There Will Be Oil
September 21, 2011 3:29 AM Subscribe

Oil prices remain stubbornly high. Daniel Yergin from CERA has an opinion piece published in the WSJ: There Will Be Oil. The Peak Oil community react in depth. Bonus : Robert McFarlane in the NYT on flex-fuel for energy security.
posted by bystander (85 comments total) 10 users marked this as a favorite

Also, we're reaching peak olive oil. It's not enough anymore that I can't drive my car, I can't even cook a decent meal.
posted by twoleftfeet at 3:34 AM on September 21, 2011 [2 favorites]

Tragically the peak oil community peaked two years ago and is now in terminal decline. Hysterical Guardian journalists are starving on the street and progressive environmental activists haven't had access to hot water for weeks - although that's more of a lifestyle choice on their part. Luckily the world has enough readily combustible fuel in the form of smug pamphlets predicting imminent collapse due to resource depletion to last over two hundred years.
posted by joannemullen at 3:48 AM on September 21, 2011 [10 favorites]

Also, we're reaching peak olive oil. It's not enough anymore that I can't drive my car, I can't even cook a decent meal.
posted by twoleftfeet at 3:34 AM on September 21 [+] [!]

Hah, that's great. Missed it at the time: the worst sort of “pal for oil joke”.
posted by chavenet at 3:54 AM on September 21, 2011

Luckily the world has enough readily combustible fuel in the form of smug pamphlets predicting imminent collapse due to resource depletion to last over two hundred years.

Not to mention the methane emanating from comments left by libertarians and Reaganomics advocates all across the web. Tap those suckers and we'll be burning blue forevar.
posted by maxwelton at 4:00 AM on September 21, 2011 [23 favorites]

Peak oil is gonna happen. Just is. Prices aren't being defined by peak oil, tho, this is just the lunacy running rampant through commodities. We're still a couple of years away from the end of the same bubble cycle dot-com stocks and housing went through. Once it pops, oil, food and precious metals will be really cheap for a while.

Also, the gold bugs will be wiped out overnight, triggering yet another recession.
posted by Slap*Happy at 4:06 AM on September 21, 2011 [2 favorites]

This specter goes by the name of "peak oil."

Its advocates argue that the world is fast approaching (or has already reached) a point of maximum oil output. They warn that "an unprecedented crisis is just over the horizon." The result, it is said, will be "chaos," to say nothing of "war, starvation, economic recession, possibly even the extinction of homo sapiens."

No. The specter described above goes by the name of "using the opponent's ridiculous, hysteric, irrational hyperbole to make your own bullshit appear reasonable by contrast." This style of writing, unfortunately, never reaches a peak.
posted by three blind mice at 4:22 AM on September 21, 2011 [1 favorite]

If we keep burning all this limitless oil, we'll choke on our own exhaust gases and roast in our own global sauna. Well, the "we" that doesn't have air conditioning, underground bunkers and produce flown in from the green valleys of Antarctica.

And that's why the Wall Street Journal is a stinking hunk of trash.
posted by seanmpuckett at 4:31 AM on September 21, 2011 [3 favorites]

I wish we were running out of oil! It'd put a limit on how bad climate change could get.

But meanwhile, back in reality, there is absolutely zero evidence that we are running out of oil. This sort of reflexive Malthusian panic would better be applied to things we actually are running out of, like fresh water or sea life.
posted by miyabo at 4:33 AM on September 21, 2011 [2 favorites]

The Peak Oil community react in depth

I knew some people in the Peak Oil community and they invited to some of their parties. I can tell you that the Peak Oil community throws really bad parties. Just when you think the evening is going great, just when you thing everyone is having a great time, they turn off all the lights and make everybody go home.
posted by twoleftfeet at 4:35 AM on September 21, 2011 [8 favorites]

When did we reach the point that peak oil or climate change can be a "belief," like Santa Claus or God?
posted by sonic meat machine at 4:40 AM on September 21, 2011 [6 favorites]

Of course we are running out of oil, the earth is not an Infinite Sphere of Plenty...

When it's going to happen, I don't know. But please think on time scales longer than 5 years. I've taken the stoic view that I'm going to be paying increasing amounts of money per watt for the rest of my life.
posted by Homemade Interossiter at 4:53 AM on September 21, 2011 [3 favorites]

The concept of peak oil is pretty commonsense, that the rate of extraction will peak as easily extracted supplies are used up. Oil companies have lots of money, but it still takes a long time to build deep sea wells and such.
posted by snofoam at 4:56 AM on September 21, 2011

there is absolutely zero evidence that we are running out of oil [...] things we actually are running out of, like fresh water or sea life.

Both fresh water and sea life can rebound to sustainable levels within a human timescale if we curb consumption enough. OTOH, even 1 mbpd of oil consumption is probably more than the formation rate of new deposits.

And peak oil is not about "running out", and by the time we do "run out" (read: realise the effort of getting out what's there isn't worth it) no one will care about oil anymore.

Also, I'm eagerly awaiting the day when some bright mind announces that "the USA is the Saudi Arabia of oil" and points to its shale oil reserves as if they weren't known about for decades and the only reason to explore them is out of desperation. Oil is not "oil".
posted by Bangaioh at 4:57 AM on September 21, 2011 [7 favorites]

That NYT op-ed is full of slightly-twisted facts that add up to blatant misinformation. Many vehicles are already flex-fuel, most of the others will run just fine on ethanol even if the manufacturer says they won't, and none of this matters because ethanol production from corn isn't an energy-positive process.

If you really want to increase ethanol usage, get rid of import tariffs on the stuff (since making ethanol is an energy-positive process when you start from tropical crops). Or we could just mandate biodiesel in all commercial trucks, which use a huge fraction of our fuel supply and are already mostly diesel.
posted by miyabo at 4:57 AM on September 21, 2011

Estimates for the total global stock of oil keep growing. The world has produced about one trillion barrels of oil since the start of the industry in the 19th century. Currently, it is thought that there are at least five trillion barrels of petroleum resources in the ground, of which 1.4 trillion are deemed technically and economically accessible enough to count as reserves (proved and probable).

This is supposed to convince anyone that peak oil is nothing to worry about? The article is called There Will Be Oil, when there were one trillion barrels produced to date, and 1.4 trillion left?

