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Author Topic: Peak Oil  (Read 6219 times)

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Offline jjakucyk

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Re: Peak Oil
« Reply #2640 on: May 24, 2016, 06:13:02 AM »
^ But the fracking sites deplete after just a few years instead of decades.  That's the problem few are acknowledging (but which is mentioned in the article).  All it does is let us more quickly scrape the leftover sludge off the bottom of the barrel, so to speak. 

Online E Rocc

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Re: Peak Oil
« Reply #2641 on: May 24, 2016, 06:26:18 AM »
^ But the fracking sites deplete after just a few years instead of decades.  That's the problem few are acknowledging (but which is mentioned in the article).  All it does is let us more quickly scrape the leftover sludge off the bottom of the barrel, so to speak. 

The other thing that starts up when the prices go up is exploration.  The other other thing is research on synthetics.


Offline jjakucyk

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Re: Peak Oil
« Reply #2642 on: May 24, 2016, 06:39:50 AM »
Well sure exploration goes up when prices go up, but all the easy stuff has been found and put into production already.  So like I said, it takes more work (and money) to find, extract, and refine the smaller, dirtier, harder to reach fields.  Since the world (and especially the American) economy is predicated on inexpensive oil, when prices get high enough to make producing these resources viable, demand goes down, and those prices crash.  This is the supply/demand destruction cycle we've seen playing out, due to time lag between supply and demand responses, plus other investments and subsidies that further distort normal market forces. 

Online Gramarye

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Re: Peak Oil
« Reply #2643 on: May 24, 2016, 09:38:54 PM »
Well sure exploration goes up when prices go up, but all the easy stuff has been found and put into production already.  So like I said, it takes more work (and money) to find, extract, and refine the smaller, dirtier, harder to reach fields.  Since the world (and especially the American) economy is predicated on inexpensive oil, when prices get high enough to make producing these resources viable, demand goes down, and those prices crash.  This is the supply/demand destruction cycle we've seen playing out, due to time lag between supply and demand responses, plus other investments and subsidies that further distort normal market forces.

It might be true that all the easiest stuff has been found and put into production already, but the combination of fracking and horizontal drilling really did represent a seismic (no pun intended) shift in the extraction cost curve, moving a large amount of "proven" reserves (a great adjective that isn't quite as significant as it sounds) into the "economically recoverable" category (a much bigger deal).  Granted, gas at $1.40 a gallon again was only ever going to be a fleeting moment in historical terms; that was a momentarily supply glut and seems to have already worked its way out of the system.  But we really do have significant supply ready to come back online as prices begin to climb again, which will in turn mitigate the upward trajectory of those prices.  It might not actually crash the price again, but treading water in the $2-3/gallon range in 2016 is a lot better than many people were predicting just a few years ago.  And if we spike up closer to $4 again or even higher, then the offshore options (which were some of the hardest hit because their break-even thresholds are the highest ... SeaDrill went from an investors' darling to the brink of bankruptcy in the space of just a few years) become viable again.

Offline punch

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Re: Peak Oil
« Reply #2644 on: May 25, 2016, 07:29:31 AM »
$60 a barrel is the new ceiling in the oil industry.
That is the number that makes fracking profitable.

For major reserves it takes an incredible amount of up front capital to exploit.  With fracking (without regulation) the costs to start and then to stop are almost negligible.  At $65 start up fraking again, flood the market, when it dips to $55 stop.

I work in oil & gas in New Orleans, and deep water is pretty much toast for a generation.  Some people may applaud that, but think about the fines BP had to spend on Macondo.  The oil companies still need more discipline, but they are much more risk averse for safety and the environment just to ensure their investment is jeopardized.  A fracking company can start up and disappear within a month, leaving all the environmental problems for someone else to clean up.

Offline gildone

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Re: Peak Oil
« Reply #2645 on: July 23, 2016, 01:01:48 PM »
Well sure exploration goes up when prices go up, but all the easy stuff has been found and put into production already.  So like I said, it takes more work (and money) to find, extract, and refine the smaller, dirtier, harder to reach fields.  Since the world (and especially the American) economy is predicated on inexpensive oil, when prices get high enough to make producing these resources viable, demand goes down, and those prices crash.  This is the supply/demand destruction cycle we've seen playing out, due to time lag between supply and demand responses, plus other investments and subsidies that further distort normal market forces. 

