Peak Oil: The Sick Myth/Peak Oil Crisis

[Garbarsardar]

By some estimates, there will be an average of two-percent
annual growth in global oil demand over the years ahead,
along with, conservatively, a three-percent natural decline
in production from existing reserves.That means by 2010 we
will need on the order of anadditional 50 million barrels a
day.

Dick Cheney, 1999


Will there be a peak oil crisis? And is the US administration aware of the fact?

An increasing number of theorists believes some peak in world oil production has already occurred. After Hurricane Katrina, Saudi Arabia admitted that it simply could not increase production to make up for the loss of Gulf of Mexico oil rigs. This was widely believed, albeit speculatively, to be the beginning of a final oil crisis, in which there will be no choice but to radically curtail the use of oil.

Nor is the crisis restricted to oil. As natural gas supplies are coextant with oil in many places, it too may be running out, unless new sources like coalbed methane can be exploited.

Oil will not just "run out" because all oil production follows a bell curve. This is true whether we're talking about an individual field, a country, or on the planet as a whole.

Oil is increasingly plentiful on the upslope of the bell curve, increasingly scarce and expensive on the down slope. The peak of the curve coincides with the point at which the endowment of oil has been 50 percent depleted. Once the peak is passed, oil production begins to go down while cost begins to go up.

In practical and considerably oversimplified terms, this means that if 2000 was the year of global Peak Oil, worldwide oil production in the year 2020 will be the same as it was in 1980. However, the world’s population in 2020 will be both much larger (approximately twice) and much more industrialized (oil-dependent) than it was in 1980. Consequently, worldwide demand for oil will outpace worldwide production of oil by a significant margin. As a result, the price will skyrocket, oil-dependant economies will crumble, and resource wars will explode.

But what are the risks from this:

The issue is not one of "running out" so much as it is not having enough to keep our economy running. In this regard, the ramifications of Peak Oil for our civilization are similar to the ramifications of dehydration for the human body. The human body is 70 percent water. The body of a 200 pound man thus holds 140 pounds of water. Because water is so crucial to everything the human body does, the man doesn't need to lose all 140 pounds of water weight before collapsing due to dehydration. A loss of as little as 10-15 pounds of water may be enough to kill him.

In a similar sense, an oil-based economy such as ours doesn't need to deplete its entire reserve of oil before it begins to collapse. A shortfall between demand and supply as little as 10-15 percent is enough to wholly shatter an oil-dependent economy and reduce its citizenry to poverty.

The effects of even a small drop in production can be devastating. For instance, during the 1970s oil shocks, shortfalls in production as small as 5% caused the price of oil to nearly quadruple. The same thing happened in California a few years ago with natural gas: a production drop of less than 5% caused prices to skyrocket by 400%.

So was the Iraq war and the whole US policy in the middle east a ill-implemented response to these concerns?

This was the conclusion of the comission appointed by DC on the resource short fall:

The most significant difference between now and a decade
ago is the extraordinarily rapid erosion of spare capacities at
critical segments of energy chains. Today, shortfalls appear
to be endemic. Among the most extraordinary of these
losses of spare capacity is in the oil arena.

Sources:1 23

[JAN]

Interesting perspective on the possible future economic implications of Katrina in today's LA Times.

http://www.latimes.com/news/opinion/...?track=tothtml

Any thoughts?

JAN.

[Erik]

Will there be a peak oil crisis? And is the US administration aware of the fact?

The big oil companies have been expecting a peak in global oil production for years now.
This is why they did't invest in more refining capacity.
Why build more refineries now if the bottleneck wil be at oil extraction in the near future?

And did the US government know?
Of course, many of them worked for the oil industry.

[First Crusader]

The big oil companies have been expecting a peak in global oil production for years now.
This is why they did't invest in more refining capacity.
Why build more refineries now if the bottleneck wil be at oil extraction in the near future?

And did the US government know?
Of course, many of them worked for the oil industry.

