[kiwichick]

radon; the us going down the tubes is always important as it is still nominally the largest economy on our insignificant planet

[radon]

radon; the us going down the tubes is always important as it is still nominally the largest economy on our insignificant planet

If the the example of the US economy is used as a proxy for the world economy - then no question, it does make sense. But then this point has already been made in point 2, and the American example is just an illustration thereof. Better merge them - this will also help disambiguation:

"2. Modern society depends on plentiful, cheap oil. In America, when oil costs exceed 4% of real GDP the economy goes into recession."

My point was that what an oil-importer sees as a problem, an oil-exporter may view as a bounty, and the other way round. And the oil pricing at a specific point in time does not have to be necessarily peak-oil related.

[Pops]

Convince us ... that a rumor KSA was going to shut in production would not raise spot prices.

[Pops]

I rearranged and reworded, added and subtracted - trying to make these irrefutable "facts".
Maybe the next list is "10 Way PO will Affect You"
I changed the price effects to simple inarguable relationships

10 Basic Facts of Peak Oil
1. "Peak Oil" is the point of maximum production followed by long term decline.
2. Oil is a finite resource on a human time scale.
2. Discovery of new oil fields peaked 40 years ago and very large fields earlier still (?)
3. Easily extracted (inexpensive) oil will be depleted faster than difficult and expensive oil.
4. As oil exporting nations deplete reserves and consume more oil internally, their exports fall.
5. Increasing oil prices can increase reserves by making once unprofitable oil profitable
6. Increasing oil prices decrease demand by reducing the amount consumers can purchase
7. Increasing oil prices reduce discretionary income available for other uses depressing the economy. (?)
8. Scaling up substitutes will take considerable time, after the need is recognized.
9. Oil production data is proprietary making long range planning by governments difficult.
10.The amount of energy used to produce oil steadily increases reducing energy available for useful economic work.

Whadda ya think?

[Fishman]

Pop, stick with the 10 basic FACTS first then branch. Pstarr , your points are excellent, and I agree with most of them, but some express opinion. This brings on the debate. Lets stick with 10 basic facts first. The effects part should stem from the 10 facts. The debate about basic semantics of Pops top 10 should be tossed, even #1 could be batted around like a tennis ball if allowed.
#10 is great
#9 will be debated
#8 is highly probable but doesn't sit as a fact.
#7 .. decreases gross domestic output.

[DomusAlbion]

I like this concise list. Tools such as this make it easier to present the problem to the uninitiated.

I've got a problem with the first item.

"1. "Peak Oil" is the point of maximum production followed by long term decline."

It seems a little too vague. I know it's difficult to estimate the length of the terminal decline of production but "long term"? What does that mean to an average reader? 10 years? 20? 100?
Some would argue that it could be short term. So it might be good to nail this particular piece of jello to the tree with some kind of hard numbers, such as "at 7% decline production will be at half the current rate in 10 years"

Also it might be nice to footnote each point to reference some data to back up the statements or give pointers to further reading.

[Pops]

"1. "Peak Oil" is the point of maximum production followed by long term decline."

It seems a little too vague.

I was avoiding firm numbers, timelines, predictions in general, you know how those work out: you are only as good as your last failed prophesy!

I was trying to say: "a trend over time of continuous decline with short term increases probable, similar to the US decline curve showing the one-time increase from Alaskan production" -

In three words.

Maybe just:
1. "Peak Oil" is the point of maximum production followed by general decline.

---
Footnotes, links, etc are a good idea.

[Pops]

#9 will be debated

You think so? Unless you are a US corporation no figures are audited and can be made up out of whole cloth, most are treated as a PR tools at best and "national Security Secret" at worst. Guessing at numbers known to someone but not to the public is itself the cause many of the debates around po I think. CERA et al use this as a club all the time "We have the figures, they don't, so believe us!

#8 is highly probable but doesn't sit as a fact.

You are probably right, it is conjecture because it "could" be done I suppose. Suggestions?

#7 .. decreases gross domestic output.

Personally I'm skeptical of the GDP number in general but there is also debate about how much the effect on GDP actually is while there is no debate that higher prices decrease discretionary spending. ?

[Pops]

We've also neglected Mr. Jevons...
Anyone pay attention to him any more?

An interesting article...

[DomusAlbion]

Pops wrote:

"Maybe just:
1. "Peak Oil" is the point of maximum production followed by general decline."

That's better, imho. I like "Terminal decline" -- sounds scary, which is what's needed sometimes.

