This thread is the epitome of peak oil. I mean, this thread is about exactly what everyone was yammering about and predicting all these years! Demand has exceeded the capacity of the cheap/easy "conventional" oil (see: low-hanging fruit
) forcing us to use more expensive "substitutes" or do without.
The economists were right after all! The magic hand is
"creating" a substitute for $20/bbl conventional oil in the form of $80 Syncrude (now there's an Orwellian term) and of course stagflation and unemployment for those who can't afford that price. Peakers were mistaken in thinking the economists were deranged voodoo priests who promised the Energy Fairy would pull a cheap-energy rabbit out of her ear when all they really predicted was that "something" would take the place of Clampett Crude. It turns out the substitute is the Deepwater Horizon, fracking methane on tap and stagflation.
The following chart should tell us everything we need to know about peak oil:Dave Murphy/OilDrum
We've exceeded the production capacity of the $20 oil, the $40 oil, the $60 oil and now we're pushing the capacity of the $100 oil. Coal liquefaction or gas to liquids or methane from saturn might fall in that range or not but we also need to remember we're using up the cheap oil as fast as we can - that chart is being eaten up from the left constantly. (For you King fans out there it's just like the Langoliers consuming the past!)
Notice that deep-water oil, which our few remaining cornies speak of so fondly and reproduce oil company press releases about so faithfully, falls at the extreme right hand side of this chart - that's the expensive end btw. That means all that oil will be sold for at least $100 I'd guess. Of course there is more oil to find, no one disputes that, but the simple fact that is hasn't been found yet should give an indication of how well it is hidden and how hard (expensive) it will be to extract.
The only way for oil prices to fall below $80 for any period is either to come up with 50mbpd of oil costing less than $60 to produce or dropping demand by about 20%. Oil is priced at the cost of the most expensive barrel needed to meet demand.
Turns out everyone was right - except the people who said oil would always be cheap.