Technology to the rescue - er, only perhaps.

One of the recurring answers when people discuss peak oil has been the refrain that "technology will get us out of this."  It is an excuse that has been heard at all levels across the board - even in local conversations over coffee.  And, as I have mentioned earlier, by some of our technical staff who are aware of a fair bit of what is going on.  As Prof G has mentioned this is the irrational denial of reality.

This month's ASPO newsletter
(well worth a read in its own right) has a quote from Matt Simmons on the decline in production from the North Sea.

Subsequent actual production statistics show that the UK reached a secondary peak in 1997/98 at just above 2.6 Mb/d and now struggles to stay above 1.6 Mb/d. All the optimists about the role of technology were totally wrong. But the same folks still believe the same hype. They have merely moved the goal posts.
The development of technology requires a number of coincident factors.  Firstly there has to be some interest and need to drive the development (there is a lot of truth in "necessity being the mother of invention"). And we are in a time where that is prevalent.  Secondly there has to be a basis of technical knowledge.  This is where we start to fall short, and the recent problems in the Gulf will likely make this worse. And thirdly we have to have the interest of the financially able to be able to support the development.

I have written in earlier posts about the acute international shortage of qualified petroleum engineers, and those in related disciplines.  Lots of those currently expert are getting long in the tooth, and the supply has not been replenished for years.  (One does note that a part of the currently proposed National Energy Supply Diversification and Disruption Prevention Act does include a step in the right direction in that regard).  But I noted that the mayor of New Orleans was laying off personnel, because of lack of funds, and the thought came that those on the rigs and platforms that were lost have also, possibly,  lost jobs in the short term, although there is a broad need for qualified people, and this may cause but a small ripple in the tide.There are, for example, growing numbers of rigs onshore as the OGJ reports.

But in terms of developing technology there are not that many folk available with useful knowledge (TV and print ads not withstanding) to develop new technology, nor has there been huge sums available for such development in the recent past.  With the need to concentrate on repairing rigs and platforms it is unlikely that we will see much of a real (as opposed to paper) effort by either the Government or industry to fund or develop new technologies in the near future.  Their immediate needs demand large amounts of cash , so forward thinking will not carry much weight.

The world's biggest oil and gas companies are facing a $7.5billion (£4.3billion) bill from the hurricanes that lashed the Gulf of Mexico.
However, the $700m figure is likely barely to make a dent in BP's forecast pre-tax profits of $31billion, more than twice last year's $15billion. . . . . . . . . . . . BP added it would incur costs of $100m to secure and repair its massive Thunder Horse platform in the Gulf of Mexico, which was badly damaged by Hurricane Dennis in July.
Which means that it is likely that ten years from now, Matt Simmons or his equivalent will likely be able to make the same observation.
and, notice that they moved the peak of "all liquids" from 2007 to 2010...
The problem with deepwater operations is that it tends to concentrate production in a smaller number of platforms.  This makes them (and overall production) more vulnerable to events such as Katrina.  Note that just the loss of two platforms (Mars and Thunder Horse) has taken 400,000 bd of production out of the end of this year.  The Typhoon platform also went and so the vulnerability of supply with this concentration is evident.

In addition there have been a number of delays in getting some of these platforms into place and producing - some of these delays  were noted in the posts on the CERA list.  Thus deepwater may end up being more spread out than the current models anticipate, further flattening the peak zone.  

As a new poster I have a question. What are the "all Liquids" That are referred to in the ASPO and CERA report? I have a general understanding of propane etc. as it relates to ng. production but do not understand fully the "all liquids" references. Perhaps you could direct me to a link or if there is not a good explanation somewhere one of the posters here could explain it. Thanks in advance.
ASPO's Regular Oil excludes oil from coal, shale, bitumen, heavy, deepwater, polar, gasfield NGL, non-conventional gas & processing gains.  The ASPO graph conveniently breaks out their totals into these components.
Analysis of ASPO moving the peak out three years:

According to this, the reason is neglect of the West African offshore oil fields. For some reason ASPO's previous analysis did not count deepwater fields!

Now that ASPO, one of the most pessimistic Peak Oil groups, has pushed the peak out to 2010, can we drop the assumption that this is an "optimistic" date? At this point I would suggest that the pessimists are saying 2010, optimists 2020-2030, and others are somewhere in between.

Of course these dates don't work as well to scare people and keep revenue coming into Peak Oil sites.

Oh yeah, I forgot to send my check!
Sorry, Halfin, this "West Africa" allusion is total bullshit. Your peak oil debunked source quotes the ASPO newsletter statement (references re-evaluation of deepwater sources) and then quotes Big Gav talking about the Gulf of Guinea. Your source then decides with no justification that the ASPO change is due to new discoveries in West Africa.

Let's not be so sloppy, OK? As far as I can see, the reasons for the ASPO re-evaluation remain obscure since I don't know what specific changes were made in their database. West Africa is certainly a plausible candidate if we're talking about deepwater since that region leads the world in offshore discoveries. I follow that region (look at posts I made here just yesterday, for example). As far as reserves in West Africa, no one knows what they are though they are growing. If you look at HO's series of posts on CERA projections, you will see that West Africa figures prominently in them.

But there is a bigger issue, which is: "What are the database ASPO updates?" I'd like to know because the ASPO re-evaluation of deepwater sources at this point is kind of fishy (no pun intended). Why now? And what's new?
As a non-technical newbie I find this puzzling because, to the extent deepwater oil is in the GOM, I would think the hurricanes (and prospect of more intense ones) would tend to make this resource cost prohibitive to expand access to.
Welcome aboard, Liz. I think many would agree with you here that there is far more financial risk in investing in GOM deepwater drilling than previously thought.

I had a short email conversation with a Dr. Richard M., Information Manager with BP Exploration UK and he said he and a gentalman named Francis H. beleive the peak will be between 2010 and 2015... pending a depressing which causes demand destruction. Note, he's currently employeed with BP and is a Dr. of hard rock mine geology and Isotope Crystogrophy. I removed the last names because I didn't think i should share their entire names. But, he was very honest with me, which surprised me.

BP has an employee Magizine called Horizon which is actually going to feature a letter i wrote in. The editor said that 'bp experts dismiss peak oil' and Richard cc'd me on the email he wrote to the editor saying the editor was wrong. If felt good.

Sorry, I need to clarify.

He beleived that peak non-opec would be between 2010 and 2015. He said that there was not enuf info to make a prediction about opec.

One of the assumptions is that until peak oil hits we may not realise there is a problem and then WHAM, we will not have time to respond - trying to get new technology in place to weather the storm will be too little too late.  From following this site, on this, I agree.  I also agree we need incentives to address peak oil and soon.

However, I do not think actually reaching peak oil is even necessary to begin major financial dislocation.  The capital markets assume future growth.  This is nothing new.  If the markets perceive the end of cheap energy and flat/no growth (let alone contraction) as a consequence, then we will see very nasty things with respect to equities and debt instruments (by the way, the comments on bundling mortgages is called securitization and this disperses risk very well, unless a severe systemic shock occurs - which may well happen when the crap hits the fan).

This problem could create a series of cascading events leading to a crash similar to the depression (90% drop in stock indices).  It is true that we got out of that mess (WWII helped, as repugnent as it sounds) but I am not so sure we could get out of the mess if the cause is one that is chronic or is addressed by way of war given the nuclear weapons factor. What might help is a reorientation of what drives our capital markets.

If investors understand that performance will be greatest by those firms pursuing sustainability, rewards will be allocated to those that take steps to address the ramifications of the coming of peak oil.  This is not the total solution but it can help (perhaps in a very significant way - one can hope).  I have the ear of those that might, just might, make some difference in reforms on financial reporting that tells investors the prospects of a firm.  I can assure you that sustainability and the issue of peak oil is on the radar (even if only privately).

For this reason, I would like very much your thoughts on how we can reorient our 'free market' system to promote addressing PO.

