What Peak Oil means in the near-term
April 29, 2006 5:01 PM   Subscribe

The Paradigm is the Enemy: A sobering but cogent account of the state of Peak Oil, what it's already led to (reported and ignored), and what is in store for us in the near future. The worst part is the political impossibility of addressing the problem constructively: that would require acknowledging the problem.
posted by LeisureGuy (99 comments total)
 
Any reason to pay attention to a single speech by Michael C. Ruppert? Because he's marshalled a bunch of newspaper clippings and isolated statistics in favor of his argument? Does he have any real expertise or distance on his subject?

The guy's a professional crank -- note that you'll "learn" on his website that Paul Wellstone was murdered, the global economy was about the collapese (in 2001), Bush and Cheney planned 9-11, etc.

In other words: bah.
posted by argybarg at 5:32 PM on April 29, 2006


sheesh -- that should read "was about to collapse".
posted by argybarg at 5:33 PM on April 29, 2006


Jay started the first Peak Oil website in the 1980s, almost even before there was a web.

Almost?

Though I'm aware that teh Internets had all kinds of activity well before the 90s, I'm thinking 1991 is the absolute dead-set earliest anyone can describe the World Wide Web as existing, however much older Peak Oil is.
posted by namespan at 5:35 PM on April 29, 2006


please delete this post. thx.
posted by keswick at 5:39 PM on April 29, 2006


omg pee coil
posted by mr_crash_davis at 5:39 PM on April 29, 2006


Jay started the first Peak Oil website in the 1980s, almost even before there was a web.

Almost?


Yeah! I was gonna say exactly that. The first web browser was released in 1991.
posted by rkent at 5:41 PM on April 29, 2006


I'm sure that Peak Oil (and multiple crises coming to a head) will bring out some crackpots and cranks, but the crisis does seem real. For example, take a look at this poster and read around the Web after doing a search on "Peak Oil." You'll find quite a variety. In any event, enough of what Huppert states is indeed factual--and quite scary.
posted by LeisureGuy at 5:42 PM on April 29, 2006


while that may be, it is neither new, news, nor best of the web.
posted by keswick at 5:47 PM on April 29, 2006


In any event, enough of what Huppert states is indeed factual--and quite scary.

Unfortunately, much of what Ruppert states is either goofy or just plain BS. The peak oil skeptic in me likes this article because Ruppert's overdramatization makes his writing easy to laugh at. More realistically, peak oil could be a big problem and it definitely is worth of a serious discussion.

In the future, please fact check your sources more carefully before posting. I enjoy reading opinions that differ from mine, but a list of marginally related factoids collected by a crackpot isn't particularly productive.
posted by b1tr0t at 5:52 PM on April 29, 2006


The problem has been acknowledged, both by the oil industry and by government. I hear talk of "demand outstripping supply" all over the television. No one is seriously talking about price controls or other insane "remedies." Peak oil will present some serious challenges and will certainly change the way that many Americans live, but I'm not too worried about the collapse of Western civilization. Ruppert is known as a crackpot even in peak oil circles. If you want the straight dope, hang out with the smart people at The Oil Drum
posted by Crotalus at 5:57 PM on April 29, 2006


marginally related factoids collected by a crackpot

i think the word you're looking for is "evidence."
posted by Hat Maui at 5:59 PM on April 29, 2006


i think the word you're looking for is "evidence."

No, most of this article does not meet the standard of "evidence." Beside, "evidence" is cheap. An even-handed sifting of the broad range of evidence, performed by someone without a worldview and newsletter to hustle, is what is needed.
posted by argybarg at 6:03 PM on April 29, 2006


WAR ON PARADIGMS!

(I'm going to actually read it, now. I had to say that first.)
posted by blacklite at 6:05 PM on April 29, 2006


Okay, I could only skim. That was pretty useless.

Great post, though, for giving me the opportunity to once again say "PEAK OIL" in all caps.
posted by blacklite at 6:09 PM on April 29, 2006


I can't believe he quoted Frank Herbert's Litany Against Fear. Yeah, I recite the Litany Against Fear every time I ponder the U.S. trade deficit, too. The thought of currency instability paralyzes me.
posted by salvia at 6:12 PM on April 29, 2006


The exchange of personal favors was far more important to the actual functioning of the economy than the exchange of money.

I look forward to it. It will be painful in many regards, but a welcome change overall.
posted by mrgrimm at 6:16 PM on April 29, 2006


i think the word you're looking for is "evidence."

No, the stuff I'm looking for is evidence. Ruppert has collected a marginally related set of factoids. His article reads like a left-wing version of a very different Rupert's news channel. Both contain a lot more noise than signal.
posted by b1tr0t at 6:25 PM on April 29, 2006


I can draw graph showing the world population dropping to zero by 2050. That doesn't make it true.
posted by StarForce5 at 6:29 PM on April 29, 2006


Derisive rejections of scary warnings have become predictable on Mefi.

Ruppert would call the dismissals of his warnings here "denial". And that's how it comes across to me too. Maybe the collapse of the U.S. is not imminent or won't be as sudden as he suggests, but the sweeping dismissals without addressing substance strike me as nervous and defensive.

He may be a crank but it doesn't mean he's wrong. Peak oil is real. The vast, unpayable U.S. debt is real. The threat to the U.S. economy from oil markets moving away from dollars is, as far as I can tell with limited expertise, real and imminent. The points Ruppert makes about China and other nations moving into better oil-supply positions and into military alliances and supply arrangements less aligned with USA, and about low-level proxy wars, are hard to evaluate without a lot of research, but seem plausible and ominous to me. Maybe the citations are selective but there's no other attempt at refutation from those who laugh it all off.

What about "plan for the worst while hoping for the best"? If the Bush administration and the major U.S. media assure us that everything is fine, that strikes fear in my heart, because most of what they say is lies and the Bush policies are disastrous.
posted by jam_pony at 7:08 PM on April 29, 2006


almost even before there was a web

There were websites before Cern's WWW - we just called them BBs back then.

1200bd IN DA HOUSE!
+++ATH0
posted by Heywood Mogroot at 7:11 PM on April 29, 2006


The current US offensive against apparently the entire Middle East may very well be fueled (pun intended) by the impending peak oil squeeze. The closer the US gets to possible oil starvation, the more aggressive and bullying we are getting towards oil-producing countries.

We are almost hysterically trying to get a foothold in oil producing countries. You'll notice that we are not planning offensives against North Korea, who have been openly dick-waving the possibility of nuclear weapons now for years. No, we don't seem to give a shit about that. But we obviously want absolute control over anyone that may be able to withhold oil from us.
posted by Nicholas West at 7:18 PM on April 29, 2006


We have a lot of alternative energy sources, like shale oil and nuclear power, which will come into play as oil becomes more expensive. Also, conservation will become more economical and play a much bigger role. It will be painful, and it will wreak havoc on the economy of the west, especially the US which is drunk on cheap oil, but everything will be fine.
posted by caddis at 7:21 PM on April 29, 2006


Nicholas: yes, going into Iraq was a beautiful play. Liberate the Shiites and Kurds, install friendly their political parties into power, freeze out the existing Russians and French petro interests, have our own multinationals move in and start pumping.