This is the Wall Street Journal, so I presume the title was shortened from There Will Be Oil (for this Generation of Investors)
posted by romanb at 4:59 AM on September 21, 2011 [7 favorites]

Oil is not "oil".

What does this mean? I don't see any reason the US couldn't run entirely on shale oil, probably for hundreds of years before running out. It would be a little more expensive (but gas would still be cheaper than it is today in Europe!).
posted by miyabo at 5:06 AM on September 21, 2011

EROEI.
posted by Bangaioh at 5:12 AM on September 21, 2011 [5 favorites]

True story: I once worked as a night janitor and cleaned Daniel Yergin's office regularly for several months. It was a very nice office. He was a nice guy, met him a few times.

the world has enough readily combustible fuel in the form of smug pamphlets

My goodness if we could burn smug all we'd have to do is round up the libertarians and put them to work commenting.
posted by spitbull at 5:16 AM on September 21, 2011 [4 favorites]

Also, this video is a very good demonstration of what "oil" is. Note that Canada is now ranked the second country with most reserves thanks to that.
posted by Bangaioh at 5:19 AM on September 21, 2011

All oil extraction requires fresh water, especially oil shale. Ain't that much water in the U.S. states with the biggest oil shale deposits.
posted by jeffburdges at 5:22 AM on September 21, 2011 [1 favorite]

I have to wonder what scam Yergin is trying to pull with saying "there will be oil."

There isn't enough oil right now. Oil production has peaked. There are spot shortages of oil happening in poorer parts of the world every day. Check Energy Shortage for the latest stories coming from the newswires.

And it's affecting Americans too. Check Energy Trap for stories about Americans affected.
posted by ocschwar at 5:22 AM on September 21, 2011 [1 favorite]

I don't see any reason the US couldn't run entirely on shale oil, probably for hundreds of years before running out. It would be a little more expensive

It would be a little more expensive AND contaminate irreplaceable sources of clean drinking water for tens of millions of people.
posted by three blind mice at 5:23 AM on September 21, 2011 [12 favorites]

What does this mean? I don't see any reason the US couldn't run entirely on shale oil, probably for hundreds of years before running out. It would be a little more expensive (but gas would still be cheaper than it is today in Europe!).

I was also confused by this until someone explained the concept of "energy profit" (which miyabo refers to above in the context of ethanol, and on preview I see Bangaioh has addressed as well with the EROEI link) to me. It's prima facie counterintuitive to people whose standard frame of reference is conventional economics, which assumes that all value is essentially fungible, but it's obvious when you think about it.

Basically you could have 5 trillion barrels of oil in shales, but if extracting a barrel of useable oil from the shale takes 1.01 barrels' worth of energy then the shale is essentially useless as an energy source. This holds true no matter what the price of oil is.

This is also why graphs of projected world oil production which show a gradual rise then a plateau then a long, graceful tail on the right are misleading. They should have superimposed on them a line representing the energy used to extract the oil being produced; it would start out low, as all of the easiest oil is extracted first, and would have a few kinks in it as new technologies are discovered, but it will always tend to curve upwards. When it meets the production curve, that is when we have run out of oil as an energy source.
posted by A Thousand Baited Hooks at 5:25 AM on September 21, 2011 [23 favorites]

There isn't enough oil, because, simply, a lot of new people want to use it. Those pesky Indians and Chinese want a taste of what we've had, so they are buying some oil that we would have left in tanks in Saudi. That's driving the price up. It'll never go down again.

There is plenty of oil - when the price has a sustained rise, then all the parts that were uneconomic to exploit become economic to exploit. Shale will be extracted. Another example: There are methane clathrates that can be extracted from the cold seabed for centuries to come.

What we don't want to do is continue extracting energy from oil. Unless you want to live in the "Dinosaur Sauna" again (your ancestors did this while hiding from dinosaurs, unless you are an American evangelical of course). That was the last time life on Earth had all the accessible carbon released into the biosphere... and people aren't joking about the warm lush jungles of Antarctica.

As a quick guide, we're talking about 1-2 degrees Celcius rise from all the carbon we've thrown into the sky since around 1750 when we invented modern industry. The peak seen during the Cretaceous period was about 15 degrees. There's a lot more carbon to find and release.
posted by Hugh Routley at 5:31 AM on September 21, 2011

mbustible fuel in the form of smug pamphlets predicting imminent collapse due to resource depletion to last over two hundred years.

The old, old tactic of running out the clock by dragging your feet, then calling the other guy's argument old and tired.

I'll guess I'll limit myself to asking why "smug"? Alarmist, maybe. Smug? Why would someone concerned about the overuse of a finite resource be smug about it? Do you even know what that word (let alone "finite") means?
posted by DU at 5:33 AM on September 21, 2011 [4 favorites]

I'm afraid, DU, that we are a long way from Peak Troll.
posted by A Thousand Baited Hooks at 5:38 AM on September 21, 2011 [6 favorites]

True, because the comment to which we are reacting was the very *essence* of smug. I think we could run Brooklyn on it for a week.
posted by spitbull at 5:40 AM on September 21, 2011 [2 favorites]

Also, minor correction: obviously the "energy used" line won't trend upwards indefinitely; it will generally fall along with large falls in production. It would be more correct to say that it will always tend to approach the production curve.
posted by A Thousand Baited Hooks at 5:41 AM on September 21, 2011

There is plenty of oil - when the price has a sustained rise, then all the parts that were uneconomic to exploit become economic to exploit.

That doesn't invalidate peak oil, ie, the fact that oil production peaks and inevitably declines, since it is very unlikely, impossible even, that non-conventional oil extraction can be ramped up enough to compensate for the exhaustion of conventional oil fields.

Net energy for society is the issue, please do read this as it explains it much better than I do. It's not how much it costs, it's how much we can have.
posted by Bangaioh at 5:53 AM on September 21, 2011

"There is plenty of oil - when the price has a sustained rise, then all the parts that were uneconomic to exploit become economic to exploit. Shale will be extracted. Another example: There are methane clathrates that can be extracted from the cold seabed for centuries to come. "

You'll pay any number of dollars for a barrel of oil. The one price you will never pay, however, is two barrels. Shale requires more energy to produce than it produces. We will never use it.
posted by ocschwar at 6:00 AM on September 21, 2011 [4 favorites]

Bangaioh - you say I don't invalidate the idea of Peak Oil but doesn't my next comment show this - we've extracted 1 out of 15's degrees worth of the combustible carbon available to us?

