Peak Oil again - From an expert in the field

wrxpilot

The proud, the few
Joined
Jun 26, 2004
Posts
901
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Ok, I'm getting more than a little annoyed w/ all the hype going on around here about this. I know a guy that has worked in the industry for a long time and deals a lot with the reserves. I dropped him an email a couple of weeks ago and this is his response:

Part 1 -

Oil and gas are naturally occurring, depletable resources. Like tin
during
the bronze age, iron ore up through the middle of the 20th century,
whale
oil and goal in Britain during the 19th century, and now oil and gas,
there
have been people predicting the disappearance of these items because of
how
fast they were being used, how little was known to be remaining, the
reasons
don't matter, just the idea that during the age in question and a
necessary
depletable resource, people were always screaming about how the world
was
going to end during the time period in question.

The current crop of "oil is disappearing" fanatics can be found
here....

http://www.peakoil.net/

You can spend weeks reading through all their stuff, feel free to make
yourself familiar with it, here is the short version. As a resource is
found
and developed, the easy and cheap stuff is found first, given enough
time
and consumption, half of all the item will have been produced, at which
point in time it is impossible to raise the production anymore because
its
being used faster than it can ever be found, and therefore supply
diminishes, regardless of demand. Thats it. The peak oilers vary from
"gee
when we reach peak its gonna be expensive" to "gee when we reach peak
the
world will instantaneously fail".

Several things you will not find among these articles, or which are
very
difficult to find because of course they aren't fans of dissenting
opinions,
or don't like to broadcast the weakness of their arguments.

Examples:

1) The original predictor of peak oil in the US, who hit the year dead
on,
and is the founding father of the philosophy behind the movement, also
predicted a bunch of other things, all of which have been wrong. He got
1
right out of however many, in part because he didn't take into account
lots
of neat things that happened during the 80's and 90's when prices
starting
moving upwards from the crash in 86. For example, he said oil peak for
the
world would occur in 95 ( oops ), natural gas would be gone in the 80's
(
big oops ) and various other little boo-boo's which the gang doesn't
want to
talk about.

2) The original peak oiler ( Colin Campbell, you'll see his name alot
among
the ASPO gang ) was predicting peak oil problems for various fields and
areas in the 80's....the problem was, they didn't peak then. His
original
peak date was mid-90's I believe, and year after year, he keeps moving
the
peak further down the road because, of course, he keeps getting proven
wrong
by the peak increasing yet again. Big oops.

3) The peak oilers love to talk about reserves, when in fact reserves
have
nothing to do with resource base beyond quantifying what oil and gas
production companies keep on their books. But peak oilers love
it...reserves
information shows there is only 7 years of production on the
books...which
means we all die from lack of oil in 7 years when it runs out, right?
Nope....when they produce some, they do the obvious, they go and find
and
produce more. Is it getting tougher to find? Sure. Has this affected
stuff?
Sure..the price has gone up, thereby guaranteeing that they will STILL
go
find more, even if its harder.
 

wrxpilot

The proud, the few
Joined
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Posts
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Part 2 -

Now, these are just a few of the problems which peak oilers have no
desire
to talk about, I could go on about reserve growth, the resource
pyramid, the
effects of supply and demand and how the price of a resource works to
ensure
competition among competing types of energy, and so on and so forth.

Now, as to how this relates to your question, I have not a damn idea.
Right
now, inventories of crude oil are quite high, and the price is high
because
speculators are reading the same "gee we're running out" routine that
the
rest of us do. Can the price go up? You betcha. Enough to crater the
airlines? Sure as shootin. Can it stay that way? Of course not. Why
not?
Create a worldwide recession because of and oil shock and watch demand
fall
right into the toilet. When this happens, everyone will be pumping flat
out
and getting next to nothing for their product, and lots of
semi-socialist
guvmints will have a damn tough time keeping their people from killing
them
in their palaces. You think oil dependant countries have it bad? Oil
producers will have it worse because they become addicted to the
income, and
fund lots of social programs, and what are they going to do when the
price
heads south? Starve their people? Have them all dig ditches on borrowed
guvmint money? Large amounts of oil resource are more of a social curse
than
advantage.

Will we suffer in the states? You betcha. We'll all go buy hybrids,
start on
bicycles, fly less, travel less, and when everything settles out we'll
be
even LESS dependant on these countries which have oil but not a pot to
piss
in because they can't restore demands so they can pump at full capacity
ot
full price. They'll NEVER see the good old days again, here in the
States
we'll burn coal and build lots of nuclear power plants and every car
will
have a battery system to match its little diesel engine and it'll get
70mpg
around town and it can STILL tow a light motorcycle and trailer behind
it.
You boys with the planes will have a tough time finding customers for
awhile
because I'm betting trains and buses are alot cheaper for regular
people to
travel, but stuff will still move by air. But it'll be pricier because
a few
of you guys will have gone out of business until you can all raise your
prices far enough to make money. Which just makes it easier for buses
and
trains.

My only real suggestions are, buy your real estate close to your work
and
places where you purchase food, movies, meet chics, all that kinda
stuff. If
you need a cage, smaller is better than bigger, insulated houses are
better
than open ones, efficient appliances are better than inefficient ones,
and
the less energy you use the less it'll cost you personally.

The interesting thing about PeakOil is that its all true. In the end,
every
last word. Sooner or later, things run out, there is only so much.
There
problem is predicting it all the time while ignoring the times in the
past
that its happened and what the world did to adapt. We won't starve,
civilization won't end, we'll just get more efficient. It won't be
cheap,
but it'll happen because $$ will force it too.

Want an interesting career? Get into engineering for renewable
resources,
wind, wave, natural gas to liquids conversions, those things should
have an
interesting time when gasoline hits $5/gal and everybody is screaming
bloody
murder. But in the end, thats what it will take for soccer moms to stop
driving Excursions, for people to dump their SUV for a hybrid, and the
funny
thing is, the price in Europe is already that high and look what they
did...motorcycles and scooters and efficient little diesels in small
cars
getting 60mpg....over there its taxes, here it will have to be supply
and
demand and firing most politicians in Washington before people notice,
but
you hit the average american with a $200 bill to fill the tank on his
Excursion? He'll scream....and when the guvmint discovers it can't do a
damn
thing about it, and tells him the truth, he'll vote for someone else
and go
buy hisself a hybrid, or he'll take it up the ass for as long as prices
are
high. Its the american way.
 

AeroBoy

Cereal Killer
Joined
Nov 27, 2001
Posts
300
Total Time
'Nuf
Chevron ad campaign

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AA717driver

A simpler time...
Joined
Mar 27, 2003
Posts
4,911
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Diesel is subsidized in Europe. The high fuel prices in EU are the result of high taxes. They are paying the same per-barrel price as the rest of us. Natural gas requires much more energy to refine than does liquid fuel. Hybrids have the issue of expense for battery replacement or overhaul.

The world recession won't blunt the demand by China and India THAT much. Those countries are voracious consumers (still increasing) of fossil fuels. (I found it interesting that although India has one of the largest coal reserves in the world the government-run coal business is so bogged down by bureaucracy and unions that they have to import most of their coal.)

There are many facets to this problem and no clear solution.

This will be interesting as it plays out in the next few decades. Too bad we won't be disinterested spectators...TC
 
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