Is the World Approaching the Inevitable Hubbert's Peak of Oil Production?

In summary: Hubbert's peak is a theory that predicts that the rate of production of a fossil fuel will reach a maximum after which it will decline.
  • #36
I merely think it is absurd for anyone to be so certain about their own abilities (or other people's abilities) to predict the future. Such certainties reveal an opinion clouded by ideology rather than objective analysis.

Continuous use of pejorative exclamations also undermine the validity of one's comments. Unfortunately, that is the type of speak we seem to be trained to hear.
 
Last edited:
Physics news on Phys.org
  • #37
It seems obvious that this topic does not warrant your attention for long so i will let this thread slip quietly below the bottom of this forum page and into oblivion.

My next post in this thread (unless there are new questions people might have)
will be "i told you so" once enough signs have become clear that even you might believe it.
 
  • #38
well it seems i did not have to wait all that long.
wish it gave me some pleasure but it does not.

i told you so.

http://www.cbc.ca/consumer/story/2007/07/09/oilshortage070709.html#skip300x250
 
Last edited by a moderator:
  • #40
The real problem here is our reliance on instable countries for oil. Countries such as those in the middle east have far too much control over our economy, and should one day their hate for us exceed their greed, the U.S. will be in trouble.

The "oil shortage crisis" is completely exaggerated, and will only be a problem in the long term (90+ years).

We get the false impression that our oil supply will be gone soon because middle eastern oil monopolies control supply, and thus, control prices. They accidently cut supply too much shooting up prices, and it sends everyone into a panic.

Ideally (for the oil monopolies) they want to keep supply at a level that maximizes profit, and keep's everyone's eyes on oil and not alternatives.

From the U.S. perspective, what needs to be done is more local oil drilling (especially off-shore) and research on alternatives. This is for the benefit of the short, and long term.
 
  • #41
brushman said:
The "oil shortage crisis" is completely exaggerated, and will only be a problem in the long term (90+ years).

From the U.S. perspective, what needs to be done is more local oil drilling (especially off-shore) and research on alternatives. This is for the benefit of the short, and long term.

This is an opinion. Can you back it up with some facts?

Even the most optimistic world agency is not talking about 90 years for an oil crunch. Although the optimists of course say the alternatives (despite their eroei's - energy returned on energy invested) will gallop to the rescue.

The set of readings should show that even the optimists are struggling to remain so now.
 
  • #42
This is an opinion. Can you back it up with some facts?

Actual supply statistics are polluted by corrupt oil monopolies so it's hard to judge how much oil there is exactly.

You must also take into consideration that new oil fields are being discovered, and new technology is allowing us new ways to mine and manufacture the oil.

http://www.wnd.com/index.php?pageId=59502
 
Last edited by a moderator:
  • #43
From your link, I was keeping a straight face until I read this at the end...

Finally, as WND recently reported, new scientific discoveries have produced important evidence supporting the abiotic theory of the origin of oil.

Scientists have recently reported abiotic liquid hydrocarbons exuding from the mantle of the Earth in fissures such as the Lost City Hydrothermal Field on the bottom of the Atlantic Ocean and abundant abiotic liquid methane found on Titan, the giant moon of Saturn, as found by the Cassini-Huygens mission jointly launched by NASA, the European Space Agency and the Italian Space Agency.

Traditional petro-geologists have maintained that oil is biological in origin, arising from organic material deposited in sedimentary soil.

The organic theory of the origin of oil has served as a logical underpinning of the tautology at the heart of the peak oil theory.

Only a finite amount of biological material was deposited in sedimentary soil capable of forming oil, so there has to be a finite amount of oil.

The abiotic theory suggests oil is formed naturally in the mantle of the Earth by chemical reactions such as are described in the Fisher-Tropsch equations the Nazis developed to make synthetic oil from coal prior to World War II.

The abiotic theory would suggest more deep-earth discoveries of oil should be forthcoming, especially with new technology to find and recover cost-effectively offshore oil.

And other Shell executives had other views even in 2008.

http://business.timesonline.co.uk/tol/business/economics/wef/article3248484.ece

"Shell estimates that after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand."