We are centuries away from running into a bottleneck in extractable carbon fuels. It might not be West Texas Crude, but it'll be a burnable, portable energy source. There are mind-numbingly huge amounts of all kinds of things we can burn, we just haven't tried to get at them yet.
posted by Hugh Routley at 6:00 AM on September 21, 2011

we've extracted 1 out of 15's degrees worth of the combustible carbon available to us

But a lot of this is not recoverable in the sense that the energy required to recover it is more than the energy it would provide. That's why it doesn't invalidate peak oil.
posted by symbollocks at 6:10 AM on September 21, 2011

Perhaps there's too much focus on Canadian Shale (as this site has a North American focus)?

How about LPG made up of "fracked" gas? (actually, there's loads of LPG available from the existing oil wells - and at cheap prices too - hence the plans to ship LPG from the Pearl project in Qatar to the UK by tanker to feed our central heating boilers).
How about LPG-equivalent made up of clathrate from the seabed?

How about a whacking great nuclear power station powering the extraction of shale so you can still drive your car? (It's not as crazy as it sounds - we already "eat oil")

You see my point. It doesn't have to be North Sea Crude - and remember the example of the North Sea extraction... when it was discovered there was no way we could get that oil out at a reasonable price, until the oil shocks of the '70s turned the investment into off-shore rigs into a worthwhile endeavour. Suddenly we could do it at a lower cost than the price of oil.

Shale may not be easily extracted at this time (or thermodynamically, ever), but there's a load of alternative candidates we can extract and throw into the sky that could be done very cheaply if the right R&D is paid for. Peak Oil (in the wider sense of extractable portable fuel) is waaaaaay off.

(Oh, and I'll repeat, this is not a good thing if you want to live at less than 60 degrees north or south of the equator).
posted by Hugh Routley at 6:28 AM on September 21, 2011 [1 favorite]

Yergin is the ultimate oil Polyanna. His pronouncements are of use only to those who stick their fingers in their ears already.
posted by adamdschneider at 6:32 AM on September 21, 2011 [1 favorite]

A quick extra, for those who don't know what hydrates/clathrates are:

USGS Fact Sheet

Wikipedia Entry

Key quotes:

"The worldwide amounts of methane bound in gas hydrates is conservatively estimated to total twice the amount of carbon to be found in all known fossil fuels on Earth"

and

"A research and development project in Japan is aiming for commercial-scale extraction by 2016. In August 2006, China announced plans to spend 800 million yuan (US$100 million) over the next 10 years to study natural gas hydrates"
posted by Hugh Routley at 6:46 AM on September 21, 2011

Everyone pointing at shale, deep sea extraction, or natural gas from fracking, is just proving the peak theorists prescient. Every new source is more difficult and destructive to get at than the last one, and yet one after another the new sources are proving workable because the prices will support it.

If there were any easy and non-destructive source left for us to use, would we really be using submersible robots on what might as well be Mars, or hydrofracking?

Doesn't this follow the storyline? First the easily-recoverable stuff becomes insufficient for demand, we go for the harder-to-reach stuff as prices become permanently high, and eventually...
posted by tempythethird at 6:54 AM on September 21, 2011 [2 favorites]

But the point there is that the "eventually..." bit is so far down the road that we'll be farming in Antarctica before we run into a production/consumption bottleneck. That's the bit that doesn't fit the Peak Oil theorists.

Plus - Hydrofracking is only hard because we don't do it much yet - it seems to be theoretically cheaper to extract than crude. As usual, of course, everyone involved seems to be going through the early part of the Hype Cycle, so let's wait and see.

Hydrates could be just the same (but it's unlikely as they seem to be evenly distributed, we just don't know for sure if there are dense, easy deposits). The future may be huge numbers of cheap, mass manufactured underwater robots slowly churning the entire ocean bottom for our fuel. What a wonderful environmentally-aware future that'll be... :-(

Crude being the easiest and cheapest to extract is just an accident of history. It was the product that came to the surface and stayed there. It was easily burned in an internal combustion engine using 1890's technology. It isn't the be-all-and-end-all of portable energy.
posted by Hugh Routley at 7:06 AM on September 21, 2011

I've always had this vague sense that it's a bit ridiculous for there to be a "peak oil community". Or a "movement" or whatever. Yeah, peak oil is for real and pretty much here. Once everyone (other than Daniel Yergin and the WSJ of course) knows that they were basically right, the "community" becomes obsolete.
posted by sfenders at 7:06 AM on September 21, 2011

This is the "conservative" argument for all sorts of things. It's a logical fallacy, but I'm too lazy to look it up. "Oh, we've heard this all before and it always worked out. Don't worry about it." That may well be true, but it only worked out because there *were* people worrying about it and working to fix the problem.
posted by gjc at 7:06 AM on September 21, 2011

Next up, the WSJ puts its fingers in its ears and shouts "LA LA LA LA LA I CAN'T HEAR YOU."
posted by clvrmnky at 7:07 AM on September 21, 2011

Basically you could have 5 trillion barrels of oil in shales, but if extracting a barrel of useable oil from the shale takes 1.01 barrels' worth of energy then the shale is essentially useless as an energy source. This holds true no matter what the price of oil is.

Net energy loss doesn't make it useless, though. The main advantage to oil over everything else we use, both other hydrocarbons and alternative energy sources, is its ability to hold easily releasable energy in a highly transportable form. If this number is accurate, all it probably really means is that net coal consumption (or, I suppose, if we're very lucky, consumption of a renewable energy resource) will go up, not that people will decide shale oil isn't worth the trouble.

On preview, gjc is more succinct.
posted by solotoro at 7:14 AM on September 21, 2011 [1 favorite]

But the point there is that the "eventually..." bit is so far down the road that we'll be farming in Antarctica before we run into a production/consumption bottleneck.

We're in a production bottleneck right now.

