Peak Oil is You

Donate Bitcoins ;-) or Paypal :-)

Page added on March 27, 2013

Bookmark and Share

The Reward for Being Right About Peak Oil: Scorn Heaped With Derision

General Ideas

Right before the end of the millennium, the clues started piling up. The world had been scoured many times over in the quest for the ultimate bounty, gushers of light sweet crude. Discoveries of new oil had peaked in the decade of the 1960s and had been falling ever since. Supergiants, the oilman’s term for those wells capable of pushing out a million or more barrels a day, were no longer being found, and the ones in extraction were starting to accelerate in their decline, from Prudhoe Bay to Ghawar Field to Cantarell Field. Sure, there was other “oil” out there, but it was trapped in very deep water, or stuck in tight rock formations that had to be fractured at great expense for the oil to come out. These plays could be worked, but only if the price of oil stayed very high, and even then the flow rates would never match those of the supergiants and giants that the world depended on for its tens of millions of barrels required each day for the economy to keep humming.

So former oil geologists like Colin Campbell and Ken Deffeyes started ringing the alarm bell. “Hey!” they shouted at the top of their lungs, “we can’t maintain this flow of oil forever! Even if we use all the non-conventional sources like tar sands, Arctic oil, etc the amount is going to get less and less over the course of this century. And those other kinds of oil are a lot dirtier and carbon-intensive than the oil we’ve been using!”

What did they predict? And how close were they to being right? Let’s take a quick look, lest we get overwhelmed with the cornucopian hyperbole that bombards us every day.

The price of oil will rise dramatically, possibly by an order of magnitude.

Check. Got that one right. Oil went from $10/barrel in 1999 to about $100/barrel today. Suddenly that made all that hard-to-extract oil that we’d known about for decades in places like Alberta and North Dakota look attractive.

Extraction will plateau for a decade or so as conventional oil starts to dwindle and we throw everything we can at unconventional sources like tar sands, tight oil, ultra deep water, etc.

Check. In 2004, production reached 73 million barrels per day (mbpd). Annual average expenditures on oil exploration doubled from 2004 to $600 billion annually in 2012. For doubling our cumulative effort at oil extraction, we’ve managed to raise production to 75 mbpd, as the oil price has tripled since 2004. It seems logical to assume that an additional two million barrels a day global increase will require another doubling of expenditures and another tripling of prices, which would mean $10/gallon gas here in the U.S. China increases its daily oil consumption by two mbpd about every four years.

The economy will contract and enter a period of stagnated growth. More vulnerable economies will crash profoundly.

Check. U.S. employment has yet to reach its 2008 levels. Economies like Greece and Spain have collapsed by as much as 25 percent.

Oil exports will begin to fall, especially as the price rises and extracting nations becoming richer, because this means they will be wealthier and consume more of their own oil.

Check. Worldwide oil exports peaked in 2006 at 45.6 mpbd and have declined by over 2 mbpd since. Saudi Arabia has the highest growth rate in oil use. Consumption has risen by one mbpd to almost 3 mbpd over the last decade, and exports have fallen by over one mbpd. If current trends worldwide continue, available oil exports could reach zero by around 2032. Currently the U.S. extracts about seven million of the 18 million barrels of oil we use, so assuming we could hold extraction at that level, we would need to cut oil use by two-thirds in twenty years.

New resources will be more expensive and carbon-intensive.

Check. The previous assumption of maintaining oil extraction in the U.S. is very unlikely to hold true. Deep water and tight oil (like what comes from the Bakken and Eagle Ford) have extremely high depletion rates. Deep water wells deplete about 10-20 percent a year. Tight oil depletes at about 40 percent annually the first few years. Think about that latter number, where most of our new oil extraction is coming from. What if you had a part-time job but within two years you would only be making about a quarter of your current income. Probably need a new part time job, right? But that one does the same thing. Before you know it, you need 40,000 part time jobs. But even that doesn’t help, because they’re all still depleting at 40 percent. Give a thought to how much you would have to work to maintain your original income after five years, then ten years, then twenty years… How many of you out there are thinking you’ll eventually end up rich? Well, if you’re an economist or work for an oil lobby like CERA or API, you’re totally convinced you’ve hit the jackpot. But don’t let their malarkey and access to primary media outlets jam up your ears and eyes so bad you can’t see the truth.

