Peak oil is fun for everyone!
July 7, 2005 9:47 PM   Subscribe

Even as oil prices hit record highs, the Saudi’s are now warning that they do not have the oil supply to keep up with future demand. With news like this it’s time to start taking peak oil seriously. Matthew R. Simmons, a former bush advisor, recently wrote a book that examines the future prospects of Saudi oil reserves and the implications for global oil production. He finds that the amount of oil left in the big fields may be much lower than is publicly reported and that there is no where else in the world where we can find the oil to make up for the shortfall. This interview with Simmons (part 2, part 3) was one of the scariest things I’ve read in awhile. I guess it’s time to buy a hybrid… (Peak oil previously talked about here and here and here)
posted by afu (69 comments total)
Oddly enough, I read the first sentence of you're post, and immediately thought of Simmons' book.
posted by drezdn at 9:52 PM on July 7, 2005

Amazing what happens to the price of oil when you destabilize the worlds 2nd largest oil fields. Oh wait, just saying that makes me some sort of "no blood for oil" nutjob.
posted by H. Roark at 9:58 PM on July 7, 2005

fascinating. the saudis appear to be backpedaling from their recent position, which was, basically, don't worry, we've got this.

i like James Kunstler a lot. i've also read some thoughtful critiques of his stuff that have given me pause. but i have to say that "the long emergency" strikes me as perhaps the most plausible speculation about what might happen as the rise in oil prices slams on the brakes of globalization.
posted by Hat Maui at 10:00 PM on July 7, 2005

I recently heard the Canadian Ambassador to the US interviewed on some beltway radio talk show and as soon as oil came up, he was all about peak oil.

posted by blacklite at 10:02 PM on July 7, 2005

Peak oil is coming and there ain't nuttin you can do bout it.
posted by euphorb at 10:04 PM on July 7, 2005

It's unwise to make big predictions, because if they're wrong, you and anyone associated with you will be ignored for decades. Global warming has this problem, with scientists predicting a heat death for the earth sometime in the mid-70s. Now we have 25 years of a public discourse that treats climate change as a fictitious bugbear.

Perhaps the correct prediction is: "Whenever peak oil passes, and it may be soon, it's gonna hurt really bad."
posted by breath at 10:08 PM on July 7, 2005

This makes me wonder if Peak oil or Nuclear Fusion will come first.

Both have been predicted to be just around the corner for as long as I can remember.

It should also be noted, that in 2002 dollars oil prices reached about $100 in 1980. Peak Oil was said to be occurring then too.

The price mechanism is a wonderful thing folks.

Oh, and isn't shale oil economic at around $60-70 a barrel?
posted by sien at 10:09 PM on July 7, 2005

Two points:

1. Adjusted for inflation, the prices during the 70's oil crisis make
$61 a barrel look like a firesale.

2. Supply hasn't really changed that much. It's a combination of
the increase of demand by China and India and speculation on
the continuation of that increase that's the real driver.

Prices are going to continue to rise in the long run even if the Saudis start running every well at full capacity 24hrs a day and Bush finds a 4 billion barrel reserve underneath his Crawford ranch.
posted by jcking77 at 10:34 PM on July 7, 2005

Oh, and isn't shale oil economic at around $60-70 a barrel?

Does this account for the environmental costs?
What grade of oil do you get? Is it light enough to make gasoline out of?
And what happens when you have to expand the same amount of energy or more to get an equivalent amount of energy from oil you get?
posted by c13 at 10:34 PM on July 7, 2005

It should also be noted, that in 2002 dollars oil prices reached about $100 in 1980. Peak Oil was said to be occurring then too.

I have no idea if peak oil is upon us but this reminds me of what I read in Cadillac Desert last week (otherwise a very good book) in which it was stated (in 1984) that oil would cost about $260/barrel by 2000.

Predicting the future is very hard stuff.
posted by obfusciatrist at 10:39 PM on July 7, 2005

Right on time with another message of FEAR.
The system is nothing if not consistent.
posted by nightchrome at 10:47 PM on July 7, 2005

I know it is sick and twisted, but I am actually looking forward to the supply drying up.
posted by shoepal at 10:48 PM on July 7, 2005

posted by raaka at 10:59 PM on July 7, 2005

It's not going to dry up anytime soon. The Alberta tar sands have more than the entire middle east. It used to be too expensive to extract, but time and technology have pushed the price downward. It may never be as cheap as oil as we currently know it, but we'll get used to it, and the price of Alberta oil won't tank the economy.
posted by jikel_morten at 11:01 PM on July 7, 2005

Predicting the future is very hard stuff.

Barring the catastophic-

Demand in the developing world will continue to increase quite rapidly as the two most populous nation states continue to industrialize. Don't forget the power of sheer numbers. If 5% of China starts to drive a car in the next 10 years that's more than the current total population of the UK.

Supply will remain constant and/or decrease as oil reserves are a limited natural resource.

Either demand for oil in the industialized world tapers off as quickly as it increases in the developing world, supply of oil somehow increases or prices increase.

