Our Dependency on Foreign Oil

Jon Stewart's eight minute piece illustrating the populist talking point that is U.S. Presidents vowing to reduce our dependence on foreign oil is a must watch. Click and watch and laugh at the absurdity of the ceaseless rhetoric, which continued this week.
As Stewart says, "Fool me once, shame on you. Fool me twice, shame on me. Fool me eight times - am I a smacking idiot?"

embedded video:


The Daily Show With Jon Stewart Mon - Thurs 11p / 10c
An Energy-Independent Future
http://seekingalpha.com/article/210687-our-dependency-on-foreign-oil?source=email
===========
A definate, must watch!

This guy is good, funny & makes the points, well!

Btw, the "Seeking Alpha" site, is quite good for a variety of "financial perspectives".

Try to view this video  - but alas no luck on dial up .. :-[

However would like to comment that satire is missing badly in Australia to keep our politicians at bay... :'(

Satire has it place !

Enjoyed the video perce. I liked the plant products for gasahol, now that's innovative.  Two wars and a giant spill - it's a lot to overcome.

What happens when energy resources deplete?

This article is lengthy, so I will only post some small segments and a few graphs.

However, the whole article is worth a read!
http://www.theoildrum.com/node/6574
=========
Peak Oil and Exponential Growth
Oil supplies are expected not just to level off, but to actually decline. Part of this happens because of the natural decline rate of conventional oil fields, as the finite amount of oil that is in the field is extracted.

The decline is likely to be more severe than historical decline rates (2% to 8% per year) would suggest, for two reasons mentioned earlier:

1. Declining credit availability, as high default rates continue among buyers. Lack of credit will tend to keep oil prices low, and discourage investment.

2. Higher tax rates on fossil fuels. Governments are short of funds and oil companies are temping targets. If tax rates are raised, this will likely cut back production, since oil companies base investment decisions on expected after-tax profit, and this will be lower for many projects.
=======

http://www.theoildrum.com/files/Oil%20prices%20begin%20rising%202004.png

http://www.theoildrum.com/files/Unconstrained%20demand.png


http://www.theoildrum.com/files/Gov%20Receipts%20and%20Disbursements%20div%20Personal%20Income.png

Tic Tic Tic .....We’re not  out of oil … yet

BUT  are we running out of time to prepare for Peak Oil  >:(


http://www.brushtail.com.au/july_04_on/oil_running_out_of_time.html

Cuba is a great model for surviving with minimal oil.

Annie Anthrax wrote on Jun 21^st, 2010 at 11:29am:

Cuba is a great model for surviving with minimal oil.

Dont they use a recycled cooking oil? I'd love to go to Cuba, all those old cars fat cigars and latin woman.

When the crisis hit, they were blindsided. It took a few years for the soil to be properly productive - they had to grow organic because they no longer had chemical fertilisers. Every spare patch of land in the cities was turned into urban gardens to grow food.

There are horse-drawn buses in Havana, and probably other places too. It's a trip to watch.

I think there was a period of about 3 years where they really struggled (the average Cuban lost about 10kg), but they came out well.

Good points, Annie - I have a great video on Cuba's paradigm socio-economic shift...

Is it online?

Annie Anthrax wrote on Jun 21^st, 2010 at 11:54am:

Is it online?

It's called 'The Power of Community: How Cuba Survived Peak Oil' - and it is definitely available online - via YouTube and elsewhere...

For starters, see: http://www.powerofcommunity.org/cm/index.php

Ah, yes. I've seen it - it's very good.

Annie Anthrax wrote on Jun 21^st, 2010 at 11:43am:

When the crisis hit, they were blindsided. It took a few years for the soil to be properly productive - they had to grow organic because they no longer had chemical fertilisers. Every spare patch of land in the cities was turned into urban gardens to grow food. There are horse-drawn buses in Havana, and probably other places too. It's a trip to watch. I think there was a period of about 3 years where they really struggled (the average Cuban lost about 10kg), but they came out well.

Take that Global, plus add a few extra obstacles, you then have a much more local economy and a disappearing Globilisation!  

http://www.communitysolution.org/poc.html

http://www.communitysolution.org/images/poclg.jpg


Quote:

Community Solution Website         Home | Blog | About Us | Bookstore | Donate | Contact Us The Problem The Problem Plan C Solutions Plan C Housing Solutions Plan C Transportation Solutions Plan C Food Solutions New Solutions Reports Press and Presentations Community Solutions Conferences Resources       The Power of Community – How Cuba Survived Peak Oil When Cuba lost access to Soviet oil in the early 1990s, the country faced an immediate crisis – feeding the population – and an ongoing challenge: how to create a new low-energy society. This film tells the story of the Cuban people's hardship, ingenuity, and triumph over sudden adversity – through cooperation, conservation, and community. "Everyone concerned about Peak Oil should see this film." Richard Heinberg. Produced by Community Solutions; Directed by Faith Morgan 53 minutes. Region-free. Subtitles in English, French, Spanish, Portuguese, Norwegian, and Taiwanese-Mandarin. DVD: $20.00+SH VHS: $20.00+SH If you prefer to send a check, download the order form here. Send me 1 DVD shipping Send me 1 VHS shipping For multiple quantities, please contact us via email or call 937-767-2161. Bookstore Special Buy Plan C and the DVD of our film, The Power of Community: How Cuba Survived Peak Oil, both for $35 +sh. The Power of Community DVD or VHS Click here to order.

http://www.communitysolution.org/images/special.gif

Annie Anthrax wrote on Jun 21^st, 2010 at 12:08pm:

Ah, yes. I've seen it - it's very good.

Somehow, I suspected as much - but I posted the info for the benefit of others anyway...

;)

Oil and gas production in Russia to fall after 2011 - LUKoil head

Oil and gas production in Russia will start declining gradually after 2011 if the government does not change laws to stimulate geological exploration, LUKoil head Vagit Alekperov said on Wednesday.

"The production will reach its peak in 2010-2011, and then it will face a gradual slowdown caused by a total absence of incentives in that sphere," Alekperov told a meeting of the Russian Union of Industrialists and Entrepreneurs.

He said that investment in geological exploration already slumped 65 percent in 2010 as newly-discovered fields are signed away to the state, not to a licence holder, which had discovered it, discouraging geological exploration on new fields.

Another stumbling block was the fact that expenses on new deposits discovery were only reimbursed if exploration proved successful, he said.
Link -
http://peakoil.com/production/oil-and-gas-production-in-russia-to-fall-after-2011-lukoil-head/
=============
From Russia, with Love, bugger a 40% Super profits tax, we'll just have it all!

Our Dependency on Foreign Oil
Worth a re-run

Jon Stewart's eight minute piece illustrating the populist talking point that is U.S. Presidents vowing to reduce our dependence on foreign oil is a must watch. Click and watch and laugh at the absurdity of the ceaseless rhetoric, which continued this week.
As Stewart says, "Fool me once, shame on you. Fool me twice, shame on me. Fool me eight times - am I a smacking idiot?"

embedded video:
http://www.theoildrum.com/node/6625
=============
A definate, must watch!

This guy is good, funny & makes the points, well!

Btw, the "The Oil Drum" site, is good for a variety of "Energy related perspectives".

wrote on Jun 21^st, 2010 at 11:25am:

Tic Tic Tic .....We’re not  out of oil … yet BUT  are we running out of time to prepare for Peak Oil  >:( http://www.brushtail.com.au/july_04_on/oil_running_out_of_time.html

Peak Oil world production has already happened - in 2003. It has been suggested that the rising oil price prior to the Global Financial Crisis was a major causal factor for the GFC.  The Sub Prime Mortgage holders in the US generally lived further from work than the average person because that was the only way they could get reasonably priced homes.  Eventually something had to give - the rising price of fuel resulted in widespread loan defaults because they could no longer afford to pay their mortgages.  

I'll see if I can find the original editorial on it.

Of course, the GFC has resulted in a lower demand for oil, which has given exploration some time to catch up with demand, so there might be another peak oil episode.  

I don't doubt that there were other factors that came into play about 2003 (including the invasion of Iraq) which helped reduce production, but it hasn't recovered to 2003 levels yet.

muso wrote on Jun 22^nd, 2010 at 3:55pm:

wrote on Jun 21st, 2010 at 11:25am: Tic Tic Tic .....We’re not  out of oil … yet BUT  are we running out of time to prepare for Peak Oil  >:( http://www.brushtail.com.au/july_04_on/oil_running_out_of_time.html Peak Oil world production has already happened - in 2003. It has been suggested that the rising oil price prior to the Global Financial Crisis was a major causal factor for the GFC.  The Sub Prime Mortgage holders in the US generally lived further from work than the average person because that was the only way they could get reasonably priced homes.  Eventually something had to give - the rising price of fuel resulted in widespread loan defaults because they could no longer afford to pay their mortgages.   I'll see if I can find the original editorial on it. Of course, the GFC has resulted in a lower demand for oil, which has given exploration some time to catch up with demand, so there might be another peak oil episode.   I don't doubt that there were other factors that came into play about 2003 (including the invasion of Iraq) which helped reduce production, but it hasn't recovered to 2003 levels yet.

Muso,
You may find the following site of interest.

It's "the official" US Energy Information Administration site and it has a breakdown, by Country, by Region & Global. It also provides details going back to 1980.

http://tonto.eia.doe.gov/cfapps/ipdbproject/iedindex3.cfm?tid=5&pid=53&aid=1&cid=&syid=2000&eyid=2009&unit=TBPD

You may like to have a look at the global figures up to & after 2005.

Oh, so Peak Oil...we're running out of oil again????

This will be the 5th time in my life time that we've run out of oil....

Yawn...

gizmo_2655 wrote on Jun 22^nd, 2010 at 6:37pm:

Oh, so Peak Oil...we're running out of oil again???? This will be the 5th time in my life time that we've run out of oil.... Yawn...

So, is it possible then , that Oil Production Growth is an exception to the rule, along with Population Growth?

In fact, are all human needs, an exception to the rule?

Which rule, I hear you say?

The Exponential Growth Rule, which says that "Exponential Growth, on a finite planet, is impossible!"

perceptions_now wrote on Jun 22^nd, 2010 at 6:58pm:

gizmo_2655 wrote on Jun 22nd, 2010 at 6:37pm: Oh, so Peak Oil...we're running out of oil again???? This will be the 5th time in my life time that we've run out of oil.... Yawn... So, is it possible then , that Oil Production Growth is an exception to the rule, along with Population Growth? In fact, are all human needs, an exception to the rule? Which rule, I hear you say? The Exponential Growth Rule, which says that "Exponential Growth, on a finite planet, is impossible!"

Well considering we had an 'Oil Crisis' (Peak Oil ...'We're running out of Oil') in 1973, 1979, 1980-1986, 1990 and 2000-2003....

Forgive me for being cynical about the 'current' Peak Oil Crisis.......

After 37 years of hearing..."OH MY GOD, We're almost of OIL" it is starting to feel a bit like 'The Boy Who Cried WOLF!!!'....

After almost 4 decades of warnings about 'We'll run out of Oil, next month/next year/in 5 years/in 10 years/by the turn of the century'....And watching the prices INCREASE each and every time a warning sounds....
It's starting to look like the 'OIL Crisis/Peak Oil' thing is fabricated by the oil prducing nations and/or the oil companies as an excuse to raise the $ per barrel rate......

gizmo_2655 wrote on Jun 22^nd, 2010 at 10:31pm:

After almost 4 decades of warnings about 'We'll run out of Oil, next month/next year/in 5 years/in 10 years/by the turn of the century'....And watching the prices INCREASE each and every time a warning sounds.... It's starting to look like the 'OIL Crisis/Peak Oil' thing is fabricated by the oil prducing nations and/or the oil companies as an excuse to raise the $ per barrel rate......

The following chart, may assist, with where we have come from and where we are going.

http://www.theoildrum.com/files/ccst20090515.png

perceptions_now wrote on Jun 23^rd, 2010 at 4:08pm:

gizmo_2655 wrote on Jun 22nd, 2010 at 10:31pm: After almost 4 decades of warnings about 'We'll run out of Oil, next month/next year/in 5 years/in 10 years/by the turn of the century'....And watching the prices INCREASE each and every time a warning sounds.... It's starting to look like the 'OIL Crisis/Peak Oil' thing is fabricated by the oil prducing nations and/or the oil companies as an excuse to raise the $ per barrel rate...... The following chart, may assist, with where we have come from and where we are going. http://www.theoildrum.com/files/ccst20090515.png

No perceptions, it doesn't help....mostly because it's a graph from a website that believes in the whole 'Peak Oil' story.

In the 1970's, we were told that we only had 6-12 months supply of oil left.....what happened?..Geologists went out and found more oil fields...result, we were no longer 'running' out of oil...

The 2003 peak oil panic was caused by the OPEC nations reducing the amount of oil pumped out of the wells...and of course, when a commidity becomes 'rare', the price goes up....under the 'laws' of  Supply and Demand..
Does that mean that the crude oil is running out?...NO not neccessarily....it just means the producers want to be paid more per barrel for the oil....

When I was growing up, there were ads on the TV every week, telling us how ESSO( I think, or it might have been Mobil) were finding and 'capping' an oil well per WEEK in Bass Strait and on the North-West Shelf of Western Australia....In order to 'secure Australia's Oil independance in the Future'....

So 2 wells per week equals 112 wells per year, and the adds ran for 5 or 10 years...

What does that mean?? It means the ONE company found between 560 and 1120 oil wells, just in Australia.....

Does THAT sound like we're short of oil?????

A normal oil well has an average life span of 20 years (or 22.5 years according to the Oildrum.com)...so 560x20 years...equals 11200 years worth of oil( providing we use each well until it runs out, then open the next one...which probably won't happen)...so lets have 10 wells running at a time.....11200 divided by 10 = 1120 years....

Have we 'Peaked' in our oil production in Australia?????

Quote:

Gizmo In the 1970's, we were told that we only had 6-12 months supply of oil left.....what happened?..Geologists went out and found more oil fields...result, we were no longer 'running' out of oil...

That's not quite right, as the following graph shows, Oil discovery actually Peaked around 1964.
http://www.theoildrum.com/files/Oil%20discoveries.png



Quote:

Gizmo The 2003 peak oil panic was caused by the OPEC nations reducing the amount of oil pumped out of the wells

That's not quite rught either, you may like to have a look at the following USA Energy Information Administration site (EIA), which has "official figures on various issues, including Production

http://tonto.eia.doe.gov/cfapps/ipdbproject/iedindex3.cfm?tid=5&pid=53&aid=1&cid=&syid=2000&eyid=2009&unit=TBPD


Quote:

Gizmo Does that mean that the crude oil is running out?

No, it doesn't mean that, at least not now. But, the mere perception of Demand outstripping Supply is & was enought to send the Oil Price into orbit @ $147 P/barrel. And, the additional impost acted like a drag on the Global economy and was enough to slow the Global economy, in concert with other issues and send the share markets crashing.  

That said, if the Population Growth does not come back down to earth, so to speak, then Peak Oil will convert into NO Oil, very quickly!

Btw, you may also be "interested in the following graph of the Mexican Cantarell Field Production, which is now in rapid decline. After being one of the Worlds more recent discoveries, these fields are headed for oblivion, after the USA has sucked them dry.

Mexico has been the third largest supplier of Oil to the US, after Saudi Arabia & Canada, so the USA will now on the lookout for another major supplier? Iran?
http://www.theoildrum.com/files/Cantarell.gif

Perceptions, you don't seem to be getting my point.....

IF the whole 'Peak Oil' concept is a 'con' or 'excuse' involving price fixing.....then WHY would any of the graphs, lists or any other 'information' be reliable???

OPEC, the various Oil companies, AND the USA Energy Information Administration site (EIA), would be 'biased'.....

And before you say it....YES the various Governments would be quite happy to support 'artificially inflated prices'...because inflated prices means inflated TAXES...

gizmo_2655 wrote on Jun 23^rd, 2010 at 6:13pm:

Perceptions, you don't seem to be getting my point..... IF the whole 'Peak Oil' concept is a 'con' or 'excuse' involving price fixing.....then WHY would any of the graphs, lists or any other 'information' be reliable??? OPEC, the various Oil companies, AND the USA Energy Information Administration site (EIA), would be 'biased'..... And before you say it....YES the various Governments would be quite happy to support 'artificially inflated prices'...because inflated prices means inflated TAXES...

Oh, I think I get where your coming from, I just don't agree that the facts fit with your conspiracy theory!

I agree there are certainly some smoke & mirrors games being played, but they are to try to continue the status quo, in Politics, Economics & in big Business!

If I am correct, we will not  see Oil Production recover and then grow, this side of the 2nd coming and along with the decline in Oil Production, will go the decline of the Global Economy, it will go down the toilet.

If you are correct, then Governments & Big Business (Oil company's), will continue to pilage us, for all they can, for as long as they can.

Wait on, perhaps your conspiracy sounds like a better option?

OPEC is involved in price fixing. That is the whole point of OPEC. They would be arrested if they did that within Australia.

However, peak oil is real and is nothing to do with OPEC. Getting yourself all confused about whether it is five peaks or one kind of misses the point.

freediver wrote on Jun 23^rd, 2010 at 8:17pm:

OPEC is involved in price fixing. That is the whole point of OPEC. They would be arrested if they did that within Australia. However, peak oil is real and is nothing to do with OPEC. Getting yourself all confused about whether it is five peaks or one kind of misses the point.

I don't disagree! OPEC or at least certain countries within OPEC are certainly making hay whilst the sun is shining, because when the music stops, their decline starts!

Quote:

are certainly making hay whilst the sun is shining

That is kind of an unfortunate choice of term. You do realise that OPEC is all about reducing output right? And that other non-OPEC countries increase their production to capitalise?

perceptions_now wrote on Jun 23^rd, 2010 at 8:22pm:

freediver wrote on Jun 23rd, 2010 at 8:17pm: OPEC is involved in price fixing. That is the whole point of OPEC. They would be arrested if they did that within Australia. However, peak oil is real and is nothing to do with OPEC. Getting yourself all confused about whether it is five peaks or one kind of misses the point. I don't disagree! OPEC or at least certain countries within OPEC are certainly making hay whilst the sun is shining, because when the music stops, their decline starts!

And at the 'risk' of sounding cynical, or 'conspiratorial'...

That's the whole point to 'Peak Oil'.....price control...

freediver wrote on Jun 23^rd, 2010 at 8:26pm:

Quote: are certainly making hay whilst the sun is shining That is kind of an unfortunate choice of term.

Not really, I thought it was quite apt, given the discussion!

freediver wrote on Jun 23^rd, 2010 at 8:26pm:

Quote: are certainly making hay whilst the sun is shining You do realise that OPEC is all about reducing output right?

Oh, I can guarantee there are games being played and some OPEC countries are certainly into games!

But, many of the countries are also on the other side Hubberts Peak and they have no option, but to reduce Production!

freediver wrote on Jun 23^rd, 2010 at 8:26pm:

Quote: are certainly making hay whilst the sun is shining And that other non-OPEC countries increase their production to capitalise?

Well, even though I don't completely trust the EIA figures, they do provide some insight into Production and the results are of interest -

Of those countries producing reasonable volumes,
Production Up -
Canada (up on poorer quality non conventional Oil - Higher cost of Production)
Azerbaijan
Kazakhstan
Angola
Brazil
Russia (the big gainer in last few years, taking advantage of Pricing, but likely to start to decline, shortly - 2011?

Production Down - all substantially down on Peaks
Mexico
Venezuela
Norway
UK

Production Steady -
Oman
Iran
Kuwait
Qatar
UAE
Algeria
Libya
Saudi Arabia (steady, but down 10% in 2009, suggested Ghawar is in Decline)

Others -
Iraq - Up & Down over the years, reasonably steady since 1999, notable exception in 2003 when it dropped off the radar! Wonder why?

Australia - Reasonably steady, in recent years, but well below Peak , which was in 2000
http://tonto.eia.doe.gov/cfapps/ipdbproject/iedindex3.cfm?tid=5&pid=53&aid=1&cid=&syid=1980&eyid=2009&unit=TBPD#

World Oil Consumption Was Down in '09: U.S. Production Increased

In 2009 the world's consumption of oil fell by 1.7%. That is the second consecutive year of decline, but relative to a decade ago consumption is up 11.1%. This is a reflection of both the weak world economy and of conservation efforts spurred by the extremely high oil prices in 2008. Consumption in the U.S. fell much further, dropping by 4.9% in 2009, and it was actually 4.3% below what it was in 1999 when oil prices were extremely low, but the economy was booming.

Still in 2009, the U.S consumed 21.4% of the world's oil. The U.S. was actually able to increase its production of oil by 7.0%, although that feat is certainly not going to be repeated in 2010 given the moratorium on deep water drilling after the Transocean (RIG) deepwater Horizon went down in flames. Over the longer term U.S. production has been in a steady decline, and is 6.9% below the level of a decade ago. The U.S. is actually the world's third largest oil producer at 7.196 million barrels per day (Mb/d), or 8.5% of the world's total. That is more than Iran and Kuwait combined. Russia was the world's largest producer at 10.032 Mb/d, followed by Saudi Arabia at 9.713 Mb/d.

The U.S. was not the only major country with the biggest reduction in oil usage last year. Japan's consumption plunged 10.7% and is 21.5% below where it was a decade ago. Most of the major European countries had declines in consumption that were roughly in line with the decline in the U.S., ranging from a 3.5% decline in France to a 6.3% drop in Italy. Over the longer run though, the major European countries have reduced their consumption significantly more than the U.S. has. For example, consumption in Germany in 2009 was 14.2% below 1999 levels and in Italy it was down by 20.2% over the course of the decade.

The consumption declines in the developed world were offset by increased usage in the developing world. Most significant of these is, of course, China, where oil consumption rose by 6.7% in 2009 and is up 92.7% over the course of the last decade. India burned 3.8% more oil in 2009 than it did in 2008, and 49.2% more than it did in 1999.
One area of the world that has really been increasing its oil consumption rapidly is the oil-producing countries. Both Saudi Arabia and Kuwait increased their consumption by 9.8% in 2009 and their consumption is up 69.4% and 72.4%, respectively over the last decade. From the U.S. perspective, the important number for the big producers is not just how much they can produce, but how much they have available for export.

Even with the U.S. decline in 2009, the U.S. still consumes a massive amount of oil relative to the rest of the world. In 2009, the U.S. consumed 21.7% of the world's oil. That is more than China, India and all of Central and South America combined. While being able to increase production by 7.0% was a nice accomplishment, it is not sustainable. We already produce 8.5% of the world's oil, but we have just 2.1% of the reserves.

On the other hand, the reserve figures for most of the rest of the world are, in a word, flakey. OPEC sets its production quotas on the basis of reserves, and the reserves it uses are pretty much whatever the member governments say they are. Back in the 1980s, that lead to most of the countries vastly increasing their reserves without actually finding more oil. Since then even though they have been procuring heavily, the reserves have not declined, and indeed in many areas crept upwards. Only in the oil industry is it possible to take a positive real number and then subtract a positive real number and not have the original number decline. That process did not end in the 1980s either.

The biggest news in the world in terms of new oil finds over the last decade have been the finds off the coast of Brazil by Petrobras (PBR) . However since 1999, Brazil's (not a member of OPEC) reserves have only increased by 4.6 billion barrels or 56.0%. On the other hand, Venezuela's reserves have shot up by 95.5 billion barrels, or 124.4%. Did you hear about the massive new finds in Venezuela over the last few years, an oil find that is truly world changing? Funny, neither did I. It's far more likely that Hugo Chavez is full of it. Thus, it is very possible that the U.S. has a higher percentage of the world's oil reserves than the 2.1% shown by BP. However, that would be because the rest of the world, particularly OPEC, is vastly overstating the amount of oil they have.

While the decline in overall world oil consumption in 2009 is encouraging, it is probably mostly a reflection of a weak global economy. America in particular needs to continue finding ways of using oil more efficiently and to find alternative sources of energy. The combination of 21.7% of world consumption, 8.5% of world production and 2.1% of world reserves is simply not sustainable over the long run.
Link -
http://seekingalpha.com/article/211300-world-oil-consumption-was-down-in-09-u-s-production-increased?source=email
===

FUTURE WINDOWS

Written in mid 2006, this contained 6 Possible, Major Influencing Events, including this one, relating to -


4) PEAK OIL
Event Initiator
- First reports that production can not keep pace with consumption, due to insufficient reserves.

Event Start Date
- Within 5 years.

Event Outcome/s
- Significant, to rampant increase in Oil related product pricing.
- Significantly increase inflationary pressure.
- Significant problems, in replacing Oil base, in many product lines.
- Immediate, knee-jerk reaction to implement Nuclear power.
- Increased, subsequent push for Green alternatives.

Event Duration
- 20 to 30 years

Event Probabilities
- Within 5 years, 80 to 20.
- Worse Case Scenario, 60-40.

Btw, in parts 4 & 5 of the following Dr Bartlet video, he refers to the medium Peak Oil date nominated by industry insiders was 2004 and those video's where put together around 1999.

A look at the Oil graph posted  4.08pm June 23rd, shows that Oil did in fact effectively plateau around 2004-2005.

Link (Dr. Albert A. Bartlett - Arithmetic, Population, and Energy) –
http://www.youtube.com/view_play_list?p=9B70AC68E1D2AA54&search_query=Dr.+Albert+Bartlett%3A+Arithmetic%2C+Population+and+Energy+Parts+1-8

Link (The Crash Course – Chris Martenson) -
http://www.chrismartenson.com/crashcourse

I highly commend both of the above sites, as they contain an  enormous amount of information on Energy, Population, Economics & more!

Canterell now Sub-500k bpd and Colin Campbell Talks Peak Oil

We’re getting closer to the edge – actually, we may have already fallen off the edge and are experiencing the side-effects of expensive oil. The erosion of the Canterell field in Mexico only increases US dependence on its quasi-enemies for economic growth.

http://www.planbeconomics.com/wp-content/uploads/2010/06/Cantarell-2008-20101.jpg

The Cantarell fields were a relatively recent discovery, with most of its production going to the USA. However, as its production declines, the USA will be forced to look elsewhere for its third largest supplier of crude oil.
Cantarell Wiki link -
http://en.wikipedia.org/wiki/Cantarell_Field
==========
There is also a useful video at the following link, which is an interview of Colin Campbell, who is a Petroleum Geologist & Peak Oil specialist. This includes reference to the North Sea Oil having declined from its Peak in 1989 of around 4.5 million bpd, to a current production of around 1.5 million bpd.

http://www.planbeconomics.com/2010/06/29/canterell-now-sub-500k-bpd-and-colin-campbell-talks-peak-oil/

Richard Heinberg Interview Part 1 (Peak Oil)
http://www.youtube.com/watch?v=DHXdS9XYVs8&feature=player_embedded#!

Richard Heinberg Interview Part 2 (Peak Oil)
http://www.youtube.com/watch?v=osbQ9UHMAvY&feature=related

Richard Heinberg is another whose logic, I can agree with, in some instances, regretably!

Are we humans, better than yeast?
I don't know, we will find out!

Australian crude oil production to decline by 85% over the next 10 years

http://www.crudeoilpeak.com/wp-content/gallery/ozy-graphs/fig_3_43_geoscience_australia.jpg

What we can see from this graph (note the inserted comment is by the author of this paper):

Crude oil production from known oil fields will dramatically decline by 85% over the next 10 years ( 1 – (105 + 0.14*152) / 890 = 0.85 )
This decline is offset by condensate from wet gas (mainly in LNG projects) but because of a lack of condensate splitters in Australian refineries 95% of this is exported.
The prospect for new oil discoveries is not very good. Geologically, Australia is better off with natural gas
Since global oil export volumes are shrinking at the same time (details below), Australia will slide into a huge oil import crisis. The government hopes coal-to-liquids, gas-to-liquids and 2nd generation bio fuels will come to the rescue but it is very uncertain whether that will materialize in the quantities required, at acceptable prices and the timeline dictated by events surrounding the global peaking of oil production.

These events in the next years include

an oil war or oil proxy war in the Middle East
social unrest in ME countries when declining OPEC oil production
impacts on budgets and subsidies for the general population
oil hoarding and freezing of oil markets when the truth comes out about OPEC’s overstated reserves and confidence in all oil reserve data disappears

In any case, the energy profit ratios of  alternative  fuels will be very low:

6/1/2010
Diminishing Returns of Fossil Fuel Energy Invested
http://www.crudeoilpeak.com/?p=909

Let’s check how the above graph compares with previous government reports. This figure 6 is from Geoscience Australia’s 2005 submission 127 to the Senate Inquiry on Oil Supplies:[2]

http://www.crudeoilpeak.com/wp-content/gallery/ozy-graphs/figure6geoscienceaustralia.jpg

It shows 3 projections up to 2025: P10, P50 and P90. Each number denotes the probability in percent that this projection will actually occur. Strangely, the AERA report does not show different probabilities. So let’s superimpose the 2 graphs to see where we are:

http://www.crudeoilpeak.com/wp-content/gallery/ozy-graphs/fig_3_43_superimposed_ga_subm127_actual_au_petroleum_stats.jpg

We can see from the graph:

The actual crude production curve (black line 2006-2009) has just hit the P90 estimate from 2005. It remains to be seen whether it will follow the new projection (light blue columns)
A lot of condensate has been added and that assumes all LNG projects go ahead as planned.
Read more about:

Australian oil reserves and resources, how AERA omits Geoscience Australia’s conservative 2P reserves
AERA’s misldeading statement about “enough” oil for 42 years and a factually incorrect “balanced” oil supply
The problems with propane deficient LPG, propane imports on the East coast and butane exports from the West coast
Timelines about global net oil exports shrinking and Australia’s coming oil import crisis
Lack of a Strategic Oil Reserve
Need to save oil in a hurry
3 examples of road projects which make no sense in a period of declining oil production: new Clem7  road tunnel in Brisbane, Hunter freeway and Western freeway in Melbourne
by downloading the full article of 10 pages as PDF file:  Australian Crude Oil Decline 85 Percent Over 10 Years [1.27 MB]
Link -
http://www.crudeoilpeak.com/?p=1243
=====
I think that OZ became net Oil importers, again, around 2000-2002. If these charts become reality, then the cost of Oil (read Energy) to the Australian Economy will become much greater, over the next decade, as will our reliance on following the USA into Oil Conflicts!

Lloyd’s adds its voice to dire ‘peak oil’ warnings

The Lloyd’s insurance market and the highly regarded Institute of Strategic Studies (ISS, known as Chatham House) says Britain needs to be ready for “peak oil” and disrupted energy supplies at a time of soaring fuel demand in China and India, constraints on production caused by the BP oil spill and political moves to cut CO2 to halt global warming.

“Companies which are able to take advantage of this new energy reality will increase both their resilience and competitiveness. Failure to do so could lead to expensive and potentially catastrophic consequences,” says the Lloyd’s and ISS report “Sustainable energy security: strategic risks and opportunities for business”.

The insurance market has a major interest in preparedness to counter climate change because of the fear of rising insurance claims related to property damage and business disruption. The review is groundbreaking because it comes from the heart of the City and contains the kind of dire warnings that are more associated with environmental groups or others accused by critics of resorting to hype. It takes a pot shot at the International Energy Agency which has been under fire for apparently under-estimating the threats, noting: “IEA expectations [on crude output] over the last decade have generally gone unmet.”

The report the world is heading for a global oil supply crunch and high prices owing to insufficient investment in oil production plus a rebound in global demand following recession. It repeats warning from Professor Paul Stevens, a former economist from Dundee University, at an earlier Chatham House conference that lack of oil by 2013 could force the price of crude above $200 (£130) a barrel.

It also quotes from a US department of energy report highlighting the economic chaos that would result from declining oil production as global demand continued to rise, recommending a crash programme to overhaul the transport system. “Even before we reach peak oil,” says the Lloyd’s report, “we could witness an oil supply crunch because of increased Asian demand. Major new investment in energy takes 10-15 years from the initial investment to first production, and to date we have not seen the amount of new projects that would supply the projected increase in demand.”

And while the world is gradually moving to new kinds of clean energy technologies the insurance market warns that there could be shortages of earth metals and other raw materials needed to help them thrive.

Lloyd’s also calls on manufacturers, retailers and the wider business community to reassess global supply chains and their just-in time models because the “current system is increasingly vulnerable to disruption.”

The report says government needs to do much more to bring additional price stability and transparency if the global carbon market is to become a reality.

Richard Ward, chief executive of Lloyd’s, said the failure of the Copenhagen climate change talks last December has helped lull many business leaders into a false sense of security about the challenges ahead. “We are in a period akin to a phony war. We keep hearing of difficulties to come, but with oil, gas and coal still broadly accessible – and largely capable of being distributed where they are needed – the bad times have not yet hit … all businesses … will be affected by energy supplies which are less reliable and more expensive.”
Link -
http://peakoil.com/bussiness/lloyds-adds-its-voice-to-dire-peak-oil-warnings/
==========
Having spent over 40 years in the financial sector, largely in insurance, I concur that risk assessment & early preventative medication, is much more preferably than trying to remedy problems, after they have occured.

And, in this case, the lead in times are enormous!

Looking ahead to When the tank runs dry

Addiction is defined as the state of being enslaved to something to such an extent that its cessation causes severe trauma. It is usually associated with drugs or alcohol. But, my fellow citizens, we all have an addiction problem: we're addicted to fossil fuels: oil, coal and natural gas.


Hooked

We began falling under their spell during the industrial revolution, when the steam engine was invented. It ran on coal and vastly improved life for our forefathers because it did work previously done manually.

Steamships and locomotives came next, then power plants and the internal combustion engine that is still used in vehicles worldwide today. Plastics - derived from oil - revolutionized consumer products and nitrogen-based fertilizers - derived from natural gas - enabled us to grow more food.

As a result, today we consume nearly 50 times more fossil fuel than we consumed in 1850. In 2008, fossil fuels provided an incredible 86 per cent of the energy used by humanity worldwide. We rely on them to grow and process our food; to purify and pump our water; to run our hospitals and schools; and to get around.

We rely on them every day, in every way. We're truly addicted.


A looming supply problem

Compounding our problem is the fact that we are addicted to something non-renewable: once it's gone, it's gone.

Consider oil. Wells that supply water to our homes are virtually bottomless, because they are continuously refilled by groundwater. Oil wells are different: there's only so much oil down there, so they eventually run dry. Historically we've simply moved on and found new ones. As the old lumberjack's cry goes, "There's always more wood over the next hill!"

But our voracious addiction has meant that all the easy oil is now gone. In the past few decades, we haven't been as successful at finding new wells to replace the ones that are running dry.

These days, we're down to dirty tar sands or drilling offshore to find more oil - much like an addict reduced to using a vein in a toe because all other veins have become scarred beyond use. Both have huge environmental implications. Devastating as it is, the Deepwater oil spill in the Gulf of Mexico is a predictable consequence of our addiction.

Credible energy analysts such as Dave Hughes and Jeff Rubin (Why Your World Is About To Get A Whole Lot Smaller) believe the day when global oil demand exceeds supply is not very far away. It's called Peak Oil theory, and it has some troubling implications. The first will be higher prices, for just about everything. The next will be shortages, ditto.

When the supply of the substance that underpins your society starts to run tight, you're wise to be concerned. Cuba experienced turmoil when its oil supply dried up in 1989 after the collapse of the Soviet Union. It survived - but Cuba has no cold winter and can grow food year round. Canadians, far more addicted to fossil fuels than most, should be especially uneasy.


Rehab or cold turkey

If Peak Oil theory is true - and overwhelming logic offers no clear reason to doubt it is - we have an addiction to break, quickly.

We have two options: we can choose a rehab program that involves, in order: 1) greatly reducing our energy demand; 2) using what we do use as efficiently as possible; and 3) developing renewable energy sources.

Or we can choose to do nothing, and just let things come to pass. But that's unwise. It's better to plan for the day when there is no gas at the local station, than to simply show up one day with an empty tank to find there is none.
Link -
http://telegraphjournal.canadaeast.com/magazine/article/1131278
========
Try telling that to the folks on Easter Island?

Quote:

perceptions-now In fact, if current rates of Economic & Population growth were to continue, which I suspect they won't, then coal could go the same as Oil is now & NG will within 20-30 years, whilst Coal may take slightly longer at 40-60 years. It really does DEPEND on what changes we make to Economic & Population GROWTH, now & in the immediate future!

Quote:

muso I don't know where you get your figures from, but it's more like 500 years for coal, and that's a conservative estimate. We have enormous reserves of coal worldwide. For example, some coal producing basins in Australia have not even been touched yet.

 
=========  
Muso/freediver,
You may be interested in the following comments, from the World Coal Institute -

"It has been estimated that there are over 847 billion tonnes of proven coal reserves worldwide. This means that there is enough coal to last us around 119 years at current rates of production. In contrast, proven oil and gas reserves are equivalent to around 46 and 63 years at current production levels."
http://www.worldcoal.org/coal/where-is-coal-found/
===========
So, what we have above is the Coal industry saying there are 119 years of Coal left, Globally.

However, as I previously mentioned, there is usually a rider to these statements, saying "at Current levels" or as they have done here " at current rates of production".

So, let's add an "acceptable" rate of growth of say 5%, which means the current usage/production doubles in 14 years, then doubles again at the end of another 14 years.

That means that the Coal Industries own figure of 119 years, suddenly becomes 40 years or less, if only 5% growth becomes reality and China is currently going along at 10% growth, with the rest of the world in a slight decline, due to the GFC.

The Chinese Coal Monster

•China set to consume 50% of global coal production this year
•Production and consumption roughly in balance
•Coal imports used for stock pile growth?
•Consumption growing >10% year on year in line with economic growth
•Rest of world consumption declined 7% in 2009

http://www.theoildrum.com/files/china_coal_consump.png

http://www.theoildrum.com/files/China_coal_perc_share.png

http://www.theoildrum.com/files/top_20_coal_0.png

http://www.theoildrum.com/files/coal_exports.png

Threat to global economy
Should China ever fail to match coal consumption with indigenous production then 1 of 3 things may happen. The first option is that consumption is pegged back to match stalled production and this would stall Chinese economic growth with knock on effects to the global economy. The second option is that China tries to meet any shortfall buying coal on the international market. As already pointed out China is such a huge consumer of coal this would create great competition in the international market for limited supplies leading to severe upwards pressure on coal prices. The third option is that China somehow manages to install sufficient nuclear capacity to plug any energy gap
Link -
http://europe.theoildrum.com/node/6700
=========
There are other threats!

Planning for Europe's Energy Future: My Submission to the Commission's 2010 Consultation on Energy

http://www.theoildrum.com/files/PetrobrasSlide6.jpg

http://lh3.ggpht.com/_uSGWDpzXGys/TC9vhIBzIjI/AAAAAAAAAE8/yQZ9QmlzvNc/s576/WOE_October2008_2.png

Link -
http://europe.theoildrum.com/node/6694

Uk Energy Security and Peak Oil by Simon Snowden (Parts 1-5)

The following short video's give a perspective of Peak Oil and how it is affecting us now & will affect us in the future.

Also includes references to business & the economy in general.

There are some good points raised, however the presenter is not another Lord Munckton.

http://www.youtube.com/watch?v=wl10Vp2aKuU&feature=related

http://www.youtube.com/watch?v=1CaviX2-kqY&feature=related

http://www.youtube.com/watch?v=9jkaH9tLArM&feature=related

http://www.youtube.com/watch?v=WZBYz7B2aMw&feature=related

http://www.youtube.com/watch?v=iA57wQv4O5M&feature=related

Just on way out, I will post full article later.

But I thought this chart was worth a look, purely to show some of the "official misdirection" of Governments & their agencies!

http://www.theoildrum.com/files/iea_mediumterm_omr_2005_2015_production_vs_capacities.jpg

perceptions_now wrote on Jul 18^th, 2010 at 3:04pm:

Just on way out, I will post full article later. But I thought this chart was worth a look, purely to show some of the "official misdirection" of Governments & their agencies! http://www.theoildrum.com/files/iea_mediumterm_omr_2005_2015_production_vs_capacities.jpg

That's a fascinating graph - thanks Perceptions!

OPEC Going Sideways: Not a Good Time for Oil Importers

OPEC tells us it has lots of spare capacity, but how much should we believe them? Even when prices were much higher than they are now, back in 2008, they did not make use of all of the spare capacity that they supposedly had.

http://www.theoildrum.com/files/iea_mediumterm_omr_2008_capacity_vs_production.jpg
When one looks at a history of estimates of future productive capacity, we find too, that they have tended to decrease over time (up until the new 2010 report)--also raising questions about current estimates.

The International Energy Agency (IEA) recently put out its Mid Term Oil and Gas Market Report 2010 (MTOMR 2010). Although the report talks about a 7.1 million barrel a day decline between now and 2015 when all of the anticipated new capacity is added, total capacity is expected to increase from 34.85 barrels per day to 35.78 barrels a day (page 82) in that time period.
http://www.theoildrum.com/files/Estimated_Average_Sustainable_OPEC_Crude_Production_Capacity_IEA_MTOMR_2010.png

According to this table, the Iraq is expected to have the largest increase in capacity (amounting to .97 million barrels a day). The second largest increase in capacity is Saudi Arabia, and the third largest increase in capacity is UAE. Iran is expected to have the largest decrease in capacity.