You are correct.  Development of expensive, low energy returned on energy-invested oil (EROEI) is the result of peak oil, which was never about running out of oil but about how fast you can get it out of the ground to keep production growing an affordable price.  We're stuck between an inability to grow production as fast as we did for the first 150 years of the oil age and an economy that needs cheap oil to function. 

Offline gildone

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Re: Peak Oil
« Reply #2646 on: September 09, 2016, 07:59:03 AM »
Despite temporarily low oil prices and what the industry and media say, Peak Oil is still a reality.  Discovery of new sources of oil have been lagging behind global oil production for decades  and it is now at a 70-year low:

Peak Oil by Any Other Name is Still Peak Oil

One of the most compelling charts I have ever seen is the “Growing Gap” chart that used to appear on the front page of every ASPO Newsletter. This is the one from the last ASPO Newsletter, written by Colin Campbell and published in April 2009.

Since then, more than seven years have passed, and peak oil has disappeared from the mainstream press headlines--almost. On August 29, Bloomberg published a story alerting to the fact that conventional oil discovery has reached a 70-year low. It published a very interesting chart, using data provided by Wood Mackenzie, the oil consulting firm, to show that fact. Unlike the ASPO chart, Bloomberg's chart only goes back to 1947, the year before Ghawar was discovered...

Full article at:

http://www.resilience.org/stories/2016-09-08/peak-oil-by-any-other-name-is-still-peak-oil

Offline GCrites80s

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Re: Peak Oil
« Reply #2647 on: September 09, 2016, 08:29:02 AM »
It's market forces at work keeping new discoveries down since it costs a lot to get oil today out of the ground while prices are low.

Offline gildone

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Re: Peak Oil
« Reply #2648 on: September 09, 2016, 09:32:05 PM »
It's market forces at work keeping new discoveries down since it costs a lot to get oil today out of the ground while prices are low.

Sorry, but no it's not.  Your statement is a good example of how we keep lying to ourselves about what's really going on.  Plus it's awfully easy to make a statement like that without providing a shred of evidence to back it up. Anyway...

1.  This is not a recent development.  Production has been exceeding new discoveries for several decades now-- read the article and look at the data (I suspect you haven't actually read the whole thing?). 

2.  Oil companies never stop looking for oil.  They need to replace their reserves in order to keep their stock prices up, the dividends going and the investors happy.  This problem really started rearing its head in the mid 1990s when decades old oil companies began merging.  They were merging because they could no longer increase their reserves anything but marginally with  new discoveries, so they increased them by merging.  In a similar vein, the reason Exxon, for example,  has been quietly buying back its stock for quite a few years now is to artificially keep the price of their stock up because they can no longer replace their reserves like they used to.  The new oil just isn't there in significant quantities anymore compared to the past. 

3.  New oil discoveries are expensive because they are smaller in size,  lower in quality, lower in yield, and lower in energy returned on energy invested compared to the super-giant fields in Saudi Arabia, Kuwait, Mexico, Texas (the original Texas fields, not the new shale oil ones), Shallow Gulf of Mexico, North Sea, Daquing field in China, Iran, Iraq, Alaska Prudhoe Bay, etc that were discovered decades ago.   If there were significant cheap, easy fields left that's what the oil companies would be going after, but there are none left.     

4.  90% of global production today comes from legacy, super-giant oil fields that are decades old (see partial list above).  There just isn't enough new oil out there to replace these huge, cheap, easy fields, many of which are in production decline. 

5.  Even when prices were higher, these new, expensive fields just couldn't do what the super-giant legacy fields (again, see above). It takes a couple thousand wells in the shale-oil fields of North Dakota, for example to produce what less than a 10th of that number can produce in Saudi Arabia.

6.  On top of it all, and I provide this one to show the level of denial that is occurring:  things that aren't crude oil have been included in "new oil production" since about 2006-- the industry and even the US government in the US Energy Information Administration changed the definition of crude oil to mask the problem.  They started including things like biofuels and natural gas liquids in the oil production figures.  These things aren't oil.  I even saw a figure in the Wall Street Journal a few years ago that was comparing US oil production with Saudi production in an effort to show that our oil production was exceeding that of Saudi Arabia.  But the US chart included natural gas liquids and biofuels, but not the Saudi chart.  Sorry, but you can't take two bushels of apples and a bushel of oranges produced in one place and compare it to to two and a half bushels of apples produced somewhere else and say the first place produced more apples. 

Reality is what it is.  Denial can't change it.  We are in the midst of Peak Oil now. 