Jeroen van der Veer, CEO, Royal Dutch Shell
 
  • #44
apeiron, I don't see in any of your links a statement that we've passed peak oil and your 4th link down (which is from a Peak Oil newsletter, so can be considered to be on the pessimistic side) says that production will likely start to drop in 2014 and in 2015 will be between 20 and 35% higher than it is today. How do you reconcile that with the OP's claim (in post #5) that:
corra said:
The general consensus among now disinterested scientists
is that oil production will peak by 2010 at the latest.
...and what I quoted in post #13:
Campbell's critics, like Michael C. Lynch, argue that his research data is sloppy. They point to the date of the coming peak, which was initially projected to occur by the year 2000, but the date was pushed back to 2007 and later to 2010.
Seeing as how 3 years later, the date has been pushed back another 4 years, what does this mean for my general point that peak oil claims tend to be overblown.
 
Last edited:
  • #45
corra said:
I know the thesis is long but it is full of grim facts, so if you actually read it you would have noticed this.

"If the actions - rather than the words - of the oil business's major players provide the best gauge of how they see the future, then ponder the following. Crude oil prices have doubled since 2001, but oil companies have increased their budgets for exploring new oil fields by only a small fraction. Likewise, U.S. refineries are working close to capacity, yet no new refinery has been constructed since 1976. And oil tankers are fully booked, but outdated ships are being decommissioned faster than new ones are being built."

also you would have found this link embedded in the thesis.
http://www.corpwatch.org/article.php?id=12227
in which it confirms that statement.

also i find this statement to be interesting.

"In addition to lowering their investments in oil exploration and refinery expansion, oil companies have been merging as though the industry is living on borrowed time:"

December 1998: BP and Amoco merge;
April 1999: BP-Amoco and Arco agree to merge;
December 1999: Exxon and Mobil merge;
October 2000: Chevron and Texaco agree to merge;
November 2001: Phillips and Conoco agree to merge;
September 2002: Shell acquires Penzoil-Quaker State;
February 2003: Frontier Oil and Holly agree to merge;
March 2004: Marathon acquires 40% of Ashland;
April 2004: Westport Resources acquires Kerr-McGee;
July 2004: Analysts suggest BP and Shell merge;
April 2005: Chevron-Texaco and Unocal merge;
June 2005: Royal Dutch and Shell merge;
July 2005: China begins trying to acquire Unocal
June 2006: Andarko proposes buying Kerr McGee

The lack of construction of new refineries in the US is a cost issue due to environmental regulations. Like most outsourcing, when local regulations make it cheaper to do something elsewhere, it is done there.

The mergers do not indicate anything unusual. This trend is similar in the corporate world across multiple industries (just think of how consolidated the media has become, for instance). I might connect the lack of investment in increasing supply to a reduction in competition. More mergers=less competition. Less competition=less pressure to bring down prices.

Not to say that oil is not a more or less finite resource, just that these points you made, gauging supply by industry behavior, don't make a lot of sense to me.
 
  • #46
I got a feeling the period from 1950 to about 2050 will be called the Golden era of hydrocarbons.

Hopefully new technologies will emerge, but I agree that $15 a gallon gas be come in about 20 years or less.
 
  • #47
russ_watters said:
apeiron, I don't see in any of your links a statement that we've passed peak oil and your 4th link down (which is from a Peak Oil newsletter, so can be considered to be on the pessimistic side) says that production will likely start to drop in 2014 and in 2015 will be between 20 and 35% higher than it is today. How do you reconcile that with the OP's claim (in post #5) that: ...and what I quoted in post #13: Seeing as how 3 years later, the date has been pushed back another 4 years, what does this mean for my general point that peak oil claims tend to be overblown.

This was a selection of mainstream views, so not the extreme pessimists. My point was that even the mainstream is now voicing concern and shortening their time frames (you will be aware of the IEA's changed tune).

And I've spoken to plenty of scientists who feel peak was hit in 2006 most likely (though we have another few years for peak liquids - oil and gas).

Either way - 2006 or 2015 - it makes no difference to the essential fact that the era of cheap oil is passing fast.

I had a chance to chat about the issues with the US undersecretary for alternative energy recently. She says she wants to shorten the US "20 percent wind power by 2030" by 10 years. So a reasonable urgency there.