The question is, "Will this large an increase in capacity really result in higher production?"

If we look at historical forecasts of capacity, alongside actual production, we discover a pattern not unlike that recently shown by Steve Kopits with respect to the EIA forecasts. The forecasted amounts keep coming down!
http://www.theoildrum.com/files/iea_mediumterm_omr_2005_2015_production_vs_capacities.jpg

Each year, from the 2006 to the 2009 report, the medium term oil market reports bring the estimated capacity down by about 2 million barrels a day. In 2010, the capacity estimates increased a bit, but mainly because of Iraq.

More importantly, a huge gap between capacity and actual production has developed, suggesting there is plenty of spare capacity. While one may argue the 2009 drop in production was the result of less oil demand after Lehman Brother’s collapse, and financial turmoil and recession that followed, these adverse conditions did not exist in the 1st half of 2008 when the economy was booming and high oil prices encouraged maximum production. Yet, OPEC’s claimed oil production capacity did not turn into actual production!
Link -
http://www.theoildrum.com/node/6738
==========
Now, what was it that Don chip used to say, about keeping them honest?
Oh, yes, they are all bastards or something similar?

There are statistics, damned statistics & then there are government stats?  

perceptions_now wrote on Jun 19^th, 2010 at 10:40am:

Our Dependency on Foreign Oil Jon Stewart's eight minute piece illustrating the populist talking point that is U.S. Presidents vowing to reduce our dependence on foreign oil is a must watch. Click and watch and laugh at the absurdity of the ceaseless rhetoric, which continued this week. As Stewart says, "Fool me once, shame on you. Fool me twice, shame on me. Fool me eight times - am I a smacking idiot?" embedded video: The Daily Show With Jon Stewart Mon - Thurs 11p / 10c An Energy-Independent Future http://seekingalpha.com/article/210687-our-dependency-on-foreign-oil?source=email =========== A definate, must watch! This guy is good, funny & makes the points, well! Btw, the "Seeking Alpha" site, is quite good for a variety of "financial perspectives".

There is a 'hacker' by true definition of the word not the media interpretation that is developing a technology that could be like a fuse core generator that could run on Depleted Uranium for 50 YEARS this company owns the patent but I am not sure if it is this particular company.

http://cleantechnica.com/2009/02/02/terrapower-developing-nuclear-reactors-that-run-on-depleted-uranium/

http://fora.tv/2007/09/27/Implementing_Science_Fiction#fullprogram

Jump to Chapter 12 and 13 if you want to see what they are doing about the 'hacking of ideas' it should be about the depleted uranium generator.

The actual reactor just burns depleted uranium up and when its done supposedly there is nothing harmful left.

Quote:

perceptions_now are certainly making hay whilst the sun is shining

Quote:

freediver That is kind of an unfortunate choice of term. You do realise that OPEC is all about reducing output right? And that other non-OPEC countries increase their production to capitalise?

There are actually some ups & some downs, both inside of OPEC & outside of OPEC.

But overall, it seems most countries are struggling to keep up with production, as can be seen by looking thru the following EIA site figures!

http://tonto.eia.doe.gov/cfapps/ipdbproject/iedindex3.cfm?tid=5&pid=53&aid=1&cid=&syid=1990&eyid=2009&unit=TBPD

bring out the free energy technology that the government of the world has been hiding, then there will be no debating about oil.

Lloyd's 'Sustainable Energy Security' White Paper - Some hits; some misses

First, what does it get right? The big thing it gets right is what it lists as Conclusion 2:
2. Traditional fossil fuel resources face serious supply constraints and an oil supply crunch is likely in the short-to-medium term with profound consequences for the way in which business functions today.

Some other things it seems to get right include these points, listed as "Conclusions" to the report:

1. Energy security is now inseparable from the transition to a low-carbon economy and businesses plans should prepare for this new reality.

5. Increasing energy costs as a result of reduced availability, higher global demand and carbon pricing are best tackled in the short term by changes in practices or via the use of technology to reduce energy consumption.

6. The sooner that businesses reassess global supply chains and just-in-time models, and increase the resilience of their logistics against energy supply disruptions, the better.

7. While the vast majority of investment in the energy transition will come from the private sector, governments have an important role in delivering policies and measures that create the necessary investment conditions and incentives.

Where the Report Misleads
High Tech Alternatives

One of the problems I have with the report is the assumption that the world should be planning to transition to high tech alternatives. Furthermore, the report seems to say that there is lots of money to be made during the transition by those who plan right.

The report starts out with the following quote:

“In some cases, the surprise element is only a matter of timing: an energy transition, for example is inevitable; the only questions are when and how abruptly or smoothly such a transition occurs. An energy transition from one type of fuel (fossil fuels) to another (alternative) is an event that historically has only happened once a century at most with momentous consequences.”

I very much agree with the basic statement, that energy transitions take place at most once a century, with momentous consequences. We know we are reaching limits on oil, and that in not too long we will have to transition away from fossil fuels all together. The big question in my mind is what we transition to.

The Main Impact of Oil Shortages will be High Prices

The report seems to assume throughout the standard belief that oil shortages will cause high prices. There is an assumption, too, that this is all still in the future.

It seems to me that the biggest impact of oil shortages is recession--something that is not even mentioned in the report, and something that companies would do well to learn to adapt to. This means companies would probably do best to concentrate on basics, since people are likely to be buying fewer and fewer discretionary items.

What tends to happen if oil prices rise is that people will find the price of essentials (food, gasoline for transportation to work, and perhaps home heating costs) rising. With these prices higher, consumers will cut back on discretionary spending--vacation trips, new higher-priced homes, new cars, and going out to eat for example. These cutbacks will have a recessionary impact, and will tend to bring down the price of oil (as well as raise unemployment). Many people will find it harder to find the funds to repay loans (either because of the higher price of oil, or because they have been laid off from work, in the recessionary aftermath), so debt defaults will rise greatly as well.

We are do depent on oil that we go to war on it, we polute with and we dont even need the f#$%en thing, free energy technology isnt a joke, it does exsit and is available NOW,  why not use it....greed, Money.....

Theres a guy in australia who has built magnetic generator, it can produce up to 500hp of clean free energy using magnets, these can be used to power homes, offices, factories and much more, yet these technologies are bared, and bought and kept hidden by the government and oil companies.

Lloyd's 'Sustainable Energy Security' White Paper - Some hits; some misses (Cont)

While the report seems to indicate this is all in the future, it is really something that we are already experiencing, starting not long after world oil production hit a plateau in 2005.

http://www.theoildrum.com/files/Unconstrained%20demand.png

We have already begun seeing recessionary impacts and problems with the credit system. We have seen very high oil prices, and a drop back in these high prices to prices which are lower, but still high by pre-2005 standards. In the years ahead, recessionary impacts and credit problems are likely to get worse. It is unclear to what extent oil prices will really rise and stay at extremely high levels.

Insurance companies are likely to be hit particularly hard by loan defaults, because many of their assets are bonds. For example, there are many municipalities that are having difficulties maintaining tax revenues, and may have difficulty repaying their debt.

Natural Gas as Transition Fuel

The other area where the report misleads is in giving more hope to natural gas as a transition fuel than would seem to be warranted.

There may be some potential for a small ramp up in natural gas production, but we need to remember that a major change in infrastructure to accommodate a much larger natural gas supply will take many years and significant fossil fuel resources.

But it is not clear there is really all that much more natural gas. First, the amount of natural gas used today is less than that of oil, so expanding natural gas to replace oil is not something that can really be considered. But even raising the current amount by say, 30%, is likely to be difficult. One of the issues is how much can be produced at affordable prices. If the prices are much higher than today, there may be some of the same issues with recession and cutback in demand as with high priced oil. And there are concerns that a huge expansion of natural gas will require drilling in populated areas, with possible environmental issues associated with fracking. A transition to natural gas as a primary fuel source--assuming we really do have enough--would likely take 40 years as Smil indicates, and by that time what natural gas we have would likely be gone.

The report seems to suggest natural gas might be used as a transition fuel, but if high tech alternatives that don't rely on fossil fuels really are lacking, it is doubtful that there will really be a new fuel supply to transition to--especially one that will permit business as usual.
Oil Drum Link -
http://www.theoildrum.com/node/6743
==========
Anyone that has not looked into the Oil Drum site, I reccommend Gail the Actuary (this articles author), she is a senior writer and has a good grasp of the issues!

Quote:

Theres a guy in australia who has built magnetic generator, it can produce up to 500hp of clean free energy using magnets, these can be used to power homes, offices, factories and much more, yet these technologies are bared, and bought and kept hidden by the government and oil companies.

I have a bridge for sale. Interested?

Quote:

Moh Theres a guy in australia who has built magnetic generator, it can produce up to 500hp of clean free energy using magnets, these can be used to power homes, offices, factories and much more, yet these technologies are bared, and bought and kept hidden by the government and oil companies.

Quote:

freediver I have a bridge for sale. Interested?

As the saying says, never say never, but like Fusion Reactors, these new Energy sources keep being talked about, but that's as far as it goes!

Btw, freediver, does your bridge have Harbour views?

freediver wrote on Jul 20^th, 2010 at 7:28pm:

Quote: Theres a guy in australia who has built magnetic generator, it can produce up to 500hp of clean free energy using magnets, these can be used to power homes, offices, factories and much more, yet these technologies are bared, and bought and kept hidden by the government and oil companies. I have a bridge for sale. Interested?

I am. It's not too far, is it?

Congressman Bartlett and Peak Oil Revisited
This is US Congressman Bartlett, as distinct from Dr Albert Bartlett, but perhaps they are related, as they have some similarity in their messages.

In one section Congressman Bartlett points Global Oil usage in a single decade, being the same as Oil usage in all of previous history!

He also points to Peak Oil being a known certainty, for quite some time, but that moves have not been made to solve the upcoming crisis!  

The chart showing in part 2 is of interest because it shows how Global Oil discovery Peaked back in the 1960's and has been falling ever since and Consumption is now beginning to Decline, as is Production. 

Congressman Bartlett and Peak Oil Revisited [Part 1]
http://www.youtube.com/watch?v=Gtkq5DdcgYA

Congressman Bartlett and Peak Oil Revisited [Part 2]
http://www.youtube.com/watch?v=N2M-_5oQCik

Congressman Bartlett and Peak Oil Revisited [Part 3]
http://www.youtube.com/watch?v=q6hzZ1w-1As

China Tops U.S. in Energy Use

China has passed the U.S. to become the world's biggest energy consumer, according to new data from the International Energy Agency, a milestone that reflects both China's decades-long burst of economic growth and its rapidly expanding clout as an industrial giant.

http://si.wsj.net/public/resources/images/WO-AB803A_CENER_NS_20100719220602.jpg

China's ascent marks "a new age in the history of energy," IEA chief economist Fatih Birol said in an interview. The country's surging appetite has transformed global energy markets and propped up prices of oil and coal in recent years, and its continued growth stands to have long-term implications for U.S. energy security.

China overtook it at breakneck pace. China's total energy consumption was just half that of the U.S. 10 years ago, but in many of the years since, China saw annual double-digit growth rates. It had been expected to pass the U.S. about five years from now, but took the top position earlier because the global recession hit the U.S. more severely, slowing American industrial activity and energy use.

China's economic rise has required enormous amounts of energy—especially since much of the past decade's growth was fueled not by consumer demand, as in the U.S., but from energy-intense heavy industry and infrastructure building.
China's growing energy demands will present new challenges to U.S. foreign policy, as well as to international efforts to reduce emissions of greenhouse gases linked to climate change. China National Petroleum Co., the country's biggest oil company, is pushing forward with oil and gas projects in Iran, despite U.S. efforts to enforce sanctions against the Tehran government.

Beijing has refused to agree to cap its overall growth in its consumption of fossil fuels, or reduce its emissions of carbon dioxide and other greenhouse gases.

China's growth has transformed global energy markets and sustained higher prices for everything from oil to uranium and other natural resources that the country has been consuming. Once, China was a major exporter of both oil and coal.

China's rapidly expanding need for energy promises to have major geopolitical implications as it hunts for ways to satisfy its needs. Already, China's rising imports have changed global geopolitics. Chinese oil and coal companies have been looking overseas in their quest to secure energy supplies, pitching the Chinese flag in places like Sudan, which Western companies had largely abandoned under international pressure.

Voracious energy demand also helps explain why China—which gets most of its electricity from coal, the most polluting of fossil fuels—passed the U.S. in 2007 as the world's largest emitter of carbon-dioxide emissions and other greenhouse gases.

In the past, being the world's biggest consumer of fossil fuels went hand in hand with being its dominant economy.

Before China joined the WTO, most international prognosticators, including the IEA, predicted energy demand would increase at an annual rate of 3% to 4% from 2000 to 2010. Demand wound up growing four times faster than they predicted.
Link -
http://online.wsj.com/article/SB10001424052748703720504575376712353150310.html#project%3DCHENERGY0719%26articleTabs%3Darticle
=========

One of the problems with an ETS style tax in Australia &/or the USA etc, is that unless the tax is sufficiently large, as to severely hurt the Publics disposable income and therefore curtail their economic activity and therefore drastically bring down the economy, it will be consigned to being only maginally effective (locally), in respect of GHG emissions and in fact, be used primarily as a tax raising avenue.

However, Globally, a much greater impact will be felt in GHG emissions, from the likes of China, India & others, who would continue to surge ahead with their Economic/Industrial reforms, thus resulting in huge GHG increases, via Coal power stations & increased middle class activity.

Regrettably, this is NOT SUSTAINABLE and tipping points, will be tripped!    

FACTBOX-Oil reserves: declining - but how fast?

(Reuters) - A declaration by Venezuela last week
that it hopes soon to overtake Saudi Arabia as the country with
the biggest oil reserves has stoked debate on how much oil and
gas the world really has left. OPEC said last week its proven crude oil reserves rose 4 percent in 2009 to 1.06 trillion barrels, led by an increase in Venezuela.  
BP estimated last month total global oil reserves were over 1.33 trillion barrels -- equivalent to more than 40 years of consumption at current rates..
But many industry analysts have cast doubt on these figures, saying estimates may be inflated for a variety of reasons.
Link -
http://af.reuters.com/article/commoditiesNews/idAFLDE6681JK20100721
==========
So, given what are most likely inflated figures of 1.33 TRILLION BARRELS OF CURRENT, GLOBAL OIL RESERVES, which in the usual jargon will last over 40 years at current consumption rates, does anyone know how long it is likely to last, in real life, in the real world???

North Sea Oil’s New Boom

I’ve been hearing dark mutterings about the imminent ‘end of North Sea oil’ all my life, with the dramatic impact that would have for the UK economy. North Sea oil was a diminishing resource that would be “gone by the end of the century” experts constantly assured back in the 1970s. But the rigs just kept right on drilling and producing into the new century – and the experts just kept right on being confounded. And it looks like they are to be confounded yet again as a new North Sea boom is set to boost oil reserves – and the UK’s economy.
And the hits just keep on coming
Bizarrely, as the oil giant BP – and its share price – flounders, the British oil and gas sector is experiencing a new boom, in the North Sea and beyond (see Falkland Islands link below), the newfound confidence being best exemplified in a string of drilling successes for British independents like Dana Petroleum. Dana has recently announced discoveries in the North Sea, Egypt and Morocco, sending its share price on a steady upward tack.

In April, Dana announced a find of approximately 130 billion cubic feet of gas in its Platypus prospect in the southern North Sea. In May, the company’s skyrocketing confidence saw it enter into an agreement to buy out PetroCanada Netherlands, boosting its own North Sea holdings from 36 to 54 fields, including 15 new fields. In June Dana announced a new North Sea oilfield discovery at West Rinnes before announcing two more for its North Africa holdings, one in Egypt, one in Morocco.

Almost inevitably, Dana’s ‘string of hits’ has attracted attention from the bigger oil companies. In July, amidst interest from China’s large national oil companies, a takeover bid was formally issued by the Korea National Oil Corporation, sending Dana’s share price spiralling up another 17 percent.

Elsewhere in the North Sea, the large Catcher prospect, held between British independents Encore Oil, Premier Oil, Wintershall and Agora Oil and Gas, represents a section of rich formation. Catcher is estimated to hold 150-300 million barrels – worth around £1 billion/$1.4 billion in terms of boosting UK Government coffers. Encore Oil’s further tests at Catcher suggest that figure too could be “very significantly” increased in the future.

Extrapolating the North Sea Experience
More significantly, there is no reason to doubt that the North Sea story of renewed viability and new, if more difficult to extract, prospects can be replicated in other parts of the world. And it makes a nonsense of peak oil theories that predict steep and imminent decline for global oil reserves.

A resurgent UK North Sea oil industry has real implications for panicky peak oil assessments. Not only does it offer a hard lesson in the impact of “above the ground” economic factors on extraction, it offers a major case study that could be extrapolated across the globe.
Link -
http://www.energytribune.com/articles.cfm/4747/North-Sea-Oils-New-Boom-
===========
So, there is a new BOOM, all is well with the North Sea, the UK & world Oil production?

Well according to the EIA figures, which usually paint a slight rosy picture, the major countries involved in the North Sea, which are the UK & Norway, are now around 50% & 35% down on their Peak production, which goes back to around 2000 and production is continuing to decline.
http://tonto.eia.doe.gov/cfapps/ipdbproject/iedindex3.cfm?tid=5&pid=53&aid=1&cid=&syid=1990&eyid=2009&unit=TBPD

The so called huge find (the Catcher prospect", is only equivalent to other small finds of the last 10-20 years and nothing like the earlier finds of the 60's & 70's.

To put it into perspective, this new find is about 2 days Global supply.

Unyet, if you listen to this author & others, these sort of new fields will "save the world".

Peak Oil 2012 - Economic Collapse, Cities abandoned and Starvation inevitable as Oil runs out

Department of Energy and Oil producers predict a Peaking of Oil Production between 2011 and 2015.

10% decline in Oil production by 2015 is foreseen in DOE report and oil supply deficit in 2015 equal to output of Saudi Arabia.

By 2027, Oil production will only be able to supply 50% of World's needs unless new Oil projects fill the void.

This is highly unlikely as Offshore drilling loses its appeal after the BP oil spill in the Gulf of Mexico. A World wide Economic collapse due to inadequate cheap energy is the result.

http://www.youtube.com/watch?v=8j4Tyy5nsQ8&feature=player_embedded

You may not like or agree with the theme, but you should be aware of the scenario!

Oilwatch Monthly July 2010

Latest Developments:

1) Conventional crude production - Latest figures from the Energy Information Administration (EIA) show that crude oil production including lease condensates decreased by 100,000 b/d from March to April 2010, resulting in total production of crude oil including lease condensates of 73.52 million b/d.

2) Total liquid fuels production - In June 2010 world production of all liquid fuels decreased by 250,000 b/d from May according to the latest fgures of the International Energy Agency (IEA), resulting in total world liquid fuels production of 86.15 million b/d. Liquids production for May 2010 was revised upwards in the IEA Oil Market Report of July from 86.31 to 86.4 million b/d. Average global liquid fuels production in 2009 was 84.94 versus 86.6 and 85.32 million b/d in 2008 and 2007.

3) World oil production capacity - Total oil production capacity in June 2010 decreased by 80,000 b/d from May 2010, from 90.0 to 89.94 million b/d. World production capacity is measured here as the sum of world liquids production excluding biofuels plus total OPEC spare capacity excluding Iraq, Venezuela and Nigeria.

4) OPEC Production - Total liquid fuels production in OPEC countries decreased by 60,000 b/d from May to June 2010 to a level of 33.97 million b/d. Liquids production for May 2010 was revised downwards in the IEA Oil Market Report of July from 34.23 to 34.03 million b/d. Average liquid fuels production in 2009 was 33.7 million b/d, versus 36.09 and 35.02 million b/d in 2008 and 2007 respectively. All time high production of OPEC liquid fuels stands at 36.4 million b/d reached in July 2008.

Total crude oil production excluding lease condensates of the OPEC cartel decreased by 60,000 b/d to a level of 28.89 million b/d, from May to June 2010, according to the latest available estimate of the IEA. Average crude oil production in 2009 was 28.7 million b/d, versus 31.43 and 30.37 million b/d in 2008 and 2007 respectively.

OPEC natural gas liquids remained stable from May to June 2010 at a level of 5.08 million b/d. Average OPEC natural gas liquids production in 2009 was 4.67 million b/d, versus 4.47 and 4.55 million b/d in 2008 and 2007 respectively.

5) Non-OPEC Production - Total liquid fuels production excluding biofuels in Non-OPEC countries decreased by 190,000 b/d from May to June 2010, resulting in a production level of 50.38 million b/d according to the International Energy Agency. Liquids production for May2010 was revised upwards in the IEA Oil Market Report of July from 50.05 to 50.57 million b/d. Average liquid fuels production in 2009 was 49.67 million b/d, versus 49.32 and 49.34 million b/d in 2008 and 2007 respectively.

Total Non-OPEC crude oil production including lease condensates decreased by 73,000 b/d to a level of 42.48 million b/d, from March to April 2010, according to the latest available estimate of the EIA. Crude oil production for March 2010 was revised upwards in the EIA International Petroleum Monthly of July from 42.34 to 42.55 million b/d. Average crude oil production in 2009 was 41.61 million b/d, versus 41.32 and 41.80 million b/d in 2008 and 2007 respectively.

8) Chinese liquids demand - Oil consumption in China decreased by 24,000 b/d from April to May 2010, resulting in a consumption level of 9.12 million b/d according to JODI statistics. Average oil consumption in China in 2009 was 8.05 million b/d, versus 6.92 and 7.29 million b/d in 2008 and 2007 respectively.

http://www.theoildrum.com/files/oilwatch_monthly_july2010_8.png
==========
As can be seen, Production effectively Peaked in 2005 and has not subsequently kept pace with Demand, nor Population Growth!

Whilst Consumption has resummed its upward path, after taking a short dip for the GFCin 2008.
http://www.theoildrum.com/files/oilwatch_monthly_july2010_3.png

It's time to end the excessive subsidies for corn ethanol

WHEN WASHINGTON starts handing out cash, it can be hard to stop. See, for example, the decades of subsidies the government has showered on the corn ethanol industry. The fuel was supposed to free America from its dependence on foreign oil and produce fewer carbon emissions in the process. It's doing some of the former and little of the latter. But corn ethanol certainly doesn't need the level of taxpayer support it's been getting. Lawmakers are considering whether to renew these expensive subsidies; they shouldn't.

The feds give companies that combine corn ethanol with gasoline a 45-cent tax subsidy for every gallon of corn ethanol added to gasoline. That's on top of a tariff on imported sugar cane ethanol from Brazil and federal mandates requiring that steadily increasing amounts of these biofuels be produced. The Congressional Budget Office this month estimated that, all told, the costs to taxpayers of replacing a gallon of gasoline with one of corn ethanol add up to $1.78.

How about the environmental benefits? The CBO calculates that it costs a huge $750 to reduce annual carbon dioxide emissions by one ton using corn ethanol. And that figure relies on assumptions extremely favorable to the industry.

Not only are these subsidies expensive, but they are redundant. Since Congress has mandated that the industry furnish a steadily increasing number of gallons of ethanol every year, the stimulative effects of the tax incentives on corn ethanol production will continue to diminish. Numbers from the Food and Agricultural Policy Research Institute at the University of Missouri, on which the CBO relies, show that over the next 10 years, corn ethanol production will still increase -- just not quite as quickly -- if Congress allows the subsidies to lapse this year and leaves the mandate in place.

At this point, the question should not be whether to allow corn ethanol's tax incentives and trade protections to expire. The debate should be about why corn ethanol deserves any federal protection at all. There are certainly more effective ways to reduce oil consumption and greenhouse emissions.
Link  -
http://www.washingtonpost.com/wp-dyn/content/article/2010/07/23/AR2010072304345.html
============
The EROEI (Energy Return On Energy Invested) in respect of Ethanol means that it costs more to make it, than we get back when it is used!

If Oil Production was going to make a come back, then Ethanol would not still be in production. In any event, I suggest in the not too distant future, Ethanol may be put on the backburner, so to speak and both the USA & Europe may cease pushing its barrow, because its EROEI makes it un-viable.

Finally, the subsidies paid here and elsewhere in the Energy industry, does not fit well with the industry and its GHG emissions!

Saudi Arabia, Russia and Oil Production

In a recent interview on the Keiser Report:

http://www.youtube.com/watch?v=tPOGc5DhUD4&feature=player_embedded#!

I found myself casually mentioning that Russia had now surpassed Saudi Arabia to become the number one oil producer in the world. This is not an event that happened last month, either. The leap forward emerged as far back as 18 months ago, in October of 2008. It seems in Russia, big things often unfold in October.

As subscribers to Gregor.us Monthly know, I like to break up the world of global oil production into four parts. There is OPEC, anchored by Saudi Arabia. And then there’s Non-OPEC, anchored by its top producer, Russia. With the most recent EIA data out for April crude oil production, I made up charts for Saudi Arabia, and Russia, and thought it might be instructive to pose a few questions. First, let’s take a look at Russia

http://static.seekingalpha.com/uploads/2010/7/27/saupload_russia_crude_oil_production_2001_2010.jpg

As I have discussed previously, without Russia the world of Non-OPEC supply would have fallen down into a hole shortly after 2003. Indeed, without Russia Non-OPEC production (Non-OPEC ex-Russia) would have fallen every year from 2004 through the present day.

What’s been a surprise is that Russia has been able to sustain its current ~9.5 mbpd for over four years now. A number of analysts are reasonably confident that Russian oil production has now entered a plateau. Now let’s look at Saudi Arabia

http://static.seekingalpha.com/uploads/2010/7/27/saupload_saudi_arabia_crude_oil_production_2001_2010.jpg

As we look at the chart of Saudi Arabia crude oil production, I like to consider the following propositions:

1. This is a chart of the central bank of oil, with lots of spare capacity, that works to dampen oil price increases.
2. This is a chart of the central bank of oil, with lots of spare capacity, that works to perfect oil price increases.

3. This is a chart of what had once been the central bank of oil, as it transitions to a secondary role.
4. This is a chart of an oil producer doing its best, within technical and geological limits, to maximize its profit.
Regardless of which we choose among these possibilities (or others), it’s clear that Saudi Arabia has been a very different kind of oil producer than Russia, in the past ten years. I would encourage readers to think about, in particular, the period starting in late 2005 through late 2007 when against a backdrop of steadily increasing prices Saudi Arabia production fell by nearly a million barrels per day. Per the interview mentioned above, with the Keiser Report, we might also want to consider the decision to develop fields such as Khurais. | see: Khurais Update: Got Seawater?

Based on the totality of information over the past ten years, I think one can get much closer to reality in Saudi Arabia’s production profile than many presume, given the country’s secrecy. I would also remark that the untested assumption that Saudi Arabia has ~3-to-4 mbpd spare production capacity is one of those slippery and large concepts that can easily lose its shape, in the wrong hands. What do you think?
Link -
http://seekingalpha.com/article/216593-saudi-arabia-russia-and-oil-production?source=email
==========
It seems that -
1) Russian Production has plateaued & is about to Peak, before going into Decline.
2) Saudi Arabia is still the unknown factor, but I suspect they may also have Peaked.
3)  Non OPEC Production, without Russia has been in decline for some years.
4) The video is worth a look, bear in mind that Gregor McDonald doesn't come on until about the 14 minute mark.

Also, of interest, is the following chart of US Energy Costs, as a percentage of US GDP 1999-2008, which rose substantially and is contributing to the decline of the US & Global Economy!

http://gregor.us/wp-content/uploads/2010/07/United-States-Energy-Expenditures-as-a-Percent-of-GDP-1999-2008.jpg

Peak Oil - Solution to Global Warming

Global warming is not going to be a problem. Why do I think that? Because Lord Monckton has debunked anthropomorphic global warming? Because of the Climategate scandal? No. It's much simpler than that.

We'll run out of oil long before we get to any climate crisis.

Many experts believe we are reaching or have reached “peak oil” production on this planet. That's the point at which the glass starts looking half empty rather than half full and last half becomes harder and harder to drink amongst the ice cubes. As we empty the wells, the remaining reserves become harder to extract, are less refined making extraction more expensive. The cost of oil after peak oil can only go up and can never come back down.

http://www.youtube.com/watch?v=cwNgNyiXPLk&feature=player_embedded#!
Chris Martenson presents a crash course in "Peak Oil"

Ok, so we'll all have to drive Priuses, put solar panels on the roof and recycle a bit harder? No, it's worse than that...a lot worse. Look around you. Just about everything you see created by the hand of modern man is derived from oil or was produced using oil as an energy source or was gotten to you using oil fuelled transport. Everything. The plastic in your laptop, the coffee you're drinking, the rubber tyres on the road you're driving on, all of it comes to you because of oil.

Now imagine the cost of everything going up, and up and up. How do you afford to drive to work to pay for it? How does fruit & veg from the countryside get to my local supermarket without turning into a luxury item? How much will my cup of Columbian coffee be?

Energy now becomes as valuable as blood. Welcome to the road warrior world of Mad Max.

We are facing no less than the complete collapse of civilisation. That's it. Game over. We will return to a pre-oil horse & cart medieval world and whoever still has access to energy will rule the world.

We are like bugs on a petrie dish. We have fed on oil as a serendipitous growth medium, growing our population and consumption off the chart. However, once the oil is exhausted, the colony will die and the world population will revert to more sustainable levels, many estimate that to be about 1 billion people. We have splurged on cheap energy for the last 100 years like a hobo who has found a $50 bill on the pavement and has spent it at the boozer in one night.

When will this all happen? We don't have to wait until the last drop of oil comes out of the last well. We only have to get to the point when it takes more energy to extract the oil than it produces. This point may be decades away, it may be imminent, within months. Commentators vary on the timetable, but they agree that collapse is inevitable. If we don't see it ourselves, our children certainly will.

Is it any surprise that there is now a race on to secure the middle east oil reserves, at any cost, by any means, using any pretence? Is it that hard to imagine that the Bush administration could stage 9/11 as a false flag operation to create a justification for the invasion and occupation of Iraq? Is it any surprise that governments everywhere are investing in an New World Order Orwellian control grid to control the people as things spin out of control? It's going to get ugly.

Australia faces a federal election next month. Who's taking peak oil seriously as an issue? Yes, candidates talk about sustainability for the reasons of climate change, but not because of peak oil. Our pollies don't dare mention it because we the people don't ask the question. It's
the elephant in the lounge room. In fact, Tony Abbott in 2008 didn't even know what peak oil was. (Can't find any comment at all from Julia about peak oil.)
http://www.youtube.com/watch?v=tCiHFyLIfu8&feature=player_embedded
Tony Abbott "What's Peak Oil?"

http://www.youtube.com/watch?v=WAyHIOg5aHk&feature=player_embedded
Mike Ruppert is author of "Crossing the Rubicon". This is essential reading to understand how peak oil is fuelling the current geo-political/NWO agenda. Also watch his movie "Collapse" if you can find it. It's themost disturbing movie I've seen after "Endgame" by Alex Jones.

http://www.youtube.com/watch?v=Fn4UjHp20OM&feature=player_embedded
Here is advice from Ruppert as to how to prepare for Peak Oil - get out of debt now and think locally. You won't be going anywhere quick.

Link -
http://wakeupaussie.blogspot.com/2010/07/peak-oil-solution-to-global-warming.html
===========
A couple of abservations -
1) Chris Martenson knows his stuff, on Peak Oil, but if you like what you hear & see in this video, he has 20 more on many issues, which also make a lot of sense!

2) Tony Abbott, obviously has zero idea of what is happening & what is likely to happen!
He is a WORRY!!!

3) Mike Ruppert is a mixture of theatre and a lot of poosible/likely futures that many would rather not hear!

I don't think there is anything to worry about. Everybody just needs to calm down. When oil does become scarce, it will become more expensive. Scarcity obviously drives up price. So when energy companies realise oil is becoming too expensive, to the point where it might no longer be profitable, they will voluntarily switch to other sources of energy. It doesn't need to be forced. When you force it, that's when you run into trouble. I think we need to decide what will be our next major source of energy by letting the market compete over it. Let oil run and let energy companies invest in other sources of energy until one, like solar or nuclear or geo-thermal, triumphs over the others. That's the only smart way to transform the energy sector.

BobH wrote on Jul 29^th, 2010 at 6:26pm:

I don't think there is anything to worry about. Everybody just needs to calm down. When oil does become scarce, it will become more expensive. Scarcity obviously drives up price. So when energy companies realise oil is becoming too expensive, to the point where it might no longer be profitable, they will voluntarily switch to other sources of energy. It doesn't need to be forced. When you force it, that's when you run into trouble. I think we need to decide what will be our next major source of energy by letting the market compete over it. Let oil run and let energy companies invest in other sources of energy until one, like solar or nuclear or geo-thermal, triumphs over the others. That's the only smart way to transform the energy sector.

Bob, no offense, but it would seem your knowledge of Peak Energy, is a little less than that displayed by Tony Abbott, in the video previously placed on here & he is a worry.

You don't realise that -
1) The transition off Oil, to other Energy sources, would take about 30-40 years, if well managed and if there were other suitable Energy sources to transition to, which there are not.
And perhaps, 10 years, with absolute Manhattan Style project urgency!
2) It does need to be forced, the "free market" will not shift itself, it will need to be dragged, kicking & screaming, over the dying bodies of all of the self interest groups, including the Oil & Coal industries, for starters!
3) This is not a horse race, with 4 to 5 good favourites, all competing for a glittering prize. There are no choices here, we will struggle to get enough of the various Energy types & other essential Resources, for humanity to see out another century!
4) There is a lot more involved than a simple switch over of base load electricity, to Solar, Wind or Geo-thermal.

I gather you are a candidate or helper for the LDP, if so, do yourself & them a favour, do some research!

perceptions_now wrote on Jul 29^th, 2010 at 10:31pm:

BobH wrote on Jul 29th, 2010 at 6:26pm: I don't think there is anything to worry about. Everybody just needs to calm down. When oil does become scarce, it will become more expensive. Scarcity obviously drives up price. So when energy companies realise oil is becoming too expensive, to the point where it might no longer be profitable, they will voluntarily switch to other sources of energy. It doesn't need to be forced. When you force it, that's when you run into trouble. I think we need to decide what will be our next major source of energy by letting the market compete over it. Let oil run and let energy companies invest in other sources of energy until one, like solar or nuclear or geo-thermal, triumphs over the others. That's the only smart way to transform the energy sector. Bob, no offense, but it would seem your knowledge of Peak Energy, is a little less than that displayed by Tony Abbott, in the video previously placed on here & he is a worry. You don't realise that - 1) The transition off Oil, to other Energy sources, would take about 30-40 years, if well managed and if there were other suitable Energy sources to transition to, which there are not. And perhaps, 10 years, with absolute Manhattan Style project urgency! 2) It does need to be forced, the "free market" will not shift itself, it will need to be dragged, kicking & screaming, over the dying bodies of all of the self interest groups, including the Oil & Coal industries, for starters! 3) This is not a horse race, with 4 to 5 good favourites, all competing for a glittering prize. There are no choices here, we will struggle to get enough of the various Energy types & other essential Resources, for humanity to see out another century! 4) There is a lot more involved than a simple switch over of base load electricity, to Solar, Wind or Geo-thermal. I gather you are a candidate or helper for the LDP, if so, do yourself & them a favour, do some research!

Why is the market incapable of moving off oil? We used to use whale oil to light our homes but then the market figured out that wouldn't last, so they put a lot of money into finding a new energy source and figured out you could refine crude oil into kerosene. But it was very expensive. So some smart businessmen who wanted to make money, spent money on trying to figure out cheaper ways of refining kerosene so you could sell it to the common man. In the process they figured out you could make more from crude oil than kerosene. They developed vaseline, asphalt and eventually gasoline. Before they new what to do with it, crude oil was waste. But out of economic self-interest, it was transformed into a resource.

See, you don't need central energy management. All you need to do is deregulate the market, and the free market will more in the right direction. Smart businessmen have always found ways to make money. What makes you think they can't do it again? When oil is no longer profitable, what makes you think rich oil companies will be stupid enough not to invest money into finding alternatives? How's they get rich in the first place? How'd they find oil in the first place? Think about it.

BobH wrote on Jul 29^th, 2010 at 6:26pm:

I don't think there is anything to worry about. Everybody just needs to calm down. When oil does become scarce, it will become more expensive. Scarcity obviously drives up price. So when energy companies realise oil is becoming too expensive, to the point where it might no longer be profitable, they will voluntarily switch to other sources of energy. It doesn't need to be forced. When you force it, that's when you run into trouble. I think we need to decide what will be our next major source of energy by letting the market compete over it. Let oil run and let energy companies invest in other sources of energy until one, like solar or nuclear or geo-thermal, triumphs over the others. That's the only smart way to transform the energy sector.

Thing is, energy is but one use for oil - and it's probably not the most useful one for humanity either!

Right now, we seem to have a reckless race to extract and burn as much as possible in the shortest possible time...

Burnt oil cannot be recycled...

Environmental degradation issues notwithstanding, once oil has been combusted, humanity has lost its utility forever...

BobH wrote on Jul 29^th, 2010 at 11:18pm:

perceptions_now wrote on Jul 29th, 2010 at 10:31pm: BobH wrote on Jul 29th, 2010 at 6:26pm: I don't think there is anything to worry about. Everybody just needs to calm down. When oil does become scarce, it will become more expensive. Scarcity obviously drives up price. So when energy companies realise oil is becoming too expensive, to the point where it might no longer be profitable, they will voluntarily switch to other sources of energy. It doesn't need to be forced. When you force it, that's when you run into trouble. I think we need to decide what will be our next major source of energy by letting the market compete over it. Let oil run and let energy companies invest in other sources of energy until one, like solar or nuclear or geo-thermal, triumphs over the others. That's the only smart way to transform the energy sector. Bob, no offense, but it would seem your knowledge of Peak Energy, is a little less than that displayed by Tony Abbott, in the video previously placed on here & he is a worry. You don't realise that - 1) The transition off Oil, to other Energy sources, would take about 30-40 years, if well managed and if there were other suitable Energy sources to transition to, which there are not. And perhaps, 10 years, with absolute Manhattan Style project urgency! 2) It does need to be forced, the "free market" will not shift itself, it will need to be dragged, kicking & screaming, over the dying bodies of all of the self interest groups, including the Oil & Coal industries, for starters! 3) This is not a horse race, with 4 to 5 good favourites, all competing for a glittering prize. There are no choices here, we will struggle to get enough of the various Energy types & other essential Resources, for humanity to see out another century! 4) There is a lot more involved than a simple switch over of base load electricity, to Solar, Wind or Geo-thermal. I gather you are a candidate or helper for the LDP, if so, do yourself & them a favour, do some research! Why is the market incapable of moving off oil? We used to use whale oil to light our homes but then the market figured out that wouldn't last, so they put a lot of money into finding a new energy source and figured out you could refine crude oil into kerosene. But it was very expensive. So some smart businessmen who wanted to make money, spent money on trying to figure out cheaper ways of refining kerosene so you could sell it to the common man. In the process they figured out you could make more from crude oil than kerosene. They developed vaseline, asphalt and eventually gasoline. Before they new what to do with it, crude oil was waste. But out of economic self-interest, it was transformed into a resource. See, you don't need central energy management. All you need to do is deregulate the market, and the free market will more in the right direction. Smart businessmen have always found ways to make money. What makes you think they can't do it again? When oil is no longer profitable, what makes you think rich oil companies will be stupid enough not to invest money into finding alternatives? How's they get rich in the first place? How'd they find oil in the first place? Think about it.

Time for bed Bob, I'll get back to you.

That said, I think you need to do some work, you have a few ideals, but they are outdated, I'm afraid.

Think about this, we simplying don't have the Energy sources for 7-9 Billion people, NO MATTER HOW SMART YOU MAY THINK BUSINESS IS OR HOW GOOD THE FREE ENTERPRISE SYSTEM OR HOW GOOD THE CURRENT POLITICAL SYSTEM, IT SIMPLY WON'T WORK IN THIS NEW PARADIGM!

perceptions_now wrote on Jul 30^th, 2010 at 12:20am:

Think about this, we simplying don't have the Energy sources for 7-9 Billion people

Think about this, crude oil was waste before we refined it into kerosene and gasoline. Nothing is a resource until you know how to use it.

BobH wrote on Jul 30^th, 2010 at 12:27am:

perceptions_now wrote on Jul 30th, 2010 at 12:20am: Think about this, we simplying don't have the Energy sources for 7-9 Billion people Think about this, crude oil was waste before we refined it into kerosene and gasoline. Nothing is a resource until you know how to use it.

So Bob, thinking cap on, what are the next Energy sources, for 7-9 Billion people, once Oil & Coal run out, within 40-60 years?

