In order not to "believe" in Peak Oil, one has to believe that the sum of the output of a group of oil fields that individually show clear production peaks, e.g., East Texas, Prudhoe Bay, Cantarell, etc., will not show a clearly defined peak/plateau, followed by a decline.

This belief that the sum of a group of discrete oil fields that show production peaks, but which will collectively not peak, is analogous to the following:

Let's take 1,000 people of various ages, who are all currently employed and let's look at their combined earned income (from their jobs), ignoring items like investment income and retirement income, etc. Let's plot their combined income, from the first dollar of income, as the first person goes to work, to the last dollar of income as the last person quits work and/or passes away. Each person will in all likelihood show some kind of income peak, or "Undulating Plateau" in income, followed by either a gradual decline, or an abrupt decline, depending on why their income is curtailed. But to not "believe" in Peak Oil is analogous to believing that a finite group of people, with finite lifespans, will not show a peak in their combined earned income.

But of course the "Peak Oilers," who "believe" in the finite earth theory, are widely considered to be the crazy ones.

Exactly. While the author's definition of Peak Oil shows a glimmer of understanding, none of the data he submits has any bearing on extraction rates. If you don't understand that Peak Oil is about extraction rates, you shouldn't be writing about it!

"Peak Oil" is a direct conclusion from the fundamental theorem of calculus.

So much so it borders on tautology.

His argument about the various sources of kinda-sorta-oil that we're not exploiting can only defer the date of the global maximum in oil production, not deny its existence.

Ron – “What is the global average recovery factor for fields currently in production? Some would have it as low as around 22%!” And from you: “...vary from field to field for geological reasons but very few fields, if any, would actually be that low.” I can’t offer a weighted average for Texas let alone the rest of the planet. But I’ve worked on many fields in Texas with URR of 15% or less of inplace reserves. And a great many more with 25% recoveries. But remember that for much of my career as a development geologist/reservoir engineer I’ve been drawn to fields with lower recovery factors and large residual reserves.

But let’s look at the higher recovery fields I’ve worked. Fields with 50% to a few rare ones with 70% recovery. Right now I’m working on the horizontal recovery of residual oil from fields where a 50% recovery is common. You and others have pointed out the mistakes many cornucopians make by equating reserves with production rates. The high recovery fields I’m working are freaking dogs when it comes to production rates despite their high recovery factors. And were dogs almost from the first days they went on line. And we’re not talking small numbers: just this one relatively small Texas trend has produced over 4 billion bbls of oil. There's another shalow oil trend in S. Texas that has produced over 6 billion bo with a typical recover rate kess than 25% with no viable method for EOR.

The problem: the oil, though of premium quality, is thick. Combined with the poorly consolidated nature of these sandstone reservoirs and a strong water drive initial production rates were low: 50 - 70 bopd per well. And it quickly got worse as water production started within months. About 70% of that 4+ billion bo was produced at a water cut of 80% or better. It typically took 20+ years to just recover half of their URR. And a very large percentage of those wells are still producing today...at a few bopd per well.

Thanks to improved tech, such as hz wells and frac’ng, recoveries will be better in many fields developed today. More important, production rates will be much better. But that can also lead to false illusions. Consider the DW GOM fields where URR range in the 100’s of millions of bbls. So while recoveries may ultimately be relatively high they are developed to max flow rate and not URR. Some DW GOM fields may recover as much of the inplace reserves as some of our old heritage fields but do so in less than 10 years. Good news/bad news: a nice rate bump to give the appearance of “fixing” the PO situation but will be gone before many even realize it’s happening.

And of course they never look at flow rates, the real indicator of oil production ability.

That in the first place. They just think of how much oil is still left in the ground, even if they know that the Middle East is most probably exaggerating. Also are they counting the stranded oil reserves of which even the U.S. has more than 100 Gb. Oil that could be extracted with CO2 EOR. For the Peak oil issue this isn't important, because CO2 isn't amply available and flow rates will always be very low compared to the amount of oil still out there.

