Category: Peak Oil

The price of oil did today what it has been doing for a while: it waits for a trigger and plunges. As I’m writing this, West Texas Intermediate is down 4.4%, trading at $44.99 a barrel, less than a measly buck away from this oil bust’s January low. It’s down over 20% from the peak of the most recent sucker rally. US oil drillers have been responding by slashing capital expenditures, including drilling, in a deceptively brutal manner. In the latest week, drillers idled 56 rigs that were classified as drilling for oil, according to Baker Hughes. Only 866 rigs were still active, down 46.2% from October, when they’d peaked at 1,609. In the 22 weeks since, drillers have taken out 743 rigs, the most dizzying cliff dive in the data series, and probably in history: You’d think this sort of plunge in drilling activity would curtail production. Eventually […]

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Peak Oil Pulled a Fast One on Me thumbnail I’ll admit that I was completely caught off guard by the recent (and ongoing?) crash in oil prices. It’d be a stretch to say I’m embarrassed by my lack of foresight, although perhaps “dumb-ass” would be a bit deserving. I would say I’m well enough versed with the reality of peak oil : I’ve read perhaps a couple dozen books on the topic, poured through several of the peak oil blogs (upon deciding to end my 5-year Internet hiatus a year ago), have seen several talks given by authors and writers on the topic, and I’ve attended two Age of Limits conferences. Nevertheless, even though there were bloggers out there discussing the possible ramifications of low oil prices, its possibility still didn’t register with me. I’ll explain what I mean by that shortly, but to do that it’d be best […]

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ENLARGE Workers tend to a well head during a hydraulic fracturing operation outside Rifle, Colo., on March 29, 2013. Increased production has driven down oil prices. Photo: Associated Press The environmental movement has advanced three arguments in recent years for giving up fossil fuels: (1) that we will soon run out of them anyway; (2) that alternative sources of energy will price them out of the marketplace; and (3) that we cannot afford the climate consequences of burning them. These days, not one of the three arguments is looking very healthy. In fact, a more realistic assessment of our energy and environmental situation suggests that, for decades to come, we will continue to rely overwhelmingly on the fossil fuels that have contributed so dramatically to the world’s prosperity and progress. In 2013, about 87% of the energy that the world consumed came from fossil fuels, a figure that—remarkably—was unchanged […]

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Login Username: Password: Remember me Login as hidden 1 of 49 Humor and peak oil 3 Comments on "Peak oil explained with cartoons" Plantagenet on Thu, 12th Mar 2015 9:23 pm  Cartoons about how expensive oil is don’t make much sense in the middle of an oil glut when oil prices have fallen to near historic lows when adjusted for inflation. GregT on Thu, 12th Mar 2015 10:35 pm  Oil prices ajusted for inflation during non recessionary periods going back 130 years have hovered between 20 and 30 dollars a barrel. We are currently paying almost double those prices today. As usual planter, you are completely wrong. Northwest Resident on Thu, 12th Mar 2015 11:09 pm  The Teacher made a boo-boo. Name (required) Email Address (required) Website

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March 11, 2015 (NATIONAL) — If you’ve never heard of the concept of "peak oil" don’t feel left out. The news media rarely mentions it even though it may be one of the most significant events in the history of humans on earth. Because if peak oil hits in our lifetime, things could get dicey for every human being on the planet sometime this century. LIfe as we know it in a modern world could change forever. Peak oil is a predicted future event made famous by Marion Hubbert (October 5, 1903 – October 11, 1989) who was a a geoscientist working at the Shell research lab in Houston, Texas. He made important contributions to geology and petroleum geology, including what is called the Hubbert curve and Hubbert peak theory, a basic component of peak oil. Peak oil refers to the point in time when the maximum rate of […]

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BLASTED: An aerial photograph showing what United States military officials describe as a Command and Control Facility in the town of Tikrit, Iraq, after air strikes appears in this recent undated military handout photograph. As the empire continues to collapse, imperialism and the blatant lies (that come with it) will no longer matter. The PTB will plow forward steamrolling anything in the unrelenting ways of “progress”. We all know what the perpetual war in the middle east is about. Most mindlessly go about filling the car and shopping, whispering to themselves, “We see it, we know it, we just are not allowed to say it”, for fear of losing the false sense of security that the deception of empire instill, through delusion of comfort and “security”. “Oh holy crude” sung to the tune of “Oh Canada.” Elijah and the Widow would be proud ( The Peak of The Oil […]

