# Peak Oil. Are you ready?



## KIWIKAAS (May 13, 2003)

^^
If you look at the historic half of the graph you will see fluctuations but the average trend more of less follows the line of Hubbert's bell curve.


----------



## plcmat (Jan 16, 2008)

KIWIKAAS said:


> ^^
> If you look at the historic half of the graph you will see fluctuations but the average trend more of less follows the line of Hubbert's bell curve.


Right - but I am proposing that the graph is shaped as such because the macroeconomic conditions relative to petroleum were somewhat constant. This assumption may be way off base, but I suspect there will be greater macroeconomic fluctuation in the future as so many developing economies come on line, so to speak, at once. Or in short, can the pattern of the past be used to accurately predict the future?

To put it another way - what did the curve look like before the Industrial Revolution? And is globalization and the rapid emergence of China, India, Brazil, Mexico et al as big of a shock? (Probably not, but you get the idea).


----------



## KIWIKAAS (May 13, 2003)

plcmat said:


> All of these posts make sense, but none of them has really explained how you can tell when a resource has peaked when the remaining amount of the resource is unknown.


You can only go on the known oil reserves and known production capacity as well as demand for oil.
No body knows exactly how much is left as everyone is dependant on the information supplied by the other. A number of estimated OPEC reserves have suspiciously been upwardly revised in recent years adding to the uncertainty.
It has been said that the date oil peaks will only be known in retrospect. Nobody knows exactly on which day this will or has occured.
I can only say that historically these estimates as shown on the graphs have been very accurate up to now. The 2003-7 graph pretty much confirms the trends which incidentally have been known for the last 35 years.



> Some of these posts also assume no increased economic stimulus for finding new oil, or for that matter finding alternatives. Until recently looking for new oil hasn't paid. Only with the recent surge in demand has there been enough incentive to try to find ways of getting more oil out of the ground, getting it more cheaply, or finding something else to use altogether.


For the oil companies there is plenty of incentive to discover and extract.
Trouble is that all the easily accessible oil has already been discovered and in most cases past peak long ago. The stuff that's left is hard to get to, expensive to extract stuff in places where mother nature likes to put a spanner in the works regularly (storms,hurricanes etc).
Many have asked why refining capacity hasn't been increased to meet demand. Short answer is, there is nothing extra to refine.
And oil sands and shale aren't going to fill the gap either.
Alternative fuels? Currently there is nothing that remotely comes close to oil for expended energy/rendiment. There's a lot of toying around but even those involved with alternative energy research say that it will be a good 20-50 years before we have something equivalent. 



> Not to mention that the economic growth that is fueling demand may also spur better means of extraction.
> 
> Of course there is high incentive to cure cancer and that hasn't happened yet, but that is at least two or three orders of magnitude less incentivizing than solving our reliance on fossil fuels.
> 
> I would be interested to know how much venture capital is being used on new alternative energy companies now as opposed to five years ago.


That's the problem. Economic growth is dependant on equal growth of extraction. The problem is that even if they discover some mega field somehere the demand is still going to keep outstripping supply unless the economy contracts = massive recession. And I'm talking about economic adjustment of dozens of percent not a few.

How much venture capital is being invested in exploration? No idea. I do know that many fields are being reconsidered for exploration that were previously rejected as not being economically viable. That alone already suggests how desperate the situation is getting.
I won't even go into the US's recent strategic possitioning of it's armed forces as yet more confirmation.


----------



## plcmat (Jan 16, 2008)

KIWIKAAS said:


> You can only go on the known oil reserves and known production capacity as well as demand for oil.
> No body knows exactly how much is left as everyone is dependant on the information supplied by the other. A number of estimated OPEC reserves have suspiciously been upwardly revised in recent years adding to the uncertainty.
> It has been said that the date oil peaks will only be known in retrospect. Nobody knows exactly on which day this will or has occured.
> I can only say that historically these estimates as shown on the graphs have been very accurate up to now. The 2003-7 graph pretty much confirms the trends which incidentally have been known for the last 35 years.
> ...


Until fairly recently exploration cost more than any profit that would be made by selling the newly discovered oil. And I suspect the oil industry can't turn on a dime and just start digging the instant prices start to rise.

Honestly I suspect the Hubbert curve may be fairly accurate as a predictor; my argument is that it might not be, not that it won't be. (See my other post referencing macroeconomic shocks and wondering if globalization and the "flattening of the earth" will end up being as revolutionary as the Industrial Revolution -- I don't think the Hubbert curve has ever been exposed to a true shock).