Plus - Hydrofracking is only hard because we don't do it much yet

Oh, yes we do. We've been doing in Texas for decades. It's hard because it doesn't yield much gas for the amount of work you have to do.
posted by ocschwar at 7:14 AM on September 21, 2011

You'll pay any number of dollars for a barrel of oil. The one price you will never pay, however, is two barrels. Shale requires more energy to produce than it produces. We will never use it.

We may use it if makes economic sense, once again from Robert Rapier's article on EROEI:

First, the break even for EROEI is 1.0. In that case, you have input just as much energy into the process as you got back out. In some cases, that may make economic sense. For instance, if you input coal BTUs but got back out ethanol or diesel BTUs, then you have converted the coal into something of greater value.

Bangaioh - you say I don't invalidate the idea of Peak Oil but doesn't my next comment show this - we've extracted 1 out of 15's degrees worth of the combustible carbon available to us?

I was going to comment that fossil fuels probably existed during dinosaur times already (the Carboniferous was in the Paleozoic era), a lot of carbon is stuck in geological formations and biosphere, CO2 is not the only driver of climate and during the Mesozoic the sun ouput was significantly weaker. So there are a lot of factors to take into account and your CO2 to temperature link as indicator of fossil fuel resources doesn't seem to be very useful.

But I didn't go there because the issue isn't about quantity but quality. The remaining reserves could be 1000 times bigger than what we've spent so far but if we can't physically exploit them at a rate that gives a net return of energy similar to what we have now we're still worse off.
posted by Bangaioh at 7:16 AM on September 21, 2011

Every new source is more difficult and destructive to get at than the last one

It's true that you'll never be able to dig a hole in Texas and watch it well up with crude oil again. But there are plenty of sources that are perfectly viable once gas hits seven or eight bucks a gallon, and will last for centuries.

Net energy loss doesn't make it useless, though
And we're already seeing investors building nuclear plants in Canada, which generate electricity that is then used for shale oil extraction. In some sense, they're using oil as a way to store electricity.

Just to make it clear: I'm an environmentalist and definitely not a conservative. I wish oil were running out, because climate change is very real and is going to have horrific effects. But it's not actually happening.
posted by miyabo at 7:19 AM on September 21, 2011 [4 favorites]

But the point there is that the "eventually..." bit is so far down the road that we'll be farming in Antarctica before we run into a production/consumption bottleneck. That's the bit that doesn't fit the Peak Oil theorists.

Actually, that's the bit that is very hotly debated. This is basically the entire axis on which the debate turns. So, it's clear you don't think there even is a debate.
posted by adamdschneider at 7:21 AM on September 21, 2011 [1 favorite]

I have to wonder what scam Yergin is trying to pull with saying "there will be oil."

Guy who's spent a couple of decades writing and researching the subject: scammer
Metafilter poster who spent 5 seconds typing a comment: brilliant
posted by yerfatma at 7:22 AM on September 21, 2011 [3 favorites]

It's funny to watch people who have clearly done only the most cursory (and orthodox) reading on the subject make dogmatic pronouncements that there is no problem, and here is what's actually going on, when very smart people who are/have been in the oil industry (like the above-linked Robert Rapier) clearly think that there is not only a problem, but it is a big one.
posted by adamdschneider at 7:23 AM on September 21, 2011 [3 favorites]

Yergin's not a scammer, he's just a rainbows-up-your-ass salesman, at least publicly. I have no idea what's actually in the intelligence CERA sells to its customers.
posted by adamdschneider at 7:26 AM on September 21, 2011

Guy who's spent a couple of decades writing and researching the subject: scammer
Metafilter poster who spent 5 seconds typing a comment: brilliant

Perhaps this will shed some light on why Yergin's pronouncements are suspect.
posted by ocschwar at 7:30 AM on September 21, 2011

JDH responds, mostly by pointing and laughing at some of the tired fallacies Yergin for some reason sees fit to continue repeating.
posted by sfenders at 7:32 AM on September 21, 2011 [1 favorite]

Sure - all the oil you want, forever 'n' ever. Amen.
posted by PuppyCat at 7:34 AM on September 21, 2011

Jim Kunstler has this to say:
[quote]
So, last week Daniel Yergin came out with a blast in the Wall Street Journal affecting to debunk peak oil. His own theory is much like Irving Fisher's economic theory set out October 21, 1929 that "stock prices have reached what looks like a permanently high plateau." Three days later, the markets crashed and the Great Depression commenced. Yergin says we've hit a permanent plateau for oil production. He is pimping for a bonanza in shale oil, tar sands, and other innovative ventures in picking "fruit" that is not hanging so low anymore. He says:

"Meeting future demand will require innovation, investment and the development of more challenging resources. A major reason for continuing growth in petroleum supplies is that oil previously regarded as inaccessible or uneconomical is now part of the mix, such as the "presalt" resources off the coast of Brazil, the vast oil sands of Canada, and the oil locked in shale and other rocks in the U.S."

Spoken like a true PR whore. Translation: give us money. Calling all investors. Give your dollars to the folks working the Bakken play, or Eagle Ford down in Texas. These shale plays represent oil that is trapped in "tight," low-permeability rock that has to undergo fracturing operations ("fracking") before you can drain it out. It costs a lot more to get oil this way than by sticking a pipe in the ground and running a pump-jack to get it out the old-fashioned way. There are more than a few dirty secrets about the shale oil plays, but the biggest one is that you have to throw a huge amount of capital and steel at it to keep it running as an ongoing enterprise, and that money - other people's money - will be in shockingly short supply in the years head.
[end quote]

Dude's right, I think
posted by ocschwar at 7:36 AM on September 21, 2011

adamdscheider - you are right and wrong. I agree there's a debate, but I don't see why there should be. It strikes me as absurd.

There are so many joules of extractable energy AND there are so many possible ways of extracting this energy that this focus on a particular kind seems to me to be very silly.

Yes - in a very narrow sense we are reaching production limits on "sweet crude" with some huge and silly caveats: that this is the only way to extract oil, we will never develop ways of extracting oil from "depleted" reserves, that we should only talk about "sweet crude", that we won't see any more reservoirs (see the Falkland islands), that the largely unexplored areas of the world (e.g. most of Siberia) don't have any reserves (hah!) and so-on and so-forth.

It's crazy to talk about Peak Oil, like it's crazy to talk about peak Champagne. Just go buy some prosecco. Time and time again, we've proven Peak Oil to be wrong - see the 1970s for a most recent example.

