Chart of the Day: Peak oil

Today’s chart comes from Gregor.US and offers a glimpse of global oil production at a seeming peak:

Today, in 2012, I observe that many analysts of global oil production—and the interaction between oil prices and the global economy—continue to engage in a guessing game about the future. But, frankly, the future has already arrived. And it is not a random future, but a future that was held to be improbable, if not impossible.

For each extra barrel of oil produced over the past seven years from Russia, and Canada, there has been a loss of production from the North Sea, from Mexico, from Indonesia and elsewhere. And in the case of OPEC, there has been a stubborn flatlining of production growth, which, in the true spirit of argumentum ad ignorantium, has been taken as proof of OPEC’s hidden and secret supply.

Thus, we are led to the newest and strangest meme of all: the failure of global oil production to grow over seven years, in the face of a phase transition in oil prices, is not even suggestive of peak oil. But rather, proof of oil’s imminent supply resurrection.

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Comments

  1. Diogenes the CynicMEMBER

    This is the chart that should be near the top of investors’ and governments’ minds. