Despite Cheap Gas, Coming Back to Peak Oil

52 Comments on "Despite Cheap Gas, Coming Back to Peak Oil"

Plantagenet on Sat, 21st Nov 2015 6:53 pm 



We’ve reached peak oil if you only consider “conventional” oil resources, but we haven’t reached peak oil if you add in various unconventional oil resources.

Get it now?

Cheers!

ennui2 on Sat, 21st Nov 2015 7:32 pm 



On that note, I actually agree with Planty.

onlooker on Sat, 21st Nov 2015 7:49 pm 



Yes we get in Plant. But we also get that they are not called unconventional for no reason. They are harder to get at, have lesser flow levels, are more expensive money/energy wise and thus deliver less usable net energy ie. EROI is not as good. At some point the whole endeavor becomes uneconomical.

onlooker on Sat, 21st Nov 2015 7:50 pm 



I would add uneconomical and counterproductive

yoananda on Sat, 21st Nov 2015 8:01 pm 



Since no disruptive innovation came along the way, we are now past peak cheap oil.

But since we count it in BARREL and not in BTU (not to say exergy !) we cannot even be sure that we are not post peak energy from oil at all.

I’m pretty sure we are post peak oil per capita though !!!

So in fact, proven reserve or not, we don’t have more energy at our disposal than we have 5 or 10 yr ago !

That’s maybe why many countries are collapsing right now. Geopolitics are just the surface of it.

GregT on Sat, 21st Nov 2015 8:05 pm 



“On that note, I actually agree with Planty.’

And you should agree with planter ennui2, what she said above is correct. It’s all of the stuff that she refuses to acknowledge that she has so terribly wrong.

dooma on Sat, 21st Nov 2015 8:17 pm 



I think that onlooker has nailed it. If easy oil was not a problem, we would not be resorting to messy, energy-intensive methods like fracking. Any “normal” oil extraction has many risks to the environment. These alternative methods of extracting low quality oil from tar sands and the like are a guaranteed environmental disaster.

Also, you have to ask yourself why oil giants are searching for oil/gas 1000’s of kilometres under the sea bed where as shown on the gulf of Mexico, they do not have safety contingency plans if something catastrophic does occur. But they are more then pleased to chalk them up as “proven reserves” when they do find very expensive-hard to reach pockets.

This distorts the data when it comes to how much oil there will be available that is easy to obtain and refine to come on line in the next ten years or so.

GregT on Sat, 21st Nov 2015 8:17 pm 



onlooker and yonanda both get it. Planter does not.

keith on Sat, 21st Nov 2015 10:16 pm 



Money printing pushed back peak oil, it also killed the world economy. The elite BAU crowd don’t care, they can afford 10 dollar liter of milk. But volume plays such a big role in economy, and the printing has pushed most out of the consuming game. Watch the next five years.

antaris on Sat, 21st Nov 2015 10:17 pm 



And while unconventional has been the shiny object most have looked at, conventional is 10 years past peak.

Truth Has A Liberal Bias on Sun, 22nd Nov 2015 1:25 am 



Unconventional is a rather nebulous term. Basically it means ‘expensive’. It will peak when we can’t afford to extract it at a profit.

GregT on Sun, 22nd Nov 2015 2:29 am 



“It will peak when we can’t afford to extract it at a profit.”

Realistically, it will peak when people finally realize that we can’t afford to extract it at a profit, in the mean time, enjoy the Wiley Coyote moment!

shortonoil on Sun, 22nd Nov 2015 7:07 am 



At $42/ barrel there is not much question as to what is going on: there will soon be a whole lot of oil producers going out of business. At $42 they can’t replace their reserves. They will just keep pumping as fast as they can until its gone; and the price is not going up enough to save the oil industry:

http://www.thehillsgroup.org/depletion2_022.htm

$2.75/ gallon gas is nothing to cheer about. It’s like discovering that the someone forgot to put the bilge plug back in the bottom of the boat; after you’ve left the dock! They can keep stating that they see no Peak – all the way to the bottom of the lake?

shortonoil on Sun, 22nd Nov 2015 7:22 am 



“Unconventional is a rather nebulous term.”

Unconventional refers to the production of a whole bunch of liquid hydrocarbons that have entirely different chemical formulas for their mixtures than what is produced by conventionals. It is like saying that the difference between water and air is nebulous. If you think that is nebulous you are an idiot.

rockman on Sun, 22nd Nov 2015 7:48 am 



Truth – “Unconventional is a rather nebulous term. Basically it means ‘expensive’.” Perhaps that how it’s mutated with you civilians. LOL. But in the oil patch that’s far from true. In fact some of the most costly oil reserves in the past have come from CONVENTIONAL RESERVOIRS. And there have been thousands of relatively inexpensive wells drilled in UNCONVENTINAL RESERVOIRS that were neither drilled horizontally nor frac’d. Which also gets to a common but unavoidable misstatement: there is no such thing as “unconventional oil”…this is oil produced from unconventional reservoirs. It some trends the oils produced from both conventional and unconventional reservoirs are identical.

And wiki only confuse the issue even more: “Unconventional oil is petroleum produced or extracted using techniques other than the conventional (oil well) method.” I’m not even sure what they mean by “conventional method”. But they probably mean frac’ng is an unconventional extraction method. Thus even more confusing: there have been many thousands of wells in CONVENTIONAL RESERVOIRS that have been frac’d.

And then wiki makes it even more confusing: “Conventional oil is a category that includes crude oil. Unconventional oil consists of a wider variety of liquid sources including oil sands, extra heavy oil, gas to liquids and other liquids. In general conventional oil is easier and cheaper to produce than unconventional oil. However, the categories “conventional” and “unconventional” do not remain fixed, and over time, as economic and technological conditions evolve, resources hitherto considered unconventional can migrate into the conventional category.”

IOW wiki s saying that some drilling could be called conventional at one time and then a few years later when conditions chang it could be called unconventional.

I used to try keeping folks straight on the technically correct definitions. But I’m giving up the effort. Folks can just keep using their OPINIONS of what those two words mean. That will lead to confusion and unnecessary arguments from time to time.

But so be it. LOL.

rockman on Sun, 22nd Nov 2015 8:11 am 



And just a reminder of the definition of PO is: it’s the date of the ULTIMATE maximum rate of production from a field, a trend, a country, a continent, the world or what ever subdivision one choses. It is not based upon the price of oil, the cost to extract oil, the economic conditions, the demand for oil or any other qualifier someone choses. And one has to keep focused on the “ultimate” qualifier. The US reached PO over 40 years ago but came very close to resetting that PO date recently. Not only can any PO date be called only looking back historically it might take many decades to be sure.

But all those different qualifiers some try to use to define PO are important…some extremely important. In fact much more important then the PO date. Those are the conditions that directly effect the lives of billions of people.

If there were only another acronym we could use a shorthand like “PO”. It could encapsulate all those conditions and feedback loops regarding oil production, drilling, activity, economic vitality, geopolitical impacts, etc. It would have to be dynamic given how the situation is in constant flux. But what acronym could we use for those Peak Oil Dynamics? I just can’t imagine what we could use. LOL.

Davy on Sun, 22nd Nov 2015 9:14 am 



Gas here in central Missouri at my local fillup spot is $1.85 yesterday.

Boat on Sun, 22nd Nov 2015 10:38 am 



Davy,
Using resident doomer economics theory I guess that means your going broke. I saw a station yesterday at $1.79 in Houston.

