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Adapted from "Half Gone: Oil, Gas, Hot Air and the Global Energy Crisis", by Jeremy Leggett (Portobello Books, £12.99). To order a copy for the special price of £11.99 (inc P&P), call Independent Books Direct on 08700 798 8897

Basically we're sleepwalking to doom.

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I liked the comment that there's between half and a full Lake geneva left. Is that it? All the oil left to be burnt could be fitted into a lake, albeit a sizeable one? I had though there would be more. But then I don't suppose I'd thought about it before.

Burning question: does it or does it not make BP, Shell or others good plays at present? And for how long?

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I liked the comment that there's between half and a full Lake geneva left. Is that it? All the oil left to be burnt could be fitted into a lake, albeit a sizeable one? I had though there would be more. But then I don't suppose I'd thought about it before.

Burning question: does it or does it not make BP, Shell or others good plays at present? And for how long?

As the price will rise and the costs hardly move, the profits will be good for a while.

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Quote from the article:

An investor friend of mine has already concluded that this scenario is inevitable. He has switched his investment portfolio to anticipate the moment of "market realisation". This peak panic point, as he calls it, will not be limited to oil traders. The worlds of economics and business routinely assume a future in which oil is in growing and cheap supply.

How?

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would someone read it for me and let me have a 2 line precis?

http://news.independent.co.uk/environment/article339928.ece

I thought it very long-winded. I am surprised that the Editor allowed him to waffle on so much. It's all conventional Peak Oil stuff; that oil supplies aren't guaranteed beyond about 2007. The guy says he is a petrologist, but he appears ignorant of basic matters like water cut. He places faith in renewables to save the day. If there is a peak in oil production as early as 2007, it will probably lead to a great depression. There is mass ignorance and mass denial.

It could have been 80% shorter with a bit of effort.

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I read this article this morning before going to work.

It states following Kuwait’s admission it cannot continue at current production levels without international help, that the US has downgraded 2025 maximum production levels by 11 mbpd.

The US strategically projects maximum global production well into the future, this is one of the factors which govern US policy

Current consumption is 80 mbpd projected 2025 levels are 120 mbpd.

The US downgrade for the projected maximum future output, indicates ‘peak oil’ maybe sooner rather than later. The fact the downgraded the 2025 figure indicates ‘peak oil’ will occur before 2025.

Imagine a supply and demand graph, and then imagine what happens when you have an exhaustible supply but you only realise after selling half of it.

You would over inflate prices and reduce supply to generate a higher longer lasting demand.

More than half of all oil lies in giant fields 500 million barrels +, which @ 80mbpd is about a weeks supply.

In 2000 there were 16 such discoveries

In 2001 there were 9 such discoveries

In 2002 there were 2 such discoveries

In 2003 there were 0 such discoveries

Increased demand cannot be met by new significant discoveries the last was in 2002, once all these fields are online in the next three or four years, we will have peak oil.

“Shell's then chairman, Sir Philip Watts, told investors that the company had overestimated its reserves by more than 20 per cent.”

Imagine what the true figure is!!

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2 sentences:

Oil consumption has exceeded new discoveries being made for 25 years: demand growth is likely to exceed new production & refining capacity being added, which takes time. The demand/supply balance is already very tight, and anything which upsets it sends the price of oil hgher.

3rd sentence:

America needs oil as much as it needs air

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One of my neighbours works for Portobello, and asked me to take a look at the manuscript before Xmas (I am in the oil business).

I told her it was very poorly written, and the two halves of the book almost contradicted each other, but that the Peak Oil fears expressed in the first half are probably correct.

As far as I can see they published without any further editorial input.

I guess Leggett (and Portobello) was keen to catch the wave before it broke - interest and awareness of Peak Oil is currently at a high. It'll probably fall out of fashion in the next few months.

Incidentally, I didn't notice any reference in the article to the fact that Leggett is the director of a solar energy company;

Solar Century and is therefore slightly tainted as a VI.