Oil extraction worldwide is peaking right now, and the sources of oil we’re turning to are much more carbon-intensive than the ones we’re leaving, meaning even if we use the same amount of oil and gas, we’re still increasing our rate of adding greenhouse gas poisons to our atmosphere. You know, our atmosphere — that invisible thing all around us that keeps us and everything else on our planet alive? Friends, readers, don’t believe the hype. The age of oil is coming to an end, but this can be a very good thing if we realize it and make forward-looking choices to leave this dark cloud of exhaust behind us. The sooner we make a commitment to transition our economy to renewable energy, the better off we’ll be in every respect.


20 Comments on "The Reward for Being Right About Peak Oil: Scorn Heaped With Derision"

  1. BillT on Wed, 27th Mar 2013 1:37 pm 

    Start seriously cutting your energy use NOW. At the rate it is contracting, you have less than 10 years to be at 1/4 to 1/3 of your present consumption. And it will not stop there. IF the climates allow, we will be living on 10% or less of out current energy by 2050. If the climates continue to be radical, we may not have that long to worry about it.

  2. Arthur on Wed, 27th Mar 2013 2:55 pm 

    Bill, you are too pessimistic. Have a look at this curve produced by professional fellow peakers:

    And than there is shale and methane hydrates leading to a postponement of the inevitable (if we do nothing) crash. There is enough reason to assume the world will stay at a plateau until at least 2020. And already renewables in EU, US and China are the largest new installed energy sources, leading to demand destruction and the installation of renewables will continue to grow.

    Economic growth is a thing of the past, but collapse of energy use by 2/3 within 10 years is unlikely, except in a war scenario.

  3. GregT on Wed, 27th Mar 2013 3:52 pm 


    At my work we have been mandated to cut all energy use in half by 2020.

    And yes, there are many in the scientific community that believe that we have already passed the point of no return and are well on the path to “Catastrophic Climate Change”. An ice free Arctic in the next couple of summers was not anticipated to happen until near the end of the century. The effects of climate change have accelerated much faster than proposed in the last IPCC assessment report of 2007.

    You are correct, we may not have that long to worry about it. At this point, I guess we’ll just have to wait and see.

  4. Plantagenet on Wed, 27th Mar 2013 4:11 pm 

    Peak Oil happened right on schedule. Fortunately, frakking has found huge reserves of Natural Gas.

    It won’t be easy, but now we have to switch to Natural Gas.

  5. rollin on Wed, 27th Mar 2013 4:19 pm 

    Whether or not we have enough energy or not, conserving energy will save money and that money can be used to build resilience.

  6. GregT on Wed, 27th Mar 2013 4:33 pm 

    Conserving energy, would save the energy that we will desperately need to build out alternate energy infrastructure.

    Money, in of itself, will do nothing without energy.

  7. rollin on Wed, 27th Mar 2013 6:38 pm 

    Building resilience = insulate buildings, sustainable food growing, high mpg vehicles, solar electric, personal water storage, etc.

  8. bobinget on Wed, 27th Mar 2013 7:13 pm 

    Four years ago, encouraged by state and federal tax incentives we installed a seven KW, grid tie, solar system on the farm.

    The fact is, since we now have all this “free” power, unlike pre solar days, I never bother to unplug all those vampire 24/7 power suckers. Besides, Wi-MAX, cell phone signal amplifiers, battery back-ups, four tablets and laptops,we can list two freezers, typical electric water heater, microwave oven, several flat screen TV’s
    all awaiting our convenience. Mind I’m not counting
    appliances that normally turn on only when in use, like electric heat or cooking.
    I do not ‘unplug’ because my power company is about to wipe clean any banked ‘surplus’ KW’s we generated
    mostly in 2012 and have not withdrawn prior to April 1st. Pacific Power does this every year. I suspect this
    policy is standard procedure across the US.

    I also enjoy a VW Diesel auto that since it averages over 42 MPG do not hesitate to drive instead of ride a bike.