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For a long time, there has been a belief that the decline in oil supply will come by way of high oil prices. Demand will exceed supply. It seems to me that this view is backward–the decline in supply will come through low oil prices. The oil glut we are experiencing now reflects a worldwide affordability crisis. Because of a lack of affordability, demand is depressed. This lack of demand keeps prices low–below the cost of production for many producers. If the affordability issue cannot be fixed, it threatens to bring down the system by discouraging investment in oil production. This lack of affordability is affecting far more than oil products. A recent article in The Economist talks about LNG prices being depressed. LNG capacity ramped up quickly in response to high prices a few years ago. Now there is a glut of LNG capacity, and prices are far below […]

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One of the many barbs often pointed at peak oil proponents is that they are constantly shifting the goal posts. Peak oilers are accused of changing the definition of what peak Continue Reading

President and Vice President, Illinois Renewable Energy Association We were asked recently if peak oil remains an issue. Just as cold weather stimulates doubt regarding climate change the current low price of oil stimulates doubt about peak conventional oil. Such short-term anomalies confuse the public and bring out a new round of denials regarding the existence of these long-term trends. Researchers documenting peak conventional oil provide data indicating it occurred around 2005. Since then the production of conventional oil has been virtually flat. The dramatic increase in the production of oil shale in the United States obscured recognition of the long term implications of the drop in conventional oil supplies. As major independent oil companies such as Exxon Mobil and Shell spent more money on developing new sources of oil the actual amount of oil secured per capital expenditure declined. In response, oil companies cut back on expenditures and […]

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By Robert and Sonia Vogl President and Vice President, Illinois Renewable Energy Association We were asked recently if peak oil remains an issue. Just as cold weather stimulates doubt regarding climate change the current low price of oil stimulates doubt about peak conventional oil. Such short-term anomalies confuse the public and bring out a new round of denials regarding the existence of these long-term trends. Researchers documenting peak conventional oil provide data indicating it occurred around 2005. Since then the production of conventional oil has been virtually flat. The dramatic increase in the production of oil shale in the United States obscured recognition of the long term implications of the drop in conventional oil supplies. As major independent oil companies such as Exxon Mobil and Shell spent more money on developing new sources of oil the actual amount of oil secured per capital expenditure declined. In response, oil companies […]

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All right, the headline might be a tad hasty. Nevertheless, geologist M. King Hubbert famously (and so far) correctly predicted in 1956 that U.S. domestic oil production in the lower 48 states would peak around 1970 and begin to decline. In 1969 Hubbert predicted that world oil production would peak around 2000. Hubbert argued that oil production grows until half the recoverable resources in a field have been extracted, after which production falls off at essentially the same rate at which it expanded. This theory suggests a bell-shaped curve rising from first discovery to peak and descending to depletion. In fact, daily U.S. oil production did “peak” at an average 9.6 million barrels in 1971. In January, U.S. production averaged about 9.2 million barrels per day. If Hubbert were right this should not be happening. The problem with Hubbert’s analysis and that of his many peak oilist devotees is […]

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Why don’t more homes have this sign? Photo: U.S. Department of Agriculture/Flickr. Some people who worry about peak oil like to point out that renewable energy won’t save us. That is, given the amount of fossil fuels that the world uses today, it would take an unrealistically large increase in the amount of renewables available now to make up the difference as oil, natural gas and coal start to deplete. So we might as well resign ourselves now to a future of shivering in the dark. Those same peak oil doomers share what they seem to think is news to the rest of us — namely, that solar panels require oil. Petroleum-based plastics and chemicals go into solar panel components. And of course energy, mostly fossil fuels, is required to make, ship and even install solar panels. This is somehow supposed to mean that solar power is bogus and […]

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Modern Life Is Probably Screwed by Peak Oil, But It’s Not Too Late to Avoid Mass Starvation thumbnail The challenge of feeding 7 or 8 billion people while oil supplies are falling is stupefying. It’ll be even greater if governments keep pretending that it isn’t going to happen. I don’t know when global oil supplies will start to decline. I do know that another resource has already peaked and gone into freefall: the credibility of the body that’s meant to assess them. Last week two whistleblowers from the International Energy Agency alleged that it has deliberately upgraded its estimate of the world’s oil supplies in order not to frighten the markets. Three days later, a paper published by researchers at Uppsala University in Sweden showed that the IEA’s forecasts must be wrong, because it assumes a rate of extraction that appears to be impossible. The agency’s assessment of the […]

