For those of you who don't understand or have never heard of peak oil, it's a simple concept to grasp, but before I enlighten you, you've got to own up to some behavioral issues we all face as humans. Our minds are not prepared to deal with catastrophic news, instead our brain finds short cuts that can provide an emotional comfort to sooth the pain that real facts present. In other words, people don't want to hear that bad shit, we just want to hear the good stuff. Like I've said before, we keep drinking the kool aid, the flavors change and no one seems to notice. I've warned you.....
Peak oil is the end of the modern suburban lifestyle as we know it. Now as bad as that shit sounds, there's comfort all over the place - in pockets anyway. I'm going to skip over the details in an effort to make my larger point about the NEW information as of March 2, 2007. For a complete run down of what peak oil entails check out http://www.energybulletin.net/primer.php. What follows is simply some bullet points to help those who don't understand peak oil to catch up.
Let's agree on a few points and you'll soon understand the problem we, as humans, are choosing to ignore. Oil is finite, there is only so much that was endowed to this planet, the point here is there will be an end to the production of oil at sometime. Next, extracting oil follows a bell curve similar to a Gaussian Distribution, but a bit different. In the beginning, the easiest oil, the stuff bubbling at the surface - is tapped first. Then we move on to harder to reach spots and then on to flat out dangerous regions of the planet. M King Hubbert, in 1956, predicted a peak in US production. When? 1970....14 years in the future. Was he wrong? Yes, but by one year and that's debatable.
Imagine the surprise of all those in Texas that despite massive increases to the well counts, peak oil production had passed and nothing could stop the decline in production of oil. Instead, the next place to find oil, was going farther into the ocean, namely the Gulf Of Mexico. People, the fact that the easy oil is gone, serves as validation in the eventually complete decline in oil production worldwide. The fact that we needed to go into the GOM to find and extract more oil, serves as the very basis for the need to PLAN for peak oil on a world wide scale. We have been strictly discussing historic facts during the peak in US production.
To further prove the point, we have to locate the oil to pump first and foremost. Oh shit, discovery of oil peaked in the late 60's.
We are consuming more oil per day than we find. Can you imagine eating more corn today than we've harvested and continuing to do so for YEARS? Eventually we would go to get more corn and it's all gone. That's basically what's going to happen to our oil reserves. Now I know, right now you're reasoning your way out of this. Stop letting your brain trick you into not appreciating the raw numbers, facts if you will.Lastly, at some point it will literally take more energy(called EROEI) to recovers the oil than it's worth when it reaches the top. Keep in mind, in this highly oil dependent, circular world - the same oil rigs pulling oil from the ground, need oil to function. At some point the value of that oil in terms of it's energy content, will be less than what it takes to get at it.
There will be catastrophic changes throughout the entire system as everyone adjusts to the new paradigm shift - oil scarcity. Our coming ages will be dominated by resource wars to secure the last remaining pools of resources. We've seen China trekking all across the Globe to secure their resources and they don't tend to mettle in the countries as the US does (how many military bases do we have again).
I know that's a lot to digest and so I'll make the real point, quick. In spite of your yearning for me to be wrong and to validate what your mind wants to tell you is false - the oil production peak is in. We're about to begin a long slide down Hubbert Curve and it's going to get nasty. Stuart Staniford over at http://www.theoildrum.com/ has laid his reputation on the line in the name of calling the peak in oil production. His analysis was presented on TOD on March 2 and received an overwhelming response within TOD. His full analysis can be accessed at http://www.theoildrum.com/node/2325.
The Oil Drum is reporting that the kingdom of Saudi Arabia has peaked in it's oil production. Currently the world is burning through roughly 85 million barrels per day(mbpd). When you see the MSM talking about the HUGE Jack find in the GOM a few months back, it's not that large when you realize how fast the world burns oil. The US has not even 1/5 the population on the planet, yet we use roughly 1/3 of that oil total or 26 mbpd. KSA hs the largest remaining oil field, Ghawar, and it's crashing hard. Understanding KSA is simple - they (Sunni's) are in the minority and the majority is Shia. The Sunnis sit on the oil wealth in the name of the US. We have bases in KSA and those serve the interest of the ruling elite. Can you imagine such a small group of people in charge of the cash? Oh wait, yeh I can too.