I can understand why the neocons had such a hard-on to lie the country into this war.

Isn't Chalabi still the interim oil minister?
posted by Heywood Mogroot at 7:23 PM on April 29, 2006


Ruppert would call the dismissals of his warnings here "denial".

I don't dismiss anything about Peak Oil on the basis of this article. I'd like to know more about Peak Oil before I'm sure, but I'm inclined it's a real and crucial issue.

What I'm commenting on is the quality of the argument here. What I read is a pastiche of (often uncited) factlets and broad, often unwarrented assertions. Clearly, this man makes a living hawking doom and conspiracy theories. Put together, this makes for a poor argument for either side.

It's not the responsibility of thoughtful people to refute poorly-made arguments line by line. It's a much better use of time to get to the substantial stuff, presented by credible people who show the capacity to think from many directions.

Quality and depth in argumentation does matter, even (or especially) when arguing in favor of something that may be true and important.
posted by argybarg at 7:24 PM on April 29, 2006


but everything will be fine

Thanks Daddy. Good night.
posted by Heywood Mogroot at 7:25 PM on April 29, 2006


I'd be curious of someone could comment on this particular snippet:

"working together toward the goal of providing plentiful, clean, environmentally safe energy, to fuel another century of economic expansion. Welcome to the sideshow at the end of the universe!"

I was talking to a friend just today, and expressed the opinion that while oil is scarce, it is not the fundamental resource. The fundamental resource is energy, which is completely fungible. Therefore peak oil -- in contrast to climate change, wilderness depletion, deficit spending, etc -- is perfectly suited to a technological fix. Is this mistaken?

(I also expressed the opinion that such a technological fix will probably be pioneered by the Chinese, who lack the infrastructural inertia and corporate conflicts of interest that keep the US in blinders, and that the resulting economic bonanza will cause future generations to look back and shake their heads at America's short-sightedness.)
posted by bjrubble at 7:28 PM on April 29, 2006


This planet, this universe, is drenched, shimmering, throbbing with energy, from thousands of sources. Sunlight is beating down ferociously 365/24/7, the oceans are surging with untamable force, winds are rushing across every exposed surface. Thousands of plants are producing flammable substances. A single nuclear fission reactor, if properly directed, can boil water for a thousand years continuously to run a turbine.

It is ridiculous, obscene, that anybody should fight a war over energy. If the human race slaughters themselves over oil, without attempting to harness the endless clean energy available all around them every second of the day, then that would be the crowning stupidity of the race. We would not die of lack of oil-produced energy. We would have died of stupidity.
posted by Nicholas West at 7:38 PM on April 29, 2006


As a result, I would estimate that of every ten units of energy (or money) expended preparing for Peak Oil today, nine are spent preparing for war while only one is spent building lifeboats and teaching people how to survive. This is sheer insanity.

Uh, that's cabin in the woods stuff. I'd give this guy twenty units to stop talking. What about providing affordable healthcare?
posted by sswiller at 7:46 PM on April 29, 2006


sleep tight and don't let the bed bugs bite
posted by caddis at 7:47 PM on April 29, 2006


It will be painful, and it will wreak havoc on the economy of the west, especially the US which is drunk on cheap oil, but everything will be fine.

That's it!? Shit, we ain't got a thing to worry about.
posted by c13 at 7:58 PM on April 29, 2006


The fundamental resource is energy, which is completely fungible. Therefore peak oil -- in contrast to climate change, wilderness depletion, deficit spending, etc -- is perfectly suited to a technological fix. Is this mistaken?

John McCarthy, who is primarily known as the inventor of the Lisp programming language and one of the all-time great computer scientists, maintains a web site about "the sustainability of human progress." He basically makes this argument.
posted by gsteff at 8:10 PM on April 29, 2006


I'm already in training for Road Warrior. All I have to find is a mean ass dog to ride with me.
posted by i_am_a_Jedi at 8:13 PM on April 29, 2006


"It will be painful, and it will wreak havoc on the economy of
the west, especially the US which is drunk on cheap oil, but
everything will be fine.*"




* Essentially, upper-middle-class Americans and Europeans will fare just dandy. The rest of y'all are probably fucked.
posted by stenseng at 8:14 PM on April 29, 2006


I was talking to a friend just today, and expressed the opinion that while oil is scarce, it is not the fundamental resource. The fundamental resource is energy, which is completely fungible. Therefore peak oil -- in contrast to climate change, wilderness depletion, deficit spending, etc -- is perfectly suited to a technological fix. Is this mistaken?
Well, I'd answer yes and no. While oil is not the fundamental resource, it is about the most energy dense of them.

It's not that there aren't other sources of energy, just that it's so damned much easier and more efficient to process up a gallon of gasoline and pour it in the tank, then it is to try and turn flax seed, or solar rays, or what have you into ways to make engines go.

Plus there's a whole worldwide distribution system for oil energy, whereas there's virtually none for other forms (comparatively speaking.)

The biggest problem is that we've created and grown a society that is dependent on the energy density and availability of oil to thrive.

It's going to be a bit like going from three calorie rich American meals a day, to broth and stale bread. The very rich will hog all the malomars, and many of the very poor will likely get next to nothing.

When you grow a population predicated on cheap abundant calorie rich energy, and then find that supply dwindling, while the population demanding it keeps growing, somebody is going to have to do without (and/or die off) to balance the equation.
posted by stenseng at 8:25 PM on April 29, 2006


With China as an emerging nation which wants to attain a lot of the same luxuries that we in the U.S. take for granted, we are in the unenviable position of realizing that we simply can't allow that. If their masses start to use the same amount of resources as we use, we are all really, really fucked.

So do we tighten our belts and lower our standard of living? (Yeah, right--like that's going to happen) or do we politely explain that we deserve it and they don't? Or do we go to war and wipe out large groups of people thereby freeing up the resources that they would have used so that we can continue to ride around in our Hummers shouting, "We're Number 1! We're Number 1!"
posted by leftcoastbob at 8:26 PM on April 29, 2006


Cranky as he might be, Ruppert sounds like he has a few points. Oil is certainly, at least in any of our lifetimes, a finite resource. Regardless of who we invade, where we drill or who we buy, we are going to run out of oil. Sooner, rather than later.

As someone above mentioned, to deny this is... uh, denial. Our, 'our' in the collective Westernized sense, grandchildren are going to be cold. Then again, what did we expect? We elected a couple of shills for the oil industry and sat by while they led us into a war to protect their interests. D'uh.