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The world is running out of oil. Peak Oil is a reality, all that is open to debate is how fast production will drop off, and how quickly the world will simply run out of oil. The lack of certainty is due to the fact that (as with everything else) we can’t trust the “official” numbers fed to us, with respect to either global production or global reserves. Numbers supplied by Saudi Arabia’s corrupt monarchy have been regarded with deep suspicion, for many years, based on inconsistencies in the numbers themselves, and the high degree of secrecy within the Saudi oil industry. More recently; the massive conspiracy with respect to U.S. “shale oil” has now been exposed, with actual supply being as little as 4% of the fantastic “reserves” claimed by the Shale Charlatans. What does it mean when we live in a world of diminishing (oil) supply, and […]

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I’ve written about the myth of “peak oil” for at least eight years — every year brings new evidence against the prophecies of the doomsayers and yet every year their faulty premises require debunking. As I said in 2006 (“ Oil is Well: The Shortage is a Myth, and Not a New One “): “The left consistently underestimates the power of human ingenuity — given sufficient price incentives — to devise new technologies which expand supply.” The principal resource underestimated in every single dire prediction is  people — their intellect, creativity, and resilience. But of course, that other resource underestimated by so many of our friends on the left is the market : the legitimate desire of people to get ahead by solving other people’s problems. That desire incentivizes a level of creativity not often witnessed at, say, the Post Office. So here we are in 2015. What’s happening today? Just read Russell Gold’s […]

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What follows is the continuance of my research, discussions, observations and thoughts around the nexus of debts, interest rates and the oil price. I now believe these relations are poorly understood and with total global debt levels at all time highs (and growing), years of low interest rates, which are kept low (by concerted efforts by central banks) while the oil price in recent months has collapsed may hide a SIGNAL that struggles with attention from too much noise. A collapsing oil price while interest rates remain low is likely the proverbial canary. Global Crude Oil Supplies, The Oil Price And Interest Rates Figure 1: The green area [left hand axis] in the chart above shows the world’s development of crude oil and condensates supplies between 1980 and 2013. The pink line shows the development in the interest rate (yield) for US 10 Year Treasuries [right hand axis]. The […]

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While some observers, including oil giant BP, are now predicting a slowdown in U.S. shale oil production as wells are depleted at a faster rate, to be replaced by Middle Eastern output that has lost ground to U.S. sha.. In 2008, Canadian economist Jeff Rubin stunned the oil market with a bold prediction: With the world economy growing at 5 percent a year, oil demand would grow with it, outpacing supply, thus lifting the oil price from $147 to over $200 a barrel. The former chief economist at CIBC World Markets was so convinced of his thesis, he wrote a book about it. “Why the World is About to Get a Whole Lot Smaller” forecast a sea change in the global economy, all driven by unsustainably high oil prices, where domestic manufacturing is reinvigorated at the expense of seaborne trade and people’s choices become driven by the ever-increasing prices […]

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End of Cheap Oil Scenario Desmond Smith posted a comment after my previous blog: “The crash in the price of oil may change the oil market – a look at the IEA’s “Oil Medium-Term Market Report 2015” and it requires a lengthy response. Therefore, I am giving it in this separate blog. End of Cheap Oil Scenario 17 years ago, in March 1998, Colin Campbell and Jean Laherrère published their now classic article, “The End of Cheap Oil” in the journal Scientific American. The figure above is copied from the 1998 article and shows curves fitted to oil production with the source of this information given as Jean Laherrère. It has been quite a long time since I read Colin and Jean’s article but after a comment by Desmond Smith below my blog, “The crash in the price of oil may change the oil market – a look at […]

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Poker game image via shutterstock. Reproduced at Resilience.org with permission. In the grand poker game of geopolitics, energy is often the wild card. That’s why the Middle East is such a mess: Great Powers (first Britain, more recently the United States) have been installing, propping up, toppling, threatening, or bribing regimes in that region — almost always to the detriment of indigenous populations — ever since the first oil discovery there  prior to World War I . Oil and natural gas interests are clearly implicated in current turmoil in or around Libya, Iraq, Syria, and Iran—and also Ukraine. In each instance it requires some historical context to understand the peculiarities of the situation; let’s focus for a moment on the last of these countries. Ukraine has long been a transit route for Russian gas destined for Europe. The fact that Russia is an energy superpower is frustrating to Anglo-American […]

