Three Nails in the Coffin of Peak Oil

[Tarrel]

There are numerous alternatives to crude oil, but it seems most unlikely that any combination of these alternatives will be available in sufficient volumes and at low enough prices to allow BAU.

Biofuels help to a limited extent but cant be produced on a large enough scale to replace the oil used now.

Wind, solar, and hydro help are useful for electricty production but dont produce oil based fuels for transport.

Coal is cheap and relatively plentifull, but will eventualy peak, and is carbon intensive, and not ideal for transport.

Nuclear is potentily expensive, and again does not help much with transport

Agreed. So there will be a transition in the way we live, work and trade, away from moving ourselves and stuff around so much - both at a local level and globally.

The big question, often debated on here and in the Peak Oil blogosphere, is whether that transition will happen chaotically, or smoothly, or in "tumbling down the mountain" style.

I am increasingly of the view, however, that some of the climate change effects may well hit us first. The global economic system has shown remarkable resilience to shocks, and has a habit of re-grouping around challenges. But the climate presents certain imperatives and buffers that even the most resilient self-organising system will run up against.

[vtsnowedin]

[I am increasingly of the view, however, that some of the climate change effects may well hit us first. The global economic system has shown remarkable resilience to shocks, and has a habit of re-grouping around challenges. But the climate presents certain imperatives and buffers that even the most resilient self-organising system will run up against.

That is a pretty good bet, but if I had to place a stack of blue chips on the table I would sit it on the square of over population. Even without climate change we will run out of food soon and climate change in our prime food growing regions will only hasten the moment of crisis.

[Ralph]

the actions of world leaders have flattened the top of the peak oil curve.

I don't think I have ever heard of anyone who actually thought that "world leaders" of any stripe or persuasion could ever actually CHANGE the geology upon which the idea of peak oil is based.

Interesting concept. What did these leaders do, pass a law demanding that instead of a peak, the geology create a plateau instead?

[vtsnowedin]

the actions of world leaders have flattened the top of the peak oil curve.

I don't think I have ever heard of anyone who actually thought that "world leaders" of any stripe or persuasion could ever actually CHANGE the geology upon which the idea of peak oil is based.

Interesting concept. What did these leaders do, pass a law demanding that instead of a peak, the geology create a plateau instead?

Geology determines how much oil is in a given field and technology determines how much of that can be recovered but economics and human decisions rule as to how fast the wells are drilled and the rate they are pumped out up to the limits of geology and technology. KSA has been pumping at a rate determined by them to extend the life of their fields "For the future generations" and to achieve market price targets for years. If they had pumped it as fast as they could get it out of the ground they would already be back to being the sandstorm capital of the world.

[Ralph]

the actions of world leaders have flattened the top of the peak oil curve.

I don't think I have ever heard of anyone who actually thought that "world leaders" of any stripe or persuasion could ever actually CHANGE the geology upon which the idea of peak oil is based.

Interesting concept. What did these leaders do, pass a law demanding that instead of a peak, the geology create a plateau instead?

Geology determines how much oil is in a given field and technology determines how much of that can be recovered but economics and human decisions rule as to how fast the wells are drilled and the rate they are pumped out up to the limits of geology and technology. KSA has been pumping at a rate determined by them to extend the life of their fields "For the future generations" and to achieve market price targets for years. If they had pumped it as fast as they could get it out of the ground they would already be back to being the sandstorm capital of the world.

I'm not so sure everything you said except for how much oil is actually in the ground can't be covered with just the statement..."its economics".

The concept I found interesting was that human hubris makes people think they are the centers of the universe and just by pompously claiming something, passing a law, dreaming it, they can alter some immutable law or another. "If only wishing would make it so" type of thing.

[PS_RalphW]

I'm not so sure everything you said except for how much oil is actually in the ground can't be covered with just the statement..."its economics".

Therein lies your problem. Economics is simply how we allocate the resources we have. It cannot create resources out of thin air. If getting oil out of the ground requires ever more resources to extract, which in turn have to be extracted, processed and delivered to the point of oil extraction or transportation, then that is a permanent and ever growing drag that will leave less and less resources for the rest of the economy, and ultimately that will quite simply price oil out of the market. If the world has not invested massively in alternative energy infrastructure in the mean time, then the global economy implodes whilst those massive oil resources underground may as well not be there.

[Ralph]

I'm not so sure everything you said except for how much oil is actually in the ground can't be covered with just the statement..."its economics".

Therein lies your problem. Economics is simply how we allocate the resources we have. It cannot create resources out of thin air.

I agree with you whole heartedly. But I don't see the relevance in this case, because economics doesn't say it creates resources out of thin air. It does what you say, it explains how we allocate resources. Not create them.