I wonder if the coming winter of 2005 will wake investors (and people) up to the problems of an unsustainable economy.

It's only October, and people here are scared because of what they've heard about natural gas supplies.

Of course, everything that happens now may be too late.

My current usa energy forecast is virtually spikeless based, not on supply concerns, but the fact that long term weather models are forecasting that this could be the USA's warmest ever Winter.  As we are well above the five year avg in both oil and gas stocks, the contemplated supply should mitigate price shocks 'til Spring.
No one in the USA has announced an "E- Prize",an energy independence prize similar to the X prize for commercializing space travel.

Who will do it?
 Bill Gates?
 Paul Allen?
 Some other gizzilionaire?

Here are a series of lies:

  1. The markets will provide.
  2. Necessity is the mother of invention
  3. "They" will come up with something, they always have.

info about the X-Prize:

the Russians have an E-prize program:

One example of hitting a problem before the peak is corn and wheat production - annecdotal evidence from friends and family indicate many midwest farmers have decided not to plant this coming season as the commmodity prices are too low (at the moment) and natural gas (for irrigation pumps) too expensive. I have seen some MSM reports on this but I think the extent is more pervasive than recognized.
The Chinese are already noticing and responding to dislocations. The typhoon that interrupted supplies in August gave them a good taste of the future. Even before that, they seem to have stepped up efforts to acquire oil (as opposed to our inefficient method of acquiring countries that have oil!).

Now the Chinese seem to have pretty good cash reserves. So how forward looking are they? Are they also developing alternative energy? Are they importing technology to help them make a transition?

Another point about economic dislocations. The worst dislocations are likely to start in the third world in the sense that the third world will have difficulty competing for supplies. That might provide the U.S. more time but at the price of political instability in third world countries. However, dislocations in the third world also opens up the possibility of local alternative energy methods, something that is still undeveloped in third world terms (I'm thinking of the tendency of engineers to think up billion dollar projects that are difficult if not impossible for third world countries to fund when what's needed are more practical and doable million dollar projects).

The peak pushed out to 2010 won't make much difference when the Credit card bills come Due in 2006 for the Things people HAD to buy in the latter quarter of 2005.  Just think we are going to have 40% to 70% higher heating bills this winter.  We are all paying higher than last year for the gas to get around.  I see it in my medium sized city, a bit less traffic at non-peak times.  But the ads on the Radio still press people to re-fi, to Get a better car, To buy, buy, and buy, some more.  

All this new money, Does not go into getting technology to fix the problem, but into making better consumer goods so that the Jones' will spend the credit or new mortgage money on the newest toy at the "big box store". All the while, when folks are asked why the Oil prices are going up, they point to the Fact that Exxon Made a DOUBLE last year profit and say its nothing to worry about if only the BIG BAD OIL companies only pumped more oil.  Or in those cases where you can show someone that this is "a nasty thing going to happen soon" They turn to you and say "they always fix it with new technology"  ( which is my brother's pat answer, even as he re-fi's his house and goes that much more into debt).

So when will the manure hit the fan?  4 more years till the peak as far as ASPO is concerned!  But will we have Demand Distruction to the order that "Peak" never really gets here??  

 Aw the questions that none of us can really answer, Only sit back and watch the neat fireworks!!


          Mulberries,  Not just the weed tree on your fence row.  Young leaves make a nice fruity tea, fresh or dried. and the Spring to Summer fruit make a great snack or if you can fight the birds jams and jellys, and juice.  

Of course, sometimes `technology will get us out of this' is embellished to make it sound more plausible by saying `if the supply of oil begins to drop, the market will provide technology to get us out of this' -- as if The Market is busy puttering away in its basement lab, coming up with various breakthroughs in its spare time, between providing price signals and allocating resources. I just recently posted about this at my own spot, because the number of people who seem to think that `the market' is capable of creating technology from nothing is a little discouraging. I'm glad you're here to help drive home the fact that technology doesn't just happen.
Even if there was a technology to save us, "the markets" would not fund it unless the ROI (Return On Investment) exceeded competing investment opportunities.

Put more bluntly, if you were a true capitalist and the world was going to end in one year, would you invest your money in a real estate deal that promised 500% returns in 6 months or in a science project that would save the world but only gave 101% return in 11 months?

Answer: pick the real estate deal because it gives a higher rate of return per unit of time. The fact that the world will end does not enter the equation. It is well outside the bottom line for this quarter.

P.S. Speaking of how the Markets DO NOT PROVIDE,
here is a case study by Prof. Dan Kammen of Berkeley U.:

Believe it or not, but most people now believe that building more refineries is the answer to all our problems.. No kidding. I have daily discussion on other forums about high gas prices and such and most people are now repeating the mantra of more refineries.. they actually believe that building more refineries will lead us back to cheap gas!!

But then again, these very same people believe we can actually gain "energy indepedence" by converting to ethonal...Its going to be a long road..

This is the media's fault.  There is incessant droning in most oil related articles that the reason for the price per barrel increase is that there is not enough refining capacity.  This is patent nonsense since insufficient refining capacity would create a crude oil glut while driving up the gasoline prices. Apparently most journalists that write about oil are clueless.
As posted below, CNBC just did an interview where the talking head described "Demand Destruction" briefly. The moderator was taken aback as if she had never heard of DD before. Wow, you mean it could lead to "shut down" of our economy? she asked. Yes replied the talking head. If business does not see a way to make profit with current high priced crude, then business will simply "shut down".

Given the short duration of that interview, I doubt any of the sheeple were paying "attention" or understood what was being said.

Reno, you are right. New talking head on CNBC SQUAWK/MORNING CALL show arguing we need more refineries to bring down cost of diesel fuel. He represents trucking industry.

p.s. --doing this in real time. they are now claiming we have hit "peak demand" and that demand reduction is taking down crude and diesel prices.

I suppose "peak demand" is supposed to refer to the point at which enough buyers are priced out of the market that supply=demand and prices need not rise further.

Bids people - commodities go to the highest bidders.  Not necessarily the richest, but those who can (or must) pay more for it.  

Demand destruction is just like too many fans showing up at the ticketcounter to the U2 concert expecting to get in at the last minute for $80 from a scalper - and finding out there's more fans than tickets.  Who's goin' home unhappy tonight?  Anyone who thinks $150 is too much for a friggin' concert....

But they are very good at repeating administration, think-tank and activist talking points.

Most journalists and editors are scientific illiterates, who think that "balance" is taking one talking head from either extreme and presenting them together.  Factual analysis and vetting for credibility have fallen out of style.

And the MSM wonders why they are losing readership...

Yes, correct.  It is why I use this blog.  I also use multiple news sources including:

You will find the site gives interesting takes on the oil issues among other things.  I also do not see this Arab network as being overly biased - they feel heat for their reporting from all sides of the debate and this is a sign of good reporting - you will even see use of facts and analysis in their reporting.

Take for instance the recent oil price drop. For me the obvious reason is the end of driving season in USA and the drop of refining capacity here in the country, affected by the hurricanes. Both effectively reduce demand of oil, while the refined products prices of course rise.
This will all change probably next summer with the recovery of the US refinaries and the completion of new ones around the world. My scenario is that the mostly US-driven oil price (USA can easily afford even 100$ of oil) will spark a world wide recession within a year or two. This will cause a sudden price drop and also halt to almost all investments (especially in alternatives). Eventually we will hardly notice the peak oil arriving, and will start our way down through ever shorter and more and more severe depression-slight recovery cycles. Quite ugly but this I think would most probably happen if we leave our future depend on someone's "invisible hands".
In the seventies oil price was very volatile, but never declined yoy. Higher prices generally (Nixon's price controls in the early part of the decade unfortunately muted the us response) encouraged fuel switching to coal and nuclear for electric power generation and from large fuel guzzlers to smaller, more fuel efficient ones. GM and Ford, having the wrong products, nearly went under, Ford shares declining to $1 at one point. As a result of this we bacame far more energy efficient in 1982 than we were in 1972. Of course, the higher prices also goaded the world to develop the non-OPEC far north, the north slope, the north sea, and Siberia, and this part of the solution might not work as well this time.
There is no reason to think the invisible hand will not work this time, and every reason to think that controls would delay and increase the overall pain, just as before. Every era is different, nukes and coal gasification will take a long time to bring on line and we cannot hope for substantial new supplies. The major changes will be to become much more efficient in the transportation sector - car pooling in a prius is quite a bit better than single drivers in suv's. And, trucks are more convenient but far less efficient than trains. Many truckers complaining about disel prices will need new jobs, along with us auto workers, highway and airport builders, and others. Demand destruction is painful, but leads to greater energy efficiency.
I think in 70s we had a permanent shortage that caused the economic restructuring that adjusted the economy a little away from oil. But we did not have a pending financial crisis, just not enough oil.

