The Oil Drum is closing down after eight years, giving up the long struggle to alert us all to "peak oil" and the dangers of an energy crunch. Readers have been drifting away. The theme has gone out of fashion, eclipsed by shale and fracking in the US.
The demise of Britain's leading website for oil dissidents has been seized on by critics as an admission that peak oil is just another malthusian myth like so many before. It comes amid a spate of reports from global banks announcing the death of the commodity supercycle, slain by creative technology and a surge of new supply.
Yet if you stand back, it is hardly evident that the world is again enjoying abundant sources of cheap energy, metals or indeed food. Commodity prices have held up remarkably well given that we are in a global trade depression, albeit one contained by monetary stimulus.
The eurozone is in the longest unbroken recession since the 1930s, with industrial production 13pc below the pre-Lehman peak. Average growth in the US has been 1.1pc over the past three quarters as it grapples with the most drastic fiscal tightening since demobilisation after the Korean War. The Economic Cycle Research Institute continues to insist that the US is in recession right now, a claim less absurd than it sounds.
It all adds up to a prostrate global economy, yet on Wednesday Brent crude oil was still trading at $106, and US crude at $103. There is no comparison with the collapse to $11 in 1998. The CRB commodities index is still three times higher than a decade ago. You might conclude that the supercycle is in rude good health given what has been thrown at it.
A new Eos report by the American Geophysical Union, "Peak Oil and Energy Independence: Myth and Reality", argues that global crude output has been stuck on a plateau of around 75m barrels per day (bpd) since 2005 despite enticing returns. "Global net oil exports from oil-exporting countries have peaked and are in decline."
The output of the big five oil majors - Exxon, BP, Total, Chevron and Shell - has fallen by 26pc over the past nine years, despite a relentless hunt for new fields. The North Sea, the Gulf of Mexico and Alaska are all wasting away. Expenses keep ratcheting up as fields move further out to sea in the Atlantic, drilling deeper through layers of salt. Theoretical reserves are meaningless. What matters is the break-even cost.
Eos said flows from the world's existing fields are falling at 5pc a year, and it is questionable whether shale or tar sands can easily step into the breach. "Production from these unconventional sources is difficult and expensive, and has a very low energy return on investment. Simply stated, it takes energy to get energy," it said.
Using a rule of thumb that 4pc global growth requires a rise in oil supply of 3pc, Eos concluded that the world will need another 17m bpd within five years unless we find a way to change our habits fast.
Great analysis from Ambrose, as usual a cut above the usual in the mainstream media.
His doom 'n' gloom on Europe is striking.
Peace always has been and always will be an intermittent flash of light in a dark history of warfare, violence, and destruction
montaguewithnail shows his lack of understanding of how EROEI works so it's no wonder that he has no faith in it. An EROEI of o.1 means that for every 10 barrels that you get out of the system you have to invest 100 barrels - 10/100=0.1 -, i.e. there is a net loss of 90 barrels. In the example he quoted for tar sands he is looking at an EROEI of 1.1, i.e. 110/100=1.1.
An EROEI of less than 1 means a net loss of energy and an EROEI of more than one means a net gain of energy. Unfortunately economists have a habit of disregarding science in their calculations to our great cost. Only an economist thinks that you can have constant growth in a finite environment.
In our human timescale the earth is a finite environment, as AEP alludes to in his piece above, and we are depleting it's resources at an alarming rate, to a scientist even if not to an economist. Only on a geological timescale of millions of years will the earth replenish all the minerals that we have squandered over the last couple of hundred years.
But our economic system is only concerned about what will happen in the next ten years if that even. In the next ten years economic growth of the BRIC countries, almost half of the world's population, at the current rate of 7% will require them to double their consumption of all resources to date!!! That's basic maths, divide the growth rate into 72 - if you doubt that google "Professor Al Bartlett" for a maths lesson. So we definitely have a problem as the rate of discovery of new resources is barely keeping up with our current world economic growth rate.