Not that we have to wait that long to see some of the consequences, because when it becomes apparent that we are on the after-slope of Peak Energy, various consequences will start to flow.

And, even if there is some well hidden new sources, how do we take a transition that should take 30-40 years and convert that into say 5 years, as we are already past the Peak and the next 2-5 years will see the  consequences start to kick in.

Even with the urgency of a Manhattan style project, it would still take at least 10 years to transition from the current Energy sources, to the new ones, if there were any!

Btw, don't look to Wood, Whale Oil, Kerosene, Oil, Coal, Gas or  Nuclear, as they are already been spoken for.

Solar, Wind & Thermal can have some input, but will not fill the breach left by the above Energy sources and there are many products derived from fossil fuels, which will NOT transition accross to these Energy sources.

Finally, there are some things that the "Private Sector" is good at and some where it is not.

This Paradigm change will not come naturally to the private sector, but they may be able to help, if they are given all of the information and they are enlisted to help be part of the solution, not part of the problem.

And finally, countries such as china, India & many others will have to temper their desires , whislt OZ, the USA & Europe will also have to reduce expectations, if the final outcomes are to see the survival of the human species.  

perceptions_now wrote on Jul 30^th, 2010 at 12:12pm:

BobH wrote on Jul 30th, 2010 at 12:27am: perceptions_now wrote on Jul 30th, 2010 at 12:20am: Think about this, we simplying don't have the Energy sources for 7-9 Billion people Think about this, crude oil was waste before we refined it into kerosene and gasoline. Nothing is a resource until you know how to use it. So Bob, thinking cap on, what are the next Energy sources, for 7-9 Billion people, once Oil & Coal run out, within 40-60 years?

Oil might be on it's 'last legs' but coal has a few hundred years of known and implied resource.

The only reason we would stop burning coal is because we wanted to, not because there was none left.

BigOl64 wrote on Jul 30^th, 2010 at 1:30pm:

perceptions_now wrote on Jul 30th, 2010 at 12:12pm: BobH wrote on Jul 30th, 2010 at 12:27am: perceptions_now wrote on Jul 30th, 2010 at 12:20am: Think about this, we simplying don't have the Energy sources for 7-9 Billion people Think about this, crude oil was waste before we refined it into kerosene and gasoline. Nothing is a resource until you know how to use it. So Bob, thinking cap on, what are the next Energy sources, for 7-9 Billion people, once Oil & Coal run out, within 40-60 years?   Oil might be on it's 'last legs' but coal has a few hundred years of known and implied resource. The only reason we would stop burning coal is because we wanted to, not because there was none left.

BigOl64,
You may be interested in the following post from July 13th.

=============
Muso/freediver,
You may be interested in the following comments, from the World Coal Institute -

"It has been estimated that there are over 847 billion tonnes of proven coal reserves worldwide. This means that there is enough coal to last us around 119 years at current rates of production. In contrast, proven oil and gas reserves are equivalent to around 46 and 63 years at current production levels."
http://www.worldcoal.org/coal/where-is-coal-found/
===========
So, what we have above is the Coal industry saying there are 119 years of Coal left, Globally.

However, as I previously mentioned, there is usually a rider to these statements, saying "at Current levels" or as they have done here " at current rates of production".

So, let's add an "acceptable" rate of growth of say 5%, which means the current usage/production doubles in 14 years, then doubles again at the end of another 14 years.

That means that the Coal Industries own figure of 119 years, suddenly becomes 40 years or less, if only 5% growth becomes reality and China is currently going along at 10% growth, with the rest of the world in a slight decline, due to the GFC.

perception

Depends on what type of coal you are talking about, thermal or coking, I have bugger all knowledge of thermal, QLD is mostly coking coal.


Proven reserves are what we absolutely know about, then you have implied reserves, the stuff we're fairly sure about. It costs a lot of money to prove a resource, so it never gets done until it needs to.

The bowen and surat basins are friggen huge and far from fully explored and even further again from being 'proven'.

Coal has a lot of years in QLD, before we get too worried.

BigOl64 wrote on Jul 30^th, 2010 at 2:08pm:

perception Depends on what type of coal you are talking about, thermal or coking, I have bugger all knowledge of thermal, QLD is mostly coking coal. Proven reserves are what we absolutely know about, then you have implied reserves, the stuff we're fairly sure about. It costs a lot of money to prove a resource, so it never gets done until it needs to. The bowen and surat basins are friggen huge and far from fully explored and even further again from being 'proven'. Coal has a lot of years in QLD, before we get too worried.

The previous post I referred to, which is from the World Coal Institute, refers to -

"It has been estimated that there are over 847 billion tonnes of proven coal reserves worldwide. This means that there is enough coal to last us around 119 years at current rates of production. In contrast, proven oil and gas reserves are equivalent to around 46 and 63 years at current production levels."

http://www.worldcoal.org/coal/where-is-coal-found/

These are Global figures, not local, so by my figuring the planet has about 40-60 years left of real time Coal consumption and Gas & Oil have somewhat less.

Peak Oil, Zero Growth and Asset Prices: Playing with Numbers

Question: What happens to asset prices if / when Peak Oil permanently slows economic growth?
Peak Oil Theory suggests that global oil production reaches a plateau as reserves deplete and remaining oil becomes more difficult and expensive to extract. As this occurs, oil shortages are expected to increase oil prices. Many argue we witnessed this phenomenon in 2008 as oil prices hit $147/bbl sending the economy into a tailspin.

But you thought subprime mortgages were responsible for the financial crisis? Subprime and over-leverage in general was the financial transmission mechanism that derailed the global economy. However, rising gas prices helped push indebted consumers and businesses beyond their threshold for debt capacity and consumption. For example, as gas prices rose, personal economic tradeoffs between travel, discretionary spending and housing became necessary. Those who drove to work were forced to spend more on gas, so they crimped in other areas.

Research suggests that residential areas where residents had the longest commutes were the first areas to witness declines in property values. This is probably one of the best demonstrations of the link between higher energy costs and asset prices. Proponents of Peak Oil Theory expect oil prices to continue to drag on the economy into the indefinite future – the magnitude of drag depends on the sensitivity of the economy to exogenous shocks and the size of the exogenous shock. Consequently, opinions on the economic impact and timing of peak oil vary. Some predict a gradual  economic deceleration, while others predict a hard crash and GDP declines of over 20%.

Given various peak oil scenarios, what is the potential impact to asset prices?
To conduct a sensitivity analysis, I looked at the terminal value of a $100 cash flow in a valuation model.

[The terminal value of an asset is essentially its value when cash flow growth hits a steady state. For example, a company may experience high growth in its early stages, but as the company matures cash flow growth tends to align with the rate of general economic growth. On average, and over the long run, it is reasonable to expect all financial assets combined to grow at the same rate as nominal GDP.]

The point of this exercise is not to value an asset but to highlight the range of terminal values given multiple scenarios. To do this, I calculated the terminal value using continuous terminal growth rates ranging from 3.8% to -10%. Also, the discount rate is adjusted based on the severity of the terminal growth rate. Under declining growth scenarios, investors will incorporate greater risk expectations into financial asset valuations.

Note: The average historical long-term nominal earnings growth rate is 3.8% (as observed by Robert Shiller between 1874 and 2004). I consider this growth rate and an 11.5% discount rate a prudent base case.

The chart below shows the range of terminal values based on different growth and discount rate expectations. Simply going from the long run average growth rate (3.8%) to a zero-growth scenario implies a 49% haircut to asset values. If the Peak Oil Theories are correct, a 0% growth rate is quite optimistic – it essentially assumes we are able to maintain the status quo indefinitely.

Realistically, unless a substitute energy is discovered, growth is likely to turn negative. Under a negative growth scenario, the terminal value is cut by up to 81%.

http://www.planbeconomics.com/wp-content/uploads/2010/08/Terminal-value.jpg

The point of this exercise is not to point to a specific final value for any particular asset if economic growth permanently stagnates or declines. The mission of this article is to inform readers that asset prices are highly dependent on the assumption of continuous growth. If Peak Oil Theory – or any other theory that threatens mankind’s ability to grow continuously – becomes widely accepted as reality, expect asset prices to plummet.
Link -
http://www.planbeconomics.com/2010/08/01/4630/
================
And that purely relates to Peak Oil, now throw in an Aging Population, which is set to start declining in 20-30 years time, a current Debt problem where many countries are quite possibly already insolvent and then factor in a looming Climate Catastrophe in 50-100 years time.

Yep, all is fine, when's Christmas, I NEED TO CONSUME SOME MORE GOODS?

Study Warns 'Peak Coal' Could Be Just Years Away

With electricity poised to potentially replace gasoline as the fuel that powers tomorrow's automobiles, the question of where that power comes from is an important one. If the majority of the world's electricity continues to come from coal, replacing internal combustion engines with lithium ion batteries will, in essence, just mean replacing one carbon-spewing combustible with another—though most research on the subject shows that EVs are still significantly cleaner.

But a new study calls into question whether coal will still be cheapest available source of energy by the time electric vehicles start making a major dent in the auto market. Could a looming shortage force our hand in replacing coal with nuclear energy and renewables?

Twin Peaks
In recent years, peak oil theory has received a lot of attention—and not just from the commodities gurus and conspiracy theorists who have been shouting warnings from the rooftops for decades. With global energy demand rising and countries like China and India on the cusp providing the world with billions of new consumers seeking something similar to the energy-thirsty "American way of life," even the mainstream media has been known to throw the term out there from time to time. In fact, it's possible that the consensus on peak oil has shifted in the last decade from a question of "if," to one of "when."

What hasn't gotten as much attention in recent years though is the global supply of another fossil fuel that mankind relies upon to power its prosperity: Coal. About half of the electricity used in the United States comes from the burning of coal, and in other countries that number is often much higher. China relies on the fuel for more than 70 percent of its energy. But with international demand for coal expected to rise by nearly 50 percent by 2030, exactly how much of this finite resource is left to mine, and how long will it be until global production peaks?

According to a study by Tadeusz Patzek of the University of Texas and Gregory Croft of Berkeley, that day is a lot closer than anyone would imagine. Patzek and Croft are warning that after 2011, global production rates for coal will begin to decline—sinking to 1990 levels by 2037 and dropping to half of peak production by 2037. The paper also projects a corresponding decrease in emissions from coal, by an average of 2 percent per year.

Peak coal isn't a new concept by any stretch, in fact it dates back to M. King Hubbert, the founder of peak oil theory. Using the same model he correctly used to forecast the decline of American oil production back in 1956, Hubbert predicted that global coal production would reach its apex in 2150. Since then, other researchers have placed the event closer and closer to the present day, with a 2007 study by the Energy Watch Group claiming that China will only be able to sustain its production trajectory until 2015.

Natural Cap and Trade?
So does this mean that the push to limit our emissions from coal is less dire than we might have thought? Patzek and Croft seem to think so, saying that the "current focus on carbon capture and geological sequestration may be misplaced. Instead, the global community should be devoting its attention to conservation and increasing efficiency of electrical power generation from coal."

Still, most global warming experts warn that decreasing the amount of carbon that enters the atmosphere is an essential task that must be undertaken immediately if governments want to mitigate the effects of climate change. Waiting for global coal production to decline on its own might be the path of least resistance—and more satisfying to believers in the divine wisdom of the free market. But why focus on increasing the efficiency of coal when renewable energies are the only long-term solution to a looming problem that threatens to significantly alter the environment, destabilize world economies, or both?Link -
http://www.hybridcars.com/news/study-warns-peak-coal-could-be-just-years-away-28330.html
==============
Peak Coal 2011???

Peak Oil? Yes! Peak Food? I Don’t Think So!

Earlier today, Michael C. Ruppert, former editor and publisher of the newsletter and web site From The Wilderness and currently publisher of the web site collapse.net, put a video clip called “Global and US Food Price Alert” online. I found it on Facebook and it is also on You Tube. Doubtless, it is other places as well, but these are the two places where I accessed it.

This clip, made on August 4th, is a 1:13 teaser to a longer video made available to paid Collapse.net members. You can pay ten dollars per month to be a member to see the whole thing. I am not currently a member so I have not seen the entire video. However I had a strong reaction to the part I did see, in which Ruppert stated that he saw, in a 24-36 hour news cycle, “almost an epidemic of stories from some of the biggest financial publications and news entities in the world” proclaiming that global food prices were about to “soar.” Ruppert said that after reading the stories, he came to the conclusion that “it’s quite possible we have arrived suddenly at Peak Food.”

I issued the following response on Facebook, both on my personal page and on “The End of Money” page that I founded earlier this year to promote discussion of ending monetary systems and working “for a living” as we know them today. I believe that doing those two things is the key to post-industrial prosperity:

“How do you know that the stories were not planted in the corporate media so that people would be scared into accepting the Monsanto "solution" for food crises? So often, corporations/governments create the problem e.g. 9-11, so they can propose their solution e.g. global war on terror and clamp down of dissent. And you know that so much of the media is under corporate control that the fact that so many stories came out at the same time should be a big RED flag.

I believe Peak Oil because oil is a finite resource whose decline has been measured over time. Food is not the same beast that oil is. Production levels are variable; a potato field can yield more a season after a bad harvest, whereas once an oil field is in decline, it won't produce at higher levels later on. We have ready alternatives for food production: We can go back to the organic production methods we had before WWII. No need to invent anything new.

Yes, there are places in the world that are having bad harvests and food shortages. But the overall problem globally is not production but distribution. e.g. The US takes the official position that there is no human right to food, only an opportunity to buy food.

Here is another example of why we must abolish money-based economics and the sooner the better for humanity and the rest of the planet. Why must we pay to live on the planet we're born on? Why must we be profitable to someone else, or something else, a corporation, before we can eat?

Talk to me about Peak Food when the US and UK stop wasting so much food.”

I have not read the articles that Ruppert has read, so I do not know why they predict world food prices imminently soaring. I am aware that Russia has had a bad harvest and has recently halted grain exports. This and other factors around the world may indeed lead to soaring food prices...for a while. But Peak Food? For the reasons I stated above, the very concept does not make sense.

Unfortunately, the concept of “peak” may have, for lack of a better term, “jumped the shark.” It fits in the context of oil and other finite resources such as uranium. But it makes no sense when one is talking about renewable resources such as crops. And it makes no sense when the problem is less with the supply of natural resources than with the political will to use them wisely and distribute their fruits, literally and figuratively, in an equitable manner.

So if food prices do soar, I will ask if agribusiness is behind it, as it is hell bent on things such as GMOs, chemical additives, seed patents, privatization of water resources, and any other thing it can attempt in order to monopolize the stuff of life for the purpose of profit. After all, big corporations and their government lackeys have done much already to ruin the peace, health and prosperity of billions around the world. Soaring food process would be consistent with past practice.
Link -
http://atlanticfreepress.com/news/1-/13648-peak-oil-yes-peak-food-i-dont-think-so.html
===========
There are a couple of things to remember, when talking about Peak Energy & Peak Food -
1) Oil is heavily involved in agriculature in many areas, including the Fertiliser/Chemicals used, transport of the produce around the world and many other issues related to food.
2) The requirement for Growth in Food is linked to the Growth of Populations, which are already slowing and will  start to actually decline in around 2030-2040.
3) Climate Change is already impacting Food production, as indicated by such issues as the current Russian example & the Murray-Darling basin.

Exactly when Food will Peak may not yet be certain, but clearly it has already started to outstrip inflation, next comes shortages!

Peak oil is the villain governments need

Using the threat of a high oil prices is a sell the public will buy into – unlike intangible arguments over climate change.

Could peak oil lever politicians out from between the rock of the electorate and the hard place that is climate change mitigation? As Daniel Gros wrote in the Guardian: "the climate-change bill, for which President Barack Obama had pushed so hard, will not even be presented to the US Senate, because it stands no chance of passage". His analysis ends with a fatalistic statement: "Determined action at the global level will become possible only when climate change is no longer some scientific prediction, but a reality that people feel … A world incapable of preventing climate change will have to live with it."


Isn't that the trouble? Climate change is a stealthy foe, hard to feel, see or identify. Unlike peak oil. So here's another question: did western administrations know that the International Energy Agency (IEA) had been consistently concealing the imminence of peak oil? One might hope our leaders would know about something as serious as this. But if they did, why is it that renewable energy replacements haven't been far higher on the agenda, for much longer and addressed with rather more conviction? This is the question George Monbiot put in a freedom of information request sent to the Department for Business in February 2008, asking for details of the government's peak oil contingency planning.


"The answer I received astonished me," he wrote in the Guardian. Hardly surprising, considering the answer: "The government does not feel the need to hold contingency plans specifically for the eventuality of crude oil supplies peaking between now and 2020." Eighteen months later, the Guardian published the IEA whistleblower story and the 2020 cover was blown. Were the government really taken in by the duplicity of the IEA? Or were they in on the act, making it difficult to appear sanguine about an imminent and permanent disruption to energy supplies?


Outside of the fossil fuel industry, it is hard to know to what extent commerce is aware of the impending crisis or the speed at which it would envelop us. Either way, industries appear to have woken up with a start, at least if the white paper, Sustainable energy security: strategic risks and opportunities for business, is a guide. Produced by Lloyd's of London and Chatham House, their assessment is sobering. They identify opportunities for the quick witted, as well as risks to the somnambulant. One statement by professor Paul Stevens in particular caught my eye: "A supply crunch appears likely around 2013 … given recent price experience, a spike in excess of $200 per barrel is not infeasible".


What effect would a barrel price of $200 have on industrial economies, should that spike be sustained for any length of time? We would witness endemic global market disruption, reductions in agricultural yield, increased transport costs for both finished goods and raw materials (true pessimists would add an oil war or two for good measure). The shockwaves would be felt everywhere, although as ever, the poor will take the brunt of it.


And yet when the price of oil shoots up, we use less – meaning we output less CO2. So let me rephrase my question: what effect would a barrel price of $200 have on the CO2 output of nations? It would certainly force a substantial reduction. It would be violent change, but that is the price of hubris. The longer we wait, the greater the cost when we finally act, when everything is rushed because the public furore can no longer be ignored. Remember the fuel protests? The UK ground to a halt in a matter of days at the behest of a few thousand protestors. Scale that up by an order of magnitude and you can see what a $200-an-oil-barrel world might look like, at least until we got used to it.


Since it will happen far sooner than any of the more serious impacts of climate change, we should abandon attempts to stop fossil fuel use because of climate change and concentrate on reducing fuel use, controlling energy prices and keeping national economies reasonably stable. That's a sell the public will buy into: the price of petrol or heating oil, the security of their jobs, the scarcity of resources – these are things the public can feel and see, and that contrarians cannot obfuscate out of ideological opposition.


Peak oil is inevitable. Something has to give, and it's consumerism. Governments know this perfectly well. What they really need is some externality, something abstract they can blame – deflecting the public wrath from the ballot box. Western governments need a villain. Oil at $200 a barrel fits the bill perfectly.
Link -
http://www.guardian.co.uk/commentisfree/cif-green/2010/aug/11/peak-oil-villain-governments-need
=========
Some Politicians, Economists & government officials are aware & have been for some time, whilst the majority have no idea!

New Perspectives on the Energy Return on (Energy) Investment (EROI) of Corn Ethanol

Conclusions
The debate over the EROI of corn ethanol has been concerned mostly with whether it is a net energy yielder. As such, the dialogue has veered away from many of the larger implications of EROI analyses. Our results indicate that the EROI of corn ethanol is statistically inseparable from one energy unit returned per energy unit invested, and it is likely that much of our ethanol production is acting as an energy sink, requiring more energy for production than that contained in the ethanol product. This conclusion was confirmed in our spatial analysis, where the average EROIRG was 0.06 lower than the average calculated from the literature.

Increasing yields is oft-touted as a way to increase the EROI of corn ethanol, but our analysis indicates that the gains in EROI are small even when the average yield from 2005 was tripled. Co-product credits, on the other hand, have a large influence on the EROI from corn ethanol. There is no consensus within the literature regarding an appropriate co-product value, and until one emerges (one way or another), we should err on the side of caution when applying credits to co-products. Finally, the analysis of ethanol production from biorefineries supports our conclusion from the spatial analysis: the EROI is too low in too many locations to make an impact on our gasoline consumption. Our best estimate is that the net energy provided from ethanol accounts for only 0.8% of the net energy provided by gasoline.

The evidence provided in this research is clear: we do not know the exact EROI of ethanol, but even if we are remotely close (± 0.2), we are still, in the best case scenario, gaining an insignificant amount of net energy. Furthermore, Hall et al. (2009) estimated that only fuels with an EROI greater than 3:1 provide the requisite net energy to provide a fuel source and to maintain the infrastructure associated with the current U.S. transportation system. Fuels that have an EROI below 3:1 require subsidies from other energy sources to pay for all of the infrastructure associated with the transportation system of the US. The EROI of corn ethanol that we calculated is lower than the 3:1 threshold, indicating that corn ethanol requires large subsidies from the general fossil fuel economy, and as a result, drains energy from the US transportation system.
Link -
http://netenergy.theoildrum.com/node/6761
==============
I prefer EROEI - Energy Return On Energy Invested!

That said, whichever way you look at Ethanol, it is a waste of time, effort & resources.

The Energy return on Energy Invested is far too low and it also takes up far too much productive agricultural land away from the production of FOOD for human consumption.

That's corn ethanol - and yes, we know that already. Ethanol derived from sugar cane is an entirely different prospect.

As far as I know, there is no debate on corn ethanol. It's a bad idea.

(so is ethanol derived from natural gas, but that's even worse)

If you want a viable alternative to corn ethanol, look at cellulosic ethanol.

Here in Australia, we primarily use sugar cane anyway, but if we can use the entire cane crop including the cellulosic  portion, we'd be on a winner.

muso wrote on Aug 12^th, 2010 at 11:58am:

That's corn ethanol - and yes, we know that already. Ethanol derived from sugar cane is an entirely different prospect. As far as I know, there is no debate on corn ethanol. It's a bad idea. (so is ethanol derived from natural gas, but that's even worse)

Agreed, although even the sugar based Ethanol return is not all that great, compared to what we have had.

Book Review - Energy Transitions: History, Requirements, Prospects

The discussion about our energy supply is full of extremely optimistic expectations. There are many people who believe that full replacement of fossil with renewable energy sources in an extremely short time span is possible. Such ideas have been publicly voiced in Al Gore’s call for 100% renewable energy in the United States within 10 years, and Jacobson & Delucchi’s plan to power 100 percent of the planet with renewable by 2030 published in Scientific American.
Their optimism stems from ignoring the inherent gradual nature of energy transitions and the quality differences between energy sources.

Both issues are described in Vaclav Smil’s new book, Energy Transitions: History, Requirements, Prospects. Vaclav Smil, a Professor at the University of Manitoba, has been writing about energy for more than two decades. This book is written in his usual clear descriptive style. He has an eye for detail as he quantifies many historical amounts, providing a much needed reality check for any energy transition scenario under consideration. He concludes that energy transitions are a generations-long process. To increase the likelihood of success of the coming energy transition, it would be wise for affluent nations to introduce policy targets to reduce absolute energy usage per capita.

“The scale of the coming energy transition is best illustrated by comparing the future demand for non-fossil fuels and primary electricity with the past demand for fossil energies that were needed to complete the epochal shift from biomass to coal and hydrocarbons.

By the late 1890s, when the share of biomass energies slipped just below 50% of the world’s total primary energy supply, less than 20 ExaJoules (EJ) of additional fossil fuel supply were needed to substitute all of the remaining biomass energy consumption.

By 2010 the global use of fossil energies runs at the annual rate of roughly 400 EJ, which means that the need for new non-fossil energy supply to displace coal and hydrocarbons is 20 times greater in overall energy terms than was the need for fossil energies during the 1890s.”

"Globally, coal began to supply more than 5% of all fuel energies around 1840, more than 10% in the early 1850s, more than a quarter of the total by the late 1870s, and one half by the beginning of the twentieth century…”

Vaclav Smil concludes his book with advice that a shift away from fossil fuels is a generations-long process.

“The inertia of existing massive and expensive energy infrastructures and prime movers and the time and capital investment needed for putting in place new convertors and new networks make it inevitable that the primary energy supply of most modern nations will contain a significant component of fossil fuels for decades to come.”

Therefore, from Smil’s perspective, hoping for rapid technological development and increasingly better conversion efficiencies is insufficient. He believes that a precondition for a successful transition from fossil fuels is that all affluent nations take steps to reduce fossil fuel consumption, through conservation and increased energy efficiently. In this way, the amount of replacement fuel can be reduced.

“Difficult as it would be, reducing the energy use would be much more rewarding than deploying dubious energy conversions operating with marginal energy returns (fermentation of liquids from energy crops being an excellent example), sequestering the emissions of CO2 (now seen as the best future choice by some industries), and making exaggerated claims for non-fossil electricity production (both in terms of their near-term contributions and eventual market shares). Or hoping for an early success of highly unconventional renewable conversions (jet stream winds, ocean thermal differences, deep geothermal). After all, a dedicated but entirely realistic pursuit of this goal could result in reductions on the order of 10% of the total primary energy consumption in a single generation, an achievement whose multiple benefits could not be matched by the opposite effort to increase the overall energy use.

Affluent countries should thus replace their traditional pursuit of higher energy output and increased conversion efficiency with a new approach that would combine aggressively improved efficiency of energy conversion with decreasing rates of per capita energy use. This combination would be the best enabler of the unfolding energy transition. Until we get such history-changing conversions as reliable, inexpensive PV cells generating electricity with 50% efficiency or genetically engineered bacteria exuding billions of liters of kerosene, it is the best way to ensure that new renewables will come as close to displacing fossil fuels as is economically advantageous and environmentally acceptable”
Link -
http://europe.theoildrum.com/node/6828
===========
The transition will take place, for various reasons, but will it be voluntary and will it be planned?

http://www.youtube.com/watch?v=efEckI8IXjg&feature=player_embedded#!

PEAK OIL? I cant believe its oil!

Product DescriptionI can’t believe it’s oil!
uses include: deodorants, petroleum jelly, moisturizers, rubbing alcohol, soaps, heart valves, antiseptics, hearing aids, nasal decongestants, antihistamines, moisturizers, Bactine, vaporizers, latex gloves, bandages, allergy medications, aspirin, burn lotions, insect repellents, anesthetics, artificial limbs, cough syrup, cologne, dentures, stethoscopes, syringes, glycerin, cortisone, cosmetics, dentures, vitamins
Link -
http://heinzduthel.com/2010/08/14/peak-oil-i-cant-believe-its-oil/
=============
And, that's only a very small amount of Products that incorporate the use of Oil.

Oil prices fall amid recovery concerns

World oil prices fell for the fourth consecutive day on Friday, holding under $US76 amid stubborn concerns over the global economic recovery despite upbeat growth data in Europe.

New York's main contract, light sweet crude for September, fell 35 US cents to $US75.39, wrapping up a drop of more than $US6 in four days.

On Friday, the Organization of Oil Exporting Countries (OPEC) revised upwards its world oil demand growth estimate for 2010 to 1.2 per cent.

"Given stabilised oil demand in the US, the world oil demand growth forecast is revised up by 0.1 million barrels per day (bpd) to show growth of 1.05 million bpd or 1.2 per cent," the cartel said in its monthly report.

Total demand for 2010 was now expected to reach 85.5 million bpd, up from 84.46 million bpd in 2009.

OPEC warned, however, that a slower economy in the second half of the year, caused by a phasing out of fiscal stimulus, would likely affect demand.
Link -
http://news.smh.com.au/breaking-news-business/oil-prices-fall-amid-recovery-concerns-20100816-125jh.html
==========
The above article is suggesting that Oil Demand may rise slightly in 2010, but a slowing world economy may mean that Demand may lessen, if the Economy falls away, as stimulus programs phase out?

So, as a result of all that uncertainty the price of Oil has recently fallen!

Q. Could there be another, more direct reason?

A. The vast majority of Oil contracts, are actually priced in US$'s, so as the US$ rises & falls, so to does the price of Oil.

For example -
On July 17th the US$ index was 82.56 & Oil was $76.01.
On August 6th the US$ index had fallen to 80.32 & Oil had risen to $80.70.
Today the US$ index is back to 82.92 & Oil has dropped to $75.39.

http://www.chartseeker.com/images/USDX-5Dy-LG.png

In fact, the recent appreciation in the US$ value is highlighted by the above chart, which shows the US$ index (US$ against a basket of currencies) rising last week from an 80.267 low on Monday, to a 82.952 high on Friday.

Whilst it may well be that the US$ appreciation was caused by concerns over the state of the US & Global Economy translating into a "flight to quality", which is the historical reputation that the US$ has, it is the direct link between the US$ and Oil contracts that saw the immediate fall in Oil pricing, not a possible future decline in Oil usage!

That said, it could also come to pass, that Oil Demand may fall significantly if the Global Economy plunges into a serious slowdown.
But, it is also possible that US Debt may force a serious re-evaluation of the US$ status as "the international currency" and the resulting depreciation in the US$ could see a dramatic rise in the price of Oil, even whilst Demand was falling significantly.

Declining Global Oil Supplies Have Caused An Irreversible Decline Of The Fed


The Federal Reserve is an artifact of the Abundance Economics that have governed Western economies over the past 250 years. For nearly 250 years exactly we have climbed the ladder of ever increasing energy density, and ever increasing energy supply. That era has now come to an end.
You can see that view, the end of the abundance era, expressed by a number of different writers, whether it’s today’s longish piece from Matterhorn Management, last year’s piece by Richard Heinberg on the End of Growth, or some of the shorter (free) posts I write here at Gregor.us. To keep things simple, oil is no longer available to fund world growth. Oil is certainly available to fund existing systems as they are currently set up, but not new growth. You can only fund new growth with an energy supply that is growing. That’s why the developing world has turned to coal, not oil, to fund its growth. Based on the most recent data, let’s update the chart of global crude oil production:

http://static.businessinsider.com/image/4c69a7da7f8b9af758710700/crude-oil-supply.jpg


The credibility of the United States Federal Reserve is closely aligned with its ability to induce economic activity, by the provision of money and credit. But you can see the problem: if there is not an expanding supply of energy, credit is less useful as credit cannot be paid back very easily in a future of either flat, or declining growth.Now that the return on the Fed’s credit provision has gone into decline, then its incumbent on the Federal Reserve to rethink its approach. But the Fed, governed by post-war economists, is apparently unable to learn from new information.

There is another limit to the Fed’s provision of money and credit: and that is the quantity of debt already being carried in the economy.  As debt levels rose in the US economy over past decades, the Federal Reserve simply kept repeating itself in a kind of argumentum ad infinitum, providing ever more money and credit as though completely unaware of the levels to which debt was rising. Now, presently, the Fed has declared a war on debt-deflation. But, the Fed indicates no understanding of the core thrust of debt-deflation. I’ll help out: there can be no kick-starting of economic activity, until debt levels are reduced significantly. What the Fed is looking for is not the effects of more credit provision, but instead, debt jubilee.

The Federal Reserve is now in permanent, irreversible decline because it has no tools to fight both the limits placed on the economy by oil, and, current debt levels.

Were the Fed to conduct debt jubilee on a scale sufficient to restart demand, that would vaporize the currency. But even if it were possible to manage a workable debt jubilee, then the economy would come more squarely back into confrontation with the energy limit. And there too the Fed would discover that its role as provider of money and credit was reduced, as credit itself relies on future growth.

The Federal Reserve came into existence during the fattest part of the abundance curve, made possible by the extraction of energy-dense fossil fuels. The early part of the last century was the moment when the world started to transition from Coal to Oil, with the fullness of oil’s resource spread out before the industrial economy like a broad forest.

As an artifact, not a creator, of this abundance the Fed was merely a mediator of wealth and performed (at best) a smoothing operation as the economy traded credits on future labor and future growth. Like most institutions in decline, the Fed can either reform itself now and embark on a substantially new mission, or, it can decay into irrelevance as it attracts lower quality intellects, and is dismembered of its power. Indeed, if you look around the edges, that process of decay in the Federal Reserve has already begun.
Link -
http://www.businessinsider.com/federal-reserve-enters-decline-2010-8
===========
It is certainly correct that the US Federal Reserve does not have the tools to overcome Energy Decline in isolation, let alone in concert with an Aging Global Population, which is set to go into actual decline within 20-30 years and current Global Debt simply exacerbates the situation! i

OPEC's Spare Crude Oil Capacity - Will it Disappear by the End of 2011?

Two energy subjects that often fuel lengthy debates are

•The oil price and its future trajectory
•OPEC’s present marketable spare capacity for crude oil
IEA Oil Market Report for August 2010 estimates OPEC's crude oil spare capacities at around 6,0 Mb/d, while the EIA Short Term Energy Outlook for August, 2010 provides a corresponding estimate of 5,1 Mb/d for 2010.

Oil prices and OPEC spare capacities are closely linked, and therefore monitored closely by companies planning to invest in new supplies that presently are at the margin--for example, some oil sands developments. Most analysts seem to agree that OPEC presently has spare marketable crude oil capacity, and that this spare capacity could be used to maintain an oil price in the present “comfort zone” of $70-80/bbl. The amount of the this spare capacity would thus define how long investments in new supplies at the margin are deferred.

http://www.theoildrum.com/files/01_EIA_GLOBAL_SUPPLIES_MAY_2010.PNG
Link -
http://europe.theoildrum.com/node/6859
==========
This article is very lengthy, so I will leave you read what you wish.

That said, given a standard growth of 2% per year, World Oil Supply would "normally" have grown from 85 mbpd in 2005, to around 93mbpd in 2010, clearly that has not happened and just as clearly supply started to slow before the GFC started in 2007!

Whatever the cause & effect is, it is clear that the game has changed and I believe that is because supply IS tightening, prior to declining.

As we proceed and it becomes apparent that supply can not keep up with the usual Population & Economic growth, then the new paradigm officially begins!  

Oildrum Oilwatch

http://www.theoildrum.com/files/Oilwatch_august2010_1.png

http://www.theoildrum.com/files/Oilwatch_august2010_3.png

http://www.theoildrum.com/files/Oilwatch_august2010_5.png

Non-OPEC supply has been boosted mainly by Russia, which has now over taken Saudi Arabia as the number 1 producing country.

There are indications that Russia is not far away from Peak production and when it levels off &/or starts to decline, we shall then see the truth of whether the fabled OPEC spare production capacity is there or not?

If or should I say when, the reported OPEC spare capacity does not eventuate, after Russia & others go into decline, then all bets are off!!!

Nine Challenges of Alternative Energy

9. Energy Return on Investment
The complexity of our economy and society is a function of the amount of net energy we have available. “Net energy” is, simply, the amount of energy remaining after we consume energy to produce energy. Consuming energy to produce energy is unavoidable, but only that which is not consumed to produce energy is available to sustain our industrial, transport, residential, commercial, agricultural, and military activities. The ratio of the amount of energy we put into energy production and the amount of energy we produce is called “energy return on investment” (EROI).

This concept differs from “conversion efficiency,” which compares the amount of energy provided as a feedstock to a conversion process (such as an electric power plant or petroleum refinery) with the amount remaining after conversion. Physics dictates that this figure is always less than 100 percent. In contrast, EROI can be very high (e.g., 100:1, or 100 units of energy produced for every 1 unit used to produce it—an “energy source”) or low (0.8:1, or only 0.8 unit of energy produced for every 1 unit used in production—an “energy sink”). Society requires energy sources, not energy sinks, and the magnitude of EROI for an energy source is a key indicator of its contribution to maintenance of social and economic complexity.

Net-energy availability has varied tremendously over time and in different societies. In the last advanced societies that relied only on solar power (sun, water power, biomass, and the animals that depended on biomass), in the seventeenth and early eighteenth centuries, the amount of net energy available was low and dependent largely on the food surpluses provided by farmers. At that time, only 10 to 15 percent of the population was not involved in energy production. As extraction of coal, oil, and natural gas increased in the nineteenth and twentieth centuries, society was increasingly able to substitute the energy from fossil fuels for manual or animal labor, thereby freeing an even larger proportion of society from direct involvement in energy production. In 1870, 70 percent of the U.S. population were farmers; today the figure is less than 2 percent, and every aspect of agricultural production now relies heavily on petroleum or natural gas. The same is true in other energy sectors: Currently, less than 0.5 percent of the U.S. labor force (about 710,000 people) is directly involved in coal mining, oil and gas extraction, petroleum refining, pipeline transport, and power generation, transmission, and distribution.

The challenge of a transition to alternative energy, then, is whether such energy surpluses can be sustained, and thus whether the type of social and economic specialization we enjoy today can be maintained. Indeed, one study estimates that the minimum EROI for the maintenance of industrial society is 5:1, suggesting that no more than 20 percent of social and economic resources can be dedicated to the production of energy without undermining the structure of industrial society.11

In general, most alternative energy sources have low EROI values (see figure 18.3). Because of their high energy-input requirements, biofuels produce very little or no energy surplus.12 Similarly, tar sands provide less than 3 units of energy for each unit consumed. In contrast, wind energy shows a high return on energy investment, but it is subject to the problems of intermittency and siting issues.

http://www.theoildrum.com/files/Alternative%20fuel%20EROI.png

A high EROI is not sufficient to ensure that the structure of modern society and economies can be maintained, but it is a prerequisite. Unfortunately, EROI is not well understood or routinely used in energy analyses by government or industry, despite the insights it can provide. Because of the enormous investment in resources and energy that any alternative energy pathway will require, it is important that we look beyond simple financial payback, particularly in a future of rising energy prices, declining fossil-fuel resources, and increasing danger of climate catastrophe.Link -
http://www.theoildrum.com/node/6854
==============
The rest of this article is also worth a look, but the EROI issue is certainly worth taking the time to fully understand!

Analysts warn of threat to oil price stability

The deteriorating global economic outlook and weakening OPEC discipline could force oil prices as low as US$50 per barrel within the next year, analysts say.

“We see both lower prices and a tighter range ahead but with increased risks,” Lawrence Eagles, an analyst at the US investment bank JPMorgan Chase, wrote in a recent report. “Weaker economic growth, energy efficiency and [OPEC] intransigence provide downside risks.



“If demand drops, the Gulf Trio [of] Saudi Arabia, Kuwait and the United Arab Emirates, are likely to demand cuts from ‘leaky’ [OPEC] members to rebalance the market, but any delay in response risks a fall in prices [to] as low as $50 a barrel.”

Late last month, the bank cut its forecast for New York oil prices for the rest of this year by 5.5 per cent to $77.25 per barrel. It also lowered its price forecast for next year to an average of $79.25 per barrel from $90.



That move has been followed by a flood of bearish economic reports from the US, Europe and Asia. The gloomy data triggered a sharp fall in equities last week as the US dollar strengthened, which combined to send crude prices south.

On Friday, crude dipped as low as $73.96 in New York as OPEC, Oman and Yemen cut exports to China on slowing demand.

Crude’s recent retreat from above $82 per barrel to the middle of the $70 to $80 range that has prevailed for much of this year followed a recent OPEC forecast of anaemic growth in global oil demand next year.
Link -
http://www.thenational.ae/apps/pbcs.dll/article?AID=/20100821/BUSINESS/708219918/1678/pollarchive
===================
Oil Price is a reflection of US$ value rising, which is a reflection of concern of a declining world Economy,
which means less Oil is likely to be consummed, which means that the Oil Price will decline on the back of a lower demand,
unless Supply is actually in decline,
in which case the Price of Oil may actually rise substantially,
which would then precipitate another Economic Decline,
because the Energy to GDP ratio would rise rise too much,
causing the world Economy to decline further,
which would mean less Oil consumption
etc. etc

There are a number of major influencing factors in play, at present.

Whilst Politics is not one of those major influencing factors, it can make a difference at the margins, to improve the situation slightly, but it can not make those major influencing factors disappear!

UK government held secret peak oil talks

The UK government has been holding secret talks to assess the potential impact of peak oil, according to reports, suggesting that it is seriously concerned about the issue.

According to reports in the Observer newspaper, the Department of Energy and Climate Change (DECC), the Bank of England, and the Ministry of Defence participated in talks over the issue.

Documents, obtained by the newspaper under the Freedom of Information Act, revealed that the departments believe the government's policy on peak oil is " not quite right" and needs to "take account of climate change and put more emphasis on reducing demand and also the fact that peak oil may increase volatility in the market".

DECC, which has been asking industry leaders for their views on peak oil, refused to release details about current policy discussions, in spite of having written privately that secrecy around the topic is "probably not good".

Peak oil, a phenomenon first posited by Shell geoscientist Marion King Hubbert, suggests that oil production will reach a maximum level, after which point it will go into decline. The concept has been controversial, with industry commentators varying wildly on the timing of the peak.

Airline magnate Richard Branson predicted an oil crunch within five years in February, while others, particularly the International Energy Agency, have predicted sustained production for several decades more. Some experts even believe oil production may have already peaked and oil prices have only been kept low over the past few years as a result of the global recession.

In February this year, the UK Industry Taskforce on Peak Oil and Energy Security – a group of companies including Virgin, Scottish and Southern Energy and the StageCoach Group – released a report criticising the UK government for not taking peak oil seriously.

