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Page added on February 26, 2016
Forget the old Peak Oil theory, now the oil industry’s doom will be its everlasting supply
Peak-oil theorists — they’re the ones who predicted $300-a-barrel oil, because new discoveries wouldn’t materialize — were fundamentally right after all. So they say.
No, not about the $300 price tag. Oil is now around US$30 a barrel and could stay there indefinitely, but that detail, they explain, only helps prove their point. And no, not about the failure to find new oil: The beauty of their theory, modestly revised, is that it doesn’t depend on ever-diminishing supplies. To the contrary, peak-oil theorists got it right, sort of. Oil will still peak and people will still abandon oil, just not because we run out. To the contrary, the oil industry’s doom will be its everlasting supply.
For those who have trouble understanding this horror scenario, here is a short course from instructors such as Bloomberg Business and Thinkprogress’s Joe Romm, crowned Hero of the Environment by Time magazine. If you don’t have US$41 billion worth of savvy, as Bloomberg Business’s owner does, or a PhD from MIT as Romm does, you might need to read this explanation twice.
The peak-oil theory is valid, they explain, if peak oil is understood in terms of demand, not supply. While the supply of oil won’t peak, demand for oil will, and soon, since no one really wants oil. The proof is abundant and obvious — everything’s trending that way — once you think about it. Take the automobile.
The oil industry’s doom will be its everlasting supply
Electric vehicles now account for a mere one-tenth of one per cent of the world’s one-billion cars and, according to OPEC, will only account for one per cent in 2040. But that estimate could be way off, Bloomberg Business announced this week in “Sooner Than You Think,” its series that “examines some of the biggest transformations in human history that haven’t happened quite yet.”
“By 2020, some electric cars and SUVs will be faster, safer, cheaper, and more convenient than their gasoline counterparts,” leading people to abandon gas vehicles in droves. A Bloomberg New Energy Finance chart shows world oil demand peaking about 2025 due to this “transport transformation.”
Even earlier, by 2023, electric cars could displace two-million barrels of oil a day, creating a glut that will cripple the oil industry in the same way the advent of shale oil led to a crippling glut of two-million barrels of oil a day. (Are you still with me?)
But it gets better (or worse, if you’re rooting for the oil industry) because more and more barrels get displaced as the electric car takes over from the gasoline vehicle, in the same way colour TV took over from black and white. By 2030, eight-million barrels a day get displaced; by 2040, when half the world’s cars are electrified, 18 million barrels. If you think the oil industry is on the ropes now, imagine it after 2030. How many black-and-white TVs do you see at Best Buy?
The imminent demise of the gasoline vehicle joins other trends that make peak oil inevitable, peak-oil enthusiasts note, like Millennials’ rejection of the car culture and the imminence of a breakthrough in car batteries that will let them propel vehicles 200-300 miles on a single charge.
Absolutely key to all this was the Paris global warming meetings, explains Romm, where world leaders promised to leave most of the world’s fossil fuels in the ground. As evidence that they will succeed, he cites that exemplar of environmental responsibility: China. “China understands the future is low-carbon and then zero-carbon — so it plans to become the world leader in both the production and use of battery electric vehicles, just as it already has in both wind and solar power.” Besides, global governmental action “is inevitable in the 2020s as the reality of accelerating climate change becomes increasingly obvious.”
Put all these imminences and inevitabilities together and something else becomes inevitable — the embrace by environmentalists of a new Peak Oil Theory.
12 Comments on "Forget the old Peak Oil theory, now the oil industry’s doom will be its everlasting supply"
Truth Has A Liberal Bias on Fri, 26th Feb 2016 8:22 pm
Fucking retarded!
In the middle on Fri, 26th Feb 2016 10:12 pm
The only way it will be everlasting is if there is no demand. It’s possible.
ohanian on Fri, 26th Feb 2016 10:40 pm
This is only true if electric vehicles offer an advantage over ICE vehicles and if electric vehicles cost of ownership and usage over its lifetime is less than ICE.
adonis on Sat, 27th Feb 2016 12:12 am
thats 1 million elecric cars that we can all share at 0.1% at current values this dudes trippin
twocats on Sat, 27th Feb 2016 1:40 am
This triple meme of electric vehicles, Paris talks, and super-cheap oil is rampant and just completely crazy. Oil isn’t plummeting in price because EVENTUALLY people are going to buy electric cars. That would be insanity. And the Paris mandates don’t even begin to think about going into effect until 2020.