This is a serious point I'm making - the debate started in the industry BEFORE the oil-shocks of the 70s - and then the price returned below the average inflation-adjusted price of $20 per barrel (in April 2011 adjusted dollars) for more than two decades after.

Once the next big thing is developed, the debate will go quiet again for another few decades. It's a silly debate.

The price going up is NOT because we somehow can't provide enough oil to the people. It's because we haven't built enough refineries to take into account the number of Indians and Chinese requesting gasoline.

That's just in the sense of focussing on purely oil. Widen the debate to "extractable portable fuel" and Peak Oil becomes a joke.

The other side is this weird idea that there's no way we can invent NEW ways of extracting energy. Ignoring the fact that ALL of the ways we extract oil now were invented in the 20th Century because we don't use those wooden derricks you see in the 1890's photos from Texas where the oil fountained out of the ground without any pumping...

We won't be extracting low-sulphur crude oil from the existing reserves, because, yes, we've emptied them. So what? I can drive my car on LPG. I can drive my car on diesel from alternative sources. Why do I care that some traditional way of providing energy is over? After all, I don't cook my meal using dried horseshit, do I?
posted by Hugh Routley at 7:47 AM on September 21, 2011 [1 favorite]

Sure - all the oil you want, forever 'n' ever. Amen.
posted by PuppyCat at 7:34 AM on September 21 [+] [!]

Yep - all the extractable portable fuel you want... Right up until we abandon Africa and Europe and most of North and South America because you can't go outside in the daytime without dying.

Extracting all the hydrates on the surface of the seabed is possible - and possibly cheap too. Is it a GOOD idea? Hell no.
posted by Hugh Routley at 7:51 AM on September 21, 2011 [1 favorite]

Peak oil may be a reasonable viewpoint in historical retrospect. But that's a viewpoint where it no longer matters. Because of shifting economics, tech, and slippery estimates of what "reserves" mean, peak oil is a useless concept for policy guidance. What will matter is the rate at which we convert to carbon-neutral and/or renewable energy sources.

In the meantime, peak oil will provide plenty of doomsaying moral one-upsmanship, which is more annoying than meaningful or useful.
posted by warbaby at 7:51 AM on September 21, 2011 [1 favorite]

Ok, here's the deal, as I understand it:

Generally, how oil is removed from a deposit (traditionally) is to drill and extract until the yield drops below a certain point, and then abandon that well. Repeat until you run out of places to drill. At this point, we have roughly extracted about 1/2 of the available resource from the well.

Because oil is a commodity, it made more sense to move on to the next rich deposit, even expensive ones like undersea deposits, because the yield was so high it offset the cost.

However, if we want to extract the next half from a deposit (and the next, and the next), the costs go up, and go up fast. It is still a worthwhile process overall, but the industry recognizes that this is a classic diminishing returns situation. But at some point the demand for oil will drive additional investment, but at the cost of increasing that commodity price regardless of how much surplus we get. For instance, Saudi Arabia is the midst of a massive revisit to some of their largest fields to invest in some new tech to squeeze more oil out of them. Some of these wells have only ever been visited once -- that is how rich these deposits were.

(I am not taking into consideration here the costs associated with these new technologies, some of which use chemicals and water resources in ways that, if we didn't treat them as externalities, might make us think of oil-as-a-commodity in a different light.)

And so it is will oil sands and shale oil deposits. The reason we are visiting these well-known deposits is not because they are particularly rich, or easy to extract oil from, or that some new technology has really changed the realities of diminishing returns.

Peak oil tells us that we will continue to spend more and more for the shrinking amount of oil that there is left (and, let's be frank, there is a lot of oil left; it's just increasingly hard to get for the currently accepted demand and price.)

But the realities of the modern global market want oil to not only be a fungible commodity, but also be treated /essentially/ as a global currency. This is in direct conflict with the realities of an ever-growing cost of extraction. We can try to minimize these costs, but they will never flatten completely, and will continue to rise over time, which means our oil-currency is going to be subject to constant inflation.

Taken to an extreme, we might end up making decisions about how much energy and money to spend to extract a commodity that is the eventual source of that energy. We don't want deflation, either, because this is pretty much an end-times scenario.

Peak oil is not about "running out of oil", per se. It is about running out of cheap oil, and the fundamental changes to a global energy market (and, thus, a change to global everything) that happens when some line on the X-axis crosses below a point on the Y-axis. We can discuss the hows and whys and whens of that graph, but peak oil tells us that the scale of the graph is unimportant, really. The curve described on it is, based on evidence we have right now, inevitable.
posted by clvrmnky at 7:53 AM on September 21, 2011 [2 favorites]

Hugh Routley, I don't follow the subject anymore, but I read the Oil Drum religiously for a while, and I can assure you that you are not the only person who has thought of these things. There are serious arguments to be made in favor of the PO crowd's viewpoint. I'm not going to make them here because I don't have the time. I will say that your stance here has more in common with climate change denial than it does with creationism denial.
posted by adamdschneider at 8:01 AM on September 21, 2011 [1 favorite]

Luckily the world has enough readily combustible fuel in the form of smug pamphlets predicting imminent collapse due to resource depletion to last over two hundred years.

How ironic that you think of the ones arguing that we might not be as secure as we think we are the "smug ones."
posted by saulgoodman at 8:04 AM on September 21, 2011 [5 favorites]

when some line on the X-axis crosses below a point on the Y-axis

This is the crux of the issue. I think gasoline in the US will cost $5-6 gallon in the near future. I think it can stay that way for a long, long time, without any further major price increases. I don't think this will destroy the world economy -- much of the world already has gas prices that are far higher!
posted by miyabo at 8:10 AM on September 21, 2011 [1 favorite]

Gas prices are higher in other parts of the world largely due to taxes. Some of these crazy, socialist nations are using these taxes to fund pie-in-the-sky things like public transit and/or renewable energy.

BTW: Do you have any data to back up your assertion, or is it just a hunch? Oh, have you noticed how everything is more expensive now that gas is more expensive? How much more expensive do you think things will be when gas is $5-6 in the US? How much more do you think the middle class and those below can take?
posted by entropicamericana at 8:48 AM on September 21, 2011 [2 favorites]

First, here's a handy graph charting Daniel Yergin's abysmal oil price prediction record from 2002 to 2008.

