Category: Peak Oil

“For some years now,” Tim Morgan writes in Life After Growth , “global average EROEIs have been falling, as energy resources have become both smaller and more difficult (meaning energy-costly) to extract.” You may have heard of this concept called energy return on energy invested (EROEI). It looks at how much energy we expend in relation to how much energy we extract. Some, like Morgan, think this is very important. Consequently, falling EROEIs have become the basis of a variety of dire forecasts… Be skeptical of anything that seeks to analyze our economy by taking money out. In these scenarios, we spend more and more energy just getting energy, and we have less and less for other discretionary items. As Morgan writes, “If EROEI falls materially, our consumerist way of life is over.” I’m writing to you today to slay this flawed EROEI concept. I have to say I […]

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Oil industry costs are spiraling out of control, and it’s time to rein them in, Total CEO Christophe de Margerie insisted Tuesday. “Excellence cannot be an excuse for doing anything at any price,” de Margerie told oil and gas industry executives gathered at the IHS CERAWeek energy summit in Houston. “We cannot continue to swallow this huge inflation.” The French oil executive suggested that soaring capital expenditures are partly being driven by greedy subcontractors. He stopped short of naming names, but blamed “Asian countries (that) think we are ready to pay forever.” “We have to go to the sub-subcontractors and say: ‘We know what’s going on. We can no longer be the deep pocket,’” de Margerie said. Big oil cuts De Margerie’s comments came […]

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Page added on March 3, 2014 Last week, I mused on the death of cars and big-picture factors working against the auto industry, including urbanization and declining driving rates in younger Americans. Now, I’ll trot out my crystal ball again and offer you another prediction: This is the beginning of the end for Big Oil, too. Now before you jump down my throat for trolling you again with hyperbole, I will state up front that I don’t expect Exxon Mobil XOM -1.01%  , BP BP -2.13%  and Chevron CVX -0.69%   to disappear tomorrow any more than I expect I-95 to start sprouting daisies. But as with the decline of automobile ownership — and in part because of it — we may also be witnessing a protracted decline in major energy stocks and fossil fuel demand. That’s bad for big oil, and bad for investors in these stocks. Efficiency […]

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Page added on March 3, 2014 The economic foundations supporting fossil fuels investments are collapsing quickly, as the business case for renewables such as solar and wind finds a new center of balance. I have waited a long time—decades, really—for a tipping point in the energy transition from fossil fuels to renewables beyond which there can be no turning back. Fresh evidence pertaining to many themes I have explored in this column over the past three years suggests that tipping point is finally here. Oil and gas Underlying the abundance hype over tight oil, tar sands and other “unconventional” sources of liquid fuel has been a dirty little secret: They’re expensive. The soaring cost of producing oil has far outpaced the rise in oil prices as the world has relied on these marginal sources to keep production growing since conventional oil production peaked in 2005. Those who ignored the […]

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Steve Kopits recently gave a presentation explaining our current predicament: the cost of oil extraction has been rising rapidly (10.9% per year) but oil prices have been flat. Major oil companies are finding their profits squeezed, and have recently announced plans to sell off part of their assets in order to have funds to pay their dividends. Such an approach is likely to lead to an eventual drop in oil production. I have talked about similar points previously (here and here), but Kopits adds some additional perspectives which he has given me permission to share with my readers. I encourage readers to watch the original hour-long presentation at Columbia University, if they have the time.>Click here to view full article at ourfiniteworld.com

In last week’s column, The Case of the Missing Propane , I explained how the widespread use of hydraulic fracturing (fracking) of shale oil deposits since 2008 has led to a 30% increase in the production of crude petroleum in the United States. While that statistic makes for snappy headlines, it is not particularly meaningful to the overall world oil supply or the phenomenon known as Peak Oil. If you are not familiar with Peak Oil, I published a column in June of 2011 called Peak Oil in Five Paragraphs or Less . Here are the key points: • Peak Oil refers to the time at which we reach the global maximum rate of oil production, which is followed by decades of declining rates of production. • Due to oil’s pivotal role as a transportation fuel and (as I explained in Everything Comes […]