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Oil: Shocking how vital it still is thumbnail The idea is a pretty simple one. Every now and again – amid all the swirling reports and breaking news – it is worth taking a pause and bringing together what we know about the most important resource in the world. As part of the Big Oil Drop project , I was asked a straightforward question. “Why is oil so important? And could you write about it.” It was so straightforward a question that it sounded faintly ridiculous. Well, of course oil is important, I blustered, erm, we need it to drive in our millions of cars, jobs depend on it, the supply of energy is at the heart of much of global politics (just look at Russia now), wars are fought over it, without oil the lights would go out… I tailed off, realising that yes, of course, I knew […]

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The United Steelworkers union (USW) has launched additional work stoppages at the largest refinery in the US and three other facilities as part of USW’s unfair labor practice (ULP) strike.  Twenty-four-hour strike Continue Reading

Summary: In a world overrun with humans, what fate awaits wildlife, fisheries, and forests when the fuels run short? Several years ago I was working as a biological consultant to the U.S. Fish and Wildlife Service, helping this federal agency prepare a long-term management plan for Innoko National Wildlife Refuge (NWR) in Alaska. This Comprehensive Conservation Plan (CCP) would provide overall management guidance for the refuge’s wildlife, habitat, and public use. The huge, sprawling 3.8-million acre (5,940-square mile) Innoko NWR is one of the remotest national wildlife refuges in the United States. It is so wild that it contains not a single human inhabitant in all that vastness; its headquarters are located in the village of McGrath, on the Kuskokwim River, some 50 miles as the raven flies from the refuge itself. In 1980, the U.S. Congress officially designated 1,240,000 acres of Innoko NWR (1/3 of it) as part […]

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The world peak of conventional oil production took place in 2005-2006, but the supply of combustible liquids did not decline, mainly because of the contribution of the newly developed “shale oil” (or “tight” oil) fields. With the impending worldwide peak of “all liquids” it is likely that the industry will try a new, all out effort to squeeze out the last drops of liquid oil from whatever sources are available, no matter how dirty and expensive. It is not certain that the attempt will be successful, but it is likely that some new monstrosity will be created in Sauron’s satanic mills.  Peak oil is something referred to as a “theory,” intended in a derogatory sense. But the concept is not just a theory; production peaks are historically observed facts, occurring not just for oil, but for any natural resource which is exploited beyond its capability to reform (e.g. for […]

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What happens if we run out of oil? thumbnail It took hundreds of millions of years to create the world’s oil reserves. It took less than a century before oil became the commodity on which world power turned. And it was little more than a century before fears were raised that we would run out of oil. Fifty years further on, it’s less clear than ever how much is left. That’s because technological advance has confounded those who feared there were tight constraints on what could be drilled. The rich rewards from oil have fuelled initiative and invention. As Professor Iain Stewart explains in his BBC series Planet Oil , this wasn’t just a passion for scientific and engineering endeavour. It was economic, political and strategic military calculation that drove the UK and the US to find ways of becoming less dependent on supplies from the Middle East. Having […]

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Peak What? thumbnail I’ve been maintaining “radio silence” for a while—mostly on account of an overflowing plate and several new new hats I wear. All the while, I have received a steady stream of e-mail thanking me for Do the Math, asking if I’m still alive, and if so: what do I make of the changing oil situation? Do I still think peak oil is a thing? Let’s start with the big picture view. I was wrong about everything. Oil is not a finite resource: never was and never will be. We will employ new technologies and innovate our way into essentially perpetual fossil energy. We’ve only scratched the surface in exploration: there are giant deposits (countless new Saudi-Arabia-scale fields) yet to be discovered). The shale oil tells us so—and it won’t stop there. Shale first, then slate, marble, granite: just squeeze the frack out of rocks and we’ll […]