Any other ramifications, yes impossible to predict.
posted by jcking77 at 11:12 PM on July 7, 2005

Fixed link: Tar Sands. (you forgot the 'http://')
posted by ao4047 at 11:12 PM on July 7, 2005

Well, whatever happens hopefully Saudi Arabia will get fucked right proper.

It's unwise to make big predictions, because if they're wrong, you and anyone associated with you will be ignored for decades. Global warming has this problem, with scientists predicting a heat death for the earth sometime in the mid-70s. Now we have 25 years of a public discourse that treats climate change as a fictitious bugbear.

well, if you consider a group mostly made up of a few crackpots and Exxon execs to be the "public"

Speaking of the mid-70s, peak oil production in the US was predicted to happen in the 70s, and it did. The same guy who made that prediction is making the global one.
posted by delmoi at 12:00 AM on July 8, 2005

Well, whatever happens hopefully Saudi Arabia will get fucked right proper.

Unless the sand trade takes off, I think that's likely. Of course, the arms trade is booming, and SA has influential partners...
posted by dreamsign at 12:06 AM on July 8, 2005

Saudi Arabia will get fucked right proper

Except of course we'll get fucked first. They still control the spice and they be keeping it for themselves when it starts running out...

I am actually looking forward to the supply drying up

The idea or running around on your bike may be fun, but you also eat oil. When the fertilizer and pesticides disappear and crop yeilds plummet, it won't be so jolly. Ask North Korea.
posted by missbossy at 2:18 AM on July 8, 2005

This makes me wonder if Peak oil or Nuclear Fusion will come first.

Both have been predicted to be just around the corner for as long as I can remember.

I believe the traditional prediction for fusion is "at least 50 years". This figure hasn't changed in at least a decade.
posted by biffa at 3:05 AM on July 8, 2005

Here's a shot of all that oil going down the drain.

posted by furtive at 3:29 AM on July 8, 2005

They still control the spice

Huh. That really jumped out at me; I just finished rereading Dune.
posted by alumshubby at 3:45 AM on July 8, 2005

They still control the spice and they be keeping it for themselves when it starts running out...

Goodness. What on earth makes you think that they'd be allowed to keep it when the shit hits the fan?
posted by ROU_Xenophobe at 4:00 AM on July 8, 2005

Cute map, but you could just as easily make one with China or Europe at the center.

As to Saudi claims, just weeks ago they were saying that the problem wasn't production, the problem was our (America's) incapacity to refine the stuff at a fast enough clip. (PS- If I had a commodity selling at high prices, I too would talk up the scarcity argument, true or no.)

Mostly I'm with shoepal, I'd like to see us kick the habit once and for all. Human nature being what it is, I suppose that means a long period of ever higher prices and hybrid stop gaps. (I foresee a MadMax future wherein entrepreneurs mine old garbage dumps for plastic coke bottles and rain coats.....)
posted by IndigoJones at 4:26 AM on July 8, 2005

I foresee a MadMax future wherein entrepreneurs mine old garbage dumps for plastic coke bottles and rain coats....

While extremely original, that prediction is not based on anything but an oil-slick slope.
posted by gorgor_balabala at 4:34 AM on July 8, 2005

The environmental costs of using oil (especially with China and India moving into leading consumer roles) will devastate the global economy long before the oil runs out. And eventually those costs will have to be more fully represented in the price of the stuff or people will just keep burning it until the atmosphere is truly wasted. The dealers have got enough of the shit to keep us strung out until we OD. Disgusting as the prospect is, going hard for nuclear power is probably our only hope in the medium term. In the long term, we're all dead. And radioactive. Here comes an interesting epoch.
posted by realcountrymusic at 5:01 AM on July 8, 2005

Peak Oil?! We'll starve!!
posted by TwelveTwo at 5:10 AM on July 8, 2005

I cycle commute 6000+km a summer. I recycle aggressively. I try to have as small a footprint as possible. However, I still know that my life is absolutely dependent on black gold. My food, my furniture, my hobbies, my heating, my electricity ... every single thing I can think of depends on a fossil fuel economy.

Kicking the habit would require retooling all of civilization. No small task. I look forward to it like I look forward to arthritis.
posted by srboisvert at 5:15 AM on July 8, 2005

I look forward to it less than you look forward to it! Haaa! Neenerneener.
posted by TwelveTwo at 5:17 AM on July 8, 2005

IndigoJones You could make the map with just about any country, but the reason this one is poignant is because 60% of all oil consumption is done by the USA.
posted by furtive at 5:55 AM on July 8, 2005

It's not as hard as you think to get away from oil today on a personal level.. takes a little creativity and effort. I hear a lot of people worried but not doing anything but resignation and fear. I welcome our new future: wood burning stoves and wind power.
posted by stbalbach at 6:12 AM on July 8, 2005

raaka: Daniel Yergin is more than a contrarian. He is the expert on the oil market.
posted by Kwantsar at 6:29 AM on July 8, 2005

Simmons's point in part 3 of the interview about the age of equipment is a very interesting one. Since the mid-eighties, the majors have significantly ramped back reinvestment: searching for new oil, building platforms to service existing fields and refining capacity. There has been some reinvestment in tankers, mostly because of the Valdez incident. Simmons comment in part 1, about there being a lack of capacity to handle heavy oil (and API° 28 isn't that heavy either) is telling.