The report called on the UK government to prepare for peak oil, which it said could have economic, political and social impacts from as early as 2015.

The group is now preparing a follow up report, which is expected to be released in October and will assess how the BP oil spill in the Gulf and the resulting cuts in anticipated output from deepwater oil rigs will impact global production and potentially lead to oil supplies peaking even earlier.

In the US, the Joint Operating Environment within the Department of Defense, published a report on peak oil in February warning that peak oil could have an effect within a few years.

It warned that "a severe energy crunch is inevitable without a massive expansion of production and refining capacity", adding that "by 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD [Millions of Barrels per Day]".
Link -
http://www.businessgreen.com/business-green/news/2268554/uk-government-held-secret-peak

perceptions_now wrote on Aug 20^th, 2010 at 6:15pm:

Nine Challenges of Alternative Energy 9. Energy Return on Investment

The two most important Energy generation technologies for the future are missing from that graph. They are Nuclear and Solar Thermal. Solar Thermal is much more cost effective than standard non-concentrated  Solar PV, and represents a larger market share in the US for example.

Nuclear is likely to rival crude oil in the Generation III power plants. The older technology averaged about 5:1. The new technology should be around 20:1 (conservative estimate). It's an American study, and it omits Sugar Cane derived Ethanol too. I suspect that the results are skewed because it was written for certain vested interests.

The Americans don't have as much Solar energy per square metre that we have in Australia either.

Sugar Cane derived ethanol has an EROI of between 8.3 (average) and 10 (best).

http://news.mongabay.com/bioenergy/2006/10/brazilian-ethanol-is-sustainable-and.html

The other technology on the horizon is high efficiency concentrated triple cell PV and hybrid thermal/PV systems with concentrators.  These have tracking systems and they attain an overall efficiency of up to 75% for hybrid systems even with small scale installations.

Zenith Energy in Israel claim grid parity (4kW peak system), as do Green and Gold Energy in Adelaide Australia with their Solar cube technology (3kW peak).

The Americans (Soliant Energy) are also working hard on concentrated PV although all they offer at the moment are 330Watt peak units:

http://www.technologyreview.com/Energy/18718/
http://www.zenithsolar.com/

http://www.greenandgoldenergy.com.au/

http://www.greenandgoldenergy.com.au/images/DSC01767.jpg

China Will Force the World Off Oil

As a country’s per capita income increases, its per capita oil consumption increases. Consumption growth tends to be modest up until $15,000 income per head, but then accelerates rapidly. China is quickly approaching this point. South Korea, which consumes 3% of world oil output, is too small to disrupt oil markets.

China is too big not to disrupt them. Were China’s per capita oil consumption to be brought up to South Korea’s, its share of global consumption would increase from today’s 10% to over 70%.

In order to cap China’s share at 22%, which is the U.S. share today, global oil output would have to increase by a massive 13% per annum over ten years – well beyond the 1% growth averaged since 1975.

This rate of growth is inconceivable, even if vastly more expensive sources of supply, such as the Canadian oil sands, were developed at breakneck speed.

If China’s recent economic growth pace continues, it will surpass South Korea’s current per capita GDP shortly after 2020 – meaning that the world may be forced onto alternative energy sources much sooner than it realizes.

http://4.bp.blogspot.com/_H2DePAZe2gA/THMC0sAkSqI/AAAAAAAAOVI/reDfYwoAhmo/s400/oilchina.PNG

Link -
http://jessescrossroadscafe.blogspot.com/2010/08/cfr-china-poised-to-shock-world-oil.html
===============
How far can you stretch a lacky band, before it snaps?

If you are unsure, then it would be prudent to take mitigating steps to try to ensure the lacky band does not approach its limits!
I think some steps have been put in place, we will see how things progess?

Green technology key to future

GREEN, clean industries are the way of the future but Fraser Coast people must act now if the region's idyllic lifestyle is to be maintained, says Maggie John of Transition Towns.

“Oil has fuelled much of the massive population growth and the extraordinary achievements of the last 150 years. It is the lifeblood of industrial society,” Ms John said.

“According to a growing number of experts, soon the world will reach the ultimate peak in global oil production. After this point, production will begin its slow but terminal decline.

“Peak Oil represents an historical turning point, from an era of growth to an era of contraction. Peak Gas won't be far behind.”

Ms John said alternative energy sources could not fill the entire gap that oil and gas left behind and as a result, massive social changes were certain.

“There's not one of us who won't be touched by this in the next 10 years but there are things we can do to help ourselves,” she said.

“As oil prices rise there will be flow-on effect for transport, food, services, business and lifestyle. Tourism will suffer, supermarket food prices will skyrocket, vehicles will be used less, there will be less job security and a reduction in essential services.

“We have to learn to be much more energy efficient and technology can help.”

Link -
http://www.frasercoastchronicle.com.au/story/2010/08/26/green-clean-industries-fraser-coast-maggie-john/

OPEC Reserves & Production

Based on published data, the ME OPEC countries contain more than 50% of the World's remaining producible oil reserves. Understanding the reliability of these reserves estimates is therefore vital to the future of the oil driven growth in the World Economy.

The anomalous nature of ME OPEC reserves, illustrated below for Kuwait, can be summarised as follows:

1. Reserves were uplifted by 38% in 1984. This does not relate to any verifiable new field discoveries. If Kuwait was the only country to have done this it might be excused as rectifying a past mistake. But in the period 1984 to 1987 all of the ME OPEC countries uplifted reserves by large amounts in this period (Figure 3). For example, the UAE increased their oil reserves by 295% in 1986. One view of these anomalous revisions is that they are related to OPEC quota negotiations and are not founded on geological or engineering data.

2. Following this arbitrary uplift, reserves have more or less remained unchanged. Most significantly, no deductions have been made for production for around 20 years.

http://europe.theoildrum.com/uploads/3246/Kuwait.png

http://europe.theoildrum.com/uploads/3246/ME_OPEC.png

The Big 5 ME OPEC producers all show a similar history to Kuwait, with large arbitrary uplift in reserves during the 1980s, followed by "flat line" reserves histories lacking evidence for depletion, though additions are evident in Iran and Iraq.

So much for Reserves, but suffice to say, the reserves quoted clearly are not there!
http://www.theoildrum.com/files/02_OPEC_SUPPLIES_MAY_2010.PNG


It has been said that OPEC have reduced their 'barrels per day' production production a number of times over the last decade.

The reality is that there were two substantial Production declines, the first following the 9/11 attacks & the 2nd following the current GFC, both relate to declining Demand, due to the Economic slowdowns that followed both events.

However, whilst the period mid 2004 to mid 2008 was a relatively stable period, the Oil Price went thru the roof, but production remained stable.

It defies believe that whilst prices rise dramatically and Demand also rose during the 2004-2008 period (in line with Economic & Population Growth), that Oil Production (Supply) did not also rise in line with Growth during that period.

If both Demand & Price are rising, then Economics 101 would see Supply (Production) increase , to take advantage of that situation.

However, Supply (Production) did not rise in line with Growth during that period & it is still only just holding onto current Production.

Why, Because fields such as Ghawar (in Saudi Arabia) & Burgan (in Kuwait) are now in decline and that is why Production will not recover!

Peak Oil Update

http://www.theoildrum.com/files/PU200906_Fig3b.png

World oil production (EIA Monthly) for crude oil + NGL. The median forecast is calculated from 15 models that are predicting a peak before 2020 (Bakhtiari, Smith, Staniford, Loglets, Shock model, GBM, ASPO-[70,58,45], Robelius Low/High, HSM,Duncan&Youngquist).

95% of the predictions  sees a production peak between 2008 and 2010 at 77.5 - 85.0 mbpd (The 95% forecast variability area in yellow is computed using a bootstrap technique). The magenta area is the 95% confidence interval for the population-based model.

http://www.theoildrum.com/files/PU200906_Fig1c.png

World production (EIA data). Blue lines and pentagrams are indicating monthly maximum. Monthly data for CO from the EIA. Annual data for NGPL and Other Liquids from 1980 to 2001 have been upsampled to get monthly estimates.

Link -
http://www.theoildrum.com/node/5521#more
============

As can be seen, Production has plateaued and the best concensus is that we are beginning to decline & depart away from Population Growth Demands!  

Andrei.Hicks wrote on Aug 31^st, 2010 at 8:23pm:

Perceptions - Do you deny that technology on oil drilling has advanced considerably in the last decade alone? Do you agree we can drill deeper, safer and cleaner than ever before? This all must be taken into account. Oil is becoming more and more reachable and we can drill in ever more remote places.

No, why would I!

But, whilst it is only affecting Production at the margins, it is raising Production costs greatly and lessening the EROEI in those Deepwater areas & in the likes of the Canadian Tar Sands operations!



It has been taken into consideration, but as I said, it will only affect the margins, it will not change the overall direction, which is that OIL PRODUCTION HAS PEAKED!

perceptions_now wrote on Aug 31^st, 2010 at 9:07pm:

It has been taken into consideration, but as I said, it will only affect the margins, it will not change the overall direction, which is that OIL PRODUCTION HAS PEAKED!

Agreed, but there is just a chance that it could peak again (higher). I agree that there will be a drop off around 2015. In my view, we have to start replacing current energy with renewables and nuclear as a priority. If we can do that, we might be able to avert a really major economic crash.

muso wrote on Sep 1^st, 2010 at 9:21am:

perceptions_now wrote on Aug 31st, 2010 at 9:07pm: It has been taken into consideration, but as I said, it will only affect the margins, it will not change the overall direction, which is that OIL PRODUCTION HAS PEAKED! Agreed, but there is just a chance that it could peak again (higher). I agree that there will be a drop off around 2015. In my view, we have to start replacing current energy with renewables and nuclear as a priority. If we can do that, we might be able to avert a really major economic crash.

Yes, it could Peak again, but if that were going to happen, it would have to be soon, given the net exchange between the additional production capacities of new fields coming on stream, the deletion rate of existing fields and the  future Demand for what is to be consumed, due to likely Population increases.

In fact, IF "the current GFC did not just happen", then it would be likely that the current fall in Demand & Consumption, would be exposed as actually masking a decline in Production capacity.

Whenever, it becomes obvious that Production Capacity of Oil is heading South & Demand is heading North, then the crash will ocurr. I suspect that will happen well before 2015, but you should never say never.

You are correct about transitioning away from the current Fossil Fuel based Energy supply!

Renewables must come heavily into the picture, as will highly improved versions of some of the Carbon Based products and I suspect that Nuclear may also be involved, but perhaps only for a transitional time.

One of the problems is that there are simply not a sufficient range of products available for all of the current uses of Oil, in particular and the huge timelines involved to move from one Energy based system to another, particularly when related to the likely time that we will or more prcisely, we will NOT have available to us, not just in Australia, but Globally.  

The Peak Oil Crisis: Prospects for China

Headlines were made recently when it was announced that in July China's GDP surpassed that of Japan to become the world's second largest economy. This was immediately followed by a passel of stories speculating on how long it would take China's domestic output to surpass that of the U.S. and thus become the world's largest and by inference most influential economy. The mean estimate of the prognosticators seems to be about 20 years so that by 2030 China could be #1. This estimate is derived, of course, by assuming that China's economy will continue to grow at circa 10 percent each year and that the U.S. in turn will suffer from decades of stagnation.

If only it were so simple.

There is no question that China has had 40 good years. Once the Chinese got over celebrating their revolution, the cult of the personality (Mao worship), and the more onerous features of Marxism-Maoism (such as shooting capitalists), they came up with a political-economic system, which while not democratic, served well to harness the country's strengths and set it on the way to rapid economic growth. Blessed with a good endowment of natural resources, a long tradition of selecting and educating the best and the brightest for leadership, a reasonably homogeneous population, and the developed world as an example of where they would like to go, China has assembled a mixture of capitalism and socialism that undeniably yielded decades of impressive economic growth.

By moving tens of millions of peasant farmers into industrial enterprises where they worked long hours, under harsh discipline, for poor wages, China soon became the world's preeminent factory producing an inordinate share of the globe's manufactured goods. The question of the day is "How much longer can this last?" Rapid economic growth requires every increasing quantities of fossil fuels and other minerals. After forty years of hyper-exploitation of its domestic mineral deposits, China is now in a position where it must import half of its daily oil demand and is starting to import coal and other minerals as domestic sources become thinner and more difficult to produce.

Recent events suggest that China may suffer disproportionally from the effects of global warming.
The key question in all this is how much longer China's economic miracle can continue before the realities of finite mineral resources force a slowdown? Another five years of 10 percent annual economic growth will result in Beijing increasing its oil consumption by another 2.5-3 million barrels per day. This alone would likely mop up much of the world's spare capacity to produce oil and result in very large price increases. When China's ever growing demand is added to that of India, Brazil and the oil exporting states, the likelihood that we will see a substantial increase in oil prices within the next five years becomes very high.

Although China still has large reserves of coal, they have now begun importing which suggests they are having trouble producing it fast enough from deeper, aging mines to keep up with demand. Some believe that Beijing will only be able to keep increasing production for another 15 or 20 years before peak coal production is reached.

Recent events suggest that China may suffer disproportionally from the effects of global warming. This year the country was ravished by droughts, dust storms, and floods as increasing global temperatures worked their way on the weather patterns affecting China. If these changed patterns prove to be permanent feature of China's weather, droughts, floods, tropical storms, falling water tables and the melting of the Himalayan glaciers may force China into a survival mode where the struggle for food and water will trump industrial growth.

Although, climate change, decreasing exports, and depleting mineral resources will all eventually impact China's ability to grow economically, the availability and affordability of oil is still likely to impact first. Despite the current oil glut, all indicators suggest that global oil supplies are likely to start running short in the next three to five years. Although China Incorporated may be in better shape to weather the initial stages of a price spike than the average American consumer, it is doubtful if China can grow its economy at 10 percent annually without increasing supplies of oil.

Beijing clearly recognizes all this and is moving to build a more efficient, less energy-intensive economy that can grow with less fossil fuel. Moreover, China's leaders are catching onto the notion that the costs of ignoring air and water pollution may eventually be prohibitive. The precept that China can keep growing its emissions until they reach the per capita level of the industrial nations may eventually fall as climate aberrations start to take an unacceptable toll on economic growth.

There are many unknowns and variables in all this, but it is a good bet that China's miracle of 10 percent annual economic growth has a half-life far shorter than many suspect.
Link -
http://www.fcnp.com/commentary/national/7242-the-peak-oil-crisis-prospects-for-china.html
=========
China is still linked to the same Global Macro Economic factors that all other nations are linked to and they are still interlocked with the USA!

OPEC Oil Output Fell on Iraqi Pipeline Bombing, Survey Shows

Aug. 30 (Bloomberg) -- The Organization of Petroleum Exporting Countries’ crude-oil output fell in August to a seven- month low, led by Iraq, where production was hobbled by a pipeline bombing, a Bloomberg News survey showed.

Production slipped 75,000 barrels, or 0.3 percent, to an average 29.15 million barrels a day, the lowest level since January, according to the survey. Output by members with quotas, all except Iraq, dropped 5,000 barrels to 26.805 million, 1.96 million above their target.

Iraqi output dropped 70,000 barrels, or 2.9 percent, to 2.345 million this month, the biggest decrease in OPEC. It was the lowest level since April. The Persian Gulf nation was the group’s third-largest producer in August.

“This shows Iraq is still a risky place to do business,” said Rick Mueller, director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “The events of the past week and drawdown of the U.S. presence will add to the uncertainty.”

Iraqi oil exports by pipeline from the northern Kirkuk fields to the Turkish port of Ceyhan were halted from Aug. 20 to Aug. 26 after a bombing stopped the flow of crude.

The last U.S. combat unit left Iraq on Aug. 18, seven years after the invasion that ousted Saddam Hussein. Fewer than 50,000 U.S. troops remain in the country, mainly to train Iraqi forces. On Aug. 25, Iraqi cities were hit in bombings that targeted the police, killing at least 37 people and injuring 126.
Link -
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aUbvl3HNpBYs
==========
And, that is the reason the US is in & will remain in, Iraq!

Leaked Study on Peak Oil Warns of Severe Global Energy Crisis

This week a study on peak oil by a German military think tank was leaked on the Internet. The document shows that the German government is closely studying the issue of peak oil, and is aware of the potential for serious consequences as oil production declines. The study is reminiscent of the Hirsch Report, commissioned by the U.S. Department of Energy, that warned of the risks posed by peak oil.

The document warns of the potential for regional shortages, market failures, and a shift in political power toward those capable of exporting oil. This report describes potential outcomes that require planning and preparation.

The report clearly lays out just how vulnerable Europe will be because of its continuing dependence upon Russia for both oil and gas, and notes that Russia will be in a very strong political bargaining position as a result.

Peak Oil
Implications Of Resource Scarcity On (National) Security
Center for German Army Transformation, Group for “Future Studies”
July 2010

Introduction
The focus of the document is on the topic of finite resources, using Peak Oil as an example. The report is part of a series of publications focused on long term (30 years) with the intent to enable the Ministry of Defense to take action early.

In the past, resources have always triggered conflicts, mostly of regional nature. For the future, the authors expect this to become a global problem, as scarcity (mainly of crude oil) will affect everybody.

The authors confirm multiple views on Peak Oil timing and concede that there will be Peak Oil eventually. The study isn’t about positioning the problem on a timeline, but instead about the consequences of a peak. They expect major consequences with a delay of 15-30 years after the peak has hit.

The report refers to the uncertainty of reserve statements mainly in OPEC countries based on the quota allocation method within OPEC but also refers to the possibility of better extraction technologies.

They suggest that it has become urgent to understand those consequences of an eventual peak now in order to have enough time to adapt.

The Importance of Oil
2.1       Oil as a driver of globalization
95% of all industrial outputs is dependent on oil, in fuels, as a chemical base for polymer production etc. Oil has become a key driver of modern lifestyle and globalization.

Substantial oil price increases poses a systemic risk, not just for obvious things like transportation, but equally for other subsystems.

Thus, internationally, but equally nationally, there is a vital interest in securing access to oil, which is currently possible on world spot markets, with OPEC being cooperative due to a mutual dependency between key actors (and a massive presence of the U.S military in the gulf region).

Yet on the other hand, regional conflicts can always at least partially be attributed to resources, such as in the Caucasus region, the Middle East or in Nigeria, or they fuel conflicts due to the wealth they create (such as in Africa).

The report sees – within a timeframe until the year 2040 – a changed international security layout based on new risks (including transport risks for fuels) and new roles of actors in a possible conflict around the distribution of increasingly scarce resources.

General interdependencies driven by Peak Oil
Oil as a deciding factor in international relationships
With increasing scarcity, producers are increasingly in an advantageous position, both from high revenues and access to cheaper oil when compared to spot market prices. This partly reverts the trend to free oil markets which took place after the ’70s shocks, and gives those countries more control over the supply chain, with a risk of monopolies and nationalizations, and of “political pricing.”

Further, oil producers use increasing amounts of their production internally at lower prices, which increases domestic consumption and inefficiencies, accelerating the problem.

The report then looks at increasing “strategic” moves by key actors including the Chinese CNPC (China National Petroleum Corporation), which tries to grab the sources that are still available (particularly in Asia and Africa), but often at relatively unattractive conditions.

Overall, the authors expect a reduction of “free market” mechanisms in oil trade, and a rise in more protectionism, exchange deals, and political alliances between suppliers and customers, which could lead to significant geopolitical shifts.

Overall, higher volatility and loss of trust are seen as possible outcomes in a world where oil supplies are limited, increasing the need for “oil related diplomacy” and thus increasing risks for moral hazard among all actors, which in turn decreases overall global supply security.

The Middle East is identified as a very dangerous region with high external involvement from many players and thus a very unstable overall situation.
Link -
http://www.consumerenergyreport.com/2010/09/02/leaked-study-peak-oil-warns-severe-global-energy-crisis/
==========
The Hirsh report also makes interesting reading!  

The Fake Fire Brigade - How We Cheat Ourselves about our Energy Future

The longer straw - the future of fossil fuels (and most other resources)

The future of fossil fuels, particularly of oil, but also many other resources including water and minerals, looks problematic. People keep discussing proven reserves and whether peak oil already has arrived or not.
Unfortunately, we will only be able to put this argument to rest in hindsight. But what is more important is the fact that - no matter how much additional oil we can still retrieve - future barrels will be much more difficult to extract relative to the past.
http://www.theoildrum.com/files/glass.img_assist_custom.jpg

Drilling a hole in the desert and waiting for black gold to gush out is infinitely less complex than drilling a much deeper hole 5000 feet under water, as  the public is now painfully beginning to understand. Many experts agree that we probably have used about 40-50% of recoverable oil. It is difficult to prove such numbers, but we may for a minute assume that this is true. For pessimists, this makes our glass half empty.

We still have half of our favorite drink left, but the efforts to get to it are becoming increasingly painful, significantly diminishing the net benefit of that next sip. And so we might (have to) give up drinking long before the glass is empty, just because its too difficult to get at the fluid in a meaningful way, and because the effort of sucking eventually exceeds the benefit and joy from each sip.

The more we have extracted, the more difficult it becomes to get to the next unit. Over time, this increasing effort makes the production less and less useful to societies. Or to use our drinking straw example: at one point sucking out more from that glass exhausts us so much (e.g. the energy invested per sip becomes so big) that we will have to stop our effort and turn to something else, or - if there is no equivalent alternative - drink less.

Renewable energies - the fake fire brigade
Overall, our global energy delivery system continues to be as dependent on fossil fuels as ever before, or even more so. On top of that, even those renewable technologies are mostly based on fossil fuel inputs, which are either used during the manufacturing of the equipment, or even during production and processing (e.g. biofuels).

Most technological optimists believe that this challenge can be met with some combination of biofuels, renewable electricity generation technologies, electric cars, smart grids, and many other investments. However, when we examine these technologies more closely, none of these so-called “solutions” come close to providing any relief, quite the contrary.
http://www.theoildrum.com/files/electricity-renewable.preview.jpg

As Robert Rapier, a well-respected energy analyst, puts it: “We are running out of traditional energy sources, which can be compared to our house being on fire. While that happens, many people linger around the burning building and pretend to be firemen, mimicking their actions, carrying some equipment, shouting commands - but actually they have no real water, no real skills, no appropriate tools.

That way your house will burn to the ground because the “real” firemen never showed up, as everybody thinks there are more than enough firemen on site.” This is exactly what it is: when taking a closer look,  most - almost all - of the renewable energy technologies promoted today won't solve any of our future energy problems.

The Fake Fire Brigade - How We Cheat Ourselves about our Energy Future

The future of electricity – a shaky one
Today’s electricity grids are key building blocks of modern civilizations. Advanced economies depend on the reliable and discretionary delivery of power to every single socket. Our way of living, which includes the ability to read this article, wouldn’t be possible without.

Today, this is manageable, because most sources are either providing steady power flows (such as coal, nuclear or run-of-river hydro power plants) or then they are mostly controllable (such as gas fired power plants or hydropower from dammed water pools). With that mix of inputs, electricity on demand becomes possible for most advanced economies.

Additions of wind and solar power over the last decade introduced renewable electricity generation technologies into the grid. Those two sources have none of the above qualities: they neither provide steady flows, nor are they controllable. “No wind” means "no power", so does “no sunshine”, and even sharing across long-distances using high voltage DC (HVDC) transmission lines won’t change that fact, due to the stochastic nature of the inputs.

Given sufficient backup generation systems powered by fossil fuels, a larger penetration of renewable electricity is definitely possible, and might reduce carbon dioxide production and other externalities, albeit at a horribly high cost. However, these types of add-in systems fail to break our dependence on fossil fuels and don’t prove that we can deliver stable electricity in a world where renewable sources supply a majority of inputs into electricity grids.

The truth about electricity is simple, surprising and daunting: with the most promising renewable technologies - wind and solar - irrespective of expensive supplements being added, electricity systems as we know them today will not be able to operate.

And for those who now suggest to go for a nuclear option: irrespective of any argument about long-term risk, this technology too has a number of downsides, among them the inability to control output according to demand, relatively high cost, and a high dependence on fossil fuels both for the construction of plants and the mining of uranium.

And last, but not least, the fact that uranium too, is a non-renewable resources, subject to the fact that we will eventually arrive at the limits of meaningfully extractable material (e.g. the ones offering an attractive RREI) - particularly if we plan on scaling up nuclear power to replace other fuels.

The Fake Fire Brigade - How We Cheat Ourselves about our Energy Future

Combustion fuels – headaches all over
The other big challenge ahead lies in fuels used for transportation and heating, mainly in oil. This is the place where scarcity is most apparent, as described above. We wouldn’t try to drill in deep water or extract oil from shales if it wasn’t for the inability to find and explore easier and cheaper sources.

What this has done, at a minimum, is lifted the cost of oil to above 70 US$ a barrel, about three times its inflation-adjusted long-term average price. This is not because of speculation, as some claim, but just because it costs 60-70 US$ to extract those least attractive sources. Thus, we truly have to start thinking about alternative ways to move our cars, trucks, planes and even tractors.

The easy way out would be electric vehicles, but after reading the above paragraph on electricity, this might not be an entirely safe bet. And that doesn't even take into account the still existing technology and cost problems with battery technology.

One of the many challenges of a number of renewable energy technologies is that they are themselves heavily dependent on fossil fuel inputs. This is true for raw material extraction and manufacturing of solar panels, wind turbines and other things, but even more so for many so called “green” fuels.

Significant inputs to the production process of biofuels - for example of corn based ethanol - come in the form of oil (fuels, pesticides), coal (electricity) or natural gas (fertilizer). This has two consequences: first, it doesn't break our dependence from fossil fuels and second, as fossil fuels become more expensive, so do these "alternatives".

However, one of the biggest challenges of all renewable (green) fuels is their limited availability. There simply isn't enough biomass potential in any Western society to produce a sufficient amount of non-fossil combustion fuels that could meaningfully replace what fossil fuels we use.

So in a nutshell, there is no such thing as a replacement for fossil liquids coming from biofuels, instead this is just one more of those fake fire brigades.

A true plan for the future – begin from the other end
All of today’s planning efforts take place based on today’s energy delivery systems. We add some renewables to the current mix and see how we can manage. When we see that this causes problems, we respond by adding highly complex and costly bells and whistles.

Alternatively, we start introducing new technologies that will never be able to truly scale up, are in fact heavily dependent on fossil fuel inputs, or both. We would go so far as to say that we can safely prove that more than 90% of energy system alternatives discussed and introduced today have no potential of helping us to secure a longer term energy future.

We are thus not sure if it is a good idea to put all of society’s efforts into fixes and add-ons to today’s energy delivery and consumption systems, but instead we strongly recommend the development of approaches and technologies that radically break with a fossil fuel base. The only meaningful way of looking at the future of energy delivery and application technologies would be to build energy systems based on an assumption that renewable technologies have to provide the entire amount required by our societies, and then to reshape societies so they are in line with what and how these technologies can deliver.

Only when applying this (what is probably considered radical) view, we would be able to model a sustainable and reliable energy future. Once we have figured out how this can work, we may still consider how to make the best use of our remaining fossil fuels, but going the other way will just fool us into believing that we have solutions, until we recognize we don't. And today, to be frank, this is exactly where we are. A lot of fake firemen are standing around a fire that is right now openly breaking out.

IIER puts substantial effort into trying to understand what energy systems could work in the long run. But unfortunately, very few other people do so, which is something we want to change. Instead of spending billions or even trillions on amendments that most likely won't help, a significant portion of these investments should go into a completely new design of our energy future. Let's finally bring in the real fire brigade.
Link -
http://www.theoildrum.com/node/6641
========
As usual, there is much to agree with and much to disagree with.
The glass half full or half empty!

However, there is an absolute, we can not increase the size of the glass, we can not increase the size of the fossil Fuels that remain.

We may be able to increase the Energy mix, by employing new Technologies and Renewal Energy sources, but not to an extent that will allow our Global Economy & Population to continue its exponential growth rate, as has applied over the last 80-100 years.  

So, decisions will be made to re-shape society, to enable a more sustainable future.

The question is, just how much input, if any, will WE have in that decision making process?

Toxic legacy of uranium haunts proposed Colorado mill

GRAND JUNCTION — As Colorado nears the possible approval of the nation's first new uranium mill in a quarter century, the federal government and state continue to deal with the staggeringly expensive and never- ending mess left by earlier mills.

More than a billion dollars has been spent cleaning up radioactive tailings piles and lessening toxic leaks into rivers and aquifers at nine defunct mills in Colorado. Nearly 20 million tons of radioactive tailings sit in disposal sites where they must be monitored in perpetuity. Hundreds of acres of unusable water fill contaminated aquifers.

Much has changed in the understanding of uranium milling since that toxic legacy was created. New regulations are in place to make the industry safer. But those regulations are still untested. Costs for dealing with its inevitable contamination are as long-lived as its radioactive leavings: The state's latest regulations call for the monitoring of new mill waste for 1,000 years.
A full picture of all the taxpayer and privately funded expenses for past cleanup and ongoing monitoring and maintenance is not available because multiple agencies — the Department of Energy, the Nuclear Regulatory Commission and the Colorado Department of Public Health and Environment — along with multiple programs within those agencies, have a hand in overseeing the uranium legacy. The only federal cost information available is 5 years old.

Using those federal figures, The Denver Post found that, so far, the cleanup cost of mills in Colorado ranges from $50 million to $504 million per mill.

Nonetheless, the state is requiring that owners of the proposed new mill put up only $12 million in a bond for cleanup — an inadequate pittance in the opinion of mill opponents with an eye on history.
Link -
http://www.denverpost.com/ci_15996355
=============
A $12 million bond and a 1,000 year wait!

Makes sense?

Whilst I suspect that Nuclear make be pressed into action, to make up a short to medium term shortfall in the transition away from Oil & Coal, it will run into some Public scrutiny & deservedly so.

Like Oil & Coal, Nuclear is certainly a two edged sword!

perceptions_now wrote on Sep 5^th, 2010 at 12:23pm:

Whilst I agree there are a number of replacements for "carbon based" power generation, there are also major obstacles, including - 1) Lack of time, given that we are already 5 years into a Post Peak Oil world. (See Hirsch report) 2) Lack of funds, given the existing amount of Sovereign & Personal Debt, thruout most of the world. 3) Other major negative Economic factors, including Demographics, which will exacerbate the above factors. That said, we have little alternative, but to proceed with all haste, as time is also getting short on the other great drama, that being Climate Change. In respect of Nuclear power, whilst I think it may be needed, at least in the medium term, it may find great difficulty getting past public opinion! Notwithstanding the above, the other great difficulty and perhaps greatest, is the transition of Transport (See Hirsch report), which will be very time consuming and by its very nature (at present), it may require a largely liquid fix?   Finally, I would get too concerned about 40 years from now, the next 20 will be concerning enough!

freediver wrote on Sep 6^th, 2010 at 11:08pm:

Quote: I think I already substantially covered that in the following post. But those points don't support your claim. They contradict it, as I have already pointed out. Simply listing a bunch of random opinions and factoids is not the same thing as contructing a reasoned argument.

No, I'm happy, it explains what I wanted to convey!

Btw, you may "enjoy" the film embedded in the following link.
It is titled "A Crude Awakening" and it conveys quite a bit of information relevant to the Energy discussion.

http://videosift.com/video/A-Crude-Awakening-The-Oil-Crash-full-film

Coal and Oil: The Dark Monarchs of Global Energy: Understanding Supply and Extraction Patterns and their Importance for Future Production

Abstract:
The formation of modern society has been dominated by coal and oil, and together these two fossil fuels account for nearly two thirds of all primary energy used by mankind. This makes future production a key question for future social development and this thesis attempts to answer whether it is possible to rely on an assumption of ever increasing production of coal and oil. Both coal and oil are finite resources, created over long time scales by geological processes. It is thus impossible to extract more fossil fuels than geologically available. In other words, there are limits to growth imposed by nature.

The concept of depletion and exhaustion of recoverable resources is a fundamental question for the future extraction of coal and oil. Historical experience shows that peaking is a well established phenomenon in production of various natural resources. Coal and oil are no exceptions, and historical data shows that easily exploitable resources are exhausted while more challenging deposits are left for the future.

For oil, depletion can also be tied directly to the physical laws governing fluid flows in reservoirs. Understanding and predicting behaviour of individual fields, in particularly giant fields, are essential for understanding future production. Based on comprehensive databases with reserve and production data for hundreds of oilfields, typical patterns were found. Alternatively, depletion can manifest itself indirectly through various mechanisms. This has been studied for coal.

Over 60% of the global crude oil production is derived from only around 330 giant oilfields, where many of them are becoming increasingly mature. The annual decline in existing oil production has been determined to be around 6% and it is unrealistic that this will be offset by new field developments, additional discoveries or unconventional oil. This implies that the peak of the oil age is here.

For coal a similar picture emerges, where 90% of the global coal production originates from only 6 countries. Some of them, such as the USA show signs of increasing maturity and exhaustion of the recoverable amounts. However, there is a greater uncertainty about the recoverable reserves and coal production may yield a global maximum somewhere between 2030 and 2060.

This analysis shows that the global production peaks of both oil and coal can be expected comparatively soon. This has significant consequences for the global energy supply and society, economy and environment. The results of this thesis indicate that these challenges should not be taken lightly.Link -
http://uu.diva-portal.org/smash/record.jsf?pid=diva2:343046
==========
At the bottom of the link page, is another link to download the full report in PDF format.

Whilst it is a lengthy report, I recommend it, particularly for those who have limited knowledge of the issues or those who think they know it all.

As the final notes of thios report say -
"If we take a lamp and shine it toward the wall, a bright spot will appear on the wall. If the lamp is the search for truth and for understanding, one should not assume that the light on the wall is the truth as too many often do.

The light is not the goal of the search; it is rather the result of the search. The more intense the search is, the brighter the light on the wall will be. The brighter the light on the wall, the greater the sense of revelation upon seeing it! Similarly, someone who does not search, who does not bring a lantern with him, sees nothing. For what we perceive as truth, is the by-product of our own search. It may simply be an appreciation of the light, pure and unblemished, not understanding that it comes from us.

Sometimes we stand in front of the light and assume that we are the center of the universe. If we allow ourselves to get in the way, we defeat the purpose; which is to use the light of our search to illuminate the wall in all its beauty - and in all its flaws. And in so doing, we also gain a better understanding of the world around us.

There is namely one thing even more vital to science than intelligent methods or accurate data; and that is the sincere desire to search for the truth, whatever it may be.
However, the saddest aspect of life right now seems to be that science
gathers knowledge faster than society gathers wisdom to use the knowledge.

To paraphrase M. King Hubbert, it appears as if our ignorance is not as vast as our failure to use what we already know."

One part of the conclusions of this report also says -
"Just offsetting the decline in existing production would require a new production capacity of something like 5 new Saudi-Arabia over the next 20 years."

Clearly, given the history of new Discoveries of Oil over the last 50 years or so, we are unlikely to find even ONE new Saudi Arabia, let alone one every four years, so production has no option, it is about to start heading South!

perceptions_now wrote on Sep 7^th, 2010 at 1:19pm:

Like Oil & Coal, Nuclear is certainly a two edged sword! [/b]

I agree with you that Nuclear is a medium term solution. It will be a stop-gap measure to give us enough time to develop a renewable infrastructure.

The US has a very poor history of regulation in both industry and mining. That doesn't mean to say that it's impossible to mine Uranium in a professional manner. Other countries have succeeded (eg in Europe). The US has major stockpiles of waste because the governments over the years have allowed this to happen.

For example, I've worked very closely with Dupont in the past. Nowadays they try to be squeaky clean perhaps, but in the past they were grubs. They were the biggest polluters in the world - because they had a strong industry lobby and were allowed to get away with just about anything in the land of the free (to pollute).  Things have changed. Try pouring toxic waste down a disused underground coal mine today and see what happens.

muso wrote on Sep 9^th, 2010 at 9:47am:

perceptions_now wrote on Sep 7th, 2010 at 1:19pm: Like Oil & Coal, Nuclear is certainly a two edged sword! [/b] I agree with you that Nuclear is a medium term solution. It will be a stop-gap measure to give us enough time to develop a renewable infrastructure. The US has a very poor history of regulation in both industry and mining. That doesn't mean to say that it's impossible to mine Uranium in a professional manner. Other countries have succeeded (eg in Europe). The US has major stockpiles of waste because the governments over the years have allowed this to happen. For example, I've worked very closely with Dupont in the past. Nowadays they try to be squeaky clean perhaps, but in the past they were grubs. They were the biggest polluters in the world - because they had a strong industry lobby and were allowed to get away with just about anything in the land of the free (to pollute).  Things have changed. Try pouring toxic waste down a disused underground coal mine today and see what happens.

Yes, the USA has had, but also still has problems and not just in the Nuclear arena, but mining & industry generally.

Interestingly, there is a large push for less, not more regulation and for less, not more government involvement.

However, it seems Capitalists happily accept Socialist bailouts, where it concerns the Big end of town!

It is difficult to see a satisfactory resolution to the dilemma and that also applies to other nations, including Australia.

Personally, I would think it's a bit like food, all things in moderation, but some things are more vital than others, at certain times!

Peak Oil and Collapse of Everything?

As a follow up to my post earlier this week - The Collapse of Everything? - about the report from a think-tank inside the German military warning that shrinking global oil supplies will threaten the world's economic foundations and possibly lead to mass-scale upheaval within the next 15 to 30 years, the collapse of the industrial supply chain, and that "In the medium term the global economic system and every market-oriented national economy would collapse," here is more background in a 2007 report from the Energy Watch Group.

Why the US is occupying Iraq and Afghanistan and encircling Iran. Why Democrats and Republicans are not listening to the left and the antiwar movement.

Replacing oil video -
http://www.youtube.com/watch?v=QgVfHqq4GtA&feature=player_embedded

Peak Oil could trigger meltdown of society
By: Energy Watch Group
Published: Oct 23, 2007
According to a newly published global oil supply report to be presented by the Energy Watch Group at the Foreign Press Association in London, world oil production peaked in 2006. Production will start to decline at a rate of several percent per year. By 2020, and even more by 2030, global oil supply will be dramatically lower. This will create a supply gap which can hardly be closed by growing contributions from other fossil, nuclear or alternative energy sources in this time frame.

"The most alarming finding is the steep decline of the oil supply after peak", warns Jörg Schindler from the Energy Watch Group. This result, together with the timing of the peak, is obviously in sharp contrast to the projections by the International Energy Agency (IEA). "Since crude oil is the most important energy carrier at a global scale and since all kinds of transport rely heavily on oil, the future oil availability is of paramount importance as it entails completely different actions by politics, business and individuals.", says Schindler.

This cautious energy outlook corresponds with statements made by former US Defense Secretary and CIA Director, James Schlesinger, who said at a recent oil summit in Cork: "The battle is over, the oil peakists have won. Current US energy policy and the administration's oil strategy in Iraq and Iran are deluded."

However, until recently the International Energy Agency denied that a fundamental change of energy supply is likely to happen in the near or medium term future. Hans-Josef Fell MP, a prominent member of the German Parliament, is clear: "The message by the IEA, namely that business as usual will also be possible in future, sends a diffusing signal to the markets and blocks investments in already available renewable energy technologies.

Remaining world oil reserves are estimated to be 1,255 Gb (Giga barrel) according to the industry database HIS (2006). For the Energy Watch Group (EWG), however, there are sound reasons to modify these figures for some regions and key countries, leading to a corresponding EWG estimate of 854 Gb. This oil supply outlook does not rely primarily on reserve data which in the past have frequently turned out to be unreliable. Hence the EWG analysis is based primarily on production data which can be observed more easily and which are more reliable.

Peak oil is now. "The oil boom is over and will not return. All of us must get used to a different lifestyle.", said King Abdullah of Saudi Arabia, the largest global oil producer. For quite some time, a hot debate has been going on regarding peak oil. Institutions close to the energy industry, like CERA, are engaging in a campaign trying to debunk peak oil as a "theory". However, the EWG report shows that peak oil is real. The world is at the beginning of a structural change of its economic system. This change will be triggered by a sharp decline of fossil fuel supplies and will influence almost all aspects of daily life. Climate change will also force mankind to change energy consumption patterns by significantly reducing the burning of fossil fuels.

Anticipated supply shortages could easily lead to disturbing scenes of mass unrest as witnessed in Burma this month. For government, industry and the wider public just muddling through is not an option anymore as this situation could spin out of control and turn into a meltdown of society.

"My experience of debating the peak oil issue with the oil industry, and trying to alert Whitehall to it, is that there is a culture of institutionalised denial in government and the energy industry. As the evidence of an early peak in production unfolds, this becomes increasingly impossible to understand", says Jeremy Leggett, the Solarcentury CEO and former member of the British Government's Renewables Advisory Board.
Link -
http://www.antemedius.com/content/peak-oil-and-collapse-everything
==========
Some interesting info on video!

Coal and Oil: The Dark Monarchs of Global Energy: Understanding Supply and Extraction Patterns and their Importance for Future Production

Introduction
Oil is the black blood of the earth which runs through the veins of the modern global energy system. Coal is the equally black flesh of the earth which makes up the spine of the worlds power grid. Together they account for over 60% of all energy annually used by mankind. In some senses, these two Dark Monarchs can be seen as the black soul of the modern society.