Very true. Investing in more capacity would mean bankruptcy in the event of a peak.

[Rowan11088]

Well not to downplay the significance of this for the world, but for the U.S. specifically I don't think it's going to be as bad as people say. Our economy is actually much less oil-dependent than those of developing and industrial nations. I'd be more worried about, for example, China. Note this is coming from someone with only a taste of economic knowledge, but AFAIK our economy is based more on services than any other economy world-wide, and such businesses can work with any kind of industry in any country, whether it be oil, gas, hydrogen, land, or nuclear based. Sure the loss of oil industries will cripple everyone to some extent, but we have so much non-oil specific capital just lying around right now we'll have investors starting up every possible energy alternative hoping for a big profit, and I think within a few decades the problem will be solved for all but a few unfortunate countries who get left behind.

[Tiwaz]

Rowan, do you realise how much oil is used in every daily item you have?

Shampoo bottle, house heating (energy generation in general), cars... Simply put, the service economy would run out of ability to provide any services if there wasn't oil around. And it is not as easy as you think to generate alternatives for oil. Unfortunately in this world no matter how much money you pour into something it doesn't necessarily make it possible.

In my opinion, which is just another opinion of economical idiot, so called "service economy" is one of the biggest bubbles in economics and one which is most likely to collapse when trouble appears.

[Rowan11088]

Rowan, do you realise how much oil is used in every daily item you have?

Shampoo bottle, house heating (energy generation in general), cars... Simply put, the service economy would run out of ability to provide any services if there wasn't oil around. And it is not as easy as you think to generate alternatives for oil. Unfortunately in this world no matter how much money you pour into something it doesn't necessarily make it possible.

In my opinion, which is just another opinion of economical idiot, so called "service economy" is one of the biggest bubbles in economics and one which is most likely to collapse when trouble appears.

Are you sure you know what services really mean? Sure shampoo and cars depend on oil, but more often than not both of those things are produced abroad, along with almost all of the cheap everyday things we use. America has more people than most involved in providing financial services, insurance, doctors, lawyers, etc. These people will have jobs as long as they are qualified enough, they don't depend on oil. Obviously a total worldwide eocnomic collapse will affect them too, but I think that's an unlikely scenario. As long as other countries adapt to the loss of oil, the U.S. has to do relatively little I believe but continue to provide services to those other countries and our own citizens.

[Tiwaz]

Are you sure you know what services really mean? Sure shampoo and cars depend on oil, but more often than not both of those things are produced abroad, along with almost all of the cheap everyday things we use. America has more people than most involved in providing financial services, insurance, doctors, lawyers, etc. These people will have jobs as long as they are qualified enough, they don't depend on oil. Obviously a total worldwide eocnomic collapse will affect them too, but I think that's an unlikely scenario. As long as other countries adapt to the loss of oil, the U.S. has to do relatively little I believe but continue to provide services to those other countries and our own citizens.

But how many of these services you can provide WITHOUT such cheap source of goods?

Everything depends on manufacturing. Lawyers can sue one another until their heads explode and without outside input of resources they are not going to do a thing.
When oil based products get more and more expensive the lawyers will notice their income being reduced by costs of life. As this happens their options are to either charge more or accept cut in income. Odds are they will charge more.
Result will be that they will outprice themselves as service providers.
You can already see this process in for example IT professionals. They are being replaced by cheaper indian workers who do nearly same work for fraction of price. China produces thousands and thousands of engineers every year who do same work as western engineer for what can be considered peanuts.


Also, much of the services in economy tend to depend on foreign investments. That again depends on US economical status. For example financial services and insurances depend on US economical status overall which is rather fickle thing, and IT and other "qualification" industries already are abandoning the west. USA is unable to hold current economical status for much longer, and when shift to other markets comes the investments which held up that part of service economy will go with it. And in case you haven't noticed large users of oil like USA (USA uses huge amounts of oil and oil related products even if percentage of overall energy production is not that impressive) will feel the pain.

