Thursday, June 14, 2007

Peak Oil Is Back

World oil supplies are set to run out faster than expected, warn scientists

This could cause the world economy some problems. Ya think?!!

Posted by nearly30 @ 09:53 PM (493 views)
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23 thoughts on “Peak Oil Is Back

  • The article about 1973 has some interesting parralels.

    Interestingly see The Pentagon v. Peak Oil

    http://www.motherjones.com/commentary/tomdispatch/2007/06/klare_pentagon_peak_oil.html

    Best bit:


    .3 billion gallons: the estimated annual oil expenditure for U.S. combat operations in Southwest Asia. That’s greater than the total annual oil usage of Bangladesh, population 150 million — and yet it’s a gross underestimate of the Pentagon’s wartime consumption.

    No that’s a figure!!

    Any political connotations there then????

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  • Sorry should have read:

    1.3 billion gallons: the estimated annual oil expenditure for U.S. combat operations in Southwest Asia. That’s greater than the total annual oil usage of Bangladesh, population 150 million — and yet it’s a gross underestimate of the Pentagon’s wartime consumption.

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  • Forget the arguments about when the world will run dry and whether or not the ‘peak’ theorists are right or not, as an Engineer I can tell you now that the era of ‘cheap’ oil is at an end now. The end of cheap oil means dearer travel (especially air travel), dearer food (especially in the U.K.), dearer plastics and electronic goods in fact virtually everything (including house building costs) will gradually become more expensive especially as the short term cost benefits of the globalisation of manufacturing start to wear off. The net result will be ever increasing inflationary pressure on the UK economy at a point where the books are already being cooked by the incumbent government.

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  • This is the kind of thing that in retrospect, everyone understands to be true, but no-one realizes when it’s important. Now.

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  • Absolutely enuii – we were ‘saved’ by North Sea oil – but what next with inflation?

    We are less self-sufficient and diversified than we were in the 1970s – the economy is so radically altered towards services and the rich poor divide so skewed – I can’t see the transition is going to be a happy one.

    In addition – I really think we will have some major inter-generational tensions through protectionism [lifestyle and who has the wealth/power – see immigration Graduate Tax too]

    Lots and lots of chickens will come home to roost!

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  • Everyone has cars you know, except for me because I believe in public travel. I am sure there is plenty of oil left because everyone seems to be buying it just fine, even students and pensioners.

    “Next on CNN – oil goes up 10p” – oh my God, what will we do now?! Get real! If you can still afford your metallic painted car and your black market priced football kit and match tickets for you and your chav-like-father son and your pints down the pub, then there is nothing to worry about.

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  • Its a shame that the article didn’t cite efficiency and decentralised combined heat and power as alternatives to oil.

    If I was at the MPC, seeing this info, I’d be trying to get inflation down to 0, so that when peak oil comes along there’s a buffer and only oil led inflation is beaten down. Its a real problem, one of the results of supply and demand being so close is volatility. Swing producer production, from places like Saudi-Arabia cannot be relied upon when the world needs an extra couple of million barrels a day in a crisis if all spare capacity is being used, i.e. Iraq war or an American Gulf hurricane, so there is no control. With interest rates controlling 2yrs ahead and oil prices causing 1% inflation fluctuations at a days notice, you can suddenly see that fiscal policy becomes meaningless. Business planning will become very conservative and highly geared companies unviable. The only result could be a retreat from global capitalism to reduce exposure to international fluctuations. The system breaks down. And then there’s the humanitarian outlook. Alternatives that rely on biomass look certain, but that takes food from the 3rd world. Expect famine, the west and newly developed countrys will fight for access to oil and other resources, and expect a reaction from everybody else. Why do you think that the US is so keen for a missile protection system? I just hope to God that peak oil doesn’t result in World War III. So, maybe a house price crash is the least of my worries, ah, what the heck, another pint?

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  • Enuil is correct.

    As oil gets more expensive to find and refine it wont end it will just become far more expensive, i can easily see $100 / barrel in the next 5 years and that staying the norm for the future, 1973 >> well i remember that and we are “all doomed Oils Running Out”, however that was 34 years ago and a lot of oil has been burnt since, also our understanding of the planet has grown considerably.

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  • Well, it’s going to be back to the future on this one –
    No more cheap Energy – mind you there was a dear old Baroness Thatcher that deposited a coal account – trouble is, she filled the pits up with water. Looks like we’ve all inherited her maternal influence and got stuck in the dessert – without the British Army.
    Global Warming – Australia/America worst drought since (crops destroyed)..
    Middle East Tension – Iran (No#2)..
    Asian Pacific consumption..
    High Western Prices – Low Eastern Prices..
    Low level Immigation – High level Emmigration..
    Increased Western Regulation – Increased Eastern Freedoms…

    Whats left of the dying empire? – Well suppose we’ll go with a bang – lets mash it out over Iran, no point fighting this one though – the east are reborn with vigour and enthusiasm and we are pacifists and tired of wearing the purple – we haven’t got the psychological character to win this one.
    Sorry Folks.

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  • David20040_0 says:

    Oil will not run out for the forseeable future.