In other words, KSA can't tell us how much oil is left because to do so would cause violent social changes by the minority party who would now know without a doubt, that an end to oil hegdemoney by KSA is soon. However what little data we do get comes from IEA and it's unrealiable at best, but gives a good direction. That direction for KSA for the last 16 months has been negative. Normally we could push this off as a condition of an over supplied market and KSA is choosing to reduce output. This time, as they say, is different. There is ONE tell that provides the basis for cementing the truth that peak oil is here.
Rig counts - Oil rigs counts. Remember, the US, doubled, tripled, by the 90's, quadrupled total oil wells in the ground and what happened to production? It fell and it continues to fall to this day. KSA has been leasing every oil rig on the planet for the past 18-24 months. Yet in spite of increasing their oil wells, they are showing LESS production. If that not enough, one more point that I find compelling and that's following the money. Katrina/Rita hit in Aug 05 and in the ensuing months KSA briefly increased production followed by declines every single month. Why in the world would the largest producer in the world voluntarily choose to make less money? Why would KSA reduce consumption with higher prices to the tune of $70-80/barrel? Simple supply and demand demonstrates that at higher prices, producers produce more. Remember, Exxon and their out sized profits? Why didn't KSA enjoy that since they can produce as much as they choose?
If you've reached this, than you've probably got a knot in your stomach. It's ok, it'll go away in a few days/weeks or however long it takes for you to digest the truth that seems to be missing from the MSM bullshit. Going forward, you have to reduce your dependence on a car. I know it's not easy in this country, but simple things like moving closer to light rail will help benefit your bottom line in the long term. Where do you think the prime real estate spots will remain following oil declines - closer to the light rail that's for sure.
3 comments:
CHEAP oil has definitely peaked, but if we consider near-oil sources such as tar sands and oil shale, and that in the United States we could cut total oil consumption by 10% simply by switching from driving SUVs and pickups to sedans and station wagons, then we can see that "peak oil" isn't a civilization-ending catastrophe.
We'll just adjust and move on. It helps that, as the richest and most productive nation on Earth, the U.S. can afford to simply outbid anyone else for the remaining oil.
As far as U.S. oil usage goes, it's true that Americans are only 5% of the planet's population, and we use a huge chunk of global oil production, but America also produces 25% of global economic activity. The Chinese, for instance, are only a third as productive as is America, measured by economic output per input of oil.
Sir,
The end of cheap oil is exactly what peak oil is all about. The peak in cheap oil. You bring up tar sands and oil shale. Perhaps you should investigate further. The energy it takes to create oil from shale is more than it would take to simply recycle highway blacktop. To date, how much oil from shale has been produced?
I'll create a post to answer you're points. True we can reduce consumption be reducing our fleet of SUV's, but it's not going to happen. You're never going to eliminate all of them. You are missing the point - at what price signal will SUV's owners all abandon ship? $5/gal? Meanwhile, less gets produced later because it was wasted already in an SUV b/c the gas ONLY cost $2.
Our 5% is using roughly 1/3 of total oil consumption, however it is most rapidly increasing in Asia. Why are you bringing up domestic activity and comparing oil? Why would productivity matter when we are running out of oil? It's still going to be wasted over there at INCREASING RATES. And we will not outbid everyone. America's financial situation is quite dour to say the least. $50 Trillion in debt, and we'll outspend everyone? It if weren't for CHINA we would have been fucked years ago.
Productivity matters because we aren't going to run out of oil tomorrow. It'll happen gradually, over many decades, and as the price goes up, we'll start substituting other alternatives, ones that ALREADY EXIST.
As for investigating further tar sands and oil shale, I respectfully submit that you really ought to do just that, if you believe that they're net energy sinks.
Regarding the $50 trillion, perhaps you don't realize that that figure is the estimated total debt for the next seventy-five years, during which period total American GNP will be between $1,500 - $2,500 trillion, in constant dollars.
Given that, I think that we can spare a mere $50 trillion.
You also have the roles of America and China reversed. If it weren't for the voracious appetites of the American consumer, China would be in a world of hurt right now. They give us cheap loans on E-Z terms, and steal from their own population to subsidize American consumers by linking the yuan to the dollar, all to keep good flowing into Cali, and employment high in China.
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