Without a serious, Manhattan Project or Apollo project kind of serious, effort to reduce our consumption while alternative sources of energy are researched and put into production, they are screwed. We are fucking the next generation of suckers to max out their credit buying absurd SUV's that will never see anything deeper than a mud puddle or an inch of snow. We keep our homes and offices at a cozy seventy and our children don't understand the concept of putting on a sweatshirt when they get a chill or opening a window and shutting off the AC if they are too warm.

Mad Max really isn't that far off. Thirty, forty years. That's a drop in the bucket to anyone with young children or aged parents.

Chavez is so screwed. The fun is over in the east but we're just getting warmed up to the south. So much closer. So much less scary.
posted by cedar at 8:48 PM on April 29, 2006


Plus there's a whole worldwide distribution system for oil energy, whereas there's virtually none for other forms (comparatively speaking.)

Plus we need to dismantle the current energy distribution and conversion (gas engines, turbines, etc) and convert them into something that will accept all those inexhaustible energy sources Nicholas West is talking about. And the only thing we can do it with is with oil-powered machinery. And we have to do it while we can afford the oil. Oh yes, and while we still have a functioning economy.
And of course I'm not taking into account all of the other things that are made out of oil.

But hey, caddis said we're all gonna be fine..
posted by c13 at 8:52 PM on April 29, 2006


And the only thing we can do it with is with oil-powered machinery.

this occurred to me, too. I think the world is ripe for another industrial revolution. that's what it boils down to, right? we--'we' as anyone who makes things with machines--won't be able to run our industry once oil is gone, and we're making no progress in using the current system to build a new one. so soon enough we'll need to find a new way to make things. new stuff to burn in our engines won't work (right?), but different engines altogether might be possible. maybe the internets can help. maybe the fablab?
god, I feel like a shill for these things. I love them.
posted by carsonb at 9:08 PM on April 29, 2006


What about providing affordable healthcare?

This is the big disconnect. Denial. Ignorance. I don't know what you call it, but in the end health care is the least of our problems. Immigration, terrorism, the Bill of Rights... none of it matters. It's all gone in a generation anyway.

If we can't eat (combines don't run well without fuel and they can't afford it now) and if we can't stay warm (anyone else finding the winters utility bills rather high) and if the local ambulance squad can't get you to the hospital (the local trauma center got 'managed' right out of business and the fire tax assessment isn't built for gasoline costing four bucks a gallon for a ninety mile round trip) then we're not going anywhere. At all.

Energy policy is all that matters. Cheap juice is a prerequisite for everything we do on a daily basis.

Yeah, the shack in the woods, with a boatload of ammo, food and booze, is sounding better by the minute.
posted by cedar at 9:17 PM on April 29, 2006


cedar: isn't time for you to go listen to Art Bell now?
posted by keswick at 9:25 PM on April 29, 2006


Energy is a fungible unit. Lets look at in terms of "calories".

Average global per-capita energy usage in 2000 was 230,000 calories per day (food, fuel, heat, mfg, etc..). In other words, every person on the planet used 230,000 calories per day on average in 2000.

*In 1850 it was 77,000
*In 3000 BC it was 12,000
*In 8000 BC it was 5,000

Multiply by how many people are on the planet you have global energy requirements:

*Global energy needs in 2000 = 1,380,000,000 calories per day.
*In 1850 = 23,300,000 calories per day.
*In 3000 BC = 600,000 c/pd
*In 8000 BC = 30,000 c/pd

Where does the energy come from? Presently the world energy requirements are met roughly %50 oil with the next biggest portion coal, then gas, and a small remainder nuclear, wind, etc..

In other words we are using energy at exponential rates and most of the energy is coming from sources that are limited in supply and pollute the environment. What are the alternatives? No one has a good answer.
posted by stbalbach at 9:27 PM on April 29, 2006


Carsonb, I completely agree with you on the first point. I don't see much talk about new engines that can power things like airplanes, for example. Or new fuels that these engines use, that can be stored in sufficient quantities in airplanes, or ships, for that matter. The point about Peak Oil is not that we'll never find another energy source in principle, but that we won't do in time. A blueprint for a working fusion reactor is not of much use if all you've got is horses.
The fablab, on the other hand... we need things the scale of GM, Boeing, Hoover dam, we need to manufacture things by tens of millions. I just don't see how fablab would scale up.
posted by c13 at 9:28 PM on April 29, 2006


Art Bell is still alive?

It would be so easy to just say you were in denial... Art would approve. But I won't. What I will point out is that projections, from real scientists, even make it clear that we will run out of oil. Ten years, twenty years or fifty years from now. I don't know and I'd venture to say that even real scientific folk don't know. There seems to be some conflicting information out there and I'm not smart enough to tell fact from fallacy. But we will run out of oil, this much I'm pretty convinced of.

Maybe now is the time to pay attention?
posted by cedar at 9:33 PM on April 29, 2006


I think the most alarming aspect of the peak oil problem is not the drop in resources for all of our energy needs--it's war. It seems entirely plausible that we're entering a protracted stage of world war over resources that, while at a relatively low level now, will gradually escalate. Nuclear war, anyone?
posted by Dogmilk at 9:35 PM on April 29, 2006


Cedar, the point I am making is that why should the government be using 10% or 1 unit of expenditure on building life boats and teaching survivalist skills? I would trade my government subsidized lifeboat and kung fu lessons for a health insurance. That's all I'm sayin.
posted by sswiller at 9:42 PM on April 29, 2006


It seems that many people are thinking of peak oil as a cliff, in that there will be a sudden and catastrophic gap in supply relative to demand. I have trouble understanding exactly how this would come about. presumably demand will be somewhat predictable. Do you think there is going to be an unexpected dropoff in what the companies can supply? Barring any huge, unexpected changes in supply or demand alternative technologies should (it seems to me) be adopted in a fairly orderly and efficient fashion, as we have started to see with gas-to-liquids, oil shale/tar sands, and ethanol. There would alot of pain, but not quite Mad Max.
posted by thrako at 9:45 PM on April 29, 2006


I just don't see how fablab would scale up.

I don't think they're really supposed to scale up. the fab lab structure leaves design on an industrial scale (ideally on an open source framework rather than a proprietary one) but moved production to a local level. shipping changes then, to almost solely raw materials. factories change too, maybe disappear except for recycling plants that can produce raw materials. ways of life would change as well, which is the rub. I dunno.
posted by carsonb at 9:47 PM on April 29, 2006


Putting aside the arguements, cranky or otherwise,of this post, and setting aside the many snippy comments also, I would point out that prior to the US becoming a great industrial poer, England ruled as one with an economy based on coal. Ours began that way and shifted to oil, and it is till now oil that has ruled the industrial world. That may be changing. But till it fully does, we have forged much of our foregin policy on our energy (oil) needs. The simple question Gary Hart asked of the present administration and one not answered as yet: are we or are we not building permanent bases in Iraq? If so, why?
posted by Postroad at 9:50 PM on April 29, 2006


Dogmilk, considering that we use nearly half of the entire friggin' worlds combined generation, it goes to follow that we are likely to go to extreme lengths to protect that supply. When China steps up to the plate and takes the other half, there are going to be some problems.