A guy from Chevron, one of the program managers in their Houston production facility, recently told me that it was as if the majors were running the industry for a $15/bbl price while collecting the $30 to $50/bbl for the last ten years. Exxon has been extremely profitable for the past decade, but the major oil companies are not well positioned to deal with increasing demand.
posted by bonehead at 7:19 AM on July 8, 2005

Really liked that crack about how the southeast was doomed cause we were crazy Christians w/ guns. Nice one there.

If he's predicting a return to a local rural agricultural lifestyle, then I personally think that the southeast will do pretty dang well. If I was going to make a generalization about people here I'd say that they like large pieces of land, and that a lot of that land is still fit to farm.

Thing I hate about reading these sort of things is they're never statements from our leaders emphasizing a new challenge to American life that we will have to overcome like our ancestors overcame the problems of their times. They always read like doomsday prophets at the corner wearing cardboard boxes. There's no wonder that nobody believes this stuff, and that we're all living in a cosy dream world for as long as possible.

(It really reminds me of that scene from Futurama, where Wernstrom (sp?) says "Well, if my calculations are correct, we're all going to die horribly!")
posted by SomeOneElse at 7:43 AM on July 8, 2005

sien writes "This makes me wonder if Peak oil or Nuclear Fusion will come first."

But PO is inevitable, nuclear fusion isn't.
posted by Mitheral at 7:44 AM on July 8, 2005

the problem was our (America's) incapacity to refine the stuff at a fast enough clip

If that was the problem then prices for the raw oil would be going down.

I just watched The End of Suburbia yesterday. It's a documentary exploring the possible effects of the increase in the price of oil after the peak. The general conclusion it reached was that there would be increasing economic stagnation, increasing difficulty in growing food and a return to regional economies.

They also explored what would happen to the electrical grid. Methane production and oil production are tied to each other. As oil production drops, so does methane production. The US has made an increasing percentage of its electrical plants methane powered in period when methane is becoming increasingly scarce. So as peak oil hits not only will we have to worry about the prices of oil and everything refined from it, we will have to do it in the dark.

Assuming peak oil happens in 2010, even if we had perfected fusion power before it struck, we would still have to build the infrastructure needed to take advantage of it. That would be hundreds of fusion plants, hundreds of electrolysis refineries to produce hydrogen and tens of thousands of hydrogen fueling station in order to maintain our standard of living. I have great difficulty believing that so much could be built so quickly in a time of increasing energy costs. We won't have fusion perfected by 2010.

I think that things are about to get harder but we get to ease into it like an old man getting into a cold pool.
posted by 517 at 9:28 AM on July 8, 2005

Everyone looking forward to the end of oil know that its going to be replaced with coal?


The end of oil is not going to start of renewable energy lovefest. The price of oil will slowly but surely go up, making other energy products more economical in comparison.

You want to end the fossil fuel slurp-in? Lobby governments and business to invest in renewable energies to bring down their cost (Or to better integrate current environmental costs into price)

By itself, this Peak Oil thing (which your really all wrong about anyway, at least this year) will amount to no real change.

My prediction! 10 years from now, netizens of metafilter whine about people driving bigger cars then them.
posted by PissOnYourParade at 10:17 AM on July 8, 2005

...steam powered cars bigger cars.
posted by 517 at 10:34 AM on July 8, 2005

From Wikipedia:
1865 - William Stanley Jevons published The Coal Question in which he claimed that reserves of coal would soon be exhausted and that there was no prospect of oil being an effective replacement.

So I guess coal's out of the question then and we're doomed.
posted by jcking77 at 10:35 AM on July 8, 2005

Chevron: "The era of easy oil is over."
Many of the world’s oil and gas fields are maturing. And new energy discoveries are mainly occurring in places where resources are difficult to extract—physically, technically, economically, and politically. When growing demand meets tighter supplies, the result is more competition for the same resources.
posted by jbrjake at 10:49 AM on July 8, 2005

If it actually happens that the massive investments required to use coal to make up for the decline of oil production are successfully made, without the global economy falling over, then we'll run out of coal in a few decades or so. Or so I estimated, after one of the previous peak oil threads here.

My impression is that nobody knows when global oil production will start its decline. Maybe the data that would be necessary to figure it out does exist, but it isn't accessible to any one person (at least, not anyone who's willing to talk about it).