Davy on Sun, 22nd Nov 2015 11:13 am 



Boat, resident doomers realize a foundational commodity like oil at the price it is at, at a time like we are in is foreboding and ominous for bad things to come. Then, there are narrow minded corns like yourself who only look for the advantages without the consequences. Your corny thinking is markets and prices will work all these issues out. Boat, we are no longer in the 20th century. We are now in the dangerous 21st century of decay and descent.

peakyeast on Sun, 22nd Nov 2015 11:36 am 



At the current rate and development we will in a few years start tearing up the road asphalt and call it unconventional oil..

rockman on Sun, 22nd Nov 2015 1:35 pm 



peaky – We’re already there. I suppose we could call it unconventional asphalt. It even hints at “asphalt independence”. LOL:

Asphalt Recycling & Reclaiming Association’s (ARRA) primary function has been to promote the recycling of existing roadway materials through various construction methodologies, to preserve limited natural resources and reduce costs. No matter what goes on with politics, social issues, anti-terrorism policies and procedures, or the economy, one thing is certain – America needs its highways. Everyone acknowledges that sooner or later all roads have to be maintained, preserved, and rehabilitated, and that the methods represented by ARRA offer the least expensive, longest lasting alternatives for stretching available dollars. Our future is bright!

energyskeptic on Sun, 22nd Nov 2015 1:41 pm 



For the millions of unemployed or underemployed, even $1.75 is expensive. I know people who can’t afford a car anymore, or who drive a whole lot less. None of these people are living on our street because on the whole we are in a bubble of prosperity in the San Francisco area. It was the same way after the Soviet Union crashed. On average, Moscow citizens did a whole lot better than rural residents, more food and other aid was sent to Moscow than 2nd or 3rd tier cities (as I write about in http://energyskeptic.com/2014/a-book-review-of-russias-food-policies-and-globalization/ ).

The same is happening here. And the top 10% in the U.S. tend to hang out with each other. Based on the very few people I know from the bottom 50%, and from what I read about increasing percentages getting food aid, debt levels, the crumbling of infrastructure, and so on, isn’t the crash already happening from the demand reduction of the poor, allowing those of us who aren’t so poor to continue our Happy Motoring? As long as the government can keep feeding the poor, this gradual poverty can keep increasing for a long time perhaps.

makati1 on Sun, 22nd Nov 2015 7:26 pm 



peaky, I’m surprised that they have not added those billions of barrels to the US reserves. Or maybe they did? lol.

makati1 on Sun, 22nd Nov 2015 7:33 pm 



Energy, you see the present and near future clearly. Oil/gas price means nothing to the unemployed. They cannot afford it at any price. Employment numbers are still in free fall and there is no safety net in sight.

Soon none of us will care what the price of gasoline is as we will have no use for it. Food, clothing and shelter will be our major concerns.

I don’t even look at the prices when I pass the gas station on the corner. I don’t buy it so I don’t care if it is $1 or $10.

makati1 on Sun, 22nd Nov 2015 7:44 pm 



Energy, I may read your book. I liked the review by Alice Friedemann and especially the paragraph that explains why other countries will not suffer as much as the West when the SHTF.

“But because of the hard times for centuries, Russians are more prepared than highly functional, industrialized societies like America or Europe, because when times have gotten tough, many of Russia’s citizens have had access to garden plots. In the 1980s, households that grew food consumed 90% of it and sold the other 10%.”

This is not only true of Russia. Many countries have not forgotten their past and even today have home garden plots and raise chickens as a safety net. I often hear roosters even here in Manila and see vegetables growing out of pots and any empty space in the city. Not to mention the thousands of coconut trees that line the streets and produce coconuts for anyone who can take them.

apneaman on Sun, 22nd Nov 2015 7:51 pm 



Mak, energyskeptic is Alice.

rockman on Sun, 22nd Nov 2015 7:51 pm 



energy – “…isn’t the crash already happening from the demand reduction of the poor”. I think I get you point but how much demand destruction can a person experience if they didn’t have much consumption in the first place? I grew in S La. without AC. Didn’t really think of ourselves as poor even though we couldn’t afford the electricity to keep cool in August. Perhaps a better sense of what crash might be happening is to look at the middle class. I also think the term crash has to be used carefully. In Houston in the mid 80’s we had a “crash” the severity of which I haven’t seen since. But that was due to the oil price bust…for most of the country those were improving times.