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Earth insight badge A pro-European protester swings a metal chain during riots in Kiev A protester in Ukraine swings a metal chain during clashes – a taste of things to come? Photograph: Gleb Garanich/Reuters If anyone had hoped that the Arab Spring and Occupy protests a few years back were one-off episodes that would soon give way to more stability, they have another thing coming. The hope was that ongoing economic recovery would return to pre-crash levels of growth, alleviating the grievances fueling the fires of civil unrest, stoked by years of recession. But this hasn’t happened. And it won’t . Instead the post-2008 crash era, including 2013 and early 2014, has seen a persistence and proliferation of civil unrest on a scale that has never been seen before in human history. This month alone has seen riots kick-off in Venezuela , Bosnia , Ukraine , Iceland , and […]

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Venezuela protests February 2014 image via aandres/flickr. Creative Commons 2.0 license . If anyone had hoped that the Arab Spring and Occupy protests a few years back were one-off episodes that would soon give way to more stability, they have another thing coming. The hope was that ongoing economic recovery would return to pre-crash levels of growth, alleviating the grievances fueling the fires of civil unrest, stoked by years of recession. But this hasn’t happened. And it won’t . Instead the post-2008 crash era, including 2013 and early 2014, has seen a persistence and proliferation of civil unrest on a scale that has never been seen before in human history. This month alone has seen riots kick-off in Venezuela , Bosnia , Ukraine , Iceland , and Thailand . This is not a coincidence. The riots are of course rooted in common, regressive economic forces playing out across every […]

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We’ve all heard a lot about Peak Oil, the point at which global oil production begins to decline because the accessible supply is simply not as big as it was the year before. Whether it has been passed or is looming in the near future, is still being debated, especially in the light of the recent boom in U.S. production. But it is highly likely that it is imminent, which is really a good thing, given the carbon emissions entailed, which has not been reason enough for many people, institutions and governments to press for alternatives. But what about all of those cars and trucks that most of that oil goes into? There are a number of analysts who think that, despite the optimistic sales projections of automakers, we may be approaching the point of peak cars. Given the fact that more and […]

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We’ve all heard a lot about Peak Oil, the point at which global oil production begins to decline because the accessible supply is simply not as big as it was the year before. Whether it has been passed or is looming in the near future, is still being debated, especially in the light of the recent boom in U.S. production. But it is highly likely that it is imminent, which is really a good thing, given the carbon emissions entailed, which has not been reason enough for many people, institutions and governments to press for alternatives. But what about all of those cars and trucks that most of that oil goes into? There are a number of analysts who think that, despite the optimistic sales projections of automakers, we may be approaching the point of peak cars. Given the fact that more and […]

Click here to view full article at 3blmedia.com

As our civilization proceeds down the slope of the post-peak-oil curve, global trade will become more and more expensive, so our economies will naturally localize. The energy-efficiency benefits of localized economies are obvious to us, but there are also social and even psycho-social benefits that aren’t often contemplated. I had the good fortune to work with respected crowd-behavior expert Alan Berkowitz several years ago on a film project about “bystander behavior.” Berkowitz is a psychologist and sociologist who advises, writes, and speaks on bystander behavior, as well as a number of other health and social justice subjects. He founded and edited the Report on Social Norms . I later interviewed him for my documentary, GrowthBusters: Hooked on Growth . I was curious about why human beings react so irrationally to evidence we are harming our planet and the life support systems on which […]

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The key take-away from the US EIA’s Annual Energy Outlook released [in December] jumps out in the graph below: US crude oil production should peak in 2016 at a level 26% higher than that projected just one year ago. That’s an additional 2 million barrels a day (mb/d), pushing the US total to 9.6 mb/d within three years—the same total that the US produced during its first peak in 1970, as an acquaintance at the EIA pointed out last week. That’s three more break-through years like the last two. Then flat. Finito. As some wag asked last week, is that really a recipe for a continuing oil revolution or an oil retirement party? [1]   Data: EIA’s Early Release Annual Energy Outlook, 2014.  From Ron Patterson. [A] full appraisal of the challenge posed by oil depletion must extend beyond geological assessments of resource size to […]

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World Yearly When will Peak Oil actually arrive? There has been considerable debate on that point recently. Well if you are talking about “Conventional Crude Oil” it arrived in 2005. But in many cases unconventional crude oil works just as well so I think we must count that. I will comment on that at the end of this post below. The chart below is kb/d with the last data point, 2013, is the average through October. Averaging the first 10 months of 2013, World oil production was up only 66,000 barrels per day. And without the US LTO input, world production would have been down 807,000 barrels per day, lower than the 2005 level. And it is all about LTO, primarily it is about three oil plays, the Bakken, Eagle Ford and the Permia. The data for this chart was taken from the EIA’s Drilling Productivity Report . The […]