I think I'll go read Simmons' book now. From the looks of it, it might take a while to get through.
posted by sfenders at 10:54 AM on July 8, 2005

By itself, this Peak Oil thing (which your really all wrong about anyway, at least this year) will amount to no real change.

assertions like this need substantiation (and an editor).

how many of you read the whole interview with simmons? i want to see your hands...

it's a little frightening to see that everyone is so cavalier about the coming global energy crisis. you can characterize those issuing scientifically credible warnings as cassandras, because gosh, people have been making incorrect predictions for centuries now! or, instead of being mired in the tar sands of denial, you could examine the truly scary facts and take steps to make some sort of positive change.

i hate to think that it'll take global conflict (u.s. v. china, specifically) to make everyone realize the contours of this crisis, but it seems like, based on the attitudes of posters in this thread, that we'll be gas-guzzling until it's too late to do anything else.

could it not be more obvious that we're involved in the iraq war for one reason alone: we need access to that region militarily and economically?

could it not be more obvious that we'll be drawn into conflicts like this for decades to come, especially as china modernizes?
posted by Hat Maui at 11:43 AM on July 8, 2005

Hat Maui: well Yergin is in direct contradiction to Simmons with superior bona fides.

So I would say the prospect is the opposite of "obvious".
posted by bukvich at 12:46 PM on July 8, 2005

Yergin is in direct contradiction to Simmons with superior bona fides.

Oh, yeah? Well, T. Boone Pickens! So there.

I am rather sceptical about the CERA report. Its predictions for Saudi Arabia in 2010 are even more optimistic than those of Saudi Aramco itself. Still, nothing about this is obvious.
posted by sfenders at 1:22 PM on July 8, 2005

You could make the map with just about any country, but the reason this one is poignant is because 60% of all oil consumption is done by the USA.

More like 26% according to these guys, but what's a few percentage points between friends?

More interesting are the per capita figures by country.

We're bad, but not as bad as Canada. (Other stats always welcome. I'm on my endless search for truth)
posted by IndigoJones at 3:56 PM on July 8, 2005

These guys are sitting on oil that rivals all of Saudi Arabia's total reserves.

And there's about twice more the total known amount of fossil fuels yet to be exploited here.

And if these two sources get to be a problem (open carbon cycle greenhouse gases), we can increasingly rely on recycled carbon from biomass.

So don't write off our energy future right away. If we really want that dystopian outcome, we're going to have to fire up our SUV's and get to work!
posted by gregor-e at 4:00 PM on July 8, 2005

One thing that is lost in discussions of those alternative fuels, gregor-e, is the immense expenditure of fossil fuels which will be necessary to get those systems up and running, or even create the basics to produce them. For example, biomass requires massive machines to compress and create fuel, and what do you think is going to run them?

It seems to me that the absolute best method is conservation and increased effieciency in the interim. It really isn't that hard to do and can be done in a way that fits into our exisiting (read: capitalist) system.
posted by chaz at 4:11 PM on July 8, 2005

The Canadian tar sands are an important resource, and production there will continue to build. There are a few projects going on there. But you need to take a realistic look at how quickly they can be developed, and at what cost. I'm no expert or nothin', but I think you'll find that the oil sands projects make up a relatively small fraction of the new production that's going to come online in the next few years. Add them all up and see how long they'll keep up with decline rates. Longer-term, I expect the tar sands and the other proven but "unconventional" sources will make up a slowly growing proportion of the total, much like in that notorious ASPO chart, but that will take a few decades to play out.

methane hydrates (and nuclear fusion), on the other hand, are not such a safe bet.
posted by sfenders at 4:35 PM on July 8, 2005

Interesting that Simmons drives a diesel. Wonder if he runs it on biodiesel. With oil prices rising the price of biodiesel ($2.5-3/gallon) is becoming competetive with petro-diesel. And if it's 100%BD there's no oil drilling required. Just crops to provide the vegetable oil. That could be one way to gain energy independence.
posted by humbe at 4:36 PM on July 8, 2005

This is the chart I meant there, I'm sure you've all seen it.
posted by sfenders at 4:38 PM on July 8, 2005

no oil drilling required. Just crops to provide the vegetable oil.

Yeah, biodiesel is good. The main cost there is the vast amount of land that would be required to grow enough fuel to make any significant dent in oil consumption. If we all became vegetarians, it would be much easier.
posted by sfenders at 4:54 PM on July 8, 2005

Hat Maui: well Yergin is in direct contradiction to Simmons with superior bona fides.

So I would say the prospect is the opposite of "obvious".

I read Yergin's The Prize, although it was a long time ago. His authority is impressive, certainly, but as sfenders points out, for whatever reason he's more optimistic than ARAMCO. that makes me suspicious.

as for the prospect of conflict, it's already happening -- look at the chinese government's reaction to the blocking of the UNOCAL deal.

and as for iraq, does anyone really believe that the prime motivator in that conflict isn't access to oil?

look, all the tar sands and recycled biomass in the world aren't going to speed up our ability to react to energy market shocks. these types of prospective sources of energy take lots and lots of time (and energy!) to get online in any significant way.
posted by Hat Maui at 5:00 PM on July 8, 2005

Saudis. I did the calculations on their previous claims that they had everything covered and at current consumption it would last about 80 years. In that link experts said they were probably exaggerating how much oil they had by twofold.

