market goes into its final fall.
For oil its simply inverted eventually all the financial angles play out the cherry picking leaves the cabinet bare and all you have are two million dollar prospects that cost five million to develop. Rising oil costs feed into rising production costs and you have a receding horizons effect. The financial signal of EROEI. Associated with this is that the absolute decline in oil production reaches the point that the global economy simply does not have enough oil to function within its current infrastructure and monetary system.
Simply put we have way to much debt and oil is to expensive and we can't take on more debt to change.
So the consumer side becomes stuck in a sort of downward spiral with demand destruction from fundamental unraveling of the economic engine. A sure bet this leads to volatile prices which we have already seen. Its not clear exactly how prices unfold in the future it all depends on which factors dominate.
Regardless as you enter the second phase uncertainty caused by widespread instability begins to dominate forcing the oil industry to retrench even if prices increase. On top of this and fairly directly related as the absolute volume declines all the upstream industries face massive overcapacity and thus losses regardless of the price of oil. I'd argue that this is highly destabilizing as no way can the industry operate if the only profit is producing wells with every other aspect looking at losses are razor thin profits.
Even drilling companies are not immune as prospects decline and investment declines at some point you also have significant overcapacity in drilling rigs.
Finally if we assume that the super straw effect finally kicks in in earnest at some point along this path then things steadily worsen as the fundamental absolute decline in oil production ensures that overcapacity remains constant even as all the associated business retrench and reduce capacity. The steady decline in volume leaves the industry in the red constantly it can never right size.
And on the price front obviously you have serious uncertainty as above ground economic conditions worsen and rising prices with the possibility of collapse ensure that money simply does not flow. In fact a return to very high prices will probably have a reverse effect actually causing capitol to flee the oil industry in anticipation of another collapse in prices.
Thus overall its not unreasonable to expect a certain period of time between peak oil and the large influx of cash resulting from the initial increase in prices and the final decline of the industry from absolute decline in flows to exist. This dead cat bounce situation is almost universal across all markets and related to the draining of excess capitol from the initial boom.
I suspect that you will find over the next year or so that your dead cat has bounced its last bounce as we should see overall capitol outflows from the oil industry caused by widespread losses swamp any subdued influx from rising prices.
In short the industry itself is not viable if only producing wells are profitable they simply cannot sustain it. I think as I said earlier that this is the real financial signal of the combination of declining EROEI and absolute production as it leads to a counterintuitive flow of capitol that cannot be offset by rising prices. Effectively the higher the price goes the more profit taking occurs and investment declines.
Whats really interesting is this is purely financial and its what I think underlies the bear market rallies. The problem is on the backside of the rally the depths of the previous crash become important and as it becomes clear that the rally has failed and fundamentals assert themselves everyone heads for the exits with little price support on the downside.
Thus for oil you end with very expensive oil but paradoxically no one left to ship it refine it or sell it.
The production side is actually the last part to collapse as the rest of the infrastructure collapses first.
The decline in the absolute volume of oil production is the driver of collapse not price.
memmel -- there you are devil. You know in Texas it's considered rude to not acknowledge someone when they insult you. You offer a lot of interesting points. One in particular is the potential minimal response from the oil patch in the face of another price spike. While we were use to the boom/bust cycle we've never seen it run its course in such a short time frame. Should the economics began to improve soon that memory will still be fresh in everyones mind. As I pointed out there's no big rush back to drilling today despite satisfactory economics.
And cherry picking is THE rule of the day. When I took my present gig the biggest uncertainty for me was the availability of good prospects. I'm glad to say it has proven to be so. Our owner demands not only a high success rate but also very good economics. Thanks to 3d seismic technology we will have a good success rate. My partners are at a prospect expo right now. Will be very interesting to see what's on the market. At the previous expo 6 months ago I saw 65 prospects that fit our criteria. And there were at most 6 serious buyers roaming the aisles. But if the prospect generators don't make some profits let alone recover a good bit of their sunk costs they won't be around when a price spike hits again. You can only work on the come if you're certain that day will arrive soon. I don't think there's a strong expectation of such among these folks. Add that to the fact that a large percentage of generators as well as the rest of the oil patch are quickly approaching retirement age.
Not too confident I know what will happen. The current lack of driling activity is a surprise to me. Had we seen the same circumstances 3 or 4 years ago I would not have been shocked to see the rig count twice what we have today.
:)
:)
Yeah this interlude period between peak oil and the final crush is actually fascinating. Full of all kinds of one time and what I'd call end of life events. A lot of people are using it to extrapolate the future but realistically its like the fall which is between summer and winter. Some days like the future some days like the past attempts to selectively use any of the data to argue one way are another is probably not correct unless your right about winter.
Even then obviously how things are partitioned during this fall period is not at all obvious or easy to understand as its a "mix" or transition period.
Now with that said the paradox is that EROEI insures that at some point we will stop pumping oil as it won't be worth it energetically. However this also suggests that overall oil production will fail to respond to price thus blowing away traditional supply demand equations. And of course depletion insures that the oil simply is not there regardless of price.
Translating that into and economic outcome is difficult. First of course you have this fall effect which is generally misinterpreted by many I even got it wrong but I've recognized its existence at least if not guessed correctly about whats going on.
Next the absolutely most important thing is understanding how the oil industry collapses as obviously either the price of oil will be high or demand will perhaps shrink to hit some price point balancing supply and demand in other words oil itself must always be balanced between supply and demand at some price point.
Thus thats not the source of collapse of the industry the key is the source lies at the other end of the spectrum and starts with a candy bar.
A candy bar ?
Yep and perhaps a soda.
Consider your typical convenience store often it sells gasoline at a loss or for a small profit it depends on purchases in the store to make money. As gasoline gets more expensive and the overall economy declines these stores become unprofitable with many shuttering. This of course means less gasoline out on the edge of the supply chain. As these stores shutter local gasoline delivery trucks go out of business and eventually pipeline operators find they don't have enough gasoline to keep their pipelines in operation as they drop below MOL. Sure they can keep the line full but the ship a lot of different products it does not matter if they can actually fill the line as the products are serialized in the pipe below a certain point the pipeline simply does not make sense and they should have trouble filling it to begin with.
Next of course refiners are hit hard this is fairly well known so I won't belabor the point. And of course shipping as VLCC's go unused.
What you see is the nasty things that happen when a industry faces reversals which destroy the profitability of economies of scale one of the big reasons underlying growth economies they simply don't work in reverse. Not don't work well but literally don't work.
Of course obviously as the storage levels drop and supply becomes intermittent your going to see shortages instead of pipelines shipping gasoline you have tanker trucks and erratic supply.
Thus its the collapse of the upstream oil/gas industry that will actually take us out.
I think this is why collapses because of intrinsic shortages of raw materials are so hard to understand because the actually cause is the collapse of the "upstream" half of the industry first not the underlying harvester of the resource.
A example assume your a starving mammoth hunter and you finally have a scout come back to camp and announce he found mammoths a two month walk away. However your so hunger you know your band of hunters no longer have the strength to make it walking that far. Obviously your EROEI is negative and thus the news does no good.
For a modern society its upstream that fails first. I talked about the upstream oil industry but the apex hunter or final energy leach if you will is government and the banking industry. Going with the assumption that the collapse happens at the extreme end user of oil which for economy are bankers and government officials which serve no useful purpose except to use their power to suck wealth we find that these are the institutions that collapse first. The reasoning is the same as the resource base declines the absolute amount of wealth creation declines and the cost increase therefore there simply is less wealth to steal. In this case you then have a massive excess in government officials and bankers that can no longer be supported.
Thus if the thesis is correct that collapse starts at the end with the least productive members of the economy feeling the pinch first then it becomes obvious that the final end or farthest away from taking oil and creating wealth is the banking and governments For the real economy they are at the extreme periphery not the center.
Given this I suspect that the world has seen innumerable resource collapses that have been misunderstood as political collapses with the role of the real economies shrinking ability to create wealth from raw materials going unrecognized. Thus rising prices and absolute contraction of supply rapidly ripples outward stifling the inflow of cash into the coffers of the wealthy and their actions are then seen to be the cause of collapse where it was their position at the tail end of real wealth creation that was the culprit. Buy positioning themselves at the apex of a growth economy they have also position themselves to be the last in line in a shrinking economy as the flow of wealth from the raw material producers rapidly dries up.