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Pulitzer prize-winning author and energy analyst Daniel Yergin kicked off the 2014 MIT Energy Conference Friday by looking back at big changes in the energy landscape since the conference launched in 2006—and ahead at three visions for the future of energy. Dr. Yergin, Vice President of IHS and author of two bestselling books on the history of energy, The Prize: The Epic Quest for Oil, Money, and Power and The Quest: Energy, Security, and the Remaking of the Modern World, said much has changed over the last decade in the energy world. From “Peak Oil” to Energy Abundance? “It was the year of Peak Oil,” Yergin said, looking back at 2005, when the MIT Energy Initiative was launched and the first MIT Energy Conference conceived. America and the world were concerned about rising global oil demand […]

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With a growing population and improving diets there is a need to double our food supply by 2050. Identify three measures you would take to meet this demand. Identify one of your measures from your list and post your solution into the discussion – be prepared to defend your choice! That is a big question to throw in a climate change course. I am presently doing an online course – Climate Change: Challenges and solutions – offered by the University of Exeter (UK). So please indulge me as I also use this blog for some climate course work. This article is for week 6, section 6.5 of the course on ‘Tackling food security’. Food security is one helluva big area to try and come to terms with. Earth’s population is just over 7 billion people. It is projected by the United Nations in a June 2013 report on global […]

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WASHINGTON (Reuters) – Unusually cold weather will take a bite out of U.S. economic growth this quarter, but a rebound seems likely on the horizon and expectations for stronger growth this year have not changed. Economists estimate that freezing temperatures and the ice and snow storms that have blanketed much of the nation will shave as much as half a percentage point from gross domestic product in the first quarter. That comes on top of the drag from efforts by businesses to sell off bloated inventories and a one-time hit from the expiration of benefits for the long-term unemployed. "The slowdown is testing everyone’s optimism about the economy, but so far it’s just a soft patch. The economy will regain strength," said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester Pennsylvania. "Outside housing, we don’t believe the recent data signal a change in fundamentals." Moody’s Analytics […]

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drought map There is sound science that says there is likely to be big trouble, even in supplying Austin’s current population with enough water. Federal officials have designated portions of 11 drought-ridden Western and Central states as primary natural disaster areas. Map from UDSA.gov. Image from NBCDFW.com. First of three . I met a traveller from an antique land Who said: “Two vast and trunkless legs of stone Stand in the desert. Near them on the sand, Half sunk, a shattered visage lies, whose frown And wrinkled lip and sneer of cold command Tell that its sculptor well those passions read Which yet survive, stamped on these lifeless things, The hand that mocked them and the heart that fed. And on the pedestal these words appear: `My name is Ozymandias, King of Kings: Look on my works, ye mighty, and despair!’ Nothing beside remains. Round the decay Of that […]

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Page added on February 22, 2014 Peak oil is the ever approaching, if not already passed point in which the world’s crude oil production rate reaches its maximum output, and then falls into decline. 86 million barrels of crude oil are produced everyday, however as a planet, we are using around 88 million barrels a day (Transition Culture 2007), showing an uneven consumption rate which will aid the decline of available oil. The International Energy Agency stated that there could be as much as 20,000 billion barrels (Transition Culture 2007) of oil under the planet’s surface but that much of it will remain undiscovered. Additionally, a considerable percentage of oil has been found under protected sites such as reindeer sanctuaries in Alaska and the newly found oil in the Arctic; the question is whether the value of this oil is worth the destruction of these ecosystems and environments as […]

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More Feb 21 (Reuters) – Exxon Mobil Corp, the world’s largest publicly traded oil company, said on Friday its crude oil and natural gas reserves rose slightly in 2013, lifted by projects in U.S. shale fields and Abu Dhabi. Proved reserve additions of 1.6 billion barrels oil equivalent from places like the Permian Basin inTexas and the Bakken Shale in North Dakota helped Exxon replace 103 percent of its 2013 output, theIrving, Texas company said in a statement. In 2012, Exxon’s reserve replacement ratio, a key measure of growth for investors, was 115 percent. At year end, Exxon’s proved reserves totaled 25.2 billion oil-equivalent barrels. The reserves were 53 percent liquids, which typically bring higher profits. Shares of Exxon fell 9 cents to $95.28 in morning trading on the New York Stock Exchange. Copyright 2014 Thomson Reuters. Click for Restrictions. More