And today, I was talking to a US climate scientist who shifted to New Zealand (like me) because of peak oil (and also because Bush got re-elected, admittedly).

So overblown or not, a few of us are reacting. With luck, we will be made to look fools.
 
  • #48
apeiron said:
This was a selection of mainstream views, so not the extreme pessimists.
I'm not sure that a peak oil newsletter really qualifies as a mainstream view.
And I've spoken to plenty of scientists who feel peak was hit in 2006 most likely (though we have another few years for peak liquids - oil and gas).
It wasn't. How long ago did you speak with them?
Either way - 2006 or 2015 - it makes no difference to the essential fact that the era of cheap oil is passing fast.
Or 2020. It makes big difference in what will happen over the next few decades if we hit it in 2006 vs 2020. The maturing of electric cars and a resurgence of nuclear power are two factors that will have a fairly significant impact on our overall energy landscape over the next 10 years and it will make a big difference if the peak of the current economic cycle (in 5-7 years) sees $5 gas or $20 gas.
I had a chance to chat about the issues with the US undersecretary for alternative energy recently. She says she wants to shorten the US "20 percent wind power by 2030" by 10 years. So a reasonable urgency there.
Would be nice if the urgency was focused in a more reasonable direction, like nuclear power, but ok - that's nice.
And today, I was talking to a US climate scientist who shifted to New Zealand (like me) because of peak oil (and also because Bush got re-elected, admittedly).
You moved from the US to New Zealand because of Bush and peak oil? Really?

One thing I will say for peak oil: the risk (consequences plus odds) is greater than global warming, particluarly over the next 20-40 years.
 
Last edited:
  • #49
russ_watters said:
I'm not sure that a peak oil newsletter really qualifies as a mainstream view.

We don't live in a world of perfect information. We all need to make our own assessments on this one.

At least you are aware of the issue and have some views. Many have not even heard there is a peak oil issue.

As for nuclear reactors taking up the slack, there is also peak uranium to think about of course.

http://en.wikipedia.org/wiki/Peak_uranium
http://www.theoildrum.com/node/2379

The easy answer then is that something else like fusion will be the next fix.

And all these technological fixes may indeed come to pass.

As you say, the big question at the moment really is whether we will have time to put in the big new infrastructure - wind turbines all over the landscape and geothermal for NZ - before the economy collapses.

russ_watters said:
You moved from the US to New Zealand because of Bush and peak oil? Really?

No, that was the person I was talking to. I moved from London.
 
Last edited by a moderator:
  • #50
I wouldn't doubt that in the next 20-30 years there will be geothermal drill sites in places where the geothermal activity isn't near the surface---where there will be 8-10 mile drill holes to tap high heat resources.
 
  • #51
  • #52
The problem with official estimates of course is whether we can trust those in charge to tell us the truth...

The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.

http://www.guardian.co.uk/environment/2009/nov/09/peak-oil-international-energy-agency

And then when mainstream figures like Sir David King (UK Government’s Chief Scientific Adviser and Head of the Government Office of Science, 2000 to 2007) sound the alarm bells, do we just conclude they have just lost their heads, gone over to the other side?

The report also suggests that the current oil reserve estimates should be downgraded from between 1150-1350 billion barrels to between 850-900 billion barrels, based on recent research.

http://www.smithschool.ox.ac.uk/world-oil-reserves-at-tipping-point/
 
Last edited by a moderator:
  • #54
brushman said:
Actual supply statistics are polluted by corrupt oil monopolies so it's hard to judge how much oil there is exactly.

You must also take into consideration that new oil fields are being discovered, and new technology is allowing us new ways to mine and manufacture the oil.

http://www.wnd.com/index.php?pageId=59502

World Net daily is at the bottom of the barrel as a reliable reference. It is the home of the extreme right and about every conspiracy theory that they come up with.

Most of the content is outrageous., as seen below

http://www.wnd.com/index.php?fa=PAGE.view&pageId=95917
 
  • #55
TESLACOILZAP said:

Doom Soon is my honest & reluctant prediction, if we get whooped by an asteroid in this transition phase it may well be game over mankind

I think you are erring on the optimistic side with the date of collapse myself! 2030 is the bottleneck decade for peak oil, global warming and over-population.

