Oil is getting cheaper. The price of a barrel of Brent crude is approaching $60, down from around $140 in 2008. The price drop is largely attributed to American shale oil, also called tight oil, production of which has increased from a few thousand barrels/day a decade ago to over 5 million barrels/day today, mainly coming from the Bakken, Permian and Eagle Ford shales. By the end of 2013, American tight oil accounted for 4.1% of global crude oil production. The International Energy Agency calls it a "supply shock", and according to the World Energy Council, the notion of "peak oil" has almost been forgotten [PDF, page 24]. While speculation continues over the motives behind OPEC's refusal to curb production, others worry that the drop in oil prices distorts economic and political decision making, discourages the development of renewable energy sources [may require registration], and may induce deflation. The BBC tallies up the winners and losers.
Charles C. Mann writes for The Atlantic:
This perspective has a corollary: natural resources cannot be used up. If one deposit gets too expensive to drill, social scientists (most of them economists) say, people will either find cheaper deposits or shift to a different energy source altogether. Because the costliest stuff is left in the ground, there will always be petroleum to mine later. “When will the world’s supply of oil be exhausted?” asked the MIT economist Morris Adelman, perhaps the most important exponent of this view. “The best one-word answer: never.” Effectively, energy supplies are infinite.[more inside]
Daily Telegraph: Why the world isn't running out of oil: "Moreover, as well as bountiful oilfields in North America, Russia, Saudi Arabia and other producers in the Middle East, there are massive, barely tapped reserves in South America, Africa and the Arctic: not billions of barrels’ worth, but trillions. So the planet is not about to run out of oil. On the contrary, according to a Harvard University report published last year, we are heading for a glut. The 75-page study, by oil executive Leonardo Maugeri, was based on a field-by-field analysis of most of the major oil exploration and development projects in the world, and it predicted a 20 per cent increase in global oil production by 2020." [more inside]
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.
In September, a privately held and highly secretive U.S. biotech company received a patent for a genetically adapted E. coli bacterium that feeds solely on carbon dioxide and excretes liquid hydrocarbons. Joule Unlimited, co-founded by George Church, appears ready to forever alter the way we produce fuel. [more inside]
Matt Simmons, investment banker to the oil industry, has passed away unexpectedly. (Previously, previously) Simmons was a vocal proponent that peak oil is at hand and authored an influential analysis of Saudi oil reserves that lends credence to his view. An energy policy advisor to Dick Cheney, and regular on financial media, Simmons believed emergency action to counter peak oil is required, beginning with independent audits of global reserves.[PDF] [more inside]
Michael T Klare (previously here and here) has been writing for some time about the coming age of America's oil wars. Recently with the Deepwater Horizon disaster in the Gulf of
Storms Mexico, he's been writing about the coming about of what he calls "The Era of Xtreme Energy" and the extreme length we're going to have to go to secure it. [more inside]
Inspired by a recent Wall Street Journal* article, Robert Rapier, chemical engineer, peakist, blogger, and currently chief technology officer for a bioenergy company, reviews the pretenders, contenders, and niche players in the emerging field of green energy, with particular consideration of liquid fuels. Meanwhile, the boffins at Foreign Policy consider the risks of the coming of the green energy era, and depict the end of the oil age. (Both part of FP's extensive look at the end of oil; previously.) [more inside]
A Saudi Prince tells America to give up futile dreams of energy independence. Op-Ed in the NYT says Peak Oil is a waste of energy and an illusion. Meanwhile, the OECD's energy advisors, the IEA are saying cheap oil will run out in ten years, a decade sooner than estimates made as recently as 2007.
Peak Oil, 1925. In 2000, 20% of new buildings will be solar equipped. By the late 1990s, 90% of the world's energy will be nuclear-generated. These and other erroneous projections are being collected as part of the Forecast Project on the website Inventing Green: The Lost History of Alternative Energy in America.
The author of a new book on how rising oil prices will change America makes the claims that higher gasoline prices will make the country healthier and safer. Christopher Steiner asserts that, for every $1 that gasoline prices rise, obesity rates drop by 10% (as people walk more and eat out less). As for "safer", that comes in when high gasoline prices force police out of their cruisers and onto bicycles and foot patrols, where they can interact more closely with their communities. [more inside]
In a talk titled Definancialisation, Deglobalisation, Relocalisation given at The New Emergency Conference, Peak Oil activist and writer Dmitry Orlov (previously 1 2 3) shows how he has come to the conclusion that the oil price spike of summer 2008 was the trigger for the financial collapse that occurred later on in the fall. He goes on to summarize (from his point of view) pretty much everything that has been happening in the past year or so, and what he thinks is coming up next. [more inside]
Pickens Plan -- oilman T. Boone Pickens has a plan to reduce America's oil dependency problem: exploit the country's massive windpower potential for domestic energy, replacing natural gas, and then use natural gas to power cars instead of foreign oil. Some problems with the plan.
Bush had Karl Rove. But the original wiretapping President needed brains too. Introducing Kevin Phillips. He predicted the prolonged Republican dominance of Washington 1970-present and advised the Ford and Reagan presidencies. He predicted a more liberal 1990s and when the Bushies killed his party he became uttery disgusted. Recently he spoke about the influence of the christian right, our addiction to oil, and America's debt (public and private) at the University of California Santa Barbara. [more inside]
How much of the Oil Shock of 2008 is peak oil, and how much just speculation? Will the cavalry ride to the rescue?
