I'm questioning my own intelligence here, but, can someone explain the rationale behind comparing horse manure to the peaking of oil production? I'm not truly trying to be sarcastic in saying this, but I seriously fail to recognize the relationship in his argument.

I think his general point is that Peak Oil folks underestimate the capacity of technology to respond/change the human environment.

I suppose I can appreciate that, to some extent. But, I don't think that the shift will come nearly as quickly. From my understanding, there is simply no alternative that is/was as potent/available. Definitely algae oil running cars would be extraordinary, but, can you really supply the equivalent of 80 million barrels per day with algae? Also, the electric car, while more efficient, still requires an energy source. I feel like most people think that electricity is just part of a home and that it doesn't require a fuel of any kind. If everyone is driving an electric car, that just means we have switched where more fuel is going, right? I also thought that ethanol powered vehicles were no more efficient in terms of overall oil used, considering the fertilizer, etc. that was used to grow all the corn. I just hope the peak oil naysayers know what they are talking about. I would rather not be optimistic and disappointed. . .

I think his general point is that Peak Oil folks underestimate the capacity of technology to respond/change the human environment.

 

I agree

 

I suppose I can appreciate that, to some extent. But, I don't think that the shift will come nearly as quickly.

 

But that's also part of his point.

 

One writer in the Times in 1894 estimated that in 50 years the streets of London would be buried under 3m of manure.

 

In principle, this is the same doom and gloom prognostication that peak oil folks say.  The point being, in 1894, chaos was reportedly going to ensue due to the mounting horse manure problem.  It may seem silly, but consider how prominant the horse, horse and buggy, etc was during that time.  No one had any idea what a "car" even was, let alone that it would solve the horse manure problem.

 

So who is to say whatever the solution might be to eventual oil shortages is yet to be discovered?  And once it is, why can't it be quickly implemented?  Ask any company that has been affected by game changing innovation - you don't see these things coming, they just do and if you miss it - boom, you're done.  There are many famous examples of this in other industries...I'm sure you didn't think in 1995 when you started transitioning your tapes to CD's that 10 years later, your CD's would effectively be rendered useless.

 

Or that when 3M the adhesive company discovered the adhesive that was ultimately used for the post-it note they would delve into office supplies.

 

Or that Kodak might want to look into that "digital camera" idea instead of focusing on the film side of photography.

 

Point being, you don't know what will help solve this looming problem or where that solution will come from.  So trying to rationalize it and explain what should happen based on what you know in today's existing environment is short sighted.  the unknown is the biggest variable there is...unfortunately, it causes many people to panic.

^All good points. Maybe I'm a worry-warting pessimist? I'll just let this one go? hahaha

And yet the alternative of relying on something unknown to come along and save us is just as foolish.  So what do you do?  You plan as best you can using all the information you have, and then you change course if something comes along and changes the rules.  You don't bet on the unknown to save you.

So who is to say whatever the solution might be to eventual oil shortages is yet to be discovered? And once it is, why can't it be quickly implemented? Ask any company that has been affected by game changing innovation - you don't see these things coming, they just do and if you miss it - boom, you're done. There are many famous examples of this in other industries...I'm sure you didn't think in 1995 when you started transitioning your tapes to CD's that 10 years later, your CD's would effectively be rendered useless.

 

Or that when 3M the adhesive company discovered the adhesive that was ultimately used for the post-it note they would delve into office supplies.

 

Or that Kodak might want to look into that "digital camera" idea instead of focusing on the film side of photography.

 

 

Fortunately, we weren't buying 85 million barrels of CDs or 85 million barrels of cameras every single day. Now that would be difficult to replace.

 

There are replacements for oil available today. Just that none of them are as good as oil, as cheap as oil, as energy-dense as oil, as applicable to so many non-energy uses as oil, as portable as oil, as non-perishable as oil or as plentiful as oil.

 

I just don't think the world appreciates how much oil we're using. There simply is nothing available in the quality or quantity of oil to replace it. By all means, keeping looking for alternatives. But as I've said before, if you know you're driving toward a cliff and there is no bridge or other route to take, you slow down or stop until you find a way out of your predicament.

 

I think his general point is that Peak Oil folks underestimate the capacity of technology to respond/change the human environment.

.