But then there is the question of the response. There are both technological possibilities (the alternate tech fixes) and the social possibililities (energy descent, relocalisation).

We will either be moving from a time of boom to just brutal bust (Easter Island on the global scale). Or we may move from one kind of socioeconomic system to a better adapted one.

A process that will be very uncomfortable just for the fact it must be so different. Yet it could also ultimately be a better one in hindsight.

This is actually what I am looking into - the range of responses now taking place, from the preppers to the transition towns to the guys turning algae into biofuel. And even the local neo-nazi skinheads doing their combat training, getting ready to take over their 'hood.

There are those heading for the hills with guns (even in NZ) and those who are focusing on creating locally resilient communities, planting nut and fruit trees now, learning how to make soap and cheese.

What will the future look like? What more interesting question can there be?
 
  • #56
apeiron said:
We don't live in a world of perfect information. We all need to make our own assessments on this one.
Fine, but that's not what you said before: before, you said this was a mainstream view. You seem to now be acknowledging that it really isn't.
As for nuclear reactors taking up the slack, there is also peak uranium to think about of course.

http://en.wikipedia.org/wiki/Peak_uranium
http://www.theoildrum.com/node/2379
No doubt, birds of a feather flock together. Peak uranium is even more crackpotish than peak oil. It was cited earlier in the thread with an utterly absurd claim, but the reality is that we have a relative eternity's worth of nuclear fuel available compared to what's left of our oil. Hundreds of years at the very least. No reputable scientist sees a uranium production problem in the next century. Heck, in the US, we're already storing as "waste" enough perfectly good nuclear fuel to keep our existing plants going for another couple of centuries.
...before the economy collapses.
This is the heart of the issue and the heart of my disdain. "Peak Oil" really isn't really about a peak in oil production (which, whenever it happens, is a real phenomena), it is about doomsaying over what happens after we pass peak oil. That's what gets passionate and gullible people to buy books. That's why the title of the thread isn't just "Hubber's Peak" but rather "Hubbert's Peak. The oil crash." [emphasis added]

The beauty of this, as opposed to the 2012 doomsday claim is that peak oil is actually going to happen eventually. When 2012 passes and nothing happens, the books will stop selling. With Peak Oil, when 2006 passes and oil doesn't peak, no problem: just update it with a new date and re-publish the book. The best scenario of course is for the optomists to be right and oil to peak later, which allows for decades of book sales.

But the prediction is no less apocalyptic than the 2012 crackpottery and no less unreasonable. The book who'se title is paraphrased in the title of the thread has the tagline "Civilization as we know it is coming to an end soon." and talks about a "post-industrial stone age". Presumably, that's what has people buying houses in the country and living off the grid, but it is no less nonsensical than the 2012 crackpot nonsense.
No, that was the person I was talking to. I moved from London.
Ok, so are you saying you moved from London to NZ because of peak oil?
 
Last edited by a moderator:
  • #57
russ_watters said:
Fine, but that's not what you said before: before, you said this was a mainstream view. You seem to now be acknowledging that it really isn't.

No, I think business leaders and chief scientists and international agencies are reasonably in the mainstream.

I'm not looking for an argument on this point as I think it irrelevant. The issue here is not the exact timing but that there will be/was a peak of production in my lifetime. And so I prefer to move on to the next question of the nature of the sensible response - both personal and society-wide.

I've watched the debate develop and I've seen the mainstream position shifting - both what people say in public and what they will confide in private. Personally, I don't need proof of the fact. And I don't even feel a need to prove it to others. I offer some sources and people can make their own calls.

OK, a certain degree of debate over sources is healthy. But not to the point it derails discussion. I do in fact talk to/listen to people on both sides of the divide.

russ_watters said:
No doubt, birds of a feather flock together. Peak uranium is even more crackpotish than peak oil.

The idea that there will be a peak for uranium too is not crackpot. The estimate of when it will bite is the question.

I agree it seems far off.