[rockdoc123]

9. Oil production data is proprietary making long range planning by governments difficult.
10.The amount of energy used to produce oil steadily increases reducing energy available for useful economic work

I think my problem with these has to do with wording.
Oil production data from any publically traded oil and gas company that is listed on a major exchange is not proprietary and is announced in AIF, 10K and other filings. In certain countries the vast majority of the industry is made up of such companies. As an example if you wanted to know what the production in Angola is and what the declines might be you could get that from Cheveron, BP, Total, etc. annual report segregated information since there are few producers (if any) that don't have reporting inquires. Of course their is the issue of the large domestic producing NOC's who do not trade on an exchange (eg. Saudi, Iraq). Maybe just change the wording to reflect the issue has to do with NOC's who control their own industries and because they make up such a large portion of the world production it is a significant issue?

As to the wording of 10 I think I know what you are getting at but the way it is worded suggests something that isn't entirely correct. As an example in a given oil field the initial energy to find and develop the first well is high but as time progresses with that particular field the energy output to energy input ratio increases simply because you only need so many wells, facitilties etc. I think you need to noodle on a reword of this point.

[meemoe_uk]

1. "Peak Oil" is the point of maximum production followed by long term decline.
Ok
2. Oil is a finite resource on a human time scale.
ok
2. Discovery of new oil fields peaked 40 years ago and very large fields earlier still (?)
No, discovery is too ambiguous to be sure of the numbers. 1st, Most middle east supergiants discovered before 1970, the ones that make up the peak of discovery in doomer charts, would have run dry long ago if it wasn't for later much more oil being 'discovered' in those same reserviors. 2nd taking just a modest outlook of oilfinders recent discovery list suggests that oil discovery is setting new records right now, in this new golden age of oil discovery that we're living in, that all doomers ignore because it's inconvienient to their ideals.
And don't forget, if you chuck in tar-sands and shale, it sends the reserves waaaay off the top of the chart.

3. Easily extracted (inexpensive) oil will be depleted faster than difficult and expensive oil.
Ok
4. As oil exporting nations deplete reserves and consume more oil internally, their exports fall.
Ok. But we're still waiting for the US to significantly deplete it's oil reserves. The US is today pulling just below 1970\1 record amounts of crude.
5. Increasing oil prices can increase reserves by making once unprofitable oil profitable
Ok.
6. Increasing oil prices decrease demand by reducing the amount consumers can purchase
Ok
7. Increasing oil prices reduce discretionary income available for other uses depressing the economy.
No necessarily. It just means you stop working for some frivilous consumer\media\luxury company, and get a job with an energy company. So it's just the useless economy that takes a hit, no bad thing!

8. Scaling up substitutes will take considerable time, after the need is recognized.
Not significantly. Not on the time-scale of loss of energy due to PO. 5 years max if tommorrow the leaders got on TV and told everyone they were at war against PO, and we have to drop everything to go out and set up alternatve energy supplies. Alternate energy is currently massively suppressed by the oil cartel.

9. Oil production data is proprietary making long range planning by governments difficult.
No

10.The amount of energy used to produce oil steadily increases reducing energy available for useful economic work.
Yes, but the ERORI is so very high for oil, that ERORI concerns don't become significant till at least next century. Or alternatively when the real costs of obtaining a barrel of oil are around $10000 in todays money. Your own PeakOil leader Matt Simmons always used to propound this, and he was right.
For all intents and purposes, ERORI isn't a concern today. It's the MROMI ( money returned on money invested ). Money is spose to represent potential energy, but it's been heavily defiled from this ideal. To think that the direct link between money and energy still holds true, means you don't understand monetary history or current affairs. Of course, peakers love to insist this link is perfectly intact wrt ascribing the huge world debt due to supposed perilously low oil ERORI.

[meemoe_uk]

9. Oil production data is proprietary making long range planning by governments difficult.
10.The amount of energy used to produce oil steadily increases reducing energy available for useful economic work

I think my problem with these has to do with wording.
Oil production data from any publically traded oil and gas company that is listed on a major exchange is not proprietary and is announced in AIF, 10K and other filings. In certain countries the vast majority of the industry is made up of such companies. As an example if you wanted to know what the production in Angola is and what the declines might be you could get that from Cheveron, BP, Total, etc. annual report segregated information since there are few producers (if any) that don't have reporting inquires. Of course their is the issue of the large domestic producing NOC's who do not trade on an exchange (eg. Saudi, Iraq). Maybe just change the wording to reflect the issue has to do with NOC's who control their own industries and because they make up such a large portion of the world production it is a significant issue?

As to the wording of 10 I think I know what you are getting at but the way it is worded suggests something that isn't entirely correct. As an example in a given oil field the initial energy to find and develop the first well is high but as time progresses with that particular field the energy output to energy input ratio increases simply because you only need so many wells, facitilties etc. I think you need to noodle on a reword of this point.

Thanks rock, by lucky coincidence you addressed (9), which I couldn't be bothered to do. They'll think we're organising ourselves with PMs!

