Category: Peak Oil

The global benchmark Brent crude oil price index slipped below $50 a barrel on Wednesday for the first time in five years, continuing the dramatic plunge that has seen oil prices halved since last June. Stock markets in oil-rich countries keep tumbling, while some analysts interpret the fall — which has brought a windfall to Americans at the fuel pump — as signaling an imminent financial crisis and potential economic slowdown. While not easily explained by a single cause, the price cut is widely believed to reflect slackening economic growth and weakening demand from major consumers such as China coupled with an increase in supply due to booming U.S. shale production. Analysts expect the downward trend to continue unless the world’s major producers, especially the Gulf state members of OPEC, move to cut their output in order to stabilize prices — an option they’ve avoided for now.  In the […]

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The dawn of agriculture marked a huge turning point for human civilization.  At that point, when we, as a species (for the most part), abandoned the age-old concept of the so-called “Hunter-Gatherer” lifestyle in favor of putting down roots (pun very much intended), there were somewhere in the neighborhood of 5 million people on Earth.  It then took us around 10,000 years for that number to reach 1 billion around the turn of the 19th Century.  Now, a mere 200 years later, our population has absolutely exploded to the tune of over 7 billion people, and that growth was made possible by one thing: the cheap, plentiful energy provided by fossil fuels, oil chief among them. We’ve talked about Peak Oil Theory many times here on Backwoods Survival Blog ; it remains a future threat, even though the exact nature of that threat has changed over time (more on […]

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At the essential center of the framework of the Crash Course is the almost insultingly simple idea that endless growth on a finite planet is an impossibility. It is so simple it could be worked out by a clever 4 year-old. And yet it must not be so simple because the main narrative of every economy in every corner of the globe rests on the idea of endless, infinite growth. Various rationalizations and mental dodges are made in people’s minds to accommodate the principle of endless growth.  Some avoid thinking of it all together.  Some think that perhaps we will escape into space, and continue our growthful ways on some other yet-to-be named planet(s).  Most simply assume that some new wondrous technology will arise that can allow us to avoid pesky limits. Whatever the rationalization, none stand up well to simple math and cold logic. At the very heart […]

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WASHINGTON (AP) — The CEO of the oil and gas industry’s top lobbying arm says plunging oil prices may hurt American companies in the short run. But American Petroleum Institute CEO Jack Gerard says increased U.S. production and dropping oil prices also mean the U.S. is on its way to being a global leader in oil production. He says falling prices have empowered the United States and weakened OPEC and Russia. Gerard says the U.S. needs to maintain the right policies to secure a future that allows it to control its own interests. He says the nation should lift a ban on exporting crude oil in order to serve growing global demand. Gerard spoke at a "State of American Energy Event" in Washington.

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It’s looking increasingly likely that we’ve reached peak car , the point at which overall automobile usage tops out. The U.S. and Europe appear to be at that point now; the rest of the world may follow within a decade . You’d think that would spell trouble for the privately owned car—a future of waning use and perhaps eventual extinction. Think again. Peak car is the result of some major trends that look to marks the biggest change in automobile use since Henry Ford, as the car evolves from a huge piece of standalone hardware in a garage to a computerized network tool for the 21st century. Auto Use Really Is Down Peak car represents a major U-turn on thinking from just five years ago. That’s when transportation researchers forecast that the world was headed full-throttle towards global gridlock in the next 20 years , with the number of vehicles on […]

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Low oil prices today may be setting the world up for an oil shortage as early as 2016. Today we have just 2% more crude oil supply than demand and the price of gasoline is under $2.00/gallon in Texas. If oil supply falls too far, we could see gasoline prices doubling within 18 months. For a commodity as critical to our standard of living as oil is, it only takes a small shortage to drive up the price. On Thanksgiving Day, 2014 Saudi Arabia decided to maintain their crude oil output of approximately 9.5 million barrels per day. They’ve taken this action despite the fact that they know the world’s oil markets are currently over-supplied by an estimated 1.5 million barrels per day and the severe financial pain it is causing many of the other OPEC nations. By now you are all aware this has caused a sharp drop […]

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This Oil Thing Is The Real Deal thumbnail Well! WTI below $50 and Brent below $53 when I start writing this. Who knows where they’ll be by the time I’m finished?! The euro down below $1.20, US stocks flirting with -2%, major European ones off -3%, Italy and Greece over -5%. Welcome to the real world, baby! Didn’t think you’d see it again so soon, did you? Welcome to the world where the Kool-Aid recovery does not reign supreme. Not that you’re not going to hear that anymore, and 24/7 incessantly so, but there’s no recovery with these oil prices, no matter what anybody says. The damage must be gargantuan by now. Everybody’s invested in oil. Sure, lots of shorts and stuff by now, but that’s not going to do much good. Not for pensions funds, or for governments. This thing will not blow up or over softly. There’s […]

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Oil prices are plunging even lower today . WTI crude is down below $50 per barrel for the first time since 2009. That’s already down by more than half since the beginning of 2014, a development almost no one saw coming. It begs the question: What is the lowest possible low for oil right now? One answer — which will terrify countries that are big oil-producers like Russia and Venezuela — is that there’s no insurmountable reason that oil couldn’t sink as low as just $20 a barrel. It’s already been there, after all. Fifty dollar oil is already having an amazing effect: Russia’s ruble has gone through the floor , and that nation is now in an economic crisis because of it, Venezuela is also in a major political and economic crisis , and the tumbling prices are likely to drive the eurozone into deflation soon , if […]

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NEW YORK (Reuters) – As a war of nerves between U.S. shale producers and Gulf powerhouses intensifies, OPEC’s biggest members are counting down the months until their upstart rivals lose the one thing shielding them from crashing oil prices – hedges. They may need much more patience than they reckon, however, because those hedges are a moving target. Rather than wait for their price insurance to run out, many companies are racing to revamp their policies, cashing in well-placed hedges to increase the number of future barrels hedged, according to industry consultants, bankers and analysts familiar with the deals. OPEC officials hope that once U.S. oil companies get fully exposed to the impact of an over 50 percent slide in crude prices since last June, they will have to drill fewer new wells, causing U.S. production growth to stall and putting a floor under oil prices now testing $50 […]

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The most attention-grabbing attempts to predict oil futures have come from geologists and environmental activists, who tend to look solely at production. An overlooked doctoral thesis by Christophe McGlade, Uncertainties in the outlook for oil and gas , in contrast, focuses on how both supply and demand might be constrained in the coming decades. Peak oil researchers should take note of McGlade’s thesis because he predicted, in November 2013, that oil prices would sink, and that they will stay low throughout the second half of this decade. I found this paper on Google Scholar and have no connection with the author, but I appreciate his careful consideration of peak oil arguments, and his ability to distance himself from the more narrow-minded aspects of both economic and geological thinking. Here’s a representative quote from the middle of the thesis, p. 216: The focus of much of the discussion of peak […]

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