They find that their is literally and rapidly nothing left to steal.
This has absolutely nothing to do with price economic contraction and low priced oil works the same way in this case the candy bar and soda goes un-bought because of lack of money not because gasoline itself has risen in price it does not matter how price varies. My best guess is both conditions apply that gasoline becomes very expensive even as the economy overall shrinks so it probably both effects are in play.
But we absolutely never even get close to "running" out of oil simply having the absolute volume drop is sufficient to collapse the entire edifice and it collapses well before you even have a dramatic shrinkage of the upstream oil industry.
Thus you never really see the true nature of why the system collapsed as a combination of the "fall" period followed by overall economic collapse make the period of time when the system is actually pushed over the edge short and overlooked in history.
Now I'm guessing what this will look like but my best guess for oil is we will see another strong increase in prices followed by economic contraction starting at the government levels but continued high prices followed by infrastructure collapse and shortages blamed on above ground issues. I don't think we will see low prices again but that high prices will increasingly be blamed incorrectly on the collapsing upstream infrastructure and political moves from desperate bankers and governments. Intrinsically all that simply happening is the ancient situation where you have a failed harvest and the peasants hide food to stave of starvation while the kings men ruthlessly destroy their homes in search for food. Obviously all the intermediate users townspeople etc suddenly get nothing. This sort of wrap around if you will where the previous apex people recognize they are now last in line and try and wield their power to go right to the source hides the overall situation.
This fall period if you will is a sort of interlude where the apex plays first with its power and financial might to force some wealth to flow end without outright attacking the system however this is a shortlived situation.
Although I don't have historical records I bet that when the King found out the harvest was bad that the first thing he did was to spread misinformation claiming that the claims of a bad harvest where false and all was well. Probably spreading some money around and even giving away a bit of grain to show it was in excess.
Of course in the background he was busy filling the royal granaries and sharping the swords for when the truth finally became clear. I suspect we are right now in a very similar set of circumstances.
Damn memmel...I didn't think you were ever going to shut up. And let's knock that "end of life events" verbage. It seems like every other week these days another part of my body doesn't work as well as it used to. I'm actually roaming around this drilling barge at the moment on crutches.
But a lot of good food for thought in that pile of yours. I'll respond to just one aspect now: the obviously predictable not happening. Back in the late 70's when the embargo caused oil prices to spike every fool and his brother started throwing money at drilling deals. Over 4600 rigs running before the bubble burst. This flood of stupid/greedy money found a disproportionally small amount of oil/NG and crippled the industry when prices eventually collapsed.
A few years ago prices started to rise significantly but we didn't see such a rapid rise in rig activitry. Maybe it just didn't have the emotional impact that the embargo and gas station lines did. Now predicting the unpredictable: when PO bites us in the butt again will it be a relatively slow response or another flood of presumably inefficient spending? Or something entirely new? Perhaps how emotional/dramatic the stimulus is at the time will determine that answer. Given the economic viability of drilling today with the lack of investment being made I'm not sure how I would project a future.
You will be a lot more careful mentioning me in your posts from now on :)
And thats all I'm gonna say this time :)
Understood Forest
That's too bad about your press Tor. I do know a thing or two but I'm not the sharpest geological pencil in the box. The facts really aren't that complex. There's no excuse for anyone that labels themself as technically competant to not understand these basics.
oops guess I jumped the gun, your owner just seems to have purchased more stock and has now been upgraded to 'our owner' ?- )
How come you are not looking for capital? Or are you looking but can't get it?
It sounds like a ball bouncing...first a big bounce, then a smaller one, then smaller...smaller, still smaller. Finally stopping.
Or a rock splashing into a pond. Big splash and wave/ next smaller...smaller...etc.
It is basically a physics phenomenon, specifically, energy dissipation.
Energy dissipation.....it`s what we do......
watching this process unfold is like seeing a mirror of human life.
Exactly. However see my second post the bankers and their government lackeys where positioned on the opposite bank catching balls or skipping rocks that they where forcing to make bounce or skip ever higher. They where considered the top dog because they owned the basket. I think you can see their situation when the ball or rock begins to bounce lower or skip less.
Long before the ball makes its last bounce the basket is empty with no new arrivals. Thus the system collapses rapidly. For some reason historically it seems to get a second lower bounce in before collapse but the moment its clear that its a lower bounce and all others will be lower its over you never make it past that point.
I think that for a whole host of reasons the system sort of waits to see if its just a hiccup if you will and the ball bounces higher afterwards or more apt a new ball or rock is created and starts bouncing or skipping.
But once its clear that its the end game if you will and this second bounce is the first of many that will be lower its game over and the system collapses.
In a lot of ways its sad that this is the way things work because the underlying dynamics of the the dissipation never get fully expressed and the people never learn that depending on collecting bouncing balls and skipping rocks in baskets from the opposite bank is a bad idea. Instead everyone starts fighting over the basket and try to move it closer !
Your much better off playing the game of floating sticks and depending on a steady game of grabbing the more certain stick or log thats bound to float downstream in a stable ecology. Few realize that they are actually playing the entirely wrong game.
I see you have finally been emancipated, partners now are they ?= )
When it becomes profitable enough to develop the reserves you refer to, the environmental concerns will be dealt with. The problem with that is, you won't be able to afford said oil. Economics trumps environment almost every time.
I think you mean "economics trumps environmentalists almost every time". In the long run, economics does not stand a chance against the environment.
True enough, though few people consider "the long run".
Hollis;
The reserves that the US would be pulling from now are much more costly to produce than the big juicy fields that powered Dad's Oldsmobile.
We hit our peak in 1972, with a decent shot in the arm in the early eighties in Alaska. That horse is out of the barn, brother. Shale Oil and Tar Sands are not going to be the cash cow that Light Sweet Crude was..
Maybe I'm wrong, but you might consider hedging your bets.
Bob
The restricted reserves are minuscule, ANWR has only 6 to 16 billion barrels of recoverable oil.
And the average person lacks the information needed to judge that 6 to 16 billion barrels is, indeed, "minuscule," equivalent to roughly 12 to 30 months of current U.S. consumption.
Even the supposedly well-informed seem to lack this information. At the ASPO meeting in October, Marcio Mello said that peak oil would not occur in his lifetime, thanks to the recent discoveries off Brazil and West Africa, in the Gulf of Mexico, and elsewhere aggregating 180 billion barrels. He seemed genuinely surprised when Charles A.S Hall pointed out that this was equivalent to only 6 years of current world consumption.
ANWR does not contain reserves of any kind. ANWR is a myth, a chimera, a fraud. There is not a single petroleum geologist in Alaska willing to bet his reputation on the presence of economic oil or gas in ANWR. Seismic in ANWR was run, after looking at the results, 2 of 3 sponsors cut all ties. That seismic is still secret. ANWR is a red herring, kept alive to distract peons from the reality of energy depletion, and to gain political traction on completely unrelated energy issues.
Tell me something new about Jay Field or offshore Florida and I'm all ears. But I'm getting tired of people speculating that ANWR is North America's Ghawar.
Cold Camel
Actually, I've been watching Jay to answer the question, "How much production should we expect long-term from fields with high quality reservoirs that were developed in a world class manner?"
Jay has all the advantages one could hope for, easy access, cheap labor, low taxes, nearby CO2 reservoirs, etc, so if production could be teased out, it would be. Instead production has stopped cold-turkey. There are rumors that it will reopen, but I think the produced water isn't even brown. (I'm exaggerating, but not much.)
Jay is a surrogate for the big fields we care about; Prudhoe Bay, Cantarell, Ghawar, Burgin, Rumalia, the North Sea and others. Any field that peaked after 1970 will likely decline smoothly until production stops like a light going off. The long tail doesn't exist in a world-class developed field. The tail on the picture of the snake that swallowed an elephant needs to be chopped off, right past the big swelling. The tail will be cut even shorter in high-cost environments (Prudhoe Bay, North Sea, deep offshore).
I include Rumalia in my list because I looked into Iraq's potential after Stuart Staniford's post. Iraq is an old explored territory. Of the top 26 fields, all but West Querna have pumped half or more of thier oil, so a new higher peak can't come from them. Iraqis looked all over the nation in the 1970's and what they found has been developed, or was too small to be economic, there aren't any plums waiting to be picked. Sure, there is undiscovered oil in Iraq, just as there is undiscovered oil in Texas. Lots of money to be made, but not a game-changer.