It is problem of both USA and Europe and has all the requirements of resulting in economical disaster.

[JP226]

I don't know how many times Ihave to say this, but, ahem: WE DON'T EVEN KNOW HOW OIL IS PRODUCED MUCH LESS WHEN IT WILL RUN OUT!!!!!!!!

I hate it when governments and idiots, which is one in the same, make policy on a theory, or idea. It's like Kyoto, We don't even know if we can destroy the enviroment, but watch out we're gonna regulate it and tax it.

[JP226]

In my opinion, which is just another opinion of economical idiot, so called "service economy" is one of the biggest bubbles in economics and one which is most likely to collapse when trouble appears.

not this again...

the service economy is not going to collapse. It will be phased out one day by the new and upcoming "information economy," but it won't collapse.

Saying that oil will do it... Even assuming that the "peak oil" theory is true, you still won't run out of oil. Prices will increase to a point that it will force the market to develope new technologies and develope a new form of fuel or make our currect usage that much more efficient or what have you. That's how the world works, that's how economies work. A market doesn't just run flat out and hit a wall, it veers around problems. Maybe on paper we can run out of this or that, but with teh advancement of technology and ideas we have an inexhaustible supply of energy.

and you can already see this happeneing. In the US we are sitting on trillions of barrels of oil locked in opil shale. New technologies are being developed to where we can refine and sell it at about 25 dollars a barrel. Canada is sitting on about another trillion. Ontop of all this, a few reserves are declaring they have more oil than previously believed. Saudi Arabia for example announced it's reserves are about triple to what was previously believed back in 04. Then you have the more and more frequent cases of oil reserves filling back up.

Anyway you can all take it or leave it, but you can't deny the fact that their is so much uncertainity. We don't know what is going on down there or how much oil is hiding all over the world. Everytime we come up with a guess, we have to revise a few years down the road, and usually it's a larger revision.

[Erik]

There are lots of uncertainties.
But it is certain oil companies aren't building any new refineries.
So it's certain there isn't going to be more refined oil in the near future.

Maybe the oil companies are wrong, and they can produce much more oil than they predicted.
But this is very unlikely.

[JP226]

There are lots of uncertainties.
But it is certain oil companies aren't building any new refineries.
So it's certain there isn't going to be more refined oil in the near future.

Maybe the oil companies are wrong, and they can produce much more oil than they predicted.
But this is very unlikely.

well we can come up with many reasons why we haven't produced more refineries. It could be anyhting from peak oil to and undershot demand curve. I mean maybe the companies were caught with there pants down by this sudden deamnd increase in oil. It could be bogus legislation passed on junk science. Who knows. Today we are building more refineries and hoepfully within 5 to 10 years the oil squeeze will begin to loosen. Speaking of junk science hampering prodcution, back in 95 enviromentalists prevented the drilling anwar alaska. Within 5 years we were to have an additional 1,000,000 barrels of oil coming into the lower 48. Today, our main shortages is caused by a loss of 500,000 barrels a day from the gulf. Anyone not think those 1,000,000 a day would have helped just a tad?

[Garbarsardar]

Are you sure you know what services really mean? Sure shampoo and cars depend on oil, but more often than not both of those things are produced abroad, along with almost all of the cheap everyday things we use. America has more people than most involved in providing financial services, insurance, doctors, lawyers, etc. These people will have jobs as long as they are qualified enough, they don't depend on oil. Obviously a total worldwide eocnomic collapse will affect them too, but I think that's an unlikely scenario. As long as other countries adapt to the loss of oil, the U.S. has to do relatively little I believe but continue to provide services to those other countries and our own citizens.

Approximately 10 calories of fossil fuels are required to produce every 1 calorie of food eaten in the US.