Of course almost nothing has been spent on alternative fuels until recently so it is too early to tell if they will "save us" or not. I suspect some government subsidies will have to be added to the pot to ensure that the new fuels arrive before the old ones become prohibitively scarce. I don't know if the free market can do it fast enough on its own.

Interesting discussion!


----------



## KIWIKAAS (May 13, 2003)

plcmat said:


> Right - but I am proposing that the graph is shaped as such because the macroeconomic conditions relative to petroleum were somewhat constant. This assumption may be way off base, but I suspect there will be greater macroeconomic fluctuation in the future as so many developing economies come on line, so to speak, at once. Or in short, can the pattern of the past be used to accurately predict the future?
> 
> To put it another way - what did the curve look like before the Industrial Revolution? And is globalization and the rapid emergence of China, India, Brazil, Mexico et al as big of a shock? (Probably not, but you get the idea).


The original curve put the peak at 1995-2000. The oil shocks of the late 70's and the use of more economic vehicles in the 1980's pushed this back 5-10 years. If the US and the rest of the world suddenly dumps it's SUVs and fly alot less then we might sit on the plateau for a couple more years before the decline sets in.


----------



## KIWIKAAS (May 13, 2003)

plcmat said:


> Until fairly recently exploration cost more than any profit that would be made by selling the newly discovered oil. And I suspect the oil industry can't turn on a dime and just start digging the instant prices start to rise.
> 
> Honestly I suspect the Hubbert curve may be fairly accurate as a predictor; my argument is that it might not be, not that it won't be. (See my other post referencing macroeconomic shocks and wondering if globalization and the "flattening of the earth" will end up being as revolutionary as the Industrial Revolution -- I don't think the Hubbert curve has ever been exposed to a true shock).
> 
> ...


Up untill now the Hubbert Curve has been proven on a regional basis ie: the first being US oil production.
This is the big one of course (along with coal and natural gas) and the potential repicussions are for most people unbearable.
I think my sceptism has been fueled (excuse the pun) by the blatant military posturing of the decade, combined with the absense of any breakthrough technologies, and a global economy totally geared to fossel fuel availability.
In short, nothing has been done of any significance. This combined with a media who has turned away from reporting the ''real'' story to being a source of daily updates and weekly projections. Governments aren't supplying any serious projections and the markets are carrying on like it's business as usual. The silence is deafening.

And yes. It's a very interesting discussion. For me it's been a bit of a kick in the guts as the potential severity (and imminence) of the situation has dawned on me.


----------



## plcmat (Jan 16, 2008)

KIWIKAAS said:


> Up untill now the Hubbert Curve has been proven on a regional basis ie: the first being US oil production.
> This is the big one of course (along with coal and natural gas) and the potential repicussions are for most people unbearable.
> I think my sceptism has been fueled (excuse the pun) by the blatant military posturing of the decade, combined with the absense of any breakthrough technologies, and a global economy totally geared to fossel fuel availability.
> In short, nothing has been done of any significance. This combined with a media who has turned away from reporting the ''real'' story to being a source of daily updates and weekly projections. Governments aren't supplying any serious projections and the markets are carrying on like it's business as usual. The silence is deafening.
> ...


I guess I agree with you on a lot of this, but am more optimistic, in that I think it is very hard to predict future economic events in the context of the present economy. It is easy to predict assuming the economy stays the same but the economy changes with time too (ie, who would have predicted even 10 years ago that Search Engine Optimizer would be a legitimate profession).

Sure if there are no major new discoveries we are eventually in big trouble, but there are almost always major new discoveries, just like world records are constantly broken in sports. The absence of major new discoveries would be the oddity. Given that solving our energy problems is probably a $1T market, there is a lot of incentive in place to do so.


----------



## urbanfan89 (May 30, 2007)

plcmat said:


> Sure if there are no major new discoveries we are eventually in big trouble, but there are almost always major new discoveries, just like world records are constantly broken in sports.


But will they be enough to offset all the massive declines in the reserves in Mexico, Alaska, Iran, the North Sea, Indonesia, Venezuela, Nigeria, and other places?

Especially considering that all the easiest to access deposits have long been tapped into?



> The absence of major new discoveries would be the oddity.


No, it will be expected. Anything else is wishful thinking.



> Given that solving our energy problems is probably a $1T market, there is a lot of incentive in place to do so.


No amount of $$$ will create natural resources that didn't exist in the first place.

Ever wonder why the only thing that has grown exponentially non-stop in the past 50 years is computing power?


----------



## plcmat (Jan 16, 2008)

urbanfan89 said:


> But will they be enough to offset all the massive declines in the reserves in Mexico, Alaska, Iran, the North Sea, Indonesia, Venezuela, Nigeria, and other places?
> 
> Especially considering that all the easiest to access deposits have long been tapped into?
> 
> ...


