Oil Price

[TTiger]

very intresting article about oil peak


Experts: Petroleum May Be Nearing Peak
by Matt Crensen


Could the petroleum joyride ? cheap, abundant oil that has sent the global economy whizzing along with the pedal to the metal and the AC blasting for decades ? be coming to an end? Some observers of the oil industry think so. They predict that this year, maybe next ? almost certainly by the end of the decade ? the world's oil production, having grown exuberantly for more than a century, will peak and begin to decline.

And then it really will be all downhill. The price of oil will increase drastically. Major oil-consuming countries will experience crippling inflation, unemployment and economic instability. Princeton University geologist Kenneth S. Deffeyes predicts "a permanent state of oil shortage."

According to these experts, it will take a decade or more before conservation measures and new technologies can bridge the gap between supply and demand, and even then the situation will be touch and go.

None of this will affect vacation plans this summer ? Americans can expect another season of beach weekends and road trips to Graceland relatively unimpeded by the cost of getting there. Though gas prices are up, they are expected to remain below $2.50 a gallon. Accounting for inflation, that's pretty comparable to what motorists paid for most of the 20th century; it only feels expensive because gasoline was unusually cheap between 1986 and 2003.

And there are many who doubt the doomsday scenario will ever come true. Most oil industry analysts think production will continue growing for at least another 30 years. By then, substitute energy sources will be available to ease the transition into a post-petroleum age.

"This is just silly," said Michael Lynch, president of Strategic Energy and Economic Research in Winchester, Mass. "It's not like industrial civilization is going to come crashing down."

Where you stand on "peak oil," as parties to the debate call it, depends on which forces you consider dominant in controlling the oil markets. People who consider economic forces most important believe that prices are high right now mostly because of increased demand from China and other rapidly growing economies. But eventually, high prices should encourage consumers to use less and producers to pump more.

But Deffeyes and many other geologists counter that when it comes to oil, Mother Nature trumps Adam Smith. The way they see it, Saudi Arabia, Russia, Norway and other major producers are already pumping as fast as they can. The only way to increase production capacity is to discover more oil. Yet with a few exceptions, there just isn't much left out there to be discovered.

"The economists all think that if you show up at the cashier's cage with enough currency, God will put more oil in ground," Deffeyes said.

There will be warning signs before global oil production peaks, the bearers of bad news contend. Prices will rise dramatically and become increasingly volatile. With little or no excess production capacity, minor supply disruptions ? political instability in Venezuela, hurricanes in the Gulf of Mexico or labor unrest in Nigeria, for example ? will send the oil markets into a tizzy. So will periodic admissions by oil companies and petroleum-rich nations that they have been overestimating their reserves.

Oil producers will grow flush with cash. And because the price of oil ultimately affects the cost of just about everything else in the economy, inflation will rear its ugly head.

Anybody who has been paying close attention to the news lately may feel a bit queasy at this stage. Could $5-a-gallon gas be right around the corner?

"The world has never seen anything like this before and so we just really don't know," said Robert L. Hirsch, an energy analyst at Science Applications International Corp., a Santa Monica, Calif., consulting firm.

Still, he added, "there's a number of really competent professionals that are very pessimistic."

The pessimism stems from a legendary episode in the history of petroleum geology. Back in 1956, a geologist named M. King Hubbert predicted that U.S. oil production would peak in 1970.

His superiors at Shell Oil were aghast. They even tried to persuade Hubbert not to speak publicly about his work. His peers, accustomed to decades of making impressive oil discoveries, were skeptical.

But Hubbert was right. U.S. oil production did peak in 1970, and it has declined steadily ever since. Even impressive discoveries such as Alaska's Prudhoe Bay, with 13 billion barrels in recoverable reserves, haven't been able to reverse that trend.

Hubbert started his analysis by gathering statistics on how much oil had been discovered and produced in the Lower 48 states, both onshore and off, between 1901 and 1956 (Alaska was still terra incognita to petroleum geologists 50 years ago). His data showed that the country's oil reserves had increased rapidly from 1901 until the 1930s, then more slowly after that.

When Hubbert graphed that pattern it looked very much like America's oil supply was about to peak. Soon, it appeared, America's petroleum reserves would reach an all-time maximum. And then they would begin to shrink as the oil companies extracted crude from the ground faster than geologists could find it.