For balance, here are some industry views...

http://www.businessinsider.com/uranium-supplies-are-likely-to-be-adequate-until-2020-2009-12

http://www.world-nuclear.org/reference/default.aspx?id=294&terms=peak+uranium

(Though amusingly, the World Nuclear Association does believe in peak oil: "There are, however, examples such as oil, where prices and sophisticated projections may now be indicating that proven reserves are indeed beginning to run out.)

Of course, uranium mining and nuclear reactors presume a functioning international economy. So transitioning from oil remains the big if.

A consensus view I would be happy with is that if we have to worry about peak uranium, then things are not going too bad with the world.

russ_watters said:
That's what gets passionate and gullible people to buy books. That's why the title of the thread isn't just "Hubber's Peak" but rather "Hubbert's Peak. The oil crash." [emphasis added]

Fair enough. Apocalypse sells. Utopia too. We've seen it before. Silent Spring, the ozone layer, the millenium bug.

Luckily these are also some examples where people did wake up and react. Even if the millenium bug was way over-hyped (people getting worried about their toasters), there were things that needed to get fixed.

russ_watters said:
Ok, so are you saying you moved from London to NZ because of peak oil?

I'm not sure what you are driving at here. But I did move primarily because of climate change/population growth. There were a bunch of other good reasons as well. Like wanting a change.

But I was in a very comfortable position where I was, and there were many interesting countries I could have chosen as a next stop. Yet I made what I felt was an optimal long-term decision on the grounds that a bottleneck would develop (I have kids, and that was the decisive factor really).
 
Last edited by a moderator:
  • #58
Good news from the other side...

http://www.economist.com/business-finance/displaystory.cfm?story_id=15661889

Now North America has an unforeseen surfeit of natural gas. The United States’ purchases of LNG have dwindled. It has enough gas under its soil to inspire dreams of self-sufficiency. Other parts of the world may also be sitting on lots of gas. Those in the vanguard of this global gas revolution say it will transform the battle against carbon, threaten coal’s domination of electricity generation and, by dramatically reducing the power of exporters of oil and conventional gas, turn the geopolitics of energy on its head.

Shale is almost ubiquitous, so in theory North America’s success can be repeated elsewhere. How plentiful unconventional resources might be in other regions, however, is far from established. The International Energy Agency (IEA) estimates the global total to be 921 trillion cubic metres (see chart 2), more than five times proven conventional reserves. Some think there is far more. No one will really know until companies explore and drill.

An age of plenty for gas consumers and of worry for conventional-gas producers thus seems to be dawning. But two factors could reverse the picture again. The first surrounds the uncertainty about how fruitful shale exploration will be outside North America. A clearer understanding of the geology will emerge from pilot wells in the coming months. Second, there are reasons for caution above ground, too. Despite natural gas’s greener credentials than oil’s or coal’s, shale drilling has critics among environmentalists, who worry that water sources will be poisoned and landscapes despoiled.
 
  • #59
russ_watters said:
Presumably, that's what has people buying houses in the country and living off the grid,

In James Howard Kunstler's book he suggests that communities with working farmland (or easily recoverable farmland), and access to railway will survive==>thrive as the economy recovers from the glut of "cheap oil."

So going "off grid" by one's self in the faraway country is not likely to be the best bet. Some people a re still thinking "crash" as in "brick wall." It's much more likely to be a "slow let down," like sitting on a huge air-mattress that has a slow leak.

[Full disclosure: I share Kunstler's opinion on architecture; I believe that he 50--75%-correctly predicted the economic crash of 07-08 (better than pure chance, but not "spot on"--he predicted it to be a year earlier, and a quite a bit worse); I think that his economic prediction for the future is probably also 50--75% correct (and he doesn't predict a "neo stone-age," but rather a "neo agrarian age" in which people will need to relearn how to grow potatoes). His rants start off with reason, but he slips into crackpottery when he's not being careful; you can pick out a lot of "good points" amidst his pejorative frothing, much like many sharply opinionated members here; he's anti-anyparty but dislikes republicans more; I think he probably "punches up" the dire consequences a bit to sell his books, but he fundamentally believes in what he writes. Final assessment: I think I'd have him over for dinner, but he ain't an overnight guest.]
 
Last edited:
  • #60
Swedish report critiquing the official IEA World Energy Outlook...