Sorry - I was unclear - I didn't mean major new discoveries of oil, I meant major new discoveries of technology that would make us less dependent on oil.

We are pretty bad at imagining the future. Ever watch Blade Runner? As of 1980 or whatever, in 2014 or whatever we were supposed to have flying cars, and Atari was supposed to be a big company. In the meantime, no portable phones and no Internet! You have to dock your flying car to use a payphone.


----------



## urbanfan89 (May 30, 2007)

It's way too late to have an easy and pain-free transition. You'd have to rebuild the entire world's infrastructure within ten years or so.

The infrastructure for an entirely new communication system is by many magnitudes smaller than what we're going to put up with.

If we wanted a pain-free transition we *should* have continued what Jimmy Carter started, before Asia and Latin America started its mass industrialization. But thanks to short attention spans, things are going into the crapper before they get better.


----------



## KIWIKAAS (May 13, 2003)

*And this is what's in the media*



> "The Age of Expensive Oil" has finally arrived without large disruptions in the world economy, which is contrary to what many doomsayers predicted. They couldn't imagine that a modern economy could adapt to peak oil and foresaw the end of the modern industrial state, the end of large cities, and a return to a simple agrarian lifestyle coupled with a massive decrease in world population. Instead, peak oil has arrived gradually, without fanfare, and without major financial upheaval. The fundamental cause isn't primarily a limit on petroleum resources, but OPEC's long-term strategic considerations.


I mean...REALLYhno:

And then we have the missile defence contract



> "It will help both the (NATO) alliance and Poland and the United States respond to the coming threats," Rice said after the signing. "Missile defense, of course, is aimed at no one. It is in our defense that we do this."


Nothing to do with peak oil? Think again


----------



## Frank J. Sprague (Nov 19, 2005)

KIWIKAAS said:


> ^^
> I think Europe is in a far better state to cope with peak oil than the US, Canada, Australia or NZ. My biggest concern is food supply (in a peak oil situation I won't have a job anyway). Luckily the ''farm to plate'' distance is far lower here than in the afore mentioned countries.
> Remember that anyone in a job which relies on import/ export goods or pretty much anything to do with the ''global economy'' will probably find themselves out of work in the near / medium future.


Globalism is very petroleum intensive, today we have a situation where iron ore is mined in Labrador and sent by ship to the other side of the earth to be transformed into finished goods, which are then shipped back to North America. Much less petroleum would be used were the iron ore shipped up the seaway to the Great Lakes, transformed into raw materials and then distributed via electrified railways across the nation.

One thing I find very ironic is that Al Gore is preaching about carbon footprints, back in 1993 he was instrumental in passing NAFTA following a debate with Ross Perot. One consequence of that treaty is a huge increase in the "farm to plate'' distance for many food items, and that using tracking for the most part. I live in Seattle, in years past watermelons came from Hermiston in NE Oregon, a seasonal crop enjoyed in the Summertime. Now they travel from Mexico, that uses a great deal more petroleum. A lot of other crops which formerly came from Florida or California have also seen a big increase in "farm to plate'' distance.


----------



## jarbury (Aug 20, 2007)

Surely that will 'self-correct' as transportation costs soar. A relocalisation of production surely can't be a bad thing?


----------



## KIWIKAAS (May 13, 2003)

*Looking grim*









hno:


----------



## Tom_Green (Sep 4, 2004)

Oil is not everything. There is wind energy, water energy, nuclear energy, gas, and bio fuel.
Germany developed the second generation of bio fuel. It`s two time as effective as the first generation.

We will not die. 
Imagine the biggest cities in the world without smog. A future without oil will be a great future.


----------



## KIWIKAAS (May 13, 2003)

Oil is'nt everything, but it is everything for economies.
Our economies will have to go through a massive çorrection (recession/depression) fase.
Wind, hydro, and battery technology need to be developed at a rapid pace.
Nuclear power is too dependent on plutonium supplies and these are becoming more and more expensive. Nuclear plants also cost an awful lot to build and it takes a decade or so before they will be online. That's too slow. Bio fuel is in it's infant stages but there needs to be a way of producing it without cutting into the food harvest.
We may get electric cars and good (electrified) public transport but I have no idea how the aviation industry is going to survive in the coming decades. There is just nothing out there for them as yet.


