Peak Oil

[Eigth and State]

   "It's feasible that the changes will only be slight if we all go alternative."

    There are no true alternatives to petroleum. There are alternatives that can be built in the lab, but not at the scale needed to replace the world's automobile fleet.

    For example, battery-powered electric cars might be competitive in certain applications in terms of energy use, but they are more expensive to build. Replacing a fleet of 150 million conventional gasoline-powered cars that cost $25,000 each with a fleet of 150 million electric cars that cost $50,000 each is not a viable option. We might be able to replace a fleet of 150 million conventional gasoline-powered cars with 75 million electric cars, but then 50% of Americans that currently have a car will have to go without one. That's what peak oil is all about.

   

[Gramarye]

   "It's feasible that the changes will only be slight if we all go alternative."

    There are no true alternatives to petroleum. There are alternatives that can be built in the lab, but not at the scale needed to replace the world's automobile fleet.

    For example, battery-powered electric cars might be competitive in certain applications in terms of energy use, but they are more expensive to build. Replacing a fleet of 150 million conventional gasoline-powered cars that cost $25,000 each with a fleet of 150 million electric cars that cost $50,000 each is not a viable option. We might be able to replace a fleet of 150 million conventional gasoline-powered cars with 75 million electric cars, but then 50% of Americans that currently have a car will have to go without one. That's what peak oil is all about.
  

Yes, which is why the threat of it is seriously overhyped.

First, many Americans do not have just one car; they have two or three or even more.  Therefore, while there definitely are some Americans that would have trouble getting just one car, more families would simply have to live with fewer, not none at all.

Second, the waning of oil as a transportation fuel is a change that will not happen all at once.  It will happen gradually, though there will obviously be intermittent price spikes alongside the more gradual upward trend.  The practical result of this is that there will be used electric cars on the market down the road that will make it easier for those of lesser means to switch to alternative-fuel vehicles in the future more easily than they could do so today.  This is also an argument for not rushing the transition with needless anti-fossil-fuel regulation today.

Third, the price of the electric car still has a good deal of room to come down and the quality still has a good deal of room to improve--the diminishing returns curve is far less exhausted with electric cars than with gasoline-powered ones.  I predict that those who are saying that the electric car will remain an expensive oddity will, in 30 years, look very much like Ken Olsen of Digital Equipment.

Fourth, don't discount the effects of economic growth.  While $50,000 cars might be beyond the reach of most today, I wouldn't be so sure that they'll be out of reach of the majority of people by the time oil gets sufficiently expensive--and this is assuming that the price doesn't come down, an assumption that I think is deeply flawed.

I still have trouble envisioning capacitors strong enough to move semis and buses, but given how many times those who have said "that'll never happen" have been proven wrong when it comes to American technological innovation (and we're hardly the only center of major engineering breakthroughs anymore), I tend to bet on being pleasantly surprised.

Bottom line: Those who say peak oil is a fact are probably right, though exactly when the moment of peak production will happen is open to debate.  Those who push for major public policy reforms motivated by the fact have a somewhat steeper mountain to climb.  Peak oil is going to be like Peak Atari.  Some people will miss it, but most will be happy to move along to something better once the marketplace offers it, which it will.

[KJP]

Some people will miss it, but most will be happy to move along to something better once the marketplace offers it, which it will.

The market cannot offer a more resource-rich planet. Yes, we can use resources more efficiently. But there are only so many humans this planet can sustain.

[Gramarye]

Some people will miss it, but most will be happy to move along to something better once the marketplace offers it, which it will.

The market cannot offer a more resource-rich planet. Yes, we can use resources more efficiently. But there are only so many humans this planet can sustain.

Over the next 300, maybe 400 years, perhaps, though we've barely begun to scratch the earth's crust or the ocean's floor for resources.  Beyond that, I wouldn't rule out being able to mine near-Earth objects for resources.  Also, even if what you were saying was true, which I sincerely doubt (I see no practical reason why the planet could not support a population of more than a trillion, as long as the growth rate to get there is manageable), what would be the point?  I honestly don't care what you believe as long as you're not out there trying to force me, through government action, to change my way of life based on your misperceptions.

[unusualfire]

^ A trillion??? Our oceans would be polluted with all that waste.

[KJP]

I honestly don't care what you believe as long as you're not out there trying to force me, through government action, to change my way of life based on your misperceptions.

Don't worry, I will. It will be fun watching you squirm, being forced to actually be responsible..... 

Seriously though, have a nice life. See you in the lines waiting at gas stations starting around 2015 -- as I walk on by...

