The peer-reviewed report calls for the European Commission to consider oil as the world’s most important "critical raw material." Despite offering a scathing critique of conventional peak oil theory, the report arrives at the shock conclusion that the economic viability of the entire global oil market could come undone within the next few years.
Oil, oil everywhere, too costly to drill
The plateauing of conventional crude oil production in January 2005 was one of the triggers of events leading to the 2008 global financial crash, according to the report. As debt built-up in the subprime mortgage sector, the crude oil plateau drove up the underlying energy costs for the entire economy making that debt more difficult to repay—and eventually resulting in catastrophic defaults. The report warns that “unresolved� dynamics in the global energy system were only temporarily relieved due to "Quantitative Easing"—the creation of new money by central banks. A correction is now overdue, it warns.
The report says we are not running out of oil—vast reserves exist—but says that it is becoming uneconomical to exploit it. The plateauing of crude oil production was “a decisive turning point for the industrial ecosystem,� with demand shortfall being made up from liquid fuels which are far more expensive and difficult to extract—namely, unconventional oil sources like crude oil from deep offshore sources, oil sands, and especially shale oil (also known as "tight oil," extracted by fracking).
These sources require far more elaborate and expensive methods of extraction, refining and processing than conventional crude mined onshore, which has driven up costs of production and operations.
Greer has predicted for a while now a coming oil supply crunch in early 2020's - something I have found tallies with other analysis from those who closely follow global oil supply stats.
It also coincides with the LOG modelling of a peak in industrial production around 2020 - after which we enter the Long Descent.
Peace always has been and always will be an intermittent flash of light in a dark history of warfare, violence, and destruction
The oil price has declined recently due to plague concerns.
This I suspect is only short term, and the end of cheap oil is within sight.
I doubt that oil extraction from existing wells will become uneconomic in the foreseeable future.
Rising costs will result in little or no NEW supply becoming available, perhaps for some years.
Demand will then push up prices, probably to well over $100 and perhaps to $150.
This higher price will render economic, extraction from existing known reserves that uneconomic at $50/$60 but that would be profitable at two or three times todays price.
If the higher price continues, then more exploration will be encouraged, and more oil will be found. Most of the easy oil in large fields has already been discovered.
A determined search will no doubt find a bit more, probably in small reserves that are expensive to exploit.
This is how a free market works.
We are some way away from "running out of oil" but we might run out of cheap oil within a year or two.
"Installers and owners of emergency diesels must assume that they will have to run for a week or more"
adam2 wrote: ↑29 Feb 2020, 22:34
The oil price has declined recently due to plague concerns.
This I suspect is only short-term, and the end of cheap oil is within sight.
I doubt that oil extraction from existing wells will become uneconomic in Kigurumi renifer in the foreseeable future.
Rising costs will result in little or no NEW supply becoming available, perhaps for some years.
Demand will then push up prices, probably to well over $100 and perhaps to $150.
A government research report produced by Finland warns that the increasingly unsustainable economics of the oil industry could derail the global financial system within the next few years.
The new report is published by the Geological Survey of Finland (GTK), which operates under the government’s Ministry of Economic Affairs. GTK is currently the European Commission’s lead coordinator of the EU’s promise project, its flagship mineral resources database, and modeling system.
