Peak Oil

[Finner]

Hey guys,

I got in an arguement with one of my friends a few days ago over what would happen as the peak production of oil passes, and supply cannot rise as quickly as demand does.

My friend believed that basically the next great depression will happen.

My arguement on the other hand wasthat the laws of supply and demand would give the economy time to adjust. In other words, as oil prices rise, less peole will use oil, thus increasing the time we have to find a pontentially new oil resource.

Either way, I got home and looked it up and stumbled across this page : http://www.lifeaftertheoilcrash.net/Index.html

Its basic premise is that oil is on a bell curve, once peak production is passed, demand will continue to rise, while supply cannot continue to increase at the same rate. Conventional oil sources are continueing to decline, and newer methods for extracting oil, ie the oil sands or sythetic oil from coal are not only dirty but cannot keep up with increasing demand.

It also mentions how oil driven our economy is, and how dependent we are( ie. plastics, fertilizes), and also explains why solar, wind, nuclear and even conservation will never work. It also mentions what it believes to be the reason for the iraqi war.

Ethr way its an interesting read, albeit long. The guy is a good writer and cites his sources almost relgiously as well as has been quoted in congress multiple times.

Anyway just wanted some opinions to weigh in. I think it would make an interesting discussion for the people who choose to read.

[Cowperson]

If there is such a thing as peak oil, price action will eventually encourage either new technologies to recover current uneconomic reserves or we'll see economics encouraging other forms of energy, including nuclear power . . . . .

If I'm not mistaken, there are something like 100 nuclear reactors being constructed, on order or being contemplated in the world right now. China is particular is going towards nuclear energy in a big way.

Peak oil, it seems to me, also appears to suppose that massive known reserves such as oil shale in Colorado will continue to be uneconomic . . . . and maybe they will in the face of more economic alternative forms of energy.

The world is a constantly evolving thing. Even 25 years ago, within my lifetime, it would have been difficult to envision many of the changes we've seen.

"Everything that can be invented has been invented."

--Charles H. Duell, Commissioner, U.S. Office of Patents, 1899.

And other famous last words:

http://www.langston.com/Fun_People/1995/1995BKM.html

Cowperson

[Azure]

I think we're already seeing people move towards other sources of energy, as gas prices have risen tremendously in the past few months/years.

With the continuation of such high prices, I think the development of other sources for energy is inevitable, and will take time before the world is not so dependent on oil.

I think we have to trust the progress of man a bit more; like Cowperson said, 25 years ago, nobody would have dreamed of having the things we have today.

I trust the development of technology to find an alternative measure for oil, BEFORE our supply runs out. That gives us what, 50-100 years according to certain reports?

[Cube Inmate]

I read much of that website with morning coffee...interesting, but one-sided.

I don't have any expertise, but I'll reserve my panic for a later date. The author of that site predicts an absolute doomsday scenario without attempting to balance the arguments. He lists the arguments of the other side, but only in an attempt to discredit them.

On the other hand, I think Cowperson's nonchalant attitude is a little careless. Man can adapt to disruptive changes, but I'm not aware of any change as negatively disruptive as the sudden realization that our primary energy source is in short supply.

[Cowperson]

Originally Posted by Cube Inmate

I read much of that website with morning coffee...interesting, but one-sided.

I don't have any expertise, but I'll reserve my panic for a later date. The author of that site predicts an absolute doomsday scenario without attempting to balance the arguments. He lists the arguments of the other side, but only in an attempt to discredit them.

On the other hand, I think Cowperson's nonchalant attitude is a little careless. Man can adapt to disruptive changes, but I'm not aware of any change as negatively disruptive as the sudden realization that our primary energy source is in short supply.

If its sudden . . . . . which it isn't.

The economic adjustment is already occurring . . . . . the altering of behaviour among consumers at certain price thresholds, the growing comparative attraction of alternative sources of energy, a country like China looking to bring its electrical grid more towards nuclear energy . . . . . . and the profit motive already encouraging innovation.

Peak oil will be a disaster for those who don't view it as an opportunity.

The USA economy is far more fuel-effcient than it was during the oil crisis of 1972-1980 . . . . . the high relative cost of energy at the time, as well as stifling government regulations that discouraged new supplies, in fact encouraged efficiencies and innovation . . . . . and the people who provided those innovations and efficiencies made money.

I remember a little car called a Honda Civic in the mid-1970's getting a lot of laughs . . . . . then it killed Detroit with its original slogan of "It Will Get You Where You're Going," clearly an apology for its appearance and a play on the economics of driving.

Don't worry. Be happy.

Cowperson

[troutman]

Wouldn't it be a much worse disaster if the continued use of oil contributed to a collapse of our ecosystems?

[Cowperson]

Originally Posted by troutman

Wouldn't it be a much worse disaster if the continued use of oil contributed to a collapse of our ecosystems?

There seems to be a raging debate in the environmental activist community about some prominent members recently beginning to endorse nuclear power as an alternative to coal and oil.

Cowperson

[ah123]

You should pick up "Thousand barrels a second" by Peter Tertzakian - he talks about the energy cycle and the breaking point we're coming to...I am about midway through it so I can't really summarize any of his views

A link to the book's website: http://www.1000barrels.com/

[Clarkey]

Humans have a perverse interest in fear prophecies. We're always worried about the next big shock.

There are many self-proclaimed experts that like to market their brand of fear to the great unwashed masses. They usually accompany their ideas with various books, dvds, seminars etc that they sell. It's quite the industry.