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The world peak of conventional oil production took place in 2005-2006, but the supply of combustible liquids did not decline, mainly because of the contribution of the newly developed “shale oil” (or “tight” oil) fields. With the impending worldwide peak of “all liquids” it is likely that the industry will try a new, all out effort to squeeze out the last drops of liquid oil from whatever sources are available, no matter how dirty and expensive. It is not certain that the attempt will be successful, but it is likely that some new monstrosity will be created in Sauron’s satanic mills.  Peak oil is something referred to as a “theory,” intended in a derogatory sense. But the concept is not just a theory; production peaks are historically observed facts, occurring not just for oil, but for any natural resource which is exploited beyond its capability to reform (e.g. for […]

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Weak oil market impacting operations in the onshore and offshore sectors of the United States. Photo courtesy: Apache Corp. A steady increase in U.S. oil production has pushed crude oil markets toward the supply side, pushing crude oil prices to less than 50 percent of their June highs above $100 per barrel. That’s forced companies from BP to those in the oil services industry like Halliburton to cut spending and staff. Rig company Hercules Offshore said revenue generated from work in the U.S. waters of the Gulf of Mexico declined 33 percent year-on-year to $90.2 million. For full-year 2014, the company reported a $216 million loss from continuing operations. President and Chief Executive Officer John Rynd said the weak market was reflected in the fourth quarter and the downturn should continue in 2015 until commodity prices improve. "The significant decline in crude oil prices during the fourth quarter exacerbated […]

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We still haven’t reached peak oil . But peak milk happened in 2004, peak soybeans in 2009, and peak chicken in 2006. Rice peaked in 1988. A new study published in Ecology and Society explains that 21 key resources that humans rely on—mostly food —have already passed their peak rate of production. “Peak,” in this case, doesn’t mean that we’re actually producing fewer chickens or less milk yet. Instead, the researchers looked at the fact that the rate of production has plateaued, at the same time that population is increasing. Helmholtz Centre for Environmental Research in Germany , who worked on the study with colleagues from Yale University and Michigan State University . “We approached the whole thing with an open mind,” he says. “We didn’t want it to be apocalyptic. We tried to seek patterns that give reliable information about how we really harvest the Earth, knowing that […]

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As we’ve written about often here at PeakProsperity.com, much of what’s been ‘sold’ to us about the US shale oil revolution is massively over-hyped. The amount of commercially-recoverable shale oil is much less than touted, returns much less net energy than the petroleum our economy was built around, and is extremely unprofitable to extract for most drillers at today’s lower oil price. To separate the hype from reality, our podcast guest is Arthur Berman, a geological consultant with 34 years of experience in petroleum exploration and production.  Berman sees the recent US oil production boost from shale drilling as and short-lived and somewhat desperate; a kind of last hurrah before the lights get turned out: The EIA looks at the US tight oil plays and they see maybe five years before things start to fall off. I think it is less, but I am not going to split hairs. The […]

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Goldman Sachs executive Gary Cohn says we could see so much oil, there would be no way to physically store it all, resulting in falling prices, at least in certain locational areas. Further destabilization across the globe could, logically, follow. Cohn told Bloomberg News : “I think the oil market is trying to figure out an equilibrium price. The danger here, as we try and find an equilibrium price, at some point we may end up in a situation where storage capacity gets very, very limited. We may have too much physical oil for the available storage in certain locations. And it may be a locational issue.” “And you may just see lots of oil in certain locations around the world where oil will have to price to such a cheap discount vis-a-vis the forward price that you make second tier, and third tier and fourth tier storage available.” […]

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(This is Part 3 of my series – A New Theory of Energy and the Economy. These are links to Part 1 and Part 2 .) Many readers have asked me to explain debt. They also wonder, “ Why can’t we just cancel debt and start over? ” if we are reaching oil limits, and these limits threaten to destabilize the system. To answer these questions, I need to talk about the subject of promises in general, not just what we would call debt. In some sense, debt and other promises are what hold together our networked economy. Debt and other promises allow division of labor, because each person can “pay” the others in the group for their labor with a promise of some sort, rather than with an immediate payment in goods. The existence of debt allows us to have many convenient forms of payment, such as dollar […]

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The collapse in oil prices over the last seven months looks to destabilize the world stage by redirecting over $1.8 trillion in spending if current prices hold. While worldwide demand exceeds 92 million barrels per day , the drop in price from over $105 this past summer to under $50 translates into sizable savings for the average American. Who Gains vs. Who Loses Spread out across all industries, U.S. consumers could be looking at an extra $300 billion in savings this year, since oil touches just about every aspect of daily life in one form or another. The working poor, in particular, will be the largest beneficiaries , since energy expenses constitute a greater percentage of household income for them than for any other group. They will likely feel as though they are getting ahead, for a change, rather than continuing to slip further into the abyss . The impact of “less pain at the pump” […]