Second, no matter how often a guy like Yergin says things like "the vast oil sands of Canada" or Hugh Routley describes stuff like the hard science of EROEI as a "silly debate" because we're so goddamn inventive when the price spikes high enough, it won't make those unconventional reserves any easier to extract at the rate we'd need to extract them. The global depletion rate is about 7 percent, almost all of it easily accessible light sweet crude in giant pools like Ghawar in Saudi Arabia. It equates to 400 oil wells going offline per day.

Building out the oilsands in 2005-2008 at a rate so fast you couldn't build an office building in southern Alberta because all the concrete and steel was on trucks headed for Fort MacMurray - plus drilling as never before far offshore in the Gulf and off the coast of Brazil and all that - the industry managed to keep global supply flat at around 86 million barrels per day.

At current rates of depletion, something like 20 million barrels needs to come online over the next 20 years to keep supply flat, and everyone's energy scenario except northern Europe's needs supply to actually grow to at least 105 million. In the rosiest scenarios, Alberta could supply 5 million barrels of that by 2030. IEA officials have privately told the British government they believe even 90 million to be "impossible."

Albertan bitumen and Brazilian subsalt deposits in 5,000 feet of water are not Middle Eastern light sweet crude. They can't replace Middle Eastern crude, not all of it. There are limits, and we've reached them. With some of the most extraordinarily scaled engineering in human history, we can probably extend Yergin's technophilic plateau another decade or so. But the age of oil is over. The places that will thrive beyond it are the ones that are investing in other sources of energy now.
posted by gompa at 9:14 AM on September 21, 2011 [10 favorites]

On preview: Remember in '08, when we saw prices at the pump (in the US) over $4 per gallon? Remember how people started driving drastically less, and then prices came down again?

That was just the oil companies testing out the price elasticity of gasoline. They now know just how far they can push the price before people stop driving so much and stop buying SUVs. That's why we're sitting at the level we're at now. It's just below that break point.
posted by scaryblackdeath at 9:36 AM on September 21, 2011 [2 favorites]

Also, we shouldn't bust our asses to get off of oil because of global climate change, or because of peak oil. Both of these are ultimately irrelevant. It doesn't matter if these are real concerns or not. We should get off of oil for the sake of national security, and because it's messy as hell regardless of whether it's changing the planet's temperature.
posted by scaryblackdeath at 9:38 AM on September 21, 2011 [1 favorite]

If by "testing the price elasticity of gasoline" you mean "responding to the most rapid and intense price spike in the history of the oil industry," then yes, that's what happened in the summer of 2008. Oil was four bucks a gallon because it was $147 per barrel, not because Big Oil decided at its secret quarterly conference call to field test a new price.
posted by gompa at 9:49 AM on September 21, 2011

BP Oil Spill Not Breaking Down On Gulf Of Mexico Floor, Study Finds

'Moving on' from the Deepwater Horizon environmental catastrophe, Tony Hayward is now set to make millions from a Kurdistan oil deal
posted by homunculus at 9:49 AM on September 21, 2011 [3 favorites]

On preview: Remember in '08, when we saw prices at the pump (in the US) over $4 per gallon? Remember how people started driving drastically less, and then prices came down again?

Which people? The ones that left their homes and started sleeping under bridges?
posted by ocschwar at 10:39 AM on September 21, 2011

But people did start driving less. I didn't immediately see other links, but I thought that the whole summer of 2008 was 3-5% fewer miles.

Of course, if this was the oil industry testing things out, 3-5% demand destruction for 50-100% price increase would seem to indicate that they wouldn't have considered lowering the prices. Another thing to consider is a longer time span over which the price increase might not destroy demand as fast as a price spike.
posted by nobeagle at 11:27 AM on September 21, 2011

--Hey, honey, looks like we're running out of milk. Look, there's only a thirdnof a gallon left, and we have Johnsons coming over, and you know how their kids like milk and cookies, all seven of them.

--Oh, don't be ridiculous, tuts. We're not running out of anything. Look, there's plenty of eggs and cheese in there. And we can brew up 5 gallons of tea, if we need to. And if comes to this, I've heard the scientists over in Europe somewhere are working on a possible way of converting cheese to milk. They say they might have a working prototype in 15 years. So quit your worrying ang get me another beer.
posted by c13 at 12:01 PM on September 21, 2011 [2 favorites]

A Thousand Baited Hooks wrote: Basically you could have 5 trillion barrels of oil in shales, but if extracting a barrel of useable oil from the shale takes 1.01 barrels' worth of energy then the shale is essentially useless as an energy source. This holds true no matter what the price of oil is.

The problem, however, is not that we will run out of energy. The problem is that we will run out of dense, easily transportable, energy. Like oil. Battery powered cars are not yet awesome for those of us who have to drive long distances on occasion. Hopefully that will improve. Until then, I need CNG, hydrogen, gasoline, diesel fuel, or something along those lines to fuel my car.

Peak oil is more about shifting from oil being a primary source of energy to being a store of energy. Luckily, we have a lot of sunlight beating down on us, a goodly number of hydroelectric dams, nuclear reactors, and other primary sources of energy which can then be stored in many forms.
posted by wierdo at 1:36 PM on September 21, 2011

For the purposes of this discussion the retail price of gasoline in your $LOCALE is probably not particularly interesting. This is for several reasons, including some already mentioned, such as levies.

But the real kicker is that oil is used as a manufacturing basis for pretty much everything we associate with modern life. The factories need oil to run the machines that are fed crude oil by-products as the major component for the stuff they make, which in turn is shipped around the world using other crude-oil by-products.

That is, as an example, there is a direct line from "modern medical system" to crude oil production. The same can be said for "agribusiness" and "telecommunications" and "packaging and printing."

Almost anything you can think of is part of this global energy chain. This means that something like peak oil has the potential to affect us not just at the retail pump (which is actually only a fraction of oil product business) but nearly everywhere.

The price of gasoline in your town is an important microeconomic factor, but it is not where peak oil lives. Peak oil lives in things like the global trade in foods, electronics and plastics. Things that define what it means to live in a global modern era.
posted by clvrmnky at 2:24 PM on September 21, 2011 [2 favorites]

sonic meat machine: When did we reach the point that peak oil or climate change can be a "belief," like Santa Claus or God?