[Pops]

[

10 Basic Facts of Peak Oil
1. "Peak Oil" is the point of maximum production followed by terminal decline.
2. Oil is a finite resource on a human time scale.
2. Discovery of new oil fields peaked 40 years ago and very large fields earlier still.
3. Easily extracted (inexpensive) oil will be depleted faster than difficult and expensive oil.
4. As oil exporting nations deplete reserves and consume more oil internally, their exports fall.
5. Increasing oil prices can increase reserves by making once unprofitable oil profitable
6. Increasing oil prices decrease demand by reducing the amount consumers can purchase
7. Increasing oil prices reduce discretionary income available for other uses depressing the economy.
8. Scaling up substitutes will take considerable time, after the need is recognized.
9. Significant amounts of national oil company data are unavailable, obscuring the true situation.
10. Increasing energy expended in finding and developing, and often in extracting and refining oil reduces the net energy produced.

Suggestions on #9?

Others?

[Pops]

Don't get all bent, P, nothing is final.

I understand what you are saying but by the same token, saying there is no element of speculation in oil prices, that price is completely dependent on supply and demand is far from a fact. The spot market twitches and jumps at every rumor exactly like every other commodity, bond, equity, currency and pretending it's all peak oil is counterproductive.

Anyone else want to chime in on speculation or any other point?

[Fishman]

Pop, # 9 looks better.
#6 ... decreases the demand for other products...


Pstarr, I disagree. Your imput here was most useful. Clarity doesn't mean Pops has to include your points (nor certainly mine). Clarity demands that your points be considered and well argued, which you did.

Personally, I think the economic component is a bit skewed in these 10. These are very important (and to me the most important) but other facts will provide a broader perspective

[DomusAlbion]

I agree with pstarr on his last post. His statement is much clearer and expresses the concept of the export land model which is an important factor in the decline of exports to consumer nations.

Otherwise the list is shaping up nicely.

[kublikhan]

Nice list. If would be nice if each rule was hyperlinked to a thread or article that explains the rule in more detail, and/or provides the facts you mentioned earlier.

There are also a few Peak Oil Fallacies that annoy me. I am not sure if we need a separate "top 10 peak oil fallacies". Or maybe append the fallacies to it's closest rule?

Top 10 Peak oil fallacies:
1. Peak oil is the point we "run out of oil".
2. Oil reserves refill themselves(abiotic oil).
3. Every few years we have a new "peak" in oil, then everything goes back to normal.
4. Peak oil is caused by OPEC.
5. Peak oil is caused by speculators.
6. Peak oil is caused by greedy oil companies.
7. There are hundreds of years of cheap and abundant oil left.
8. When peak oil happens driving less will solve the problem.
9. New oil discoveries more than offset existing oil usage.

Or if we wanted to just append them to existing rules, perhaps something like:

Top 10 peak oil facts:
1. "Peak Oil" is the point of maximum production followed by long term decline. It is not the point we "run out of oil".
2. Oil is a finite resource on a human time scale. More is not being created.
etc.

The wealth part is very significant. It is the central thesis of Dallas geologist Jeffrey Brown's "Export Land Model"

But in the case of the Export Land Model, that increasing wealth because of higher oil prices lasts only a few short years. Very quickly that smaller and smaller amount of oil exported overwhelms the higher price that oil fetches. Then the wealth effect turns negative. Like in Indonesia:

Indonesia, for instance, is actually more oil-intensive than most developed countries. As a result, oil price increases hit Indonesia hard. Indonesia's uniquely high oil intensity is probably thanks to domestic production; the Southeast Asian country only became a net oil importer in 2003, and prior abundance left any notion of scarcity alien to industry and households. In short, higher oil prices are reconfiguring the entire Indonesian economy, and forcing it to confront a new world of scarcity. It is unclear what the political economy's breaking point is, but as oil prices continue their steady ascent, we may soon find out.

Indonesia's oil problem

[Pops]

Hey everyone, take a look at this paper and tell me what you think, it's new to me...

Executive summary:

In brief, the oil pricing system witnessed major transformations in the last 50 years or so which saw the oil market shift from the administered oil pricing system first governed by multinational oil companies and then governed by OPEC to a market related system in which oil was initially priced off the spot market until the futures market assumed a greater role in price discovery.

[dolanbaker]

I would slightly amend point one, to reflect the availability of oil to individual consumers.

Top 10 peak oil facts:
1. "Peak Oil" is the point of maximum availability per consumer followed by long term decline.

The reason for this is simply the fact that even though the population is still rising steadily, the production of oil has plateaued since 2005 plus the number of consumers has increased at a more rapid pace.

This has shifted the global distribution of oil quite significantly, for example Ireland has reduced its oil consumption some 10% since 2006 (OK the end of the building boom caused that), but the key point is the fact that all of that "slack" has been swallowed up by "new" consumers in the east!