Ted Wilson on Sun, 22nd Nov 2015 8:30 pm 



How did Venezuela become #1 in World’s Oil Reserves. What they have is Extra Heavy Crude Oil which needs lot of diluting and mixing with Natgas or other lighter hydrocarbons to produce motor fuels. This shows that the regular conventional oil has already hit the peak.

Oil companies are including bio-fuels in the mix to claim that oil production is increasing forever.

Boat on Sun, 22nd Nov 2015 9:48 pm 



Ted,
That Venezuela oil is considered conventional. Why we label oil conventional or unconventional is a mystery to me. Who cares. It’s the assessment that matters which determines the price the refinery will pay.

GregT on Sun, 22nd Nov 2015 10:22 pm 



“How did Venezuela become #1 in World’s Oil Reserves. What they have is Extra Heavy Crude Oil which needs lot of diluting and mixing with Natgas or other lighter hydrocarbons to produce motor fuels. This shows that the regular conventional oil has already hit the peak.”

Absolutely correct Ted, and much of those unconventional reserves are most likely not economically viable to exploit.

rockman on Mon, 23rd Nov 2015 6:29 am 



Ted/boat – Exactly. Which is exactly why such stats tend to have an inordinate amount of impact on of the thoughts of the public. Such bumper sticker expressions just aren’t sufficient to how the true nature of the energy dynamic. They are often used to mislead the public more than educate them.

Anonymous on Mon, 23rd Nov 2015 6:51 am 



One of the few silver linings to peak oil is it will make large scale organized warfare almost impossible, or more precisely, make it impossible to deploy force across great distances. in addition, mass scale human migration will come to an end as the distances involved simply become too great to tackle for most populations.

Or in other words, good luck crossing the Sahara and middle eastern deserts without motorized transportation.

We as a country may become a lot poorer, but at least we will become far more secure, as our only real potential enemy will become Mexico and Cuba.

bug on Mon, 23rd Nov 2015 7:21 am 



Anon, how will Cuba be our enemy? And Mexico for that matter? What are we going to fight over?

Davy on Mon, 23rd Nov 2015 8:12 am 



Bug, Anon is just indicating a localizing shrinking world as an analogy. We probably go a little further than that and see a civil war of sorts by locals, regions and states vying for control of resources. We will see many different reactions to a desperate situation. This failed state logic will eventually collapse down to each and every local all of us here on this board are in. It is really about the destruction of the status quo and the resulting battle for survival. Some of that will be civil war between larger areas, localized mad max, and some cooperation and alliances. At some point I imagine stability of sorts will return. Who know what will shake out but surely any of this is a possibility

GregT on Mon, 23rd Nov 2015 10:10 am 



I would hazard a guess that the world’s largest militaries will be among the last to maintain access to oil. Long past the point that the majority of us will no longer be driving to the local supermarket to buy the food that will no longer be available. Psychopaths don’t give up easily.

onlooker on Mon, 23rd Nov 2015 10:48 am 



That is what I have often speculated Greg, let us not forget for a moment that has things devolve more, the law of the jungle takes precedence and that would naturally equate to the military.

GregT on Mon, 23rd Nov 2015 10:51 am 



Understanding Unconventional Oil

Conventional oil production has peaked and is now on a terminal, long-run global decline. However, contrary to conventional wisdom, which many embraced during back-to-back oil crises in the 1970s, oil is not running out. It is, instead, changing form geographically, geologically, chemically, and economically.

These dynamics point to a new reality. We are approaching the end of easily accessible, relatively homogeneous oil, and many experts claim that the era of cheap oil may also be ending.

Many new breeds of petroleum fuels are nothing like conventional oil. Unconventional oils tend to be heavy, complex, carbon laden, and locked up deep in the earth, tightly trapped between or bound to sand, tar, and rock. Unconventional oils are nature’s own carbon-capture and storage device, so when they are tapped, we risk breaking open this natural carbon- xing system. Generally speaking: the heavier the oil, the larger the expected carbon footprint.