And people don't want to believe in peak oil because the idea that what has been built is by and large going to end up as huge cement garbage is just too painful. "We" couldn't have made such a wrong turn, right?..."We" couldn't have made such a huge mistake as to bet the whole planet and the existence of 7 billion on something that is disappearing......um (gulp!).....right?
"We" are smarter than that....right?
"We" are known for our foresight...our intelligence....our ingenuity. Therefore by definition, no major mistakes, like getting structurally dependent on something without a lasting quality, can be made by us. By definition.

We are incapable of making such a major mistake as to build out structures and ways of life with no way to continue them. We are extremely smart (everyone knows that) so, a major error like that, like an animal species breeding wildly until it collapses, is just not something that is possible for us to do.

We're just better than that. That's all. We just are.

I tried to post the following comment on the Seeking Alpha article but it has not gone past their moderators:

He pointed out that the basic source of our economy's energy was finite, and, therefore, eventually we would run out.

That's how it works with stuff like whale oil where after the last whale has been killed and its oil consumed, there would be no more whale oil. That NOT how it works for oil, gas, coal, and metals where the easy stuff is extracted first after which progressively more difficult sources are extracted. At some point, the extraction process become so difficult (expensive) that production peaks and then declines. But there's still stuff left in the ground at the peak and throughout the decline phase. So you will never run out but this argument cannot be used to disprove peak oil, gas, coal, etc...

A couple of days ago, I wrote about the peak oil theory, arguing that we wouldn't experience an irreversible decline in oil production because of supply constraints, but would see increases in unconventional production, would transition to other alternatives, and eventually see demand decline before we literally start running out of oil to produce.

First, peak oil is not a theory that you can disprove. It's simply a logical outcome of extracting a finite resource. You can argue about the timing and production rate at the peak or the slope of the decline, but cannot disprove the concept of peak oil, coal, gas, .... Otherwise, you could have a ever increasing extraction rate of a finite resource, and you know that's not possible.

Increasing unconventional production is evidence that the production of conventional oil is becoming more difficult and will or has already peaked.

Transitioning to other alternatives is also evidence that the production of conventional oil or even unconventional oil is becoming more difficult.

Several decades later, coal production began increasing again, and it's still higher than it was back in the 1920s. So much for peak coal.

I don't follow your logic here. Are you saying that peak coal will never happen BECAUSE it hasn't happened in the past?

Peak oil isn't the notion that production will peak for any reason -- it's the notion that production will peak and irreversibly decline due to supply constraints. This is very different than peak demand -- fundamentally different

Peak oil simply means worldwide oil production peak – the reason is a separate issue. Let's see what's going on in the world of oil:
Oil is extracted at a high rate -> there's less and less easy stuff left -> new oil production comes from more difficult to extract fields -> cost of extraction goes up -> oil prices go up -> oil consumption goes down -> oil prices drop -> consumption goes up -> operators in difficult to extract areas go broke -> new production from difficult to extract area goes down -> there's less easy stuff than before the cycle started -> oil prices go up -> .....

Production cost go up because of geological constraints but consumer's ability/willingness to pay for higher prices does not increase at the same rate as production costs. Both supply and demand constraints are at play, and this is why peak oil will happen.

The OPEC OMR's "secondary sources" puts Nigerian average production in the second quarter at 2.144 mb/d, only slightly above the Nigerian central bank's figures of 2.12 mb/d. The OMR also publishes a table based on direct communication. In other words what Nigeria said they produced. This table had no data for the entire second quarter but they did have figures for May. When they called them up and asked them what they produced in May they said "1.917 mb/d" or 213 thousand barrels per day less than what the OMR's secondary sources reported. That is highly unusual. Most countries give figures above what is reported from other sources.

Of course these figures are all Crude Only. The State owned oil firm NNPC may have been quoting all liquids or C+C. The EIA says Nigeria produced 2.55 mb/d C+C and also averaged that for the second quarter and almost the exact same figures for total oil. That is as if they did not produce any NGLs. I can't explain that one.

Ron P.

Thanks Ron.