I firmly believe that we will look to this hemisphere to meet our energy needs and Venezuela is the next battleground. The Monroe Doctrine is about due for a resurgence and if you think they hated Saddam you should hear what they say about Castro and Chavez.

It's not like we can't just take the stuff.
posted by cedar at 9:51 PM on April 29, 2006


It seems that many people are thinking of peak oil as a cliff, in that there will be a sudden and catastrophic gap in supply relative to demand.

I think that is exactly what will happen.

We/they are going to pump this shit out of the ground as quickly as we can. We will placate ourselves with the promise of 'untapped' reserves and improved technology that will magically fix everything.

Then the wells that we do have will make terrible sucking sounds.

Then we, or more likely our grandchildren, will collectively sigh and go tend to our crops, with our horses.
posted by cedar at 9:57 PM on April 29, 2006


Dude, you can't make stuff locally. Not in the amounts needed.
Here's an example: according to World Book Encyclopaedia (first thing that came up in Google), in 2001 there were 450 million cars in the world. Suppose you wanted only to replace their gas engines with electircal ones. That means you have to make 450 million of them, each consisting of tens of parts. If you do it in small local plants, that means that you have to move all those thousands of tons of raw materials all over the place, and then you have to move them again in the form of assembled engines to other small local plants. That is going to require many times more energy that you're trying to save.
If you make them in one giant plant, on the other hand, you run a rail road to it and deliver stuff by train -- the most energy efficient form of transportaiton we've got. (I'm not taking in to account bicycles, for obvious reasons)
posted by c13 at 9:57 PM on April 29, 2006


The Monroe Doctrine is about due for a resurgence and if you think they hated Saddam you should hear what they say about Castro and Chavez.

Since when does Cuba have oil?
posted by keswick at 10:00 PM on April 29, 2006


Cuba don't need no steenkin' oil. They are commies, right near Florida and sometimes they export armed commies to other countries. Like Venezuela. Sometimes China joins in.

Keep in mind that we built a ton of refineries in Cuba and it has really nice ports. It's also kind of convenient for the east coast. Anyway, Castro can't live too much longer.

On the other hand, maybe he can. He's been hanging in there for some time and it's not like we never tried to kill him.
posted by cedar at 10:13 PM on April 29, 2006


We/they are going to pump this shit out of the ground as quickly as we can. We will placate ourselves with the promise of 'untapped' reserves and improved technology that will magically fix everything.

Then the wells that we do have will make terrible sucking sounds.


So what I don't understand is why the oil futures prices aren't going through the roof if this is the case. Are the oil companies, banks and traders placating themselves with dreams of new reserves and technology?
posted by thrako at 10:20 PM on April 29, 2006


Since when does Cuba have oil?

Since Chavez bartered it to them!
posted by thrako at 10:23 PM on April 29, 2006


So what I don't understand is why the oil futures prices aren't going through the roof if this is the case.

They aren't?
posted by c13 at 10:28 PM on April 29, 2006


Are the oil companies, banks and traders placating themselves with dreams of new reserves and technology?

Not at all.

They are lubing you (and me) up for the biggest king hell ass rape in history. They aren't placating themselves with anything. They just don't give a fuck. They have theirs and if your a good little soldier you can have yours too.

Hell, they'll all be dead before anybody notices and will all die with a bigger dick than the asshole next to them.
posted by cedar at 10:49 PM on April 29, 2006


But cedar, aren't they just practicing capitalism? Capitalism is good, no? Invisible hand and all that...
posted by c13 at 10:53 PM on April 29, 2006


from Ruppert:
I can promise you now, Hillary Clinton, that if the Democratic Party adopts this approach it will find in me an enemy that will make FTW’s editorial posture towards the Bush administration over the last five years look like abject friendship.

M E G A L O M A N I A

Seriously, I give Ruppert the credit of bringing Peak Oil to my attention, but I don't click on FTW anymore, cuz homeboy is crazy.
posted by slickvaguely at 11:00 PM on April 29, 2006


c13, nice try, but I think I'll pass.

I'm done ranting for the moment. I'm just pissed. I have a long ride, that I can barely afford the gas for, to go split wood for a widow whose son went career military six months before we went to war. Jason is doing his third combat bit and spent his last travel vouchers and time off meeting his newborn daughter over Christmas.

He doesn't have time to split wood, fix the roof and chew on his babies toes. He has to go kill people. You know what, he doesn't want to kill people. He just wants to come home... again.

What's makes me want to cry is that while I have every cliche known to man in this post, it's all true. This war, the economy and most of all, the dichotomy between the 'okay' and the desperate, has very real consequences for very many people.

I'm going to take my car off the road. I cannot afford insurance for my children and to drive. I expect I could save a few bucks on the food budget, but that's not going to happen. Simple pleasures, and all. Oddly enough, while I hear the economy is great and my income has actually gone up, I'm not doing half as well as I was a couple of years ago. Funny, that.
posted by cedar at 11:25 PM on April 29, 2006


So what I don't understand is why the oil futures prices aren't going through the roof if this is the case.

Or why oil exporting countries aren't cutting supplies way back in anticipation of the higher prices to come. Maybe they are, and we just aren't hearing about it, but I was under the impression that Saudi Arabia, at least, is pumping as fast as it can. Indeed, I've read concerns that this itself is a problem, since there's no slack left in production if a disruption occurs, and prices will fluctuate more.

Offhand, the only econ explanation I can think of for the apparent lack of hoarding is that the crunch, though inevitable, is still at least 30 years off, and the human decision makers in the crude supply business rationally don't care about profits 30+ years from now, since they won't benefit from them.
posted by gsteff at 11:42 PM on April 29, 2006


The reason for the lack of hoarding is precisely that everybody is pumping as fast as they can. But most of that oil gets used up "immidiately". To be sure, China and US, among others, have strategic reserves, so that can be considered "hoarding" in some sense. However, apparently Bush' decision to stop refillng the one in US is only going to make 0.25% difference in daily consumption.
We just can't pump oil fast enough to use AND hoard at the same time.


Cedar, I'm sorry about your situation. Seriously..
posted by c13 at 11:51 PM on April 29, 2006


from the article (which I finally read [mostly]):
Let us not forget that in order to get to the Post-carbon world that is inevitable we must first survive the collapse and the die off that is inevitable.

I wonder what 'the collapse' is that he mentions? the collapse of what? I have an idea, but what do you think?
posted by carsonb at 12:04 AM on April 30, 2006


I mean, he obviously talks about a collapse on the scale of an empire, but wouldn't that be the sort of failure that needs multiple, domino-effect type collapses to ensue? what breaks down first in the context of Peak Oil?
posted by carsonb at 12:08 AM on April 30, 2006


... and the human decision makers in the crude supply business rationally don't care about profits 30+ years from now, since they won't benefit from them.

