[ennui2]

As for Climate Change, color me UNINTERESTED. I remain unconvinced that it is real, and even if it was true - it will hurt us far less than did two terms from POTUS Barack Obama.

Your credibility just got shot to hell with this statement. You seem concerned about peak oil, but then when it comes to AGW you fall upon a typical Fox News ideologue's view of the world. Cognitive dissonance in the extreme to believe in limits to fossil fuel extraction and not limits to CO2 pollution.

[Pops]

But this is new. And I said it first! (yay me!)

Even tar-sands is a suspect addition: for every barrel of tar-sands delivered a barrel of NGL is used for upgrading. That's double dipping.

That's truly new stuff and that makes me an expert.

Very good, +1 for you folks keeping score at work, LOL

But then so is counting the "eau d Bacon" that gets exported out as product then imported back in dilbit.
For that matter so does ethanol double dip the oil used to grow and cook it
and the condensate that gets split into ethylene and exported to make rainbow colored plastic chachkas and adds nary a mile driven.

The thing is, nobody knows but us...

[Revi]

We'll see what happens. The peak may have happened, or maybe not. I do think we're heading for trouble now.

[Revi]

Don't take my word for it. Here are some of the latest postings in Peak Oil Barrel:
http://peakoilbarrel.com/

[ROCKMAN]

Revi - Please don't feel like you're being picked upon. I suspect you're being very earnest. But lets revisit some facts. "...that the useful work of oil will decline until our society can't afford it, and quickly. He predicts that the going price for oil in 2020 is around $12 a barrel, which means nothing but the legacy fields are going to be producing." Like Pops I don't understand what "useful work" means. Every bbl of oil ever burned was useful...to whoever burned it. Otherwise why would they have done so? And look at what you just said: society won't be able to afford $12/bbl oil in 2020? You've completely lost me there. Am I misreading you?

As far as only the "legacy fields" will be producing do you understand what the legacy wells are: they are the wells that are producing today. And that's more than 80 million bopd. And I think you're confusing the cost to develop reserves with the cost to produce existing reserves. Obviously a price of $50/bbl doesn't justify the drilling of many formerly attractive shale wells. Hence the collapsing rig rates. But that price won't inhibit the production of those 80+ million bopd from the existing wells. The vast majority of those wells can generate a positive cash flow @ $12/bbl...or less. I'm producing a 400 bopd well that costs about $2/bbl to pump. So at $3/bbl I'll still produce because I can still make money doing so. Not nearly as much if oil were $12/bbl but still a positive cash flow.

By all means believe what predictions you think make sense. Personally I don't pay much attention to anyone's predictions. Even mine on the rare occasions when I make one. But just look at the current dynamics: the world is currently producing oil, NG and coal at near record highs. The world was producing oil, NG and coal at high levels 10 years ago. In 1998 the inflation adjusted price of oil was less than half the CURRENT price and the world was consuming almost 80% as much oil as it does today. And mew oil wells were still being drilled back then.

Some if you want to believe someone's radical change in the dynamics we've seen for the 20+ years that's OK. But you might want to ask them exactly what's going to cause such a major shift.

[Revi]

I am inclined to believe you Rockman, but the problem is that any decline will be a nightmare in this civilization we have. It's already wreaking havoc in the financial markets. I can't see things dropping as much as 80% by 2020, but I can see it dropping maybe 15 %, or about 3% per year easily.

That's enough to wreck the economy. Maybe we'll use less oil and the AGW will be a little less.

Anyway, that's my prediction. Please don't quote me on it in 8 years!

[Ibon]

I am inclined to believe you Rockman, but the problem is that any decline will be a nightmare in this civilization we have. It's already wreaking havoc in the financial markets. I can't see things dropping as much as 80% by 2020, but I can see it dropping maybe 15 %, or about 3% per year easily.

That's enough to wreck the economy. Maybe we'll use less oil and the AGW will be a little less.

Anyway, that's my prediction. Please don't quote me on it in 8 years!

We want to do everything to avoid wrecking the economy and yet that is inevitably the first step in changing consumption habits. So, putting aside ones personal tragedy if the economy crashes we should all be welcoming this?

We have chosen the default of consequences long ago over a designed transition.

I don't try to predict the trigger points of this teetering juggernaut.

[ROCKMAN]

Revi – You’re a brave soul…I try like hell to control myself and avoid making predictions. I’m usually pretty good at knowing what I don’t know.

As far as a decline being a “nightmare” I suppose that depended on how you define nightmare and who specifically you’re talking about. The INCREASE in US oil production has been a bit of a nightmare for countless Americans thanks to the high oil prices that caused the increase in production. Some time ago I watched a group of families selling stuff, like their childrens’ toys, at a garage sale to raise gasoline money so they could car pool to their jobs. And now that the shale boom has busted and prices dropped those families are having an easier time of it. Not a good time for sure…just better.

