Why the oil industry has buried the idea of "peak oil"

[Rune]

European Energy Review

In this article I will not undertake an exhaustive re-examination of the peak oil theory and its counter-arguments, but I will attempt to assess the lessons from the roller-coaster of the oil market of the last four years. I will discuss four areas in which key evidence has emerged explaining recent oil history and supporting a broadly optimistic view on our oil future: OPEC policy; new exploration plays and advances in unconventional oil; the reaction of the economy to oil shocks; and geopolitics, particularly in the world's oil hub, the Middle East.

Intellectually, the peak oil movement appears to have moved on to preparation for collapse (or at least an end to growth). Peak oil has become conflated with other real or potential crises: the recession, climate change and overpopulation.

This is very reminiscent of the 1970s, and indeed features of OPEC strategy, rising costs, new resource types and technologies are also familiar. There are clearly different ways the oil market may evolve over the next five to ten years. A continuation of high prices in the face of production disappointments and strong Asian growth is plausible. So is a kind of re-run of the 1980s, with new supplies, growing efficiency and intra-OPEC competition driving down prices. What is not on the horizon is a resource-limited peak in production, nor an associated economic collapse.

Good, detailed article.

[Arthur75]

lol

[pstarr]

lol

lmfao

[dsula]

it's not worth waiting for the effects of po to kick in. It's a slow 200 year grind down.

[pstarr]

it's not worth waiting for the effects of po to kick in. It's a slow 200 year grind down.

who's waiting? peak oil has come and gone. this is the down slope.

[dsula]

Yeah-but the slope is awfully gentle and some of the slack is even absorbed by NG. No doubt po/p-energy will eventually destroy our way of life and also reduce population. But it takes way longer than anticipated. There's so much fat and excess to trim, it will take many decades before po forces a radical lifestyle change upon us. Best is not to wait for it.
I'm as disappointed as you are. I liked the imminent doom.

[vision-master]

If'n we are awash with oil - gas proces should be DOWN not UP!

[Rune]

If'n we are awash with oil - gas proces should be DOWN not UP!

You didn't read the article.

[pstarr]

Yeah-but the slope is awfully gentle and some of the slack is even absorbed by NG. No doubt po/p-energy will eventually destroy our way of life and also reduce population. But it takes way longer than anticipated. There's so much fat and excess to trim, it will take many decades before po forces a radical lifestyle change upon us. Best is not to wait for it.
I'm as disappointed as you are. I liked the imminent doom.

I wouldn't be too quick to assume this plateau will last forever. Peak oil is like the tides or the seasons. This is slack at the high or low tide when change is imperceptible--but then the curve quickens. Don't you notice the accelerating day length? One minute the beach is quiet and then suddenly the tide comes rushing. We have come off 50 years of accelerating oil-production increases. We are at the top of the roller coaster. Things are quiet. Haven't you heard of IEA's 6.7% decline? That is the other side.

[pstarr]

Anyone who wants to read about the arguments FOR peak oil and AGAINST can download for free, courtesy of me, this fine book, which would cost you a cool $50 if you tried to buy it on Amazon:

Oil Panic and the Global Crisis: Predictions & Myths
http://www.4shared.com/account/dir/w9zY ... r=62806440

How can there be arguments against peak oil? There can only be debates about timing and consequences.

[dissident]

Yeah-but the slope is awfully gentle and some of the slack is even absorbed by NG. No doubt po/p-energy will eventually destroy our way of life and also reduce population. But it takes way longer than anticipated. There's so much fat and excess to trim, it will take many decades before po forces a radical lifestyle change upon us. Best is not to wait for it.
I'm as disappointed as you are. I liked the imminent doom.

There may be a lot of fat to trim but regardless it is not plausible that the all-time world production curve will be symmetric around the peak. Just by the demand stress on existing oil fields and the rapid development of the diminishing new finds there will be a shift of the future production tail towards the time of the peak, i.e. now. The area under the curve (i.e. total future production) is not going to change, much, but the steepness will. This automatically accounts for a plateau or slow initial post-peak decline. Unless world demands starts to drop significantly from now the pressure to bring oil to market will progressively steepen the future decline rate. But this will not happen without a serious economic contraction.