    Canada on its own has enough oil reserves for another 50 years.

    While easy oil may be running out, oil in the Canadian oil sands can be extracted.

    We can also make oil out of coal and we have 155 years of that left.

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  • Oil will become expensive – I have no doubt on that. The growth in consumption means that from current levels we are charging ahead to a situation where it will run out much quicker than at 0% growth – that’s a fact. A drive for efficiency and anti-waste is very much needed.

    EVERYTHING in our economy NEEDS oil. Even the alternative energies need oil to start-up and support.

    Take food – the figures are scary for the amount of oil we need to supply food at such an intensive scale – removing the oil would mean much much much lower production and yields.

    Inflation in the future will be ramped up by the oil costs. Yes we claimed “all doomed Oils Running Out” in 1970s – but perhaps this was the boy crying wolf.

    Like every commentators says – “this time it’s different!” – sorry that’s a bubble claim – re-claimed. But – now it feels like the wolf is crying boy – giving us a bit of a slap in the face.

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  • Noworriesrichy says:

    Do you really believe an “independant” scientific review headed by an ex oil man?? These guys want you to believe in peak oil so they can increase prices, tax every penny from you and control your life still further. Don’t believe the hype!!

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  • David20040,

    it’a not a problem of oil reserve, it’s a problem of tap : we won’t be able soon to extract oil fast enough, even canadian’s or Coal’s.

    the problem will come soon, no matter how much oil is left (even in north sea).

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  • tyrellcorporation says:

    David if it’s that simple we’d be doing it already. Judging by the push for Nuclear and Biofuels I’d say they’ve (Governments and PLCs) already done the sums and extracting oil from sand and converting it from coal is a non-starter.

    I believe burning oil is a pretty stupid thing to do when it’s so useful in manufacturing. The sooner we find new ways to power transportation the better.

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  • Well said that man David…

    Scargill was exploring the question of making oil and petrol out of coal 20 years or more ago…

    A case of Deja Vu???

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  • And anyway another thought,

    I know Mrs. T. has flooded the mines, but they have I understand at least 20 deep pits mothballed, and of course where there is a will in respect of re opening them?

    PFI anybody? Now that would be an ironic about turn in one of (at the time) the most statist nationalised industries!!!

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  • Extracting oil from oil sands, and petroleum product synthesis from coal will be done as soon as they start to become economically viable. Estimates vary, but I have seen reports that suggest synthesis from coal starts to become economically viable at prices as low as $40 to $50 per barrel.

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  • David if that were the case what the hell are we doing in the middle east.

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  • Noworriesrichy says:

    Does anyone really believe a report from an oil man?? They want you to believe in peak oil so as to increase prices and increase profits.

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  • David20040_0 says:

    We already have all in the infrastructure in the Middle East, extracting oil from the Canadian oil sands is only economically viable if the price of oil stays over $50 a barrel which up until recently it hasn’t. Ten years ago oil was only $10 a barrel.

    Edmonton and other areas of Canada are experiencing a massive boom.

    House prices in Edmonton have rocketed by 42% this year alone.

    The US is heavily investing in Albertan oil sands in order to get its oil from Canada in the future.

    The current oil shock will be offset when more of Canada is producing oil.

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  • PR raised an interesting point: … Swing producer production, from places like Saudi-Arabia cannot be relied upon when the world needs an extra couple of million barrels a day in a crisis if all spare capacity is being used.”

    The problem is not just down to how much oil there is in the ground – for example, Iraq has vast taps currently unexploited – there is oil around Al Anbar province which hasn’t been drilled beyond exploratory drilling in the mid-1980s. Siberia, likewise, has 40% of the world’s oil reserves although this is nothing more then a scientific estimate and no one really knows how accurate it is. Also consider the investment that is required to increase refinement capacity. When oil was less then $30-ish dollars per barrel, it was not cost effective to invest in a greater refinement capacity. Increasing refinement capacity is both expensive and time consuming – it can not be done over a matter of months or even years.

    Refineries were starved of investment during the 1990s and since. As oil prices rise and continue to be high, it might become worthwhile to invest in greater refinery capacity.

    Finally, don’t forget how clever the Arab business fraternity is. High oil prices benefit kingdoms such as Saudi; when oil prices are high, the Saudi’s have a lot of clout over the Americans. It is easier, afterall, for rich and influential people to earn lots of money.

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  • We have biofuels, gas-to-liquids technology, coal-to-liquids technology. The worlds gas and coal reserves are VAST. Technology is leading the way. Technology allows us to extract oil and gas from places that were previously deemed too diffucult and expensive.

    Don’t believe this rubbish.

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  • Blindleadtheblind says:

    David, sorry but although the oil reserves from shale/tar in Canada and other countries are enormous they are incredibly difficult ,expensive and inefficient to extract. Simply put, replacing the decling production of the worlds largest fields like Ghawar and Canterell is not currently viable. Given the added demand from Brazil / India / China to name a few the simple fact is there is not enough oil coming to market. Also many of the fields now producing are not the light seet crude of yesteryear, but heavy and sour.

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