Now my fear is that the demand can drop much faster if a depression kicks in. The world economy is much more globalised and there is a lot of hot capital that can disappear overnight and leave us in a huge whole full of oil. Mostly demand can significantly drop from gas guzzlers like USA and China. Just like the oil glut of the 90-s was partially driven by the reduced because of the currency runnups in East Asia and Russia, we can have one because of the end of the US$ hegemony.

Adam Smith's "Invisible Hand" is useful, and it plays out.  The downside is that the "Invisible Eyes"  can't focus on a problem.  It swats around blindly, and more often than not, after enough of it, it sets things right.  But, the problem we're facing is one that requires foresight, and planning, the kind of thing that ultimately doesn't happen in our political-economic system.  And, what's worse, is when we do try to correct it, we tend to mess it up even more (Greenspan with the rediculous interest rates, people? Hindsight is 20-20 but there had to be at least some idea that this would cause this huge housing bubble which is going to bring disaster to our monetary system.)  Unless we at least, in one sector of our economy, cool down on the laissez-faire for a moment, and develop a definite plan for future-energy infastructure, we'll have serious problems.

It's a smart move, really.  Create a nationalized future-tech infastructure industry, that can get us up to a point and then disperse (yea, bureaucracy keeps us from this).  It would be the most massive employment project in the history of the States, which have always shown to be good for the economy, and drop down the increasing unemployment rate.  Hell, it may even improve monetary policy situation by teaching the public the idea of savings and conservation, which coupled with higher Federal reserve requirements, would put money back in the banks and slow down growth.  In the mean time, all the money generated by the infastructure development would stay state side, as most construction materials are domestically produced (like US steel.. although post-protection, this may not be a good example, as import steel is generally from China.)  The unfortunent thing is without tariffs, alot of this money will escape back out to foreign banks.  

The politics behind those protections measure would be very fierce with political capital being spent in the "Most Favored Nation" trade status battle and possible Chinese aggression into Taiwan as retaliatory.  And, of course, this doesn't stop the imports from Japan and South Korea, which we couldn't possible raise tariffs against since they are economic and "War on Terror" allies.  The electronics will keep pouring in, and that's fine because we don't have their manufacturing capability in that area.  But, to control the auto imports, and this is controversial, would require a huge bailout of US auto manufacturers, with money allocated specifically for the development of future-tech cars.  This would have to be with complete transperency, and the money would actually have to research into future-tech and in increasing the standards of manufacture and design to make our junk cars comparable in quality to the Japanese and European markets, and keep our money inside the country.  Add this to a roll-back of upper-class tax cuts, middle-class tax breaks to encourage consumer spending in new American industries, and a balanced budget intiative (defense cuts, IMO. Politicians talk about pork.. look at the DOD, people.) with a focus on buying back American currency to stop the massive devaluation and bring back into even-competition with the Euro (You have to admit.. The Euro was a pretty damn ingenious idea by the EU.  They knew that their collective economic power and their more stable economies would create a currency that could strongly compete and surpass the dollar.  Kudos to them, but sucks for us.  OT: Power to Turkey!  The rich heritage of that area as a center of European power for so long, and it's cultural heritage as an international crossroads should have suggested they become part of the union YEARS ago.  The fact they are being denied because of their Muslim majority speaks to the racism and hypocrisy playing across Europe now.  This period in time really will play out as an extension of The Crusades in the history texts. Except this time, it will be recorded in world history and not just a Western European romantic fantasy.) Throw into this mix some fantasy solution for fixing Social Security, that is frankly, beyond my ability to expound on.  All I know, is it is about #3 on my list of dangers to the economy, #1 being peak oil and #2 Stagflation caused by a weakening dollar and housing bubble bust (As it's been seen, Greenspan almost always favors an easy money policy, which is THE worst possible solution, IMO, to stagflation.  Further, this pretty much falls trap to the "artifically fixing a problem of nature only compounds the problem" theories of Heideggerians)  

All of these policies together, won't stop the crunch, but if it's enacted now, the benefits will be felt 15-20 years out will match pretty closely to the downturn of the economy, causing only a GD1 level of recession, if the Peak Oil 2010 prediction is true.  If 2005 is PO, then those extra 5 years will make it extremely difficult, with the poorest suffering an extreme dieoff (unfortunate, and heart-wrenching, but true, without some sort of government intervention, which goes against the balanced budget ideal), but we'll eventually be able to regain current levels in energy in a couple generations time.  During this time, I'd imagine our national credit rating (if there's still an international monetary system around (God, please don't let us be bailed out by the IMF)) will plummet, more than likely due to the government defaulting on SS, and we'll have to rebuild without foreign investors which, given our history, is something we're not comfortable with, but probably better for longterm post-collapse stability.  Any prediction out of that 15-20 year window, probably will negate our economic restructuring efforts, and we have to pay mindful attention, because post-peak will be sharper, IMO, then pre-peak because of limited Demand Destruction (obvious in the current situation) and increased worldwide demand (again, China, and India), so it pays off to plan for the sooner, the better.  Also, the super-pessimistic side of me envisions a full-out war with China over trade, and it developing into a WWIII, with the final note a series of nuclear weapons usage perpetuated by either side against the other, or by fringe groups such as terrorists and the crops of doomsday like cults that will explode because of the fragmented globalized and nationalized social pattern.  The up-side of this is that after an event like that, with millions killed instantly, we WILL have a reawakening of the human spirit and we will take a collective breath to catch up with what we've done, and there's real room for positive change here, in areas like human rights, sustainable development, and an awakening of being a member of the species before being a member of the nation-state.  

My suggestion to governments during this time period (not that they will ever hear me) is to really redevelop significant portions of their economies as socialist work programs, and pay for it out of a balanced budget with cash, not credit, which will become worthless as time goes on.  And, while consolidating economic power, resist the temptation to conslidate political power in a Putin-esque manner.  Centralization of power is not a bad idea as a thought experiment (I'm a fan of the Philosopher King, as PO especially demostrates the effectiveness of intelligent dictatorship in mitigating crisis.  You can also think of it in terms of the ability to mitigate plagues, such as AIDS and Bird Flu), but the reality is centralization of power historically oppresses people and forces them to endure hardships beyond the horrible economic and warfare ones that will be the norm for those of us living.  2020 CANNOT become 1984 if we hope to survive this change with dignity and eventual returns to the relatively high-standards of living most of the Western world lives under (that's probably ethnocentrist of me).  

Now, the obvious part about this entire post.  Very little of my plan will ever be enacted, even though most economists would agree that these are pretty good steps.  They'd probably have an even more effective plan, as economics to me is a fringe study on my real studies in psychology, political science, sociology, and philosophy. Economics is a study I actually failed in high school the first time around, and have only grown to appreciate it after my formal studies, now that I have a better foundation on which to use it as a tool and comprehend it's inner workings.  The amount of national political capital needed is probably far above the highest amount ever held by a President and his party.  It is within the post-9/11 range, but still above it.  Had Bush actually used his political capital for some of the traditional conservative values he supposedly supports, such as balanced budget, we would be in a much better position right now, and let's hope that Bush won't reach that level of capital, as that will most certaintly exacerbate the problem.  And the international capital is no where close, especially with the beating we've taken for Iraq and the prevelant view of a dieing American Empire.  