« Last Edit: September 09, 2016, 09:35:34 PM by gildone »

Online Gramarye

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Re: Peak Oil
« Reply #2649 on: September 10, 2016, 05:49:38 AM »
And yet prices at the pump have been stable or declining for a long while now.  Years, honestly.  Peak oil alarmists have a serious boy-who-cried-wolf stigma at this point, at least when it comes to policy.  (And this is from someone who drives an electric car and lives in an urban neighborhood.)  Even if the fundamental underlying dynamic hasn't changed (demand for oil will at some point grow faster than the market can adapt due to physical realities of discovery and extraction), something is clearly counterbalancing it at the moment and has been for years.  I'm glad I didn't buy my LEAF for cost-saving reasons alone; I estimate my break-even point to be about $1.33/gal., and that's if I never charge at something like a ChargePoint station, where the price for electricity is actually far above the price of gasoline in terms of miles of personal mobility purchased.

Offline jjakucyk

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Re: Peak Oil
« Reply #2650 on: September 10, 2016, 09:18:04 AM »
The low gas prices today are a combination of factors. Increased US production is one, but these are hard to extract, dirty, fast-depleting fields that require a lot more refining and money to produce.  Their effect is temporary at best.  OPEC countries are also keeping production up, in part to try to undercut and drive out some of the more expensive shale producers.  That's a long term strategy whose endgame is higher prices.  More efficient vehicles and a softening Chinese economy has cut demand as well.  The trick is that relatively small moves in production and demand can have a huge influence on prices.  Slight excess supply leads to a crash in prices whereas a slight shortage causes huge price increases.  Unfortunately instead of using demand destruction as an opportunity to invest in alternative fuels and rethink transportation priorities, we in the US anyway are squandering it on more driving and yet larger vehicles again, as the recent surge in VMT numbers is showing.  That's not a path to future prosperity but volatility.  Hopefully advances in electric vehicles and continued interest in more compact city living will be enough to continue a positive trajectory in spite of backwards Federal policy and string pulling by the likes of the Koch family and other oil interests. 

Offline 327

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Re: Peak Oil
« Reply #2651 on: September 10, 2016, 10:03:58 AM »
The move to electric cars, which will probably be sooner in China, is going to have a serious mitigating effect.

Offline gildone

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Re: Peak Oil
« Reply #2652 on: September 10, 2016, 01:45:14 PM »
And yet prices at the pump have been stable or declining for a long while now.

Fluctuating oil prices, including extended of declining oil prices are not and never have been at odds with Peak Oil.  Over a decade ago, the Peak Oil crowd explained this is one of the things that would occur. 

That aside, your argument doesn't change the fact that discovery of new sources of oil-- in terms of barrels found-- vs. barrels produced (on a global scale) have been lagging for decades.  This is exactly Peak Oil.  Just facts.  Nothing alarmist. No crying wolf either despite your protestations and those of the industry and media to the contrary. 


« Last Edit: September 10, 2016, 02:17:13 PM by gildone »

Offline gildone

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Re: Peak Oil
« Reply #2653 on: September 10, 2016, 02:14:08 PM »
The low gas prices today are a combination of factors. Increased US production is one, but these are hard to extract, dirty, fast-depleting fields that require a lot more refining and money to produce.  Their effect is temporary at best.  OPEC countries are also keeping production up, in part to try to undercut and drive out some of the more expensive shale producers.  That's a long term strategy whose endgame is higher prices.  More efficient vehicles and a softening Chinese economy has cut demand as well.  The trick is that relatively small moves in production and demand can have a huge influence on prices.  Slight excess supply leads to a crash in prices whereas a slight shortage causes huge price increases.  Unfortunately instead of using demand destruction as an opportunity to invest in alternative fuels and rethink transportation priorities, we in the US anyway are squandering it on more driving and yet larger vehicles again, as the recent surge in VMT numbers is showing.  That's not a path to future prosperity but volatility.  Hopefully advances in electric vehicles and continued interest in more compact city living will be enough to continue a positive trajectory in spite of backwards Federal policy and string pulling by the likes of the Koch family and other oil interests. 

You're on the right track.   Price volatility, demand destruction when prices get too high, etc.  These are among the things that happen when you hit Peak Oil.  It doesn't negate it, though, as Gramarye seems to think it does. 

OPEC not cutting production is a bit more theater than anything else.  OPEC has never been good at sticking to production cuts.


Online Gramarye

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Re: Peak Oil
« Reply #2654 on: September 13, 2016, 08:11:20 PM »
And yet prices at the pump have been stable or declining for a long while now.