The size of this ratio stems from the fact that every step of modern food production is fossil fuel and petrochemical powered:

1. Pesticides are made from oil;

2. Commercial fertilizers are made from ammonia, which is
made from natural gas, which will peak about 10 years
after oil peaks;

3. With the exception of a few experimental prototypes, all
farming implements such as tractors and trailers are
constructed and powered using oil;

4. Food storage systems such as refrigerators are
manufactured in oil-powered plants, distributed across
oil-powered transportation networks and usually run on
electricity, which most often comes from natural gas or
coal;

5. In the US, the average piece of food is transported
almost 1,500 miles before it gets to your plate. In
Canada, the average piece of food is transported 5,000
miles from where it is produced to where it is consumed.



It's not just transportation and agriculture that are entirely dependent on abundant, cheap oil. Modern medicine, water distribution, and national defense are each entirely powered by oil and petroleum derived chemicals.

In addition to transportation, food, water, and modern medicine, mass quantities of oil are required for all plastics, all computers and all high-tech devices.


1. The construction of an average car consumes the energy
equivalent of approximately 27-54 barrels, which equates
to 1,100-2,200 gallons, of oil. Ultimately, the
construction of a car will consume an amount of fossil
fuels equivalent to twice the car’s final weight.

2. The production of one gram of microchips consumes 630
grams of fossil fuels. According to the American Chemical
Society, the construction of single 32 megabyte DRAM
chip requires 3.5 pounds of fossil fuels in addition to 70.5
pounds of water.

3. The construction of the average desktop computer
consumes ten times its weight in fossil fuels.

4. The Environmental Literacy Council tells us that due to
the "purity and sophistication of materials (needed for) a
microchip, . . . the energy used in producing nine or ten
computers is enough to produce an automobile."

For more info:
Eating fossil fuels

[JP226]

Tiwaz you are just giving examples of the new global economy, not an economic collapse. What's wrong with using indians to do the same work that we get over here for half the price? Nothing, infact it means more people now have the purchasing power to buy your goods. You can even look at it this way, as the northern states grew in wealth, they began to administer and coordinate work in the south and midwest. As the west is growing in wealth, we are beginning to administer and coordinate work througout the rest of the world. It is the new global economy, not an economic collapse.

it's called the priniciple of comparative advantage, you do what you are good at, (manufacturing) we'll do what we are good at (administration) and we both win as long as we aren't going to war. On that same note, the more interlocked we become, the less likely wars and conflict are going to pop up. In a sense we are seeing the next stage in humanity begin to rise, a very likely and possible new world order, or economic order.

[Felixion]

Peak oil, as some of you may know is a model origionally presented by Dr. Hubbert in the early 20th century. It proposes a bell curve that oil production will follow, eventually leading to the depletion of petroleoum. Why am I addressing this? Because it's almost sick. Peak Oil forums all across the web are riddled with people that are horrified, and profoundly affected by this backward, politically loaded, scientifically impossible scheme.

Every time oil prices rise for an extended period, the news media issue dire warnings that a crisis is upon us -- it's not!

Many factors are contributing to the currently high gas prices: limited refining capacity; political restrictions on development of new domestic sources of oil; reduced supply from several oil exporting countries due to political conflicts; limited supplies due to the actions of the oil cartel OPEC; and finally, increased demand for oil in China.

Dwindling supplies of oil are not a factor in the current price at the pump.

New technologies continually increase the amount of recoverable oil, and market prices -- which signal scarcity -- regularly encourage new exploration and development.

The history of the petroleum industry is one of predictions of near-term depletion, followed by the discovery of new oil fields and the development of technologies for recovering additional supplies.

Before the first U.S. oil well was drilled in Pennsylvania in 1859, petroleum supplies were limited to crude oil that oozed to the surface. In 1855, an advertisement for Kier's Rock Oil advised consumers to "hurry, before this wonderful product is depleted from Nature's laboratory."

Indeed, seven oil-shortage scares occurred before 1950. Predictions of an oil famine during the Arab oil embargo in the 1970s were followed by a glut of cheap oil. World oil production continued to increase throughout the 1990s. While prices have periodically spiked, oil prices fell to an inflation-adjusted 30-year low in 2001.