No surprise, but no less a bummer. While I am into it, I think a rise in US oil prices to reflect reality (6+ a gallon) will be a *major* hit to the economy (ok I am stating the obvious). It is starting to hit already with overseas imports costing 20-25% more to ship than it did a year ago. Retail and vendors are currently absorbing that but I expect we will see CPI continue to go up. For the record I _do_ want to see fuel costs increased - pretty badly actually, but I don't want them to 3x by this time next year.

Thinking more about oil - as mentioned above it is used everywhere. It was used to make the plastic on the iBook I am typing on to the toys kid play with AND it is used to fuel and lubricate most of our transportation.

In speaking with someone who does a lot of business with China for large retail chains (which monitor supply chains - fuel, plastic, lumber, etc. because of impacts to margins by fluctuations), it seems China are working to buy up as much oil as they can (think Unocal). It isn't just for the 1 billion plus people that are turning in their bikes for cars to live the American dream - it is to help ensure a supply of that which a large majority of their economy is based on - plastics.

I am a big fan of alternative fuels and it couldn't come quick enough. We should also be looking at alternatives for plastic and pushing recycling programs. That said I think we will start to see the wane of wasteful uses of plastics (purchased bottled watter and Coca-Cola). Look for increased use (and depletion of) aluminum, wood, etc.

Ultimately the core of it all is consumption - not just fuel, but stuff - this world is becoming an over-crowded place with people acting increasingly selfishly with little regard for long-term and global implications (this goes for everyone including myself, despite the recycling pile I am rather proud of).

I wonder - will we see in our lifetime a rationing of materials, limited travel, even heavy taxation for having more than one child (think China)?

If we are scared enough and serious enough we will work it out. I for one, am going to redouble my efforts to think globally and act locally as trite as it may sound. While I it may sound overly idealistic and perhaps optimistic, I think that the web, if nothing else, has shown everyone the power of collective movement. Could a large impact be made by people making conscious efforts to slow their consumption - 5%, 10%, 20%, 50%? Could a serious effort by individuals to this end combined with research into alternatives help to slow an increasingly bleek forecasted energy future? I think so and I am going to make best efforts at it - I hope you do too fellow MeFites.

PS: Graphic referenced above came from this site (I am sorry if this was already posted) - good information.
posted by gnash at 5:34 PM on July 8, 2005

Could a large impact be made by people making conscious efforts to slow their consumption - 5%, 10%, 20%, 50%?

In terms of oil consumption, yes of course. Conservation like that is one of the biggest things we can do as a society to reduce the pain of oil production falling short of demand, when it eventually does. Even the IEA says it's a good idea. Same would go for other resources that are scarce and irreplacable.

But reducing consumption of everything, using less "stuff" in general, would have some profound implications for the world economy. Of course it is a good idea for most Americans at this point in time, what with the national saving rate being absurdly low and household debt as a percent of GDP absurdly high. Apply the concept more widely though, and you're talking major changes in the economic system. The whole thing is driven by constant expansion, and if it stops, it dies. Maybe a good thing in the long run, but not without some very problematic obstacles. Anyway, if you're going to imagine redesigning the social structure of our world to that extent, there are bigger and brighter possibilities.

Odd that you should mention CPI, as I was just reading this. Inflation might be higher than you think.

By the way, I wouldn't read too much into current oil prices. That they're as high as they are isn't any more a sign that we've hit peak oil than the price going back to $40 would be a sign that we haven't. It's a sign that more people think we might have a problem, but whether they have (and are motivated to use) the data and skills to make that call is highly questionable. I'd expect the price to be increasingly volatile. You can guess that I don't really buy the "efficient market" hypothesis.
posted by sfenders at 6:11 PM on July 8, 2005

posted by PEAK OIL at 7:36 PM on July 8, 2005

IndigoJones sorry about that, I grabbed that 60% stat from the wrong spot (it was actually percentage of US consumption that comes from imports). Having said that, according to the link you mentioned, The USA consumes more oil than the next 5 biggest consumers combined, even though the population of the US is 1/10th that of those five other countries.
posted by furtive at 8:02 PM on July 8, 2005

As the Drum piece points out, at length, Peak Oil isn't about limits on the amount of oil in the Earth, it's about limits on how fast we can get it out. The "Peak" in "Peak Oil" is a production peak, not a price peak.

Speculation about the utility or economy of alternate oil sources (tar sands, coal-to-oil conversions, shale oil, etc) is all missing this crucial point. No one questions that these techniques can work, insofar as they can produce something very much like crude oil, given high enough prices. But no one seriously believes they will ever produce oil as quickly as pumping it right out of the ground, either.

When Peak Oil comes, there will still be a huge amount of oil left to retrieve. (Hubbert's model assumes that about half of a resource is exhausted at the production peak.) But if it's getting used up faster than it can be pumped / mined / synthesized, prices will skyrocket anyway. That's the most basic economic rule of all.
posted by Western Infidels at 9:35 PM on July 8, 2005

furtive- it did just seem a little off, but then, statistics in general, slippery stuff.