 

SHS96 responded:

I agree

 

 

 

This is a pretty typical response from the anti-peak oil crowd.  Peak oil nothing more than production rates relative to demand and the natural production cycle every single oil field goes through.  Oil companies have used all of the best technology in the North Sea fields and they are now in terminal decline-- never to recover.  54 or 55 out of 65 oil producing countries in the world have passed their natural production peaks and will never recover. 

 

Technology can't change these realities.  One thing that needs to be understood is that technology does not equal energy.  Energy is what you get when you burn oil, natural gas, and coal, when you split uranium, fuse hydrogen, the wind blowing, waves sloshing around, the suns rays. 

 

Technology is how you use energy or how you make these forms of energy of accessible.  Technology can't change the fact that 84% of oil producing nations are on the downside of their oil production peaks.  Technology can't change the amount of energy it takes to make tar sands and oil shale into usable oil.  Technology can't change peak oil.  Technology can't change the fact that the supply of fossil fuels is finite.

1/1/09 addendum:  Technology is also itself very dependent upon oil.

 

Point being, you don't know what will help solve this looming problem or where that solution will come from.  So trying to rationalize it and explain what should happen based on what you know in today's existing environment is short sighted.  the unknown is the biggest variable there is...unfortunately, it causes many people to panic.

 

Today's existing environment shows that we are on a global oil production plateau.  Today's existing environment is that Mexico (our #2 supplier) is able to export less oil every year and that in 12-36 months it is quite probable that Mexico will cease being an oil exporter.  Today's existing environment is that export declines that are occurring other oil producing nations as well.  Gloom and doom?  Panic?  No.  Just reality.  Since you can't rely on unknowns, you need to start planning and implementing necessary changes.  That's not occurring.  We have no plan for a transition.  When reality is giving you strong signals and you have no plan, that generally equals trouble. 

 

 

    The horse manure story goes something like this:

 

    Every town that had horses had a horse manure problem, and the larger and more progressive cities hired street cleaners to shovel manure and haul it away.

 

    So, someone measured how much horse manure was produced, and compared it to previous years. The trend showed that the amount of horse manure was getting larger. This made sense, as more and more horses were being used all of the time.

 

    Then, projecting the trend forward, it was said, "Within so many years, the horses in this city will be producing X amount of horse manure." The number was overwhelming.

 

    Well, the automobile was invented, and gradually replaced horses. (At the time, the automobile was said to be a great improvement due to the lack of horse manure.) So, the projection didn't come true.

 

    Looking back, it is easy to say that the previous projection didn't come true. Why should we believe any current projections? Technology will solve our problems, or so it is said. Indeed, technology has solved many of our problems.

 

 

    The essense of peak oil is this:

 

    Petroleum is a non-renewable resource. Petroleum can be used only once. Before petroleum was extracted, there was a finite amount petroleum on this planet. We don't know exactly how much; professional estimates say that we started with 3 trillion barrels, but the actual number does not matter. What matters is that there is a finite amount. Every barrel of petroleum taken from the earth leaves one less remaining in the ground. If you think that the amount of petroleum in the ground is increasing, than I can't help you.

 

    That said, for the last 100 years, the amount of petroleum taken from the ground EACH YEAR exceeded the amount taken the year before: As an example, the trend went something like this:

 

  Year 1    5 barrels

  Year 2    10 barrels

  Year 3    15 barrels

 

  Year 2000      30,000,000,000,000 barrels

                      (That's 30 billion barrels per year)

 

    Assuming that we started with 3 trillion barrels, the number of barrels remaining in the gournd is this:

 

    Year 1: 2,999,999,999,995 barrels

    Year 2: 2,999,999,999,985 barrels

    Year 3: 2,999,999,999,970 barrels

 

    2000: 1,500,000,000,000 barrels

 

We still have 1.5 trillion barrels in the ground. That's an enormous amount of petroleum. What's the worry?

 

If you compare the estimated amount of petroleum remaining in the ground with the amount we currently use, the world's supply of petroleum doesn't look as large. The world currently consumes about 30 billion barrels of petroleum per year.

 

    1.5 trillion barrels / 30 billion barrels per year = 50 years

 

    It should be clear that if these numbers are correct, that we will NOT be consuming 30 billion barrels of petroleum in the year 2058.