Estimates of the world's total oil endowment have continually grown faster than humanity can pump petroleum out of the ground. In 1920, the U.S. Geological Survey announced that the world's total endowment of oil amounted to 60 billion barrels. By 1950, the estimate had increased to around 600 billion barrels. The most recent estimate was of a 3,000 billion-barrel endowment.

By 2000, 900 billion barrels of oil had been produced. If world oil consumption continues to increase at an average rate of 1.4 percent a year, and no further resources are discovered and no improvements are made in the technology used to recover oil, the world's presently known supply will not be exhausted until 2056.

These estimates do not include unconventional oil resources that require additional processing to extract liquid petroleum.

Oil production from tar sands in Canada and South America would add 600 billion barrels to the world's supply, and rocks found in Colorado, Utah and Wyoming alone contain 1,500 billion barrels of oil. Worldwide, the oil-shale reserves could be as large as 14,000 billion barrels -- more than 500 years of oil supply at year 2000 production rates.

It is true that in the long run, an economy that uses petroleum as a primary energy source is not sustainable. However, sustainability is a chimera.

Every technology since the birth of civilization has been replaced as people devised better and more efficient technologies. The history of energy use is largely one of substitution. From wood and whale oil in the 19th century, to coal by the 1890s. Coal remained the world's largest source of energy until the 1960s.

No one can predict the future, but the world contains enough oil to last beyond 2100. Only fools would try to anticipate what energy sources our descendants will use that far in the future.

Over the next several decades the world likely will continue to see short-term spikes in the price of oil, but these will be caused by political instability and market interference -- not an irreversible decline in supply. - H. Sterling Burnett


Now, that article addresses the more "geological" side of things, let's look at the social and political impossibilities of this doomsday forecast. As was evident post Katrina and Rita, or "KatRita" as I like to call it. A disrupt in oil supplies for less than a month resulted in demand being curved to "below-year-ago-levels". A 30 cent bump in prices had that profound of an affect, the proposition that the slow process of oil depletion would not spark alternative energies to take hold is beyond reasonability.

Evidence of Artificial Scarcity:

http://www.prisonplanet.com/articles..._companies.htm

http://www.davesweb.cnchost.com/nwsltr64.html

http://politicalphysics.com/node/753

Necessity is the mother of invention.

So, in case there are any members here that have been anxious over this BS issue, take a sigh of relief and remember: Scary thing attract more people, more people = more $. Scaremongerers have been around for a long time, any idiot can get on their soap box and start preaching.

[Erik]

It's an interesting topic but there is already a thread about it:
http://www.twcenter.net/forums/showt...highlight=peak

Use the search function before you start a new thread.
Moderators: can this be merged?

[Rush Limbaugh]

It's an interesting topic but there is already a thread about it:
http://www.twcenter.net/forums/show...&highlight=peak

Use the search function before you start a new thread.
Moderators: can this be merged?

Your kidding right? How about the thread on gay marriage? Ill bet if you search you find 20 or 30 on that. The last post on this topic is two months old. Do you expect people to know that and drag up a thread that died that long ago?

[Erik]

Your kidding right? How about the thread on gay marriage? Ill bet if you search you find 20 or 30 on that. The last post on this topic is two months old. Do you expect people to know that and drag up a thread that died that long ago?

Yes, that's what the search function is for.

Everybody should watch this:
http://www.albinoblacksheep.com/flash/posting.php
Pefore they post for the first time.
(I am serious).

[Rush Limbaugh]

So again then where was your complaint on the gay marriage thread. Do you realise how many topics get repeated over and over again here?

[Nationalist_Cause]

Great. That still doesn't change the fact that eventually oil will be gone and the world economy will be largely screwed unless we find another energy source. But I guess we could just sit around and pretend like everything is ok, making baseless (and rather naive) comparisons to people in 1855 who knew almost nothing about oil, its worldwide quantity, and how reliant our civilization would eventually become on this form of energy.