I understand that people just gotta have hope, and I don't have any to offer. Intentionally offering false hopes that results in others taking harmful actions is evil. Ignorantly offering the same hopes is nearly as bad. That's why I occasionally shout down those who offer up ANWR as a hope. We need to be careful of what we write.
Now the one bit of hope is that Jay Field will start producing again, that the rumors of new production are real. Floridian, if they do, make sure you let us know.
New data on Jay Field, seems they are going to use the produced water to generate geothermal power. I smell snake oil. Google News "Jay oil" field for details.
More to the point, the US has not found any new supergiant oil fields fields since the Alaska North Slope discovery was made at Prudhoe Bay on the Arctic Coast in 1967. East Texas, West Texas, Alaska North Slope - those are the big finds that kept the US awash in oil for lo those many generations.
More recently, there have been major oil finds in the deep water Gulf of Mexico, which have slowed the decline, but there are limits to how far offshore you can go before the continental shelf turns into the ocean bottom, and the ocean bottom has all been recycled by plate tectonics, destroying any oil which once may have been there.
Bottom line: US oil production peaked 40 years ago and there's not much chance of it ever getting up to those levels again, removal of environmental restrictions notwithstanding.
developing new reserves is nonsense. What you are advocating is that we extract and consume them.
There is a special place in Hell reserved for the Republican political hack who decided to use the word "develop" in this context.
I find it amusing that now all these public figures like Richard Branson and CEO's of major oil companies are now all coming out of the woodworks and ringing the alarm bells all of the sudden in the past couple months. They are saying PO is going to happen within 5 years - It ALREADY happened and we saw the great oil shock in July 2008. Now we are in the long aftermath, the long slow unwind of the global economy and it's debts.
I think people just don't realize it cause it wasn't the end of the world, just a large disruption in the capital markets that turned into a sustained recession/depression.
Gails thesis has been spot on as much as I would like her to be wrong. It is now about extending BAU and fossil fuels for as long as possible, there will be little to no economic growth.
Has anyone here tried to suggest limits to growth to their friends, colleagues etc. just for discussion purposes or a "what if" scenario? I find they will get angry or just laugh and deny any such talk. Especially my friends in the private equity/finance space who control capital. This is a non starter for them, admittedly it almost seems futile to discuss because there is very little one can do except willingly shift down their standard of living. To them it is just further debt unwind tied to excessive leveraging that will simply take a couple more years to work through.
Whenever I suggest to people that there are limits to growth, I point out to them that, if 3% annual GDP growth requires a 2% annual increase in energy usage, that means that in a thousand years, we would require almost 400,000,000 times as much energy as we do now. I'm tempted to say that anyone who believes that such a thing is remotely possible cannot be considered a rational adult. However, as Prof. Bartlett has pointed out, "the greatest shortcoming of the human race is our inability to understand the exponential function." And even if one can get people to understand that there are, indeed, limits to growth, many of them will not care unless there's a good chance that the world will run up against those limits in their own lifetimes.
It is particularly difficult to get neoclassical economists to understand that energy could be a limit to growth because, in the model of economic growth to which they subscribe, energy consumption is not a driver of growth, but rather a result of growth. Subscribing as they do to such a model, to suggest that a 3% annual GDP growth rate might absolutely require some measure of growth in energy consumption would simply make no sense to them.
So true. Economists will continue to dismiss this phenomenon.
There are no limits to growth because we are Flatlanders living in a 2D world. Since we live on a plane, as we exhaust resources and overpopulate a particular region, we can just move out in concentric circles forever. On a plane, there’s always a new frontier.
Limits to growth only apply to those unfortunate souls who live on a ball in a 3D world with limited resources.
What might be more amusing is that even on the plane, exponential growth requires the circle to expand ever faster. When the speed of the expansion front finally approaches the speed of light, the exponential phase is done. The same would eventually hold in three dimensions, if someone ever found a practical way to construct interstellar vessels...
Limits to growth is very easily understood by science graduates, even at a lower, sub-conscious level. Anybody who had studied laws of thermodynamics know it already. He also know that energy is work and work is economy. Its that simple. Low energy means less work and less work means less economic output. You can get more work out of the same amount of energy by improving efficiency but due to thermodynamics rules you can't improve efficiency more than a particular point even in theory. In short, you can't make a perpetual machine.
Commerce graduates on the other hand are very very weak in science. Many don't even know how many thermodynamics rules are there or even what the hell thermodynamics is. They know demand and they know supply and they strongly believe that with strong demand you can do wonders. At the back of their minds, at a low, sub-conscious level, they dream about perpetual machines.
What is left is arts graduates. Those simple people who don't want to worry themselves about machines, energy flows and money matters. They want to create beautiful artifacts, be it architecture designs, paintings, dramas, songs etc.
I had divided the people simply in two categories, graduates and under graduates. I further divided graduates in three basic, classical divisions: science, commerce and arts. That put all engineers, doctors, scientists etc in the science group. Even doctors know that their are limits to growth.
This is precisely the critique by Robert U. Ayres and Benjamin Warr of the economic growth model of neoclassical economics: It ignores the laws of thermodynamics and posits the economy as a perpetual motion machine requiring no energy inputs to keep it going.
Odd grouping WfP ... I underwent an Architecture degree, and it was a lot more science than art. Buildings still need to stay up, keep the rain out, and work well, no matter how aesthetic they are (or are not).
Of course tough little sections of that keeping the rain out and other tricky little parts often gets relegated to drag and drop print details with that oh so helpful notation "similar" these days.
Unless my geriatric neurons have lost their math competence, it looks like we have had a 0.8% growth rate in world energy usage over the last 1000 years, so there's only a factor of 2.5 between not being a rational adult and reality. Of course, some non-rational people might say that the rate of energy usage growth is technology-driven and higher now than in the Dark Ages, but I wasn't around then.
Yes. They say this concept was brought up in the 70's and was proven not to be true at that time....case closed. I have given out several "Limits to Growth the 30 year update" books but people are just not interested. Yet!
All previous predictions of when the world would “run” out of oil were proved false, therefore all present or future predictions will also prove false or all present and future predictions can’t be trusted either.
Exactly. Also at one time scholars said the earth was flat, now they tell us it's round. How can we trust them when they can't get their act together.
The politicians said that the scholars said that the earth was flat. What the scholars actually said was that more research was needed.
After the first astronaut was launched he came back and confirmed the round earth theory. Many people didn't believe it until that point.
You not died yet is not sufficient evidence to prove that you will not die ever.
Keep writing.. Keep writing.
The turkey never realizes that Thanksgiving is coming. He's never experienced it before (and never will again).
To be fair they did produce a report in 2008 as well http://peakoiltaskforce.net/wp-content/uploads/2008/10/oil-report-final.pdf.
Despite the fact that petrol here in the UK is £5.14 a gallon there seems little appetite for people to give up willingly their oil based lifestyle. Having said that, a lot more people took their annual vacation in the UK last year (staycations they were called). Perhaps if energy (and related) costs continue to rise another sacred right, the right to ownership of a car, will fall away. I worked out the other day that to run our 2 smallish cars takes up 25% of our total expenditure, and thats being pretty careful(It wont last long as one of them will be gone in 2 months) Part of the travel problem is that we followed the model of out of town shopping centres, so that our town high streets are often full of empty shop fronts (but with public transport links)whereas out of town shops require car journeys. Another aggravation is where companies acquire local businesses and then centralise distribution and sales, forcing more people to commute to work or creating unemployment pockets.
Speaking to a neighbour the other day we had a chat about microgeneration using Solar PV. I'm hoping our local transition group will be producing leaflets on peak oil and other matters soon for discussion at our local market next month. Reports such as the one produced by Branson, Arup et al make peak oil a legitimate topic of mainstream conversation rather than a crackpot concept put forward by the lunatic fringe
Mazarine, if you're interested in solar pv the new feed-in tariff was announced last week and this should give a return of around 10%.