----------



## Tom_Green (Sep 4, 2004)

KIWIKAAS said:


> Oil is'nt everything, but it is everything for economies.
> Our economies will have to go through a massive çorrection (recession/depression) fase.
> Wind, hydro, and battery technology need to be developed at a rapid pace.
> Nuclear power is too dependent on plutonium supplies and these are becoming more and more expensive. Nuclear plants also cost an awful lot to build and it takes a decade or so before they will be online. That's too slow. Bio fuel is in it's infant stages but there needs to be a way of producing it without cutting into the food harvest.
> We may get electric cars and good (electrified) public transport but I have no idea how the aviation industry is going to survive in the coming decades. There is just nothing out there for them as yet.


I forgot coal and solar energy.

The airline have alternatives, too. The A380 made a flight only with biofuel. 
http://www.nextenergynews.com/news1/next-energy-news2.4d.html
The future is not that dark. 
Developing countries will be hit the most i think.


----------



## KIWIKAAS (May 13, 2003)

Solar needs alot of investment done. 
Coal is also aproaching it's peak and is terribly poluting so it should be one of the things we are weaning off and not exploiting.
Bio fuel may have it's place but it is many years away from providing anything more than a small suppliment to our energy needs. It is also of concern that it will cut into food supplies causing rapid inflation and that it is still too poluting.


----------



## Tom_Green (Sep 4, 2004)

KIWIKAAS said:


> Solar needs alot of investment done.
> Coal is also aproaching it's peak and is terribly poluting so it should be one of the things we are weaning off and not exploiting.
> Bio fuel may have it's place but it is many years away from providing anything more than a small suppliment to our energy needs. It is also of concern that it will cut into food supplies causing rapid inflation and that it is still too poluting.


Maybe we will drive hybrid cars with biofuel who needs just 3l on 100km in the future. 
Where i live i can see big changes happening. We have new a solarplant build not far away. We have also have energy from water and wind. More and more homes have solar panels on the roof. I also see more and more hybrid cars driving around. The farmers proucing plants for bio fuel.We are rich. Unemployment rate 3.3%. Living next to Frankfurt. That city has the highest saleries in Germany. 
We will have not many problems getting away from oil. We can afford it without hurting us too much. 

Afrika could feed itself and produce enough biofuel for the biggest part of the world. 

I am optimistic. Maybe next day you wll hear in the news that scientist developed a fusion reactor. A clean and neverending source of energy. 
Oil will get more expensive because it is to valuabel to be burned in engines.


----------



## KIWIKAAS (May 13, 2003)

^^
It all sounds good but it also sounds like an echo of what we were told many times during the 1990s. Don't get me wrong, the measures being taken are good but unfortunately probably too late to avoid a huge economic downturn. 
Frankfurt maybe rich today but it is also very dependant on the global economy which makes it just as vulnerable as an indrustrial city in the Ruhr. You have to take into account that the global economy is probably in for a big hit and that economies will become more local / regional of scale.
Yeah. Nuclear fusion has been 25 years away for the last 50. Even if they have a reactor tommorrow it will be atleast 10 years or more before it comes online.

I am an optimist regarding the long term (20+ years from now) and I have reasonable trust that atleast my grandchildren will inherrit a sustainable world. I am however very sceptical about the short to medium term as it would appear that reality might be uppon us....and we are far from being prepared. I do fear for the world which my children will inherit and that I will grow old in.

I think in the short term that securing local food production, water and electricity supplies should be the main priorities right now before the global economy takes a dive into depression.

And in the meantime.......back to the discussion on the coolest cars :lol:


----------



## Substructure (Sep 10, 2004)

The subprime crisis added to the high gas prices is leading to a change in America.
Sure, they still have some backward vehicles, and terrible city planning, up to 95% of Americans depend on car transportation in a way or another.
Yet, there is a city "europeanisation" ongoing at the moment, with more and more people living in downtown, at walking distance from most facilities. Chicago and NYC have gentrified especially fast for the last 2 years, and it seems that most US cities are following this path.
How long will it take before the US can adapt an oil free way of life ? They are resilient enough to support this, but it will take a lot of willingness to achieve it.

The US highway thread has some interesting bits regarding fuel economy :
http://www.skyscrapercity.com/showthread.php?t=604931&page=29


----------



## Frank J. Sprague (Nov 19, 2005)

Tom_Green said:


> Oil is not everything. There is wind energy, water energy, nuclear energy, gas, and bio fuel.
> Germany developed the second generation of bio fuel. It`s two time as effective as the first generation.
> 
> We will not die.
> Imagine the biggest cities in the world without smog. A future without oil will be a great future.












This chart illustrates your point, oil by itself is the largest single component of our energy usage at roughly 39 Quads (quadrillion btu) out of 97 used. Several observations from the chart;

1. With the exception of natural gas well over 99% percent of our electrical energy is generated from domestic sources, and the amount of natural gas used to generate electricity is greater than the amount of natural gas that we import.

