I'm yet to come across much of an explanation of why the Peak rather than the point in time when the rate of increase in production dips below the rate of increase in demand is the most important point. Can anyone point me in the right direction?
It would seem to me that the price is dependent on the difference between demand and production and that they will not begin to diverge at the Peak but sometime before as the rate of production increase declines.
Most people agree that the Peak is relatively flat, that it could be bumpy due to intermittent recessions etc and that we will only know when it was when it was over.
We do however know that prices are increasing, that countries are warning of recessions, that Saudi is struggling to keep up with rising demand.....wouldn't these all indicate that the point of demand increase outstripping production increases has already been met? And as such our energy crisis has begun?
Why the focus on the date of the Peak?
Moderator: Peak Moderation
Why the focus on the date of the Peak?
"You can't be stationary on a moving train" - Howard Zinn
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kevincarter
- Posts: 40
- Joined: 24 Nov 2005, 11:09
Yep, I agree that energy crises has "technically" begun, but I think when people talks about PO they talk more about SHTF. It is here but so far our life is not very affected by it. No one will belive that it is actually happening untill the president says it on TV.
Truth, if it goes beyond any reasonable doubt.
You are right, newmac, our "long emergency" has already begun.
At the moment people are blinkered beyond belief, and fuel price increases means they are more likely to look at tax cuts and whine about OPEC being a cartel, setting the production levels to fix prices for their own profit?s sake.
I think the significance of when production goes into decline will be that the current levels of denial / ignorance will no longer be possible (as price increases could make the current ones look miniscule).
This is where, if the S is going to HTF, will probably be where it happens. Yes, we need to prepare for a low energy existence in the meantime, but knowing around about when that date is could be vital.
Or, will people wake up beforehand and get some sane policies put in place while there?s still time?
This is why I think the date is important anyway.
Also any process of scientific measurement or modelling is subject to the methods used and accuracy of input data etc. Thus, when forecasting anything it is worthwhile triangulating the results from each of these, noting how close the grouping is also.
The thing about peak oil is that this grouping has been converging on around about now (apart from ?official? forecasts).
At the moment people are blinkered beyond belief, and fuel price increases means they are more likely to look at tax cuts and whine about OPEC being a cartel, setting the production levels to fix prices for their own profit?s sake.
I think the significance of when production goes into decline will be that the current levels of denial / ignorance will no longer be possible (as price increases could make the current ones look miniscule).
This is where, if the S is going to HTF, will probably be where it happens. Yes, we need to prepare for a low energy existence in the meantime, but knowing around about when that date is could be vital.
Or, will people wake up beforehand and get some sane policies put in place while there?s still time?
This is why I think the date is important anyway.
Also any process of scientific measurement or modelling is subject to the methods used and accuracy of input data etc. Thus, when forecasting anything it is worthwhile triangulating the results from each of these, noting how close the grouping is also.
The thing about peak oil is that this grouping has been converging on around about now (apart from ?official? forecasts).
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fishertrop
- Posts: 859
- Joined: 24 Nov 2005, 11:09
- Location: Sheffield
It's such a complex subject that I think the term "Peak Oil" is just used as a notional indicator, just a phrase that represents a much wider subject.
As you say, we won't know exactly when the true Peak date was until it's well-past and that Peak-related problems could start much sooner or occur much later than the actual peak.
The true picture of the market is so distorted and so awash with misinformation that even the actual occurence of rate-of-increase divergence between supply and demand could easily be passed unnoticed.
Until such time as oil traders can't actually find buyers in the market at any price then the main price dictators are the market's PERCEPTION of current condiditions.
If a credible source like Norway (for example) announced a big new field coming on stream tomorrow and that they fanfared it all over the media and said it had been secret for some reason until now, what would happen to the oil price? It would almost certainly go down (assuming no other news on that day).
Does that mean there is actually more oil? No.
Could the price go down if the announcement was 100% made up? Yes.
Until such time as geunine market shortages occur (ie, some trade buyers cannot find sellers, at all) and this is portrayed in the media for what it really is, I don't think the true S is going to HTF.
When you get the gov energy minister or Gordon Brown or the head of a big oil trading house on the telly saying both "there is not enough oil in the world markets to meet demand" and "and this means the following for everyone in the UK..." then the S might really fly - until then no one understands or cares or gives it a second thought.
As you say, we won't know exactly when the true Peak date was until it's well-past and that Peak-related problems could start much sooner or occur much later than the actual peak.
The true picture of the market is so distorted and so awash with misinformation that even the actual occurence of rate-of-increase divergence between supply and demand could easily be passed unnoticed.
Until such time as oil traders can't actually find buyers in the market at any price then the main price dictators are the market's PERCEPTION of current condiditions.
If a credible source like Norway (for example) announced a big new field coming on stream tomorrow and that they fanfared it all over the media and said it had been secret for some reason until now, what would happen to the oil price? It would almost certainly go down (assuming no other news on that day).
Does that mean there is actually more oil? No.
Could the price go down if the announcement was 100% made up? Yes.