There really isn't much left once you reach this point.

Though you put it better than I, the bottom line is: our children are fucked. It's inevitable.
posted by cedar at 12:12 AM on April 30, 2006


I don't know what's worse: the greed or the hopelessness.
posted by carsonb at 12:14 AM on April 30, 2006


I mean, he obviously talks about a collapse on the scale of an empire,

US is not the only country that uses oil, if that's what you mean by empire. Third world countries don't depend on the oil as much, but they sure do on all the food we are sending them...
posted by c13 at 12:21 AM on April 30, 2006


and, um, to go back a ways:
Dude, you can't make stuff locally. Not in the amounts needed.

in the amounts needed for what, hombre? to match the worldwide production figures you quoted? no, you're right, they wouldn't be able to supply that. but...new engines for ten thousand cars in one town? coupla fab labs, sure (theoretically). coupla fab labs in each city (at $25,000 a pop, not unlikely) and mass production/distribution becomes obsolete. you don't have to make millions at a time in one place because things can be made locally. anythings. and so you don't have to ship millions around the world. if anything, all you'd move is raw materials. I understand this is very much pie-in-sky handwaving, but I think it's worth some thought and certainly some discussion as a possible alternative to the type of industry that has necessitated the current energy control fiasco.

posted by carsonb at 12:27 AM on April 30, 2006


Carsonb, I'm going with hopelessness. The more I know the less hope I have.

Primarily, I'm appalled that this is all new to me. Like most other people, I just figured it would sort itself out, like the Cold War and herpes.

I'm not an idiot, I only play one on MeFi, but I'm not seeing an out.
posted by cedar at 12:29 AM on April 30, 2006


cedar: I think you have every right to be pissed. Gas price increases are a regressive tax. The Senate probably could have done better than throw $100 at everyone. I'm with c13, sorry to hear your situation, good luck.

c13: I'm pretty sure those graphs were spot prices. Spot prices certainly have increased dramatically, but I believe much of this is due to the strong growth in China, as well as a cyclical component due to the fact that crude prices were so low for so long that no one invested in the project that took $40-70 per barrel prices to pay off. Current futures prices are pretty flat out through 2012, indicating that supply and demand will remain more or less at their current balance.
Hoarding makes sense when you think the commodity will be much more valuable tomorrow than it is today. As far as I can see it doesn't matter how fast you can pump it, if you can sell it for more tomorrow you will hoard it.
I agree that halting additions to the strategic reserve was a weak move. My understanding is that the short term gas problem in the US is not primarily due to lack of crude supply, but to the refinery shutdowns and the switch from MTBE to ethanol.
posted by thrako at 12:32 AM on April 30, 2006


if that's what you mean by empire
no, the empire thing is just a riff off of Ruppert's whole Roman Empire conceit/analogy. the collapses of things like the food supply you mention and international relations, etc. leading to war and Mad Max scenarios--these collapses will probably be precipitated by an initial collapse, of industry, as in 'the making of things,' mass production/distribution. if a different way of making the making of things available to people on a global scale is implemented, I think our dependance upon highly concentrated energy sources will diminish.
posted by carsonb at 12:41 AM on April 30, 2006


thrako, c13: Thanks for your kind words. That was probably a little too much disclosure and we're not going to starve. I live in an urban area, mass transit is viable and parking the car isn't a big deal.

However, it sure would be nice if I didn't have to choose between walking and providing my children with health insurance. It wasn't so very long ago that it wasn't a choice I had to make. I'm halfway to six digits. It's fucking crazy and I'm just bleeding money for services un-rendered. And it's not like I have a choice.
posted by cedar at 12:49 AM on April 30, 2006


Ok, I don't get it. Are we going to have local sorting and recycling plants, local steel mills, plastics plants, etc? For $25000 a pop?
Right now on ebay a simple small Bridgeport lathe is going for $25950! What about all the environmental requirenments that these plants will have to fulfill? There was a reason why manufacturing centralized over time, its called the economy of scale. There is a big difference between drilling holes in a piece of micarta and forging cranckshafts.

Thrako, not really. Here is another link. It is indeed futures prices. Besides, fine, in US there is a switch to a different fuel grade, but prices are going up everywhere, not just in the US.
posted by c13 at 12:52 AM on April 30, 2006


Okay, that graph is of the futures expiring in the next month, so pretty much the spot price shifted up one month. This is the table I was looking at (sorry, I really should have linked it earlier). And the futures prices for, say, 2010 have been rising. But my point is that they are in line with the current spot prices. And with spot prices more or less equal to futures prices and no real hoarding, it seems to me that nobody in the oil business is expecting a big drop in production relative to demand.

With the global price rise I think it takes about three months for crude prices to pass through to gasoline. I had trouble finding web sites about the global price rise, though I swear I heard about it on the radio.
posted by thrako at 1:27 AM on April 30, 2006


Are we going to have local sorting and recycling plants, local steel mills, plastics plants, etc?
the paradigm is the enemy.

are economies of scale independent of the energy that fuels them? does mass production continue to make economic sense if the cost of fueling it begins to rise?

I'm not asking these questions rhetorically--I really do wonder at this.
posted by carsonb at 1:39 AM on April 30, 2006


are economies of scale independent of the energy that fuels them?

Of course they are not. However, a large, centralized plant is more efficient that a small local one. In operating cost as well as energy.

Thrako, the production does not have to drop for us to be in trouble. All it has to do is start growing slower than the rise in demand.
posted by c13 at 1:58 AM on April 30, 2006


However, a large, centralized plant is more efficient that a small local one. In operating cost as well as energy.

ok. but what if that small local plant could make many different things, including more small local plants? (as opposed to your large, centralized plant which, I presume, produces only one thing in mass quantity.) does that alter anything?
posted by carsonb at 2:14 AM on April 30, 2006


Thrako, the production does not have to drop for us to be in trouble. All it has to do is start growing slower than the rise in demand.

I said that there probably would not be a drop in production relative to demand.
I fully agree that demand outstripping supply will cause (and has caused) problems.
posted by thrako at 2:20 AM on April 30, 2006


carsonb: Why couldn't the the large centralized plant produce the same outputs as the local plants?
posted by thrako at 2:25 AM on April 30, 2006


I don't think you get it. IF it could, THEN it would be better suited. But it CAN'T. It isn't economical. For many reasons: energy, cost of shipping, cost of personnel, cost of waste disposal, cost of land, difficulty of standartization of parts and procedures, etc. That's why we ended up with large plants in the 1800-1900's.
To make a car, you need to make metal parts, plastic parts, rubber parts, textiles, paints, glass, adhesives, electronic components. That's just what comes to mind immidiately. You need to smelt, cast, roll, stamp, forge, machine, extrude, sew, spray, weld, solder... That's not couning the actual design, testing and assembly. You just can't do it in a small factory. At least if you don't want to pay for a Tercel as much or more as you pay for a Rolls, or Bentley.