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Christophe McGlade on who gets left with the unburnable carbon Christophe McGlade is a research associate in energy materials modelling at the UCL Institute for Sustainable Resources.  He recently co-authored, with Paul Ekins, a paper called “The geographical distribution of fossil fuels unused when limiting global warming to 2°C ”, a paper whose stark call to leave the substantial majority of fossil fuels in the ground generated a lot of media coverage in recent weeks (see for example here and here ).   I started by asking him to give an overview of the paper and of its key findings: “The paper is looking at the optimal use of fossil fuels if we want to have a good chance of staying below the agreed 2°C threshold. Within that, it breaks down the amount of oil, gas and coal reserves that are used and aren’t used at a regional level, so […]

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The collapse in oil prices over the last seven months looks to destabilize the world stage by redirecting over $1.8 trillion in spending if current prices hold. While worldwide demand exceeds 92 million barrels per day , the drop in price from over $105 this past summer to under $50 translates into sizable savings for the average American. Who Gains vs. Who Loses Spread out across all industries, U.S. consumers could be looking at an extra $300 billion in savings this year, since oil touches just about every aspect of daily life in one form or another. The working poor, in particular, will be the largest beneficiaries , since energy expenses constitute a greater percentage of household income for them than for any other group. They will likely feel as though they are getting ahead, for a change, rather than continuing to slip further into the abyss . The impact of “less pain at the pump” […]

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The World After Cheap Oil thumbnail The World After Cheap Oil By Rauli Partanen, Harri Paloheimo and Heikki Waris 250 pp. Routledge – Oct. 2014. $59.95. Toward the end of this book, its authors make an astute, if self-deprecating, observation about its potential merits. They’ve been discussing how innate human biases cause us to make cognitive errors when trying to make sense of world crises. They’ve described in particular the tendency of scientifically knowledgeable people to become less convinced about climate change the more evidence they encounter for it, due to confirmation bias. For the authors, this fact “raises the question of how meaningful writing this book has actually been.” Won’t skeptical readers simply cherry-pick the data that support their views and reject the rest? While it is, of course, correct that some readers will do this, there’s no question that writing the book has been meaningful. Indeed, in […]

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Terraced rice paddy fields are seen during the harvest season in Mu Cang Chai, northwest of Hanoi. Global food poisoning? Yes, We’re maxing out. Forget Peak Oil. We’re maxing-out on Peak Food. Billions go hungry. We’re poisoning our future, That’s why Cargill, America’s largest private food company, is warning us: about water, seeds, fertilizers, diseases, pesticides, droughts. You name it. Everything impacts the food supply. Wake up America, it’s worse than you think. We’re slowly poisoning America’s food supply, poisoning the whole world’s food supply. Fortunately Cargill’s thinking ahead. But politicians are dragging their feet. They’re trapped in denial, protecting Big Oil donors, afraid of losing their job security; their inaction is killing, starving, poisoning people, while hiding behind junk-science. The truth is, America, Big Ag worldwide farm production can’t feed the 10 billion humans forecast on Planet Earth by 2050. Can we wait till 2050 for the fallout? […]

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ENLARGE Tumbling oil prices were supposed to boost growth in a host of major oil-importing economies. It isn’t necessarily working out that way. Some governments have moved already to shore up their revenues by raising gasoline taxes or cutting fuel subsidies. At the same time, falling oil costs have pumped up deflation fears across Europe and Japan, adding to the risk that consumers and businesses will hold back on spending and investment, dragging on growth. China has raised fuel-consumption taxes by 50% since November. Gasoline prices have soared in Indonesia as the authorities eliminated subsidies altogether. High taxes in Japan mean pump prices have fallen only 15% in the past six months, compared with a 40% decline in the U.S. Taxes also blunt the fall in Europe: premium gasoline prices have fallen 29% in the U.K. and 32% in France. Brazil has trimmed subsidies and raised taxes to shore […]