Peak oil is an example of faulty economics. As a finite resource such as oil becomes depleted the price rises, this puts a damper on demand, but the higher price also encourages further development of reserves that were previously uneconomic. Just look at the oil sands, they are only now becoming an economic resource and weren't even considered as actual oil reserves as recent as 5-6 years ago. As it stands now recovery rates in Alberta anywhere between 10-35%, meaning there is a whole lot being left in the ground.

Peak oil experts are almost akin to doomsday predictors, there have been a whole bunch of claims that oil has reached peak production since the 70's, none of them have been correct.

[flamesfever]

I recall in the early 70's, the oil embargo was on and oil prices were rising dramatically. And at the same time, there was considerable concern about oil production peaking in the US. As a result, there was a lot of talk about nuclear fusion as being the next thing to displace oil as the main source of energy. However, they realized at the time that the knowledge base about fusion was in such an early stage of development that they were faced with training a whole generation of students in the field to become university professors for the next generation.

My question for some of you scientific types out there, is what is the status of nuclear fusion as a viable alternative for oil in the future?

[Cube Inmate]

Actually, I've heard of a fusion reactor that provides over 100 PW of power to Earth's surface...

Fusion Reactor!

The problem is turning it into something useful....

[ken0042]

Originally Posted by Cube Inmate

The problem is turning it into something useful....

Bah. Just go out and get yourself a Dyson Shpere.

[Calgaryborn]

There is a lot that can be done to reduce production needs that just hasn't been done yet because the price hasn't climbed high enough, apparently.

I predict that railways will become a more common use of transportation. The states are already looking to expand tracks and purchase land for transfer stations. Smaller trucks many of them electric will carry the goods for local delivery.

Also, there is a lot of potentual for more effective use of transport
trucks. How many miles do these trucks drive empty? Too often goods
are shipped from greater distances than necessary simply because of
price. With higher fuel prices things like lumber will be sold closer to
where it is manufactured rather than shipped across the continent.

Resource rich areas will benefit. Manufacturing will move closer to the
materials needed for production. Hydro electric power will be expanded
as well. North America might go to smaller more efficient diesel cars like
Euorope has.

There is a lot we can do before we simply shut down because of lack of supply.

[Vansmack]

it is my estimation that we will not see nuclear fusion as a viable alternative for oil. On earth fusion occurs at some insane temperature, in the neighborhood of 100 million kelvin. This fact alone completely rules out the potential for nuclear fusion as a replacement for hydrocarbons.

Cold fusion is another story that will be debated for a long time. There have been a number of controversies surrounding the topic, and there is almost no research being done on it currently in north america.

[flamesfever]

I agree with you, Calgaryborn. There will be huge adjustments to accomodate the rise in demand over the diminishing supply of oil, especially in North America where we have been spoiled for so long with an endless supply of cheap oil.

However, I see these changes taking place gradually over a large period of time, perhaps several generations, and wouldn't be cause for immediate concern.

[Finner]

Well according to the website, peak oil was passed in the 1970's in the united states , at the precise point where the US had to begin importing oil to supply its economy (ie Supply is greater then Demand.)

The idea is their is more then half the worlds supply of oil left, it just can't be pulled out of the ground fast enough.

The basic premise is that if a 5% oil reduction during the oil embargo in the 70's can cause a 400% increase in price, what will happen as supplies continue to plummet, albeit slowly.

Also oil is used in basically ever industrial process known to man. EVERYTHING uses oil, creating metals and alloys, rubber, plastic, solar panels, wind turbines, all of that needs oil to power the factories that create these products.

Secondly what can we use to replace oil as a high density transportation fuel?

Interesting questions. I never really thought about it's impact on our lives until I read that site. I agree it is a little to doomsdayish for me, but it definately makes you think about the effects it could have on us in the coming years.

[Mr.Coffee]

I hate reading stuff like this, and 1000 Barrels a Second.

Sometimes it gives me a bit of a scare. I'm lining myself up for a nice career in the oil and gas industry and stuff like this makes me very wary...

[Finner]

Originally Posted by Mr.Coffee

I hate reading stuff like this, and 1000 Barrels a Second.

Sometimes it gives me a bit of a scare. I'm lining myself up for a nice career in the oil and gas industry and stuff like this makes me very wary...

I think everybody from alberta is lined up fo a job in the oil and gas industry, myself included.

[Mike F]

I haven't read the article because it's summer and it's just too damn hot to read right now.

But to those making arguments along the lines of alternatives becoming more economical, other sources being invented, etc. you also have to understand that net energy output (amount of energy a source produces minus the amount of energy it takes to obtain that source) is also a huge factor.

Oil from traditional sources has an incredibly high net energy output because you basically just have to drill a hole into the ground and it will shoot out, and it's very easy to transport. Oil from tar sands, on the other hand, take huge amounts of energy to separate into a usable form and is much more difficult to transport because it doesn't flow as well. Therefore, even if it is now economical to extract a barrell of oil from the tar sands, you're getting a lot less net energy from that barrell.

Unfortunately, the same is true for solar energy, wind energy, nuclear energy, etc. If need be we could probably build enough of these sources to generate the same energy as we get from traditional oil, but because it would take so much energy to produce them we'd still be much worse off.

[Daradon]

While I don't believe in some of the worst doom and gloom scenarios, I could see the world going through a period of time when there are shortages and problems arise from it. I don't see the world developing new technologies at a fast enough rate, nor do I see us slowing our comsumption in a meaningful manner. Add to the fact that many second world nations are quickly beomcing industrialized and China and India are using more power than ever ad I don't see how we COULDN'T experience some growing pains.

It sure doesn't help that current governments all around the world are in bed with big oil either. There's not enough incentive to develop other energy sources in time.

Just my opinion of course.