Thrako, sorry, its kinda late, I didn't read your post carefully.
If you want more information, I can recommend a few sites:
http://www.peakoil.com/
http://www.energybulletin.net/
http://www.theoildrum.com/
http://mobjectivist.blogspot.com/ (especially for data)
http://www.peak-oil-crisis.com/ (good all around site)
posted by c13 at 2:40 AM on April 30, 2006 [1 favorite]


One more thing, before I go to bed. Yes, the days of Henry Ford's plants, which took ore at one end and spat out Model Ts at the other are over, and nowdays a lot of manufacturing is contracted and subcontracted out. But it, sure as hell, is not subcontracted to $25000 shops. But even that makes the whole system extremely vulnerable to disruption.
posted by c13 at 2:48 AM on April 30, 2006


Just one more example (damn, I'm on a roll! :-) ).

This is just one part of one component of a hydroelectric dam. Can you imagine making it in a fablab?

Ok, I'm really gone for now.
posted by c13 at 2:56 AM on April 30, 2006


yes. do not dismiss imagination as impotent when it comes to changing the world. good discussion. good night.
posted by carsonb at 3:48 AM on April 30, 2006


I am one of the many and growing number of oil company employees who have come to the Peak Oil argument with a strong technical background (Petroleum Engineering Masters degree) with the motivated aim of destroying it, and have found myself unable to.

Some key facts, which even employees of global oil companies are not generally aware of:

- Global discovery rates have been falling since the 60's. The last year we discovered more than we produced was 1981. We consume 4 barrels today for every one barrel we discover. Exxon concede there is no empirical correlation between oil price and discovery rate, and that this situation is now irreversible.

- In the last 20 years, 88% of increases in estimates of conventional oil reserves have been based on increased estimates of recovery from existing fields, and only 12% from new fields.

- 90% of known reserves are in production, and as much as 70% of the world's producing oil fields are in decline, at around 4-6% per year. Exxon estimate the industry will have to replace 80% of today's production over the next 10 years simply to maintain supply, yet production will have to grow by 2% per annum on top of that to maintain the global economy. To put it another way, conventional production from non-peak regions will have to increase by 6% per annum for 20 years to sustain growth to 54 billion barrels per year in 2037 assumed by the US Department of Energy.

- Non-conventional sources of oil and alternative energy sources cannot be brought on-stream fast enough, or deliver sufficient energy after meeting their own manufacturing energy requirements, to mitigate the decline in conventional oil supply. At 2 million barrels per day, Canadian tar sand production would consume either a quarter of Canada's daily gas production to drive the process, or between half and all of its own output.

- The global economy only functions under conditions of an expanding energy supply. At fixed or declining energy supply it doesn't slow down, it ceases to function.

What is most interesting is how this is presented by vested interests - which in all probability is the means by which you have any knowledge of the subject:

- Oil companies routinely present the ratio of current estimated reserves to current production (around 40 years) as evidence of the strength of current supplies. They rely on you not noticing that (1) 80% of all reserves data are state secret and subject to very large commercial and political inflationary pressure - there is clear evidence, for example, that Middle East reserves are inflated by a factor of 40% (2) reservoirs do not flow at a constant rate and then stop at the point of 100% depletion but enter a phase of irreversible decline at around the half way mark (3) production must increase at 2% per annum simply to maintain the economy.

- Oil companies assert that global reserves are increasing by 20 billion barrels per year. In fact they are declining by 11 billion barrels per year (last 10 years). The difference arises from the practice of oil companies of presenting reserves data compiled for financial reports, in which reserves adjustments are recorded in the year of the adjustment, rather than data compiled for geological evaluation in which reserves adjustments are recorded in the year the discovery was first made. (This in turn creates the appearance of smoothly increasing reserves and therefore present company value, and masks evidence of discovery failure and therefore future value).

- Oil companies routinely include the oil they acquire through the purchase of other companies in reports of their "replacement ratio" to preserve the illusion they replace as much or more than they produce each year (e.g. BP 2004/2005 110% and 100% vs. 95% and 78% actual).

- Oil companies (in general) assert that technology increases the total recovery volume from reservoirs. While there is considerable evidence that technology can accelerate recovery, there is none at any scale that matters that it can substantially (after net energy considerations) increase recovery. Technology allowed us to consumed in the last decade much of the incremental oil we will need in this decade.

- Oil companies have no primary accountability for maintaining security of supply. Oil companies have accountability for maximising shareholder value. It takes 10 years on average from discovery to bring 100,000 barrel a day (500 million barrel) developments on-stream (the smallest size of development that can affect peak oil timing), while supply failures are emerging in the order of 1 year. Profits and shareholder returns are enhanced in the short and medium term by supply/demand failure and share values are depressed by any reduction in confidence in long term supply. Taken together, the free market is structurally incapable of creating and responding to price signals that can ensure sufficient allocation of resource to maintain the security of supply over a 10 year period. As evidence of this, Petroleum Review (a respected industry journal) estimates a 5 million barrel a day supply shortage (on c. 85 million barrels a day demand) by 2010 based on all known new projects coming on stream offsetting existing decline. Meanwhile, oil companies are returning money to shareholders rather than investing it new production, despite clear signals of emerging shortages.

Comprehensive and unsentationalist references to all of the above are readily available through the sites offered by c13 above. I could also add Future world oil supply (PDF) for a rational survey of the data. I also found this survey of the Bush/Cheney energy strategy fascinating, in this context.
posted by falcon at 4:04 AM on April 30, 2006 [2 favorites]


Barring any huge, unexpected changes in supply or demand alternative technologies should (it seems to me) be adopted in a fairly orderly and efficient fashion

Except that prices are decidedly non-linear when supply shocks happen.

But I do whole-heartedly agree with the Nicholas West comment above. I drove from Fresno to San Jose yesterday, and the big-ass turbine cranking away above the San Luis Reservoir was a beautiful sight.

The US population is moving to the sunbelt... *Sun*belt... HELLO! While the energy density of oil is great for jets, shipping can run on other stuff like hydrogen, and with a little investment in infrastructure (intercity trains, subways, powergen) we can transition away from our wasteful energy use.

But I have no great faith in the Market -- Big Oil has got this country by the 'nads, and supply-side limitations on any good alternative's market-clearing price will be its oil-equivalent price less 1% or so, regardless of how much more efficient it is (cf. PV arrays and those longer-life light bulbs for how the "free market" prices superior but scarce alternatives).

My only feeling of hopelessness comes from how utterly corrupt and/or blind our present leadership is. $300B could have funded a shitload of R&D, infrastructure; instead, we have pissed it away in Iraq (not to mention another $600B given back to the upper quintile these past 3 years -- monies that AFAICT has gone right into the over-heated housing market).