Until such time as geunine market shortages occur (ie, some trade buyers cannot find sellers, at all) and this is portrayed in the media for what it really is, I don't think the true S is going to HTF.
When you get the gov energy minister or Gordon Brown or the head of a big oil trading house on the telly saying both "there is not enough oil in the world markets to meet demand" and "and this means the following for everyone in the UK..." then the S might really fly - until then no one understands or cares or gives it a second thought.
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fishertrop
- Posts: 859
- Joined: 24 Nov 2005, 11:09
- Location: Sheffield
Demand currently seems to be outstripping supply (in terms of production capacity) but so far it seems to be affecting only the south (in SHTF scale), in particular countries with heavily subsidized energy e.g. Indonesia. We'll wait and see what happens in winter tho - because there have been numerous fires and explosions recently in refinieries, trains carrying oil, rigs etc. and the effect of this on prices and production isn't yet known.
Maybe until production actually peaks, many countries will be priced out the market, enabling the north to get by (albeit at a greater cost to their economies) by buying oil that would otherwise have gone to other countries. Maybe the peak won't be noticed until after it's happened and it's at a stage where even those with enough money to buy oil can't get hold of it.
Does anyone think that once most countries are priced out, the price will stabilise and demand will drop, therefore prolonging the plateau? Have any predictions taken account of that?
Still learning and it's a very steep curve....
Maybe until production actually peaks, many countries will be priced out the market, enabling the north to get by (albeit at a greater cost to their economies) by buying oil that would otherwise have gone to other countries. Maybe the peak won't be noticed until after it's happened and it's at a stage where even those with enough money to buy oil can't get hold of it.
Does anyone think that once most countries are priced out, the price will stabilise and demand will drop, therefore prolonging the plateau? Have any predictions taken account of that?
Still learning and it's a very steep curve....
The likelihood is that there will be price oscillations as economies go into recession, killing demand, causing price falls, which then stoke up demand again. The problem with this is that investment into alternatives is likely to be delayed.
Olduvai Theory (Updated) (Reviewed)
Easter Island - a warning from history : http://dieoff.org/page145.htm
Easter Island - a warning from history : http://dieoff.org/page145.htm
...apart from the military alternatives. I doubt whether they will get more delayed. They will get more frequent and the initial reasons more convoluted. The only delay could be to enable the evidence/case to be fabricated. I suspect they won't bother with that for too long and will jsut start saying that they are invading because the target is breaching WTO rules and not sharing its oil.
"You can't be stationary on a moving train" - Howard Zinn
I used to think so, but I'm not so sure anymore. Now I think the powers of denial are stronger than ever. We got a scare in the 70's, but the main result was that the denial skills got honed and perfected. It is thinkable that the majority will never perceive it as an energy chrisis, just an economic chrisis - it wont look like any S hit any F, more like a slooow immersion in a huge bowl of S. A centimeter deeper for every year. Kind of...GD wrote: I think the significance of when production goes into decline will be that the current levels of denial / ignorance will no longer be possible.
It makes sense that we have reached peak at roughly the same time that supply is outstripping demand. We seem to be at a plateau where prices rise exponentially because of demand growth and fluctuate according to events (death of Fahd, rumours of hurricanes). Post peak, the price of oil will be pushed up at increasing rates caused by ever decreasing supply until theoretically the price will reach infinity in a finite amount of time. Before this happens we will see demand destruction increasing exponentially 
, keeping oil prices (adjusted for inflation) below some ceiling. We can hope that prices will be kept in check to a degree by the mass adoption of renewable energy sources 
.
I don't believe the price of oil will ever decrease much as long as the industrial and monetary systems are in use. It will be in great demand even in a depression.
The SH begun THTF already but not so much in Europe/USA. When it gets bad enough here the government will do something like implement DTQ's and explain oil depletion to the general public, who will only be aware that petrol isn't affordable and that the government should bring down prices.
, keeping oil prices (adjusted for inflation) below some ceiling. We can hope that prices will be kept in check to a degree by the mass adoption of renewable energy sources .I don't believe the price of oil will ever decrease much as long as the industrial and monetary systems are in use. It will be in great demand even in a depression.
The SH begun THTF already but not so much in Europe/USA. When it gets bad enough here the government will do something like implement DTQ's and explain oil depletion to the general public, who will only be aware that petrol isn't affordable and that the government should bring down prices.
Quoting Dmitry Orlov:newmac wrote:...apart from the military alternatives.
More here http://www.powerswitch.org.uk/forum/viewtopic.php?t=4The next circle of denial revolves around what must inevitably come to pass if the Goddess of Technology were to fail us: a series of wars over ever more scarce resources. Paul Roberts, who is very well informed on the subject of peak oil, has this to say: "what desperate states have always done when resources turn scarce? [is] fight for them." [ MotherJones.com, 11/12 2004] Let us not argue that this has never happened, but did it ever amount to anything more than a futile gesture of desperation? Wars take resources, and, when resources are already scarce, fighting wars over resources becomes a lethal exercise in futility. Those with more resources would be expected to win. I am not arguing that wars over resources will not occur. I am suggesting that they will be futile, and that victory in these conflicts will be barely distinguishable from defeat. I would also like to suggest that these conflicts would be self-limiting: modern warfare uses up prodigious amounts of energy, and if the conflicts are over oil and gas installations, then they will get blown up, as has happened repeatedly in Iraq. This will result in less energy being available and, consequently, less warfare.