As to the next top five users over all- India and China are populationally way ahead of us and economically way behind us (though both should be catching up economically any minute now, peak oil be damned), so that's going to skew any comparison. Japan and Germany are geographically smaller and more urban, which is to say, by definition more energy efficient. Russia- alas, poor Russia.

Plenty of ways to slice the numbers, of course, and to account for seeming anomalies. Bottom line, for comparably sized countries with similar economic backgrounds (e.g. Canada and the US) numbers begin to even out for good or for ill. Thus, again, my second link. Clearly it's time to pressure high living Kuwait and tony, tiny Luxembourg .

(See here for more stats if you don't like the last link. Some differences and you have to do your own math, but the rankings are similar.)

I suppose one answer is for all of us to move to NYC or Toronto. (By the way, I really did like the map. I like all kinds of maps.)
posted by IndigoJones at 3:43 PM on July 9, 2005

But see, economics will have to give way to actual realities of physics, eventually. Because money isn't really real, it represents units of energy, and we've been getting a free ride from oil.

The real end of the use of oil will come when it takes as much energy to get it out of the ground and refine it as we get out of each unit of oil.

We used to get 30 units of oil energy for each unit spent to retrieve and refine. That's basically like you hand me a dollar, and for every dollar you give me, I hand you back $30, like magic. Like getting 29 gallons of gas free for every one you buy, appearing as if by magic in your tank.

That seems like a violation of the laws of physics, but it's not, because the oil represents several hundred million years worth of biologically-compressed solar energy (along with the earth's internal heat and pressure energy which transformed the biomass into petroleum).

So, every dollar we spent on energy really gave us $30 worth of energy to play with, "magically..." and that's what has fueled our enormous growth economy.

Nowadays that ratio is more like 5 to 1. When it gets to 1:1, or even just close to 1:1, then it will not make either economic or physical sense to try to get the oil out of the ground anymore - since it's an energy source, burning the same amount or more energy to get energy out of it is counterproductive.

At that point it won't matter how much it costs to get the oil out of the ground, it simply won't be worth doing anymore, energy-wise... and that removes any economic use or consideration for oil as an energy source.

Even if we use, say, coal energy to get the oil out, if it takes 5000 BTU of coal-burning to get out 5500 BTU worth of oil, we're better off just burning 5500 BTU of coal for the energy instead. Of course it will probably still be worth that coal energy to extract the petroleum as a raw material resource for things like plastics and the chemical industry, but we won't be burning any oil anymore in engines, or to heat our homes.

(All you wood-heat fans, think about what it's like to procure your firewood with axes and handsaws, and to not have a pickup truck to haul it in. I've actually done that... it ain't fun.)

Like, if you knew there was a diamond worth $100 million (in carat weight) at the core of Mount Everest, but it would cost you $105 million to dig down and get it, the diamond is worth minus $5 million - cost you more to get it than it's intrinsically worth.

Hopefully we'll be able to transition to a more sustainable energy system in a relatively smooth manner. It would have to be based on other "get more out than you put in sources like wind and hydro, which have about a 2:1 and 5:1 ratio, respectively. However, whether it's this decade or a few decades out, the end of the huge, constant-expansion growth economy that we've all lived in (in the West, anyway) for all our lives is going to lose most of its steam.

Personally I think that the Saudis admitting that they're hitting the wall is a very bad sign - especially given that we know they exaggerate about how much oil they have. According to the article, they feel that they'll have trouble meeting demands in 10 to 15 years; I think they're having trouble right now and are saying that placate and stall.

The US oil companies did the very same thing in the early 1970s - US oil production peaked in 1970 (exactly as Hubbert predicted), but the oil companies stalled, placated and flat out denied it until around '75 or '76, when it became very obvious that production had fallen off and would not be rising again. The Saudis are no different; oil is their power base. If they admit they're not going to be able to keep up with demand, they will be in very big trouble both financially and politically.

Ah well. I just hope it doesn't hurt us too badly. I'll be okay one way or the other, I think, I'll adapt and so will many others.
posted by zoogleplex at 3:49 PM on July 9, 2005

I did some calculations of my own, and my best guess right now is that peak oil will occur around 2012.

How did I arrive at this? First, I assumed that the peak would occur when we've gone through half of all reserves. Second, I assumed total reserves (what we've already used plus what we think is in the ground) of 2.4 trillion barrels, which is about the median of most geologists' guesses. Third, by 2000, we had used 900 billion barrels of oil. Fourth, we are going through oil at the rate of 30 billion barrels a year.

Taking those numbers into account, we'll burn at least 300 billion barrels by 2010, which gets us halfway to 2.4 trillion barrels used. I added a couple of years because the proven reserve figure is tenuous and over the last 20-30 years has gone up quite a bit.

Probably no one is reading this thread any more but I'll be happy to provide links to where I got the numbers.
posted by A dead Quaker at 6:37 AM on July 10, 2005

What if the Sauds are lying, though, and there's not nearly that much oil?

I think it's entirely plausible that we're currently past peak oil.