    My point, if there is one, ‘if energy is cheap we will use

  9. WhenTheEagleFlies on Wed, 27th Mar 2013 7:43 pm 

    You want to conserve oil? Why has nobody mentioned living downtown. I can walk to everything I need, but I planned it that way, too. Get smart about where you situate yourself.

  10. J-Gav on Wed, 27th Mar 2013 8:35 pm 

    We can feel that tension building here on this forum but most people don’t have the slightest idea what’s gonna hit ’em.

  11. Plantagenet on Wed, 27th Mar 2013 9:47 pm 

    Whats so great about living downtown? Do you really want to share the streets with a million angry looters when the power goes down?

  12. Worldwacher on Wed, 27th Mar 2013 10:24 pm 

    Do you seriously believe the world will follow a nice orderly decline as shown in your jpg?
    Once peak oil is confirmed there will be a mad scramble and wars to secure the last resources the likes of which has never been seen
    To make matters worse suppliers will cut back to ensure supply for their own future generations
    Global oil supply will go off a cliff – literally!

  13. Arthur on Wed, 27th Mar 2013 10:59 pm 

    Sellers are just as much under pressure to sell as buyers need to buy. Most oil exporting countries have an economy to a large extent dependent on oil revenues. They cannot simply halt exports.

  14. PrestonSturges on Wed, 27th Mar 2013 11:55 pm 

    Foretelling the future and being disbelieved was the curse put on Cassandra, and her warnings pissed people off so much she was killed with an ax.

    It’s one of those stories that’s probably not true, but it should be.

  15. BillT on Thu, 28th Mar 2013 2:34 am 

    Few here seem to look at the financial problems across the world, and mostly in the Western countries. Do you think global trade will be the same after the financial collapse? I don’t I see many radical changes coming in the near future. When the petro dollar loses it’s world currency reserve status, a lot of things are going to change and fast. The collapse of the West is the main change, but everyone will have to adjust to a lower life style. Much lower in some cases. Energy is not the only event happening in the world.

  16. GregT on Thu, 28th Mar 2013 3:31 am 

    When The E

    Living downtown is the last place that anyone will want to be when this unfolds. It takes, more or less, one acre of arable land to produce enough food to sustain one human being for a year. Do the math. Living in a downtown core will be as close to the “Zombie Apocalypse” as it will ever get. Not a good plan.


    I whole-heartedly agree with you.


    Insulating buildings, sustainable food growing, manufacturing high mpg vehicles and solar electric, all require energy. I suppose if you had enough dollar bills, you could always burn them to create the energy required.

  17. energy investor on Thu, 28th Mar 2013 4:52 am 

    Great post to, so I will snaffle it for my own circle…

    Just one pointto make.

    Energy is more available and more plentiful than humanity can use. What we lack is energy storage systems to match the fossils.

    Diesel holds 11,600 whrs/kg
    lead acid 18 whrs/kg
    lithium-ion 100 whrs/kg

    Yet in the shops diesel is cheaper than bottled water.

    We will gradually get to appreciate the worth of oil but as in the song…

    You don’t appreciate what you’ve got ’till it’s gone.

  18. GregT on Thu, 28th Mar 2013 5:11 am 

    Energy Investor,

    Fossil fuels are more available, and more plentiful, than a planet capable of sustaining life can absorb into it’s atmosphere. If we burn the remaining fossil fuels available, there will be nothing further to discuss.

  19. econ101 on Thu, 28th Mar 2013 6:36 pm 

    No doubt, I have been right about peak oil all along and have been attacked ad hominem many times by those having what they believe to be a providence to the truth by virtue of repetition!

    “An Ad Hominem is a general category of fallacies in which a claim or argument is rejected on the basis of some irrelevant fact about the author of or the person presenting the claim or argument. Typically, this fallacy involves two steps. First, an attack against the character of person making the claim, her circumstances, or her actions is made. Second, this attack is taken to be evidence against the claim or argument the person in question is making (or presenting).

  20. GregT on Thu, 28th Mar 2013 9:06 pm 



    Did you even read the article that you are commenting on?

Leave a Reply

Your email address will not be published. Required fields are marked *