2. For every 1325 btus used in transportation only one btu is supplied by electrical energy, with 96.6% of the energy used for transportation being supplied by petroleum. 

3. For transportation and electrical generation most of the energy used is wasted, 20% and 31.1% respectively. In the case of residential and industrial use of energy most of it does useful work, 75% and 80% respectively. In the case of electrical energy the wasted energy is at least derived from relatively cheaper domestic sources and in the case of nuclear the potential supply is vast when newer reactor designs are used, for example at Lemhi Pass on the Idaho-Montana border there are proven reserves of thorium that would supply all of our current use for 500 years.

From my perspective it looks like the best strategy would be to focus on petroleum, both to develop new sources, use it more efficiently and to substitute other forms of energy where feasible. For example "Twenty BTUs of diesel fuel for one BTU of electricity is the energy trade by shifting from heavy trucks to electrified railroads. Replacing 2 million barrels/day of heavy truck diesel fuel will take just 1.4% of US electricity." 

Another potential method is to substitute as much of the 2.2 Quads of oil used for residential/commercial purposes (mainly space heating) with electrical energy using either air-source or geothermal heat pumps depending upon climate. I am a big fan of nuclear power, but realistically it will be a decade before new plants can be brought into operation. Wind turbines would not have been my first choice, but since the factories are built a represent a sunken cost we may as well take advantage of natures bounty. 

One issue of wind power is matching peak output to peak demand, right now the peak electrical load in the Plains States is in the summertime, while the wind blows strongest in the winter. Heat pumps would have their greatest demand at the wintertime. There is being advertised to have either 20% of our electrical generating capacity or electrical power (I'm unsure of the details) and one thing required will be transmission corridors. That would seem like a possible opportunity to piggyback on the existing railroad lines and electrify them in the bargain.

Just a few thoughts, pardon my rambling.


----------



## KIWIKAAS (May 13, 2003)

^^
That's a huge amount of lost energy. Certainly the waste ratio of petrolium is huge


----------



## l'eau (Jul 7, 2008)

no, im not ready


----------



## Lijman (Jul 12, 2008)

..


----------



## Frank J. Sprague (Nov 19, 2005)

Lijman said:


> ...I've read that transmitting electricity as direct current (DC) results in less energy loss compared to using alternating current (AC) as we do now. Can anyone say if this is true or not and perhaps elaborate further?


My understanding is that HVDC is superior to AC transmission over long distances, I tried researching on the internet to come up with a number but nothing was available. It does have other advantages, such as avoiding problems of synchronizing phases, and above a certain distance it is actually cheaper.



Lijman said:


> Regardless of the method of generation, electricity has a long way to go before it's a major source of power for transportation. For starters electric/hybrid motor vehicles are still in their infancy and not very commonplace, however this may change as the technology develops. Also, thousands of kilometres of railways would have to be electrified, large numbers of diesel locomotives would have to be replaced with electric ones and urban fossil-fueled buses would have to be replaced with electric trolleybuses or electric trams, all at great cost...


There is an old Chinese proverb that goes something like "the best time to plant a tree was twenty years ago, the next best time is now." We cannot expect instant gratification, the other nations that have extensive railway electrification developed their systems over decades, it will take as long for us. We did not get into our oil predicament overnight, it took us several decades to do it. I recall as a paperboy in 1973 seeing my mother in a line that stretched two blocks each morning to buy the few gallons available for the VW my dad used in his sales job to but bread on the table. And that was when we we imported less than a third of our oil, now it is over two thirds.

Railway electrification is proven technology, no technological breakthrough is needed, there is well over a hundred thousand miles of railway electrification in operation today in a wide variety of environments. Same with the trolleybus and rail transit, and a number of locomotives and buses require replacement each year anyway, regardless if they are replaced by diesel or electric powered units.

Transportation is the sector that uses energy with the greatest amount of waste, yet that is the sector with has expanded enormously under globalism with supply chains stretching to the far corners of the earth and back. Railway electrification makes it possible to use nuclear power as a substitute for petroleum in the transport of freight with the addition of a few plants to the grid. To do the same with maritime transportation would require the deployment of thousands of shipboard reactors that would visit a multitude of ports. 

In our industrial sector eighty percent of the energy consumed does useful work, a global supply chain does not save that energy, rather it just means that the energy is consumed elsewhere. It does however add an additional transportation link, and the transportation sector eighty percent of the energy is wasted. And even were the energy used at a hundred percent efficiency it would still be waste compared with transforming raw materials at home into finished goods.