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Incidentally, I didn't notice any reference in the article to the fact that Leggett is the director of a solar energy company;

Solar Century and is therefore slightly tainted as a VI.

Fantasitic omission by Mr. or Dr. Leggett or whoever he is. Just shows that most of the press is b*ll*x.

Peak Oil is real though, and probably nearer than many are comfortable to admit.

It's the main reason I'm not in the oil industry, in 40 years time the oil industry will be synonymous with legal wrangling, as the once big players fight over the scraps. As soon as oil becomes priced above a certain level it will become more economic to develop other technologies. It is the current oil price that has sparked the nuclear debate.

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Guest magnoliawalls

Quote from the article:

An investor friend of mine has already concluded that this scenario is inevitable. He has switched his investment portfolio to anticipate the moment of "market realisation". This peak panic point, as he calls it, will not be limited to oil traders. The worlds of economics and business routinely assume a future in which oil is in growing and cheap supply.

How?

Economists assume all sorts of things - from limitless supplies of cheap oil to perfect competition and information.

The world of business is dominated by corporations which are run by people who want to meet short term targets, long term strategy is only important to the individuals in charge if they expect to be working for that corporation in the long term.

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Economists assume all sorts of things - from limitless supplies of cheap oil to perfect competition and information.

The world of business is dominated by corporations which are run by people who want to meet short term targets, long term strategy is only important to the individuals in charge if they expect to be working for that corporation in the long term.

Let me be more blunt. Although we HPCers think that this author is a bit woolly, we still believe in peak oil. How can we cynically exploit our amazing foresight and STR capital to leverage personal gain from global gloom, beyond buying a cycle and woolly jumper?

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Guest magnoliawalls

Let me be more blunt. Although we HPCers think that this author is a bit woolly, we still believe in peak oil. How can we cynically exploit our amazing foresight and STR capital to leverage personal gain from global gloom, beyond buying a cycle and woolly jumper?

Interesting question - in the long term I would expect all kinds of commodities, particularly agricultural commodities to do well.

The agribusiness sector will do very well after peak oil imho.

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Interesting question - in the long term I would expect all kinds of commodities, particularly agricultural commodities to do well.

The agribusiness sector will do very well after peak oil imho.

Magnoliawalls, seen the the CRB index today?

Also saw an article a few days ago, suggested that world food demad could double/trable in the next 50 years. :o

Bit ironic if Uk agriculture collpases first due to competition, high costs and falling subsidies and they farmland becomes the most important resource we still have.

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Guest magnoliawalls

Magnoliawalls, seen the the CRB index today?

Yes I have :D<_<:unsure:

Bit ironic if Uk agriculture collpases first due to competition, high costs and falling subsidies and they farmland becomes the most important resource we still have.

Ironic and tragic.

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We are at the beginning of a long cycle in commodity prices, most notably oil, which will probably result in inflation (currently well hidden) and should last a couple of decades. Buy oil stocks and oil funds. Buy hard and soft commodity funds. Even if the world breaks out in a massive peace loving orgy and we all join the same religion, we are still running out of oil.

This article is 18 months old, but you'll get the jist of things:

http://www.safehaven.com/article-1755.htm

"We believe that the more likely scenario is an inflationary (hyperinflation) depression scenario much like the historical occurrences of the Weimar Republic and Mexico, and as evidenced by the US Federal Reserve's intention to fight deflation using whatever it takes, including unconventional measures, evidenced by a massive increase in recent years in the ensuing money supply as a result of the Fed's policies and actions. Indeed, it is to be noted that the very definition of inflation by the Austrian School of Economics is an increase in the money supply.

Should this likely scenario of an inflationary depression occur, commodity prices would likely rise substantially. In such an inflationary depression, the increased value of increasingly plentiful US Dollars would likely push commodity prices increasingly higher, given that most commodities are priced in US Dollars. The massive liquidity and depreciating US Dollar resulting from such hyperinflation would likely propel commodity prices to very high levels."

Enjoy. (...and buy a bike and a wolly jumper...)