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It is unfortunate, however, that we cannot look at the real problem. Unless we can understand the problem as it really is, it is impossible to find solutions that might actually be helpful. [1]   MIXED MESSAGES   The message behind messages like that one aren’t usually anyone’s first choice for contemplation, planning, or doing. Happier yarns about energy abundance are certainly more appealing. Reality being what it is, however, we continue to ignore that to our longer-term detriment. “Appealing” has a limited lifespan, and when the misleading half-truths are what most citizens hear most of the time, that timer will wind down sooner than we’re prepared for. That is definitely not a good message…. The bottom line is: If we want oil, we are going to need high prices. That’s what peak oil is all about –  progressively higher prices that are […]

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Page added on February 19, 2014 The idea that global oil production was nearing its peak , only to plateau and then decline was a common view in the energy world for many years. The geophysicist M. King Hubbard predicted in the 1950’s that US oil production would peak in the 1970’s, a forecast that held true until technology allowed companies to economically extract oil and gas from tight geologic formations like shale. The recent surge in US liquids output – crude plus natural gas liquids (NGLs) – quieted the peak oil community. A well-known, largely peak oil-focused website – The Oil Drum – shut down in 2013, an event some considered the death knell of the peak oil theory. But not so fast says Steven Kopits from energy business analysis firm Douglas-Westwood. Total global oil supply growth since 2005 – 5.8 million barrels per day – came from […]

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One might have the impression that hydraulic fracturing (fracking) of shale deposits is the answer to world energy security. Certainly fracking has received much attention and investment, but its prospects must be considered in a broader context. In the US, where practically all such operations have been conducted to date, fracking now accounts for 40% of domestic gas production and 30% of oil production. The price of natural gas has plummeted, and overall US oil production has increased for the first time since 1970, which had otherwise been falling in accordance with the predictions M King Hubbert made in 1956.  © Shutterstock However, this last point is the salient one. Sources of unconventional oil (listed below) such as tight oil (or ‘shale oil’ in popular discourse) are only commercially viable because the need to match the declining rate of conventional oil production has raised oil prices. It is the […]

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Surging Oil Industry Brings Opportunity To Rural California The idea that global oil production was nearing its peak , only to plateau and then decline was a common view in the energy world for many years. The geophysicist M. King Hubbard predicted in the 1950’s that US oil production would peak in the 1970’s, a forecast that held true until technology allowed companies to economically extract oil and gas from tight geologic formations like shale. The recent surge in US liquids output – crude plus natural gas liquids (NGLs) – quieted the peak oil community. A well-known, largely peak oil-focused website – The Oil Drum – shut down in 2013, an event some considered the death knell of the peak oil theory. But not so fast says Steven Kopits from energy business analysis firm Douglas-Westwood. Total global oil supply growth since 2005 – 5.8 million barrels per day – […]

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Our guest blog today comes from Steve Andrews, who is  a retired energy consultant and contributor to the Peak Oil Review, reachable at [email protected] . We reached out to CERA to determine its interest in providing a response, but did not hear back. “False optimism leads to very poor investment decisions.”: Jeremy Grantham, co-founder and Chief Investment Strategist, GMO Ten years ago this month the Oil & Gas Journal published a story from CERAWeek—an annual elite conference for the oil industry put on by Cambridge Energy Research Associates—that bears revisiting. Why go back? Three reasons. First, CERA arguably has maintained the highest profile of any oil industry analytical shop since at least the turn of the century, thanks in large part to founder Daniel Yergin’s reputation. Every time there is a surprise in world oil supply, he’s the media’s go-to guru. When the National Petroleum Council convenes a world oil […]