 

    If you want to dive into the methods of projection, there are at least 10 books on the subject. I have presented the peak oil problem in the simplist possible terms. Of course, there is much argument over the exact numbers, and the exact amount of petroleum consumed per year, but even given the most generous projections we still have a very limited supply of petroleum.

 

    That said, there are some widely varying opinions of what the future world will be like. They vary from the optimistic to the downright gloom and doom scenarios. For this reason, those who study peak oil are sometimes called "doomers," and they are compared to "chicken little" in the children's story. However, not all peak oil folks are doomers. Certainly some frightening scenarios are conceivable, but no one can say for sure what will happen.

 

    There are no replacements for petroleum. There are some substitutes or so-called alternatives, but they each have their drawbacks. I am not going to go through them at this time, but suffice it to say that there is no current technology that can perfectly replace consumption of petroleum at the current scale of usage.

 

         

That is true that oil will be hard to replace, but yet prior to the invention of the internal combustion engine it was hard to imagine gaining a great deal of energy from highly mobile (and small) energies for anything. Most 'work' had to be done in a place - running water or wind - or by living creatures. Malthusians always point to the cliff and it rarely comes (and when it does it is usually a bug that does that big work of murder).

Well also, it is not JUST that you have that amount of oil left. You have to take into account the amount of oil it will take to get to the oil remaining in the ground. Towards the end of the hypothetical (but not really all that hypothetical if you look at current trends) bell curve of peak oil, it becomes not even worth the amount of oil left in the ground. Sure we can come up with clever ways to extract and "boost" production but in the end you have you give up energy to get energy back, and that's where it gets slippery on the right hand side of the slope.

^True, and that's where the economics of everything plays a hand.  There are tons of wells that were sealed up when the 'easy' oil was done.  Once the price is right these oils will be tapped again.  I think there will probably be a relatively slow increase in the price of oil over the next 30 years (after the initial jump back to $150ish a barrel) which should lead to the development of alternatives.  And unlike the last transportation revolution (IC engine) I believe that the next revolution will lead to a number of alternatives... not one common fuel.  I can see the leader being electric, electric hybrids, natural gas, and probably bio-diesel for trucking, shipping, and freight rail.

Also, as an oil field ages, it doesn't just stop producing suddenly. Its flow diminishes in pressure and volume, and it take more money keep a field as productive. Soon, the financial return is no longer there and, even though there may still be oil left in the field, it is too difficult and expensive to recover. So just because we may have 1.5 trillion barrels left, doesn't mean we'll be able to recover all of it. Indeed, perhaps 10-20 percent may not be recoverable, according to some estimates.

I can see the leader being electric, electric hybrids, natural gas, and probably bio-diesel for trucking, shipping, and freight rail.

 

Yeah, but where do you get those? My understanding is that natural gas and petroleum are produced from the same pockets. Once one goes, the other will go with. natural gas is just vaporized petroleum right? Electric would have to come from coal, mostly. Which is also kind of in the same boat. It may not "peak" as soon as oil, but it won't be too long after.

plenty of coal, problem is you 1.) can't really use it for vehicle fuel 2.) you cook the planet

As to natural gas, there is some natural gas in the oil, but there are also plenty of standalone nat gas fields - in fact the US has quite a bit more nat gas than oil left in the ground. The problem with nat gas is transit - compared to oil. It also can't really but used for all the other petro uses like plastic.

    "That is true that oil will be hard to replace, but yet prior to the invention of the internal combustion engine it was hard to imagine gaining a great deal of energy from highly mobile (and small) energies for anything."

 

    Other forms of hydrocarbons, such as wood, animal fats and oils, have been available for centuries, and they were well known as sources of energy. There are stories of steamboat races where they used lard for fuel. Lard make a great fuel, but it is expensive, and therefore used only sparingly. The discovery of petroleum provided an inexpensive fuel, which in turn made internal combustion engines affordable. 

 

  Petroleum is projected to peak in 2008 +/- 5 years, Natural gas in 2015+/- 10 years, and coal in 2100 +/- 50 years.

 

    Coal is the largest source, and also the least predictable. The historical trend for coal does not graph as a smooth curve as petroleum does.

"Malthusians always point to the cliff and it rarely comes"

 

What Malthus actually proposed is that population is limited by the environment, not the other way around.