Here's where we were 2 years ago. Fuckin' eh.
posted by Heywood Mogroot at 4:24 AM on April 30, 2006


Falcon -- outstanding comment.
posted by Toecutter at 5:35 AM on April 30, 2006


stalbach:Average global per-capita energy usage in 2000 was 230,000 calories per day (food, fuel, heat, mfg, etc..). In other words, every person on the planet used 230,000 calories per day on average in 2000.

*In 1850 it was 77,000
*In 3000 BC it was 12,000
*In 8000 BC it was 5,000

Multiply by how many people are on the planet you have global energy requirements:

*Global energy needs in 2000 = 1,380,000,000 calories per day.
*In 1850 = 23,300,000 calories per day.
*In 3000 BC = 600,000 c/pd
*In 8000 BC = 30,000 c/pd


So in 8000 BC there were 6 people in the world?
Where did you get these numbers - the Young Earth Creationist Textbook?
The rest of them look wrong too.
posted by spazzm at 6:18 AM on April 30, 2006


spazzm, your right I missed some zeros in the global energy column. It is from Maps of Time.
posted by stbalbach at 6:26 AM on April 30, 2006


Falcon, great comment, must read for this thread.
posted by stbalbach at 6:39 AM on April 30, 2006


"A battle for oil could set the world aflame," from The Observer.
posted by stbalbach at 8:52 AM on April 30, 2006


Hmm. I'm the origiinal poster, and it seems that there are divergent views on this subject. :) A couple of remarks: nobody who has looked at the Oil Age Poster can possibly think that the supply of oil will drop off a cliff: it's close to a bell curve. But the supply will decline as demand increases, and the difference between supply and demand is the source of the squeeze.

The comment on oil's energy density is right on target: an energy source that has been plentiful, dense, and easy to transport has created not only an infrastructure but also an outlook that will be difficult to revise. Historically, the transition from one energy source to another (wood to coal, coal to oil) were turbulent times with quite a bit of suffering for many as the details were worked out, as it were.

Finally, the technological fix may be possible, though I think it's easy to underestimate the magnitude of the task--and the lack of good DENSE sources of energy (dilithium crystals aside) will have a major impact on energy intense industries--which is most of them.
posted by LeisureGuy at 8:57 AM on April 30, 2006


Peak Oil discussions need more falcon and less Michael C. Ruppert.
posted by b1tr0t at 1:27 PM on April 30, 2006


You don't need to go back to 8000 BC to consider the problem of food. In 1850, before the oil-fueled expansion of agricultural production, the planet supported around 2bn. Current agricultural practice supports 6.5bn. Think about the food you buy: it's not just transport costs, but also refrigeration, pesticides, fertilisers, packaging, etc etc. I worry a little bit about that.
posted by imperium at 6:04 AM on May 1, 2006


I was going to make an FPP out of this, but figured it might not be worth it. I feel like it is, however, a good read for all of us already reading this thread.

Peak Oil Panic:
Is the planet running out of gas? If it is, what should the Bush administration do about it?

posted by ninjew at 12:52 PM on May 1, 2006


Nenjew - since your posting rolls up so many misconceptions in one convenient package, it is a reasonably efficient posting to address its many fallacies in one mega comment. So:

"As for Matthew Simmons, Lynch dismisses him with a sneer: 'Petroleum engineers know a lot more about petroleum engineering than a Harvard MBA.'"
Unfortunately, while this is true, it overlooks the main point that, within companies and other organisations with vested interests, it is people with Harvard MBAs who determine what Reserves figures to publish, not Petroleum Engineers. For example, compare: "The idea that oil is running out is simply untrue. There is no physical shortage of oil or gas" (Lord Browne, Harvard MBA Graduate and Chief Executive, BP)[1] with "...production would peak between 2010 and 2020" (Francis Harper, Petroleum Engineer, BP)[2]. The issue is lack of data transparency and third party verification, not reservoir engineering analysis, for which Simmons is as well or better placed as any to analyse, and with less conflict of interest.

"Saudi Arabia, which currently produces about 10 million barrels of oil a day, 'is underproducing every one of their wells,' [Economides] claims. 'I can produce 20 million barrels of oil in Saudi Arabia.'"
Aramco Vice President and Head of Exploration, S.A. Husseini, warned that the USGS and IEA forecasts for future oil supplies were a "dangerous over-estimate".[3] You have to decide which is the better authority. However, note that it is as possible to get a 500,000 barrel day reservoir to flow at 1,0000,000 barrels a day as it is to get a 100 watt light bulb to glow at 200 watts. The issue that Simmons has drawn attention to is the sustainability of doing so, and the principle that reservoirs suffer irreversible damage when drawn down above a critical maximum rate of withdrawal. There is clear evidence that the main Saudi reservoirs are starting to produce water decades ahead of prediction, indirect evidence that they have been drawn down too hard in maintaining the Saudi pretence that they have sufficient capacity.

"For example, the USGS undertook a comprehensive analysis of world oil reserves in 2000. It calculated that the total world endowment of recoverable oil is 3 trillion barrels."
By coincidence, 3 trillion barrels is about the quantity of reserve you would need, at sustainable rates of conversion into production, to supply global demand growth at 1.8% per annum until 2037. It is, in other words, "the answer" to the U.S. Government's question "how much would reserves have to be to avoid catastrophic failure of the global economy". You have to conclude whether this institution acted impartially in arriving at this conclusion - many have not. For example, to estimate future reserves, the USGS multiplied estimated world reserves by a "growth factor". The growth factor they selected was derived from the historical growth of U.S. reported reserves, which are P10 quantities and exhibit high growth. World reserves are approximately P50 and don't. The outcome is a massive - but convenient - overestimation of mean world oil reserves.

"World Energy Outlook report, which accepted the USGS numbers and concluded that "the world's energy resources are adequate to meet projected growth in energy demand" until at least 2030"
World Energy Outlook attempted to reconcile projected 2020 demand against conventional and non-conventional sources consistent with USGS estimates. It was unable to account for over 19 million barrels per day of production and had to invent a category called "unidentified unconventional"[4]. This is a sophisticated term that means: "not there". You might accurately think of it as "the production there would have to be in addition to the production we can justifiably extrapolate from known data in order to avoid catastrophic failure of the global economy". Production that is "not there" remains "not there", even after it has been labelled and quantified.

"We don't share the tenets of the peak oil theory. We feel that they underestimate technological developments."
In fact, industry systematically overestimates technological developments. Most commonly, it applies technology to accelerate some quantity of production, revises its estimate of total recoverable reserves based on extrapolation of the (temporary) reduction in the decline rate, and declares the revision as a technology based reserves addition, often in support of technical data supplied with a field when it is sold to a third party at its new, increased value. In over 80% of all cases where this has taken place, the decline rate deteriorates to a rate worse than when the technology was applied such that the Ultimate reserves figure reverts to its pre-application figure. Technology depends on economy of scale to be economic i.e. massive fields - yet in future, fields will be small.