A sudden impulse has been recorded by ACE spacecraft and confirmed by earth based magnetometers. Unclear if this is the arrival of the 2nd CME. No space warn messages issued as the impulse appears to be just below the threshold. Planetary K-Index currently 3.9 (warnings start at 4).

EDIT: Warning now issued

Space Weather Message Code: WARK04
Serial Number: 2004
Issue Time: 2012 Sep 05 0028 UTC

WARNING: Geomagnetic K-index of 4 expected
Valid From: 2012 Sep 05 0027 UTC
Valid To: 2012 Sep 05 1200 UTC
Warning Condition: Onset
Potential Impacts: Area of impact primarily poleward of 65 degrees Geomagnetic Latitude.
Induced Currents - Weak power grid fluctuations can occur.
Aurora - Aurora may be visible at high latitudes such as Canada and Alaska.

If storming increases aurora may again be visible at much lower latitudes.

Further Edit: Space weather warnings appear to being issued retroactively tonight. NOAA/USGS Boulder, Colorado is showing current K-Index of 5.5 yet that's not even warned for yet.

It' not a rumor:

Naomi Klein's controversial best-selling book which explores how both natural and man-made disasters are used to force disadvantageous political and economic changes on unwilling governments is brought to the screen in this documentary from filmmakers Michael Winterbottom and Mat Whitecross.

...The Shock Doctrine was an official selection at the 2009 Berlin International Film Festival.

In Theaters: Jan 1, 2009 Wide

On DVD: Oct 17, 2011

Sundance Selects

https://www.youtube.com/watch?v=7iW1SHPgUAQ

Isn't there one already ?? You can see it on YouTube.

Already done

http://www.youtube.com/watch?v=zDwdAv6HX_w
http://vimeo.com/26718047

Thanks for the replies. The reason I asked is because I caught just a few seconds of a radio interview with someone who was talking about what sounded like a new project.

I don't know of any scientific study, nor have I specifically kept any record myself. However after following the gasoline market closely the last nine years, the opinion of the experts in general, would be no better than flipping a coin - except they usually get the seasonal price trends right.

Even if they do not state it, the price of US gasoline in the summer is usually higher, because the gasoline must be at a lower RVP (Reid Vapor Pressure). It is more expensive because it is harder to refine and also because it contains additives that are more costly than used the rest of the year. So it is not surprising that prices would fall as summer RVP gasoline is no longer used.

So the experts have figured out that summer gasoline is more expensive; otherwise they are quite frequently wrong. For example, even after I made a post here, right after the refinery blast in Venezuela that it would raise US prices, I saw at least three energy experts in the following days later state that it would not affect prices at all. But about a week later, most 'experts' changed their mind and said it would raise prices after all - this after prices already rose.

Speaking of gasoline price predictions, Robert Rapier, well known to TOD readers, has come out with a prediction stating gasoline prices will "fall rapidly" before the election.

Friday, the price for wholesale gasoline in NY harbor comparable to the one used in futures trading was $3.13, and the futures price for November gasoline was $2.88 (which is for delivery at the end of October). So the futures market expects a fall of 25 cents/gallon before the election.

Not sure if this contradicts the point Ronald Rapier is trying to make, but my expectation is that gasoline prices, using the November futures contract, will be higher than $2.88 by the end of October. However the prices average consumers may pay at the gas pump could well be less than they are now.

I still expect the effects of the Amuay refinery blast, and also the Richmond, Ca refinery fire, to take some more time to have their full impact on gasoline markets.

4 Reasons Why Gas Prices Are About to Fall Rapidly

While U.S. gasoline prices have been on the rise for the past two months — and are presently $0.15/gallon higher than they were a year ago — I expect that gasoline prices will start to fall rapidly in the weeks ahead.

http://www.consumerenergyreport.com/2012/09/03/4-reasons-why-gas-prices-...

PdVSA is set to import, however, several shipments of gasoline in the coming days totaling over 860,000 barrels, according to a company official. Additional shipments are also expected to be contracted, the official said.

http://www.marketwatch.com/story/venezuelan-refinery-restarts-some-opera...

