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.

Analysis of ASPO moving the peak out three years:

http://peakoildebunked.blogspot.com/2005/10/122-colin-campbell-wrong-again.html

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.

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.

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:
http://www.xpcup.com/index.cfm

the Russians have an E-prize program:
http://www.yukos.com/Corporate_citizenship/Energy_Prize.asp

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).

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.

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

Good stuff!  

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

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.

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.

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.

support: http://en.wikipedia.org/wiki/Integrated_circuit#History.3B_origins_and_generations

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.

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.

You'right! it's Peak Petroleum Engineers, it's should tell us something!