Fluctuating oil prices, including extended of declining oil prices are not and never have been at odds with Peak Oil.  Over a decade ago, the Peak Oil crowd explained this is one of the things that would occur. 

That aside, your argument doesn't change the fact that discovery of new sources of oil-- in terms of barrels found-- vs. barrels produced (on a global scale) have been lagging for decades.  This is exactly Peak Oil.  Just facts.  Nothing alarmist. No crying wolf either despite your protestations and those of the industry and media to the contrary.

Then I have to ask, what is the point of your argument?  If your argument says nothing about pricing or fuel affordability (which subsumes the concept of shortages), and is consistent with years-long periods of ready availability of oil at affordable prices, easily long enough to allow alternative energy technologies to mature at current technological growth rates, then of what practical relevance is it?  And would you then concede that there is no peak-oil-based reason (leave climate change aside, as I understand that's a separate issue) to legally restrict exploration, extraction, or shipping of fossil fuels, to ban pipelines, and so forth, since those would simply be voluntary wastes of investors' money to construct infrastructure for fields that you believe will deplete quickly?  And that peak oil supplies no real reason to be concerned with the increase in VMT and vehicle size prompted by the extended lull we've experienced for years now?

If the point is simply that production (or discovery, not sure which one you even make central to your thesis) cannot increase indefinitely for the next thousand years, then by all means, I won't argue it.  But I think it's disingenuous at best to suggest that peak oil is nothing more than that and doesn't also intend to imply frightening things about the implications of that fact, implications which have been thoroughly contradicted by events in the last several years.

Offline Eigth and State

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Re: Peak Oil
« Reply #2655 on: September 18, 2016, 05:48:24 PM »
Quote
...Events in the last several years.

Peak oil is a long-term event. No one knows when the actual peak is, but it doesn't really matter. If projections are correct, global oil production will definitely be in decline by 2030.


Offline unusualfire

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Re: Peak Oil
« Reply #2656 on: September 29, 2016, 01:44:10 PM »
https://www.rt.com/business/360988-opec-deal-limit-oil/

Oil soars as OPEC reaches deal to limit production first time in 8 years
« Last Edit: September 29, 2016, 01:44:41 PM by unusualfire »

Offline Eigth and State

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Re: Peak Oil
« Reply #2657 on: February 05, 2017, 09:38:32 PM »

Here's an interesting graph:



This is a familiar shape that seems to show up in lots of places. Note that:

  • From 1900 to 1970, growth follows an exponential shape, with a major anomaly at WWII. The highest sustained rate of growth occurred between 1948 and 1970.
  • Starting about 1970, the graph still shows growth, but at a slower rate of growth. There are some periods of decline, one of which lasted a decade from 1998 to 2008.
  • The entire graph could be the front half of a bell curve, but it is too early to tell if it will continue to increase, level off, or decline.

So, what is this graph? It's not about oil, specifically, but its related, because it includes travel patterns.

This graph is the number of visitors to the United States National Parks.
By the way, the most popular National Park is the Great Smokey Mountains. The second most popular is the Grand Canyon.

Online jmecklenborg

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Re: Peak Oil
« Reply #2658 on: February 06, 2017, 04:07:36 PM »
The automobile lobby pushed hard for the national parks.  If you stop at the overlooks on Newfound Gap Rd. through the Smokey Mountains, you will see that they blatantly and with a wink announce this on the informational panels.  It's as if the Smokey Mountains staff is apologizing to everyone for how car and motorcycle-infested the park is. 

I biked from Gatlinburg up that climb twice last year, once in the early spring, when I had the place mostly to myself, and again in June or July, when the place was overrun with fat tourists.  It's really upsetting getting honked at and being passed by cars with kids glued to their phones while you're motoring up the side of the mountain range under your own power. 

 

Offline Ram23

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Re: Peak Oil
« Reply #2659 on: February 06, 2017, 06:21:57 PM »
The last two episodes of Ken Burns' "National Parks" documentaries touch on how intertwined the car was with the development of national parks. The relationship went both ways, the parks wanted as many visitors per year as possible and prior to the personal automobile they were pretty much out of reach for the vast majority of Americans. They quickly started to see the side effects, though, but a bit too late as they had already invested so much into scenic routes.

Online E Rocc

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Re: Peak Oil
« Reply #2660 on: February 07, 2017, 05:44:45 AM »
Quote
...Events in the last several years.

Peak oil is a long-term event. No one knows when the actual peak is, but it doesn't really matter. If projections are correct, global oil production will definitely be in decline by 2030.