Either way, I think I'll start investing in junior oil companies with proven reserves. They're going to be worth a mint in a few years.
posted by five fresh fish at 8:49 AM on July 10, 2005

According to the International Energy Agency, it will cost $3 Trillion to provide enough energy to power world prosperity from last year to 2030 using fossil and radioactive fuels. Estimates on building a hydrogen infrastructure are approximately $600 billion (not Trillion), a super bargain.

Hydrogen can be made from North America’s abundance of Undepletable Energy that nature has conveniently stored in waves, winds, falling water, biomass and direct sunlight. Using proven technology, any form of this energy can rotate a shaft that can produce electricity, hydrogen or both. Again, using proven technology, existing gasoline engines can be converted to run on either hydrogen or gasoline with an increase in efficiency of as much as 20% on either fuel.

Only our oil soaked Congress and Big Oil’s army of lobbyists, prevents this from happening. Congress’s new energy bill speeds-up U. S. oil depletion and heavily and unfairly subsidizes fossil and radioactive energy creating a tilted playing field on which Undepletable Energy can not compete with depletable fossil and radioactive energy.

Defeat the new energy bill now! Write your congressperson; demand fair play and equal subsidies between undepletable and depletable energy and the defeat of the new but very dangerous energy bill.
posted by bill.cleanpeace at 4:21 PM on July 24, 2005

What is the source of that $600billion figure? Is that US only or worldwide?
Also - and much more significantly - you suggest that the hydrogen infrastructure costs that amount, this clearly does not include the cost of the new generating capacity required to provide hydrogen. There is no way that that amount will provide sufficient sources of renewable energy electricity generation in that time period (or any time period). Renewable generating capacity has considerably higher capital costs than traditional generation. Wind generation for example, costs at least twice as much as new gas burning electrical generation, and remains the cheapest of the new renewable generating technologies.
The $600 billion figure is thus on top of the $3 trillion figure, and if the hydrogen is to be renewably sources, then the $3 trillion figure will be rising substantially.
posted by biffa at 3:46 AM on July 25, 2005

To Biffa

Good comments.

The $600 billion hydrogen infrastructure figure is for the U.S. only, the largest consumer of oil in the world.

You mention that wind generation equipment costs twice as much as gas burning electric generation plants. You fail to mention the cost of LNG tankers at about a billion per copy or the $25 billion or so cost of an LNG plant and terminal. And don’t forget, the multi-billion dollar cost for LNG off-loading facilities. All of which will be needed if gas consumption increases as planned.

Perhaps you've also missed the point that wind plants do not burn costly fuel and that makes their higher cost well worthwhile. Further, mass production of undepletable energy equipment will reduce its costs as volumes grow.

I'm sure cars and trucks were initially far more expensive than horses and buggies; but motor vehicles won the competition because they were better. Undepletable hydrogen is better than either depletable fossil or radioactive energy.

In addition to providing abundant energy capable of mitigating peak oil, hydrogen emits only water, cleans our air and water, and reduces greenhouse gas emissions. Further, the stratified charge equipment used to adapt it to existing gasoline and diesel engines increases engine efficiency whether the engine is running on hydrogen or its design fuel.

Oh, wait a minute, isn’t there a cost for cleaning up all that fossil fuel pollution and treating diseases that arise from it? I know there's an enormous cost for centuries of storage and armed guard protection of radioactive wastes from which dirty bombs can be made. If taxpayers stop picking up these costs neither oil or radioactive fuels would be competitive with undepletable energy.

Converting just 5% of the 245 million gasoline engines in America to stratfied charge, direct cylinder, fuel injection would increase their fuel efficiency by 20%. This would lower America's oil consumption to year 2000 levels without burning a cubic inch of hydrogen and they could run on hydrogen whenever available.

Opening these engines to hydrogen would build a giant market for hydrogen fuel. The opportunity to fairly compete with OPEC and the Middle East dictators who run this cartel would attract capital for high volume hydrogen production. Unlike diminishing, depletable, fuel reserves, undepletable hydrogen is, well, undepletable. That makes the investment worthwhile.

I've used up more than my share of space. (Sorry, I'm passionate on this topic) I hope we get a chance to address your timing claims and other costs.

In short, replacing oil with undepletable hydrogen in combined cycle and diesel electric utility plants, agricultural engines, trains, other large engines, and fleet motor vehicles will progressively reduce the capital needs for fossil and radioactive fuels. This will greatly reduce the $3 Trillion number. And finally, the hydrogen infrastructure will have fuel to transport and burn for as long as the sun shines.
posted by bill.cleanpeace at 4:35 PM on July 27, 2005

so, bill.cleanpeace, how many windfarms does it take to generate 4 terawatts per year? What's the efficiency loss in the electrolysis process?
posted by Kwantsar at 7:36 PM on July 27, 2005

Dunno if Bill's right or wrong... but one thing is for certain: we can't keep doing what we've been doing.
posted by five fresh fish at 11:09 PM on July 27, 2005

Kwantsar---Glad you asked.

Like oil wells, Solar rich areas are located throughout the continents and often in inconvenient or sparsely populated areas.