When we saw that we were about to run out of cheap, easy-to-light strawmen? Seriously, this is the last refuge of the lame denialist: "Oh, you're a AGW believer, then."

miyabo: And we're already seeing investors building nuclear plants in Canada

No we're not. This idea has been promoted, but it's got a long way to go before we're anywhere near the building stage.
posted by sneebler at 3:05 PM on September 21, 2011

miyabo: And we're already seeing investors building nuclear plants in Canada

The idea we can dig up proto-oil (shale, clathrates etc.) with a negative EROEI and power the world with nuclear is lunacy. As well as being a dense, transportable fuel source, oil provides about a third of the globes energy needs. So to use EROEI negative oil precursors you need to first provide a 1/3 of the world's energy supply, then do that again to convert the oil to a usable liquid form.
When are we going to build all these tens of thousands of nuclear plants? Where? And who is going to pay for them? And where will we get the nuclear fuel to power them?

Really, the only solution that has any medium term future is a mass change to renewables and serious conservation, but both are happening much too slowly.
posted by bystander at 3:16 PM on September 21, 2011 [2 favorites]

Really, the only solution that has any medium term future is a mass change to renewables and serious conservation, but both are happening much too slowly.

This is also my belief. What it comes down to is do we want to do this in a planned, technologically appropriate way*, or are we going to wait to have it shoved down our throats, at which time we'll be forced to make it up as we go along. Hey look everyone - a "free market"!

Frankly, I think we should band together and buy a couple of medium-sized landfills. Our descendants, should there be any, will be RICH, RICH I TELL YOU! from mining the landfill for plastic and metal.

*which we've known about for the last 30-odd years.
posted by sneebler at 3:44 PM on September 21, 2011 [2 favorites]

The North Pole and Antarctica could still have large oil reserves, then there's all that Venezuelan sandy goop. Still quite a bit of untapped oil out there, although admittedly expensive to extract, and horrible for the environment.

It probably won't be a smooth curve to peak oil. It'll happen in pulses instead, with each increasing threshold in the price of oil setting off a new pulse of supply. But the pulses will get smaller as it gets more and more expensive to extract the remaining reserves. Hopefully we'll have weaned our critical industries off petrochemicals by then.
posted by Kevin Street at 1:06 AM on September 22, 2011

c13:

It's much more the case that the Johnsons are coming over and they like milk and cookies - but now the price of milk has shot up. It won't come back down in the long term.

You can either give them a smaller (more efficient) glass of milk, or you can offer them orange juice, tea, coffee, or any other beverage. Either way, they get refreshment and everyone is happy. The beverage companies are also developing milk-analogues that have the same refreshment and work well with cookies. Wishing that they could still have milk, means a higher price. So they will get used to orange juice and cookies.

Yes - there is Peak Oil and it's probably here, or about to be here. But my point is not denialist, or based on faith (I'm not American). It is simply that Peak Oil is a problem that will be solved, based on the track record of the major private oil companies. It is basically irrelevant to the lifestyle of a person in the UK - unless you are desperate to put gasoline fractions into your personal transport, rather than an alternative. Who cares if I put LPG in the tank? The filling station at the end of the road already sells LPG.

We will move over to alternatives. Anyone who fantasises that we'll be putting gasoline extracted in a refinery from low sulphur crude oil in 50 years time is unhinged.

I do understand the american obsession and panic with gasoline fractions becoming unavailable. Part of your national myth is the freedom of the open road in a gas-guzzling muscle car. But for FSM's sake - please try to see that this is a temporary state. You can do it in a hydrate-guzzling muscle car instead.

Yes, some of those solutions, such as the currently popular bugbear, shale, have lower EROEI than the currently easy solution. Some may need to burn loads of product to produce some output - using two barrels to extract one more. Remember that it's only easy to deal with low sulphur crude oil because we have more than a century of experimentation in extraction, storage, processing and so-on.

There are plenty of options with high EROEI, they just don't have the ease of use - YET. Again, LPG. Again, hydrates. Again, hydrogen from concentrated solar. There are many choices and I expect there will be a diversity of solutions rather than the single current one.

Do you think Shell, BP and Exxon want to go bust? They are putting in the time and effort to develop these extraction, processing and storage methods (quietly) because they see demand and supply diverging in future too.

Peak Oil is only important because it's a sign we'll be moving on to other sources of energy supply and transport/storage.
posted by Hugh Routley at 1:44 AM on September 22, 2011 [1 favorite]

But my point is not denialist, or based on faith (I'm not American). It is simply that Peak Oil is a problem that will be solved, based on the track record of the major private oil companies.

But that is a declaration of faith - that the oil companies will solve the problem because, well, they always have in the past, and they just have to this time. It's a declaration of faith that all the technical (and EROEI) issues with oil from tar sands, the bottom of the Arctic ocean, or wherever - not to mention methane hydrates, which with widespread use would make the carbon bomb that is the Alberta tar sands look like a child's firecracker - are merely problems that are there because we're not trying hard enough yet. But when it's necessary, the omnipotent market/human ingenuity/etc. will take care of things as if by magic. James Howard Kunstler has a name for it - the Jiminy Cricket Syndrome ("if you wish upon a star, all your dreams will come true").

But sometimes we don't get what we want, even if we wish really, really hard.
posted by jhandey at 3:15 AM on September 22, 2011 [1 favorite]

jhandey

So let's prepare for the end of civilisation and a 90% drop in the human population on Earth. Because we don't have a track record of solving hard engineering problems as a civilisation.

Or, we can understand that none of the physics involved is unknown. These are known sources of energy for humans to exploit. Their extent is also a matter of doing the surveys, not inventing new methods. Nor is the engineering unknown in the lab. There are loads of research groups around the planet who've had a look at the various ways of extracting, processing and storing these unconventional sources.

The challenges are in turning lab-based processes into efficient and cheap mass engineering activities. That's not easy, but it's by no means anything more than a hard problem. Hard problems get solved all the time.

That's not really a leap of faith - is it?
posted by Hugh Routley at 3:33 AM on September 22, 2011 [1 favorite]

All the talk about "we'll find substitutes" really masks the underlying issue, that is "but are those susbstitutes better than what they are replacing?". Oil and coal were better than wood and fodder, just like trains and the internet are better than horses and carrier pigeons.