Using the production parameter, depletion-rate-of-recoverable-resources, we have analyzed the four crude oil fractions and found that the 75 Mb/d of crude oil production forecast for the year 2030 appears significantly overstated, and is more likely to be in the region of 55 Mb/d. Moreover, analysis of the other fractions strongly suggests lower than expected production levels. In total, our analysis points to a world oil supply in 2030 of 75 Mb/d, some 26 Mb/d lower than the IEA predicts.

In all our projections, future oil production by 2030 will have decreased from present levels. The world appears most likely to have passed the peak of global oil production and to have entered the descent phase. If this is the case, then the world has reached the “Peak of the Oil Age”.

http://www.tsl.uu.se/uhdsg/Publications/PeakOilAge.pdf

Another interesting article that highlights another reason why production actually peaks - the impact of conflict as constraints approach.

But that is not accounting for politics and the rise of the "resource nationalism" that has made the multinationals persona non grata in some of the great oil-bearing regions. BP was among the companies that saw its assets seized in a US$30 billion ($42 billion) grab by President Hugo Chavez in Venezuela during 2007, while Exxon resorted to Britain's High Court to try to wrestle back its interests there.

Developing countries such as Venezuela, Nigeria and Russia have increasingly been moving down the road to self-reliance, developing their own state-owned firms at the expense of international players. But this can mean that Western know-how and finance is sacrificed, slowing down the rate of oil development if not losing new reserves completely.

BP, Shell and Exxon have all had tussles with the Kremlin over their oil holdings in Russia, while Shell has found the Government in Nigeria increasingly truculent over attempts to reopen the Niger Delta oil wells shut down because of guerrilla action.

The Western firms see part of their salvation coming from being able to enter markets where they have previously been barred, such as Iraq. Both BP and Exxon have signed recent deals there on terms so tight they would have been inconceivable a few years ago.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10612594&pnum=0
 
Last edited by a moderator:
  • #62
Peak copper as well...

http://europe.theoildrum.com/node/6307

Of course modelling for a substitutable and reusable mineral like copper is a little different than for oil or coal, but the exercise is worth it if we want to understand the various constraints to economic growth.

The logistic curve does seem a better fit for the future than unconstrained exponentials, no matter how much technological ingenuity we may credit humans with.
 
Last edited by a moderator:
  • #63
No doubt, birds of a feather flock together. Peak uranium is even more crackpotish than peak oil. It was cited earlier in the thread with an utterly absurd claim, but the reality is that we have a relative eternity's worth of nuclear fuel available compared to what's left of our oil. Hundreds of years at the very least. No reputable scientist sees a uranium production problem in the next century. Heck, in the US, we're already storing as "waste" enough perfectly good nuclear fuel to keep our existing plants going for another couple of centuries.

Indeed, as well as create more nuclear fuel through breeder reactors. Uranium is a very common element, a little bit of it is in everything. IIRC, the Japanese even found it on the moon. If that isn't enough we can always switch to Thorium, which is even more bountiful.

and BTW, a further blow to "PO is the end of the world" theory, recently we discovered a way to make plastic without crude oil. PO being the end? Sure doesn't look that way to me.
 
  • #64
aquitaine said:
and BTW, a further blow to "PO is the end of the world" theory, recently we discovered a way to make plastic without crude oil. PO being the end? Sure doesn't look that way to me.

But this is plastic from natural gas. So part of the peak oil story still.

Gas buys extra time. But how many years do you think that is?
 
  • #65
apeiron said:
But this is plastic from natural gas. So part of the peak oil story still.

Gas buys extra time. But how many years do you think that is?


They also said it can be modified to use bio fuels. Granted, bio fuels will not replace gasoline or diesel in vehicles, but the amount required to make plastics is significantly less and plastic can be recycled, further cutting the required amount down.
 