The task today is to find the best solar rich areas (the solar equivalent of the large old oil fields that provided the last century with cheap oil) and focus on developing portions of them in such a way that environmental impact is kept to a minimum.


1. According to the American Hydrogen Association and University of AZ scientists, the intense solar energy on the deserts between Tucson, Yuma and Phoenix, AZ could generate enough electricity and hydrogen to meet the energy needs of Mexico, United States, and Canada from direct sunlight ---forever.

Hydrogen from direct sunlight does not suffer a conversion loss. But it would not be wise to dedicate such a large area from one place to energy production when our continent has such an abundant solar supply.

2. The Atlantic coast of the United States and Canada have remote wave rich areas that produce fairly constant waves of 6 to 10 feet. With today's rudimentary technology an area with this kind of steady wave action of roughly 100 square miles could also power North America. That's only an area of 10 x 10 miles of our expansive coastline. However, electricity from wave action would have to be converted to hydrogen through electrolysis.

Current equipment can convert electricity to hydrogen at efficiencies of 70 to 85%. This process is the solar equivalent of converting crude oil to gasoline, diesel, jet fuel, etc..--- But there's no pollution in the solar process or when the hydrogen is burned.

As conversion equipment and technology improve, the conversion of electricity to hydrogen will increase. Some non-commercial conversion equipment can now get as much as a 95% efficiency.

I'm sure early oil refineries suffered great losses from inefficient conversions from crude oil to light fuels. Making a system work better is part of process. But first we need to focus on the issues and policies to get started quickly; not on increasing peak oil profits from shortages as Congress has just done with its new energy bill..

Although the deserts and oceans hold abundant energy, the better way to approach hydrogen production is to locate facilities locally where feasible.
posted by bill.cleanpeace at 10:31 PM on July 30, 2005

fivefreshfish ---couldn't agree more. Some form of energy must fill the oil gap or decades of war, recession, depression and worse enuse as battles rage for dwindling oil supplies. Why not the best solution?

The industry produced "Hydrogen Roadmap" calls for 90% of hydrogen to be made from fossil fuels and 10% from radioactive fuels (Nukes). (They really do know hydrogen is coming)--- And they want to control it.

The Raodmap plan is a formula for peak profits, continued dominance of energy markets by giant energy interests, and dangerous accumulations of radioactive wastes.

What a foolish plan; only the oil soaked, US Congress could follow it. Why? Big Oil owns the fisher- trope technology to make liquid fuel from fossil energy and greatly increase fossil fuel consumption in the process.
ding ding, hear the cash registers ringing now.

I find it amazing how closet fossil and nuke advocates continuously point to the managable hurdles that must be jumped to make hydrogen a reality; then sing the praises of nuclear energy that has bilked taxpayers out of billions of research dollars and still can not come anywhere near solving its safety and dangerous waste problems. Redioactive energy is a proven failure on costs and safety but Congress keeps doling out the dough to its owners.

People must take control of the world's energy future and shape it for building a sustainable world with abundant clean energy. The industry won't do it; they have too much to lose in the short term.
posted by bill.cleanpeace at 11:21 PM on July 30, 2005


Sorry about the delay in replying, but I wanted to check some data and haven't had the time.
Firstly, to get our figures straight: The $3 trillion figure for investment is purely for infrastructure (ie not fuel costs) and is, I think, the worldwide figure. Certainly it is in the ballpark of other estimates I have seen for infrastructure development worldwide over the next 25-30 years. The US share in this is likely to be around 20%, so a total of $600billion. Thus you are talking about at least doubling energy infrastructure costs within the US over the next 25 or so years. This assumes cheapest technologies, it will increase if other technologies are used, and this is based purely on current projections. Radical changes in electrical demand, as would be required to service a hydrogen economy would further increase infrastructure costs.

A recent paper by Hammerschlag and Mazzi (Energy Policy, Volume 33, Issue 16 , November 2005, Pages 2039-2043) suggests that transmission of energy via the stored energy medium of hydrogen would see a maximum utilisation of produced energy of only 51% if hydrogen is produced from renewable energy and then delivered to the consumer. This contrasts with a comparable figure of 75-85% efficiency if the electricity is delivered to a home or other user. Given the relatively low penetration of RE in the US currently, it does not make sense for electricity from RE to be used in this manner when it can more effectively be used in direct delivery as electrical energy. (Sorry I can't link to the paper direct as it is a subscription journal but if you email me I may be able to forward a copy.)

While a hydrogen economy may be appropriate in some circumstances (for example, in Iceland where RE penetration is already very high) it currently does not make sense to attempt to do so in the US. Further, it has been hypothesised that current research into hydrogen is being set up to fail due to the unacceptable high future costs and has the potential to waste the scarce resources allotted for renewable energy research and demonstration.
I am not advocating the abandonment of research into RE and other potential future energy solutions (I work in the RE sector so why would I?), I am suggesting that work in a short- or medium- term hydrogen solution is inappropriate and a poor prioritisation of effort.
posted by biffa at 6:09 AM on August 4, 2005

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