After a comprehensive study of 400 oil fields, the International Energy Agency has concluded that, barring a substantial decrease in demand, the world faces an oil supply shortfall of 12.5 million barrels a day by 2015--15% of current production. [via]
Oil Tops Inflation-Adjusted Record Set in 1980. Normally this would slow economies and thus slow demand for oil, forcing OPEC to loosen supplies, but things seem different this time: "we now have an oil world in which the impact of high oil prices is only really felt in the OECD countries" - high demand from China, India are keeping prices high, even as OECD economies slow. [more inside]
"The world is at the beginning of a structural change of its economic system. This change will be triggered by declining fossil fuel supplies and will influence almost all aspects of our daily life." The new Oil Report from Energy Watch Group makes a strong case that we have now passed peak oil. [more inside]
Heard enough about Pain at the Pump? The 24-hour news love to cover the "unreasonable" record gasoline prices, but the real issue is crude oil supply--and this latest installment of Stuart Staniford's highly detailed analysis of the world's largest oil field, Ghawar in Saudi Arabia, provides new evidence of sharply declining production. Can Saudi Arabia really increase supply to meet world demand that is surging on growth in India and China? Signs point to no--in the past week they have again voted to maintain OPEC's "voluntary" production cuts, and their petroleum minister commented that there may not be a "need" to increase Saudi production much further.
Peak Oil no more? Prophets of peak oil are being proven wrong as new technologies increase oil recovery rates. In fact, the entire peak oil theory might be based on flawed assumptions.
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.
Supertankers are so cool. Click previous sentence for more information.
Zeitgeistfilter: Lumpen Leisure and Welcome to Middle-Class Lockdown... Now Shut Up and Buy Something -- two fine rants about our current state of disunion by James Howard Kuntsler, author of The Long Emergency (excerpt), and writer and Vietnam vet Joe Bageant. "All over but the keening for our soon-to-be-lost machine world," Kunstler predicts in The American Conservative, while Bageant taps the inner stream-of-unconsciousness for Dissident Voice: "Things cannot be as bad as the alarmists say. They cannot be as bad as I often suspect they are. If there really were such a thing as global warming they would be starting to do something about it. And besides, even if it were true, science will find a way to fix it. If there really were genocide going on in so many places far more people would be concerned... If the earth were heating up we would surely notice it. If our soldiers and government agencies were torturing people around the world it would make the news. If millions were being exterminated, it would be more obvious, would it not?" (Kunstler's book previously discussed here, Bageant here.)
As of today, world oil reserves are five percent lower than previously thought. Well informed early toppers like Jeremy Leggett (previously discussed here) won't be surprised by the news, though they may be disappointed that it didn't make bigger headlines.
"Richard Rainwater made billions by knowing how to profit from a crisis. Now he foresees the biggest one yet". Rainwater discovers peak oil and wants to profit from it. Among other things, "he's thinking about opening a for-profit survivability center". Admittedly, his peak oil obsession goes beyond profiting:
But there may be something more important than making money. This is the first scenario I've seen where I question the survivability of mankind. I don't want the world to wake up one day and say, 'How come some doofus billionaire in Texas made all this money by being aware of this, and why didn't someone tell us?'
Boundless energy or bad math? Randell Mills thinks he has the solution to our energy problems. In his company's patented process, "energy is released as the electrons of atomic hydrogen are induced to undergo transitions to lower energy levels producing plasma, light, and novel hydrogen compounds." It also implies that quantum mechanics is wrong.
Running on Fumes -- a fascinating essay by the Nation's Sasha Abramsky on what rising gas prices will do to poor exurban communities.
Your Mr. Fusion is ready. Sort of.
Today the Saudi Oil Minister announced that they are setting aside OPEC production quotas. Is the end for OPEC? More importantly, when the Texas Railroad Commission did the same thing in 1971, it signaled the peaking of US oil production. Oil prices keep rising, and the Main Stream Media blames it on tight refinery capacity. But simple economics tells us that this should actually cause crude prices to drop. So what is happening? Is this the peak of global oil production? President Bush is concerned, and he is hosting Crown Prince Abdullah at the Crawford Ranch this week. Leading Oil & Gas investment banker Matt Simmons thinks that the peak is upon us, and even the Saudi Oil Minister admits that they probably won’t find any more light, sweet crude…
The Sky (and Global Oil Production) is Falling! With all the recent news on Global Warming, here's an article on the root cause of the problem: Global Energy Use. Has oil production peaked? Is the real focus of the Iraqi insurgency foreshadowing an energy-dominated future? Is there a solution to the problem??
Peak Oil? Include Me Out, is one of the best reads about the whole issue of peak oil. Its author, Mick Winter "is a former Y2K community activist who currently suffers from chronic déjà vu and still hasn't figured out what to do about Peak Oil." I am a peaknik and I can tell you this is a good read, no matter your stance on peak oil! (psssst, if you are already a peaknik, or just curious, Winter maintains a good a peak oil metadirectory. )
Greenspan on oil (speaking to the the National Italian American Foundation, which De Niro would never do :) "We will begin the transition to the next major sources of energy perhaps before midcentury as production from conventional oil reservoirs, according to central tendency scenarios of the Energy Information Administration, is projected to peak." And just to make it political, here's a chart relating presidential approval ratings to gas prices!
Saudi Arabia, the leading exporter for three decades, is not running out of oil. Industry officials are finding, however, that it is becoming more difficult or expensive to extract it (weblog safe NYT link). A very readable article that, without even mentioning it, does a good job of explaining what is "the peak of oil". Cornucopians, that should sent shivers down your spine!
Global warming will never bring a "doomsday scenario" a team of Swedish scientists say -- because oil and gas are running out much faster than thought. Oil production levels will hit their maximum soon after 2010. "The decline of oil and gas will affect the world population more than climate change."