Nicely said I could not agree more. Where the next bailout comes from is a question I have been thinking about lately. Here is an interesting article in that vein.

http://in.reuters.com/article/2012/08/10/idINL2E8J6D7920120810

True, but the overclass nonetheless is as ensconced as ever. Just look at the sponsored non-choices presently passing for politics. Reminds one of Jared Diamond's emphasis on hidebound but obstinate ruling elites as a core factor in eco-social disaster.

Interesting how the more things change the more they stay the same.

Ireland playing its usual role as a backward agrarian country of people too disorganized and inebriated to fight back against the colonizers from the east.

Iceland a harsh land of hard Nordics who come together to protect themselves when the going gets tough.

Imagine that making investor pay for their bad investments. Isn't that called capitalism? It is nothing like fascism that the west practices. In fascism the workers pay for the losses of the owning class.

http://www.cnbc.com/id/48889555
Fears Rising, Spaniards Pull Out Their Cash and Get Out of Spain

It is, Julio Vildosola concedes, a very big bet. After working six years as a senior executive for a multinational payroll-processing company in Barcelona, Spain, Mr. Vildosola is cutting his professional and financial ties with his troubled homeland. He has moved his family to a village near Cambridge, England, where he will take the reins at a small software company, and he has transferred his savings from Spanish banks to British banks.

“The macro situation in Spain is getting worse and worse,” Mr. Vildosola, 38, said last week just hours before boarding a plane to London with his wife and two small children. “There is just too much risk. Spain is going to be next after Greece, and I just don’t want to end up holding devalued pesetas.”

It should be added that you get a productive return for every few million $ invested, with a several month delay between investment and return. If you invest in solar.

Nukes are a decade (plus) wait for the first return.

Solar has no fuel cost - and operating costs are minimal. Decommissioning costs are likely to be about zero (recycle aluminum, dispose of silicon).

Nukes do require fuel and significant personnel and material costs to operate. In the range of 2+ cents/kWh *IF* things go well.

And ask Southern California Edison (among many other nuke owners) about the reliability of the capacity factor for nukes. Nukes do go down and out for years with no warning.

Alan

As wind becomes a larger fraction of total grid capacity, at some point you have to start including the cost of whatever must be built and fueled to backup the wind turbines. Nuclear, for all its other headaches, does not have that problem.

Bernanke used the forum to defend unorthodox policies such as co2 injection, horizontal drilling, deep offshore exploration, in-situ oil sands development, fracking bond purchases and made the case for further action to reduce declining oil production an unemployment rate that he called a “grave concern.”

...financial EOR; scraping the bottom of economic policy.

Ah, the old Thelma and Louise motif. Sure, why not.

Rather than specify a fixed amount of bonds to purchase by a certain date, such a strategy would leave the Fed able to announce a pace of purchases that it could adjust as the economy gets closer to Bernanke’s goals.

Rather than specify a QE amount, leave it open ended? You mean Helicopter Ben will spin QE blank checks whenever and for however much they want?! I've posted several times before that how much more QEIII is than I & II would indicate the desperateness of the situation. Well, it can't get any more desperate than the sky is the limit!

Can anyone guess what happens next?

They transition the program from providing public information about QE's, their amounts and dates, to a classified, secretive program. Once that happens they quietly add over a few months several trillion to the monetary system to see if that is enough to stimulate growth and lower unemployment.

Even if the public are not informed of QE's new ongoing system, won't the dollar lose value, effectively raising commodity prices, in particular oil, and we will be right back where we started with the problem of oil priced too high for the economy to muster growth?

I think that a lot of people have cause and effect reversed regarding the huge increase in the Federal Reserve balance sheet, versus oil prices:

http://www.clevelandfed.org/research/trends/2011/1211/01monpol-5.gif

I think that global crude oil prices doubled from $55 in 2005 to $111 in 2011, in order to balance a declining supply of Global Net Exports of oil (GNE) against demand, especially the increasing demand from developing countries, led by China.

I think that constrained oil supplies, and high oil prices, contributed to the increase in central bank balance sheets, as net oil importing countries tried to keep their economies going, via increased government borrowing--from both accommodative central banks and from real creditors.