 

 

 

 

 

Oil out with a bang with 14% spike

Crude prices rally near the close of trade as Russia moves to cut off natural gas supplies to Ukraine.

By Ben Rooney, CNNMoney.com staff writer

Last Updated: December 31, 2008: 5:22 PM ET

 

http://money.cnn.com/2008/12/31/markets/oil/?postversion=2008123115

 

NEW YORK (CNNMoney.com) -- The price of oil jumped Wednesday, capping a volatile year with a swing of $7 from the session low to the close, as investors responded to news of a possible supply disruption in Europe.

 

Light, sweet crude for February delivery rose $5.57, or 14.2%, to settle at $44.60 a barrel on the New York Mercantile Exchange.

.....

Here's an example of why I don't get the end is near, thanks to peak oil. There's just no way these alternatives can save the day? 50 years seems to be the time frame. Sounds like they're well on their way with jet fuel.

 

Someone mentioned Mexico will run out of oil in 12-18 months. That should be a good test to the theory. If their wrong, we'll make them fight the drug kingpins with a pop gun.

 

Airline Flies a 747 on Fuel From a Plant

By BETTINA WASSENER, Published: December 30, 2008

 

Air New Zealand tested a jet fuel made from the jatropha plant on Tuesday as the airline searches for an affordable and environmentally friendly alternative to crude oil. Unlike other biofuel crops like soybeans and corn, jatropha needs little water or fertilizer and can be grown almost anywhere — even in sandy, saline or otherwise infertile soil. Each seed produces 30 to 40 percent of its mass in oil, giving it a high per-acre yield, specialists said.

 

The International Air Transport Association, which represents 230 airlines, wants its members to use 10 percent alternative fuels by 2017. The association has the goal that airlines will be able to fly carbon-free in 50 years, with the help of technologies like fuel cells and solar energy.

 

To read more: http://www.nytimes.com/2008/12/31/business/31air.html?scp=1&sq=jet%20fuel%20test&st=Search

Should it flow in the quantities necessary to make a difference, at what price will this biofuel be available? What energy inputs are necessary to make this biofuel? What are the environmental effects from the growth of this biofuel?

 

Hope is great, but when hope involves natural resources, hope is inherently limited by the constraints of this planet.

"The end is near, thanks to peak oil."

 

Please don't say things like that, implying that peak oil forumers are calling for the end of the world.

 

There is no doubt that the so-called alternatives are available. The question is, in what quantities are they available?

^Agreed.  We're not predicting the end of the world, not even James H. Kunstler. 

 

And, KJP is right.  Whenever a biofuel or some other alternative energy story comes out, someone jumps on it and says something to the effect of "See, the peak oilers are wrong".  More depth of thought is necessary. 

 

Peak Oil is about the global peak in cheap, easy, high energy returned on energy invested oil.  Let's clear this up here: 

 

1.  All forms of heavy oil, Tar Sands, Oil Shales, etc have very low energy returned on energy invested. 

2.  When it comes to biofuels, even the best have much lower energy return on energy invested than the cheap, easy oil we've been dependent upon for 150 years and with some, the energy returns are negative.  Plus we can really only justify the use of those fuels that don't compete with food production, and not just the crop type, but whether or not we need to grow it where food crops should be grown instead.  This eliminates the potential of biofuels to replace oil use as we know it.  We will use biofuels, but other things will have to change significantly-- particularly our mobility choices and the way we inhabit the landscape. 

 

3.  In light of #2 above, it's inappropriate to just assume we can switch out oil for biofuels and have life go on as it has been with respect to western world levels of driving

 

Human life and human society is not going to end because of peak oil, but it is going to change radically.  Will there be difficulties?  Yes, to a degree because radical changes are seldom easy. But, many of the changes will ultimately be good... better for people and the planet.  The key will come with making the right decisions.  Making the assumption in #3 would be one of the wrong decisions.

 

I don't agree that we'll be able to maintain automobile use at the levels Americans are accustomed/forced to, but in the video below, Amory Lovins makes very valid points, particularly about energy efficiency, the huge potential of which is almost always missed in the mainstream media:

 

 

 

 

 

The article below about passive solar homes being built in Germany that don't require a furnace is also interesting (and would be one of the rare exceptions to my statement above about the mainstream media):

 

No Furnaces, but Heat Aplenty in "Passive Houses"

http://www.nytimes.com/2008/12/27/world/europe/27house.html?_r=3&hp=&pagewanted=all

 

 

Very interesting video! TED is the greatest.