What I would suggest is that the cost of our imports reflect the cost of defending the supply in the Middle East, in peacetime that ran sixty billion dollars per year. At four billion barrels per year an import tariff of fifteen dollars per barrel would get you to that number, although Canada and Mexico could be exempted depending on how secure our access is to oil imports from both nations. To stress that the goal is energy independence I would set the tariff at $17.76 per barrel, and as oil imports decrease it would need to be increased from time to time. For example if we import three billion barrels it would need to be twenty dollars per barrel, at two billion barrels the number would be thirty dollars, and so on.


----------



## KIWIKAAS (May 13, 2003)

*The Question Wall Street is Ignoring but the World Can’t * 
*Is Oil Production Falling Faster Than Demand? *
http://energytechstocks.com.previewmysite.com/wp/?p=1656&preview=true

Every Wall Street forecast of where oil prices are headed next – up or down – seems to be based solely on the degree of “demand destruction” that can be expected. But what about “supply destruction?” Whatever the level of demand destruction, if supply destruction is greater, oil prices will rise, not fall. 

Wall Street seems to think that, because OPEC is thinking about possibly lowering production, this must mean there’s plenty of oil available, forgetting that OPEC has been unable to raise production to take advantage of sharply higher crude prices. Led by Russia, it’s been the non-OPEC countries, responsible for 60% of global oil production vs. 40% for OPEC, that have been able to raise their output as global demand has grown.


_But the evidence indicates that supply destruction is starting to hit key non-OPEC producers hard, and that supply destruction may soon outpace demand destruction, even as many developed nations endure economic downturns. _


----------



## ChrisZwolle (May 7, 2006)

What effect would a national hybrid car stock have that consumes half the amount of gasoline/diesel on the total oil demand?


----------



## KIWIKAAS (May 13, 2003)

^^
Depends on whether you will be modifying existing vehicles or manufacturing 100s of millions of new ones. 
Modifying existing vehicles (if all owners can afford to do so) would prolng the current situation for a number of years before the decline sets in I suspect.
Replacing vehicles will chew up enormous amounts of oil just in the manufacture thereof making the cars very expensive to buy in the first place.



> OIL DEMAND FOR CAR MANUFACTURE
> Construction energy requirement depending on size and type of car ranges from 5 to 9 barrels equivalent per unit. 40% of this is direct oil consumption for tyres, plastics (around 130 kgs wight of plastics per CEU), composite materials, paintwork, greases, lubrication oils, hydraulic fluids, etc. The direct oil consumption per manufactured CEU is therefore 2 to 3.6 barrels oil.
> _CEU="Car Equivalent Unit"_


----------



## serendip finder (Jun 17, 2008)

If it requires the equivalent energy of 5 to 9 barrels to make 1 car, then replacing one car with even a marginally more fuel-efficient model would be justified, if taken purely from an energy savings standpoint.

For example, an accord V6 doing 20mpg would run 200,000 miles before being junked, the world would still save gas by replacing it with a model that is even just 5% more efficient.

Not to mention the dividend from having less emissions.

Of course this is not possible in practical terms.


----------



## serendip finder (Jun 17, 2008)

The chart shows there is a lot of leeway to improve energy efficiency.

Now if only the price of oil does not go down from its highest level, there would be a lot of incentive for R&D in this area. :|


----------



## ChrisZwolle (May 7, 2006)

Well, 20 mpg is really inefficient. Maybe it's better to switch to diesel with only moderate engines (1.5 - 2.5 liters) Those get between 40 and 50 mpg. That'll easily save you money over the slightly higher diesel price.


----------



## 2co2co (Apr 8, 2008)

Hong Kong and Singapore are probably the closest to becoming the first oil-free economic zone. High population density, small area and low car ownership already makes it already feasible to replace ALL cars into electric vehicles along with keeping up with the current efficient and profitable mass transit systems. They also have relatively little industry but massive services. And they are both south and solar power generation is effective.


----------



## ChrisZwolle (May 7, 2006)

Oil is more than just energy


----------



## Apostle (May 17, 2006)

ChrisZwolle said:


> Oil is more than just energy


Oil = the economy. People tend to forget that. I don't think anybody here can imagine what a world without oil would look like... I'd rather not think about it as well...


----------



## KIWIKAAS (May 13, 2003)

*Here comes $500 oil *

_If Matt Simmons is right, the recent drop in crude prices is an illusion - and oil could be headed for the stratosphere. He's just hoping we can prevent civilization from imploding. _
(Fortune Magazine) -- Matt Simmons is as perplexed as anyone that it has fallen to him to take on OPEC, Exxon, the Saudis, and all the other misguided defenders of conventional wisdom in the oil patch. Why should one investment banker with a penchant for research be required to point out what he regards as the obvious - that from here on out, oil supplies can't meet demand, and if we don't act soon to solve this crisis, World War III could be looming? 