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Cheap Oil Does Not Mean That Peak Oil Is a Myth thumbnail Peak oil is a fundamental tenet of the Transition Towns concept, but the current return of “cheap oil” has muddied the waters about how to discuss it. At a recent meeting of Transition Town Reading (U.K.), we discussed the prevailing low oil price, and the group asked me to put together some salient points on the subject, set within the context of whether or not we can now dismiss peak oil, e.g. as it is currently being contested   here and here . The following points are based on an article that I wrote on this blog which was re-posted on Resilience.org here. Most of the references that I have drawn from are in the links posted there, with a few more added into the text below. Some of the points overlap with each other, but hopefully […]

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HOUSTON, Feb. 3 02/03/2015 Expectations are moderating about growth of oil production in the US this year. A report by IHS says the US production surge may end by midyear as low oil prices crimp output from tight formations. “Growth is still expected in the early months of 2015, but that momentum will level off in the latter half of the year amidst prices at lows not seen since the 2008-09 Great Recession,” IHS said in a press statement. A study of 39,000 wells indicated month-to-month growth will cease in the latter half of 2015 if the price of West Texas Intermediate crude remains below $60/bbl. About one fourth of new wells in 2014 had break-even WTI prices below $40/bbl, according to the study. Slightly less than half the new wells had break-even prices below $60/bbl. Nearly 30% of new wells had break-even prices above $81/bbl. The study defined […]

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It all started with peak oil, the point when the maximum rate of extraction is reached, after which production begins to decline By Gwynne Dyer PEAK OIL is so last year. Now we can worry about peak everything: peak food, peak soil, peak fertiliser, even peak bees. Let’s start small. We depend on bees to pollinate plants that account for about one-third of the world’s food supply, but since 2006 bee colonies in the United States have been dying off at an unprecedented rate. More recently the same “colony collapse disorder” has appeared in China, Egypt and Japan. Many suspect that the main cause is a widely used type of pesticides called neonicotinoids, but the evidence is not yet conclusive. The fact remains that one-third of the American bee population has disappeared in the past decade. If the losses spread and deepen, we may face serious food shortages. Then […]

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It is quite obvious that high oil prices in the last 3-4 years Fig 1: WTI spot prices to 23/1/2015 http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=rwtc&f=w have reduced demand for oil, as shown in this IEA graph for OECD countries: Fig 2: Oil demand in OECD countries Oct 2011 – Sep 2014 https://www.iea.org/oilmarketreport/omrpublic/charts/ So which oil is affordable? Let’s use a graph of the Monetary Policy Report (January 2015) of the Bank of Canada (which would be favourable to Canadian tar sands) Fig 3: Oil production by area and full-cycle costs The Bank of Canada report reads: “Based on recent estimates of production costs, roughly one-third of current production could be uneconomical if prices stay around US$60, notably high-cost production in the United States, Canada, Brazil and Mexico (Chart 4). More than two-thirds of the expected increase in the world oil supply would similarly be uneconomical. A decline in private and public investment in […]

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The Problem Isn’t That We Have Too Little Oil. We Have Too Much and are Cooking the Planet With It. In 1977 Isaac Asimov wrote of “The Nightmare Life Without Fuel.” Writing in the wake of the first Middle East oil shock, Asimov imagined cars and air conditioning as distant memories, cities mined for valuable minerals and hardware, and the last barrels of oil hoarded for agricultural and military purposes. A future of scarcity seemed in the cards after the 1979 revolution in Iran disrupted global supplies, reviving gas lines and rationing in the United States, and sending oil prices to a stratospheric $117 a barrel in today’s dollars. The U.S. economy plunged into recession for the second time in a decade. Inflation, food prices and unemployment all shot up. Energy-importing Third World nations were devastated as expensive crude depleted their treasuries even as the U.S. Federal Reserve jacked […]

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Forget peak oil; we’ve reached peak everything thumbnail Peak oil is so last year. Now we can worry about peak everything: peak food, peak soil, peak fertilizer, even peak bees. Let’s start small. We depend on bees to pollinate plants that account for about one-third of the world’s food supply, but since 2006 bee colonies in the United States have been dying off at an unprecedented rate. More recently the same “colony collapse disorder” has appeared in China, Egypt, and Japan. Many suspect that the main cause is a widely used type of pesticides called neonicotinoids, but the evidence is not yet conclusive. The fact remains that one-third of the American bee population has disappeared in the past decade. If the losses spread and deepen, we may face serious food shortages. Then there’s peak fertilizer, or more precisely peak phosphate rock. Phosphorus is a critical ingredient of fertilizer, and […]