Okay, this is the last paragraph, I promise.  First, anyone who actually read this monster post, I really, really appreciate it.  Although it is slightly alcohol-induced, writing this has been nearly theraputic for me, as it crystalizes my worries about my future and the future of my loved ones, and suggests that there IS a way to at least survive our future, and doing it in a way that will actually make us a stronger species.  This is evolution's first serious test of our species, people.  It's not through disease, as we already proved our ability to proliferate enough genetically to survive, but it's through our ability of resource management, to come to an equillibrium with our environment, without having to live through the future dieoff again.  We are not populations of wolves and rabbits in a forest.  We are humans, and the dignity and responsibility that comes with being this planet's stewart, refuses that we ever live through a cataclysm like this again.  Second, let me explain a couple things about me:

  1.  I sound very anti-China, and I know this is sometimes very controversial especially among traders and power brokers, but it's not because I hate China.  It's because, IMO, the world needs the USA to stay afloat in order to keep the rest of it afloat, through the world's economic dependency, our soft hegemony, and our amazing food production, at least for now.  Keeping the US afloat first will minimize the suffering for the extremely poor peasents in China and India, who are the ones working extremely hard to push economic growth without even knowing WHY how and why their social lives being contorted around them (Seriously, the extremely poor in these Asian countries are incredibly isolated from the world stage.  They're almost an embarassment to these countries.)  I am anti-China because I want the best for humanity, and right now, China is standing in the way of that by looking short-term.  Also, I have an extreme fear that as the Chinese develop larger middle-classes, and a decorum for real public kritiking is phased into the middle-class, the social mood will change to a feeling of contentment with progress leading to a reawakening of the Mandate of Heaven being bestowed upon the oligarchial PRC, something they will on face deny but silently cheer for.  And, as history shows, the Mandate of Heaven is a strong motivator of nationalism in China.  Which only spells problems for it's number #1 opponent to it's former position as the supreme civilization in the world.  

  2.   I sound very socialist.  I guarantee, that this is not the case.  I am economically between moderate right and extreme right, with a strong position for balanced budget.  There are a few exceptions, for instance, fair trade vs free trade, demand-level economics, the use of protectionism only when it is necessary for global security (I however, find the use of sanctions as a slightly more underhanded use of a WMD) and when planned economy is the only solution to addressing a significant problem (War).  I am also rather laissez-faire in regards to corporations.  I am big into not controlling the actual wealth-creating tools of business, but controlling corporate structures is well within reason, if not encouragable, for if not, you get your Enrons, Tycos, and WorldComs, which ultimately hurt the economy (I still blame Enron partly for the hugely fluctuating economy in the last few years).  Corporations are NOT people, and granting them that status cheapens the experience of being, and ultimately, in it's tertiary forms, lead to dehumanization.  Also, worker's unions are good things, as profit and union activity are not mutually exclusive, and can actually work together to provide for the good of the company and the good of the employee.  This also fuels my opinion of demand trumping supply.  

  3.  Greed is good, but only when it can be applied by individuals on an even scale.  The rich leverage their higher capital to pursue their greed, but the average person born into a low-class lifestyle have very little power to exercise their greed, and this is the source, IMO, of sociological tension.  

  4.  I don't hate America.  I love my country, and while we are consistently bitchslapping the principles of it, we at least have in our minds the idea of what a good, JUST government is, and we're support the ideal through our social contract.  That being said, the USA will dwindle, as empire is unsustainable, as proven dozens of times previously.  And that is probably best.  Post Cold War has been a very interesting time, and one of the ripeist moments in our limited history, probably will be one of the most important as well.  My wish for the CW would have been in the Hegelian dialectic: two opposing socities with different idealogical views, the thesis and the antithesis, comfront each other, and create a new synthesis that would be superior than it's two parts. However, we're rolling off of our Cold War victory, and our empire will collapse without a sufficiently strong enemy, which would be China, and as I've already stated competition with China is a very negative prospect. With only unipole hegemony, there's no one to allign yourself for or against.  It boils down to complying with the ultimate power, and secretly resenting it. We've spent our time as conquerers, in most ways, as a brutal conquestidor instead of a benevolent prince.  I'm reminded of a pithy little witticism here.  The phrase, "May you live in interesting times," is often used as a near-compliment and good wish, at least in this country.  I personally would rather live in interesting times, despite how painful they will be.  But, remember, in China, this phrase is a curse .  It is interesting to frame the future of geopolitics, from this lens.  

  5.  It is important, IMO, not to take the postmodern nihilism route when thinking of the future.  It is certaintly nothing novel.  As Alasdair MacIntyre states in his book After Virtue:
"What matters [now] is the construction of local forms of community within which civility and the intellectual and moral life can be sustained through the new dark ages which are already upon us. And if the tradition of the virtues was able to survive the horrors of the last dark ages, we are not entirely without grounds for hope. This time, however, the barbarians [nihilists] are not waiting beyond the frontiers; they have already been governing us for quite some time. And it is our lack of consciousness of this that constitutes part of our predicament. We are waiting not for a Godot, but for another--doubtless very different--St. Benedict."

     He is making the comparison between the nihilism that was spread through the collapsing Roman empire to the current postmodern crisis our world is engaged in, and his opinion is that, as a society, the remnants of the optomistic rationalism of the Enlightenment linger with the general populace, but with the intellectual class (which is more than likely us) nihilism is becoming a more and more attractive option as we realize both empiricism and rationalism have failed us to move towards social progress.  Compounded with our knowledge of PO, it becomes infuriating to think that our two main tools of knowledge-gathering are reaching their limits, and may fail us in our wish to prevent the tragedy at our feet.  However, nihilism falls short as an acceptable life choice.  Nihilism, in the form of it's milder cousin, doubt, is a useful tool for us as human beings to trick ourselves into believing true ethical, social, and historical progress has happened.  But, with Nihilism, the doubt extends to every possible example given up to it.  The endless cycles of "Why is that so?" and "You have no way of proving it." eventually feeds back into itself, making the very tools of doubt useless as a tool of inquiry.  At some point, a hard decision has to be made that, at some point, there exists truth, but we do not have access to it, and we haven't been gifted by it's revelation.  And, that concession can come in many forms, and is personal to each individual.  Whether you choose a form of religion, continue to put faith in the power of empiricism, or decide to draw truth from your interactions with other humans, have something concrete you can mentally hold on to in troubling times.  Because, I guarantee, if shit does hit the fan, the one that will survive longest is the one that honestly believes the gun in front of him can kill him; not the person who doesn't believe in truth, thereby not believing in the existance of the gun.  Plus, your faith will be your mental liferaft in troubling times.

6. Ok, I lied earlier about it being my last paragraph.  Again, I'd like to thank anyone who actually read this without skipping it over.  Also, the more I think of this, the more I think my long rant is not entirely appropriate to this website, as you try to focus on the numbers and the facts, instead of possible scenarios, as well as it just being absurdly obtuse and "ranty".  But, at the same time, I think it's important that my voice is heard, if only by maybe a dozen that will read this, because it's only through assimiliations of other people's knowledge and critical analysis of such that guarantees our legacy on this world.  Our species, many thousands of years ago, rose above a life of pain and suffering by developing the means, language, to pass knowledge from individual to individual, creating in the process our social fabric and our group intelligence.  It is only by holding to these distinct human gifts that we can hope to not be dug up in a million years by our replacements and kept in a musuem as the previous master inhabitants of the Earth.