Why should a man who scorns most environmentalists have to argue that locally grown produce and wind power are the way of the future? Why should a lifelong Republican need to be the one to point out that his party's new mantra - "Drill, baby, drill!" - won't really fix anything and that his party's presidential candidate is clueless about energy? That the spike in oil prices earlier this year wasn't a temporary market anomaly and the recent retreat in prices is just a misleading calm before a calamitous storm? That we're headed toward $500-a-barrel oil? 


"I find it ironic that here we have the biggest industry on earth, and I'm one of the few people to figure out that we have a major problem," he says, in his confident if not quite brash way. "And I did it all in my spare time. How stupid and tragic is that? I shouldn't be one of the only folks that actually has a handful of ideas of how we can keep from blowing each other up and get through this." 

Indeed, Simmons isn't the obvious candidate to be the bearer of bad news about oil. He's spent his career working in the business, has lived in Houston for decades, and is such an industry insider that he helped edit the Bush campaign's comprehensive energy plan in the 2000 election - the document that was ultimately more or less rubber-stamped by Vice President Dick Cheney's infamous secret Energy Task Force. Over the past 35 years, his boutique investment bank, Simmons & Co., has helped finance and shape much of the country's existing oil-services business. With profits gushing, you might expect him to be celebrating. 

Not to mention that the 65-year-old banker doesn't have the personality of a prophet of doom. He has a puckish wit, a relentlessly cheerful and enthusiastic demeanor, and the appearance of a rosy-cheeked cherub in a navy blazer. He routinely refers - in earnest - to his daily experiences as "tremendous fun." His closest business associates have a hard time recalling him ever showing anger. But when it comes to oil and gas, his message is downright scary. 

for the whole article http://money.cnn.com/2008/09/15/news/economy/500dollaroil_okeefe.fortune/index.htm


----------



## ChrisZwolle (May 7, 2006)

Oil jumped from 105 to 130 dollars today, the biggest gain ever. It settled lower though.


----------



## KIWIKAAS (May 13, 2003)

^^
Indeed. More evidence of the shakey ground on which we stand

*Record one-day jump in oil price *

http://news.bbc.co.uk/2/hi/business/7630513.stm

The price of oil has jumped by more than $16 to $120.92 a barrel, the biggest one-day gain on record. 

The increase in the price of US light, sweet crude was driven by concerns about supply. 

Production in the Gulf of Mexico is still affected by Hurricane Ike and Saudi Arabia is cutting production. 

Oil traders also believe that the US government's bank bail-out plan will help the economy and therefore demand for oil. 

Last week oil traded as low as $91 a barrel. It had fallen from its peak of $147 a barrel that it reached in July. 

The volatility in the price has been exacerbated by the fact that the contract for the supply of oil in October expires on Monday.


----------



## KIWIKAAS (May 13, 2003)

http://postcarbon.org/say_goodbye_peak_oil



> *Say Goodbye to Peak Oil *
> Submitted by Richard Heinberg on October 8, 2008 - 5:08pm.
> Now that the world’s credit markets are suffering the equivalent of a cardiac arrest, one can confidently say that the peak in global oil production is behind us. With demand for oil declining (because of global recession), OPEC will want to constrain production. With investment capital disappearing in a deflationary bonfire, oil companies will have difficulty financing new projects (even if they have full governmental go-ahead to drill, baby, drill). Thus even though the peak might have been delayed for another year or five if the credit crunch hadn’t intervened, that time cushion is now effectively gone.
> This is not to say that Peak Oil should no longer to be considered to be of importance. In the larger, longer view of things, the energy decline will be the determining factor in the fate of our civilization—not a money or credit crisis.
> ...


----------



## KIWIKAAS (May 13, 2003)

*Crude Cassandra*
Christopher Helman
Forbes Magazine http://www.forbes.com/forbes/2009/0302/022_crude_cassandra.html?feed=rss_finance

*As the price of petroleum plunges, the prince of Peak Oil finds himself a contrarian again.
Matthew Simmons * 

Matthew Simmons has given 30-plus speeches in the past year, to audiences as diverse as the Pentagon and the Colorado School of Mines. One talk was tortuously titled: "Quo Vadis Energy? (Will Dawn Follow Darkness as Twilight of Energy Fades?)" Short answer: No. Simmons' message is always some variation on the global implications of Peak Oil--that point after which global crude supplies wane, prices soar and shortages spur geopolitical strife.