"We see no evidence to suggest a peak before 2020, nor do we see a transparent and technically sound analysis from another source that justifies belief in an imminent peak."
The observation that there is little data upon which to construct a transparent or technically sound analysis - either for or against peak oil theory - is of itself a key component of the Peak Oil argument. As a corollary, there can be no transparent or technically sound analysis to suggest there won't be a peak before 2020. However, given that the subject is fundamentally different in consequence to, say, the failure of the Global Sportswear Apparel market, the Precautionary Principle obliges us to act as if it were true until it can be disproved.

"They point out that reserve growth and new discoveries have been outpacing oil consumption."
In fact, they can only be made to appear to do so from extrapolations derived from data prepared for financial reporting, rather than from geological evaluation. They are probably unaware of the difference, and therefore that they are talking about statistical artifacts that have no real-world correspondence.

"In the U.S., oil field reserves typically turn out to be four to nine times as high as the original estimates."
This is inaccurate. U.S. oilfields, like all oilfields, typically turn out to be about as large as the estimate of their mean value (as Lynch sneers, Petroleum engineers tend to know a lot about Petroleum Engineering). However, a number of estimates at varying degrees of probability are made and what varies is which estimate is originally published. In the rest of the world (with the recent exception of the Former Soviet Union), these are approximately the P50 values, which in turn are approximately the mean values, which in turn tend not to vary significantly over the life of the field. In the U.S., the P10, or most conservative, value is published which grows to around the mean value over the life of the field. This is one of the fundamental mistakes which lie at the heart of the USGS 3 trillion reserve estimate analysis. If there is any trend, it is that the size of large oilfields (irrespective of their geographic location) tends to be underestimated and small oilfields are overestimated. Guess what? All new oilfields will be small, and there is a built in bias to overestimate their P50 size i.e. that future production from them is likely to be less than is currently forecast.

"But the desire to boost quotas cannot account for the fact that non-OPEC reserves grew nearly three times faster than OPEC reserves between 1981 and 1996"
Non-sequitur. It does not follow that there are no other factors that could account for spurious non-OPEC reserves growth in the same period. Poor non-OPEC countries use their reserves as collateral in securing economic aid and loans for food and weapons, as a mechanism for strengthening their currencies, and as a device for attracting foreign investment. The Former FSU quoted P90 (i.e. probable, possible and potential) reserves data throughout that period (Quote: "(the FSU resource base was) strongly exaggerated due to inclusion of reserves and resources that are neither reliable nor technologically or economically viable"[5]). And the share price of commercial firms is strongly driven by the appearance of increasing reserves, leading to Shell's write down of 20% of its reserves in what industry expects to be the first of a series of downward revisions across the industry arising from the widespread practice of inflating reserves estimates in order to manipulate the share price. In addition to suffering deliberate exaggeration, non-OPEC reserves estimates suffered from gross inflation through the mishandling of the aggregation of P10 US reserves, P50 World reserves and P90 FSU reserves, together with the misapplication of growth functions derived from US historical reserves growth performance to estimations of non-US reserve growth.

"If ChevronTexaco, ExxonMobil, or other private companies actually owned the reserves, the world would be in a much more secure position with regard to oil production."
Really? BP etc. are handing money back to their shareholders in the form of dividends because they know their shareholders can make more money investing the cash elsewhere than in remaining production opportunities. The reserves opportunities are commercial, but there are higher returns to be made in the banking and pharmaceutical sectors right now. These, by the way, are the free market decisions that are determining whether there will be an interruption in U.S. food supply in 2010...

"Goldman Sachs notes that oil is less important than it was a generation ago"
This is the sort of absurdity you arrive at from an economists perspective, in which energy is a priced commodity indistinguishable from any other commodity and subject to the same supply/demand mechanisms. Some observations: For every calorie of food we (U.S./European readers) consumed at breakfast, 10 calories were derived from hydrocarbon sources during its manufacture - meanwhile, the U.S. has relocated all of its (hydrocarbon based) fertiliser production overseas in the last 3 years following the rise in domestic gas prices. What do you think is going to happen to Mid West grain production when the South East Asians decide they want to use the gas for something else (like, fuelling their own food supply chain)? The U.S. has record levels of consumer debt, there is five times more money in circulation in the U.S. than the banks can cover, held aloft by the petroleum economy. The U.S. is structurally positioned for systemic collapse of its banking system due to spiralling foreclosure rates triggered by rising hydrocarbon costs. However, your central bank doesn't have funds to bail out more than two simultaneous failures.

Of what possible relevance is the relative change in sensitivity of GDP to the cost of energy over the last decade, when the fundamental issue is the economy's inability to tolerate even short interruptions in the supply of energy in the present decade?

References:
[1] Browne, John "IPE Keynote Address", 15th February 2006
[2] Harper, Francis "Oil Demand, Production and Cost - Prospects for the Future ", Copenhagen, 10th December 2003
[3] Husseini, S.A. (Vice President, Aramco) Channel 4 News, 26th October, 2004.
[4] Campbell, C. "Presentation to a House of Commons All-Party Committee", 7th July, 1999
[5] E.M. Khalimov, Soviet Deputy Oil Minister
posted by falcon at 5:38 AM on May 2, 2006 [1 favorite]


Thanks for continuing to post in this thread, falcon. After two posts you've already become one of my favorite MeFi members--not necessarily because I agree with your points, but because your posts are so informative and well-composed.
posted by Prospero at 3:50 PM on May 2, 2006


Thank you, Prospero. I've lurked around Metafilter long enough and decided to dip a toe in the water. I'm the first to concede, however, that my 'informative' posts could be mis-informed. I also remain in hope that I can fulfil my original aim of having them disproven. So if you disagree with any points on a factual basis, then blast away ...
posted by falcon at 1:07 AM on May 3, 2006


from the reason article above:

Michael Economides estimates, for example, that it will take $4 billion in investment to keep Venezuela’s oil production at current levels. Yet that country’s Castro-wannabe president, Hugo Chavez, is investing just half that.

Castro-wannabe, huh? one a' them democratically-elected-by-large-margins-type Castro-wannabes.
posted by Hat Maui at 1:51 AM on May 3, 2006


oh, and, uh, plus i meant to point out that i suspect Chavez is in a much better position to know what is needed to sustain the lifeblood of the Venezuelan (and world) economy than just about anyone except maybe his oil minister. are you his oil minister, Economides*? i didn't think so.


*can that possibly be this guy's name? Economides? sheesh. next month in Reason, are things in Darfur not as bad as they seem? a report from correspondent Lambert Refugides.
posted by Hat Maui at 2:00 AM on May 3, 2006


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