If, moderators, you wish to dissuade this kind of post in the future from me, please email me so we can talk about it.  I don't want to ruffle feathers of anysort, because those of us that know of Peak Oil are in an extremely small minority of the population, and the rest of the population stands vehemently opposed to anything contradictary of it's niave belief of a better future.  We are a group, on a collective voyage into the unknown ocean, and as the rest of the population paddles, faced opposite their future, we are the voice that can see ahead of us, screaming about the approaching edge of the world, trying to spread the word to the few paddlers who will listen, but ultimately unable to stop the ship quick enough.  We should be a collective, and not a channel for non-serving feelings such as anger and annoyance.  Each of us contributes our own understanding of life.

Thank You,
Cole Wenger

you've said more than a mouthful and it will take time to digest.

As for China, I think they are basically admitting communism does not work. Now they are facing the problem that capitalism does not work for them either because it causes massive demand for limited oil and other resources. No one has an answer.

Capitalism increases demand only if it increases living standards. Communism ruined living standards, the environment, peoples lives, initiative, just to begin a long list.
Capitalism distributes goods and services more efficiently than anything yet discovered. Food shortages in Africa are not the fault of capitalism, but rather gross mismanagement and corruption, with the weather merely a bit player.  N. Korea is another expample - notice that the S. Koreans are not starving. Indonesia, previously an oil exporter, is having riots over oil shortages because they did not have the political will over the past few years to pass on world prices, but rather subsidized them, so the pain was put off until today, with the government in the process of going bust.

Capitalism will do a better job of getting us through the coming crisis better than anything else, certainly including the best and brightest. Imagine if OPEC had done a better job of increasing prices gradually from $30 in 1981 to $60 today - we would be much more energy efficient, the peak would be further off, both renewable and non-renewable sources would be under development, and high prices would not be a topic of discussion. The problem is not high prices today but too low prices earlier, which the (capitalistic) system is in the process of correcting.

I disagree. If OPEC hadn't limited production somewhat, the cost of crude would've been even cheaper. Meaning that we probably would've guzzled it even more quickly. And the OPEC nations would have jack shit to show for it.

There are plenty of instances in capitalist societies where countries decide that it's in the best interest to regulate a particular market. This neoclassical economic idea that free markets will solve all the problems by themselves is nuts.

Capitalism as it's practiced today is little more than a pyramid scheme designed to transfer wealth from the masses to a few elite. The deck is stacked to favor the wealthy. I'm not saying that no form of capitalism will work, but the system we have now is not sustainable... we can't just mindlessly use resources and allow the population to grow out of control.

I think that the poster prior to you meant that OPEC should have limited oil production still further. At least, that's the only way that I can think of to increase the price of oil. Sure, they could have tried a pepsi/coke style branding campaign to raise the price. But I'd really like to think that wouldn't have been successful.
Capitalism is good at producing goods and a few unneccesary services like cable TV. It is a failure at providing education, health care, police protection, fire fighting,  legal justice, national defense, etc, etc. Attempts to privatise these services have been such failures that only a few reactionaries with the heads stuck in the 18th centuries still advocate them. The energy sector is in the hazy borderline between goods and services. Are the oscillating flow of electrons in and out of my house a good or a service. Its very difficult and inefficient to store electrons as electrons. They can be stored in reversable chemical reactions but as chemicals not electrons.  We have seen that deregulation of electricity has resulted the criminal activity of Enron and the utter failure to provide needed improvements to transmission capability as seen in the 2003 northeast blackout. Government regulations need to favor the public's interest over that of any single corporation. Too often the opposite happens and governments get black eyes from them. The providing of fuels as petroleum becomes scarcer needs governments to step in to insure conversion to alternatives in a timely manner. This is not happening in the US.
How refreshing to wake up and read your post this morning, Cole! Yes, it was long, but you have a lot to say.

I don't know how you figure that you sound like you hate America. When I read your post, I was struck by your obvious affection for the US and its ideals. I can tell by the way that you present your ideas that you've struggled to reconcile the contradictions between some of America's founding ideals, and the challenges to those ideals from many sides. You wouldn't have done that if you didn't really care. If that's the kind of feedback you get when talking to average people, well that just goes to show how ignorant the people have been kept. (I've said it many times, the professional political class, and their elite big-money contributors, stand to gain nothing from a truly educated populace.)

You seem to have studied some of the very subjects (psychology, political science, sociology, and philosophy), that are helpful in developing a well-rounded worldview, the kind which is capable of looking beyond the moment, or at just the surface, and is capable of analysing underlying systems and their outward manifestations. (How about a detour through sociobiology? Have you read "The Selfish Gene" by Richard Dawkins?)

On corporations: I've come to similar conlusions about corporations, based on the fact that corporations owe their existence to their chartering government, which in turn owes its existence to 'the consent of the governed'. Human beings, on the other hand, don't owe their existence to government. (Even if you believe you'd be dead without some Great War fought for your advantage. Governments don't die for their countries - people do.)

On China: Obviously, the "mandate of heaven" meme is as dangerous as the "manifest destiny" meme was. While "manifest destiny" was in high gear in the U.S., it led to genocide. Today, the memory of it weakens the Empire, because it exposes the ruthlessness of its founders. That happened to the Third Reich, with more speed and force. The idea that the German people were uniquely qualified to lead the world into the future emboldened the leadership, who gained temporary "political capital" from it. But it eventually led to the excesses which caused any "political capital" they may have accumulated to vanish away. Will this apply to China? That depends on them.

How to resist the "mandate of heaven" meme? By argument, possibly. But with the language barrier, how is there ever an opportunity for dialog between our countries, even with the Internet? Another way might be by showing the Chinese that we can learn, or have learned, as much about governance through the shifting sands of history as they. Can America do that? No, America cannot, at least not the existing regime. But a new breed of "philosopher kings" might.

Remember, as the shit hits the fan, China is going to undergo a crisis of leadership as well. There are already more public demonstrations in China than in America, mostly against corruption in government and polluting industries. The CCP is being pushed against the ropes. Their worst idealogues will likely get knocked off their high horses over there, just as our idealogues are getting picked off over here in the U.S. Reasoned minds and good hearts in both countries have much more in common than the []-ists of either.

And that's really why I want to write with this encouragement. The current leadership of America is almost politically bankrupt, even as they bankrupt America economically. The deed is done. The ball is already in motion, and there's absolutely nothing they can do about it. Replacing the current leadership, once the shit really hits the fan, will be easier than you can probably imagine. Never before in our lifetimes has the opportunity been greater. There will be a need for clear-headed, learned, rational and kind leadership, and the people will be practically begging the right persons to come out in front. Keep your nose to the grindstone and your head above water, because you might just be called upon to serve someday. Maybe in your neighborhood, or town, or county. But as things get more localized, the increased need for "distributed intelligence", so to speak, means that there will be many more opportunities, even for humble amateurs like yourself (I hope you take no offense, that's actually a complement). America's governments are today just bursting with corruption. That won't last long into the collapse.

The humbling of the species means that it will again be possible for "brainy" types to be respected once again. Obviously, as George Bush's public persona indicates, the average American despises any indication of intelligence. But once the collapse occurs in earnest, and people recognize that the current regime carries a huge burden of responsibility for the ill effects of it, that prejudice will likely melt away. People will become more eager to set aside their prejudices, in order to arrive at solutions.

There's not many who appreciate the hope and opportunity that petrocollapse brings to our planet and our species. As I told my girlfriend just last night: "there's PLENTY of hope, just not for everyone." So smile, dude. Mother nature "got yo back".

"America's governments are today just bursting with corruption. That won't last long into the collapse.
The humbling of the species means that it will again be possible for "brainy" types to be respected once again."

I think history shows you to be wrong. Corruption frequently continues and becomes entrenched during and after a collapse. (For example, many African nations.) Brainy types are often the first ones up against the wall (or shipped out to the reeducation camps).

Thanks for the words of encouragement.  The overwhelming feeling I get when I think of the corruption in government nowadays is that we haven't had a revolution since the 1860s, and that was a failed one.  Most other democracies only have lifespans around the 75 year mark, and in between revolutions, the conflicts of a parlimentary system has a small check on corruption.  The levels of criminal conspiracy present (and this isn't a partisan issue, it's on both sides) themselves everywhere.  

