What Will 2015 do for Peak Oil?

[clv101]

I am of the firm conviction that the world is at the peak of world oil production right now, or was at that point three or four months ago. I think history will show that the 12 months of September 2014 through August 2015 will be the one year peak. Whether the calendar year peak is 2014 or 2015 is the only thing still in question, or that is my opinion anyway.

http://peakoilbarrel.com/will-2015-peak-oil/

[biffvernon]

Conventional oil peaked in 2005 and now that unconventional is no longer financially viable... yep, this could be right.

[UndercoverElephant]

There is a possibility of one more QE-fuelled boom that makes non-convential more viable. The scenario would involve another financial/monetary crisis, worse than 2008, followed by money-printing on a rate that dwarfs even what we've seen since then, as the opposing forces of deflation and inflation grow ever stronger, like a supernovae about to explode.

I wouldn't want to bet on it, but I don't think it is impossible. I do think that if it were to happen, that when the monetary supernovae in question finally explodes that that would be definitely be the undeniable conventional+unconventional peak of oil production.

But not neccesarily fossil fuel production. Especially if somebody works out how to profitably mine methane hydrates.

[adam2]

Conventional oil peaked in 2005 and now that unconventional is no longer financially viable... yep, this could be right.

Agree. In years to come I suspect that the oil price will recover substantially, thereby making unconventional oil economic again. However I also expect that by then that conventional oil production will have declined to the extent that the total of conventional oil plus newly revived unconventional oil will never again exceed present/very near future total production.

[Catweazle]

I could be wrong, I'm not an economist, but it strikes me that the Saudis are destroying the fracking industry by selling oil at less than the frackers can produce it. Once the fracking companies are bankrupt, oil prices will climb again, but, and here is the important bit, who will invest to re-start the fracking when there is a possibility that the Saudis will simply bankrupt them again ?

[biffvernon]

Good point.

I'm rather sceptical about the oft-touted Saudi motivation to destroy the frackers.
It just makes plain selfish economic sense for them to keep pumping. If they turn the taps off they lose both revenue and market share. If they keep pumping they still make a handsome profit from their cheap to produce oil as well as retaining market share. A possible motivation to keep oil in the ground was spoken about by the King a few years ago, to preserve the oil for future generations, but now that even Saudi has admitted the reality of global warming they may have concluded that it's best to sell the stuff while there still is a market, any market.

[vtsnowedin]

So let the Saudies sell there oil now for cheap. Once Anwar finally waters out all the as yet unfracked shale will still be there and it can then be fracked and pumped dry at high prices without any competition.

[clv101]

...the as yet unfracked shale will still be there and it can then be fracked and pumped dry at high prices without any competition.

But how will a global economy, devastated by the loss of cheap to extract, high EROEI oil be able to afford high cost shale oil?

[UndercoverElephant]

...the as yet unfracked shale will still be there and it can then be fracked and pumped dry at high prices without any competition.

But how will a global economy, devastated by the loss of cheap to extract, high EROEI oil be able to afford high cost shale oil?

Most of it won't. Only the military and the rich will buy it.

[raspberry-blower]

...the as yet unfracked shale will still be there and it can then be fracked and pumped dry at high prices without any competition.

But how will a global economy, devastated by the loss of cheap to extract, high EROEI oil be able to afford high cost shale oil?

That question was answered by Ilargi of The Automatic Earth: Price Discovery and Emerging Markets

In short, they won't.

Now that the printing presses have slowed down the true state of the economy is beginning to emerge. It ain't pretty.

We're in the next wave of "Demand Destruction" - where the price of oil bottoms out is yet to be seen.

[vtsnowedin]

...the as yet unfracked shale will still be there and it can then be fracked and pumped dry at high prices without any competition.

But how will a global economy, devastated by the loss of cheap to extract, high EROEI oil be able to afford high cost shale oil?

Regardless of the cost charged a barrel of oil contains the energy equivalent of eight YEARS of hard physical human labor. As the EROEI goes down all economies will use it more wisely but we will certainly stop just burning it to heat homes that are poorly insulated or to boil water.

[PS_RalphW]

well that's my goose cooked.

Still its only the 300 year old part of the house that is uninsulated, and right now the wood burner is really toasting me.

New condensing boiler this year, and electric car if I get a new job .

[vtsnowedin]

well that's my goose cooked.

Still its only the 300 year old part of the house that is uninsulated, and right now the wood burner is really toasting me.

New condensing boiler this year, and electric car if I get a new job .

Well your aware of the situation and working the problem. Perhaps some insulation added to the old part if you need that space heated?
It is those that are still blissfully unaware that will have the hardest time adapting to changing conditions.

[Catweazle]

...the as yet unfracked shale will still be there and it can then be fracked and pumped dry at high prices without any competition.

But how will a global economy, devastated by the loss of cheap to extract, high EROEI oil be able to afford high cost shale oil?

Regardless of the cost charged a barrel of oil contains the energy equivalent of eight YEARS of hard physical human labor. As the EROEI goes down all economies will use it more wisely but we will certainly stop just burning it to heat homes that are poorly insulated or to boil water.

This is something I've been telling people too, oil is the bargain of all time. I'm very tempted to buy some more diesel for my stash.

[raspberry-blower]

Wolf Richter: This is just the Beginning of the Great American Oil Bust

Yet, even as capital expenditures are getting slashed brutally, companies have not lowered their production forecasts.

And they won’t, at least not for a while; they’ll keep pumping at the maximum rate possible, especially now that revenues from unhedged production have been plunging – while the costs of servicing their mountains of debt have remained the same, and rolling over that debt has become a lot more expensive. Cutting back on exploration, drilling, and completion stems the cash outflow, but it doesn’t cut production, not until the decline rates of existing shale wells start making a visible dent into it.

So investors see blood in the streets. And it’s the signal. The four largest exchange-traded oil-related funds – including the largest oil fund, USO – had inflows of $1.23 billion in December, the most since May 2010, and $110 million during the first few days of January, Bloomberg reported. These investors are betting on a quick rebound of the price of oil. A sign that there isn’t nearly enough blood in the streets yet.

There is a collapse in the price of oil but there is a definite time lag that will distort the true picture for a while yet.

Looks like there will be an awful lot of lay-offs in the US
UK oil sector looks just as moribund