Without looking it up I think it might be possible to also get the old grant of up to GBP 2,500 until the end of March if you are quick:-)
I wonder how long the average TODer has been Peak aware. I have spoken with Texans who looked at me with dismay and told me that Texas alone could produce enough for the entire world, this was in 2009. When I told them Texas had peaked in 1972 they offered some preposterous explanation that we were saving our reserves for later. They truly believed this, I could tell by their expression. With Mexico's precipitous decline it really makes me question the Saudis decision to relinquish their Caribbean depot. Does this mean that they believe that US consumption will shift to the far east to that degree? Even if consumption has peaked in the US, is our economy going to contract to the degree that we can get by with domestic production plus Canadian and Venezuelan exports. I remember Jimmy Carter and think how different thing could have been had we prepared then for the inevitability of this day. Whether oil peaked in May 2005 or 2015 we are woefully unprepared. We as a people do not want to hear unpleasant news and this is as unpleasant as it gets for our society. I'm sure many people have experienced the condescending looks for discussing PO in polite company.
"Look at the birds of the air; they do not sow or reap or store away in barns, and yet your heavenly Father feeds them. Are you not much more valuable than they? Who of you by worrying can add a single hour to his life?
-- God Provides
Although I'm not sure if they are paying close attention to the proviso:
Therefore I tell you, do not worry about your life, what you will eat or drink; or about your body, what you will wear. Is not life more important than food, and the body more important than clothes?
In other words, all God might provide is USAID cornmeal and the grain sacks for clothes. ;-)
Hi Ron, You are remarkably talented at selecting and quoting scripture out of context,aren't you?
If I felt like it I would look up chapter and verse and sling a few quotes about prudence, planning and saving for rainy days -and years when it does not rain.
For those who might be interested, the verses quoted are , in context, meant to assure the believer that if he or she lives according to the rules laid out in other parts of the the KJB thaat he will be ok and that he need not worry about things beyond his control.This is remarkably good advice , consistent with good modern day fiscal sanity (common sense about living within ones means and looking after family, friends, and community), and with good mental health-stress kills.
The parallels between the teachings in the KJB and the emerging philosophy here of self reliance, simple living, long term planning, maintainence of family and community ties,aviodance of extravaagence, etc,(I could go on! ) is simply remarkable to say the least.
As matter of fact , about half of the more perceptive posters here are classical fun damental Christian conservatives,minus the dogma.
Religion- a time tested survival machine!Take it to the bank.
Assurance not valid in Ireland 1846-1848, or anywhere in Europe 1348-1350, from what I can tell.
Of courdse not MR Colyle.
No particular strategy works all the time ,or against everything that can go wrong.
I presume that you are a new comer here and assume that I am myself a believer-far from it.
I am Mr. Charles Darwin's puppy dog.I don't believe in God, or that the KJB is literally true.
I don't believe that the Boy Scouts are supernatural either, but that doesn't mean what they teach about being nice to old women, survival, and preparation for possible harships is not good advice.
A religion in reality exists in the minds of the people it brings together in a group of people working together for the common end of thier personal and group survival and prosperity, just like a political party, a labor union,a street gang,or a revolutionary party such as the BOlsheviks, the Nazis, -or the patriots (or rebellious ingrate British subjects, take your pick,) who fought the American revolution.
Just because there are some errrors in the dogma (very big ones, it is true)around which they are organized does not make religions less effective as survival machines.These errors might paradoxically actually strengthen the religion.
Note that for instance Judiasm and Roman Catholicism are among the longest lived societies or social organizations in existence.
It is true that another organization of the mind,viz Nazism, nearly wiped out Judiasm in Europe less than acentury ago, but it is also true that the religious glue of Judiasm pulled the survivors together and that thye have learned from this experience and are now among the most dangerous powers on earth,being members of the nuke club, and without a doubt, in relation to thier size , THE junior scale superpower.
I am not a pusher of anti Jewish conspiracy theory any more than I am a believer in a religion.
This is a simple observation of fact, and modern day Isreal would not exist without the structural backbone and resilience provided by the very reason for the exisence of the Jewish people-the faaith itself.
Those not yet beginning to see the light should also note that the followers of a religion need not be believers as such-although it is necessary that the majority of the followers believe, or the religion will fail to perpetuate itself.
A religion is something that is alive, in the same sense that a HERD or a FLOCK or a Scottish or Irish clan is alive.Some of my ancestors died during the Plague years, without a doubt, and more died to an absolute certainty during the Famine in Ireland-but because they were not strong enough, in comparision to the English, who worshipped the same god and who are the guilty party.
I have heard some of my cousins say that if the tables are ever turned, it will go very hard indeed on the English.
That depends on the dogma, don't you think? A dogma that says that "God will provide" in all cases, and therefore that we need not provide for ourselves, must ultimately either weaken the religion (by resulting in the misery of its adherents) or be ignored or be supplanted by some contrary dogma.
Some hold to the dogma that oil exists under the ground because God put it there a few thousand years ago during Creation Week (see The Origin of Oil--A Creationist Answer for an example). Others hold to the dogma that "the Creator's goal is to provide humanity with the richest possible source of fossil hydrocarbons."
It seems to me that it would be but a step from either of those beliefs to the dogma that God can and will replenish that oil as required by his people -- just as "the barrel of meal wasted not, neither did the cruse of oil fail, according to the word of the LORD, which he spake by Elijah." (1 Kings 17:16). But such a dogma would probably not long survive the inevitable collision with reality.
"A dogma that says that "God will provide" in all cases..."
Well, in real life real dogmas tend to get more complicated than that. If a dogma like that induces people to make some effort to carry on in bad times, rather than just roll over and die, then conceivably it might assist those people, rather than others, to survive - irrespective of whether others wedded to different dogmas see it as perverse.
Real dogmas that don't play well with reality must, if they are to survive, be modified -- that is, evolve. Otherwise they will be discarded -- that is, die. If you think that Jesus is coming back to earth by Mar. 21st, 1844, on Mar. 22nd you can try again for Apr. 18th, and on Apr. 19th you can shoot for Oct. 22nd. If Jesus doesn't show up on Oct. 22nd, you may decide that it's time to modify the dogma in some rather more substantive way than by just fiddling with dates.
One way a dogma can be modified to enhance its survivability is to make it more "complicated." A better way, perhaps, is to make it compatible with any conceivable state of reality. For example: "God always answers prayer, but sometimes the answer is no."
Hi Mac,
As you know, we disagree about the usefulness of religion going forward - regardless of how useful it might (or might not) have been in the past. But, I sincerely hope this is not a discussion to be taken personally. I generally read and appreciate your comments on many subjects.
I think the discussion of religion needs to be taken very seriously in light how useful it will be in understanding the problems we face, setting appropriate goals, and working towards solutions. In this spirit, here are a couple of observations:
Lots of people over the ages, from many different cultures, have offered good advice. It is one thing to incorporate that advice into your life if it makes sense to you; it is not necessary to believe the author was supernatural just because you value the advice. It is the "supernatural" part I find dangerous because now you have set the stage for believing things to be "true" with no real evidence. Clever guys, with very bad intentions, over the ages have clearly capitalized on this.
Of course history has numerous examples that contradict this. But, looking forward, this is one of the most troubling things about all the religions that exist in the world today. I think it is really hard to get "people working together" from a religious perspective. Even at a local level, my community has numerous Churches with greatly differing belief systems - getting these folks to agree on very much is not likely. Community centers (few that there are) are more for fun and games stuff than serious discussion. Town halls are mostly to complain about taxes. I not aware of any local clergy that preach about population overshoot, planet carrying capacity, personal automobiles, growth paradigm, etc. Yes, some of them mention environmental issues, but not in terms of the real causes like we hash over here on TOD. So, I just don't see how the "common good" in the larger sense will be served in the future. And, yes, I understand how a particular church can provide comfort to a victim of today's maladies. To me this is kind of like England murdering thousands of African people and then sending in some missionaries to give comfort to the survivors.
Two sides to that coin - it seems that "faith" provided a handy tool for a bad guy to do his evil deed in the first place. Seems Hitler could get religious German people to believe they were doing a "good" thing in the way they treated people of the Jewish faith.
Of course, I would hope "religion will fail to perpetuate itself". As for "see the light", I do see some glimmer of hope in some young people who are discovering how irrelevant today's organized religions are in terms of saving humanity and all the other species of the planet. Silly as it may sound, I think the movie "Avatar" stuck a nerve with people who want to see a much truer alignment of humans with the overall systems of the planet. The are some books coming out now - like "Dark Green Religion" that moves in this direction.