Take, for example, the last two US involvements in Iraq. In each case, as a result of US actions, Iraqi oil production decreased. It now appears that the whole strategy is a failure. Supporting Saddam, then fighting Saddam, then imposing sanctions on Saddam, then finally overthrowing him, has left Iraqi oil fields so badly damaged that the "ultimate recoverable" estimate for Iraqi oil is now down to 10-12% of what was once thought to be underground (according to the New York Times).
Some people are even suggesting a war over resources with a nuclear endgame. On this point, I am optimistic. As Robert McNamara once thought, nuclear weapons are too difficult to use. And although he has done a great deal of work to make them easier to use, with the introduction of small, tactical, battlefield nukes and the like, and despite recently renewed interest in nuclear "bunker busters," they still make a bit of a mess, and are hard to work into any sort of a sensible strategy that would reliably lead to an increased supply of energy. Noting that conventional weapons have not been effective in this area, it is unclear why nuclear weapons would produce better results.
A rational being can see that conventional war for resources is a much worse option than reduction of dependency.
A rational human being would also not have made up a tonne of lies and caused 100,000 deaths in pursuit of oil.
A rational being would not have supported an unpopular coup on Venezuela.
A rational being would never design tactical nuclear weapons even less use them.
A rational being would not continue to burn one of the earths greatest gifts to us at ever increasing rates.
A rational being will not get elected in a depression, where people need scapegoats and actions to make things like they used to be.
A rational being will not get elected in a depression, where people need scapegoats and actions to make things like they used to be.
A rational human being would also not have made up a tonne of lies and caused 100,000 deaths in pursuit of oil.
A rational being would not have supported an unpopular coup on Venezuela.
A rational being would never design tactical nuclear weapons even less use them.
A rational being would not continue to burn one of the earths greatest gifts to us at ever increasing rates.
A rational being will not get elected in a depression, where people need scapegoats and actions to make things like they used to be.
A rational being will not get elected in a depression, where people need scapegoats and actions to make things like they used to be.
"You can't be stationary on a moving train" - Howard Zinn
Yep, that's roughly what Dmitry writes also:newmac wrote:A rational being can see that conventional war for resources is a much worse option than reduction of dependency.
A rational human being would also not have made up a tonne of lies and caused 100,000 deaths in pursuit of oil.
A rational being would not have supported an unpopular coup on Venezuela.
A rational being would never design tactical nuclear weapons even less use them.
A rational being would not continue to burn one of the earths greatest gifts to us at ever increasing rates.
A rational being will not get elected in a depression, where people need scapegoats and actions to make things like they used to be.
A rational being will not get elected in a depression, where people need scapegoats and actions to make things like they used to be.
I am not arguing that wars over resources will not occur. I am suggesting that they will be futile, and that victory in these conflicts will be barely distinguishable from defeat.
I think that there are two main 'peaks' to consider:
1. The theoretical maximum of extraction: this is a function of the original endowment from planetary processes X million years ago and physical and technological restraints that means URR is about 35% of this total.
2. The actual maximum output from the transport, refining and delivery processes.
I believe that #2 is the constraint that we face at the moment as oil production companies, tankers owners and refinery operatorss have no incentive to invest in delivery systems that will only be used for say 5 years when they need 20 years to be financially profitable. Similarly, the current shape of the forward futures price curve means that there's no incentive to rush to produce. BP's decision to return profits over $25bbl to shareholders also supports this theory.
There is also the issue of storage; oil demand varies throughout the year and some production goes into storage to be released later, as does the actual distilate products. I believe the US is currently filling its SPR at the rate of 1mbd, China is due to start filling its own SPR soon and India is planning a similar project. When will other countries join this particular party?
1. The theoretical maximum of extraction: this is a function of the original endowment from planetary processes X million years ago and physical and technological restraints that means URR is about 35% of this total.
2. The actual maximum output from the transport, refining and delivery processes.
I believe that #2 is the constraint that we face at the moment as oil production companies, tankers owners and refinery operatorss have no incentive to invest in delivery systems that will only be used for say 5 years when they need 20 years to be financially profitable. Similarly, the current shape of the forward futures price curve means that there's no incentive to rush to produce. BP's decision to return profits over $25bbl to shareholders also supports this theory.
There is also the issue of storage; oil demand varies throughout the year and some production goes into storage to be released later, as does the actual distilate products. I believe the US is currently filling its SPR at the rate of 1mbd, China is due to start filling its own SPR soon and India is planning a similar project. When will other countries join this particular party?
"If the complexity of our economies is impossible to sustain [with likely future oil supply], our best hope is to start to dismantle them before they collapse." George Monbiot