While slowly increasing US crude oil production will help, it's a global market, and as the WTI crack spreads indicate, Americans are almost fully exposed to global oil prices, as Mid-continent refiners pay WTI based prices for crude oil, but charge Brent based prices for refined product, and pocket the difference as refining profits.

And in the process, Mid-continent refiners are providing a massive incentive (on the order of about $1.7 billion* per month) for Canadian producers to accelerate plans to ship their crude to their West and East Coasts.

*Canadian oil exports to US times difference between Brent and WTI crack spreads, currently about $19

Yes. That's Kurt Cobb, of Resource Insights. Long time peak oiler. He's written a novel about peak oil.

If you mean the web site...OilPrice.com is a for-profit site that mostly re-posts articles from other sites.

The article didn't really touch on the potential for declining production in KSA. Are they/we assuming they will maintain, or expand on, current production levels/net energy?

But let's be realistic . . . they will start cutting the domestic oil subsidizing within a few years. It is painful, but they'll have to do it. Iran has cut their subsidy. KSA can do a lot to keep their exporting going by cutting domestic subsidies, moving to solar for electricity, installing some nuke plants, etc. They have A LOT of fat in their system that they can cut. No reason to be giving people driving BMWs and Mercedes 50 cent per gallon gasoline.

His theory is that because we never ran out of coal we will not run out of oil.

Which is exactly why England is still the coal capital of the world (sarc).

Most people will be totally shocked when oil reaches $40 bbl because of a oversupply glut.

I know the people drilling the bulken (bakken?!?) shale would be shocked at that price. They would be out of business.

Ron - I'll take this opportunity to harp on my new born "POD"...Peak Oil Dynamic vs. plain ole PO. For those that missed this brilliant contribution of mine: it's nothing more than short hand for all the aspects of PO we've been discussing for years: oil price effects on the economies (and vice versa), military adventures in oil producing regions, environmental issues (frac or no frac), political posturing (SPR release or no release; DW drilling or no DW drilling), oil price spike induced unemployment, free fall of NG prices as a result of increased drilling as a result of higher oil prices; etc, etc.

Some have offered various other components of the POD. One reason for pushing the POD concept is to escape the constant battle over the exact timing of PO and, to a lesser extent, global URR, plateaus, plateau slopes, inter-plateau price spikes, etc. I originally tossed out the POD as a counter to what seemed like, IMHO, a relentless attack on previous erroneous (or possibly erroneous) estimates of PO timing. But it wasn't to defend those predictions but to point out that such predictions, right or wrong, aren't very critical IMHO. They may have their academic interest but otherwise whether PO happened in 2005 or will happen in 2025 it doesn't change the dynamics of what's happening in the world today.

We are where we are. The interaction between all the economic, social, technical, political, and military aspects of FF production is very complex. Much more so then the exact date of PO or if there are 500 billion bbls of oil left to produce or 10X that amount IMHO. Folks who are unemployed today in part due to however much of the economic slowdown is due to higher oil prices are still unemployed even if global PO doesn't happen for another 30 years. Likewise for the thousands of shinny aluminum boxes shipped thru Dover, as well as those in the future, it doesn't matter if global PO happened in 2005 or ever happens.

What brought this to mind was that foolish analogy about Peak Coal and the inaccuracy of the original claim. PC, whenever it did/didn't/or will happen isn't relevant. What is important is the PCD...Peak Coal Dynamic. Just as with oil, coal brought with it a host of benefits and negatives. And that balance fluctuates significantly over time. And those dynamics lasted for many, many decades. And, IMHO, appears to be on the verge of becoming even more relevant as other FF supplies are in flux.

Again, it's not that global PO timing, global URR, etc, are not factors and aren't worth discussing. But that they are just a portion of the complex system that has determined where we are today and where we are heading. The path we are on wasn't created by this factor or that one. It's a complex net work of feedback loops, technical and non-technical aspects and, unfortunately, impacted significantly by less than logical human nature. IMHO if the price of oil drops significantly (though I doubt anywhere close to $40/bbl) the POD will not allow it to stay at that level very long. Just as would occur should oil spike to $147/bbl again.