Combustion of these fuels releases energy in immense amounts and can drive a wide array of machines, tools and processes. Oil and coal can also be broken down and used as a feedstock in a wide range of chemical processes, providing everything from medicines to plastics. They bring wealth and political influence to those who control them. In essence, they are a manifestation of power in the truest sense of the word.

The dark saga begins
“The Wheel of Time turns, and Ages come and pass, leaving memories that become legend. Legend fades to myth, and even myth is long forgotten when the Age that gave it birth comes again.” – Robert Jordan

In other words one may state that “nothing lasts forever”, as countless bards and poets already have announced since the dawn of time.

Currently, the world is in an age that may be called the Hydrocarbon Age. Nearly all energy is derived from fossil fuels and they dominate the present world. How did this come to be? What events lead to this present dependence on fossil energy? How did the two Dark Monarchs, coal and oil, rise to power?

The Chinese philosopher Confucius once said the following:
“Study the past to define the future”

Taming the dark flames of coal
The story of the dark twins, oil and coal, and their role in the present actually begins many hundreds of years ago, with the rise of mechanization and industry. It is from here the dark saga of the present society’s dependence on fossil energy, and the issue of peak oil and fossil fuel depletion, begins.

The dawn of the Industrial Revolution marked a most important turning point in human history. Almost every aspect of daily life was eventually influenced in some way. The most important event is undeniably the appearance of steam engines and the taming of the dark flames of coal.

The genesis of mechanization
The industrialized countries had previously been relying on manual labour, draft-animals or even slaves to power their economies and manufacturing. New innovations, brought to the world by an increasing number of engineers and scientists, made it increasingly possible to replace man and animal, with machines.

Thomas Newcomen, James Watt and other steam-power pioneers all subsequently developed steam engines to drive pump water out of mines.

The introduction of efficient steam engines, thanks to James Watt and other engineers, also played an important role in the development of the railroad, steam powered ships and machines. The use of steam-powered machinery demanded energy to feed the boilers. At first, this was chiefly done through the use of firewood. However, the demand soon outpaced the available production of wood fuels. Deforestation became a problem and firewood prices increased. This made it possible for a new fuel to emerge as main provider of energy, namely coal. Coal was commonly cheaper and much more efficient than wood fuels in most steam engines.

In hollow halls beneath the fells
Coal mining was still predominantly quite primitive at the beginning of the Industrial Revolution. At first, most mining were done from shallow pits or holes. In some places, coal was scraped from natural outcroppings. Increasing demand forced miners and producers to venture deeper into the ground and to develop more advanced mining methods.

Central and Northern Britain contained an abundance of coal that helped to make the prosperity of Lancashire, Yorkshire, and South Wales prior to 1900. Similar development occurred in Pennsylvania in the USA and in the Ruhr-area in Germany. In the US, coal production doubled every tenth year until 1900.

Heavy industry, various stationary steam engines, railroads and steamboats became major consumers and coal production soared (VIII). By the beginning of 20th century, coal was the dominant energy source for mankind.

Crafting a dawn of steel
The modern era in steel-making began with the introduction of Henry Bessemer’s new process in 1858. The Bessemer process used pig iron as a raw material and could deliver steel in large quantities.

In 1865, the French engineer Pierre-Emile Martin bought a license to use Siemens innovation and applied it to steel making. This gave birth to the Siemens-Martin process. The most interesting property of this process is that it allows rapid production of large quantities of basic steel as well as smelting and refining of scrap metal.

The new steelmaking technologies greatly changed the availability of durable materials for society. The availability of cheap steel now allowed the construction of large bridges and enabled the production of railroads, skyscrapers, and large ships. The dawn of steel was undeniably an important event for the whole world.

Coal and Oil: The Dark Monarchs of Global Energy: Understanding Supply and Extraction Patterns and their Importance for Future Production (Cont)

Intellectual sprouts from the emerging industry
Besides a dramatic increase in production capacity, new methods of transportation and manufacturing, the industrial revolution also gave birth to new intellectual paradigms. The notions of Capitalism, Marxism and Romanticism all have their origin from the social turnovers that occurred in the wake of the industrialization. Needless to say, these concepts have been major driving forces in history and continue to be vital political ideas even in the present day.

These ideas later served a role in the formation of modern environmentalist movements and their critical view on the present “dark satanic mills” of globalized industrialization.

By mid 1850s coal had become a cornerstone in every industrialized country. The tamed flames of coal were used to produce metal and propelled the world into the next stage of expansion as the coal-based economies reached new heights of prosperity and industrial output.

The radiance of a rising twin monarchy
Outside the turmoil of the socioeconomic sphere, development of internal combustion engines and electricity generation marked a new phase in the industrial expansion and sowed the seeds of modern society. Besides the rise of steel and coal many new technologies, processes, materials and substances were introduced. The ascension of a new dark monarch, namely oil, also begins at this time.

Major breakthroughs were made in the chemical, electrical, metallurgical, and mechanical industries. Rapid transport of mail by steam-powered ships or railroads, telegraphs and the subsequent development of radio and telephone improved communications worldwide. Balloons, air ships and later on the development of aeroplanes also helped to transport ideas, goods and people all over the world faster than ever before.

Large scale production of cement, explosives, solvents, agrochemicals, petrochemicals and other basic chemical products flooded the market with vital ingredients and components for consumer goods. Agricultural improvements lead to better yields and more available grain and edibles. Mechanical refrigeration, canning and other food preservation techniques also allowed better handling of groceries. The population saw major improvement in nutrition and health due to the new technologies that followed the wake of the industrial revolution.
The radiance of the rising twin monarchy of coal and oil in the 19th century marked a new phase for mankind.
Foreclose of a dream
The modern oil era began in Oil Creek in Pennsylvania with the boreholes successfully sunk by Colonel Drake. A pioneering epoch followed and many competitors and producers appeared, all trying to grab a share of the black gold that was erupting from the ground. The events that occurred in Pennsylvania also marked the rise of certain powerful ideas, individuals, important companies and remarkable products.

A long list of liniments, waxes and lubricants had also been made from whale oil prior to the discovery of new petroleum refining methods. Vaseline was patented in 1872. Other petroleum products also started to seep into medicine, hygiene and cosmetic products.

Merely 25 years old in 1865, Rockefeller formed a partnership with a refinery owner in Cleveland. By 1880s, Standard Oil controlled nearly all of the American refining capacity
John D. Rockefeller had become among the richest men in the US.

The American oil production simply accounted for the largest share of the world output and came to shape first stages of global rise of oil. For example, Standard Oil alone topped at over 90% of the world refining capacity, before slowly declining to 80% by the end of the 19th century.

Standard Oil of New Jersey was later renamed Exxon. Standard Oil of New York came to merge with another company and form Mobil. Today these companies have merged together and formed ExxonMobil. Standard Oil of California was eventually renamed to Chevron. Standard Oil of Indiana changed name to Amoco (American Oil Company) and has today become a part of British Petroleum (BP). Another offshoot was called Continental Oil Company or Conoco and has today merged into ConocoPhillips.

Coal and Oil: The Dark Monarchs of Global Energy: Understanding Supply and Extraction Patterns and their Importance for Future Production (Cont)

The march of the electrons
The kerosene barons of late 19th century would eventually find themselves surpassed by a new invention that came to replace flame-based illumination systems.
In late 1870s, Thomas A. Edison developed and began marketing the incandescent light bulb. This new device produced even light, burned longer and brighter than oil or kerosene, and was much safer than flame-based lights. As the country was electrified, whale oil and kerosene were both driven from the illumination market.

This electrification could have been a problem for the young petroleum industry, but it was saved by the successful commercialization of the automobile. As the 20th century dawned, electric capacity expanded rapidly while continuous innovation improved the electric system.

Hydroelectric plants, such as the Hoover Dam from 1930s, became vital steps in the electrification of the society. Cheap and plentiful electricity were now possible.

Thanks to the dance of the electrons coal was still the supreme ruler of the world’s energy system, even though oil started to appear as a more and more promising branch of the hydrocarbon tree. The world would never be the same after legions of marching electrons was tamed by the dark flames of fossil fuels.

Oil outshines coal through a reign of blood
The dawn of the 20th century marked a definite turn for mankind and the birth of modern society as it is known today.
The growing need for electric power in the wake of the worldwide electrification provided new uses for fuel oil in various power plants. In addition, fuels for internal combustion engines opened many new doors for petroleum utilization. Petroleum refining and the multitude of petrochemicals that could be obtained became increasing important for the emerging chemical industries. Consequently both oil demand and production soared.

The higher energy content per volume unit of oil had resulted in the conversion from coal-burning to oil-burning on a few ships prior to the First World War.

The first worldwide waves of blood and oil
The First World War broke out in August 1914. Oil came to play an important role in the entire war and securing access to oil became vital for the war strategies.
Gasoline-consuming aeroplanes made reconnaissance and engaged in early bombing raids. Diesel-powered submarines were operational and motorized lines of supply became increasingly important. Introduction of tanks, aeroplanes and other mechanized or motorized equipment had increased the mobility of armies. Meanwhile, new explosives and poison gases unleashed the destructive fury of the petrochemicals.

Automobiles and nationalism rising
The use of automobiles for personal transport continued to boom in both USA and Europe. With a car, one could literally drive wherever and whenever one wanted to. Cars soon took on a larger and larger role in society and became an integral part of city planning.
The Great Depression of the 1930s naturally reduced the speed of development for some time. However, this decade also saw major oil discoveries in California. The largest oil boom ever seen in the USA began with the discovery of the supergiant East Texas field in 1930.

The economic troubles and remaining tensions from the First World War resulted in increasing nationalism in many countries.

Petroleum troubles brewing
In 1920s, there was a fear of oil shortage in the USA. During the war, the USA had been overproducing to supply its allies and discoveries in the late 1910s had been disappointing.
USGS even expressed fear that the nation’s petroleum resources would soon prove inadequate to meet the needs of the industry. This and increasing competition made US oil companies set their aim on primarily the Middle East and Venezuela.

New oil discoveries were later made in Mesopotamia, Saudi-Arabia, Kuwait and other Middle-East countries. The discovery of the Kirkuk and Greater Burgan fields were among the largest ones ever made.

The main lesson the Japanese military had taken home from World War I was that a country cut off from raw materials was bound to lose in a military contest. Japan conquered Manchuria in 1931, and later invaded China in 1937. The new occupied areas yielded vast quantities of food, coal and iron ore, but very little petroleum.

Coal and Oil: The Dark Monarchs of Global Energy: Understanding Supply and Extraction Patterns and their Importance for Future Production (Cont)

The Second World War
Increasing political tensions between European countries appeared and finally the Second World War broke out in 1939. In contrast to the previous world war, oil became a corner stone in both planning and strategy during the Second World War.

Germany profoundly relied on the newly developed Blitzkrieg strategy, i.e. short battles with mechanized forces that would lead to victory before petroleum supply problems could develop. The German need for petroleum was one of the motives behind the campaign in North Africa and the invasion of the Soviets in 1941. However, operations in Africa failed to gain access to the Middle Eastern oilfields and at the same time the German armies got stuck in Stalingrad, partly due to a lack of oil supplies.

The lack of oil and fuel hampered the German military activities after 1943 and may be seen as a crucial factor in their concluding defeat. Similar problems arose for Japan, as the tides of war shifted and they were pushed back from the oil rich areas earlier conquered.

The end of the Second World War meant the conclusion of a bloody epoch filled with political tensions and military conflicts. During this bloody reign, oil also managed to prove itself better than coal resulting in a favourable view of petroleum from planners and politicians. The aftermath of the Second World War ensured that the world would embark on a ship sailing the dark oceans of oil, cruising inexorably toward the present.

Dark rivers flowing forth
American soil had been virtually untouched by wartime destruction. The end of the Second World War started the golden era of American capitalism.

The green revolution in agriculture and the utilization of high yield agricultural techniques based on synthetic fertilizers and high energy use took food output to record levels. Following the war and spanning 1946 to 1964, a baby boom occurred in the USA. Domestic oil production could not possibly match growing demand and the USA had to become a net oil importer.
Exporting the shackles of foreign oil dependence
In 1947, a war torn Europe suffered from a shortage of workers and faced an impending energy crisis due to a shortage of coal. Europe’s dire need of oil coincided with the development of the large Middle East oilfields.

Rising tensions between the Western countries and the communist nations in East led to an 'Iron Curtain' being drawn between the two competing blocks and marked the start of the Cold War. The discovery of the supergiant Romashkino oilfield helped fuel Soviet expansionism. Later on, Western Siberia was explored and found to contain vast amounts of oil and natural gas. By the end of 1980s, Western Siberia alone contributed to 14% of world oil production and was an even match for Saudi-Arabia.

The birth of OPEC
Increasing awareness about the value of oil in many exporting countries, in particular the Middle East, led to ideas about taking more control over oil production.

In 1959, during the Arab Oil Congress in Egypt representatives from Saudi-Arabia and Venezuela met. They shared the vision that coordination was necessary to control the price level and guarantee income for their nations. A new meeting with representatives from Kuwait, Iran and Iraq took place in 1960 and resulted in the establishment of the Organization of Petroleum Exporting Countries (OPEC).
Together the five founding members of OPEC controlled more than 80% of the exported oil.

Coal and Oil: The Dark Monarchs of Global Energy: Understanding Supply and Extraction Patterns and their Importance for Future Production (Cont)

A troublesome shift of thrones
In mid 1960s, oil became the world’s largest energy source in absolute terms after nearly 100 years with about 7% annual growth. Old King Coal finally had to step down from the throne and leave it to Oil as the new supreme sovereign of the global energy system.

Political tensions surrounding Israel resulted in the six-day war in 1967. Continued disagreement around Israel and the Arab-Israeli tensions lead to a new war in 1973.

OPEC declared an oil embargo "in response to theU.S. decision to re-supply the Israeli military". The embargo had immediate effect and OPEC forced the oil companies to increase payments drastically. Consequently, the price of oil had quadrupled by 1974 to nearly US$12 per barrel.

To make matters worse, the 1970s were also the time when many OPEC members completely nationalized their oil industries, such as Kuwait in 1975 or Venezuela in 1976.
Control over oil had definitively shifted from the major oil companies to the producing countries and OPEC.  

Meanwhile, domestic oil production in the USA reached a maximum in 1970 and started to decline, as had been predicted by Hubbert (1956).

Oil prices continued to be high during the entire decade. A second oil crisis occurred in 1979 in the wake of the Iranian Revolution when ayatollah Khomeini became the new leader. This event resulted in a severe disruption of the Iranian oil sector with drastic reductions of production capacity and suspended export.

Everything culminated with the Iraqi invasion of Iran, which nearly stopped Iranian oil production completely and severely hampered Iraqi production as well.

These two oil crises had a profound influence on both the USA and Europe as they faced both real and perceived shortages of oil. Nuclear energy and new energy sources were developed as the awareness of the oil dependence seeped into public awareness. The growth of oil consumption slowed, and was even reversed for a period. Economic growth also stagnated as oil prices climbed.

Although these two major oil crises did have significant repercussions, they eventually receded and the dark rivers continued to flow with seemingly equal strength once again. Or were these events a small prelude to an even bigger challenge?

Threading the path to the present
As the situation slowly calmed down after 1980, prices would eventually return to their previous low levels. This was an outcome of slowing industrial economies and a stabilization of supply and demand.

Two opposing views emerged, where one stated that the oil glut was temporary and the other that excess supply was permanent.

Recent production and price peaks
The new millennium unveiled the peaking of several countries around the year 2000, including Mexico, Australia, India, Yemen, and even the OPEC member Indonesia.

Meanwhile, global oil consumption continued to increase.
Oil production in the North Sea is another example of how the dark flows started to diminish and were unable to keep pace with rising demand. The UK peaked in 1999, Norway in 2001 and Denmark in 2004.

From mid 2004, the entire world oil production reached a plateau as it became increasing difficult to offset the decline in existing production with new additions. Oil prices started to rise and reached an all time high of nearly 150 dollars/barrel in July 2008. However, both the entire world economy and the oil price collapsed in the aftermath as the world plunged into financial turmoil. The fuel price spike of 2008 may have played a considerable role in the economic crisis.

While more and more of the conventional oil producers reached the onset of decline in the last 20 years, producers also turned their attention to unconventional hydrocarbons in their attempts to keep the dark rivers flowing.

Canadian tar sands, heavy oils, or deepwater regions rose in importance after the 1980s and are currently vital in planning.
The increasing challenge of sustaining continued growth of oil extraction recently became even more apparent, when a deepwater drilling rig in the Gulf of Mexico triggered the largest environmental disaster in the US history in an attempt to locate new oilfields for the petroleum-craving world.

Concerns about the anthropogenic impact on global climate became an increasingly important factor for planners and policy makers. The environmental issues relating to fossil fuels made it increasingly clear that the negative impacts from continued utilization were a challenge.

In the background of all this, coal became the fastest growing energy source of all. This is chiefly powered by the rise of China and India and their coal-powered economies.

Coal and Oil: The Dark Monarchs of Global Energy: Understanding Supply and Extraction Patterns and their Importance for Future Production (Cont)

The Peak Oil debate
The oil price hike has been blamed on speculation by some, while others have pointed to market fundamentals and the imbalance between supply and demand.

The exact cause of this price rally is probably hard to determine and likely a result of many factors.

The academic dispute about the longevity of fossil fuel supply, the future production trajectories, and how the society would be affected continues to rage even today. Needless to say, the exhaustion of many petroleum regions and the declining production in many key producers is an observed fact of reality.

A recent review of over 500 studies by the UK Energy Research Centre concluded that a peak in conventional oil production before 2030 appears likely and there is a significant risk of a peak before 2020.

Unveiling the black heart of everything
There are many factors, reasons and explanations for all that happened during the industrial revolution. However, natural science dictates that the physical factors should be found and considered.

What physical factor can be found that ties all those solitary threads together in the mighty weave that forms the modern world? I would argue that energy is that factor. In physics, energy is usually defined as the capacity of a physical system to perform work, whether the work is useful or extraneous for society. Einstein (1905) even showed the equivalence between energy and mass, implying that everything in the universe is made from energy in various forms. Naturally, it follows that energy influences everything and
cannot be substituted for other resources.

Human civilization and even life itself are processes built around energy exploitation of various forms.

Societies are built around the supply of energy resources, where the most fundamental energy source is food and the physical labour it can be converted into. More advanced societies may have domesticated animals to provide more power than a human can conveniently provide. Technology and human ingenuity allows the creation of machines, i.e. replacing human labour with work done by mechanized devices.

Of all available natural resources, none are as important as energy. In fact, energy has been described as the ultimate resource by many studies. Furthermore, energy is intimately linked to economic growth and development. Studies have found that energy consumption has a significant positive long run impact on economic growth  and connections between energy and real output.

Many people think that it is money that makes the world go round, when in reality it is a cheap and abundant supply of largely oil-based energy (Campbell, 2006). The industrial revolution, and all the things it brought, is little more than a tale of mankind's taming of the dark flames of fossil fuels.

A sequel of decay
In some sense, the world is building its present strength through depletion of fossil energy resources. Depletion of the available coal and oil endowment is a central factor in the longevity of their supply for human needs.

The rise of coal and oil will be followed by a sequel of decay where their dominance will diminish and eventually be replaced by something else as the available volumes become more and more exhausted.

The black heart of everything in society is the dependence of fossil fuels. However, this also brings about another problem. Since fossil fuels dominate the existing energy system, they will have to power any possible shift to renewable or other energy sources. Understanding how the future unfolds is vital for strategic decisions and planning.

Coal and Oil: The Dark Monarchs of Global Energy: Understanding Supply and Extraction Patterns and their Importance for Future Production (Cont)

Production patterns of finite resources?
The peak in the US, Indonesian, and the UK oil production, North Sea as well as many individual giant oilfields shows that peaking and the arrival of a maximum oil production also are well established phenomena in history.

The term “finite resource” is frequently used but few people seem to ponder what it actually means. When it comes to natural resources, one can argue that production limits are determined by the extraction and creation rates. If extraction of a resource is faster than replenishment rate the resource will be “finite” in the sense that it will eventually be exhausted or depleted.

For example, uranium is a finite resource since it is originates from the ashes of supernovas, requiring many millions or billions of years to accumulate commercially interesting concentrations.

The case of whaling in 19th century is an excellent illustration of a case where a resource has been extracted at a much faster rate than it could be replaced, making it finite. In a similar way, a forest can be “renewable” if the annual outtake is no more than the annual growth.

Bardi (2005) has shown that bell shaped behaviour are typical for fossil fuel and mineral extraction, but the curve is not necessarily symmetric. However, the appearance of one or several production peaks is natural and omnipresent.

Natural resources are vital in supporting the continued well-being of the world’s population. Such physical resource limitations, primarily the case of finite resources and as fossil fuels, affect the general growth pattern.

Approaching the problem

EROEI = Usable Energy Acquired
               Energy Expended
               
Coal and oil production require energy input to power machines, workers and other parts of the extraction process. For example, coal layers will at some point become too thin, located too deep, or containing too much non-combustible material to repay the energy investment needed for recovery of the coal. Likewise, oil production will become increasingly challenging.
Required energy investment is an as an underlying parameter that will be dominate over all other factors.
Hubbert (1982) wrote:
“There is a different and more fundamental cost that is independent of the monetary price. That is the energy cost of exploration and production. So long as oil is used as a source of energy, when the energy cost of recovering a barrel of oil becomes greater than the energy content of the oil, production will cease no matter what the monetary price may be”.

The energy return will put a limit on certain deposits and at some point it is no longer feasible to extract coal or oil as energy sources.

The concept of depletion
Today, over 80% of the world’s energy is derived from fossil fuels (IEA, 2010).

However, there have been a number of studies questioning the longevity of the world’s fossil fuel endowment and suggesting that extraction rates would one day reach a maximum and then begin to decline. The concept of resource depletion and exhaustion of the amounts available for production is by no means a new idea. It has been used by many scientists, mostly from the field of natural science, to highlight the intrinsic limitations in nature and the unsustainable exploitation of certain natural resources.

More recently, Rotty (1979) stated that one should be able to make a more accurate analysis than simply projecting continued exponential growth in attempting to estimate the energy supply and demand of the future.

However, perpetual growth is often held as a pious belief and fundamental assumption for certain economists. Naturally, perpetual growth cannot be used as an underlying assumption for non-renewable energy sources, such as fossil fuels. Even former technological and economic optimists are now seeing the end of an era with exponential growth. This is hardly surprising, given the underlying arithmetic properties of growth and how quickly unreasonable values are reached for resource production and consumption even for modest growth rates (Bartlett, 1993; 1999; 2004).

Today, hundreds of scientific articles and studies have been performed regarding peak oil and the depletion of other fossil fuels. Combined with the environmental concerns and the suggested need to reduce greenhouse gas emissions from fossil fuel use, it is only reasonable to assume that fossil fuels will have a smaller place in the future global energy supply mix.

Coal and Oil: The Dark Monarchs of Global Energy: Understanding Supply and Extraction Patterns and their Importance for Future Production (Cont)

Depletion-driven production decline in oilfields
After the discovery well, an appraisal well is drilled to determine the development potential of the reservoir. Further development follows and the first oil production marks the beginning of the build-up phase. Later the field enters a plateau phase, where the full installed extraction capacity is used, before finally arriving at the onset of decline, which ends in abandonment once the economical limit is reached.
For many fields, especially smaller ones, the plateau phase can be very short and resemble more a sharp peak, while large fields can remain at the plateau production level for several decades.

In the primary recovery stage, oil is allowed to flow out of the wells under its own pressure with nothing reinjected into the reservoir. The situation is analogous to the emptying of a pressure bottle by opening a valve. Under such circumstances the downhole pressure (the fluid pressure at the entry to a well pipe drops as oil is produced.

In oilfields of significant size, secondary recovery tends to overshadow the primary recovery stage. Water or other fluids are injected to maintain the reservoir pressure, giving a fairly constant downhole pressure.

As the reservoir depletes, the well will eventually produce too much water to be economically viable, despite the fact that reservoir pressure might still be high. The ratio of water compared to the volume of total liquids produced is referred to as water cut. In mature fields the water cut can reach very high levels, over 80-90%.
It was found that the production peak occurs when around 50% of the recoverable oil had been extracted.

Hubbert’s original approach
Resting on the arithmetic of growth, Hubbert (1956) noted that the growth rates of world coal production were 4.3%, with a production doubling every 16 years. For oil, Hubbert (1956) saw a world oil production growth of 7%, implying a doubling every 10 years.

How many periods of doubling can be sustained before production rates would reach astronomical magnitudes? Every time a growing quantity doubles, it takes more than the  total use in all the preceding growth. No finite resource can sustain doubling for longer than a brief period of time.

Combining this framework with good estimates of the recoverable resources allowed Hubbert (1956) to accurately predict the peak in US oil production.

General growth curve methods
More generally, all growth in the physical reality must be bounded or at least subjected to limitations affecting growth rates, making growth slow down over time. This is well-known in many biological systems, where an organism may grow fast in juvenile stage, but then growth slows down with maturity.

Verhulst reasoned that, any population subject to growth would ultimately reach a saturation level (usually described as the carrying capacity) and as a characteristic of the environment that forms a numerical upper bound on the growth process.

The limiting factor lies rather in the growth process itself, in form of the increasing costs required for continued expansion. The upper limit may be high, virtually non-existent, but the steps on the development ladder are becoming more and more challenging to take, thus slowing down the growth process.

Prey-predator models
This simple model deals with two main variables, resources and capital (i.e. prey and predators). The amount of available resource may be defined as the resource stock, while the amount of economic and energetic resources (i.e. equipment, land, knowledge, human work etc.) being utilized in the exploitation can be called the capital stock.

A feedback relationship between two variables describes the production or extraction of the resources.

This is plausible as the more equipment (e.g. oil rigs or coal mining machines) is available, the more resources can be extracted or produced. The income from the extraction process can be used to construct more capital and equipment. On the other hand, there must be something to extract and logic dictates that oil rigs and coal mining equipment is not constructed unless there are available resources. This is simply the core of the feedback mechanism.

Implicitly, this assumption also implies that resources are “graded” and that the “easy” resources will be exploited first. Simply, it does not make any sense for producers to develop the most expensive formations first and save the easy ones for later.

Normally the economic limitations will prevent production long before the ultimate thermodynamic limits will kick in and prevent coal or any other energy resource from being an energy source once the net energy return (EROEI) become too low.

If resources and capital is measured in energy terms, the costs will be related to the EROEI-parameter.

Coal and Oil: The Dark Monarchs of Global Energy: Understanding Supply and Extraction Patterns and their Importance for Future Production (Cont)

Concluding remarks

General findings
The present dominance of giant oilfields and their disappointing discovery trend, along with the relatively rapid decline rates together indicate that there are significant challenges for future oil production. Just offsetting the decline in existing production would require a new production capacity of something like 5 new Saudi-Arabia over the next 20 years.

UKERC (2009) summarized and evaluated many hundreds of studies on future oil supply and concluded that there is a significant risk that the world will experience a relatively imminent production peak.

Neither should coal be seen as an everlasting pillar in the global energy system. On a global scale, both coal reserves and production are focused in a few countries.

This essentially mimics the dominance of giant oilfields seen with petroleum. Depletion rate behaviour also tends to be similar to the patterns observed for oil, indicating that this is something to investigate further as a seemingly viable general approach to resource depletion problems.

Regarding future production of coal, the modelling indicates that production limitations may occur sooner than many anticipate. It appears that coal-derived fuels will be unable to bridge the gap due to diminishing oil supply.

Connection to energy security
The present dominance and dependence on coal and oil along with natural gas will also make the issue of resource depletion strongly connected to energy security.
Globalization has been fuelled by cheap and abundant energy, traded as a commodity in a free market. Increasing conflict over scarce energy would undermine the very foundations of the world-wide social, economic, and political normalization processes that have been observed over the past few centuries.

The Lloyd's insurance market and the highly regarded Royal Institute of International Affairs (often better known as Chatham House) recently said that business is underestimating the catastrophic consequences of declining oil supply (Lloyds, 2010). An industry taskforce on peak oil and energy security, consisting of six UK companies, also concluded that peak oil was an urgent, clear, and present challenge (ITPOES, 2008; 2010). The US military also foresee a massive oil crunch is inevitable without massive expansion of production and refining capacity (JOE, 2010). By 2012, JOE (2010) claims that surplus oil production capacity could entirely disappear, and as early as
2015, the shortfall in oil output could reach nearly 10 Mb/d.

The depletion of North Sea oil (I, V) will greatly reduce European production capacity. In addition, countries previously dependent on Norwegian or Danish oil will be forced to rely on other suppliers that are generally less stable and located further away. OPEC will inherently rise in importance due to the fact that most of the worlds remaining oil is located within the Arab world (BP, 2010).

The US military also points out that the turmoil from the Great Depression in the 1930s spawned a number of totalitarian regimes that sought economic prosperity for their nations by ruthless conquest (JOE, 2010). Limited availability of fossil fuels will likely have huge effects on social and economic systems, no matter when the actual peak arrives (Czúcz et al.2010).

Curtis (2009) also concluded that increased oil prices and decreasing petroleum supply would alter trade flows and their geography. Consequently, proper understanding of how, when and where resource depletion will affect the world is essential for tackling these kind of issues and maintaining a working economy, peace, and security.

Coal and Oil: The Dark Monarchs of Global Energy: Understanding Supply and Extraction Patterns and their Importance for Future Production (Cont)

Connection to anthropogenic climate change
Nearly 60% of the man-made emissions originate from CO2 from fossil fuel use, while the remainder derives from mostly deforestation and agriculture (Höök et al., 2010b).

Despite the obvious relevance of peak oil to future anthropogenic emissions it has received little attention in the climate change debate (Kharecha and Hansen, 2008), and neither has depletion of other resources been discussed, especially in this context. In fact, there is a significant disagreement between the future fossil fuel production scenarios used by the IPCC and studies on resource depletion.

Human activities strongly affect global ecological changes, and social regime shifts definitively will induce ecological alteration. Therefore, depletion of fossil fuels should be taken seriously and must definitively be integrated into anthropogenic climate change studies and environmental policies.

Connection to sustainability
Given the fundamental importance of energy, it is essential for society to find lasting and practical energy sources. Without energy, mankind would not be able to achieve anything. The present global energy system is dominated by fossil fuels, chiefly oil and coal. However, an often forgotten fundamental truth is that a transition to new energy sources also requires energy.

The effect this has on fossil fuel reserves will depend largely on the size and speed of this transition, since the fossil fuel energy used will be additional to that already in use to maintain the present system. If changes to climate necessitate a shift to alternative and/or renewable energy within the next decade, this shift would not only hasten depletion of fossil fuels, but could also hasten climate change.

Continued oil dependence is environmentally, economically and socially unsustainable (IEA, 2008). Likewise, the increasing impact from coal mining puts a strain on both local and global systems.

Perhaps what is needed is to accept the eventual depletion of oil sooner or later and to develop alternative energy while limiting populations and their excessive material aspirations to realize sustainable development of society. If mankind does not adopt that path through our own planning, it will inevitably be imposed upon us by nature, probably in a much less desirable way.

The present conviction that economic growth can be supported indefinitely by a finite earth is deeply rooted and resembles religious belief (Lloyd, 2009). Observations and studies based on the naturalistic approach to science obviously disagree with certain visions of the future. Accepting reality is and should be vital for mankind. This is perhaps best captured in a quotation from Carl Sagan about the geocentric model.
“When Kepler found his long-cherished belief did not agree with the most precise observation, he accepted the uncomfortable fact. He preferred the hard truth to his dearest illusions; that is the heart of science.”

Final notes
If we take a lamp and shine it toward the wall, a bright spot will appear on the wall. If the lamp is the search for truth and for understanding, one should not assume that the light on the wall is the truth as too many often do.

Similarly, someone who does not search, who does not bring a lantern with him, sees nothing. For what we perceive as truth, is the by-product of our own search.

Sometimes we stand in front of the light and assume that we are the center of the universe. If we allow ourselves to get in the way, we defeat the purpose; which is to use the light of our search to illuminate the wall in all its beauty - and in all its flaws.

However, the saddest aspect of life right now seems to be that science gathers knowledge faster than society gathers wisdom to use the knowledge.
To paraphrase M. King Hubbert, it appears as if our ignorance is not as vast as our failure to use what we already know.
Link to the FULLTEXT01 is at the bottom of the following page-
http://uu.diva-portal.org/smash/record.jsf?pid=diva2:343046
============
The article speaks for itself, my apology, in advance, if I butchered anything.

The article was 100 pages long and I picked out the main issues, trying to get it as short as possible, to make it readable!

That said, the article does put a good case and I look forward to comments from those who agree & those who do not agree, with it's concepts!

I has to ponder perceptions what did mankind do before oil?

Without oil? OMG will we die? Wood stoves and candle light? Horses ploughing fields?, Horses and carts for transportation?No heavy industries,no but more intense human input,harder labor!

At lest we wont have deaths on the roads,air we can breathe,Trees grown everywhere for the basics and much more!!!!

But I would say as the oil becomes scarce and the price of the stuff becomes so dear,will  then the alternates will find their markets.

lerche007 wrote on Sep 12^th, 2010 at 6:03pm:

I has to ponder perceptions what did mankind do before oil? Without oil? OMG will we die? Wood stoves and candle light? Horses ploughing fields?, Horses and carts for transportation?No heavy industries,no but more intense human input,harder labor! At lest we wont have deaths on the roads,air we can breathe,Trees grown everywhere for the basics and much more!!!! But I would say as the oil becomes scarce and the price of the stuff becomes so dear,will  then the alternates will find their markets.

Well prior to Oil, we had Coal, Kerosene, Whale Oil, Wind, Wood & probably a few others.

Of course, there is also Nuclear, Solar, Wind, Geo-thermal & a few others, since Oil.

Problem is, what can be used now, to sustain 7 Billion +, in the manner that OZ, the USA & Europe are accustomed to, on a long term basis?

And, I suggest the answer is, it can not be done!

So, the next question is what can we/the planet support, on a long term basis, with what we can make available?

Therein lays a $64 Trillion question!  

Btw, the stuff (Oil) has already become so dear, it went from $10 a barrel, to nearly $150 a barrel in the space of 8 years and I still don't see the alternatives rushing the markets in volumes anywhere near enough to supply 7 Billion people.

PEAK OIL: How it will change your life.
Richard Heinberg: Documentary regarding the dwindeling supplies of oil and the rising demand for it.

http://video.google.com/videoplay?docid=-2141508903056009420#

Peak Everything

In titling this book “Peak Everything,” I was suggesting that humanity has achieved an unsustainable pinnacle of population size and consumption rates, and that the road ahead will be mostly downhill—at least for the next few decades, until our species has learned to live within Earth’s resource limits.

I argued that the industrial expansion of the past century or two was mainly due to our accelerating use of the concentrated energies of cheap fossil fuels; and that as oil, coal, and natural gas cease to be cheap and abundant, economic growth will phase into contraction. I further pointed out that world oil production was at, or very nearly at its peak, and that the imminent decline in extraction rates will be decisive, because global transport is nearly all oil-dependent, and there is currently no adequate substitute for petroleum.

Finally, I noted that the shift from growth to contraction will impact every aspect of human existence—financial systems, food systems, global trade—at both the macro and micro levels, threatening even our personal psychological coping mechanisms.

Of course it is simplistic to argue that everything has peaked (though Peak Everything makes for a better book title than “Some Things Peaking Now, Most Others Soon”). Perhaps the most glaring exception is human population, which continues to grow and is virtually certain to pass the seven billion mark within the next couple of years.

Here’s another non-peak: China’s economy is still growing rapidly, at the astonishing rate of 8 to 10 percent per year. That means it is more than doubling in size every ten years. Indeed, China consumes more than twice as much coal as it did a decade ago—the same with iron ore and oil. That nation now has four times as many highways as it did, and almost five times as many cars. How long this can go on is anyone’s guess. But surely not many more doublings in consumption rates can occur before China has used up its key resources.

For what it’s worth, my forecast is for China’s continuing boom to be very short-lived. As I argued in my recent book Blackout, there are hard limits to China’s coal supplies (the world as a whole will experience peak coal consumption within the next two decades, but China will get there sooner than most other countries because of its extraordinary consumption rate—currently three times that of the U.S.). Since China has no viable short-term alternatives to coal to fuel its industrial machine, by 2020 or so (and possibly much sooner) that country will have joined the rest of the world in a process of economic contraction that will continue until levels of consumption can be maintained by renewable resources harvested at sustainable rates.

World population growth may likewise continue for a shorter period than is commonly believed, if global food production and economic activity peak soon in response to declining energy availability.

In short, the world has changed in a fundamental way in the past three years, and the reverberations will continue for decades to come. Indeed, we have just seen the beginning of an overwhelming transformation of life as we’ve known it.

Oil Spike Triggers Economic Crisis

It is still unclear whether world oil extraction rates have reached their absolute maximum level. As of this writing, the record year for world crude oil production was 2005, and the record month was July 2008.

The 2005 to 2008 leveling-off of extraction rates occurred in the context of steadily rising oil prices; indeed, in July 2008 oil prices spiked 50 percent higher than the previous inflation-adjusted record, set in the 1970s. As a result of that price spike, the global airline industry went into a tailspin and the auto industry crashed and burned.

The oil situation is dire enough that one might assume it would be dominating headlines daily. Yet in fact it garners little attention. That’s because the world’s ongoing and worsening oil crisis has been obscured by a more dramatic and obvious financial catastrophe. As we all know only too well, Wall Street banks—which had spent the past couple of decades giddily building themselves a quadrillion-dollar house of cards—went into a free-fall swoon in the latter half of 2008 (right after the oil price spike), only to be temporarily rescued with trillions of dollars of government bailouts and guarantees.

It was a spine-tingling show—and would have amounted to months of fine entertainment, had it not been for the fact that millions of jobs, thousands of small businesses, and the economies of several sovereign nations also came tumbling down, and there just weren’t enough trillions available to rescue all of them (it obviously pays to be “too big to fail” and to have friends in high places).

While the oil price run-up was hardly the sole cause of the ongoing world economic crisis, it has effectively imposed a limit to any possibility of “recovery”: as soon as economic activity advances, oil prices will again spike, causing yet another financial crunch.

Thus Peak Oil likely represents the first of the limits to growth that will turn a century of economic expansion into decades of contraction. But more constraints are lining up in the stage wings, ready to make their entrance.

Peak Everything

The Resource Pyramid

Geologists and others who routinely deal with mineral ores and fossil fuels commonly speak of a “resource pyramid”: the capstone represents the easily and cheaply extracted portion of the resource; the next layer is the portion of the resource base that can be extracted with more difficulty and expense, and with worse environmental impacts; while the remaining bulk of the pyramid represents resources unlikely to be extracted under any realistic pricing scenario. The optimist may assume that the entire pyramid will eventually be usable, but this is simply not realistic. We have built a society on the basis of cheap energy and materials. At some point, as we move down the layers of the resource pyramid, rising commodity prices and increasing environmental cleanup costs (think Deepwater Horizon) will undercut both demand for resources and economic activity in general. As that happens, we see not just higher prices, but more volatile prices.

This is exactly what happened with the oil price spike of 2008. Many commentators who understand the essence of the Peak Oil dilemma have tended to assume that, as petroleum and other resources become scarcer, commodity prices will simply escalate in a linear fashion. What we saw instead was a rapid rise in prices (driven by rising demand and falling supply, and then exacerbated by speculation) precipitating an economic crash, followed by collapsing oil prices and curtailed investment in oil exploration—which, in due course, will provoke another rapid price rise. The cycle begins again. Each time the cycle churns, it will likely have an even more devastating economic impact.

The same will happen with natural gas as conventional gas grows scarce and the industry is forced to rely on quickly depleting and expensive-to-produce shale gas; and the same will happen with copper, uranium, indium, and rare-earth elements. Meanwhile, we will puzzle over the fact that the economy just doesn’t seem to work the way it once did. Instead of having plenty of energy with which to mine gold from seawater, we will find we don’t have enough cheap fuel to keep the airline industry aloft. Alternative non-fossil energy sources will come on line, but not quickly enough to keep up with the depletion of oil, coal, and gas. Prices of energy and raw materials will gyrate giddily, but the actual amounts consumed will be dropping. In general, labor costs will be falling and raw materials prices rising—the exact reverse of what occurred during the 20th century; but the adjustments will be anything but gradual.

It will take most folks a while to realize the simple fact that conventional economic growth is over. Done. Dead. Extinct.

The End of Growth—and What Comes After
The economic crash of 2008 is commonly perceived as another in a long series of recessions, from which a recovery will inevitably ensue. Recessions always end with recovery; of course this one will as well—or so we are told.