  • #66
Peak asphalt!...where the EROEI hits the road :biggrin:

http://europe.theoildrum.com/node/6349

The problem, as usual, is not one of quantity, but one of energy . With minerals, we are not running out of anything except of the energy needed for extraction. It is the principle that I called the universal mining machine. Bitumen doesn't seem to be an exception; we are not running out of bitumen, but we have increasing problems in being able to afford it; just as with a lot of other minerals. For this reason, the proposal of substituting conventional bitumen with products not coming from crude oil doesn't appear to be very practical. There has been talk of "bioasphalt;"
 
Last edited by a moderator:
  • #67
Here's a former peak oil catastrophe advocate who now believes the rising price of oil will cause the law supply and demand to take over and limit demand without social upheval.
What has changed is his opinion of the price impact and implications for fuel consumption after the spike of July 2008 to nearly $150 a barrel was followed by world economic recession, a deep drop in fuel use and a crash in oil futures to just above $30 in December 2008.

"I have changed my point of view about future prices," said Campbell, who used to think the peak in conventional oil production, which he believes happened in 2005, would lead to a relentless price surge.

Instead, the record rally led to a peak in demand in the developed world.

"Peak oil drives prices up in the first place. It has its own mechanism. We're sort of at peak demand right now," Campbell told Reuters from his home in the village of Ballydehob, West Cork. "I think presently the price limit is about $100."

For those who have painted alarming pictures of civil unrest as the world economy is forced to move away from conventional fuel and pay high prices for it in the interim, an inbuilt price mechanism to limit demand and move the world to other forms of energy should be a good thing.

"We have no alternative but to go green," Campbell said.

But he does not think reduced demand is enough to offset the gravity of peaking supply. He still sees a possibility of social anger as millions are forced to change their lifestyles in a too-sudden structural shift from economic growth driven by cheap conventional fuel.
http://www.reuters.com/article/idUSTRE63539420100406

While I applaud his open mindedness, how did he not consider what is a basic economics 101 issue before now?
 
  • #68
russ_watters said:
While I applaud his open mindedness, how did he not consider what is a basic economics 101 issue before now?

Historically when natural resources are limited supply and demand doesn't regulate the usage economically
 
  • #69
russ_watters said:
Here's a former peak oil catastrophe advocate who now believes the rising price of oil will cause the law supply and demand to take over and limit demand without social upheval.
http://www.reuters.com/article/idUSTRE63539420100406

While I applaud his open mindedness, how did he not consider what is a basic economics 101 issue before now?

That is not exactly what the article quotes Campbell as saying. For example...

But he does not think reduced demand is enough to offset the gravity of peaking supply. He still sees a possibility of social anger as millions are forced to change their lifestyles in a too-sudden structural shift from economic growth driven by cheap conventional fuel.

So what is being said here?

1) The era of cheap oil has peaked, or is very close to peaking.

2) The EROEI of known alternatives are not in the same ballpark (though maybe we will crack fusion, do something magical with nanotechnology, etc).

3) This is not a classic Economics 101 supply and demand equilbrium equation as we are talking about a finite resource and a supply inelasticity (with no easy substitutions, see 2).

4) The unknown here - as Campbell is "admitting" - boils down to how people may respond to an inevitable fundamental change.

Will they move smoothly towards a power-down scenario where they kiss goodbye to the old consumerism that never really made them happy in the first place? (And I really hope that is the case, hence my warm feelings for Transition Towns, Oooby, Permaculture and other nascent social responses).

Or will people fight to preserve the growth escalator they have become so used to for the past three generations? (Or in China, India, etc, just getting that first taste for).

Economics 101 does not teach energy descent - how to run an economy smoothly in the reverse de-growth mode. I doubt you even get to study that in 401. :smile:
 
  • #70
Office_Shredder said:
Historically when natural resources are limited supply and demand doesn't regulate the usage economically
Um...is that supposed to be facetious or was that just a poor choice of words?
 

Similar threads

News When will the world reach peak fossil fuel production?
14
Replies
475
Views
82K
Coming Pandemonium: Peak Oil & its Consequences
2
Replies
57
Views
8K
News Massive oil reserves found in the US
2
Replies
57
Views
12K
News Gusher of Lies: The Dangerous Delusions of Energy Independence
4
Replies
133
Views
25K
News The Real Reason for US War on Iraq?
Replies
24
Views
6K
News Is James Randi a skeptic or a Republican climate change denier?
2
Replies
59
Views
10K
Civilization of millions of rings.
Replies
3
Views
4K

Hot Threads

Recent Insights

Back
Top