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THE PREMISE Population is a sensitive subject, but it is noteworthy that by 2050, oil supply will have fallen to a level able to support less than half the current population in its present way of life [1] Oil buyers apparently know the Western world’s economic recovery will boost consumption, since growth and oil use are aligned. That’s not all. They also know that the math doesn’t work: Prices can’t go into gradual, long-term decline, or even stay flat, when the world’s conventional oil fields are in fairly rapid decline. Exotic production – oil sands, biofuels, natural gas liquids – are supposed to fill the gap. But this so-called unconventional production is highly expensive and quite possibly insufficient to cover the drop off in cheap, conventional production. Prices will rise to the point that demand will have to level off or fall. [2] […]

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OPEC Update and EIA Short Term Energy Outlook The OPEC Monthly Oil Market Report  is just out with OPEC crude only production numbers for January 2014. OPEC Crude production was up 28,000 bp/d in January but that was after December production had been revised upward by 240,000 bp/d. November production was revised down by 51,000 bp/d. Of course Saudi is always the one to watch because it is generally believed that they have spare capacity. I think they had spare capacity back in 2011 but are now producing flat out, just like every other OPEC producer. Saudi crude production was down 115,000 bp/d in January but that was after December production had been revised upward by 119,000 bp/d and November revised up 52,000 bp/d. I think that surge upward early in 2013 is a telling indication. That was Manifa coming on line. Libya had the biggest gain in January, […]

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Every now and then, in reading about global warming and other environmental issues, I come across a reference to ‘peak oil’, usually as yet another example of how humans blindly pursue their own short-term interests, scarcely heeding the crisis that is waiting for them ahead. And of course we humans do have a tendency to do just that, some of the time, at least. Anyway, I marked down ‘peak oil’ as a subject to read about, and after some time at the computer, protected by air-conditioning that is doubtless increasing the heat outside, offer you the results of my reading. First, ‘peak oil’ is as contentious as AGW itself. The phrase itself prompts 55,600,000 hits on Google, and there are a dozen or so variants of the phrase as well. You may not be surprised to learn that there are ‘peak oil deniers’ […]

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For the first time since the industrial revolution the world is moving into an era without a dominant energy source. That’s the assertion of global oil giant BP, which is also offering a reality check on the notion of peak oil. The company’s general manager of global energy markets and US economics, Mark Finley, is adamant that natural gas, coal and oil will all scrap for the top spot over the next two decades. The assertion comes on the back of a January release of BP’s latest 2035 energy market outlook, which highlighted a convergence of the fuels at the top of the energy tree in 20 years’ time. BP’s peak oil rejection Source: BP Energy Market Outlook 2035. “We’ve never seen this before,” Finley explains of the fight for the top spot during a recent speech at Columbia University in New York. “Personally, I think it poses some […]

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For the first time since the industrial revolution the world is moving into an era without a dominant energy source. That’s the assertion of global oil giant BP, which is also offering a reality check on the notion of peak oil. The company’s general manager of global energy markets and US economics, Mark Finley, is adamant that natural gas, coal and oil will all scrap for the top spot over the next two decades. The assertion comes on the back of a January release of BP’s latest 2035 energy market outlook, which highlighted a convergence of the fuels at the top of the energy tree in 20 years’ time. BP’s peak oil rejection Source: BP Energy Market Outlook 2035. “We’ve never seen this before,” Finley explains of the fight for the top spot during a recent speech at Columbia University in New York. “Personally, I think it poses some […]

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Life often presents us with paradoxes, but seldom so blatant or consequential as the following. Read this sentence slowly: Today it is especially difficult for most people to understand our perilous global energy situation, precisely because it has never been more important to do so. Got that? No? Okay, let me explain. I must begin by briefly retracing developments in a seemingly unrelated field—climate science. But a funny thing happened along the way. Clearly, if the climate is changing rapidly and dramatically as a result of human action, and if climate change (of the scale and speed that’s anticipated) is likely to undermine ecosystems and economies, then it stands to reason that humans should stop emitting so much CO2. In practical effect, this would mean dramatically reducing our burning of fossil fuels—the main drivers of economic growth since the beginning of the Industrial Revolution. From a policy standpoint, climate […]

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It is ironic that, just as we are finally saying goodnight and farewell to Peak Oil theory, scientists are poised to bring unlimited quantities of the finest sweet crude oil to market, courtesy of algae and sunlight. Moreover, the algae route to creating oil is said to generate 95% fewer greenhouse gasses than the conventional route of drilling for oil , so, even if climate change activists would rather that we stopped using oil altogether, “green oil” goes a long way towards meeting most of their objections. The technology is not new. Research has been going on for at least the last 30 years, but for much of that time, scientists found that they were having to put more energy into the process to grow the algae and extract the oil, than was contained in the oil – not exactly a winning proposition. […]