Yet now the situation is different. With oil production peaking, climate changing, and fresh water, soil, fish, and minerals depleting at alarming rates, the computer-based scenarios of the 1972 Limits to Growth study seem thoroughly and frighteningly confirmed. Decades of expansion fueled by consumption and debt are ending; the time has come to pay bills, tighten belts, and prepare for a future of economic downsizing.

Contemplating the end of growth—not as a theoretical possibility, but as a fait accompli, forced upon us by circumstances largely of our own making—is of course a bit depressing. The 20th century was one long expansionary surge interrupted by a couple of nasty World Wars and a Depression. At the beginning of that century world population stood at a little over 1.5 billion; by century’s end, it was 6 billion. In the industrialized West, per capita GDP grew from an average of $5000 to nearly $30,000 (in inflation-adjusted terms). We all came to believe that “progress” would go on like this more or less forever.

But while we were planning for utopia, we were in fact setting the stage for collapse. We were depleting our planet’s usable resources and altering the composition of Earth’s atmosphere. And we were building a global financial regime built on the expectation of perpetually expanding consumption and debt, a regime that could not function in a condition of stasis or contraction without generating billowing crises of default, insolvency, and foreclosure.

So, instead of being characterized by a continuation of the upward trajectory we have all grown accustomed to, the 21st century is destined to be one long downward glide punctuated by moments of financial, political, and geopolitical panic. And in retrospect, we’ll all probably eventually agree that our descent began in 2008.

We really have reached Peak Everything . . . but we’ve barely had a chance to enjoy the view; how brief was our moment at the apex! From here on, it’s going to be a bumpy downward roller-coaster ride.

What’s the Point?
It doesn’t have to end that way.

If we understand the nature of the limits we are confronting, it is still possible to back our way out of the population-resources cul de sac humanity has entered.
Link -
http://richardheinberg.com/220-peak-everything
==============
There are choices, business as usual or start thinking outside the square!

lerche007 wrote on Sep 12^th, 2010 at 6:03pm:

I has to ponder perceptions what did mankind do before oil? Without oil? OMG will we die? Wood stoves and candle light? Horses ploughing fields?, Horses and carts for transportation?No heavy industries,no but more intense human input,harder labor! At lest we wont have deaths on the roads,air we can breathe,Trees grown everywhere for the basics and much more!!!! But I would say as the oil becomes scarce and the price of the stuff becomes so dear,will  then the alternates will find their markets.

The main problem is the huge world population that we have to support. Even within Australia, large cities would become unsustainable.  There is a huge supply chain machine that's driven by fossil fuels. With a deficit in energy supplies, people will die. We need to work towards plugging the deficit that will come, and we need to start now.

In those halcyon days where people got around on horseback, it was a very different world.  The population was much lower too.

lerche007 wrote on Sep 12^th, 2010 at 6:03pm:

I has to ponder perceptions what did mankind do before oil? Without oil? OMG will we die? Wood stoves and candle light? Horses ploughing fields?, Horses and carts for transportation?No heavy industries,no but more intense human input,harder labor! At lest we wont have deaths on the roads,air we can breathe,Trees grown everywhere for the basics and much more!!!! But I would say as the oil becomes scarce and the price of the stuff becomes so dear,will  then the alternates will find their markets.

Perhaps those alternatives haven't yet got thru to the "status quo" crowd?
===================

Old-style coal plants expanding across the U.S.

Utilities across the country are building dozens of old-style coal plants that will cement the industry's standing as the largest industrial source of climate-changing gases for years to come.

An Associated Press examination of U.S. Department of Energy records and information provided by utilities and trade groups shows that more than 30 traditional coal plants have been built since 2008 or are under construction.

The construction wave stretches from Arizona to Illinois and South Carolina to Washington, and comes despite growing public wariness over the high environmental and social costs of fossil fuels, demonstrated by tragic mine disasters in West Virginia, the Gulf oil spill and wars in the Middle East.

The expansion, the industry's largest in two decades, represents an acknowledgment that highly touted "clean coal" technology is still a long way from becoming a reality and underscores a renewed confidence among utilities that proposals to regulate carbon emissions will fail. The Senate in July scrapped the leading bill to curb carbon emissions after opposition from Republicans and coal-state Democrats.

"Building a coal-fired power plant today is betting that we are not going to put a serious financial cost on emitting carbon dioxide," said Severin Borenstein, director of the Energy Institute at the University of California at Berkeley.

Federal officials have long struggled to balance coal's hidden costs against its more conspicuous role in providing half the nation's electricity.

Hoping for a technological solution, the Obama administration devoted $3.4 billion in stimulus spending to foster "clean-coal" plants that can capture and store greenhouse gases. Yet new investments in traditional coal plants total at least 10 times that amount — more than $35 billion.

Utilities say they are clinging to coal because its abundance makes it cheaper than natural gas or nuclear power and more reliable than intermittent power sources such as wind and solar. Still, the price of coal plants is rising and consumers in some areas served by the new facilities will see their electricity bill rise by up to 30 percent.

1) DOE spokesman John Grasser acknowledged the new plants represent a missed chance to rein in carbon emissions. But he said more opportunities would arise as electricity consumption increases.

2) Experts say the widespread application of carbon-neutralizing technologies for coal plants remains at least 15 to 20 years away.
Link -
http://seattletimes.nwsource.com/html/businesstechnology/2012834766_newcoalplants12.html
==================
1) It seems that the DOE is also into -
Credilble
Reliable
Abundant
Paradpxes

 This US surge back into old Coal & the China surge in Coal Production & the building of Coal fired power stations confirms the clear intent of these two Global Economic powerhouses (pun intended), is to maintain the status quo.    

2) That said, Peak Energy is here now, we just don't have the luxury of having time on our side, we need to take action now on Renewable Energy , not back old Coal for another 20 years!

muso wrote on Sep 13^th, 2010 at 9:37pm:

lerche007 wrote on Sep 12th, 2010 at 6:03pm: I has to ponder perceptions what did mankind do before oil? Without oil? OMG will we die? Wood stoves and candle light? Horses ploughing fields?, Horses and carts for transportation?No heavy industries,no but more intense human input,harder labor! At lest we wont have deaths on the roads,air we can breathe,Trees grown everywhere for the basics and much more!!!! But I would say as the oil becomes scarce and the price of the stuff becomes so dear,will  then the alternates will find their markets. The main problem is the huge world population that we have to support. Even within Australia, large cities would become unsustainable.  There is a huge supply chain machine that's driven by fossil fuels. With a deficit in energy supplies, people will die. We need to work towards plugging the deficit that will come, and we need to start now. In those halcyon days where people got around on horseback, it was a very different world.  The population was much lower too.

True Muso, however it seems both major OZ Political party's don't understand basic arithmetic or they simply don't have the guts the stand up and be counted, because it may cost them votes and the support of powerful "status quo" backers!

All of which is very short term (for Pollies, "status quo" backers & the Public), driven by daily TV news opportunities, election timetables and completely lacks future vision!

As is evidenced by both major party's essentially backing OZ to continue its Population growth.

Btw, it seems that China may also be about to start growing again? The following article suggests that Shanghai may have the one child policy relaxed and its population may increase from the current 23 million, to 50 million in 2050.
http://www.cnngo.com/shanghai/life/shanghai-supersized-2050-187008

That's what they say, but I can not see it becoming reality, for many reasons, including Energy problems in Power generation & Transport!
 

Economics and security of global supply of coal

Globally, coal, with its gasification technologies, appeared in the early 19th century. The discovery of petroleum and gas and 100 years of declining prices, however, has hindered the demand for coal-based synthetic fuel conversion.

Nevertheless, due to the larger known resources and reserves of coal, compared to crude oil and gas globally, and the current trend of higher world oil and gas prices, coal will continue to hold promise.

The growing need for electricity in China and India will drive global demand, even when, due to carbon tax, coal demand in Europe will decline.

At this moment, China is installing two to three new coal-fired power plants per week with capacities of 500 to 600 MW per plant, and has plans to continue at that pace for at least the next decade.
US demand for coal will also increase significantly, but will mainly drive increased coal production in the United States.

Coal has the advantages of the least cost and a great abundance.

The abundant coal resources are distributed in regions of the world other than the Persian Gulf, the unstable region that contains the largest reserves of crude oil and gas.

The US, China and India have immense coal reserves.

The need to use electricity to replace some of the energy lost due to the decline of oil and natural gas will put yet more upward pressure on the global demand for coal.

As the global demand continuously grows, so does the global supply. Statistics say that the global coal production will substantially increase over the next 10 to 15 years, mainly driven by Australia, China, former Soviet Union countries, such as Russia, Ukraine, Kazakhstan, and South Africa.

However, this stable growth — and only up to a certain period after that — will likely be compatible with the world policy scenario, in which coal production is constrained by climate policy measures. MIT projects a window of 50 to 75 years, world coal production will then reach a plateau and will eventually decline thereafter.

However, in the absence of a technological breakthrough, coal, in significant quantities, will remain indispensable.

Our dependency on coal for decades ahead is indispensable. Worse, this is likely to involve a massive increase in low-grade coal production, as more than half of our reserves are low-grade — possessing a high water but low calorie content and higher ash disposal — producing more CO2 per ton of coal.

What is needed is a Project Apollo for coal — sizeable and global coordinated efforts to acquire clean coal knowledge, without which we are doomed to stall.
Link -
http://www.thejakartapost.com/news/2010/09/14/economics-and-security-global-supply-coal.html
==============

Well, one thing is for sure, a great big Technology breakthru is needed and it is needed urgently!

But if its just more of the same old, same old, then yes, we are doomed to stall.

A couple of abservations -
1) I just can not see clean coal, it would be a waste of time & resources, which could be better used elsewhere.
2) Yes, you did read correctly, it said "China is installing two to three new coal-fired power plants per week, but I can not see that pace continuing for another decade.
3) Yes, lower grade Coal, will lead to more CO2, which will accelerate Climate Change.

First peak oil, now peak coal, says former Cal prof

This story from Mason Inman of National Geographic News warns that we’re perched on the brink of peak production of one of the world’s crucial energy sources, coal.

For folks here in Berkeley, the name of researcher who’s work Inman relies on will strike a familiar chord. It’s Tad Patzek, formerly of UC Berkeley, where he was one of the most outspoken of the critics of the university’s $500 million contract with BP.

Patzek, who has warned that peak oil will force major changes in American lifestyles, now cautions that the fuel we rely on for much of our electricity and most of the world’s steel production:

No matter how bad coal might be for the planet, the conventional wisdom is that there is so much of it underground that the world’s leading fuel for electricity will continue to dominate the energy scene unless global action is taken on climate change.

But what if conventional wisdom is wrong?

A new study seeks to shake up the assumption that use of coal, the most carbon-intensive fossil fuel, is bound to continue its inexorable rise. In fact, the authors predict that world coal production may reach its peak as early as next year, and then begin a permanent decline.

The study, led by Tad Patzek, chairman of the Department of Petroleum and Geosystems Engineering at the University of Texas at Austin, and published in the August issue of Energy, predicts that by mid-century, the world’s coal mining will supply only half as much energy as today.

The idea that the world will face “peak coal” as soon as 2011 flies in the face of most earlier estimates and analysis.

The London-based World Coal Institute, an industry group including the largest international coal producers, says “the use of coal will rise 60 percent over the next 20 years,” and that “coal will last us for at least 119 years.” And the U.S. Energy Information Administration, in its most recent international outlook, projects that coal consumption for electricity will grow more than 50 percent by 2035 unless policies are put in place to stop the growth of greenhouse gas emissions.

However, the Patzek study paints a far different picture — and not because people will use up the last of the coal in the ground. Rather, the world will finish off the coal that is easy to reach and high-quality — the coal that produces a large amount of energy per ton, the new study says. What remains will often be of lower quality, and progressively harder to dig up and bring to where it is used.

The study’s prediction for the time of the peak — actually a peak in the energy produced by global coal production — may not turn out to be exactly right, Patzek said. “I’m not saying that on July 1, 2011, there will be a peak.”

But the main thrust of the study is stark: “We are near or at the peak right now,” he said.

If true, this could have a vast impact on the world economy.

Coal-fired power plants supply 40 percent of the world’s electricity, and energy for two-thirds of the world’s steel production.

“If we are right,” Patzek’s study said, “major restructuring and shrinking of the global economy will follow.”

Many countries are counting on coal to continue powering their economies for decades to come.

“The United States is the Saudi Arabia of coal,” said President Barack Obama earlier this year, referring to estimates that the United States has the largest coal reserves of any country. Citing the huge stores and the need for clean energy, Obama made the remark at the launch of a task force to study how to deploy technology to “clean up” coal, through carbon capture and storage technology, in the next 10 years.

However, Patzek argues that the reserves estimates of the United States and other countries overstate how much coal is actually practical to mine and use.

“In my study, I disregard completely these [reserve] estimates,” Patzek said. “They’re not credible.”

“The only estimate that’s credible,” he argued, “is what actually comes out of the mines, and how you project that into the future.”
Link -
http://richardbrenneman.wordpress.com/2010/09/14/first-peak-oil-now-it%E2%80%99s-peak-coal-says-former-cal-prof/
=============
So, there may well be a lot of Coal left, but at what quality, what is it's Energy producing capacity and at what cost?

The Peak Oil Crisis: Is $50 Oil in the Offing?

In the last few weeks, there has been an upswing in articles emanating from prestigious commentators, such as the American Enterprise Institute (AEI), and Fortune magazine, which attempt to debunk the notion that the world's oil supplies may start to fall in the next few years.

There is of course nothing new in the AIE's and Fortune's arguments that there is plenty of oil left in the ground and that free enterprise, new technology, and higher prices will bring all the oil you will ever want to your nearest gas station in time to avert an economic crisis. Fortune even talks about a great glut of oil and lower prices ($50 a barrel) that will soon emerge from the unusually high U.S. stockpiles, a great surge in Iraqi and Kazakh oil production, and more efficient cars.

The editors commissioning these pieces and the authors apparently have never looked at the IEA's and EIA's oil production and demand charts which show global production has been flat for five years, and that demand from China, India, and domestic consumption in oil producing countries is rising steadily. There are simply not enough new oil fields being drilled to offset declines in production from currently producing oil fields.

Now what does peak oil tell us about economic growth? In a nutshell, it says that continuing to grow with declining global supplies of oil and eventually coal and then natural gas is going to be very difficult if not impossible to pull off. For the last 100 years, the global economy has been in lockstep with global oil production. More growth requires more oil. There are of course many unknowns and interactions ahead. We have no idea how fast global oil production is going to go down or how much is going to be available to oil importing economies. We have no idea whether China, India and the oil exporters are going to be able to continue growing at 8-10 percent a year until they hit the wall of falling resources.

Closer to home, we have no idea whether the economies of the U.S. and the other OECD countries are going to lurch along with little or no growth for the foreseeable future or sink further into decline under the weight of massive public and private debt. There are simply too many variables to work out a likely path ahead. While there are substitutes for oil and many ways to conserve or increase the efficiency with which we use the world's remaining resources, these substitutions cannot happen overnight. While discretionary motoring can be abandoned, conservation programs started, and car pools formed relatively quickly, implementing sufficient efficiencies in energy consumption will take decades - even if there remain sufficient resources to implement the required changes.

Therefore, peak oil is a phenomenon no one with an interest in the status quo cares to acknowledge publicly or even think about for it implies there will be massive changes in ways of life. Those "debunking" peak oil know this, but they also want to keep the status quo moving for as long as possible. Once a critical mass of people understands that global oil production will soon be in a decline and a return to economic growth will become nearly impossible, behavior will change. A massive scramble will ensue that likely will cause great harm to the financial services industry that has grown so large and influential in recent decades.

It is to delay the realization of what is about to happen on the part of the general public for as long as possible, is what motivates the debunkers. Until the day when declines in global oil production become too obvious to deny we will continue to read stories about $50 oil.
Link -
http://www.fcnp.com/commentary/national/7360-the-peak-oil-crisis-is-50-oil-in-the-offing.html
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Yes, The "status quo" will only go, if dragged kicking & screaming and even then, not until after a great deal of damage is done!

Coal's days numbered as power fuel

COAL is becoming the dinosaur among fuel sources, irrespective of future political decisions about a carbon price or an emissions trading scheme.
The economics of electricity -- with the coal price skyrocketing, tighter regulations on coal-fired power, and uncertainty around future emissions laws -- have put gas in the driver's seat.

The proportion of power generated by coal is dropping rapidly, and state governments and industry alike regard the emergence of new coal-fired baseload power station proposals as unlikely.

A recent report by the Australian Bureau of Agricultural and Resource Economics showed that, among electricity projects that are advanced but not yet on line, only 9 per cent of capacity will be coal-generated. The report predicts coal's share of power generation will drop from 72 per cent to 43 per cent between now and 2030, while the share contributed by gas will almost double to 37 per cent.

None of the states have issued outright bans on coal, but NSW and Queensland have introduced tight rules, adding significantly to the cost of coal-fired stations.

The rules resemble those projected by Prime Minister Julia Gillard during the election campaign. They deem that any coal-fired stations must use low-emissions technology and be able to be retrofitted with carbon-capture technology, when it becomes available.

South Australian Energy Minister Pat Conlon told The Australian yesterday the best way to deal with the issue of fuel was to introduce an emissions trading scheme.

"The sooner we have an ETS or some clear understandable method of pricing carbon, the sooner we will see the next stage of investment in baseload," Mr Conlon said. "On present indications, we would believe that gas would be the most likely fuel used in new baseload."

Western Australia does not currently have a plan for its future baseload power generation and the role coal will play in that.

In Victoria, Premier John Brumby has committed to cutting greenhouse emissions by at least 20 per cent on year 2000 levels by 2020, driven by a focus on solar.
Link -
http://www.theaustralian.com.au/business/mining-energy/coals-days-numbered-as-power-fuel/story-e6frg9e6-1225925060596
===============
If Australia does start to transition away from Coal, it will be taking an opposite tack to China & the USA, which are busy building old style Coal power stations.

One very good reason to move away from Coal, is that we are faced with higher costs, as the higher grades of Coal Peak and we are forced to shift to lower grades, which produce less Energy & more CO2.

Western Australia appears to be waiting & hoping that things will change? And that may happen, as Babcock & Brown, the owners of Alinta Gas, who are the sole supplier of Gas to WA & also supply about a third of South Australia's gas, are reportedly nearing receivership, as they struggle to find agreement with the lenders.

Finally, I repeat again, an ETS is not the answer. I suggest that legislated, mandatory cuts in GHG emissions, backed by tax carrots & sticks would be a better option!

EROI, Insidious Feedbacks, and the End of Economic Growth

Numerous theories attempting to explain business cycles have been posited over the past century, each offering a unique explanation for the causes of--and solutions to--recessions, including: Keynesian Theory, the Monetarist Model, the Rational Expectations Model, Real Business Cycle Models, New (Neo-) Keynesian models, etc…

Yet, for all the differences amongst these theories, they all share one implicit assumption: a return to a growing economy, i.e. growing GDP, is in fact possible. Historically, there has been no reason to question this assumption as GDP, incomes, and most other measures of economic growth have in fact grown steadily over the past century. (Note: economic growth and “business as usual” economic growth are used synonymousy to mean an annual growth in GDP)

But if you believe as I do that the world is entering a unique period defined by flattening and then declining oil supplies, then for the first time in history we may be asked to grow the economy while simultaneously decreasing oil consumption, something that has yet to occur in the U.S. In this post I attempt to answer the following question: Is a return to long term economic growth possible?

Economic growth over the past 200 years has correlated highly with energy consumption (Figure 1). Even more telling, since 1970, 50% of the year on year change in GDP in the U.S. is explained by the year on year change in oil consumption alone (Figure 2). This is important because oil consumption per se is rarely used by neoclassical economists as a means of explaining economic growth. For example, Knoop (2010) described the 1973 recession in terms of high oil prices, high unemployment and inflation, yet omitted mentioning that oil consumption declined four percent during the first year and two percent during the second year. Later in the same description, Knoop claimed that the emergence from this recession in 1975 was due to a decrease in both the price of oil and inflation, and an increase in money supply. To be sure, those factors contributed to the recession and the emergence from the recession, but what was omitted, again, was the simple fact that higher oil prices led to less oil consumption and lower economic output during 1973 and lower oil prices led to increased oil consumption and hence greater economic output in 1975.
http://www.theoildrum.com/files/Figure1_a.png

Figure 1. Energy production and GDP for the world from 1830 to 2000.

To summarize: economic growth requires not only energy per se, but inexpensive energy.
With that point in mind, we can address the previous question about whether or not a future of long term economic growth is possible by answering two sub-questions: 1) do we have the physical resources to supply a growing economy, and 2) can we reach those supply targets while maintaining a low price? Since long term economic growth requires an increasing supply of cheap energy, answering no to either of these sub-questions would indicate that long term economic growth is unlikely.

First, economic growth requires increasing oil supplies, so increasing GDP by 4 or 5 percent per annum will require a commensurate increase in oil supplies. Although most of the readers on this website are aware of Peak Oil, some argue that it is a red herring. I will not go into the numerous arguments rebutting the naysayers other than saying the following: what matters in the context of business as usual economic growth is whether we can continue increasing our oil supply into the future or whether oil supplies will be constrained. In this context, the actual date of the peak is irrelevant. Even a cursory examination would reveal that, at a minimum, oil supplies will be constrained in the future.

Second, increasing the supply of oil will require maintaining current production and discovering new sources of oil. This includes maintaining production in oil sands, exploring ultra deep water, and exploring even the poles. Let’s say, for argument sake, that we are able to find oodles of oil in these locations. The question then becomes: can we produce this oil cheaply? We can get a glimpse at how production costs change over time by relating the EROI of production to the financial cost of production (Figure 4).

As resource quality declines, i.e. lower EROI, the cost of producing the resource increases. Alternatively, if we examine a supply graph for global oil production we can see an interesting relation between quantity and price (Figure 5). Both of these figures indicate that increasing oil production much beyond today’s level will create an exponential increase in price. In sum, increasing the oil supply, if in fact we can do such a thing, can occur only at high oil prices.

http://www.theoildrum.com/files/figure4_a.png

Figure 4. Oil production costs from various sources as a function of the EROI of those sources. The dotted lines represent the real oil price averaged over both recessions and expansions during the period from 1970 through 2008.

EROI, Insidious Feedbacks, and the End of Economic Growth (Cont)

Due to the depletion of high EROI oil (and hence cheap oil), the current economic situation can be described by the following feedbacks (Figure 6): 1) economic growth increases oil demand, 2) higher oil demand increases oil production from lower EROI resources, 3) increasing extraction costs leads to higher oil prices, 4) higher oil prices stall economic growth or cause economic contractions, 5) economic contraction leads to lower oil demand, 6) lower oil demand leads to lower oil prices which spur another short bout of economic growth until this cycle repeats itself.

http://www.theoildrum.com/files/Figure6_a.png

This system of insidious feedbacks is aptly described as a growth paradox: maintaining business as usual economic growth will require the production of new sources of oil, yet the only sources of oil remaining require high oil prices, thus hampering economic growth.

The growth paradox leads to a highly volatile economy that oscillates frequently between expansion and contraction periods, and as a result, there may appear to be numerous peaks in oil production (a so-called "undulating plateau"). In terms of business cycles, the main difference between economic models of the past and the this model is that in the past business cycles appeared as oscillations around an increasing trend whereas in this model they appear as oscillations around a flat trend. In other words, our baseline economic models may be switching from an implicit 1 or 2 percent growth to a steady-state, or dare I say, declining trend.

So arguments that cite vast oil reserves 10,000 leagues under the sea or in the poles as evidence that peak oil will not matter need to realize that in terms of economic growth, oil per se isn’t enough. Cheap oil is needed for economic growth, and we are simply running out of the good, cheap crude.
Link -
http://www.theoildrum.com/node/6961
==============
Whilst I agree with the basic trust of what the author is saying, I would also say that Oil & Energy do not exist in isolation.

Oil & Energy per se, are part of an interlocking whole, in which humanity integrates Population issues, such as Aging, over-population & decline, other major factors include Debt, Climate Change & human interaction with ourselves.

The human condition itself is a source of major conflict, as some want to retain what they have, whilst others see what is available and seek it for themselves!

You talk of a flat trend, a steady state and possibly dare to say, declining trend.

I would observe that you have rightly pointed out regarding Oil & Energy and that the other major factors of Aging (Baby Boomer Bust), an actual declining population starting within 20-30 years, Global Debt oveflowing & Climate Change, are all conspiring to prevent the usual Economic remedies!

Given the broad thrust of all major influencing factors, I would suggest that there can be no flat trend and no steady state.

Global Economics is now set on that growth paradox, which leads to a highly volatile economy, which oscillates frequently between expansion and contraction, but now the new trend line is down and it is set to continuing reversing until probably the end of this century or longer.

As usual, there is a possible way out and that depends on whether a cheap and abundant replacement for Fossil Fuels is found, in terms of Power generation, Liquid Transport Fuels & the many others uses, as well as a quick agreement can be found thru the human condition, to implement that new Energy source, with a Manhattan project urgency, on a Global basis!

One of the comments to this article also included the following useful charts -
http://www.theoildrum.com/files/Slide20_0.png

I draw your attention to the similar trajectory followed by growth in Human Population & growth in Fossil Fuels usage and I also draw attention to the expected Fossil Fuel Peak Production dates -
2012 - Oil
2024 - Coal
2029 - Gas  

2018 - Peak All Fossil Fuels

Chris Martensons Crash Course

Anyone wanting to get a holistic handle on current & future events, including Financial issues, would do well to review all of the following!

Personally, I would view Chapter 19, for an overview, then go back to Chapter’s 1 thru 18, to get a full perspective. Finally, look at Chapter 20 to view, What should we do?

The following observation of Arthur Schopenhauer is included in these videos and is very apt!

All Truth passes through three stages.

First, it is ridiculed.
Second, it is violently opposed.
Third, it is accepted as being self-evident.

Chapter 1 – Three Beliefs
http://www.youtube.com/watch?v=XnXZzx9pAmQ&feature=player_embedded

Chapter 2 – The three E’s
http://www.youtube.com/watch?v=JTEHUbfP7OA&NR=1

Chapter 3 – Exponential Growth
http://www.youtube.com/watch?v=EXd66gP53fk&NR=1


Chapter 4 – Compounding is the Problem
http://www.youtube.com/watch?v=iIwyMif5EOg&NR=1

Chapter 5 – Growth Vs Prosperity
http://www.youtube.com/watch?v=k1KsFDLZ3B4&NR=1

Chapter 6 – What is Money?
http://www.youtube.com/watch?v=U8dq1bH1X6s&NR=1

Chapter 7 – Money Creation
http://www.youtube.com/watch?v=qIxhsF6JLEA&NR=1

Chapter 8 – The Fed & Money Creation
http://www.youtube.com/watch?v=p3_Q1SiRN-A&NR=1

Chapter 9 – A brief History of US Money
http://www.youtube.com/watch?v=kM7rITeNW6U&NR=1

Chapter 10 - Inflation
http://www.youtube.com/watch?v=afWqKcqntfs&feature=channel

Chapter 11 – How much is a TRILLION?
http://www.youtube.com/watch?v=caMRBGmja3w&feature=channel

Chapter 12 – DEBT (1 of 2)
http://www.youtube.com/watch?v=wsTblStwiuM&feature=channel

Chapter 12 – DEBT (2 of 2)
http://www.youtube.com/watch?v=w8ECro3HwPo&NR=1

Chapter 13 – A National Failure to Save (1 of 2)
http://www.youtube.com/watch?v=lKn3jROgznM&feature=channel

Chapter 13 – A National Failure to Save (2 of 2)
http://www.youtube.com/watch?v=ZuJIEscbKGI&NR=1


Chapter 14 – Assets & Demographics (1 of 2)
http://www.youtube.com/watch?v=Y23zmnocxdM&feature=channel

Chapter 14 – Assets & Demographics (2 of 2)
http://www.youtube.com/watch?v=6EcXKzRNBVE&NR=1


Chapter 15 – Bubbles (1 of 2)
http://www.youtube.com/watch?v=9v2QynM0V2E&feature=channel

Chapter 15 – Bubbles (2 of 2)
http://www.youtube.com/watch?v=O0QStbuLRLc&NR=1


Chapter 16 – Fuzzy Numbers (1of 2)
http://www.youtube.com/watch?v=zsNgJVD8KgY&feature=channel

Chapter 16 – Fuzzy Numbers (2of 2)
http://www.youtube.com/watch?v=01KIOjTe2CM&NR=1


Chapter 17a – Peak Oil (1 of 2)
http://www.youtube.com/watch?v=Ni8s7orGZbY&feature=channel

Chapter 17a – Peak Oil (2 of 2)
http://www.youtube.com/watch?v=uoFTNurAcws&NR=1


Chapter 17b – Energy Budgeting
http://www.youtube.com/watch?v=WeBtdwPpTQM&feature=channel

Chapter 17c – Energy & the Economy
http://www.youtube.com/watch?v=6w6gf3tSGTg&feature=channel

Chapter 18 – Environment Data (1 of 2)
http://www.youtube.com/watch?v=3lRkB6gvBC0&feature=channel

Chapter 18 – Environment Data (2 of 2)
http://www.youtube.com/watch?v=BafOxXU13sk&NR=1

Chapter 19 – Future Shock
http://www.youtube.com/watch?v=YDNvr82gqd0&feature=channel

Chapter 20 – What should I do?
http://vodpod.com/watch/1239314-crash-course-chapter-20-what-should-i-do-chris-martenson

Arithmetic, Population & Energy
Dr Albert Bartlett

(Part 1 of 8)
http://www.youtube.com/watch?v=F-QA2rkpBSY&p=230E06A93105883E&index=1

(Part 2 of 8)
http://www.youtube.com/watch?v=Pb3JI8F9LQQ&p=230E06A93105883E&index=2

(Part 3 of 8)
http://www.youtube.com/watch?v=CFyOw9IgtjY&p=230E06A93105883E&index=3

(Part 4 of 8)
http://www.youtube.com/watch?v=yQd-VGYX3-E&p=230E06A93105883E&index=4

(Part 5 of 8)
http://www.youtube.com/watch?v=t-X6EpvWWu8&p=230E06A93105883E&index=5

(Part 6 of 8)
http://www.youtube.com/watch?v=-3y7UlHdhAU&p=230E06A93105883E&index=6

(Part 7 of 8)
http://www.youtube.com/watch?v=RyseLQVpJEI&p=230E06A93105883E&index=7

(Part 8 of 8)
http://www.youtube.com/watch?v=VoiiVnQadwE&p=230E06A93105883E&index=8

The Bacteria comparison in Chapter 3, is apt!

But, there are a few other apt observations –
1) Technology Optimists will always be able to solve all of our Population Growth, Food, Energy & Resources problems?
2) Thinking is upsetting, it tells us things, we’d rather not know!
3) The chief source of problems, is solutions!
4) Facts do not cease to exist, simply because they are ignored1
5) The 1st Law of Sustainability, is that Population growth &/or growth in the rates of Consumption of Resources
CAN NOT BE SUSTAINED!
6) The greatest shortcoming of the human race, is OUR INABILITY TO UNDERSTAND THE EXPONENTIAL FUNCTION!

Peak Oil Interview: Misconceptions, Replacing Oil, and False Solutions

http://www.youtube.com/watch?v=PjOFCegjoik&feature=player_embedded

The misconception that Peak Oil means we are running out of oil
The idea that oil will be very difficult to replace, and impossible to replace solely with biomass
The danger posed by false solutions (which I denoted the ‘fake fire brigade‘ in my presentation)
The difficulty the developing world will have in attaining a ‘First World‘ standard of living
What will happen if oil peaks soon and declines rapidly
The reasons for the rise in oil prices over the past decade
That we are now comfortable with $80 oil — and why that is dangerous
The fact that some “renewable energy” is mostly embedded fossil energy
The reason I prefer thermochemical technologies over biochemical technologies
The types of projects that my company is working on; primarily energy projects that can be operated on low fossil fuel inputs and ideally off the grid (i.e., projects that could provide meaningful energy in a world in which oil supplies are declining)

The Biggest Systemic Risk For The Financial System Is Limited Oil

It seems to me that if we are in fact reaching limits with respect to oil supply, this should be of considerable concern. We have a financial system that demands economic growth, for reasons that will be discussed later in this paper. At the same time, as we approach limits with respect to oil production, the ability of the world’s economy to grow becomes constrained, because in order for economic growth to occur, we will need to do more and more, with less and less oil.

The conflict of these two forces – a need for economic growth in a world that can no longer provide growing oil supply – sets the financial system up for a systemic risk of collapse. Furthermore, there is significant evidence that the financial problems of 2008 were early signs of this systemic risk affecting the financial system. If oil supply should actually begin to decline in the future, we can expect financial problems of 2008 to return and worsen.

Oil’s Connection to the Economy

Oil is used for a huge number of purposes—transportation fuel, heating fuel, fuel for extracting minerals of all types, lubricant, and raw material for asphalt for road paving, plastics, synthetic cloth, medicines, fertilizer, pesticides, and herbicides, to name a few things. A declining oil supply, or even a level supply, should be a serious concern, with the world’s rising population.

In recent years, there have been many attempts to try to find substitutes for oil, but with very limited success.


Other so-called replacements for oil are only very partial replacements, and are still very far away from being full-scale solutions. Biofuel from algae is being investigated, but it is still very expensive, and not yet scalable. Electric cars are being developed, but they still are many years from being ready to replace our huge fleet of cars with internal combustion engines.

It should noted that the problem with oil supply is really an economic one.
At some point, limits are reached in the amount people can afford to pay for oil, and we may already approaching those limits.

Timing
Many observers would like us to believe that limits on oil and other resources are still a long way off, but this is not really true. World crude oil production has already stopped rising. Oil production has been essentially flat from 2005 to 2010,6 meaning that more and more cars and trucks must compete for the same fuel supply.

http://static.businessinsider.com/image/4c98d2f27f8b9aee3d3d0400/chart.gif

Impacts

While crude oil supply has not yet begun declining, it had been essentially flat since 2005, and this lack of growth is putting tremendous pressure on the world’s financial system, since we now must do more and more with essentially the same oil supply. Oil prices have risen, and this is one source of financial problems, because higher oil prices have a disruptive impact on balance of payments, and can also cause a reduction in profits of companies.

But higher oil prices can also lead to recession and debt defaults.
High oil prices don’t give ordinary citizens more salary to spend, so they have to cut back on something else. One possibility is a cutback in discretionary spending, which will tend to lead to recession. If the cutback is in buying new homes, the price of new homes can be expected to drop. James Hamilton wrote a paper called, “Causes and Consequences of the Oil Shock of 2007-2008” showing that the run up in oil prices in the years prior to 2008 was sufficient to cause the major recession we have recently experienced.9

Economic System’s Need for Growth
Our current economic system includes a huge amount of debt. Money is loaned into existence. Debt is used to finance many business expansions. Governments rely heavily on debt.

The US economy has been growing for many years, with only brief interruptions, so nearly all of our experience with borrowing money, and paying it back with interest, has been during periods of economic growth.

Borrowing from the future is relatively easy when the economy is growing, because when the time comes to pay back the debt, the debtor’s economic condition is likely to be as good as it was when the loan was taken out, and may even be better. So defaults are relatively uncommon, and the growth in the economy between the time the loan was taken out and the time it is repaid provides some contribution toward the interest payments.

But what if we start encountering a very different kind of world, one with a decline in oil supplies? If oil resources constrain economic growth, debt defaults can be expected to rise, and the whole debt system underlying our financial system is at risk. Insurance companies are very much at risk too, because many of their assets are bonds. In the past, these bonds would have been repaid with interest, but in a world with little economic growth, and perhaps economic decline, the risk of default becomes much higher.

Even if we should discover a way around our problems—say a new technology, which permits more oil extraction at lower cost, or a better substitute for oil, financial institutions--including insurance companies--are still likely to encounter substantial systemic risk related to debt defaults in the next few years.
Link -
http://www.businessinsider.com/peak-oil-systemic-risk-financial-system-2010-9

Peak Oil Consumption - How much oil is left?


http://www.carrentals.co.uk/petrol.jpg

Link -
http://www.ozpolitic.com/forum/YaBB.pl?num=1276908003;action=post2
==========
Whilst Reserves & Consumption will fluctuate, both up & down, on current indications we (humans) will be running on the fumes of an empty Oil tank around the middle of this century.

SA is nearing peak coal, say scientists

South Africa has more coal than it can ever burn, right? If you think this, as many of us do, think again.

Research by international and local scientists has shown that coal, like other resources, is finite and can be expected to comply with peak resources theory. The theory shows that production in commodities such as oil grows until a peak is reached, whereafter production declines.

In the case of South African coal, the studies show production has already reached its peak, or soon will.

"It is commonly believed that South Africa has abundant coal reserves which will last 200 years or more," says Jeremy Wakeford, chair of the Association for the Study of Peak Oil (Aspo) in South Africa, in the organisation’s latest newsletter.

"But recent research [from] three scientific journals suggests that usable reserves are much smaller than previously thought, and that annual production could reach a peak and begin to decline within a decade -- or might even have peaked already."

Wakeford says that "given the country’s overwhelming dependence on coal, this issue has huge ramifications for our future development path".

Coal provides 70% of the country’s energy supply, supports 90% of electricity generation, is used to make a quarter of the country’s liquid fuels using the Sasol process and is a big earner of foreign exchange through exports to foreign users.

Geologist Chris Hartnady, in a paper to be published in the SA Journal of Science, has forecast peak production in 2020 at about 285-million tonnes a year.

This compares with total production last year of 242-million tonnes. This was mostly used by Eskom (123-million tonnes), Sasol (40-million tonnes) and export (66-million tonnes). Eskom’s current expansion programme could use an additional 50-million tonnes, and if the Sasol Mafutha project goes ahead it will need another 20-million tonnes annually, says Wakeford.

David Rutledge, a professor at the California Institute of Technology, has meanwhile forecast South African production to peak in 2011 at about 253-million tonnes a year.

This is supported by research by two American professors, says Wakeford, Tadeusz Patzek and Gregory Croft, published this year in the journal Energy. "They estimate that South Africa’s coal production from existing coal fields, when measured in energy units, peaked in 2007.

"They further contend that future mines are unlikely to reverse the trend since the economics of mining dictates that most accessible reserves are mined earlier on, so that the net energy return from the coal mining declines while the production costs rise over time," says Wakeford.

Eskom chief executive Brian Dames bemoaned the poor quality of coal Eskom is receiving in a briefing to parliamentarians earlier this month.

Dames said that Eskom was losing 1 000 megawatts of power each day because of the low quality of coal it was being supplied. He warned that the utility may have to start paying higher prices to improve the quality of its coal supplies and that these costs would be passed on to consumers.

Wakeford said that the implications of peak coal are stark. "The cost of coal is almost certainly going to maintain a rising trend -- albeit with greater volatility -- resulting in increasingly expensive electricity and steel."

"Domestic demand for coal could increasingly compete with exports, raising questions around how the country’s natural resources should best be utilised and the role and rights of privately owned mining companies.

Wakeford said that leaving aside social and environmental concerns around carbon dioxide emissions, water scarcity, pollution and health impacts, entrenching dependence on a depleting fossil fuel is taking the country down a cul-de-sac.

He said that the solution is to embark on an aggressive drive for energy conservation and efficiency while diversifying our energy mix away from coal as an imperative. "We should not wait until coal becomes too expensive or scarce, but invest now in renewable energy infrastructure and industries.Link -
http://www.mg.co.za/article/2010-09-24-sa-is-nearing-peak-coal-say-scientists
==========
Do we wait for the scientists to tell us (OZ) that our Coal Production has Peaked?

Or, has it already and that is the real reason for increasing power costs?

http://www.theoildrum.com/files/top_20_coal_0.png

http://www.theoildrum.com/files/coal_exports.png

Peak of the Devil

The very best we can hope for is a smooth and orderly transition from the modern oil powered world we have now to a stable world of little or no oil in the next hundred years or so. Human nature being what it is, I don’t look for that smooth and orderly part to happen so much.

It would be comforting to think that we can change our lives without disruption and conflict; that we can all work together toward this one common goal and put aside our differences and minimize the trauma and drama.

It would also be nice if there were no calories in chocolate and we could eat all we wanted without gaining weight. Again, don’t look for that to happen either.

Peak oil, and the aftermath of that peak, is going to cause traumatic shocks that will unsettle virtually every aspect of our lives, no matter where you live.

Link -
http://www.energybulletin.net/stories/2010-09-23/book-review-peak-devil

It's not that people who are concerned about the depletion of natural resources don't understand economics, it's that they don't understand what economics is. Economics is how we appropriate or ration out limited resources. The most successful way we've ever figured out of doing that is the price system. The price system is simply a way of measuring demand so you can appropriate supply more efficiently. You have milk, you make ice-cream and yoghurt out of it, heaps of of people buy your ice-cream but not your yoghurt, so you appropriate more of your milk to ice-cream so as not to waste it on yoghurt. Like milk, crude oil is used for more than just petrol. But the reason most of it used for petrol and not wasted on too much kerosene or asphalt is because we let the supply of oil be determined by a price system.