It’s obviously much more complex than the volume of oil produced. Look back at the 80’s: oil consumption tanked as the world slide into a recession caused primarily, IMHO, by the oil price spike of the late 70’s. And then oil prices dropped below $15/bbl by the mid 80’s. And a $15/bbl oil price was not a good thing for the world because it represented economies that couldn’t function very well with prices at half our current level.

Which is why I try hard to not predict future oil prices. Even if I were correct that prediction wouldn’t really tell you what the world would be like at that point in time. Consider the prediction of $12/bbl oil in 2020. Is that going to be a vibrant global economy reaping the benefits of cheap oil or will the world be in another soul crushing depression? One could build a case for either scenario but I would lean towards the global depression.

Damn it…I lost control and made a prediction. LOL.

[Pops]

Sounds like peak to me.

Ron @ POB has said for a while that he thinks peak is right now, I think he said in the 12 months from last to next October.

He is talking about something different than Short. Ron is talking about peak oil, which is the same as saying maximum flow rate, in other words, inability to increase or even maintain production volume, suffice to say the point never again to be exceeded, as such it would be the highest level of extraction ever attained and never to be repeated, the apogee before the long road to happy motoring nadir, the pinnacle of the oil age, the zenith of ...

The thing Short is selling (literally) is a silly "economic" model all dressed up in thermodynamic jargon. He starts with the assertion (without citation that I've found) that in 2012 to extract and refine oil required the expenditure of half the oil produced - even shales have a better return than that, maybe 5-10 at worst? Anyway, by 2020 (so says the model) all the oil produced will be used to produce oil with none left over for trips to the Quik Sac.

As if that isn't dramatic enough to sell a "report", he then charts the nominal price of oil (asserting there is no such thing as inflation) and deduces the economy will only be able to afford $11.82/barrel in 2020. Down to the penny, baby!

--
Those are 2 very different things.

Ron's is the typical PO prediction: depletion + nowhere to drill = decline. That isn't dramatic enough to make for a good "Movie Treatment" though (h/t mos). Even if there were absolutely no new wells drilled and no reworking of old wells, none, decline would "only" be in the 3-4% range, (maybe a little more the first couple of years as the shales rapidly croaked). But even that isn't going to happen since supply constraint will return the price to the edge of affordability and enable some newer fields to be developed, infill wells drilled, old ones reworked, tar mined, wet gas tapped, yada yada.


EROI by most accounts is in the 12-18 to 1 to one range, not 2:1. Does anyone remember this chart?



There is very little difference in net energy between 100:1 and 10:1 efficiency. Maybe 8-9% less energy out? Considering we have built the current economy on ICE engines that, at the theoretical maximum efficiency, waste 65% of the stuff we put in the tank (much, much more in a 3/4 ton coffee cup hauler or '72 Eldo), I'm thinking we have a ways to fall yet.

Regardless, there is very little oil that can be extracted for $11.82/bbl. That being the case, the appeal of Short's "model"—especially to us old farts, is that it predicts we do run out, and it happens quickly, before we croak! The shit of course will then hit the fan and...
we get to make fun of all the cornies and sheeple dying in the streets.
Headline reads: Peakers Vindicated!
We're the Winner!

.

[Revi]

Thanks for the explanation Pops. I was wondering how that can happen. I guess I'm one of those "old farts", but I am also hoping to retire in 3 years!

[kanon]

The thing Short is selling (literally) is a silly "economic" model all dressed up in thermodynamic jargon. He starts with the assertion (without citation that I've found) that in 2012 to extract and refine oil required the expenditure of half the oil produced - even shales have a better return than that, maybe 5-10 at worst? Anyway, by 2020 (so says the model) all the oil produced will be used to produce oil with none left over for trips to the Quik Sac.

Thanks for the graph. There should be some way to get a good approximation of the oil consumed in the extraction and refining (and delivery) process. I do not have access to these statistics and probably would not know what to do with them if I did. Still, there should be some information available to test the assertion.

I recall comparisons to whale oil and its eventual exhaustion. In the case of whale oil, the price did not rise because, IIRC, petroleum oil was substituted. Likewise, if oil supplies become problematic due to peak oil, replacements will be found. There are, no doubt, many ways to accomplish the same "value" or "work" with less energy and different social arrangements than we have now. We hear that there is no viable substitute for oil, but I think this is as much marketing propaganda as serious analysis. Our present FF based lifestyle is, of course, the pinnacle of human existence and it seems unthinkable that any other way of life could be as wonderful. Ignore the fact that much of it is not really optional. Yet, I think if peak oil begins to bite a new lifestyle and marketing program will take shape. We will likely have fewer "energy slaves" and less consumption, but there will be benefits. There will probably be a lot of controversy and possibly social upheaval, but the interrelated factors are too complicated to summarize in simple relationships. Thus, I do not think the price of oil is necessarily a good yardstick or indicator of peak oil.