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Figure 1 A recent post at Peak Oil Barrel by Jean Laherrere suggested an ultimate recoverable resource(URR) for the North Dakota Bakken/Three Forks of about 2.5 Gb based on Hubbert Linearization.  This conflicts with a recent (April 2013) USGS mean (F50) estimate of 8.4 Gb.  I decided to update my scenarios based on the range of USGS estimates from F95=6 Gb to F5=11.3 Gb for the North Dakota(ND) Bakken/ Three Forks.  Note that at year end 2011 there were 2.6 Gb of crude proven reserves in ND and at the end of 2007 about 0.5 Gb, I will assume all of this reserve increase came from the Bakken/ Three Forks, so 2.1 Gb of proven reserves added to 0.35 Gb of oil produced from the Bakken/ Three Forks gives us 2.45 Gb for a minimum URR.  The Hubbert Linearization points to about 0.05 Gb of undiscovered oil whereas the USGS […]

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Page added on February 8, 2014   “To me at least the connection is clear and statistically certain… far more certain than anything I ever see in the stock market or the economy.” That’s Jeremy Grantham, the highly-regarded co-founder of the $117 billion investment fund GMO, who predicted both the dot com crash of the late 1990s and the subprime meltdown a few years later. Above is an accompanying chart included in his  latest investment letter . Rather than pushing an investment idea here, he’s convinced there’s a causal link between a surge in earthquakes measuring above 3 on the richter scale in the US and the boom in  hydraulic fracturing  (“fracking”), the controversial drilling technique used to extract oil and gas from shale rock. His overall skepticism about fracking informs Grantham’s broader, bearish thesis about oil prices. In the investment letter he questions whether “this year’s $650 billion spent looking […]

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Page added on February 8, 2014 Climate change is the reality we are living in. It is not going away; it has been clearly established as a fact, IOMCO — or immediately obvious to the most casual observer. The weather is simply becoming more extreme. More tornados, more flooding, more drought, stronger hurricanes and other extreme weather events are only the tip of the iceberg. Climate change is not something that you can change overnight. It has taken a few hundred years for man to have the negative impact that it has on the climate; even if we stopped burning all fossil fuels tomorrow, it would take hundreds more to reverse the trend. We hit the big time lottery when we discovered oil and gas. It was like we stumbled upon a treasure chest with millions of years of stored energy and just like some lottery winners, we became […]

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Energy analyst Chris Nelder fires back at the latest fact-free commentary on peak oil. The Oil Drum, a Web site dedicated to informed discussions about peak oil and energy,  announced on July 3 that it is closing down. (For a brief primer on peak oil, see my conversation with Brad Plumer in the Washington Post .) Those who hate the peak oil story didn’t bother to conceal their glee at the news; some even saw occasion to claim victory for their side in the "debate" over the future of fossil fuels. “We could say ‘I told you so,’ not as a school-yard epithet, but simply as a fact,” crowed Mark Mills , co-author of a lightweight book entitled The Bottomless Well , which Publishers Weekly described as “Long on Nietzschean bombast but short on some crucial specifics.” David Blackmon, a Houston-based consultant with a 33-year career in the oil […]

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Energy analyst Chris Nelder fires back at the latest fact-free commentary on peak oil. The Oil Drum, a Web site dedicated to informed discussions about peak oil and energy,  announced on July 3 that it is closing down. (For a brief primer on peak oil, see my conversation with Brad Plumer in the Washington Post .) Those who hate the peak oil story didn’t bother to conceal their glee at the news; some even saw occasion to claim victory for their side in the "debate" over the future of fossil fuels. “We could say ‘I told you so,’ not as a school-yard epithet, but simply as a fact,” crowed Mark Mills , co-author of a lightweight book entitled The Bottomless Well , which Publishers Weekly described as “Long on Nietzschean bombast but short on some crucial specifics.” David Blackmon, a Houston-based consultant with a 33-year career in the oil […]