[Hootenany]

^ A trillion??? Our oceans would be polluted with all that waste.

What makes you say that?  We seem to handle our waste pretty well, at least in the US.  The liquid waste is processed and pumped back into the environment and the solid waste can be used for a number of things from fuel to fertilizer.

[Gramarye]

I honestly don't care what you believe as long as you're not out there trying to force me, through government action, to change my way of life based on your misperceptions.

Don't worry, I will. It will be fun watching you squirm, being forced to actually be responsible..... 

Seriously though, have a nice life. See you in the lines waiting at gas stations starting around 2015 -- as I walk on by...

First, as long as those gas lines are caused by market forces and not government intervention (i.e., restrictions on how much gasoline people can buy at a time or other rationing), that's fine.  People make choices and live with the consequences.

Second, I'm defending the right of others to make their own decisions here.  I walk ten minutes to work every day, and if I can keep that true for my entire working career, I'll be more than fine with it.  That said, I also drive from Akron to Kent fairly regularly to see my girlfriend, and she makes the drive in the other direction a fair amount, too, both to see me and to volunteer at one of the major hospitals in downtown Akron.

So jump to what actually matters: What exactly are you proposing we do about this grave threat of oil getting pricier later?  Make it pricier now?  How will that solve anything?  Put some specific policy agendas out there, not just random fearmongering.

[KJP]

I have. Read more of this site.

[Hootenany]

There's a fine line.  While artificially inflating the price of gasoline/oil will reduce consumption and possibly delay oil shortages it could also have a large negative impact on our economy. 

I'm more on the side of letting the market take care of itself, but oil shortages would have a huge impact on the United States economy and the quality of our lives.  There are some things we can do to make the transition a little easier and one of those is slowly and artificially increasing the price of gasoline in the United States.  The point is to avoid a possible scenario where supply drops off a cliff and the price spikes causing the US economy to screech to a halt.

It's obvious to me that we rely to heavily on oil for transportation and it's time to diversify.  Our transportation policy is too risky right now and we need to come up with some ways to diversify our portfolio before the stock price tanks...

[Gramarye]

^ A trillion??? Our oceans would be polluted with all that waste.

If a trillion people materialized out of thin air on Planet Earth tomorrow, absolutely.  But it we get there over the course of 500+ years?  Keep in mind that if 18 million people had materialized out of thin air in what is now the New York-Newark metro area in 1800, it would have spelt ecological catastrophe.  It can handle that population today, however, because we're both wealthier and more scientifically advanced, particularly in critical civil engineering fields like sanitation.  Wealth is important because some of the major infrastructure builds in the NY metro area would have been financially impossible if we were still as poor as the Colonists (who were relatively wealthy by 18th-century standards but who would have been mostly paupers today), just like major engineering leaps forward like hydroponic vertical farming and arcological structures are too expensive to be justifiable today but could easily become so in the future, when we'll be both more able to build them and more inclined to do so.

[EagleFan]

See you in the lines waiting at gas stations starting around 2015 -- as I walk on by...

Wow, you are cynical.  You drive a car just like 99% of us...oil shortages are quite real challenges that need to be dealt with, but spare us the "you-should-feel-guilty-for-driving-a-car" nonsense.

[Eigth and State]

   Just for fun, a trillion people in 500 years would take a doubling period of about 62 years. The yearly growth rate would be about 1.1% per year. The following sequence illustrates the growth. 

    2010  6  billion
    2072 12 billion
    2134  24 billion
    2196  48 billion
    2258  96 billion
    2320 192 billion
    2382  384 billion
    2444  768 billion
    2506 1536 billion = 1.5 trillion
         
     1.1% is about what some economists think our current growth rate is, and that's in this depressed economy.

     With these assumptions, in 2506, there will be 250 people for every one person today. To keep the same average standard of living, we need to come up with 250 times today's resources.

     Proportionally, Ohio's population would be 2.7 billion, a little less than half of the world population today. Could you cram half of the world's population today into Ohio? 

     

[unusualfire]

^ Viruses would prevent that from EVER happening.

[dmerkow]

My question is: how will BRIC plus Korea deal with the reality of Peak Oil?

[Gramarye]

Into 0.33-acre surface lots, no.

Into arcological structures with automated subterranean infrastructure (for waste processing, etc.)?  Absolutely.  It would be a radically different world, of course, but would you expect 2506 to resemble 2010 any more than 2010 resembles 1504?  I would also suggest that one of the hundreds of billions of people who would live and die between now and 2504 would find ways of colonizing the ocean floor, dramatically increasing the available area for human habitation, while others would find ways of terraforming the deepest deserts and the barren tundra of Canada and Russia.  You can't confine your mind to the technology of 2010 when you speak of 500 years in the future.  We might well even be off-planet by then.