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. --That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.
-- Declaration of Independence

Not only do we have the right, but I believe it is our duty to.  It would certaintly reset the clock.

RE: Dawkins.  I have not read that book, however I am a real fan of most of his work.  Meme theory is excellent, especially from a psychological perspective.  I will add this to my reading list.

RE: Mandate of Heaven.  I believe there's a difference between the examples and China.  While Manifest Destiny was definently a social policy, and it had it's religious tones, it wasn't much more than a social theory.  And the Aryanism was little more than a tool created by the government to leverage capital and gain popular support.  In China, however, the Mandate of Heaven is richly steeped in their 4,000 year history and in Confucianism, both of which are probably the two things that make up the character of the Chinese society, and this makes it a nationalization tool far more powerful than any of the others.  The Chinese are very adept at surviving hardship.  And, it's widely known that the Chinese are extremely ethnocentric, but you have to stop and remember, they have a pretty good reason to be.  Hopefully, the government will be weakened before it gains enough momentum to make a large middle class a reality.  Because I really do believe that will be what forces the MoH.  

RE: American Leadership.  The problem in replacing our leadership is that we will invariably rise a polemic group to power.  And given the current and forseeable atmosphere of the society, I don't believe the new leader would be any better.  The only good option is complete revolution, which will have to cater to a wide group of people and compromise to form a new government.

 Personally, I'm predicting a collapse of the nation-state post-PO, as the very concept of the nation requires the ability to travel quickly between different regions, so that those in other regions no longer appear as foreigners, but people who share a common history.  

ChrisPhoenix says:

"Corruption frequently continues and becomes entrenched during and after a collapse. (For example, many African nations.) Brainy types are often the first ones up against the wall (or shipped out to the reeducation camps)."

Yes, anti-intellectualism is a defining characteristic of fascism. In America, the trend has been towards greater fascism since even before Bush II. I think this will continue for some time, as the capitalist system tries its hardest to hold onto the reins of power. But as most folks who are studied in the issue of peak oil are aware, there's not enough time or energy left to "solve" the problem of peak oil - that is, to keep the current system in place and not have it be crushed by petrocollapse, and this is going to present a real problem to the current regime.

With the increase in education and information available to people of all classes, a larger percentage of the population than ever before is able to embrace virtues of skepticism, rule of law, equal rights for everybody, etc. These virtues are sincerely desired by all sorts of people all over the political spectrum - left, right, libertarian, and center. Very few people reject those ideals. Among those are most of those in leadership today!

(I'd like to point out as an aside, that "capitalism" does not equal "free markets". Capitalism allows a limited amount of freedom, within definite restraints.  You cannot have Capitalism without a massive investment in armies and police. You can have "free markets" without them.)

The Bush II administration is on the ropes, and there's very little that they can do to overcome their problems. Whoever comes next is going to be impotent to stop the collapse. Same goes for whoever follows them. The species is about to enroll in a nice long graduate program, if you will, which will drive home some serious lessons.

In the coming world energy crisis, the "battle lines" are not primarily drawn between nations. Sure, the "developing world" might have a lot of resentment against the United States for using a disproportionate amount of fossil fuels during its heyday. But that resentment will probably dissolve, and maybe give way to compassion, as the United States is brought down to the standard of living of the "developing" nations themselves, which it is ill-prepared for, both in its mode of living, and psychologically.

No, the battle lines are not drawn between nations. The battle lines have been drawn between generations. The generation that voted Ronald Reagan into office chose to live beyond moderation, at the expense of their heirs. Listen to Jimmy Carter's "crisis of confidence" speech, and this becomes clear.

(In the midst of the Iran Hostage Crisis, unprecendented oil prices and rising imports, Jimmy Carter delivers the "Crisis of Confidence" Speech on national television:

It's not that the younger generations would have likely chose differently. But that doesn't negate the fact that they did get screwed. Not fair to their elders? Neither was the petro party fair to them. It sucks, but that's the way life is.

I don't see how the civilized world, made up of many individuals belonging to different classes (don't pretend), can collapse, without social upheaval and revolution. The survivors will have very little motivation to preserve the manners of life of their parents and grandparents. During this upheaval, I think that a lot of "isms" will continue to be discredited during the downside, and that includes crony capitalism, fascism, and most statism in general.

As far as the existence of a large state being impossible, I'm not so sure. Large states existed before the oil age. And I don't think that global communications are simply going to disappear. So I think it will be possible to maintain large states, just not at the level of exploitation currently practiced. You can easily help people with information. It's more difficult to hurt people with just information, (although not impossible). It will be a lot harder to muster armies against your population without cheap energy (or abundant food). A hundred years ago, very few citizens of the United States had any interaction with the federal government. Large nation-states, while maybe not disappearing, will likely at least return to their humbler roots.

Anyway, Chris, calling "fascism" goes a long way towards countering it, and I wasn't the one who called it. You were.

Peace out!

You forgot the most important three words.

"White nationalist ecofascism."

i'v plotted Colin Campbell's September revision against his 1996 & 2002 scenarios at

At the top of the same page, we première the CERA projection scenario.  Like Total & IEA, CERA forecasts high extraction rates for the future but has a very low URR.  This presents a dilemma for TrendLines, because when high peak forecasts do not reconcile with a modeler's URR, we have to choose whether to use the high peak and show a greater than reasonable drop off when their "remaining oil" forecast runs out; or we can dampen the peak to levels that accommodate a measured depletion.  Either way it sucks.  In the future, i think we will make a determination based on whether the forecaster has done their due diligence more so on the peak analysis or the URR study.  If it's a toss up, we will lean toward their URR as being the main determinate and assume that they are mathematics-challenged.  Thus, today, CERA has a peak far from Daniel Yergin's oft mentioned 126-mbd just as we have recently clipped the IEA's 107-mbd & Total's 110-mbd.

Either way, these three forecasts are up for criticism.  If we show the high peaks, some will say "hey buddy, they can't get there with the amount of URR they show".  If on the other hand, we graph extraction that represents their URR limits, others will say "hey, i saw an article where they claimed the peak was way higher than your graph, eh".  In short, we cannot (or should not) show peaks that require more oil than is provided for in their data.  Much of this ambiguity is related to forecasters' reluctance to include non-conventional oils in their URR.  When & if they feel more confident in using non-conventional, undiscovered &/or reserve growth components in their URR calculations, we shall undertake to draw the respective production that would then be validated.  As mentioned, we will lean towards the modelers' strong point (peak or URR) when we make our determination if there is a conflict.  We do realize that it is hard to get good help these days!

Upon discussions with Jean Laherrère with respect to depletion rates, we are satisfied that his approach of determining future extraction by relating it to discoveries (a là Hubbert) has similar merit to those that examine fields (Koppelaar) and nations (ASPO).  Because his methodology leads to an overall depletion rate that is less harsh than the Koppelaar findings, we have applied a factor (0.965) that blends the studies of Colin Campbell, Rembrandt Koppelaar & Jean Laherrère on those scenarios and models that do not address depletion but merely publish their peak production predictions and URR.

TrendLines is honoured and humbled that our collaboration has influenced some of the respected models.  It is our goal that shared data and enlightenment will bring many of the scenarios together in the interest of better planning by stakeholders.

Good stuff!  

One of the graphs at the bottom of the page lists ten ASPO forecasts but only incldues plots for three.  Huh?

Sorry, only one of the graphs stated that it was a draft "work-in-progress".  We deleted the straight line presentations and replotting each with a more representative sloping graph style.  Straight line graphs show far too much available supply at the exhaustion end (latter third).  We're scrambling 'cuz Colin's stunning announcement and referral of our work was unexpected.  For years he denied in his newsletter that the Y2K production peak was being challenged. Finally in April 2004 he admitted publicly that he had to push the Peak back and increase the extraction targets.