 

Along the lines of passive homes, this looks very nifty. . .

 

Solar Panel Windows in Maybe Three Years

http://web.mit.edu/newsoffice/2008/solarcells-0710.html

The best solution to our energy woes finally gets some love by a respected publication....

 

http://www.time.com/time/magazine/article/0,9171,1869224-1,00.html

 

Wasting Our Watts

By Michael Grunwald Wednesday, Dec. 31, 2008

 

This may sound too good to be true, but the U.S. has a renewable-energy resource that is perfectly clean, remarkably cheap, surprisingly abundant and immediately available. It has astounding potential to reduce the carbon emissions that threaten our planet, the dependence on foreign oil that threatens our security and the energy costs that threaten our wallets. Unlike coal and petroleum, it doesn't pollute; unlike solar and wind, it doesn't depend on the weather; unlike ethanol, it doesn't accelerate deforestation or inflate food prices; unlike nuclear plants, it doesn't raise uncomfortable questions about meltdowns or terrorist attacks or radioactive-waste storage, and it doesn't take a decade to build. It isn't what-if like hydrogen, clean coal and tidal power; it's already proven to be workable, scalable and cost-effective. And we don't need to import it.

 

This miracle juice goes by the distinctly boring name of energy efficiency,

 

............

 

When President Clinton was campaigning for Senator Hillary Clinton in the Kirtland HS gymnasium, a major focus of his speech was efficiency and a jobs program to refit homes, and commercial and public buildings.

 

The message is out there.

http://www.worldchanging.com/archives/009304.html

 

Choosing What Our Cities Will Look Like in a World Without Oil

Sarah Kuck

January 13, 2009 5:58 PM

 

As we draw nearer to reaching the point of Peak Oil, it benefits us to imagine what our cities will look like in a world without oil. Does this conjure up images of cities turned into urban farms just to produce enough food for us all? Do we devote all our energy to growing, bartering and trading the food we grow? Or will the city become divided, with the wealthy moving to the center while higher costs of living force lower-income families to the outer-ring suburbs, where access to goods, services and transport will be limited?

 

If we start now, we can choose what we want our cities to look like in the future. We can make them the resilient, sustainable centers of culture, justice, art and creativity that we hope they will become.

 

.........

This is nuts....

 

http://www.bloomberg.com/apps/news?pid=20601072&sid=aZ.fkHAp0gPo&refer=energy

 

Morgan Stanley Said to Seek Supertanker to Store Oil

 

By Alaric Nightingale and Todd Zeranski

 

Jan. 15 (Bloomberg) -- Morgan Stanley is seeking a supertanker to store crude oil, joining Citigroup Inc. and Royal Dutch Shell Plc in trying to profit from higher prices later in the year, four shipbrokers said.

 

The bank has yet to find a suitable vessel, said one of the brokers, all of whom asked not to be identified because the information is private. Carlos Melville, a spokesman for Morgan Stanley in London, declined to comment.

 

“There’s a lot of people looking for storage,” Denis Petropoulos, London-based head of tankers at Braemar Shipping Services Plc, the world’s second-largest publicly traded shipbroker, said by phone.

 

.........

That's a return on investment I would do if I could!

No doubt. Look at NYMEX oil futures prices. They're priced at $80 per barrel for 2016.

 

But you can invest in oil futures. Buy shares in a commodity tracking fund. I believe about half of its value is indexed to oil futures.

http://www.clipsandcomment.com/2009/01/14/more-evidence-that-peak-oil-is-a-reality-just-around-the-corner/

 

More Evidence That Peak Oil Is A Reality Just Around the Corner

January 14, 2009 by Pelikan

 

In the last month or so there have been two very public indications that not even the Middle East’s oil states are counting on endless supplies of the black gold which in the space of one or two generations moved their economies from the 18th century to modernity.

 

......

I would say that is funny. But, it's scary.