If getting oil out of the ground requires ever more resources to extract, which in turn have to be extracted, processed and delivered to the point of oil extraction or transportation, then that is a permanent and ever growing drag that will leave less and less resources for the rest of the economy, and ultimately that will quite simply price oil out of the market.

Good. Oil getting more expensive is not a bad thing, particularly for those who build a business model to compete against it. Economics has this one covered lock, stock and barrel.

If the world has not invested massively in alternative energy infrastructure in the mean time, then the global economy implodes whilst those massive oil resources underground may as well not be there.

Fortunately, economics does work well in this regard. Some part of the global economy will certainly be unhappy, pissing in the porridge of the oil companies as it were, but as I already mentioned, competing business models to the oil company model aren't going to mind in the least. LEAVE the massive oil resources in the ground, PLEASE!

[emordnilap]

Troll alert.

[woodburner]

What's all this "troll alert" business that some are some are indulging? It seems like the "Elvis alert - the presence of Elvis has been detected nearby" rubbish of the 1980s.

Just because someone holds a different view doesn't make them a troll. Trolls are nasty people who set out to destroy people's lives for no reason except they get some warped satisfaction from it. People here are just expressing an opinion.

[biffvernon]

You don't remember RGR?

[woodburner]

And the connection is?..............

[kenneal - lagger]

I'm not so sure everything you said except for how much oil is actually in the ground can't be covered with just the statement..."its economics".

Therein lies your problem. Economics is simply how we allocate the resources we have. It cannot create resources out of thin air.

I agree with you whole heartedly. But I don't see the relevance in this case, because economics doesn't say it creates resources out of thin air. It does what you say, it explains how we allocate resources. Not create them.

The problem is that economics thinks that you can although it doesn't actually realise that this is the result of their thinking. Economics says that if a resource is getting short its price will rise so that investing in it becomes more attractive. That increased investment will guarantee more of the resource becomes available. Economics takes only minimal account of the higher energy needed to extract that resource or the fact that energy might become harder to find. It takes no account of declining ore concentrations or the massive problems of getting ultra lean ores from 5000 feet underground. Economics thinks resources are similar to money - something a bank can magic into existence, on demand, at the click of a mouse. Economics has no regard for geology.

If getting oil out of the ground requires ever more resources to extract, which in turn have to be extracted, processed and delivered to the point of oil extraction or transportation, then that is a permanent and ever growing drag that will leave less and less resources for the rest of the economy, and ultimately that will quite simply price oil out of the market.

Good. Oil getting more expensive is not a bad thing, particularly for those who build a business model to compete against it. Economics has this one covered lock, stock and barrel.

Economics doesn't have this covered as economics doesn't take account of the fundamental place in our economies taken by energy. Economics thinks that output is the product of capital and labour. It's one of their basic equations, dating from the 16th century, but unfortunately this hasn't been so since the 18th century when the input of man's labour was overtaken by the input of water and then coal. The input of coal has long been overtaken by the input from oil and gas in the form of electricity. As far as economics is concerned energy is just a minor cost in the system. Although it has usually been a minor cost its major input has also been at the heart of productivity increases. As the cost of energy increases it might be appreciated by economists just how important its contribution is. We can but hope!

If the world has not invested massively in alternative energy infrastructure in the mean time, then the global economy implodes whilst those massive oil resources underground may as well not be there.

Fortunately, economics does work well in this regard. Some part of the global economy will certainly be unhappy, pissing in the porridge of the oil companies as it were, but as I already mentioned, competing business models to the oil company model aren't going to mind in the least. LEAVE the massive oil resources in the ground, PLEASE!

This shows up a massive failure in the economic system; its inability to efficiently allocate resources to a new technology. In the case of oil its scarcity causes a massive price increase, sufficient to cause a worldwide recession (2007). This oil price increase stimulates the market for the replacement technology, Renewables, but then the resulting recession drops the price of oil again which wipes out the market for renewables. This is because economists regard energy as only a minor input to the system not one that is fundamental to the whole system.

Economics is no longer fit for purpose in the 21st century.

[kenneal - lagger]

You don't remember RGR?

I don't think RGR would ever have said

LEAVE the massive oil resources in the ground, PLEASE!

[biffvernon]

You are probably right, Ken, this is a different person, not in the same league, but with some similar agendas. When people post anonymously on forums, with no way of checking their real life status, suspicion is likely to be aroused if they frequently post odd stuff.

[woodburner]

You are probably right, Ken, this is a different person, not in the same league, but with some similar agendas. When people post anonymously on forums, with no way of checking their real life status, suspicion is likely to be aroused if they frequently post odd stuff.

Everybody posts anonymously to some extent. Just because someone has a username "JimJones", it doesn't tell you who they are. Even their profile is no proof.

I suspect there are more people who post on forums who don't have agendas, than those those who have. They are just discussing a point of view.