Since that "moment" he has stalwartly attempted to illustrate his data graphically and via tables and makes no attempt to taint the figures.  Tho his arithmetic may not be the best, new information is reflected monthly in his studies.  The extraction peak and Peak Year thus moves around like a yo-yo but that is the nature of dealing with abstracts.

Further, folks must understand that his work relates to four peaks.  The extraction peak and Hubbert Peak (half-way consumption) of Regular Oil.  And those same two peaks for "all oils".  Colin has shared his Excel data with TrendLines, and we calculated the Hubbert Peak for Conventional Oil to be the Spring of 2004.  Colin has since agreed and he has reflected that in his new graphs and tables.  By coincidence, or maybe not, the Extraction or Production Peak seems to have hit at precisely the same time.  Wow ... is all i can say.

Now we are looking forward at the more important "all oils" peak.  That is the real "Peak Oil".  Only academics and purists dwell in the playground of conventional oil and its peak.  It means nothing in the marketplace and everyday world.  At the moment, we calculate the Hubbert Peak (half way consumption of "all oils") to be in the Spring of 2010 based on the Campbell/ASPO Depletion Model. This is based on the analysis of past usage vs future reserves.  The mid-point of URR.  On the other hand, Mike Lynch and others state that due to technology etc, the Production Peak of "all Oils" may be moved around.  Because of the success of the Hubbert Curve in the usa analysis and Global Conventional Oil, i am swinging towards agreeement with ASPO and its new 2010 target.

New extraction methods may indeed be moving the production peak sooner, but my Scenarios work also shows that this action so also moves up the dates of eventual exhaustion.  If one believes in finite oil supplies, then claiming fantastic extraction rates of 120-mbd in the next decade or beyond only serve to diminish the supply and exhaustion occurs sooner rather than later.  As the models coalesce when modellers get a better handle on URR, we will see that the high production scenarios will run their supplies dry prior to 2100AD and the conservative and prudent will see exhaustion postpones 'til will into the next Century.  All this and more at


I don't know about this Freddy - your curve for CERA seems to do violence to all the optimistic things they've called for - the long bumpy plateau for several decades, etc. What you've put on for them makes them look like total pessimists.
Stuart, one can only spend as much money as one has or their credit availability allows.  It's the same for oil depletion scenarios.  They can't say their is only 0.843-Trillion barrels in reserves and then claim extraction rates acomin' that boast of future production of 1.5-Tb.  CERA, Total, IEA (and IHS to some degree) have confidence problems in the future reserves component of some public URR stats.  Well, some some would say they can't have it both ways.

A resolution to this dilemma, where some analysts or modelers have done lotsa homework on field analysis and iminent technology advances, but not URR studies, is for me to trust those folks in their Production Forecasts and use other deemed more reliable data for the URR application.  In effect, we do this now for Depletion Rates when none is specified.  In short, as i see some concensus on URR, and mind u everyone is smack on pretty well for "past consumption", then i will start applying an arbitrary "ultimate" to those high production scenarios that have chosen to publish low or a more contricted definition of URR.  As mentioned in an earlier post, that process involves me being criticised for allowing the 120-mbd claims w/o their referenced support.  I will dance around that issue by "footnotes" 'cuz i don't want to muddy the image with two graphs for some like we did with EIA/Aramco.

A fortunate event is that due to exposure of my Presentations by TheOilDrum, ASPO, Wikopedia & others, modelers have become much more willing to share data with us for better interpretation of their Outlooks.  Jean Laherrere and Colin Campbell deserve much credit for Peak Oil being in the public domain.  To tell the truth, i have used their data for years to prove the opposite; that their was going to be lotsa oil for decades albeit in dimishing volume.  The doomsters were making it sound like the taps would be dry within a generation.  Work by these two gentlemen made it easy to illustrate that there was plenty of oil for a very long time for the essential activities that are not adaptable to demand destruction or fuel switching.

I am a firm believer in demand destruction.  Oil as a commodity operates in the same realm as others in supply/demand realities.  Post peak, aggresive pricing will smother demand in areas that are now only to commonplace because we entered a long period where oil byproducts were available much below their historic norms in real price terms.  That created "illicit" demand that was not sunstainable.  Those purposes are now the vulnerable as we see pricing seek its equilibrium.

In the future, i think we will make a determination based on whether the forecaster has done their due diligence more so on the peak analysis or the URR study.  If it's a toss up, we will lean toward their URR as being the main determinate and assume that they are mathematics-challenged.  Thus, today, CERA has a peak far from Daniel Yergin's oft mentioned 126-mbd just as we have recently clipped the IEA's 107-mbd & Total's 110-mbd.


They can't say their is only 0.843-Trillion barrels in reserves and then claim extraction rates acomin' that boast of future production of 1.5-Tb.  

But CERA's emphasis is on their conclusion of an undulating plateau at 126 mbd.  I think that is what you should show and indicate that their URR is inconsistent with their optimistic conclusion.

Having tasted 15-20% ROIs, the energy corporations are not going to make long-term investments in new infrastructure.  They can make more money short-term by doing nothing.  The only chance for implementation of new technology (if such exists) is a public-funded effort.  Unfortunately Republicans do not believe in this (and possibly most Democrats don't either).  And both the federal government and most state governments can't afford it anymore, anyway.
Governments would be foolish to build more refining capacity.
  1. A refinery is no good without the crude to feed it.  If oil is peaking, we'll soon have surplus refining capacity and profit margins fall back toward zero.
  2. Even if crude supplies are okay, high prices will cause a contraction in demand.  Once demand falls below refining capacity you're back in a zero-margin situation.

Which is not to say that some sharp operators might not persuade their paid-for pols to give them a contract to build a refinery at the public's expense.  Fleecing the taxpayer is where the money is.
Mr. Engineer-Poet,

I agree.  We can always import refined products from refineries elsewhere via tankers.  There is no persuasive reason refineries have to be within the territorial bounds of the US.

One problem is the special formulations of gasolines we need within various air quality jurisdictions.  Make a common market in gasoline (ie fungible gasoline), and we'll lower the cost, reduce the shortages, and save money.

The number of "boutique" blends required by the EPA has just been slashed from 19 to 6.  That ought to do a lot for regional shortages.
We need refineries that can handle increasingly heavy, even sour, crude.  We also need jobs for the workers at our old, out-of-date refineries.  As we peakoilers anticipate a recession/depression/whatever, why let those jobs go somewhere else?
When oil peaks the availbale oil will gradually become more heavy and sour. Heavy and sour oil require more refinery capacity, this ought to give that investemnts in cracking, sulphur reduction, etc will be useful and valuble long into the declining production.
The talk about missing oil technology R&D investments resembles much the usual talk about missing exploration investments in mature oil provinces. These investments are missing because no one would like pay for dry holes.

What should we expect from the oil and energy R&D? Most technology improvements in the upstream may already be rather marginal and very capital-intensive. It is possible that EROEI wall is ahead: the net energy gain from the new technology does not cover the energy used for the implementation of that technology.

In the energy effeciency field the problem probably is that the knowledge is already there but is not applied. Everybody knows that smaller cars get better mpg. Everybody knows that better isolation will save heating energy. A lot of research was done in the '70s and in the beginning of the '80s but much of it is unimpelemented.

There is an unending stream of lies about how the "free markets" did this and did that.

Let's start with the integrated computer chip or IC.
At the time of its "invention" (by Noyce or Kilby), the cost of manufacturing such an integrated circuit (computer chip) was so high that it could not compete against discrete transistor circuits (the older technology). No one in commercial industry was willing to "invest" in a new technology that cost way more than the entrenched tranisistor technology. To the rescue comes the Department of Defense [and war-making], the DOD. They paid $1000 for each IC for their Minute Man ballistic missiles in 1960 as opposed to say, $5 for a competing, discrete transistor. It was only with this non-market, governement booster that the computer chip industry got launched.


Another story is the "Internet". As is well known, it was originally funded by a DARPA grant. Private industy and "free markets" could have never launched an internet.