From extraction through final use, these new oils will require a greater amount of energy to produce than conventional oil.

As conventional crude oil supplies have peaked and leveled o globally in recent years, oil has begun to transition. Many current forms of oil that were once considered unconventional are now grouped into the conventional category, from ultra-deep oil in the Gulf of Mexico to Maya heavy oil in Mexico. These and other new transitional oils are being developed as well, from shale rocks saturated with oil over a broad, continuous area, with the fabric of the rock itself trapping the hydrocarbons in place. is oil transition is in turn giving way to an oil transformation. Non-flowing oils are being produced from non-crude sources in processes that require emergent tech- nologies, as is happening with the oil sands in Alberta, Canada, Venezuela’s Orinoco belt, and eventually the kerogen (an oil precursor) in oil shales in U.S. mountain states, Western Europe, and beyond.

Still, according to the U.S. Department of Energy, although new liquid hydrocarbon supplies have been acknowledged, unconventional oils have yet to be strictly defined. Generally speaking, unconventional oils cannot be produced, transported, and/or refined using traditional techniques. They require new, highly energy intensive production techniques and new processes to deal with their inaccessible placements or unusual compositions.

http://carnegieendowment.org/files/unconventional_oil.pdf

GregT on Mon, 23rd Nov 2015 10:59 am 



Conventional Crude Oils

Conventional oils are hydrogen-rich compounds with relatively short hydro- carbon chains, fewer carbon atoms—C1 to C60—and lower molecular weights than most unconventional oils (around 200). Since hydrogen packs all of the energy while carbon goes along for the ride, conventional oils tend to deliver more productivity with less waste than unconventional oils.

Unconventional Oils

Lacking a clear definition, unconventional oils are typically identified by their characteristics. The heavier the oil is—for example, oil sand (bitumen) and oil shale (kerogen)—the more carbon laden, higher in sulfur, and filled with toxic impurities. Unconventional oils are typically much heavier and sourer than even the lowest-quality conventional oil.
An array of unconventional solid, liquid, and gaseous hydrocarbons can be processed into petroleum products, as shown in Figure 3. But these extra- heavy, impure oils require very large energy inputs to upgrade and preprocess into synthetic crude oil that is then processed by a refinery (known as feedstock). Some new oils are e ectively solid and must be removed through mining or heated in place (in situ) until they flow. These new oils tend to be less valuable than conventional crude, which is readily transformed into the most marketable petroleum products by today’s standards.

http://www.statoil.com/en/technologyinnovation/refiningandprocessing/oilrefining/hydrocarbonvaluehierarchy/pages/default.aspx.

ERRATA on Mon, 23rd Nov 2015 11:39 am 



Please calculate the current price of crude oil (up!) By a factor
DEFLATION !

Is wages in the US are falling (going down)?

https://en.wikipedia.org/wiki/Deflation

http://www.cnbc.com/2015/10/13/the-us-is-closer-to-deflation-than-you-think.html

http://qz.com/555817/deflation-is-still-a-problem/

http://web.mit.edu/krugman/www/deflator.html

makati1 on Mon, 23rd Nov 2015 9:04 pm 



GregT/Onlooker, have you considered the TOTAL SYSTEMS to get a usable product from raw petroleum? You are not talking about just oil fields. You are also talking about refineries, chemical plants, mining, refining, steel making, fabricating, transport, not to mention huge amounts of energy input at every phase and the perhaps hundreds of thousands of people involved, to get from raw petroleum in the ground to that gallon of diesel or gasoline at the pump.

And what are they going to power if there is no one making the replacement parts for their oil burners, equipment, guns, etc.? Today’s systems are not magic. They require many thousands, and some, millions of people from point A to the consumer. And huge energy inputs at every step.

THAT is why I don’t see even militaries holding together for long after the SHTF. Not to mention that many will just desert and go home to protect their families, including that police force some hope will protect them. Yes, they may hold together for a short while, but not for long. This is NOT like any previous SHTF event. This one is the endgame.