I'm reminded of P. J. O'Rourke's observation that running out of whale oil was a big non event.

Offline Eigth and State

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Re: Peak Oil
« Reply #2661 on: February 07, 2017, 08:12:54 AM »




The Whaling industry in the United States lasted about 100 years and peaked about 1850, with 640 whaling ships in service. Whaling was the fifth largest economic sector at the time. The following graph shows the rise and fall of the whaling industry in the United States.



As you can see, whaling followed an exponential growth pattern until 1840. Who could have predicted at that time that the industry would suffer exponential decay just 30 years later?

https://www.theatlantic.com/business/archive/2012/02/the-spectacular-rise-and-fall-of-us-whaling-an-innovation-story/253355/

Online Gramarye

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Re: Peak Oil
« Reply #2662 on: February 07, 2017, 09:38:29 AM »
That's fine.  But peak oil as a hypothesis for why investments in fossil fuel companies aren't going to be good long-term performers is one thing; peak oil as a guide to national policy is another.

Online jmecklenborg

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Re: Peak Oil
« Reply #2663 on: February 07, 2017, 09:56:07 AM »
The last two episodes of Ken Burns' "National Parks" documentaries touch on how intertwined the car was with the development of national parks. The relationship went both ways, the parks wanted as many visitors per year as possible and prior to the personal automobile they were pretty much out of reach for the vast majority of Americans. They quickly started to see the side effects, though, but a bit too late as they had already invested so much into scenic routes.

I lived in Knoxville for four years and so read a lot about the history of the Smokey Mountains park.  Probably the most interesting part of its history is that its location is pretty arbitrary.  Whereas Yosemite was centered around its namesake valley, there was simply a general concept for a park in Tennessee and North Carolina and in a parallel universe a park of a similar size exists that doesn't overlap the protected area of our planet's park. 

I think the thing we narrowly missed with the Smokey Mountain park is that all of the controversy over kicking out the families who farmed Cade's Cove prevented that valley from becoming overrun with auto-oriented development like Pigeon Forge.  Those poor families would not have been able to resist the temptation to sell out and where a bucolic but tourist-infested valley now exists would instead be a loud, wildly illuminated tourist-infested valley. 

Offline Eigth and State

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Re: Peak Oil
« Reply #2664 on: February 07, 2017, 11:06:35 AM »
That's fine.  But peak oil as a hypothesis for why investments in fossil fuel companies aren't going to be good long-term performers is one thing; peak oil as a guide to national policy is another.

I'm not sure what you're getting at, but peak oil is a hypothesis that the long-term shape of the oil extraction curve is more or less bell-shaped, with the first half in growth and the second half in decline. The implication is that at some point in the future, the rate of oil extraction is going to be in irreversible decline when we realize that we are on the back half of the bell curve.










Offline KJP

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Re: Peak Oil
« Reply #2665 on: December 05, 2017, 11:31:08 PM »
70% of Americans oppose drilling in the Arctic National Wildlife Refuge according to a Yale poll. https://t.co/30xxmUknRo
America will never be destroyed from the outside. -- Abraham Lincoln.

Online Gramarye

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Re: Peak Oil
« Reply #2666 on: December 06, 2017, 09:10:18 AM »
I have no principled objection to it, though I'm surprised that this is even still an issue considering the collapse in oil prices that has lasted almost a decade now.  In 2007, gasoline in Canton, where I worked at the time, was north of $4/gal.  In the Great Recession, it dropped to $1.55.  (I remember that because I bought oil stocks when I saw that on my way to work, thinking that would never be sustainable regardless of economic collapse.)  Then it rebounded a little bit, then collapsed again with the fracking boom and I saw it at $1.40 just last year.  Now it's back into the mid-$2 range.  That still shouldn't be enough to justify even really wanting to go through all the time and expense of extracting north of the Arctic Circle.  Not when we're producing a tremendous amount in the lower 48.

Offline KJP

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Re: Peak Oil
« Reply #2667 on: December 06, 2017, 09:44:50 AM »
Unless the industry's expectation is that the price/supply won't stay at current levels for long.
America will never be destroyed from the outside. -- Abraham Lincoln.

Online X

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Re: Peak Oil
« Reply #2668 on: December 06, 2017, 05:30:43 PM »
Is the industry really pushing for this so they can drill right now, or do they want future rights?  And are we assuming that this administration is allowing this drilling in response to real economic planning, or is this a culture-wars, "liberal tears" victory for him in the eyes of his base?