Click here to view full article at www.smartplanet.com

Jeremy Grantham, whose GMO LLC investment firm manages $117 billion in assets, says the Great American Shale Boom is a dangerous waste of time and money. Grantham, who started his career as an economist at Shell, recently contemplated attending an anti-Keystone Pipeline demonstration in front of the White House.  In his new letter to clients , Grantham explains why any country, from the U.S. to China, still going down the path of developing fossil fuels is walking into a trap.  First, he argues we are overstating the benefits of switching to natural gas: “Fracking gas,” like all natural gas, is basically methane. Methane unfortunately is an even more potent greenhouse gas than CO2: at an interval of 100 years it is now estimated to be 32 times as bad, and at 20 years to be 72 times worse! If it leaks from well head to […]

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Page added on February 6, 2014 How long can economic growth continue in a finite world? This is the question the 1972 book The Limits to Growth by Donella Meadows and others sought to answer. The computer models that the team of researchers produced strongly suggested that the world economy would collapse sometime in the first half of the 21st century. I have been researching what the real situation is with respect to resource limits since 2005. The conclusion I am reaching is that the team of 1972 researchers were indeed correct. In fact, the promised collapse is practically right around the corner, beginning in the next year or two. In fact, many aspects of the collapse appear already to be taking place, such as the 2008-2009 Great Recession and the collapse of the economies of many smaller countries such as Greece and Spain. How could collapse be so […]

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CAPEX, AGAIN   [T]he 2013 WEO has the oil industry’s upstream capex [see this and this ] rising by nearly 180 per cent since 2000, but the global oil supply (adjusted for energy content) by only 14 per cent. The most straightforward interpretation of this data is that the economics of oil have become completely dislocated from historic norms since 2000 (and especially since 2005), with the industry investing at exponentially higher rates for increasingly small incremental yields of energy. [1] I pretend no expertise whatsoever in any and all economic matters … never have. But I understand just enough to realize that those numbers (from that excellent article by energy analyst Mark Lewis) suggest that the oil industry isn’t getting anywhere near its expected “bang for the buck.” And since those increased investments are made possible courtesy of the […]

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Gasoline-like fuels can be made from cellulosic materials such as farm and forestry waste using a new process invented by chemists at the University of California, Davis. The process could open up new markets for plant-based fuels, beyond existing diesel substitutes. “What’s exciting is that there are lots of processes to make linear hydrocarbons, but until now nobody has been able to make branched hydrocarbons with volatility in the gasoline range,” said Mark Mascal, professor of chemistry at UC Davis and lead author on the paper published Jan. 29 in the journal  Angewandte Chemie . Traditional diesel fuel is made up of long, straight chains of carbon atoms, while the molecules that make up gasoline are shorter and branched. That means gasoline and diesel evaporate at different temperatures and pressures, reflected in the different design of diesel and gasoline engines. Biodiesel, refined from plant-based oils, is already commercially available […]

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At the risk of starting a cat fight where truth may too quickly become a casualty, why don’t we more forcefully challenge those who deny peak oil (and global warming) and who do so for reasons that generally ignore reality in favor of narrowly-defined interests? Those motivations will ultimately do nothing but promote more eventual harm by denying the truths to those who clearly need them the most…. Of course, we run the risk of getting bogged down in he said/she-said arguments that quickly devolve into the lowest forms of ‘debate’, but why let those types of offerings go unchallenged? They feed on themselves, and it is tiresome and time-consuming to have to rebut all the nonsense. But if we don’t, uninformed readers and listeners have no reason to at least consider the possibility that there may indeed be other facts out there […]

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In order to understand what solutions to our energy predicament will or won’t work, it is necessary to understand the true nature of our energy predicament. Most solutions fail because analysts assume that the nature of our energy problem is quite different from what it really is. Analysts assume that our problem is a slowly developing long-term problem, when in fact, it is a problem that is at our door step right now. The point that most analysts miss is that our energy problem behaves very much like a near-term financial problem . We will discuss why this happens. This near-term financial problem is bound to work itself out in a way that leads to huge job losses and governmental changes in the near term. Our mitigation strategies need to be considered […]