That made sense. Hubbert knew some oil fields, especially the big ones, were easier to find than others. Those big finds would come first, and then the pace of discovery would decline as the remaining pool of oil resided in progressively smaller and more elusive deposits.

The production figures followed a similar pattern, but it looked like they would peak a few years later than reserves.

That made sense too. After all, oil can't be pumped out of the ground the instant it is discovered. Lease agreements have to be negotiated, wells drilled, pipelines built; the development process can take years.

When Hubbert extended the production curve into the future it looked like it would peak around 1970. Every year after that, America would pump less oil than it had the year before.

If that prognostication wasn't daring enough, Hubbert had yet another mathematical trick up his sleeve. Assuming that the reserves decline was going to be a mirror image of the rise, geologists would have found exactly half of the oil in the Lower 48 when the curve peaked. Doubling that number gave Hubbert the grand total of all recoverable oil under the continental United States: 170 billion barrels.

At first, critics objected to Hubbert's analysis, arguing that technological improvements in exploration and recovery would increase the amount of available oil.

They did, but not enough to extend production beyond the limits Hubbert had projected. Even if you throw in the unexpected discovery of oil in Alaska, America's petroleum production history has proceeded almost exactly as Hubbert predicted it would.

Critics claim that Hubbert simply got lucky.

"When it pretty much worked," Lynch said, "he decided, aha, it has to be a bell curve."

But many experts see no reason global oil production has to peak at all. It could plateau and then gradually fall as the economy converts to other forms of energy.

"Even in 30 to 40 years there's still going to be huge amounts of oil in the Middle East," said Daniel Sperling, director of the Institute of Transportation Studies at the University of California, Davis.

A few years ago, geologists began applying Hubbert's methods to the entire world's oil production. Their analyses indicated that global oil production would peak some time during the first decade of the 21st century.

Deffeyes thinks the peak will be in late 2005 or early 2006. Houston investment banker Matthew Simmons puts it at 2007 to 2009. California Institute of Technology physicist David Goodstein, whose book "The End of Oil" was published last year, predicts it will arrive before 2010.

The exact date doesn't really matter, said Hirsch, because he believes it's already too late. In an analysis he did for the U.S. Department of Energy in February, Hirsch concluded that it will take more than a decade for the U.S. economy to adapt to declining oil production.

"You've got to do really big things in order to dent the problem. And if you're on the backside of the supply curve you're chasing the train after it's already left the station," he said.

For example, the median lifetime of an American automobile is 17 years. That means even if the government immediately mandated a drastic increase in fuel efficiency standards, the conservation benefits wouldn't fully take effect for almost two decades.

And though conservation would certainly be necessary in a crisis, it wouldn't be enough. Fully mitigating the sting of decreasing oil supplies would require developing alternate sources of energy ? and not the kind that politicians and environmentalists wax rhapsodic about when they promise pollution-free hydrogen cars and too-cheap-to-meter solar power.

http://www.commondreams.org/headlines05/0528-03.htm

[psili]

I unfortunately Googled "peak oil", read the sites and got all sad.

[TTiger]

how much is the oil price in your town righ now?
here in quebec its between 1.06$ to 1.19$ per Liter

[rickholio]

Peeps been talking about peak oil since the 70s. Glad you're up to speed though.

[kektex]

I am aware of the timeline posted above but its still scary stuff...
I think everyone should read this article:
http://www.rollingstone.com/news/sto...player=unknown

[TTiger]

The Hubbert peak theory
have sleep probleme caused by the oil price?
read this theory and be scared to death

http://en.wikipedia.org/wiki/Peak_oil


or they this one it's nightmare time !!
THE END OF SUBURBIA: Oil Depletion and the Collapse of The American Dream
http://www.endofsuburbia.com


Since World War II North Americans have invested much of their newfound wealth in suburbia. It has promised a sense of space, affordability, family life and upward mobility. As the population of suburban sprawl has exploded in the past 50 years, so too has the suburban way of life become embedded in the American consciousness.

Suburbia, and all it promises, has become the American Dream.

But as we enter the 21st century, serious questions are beginning to emerge about the sustainability of this way of life. With brutal honesty and a touch of irony, The End of Suburbia explores the American Way of Life and its prospects as the planet approaches a critical era, as global demand for fossil fuels begins to outstrip supply. World Oil Peak and the inevitable decline of fossil fuels are upon us now, some scientists and policy makers argue in this documentary.

