Category: Peak Oil

Where is George Orwell when you need him? It is a supreme irony that cornucopian oil industry mouthpiece and consultant Daniel Yergin should receive America’s first medal for energy security named after James Schlesinger, the first U.S. energy secretary. For those not familiar with the late Dr. Schlesinger’s views, in a keynote speech he told attendees at a 2007 conference sponsored by the Association for the Study of Peak Oil (ASPO) the following: Conceptually, the battle is over. The peakists have won. I was sitting next to an oil executive in New Mexico just recently, and he said to the audience, "Of course, I’m a peakist. We’re all peakists. I just don’t know when the peak comes." But that represents part of a conceptual victory. And, therefore to the peakists I say, you can declare victory. You are no longer the beleaguered, small minority of voices crying in the […]

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Power lines criss-cross the sky near downtown Los Angeles, California in September. European Pressphoto Agency IVÁN MARTÉN : Many still fail to appreciate the huge potential for using energy more efficiently, which is probably the best way to reduce carbon emissions. In the Boston Consulting Group’s report The Energy Efficiency Opportunity: Winning Strategies for a High-Growth Market , which was published in May, we calculate potential energy savings of 200 megatons of oil equivalent (Mtoe) in the U.S., which is equal to 20% of annual energy demand. In Europe, we project that energy-efficiency technologies will represent a market worth approximately €30 billion ($38.2 billion) by 2020. The most robust growth will be in countries with high energy prices, determined regulators, stable regulatory environments, and established energy-efficiency markets. Some important challenges remain in the residential market, however. One challenge is that consumers perceive energy-efficiency projects as risky. They are unsure […]

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Russell Gold writes in the Wall Street Journal that perhaps the idea of peak oil is a myth. After all, technology keeps getting better and better, allowing us to extract more oil from old fields. Of course, it’s expensive to do business this way: When the oil industry overcomes an obstacle and boosts oil production, costs typically increase. That opens the door for a better and cheaper energy source that will eventually displace crude oil. So at some point, the cost of getting more and more oil likely will get so high that buyers can’t—or won’t—pay….Already, economics is bringing about some changes. Despite the abundance of oil that fracking has delivered, global oil prices remain high. This has kept the door wide open for alternative sources of energy and spending on energy efficiency. …."There will be peak oil, but it will be [because of] peak consumption," says Michael Shellenberger, […]

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Russell Gold’s Wall Street Journal article “ Why Peak-Oil Predictions Haven’t Come True ” hit the web yesterday. And given Gold’s position as senior energy reporter for the Journal, this is likely the highest profile Peak Oil article of the year. You may also remember Gold from the great video interviews filmed as part of his book tour for his latest work “ The Boom: How Fracking Ignited the American Energy Revolution and Changed the World .” Gold’s article comes from a very optimistic side of the Peak Oil Debate, but the pessimistic position isn’t as weak as Gold suggests. Let’s jump in to examine the truth about past oil predictions, why the rate of oil production is the only correct metric for these debates, why these discussions should be grounded on present-day events, and why realistic estimates of our energy future should be our ultimate goal. Peak Oil […]

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A year ago saw the final post on The Oil Drum, a popular blog — started in 2005 — devoted to discussing the idea that global oil production had peaked. Next up was an age of energy scarcity and economic collapse. Actually what peaked was interest in “peak oil.” As reporter Russell Gold points out in the WSJ today, US oil production began to rise in 2009 and continues to rise today thanks to the oil field innovation of hydraulic fracturing and horizontal drilling. Innovation met scarcity and innovation won. And there are more innovations on the way, according to Gold. But won’t we one day run out of oil? It’s not infinite, after all, right? Actually price and technological advances rather than petroleum supply is more likely to keep plenty of oil in the ground forever. Gold:  When the oil industry overcomes an obstacle and boosts oil production, […]

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I’ve described the dynamic of structural imbalances of supply and demand leading to lower prices for crude oil as the Oil Head-Fake:  high global production (supply) continues while demand declines due to global recession, and the resulting imbalance of supply and demand triggers a major decline in price. But this drop is not positive; it’s a temporary response that triggers a variety of disruptive consequences. There’s nothing fancy about a basic supply-demand pricing model; if the world is awash in crude oil and demand slides, price will eventually follow. The interesting parts of the Oil Head-Fake Dynamic arise from the supply side, not the demand side.  Demand for oil is famously inelastic, meaning that easy substitutes are not readily available, and the primacy of oil in the global economy insures a steady demand. Yes, natural gas can be substituted for vehicles that have been converted to burn natural gas, […]

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How Far Will the Shale Boom Go? The shale energy revolution has already upset the “peak oil” forecast, which predicted that the world will soon reach the point of highest physical oil output and thereafter global production will begin an inexorable decline. Now, in the context of the worsening political situation in the Middle East and Eastern Europe, its impact is being discussed in terms of America’s ability to secure its own energy supplies and assist its allies with theirs. The near-term enthusiasm for shale energy is understandable, but what are its longer term prospects? Energy markets are notoriously difficult to predict. In the 1970s, as U.S. oil production reached a historic high point and turmoil in the Middle East produced two spikes in crude prices, there was talk of imminent scarcity. While global output stood at around 60 million barrels per day (mbd), some analysts declared that the […]

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Ready Or Not… The Unsustainable Status Quo Is Ending ~ Walking straight in a hall of mirrors I have to confess, it’s getting more and more difficult to find ways of writing about everything going on in the world. Not because there’s a shortage of things to write about — wars, propaganda, fraud, Ebola — but because most of the negative news and major world events we see around us are symptoms of the disease, not the disease itself. There are only so many times you can describe the disease, before it all becomes repetitive for both the writer and the reader. It’s far more interesting to get to the root cause, because then real solutions offering real progress can be explored. Equally troubling, in a world where the central banks have distorted, if not utterly flattened, the all important relationship between prices, risk, and reality, what good does […]

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Have we beaten "peak oil"? For decades, it has been a doomsday scenario looming large in the popular imagination: The world’s oil production tops out and then starts an inexorable decline—sending costs soaring and forcing nations to lay down strict rationing programs and battle for shrinking reserves. U.S. oil production did peak in the 1970s and sank for decades after, exactly as the theory predicted. But then it did something the theory didn’t predict: It started rising again in 2009, and hasn’t stopped, thanks to a leap forward in oil-field technology. To the peak-oil adherents, this is just a respite, and decline is inevitable. But a growing tide of oil-industry experts argue that peak oil looks at the situation in the wrong way. The real constraints we face are technological and economic, they say. We’re limited not by the amount of oil in the ground, but by how inventive […]

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Growth in China has slowed from double digits to 7.5% A “poisonous combination” of record debt and slowing growth suggest the global economy could be heading for another crisis, a hard-hitting report will warn on Monday. The 16th annual Geneva Report , commissioned by the International Centre for Monetary and Banking Studies and written by a panel of senior economists including three former senior central bankers, predicts interest rates across the world will have to stay low for a “very, very long” time to enable households, companies and governments to service their debts and avoid another crash. The warning, before the International Monetary Fund ’s annual meeting in Washington next week, comes amid growing concern that a weakening global recovery is coinciding with the possibility that the US Federal Reserve will begin to raise interest rates within a year. More On this story On this topic IN Global Economy […]

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