To the thread starter, I think the ill effects of FF pollution will make more difference than peak oil. I will predict an increased focus on PV, AltE, efficiency, and alternative transportation modes to the point that peak oil can be reported as demand destruction. We will eventually ban FF burning outright, but not until there is enough alternative energy to support the people who would enforce the ban (assuming that drought, famine, and war don't accomplish this first).

[Pops]

Hamilton, Hall, Cleveland are some guys to search on.

Here is one recent meta-study



Remember, around 15 years ago, exploration went through the roof trying to increase production to keep up with huge demand from Asia. Of course exploration is where most of the energy goes. If all exploration stopped tomorrow (maybe it has, LOL) ERI would shoot skyward—or at least back up to 30:1.

Again, poor ERI isn't a non-problem, it is a real symptom of supply constraint. But like everything about the future, how you choose to view it makes all the difference. If Short adjusted his model to match that ERI chart and his price projection to account for inflation—and then came up with the same conclusion, I'd be just as wigged as the Mad Hatter.

[kanon]

What do you say about this graph?
EROI of different fuels and the implications for society


At what point does the economic activity cease to justify the effort? There was an argument that the economy could be based upon digging holes and filling them up again. Just have some activity to keep everyone busy and have something to monetize. That seems to be an implication of shortonoil's statement that half the oil is consumed in all production aspects.

However, I question the value of EROEI studies because I doubt they really capture the cost/benefit of various energy forms. They are certainly valuable, but what is the context? For example, how does acid rain and ozone pollution figure into EROEI calculations? What about special activities that can only be done with certain energy forms? Secondly, I question economic analysis because (1) it is so filled with propaganda, value bias, and price distortions that it has little objective value and (2) the economic/social relations for different energy systems are different and not directly comparable.

I would like to throw out the assertion that FF leads to debt, while PV and wind lead to equity. For FF, one must always buy fuel so there is a constant expense in addition to the capital/equipment costs. For PV and wind, however, there is a period when the equipment is paid for and there are no fuel costs. If there is any validity here, I think the economic analysis from people like Tverberg would have to be revised.

[Pops]

The important number I think is the extraction number, that is where the increased difficulty of finding and getting oil shows up. Refining has always taken a lot of power, oil is distilled with heat to break it down into constituents, so that is not new. Ditto retail distribution. And of course we have had roads for a while now, too.

As I mentioned above, ICE autos are maybe 20-25% efficient at moving the 3,000# of themselves around, not exactly sure how that translates to moving a 200# human his requisite 36 miles per day to somewhere important.

You can go on and on, prolly otta figure the energy required to make the electricity to power the radio station the driver of the auto listens to on his 36 mile route .... LOL

[kanon]

The important number I think is the extraction number, that is where the increased difficulty of finding and getting oil shows up.

You can go on and on, prolly otta figure the energy required to make the electricity to power the radio station the driver of the auto listens to on his 36 mile route .... LOL

Yes, it can go on and on. Looking at the extraction number makes sense.

[Pops]

I would like to throw out the assertion that FF leads to debt, while PV and wind lead to equity.

I think that is right. Oil has always been energy negative from the perspective that you start with 100units of energy in the ground and wind up with 20 units at the pump and maybe a couple at the wheels.

But the key is those couple of left over units are so very powerful it is easy to waste even them.

Pretty crazy.

[ROCKMAN]

kanon - I'll address the drilling/production aspect of EROEI. As far as the other phases I'm not sure how it makes sense to put any sort of tag on them. Consider the EROIE of moving a bbl of oil sands production 1,700 miles from Alberta to a Texas refinery when there's oil that travels less than 50 miles to get to the same refinery. And products? I live across the road from the 2nd largest refinery in the western hemisphere. Fuel is hauled 2 miles to my local Exxon station with the same gasoline hauled 800 miles to Atlanta and 1,400 miles to New England.

OTOH how does the EROEI of any phase impact the dynamics? If a refiner can’t sell oil for a profit he’s not going to buy any if the EROEI is 5 or 50. A trucking company is going to haul gasoline to a service station if the EROEI of the process is positive or even negative: as long as he’s getting paid enough he could care less if he burns more energy than he delivers. That’s not his problem…that’s the problem for the folks having him haul the fuel.

And as I’ve explained many times the EROEI of DRILLING FOR OIL can’t get much below 5 or 6 before the economics of the project kill it before the EROEI gets any lower. Folks grossly over estimate how much energy it takes to drill a well. EROEI has never been a direct factor in determining if a well is drilled and never will be. But as far as PRODUCING an existing well the EROEI isn’t even in the discussion. I’m producing a 400 bopd well that costs about $2/bbl to pump. With that little energy utilized imagine how high the EROEI must be.

The critical thing to remember about that chart IMHO is that none of those phases are judged on the basis of EROEI by the folks conducting those operations. In fact the vast majority of those folks are probably not even familiar with the term EROEI.