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To be fair to Dr. Leggett, he is quite upfront in the actual book about his association with Solar Century and Greenpeace, in fact it's on the very first page. And as at least the second oil-type on these boards I can second RockDoctor's comments. It's not the most well written book in the world but the 1st section (pretty much conventional PeakOil) is worth reading. It has quite a few interesting stats and anecdotes too.

There is a problem with all these books though... There's loads of them. Half Gone; The End of Oil; Twilight in the Desert; High Noon; Beyond Oil; etc., etc. Peak Oil is fashionable. The problem is that Peak Oil also doesn't fit neatly into a season. It might not happen quickly enough to make a nice understandable story. It will most likely be a confusing, volatile, and contradictory affair. And it might not play very well into an HPC either. You might have to wait a while.

Having said that, my job is to find the stuff. And I can tell you that as an industry we're finding the square root of f*ck all. Bit concerning really. So I buy the Peak Oil concept in general. However, my personal feeling is that the current high oil price is a pre-cursor, a warning. We're not quite there yet. The price is partially driven by security concerns, speculation, and the fact that nobody has a clue how much some of the OPEC countries actually have left and how quickly they can turn the taps. $65 oil is a useful wake up call, although most people aren't listening. As a society we seem quite willing to live for today at the expense of tomorrow. Not just in mortgaging ourselves to the hilt but by wasting oil and ruining the environment for our children too. They're going to be REALLY, really annoyed.

In the short term (1-2yrs) there's actually quite a lot of new oil coming to market in 2006. If Nigeria wasn't busy burning, or the Middle East wasn't in a complete mess, then I think we'd see cheaper oil. If that were to happen no doubt there'd be plenty of economists saying "look, it's all a storm in a tea cup. It'll last forever".

Thing is, it's only in the medium to long term things start to look interesting. OECD has like 8-9 years in it. After that we're more and more beholden to the Kremlin and OPEC. Presumably this is the sort of thing that keeps Washington types awake at night. That's the easy bit though. We can live, albeit painfully, with $150- $200bbl oil as long as the pumps keep churning (the inflation will nicely eat away at all those massive mortgages too). However, if we plummet off the end of a production profile and China/India/ROW still insist on aspiring to an American lifestyle then we're in a world of pain. Wars in the Middle East anyone? Oh no, we're already doing that.

Anyway, my overly long-winded point was: yeah, kinda interesting book; good concepts; might not play into an HPC if you want it this side of 2010 though... But it's arguably much, much more important than that. If you REALLY believe it, you might want to think about getting yourself some fertile farmland somewhere the annoyed masses can't easily walk to. New Zealand perhaps.

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Sorry if you really feel that way. I was just kidding. I think the future is really quite bright. I think something wonderful is happening.

Have faith. People who've been through the bleakest experiences will tell you it made them who they are.

It's just that peak oil freaks me out, and once the global economic consequences of that kicks in it seems to me that everything else including house prices is going to become a total irrelevance.

I think most other issues are manageable but if we can't find another cheap source of energy to keep the machine going we're stuffed.

Anyway, you're alright Durch

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I expect people got a bit freaked out when the UK's supplies of shallow high-quality coal started to run out and the mines had to go deeper and deeper.

The point is that until the cheap and easy oil runs out you don't know how creative the human race can be in finding a replacement.

The price of all energy is kept artificially low by oil. Once oil gets expensive all sorts of alternatives become viable. The market mechanism will do a good job ascertaining which technology is best for which region and which purpose.

It would be nice to think that the UK will be in the vanguard of countries developing and profiting from these alternatives (including nuclear) but the fact that we have (had) coal, oil and gas in quantities far greater than many developed countries will almost certainly hold us back.

As it is, the French and the Japanese have the lead in nuclear fission.

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There is a problem with all these books though... There's loads of them. Half Gone; The End of Oil; Twilight in the Desert; High Noon; Beyond Oil; etc., etc. Peak Oil is fashionable.
These are the books I've read over the last couple of years: My reading List

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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