And if everything is such flipping peaches and freaking cream, why is the value of global trade, and almost Every Other Economic Indicator that has ever graced our lives, going DOWN?
http://mishtalk.com/2016/02/26/world-trade-plunged-13-8-in-us-dollar-terms/
Unbelievable. But its like I’ve said, Peak Oil might not be recognized even a decade after its actually happened. The dark side of the force is too strong with the propagandists.
Go Speed Racer on Sat, 27th Feb 2016 3:45 am
That was something for rich fat Trump voters to browse, while sitting in the captain chairs of their 55 foot motor home. It seemed to say oil will never run out and we don’t need it anyway.
yoananda on Sat, 27th Feb 2016 4:59 am
“The only way it will be everlasting is if there is no demand. It’s possible.”
This is it !
But it needs to change the way we think the world to realise this.
Davy on Sat, 27th Feb 2016 6:51 am
These articles have no danger meter. They typically will take bad news and spin it. They will use the news to discredit those that threaten their narrative. Most main stream criticisms of peak oil are not academic. Often Financial main stream media is promoting something. Peak oil was happening and is happening. No need to elaborate depletion and the effects of a more expensive resource that can’t be substituted.
EV’s are a joke and nothing more than a niche. I feel they are important and should be promoted. The more we can have running around the more that can be used in our coming transition to a salvage economy along with the return of traditional work sources like animal and human labor.
What is really hard for the financial mainstream to understand is our economic system is in danger much more than our oil situation. Oil is a brick wall somewhere over 5 years down the road. At that point supply will be uncomfortably close to uneconomic per the needs of our global system. What should be worrying to these folks now is the damage demand is doing to supply. The global oil complex is being gutted. The demand destruction that is occurring now will leave supply potential permanently damaged which will permanently damage the ability of the global economy to grow. Potential growth is being permanently lowered. Right here right now is likely peak oil, peak demand, and peak everything.
This period is a combination of many things that can come under the heading of limits to growth with diminishing returns to our complex global arrangements. What is really happening now is the economy and global arrangement are buckling under economic dysfunction of a decade of a variety of poor policy and economic activity along with long term limits and diminishing returns. It is systematic and as simple as that. Years of malinvestment, overcapacity, and uneconomic development cannot be qualified as demand. It is in reality demand destruction that will not bring a return to support future demand.
If you discard reality and make poor decisions bad results happen. When this is done at a global level the results are global. It is our global economy now that is broke. All other issues are part of that and influenced by it. Economic decay is leading the pack and being magnified by all the other well-known problems.
If we cannot properly manage and apply our collective wealth it will decay. There is nothing spectacular about that. What is amazing is the global social narrative that believes either there are no problems or problems are far into the future and can be overcome. The idea that anything can save us as the momentum of decay intensifies represents that part of human nature that has always been present. Humans have always discounted their collapse. It is our human nature to value more today than tomorrow. If our wants are satisfied today we are hard to scare. Our abilities to imagine a better future or a solution to problems is amazing. Then there is the WTF attitude of what can I do about something so big.
We are now in danger at all levels of uncontrolled descent across the board. This is complete systematic decay and it will be manifested everywhere. The time frame and intensity has not been enough to shake us out of our stupor of optimism. We appear to now be in the bumpy descent period with the economy destabilizing. Once we go into a deep recession that will be a time we can visualize a period of no return. Normality will change in a period of decay than we are used to in a period of growth. This new period will have different characteristics that we will try to explain with traditional thinking hence that article above. More of these articles will come until reality fully discredits them.
Dredd on Sat, 27th Feb 2016 7:08 am
Forget the old bathtub model theory too (The Bathtub Model Doesn’t Hold Water).
penury on Sat, 27th Feb 2016 9:15 am
What Davy said. Hope is a marvelous drug. However, Reality bites.
rockman on Sat, 27th Feb 2016 9:52 am
You guys are too mean. LOL. Of course there will always be oil to produce. It might only be a small % of current production and might cost $30 or $300 per bbl. But they are correct: we do have an ever lasting supply of oil. Just as we have an ever lasting supply of idiots that can’t grasp the concept of the Peak Oil Dynamic. LOL.
twocats on Sat, 27th Feb 2016 10:59 am
absolutely rock, I’ve got family (who also have a neighbor or two) with small crickets in middle-Ohio. They produce about 15 barrels a month, and have been for as long as I can remember (20 years or so). I don’t know how long they’re going to last, but I imagine if a well is producing 100,000 bpm now, for how many years will it be producing something. I guess people should stock up on spare parts for tractors. And set up a mini-refinery?