The consequences of inaction in the face of this global crisis are enormous. What does Oil Peak mean for North America? As energy prices skyrocket in the coming years, how will the populations of suburbia react to the collapse of their dream? Are today's suburbs destined to become the slums of tomorrow? And what can be done NOW, individually and collectively, to avoid The End of Suburbia ?

[slapass]

Before we all hide in a cave wouldn't we go nuke? I know it has tons of bad press and safety issues but I would prefer to grow at night thn give up the internet.

Imagine a dozen nuke plants for each state and an all electric society. Would we drive around on ethanol? Tons of stuff that makes zero sense at $20/barrel makes a lot of sense at $60bbl and beyond. Not to mention a global recession will even out oil usage real quick.

[JuiceMonkey]

cliff notes please

[High Quality]

I was actually going to post about this today.. I heard on the news last night all about how oil company stocks are the highest they have ever been... and oil prices are the highest since 1989 or something (inflation adjusted).

[TTiger]

about the end of suburbia The intro featured some hilarous old technicolor footage from the late 40's and 50's showing idealized images of the suburban nuke'you'lar family, complete with the paternalistic voice-over, that film from those days often had.

Following much the same thread of his, "The Geography of Nowhere", Kunstler, narrates from the era of the first suburban estates of the 1870's, to the railroad suburbs of the next 40 years and then the 1920's when the economy takes off largely on a frenzy of suburban development rudely interrupted by The Great Depression and WWII. Then there's footage of workers putting up subdivisions like mad from the late 40's on.

Much like Kunstler's authorial discussion of the issue, the film does not touch on the social and racial issues that fueled white flight to the suburbs following the race riots in the 50's, 60's and 70's. Perhaps that would enlarge the scope of the movie beyond a manageable scale, but still I find it annoying how little mention the role of race gets.

The film also did not really delineate the way in which the 1970's oil shocks differ from the coming of Peak Oil (They were a matter of politics, Peak Oil is geology). But there was a mention that in 1979, the Carter administration issued a doctrine stating the U.S. had a strategic interest in maintaining access to Middle East oil and that it should use it's military power to control and protect the oil.

Unlike John Kerry, the film clearly conveys it position on the Iraq war. Ruppert in particular says "Did you think Dick Cheney was kidding when he said ""It is a war that will not end in our lifetime.""?. Afghanistan and Iraq were just the beginning. Another commentator says, "We would not be in Iraq if it had no oil." Heinberg says, "We are living in the age of the most powerful empire in the history of the world: oil". He then unveils the PNAC for what it is - a plan for military domination of the world's remaining oil reserves.

The film also does a good job of discussing the peaking of natural gas as well and it's vital role in electricity generation. They cover the northeast blackout of 2003. The official explanation was that it was caused by a branch falling on a power line. In reality, it occured on the first super hot day of what had been a mild summer, at 4:30 pm when industrial, commercial, and residential AC demand overlaps. Here the film isn't so optimistic about the ability of supply to meet the future energy demands of the hot/cold midwest and super hot sunbelt. People didn't seem to learn anything from the blackout, i.e. how dependent they are on energy.

Without getting bogged down in detail, the film does a good job of explaining Hubert's Peak and why it entails consequences occuring long before we run out of oil. Kunstler says "We have a railroad system that not even Bulgaria would be proud of." He explains that no amount of renewables will allow us to continue running what were running now, the way we're running it. Biodiesel, ethanol etc. are net energy losers. We rely on tons of chemicals to grow large crops of corn. The energy involved in growing the corn and then converting it to ethanol, far exceeds the energy we can extract from the ethanol. The film mentions how the interstate highway system has encouraged sprawl along it's entire perimeter and how much money it costs to maintain it in good service.

The film also touches on New Urbanism with footage of some examples of it. It makes it clear that people will have to live more locally in the future.

Summation: The passivity inherent to a documentary presents the information in a form that American attention spans can digest. If PBS doesn't start playing this movie soon, we can be sure it has been taken over by the neocons. In the words of Carl Sagan: "What are conservatives conserving?" Not the environment or its resources, that's for sure.

For anyone who has read this review and remains skeptical of the urgency of its message:
Ask yourself a question: Do you have a mortgage on a house in the mid-suburbs or beyond that is less than half paid off? If the answer is yes, then do you think the responsibility of owing several hundred thousand dollars more, might possibly be biasing you to tune out any info that conflicts with an - everthing in the future is going to be much like the past - attitude toward reality?