Category: Peak Oil

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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