At least, that is how I see it.

toms2 on Mon, 23rd Nov 2015 11:59 pm 



Anon,

What about all those steamships and steam trains traversing the world in the early 20th century? They were powered by COAL and were made without using any oil. Coal is at least 10x more abundant that oil, so it’s not peaking anytime soon.

-Tom S

GregT on Tue, 24th Nov 2015 12:27 am 



“Coal is at least 10x more abundant that oil, so it’s not peaking anytime soon.”

Yes toms2, that is a serious problem. Keeping all of that coal in the ground to avoid cooking our planet is going to be next to impossible. Another good reason why our species is so fucked.

GregT on Tue, 24th Nov 2015 12:42 am 



“GregT/Onlooker, have you considered the TOTAL SYSTEMS to get a usable product from raw petroleum? ”

Yes Mak, that’s why I said: “I would hazard a guess that the world’s largest militaries will be among the last to maintain access to oil.”

At some point they too will fall apart.

onlooker on Tue, 24th Nov 2015 1:03 am 



Besides Mak, towards the end we would not be talking about sophisticated weapons we would be talking about simple rifles or machine guns. I suspect at some point the military would take away the weapons of all civilians. Anyway yes your overall point Mak is correct. Stretch the timeline far enough and we regress pretty much too the stone age. As technology also is a product of energy and needs energy to run.

rockman on Tue, 24th Nov 2015 6:34 am 



“One of the few silver linings to peak oil is it will make large scale organized warfare almost impossible.” I gather that you aren’t aware that the majority of the 700 MILLION BBLS OF OIL in the US SPR are dedicated, by FEDERAL LAW, to the US Dept. of Defense, the single largest consumer of fossil fuels on the planet?

You might also want to consider the tens of $TRILLIONS spent by all parties in efforts to secure oil producing regions and then explain why such efforts wouldn’t continue as the world slides well past PO.

makati1 on Tue, 24th Nov 2015 7:30 am 



onlooker, I think the time line for desertion is days and weeks, not years. The lack of ammunition is going to happen quickly as there will be no factories to make them. We do not live in the age of muskets and black powder where ammo can be whipped up at home from simple ingredients.

I do not see any confiscation of guns AFTER the SHTF as there will not be enough military to do so. At best, we have ~1.5 million in the military. Half are not even in the US. That makes the ratio of gun owners about 100 owners to 1 military, IF the military even exists that long. Not to mention the territory to be covered to do so. The US is a big place.

When the SHTF, the world we know will disintegrate quickly. I suspect that TPTB will go completely insane and order a war like we have never seen. Do you think the Empire will go out with a financial whimper? I don’t think so. I see the endgame as a nuclear exchange for too many reasons to go into here. That exchange will be over in a matter of hours with no winners. I hope I am wrong. We shall see.

Einstein said that if we have world war three, world war four will be fought with stones and clubs. I think he was optimistic.

toms2 on Tue, 24th Nov 2015 12:09 pm 



Mak, why won’t we be able to make ammunition after peak oil? How did we make all those bullets during World War I, before the age of oil? Also, if oil peaked now and dropped by 10% over the next 5 years, couldn’t we just divert oil away from discretionary driving (by rationing, for example) and use that oil to transport workers to bullet factories instead?

-Tom S

Flash0 on Sat, 28th Nov 2015 8:43 pm 



Lockheed Martin says they will have a prototype nuclear fusion reactor working by 2020. If that works, it is peak oil, prices that is. Also solar will be so cost competitive by then, it will provide a lot of energy as well. Peak oil is just like peak whale oil, peak wood, etc One could say it happened but it was irrelevant.

Flash9 on Sat, 28th Nov 2015 8:44 pm 



I want my Tesla

Flash9 on Sat, 28th Nov 2015 8:49 pm 



This is my first visit to this site. Do you guys not know about progress. One way or another we will change energy sources due to scientific and technological progress. Peakers and Goldbugs seem to be modern day luddites and hoarders.