 

Most people though it would probably be a big deal to become independent from the middle east oil, looks like it is happening for us.

http://www.energytribune.com/articles.cfm?aid=1238

 

Posted on Jan. 20, 2009

 

By Michael J. Economides

 

Oil Price Over $100, in a Blink

 

The Cassandras are out in force these days. Some are true believers. Others are masochistic oil men. They claim that the recent price of oil -- at almost $150 -- was a “spike” fomented by speculators. And now that the oil price is down, it will never go over $100 again, it may even go down to $10 or it will stay at $30, forever.

 

Some of these analysts have written for this publication. How US-based speculators, as blamed by a recent TV show, can cause the wild ride towards $150 oil, is mystifying. This was supposed to happen while world oil consumption was more than four times that of the US. Big, bad oil is no longer blamed for the price hike?

........

"Most serious oil analysts see a global peak as still being some way away, perhaps several decades," Mills said.

Then I guess there aren't too many "serious oil analysts." --KJP

 

 

http://www.business24-7.ae/articles/2009/2/pages/02112009_2605ba6d866a4f20ae95fcbf54cb6ca5.aspx

 

Global oil production will decline further: Merrill Lynch 

By Shashank Shekhar  on Wednesday, February 11, 2009

 

Global oil production decline rate is set to accelerate in the coming years, according to a new research report.

 

"The global decline rate has averaged at least 4.5 per cent year-on-year in recent years. These rates, however, could accelerate further over the next few years," Merrill Lynch said in its recent update.

 

The New York-based financial advisory company produced several reasons in support of its argument.

 

It blamed the emphasis on developing small oil fields in past years and lack of regular investments for the expected decline.

 

......

This little piece of information by itself annihilates the peak oil theory.

 

3 to 4.3 Billion Barrels of Technically Recoverable Oil Assessed in North Dakota and Montana’s Bakken Formation—25 Times More Than 1995 Estimate—

Released: 4/10/2008 2:25:36 PM

 

Reston, VA - North Dakota and Montana have an estimated 3.0 to 4.3 billion barrels of undiscovered, technically recoverable oil in an area known as the Bakken Formation.

 

A U.S. Geological Survey assessment, released April 10, shows a 25-fold increase in the amount of oil that can be recovered compared to the agency's 1995 estimate of 151 million barrels of oil.

 

http://www.usgs.gov/newsroom/article.asp?ID=1911

It would only annihilates the peak oil theory if we found out that oil was actually produced between the '95 estimate and the recent estimate.  Otherwise, we are still dealing with a non renewable resource.

It would only annihilates the peak oil theory if we found out that oil was actually produced between the '95 estimate and the recent estimate.  Otherwise, we are still dealing with a non renewable resource.

 

Hasnt happened:

 

"The Elm Coulee oil field in Montana, discovered in 2000, has produced about 65 million barrels of the 105 million barrels of oil recovered from the Bakken Formation."

 

Due to these new discoveries the peak will not be as sharp as some have predicted, but it will certainly come.  Any new oil discovery is a very good thing, but that doesn't mean we should ignore the fact that EVENTUALLY we will run out and need to have alternatives in place to avoid a total meltdown of society.

 

In any case it's very good that these discoveries have been made in the US.

BTW, 75,000 barrels per day of production from Bakken is insignificant when the U.S. consumes 20 million barrels per day. We often forget the immensely hugely gigantically large amounts of oil we consume. So here's another view......

 

The Bakken Formation: How Much Will It Help?

Posted by Gail the Actuary on April 26, 2008 - 9:00am

Topic: Supply/Production

Tags: bakken, bakken shale, williston basin

 

This is a post by Piccolo, a petroleum engineer working in the petroleum industry.

 

The Bakken formation in North Dakota and Montana has generated a lot of buzz in the past year. Reserve numbers in the billions of barrels, even tens or hundreds of billions show up in press reports and blogs. Now the USGS has weighed in with a comprehensive assessment of the resource. So just how much will this oil accumulation help the world's largest importer of oil? Is it time to relax or is this just another small blip in the long-term decline of domestic production? We'll examine these questions and others below the fold, using data from the IHS database.

 

Continue reading at:

http://www.theoildrum.com/node/3868

Due to these new discoveries the peak will not be as sharp as some have predicted, but it will certainly come.