In addition, it may not be accurate to suggest that the growth rate of 1.1% will be constant for the next 500 years.  After all, not so long ago, it was much higher.  It tends to drop in proportion with how well an economy develops.  Suppose in another 100 years, the average life expectancy is 250, people are fertile until 80, but people have to basically work for 30+ years in order to be able to afford a decent sized amount of space in a good area.  Childbearing rates would plummet substantially.  That's probably an exaggeration of what will happen, but then again, it's just a restatement of what's already happened in America, just using larger numbers for this hypothetical future iteration.  Take a quick survey sometime: How many people have 5+ kids today vs. how many people have/had at least one grandparent from a family of 5+ kids?

It is a fallacy is to treat humans as only consumers, not producers--liabilities rather than assets.  This can be true but need not be true, and the creative energies unleashed by capitalist economies make people far larger assets than liabilities.  That figure of 1.5 trillion people is not just 1.5 trillion mouths to feed, not just 1.5 trillion consumers of resources.  It's 1.5 trillion scientists, engineers, teachers, computer programmers, doctors, nurses, construction workers, heck, probably billions of people in professions that don't even exist yet, any more than "computer programmer" existed 100 years ago.  It's 1.5 trillion people who will very likely be able to capture all of their memories in 5-sense recorders in real time and record them, regrow lost limbs, control computers with their thoughts (computers that will be tens of thousands of times stronger than they are today), and very likely even manufacture anything they want on 3-D printers tens of generations more advanced than the primitive prototypes exhibited at scientific conferences and conventions today.  The Age of Oil will be as distant to them as the Age of Sail is to us.

[Eigth and State]

^---"it may not be accurate to suggest that the growth rate of 1.1% will be constant for the next 500 years."

   Well, there's one thing we agree on.

[Gramarye]

My question is: how will BRIC plus Korea deal with the reality of Peak Oil?

Would that be the BRICK?

(I had to.)

I imagine they'd deal with it the same way everyone else would: Use oil under something more efficient came along, then use that.

[KJP]

WTF? Perhaps more than just a tad ironic since the North Sea oilfield is past its own geographic peak oil. I think this one falls into the category of "time to fish or cut bait." Looks like they're cutting and running....

Shell could sell over $10 billion in assets: report

LONDON (Reuters) - Royal Dutch Shell Plc (RDSa.L) could sell more than $10 billion of assets including its North Sea oilfields operations, the Sunday Times reported, citing sources close to the company.

Shell has hired Credit Suisse to sell its $1 billion European liquefied petroleum gas (LPG) arm, the paper said, adding first-round bids of about $500 million have also been lodged for a network of petrol stations across Africa.

Shell, Europe's second-largest oil company by market value, declined to comment.

READ MORE AT:
http://www.reuters.com/article/idUSTRE61D1EV20100214

[KJP]

One more.......

Branson warns that oil crunch is coming within five years
• Virgin chief and fellow business leaders call for action
• Energy crisis threatens to be more serious than credit crunch
Terry Macalister guardian.co.uk, Sunday 7 February 2010 20.18 GMT

Sir Richard Branson and fellow leading businessmen will warn ministers this week that the world is running out of oil and faces an oil crunch within five years.

The founder of the Virgin group, whose rail, airline and travel companies are sensitive to energy prices, will say that the ­coming crisis could be even more serious than the credit crunch.

"The next five years will see us face another crunch – the oil crunch. This time, we do have the chance to prepare. The challenge is to use that time well," Branson will say.

"Our message to government and businesses is clear: act," he says in a foreword to a new report on the crisis. "Don't let the oil crunch catch us out in the way that the credit crunch did."

Other British executives who will support the warning include Ian Marchant, chief executive of Scottish and Southern Energy group, and Brian Souter, chief executive of transport operator Stagecoach.

READ MORE AT:
http://www.guardian.co.uk/business/2010/feb/07/branson-warns-peak-oil-close

[thomasbw]

World Oil Production 2003-2009 (Oct.) in MBDs the "Bumpy Plateau"

[KJP]

The amazing part of about that graph is that it hit the plateau starting in 2005 when there was still economic growth occurring -- and oil production couldn't grow with it despite that the Canadian oil sands were going full tilt and the Saudis were pumping for all they're worth.