I have no illusions about how deep seated is religion in our culture. As I've mentioned before, TOD is the only place I even dare to bring up this subject. But, at a practical level, I would hope that even religious folks can support the idea of "Separation of Church and State"
http://www.au.org/
BTW, I visited my grandfather's village in Ireland and reviewed the birth records - my not-to-distant relatives definitely suffered in the so-called "Irish Famine" or as the British called it "The Irish Problem".
Hi Dave,
e aren't quite on the same page-when I say the common end of group survival and prosperity , I mean the survival and prosperity of the MEMBERS OF THE GROUP, not the human race.
Now of course there are leadersof religious gropus out for thier own ends, to accumiulate power fr themselves, and someof them will sacrifice thier followers in order to strengthen thier own position.
But the really simple guys and girls are not to my experience ever in the position of leaders.
i know a great many thorougly IGNORANT preachers and pastors of churches, but EVERY LAST ONE OF THEM understands that in the real world "God helps him who helps himself."I have NEVER in my entire life met a single person who actually BELIEVES god is going to take care of all of his problems-the idea is that God (who doesn't exist of course) will give them the strength and judgement to take care of themselves.
Otherwise my old grandparents, who could niether read nor write, would not have worked daylight to dark.They would have starved waiting for god to feed them and froze to death waiting for god to keep them warm.
There are a very very few people in the entire world at any one time dumb enough to take such foolishness literally-they are the ones who strap on the dynamite and literally drink the koolaid. Even the LITERAL can't-learn-to-read retards in the local churches , of whom there are many, know it doesn't work that way.
If you don't want to understand religion from a scientific viewpoint(poorly presented by yours truly, it is true) you never will-your DESIRE to see it go away blinds you to the reason it exists,and the way it works, worldwide, throughout history, throughout society.Religion ( god) is the alpha male monkey morphed into a form suitable for groups too large to have a literal alpha male.
My thinking is that as secular societies arise, religion as such is replaced by a belief in the organized state.Biut the underlying structure remains, as the underlying structures of physical evolution remain, and are only modified to suit new circumstances.
Get this thru your heads folks-when a religion goes away , be it protestant fundamentaliasm, catholicism, communism( a religion without a god, but with diefied alpha males) naziism, or whatever, it will be replaced with a new "ism " of another kind.
It might be a better "ism ", or not, depending on the viewpoint of the observer.
Think if you can stretch your imagination so far of a socialist country as a place where the state is god,and the prime minister is the pope.
That Hitler tried(and nearly succeeded ) to wipe out the Jews is not a refutation f my argument at all-it is a value judgement substituted as an argument .
It is ALWAYS "US " AND /OR 'THEM " , THE WORLD IS A DARWINIAN PLACE.Religons are darwinian adaptations, created by evolution, useful in living in a darwinian place.Now of course they may have lost thier utility, temporarily, or perhaps even permanently.Of course they may start as many fights as they prevent.But we are going to fight ANYWAY.
But I strongly suspect that when tshtf , I will be in a much better spot, living in a community bound together by a strong religious glue, than those living in communities without that glue, every thing else more or less equal.Notice that I do not have to be a believer to be a member of that community-all I have to do is observe the outward forms of belief and conformity-but sfaics, we must do that to live in ANY society.
SORRY ABOUT THE TYPING FOLKS-when I have time, I correct the one finger errors , witth one finger, of course.
"...about half of the more perceptive posters here are classical fun damental Christian conservatives,minus the dogma."
Oldfarmermac, you've identified me quite well. I am a conservative evangelical Christian. I also believe the way we're living on the earth right now is totally nuts. I believe that America is composed largely of immature materialists who refuse to acknowledge the consequences of our actions. And I believe that while God doesn't always give us what we want, He always gives us what we need - even if what we need is to sleep for a while in the bed we've made for ourselves.
By the way, did you see my final post on the earlier thread, "Energy Flow, Emergent Complexity and Collapse"?
Put me in this large bucket as well. As far as scripture goes, being a "good steward" we ain't.
Still, I raise my kids Christian as from what I see around here, they are the "better folks", and absolutely a more cohesive community. I also emphasize science, math, and critical thinking. As to the details of theology, they'll find their way same as I did. As long as you don't argue the minor points, getting along and going along are easy enough.
TH: I'd be interested in talking with you. tlove AT linfield DOT edu
Religion- a time tested survival machine!Take it to the bank
I absolutely agree. Religion provides both a community and a sense of purpose ('there must be a reason why this is happening') that promotes survival. No argument from me there.
And of course there are parables/proverbs that encourages industry: Whatsoever a man soweth, that shall he also reap.
But I also sense a certain 'God provides' attitude in certain quarters that seem to make some believers more likely to dismiss the possibility that man can have a significant impact on resources, climate, or ecosystems. It's in God's hands. Inshallah.
There are two natural centers of community in pre-modern life: the church and the tavern. Both will play a part in post-modern life.
And then there are those weird Unitarian Universalists...a true religion or not? Regardless of definitions, I'm happy to note that my church is actually teaching a course,
Building Community Resilience in Response to Peak Oil and Climate Change. If there is a religion to be carried forward, let it be a liberal one that values diversity and reason/science. :-)
Well, that is a faithfull representation of what Joel Osteen and many other evangelists are doing, which is to take a little Scripture, a lot of pop psychology, mix it in a bowl of treacle and serve it out. I've heard that very Bible passage used time and time again by preachers (who live off the damned offering plate!) to tell their parishioners not to worry about their future.
Do they have treacle in Texas?
Hi Ron,
Caution - your implied attitude could relegate you to an even smaller fringe group of TODers.
My very explicit attitude is that your comment strikes to the heart of the cause of our mass delusion and denial. Clever guys seeking power figured out this god thing long after it served any really useful purpose - it is one of their most potent tools. Often cheaper and more effective than bullets. But, this POV is often considered irrelevant to PO/GW - I wonder what other force could so effectively blind billions of people to the obvious facts of population overshoot and carrying capacity exhaustion?
I'm often reminded of the old saying "you can expect bad people to do bad things; but to get good people to do bad things, you need religion".
Religion indeed cuts both ways. History is soiled with instances of religious persecutions. The First Crusade comes to mind, including the 11th and 12th century conversion/extermination of the Jews in the Germanic countries. How much of Islam's tense relationship with the Christian west results from this period? The dark side of the force has always been with us.
I have a hunch -after the debacle of 2008- that the question of whether we have enough or not will never actually be of significance because we will always 'have enough', it will just be reduced to the simple problem that nobody can afford whats left...
Nick.
I have an analogous comment posted below - we cross posted.
A few weeks ago I was asked, seriously, by an intelligent computer engineer (my profession) if I had heard that "maybe oil is manufactured in the earth." Seriously! Some of these deniers go to great lengths to maintain their perpetual growth beliefs. This comes part-and-parcel with the distrust of science as well.
(I'm from Texas, and I'm peak oil aware. It's ludicrous to think any resource can be infinite on a globe standing in space.)
Careful here. There's no logical contradiction between ultimate physical limits to growth, and oil being 'manufactured' in the earth - and anyone versed in math is likely to know that. Now, whether oil is being manufactured, or if so, whether the quantity is significant, or if so again, whether any of it can be accessed, now those are other questions.
Oh, and in social and political terms, few people outside academia care whether perpetual growth can occur. For most, it will be utter folly to get their undies in a bundle over what might or could happen in principle, millennia from now. If growth seems like it can continue in one's lifetime and perhaps somewhat beyond, many will find that to be good enough.
As a computer engineer, I do believe that oil is manufactured in the earth, primarily through the agency of methanogens -- good old anaerobic, oxygen deprived methane consuming bacteria giving up their lives so that some poor slob can drive his SUV to the Nascar track every weekend. I`ve always felt that the amount of oil and coal produced in the world (and deposited in the way that it has been) has always been too low to be accounted for even by cooking diatoms for a few hundred million years.
That being said, that biomass of methanogens dies off at a very fixed rate, and as such, it`s very likely that while, say in 30 or 40 million years or so, some descendants of racoons who developed opposable thumbs, learned to stand upright and managed to evolve a sufficiently mobile muzzle to allow for communication will be living up the good life in their racoon mobiles, the ability of the earth to replenish its own oil reserves will very likely take far longer than humanity has on this planet.
http://en.wikipedia.org/wiki/Not_even_wrong
I wonder if Stewart or Colbert would have any luck making this ridiculous denial a little more obvious?