The same kind of thing is needed for our "energy crisis".
The free markets and Adam Smith's "Invisible Hand" will not come to the rescue because there is no short term "profit" in developing a new technology. Like a baby in a womb, a new technology is not "viable" until it has been developed at the end of an umbilical cord for a necessary amount of time.

I heard this argument before. I also know that the US Federal Government, the same government which has ver $20 TRILLION dollars of outstanding obligations, has spent oodles of money on medical research, and then simply GIVEN the resulting patents to private industry. Why weren't these patents held in the name of the people of the United States, and the profit returned to the treasury?

When will it ever dawn on the American people that their country is bankrupt, because of a massive amount of corruption and massive amounts of welfare to the rich?

Time for a government by the people, for the people, if you ask me. We can't carry the lazy, greedy, and irresponsible upon our backs for much longer.
shock horror someone mentions land use..


Some automotive consultants are convinced that medium-sized vehicles that emit only around half of the emissions produced by today's new cars, according to Professor McGlade. She described the technology as 'a definite possibility for the future', but also emphasised that 'Technology can take us part of the way to a more sustainable mobility future, but it will not solve all problems. We also need to take a closer look at how we plan our infrastructure and how we use our land.'

The Federal Government should not be involved as a competitor in any business unless its involvment is necessary for "promoting the general welfare" of the populace (preamble to the US Constitution). An example of governement involvement is the US Postal Service.

One of the areas where government intervention is necessary, is that of launching an infant technology. Once the baby is born, the government needs to step away and let private businesses take over. How will the private sector take over if the government holds all the patents?

You are right. There is a fundamental "unfairness" to using tax dollars for jump-starting the technology and then letting the private sector collect the private profits off this tax-funded jump start. But no one has proposed a better way.

"How will the private sector take over if the government holds all the patents?" you ask?

The GNU Public License encourages software development by not allowing one party to monopolize access to software technology, and its been very successful. Free software is already overtaking un-free software all over the world, even in the richest country in the world, the United States of America.

The House of Representatives holds the purse strings. De-funding the patent office would not be out of the question, once people start dying because they can't afford drugs. Not fair to the drug companies you say? Sorry, but we can't support them on our good graces forever.

Sorry, the free lunch is almost over. True free-market competition exists in a world with or without patents. The coming petrocollapse is going to make the "suffering" of a few billionaire executives look like a absurd farce.

Life's not fair. Deal.

"You are right. There is a fundamental "unfairness" to using tax dollars for jump-starting the technology and then letting the private sector collect the private profits off this tax-funded jump start. But no one has proposed a better way."

How about the public benefit from the taxes, jobs and exports resulting from the new industry?  Taking the Internet as an example, the benefit gained by the US, and indeed the world, is orders of magnitude greater than the initial investment of our tax dollars.

Before anyone gets a chance to bring this up, there's alot of fury right now over how the UN and EU is basically strongarming the American government into "turning over" the Internet to an international community for regulation.

Just so nobody gets this confused, let me tell you, right here, right now, that there is absolutely no good reason for the fury, and the overall uproar is more from conservative commentators that those actually in technology.  The internet is an extremely unregulated system, and the only thing that is in control of the US is the root DNS servers (those things that turn names like into a series of computer understandable numbers like  The root level servers are the library of libraries, per se).  And those aren't actually in control of the US government as much as a private corporation which has to answer to the government.  So, the worst that the UN can do is create their own system of root level DNS servers and mandate that every country uses it, which really isn't going to have much effect.

So... just to point that out.

CNBC (squawk box) discussing "Demand Destruction" due to high crude prices now. Moderater says, Wow that is shocking, you mean our economy will "shut down"?
speaking of how "the markets provide", FTD has been taken over by a purveyor of porn. sigh. anyone know what happened to father of four?
OT:  Got cold fusion?  An interesting listen on nuclear energy on NPR's "Living on Earth" last night.

Nope.  No cold fusion on the horizon.  There may be other amazing as-yet-unknown sources of energy, but cold fusion isn't likely to be in the mix.

Protons repel another.  To get protons to fuse together you must have enough energy (velocity) to overcome that repulsion.    That is, if you throw two protons at each other with enough speed they will get close enough to one another for the nuclear attraction between them to be stronger than the electical repulsion between them.

So to do anything useful, you need lots of protons flying around at high speed and running into each other.  

There's a measurement that describes the average speed of such a collection of protons (or anything else for that matter):  TEMPERATURE.  

When you say the protons must all be moving very quickly you are therefore saying the collection of protons must be HOT.

There is no possible way a chemical-reaction (such as the catalysts claimed by Fleischmein (sp?) & Pons) can get you around that.  The protons have to moving fast in order to fuse (unless you can turn off electrical charge!).  Fast means hot.

For fusion to occur it has to be hot.  However, that's not necessarily a bad thing -- a hot reactor can only run if its plasma is precisely contained.  If you have any kind of system failure the reaction shuts down rather than running away.

GUNNK's point is pretty much what the original panel of physicists concluded in reviewing the initial announcement of cold fusion.  It hasn't the temperament or the negative side effects (hard neutrons) to be fusion.  Essentially, they couldn't explain it so it didn't exist.

I look at it differently.  The original experiment melted the test apparatus, melted through the lab table, and melted through the lab floor!  While I haven't heard of anyone replicating that result, some experiments have indeed shown a positive net energy release.

There are two problems here.  1) The experiments are not yet repeatable and 2) there is no theoritical explanation.  It's neither art nor science.

The original board did the right thing - pour cold water on it until the guys in the labs can make some headway on either or both of the basic problems.

Besides, if experiment #1 worked so well, what if experiment #999 worked REALLY, REALLY well?

So in discussing real-world energy policies, we should not assume any contribution from cold fusion at this time.

The energy amounts are sufficiently large that several Japanese researchers have been seriously injured when their apparatus exploded.  A Brit was was killed a few years ago in a lab in California.

The experiments are repeatable.  It's a shame that the initial reaction was so strong that 15 years later we have made so little progress and the researchers who are trying have to do it on their own time, often at great professional cost.

Fusion doesn't require high temperatures.  Anything that can persuade the proton wave functions to have some significant overlap will do.  
One method that works is to create a muonic atom, where a muon is bound to the proton instead of an electron. Since the muon is more massive than an electron, the cold muonic molecule is small enough so that the protons "see" each other and eventually fuse.  The trouble is that muons, though fairly long-lived as particles go, decay in about a microsecond, and can only contribute to a few fusion reactions. The catalyst wears out.
Last year, about a third of the DOE review panel members agreed there were "anomalous effects", and half of the reviewers found the evidence for excess power compelling.

At a minimum, experimental cold fusion has gone farther in 15 years than experimental hot fusion has in 50.

Gunnk, I think you should read the stories.  Cold Fusion is not dead.  Something very wierd is going on there, and it IS reproducible.  The Japanese have spent $100m on it so far.  Advances in solid-state/low-energy fusion were listed as the most important physics development of 2004 in Japan.  High School students are building working apparatus that generate excess heat.  See for more info.  

Your explanation is a very nice summary of the traditional physics approach to the subject: theory says X, we do not observe X, therefore X did not occur.  But that's the problem: it's experimental - so of course their's no theory.  A substantial minority the DOE panel reviewers agreed that more investigation was needed.

Let's step back to one of Simmons' core points - people.

One oil company CEO pointed out that the US graduates 43,000 lawyers every year but only 430 petroleum engineers.

Simmons seems to think this is going on globally.

The technical people in the petroleum business are missing a whole generation - most people are looking ahead to retirement with a few newbies starting out.  Very few are inbetween.

We see the same issue with the US nuclear industry.  In fact, experienced personnel may well be the limiting factor for a nuclear rampup.

You'right! it's Peak Petroleum Engineers, it's should tell us something!
My kid sister couldn't get a geophysics job in 1995, when she graduated. Now she is a tech writer. She isn't going to switch back.