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Judging by pump prices, drivers might think oil companies were rolling in profits that only move higher. Lately, though, the big boys in the global oil industry are finding that earning a buck isn’t as easy as it used to be. Royal Dutch Shell, for instance, just announced that fourth quarter earnings would fall woefully short of expectations. The Anglo-Dutch energy giant warned its quarterly profits will be down 70 percent from a year earlier. Full year earnings, meanwhile, are expected to be a little more than half of what they were the previous year. The news hasn’t been much cheerier for Shell’s fellow Big Oil stalwarts. ExxonMobil, the world’s largest publicly traded oil company, saw profits fall by more than 50 percent in the second quarter to their lowest level in more than three years. Chevron and Total, likewise, are warning the […]

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Peak Oil is a controversial concept. Some people actually think that the production of oil in nature is continuous (which is a tiny bit, but hardly at all, true) so we can keep pumping oil out of the ground and it will just keep being produced by tiny microbes. But aside from that particular, and annoying, made-up controversy, “real” Peak Oil (or should I say Peak Real Oil) is still controversial. Peak Oil is defined as the moment when the maximum rate of petroleum extraction occurs, and thereafter production declines steadily, like on a bell curve. But that is, in my view, the wrong way to look at it. I would like to propose a different way, and to understand this approach we first must understand chocolate chip cookies. Which is not difficult. If you make a batch of chocolate chip cookies, then […]

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Despite the arguments that once raged and the considerable volumes written to advocate certain viewpoints and disparage others, interest in peak oil is at an all time low. Indeed some commentators have confidently declared that peak oil is dead and that the theory has turned out to be nonsense . But this attitude stems largely from the explosion of tight or shale oil production in the US. This oil, trapped in shale rock formations in the same way as shale gas, and similarly extracted by fracking, was almost unheard of just over five years ago. Yet recent projections suggest production of it could exceed 7m barrels per day by 2035 . Despite this, some analysts maintain that tight oil has no bearing on peak oil, and others claim that it is a point we have already passed . So we are in the strange position where both sides of […]

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My anomalous position as a writer and speaker on the future of industrial society who holds down a day job as an archdruid has its share of drawbacks, no question, but it also has significant advantages.  One of the most important of those is that I don’t have to worry about maintaining a reputation as a serious public figure. That may not sound like an advantage, but believe me, it is one. Most of the other leading figures in the peak oil scene have at least some claim to respectability, and that pins them down in subtle and no-so-subtle ways. Like it or not, they have to know that being right about peak oil means that they might just pick up the phone one of these days and field an invitation to testify before a Senate subcommittee or a worried panel of long-range […]

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Citizens of the U.S. and world are heading into a future that few have prepared.  It will also turn out to be much worse than most realize as it will be unlike anything we have witnessed in the past. Part of the reason we are in such a bad fix has to do with the compartmentalization and specialization of our modern educational and economic system.  There are many intelligent people in the market doing smart things, however they have no clue on what the hell is going on in other industries or professions. For example, there are many precious metal analysts that I have much respect for, but who fail to understand the energy industry.  Now, I would imagine there are a few analysts in the precious metal Biz that do understand the ramifications of Peak Oil, but it’s more rewarding for them […]

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At the risk of starting a cat fight where truth may too quickly become a casualty, why don’t we more forcefully challenge those who deny peak oil (and global warming) and who do so for reasons that generally ignore reality in favor of narrowly-defined interests? Those motivations will ultimately do nothing but promote more eventual harm by denying the truths to those who clearly need them the most…. Of course, we run the risk of getting bogged down in he said/she-said arguments that quickly devolve into the lowest forms of ‘debate’, but why let those types of offerings go unchallenged? They feed on themselves, and it is tiresome and time-consuming to have to rebut all the nonsense. But if we don’t, uninformed readers and listeners have no reason to at least consider the possibility that there may indeed be other facts out there […]

Click here to view full article at peakoil.com

Something has bothered me of late: why is the price of crude oil still elevated? Other commodities have taken a battering since 2011. Gold, copper and iron ore – all are way down off their peaks. But oil has seemingly defied gravity. And that’s despite increased supply from shale oil in the U.S., still soft demand particularly in the developed world and declining rates of inflation growth across the globe. What gives? Well, shale oil proponents will say falling oil prices are just a matter of time. And that the boom in shale oil will reduce U.S. reliance on foreign oil, leading to cheaper local oil, which will free up household budgets and spur consumption as well as the broader economy. Perhaps … though I’d have thought all of that would already be reflected in prices. On the other side, you have "peak oil" supporters who suggest high oil […]

Click here to view full article at seekingalpha.com