1954 -- Let me attempt to explain what you've run into. In Texas we have some of the prettiest women, most rugged men, best shots and smartest geologists. But we are so big we've also allocated plenty of space for some the dumbest and obstinent buttheads on the planet. We're just accepting and hospitable in that way. Pretty nice folks, ya know. There are about 6000 petroleum geologists in Houston alone. And everyone of them understands PO and have for decades. But it may also confuse you from time to time when you hear the PR machines of some public oil companies offering a conflicting opinion. Just remember they are trying to give folks a reason to buy there stocks. Telling folks that the projects they need to make a profit are getting fewer and fewer doesn't get people to write that check.
Hi, Rockman, "longtime listener, first-time caller." This is a point that can't be emphasized enough, IMHO. The price of an oil company's stock depends only in part on the current price of oil. From what I can tell, it depends at least as much on the amount of actual reserves the company has, and on the notion that it will be able to replace existing reserves with new reserves in the future.
Am I mistaken, or is it not the case that NO "oil" company has a sustainable long-term business model, where "long-term" is defined in terms of decades and not just months or years? But who in top management wants to tell such a thing to current or prospective shareholders?
I wonder.
This might have been true sometime back - now Wall St cares only about the next quarterly result. Definitely noone cares about decades from now.
Peak oil aware? 40 years now that I think about it, since 1975. In 1977 I proposed a very small tax on non-renewable energy to be applied to renewable development and deployment. Fat chance.
Case in point; I have been mining for 20 years in Coal and Quarry operatons in the south east region. In Florida my quarry operation is overwhelmed by State, County and Federal agencies looking for somethng to do or charge me for or make me spend money on flowers and trees, that I cant spend on permitting new reserve. The state of Florida through SWFMD has bought all property around me (with tax dollars) to restrict any growth of any kind. What happens when theres no more rock to crush for concrete, asphlt etc? At 6 million ton a years it wouldnt last long, although Im down 70%, but with the same expences toward these agencies. In Kentucky our mining company is always in a battle with the same folks over obtaining reserves that have been approved by EPA and then resended by then for "futher review" . That stops the machines, the interest meter keeps running, and the electric company rasies your rates.
That's business as usual (BAU).
You feel hemmed in by regulation but society doesn't want you to despoil the environment and use up all the resources.
You can buy politicians to keep the public at bay but the pressure isn't going away.
You're in the wrong business.
Try recycling.
I know that pain Hollis...been there and had that done to me more than once. But fortunately I found other opportunities to drill a hole and make some money. Sounds like you have more limited options.
Well, when that mountain is gone (pointing out window to mountain across valley with bulldozers working on it) they'll probably have to start on that other mountain over there (pointing at mountain next to it). But fortunately I'll be dead by that time, and if I'm not I'll just move to another planet and try to forget about it.
You may not have a lot of resources left, but we do, so if you have enough money you can buy them. Keep in mind that it will have to be enough for the TBR (total body replacement) I'll need by that time. The hip replacement I might need in the less distant future I can pay for myself.
As a note, the South Florida Water Management District (SFWMD) at the behest of the Gov. Crist purchased land south of lake Okeechobee in order to create a flow lane to the Everglades. This is an incomplete and controversial project aimed at water conservation.
As a further note. This project to restore some of the everglades goes back several decades. After many decades of drainage through a multitude of projects by the U. S. Army Corp of engineers and the Water Management District it was discovered that this region, one of the most unique in the world, received about 70 percent of its rain fall during a 5 month period, known as the Hurricane season. Rushing the water to the sea via a vast expanse of canals during wet periods resulted in drouths and massive wildfires during the dry season, plus salt water intrusion and loss of untold amounts of wildlife and fishes produced in this one of the largest nursery areas in the world. Spreading the water in a sheet flow across the glades provides many benefits, including removing many of the nutrients caused by multi national agriculture just south of Lake Okeechobee. The thick layers of muck which built up by the overflow of the Lake throughout the last several thousand years has been mined by agriculture to provide winter vegetables and sugar to the nation. Very energy intensive operation, pumping water around, and unlikely to be sustainable in our emerging energy future. A careful history of the cultural practices during the 20th century reveals this area to have experienced some of the most destructive practices ever on the planet. Excellent project being carried forward by gov. Christ, in my opinion.
Oh no. You mean the govt is not letting you destroy the environment and make some money. That is really sad.
I forwarded this article to some of my friends who are deniers (peak oil, AGW, etc) because they think WSJ is almost as good as FOX. It's good to get a source that can't be pawned off to "librul media".
From the article:
A question about Machiavellian manipulation of statistics by our Government and peak oil. First a lead-in: my brother was a drill hand in the Permian Basin area of Texas in mid-to-late '80s. He tells me, when we discuss peak oil, that there were multiple times where they found oil, but then big-wigs with the clipboards would mark the hole "dry", cap it off, and they went on to drill in another location.
If we take my brother's account as true, what do we make of it? Was this a factor of the collapse of oil prices in '82 and the drilling was only done to keep some drillers going through subsidies? Does anyone think our Government has foresight enough to intentionally under-report reserves by capping known finds? Would the "free market" allow known untapped barrels to sit idle when prices top $100 pb?
The "Leave it in the ground" quote above made me think of this again. Perhaps we have a more underhanded way of "Leaving it in the ground" because someone up there actually has foresight.
Regards,
John
I like to show people this article:
"Climate talks bigger threat to Saudi than oil rivals"
http://uk.reuters.com/article/idUKTRE60N0YE20100124?rpc=401&feedType=RSS...
and point to the paragraph at the end that the Saudi's are now beginning to develop Solar so they can sell GW.
If there is so much oil available why would they need to switch to developing CSP plants such as the Desertec project, etc. for their "second curve?"
This question and the article seems to support previous TOD articles that question the validity of the stated reserves of Saudi Arabia.
I suggest that you rethink your premise.
john -- I've personally drilled dozen of wells that had oil/NG in them and I plugged the hole. And did so for a very good reason: I didn't want to lose money. I might spend $5 million to drill a hole in the ground to see if there's any oil/NG there. And son of a gun I found some...about $2 million worth. And it will only cost me another $3 million to complete and produce it. Simple question: is it smart to spend $3 million to produce $2 million of oil/NG? OTHO I've completed wells when it made economic sense to do so even though I'll still lose money on the project: initial cost = $5 million. Oil/NG found $2 million. Completion cost $500,000. It makes sense to complete the well because I'll make 4X my completion cost. But I lose money on the project because I spent $5.5 million to produce $2 million worth of oil/NG. Don't mean to take anything away from your brother but what a hand sees on the drill floor doesn't say everything about the decision process. Your brother probably knows more about drilling a hole in the ground then I ever will. But I suspect I know a good bit more about the financial decision making process then him.
ROCKMAN,
I've seen those Energy Tomorrow TV spots with that gal(former FOXNEWSer Brooke Alexander) saying that with horizontal drilling a single offshore platform can collect oil from as far as 40 miles away( or is this bullcrap).
So how can you be sure that all you can suck up is $2 million dollars.
IOW, what kind of game changer is horizontal drilling?
Just curious.
Damn maj...I've been sitting on a rig for about a week without seeing one women. And now you remind me about Brooke. Thank you...I think.
Bullcrap for sure. But I would still watch her deliver it all day long. I just missed out on a contract to drill several hundred 26,000' (about 5 miles) hz wells in the Persian Gulf for Maersk a couple of years ago. That's pretty much the state of the art. But the project was very reservoir specific. In certain fields in certain plays hz wells are a game changer for sure. But as productive as they can be they are not applicable across the board. I know several plays in Texas where they could deliver a big increase in oil rates. But the economics just don't work. A simple vert well won't produce as fast or recover as much oil but it makes a better return. And at the end of the day that's all that matters to us. If an oil company is drilling hz wells they are doing so because the profit motive is right and not as an effort to relieve the world from some PO pain. "We" really don't care about easing the pain despite what the TV ads say. "We" just want to make the best profit possible.
Me too, ROCKMAN
She blinded me with science.