Professor Charles Hall in his book "Energy And The Wealth Of Nations" says that we need an EROEI of at least 1.3 to 1.5 to cover all the other energy uses that go into the recovery of a fuel resource. He also says that the smaller the EROEI we get from our fuels the less non essential activities we can undertake. So as the EROEI of our fuels goes down to a certain level, once we have grown our food and delivered and collected it and cleaned and delivered our water and warmed our houses, we will have no fuel left to enable us to run the NHS or go the the cinema or theatre or go on holiday or carry out the research to find other ways of providing the high levels of energy that our current life styles make essential. As the EROEI gets even lower we will have to choose between food water or a warm home!
The EROEI of recent conventional oil finds has reduced to about 20 from the figure of well over 100 of the original oil fields, shale oil is much less and shale gas is even less than shale oil. Monty above is quoting 1.1 for tar sands so we have a looming problem of disastrous proportions for human civilisation and population as we know it.
The Oil Drum is closing down after eight years, giving up the long struggle to alert us all to "peak oil" and the dangers of an energy crunch.
Great analysis from Ambrose, as usual a cut above the usual in the mainstream media.
It isn't an "alert" 5 years after TOD proclaimed it is historical fact, and it strikes me as a little disingenuous to not mention that "the long struggle" might be more related to trying to sell the idea that peak oil 5 years after the fact at the same time that one of the oldest producing regions on the planet is going through the fastest increase in oil production rates in its history, nearly half a century after it peaked.
Just the idea that the same concept, when applied to the rest of the world, might cause the same result is enough to give reporting agencies like the IEA and EIA heartburn; a blog which said that it can't happen immediately followed by it happening isn't a struggle with anything more than maintaining credibility and losing it with every new barrel produced in North Dakota and Texas.
The Oil Drum is closing down after eight years, giving up the long struggle to alert us all to "peak oil" and the dangers of an energy crunch.
Great analysis from Ambrose, as usual a cut above the usual in the mainstream media.
It isn't an "alert" 5 years after TOD proclaimed it is historical fact, and it strikes me as a little disingenuous to not mention that "the long struggle" might be more related to trying to sell the idea that peak oil 5 years after the fact at the same time that one of the oldest producing regions on the planet is going through the fastest increase in oil production rates in its history, nearly half a century after it peaked.
Just the idea that the same concept, when applied to the rest of the world, might cause the same result is enough to give reporting agencies like the IEA and EIA heartburn; a blog which said that it can't happen immediately followed by it happening isn't a struggle with anything more than maintaining credibility and losing it with every new barrel produced in North Dakota and Texas.
Bloody hell, no wonder I found it a struggle to understand it. Your first sentence is 80 (yes, eighty) words,and the second is 67 words. What happened to plain English?
To become an extremist, hang around with people you agree with. Cass Sunstein
The Oil Drum is closing down after eight years, giving up the long struggle to alert us all to "peak oil" and the dangers of an energy crunch.
Great analysis from Ambrose, as usual a cut above the usual in the mainstream media.
It isn't an "alert" 5 years after TOD proclaimed it is historical fact, and it strikes me as a little disingenuous to not mention that "the long struggle" might be more related to trying to sell the idea that peak oil 5 years after the fact at the same time that one of the oldest producing regions on the planet is going through the fastest increase in oil production rates in its history, nearly half a century after it peaked.
Just the idea that the same concept, when applied to the rest of the world, might cause the same result is enough to give reporting agencies like the IEA and EIA heartburn; a blog which said that it can't happen immediately followed by it happening isn't a struggle with anything more than maintaining credibility and losing it with every new barrel produced in North Dakota and Texas.
Sorry, no idea what you are trying to say here. Can you explain in simple english?
Peace always has been and always will be an intermittent flash of light in a dark history of warfare, violence, and destruction
I experience pleasure and pains, and pursue goals in service of them, so I cannot reasonably deny the right of other sentient agents to do the same - Steven Pinker
That explains the confusion. I was reading the posts in the oil drum thread and couldn't understand why someone who normally posts thought through comments with significant authority. Instead there seemed to be so much tosh as a substitute. Thanks E, I have just noticed it was being generated by "Ralph" without a "W".
Sometimes I wish there was an "ignore" button.
To become an extremist, hang around with people you agree with. Cass Sunstein