The Hubbert curve would be symmetric if we had world economic and even population decline that mirrored its increase until the peak. Or alternative energy sources became serious contenders and rapidly. World governments are dithering about nuclear and the "green" alternatives forecasts are simply whack.

[rangerone314]

I wonder if the trimming of the fat includes the rising expectations of the growing Chinese and Indian middle classes for continued economic growth and progress. The revolutions often happen when people had hope and rising expectations and then become angry when they are denied. Add to that a huge youth bulge, and in China, a surplus of about 50 million men who will never have wives or families. Does trimming the American "fat" include relocating a hundred million Americans from the suburbs?

I predict that China will have a revolution in the future, from a leader who will promise the Chinese to get their fair share of oil, perhaps from the greedy Americans who have priced them out of the market. Or perhaps they will collapse the US economy. In any event, in 15 or 20 years when there are multiple massive resource wars, I'm going to think of this article and laugh. Maybe I'll print it out, in case there is a perpetual black out in the future.

[dsula]

The area under the curve (i.e. total future production) is not going to change, much, but the steepness will. This automatically accounts for a plateau or slow initial post-peak decline. Unless world demands starts to drop significantly from now the pressure to bring oil to market will progressively steepen the future decline rate.

That of course is questionable. As high price makes additional reserves viable. Heroic effort (manpower and industrial output) will be put to work in extracting this oil. The decline will then gently go on for decades.

[dsula]

In any event, in 15 or 20 years when there are multiple massive resource wars,

Exactly, it's always next year, or in 5 years, or in 20 years.
Listen to Kunstler, he's predicting doom next week, for how long now?

[radon]

Listen to Kunstler, he's predicting doom next week, for how long now?

Good point, but one feature of a fast crush is that it always comes unexpected.

[kiwichick]

USGS reduces estimate of yet to find oil from 649 billion barrels to 565 billion barrels

[Maddog78]

Doomer says he will laugh when proven right in 20 years.



I love this forum.

[Pops]

The area under the curve (i.e. total future production) is not going to change, much, but the steepness will. This automatically accounts for a plateau or slow initial post-peak decline. Unless world demands starts to drop significantly from now the pressure to bring oil to market will progressively steepen the future decline rate.

That of course is questionable. As high price makes additional reserves viable. Heroic effort (manpower and industrial output) will be put to work in extracting this oil. The decline will then gently go on for decades.

What is questionable? There is only so much oil and sorta-oil. No question about that.

"high price makes additional reserves viable" = high demand brings production forward = "pressure to bring oil to market will progressively steepen the future decline rate"

What, besides wishful thinking, will cause "The decline will then gently go on for decades" if we will take heroic measures to keep increasing production?

[Pops]

USGS reduces estimate of yet to find oil from 649 billion barrels to 565 billion barrels

Where did you see that KC?

[pstarr]

The area under the curve (i.e. total future production) is not going to change, much, but the steepness will. This automatically accounts for a plateau or slow initial post-peak decline. Unless world demands starts to drop significantly from now the pressure to bring oil to market will progressively steepen the future decline rate.

That of course is questionable. As high price makes additional reserves viable. Heroic effort (manpower and industrial output) will be put to work in extracting this oil. The decline will then gently go on for decades.

Our consumer society does not run on heroic efforts rather inexpensive light, sweet, free-flowing crude oil. The Oil Expense Indicator tells us the 1st-world nations such as ourselves must pay less than 5% of our GDP on crude or the system fails. Read your Hamilton et. al. on the causes of recession and the especially the recent Great Recession. The more money/energy we spend on procuring energy the less is left over for consumer goods, and eventually necessities such as housing, heat, food and water. When that happens much oil will be left in the ground and once again mostly function as canoe caulking.