Thanks Rockman - makes perfect sense. These days, given the nature of gridlock in Government, I just can't see too much of a capability of that much foresight to just leave oil there for whatever reason.
Question - how, once you've found oil, (with that $5M drilling investment) do you determine what the worth of the find is? (I know spindletop-type gushers are rare nowdays, so I picture a platform on which a drill bit is hoisted with oil dripping off.) Is the chemical composition of the find the main determinate, or the physical nature of the material where it was found that helps determine the value of the find? It seems a several thousand foot hole in the ground provides a very narrow field of view for determining how much oil you can extract.
Final question, suppose we're talking 6 years into the future and oil is now sitting at $300pb - would you or could you go back to revisit completion costs for a well you left behind today?
Insightful question john. Above all else it's just an educated guess. When we drill a prospect we have a fairly good idea of the potential size of the "bucket". For whatever support data we have there's an expectation of how much the bucket might hold. We might expect oil...we might expect NG. Once we drill the hole we run electronic devices down the hole to determine what we have in the bucket. We might find the bucket completely empty so it's an easy decision: plug and go down the road. We might find the bucket full of oil: color me very happy. Run casing and order that new big SUV. Sometimes you find the bucket only partially full. Enough to justify the completion costs. But sometimes not enough to pay back the total investment. And sometimes you still don't produce as much as you think is there. Rarely you make even more than you calculate.
Nothing as elaborate as chemical analysis and such. Pretty much just a volumetric estimation. And yes, many a prospect has been redrilled when prices get back up. The best big example was NG in the 1970's. NG was so cheap for many years that it was flared so they could produce any associated oil becasue it wasn't worth selling. If you drilled a well and found a nice thick NG reservoir you immediately ordered the cement to plug the hole. But as oil became more difficult to find the market value of NG rose. A lot of money was made in the 70's just by redrilling these old wells.
The 6 year out scenario is difficult to answer. Yes, I might know where there's some oil that could be commercial at $300/bbl. But only if drilling costs were where they were back when oil was cheaper. At $300/bbl lots of folks might be drilling anything that moves so drilling costs will shoot thru the roof. That's what happened after the embargo price spike in the late 70's. I know this sounds hard to believe but that oil price spike destroyed a huge portion of the oil patch. High prices led to 4600 drill rigs running with probably half of them drilling prospects that had almost no chance of working. Lots of non-oil patch investors writing checks. In the oil patch we have a technical name for this: "stupid money". Reallly...that's what we call it. Then add managers of public oil companies trying to boost their reserves to get the value of their stock options up. Then the price collapse due to the global recession was the final death blow for many companies. Sounds familiar? Look at what happened to so many shale gas drillers in the last 2 years. As the man said: deje vu all over again.
There seems to be a trend lately in predicting problems that are already happening. The problems from peak oil are coming in less than five years, but it was actually less than five years ago when it started, when the production of oil couldn't be appreciably increased. And we know that the oil majors have been trying to increase production since then, putting more energy and resources into it, which means the net energy from petroleum has fallen since 2004.
This is a significant piece of the core of the problems with the economy since 2004.
I've also seen this when people are predicting problems that are already happening with climate change.
Maybe this is as fast as human beings can psychologically move? (Our house is on fire in the basement, alarms are ringing, but the TV program we're watching upstairs is good and has a loud soundtrack that drowns out the noise. Maybe we subconsciously even smell smoke, but these American Idol auditions are so riveting, it's hard to shift our attention, and after all, the room we're sitting in is just fine. Eventually we do sniff an odd odor and plan on investigating it during the next commercial break.)
Of course, it's frustrating as heck being one of those out on the street that sees the flames, calls 911, and nothing happens.
Exactly, and game theory can explain why this happens.
Because no event of the magnitude and inherent complexity of Peak Oil or AGW can ever be predicted with 100% accuracy (just too many variables & the occasional Black Swan disruption event), most politicians and PR flacks are extremely cautious and reactive by nature. No one wants to be the one accused of being wrong ("crying wolf") and creating a panic that crashes markets and loses the financial oligarchs a ton of money. Lots of people have ended up in unmarked graves outside Las Vegas for far less.
On the other hand, once the evidence and data is overwhelming that something has actually occurred, at that point the politicians and PR flacks can safely *begin* to acknowledge the problem. However, if the event is now past tense --as you pointed out-- this creates a new problem: people will naturally ask, why didn't the politicians mention this before? They begin to ask troubling questions like, "What did they know and when did they know it?"
So, the politically ideal response is to... shift the timeline forward. Peak Oil hasn't actually *passed*, it's going to happen 'x' years from now. Never mind what the data actually says. (And since when did Joe 6pack ever care about "data" or question what he's told by authority figures? There were WMDs in Iraq, Obama is a sleeper cell Muslim terr'ist with no birth certificate, and AGW is a hoax, don'tcha know?) Pols get credibility when it comes to sounding the alarm, and deniability when it comes to being too late. A win-win (for politicians).
Excellent analysis HARM. It now is safer from a PR and political standpoint to start talking about PO. Heck, the MSM might even start talking about it soon. I doubt that would be good for the markets however.
If you read Paul Farrell over on Marketwatch, which is a huge financial site, he talks about Peakoil from time to time. He is a doomer and his editorials are always fun to read, and the comments are also good.
Should be noted that this piece is not a "report", it is an editorial about a report (and other things -- editorials do tend to range). The author is the European editor-in-chief.
Still significant, however.
We are all on the same page although under different circumstances. As in oil, coal and rock twenty years ago I could "sweep the leaves" and start digging. Now my ratios on strip are 15-1 or 20-1 before I go underground. Huge expence. No insurance companies will write a rec. bond, the company has to provide it's cash to secure a permit with the state. Corp of Engineers, OSHA, EMSA, EPA,SWFMD, Office of Reclamation, Seaira Club, ATF(explosives),then there's the local agencies. Mining rock in Lee and Sarasota Counties in Florida there is a inland reaf that is millions of years old that we all mine and is limited to a certain area. Those areas are owned buy Rinker, Cemex, Vulcan and ourselves. We all enjoyed the highest growth rates there during the boom and are still doing well by adapting or they have shut down temporarily. But the government has not, it keeps growing and trying to feed its self on us at an even higher rate by creating new agencies or those semi-agencies buying land for self presivation of the agency. As oil peeks and production turns downward on the curve, government regulation will continue to "hockey stick" driving up cost of natural resources. My point is oil will peek for sure and then so will everything else that creates a derivative. Most of our equipment at both companies is electric, draglines, underground miners, crushers and the conveyors. That electric source comes from coal in Kentucky and natual gas in Florida. As those fuels go up in price, I will get $30/ton or more for rock, which will make a yard of concrete $300. Everything built in Florida has to be to fire and storm surge standards or built out of rock or concrete. Do you think the government will change those requirements?
Mr. Smith,
thanks for your insights. so you are affiliated with multi national companies mining rock for concrete. No the govment will probably not change those requirements. Hurricanes you know. But then it probably doesn't matter. You see, growth is over, especially in places like Fla and Arizona which is as i understand it is primarily where you are located in the USA. guess there may be a little demand for things like the rail system from Tampa to Disney world, but I would not bet on it. Notice your stock price went up after the announcement of the project. Lot of money to spend on infrastructure for visiting a place destined to see declining tourist. But we will probably build it for the jobs and the profit to be made by companies such as yours. No i am afraid its about over. Go just south and look at what has happened areas of Lee county. Forclosures are staggering. In fact the entire souther part of the state leads the nation is some types of foreclosure. Folks are packing up and going back north, or have stopped coming south because they can't unload their property in Cleveland, Newark, or where ever. A Australia and Mexican Company is i believe part of your conglomerate. Not looking too good there either according to what i read on this site. I would be curious though where do you believe the future growth will occur that will require this $300 concrete? Haven't seen much info on the impact of this recession, which looks like a long one, on multinational corporations, especially one that deals in one of the most flexible and valuable of building materials derived from natural resources.
Relax, Hollis. Business should pick up when they start building the levees around South Florida.
yup, until then continue to blame all the problem on regulations and those environmentalists. Bastards, the lot of them. One of the primary planks in the Rubio platform is being played out here. The other is "drill baby drill" in the gulf off Fla. Wish folks would just tell them to go ahead, cause the area has been explored extensively and no one is about to drill for puddles. Rockman, please tell me i am wrong.) But much political mileage is available among the ignorant, so it will be just another card played in this casino in which we live. As Scrooge"s nephew says in the Christmas Carol, "God bless us all."