[Gramarye]

Slowly but surely:

http://www.nytimes.com/2010/02/15/business/15electric.html?em

[Eigth and State]

   Tesla Roadsters at $100,000+ are not going to get us out of Peak Oil. Tesla Roadsters are for the rich.

    On top of that, California people are buying hybrids because they can drive in the HOV lanes. We don't know what the market would do without the HOV lane rule.

[Gramarye]

ROFL Of course Tesla Roadsters are only for the rich.  However, you might have missed the part in the article about "As automakers prepare to introduce the first mass-market electric cars late this year ...," with GM, Nissan, and others poised to push into the electric market soon.  In addition, assuming Tesla survives (they've not had the best of years, since they're definitely a luxury manufacturer), they're planning on introducing a high middle-market car in the near future, too.  That one will still put a hit on one's wallet in the neighborhood of $50-$60k, but high-end SUVs and luxury-nameplate cars from the major manufacturers are pushing into that range already.

The issue isn't where things stand, it's where they're headed.  I think it was Wayne Gretsky who said that you skate to where the puck will be, not where it is.  Do you really think electric car technology has peaked?

[Eigth and State]

   I look forward to seeing more electric cars, but I doubt that electric cars wil ever replace conventional gasoline powered cars.

  For one, our highways are primarily funded by the gasoline tax. Our highway departments from the federal to local level are all in budget trouble, and they are facing declining revenues. Electric cars are going to do nothing to enhance our highway budgets. If our highway system declines, utility of automobiles is going to decline with it, and it doesn't matter how the vehicle is powered.

   

[thomasbw]

   I look forward to seeing more electric cars, but I doubt that electric cars wil ever replace conventional gasoline powered cars.

  For one, our highways are primarily funded by the gasoline tax. Our highway departments from the federal to local level are all in budget trouble, and they are facing declining revenues. Electric cars are going to do nothing to enhance our highway budgets. If our highway system declines, utility of automobiles is going to decline with it, and it doesn't matter how the vehicle is powered.

   

If you have electric cars as a substantial amount of the fleet, I suppose the only way to impose end user fees on road use would be tolls or GPS

[Eigth and State]

    ^---- Which would put the decisions on pricing in the hands of politicians.

    Besides the comparitive technology advantages between various modes of transportation, automobiles have a significant POLITICAL advantage: they are generally free of price controls.

   

[Gramarye]

   I look forward to seeing more electric cars, but I doubt that electric cars wil ever replace conventional gasoline powered cars.

  For one, our highways are primarily funded by the gasoline tax. Our highway departments from the federal to local level are all in budget trouble, and they are facing declining revenues. Electric cars are going to do nothing to enhance our highway budgets. If our highway system declines, utility of automobiles is going to decline with it, and it doesn't matter how the vehicle is powered.

I'll take you up on that bet.  Gasoline has higher energy density for the moment, but as soon as we come even close to parity, gasoline loses much of its lustre because of all the other equipment necessary to have under the hood to convert that stored chemical energy into kinetic energy.  An electric car basically requires just a battery and a motor.  There are promising technologies in prototype form already that lead me to believe that we're not far from that day.  It would not take too long for Americans to come to think of charging their car overnight the same way they charge cell phones.  In addition, once oil starts to trend upward again (which it will, and I'm saying this as someone who thinks KJP is giving himself needless hypertension on the peak oil issue), the price-per-mile spread will expand again.

As for the gasoline tax: The government will be forced to adapt.  It won't be the first time, and it may not come easy, but the ability of the government to restrain the invisible hand of the market has limits.  The government still has the advantage because it has to subsidize electrics ($7500 tax credit).  Once electric cars are sufficiently market-competitive enough that people prefer them to gasoline-powered alternatives even on a level playing field, the government will find another source of revenue.  It can do that.

[Gramarye]

   I look forward to seeing more electric cars, but I doubt that electric cars wil ever replace conventional gasoline powered cars.

  For one, our highways are primarily funded by the gasoline tax. Our highway departments from the federal to local level are all in budget trouble, and they are facing declining revenues. Electric cars are going to do nothing to enhance our highway budgets. If our highway system declines, utility of automobiles is going to decline with it, and it doesn't matter how the vehicle is powered.

   

If you have electric cars as a substantial amount of the fleet, I suppose the only way to impose end user fees on road use would be tolls or GPS

In this day and age, it wouldn't be too hard to have a mileage fee without GPS.  Any discrepancies due to underreporting would be sorted out as soon as a person tried to sell the car or otherwise had to do anything involving the title.  That said, I wish they'd just do away with the system and fund transportation out of the general budget.  It doesn't need its own dedicated revenue stream.