 

It won't be a sharp as some have predicted assuming that we still go on to undertake the sorts of conservation initiatives that have been been more widely discussed by public because of the growing public awareness of peak oil.  If we as a people say, "look at all that oil in Montana, I'm going out and getting an Escalade!", then we will still come to that same peak, just slightly later.

^Well, I think the peak will be flattened due to the market price of oil.  We saw demand drop when oil got over $3 a gallon and this type of consumer reaction should keep the world oil markets from freeking the fonk out.  I'm very confident that as the price of oil goes up more and more alternatives will come online.  I don't think a crisis is imminent and I am actually very confident in our ability to deal with dwindling oil supplies.

Well, it wasn't the markets "freaking the fonk out" when gas prices rose modestly to $4, but it was more of the media overhyping the effects of $4. People going hungry! Vehicles that people could no longer afford to drive! Commuters stranded!

 

Yeah, breaking that down, it was: a) People were not going hungry, but transportation cost increases led to some items having slightly higher prices. Not a deal breaker. b) SUV's were more costly to fill up, but you heard not a peep from those driving fuel efficient vehicles, mopeds or those who chose to ride a bike or commute by bus. c) Commuters stranded? Those who live in the suburbs, 30 miles from their workplace?

 

That's not bad. Now, if prices rose to $6 or $7 from today's average prices (~$2), then we might see more of the panic, but it would be much more subdued.

 

  Peak oil is not really about the price of gasoline, nor about the short term fluctuations. Peak oil is about the long term trend in oil consumption.

 

    We don't know all the answers, but we think we see the broader picture:

 

    A person born in 1970 and living 80 years will see two thirds of the world's petroleum consumed in his lifetime.

 

    Around 2040 there will be about half of the daily oil consumption available compared to what is available today.

 

    There are no substitutes for petroleum.

Matt Simmons:  Oil Price Shock in 3-9 months:

http://www.reuters.com/article/reutersComService_3_MOLT/idUSTRE52P2D620090326

 

Financier sees oil shock from credit crunch

Thu Mar 26, 2009 8:56am EDT

 

By Christopher Johnson

 

LONDON (Reuters) - The global financial crisis and collapse in the oil market have stalled vital investment in oil exploration and production and are likely soon to lead to a sharp spike in prices, an energy consultant and financier says.

 

Matt Simmons, founder of Houston-based investment bank Simmons & Co, argues the underlying rate of decline of the world's aging oilfields is as much as 20 percent a year and only high levels of investment can reduce that to single digits.

 

With credit tight and oil prices almost $100 a barrel below their highs last year, oil companies are unable to sustain previous levels of spending and the result is falling production, he said in an interview on Thursday...

 

.........

Gildone, I know it's a big story, but you posted five of them! I deleted four...

http://www.nytimes.com/2009/03/27/business/energy-environment/27oil.html?_r=1&th&emc=th

 

March 27, 2009

Rising Fear of a Future Oil Shock

By JAD MOUAWAD

 

Sharp reductions in investments and low oil prices could curb future supplies by almost eight million barrels a day within the next five years, according to a study scheduled for release Friday, the latest warning that the world could face a new energy shock when the economy picks up.

 

The report by Cambridge Energy Research Associates, an oil consulting firm, said that the potential drop in production capacity is a “powerful and long-lasting aftershock following the oil price collapse.”

 

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A shock is a real threat but there is a lot of oil sitting around right now that was brought up last summer. Nonetheless, finding a new balance of demand, supply, price, and economic growth is at the top of the list for the future.

I think what Simmons is getting at is that depletion is catching up due to lack of investment.  Yes, there is a lot of oil sitting around right now, but as depletion catches up, those stocks well diminish.  I think his 3-9 month estimate has to do with how long those stocks will last.  And, since investment in drilling has plummeted, we're not doing a good job of maintaining the plateau we've been on for nearly 4 years now. 

 

I often wonder how much of the Saudi's "production cuts" are really just net depletion:  Additional drilling they have done (mostly heavy oil) minus depletion in Ghawar

 

 

A shock is a real threat but there is a lot of oil sitting around right now that was brought up last summer.

 

Yes, there's more than 80 million barrels of oil sitting in ships docked or just floating out at sea throughout the world! Can you imagine that?? 80 million barrels of oil!! What an incredible amount...

 

Ooops. That's just one day's supply.