And everything I just said could have been as easily communicated by just referring to the POD. I'm beginning to see a potential spin off from the Holy Order of the Plateauite to the Orthodox Podites.

After more than 7 years now of studying peak oil and the implications of it, I understand that the world has peaked in the rate of production - roughly now. The remaining oil will be more expensive to produce, will not be extractable at the same rate, and and will likely be of lower quality. Based on some of the side paths I've followed I understand that the vast majority of people will never understand or accept it, even long after the effects get obvious (they already are).

Exactly analogous situations exist in regards to climate change, species extinction and ecosystem damage, and the economy.

So here we are, on a planet in crisis with a population that is unable and/or unwilling to see or change what they are doing and what is coming. That is our lot, and the few of us who understand must deal as bet we can. Some try to do long odds, bigger impact things (like Alan's rail efforts), some try to make local, personal efforts to increase resilience and reduce negative impact.

It simply does not matter if people believe in peak oil, it is here anyway and believing in it or not changes nothing. Same with the other issues. It might have been worthwhile to convince people of these things before they happened, even at the late hour of the LTG in the 1970's, but it's really too late now. It's time for adapting to and dealing with consequences now, and even understanding does not mean we won't be swept up in the effects.

I would guess that we've had some impact on the discourse, as there is now an almost daily flow of articles denying the possibility of peak oil, some of it bordering on hysterical. Probably next will come a grudging acceptance of it from some quarters - but too late, and that does not translate into widespread acceptance or changing of habits.

So there is no need to get all worked up about all these denial articles, it just does not matter much.

I have seen plans to harness wave power, tidal power, and even underwater turbines to harness the flow of the Gulf Stream. I have not seen even one of them ever come to fruition, and I doubt seriously that I ever will. It is not that I am not for all these things, I would really like to see just one of them happen. But I seriously doubt that I will.

Roll Tide!

Oil production in the region is seen doubling in absolute value during the period, but will drop from 10 percent of the global total in 2010 to eight percent in 2050, the researchers said.

For that to be true, peak would have to be beyond 2050. I have my doubts...

S - As I've always suspected: women are natural born communists. LOL. Had it not been for one thing we would have drove them to extinction generations ago.

It's a nasty mechanism for total extinction of a species.

If an animal is just hunted, say, for meat like baleen whales, it is possible at least in theory that "commercial extinction" - the inability to find enough of them to make it worthwhile to put to sea - will provide a way that a few may survive.

However, this can be overwhelmed if a product is popular enough to cause irrational prices to be paid; witness the bluefin tuna selling for a half-million dollars per fish in Japan. With this sort of bounty on its head, the fish will not have much chance. Yet there is at least SOME vested interest, in theory, in not killing them all off.

But even more powerful is when the species produces something of durable/storable resale value like ivory, or mythic utility, like rhino horn, tiger bone, etc. In that case, those who buy and store the supply are saving a commodity that will become almost priceless once the species goes extinct. It is in their INTEREST for it to become extinct. Indeed, those who already sit on - say - an ivory supply have a vested interest in seeing elephants exterminated ASAP on general principles, even if they don't buy any more.

It is pretty sobering to see a live tiger auctioned off and then cut to bits on the spot once the spot market has gotten the high bids for its blood, ears, teeth, eyeballs, bones, etc. The critter is skeletonized by a crowd with knives, just like walking a cow into a pond of starved piranha. I have photos, you wouldn't want to see 'em. Of course, there is no pharmacological value to tiger bones, but human belief - that old standby - comes through.

And it ain't only tigers, rhino's, elephants... ANY species which gets rare enough gets a "buzz" going in the "chinese medicine" trade. It's powerful; even undercover agents I've sent into China have wound up believing it because the power of belief around them is so strong.

There is a lively trade throughout the world in making animals extinct and storing their mummified remains to sell in small bits to rich chumps.

There's nothing for it but economic collapse, and the large uncommon species will all be gone within a human lifetime unless they are actively relocated and protected. Not likely, and seldom practical.