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World’s renewable resources reach limit thumbnail Renewable resources representing 45 per cent of global calorie intake have reached peak production levels Peak oil has become a familiar term over the past decade, but the world will soon have to get used to peak rice, peak wheat and peak maize, according to new research from the Helmholtz Centre for Environmental Research . ‘Peak oil seemed believable because oil is a limited resource, but surprisingly our methodology in this study could not prove it,’ says Ralf Seppelt, a landscape ecologist working on the project. Money and innovation from the oil industry has seen peak oil recede as a risk, according to the research. The Helmholtz study found that while peak oil is not a cause for concern, renewable resources have reached the limit for annual growth. Among the 20 renewables studied, 18 – including meat production and the global fish catch […]

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Since weak oil demand growth is a major ingredient in the current oil price crash, higher demand stimulated by low prices could be a moderating factor. While US demand has risen since prices fell, there are several reasons why the global response may be slower to appear and less dramatic. One of the main factors that will determine the depth and duration of the current slump in oil prices is the extent and timing of a resulting rebound in demand. It is likely to occur first in countries like the US, where fuel taxes are low and consumers see the results of lower oil prices at the gas pump relatively quickly–a $1.65 per gallon drop already, since June. However, other factors besides taxes could impede faster demand growth elsewhere. From 2007 to 2009 the combination of high oil prices and a weak economy reduced US petroleum demand by almost […]

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Iraqi onlookers stand next to a burnt car following a motorcycle bombing attack which killed at least eight people on September 19, 2014 in the northern city of Kirkuk.(Getty) For Kirkuk, its oil-rich surroundings have been more a curse than a blessing. The northern Iraqi city struck black gold in 1927, while still under the control of the British Empire, and became the country’s oil production powerhouse in the north. At its peak, its oil fields were pumping out 3.2 billion barrels per day, but this has since fallen sharply amid war and mismanagement by the former Iraqi dictator Saddam Hussein, who seized control in 1968. Kirkuk is in what is now Kurdistan, a semi-autonomous region of Iraq, and was for years a multi-ethnic city. Many Kurds, who make up the bulk of the 850,000 population, had arrived in Kirkuk in search of work in the city’s oil industry. […]

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A new poll of American scientists suggests that a large majority of them (82 percent) regard population growth as a major challenge, almost as many as those who believe that climate change is mostly due to human activity (87 percent). The poll, which was conducted by the Pew Research Center, indicates that a clear majority of the American public (59 percent) are concerned that there won’t be enough food and resources to accommodate a growing world population, but the level of concern in the scientific community, as with climate change, is noticeably higher. On one level, the poll results are not surprising. For decades now leading scientists have been warning that humanity is overusing planetary resources and inflicting dangerous harm on the environment. Earlier this month 18 scientists authored a paper in the journal Science warning that humanity is encroaching on nine “planetary boundaries,” and that we have already […]

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In this life nothing is certain. Therefore I am not declaring, absolutely, that we are at peak oil, only that it is a near certainty. But I am putting my reputation on the line in making the claim that the period, September 2014 through August 2015 will be the year of Peak Oil. Below are my reasons for making this claim. First of all, Peak Oil is not a theory. The claim that Peak Oil is a theory is more than a little absurd. Fossil hydrocarbons were created from buried alga millions of years ago and they are finite in quantity. And as long as we keep extracting them in the millions of barrels per day, it is only common sense that one day we will reach a point where their extraction starts to decline. In fact most countries where oil is extracted are already in decline. So obviously […]

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Shale oil’s investment cycle is shorter and its decline profile sharper than conventional oil production. Current indicators suggest legacy declines from shale will catch up fast with the industry. This points to a sharp deceleration in US shale oil output. But, while conventional oil takes time to slow down, it also takes time to speed up. It will be shale that is best placed to benefit from any oil price recovery, as Ross McCracken, managing editor of Platts Energy Economist , explains in this month’s selection from the publication. The full analysis can be found in the February 2015 issue, which is also issue 400 of Energy Economist. Global crude oil production has only fallen in six years since 1984 and then generally as a result of geopolitical disruptions to supply or restraint by OPEC, rather than as a reaction to price. This is because the conventional oil industry […]

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