Even if Hugh is correct and 50 years from now everyone will be powering their cars with shitty oil (I wouldn't bet on it, at least not on private cars being as ubiquitous as they are now), every resource that was spent in making that happen has an opportunity cost. We're making a lot more effort without any real improvement. And I'm not even bringing the extra pollution and its long-term effects into the equation.

It's like saying, "Bah, who cares about fish, we can still eat jellyfish, and meat, and fruit, and grain, and milk and cheese and insects and...". Yes, but are we better off than when we still had the option to also eat fish if we wanted?

So let's prepare for the end of civilisation and a 90% drop in the human population on Earth. Because we don't have a track record of solving hard engineering problems as a civilisation.

Fossil fuels won't disappear overnight. We can invest them more wisely than wasting them like we do now and trying to maintain that dependency by going down the non-conventional oil dead-end. Civilisation doesn't need 80 mbpd of oil consumption, only our present one does.
posted by Bangaioh at 3:42 AM on September 22, 2011 [2 favorites]

Because we don't have a track record of solving hard engineering problems as a civilisation.

I apologize, but I'm not quite sure how to respond. I feel like we'd just be talking past one another.

First of all, the attitude of "well, everything gets solved if there's enough incentive" is a very strange one to me. I make my living thinking about mitigating the impact of natural disasters on communities. If I took the approach you're advocating regarding energy, I'd have to tell people "sure, build that multi-million dollar beach home on flimsy stilts in an area hurricanes and tropical storms hit on average every few years" with the expectation that someone would develop, I don't know, hovercraft-style pylons or antigravity or something. But nobody (with a conscience) could do that, outside of I-hate-society libertarians (and they're the first in line begging for the evil government to save them when a natural disaster strikes).

And it's not just an engineering problem. I'll admit, I've been snookered by the whole New Scientist "oooh, look at this wonderful breakthrough" sort of journalism, but science - actual science - doesn't work like that (if it did, I'd have that personal jetpack Popular Mechanics promised me 50 years ago). There are such things as market failures - the concept is usually introduced early on in any academic course on policy analysis.

It all seems very unrealistic/cargo-cultish to me, as if the universe is just a giant computer game that is easily solveable with the right cheat codes. But the universe I live in doesn't work like that. Problems don't get solved because I want them to be. People have to work at them, and to get the problem of peak oil solved, people have to be concerned enough about it to want to do something. If everyone twiddles their thumbs and waits for cargo to drop out of the sky/the aliens to come/etc., the problem doesn't get solved.
posted by jhandey at 3:57 AM on September 22, 2011 [2 favorites]

Bangaioh - you are absolutely right. As you can see from my previous comments - continuing to throw carbon into the sky is a really bad idea. We don't need to throw 80+ mbpd of oil into the sky, but if we want to have our civilisation we need to have that much energy.
We already "eat oil" so we can't just cut our energy consumption by too much if we want to live. But the source of that energy must change or we'll be unable to survive on much of Earths surface in a thousand years or so. I'm addressing my comments to the next few decades, where we don't seem as a civilisation to want to go down the sensible route of nuclear->electric->hydrogen and so we must continue to live using portable energy sources extracted from the biosphere for the next few decades at least. They don't have to be oil.
posted by Hugh Routley at 4:59 AM on September 22, 2011

There are plenty of options with high EROEI, they just don't have the ease of use - YET. Again, LPG. Again, hydrates. Again, hydrogen from concentrated solar.

This is factually wrong. LPG is a fraction of crude (my car runs on it), and is less available after oil peaks. Hydrates require significant energy input to be usable. Hydrogen from solar requires very high capital costs and embodied energy in the infrastructure.
None of these are even a fraction of a replacement for crude that was easily pumped and simply/cheaply refined.
Peak oil is an economic problem, we will have much less wealth for everything else if we have to pay a much bigger chunk of our income to securing our energy wants.
I am absolutely not advocating a 90% die off, but a hand waving "its just an engineering problem" is just wrong, and will more likely result in a catastrophe.
I think the only prudent move is conservation, resiliency and renewables, and all as a matter of urgency.
posted by bystander at 5:36 AM on September 22, 2011 [1 favorite]

if we want to have our civilisation we need to have that much energy.

We WANT our civilisation but we don't need it. I'm old enough to remember a time when going by plane from Germany to Italy was a luxury only rich people could afford. Now it's almost unthinkable for a middle-class person not to do so and take a train instead.

There is still a huge amount of cheap hydrocarbons available, it's just that we have set our expectations Too. Damn. High. so it's our own fault if we can't meet our unrealistic ambitions. We're so obsessed with what we'd have to lose if we consumed much less resources that we forget how much we'd still have.

We still have enough hydrocarbons to feed the world and let the population reach a sustainable level, as long as we don't spend most of them commutting 50 miles to work 5 days a week to make shiny, energy-intensive gadgets that will be landfilled in less than 2 years, and then taking vacations in the other side of the world every other year as if it were an unquestionable human right. Not only that, but Americans consume about 2 times as much more energy per-capita than Europeans and do not live that much better than us, if at all.

And there's more to environmental problems than carbon emissions, and to try to scale renewable energy production enough to replicate as closely as possible the sort of civilisation fossil fuels made possible would create enough problems of its own.

I think the only prudent move is conservation, resiliency and renewables, and all as a matter of urgency.

QFT
posted by Bangaioh at 5:56 AM on September 22, 2011 [1 favorite]

I'd agree that "Peak Oil is a problem that can be solved", namely by building armies of windmills, designing a Ground-level power supply standard for automobiles, tearing up all the highways to implement said mobile power transmission grid, and selling armies of pure electric cars with batteries that only last 50 miles, but drive for free on powered highways. It ain't rocket science. It's just very painful for the oil industry. It's extremely beneficial for the automotive and construction industries of course, but ask Dawkins about running for your life vs. running for your dinner.
posted by jeffburdges at 12:17 PM on September 22, 2011

This critique of Yergin was online today and I thought was good.

(John Daly at Foreign Policy Journal.
posted by bukvich at 12:37 PM on September 23, 2011

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