The price system also tells us just how scarce a resource is. Beach houses are expensive because there's not enough beachfront property to go around. But a beachfront property is highly desirable. So the high prices of beach houses reflect their high demand and limited supply. As a result of the high price of owning beach front property, only a few can purchase it. As oil reserves deplete, the price of oil will rise to reflect its scarcity. The higher the price of oil, the less people will be able to afford it which will create a huge demand for alternative sources of energy. The more you understand these economic mechanism, the less worried you are that oil is going to run out and we're going to have an energy crisis.

I think that everybody understands the concept of supply and demand. And that is the big concern.

Yes I can invisage a time, maybe in the not too distant future, where fossil fuels will largely be used by more essential industries such as: agriculture, airlines, military..etc.
But what does that mean for the rest of us? I can only see that it means rising prices for a lot of the essentials and non-essentials that we take for granted.
In real terms (the buying power of our dollar), our wages must drop.
Whether that is achieved by wage squeeze, taxes, inflation, or a combination of all, the result will be the same.

And yes I agree that there will a huge demand for alternate sources of energy. What you're not factoring in is that our entire infrastucture is reliant on the abundance and efficiency of oil. Even a very smooth transition away from this reliance will be very costly.
Also, the end result where the masses aren't so reliant on fossil fuels may not be so rosy for a long while to come.
The demand will definitely be there for technology to make some leaps and bounds in renewable energy sources, but I wouldn't expect anything near the unsustainable efficiency of what we have today.

Amadd wrote on Sep 27^th, 2010 at 4:43pm:

I think that everybody understands the concept of supply and demand. And that is the big concern. Yes I can invisage a time, maybe in the not too distant future, where fossil fuels will largely be used by more essential industries such as: agriculture, airlines, military..etc. But what does that mean for the rest of us? I can only see that it means rising prices for a lot of the essentials and non-essentials that we take for granted. In real terms (the buying power of our dollar), our wages must drop. Whether that is achieved by wage squeeze, taxes, inflation, or a combination of all, the result will be the same. And yes I agree that there will a huge demand for alternate sources of energy. What you're not factoring in is that our entire infrastucture is reliant on the abundance and efficiency of oil. Even a very smooth transition away from this reliance will be very costly. Also, the end result where the masses aren't so reliant on fossil fuels may not be so rosy for a long while to come. The demand will definitely be there for technology to make some leaps and bounds in renewable energy sources, but I wouldn't expect anything near the unsustainable efficiency of what we have today.

See, that's the thing. It's not reliant on the abundance of oil but the scarcity of oil.

Quote:

See, that's the thing. It's not reliant on the abundance of oil but the scarcity of oil.

Huh?  :-?
How do you get that?

Amadd wrote on Sep 27^th, 2010 at 6:35pm:

Quote: See, that's the thing. It's not reliant on the abundance of oil but the scarcity of oil. Huh?  :-? How do you get that?

That's what economics is, rationing out scarce resources. If oil was abundant we wouldn't have to economise it, we could give it away. Our economy has always relied on the scarcity of oil.

Quote:

That's what economics is, rationing out scarce resources. If oil was abundant we wouldn't have to economise it, we could give it away. Our economy has always relied on the scarcity of oil.

So what you're saying is that when oil becomes so scarce that it can only be used by the wealthy or by certain industries, before it eventually dries up or becomes nearly impossible to extract, that this will be nothing but a hiccup to the economy?

Jeez, nations like China and India have done so well building their nations with a bull and dray haven't they?
It took them thousands of years and a hundred times more people to build something 1/10th as good as we've built in the last 100 years.

BobH wrote on Sep 27^th, 2010 at 2:00pm:

It's not that people who are concerned about the depletion of natural resources don't understand economics, it's that they don't understand what economics is. Economics is how we appropriate or ration out limited resources. The most successful way we've ever figured out of doing that is the price system. The price system is simply a way of measuring demand so you can appropriate supply more efficiently. You have milk, you make ice-cream and yoghurt out of it, heaps of of people buy your ice-cream but not your yoghurt, so you appropriate more of your milk to ice-cream so as not to waste it on yoghurt. Like milk, crude oil is used for more than just petrol. But the reason most of it used for petrol and not wasted on too much kerosene or asphalt is because we let the supply of oil be determined by a price system. The price system also tells us just how scarce a resource is. Beach houses are expensive because there's not enough beachfront property to go around. But a beachfront property is highly desirable. So the high prices of beach houses reflect their high demand and limited supply. As a result of the high price of owning beach front property, only a few can purchase it. As oil reserves deplete, the price of oil will rise to reflect its scarcity. The higher the price of oil, the less people will be able to afford it which will create a huge demand for alternative sources of energy. The more you understand these economic mechanism, the less worried you are that oil is going to run out and we're going to have an energy crisis.

If that were the case, then we should now be swimming in a sea of alternative Energy supplies, because in 8 years Oil went from $10 a barrel to $147 a barrel. I see no such movement towards the alternative sources and certainly not on the level of urgency that is needed.

I'm sure FD would agree with me, when I say, based on your assessment, my understanding of Economics & Energy must be zero, because I think we have a huge crisis on our hands!  

http://planetforlife.com/images/growinggap.jpg

The Conclusion
Oil discovered 40 years ago is the basis of current oil production. The search for oil continues but projected oil discoveries will contribute little to projected oil production in 2030. The declining rate of oil discoveries makes it painfully obvious--most of the oil has already been discovered. The technology for finding oil has improved greatly since the major discoveries, yet little oil has been found in recent years. THe heyday of oil discovery was from 1950 to 1980. It is difficult to avoid the conclusion--most of the oil has been found.

There is a growing gap between discoveries and production.

World oil production is running flat out. Only the Saudis claim to have the ability to produce more though some dispute this. It is not a simple matter of turning a spigot or pumping faster. Oil fields can be permanently damaged by attempting to produce too fast.

Soon there will be a gap between production and demand.

It Gets Worse
According to BP (British Petroleum)[2] world oil reserves stand at 1238 billion barrels. At present (2008) yearly world oil production stands at 31 billion barrels. There is enough oil to last 40 years if production holds constant and no new oil is found. According to BP, the Middle East has 61% of the world's oil reserves. Africa has 9.6% and the Russian Federation has 6.4%. The two countries sharing borders with the United States, Mexico and Canada, together have only 3.2%. Venezeula, a short distance away via oil tanker, has 7%

The United States possesses 2.6% of the worlds oil reserves while it consumes 24% of the world's oil production.

Although the United States has only 2.4% of the world's oil, it produces 9.2%. If the production rate could be maintained, the oil will be gone in 11 years. The figures for Canada are the same and they are worse for Mexico. The Middle East has enough oil to last 88 years at present production rates. Africa has 33 years. Clearly the United States will be increasingly dependent on oil imported from those places. It is impossible to consider oil independence in light of these numbers.

The majority of the world's oil comes from old oil fields. For example, Kuwait still supplies 3% of the world's oil from a 70 year old field. The world's largest oil field, Ghawar, a 57 year old oil field, still supplies 5% of the world's oil.� The North Sea (discovered in 1963) was exploited very quickly and is now in steep decline. Alaska's Prudhoe Bay (discovered in 1968) is now a trickle.

Oil varies greatly in quality. Some oil is so light and sweet (low in sulfur) it can be pumped directly into the fuel tank of a Diesel truck. Some oil is more like tar and it may contain sulfur. It's hard to transport and natural gas may be needed to refine it into useful fuel. The oil from Manifa, a large oil field in Iran, is an extreme example. It contains so much sulfur and vanadium it can't be refined using today's technology. The average quality of oil is declining because the best quality was produced first.

Oil varies greatly in accessibility. It is convenient to access Kuwaiti oil. Oil tankers in the Persian Gulf load from nearby Kuwaiti oil wells. It is inconvenient to access oil from the north slope of Alaska. It was necessary to build an 800 mile pipeline over mountains and permafrost to reach the oil in Prudhoe Bay. Oil drilling platforms can reach oil in mile deep water but only at great expense in money terms and in energy terms. There is oil in the arctic but oil drilling platforms will have to deal with ice and deep water to access it.

The remaining oil will be expensive and difficult to produce, refine and transport.
Link -
http://planetforlife.com/oilcrisis/oilsituation.html
=========
That puts a few things into perspective!

All the low hanging & juiciest fruit (Oil Fields) has already been picked!

As the earlier mega fields are now either Peaking or already Peaked, their is only one direction for Production and that is down!

Similar basics apply for Coal & Gas, just a little later.

PS - The red dots are the IEA projections, which clearly are not based in reality.

Peak Coal: Profit from the Peaks

Now I realize that those who aren't keen to the idea of peak oil aren't about to embrace the notion of peak coal with open arms...

"After the peak oil garbage, you want us to believe in peak coal, Ian? What gives?

According to USGS studies, we have 250 years of it left. Peak coal is a fallacy. We're not running out of coal. Stop the fear mongering."
— James T.

That 250-year supply report from the USGS was compiled in the 1970s. And, as I'm sure even James can attest to, a lot has changed since then...

Updated USGS studies find that we may only have 100 years of coal left — a startling drop from 250 years.

Plus, what James doesn't understand is that the easiest and most profitable coal reserves are mined first. New technology can help, but sooner or later, you reach the point when the energy needed to extract coal is so great that it's no longer profitable.

And at the rate that we're burning through coal, it's not surprising that we're approaching that point. About half of the electricity in the United States is generated by burning coal.

So exactly how much do we have left?

Back in 1907, the USGS first said we had three trillion tons, or enough for 5,000 years. By the 1950s, we had 500 billion tons. By 2007, we have 250 years remaining.

Nowadays, experts argue there's far less. David Rutledge from the California Institute of Technology said in 2009 that he believes we have half that amount, which would work out to 120 years' worth.

And more than likely, the actual amount is less than Rutledge's best guess.

Peak coal by 2011?
Yep, there are new studies that existing coal mines will reach peak production as early as 2011, with peak production levels cut in half shortly thereafter.

But 2020 is more likely in my opinion, based on reserve to production ratios.

Tadeuaz W. Patzek and Gregory D. Croft, authors of a recent coal study published in the scientific journal Energy, find that coal production will decline after 2011. They believe mines won't be able to reverse that trend.

"It's unlikely that future mines will reverse the trend predicted in this scenario," according to the authors.

"The most important conclusion of this paper is that peak of global coal production from existing coalfields is imminent..."

That runs counter to current reserve estimates, which those researchers call overblown and based on data that's dated or unreliable, including recent studies from the World Coal Institute and the U.S. Energy Information Administration.

The World Coal Institute finds that the use of coal will rise 60% over the next 20 years, and that coal will last us 119 years. The U.S. Energy Information Administration finds that coal consumption will grow 50% by 2035.

But Patzek doesn't believe it. He maintains the world will finish off the easy-to-reach coal of higher quality, and what remains will often be lower quality stuff that's much harder to dig up and deliver.
(Sound familiar?)

Global peak coal findings
South Africa may have already reached peak production, according to research.

The chairman of the Association for the Study of Peak Oil (ASPO), Jeremy Wakeford:

It is commonly believed that South Africa has abundant coal reserves which will last 200 years or more. But recent research [from] three scientific journals suggests that usable reserves are much smaller than previously thought, and that annual production could reach a peak and begin to decline within a decade — or might even have peaked already.

Richard Heinberg, author of Blackout, explains in his book that coal figures out of the United States are misleading because the quality of the coal is uneven.

If production continues to increase in volume, the coal will decrease in energy value.

Worse, researchers are already finding exhaustion of high quality coal in Pennsylvania... and they expect for production in West Virginia to soon fall off.

In China, reserves were estimated to contain 200 billion tons in 1930. That has since been cut to 114.5 billion tons by 1992. According to Heinberg, the problem is that China suffers from weak productivity, thanks to disastrous working conditions.

The bottom line here is we are nearing peak coal, and must find other sources of energy to replace it.
Link -
http://www.energyandcapital.com/articles/peak-coal-theory/1284

Analysis: Soaring Chinese economy at odds with climate goals

Just last year experts at the International Energy Agency proposed a target for China's carbon emissions to peak in 2020 before declining if the world were to be saved from devastating climate change. Too late now.

Figures from energy firm BP showed earlier this year that Chinese emissions will steamroll through the Paris-based IEA's 2020 peak target next year, nearly a decade early, with no sign of slowing down.

China already emits a quarter of the world's CO2, the main gas contributing to global warming, making it the world's top emitter ahead of the United States. Its emissions have more than doubled since 2000.

The IEA's suggested target for China of 8.4 billion tonnes of CO2 per year by 2020, which would then fall, is in line with most other research for a safe peak, said Michel den Elzen at the Netherlands Environmental Assessment Agency.

But the latest figures released by BP and den Elzen's agency in June show China will hit that figure in a matter of months, rather than over the next decade.

"They are hitting that level earlier than expected because of their rapid growth the last decade," den Elzen said. "For meeting a 2-degrees target (of increasing global temperatures) such a high emissions rate is definitely bad news."

Instead, its focus is on reducing "carbon intensity" -- the amount of the main greenhouse gas, carbon dioxide (CO2), emitted for each dollar of economic activity. It plans to reduce this by 40-45 percent by 2020 compared to 2005.

But even with such big efficiency gains, China's expected rapid economic growth will push its absolute volume of emissions to between 9.6 and 10.1 billion tonnes of CO2 per year by 2020, compared with 5.2 billion tonnes in 2005, according to a study from the Chinese Academy of Sciences.

Its emissions rose about 9 percent last year, faster than any other major economy.
Link -
http://www.reuters.com/article/idUSTRE68T3BM20100930?pageNumber=2
===============
China can say what it wants, but so long as it keeps growing at 9% + annually & building another Coal power station EACH WEEK, there is no way their GHG emissions will do anything, other than go thru the roof!

Btw, the IEA's suggested CO2 target for China in 2020, is nearly as large as the entire Global emissions, TODAY!

Peak Oil & The Four Futures – Tim Hudson

Part 1 of 2
http://www.youtube.com/watch?v=qoq_NQjfZu8&feature=player_embedded

Part 2 of 2
http://www.youtube.com/watch?v=XtYBonDRKu4&feature=related

What will be our future after peak oil? How will our jobs, lives, and the overall economy be impacted? In this 20 minute presentation, expert peak oil educator Tim Hudson defines the four futures after peak oil, and explains how to create a personal post peak oil profile by assigning probabilities to the four scenarios. Personal peak oil profiles are useful in both assessing one’s own current expectations for the future as well as better understanding the beliefs and expectations of others. Tim Hudson created this talk drawing from many sources including peak oil books written by Richard Heinberg.
Link -
http://www.wallstreetstocks.net/peak-oil-the-four-futures-tim-hudson-part-1-of-2-2
============
Not a patch on Lord Monckton as a presenter/speaker, but the are a few areas of interest.

I must admit that I once thought that a relatively smooth transition from fossils to renewables was very possible.
The King would offer 1000 sovereigns of gold to anybody who could make that eventuate, and another 2 for a cancer cure.

Energy in vs. energy out economics is deteriorating whilst energy demand and the global impact of fossil fuels continue to grow exponentially.
It's gonna be a hella collision.

With all of our wisdom and "know how", it seems to have already stalled.
I remember when I did a skydive and my feet were running in mid-air searching for the ground below, the instuctor said " Just about everybody does that on their first jump nomatter how well they've been trained, until they get used to nothing being there".

It's a whole new paradigm at our doorstep alright.

There was a point in time, when Alaskan Oil was going to be the great saviour of US Oil production.

http://www.eia.doe.gov/dnav/pet/hist_chart/MANFPAK2a.jpg

And, all that Alaska meant was 2,000 barrels per day at its Peak of Production, which has now dropped to just above 600 bpd.

All this compared to a US Oil Consumption of 20 Million barrels per day!

Makes you wonder what the new saviours will actually produce?

Summary of annual meeting of the Association for the Study of Peak Oil-USA (ASPO-USA)

This week I attended the meeting of the US chapter of the Association for the Study of Peak Oil and Gas (ASPO-USA) in Washington, D.C. (http://www.aspousa.org/worldoil2010/). What is interesting about this meeting is the range of backgrounds of the individuals that attend and speak. There were practicing and academic economists, persons working in the oil and gas industry, ecologists, a congressman (Roscoe Bartlett), and a Navy admiral (Lawrence Rice). With all of these backgrounds, the basic consensus of the group is that oil production is in fact peaking now as production has been within 5% of the same level of production around 83 to 85 million barrels per year over the last five years, and will begin to irreversibly decline within the next five years. Additionally, the current economic downturn and high unemployment levels are directly tied to the precipitous rise in oil price from 2003 to summer of 2008.

Simply put, the world economy, and primarily that of the US and the rest of the OECD, could not afford and is not structured to function in a world of oil price > $100/BBL. Southeast Asia is growing up in an oil economy as it peaks out, but they are adjusting from transport systems such as scooters and bicycles. Additionally, as Jeff Rubin (http://www.jeffrubinssmallerworld.com/meet-jeff/) likes to point out (and he’s a good speaker), the OPEC exporting countries are consuming oil at a faster rate than anyone because they keep their prices artificially low (Iran, Saudi Arabia, Venezuela, etc.). Thus, if the Asian economies have to go back soon to lower oil consumption, the adjustment won’t be that drastic. Additionally, the OPEC countries will just export less without imposing anything close to market price on their citizens - a necessity to maintain order. On the other hand, the OECD countries will have a hard time adjusting, and this adjustment of the economy will probably take at least a decade. Think about people in the suburbs of the USA going to carpooling, then trying to move closer in to cities or out of urban life altogether, subsequently leaving some abandoned lots in surburbia with which the remaining inhabitants can use for suburban farming. This is not such a bad outcome depending upon your world outlook. But as Jeff Rubin pointed out this past week (and in his book), this is how the world will get smaller. Oil simply gets too expensive to “lubricate” world transportation of goods and raw materials that is necessary for much of globalized trade.

The opinion of more and more “mainstream” organizations are accepting the reality of peak oil production. Widely mentioned and quoted at the conference was a report by the US military from the Joint Chiefs of Staff: the Joint Operating Environment (JOE) (http://www.jfcom.mil/newslink/storyarchive/2010/JOE2010o.pdf), and I quote a few passages here:

“Peak Oil As the figure at right shows, petroleum must continue to satisfy most of the demand for energy out to 2030. Assuming the most optimistic scenario for improved petroleum production through enhanced recovery means, the development of non-conventional oils (such as oil shales or tar sands) and new discoveries, petroleum production will be hard pressed to meet the expected future demand of 118 million barrels per day.”

“By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD.”

These statements are strong support for the oncoming peak oil scenario, but the rest of the section on energy does little to make me think that the JOE report is going too far on a limb due to the caveats and continuing discussion of possible 100 million barrel per day (MMBBL/d) production in the future. If you are a real peak oil person, then you believe we’re at the peak now near 85 MMBBL/d.

On the notion of other fossil fuels, there was a good presentation on the “true” economics and production levels from natural gas shales from Arthur Berman - who has often presented interpretations of well data and financial statements that support his view that is quite contrary to the shale gas producers. Presentations from David Rutledge and David Summers regarding much less coal production (and hence CO2 emissions from coal) than used for emissions scenarios (so-called SRES) for the various Intergovernmental Panel on Climate Change (IPCC) climate model simulations. The data are compelling, and along with the recent paper from Tad Patzek on the soon-to-peak world coal production (i.e. 2011). Granted there were audience members who greatly disagreed that we are anywhere near peak coal production, and obviously we do not precisely know the speed of development of new coal mining areas. However, I’d say the evidence is leaning toward a near term peak coal scenario given the remoteness and coal quality of some virgin coal field locations (e.g. lignite in Eastern Siberia).[/b]Link -
http://environmentalresearchweb.org/blog/2010/10/summary-of-annual-meeting-of-t.html
=============

The above graph shows an obvious nessecity to invade other nations for oil.

Where does the necessity for Iraqi freedom come in?

Amadd wrote on Oct 12^th, 2010 at 10:20am:

The above graph shows an obvious nessecity to invade other nations for oil. Where does the necessity for Iraqi freedom come in?

Can I suggest that places Iraqi freedom just behind the US "desire/want/need" for Oil?

Can I also suggest that the necessity for Iraqi freedom, is of slightly less importance than the freedom of citizens in Iran, Venezuela, the UAE, Saudi Arabia & a few countries!

Peak Oil Experts Fear Big New U.S. Job Losses, Economic Downturn

Former CIBC chief economist Jeff Rubin predicted oil production declines ranging soon from 2 to 6% annually. This, he said, will double or triple oil prices on the market, creating economic slow-downs and job losses beyond those of the recent recession. His Toronto Globe and Mail column last week on this was entitled, “We have run out of oil we can afford to burn‎.”

Regarding issues more specific to oil production, several speakers cited a U.S. Department of Defense study that predicts worldwide peak oil in 2015.

Thus, the only federal politician on the speaker program was U.S. Rep. Roscoe Bartlett of a Maryland, the second-ranking Republican on the House Armed Services Committee.  A member also of the congressional Peak Oil Caucus, Dr. Bartlett is a former professor and scientist.

“Just about everyone understands peak oil now, from major oil companies to academics to the environmental community,” Baldauf said. “It’s an endowment of energy that has taken hundreds of millions of years to accumulate and we’ve ripped through about half of it in 150 years.”

Some predicted gas lines similar to those in the 1970s after OPEC embargoes but of much longer duration, along with further U.S. job losses as companies reduced production. Predictions for the rest of the world included warnings that emerging economies in China and India would use their funding for a larger share of the available fuel, thereby ramping up gas-station prices in the U.S. at least to current world levels of $7 a gallon and higher, and that have-not Third World nations would face desperate food-production and other calamities.
Link -
http://ctwatchdog.com/2010/10/12/peak-oil-experts-fear-big-new-u-s-job-losses-economic-downturn
============
It is of interest that the only Politician attending this ASPO Conference was a Republican!

Republicans as a rule, do not believe in things such as Peak Oil & Climate Change, but Bartlett is a former Professor & Scientist, so perhaps he understands the issues a little more than the standard Conservative Republican.  

Peak Oil Causes Global Recession, Depression

Clips featuring Colin Campbell, Richard Heinberg, Julian Darley, etc. Oil is used for everything. When we reach maximum production, that is a very significant point. Global oil production will peak, and everything will change. Less and less oil fields are being discovered. New oil is found in smaller pockets. 4/5 of oil being consumed was found before 1970. Norway, Britain UK, and Norway have all passed their nation’s peak. The world consumes three times as much oil as we are finding. 53 countries are producing less oil now than in the past. We expend about 10 Calories of fossil fuel energy for every Calorie of food energy produced. This is unsustainable. Global hunger and famine could be a result of peak oil. Economic contraction will most likely result from peak oil. A perception of a contraction economy will itself cause a contraction. This could cause the second great depression.

http://www.youtube.com/watch?v=PYmnriCJ18I&feature=player_embedded

Link -
http://www.health71.com/20101012/peak-oil-causes-global-recession-depression/
=============
The peception that Peak Oil is here, does not require Public acceptance to cause a dramatic Economic Contraction, it only requires acceptance of a small percentage at the top of the Establishment, which would in turn cause a stampede of the herd!

Quote:

The peception that Peak Oil is here, does not require Public acceptance to cause a dramatic Economic Contraction, it only requires acceptance of a small percentage at the top of the Establishment, which would in turn cause a stampede of the herd!

Yeah, that's how it will happen I'm sure.
I was having a discussion about this topic at a BBQ the other week, and not surprisingly, the general concensus was that there is more oil around than they're letting on and if it's such a problem, they'd be doing something about it.
Nothing will change at the ground level. I haven't changed anything, I don't really know what I can do to change anything besides opting for solar power, which I would've done regardless.

US Association For The Study Of Peak Oil (US-ASPO) Conference Thoughts: Listen To These Folks

Chris Martenson -
what a great presenter! Great popularizer, but still very empirical. Fantastic at boiling it down to the key convincing information and seeing the big pictures.
Takeway: Find a way to follow this guy's works. He claims there is a relationship between the economy and energy and that energy is the key input to the economy. He claims peak coal in 2030. Integrates fiat, fractional reserve money system where money is loaned into existence with Peak Oil. The money system requires continued GDP growth which it has been getting from cheap oil-based energy (whose consumption has been growing at roughly an exponential rate). He claims that bad and unexpected things are bound to happen as oil-based energy cannot continue to grow and thus the fiat money system can no longer grow. The money system will have to change. The money system is a complex non-linear system and is inherently unpredictable. Martenson answers the question: "How did we get two bubbles in one decade: Internet and Housing" when ordinarily they come at least a generation apart" with the answer: "They are really one big credit-expansion bubble which hasn't blown up yet". Financial markets do not change gradually and some kind of fundamental change is about to happen.
Takeway: I've got to get more liquid so that I can change course when the big changes hit.


Dr. Robert Hirsch, Senior Energy Advisor, MISI -
Seems to have the best overall view (and makes the best overall case) that Peak Oil is significant and what its implications are.
Takeway: Hisch makes a strong empirical case that oil consumption correlates with world GDP 1 to 1 (1% GDP growth correlates with 1% oil consumption growth) and that with Peak Oil we might very well be looking at a 4% fall in oil (and GDP) for at least a decade (that's a more than 40% drop in world GDP!!!).
Link -
http://www.worldofwallstreet.us/2010/10/us-assocation-for-the-study-of-peak-oil-us-aspo-conference-thoughts-part-1.html

I don't think that the importance of the Import/Own Production figures can be overlooked.
In the short space of 40 years, the US own Production Declined from 9.5 Billion bpd to 5 Billion bpd, whilst Imports went from 1 Billion bpd to 10 Billion bpd.
That's a combined turnaround of 13.5 Billion bpd, in 40 years and that includes every President saying that the US must wean itself off of imported Oil, which includes President Carters dire words.

http://upload.wikimedia.org/wikipedia/commons/c/c5/US_Oil_Production_and_Imports_1920_to_2005.png

When will Peak Oil arrive? How will it effect us? and can Green Energy save us?

http://www.youtube.com/watch?v=QMe3-D8-jhc&feature=player_embedded#!

http://i289.photobucket.com/albums/ll225/Fmagyar/WileysOlduvai.jpg

I don't care, I'm gettin' solar panels (all controlled by electricity companies of course) and I'll be able to produce enough power for my electric scooter to ride to the milk bar and back once a week, if I don't need the lights on at night that is  ;D

Too bad my place of work won't fair so well. They probably won't pay me if they can't operate, but jeez I'm glad we have the dole to save us all  :D

Peak Oil — Where Do We Stand?

On October 14, 2010, Aaron Task interviewed Chris Martenson at Yahoo's Tech Ticker (video below). Martenson, fresh off of attending ASPO-USA's annual peak oil conference, told Aaron that "conventional oil" peaked "around 2005." Aaron had no way to assess this statement, so he ran with it. It was then that I decided to write this post in a futile attempt to get everybody on the same page about future oil production.

IMHO, anybody with a vested interest in the world's future oil supply—that would be almost everybody on Earth—should read this post. Realistically, my expectations are somewhat lower

First things first. Conventional oil refers to crude oil plus lease condensate according to the Energy Information Agency (EIA). That's as good a definition as any, and I will use EIA data today.  All liquids refers to conventional oil taken together with natural gas liquids, refinery gains and biofuels, but today I will stick with conventional oil. In July, 2010 the world produced 73.691 million barrels per day (b/d) of conventional oil. The all-liquids total for that month was 86.474 million b/d. You can see that conventional oil by far makes up the largest share of the total liquids supply. When I refer to just "oil" in the text below, I mean conventional oil as defined by the EIA.

Chris' claim that conventional oil peaked around 2005 is false. If anything, conventional oil production peaked in July, 2008 or the first half of 2008 (see the graph and caption below).

http://peakwatch.typepad.com/.a/6a00d83452403c69e20133f560fed3970b-800wi

The EIA estimates that OPEC's spare (unused) capacity is about 5 million b/d right now in 2010 (and this doesn't change in 2011). Any increase in demand requires that new supply be taken from this capacity. The main problem is that Saudi Arabia has almost all the spare capacity!

http://peakwatch.typepad.com/.a/6a00d83452403c69e20133f56137ba970b-800wi

And then there is the trust issue. Clearly, the Saudis have exaggerated the size of their recoverable reserves as I demonstrated in OPEC Will Never Run Out Of Oil. Can we trust their spare capacity numbers?

Where do we stand? Peak oil does not mean the end of the world as we know it in the medium-term—the next 5 years or so depending on how the global economy fares—but in the longer term things don't look so good. Some say Iraq will increase its output by several million barrels per day in the next decade, but that's a very risky proposition.

Our utter dependence on the Kingdom of Saudi Arabia to meet our future supply needs poses a significant threat to the global economy. Moreover, it's a disgrace that the world has allowed such dangerous risks to pile up without adequate preparation for a future it was not hard to see coming.

Here's the Martenson video.
(video is available on link)

http://www.declineoftheempire.com/2010/10/peak-oil-where-do-we-stand.html
=============
A couple of observations -
1) I am of the opinion that Oil Production did "effectively" Peak in 2005, as it has since failed to keep up with either Demand & Population Growth!

2) There are strong suggestions that the Saudi spare capacity is unlikely, for any more than a limited duration, particularly given the reported declines in the Ghawar fields (the worlds biggest), the Saudi announcement that they will start offshore exploration and the Saudi announcement that they will go into local Nuclear power.

If we are trusting in the Saudi's word, then that's our fault. We'll get, or not get, what we deserve.

If we are trusting in our governments to tell us when oil has run out, then that's our fault.

Amadd wrote on Oct 29^th, 2010 at 10:43am:

If we are trusting in the Saudi's word, then that's our fault. We'll get, or not get, what we deserve. If we are trusting in our governments to tell us when oil has run out, then that's our fault.

Agreed!

The peak oil debate is over

May I start with a bromide: a resource which is finite is not inexhaustible. If you think that over, it should not be a revelation. That was a bromide… some people think a keynote should never rise above a bromide….

Some five years ago in Italy I concluded a talk by saying that like the inhabitants of Pompeii, who ignored the neighboring volcano, Vesuvius, until it detonated, the world ignores the possibility of peak oil at its peril.

Two years ago in addressing ASPO in Cork, Ireland, I argued that the peakists had won the intellectual argument, except for some minor details about precise timing, but that by and large everyone recognized that there were limits on our capacity to increase the production of crude oil as we have steadily since World War Two.

[I also argued] that peakists were no longer a beleaguered minority, that they had won, and that consequently they should be gracious in victory.

There’s an old spiritual that is relevant here. The walls of those who doubted the peak seemed to be impregnable. Nonetheless, you marched around the walls seven times and then blew the trumpets and the walls of Jericho came tumbling down.

But acceptance by knowledgeable people is not enough. The political order should respond. Nonetheless, our willingness, let alone our ability, to do anything serious about the impending inability to increase oil output is still a long way off.

The political order responds to what the public believes today, not to what it may come to believe tomorrow. It is also resistant to any action that inflicts pain or sacrifice on those who vote. The payoff in politics comes from reassurance, perhaps precluded by a rhetorical challenge.

Still, the challenge is clear in both logic and in the evidence. Let me start briefly with the logic,

If something cannot be sustained, it will eventually not be sustained… ultimately it will shrink.

Secondly, you cannot produce oil unless you first discover it (a contribution by Colin Campbell).

Third, a resource that is finite cannot continually have its production increased.

What is the evidence?

First, we remain heavily dependent on super-giant and giant oilfields discovered in the 50s and 60s of the last century… I might add, of the last millennium. Only rarely in recent decades have discoveries equaled production. Mostly, it’s been one barrel discovered for every three barrels produced.

Second, old super-giants like Burgan in Kuwait and [Cantarell] in Mexico have gone into decline earlier than had been anticipated… and going into decline have been Alaska, the North Sea, western Siberia and the like.

Third, while it is not yet “Twilight in the Desert” (as you may have read) still we are well into the afternoon, even in Saudi Arabia. Even the Ghawar oilfield is increasingly hard to sustain.

Fourth, in 2004 we experienced our first demand-driven price spike, as opposed to the previous price spikes driven by supply interruptions. We still operate at about the level of production capacity of 2004.

Next, given projected decline curves running from 4 to 6 percent, and the projected increase in demand during the next quarter century, we shall require the new capacity equivalence of five Saudi Arabias.

Note that it is conventional oil: that is all that Hubbert talked about. Somewhat disingenuously, the debate has been turned on him by talking about fuel liquids in general, throwing in tar sands, heavy oil, coal liquids, oil shale and so on.

But clearly, large conventional oil production is increasingly no longer part of the future unless there is a technological breakthrough, which Mr. Gilbert talked about just a few moments ago, raising the ultimate recovery rate from existing fields, which at this moment we cannot expect.

Of course, there are uncertainties which make timing predictions with regard to the peak risky. Iraq, which has been held back for a variety of reasons, may come along as one of those five new needed Saudi Arabias.

Offshore Brazil and offshore oil elsewhere are promising. Shale gas, which is apparently coming in abundance (but is not, of course, oil) may somewhat alleviate the pressures on liquid fuels.

But in general we must expect to get along without what has been our critical energy source in expanding the world’s economy for more than half a century.

Can the political order face up to the challenge? There is no reason for optimism.

We are likely to see pseudo-solutions, misleading alternatives and sheer sloganeering: “energy independence,” “getting off foreign oil” and the like. All of that sheer sloganeering we have seen to this point.

The political order (which abhors political risk) tends to rely on the Biblical prescription, “Sufficient unto the day is the evil thereof.”
Link -
http://energybulletin.net/stories/2010-10-30/peak-oil-debate-over
==================
For those who may not be aware, Dr. James Schlesinger served as Chairman of the Atomic Energy Commission (1971-73), Secretary of Defense (1973-75), Director of the CIA and was the first Secretary of Energy (1977-79), in the USA. His experience therefore, comes at the highest relevant levels.

Whilst he is not one of the worlds great speakers, you would think given his background that he comes from a position of insider knowledge, that some of his points are, indeed, salient!

US Coal to Gasoline Plant Will be the Largest in the World

TransGas Development Systems, LLC announced an agreement with SK Engineering & Construction Co., Ltd (SKE&C) leading to engineering, procurement and construction of its first US coal-to-gasoline plant—Adams Fork Energy—to be located in Mingo County, West Virginia. _GCC

US coal deposits contain 12 X as much energy as all known oil in Saudi Arabia. The gasification process to be used in the new West Virginia CTL plant could cleanly utilise coals of any grade -- including the cheapest and dirtiest coal. By moving US coal reserves into the liquid fuels arena, the prospects for peak oil continue to remain slight -- unless the Obama administration decides to shut down all coal, even clean coal projects. Obama has promised to bankrupt coal companies, and all his other policies are consistent with an "energy starvation" approach to shutting down US industrial production. Time will tell.

The Adams Fork Energy project will convert regional coal into premium-grade gasoline, producing 18,000 barrels per day (756,000 gallons US, 2.86 million liters). When fully developed, the Adams Fork project will be the largest coal-to-gasoline project in the world, according to Adam Victor, President and CEO of TransGas Development Systems.

The project team has been issued a permit to construct by the West Virginia Department of Environmental Protection and plans to begin work on the site during the second quarter of 2011.

The plant will have several process components. First, coal is gasified to produce synthesis gas, using Uhde PRENFLO PDQ gasifiers. The synthesis gas will then be cleaned to remove impurities, turning most into marketable byproducts. Next, the synthesis gas will be converted into methanol, which in turn will be converted into gasoline utilizing ExxonMobil Research and Engineering Company’s (EMRE) MTG process. During the operation of the integrated facility, air emissions are expected to be so low that it will qualify as a minor source under US law.
Link -
http://oilprice.com/Energy/Energy-General/US-Coal-to-Gasoline-Plant-Will-be-the-Largest-in-the-World.html
===============
A few observations -
1) The current US Oil consumption is around 20 Million bpd (Barrels per Day).
2) Large scale Coal to Gas plants, even one, would have an immediate upwards impact on Coal & Power pricing.
3) If sufficient Coal to Gas plants were brought online, to make some realistic impact, then the Coal Peak could be brought forward by decades.
4) There is no such thing as a clean Coal to Gas process!

The coming liquid fuel crisis

We face a liquid fuel crisis in two to five years. That was the stark message from an international conference on peak oil in Washington DC that I attended last month.

It will be far worse than the 1973 and 1979 oil shocks that induced panic, disorientation and insecurity. Back then stock market declines followed big hikes in fuel prices. This time we can expect ever-rising fuel prices accompanied by annually deepening recession, increasing inflation and unemployment, and a decline in world trade.

Last time, the crises resolved themselves as oil production and trade were resumed. This time, there will not be enough oil to resume business as usual. Despite a decrease in demand from OECD countries, overall demand continues to rise as global population climbs inexorably from 6.8 towards 9.2 billion and newly emerging economies expect their share of the global resource pie. Come 2015, however, we can anticipate a significant increase in the price of oil as global production starts its inevitable decline. Production of regular or conventional oil has already peaked while supplies of unconventional oil - heavy, deepwater and Arctic oil - will peak within a few years.

"We're drillin' three miles down in the Gulf of Mexico because of peak oil," drawled Jim Baldauf, former Texan oilman and organiser of the conference. "We're scrapin' the bottom of the barrel, so to speak. We have to drill twice as deep at twice the cost to get half what we're used to."

The recent Deepwater Horizon spill in the Gulf was a rude awakening to those who thought drilling for unconventional oil was going to be easy. And it's not cheap to produce oil from unconventional sources - the price needs to be $100 a barrel to make it worthwhile. But as Chris Skrebowski , a leading expert on global oil supply, asked: "Can we afford this price? Where is the price that allows everyone to be employed? Europe already has 10 per cent unemployment."

Like it or not, $100 a barrel is what we can expect, or worse. Another leading oil analyst Jeff Rubin laid it on the line: "We can expect triple-digit oil next year."

A peak in oil production does not mean the end of oil, nor indeed of energy supplies. But oil is the energy source that all others are measured against. The coming oil crisis is largely a crisis in transportation since oil products power 95 per cent of land transport. Skrebowski felt that only when we take oil out of transport could we hope to see a solution. Otherwise, as Rubin notes: "We have to get off the road".

Anthony Perl, author of Transport Revolutions, said we will see a major redesign of our transport within 10 years. In order to survive this "mother of all energy crises", we need to fast track mobility systems that can perform without oil. The most promising developments are electric motors replacing the internal combustion engine; greater use of rail and water replacing road and air; and greater use of collectively managed travel.

A lot of solutions are already out there, according to Perl, for example, high speed rail (HSR) for up to 500 miles (800 kms) though this will soon increase to 1000 miles (1600kms). China is currently building 12,000 miles of HSR that will double the world's capacity and in turn reduce the price by 50per cent. "Sky sail" technology can reduce a ship's oil use by 50-80 per cent. Electric railways are already a proven technology - the Trans-Siberian is a case in point.

Planes and trucks, however, which cannot run at scale without oil will see the most radical changes. New priorities, new skills and new priorities are needed. We need a Transportation Redevelopment Agency, according to Perl, that will anticipate future technologies and modes of transport; develop strategies for deploying those modes; and determine how to fund them.

What then is the future of air transport? Charles Schlumberger, principal air transport specialist at the World Bank, noted that oil is already the biggest cost for airlines. Nevertheless, the air industry is looking at significant fleet replacement, especially in the Asia-Pacific. Air transport has been a catalyst for world economic development and is a crucial part of trade, globalization and foreign investment. Thus if air transport shrinks because of oil prices, it will have a significant impact and accelerate recession.

Australia imports 40 per cent of its oil. We are not immune from the coming oil crunch. Perhaps it was apocryphal, but the story goes that Opposition leader Tony Abbott was overheard saying to an adviser at the beginning of the year: "Peak Oil? Do we know about Peak Oil?"
Let's hope our new Prime Minister does know and acts accordingly.

Link -
http://www.onlineopinion.com.au/view.asp?article=11171
================
There is always hope, but I wouldn't bank on either of the major party's, they both blocked a parliamentry enquiry!

Nicole “Stoneleigh” Foss: “Expect Next Phase Of Market Crash And A Large One For That Matter…”

Nicole Foss alias Stoneleigh – the co-editor-in-chief of the blog The Automatic Earth, together with Ilargi – is one of a few „big picture“ persons and it was a delightful experience to meet her at ASPO peak oil conference. For her, business-as-usual is not an option and current form of capitalism is a Ponzi scheme. She is clear about peak oil (it is here and renewables will not come to the rescue!), but she is even much more clear about financial markets – they will make everything worse. The next phase of debt-deflation and final bubble bursting will hinder future investments in energy sector. In the short term oil prices will go down, not up, as probably most of peak oil energy analysts expect. Unless we are in debt, nothing is solved, and she says that Paul Krugman is a monetarist whose recommendations will make nothing better (except maybe prolonging the life of banks – which is not good either). One planet for her would be not enough, but she hopes that that what she does justifies this. Decide for yourselves.