I'm a indepandent producer, thank god! You are correct in a lot of what you say for now. I have noticed Equity Funds buying large tracts of forclosed properties in Florida and large home building companies doing the same.
To answer the $300 yard of concrete, it is impossible to permit a cement mill in the U.S. and most of the production goes overseas or is produced over seas in countries that allow it. Mining regs are at the highest in years for those in the business and the waters in South West Florida are 25 feet deep south of Port Tampa. No Panemex ships can import. The rail is only used for a dinner train and some lumber. When I started 20 years ago a ton of rock sold for $3 now its $15 FOB the mine add another $3 per ton for transport. Concrete a mixture of sand, cement, rock and water is now huvering at $70 per yard was as high as $125 a yard.
If they build the high speed train between the two cities it will cost three time as much as they are saying. There's a lot of land between the two, very swampy. If a eagle builds a nest in an area of construction, now, there will is an enforced one mile area around the nest to prohibit any construction for certain times of the day. Thats just on eagles. One built a nest in a crane of Boe Brothers building the Sanibel Causeway and closed it down for a month. This is how government agencies survive.
Seeing all these posts about Texas, I just can't help dragging her into a discussion about AGW.
I lived in/around Galveston 2005 to 2008, and twice in the timeframe we had Category 5 hurricanes threaten the area-Rita 2005, Ike 2008. Both times I was amongst the millions of sheeple who fled-some by choice, some by decree.
And now I'm in Dallas and we are having record snowfall, like nothing I've ever seen. It could also just be me, but last year I noticed an increase in the intensity and duration of thunderstorms around here. If this isn't AGW/climate change, then nothing is.
That is just liberal propaganda to deny you your divine right to prosperity. AGW is a commie plot to destroy capitalism, and the 'Merkin Way!
You mean you don't remember those Dallas winters that look like Canada? Pretty amazing views of of the snow outside my window this morning.
I remember a trip to Dallas once with the worst ice on the roads I had ever experienced. Decades ago.
I would think that the OECD oil consumption will fall several million barrels each time we hit up on the oil limits and the Asians will taske upo the slack afterwards unitl the Asians are using more than the West or at least it is more equitable. So that while the amount of oil will fall down to say 75 million barrels from now around 85-86 million barrels per day in 5-10 years tath the distribution will be much more towards BRIC countries and Arabs. So USA will be importing half of what it does now due to price increases crashing its economy (i.e. enrgy costs induced recessions) and will keep crahing to a lower and lower 2nd then 3rd world standard of living. As USA takes more energy to live then this is obvious. Longterm depression. US milityry is useless to stop this. WE whould test this again this year since oil usage is supposed to climb over a million bbl/day due tio Chinese bubble growth.
Let's all remember who screwed up the everglads first. The Corp of Engineers. Didnt work out like they thought. Natural resources for building are tyoically used close to the source. Florida has the smallest reserve base of construction material in the nation , but is number 2 (two) in production in the U.S.A. The water is to shallow in southwest Florida for imports and the railline is non-exsitent. Get the picture? People are returning to warm climates and will continue. If all goes bad at least they wont freeze. Building will resume and it will be more expensive. Regulations and weather wil demand $200 a square foot cost for a moderate home. Supply and demand.
mr. Smith,
thank you for the excellent explanation of broad aspects of your business model and of the future of the Fla economy in general . i notice you are new to the TOD. I do hope you will stick around and provide us with further insights and wisdom. You include many assumptions in your analysis which might be occasionally challenged by some of the commenters, but it is all in good fun, even though we are talking about a very serious subject.
By the way the Corp. of Engineers had a local sponsor for the work they did in the everglades, the South Florida Water District, Being an old man, and a fifth generation Floridiam i attended many of the public meetings in the 50's 60's and 70's regarding these projects. The cost benefit analysis which was produced for the projects was clearly a fraud. It included totally unrealistic assumptions about benefits and brushed aside the enormous costs. Only by taking into consideration the "maximum power principal" could any of this devastation be understood.
This conversation reminds of the days i spent on the Kissimmee River watching a large barge with a cutter head dredge destroy one of the most unique ecosystems in the world. It turned a 60 mile diverse semitropical ecosystem into a 38 mile ditch. I cried. I am proud i was part of a group of scientists who fought and won the battle against the placement a jet port in the middle of the River of Grass. Marjorie Stoneman Douglas, Art Marshal, Luna Leopole were friends of mine. Yep, Luna was the son of Aldo the author of " A Sand County Almanac." If you are a reader, you might want to pick up a copy. Interesting stuff.
cheers
It is a shame that this wasn't reported in my nation. I wish I could tell my people the truth, but Bernanke won't have it. I suppose it's time to dust off those faded blueprints for the integral fast reactor... The Russians and South Koreans keep begging me for them...
Rest assured, if the US national media will not cover ClimateGate, and it has not, there is no chance it will cover Peak Oil.
Actually 'ClimateGate' was all over US MSM for at least a week. Are there truely any new earth shaking developments to be gleaned from that bit of old news now? Peak oil on the other hand is skirted around by the big boys though it pops its head in around the edges from time to time.
National Geographic Magazine, which is often uncanny about getting current stories into issues and onto covers even though they must be final long before press time, had a black bordered, multi-page spread titled 'Tapped Out' in the middle of the June 2008 issue. How timely was that Peak Oil piece, which mentions M. King Hubbert and all?
Granted that isn't the same as Walter Cronkite saying 'day number ... of America held hostage' every night for as long as the crisis lasts. That won't happen until the supply is conscticted in big way--unfortunately
MSM, compared to it's many years of unquestioning Global Warming/Climate Change reporting? And what about ABC, CBS and NBC since the early 1990's? What do you say in their defense? See or hear much "due diligence" reporting over the years? Or even just a few common sense questions? Any stick out in your memory? Not mine.
And, no investigative reporting came close to this recent revelation.
http://www.dailymail.co.uk/news/article-1250872/Climategate-U-turn-Aston...
Just why do think that might be? Science? Journalism? I don't think so. But ---- feel free to defend these elite professionals. It's memorable reading and I enjoy the tortured logic I often find here when it comes to the horrors of AGW. I maintain that early and continuing TOD support for the collective insanity of AGW innoculated it's good and cogent arguments for the evolving crisis of Peak Oil against a fair hearing by rational visitors to this website. If the leadership of this site would like to have their opinions taken seriously they must choose their battles carefully. Clearly that hasn't happened.
I really don't know what part of the planet you live on, but up here in the subarctic it is very obvious the place is getting warmer. I tend to keep a weather eye on this site http://nsidc.org/arcticseaicenews/
Read the monthly reports at that site for a few years and gauge short term change for yourself, its what I do. Right now we are watching to see if all the rotten stacked up year or so old ice that we thought was good solid multiyear ice will get blown apart by the summer storms or solidify into a new solid multi year old core. Of course that takes a bit more patience and big picture view than FOX on the one side or ABC on the other could sell to their attention deficit ridden audiences, so sensationalized trivial discoveries will will be headlined to keep ratings up and advertising dollars coming.
Of course my 'favorite' big error in the IPCC report was that the Himalayan Ice fields would be gone in less than fifty years. I assumed such statements were well vetted before they appeared in such a report but my assumption was wrong. That is the single most indefensible AGW published piece of 'data' I have seen. That doesn't mean the glaciers are doing fine and maintaining, but rather that instead of 30-50 years life they will make it a century or two. Not long a long time for ice mass on that scale, but lifetimes to humans, certainly well out of the range of the longest news cycle.
All that said it is very likely our activities are a significant accelerant in the current warming cycle. Our infrastructure would prefer changes to be slow. If we pump all the coal combustion waste we can into the atmosphere to keep the cheap power coming for the next century, precious few of our descendants will be happy with the results.
The science concluding that higher CO2 atmospheric concentration increases the temperature on the planet has been accepted since the 1930s, well before the advent of commercial television. An earth without a year round arctic ice cap is a warmer earth. Blizzards in the mid Atlantic states and snow in Dallas don't indicate much about planet's average surface temperature at all.