The Ukraine-Russia gas tiff is a first taste of the transnational energy disputes to come. *Simmons believes Moscow's saber rattling is political cover for a more serious problem: a shortage of gas in Gazprom's pipeline system. "This is really serious stuff. We've had a peak in Russian gas. Next year Europe is toast. Cold toast." Could he be right? Chief Executive Alexei Miller stated last July that Gazprom's output had flattened out below 2006 production levels.* Russia is already importing gas from the central Asian "Stans" and exporting it to Europe.

BuzzPeak Oil zealots eat this stuff up. As crude climbed to $147 a barrel last year, Simmons won lots of converts. But prices have since fallen 75%; OPEC has slashed output; oil companies are laying off workers and mothballing drilling rigs at a rate not seen in a decade. The market signals oodles of oil. Can't we put Peak Oil to rest?

No way, says Simmons. In the library of Simmons & Co., the Houston investment bank he founded 40 years ago, *he insists we've already passed Peak Oil--but the world won't realize it until economic recovery stimulates oil thirst anew. When that comes, gird for shortages and $500 a barrel.* "There's no logical reason for the price to be this low. If it doesn't reverse itself soon, it will destroy the industry," he says. If Simmons ruled the world, he'd order an oil price floor of at least $150 a barrel to stimulate exploration and to combat rust, which he says is the biggest threat to the oil supply. He figures it could cost $100 trillion to replace aged pipelines, rigs and platforms. That's quite a sum--70 years of oil industry revenues, at present rates.

*According to the U.S. Department of Energy and the International Energy Agency, non-OPEC output appears to have peaked in 2006 *at just above 51 million barrels per day (bpd), and fell below 50 million in 2008. World output inched up to 86 million bpd a year ago only by dint of spigot-opening by OPEC.

"We've avoided shortages only by squeezing every molecule of natural gas liquids, ethanol and biofuels, by increasing refinery gains a bit, by drawing down stocks," says Simmons. "That's how we balanced a market we couldn't supply." OPEC's numbers include natural gas liquids (like propane and butane), up from 4.5 million bpd to 5 million in two years. U.S. figures also include ethanol, which now contributes 600,000 bpd. Back out such substitutes and crude oil volumes have been flat at around 75 million bpd for four years. *Simmons prophesies that in ten years oil will be down to 60 million bpd and natural gas production will be off 20%. He thinks the Saudis are lying about their ability to crank up output and that natural decline rates from existing fields will overwhelm new fields from Iraq, Venezuela or Nigeria.*

Can the deepest commodities market on earth be getting it so wrong? "What would be really unfortunate is if 80% of the collapse in oil prices were the unforeseen implications of the credit freeze," he says. Simmons contends that traders were forced to liquidate oil contracts as credit dried up, causing prices to fall. He pulls out a chart showing the price of credit default swaps on Glencore (a Swiss firm and the biggest oil trader not part of an oil company). It went from 300 basis points (3%) in September to 3,200 in December. The chart line is a near-perfect inverse of the plunging cost of crude. As credit markets recover, he says, traders will bid up oil once again.

It wouldn't be the first time the market miscalculated. Simmons points to a framed copy of a 1999 cover story in the Economist--"Drowning in Oil"--which asserted that crude, then around $10 a barrel, would fall to $5 and stay there for a decade. Simmons (interviewed, but excluded from the article) insisted plenitude was a mirage and prices were set to soar. Nine months later oil passed $25 and the magazine issued a mea culpa.

Simmons, 66, wasn't supposed to end up in the oil game. His father, Roy, took over Utah's Zions Bank in 1960. He expected young Matt to fill his shoes. But after Harvard Business School in 1969 Simmons landed his first VC deal for a deep-sea diving company that eventually became offshore rig fixer Oceaneering. (His brother Harris is now chairman of Zions Bancorp.) Simmons arranged hundreds of M&A deals in the go-go 1970s. After the 1982 oil crash he spent the decade rolling up failing outfits into big service companies like Weatherford International.

Simmons' critics insist he doesn't appreciate the power of new technology to tap previously unreachable deposits trapped in shale or under ultradeep water. *"Technology is fabulous, but it does exactly the opposite of what people thought it was going to do--it accelerates decline rates," he says. "The simple analogy is you're having a Slurpee-slugging contest. You have a normal vertical straw and someone comes along with a multilateral straw. You're not getting more out, just getting it out faster."*

This paradox is evident at Cantarell, Mexico's largest field. For 15 years it produced 1.5 million bpd like clockwork. Then natural decline set in. State oil company Pemex drilled dozens of new wells and built a system to inject nitrogen gas. This boosted output to 2.1 million bpd in 2004. Then the collapse: Cantarell is down to 800,000 bpd.


----------