Alexander Ac: Here at ASPO-USA conference in Washington everybody seems to understand implications of energy scarcity. What would be your message to a lay person? What are the main implications of peak oil for the daily life?

Stoneleigh: We are going to have to get used to a much lower energy lifestyle. Energy has been cheap for a very long time, so we have developed a structural dependency on it. Energy is not going to be cheap for much longer though, and that means many of the things we take for granted will no longer be affordable. A much larger proportion of our income will have to go to energy costs, and that will leave very much less for everything else. Our material standard of living will fall, and we will have to go back to performing many functions with human energy rather than fossil fuel energy.

The wealthy may still have access to fossil fuels, but if most people do not, then they will not be able to live a modern life. A life fuelled by human energy alone is one where people have to spend an enormous amount of time performing everyday tasks, and will not have time to undertake much of a role in the wider economy. Some family members will have to stay at home and devote all their time to household tasks that will take far longer than we are used to.

AA: When did you first see the term “peak oil” and when did you realize it might be a problem?

Stoneleigh: I used to work at the Oxford Institute for Energy Studies, which is primarily an oil and gas institute, back in the 1990s. I worked on electricity, but most of my colleagues were involved in fossil fuels. There were many discussions about the upstream, meaning where oil is coming from, and that fact that it is finite. It was clear that supply would be a problem at some point, although when I was there, oil prices were very low ($10/barrel), so no one thought it would be an imminent problem. I began to look into energy returned on energy invested (net energy) and realized the problem would be much closer at hand in net energy terms, and that we would see major declines in my lifetime.

AA: Why is that most of the economists do not recognize the role of energy in economy?

Stoneleigh: Energy is invisible, and therefore taken for granted. Most economists do not recognize resource limits at all, partly because they do not understand the laws of thermodynamics. They live in a world of substitutions when something becomes scarce, and do not understand that energy is the master resource for which there are no substitutes.

Economists typically say that there are no limits, only price. If something is scarce, it will cost more, but we will never run out. I think this misses the tremendous impact on a society dependent not only on energy, but on cheap energy. All our modern infrastructure requires a steady supply of affordable energy to maintain it.

Nicole “Stoneleigh” Foss: “Expect Next Phase Of Market Crash And A Large One For That Matter…” (Cont)

AA: What about alternatives or nuclear energy? People often say that if oil gets more expensive, alternatives are to be deployed. Is this flawed logic?

Stoneleigh: Alternatives to oil typically have a much lower energy returned on energy invested (EROEI), and are expensive, at a time when money will be very scarce. They also depend on the availability of cheap oil to produce them. These problems mean that it will be very difficult to provide anything like the energy we get from fossil fuels. Alternatives can help in small-scale niche applications, but they cannot solve the problem of running a society, especially an energy-intensive industrial society.

Alternatives generally do not scale up, for reasons of net energy, money and time. We do not even have the capacity to produce things like solar panels on a massive scale, and we have neither the time nor the money to build that capacity before our oil supplies decline, let alone build all the panels we would need as well. We have also allowed our grid infrastructure to age, to the point where much of it will need to be replaced.

As most alternatives produce electricity, we are very dependent on the grid. Unfortunately there is a large mismatch between renewable energy resource intensity, energy demand and grid capacity. That means far more grid investment would be required. We would also have t covert energy demand away from liquid fuels to electricity, and that will take a huge amount of time and money at a time when both will be in very short supply.

AA: Financial system seems to complicate the whole issue? In which way?

Stoneleigh: Financial crisis will make everything very much harder. We will have very little money in a deflationary world, and people will be highly risk averse. No one (individuals, companies and governments) will be wanting to spend at a time when future earnings are so uncertain, which will make it almost impossible to invest in the infrastructure changes we need to make in order to address energy crisis. With not enough to go around, people are unfortunately likely to waste efforts and resources fighting over what there is, rather than pooling scarce resources for the good of all. Financial crisis leads to social instability at a time when we most need to keep our heads and work together.

AA: Do you expect crash in stock markets? How serious it will be and what will be the main consequences?

Stoneleigh: Yes, I do expect a crash, and a very large one at that. I expect the larger trend to be down for several years. A lot of investments will fall a very long way in value, and where these investments have been used as collateral for borrowing, there will be knock-on consequences. We will see margin calls as values decline, and outstanding debt is now too high compared to the value of the asset, so that additional debt repayments have to be made. We are going to see a very large number of bankruptcies and many debt defaults. This will be a factor in crashing the money supply, leaving too little lubricant to run the engine of the economy.

AA: Debt seems to be large part of the problem. How large?

Stoneleigh: A massive debt bubble is the at the heart of the problem. It has been building for decades and is now far larger than any previous debt bubble in human history. Humanity periodically rediscovers leverage on a grand scale, after the lessons of the previous episode have mostly passed out of living memory. Expansions of credit and debt create the appearance of great wealth, but it is illusory (virtual). The obligations created are real though. People have expectations of being repaid, and they will not be, which will set up a grab for the underlying real wealth (collateral) which is nowhere near enough to go around. This is deflation, and its effects are very significant. Money will be scarce for a very long time.

AA: Still, some people say we should leave the solution of peak oil to the free market…?

Stoneleigh: The free market has a very short time horizon, while energy investments are long-term. In fact the time horizon of the free market is likely to shrink in the times of high risk that we are facing. No one will be making investments where there is no economic visibility, so returns are completely uncertain. Financing projects will be almost impossible. We are going to have to depend on public financing, but governments will have very little money and many more calls on their resources, so they will not be in a position to make many investments either.

Nicole “Stoneleigh” Foss: “Expect Next Phase Of Market Crash And A Large One For That Matter…” (Cont)

AA: What does Paul Krugman (or others) get wrong? Should we listen to him (and spend more)?

Stoneleigh: No, we should not listen. Spending more will only dig us into an even deeper hole, and will not prevent the deflation that is coming. We need to become economically responsible and save. Of course this will accelerate the decline in economic activity, but this needs to happen. If we keep making the problem worse by spending, we will only have to face an even larger set of consequences later. It is better to let the house of cards fall and begin rebuilding once the toxic debt has been defaulted upon. The sooner that happens, the sooner we can begin to rebuild the trust and social cohesion that facilitate investments in the public good.

Mr Krugman is a monetarist, and does not understand the critical role of debt in setting up a deflationary collapse. Monetarists treat economies as machines governed by the laws of physics, rather than as formed of people. Machines can be controlled in order to produce predictable outcomes in ways that people cannot. Any human social construct will depend on the mechanisms of human social behaviour, and this is outside the monetarist model.

AA: We have created the most complex and interconnected civilization that ever existed on Earth. Does it make us more fragile or more vulnerable to resource exhaustion?

Stoneleigh: That makes us much more vulnerable, because we have so many more structural dependencies. The rate of change in both energy and finance is likely to be rapid enough that adaptation will be very difficult. We will not have time to adjust gradually, which means we face a significant dislocation.

Financial crisis is going to make resource depletion much harder to address, because we are not going to have the money to replace highly energy-dependent infrastructure. Doing so would be staggeringly expensive and would take a very long time even if we did have the money. As it is, we will be forced to conserve both money and resources by going without.

Socioeconomic complexity is very dependent on energy subsidy. With less energy, we will have to have a simpler society. Getting from here to there will be very painful though.

AA: Politics is another part of the problem. What should an honest politician do in an era of general decline? Should politicians acknowledge peak oil or try to “solve” it quietly.

Stoneleigh: That is a difficult question. Politicians never like to alarm people for fear of creating the very situations they are trying to avoid. Personally I think they should acknowledge the problem, as Jimmy Carter tried to do in the 1970s. That is a thankless task though. People do not like to see their politicians express challenging messages, especially messages with implications for their material standard of living. Hard times have very negative effects on the reputations of politicians, whatever they do or do not do, as people tend to blame their leaders for what happens to them, regardless of fault.

Ultimately, there can be no progress towards addressing the problem through the political process without public acceptance of the need to do so. However, events are going to overtake the political process anyway, and societies will be forced to change.

AA: How many politicians are ready to talk about peak oil?

Stoneleigh: I do not know of any who are prepared to talk about it. I do know quite a few are aware of it. Matt Simmons spent a lot of time explaining it to the previous administration in the US, who were oil men anyway.

The previous national liberal party leader in Canada, Stephane Dion, had read much of the literature on peak oil, but never addressed it during his tenure.

The military in several countries has been producing peak oil reports, and they would certainly have provided those to their political leadership before making them public. Still, politicians say nothing.

AA: Which countries in general are more adapted to post carbon future?

Stoneleigh: Countries with fewer structural dependencies on cheap energy should find adjustment much less painful. In other words, countries which have been poorer and less able to transition to what people typically consider a fully modern lifestyle over the last few decades may well find the future less difficult than wealthier countries. The more entrenched the dependencies, the more difficult the transition to a low-energy future will be.

Also, countries or regions with climates where there is less need for heating and cooling, and a longer growing season, should find a lower energy future easier to manage. An established tradition of family-scale farms should be a significant bonus, since the agri-business model is very vulnerable to both energy and financial shocks. Well developed renewable energy infrastructure should help, as should relatively localized economies which are less ‘plugged-in’ to globalization.

Ironically, the most economically efficient societies have the least ability to adapt, as buffers have often been trimmed to the bone already on cost grounds. That leaves them much less resilient than they would once have been. Jim Kunstler calls efficiency “the straightest path to the hell”, and it is this brittleness that he is referring to.

Nicole “Stoneleigh” Foss: “Expect Next Phase Of Market Crash And A Large One For That Matter…” (Cont)

AA: Do You think that the more complex view of the world one has, the more pessimistic outcome?

Stoneleigh: Yes, because it becomes obvious that simplistic one-dimensional solutions will not work. We need to understand the world in all its complexity in order to understand what we need to do and why, but in doing so we realize the extent of our predicament.

AA: What will be the key economic trends in (eastern) Europe in the coming months?

Stoneleigh: All of the European periphery is going to face very significant difficulties. There is far too much debt, both public and private, and the austerity measures that will have to be imposed at some point in order to stay in the eurozone could well be political suicide for any domestic politician. I think this could break up the eurozone and cause a great deal of anger.

I think the speculators will have a field day with sovereign debt default risk in Europe, and that will greatly increase the cost of borrowing for many European countries. I think the effects will be very uneven, which sadly will sharpen regional disparities and inflame regional tensions further.

I think European unity has been a noble goal and I do not like to see it under threat, but unfortunately I think that is a very real possibility.

AA: How does your optimism or pessimism scale to the rest of the peak oil and financial community?

Stoneleigh: I am more pessimistic than most, because I am addressing a broader scope of difficulties than most. Few commentators really cover even both energy and finance, and fewer still discuss geopolitics, collective human behaviour, ecological carrying capacity, population, climate change, pollution, resilience etc. Each field represents challenges for all the others.

AA: Are you more or less pessimistic about the future than 5 years ago?

Stoneleigh: My position has not changed significantly. I have been aware of where we are heading for many more than five years.

AA: If everybody on Earth had your lifestyle, would one planet be enough?

Stoneleigh: No. I live in a highly industrialized country (Canada). Any kind of life that would be considered remotely normal in such a place is not sustainable. Even a deliberate attempt to simplify as much as possible in one’s personal life does not compensate for the over-consumption of the public and corporate spheres that are part of life here, whether one wants to be associated with them or not.

Also, I travel a great deal, and carry with me a number of electronic devices which allow me to function while on the road. This has a significant resource cost. I hope what I am doing justifies this.
Link -
http://peakoil.com/bussiness/nicole-stoneleigh-foss-expect-next-phase-of-market-crash-and-a-large-one-for-that-matter%E2%80%A6/
================
Nicole appears to have a reasonable handle on many of the factors that are in play, but there are Demographic issues of Aging & Declining Global Population Growth that need to also be included!

I partially agree with Nicole regards Oil Pricing, but I believe it is likely to spike significantly upward first, then fall back significantly again, as the real Economy falls into a massive heap!

That said, at some point Oil Pricing will increase dramatically & stay there and Oil Scarcity will then come into play!

Meanwhile, the Establishment, the Economists & the Politicians will allow it to happen, as will we!  

http://farm5.static.flickr.com/4014/5162183182_bef3f1649f_z.jpg

Why would anyone trust government/s &/or their public institutions?

Just look at the above EIA "Guesstihopes" of future Liquid fuels. Their rubbery figures have steadily been lowered each year!

Peak coal in China

On November 17 the Wall Street Journal published an article discussing China and “Peak Coal” (China’s Coal Crisis):

“The idea of peak oil—the point at which global production reaches its maximum—has fixated the energy industry for years. Now, China is grappling with a new worry: peak coal. State-run media reported that Beijing is considering capping domestic coal output in the 2011-2015 period, partly because officials worry miners are running down reserves too quickly to meet the needs of a rapidly expanding economy.”

Conclusions concerning Chinese coal production:
Coal is very vital to China and decreasing exports, together with increasing import clearly show that they have a supply problem. But whether this is due to resource problems, production problems or infrastructure bottlenecks is hard to say yet. A more comprehensive study of the Chinese coal assets needs to be done.

The forecast estimates that Chinese coal production will reach a peak in 2020, perhaps even earlier if the reserves are backdated to 1992, when the last actual update took place, and corrected for cumulative production. So China might be very close to its maximum coal production unless the reserves are larger than reported or a significant amount of resources can be transformed into produced volumes in the near future. Unless something dramatic happens to the Chinese reserves the future production will very soon end up under reserve constraints.

Clearly there are problems with the Chinese coal market and future production but this needs to be investigated more in detail than is done here.
http://www.fysast.uu.se/ges/files/images/Coal_production_in_China.preview.jpg

Link -
http://www.energybulletin.net/stories/2010-11-17/peak-coal-china
============
Chinese growth over the last 20 years has been largely fueled by a growth in Coal Power Plants, which has in turn been fueled by a massive internal growth in Coal Production AND by imported Coal from the likes of Australia.

This growth has seen one new Coal Power plant per week, for some years, but that sort of growth can not continue and the Chinese will shortly be obliged by the laws of Supply & Demand to reign in their Growth.

If they (the Chinese), were smart (smarter than us), then they would USE UP as much Foreign (OZ & everywhere else, outside of China) Coal as they can, whilst restraining their own internal Production of Coal for future years.

Based on past & current evidence, it would take little persuasion (on behalf of the Chinese), to have Australia & Australian Coal producers fall over themselves, in a rush to supply China with Coal, at the cost of Australia quickly depleting its own supplies of Coal for future use!

Quote:

If they (the Chinese), were smart (smarter than us), then they would USE UP as much Foreign (OZ & everywhere else, outside of China) Coal as they can, whilst restraining their own internal Production of Coal for future years.

..and if we were smart, we'd move towards renewables as far as possible and save our coal for a better price later on.

Amadd wrote on Nov 19^th, 2010 at 4:00pm:

Quote: If they (the Chinese), were smart (smarter than us), then they would USE UP as much Foreign (OZ & everywhere else, outside of China) Coal as they can, whilst restraining their own internal Production of Coal for future years. ..and if we were smart, we'd move towards renewables as far as possible and save our coal for a better price later on.

Agreed!

However, the word agreed goes a long way towards explaining the reasons why we are not likely to take that smart approach.

And, primary amongst those reasons is -
A) GREED!

Btw, I would think that our primary use for our essential resources, at present, is to save them for our own future use. 

Quote:

Agreed! However, the word agreed goes a long way towards explaining the reasons why we are not likely to take that smart approach. And, primary amongst those reasons is - A) GREED! Btw, I would think that our primary use for our essential resources, at present, is to save them for our own future use.

Agreed too.

That may be more likely than a government investing in the future only for a future government to sell it off and put tickets on themselves as being economic masters.

Unfortunately, our governments have less than 3yrs to prove themselves. It's up to us to demand with our ballot papers what we expect from them.
I think you already mentioned that one.

The Chinese Coal Monster - running out of puff

In July of this year I wrote a story called The Chinese Coal Monster drawing attention to the fact that China would soon account for 50% of global coal production and consumption. 10% per annum growth in Chinese coal is clearly unsustainable and I posed the question "How long can this go on?"

An article published in the Wall Street Journal earlier this week called China's Coal Crisis suggests the answer to this question is not much longer.

Let's begin with a few excerpts from the WSJ article:

State-run media reported that Beijing is considering capping domestic coal output in the 2011-2015 period, partly because officials worry miners are running down reserves too quickly to meet the needs of a rapidly expanding economy.

Imposing a cap would be significant as China's mining sector is already finding it hard to keep up with domestic coal demand, which has grown around 10% annually over the past decade.

So the cap has been set because the mining industry is finding it increasingly difficult to maintain and grow production.

In the three years to September 2010, Chinese companies spent $20.96 billion on overseas coal-sector acquisitions, according to Dealogic.

Even if no official limits are introduced, China can't keep growing coal output much beyond another decade, analysts say. The mining sector is constrained by chronic infrastructure bottlenecks, especially road and rail, and those coal deposits that are easiest to mine have already been tapped.

Experts are starting to predict when China's coal reserves will run out—a nightmare scenario in a country where 70% of its energy is derived from coal.

This is a key issue. China may well have vast reserves remaining, but these may be further away, deeper down, thinner seams and lower energy content, and at some point it just becomes impossible to achieve what you achieved the previous year when so many variables work against you.

Let's put the 3.6 to 3.8 Gt cap in perspective. In 2009, China produced 3050 million tonnes (3.05 Gt) coal (2010 BP statistical review of world energy). If that increases by 10% this year that will bring production to 3355 million tonnes already suggesting that the lower limit of the proposed cap may be reached in 2011 (next year). At this point it's worth noting that Patzec and Croft (2010) forecast peak coal production in 2011, which I and many other commentators thought was unduly pessimistic.

What I imagine we will see happening is that Chinese production growth in 2010 will be significantly less than 10% and we will see a plateau develop within the 3.6 to 3.8 Gt range in the period to 2015. Growth in Chinese coal production has underpinned their industrial revolution and an end to growth in their primary energy source poses risks to their and global economic growth. But the Chinese are enterprising people and I imagine they will manage their transition away from domestic coal by a combination of increasing dependence upon coal imports, improving energy efficiency of coal fired power stations, and rapid expansion of nuclear capacity.

The Chinese Coal MonsterPublished 12 July 2010

•China set to consume 50% of global coal production this year
•Production and consumption roughly in balance
•Coal imports used for stock pile growth?
•Consumption growing >10% year on year in line with economic growth
•Rest of world consumption declined 7% in 2009
http://www.theoildrum.com/files/china_coal_consump.png
Figure 1 Chinese coal consumption compared with the rest of the world.

How long can this go on?

Data
Data are taken from the 2010 BP statistical review of world energy - both a priceless but flawed resource. BP provide annual coal production figures in tonnes and tonnes oil equivalent (TOE) from 1981 and consumption figures in TOE only from 1965. Hence to make a production / consumption balance comparison it is necessary to use TOE. In China, 1 TOE is close to 2 tonnes coal - so simply double the TOE numbers to get at the approximate tonnages. Note that the energy content of coal varies by rank and from region to region and conversion factors to TOE vary from 1.5 to 3.

The coal monster
Like everything else in China, coal production statistics are simply immense. China now consumes and produces close to 50% of all the coal in the world. Thus, changes in Chinese consumption and / or production may have a dramatic impact upon the global coal market.
http://www.theoildrum.com/files/China_coal_perc_share.png
Figure 2 Since 1965, China has steadily increased its percentage share of global coal consumption and looks set to account for 50% of global coal consumption this year. Virtually all consumption is met from Chinese domestic coal production (Figure 3)

The Chinese Coal Monster - running out of puff (Cont)

Coal production and consumption are in balance
In light of press stories describing rapid growth in Chinese coal imports, I was both surprised and puzzled when I plotted the Chinese coal production and consumption data and saw that these have always been roughly in balance (Figure 3). I sent the chart around the TOD email list and copied to Professor Dave Rutledge at Cal Tech. It was DaveR who came up with a possible explanation.

DaveR pointed out that in countries like the UK, coal stock piles equivalent to roughly 4 months consumption are maintained. If China does similar then stock piles will be around one third of 3 Gt equal to 1 Gt. With consumption growing at 12% in 2009, stock pile growth would need to be around 120 Mt to maintain the 4 month buffer. China People's Daily reported that Chinese net coal imports were 104 Mt in 2009 - barely sufficient to maintain stock pile growth.
http://www.theoildrum.com/files/china_coal_cons_prod.png
Figure 3 Despite stories of ballooning coal imports, China produces as much coal as it consumes. It seems imports merely contribute to domestic coal stock piles.

Global coal trade
The top 20 coal producers account for 98% and the top 5 producers account for 79% of global coal production. It is therefore possible to get a handle on global coal trade by looking at the top few producers. China as we have already seen is roughly in production / consumption balance, and India is a major importer of coal. The main export nations are the USA, FSU, Australia, Indonesia and South Africa. Looking at the production / consumption balance of these 5 nations shows an export surplus of 450 million TOE (roughly 900 million tonnes coal). Chinese coal imports of 100 Mt therefore account for roughly 11% of global coal trade (contrary to the People's daily report) - and that is just to maintain stockpiles!

http://www.theoildrum.com/files/top_20_coal_0.png
Figure 4 The top 20 coal producers. The dashed grey line marks approximate zero growth for the last decade. All the growth in coal supplies comes from the nations above that line with growth dominated by China with contributions from India and Indonesia.

http://www.theoildrum.com/files/coal_exports.png
Figure 5 The global export market is dominated by 5 nations. Export growth has come mainly from Australia and Indonesia.

Threat to global economy
Should China ever fail to match coal consumption with indigenous production then 1 of 3 things may happen. The first option is that consumption is pegged back to match stalled production and this would stall Chinese economic growth with knock on effects to the global economy. The second option is that China tries to meet any shortfall buying coal on the international market. As already pointed out China is such a huge consumer of coal this would create great competition in the international market for limited supplies leading to severe upwards pressure on coal prices. The third option is that China somehow manages to install sufficient nuclear capacity to plug any energy gap.

The People's Daily reports a doubling of Chinese coal imports for the first 5 months of 2010 and upwards pressure on coal prices and it therefore looks like option 2 may be under way. Should Chinese coal imports double this year and next then China will be competing for about 50% of the coal on the world market and that may be like a wrecking ball going through the global economy that is founded on abundant and cheap supplies of energy.

Reserves and peak production
Finally a note on reserves. BP report China to have 114.5 Gt of coal reserves. BP in fact report coal reserves figures from the World Energy Council and the figure of 114.5 Gt has been reported every year since 1992. Thus we have the same unsatisfactory non-varying reserves reporting for Chinese coal that exists for Middle East OPEC crude oil reserves. Since 1992 China has produced 31 Gt of coal and the reserves should be reduced by that amount leaving 83.5 Gt reserves as of end 2009.

In 2006, the German based Energy Watch Group (47 page pdf) reported Chinese reserves to be 96.3 Gt. They produced a Hubbert curve forecast scenario that has proven to be inaccurate thus far (Fig. 6).

Dave Rutledge is currently estimating 139 Gt for ultimate recovery of Chinese coal. Cumulative production 1896 to 2009 is 51 Gt indicating 88 Gt remaining.

http://www.theoildrum.com/files/china_coal.png

Figure 6 A Chinese coal production scenario produced by The Energy watch Group in 2006 (page 28 of report linked to above) illustrating how difficult it is to forecast production scenarios, especially pre-peak. One possible outcome is that Chinese coal production peaks earlier than shown and then enters rapid decline. Alternatively, substantially larger reserves may produce a taller and broader peak than shown here.

Chinese coal production will peak one day but it is very difficult to predict when that day will come based on these figures. The indications are that China has used about 37% of its coal. It has to be assumed that the best resources have been mined first and that for every year that passes the challenge of first meeting and then exceeding the previous year will become increasingly difficult. But the Chinese are an enterprising people.
Link -
[url]http://europe.theoildrum.com/node/71

IEA forecasts that peak oil production started in 2006

The IEA is forecasting for the first time that the global crude oil production peak has in fact already been reached more than four years ago, in 2006.

International crude oil demand has since fallen slightly all thanks to the recent global economic downturn, but once economies around the world have recovered, the IEA says daily crude oil production alone will no longer be sufficient to meet their needs.

IEA Talks other Fuels, Renewable Energy
The 2010 IEA report forecasts that increases in other fossil fuels including natural gas and tar sands will help crude oil in meeting new demand with clean, renewable energy sources also making major gains.

The IEA says that daily global oil production will “plateau” at around 68 million barrels per day by 2035, as total energy demand increases by more than 35 percent over the same period. According to the report, by 2035 three quarters of currently operating oil fields won’t be producing anymore. In fact, current oil fields are only expected to account for less than one fifth of that year’s production.

Thanks in part to pledges from governments to reduce their countries’ reliance on fossil fuels though, new contributions to the energy mix will help to avert the sort of catastrophic oil spike that many have predicted to coincide with the start of the peak oil age.

But while the projection may bode well for the world economy, the IEA is convinced that even if governments live up to the pledges they made in lowering greenhouse gas emissions. If the world continues on its current trajectory, the IEA says that average global temperatures will likely rise by at least 3.5 degrees C. The IEA recommended that the following conditions must be met to achieve the intended outcomes:

The IEA Wish List
Oil demand must peak sooner and decline more sharply than it would under natural “peak oil” conditions.

Coal will have to play a significantly smaller role in the energy balance, with global demand peaking in 2020 and declining steadily thereafter.

Demand for gas and liquified natural gas must also also peak before the end of the 2020s.

Renewables and nuclear power must double to represent nearly 40 percent of the energy market by 2035.

Advanced vehicles will also have to make rapid gains in the coming years, to levels in the upper reaches of what most analysts believe is possible. By 2035, the IEA says that not only will 70 percent of new worldwide vehicle sales will have to come from advance technology plugin hybrid and electric vehicles, but that that those cars will need to run mostly on electricity generated from nuclear and renewable sources rather than fossil fuels.

The IEA’s Outlook is considered by many to be one of the most comprehensive and authoritative annual energy market analyses available to the public. The IEA has historically denied the existence of peak oil.

Is the World Running Out of Oil?
Of course this doesn’t mean the world is literally running out of oil, as the World Energy Outlook emphasises with its forecast of ever greater reliance on unconventional oil resources. But for these resources to become legitimate reserves, they have to be accessed at prices consumers can afford to pay. Yet even the IEA acknowledges that oil prices as high as $200 per barrel will be needed to make these resources economically viable in the future.

The global economy is now experiencing its most severe post war recession after its brief initial encounter with the very same oil prices that are now being forecast for our oil consuming future. And this recession happened despite record fiscal stimulus and bailouts (money printing) that have left countries including Greece and Ireland in debt for many years to come and may soon threaten the solvency of others including Portugal, Spain and Italy.
Link -
http://www.liveoilprices.co.uk/oil/peak_oil/11/2010/iea-forecasts-that-peak-oil-production-started-in-2006.html
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Does anyone think that the IEA really has a handle on what is happening & presents factual information?

Kuwait weighs nuclear future

Kuwait has launched a feasibility study into nuclear power development with the aim of having one or two atomic plants in operation by 2020.

The study, undertaken by the French government's Agency France Nuclear International and the US nuclear consultant and fuel developer Lightbridge, will assess potential project sites in southern Kuwait, where water from the Gulf could be used to cool reactors.

The size of the potential power plants has not been determined but each would have a capacity of at least 1 gigawatt, the Middle East business intelligence publication MEED reported, citing Suhaila Marafi, the director of studies and research at Kuwait's ministry of electricity and water.

In September, Ahmad Bishara, the secretary general of Kuwait's national nuclear energy committee, said the emirate planned to build four nuclear reactors by 2022. "Kuwait has enough sovereign funds to take up the expenses," he said.

Currently, Kuwait meets about 75 per cent of its power demand by burning oil and the remaining 25 per cent from gas-fired plants. UAE power generation is about 30 per cent oil and 70 per cent gas, while more than half Saudi Arabia's electricity generation is oil-fuelled.

Link -
http://www.thenational.ae/business/energy/kuwait-weighs-nuclear-future
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Kuwait is the home of the Burgan Oil Fields.

The Burgan field is also one of the older  (discovered in 1938) & larger fields (2nd largest Globally, by reserves) still in production and there is an obvious reason why the Kuwaiti's would be looking at Nuclear power.

Kuwait's Oil Production is about to go into steep decline!

End of Consummerism

It's not the end of the world, just the end of consumerism. We are about to wave goodbye to the dream of endless economic growth.

A change is about to be forced on society because energy consumption pretty much is the economy. And we are about to run short of the cheap energy which has been driving the past century of unchecked economic expansion.

Graph the world's energy consumption against its gross domestic product (GDP) and the two lines track.

However, a reckoning is coming. The ecological limits on growth have come into view. Climate change and over- population. But peak oil most immediately.

Anyone who can remember the last oil crisis of 1979 - President Jimmy Carter warning of national catastrophe in the United States - will also remember how swiftly the world moved on again.

The Club of Rome's The Limits to Growth, a study based on an alarming set of computer predictions, was briefly a fashionable read; it fell out of fashion, along with flared pants.

In truth, several factors underpin economic growth.

The availability of capital is one - a free flow of credit to build factories and launch businesses. Population is another. More people means more production. And technology. That goes without saying. We would like to think human inventiveness is the biggest single reason for continually rising living standards.

However, "biophysical economists" like Charles Hall, a professor at State University of New York, argue that the modern era is predominantly the story of how we have turned the energy so conveniently locked up in buried fossil fuels into an ever-expanding array of consumer goods and services.

It even accounts for empires. Great Britain arose because it had the ready supply of coal to turn iron into ships and cannons. The US became a world power because it had the sweet light oil fields of Pennsylvania and Texas.

Hall says it is obvious energy is needed to make things. Or even grow them. When the tractors, fertilisers and all the other energy inputs are totted up, it takes about four litres of oil to put the food on our plates each day.

But Hall says what really matters is the gap between the price we pay for energy and how much value we can then extract from it - the energy returned on the energy invested (EROEI). This is the profit margin which makes the difference between us feeling rich or poor as nations.

For a century, oil and coal have seemed so cheap that economically they have barely been a talking point. It has only cost about a barrel of oil for every 20 barrels extracted. So petroleum has been inexpensive to deliver. The EROEI story for coal-mining has been very similar. Then, because economic activity is energy consumption by another name, this has created plenty of head- room in the economy as a whole.

Hall's analyses show that in the 1990s and into the 2000s, the energy bill to run the US was less than 10 per cent of its GDP. Which, after all the necessary costs of life, like infrastructure, health and education, were taken into account, still left a quarter of the entire economy for discretionary spending.

But, he asks, what if the price of oil were to double - as it did in the 2008 spike that preceded, and may have even provoked, the financial meltdown? Or quadruple as it did in the 1970s, and some are suggesting might happen again if oil supplies become constrained?

Hall says energy could suddenly become 20 per cent of society's running costs, or even more than a third. And the cuts to balance the books would have to come off the discretionary spending. So that sense of easy wealth would fast be wiped out. A quarter could shrink to next to nothing fairly rapidly.
But broadly it can be seen we rely on a world where our energy sources are not just plentiful but also dirt cheap. A profit margin has to be built in to rig the national GDP game. And when that era ends, we had better have a plan B ready, Hall says.

The focus is on petroleum because oil and natural gas are still overwhelmingly the prime fuel sources for the world.

According to the annual BP statistical review of world energy, oil makes up 35 per cent of the global energy budget, while natural gas is another 24 per cent. Coal is then 29 per cent, while nuclear is just 5 per cent and renewables, like hydro and wind, answer for the remaining 7 per cent.

The peak oil argument is that the Earth's supply of petroleum is limited and we have burnt through a trillion barrels of crude oil now. Our appetite has been exponential - each year always more. We have also quite naturally been pumping the cheap and easy-to-get-at oil first, the large reservoirs found in places like Alaska and the Middle East.

So eventually, we will be left with only a diminishing supply of the dirty and hard-to-recover oil. The deep sea wells that blew up in the Gulf of Mexico, the tar sands that will have to be open-cast mined in Canada, the scattering of smaller fields that might remain spotted around the world.

Which is when Hall's EROEI and the law of diminishing returns kicks in. Steadily the cost of producing oil will rise and its in- built profit margin will begin to shrivel.

http://www.stuff.co.nz/the-press/lifestyle/mainlander/4448279/End-of-consumerism
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Guess what is already happening to discretionary spending, at both Personal & Government levels?

Peak Oil & Climate Change

13 Minutes of Embedded Video of Practical Examples of Peak Oil & Climate Change.

Link -
http://leyerle.blogspot.com/2010/12/peak-oil-climate-change.html

Oil And U.S. Hyperinflation

As precious metals investors, it can often seem to us that the U.S. government (and the banking cabal which pulls its strings) is exclusively focused on suppressing gold and silver prices - given the historic role of precious metals as a "barometer" of economic conditions, especially inflation. However, there is a different commodity that this group obsesses about to a far greater degree than precious metals: oil.

The United State's enormous dependency on imported oil translates directly to enormous economic vulnerability. Indeed, U.S. paranoia about "securing" oil supplies for itself has been the driving force behind most (if not all) of the wars it has instigated in the Middle East.

The U.S. dependence on petroleum goes well beyond simply the massive amounts that is spent each year by the U.S. to satisfy its oil-gluttony. Cheap oil is the essential input needed to operate the "levers" of U.S. military/economic imperialism, as well as the foundation upon which the entire U.S. domestic economy is built.

Let me summarize this dependence briefly. By itself, the U.S. military is one of the ten largest oil-consuming entities on the planet. In other words, operating the U.S. war machine by itself consumes more oil each year than all but a handful of nations. Thus, the death, destruction, and misery that the U.S. military has inflicted upon its victims over recent decades is accompanied by the horrendous waste of countless billions of barrels of our most precious natural resource.

In this respect, high oil prices are a "blessing" to much of the world, as the hopelessly insolvent U.S. government is totally incapable of financing any more "military adventures", now that the era of cheap oil is gone forever. Indeed, we can only assume that Iranian defiance to the U.S. regarding its nuclear program is based upon their firm conviction that any military harm which the U.S. could inflict upon Iran would pale in comparison to the economic harm it would inflict upon itself from such an attack. Thus, we know the #1 reason why the U.S. is vainly attempting to keep a lid on oil prices: having a "big stick" is of little use if you're never able to use it.

The U.S. military is but one facet of the U.S. empire totally dependent upon cheap oil.

Of near-equal importance is the need for cheap oil in order to pursue its agricultural imperialism. Roughly two decades ago, the U.S. government made a conscious decision to abandon most manufacturing activity - with the exception of the industrial and hi-tech sectors which service the U.S. war-machine.

Replacing manufacturing as the foundation for the U.S. economy is agriculture.

Even here, however, the U.S.'s Achilles heel asserts itself. Apart from the fact that U.S. agriculture is highly dependent on massive water subsidies, what few people realize is that agriculture is an oil-intensive industry. Oil-powered machines plant the crops. Oil-powered machines distribute the petroleum-based fertilizer products used by most forms of agriculture.

Oil-powered machines then harvest most of these crops, so that oil-powered trucks can take this food to processing centers, before ultimately being shipped to consumers - primarily in more oil-powered trucks. Compounding U.S. oil-gluttony, the U.S. has embarked on a huge program to produce the world's least efficient bio-fuel: corn-based ethanol.

In other words, after consuming vast quantities of oil to produce its crops, the U.S. then takes a large chunk of that agricultural production and converts it to fuel - in a process which uses nearly as much fuel as is produced, resulting in no economic benefit to anyone (and no increase in energy supply), except for a windfall for corn-farmers.

While the U.S. selfishly wastes vast quantities of oil with its war-mongering, and foolishly squanders vast, additional amounts through short-sighted agricultural policies which can only be characterized as "idiotic", this endless waste of precious petroleum is 100% certain to destroy its domestic economy.

As U.S. "inner cities" became increasingly uninhabitable due to endemic poverty - and the crime which inevitably accompanies that - U.S. "urban sprawl" turned into a gigantic population-shift, where urban Americans became "suburban Americans", forced to commute long-distances (in oil-powered vehicles) just to make it to work each day.

Meanwhile the rest of the world chose to reduce their own oil-consumption through adding high taxes to oil, which also made various forms of mass, public transit economically viable - further reducing their oil-dependence. In its typically short-sighted fashion, the U.S. did the exact opposite. It continued to heavily subsidize oil consumption amongst its population.

Decades of this totally suicidal policy has left the U.S. with the following problems. Americans possess tens of millions of obsolete gas-guzzlers - for which they are still making $billions in payments. They live in massive homes they can no longer afford to heat, located so far from employment centers that they can't afford to drive to work. Meanwhile, equally short-sighted city planners never bothered to embark upon any significant investments in mass-transit.

Oil And U.S. Hyperinflation (Cont)

Even if the U.S. had the money to begin to create 21st century mass transit for its cities (which it doesn't), these long-term infrastructure projects would take at least a decade before making a significant dent in U.S. oil consumption. The U.S. has no money, no oil, and no options.

While Wall Street caused the "Crash of '08" to attempt to hide its own insolvency as being merely part of a "global crisis", the U.S. government had an entirely different motive for engineering a global economic crash, and a total meltdown in all commodity markets: $140/barrel oil. In this respect, Rob Kirby wrote a very interesting article about U.S. "machinations" in the oil market, beginning in May/June of 2008.

Through a combination of sleuthing and deduction, Kirby connected a dramatic change in U.S. oil policy to the Crash of '08, and otherwise inexplicable price-behavior regarding the different grades of global crude - which coincided with the change in U.S. energy policy. He also noted that these "machinations" bore an uncanny resemblance to "activities" of the U.S. government in precious metals markets.

Media talking-heads continue to perpetuate the myth that a "cheaper dollar" will improve the U.S. trade balance - and ultimately help the U.S. dig its way out of insolvency. Empirical data has revealed this to be nothing but wishful thinking. In fact, each time the U.S. dollar takes another nose-dive, the U.S. trade deficit usually widens, as the modest up-tick in U.S. exports is overwhelmed by the soaring bill for U.S. imported oil.

The bottom-line for these parameters is that the only way in which the U.S. can delay economic collapse is to continue to push-down oil prices (versus the U.S. dollar). Where precious metals factors into this equation is that oil-producing nations (most notably the Arab, OPEC nations) watch gold and silver prices - to tell them when/if they need to push crude prices higher, as compensation for the ever more rapid dilution/depreciation of the U.S. dollar.

Therefore, while the U.S. government desperately wants to keep gold and silver prices down, it absolutely needs relatively cheap oil prices. What this means is that when oil surges above $100/barrel (likely by January or February) we should all expect another made-in-the-USA "economic crisis".

If (or when) the U.S. finally loses any ability to control oil prices, the consequence is inevitable: hyperinflation. Soaring oil prices increase the U.S. trade deficit, cripple the domestic economy, negate any/all benefit of its massive agricultural subsidies, and leave its war-machine "out of gas".

Simply, there is not a single facet of the U.S. economy which can remain solvent with high oil prices. When cities, states, and most average Americans begin a downward spiral toward bankruptcy due to high oil prices, the last and only option for the U.S. is more money-printing - much, much more.

With current U.S. money-printing already a threat to set-off U.S. hyperinflation, any further escalation of Bernanke's monetary madness must result in hyperinflation. Much like decades of suppression of the silver market has resulted in the near-total depletion of silver stockpiles, so too has the U.S. policy of depressing global oil prices resulted in the depletion of global oil reserves - decades sooner than would have occurred with any kind of sensible, long-range planning.

While the silly, suicidal bullion-banks only increase silver demand each time they launch another "attack" on prices (advancing the date of their own funerals), so too has the U.S. government's permanent policy of oil price-suppression merely served to dig its own economic grave.

At the exact same time that U.S. vulnerability to high oil prices has reached a new, all-time high, the ability of the U.S. to suppress oil prices through any form of moderate/subtle manipulation of global markets has been exhausted. With the U.S. economy already on the verge of collapse, creating another "crisis" (its last and only "tool") will require nothing more than simply being honest about the severity of its economic problems.
Link -
http://www.silverbearcafe.com/private/12.10/hyperinflate.html
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Whilst I inderstand where the authors comments arise from and in many instances agree, there are also some factors that are influencing events that he has not touched and I also disagree with some of his conclusions.

In particular, it still seems self-apparent that the US military is still the most effective military of the planet!

Whilst US Politicians have shielded US citizens (so far) from the effects of approaching Peak Oil, other countries have not. It is highly  debatable whether higher taxes introduced by many countries has reduced their dependence on Oil or whether governments have simply used that mechanism, as a tax raising avenue!

There has certainly been NO MOVEMENT AWAY FROM OIL!

We are now moving into a new paradigm, one affected by -
1) Peak Oil - Already started.
2) Demographics (Aging Population now, followed by a larger Population (another 1 or 2 Billion Global) by 2040 or so, then a long Population decline (to around 3-4 Billion by Century's end)  
3) Climate Change - Already started, but becoming more apparent towards the later end of the century.

Bernanke is living a different crisis!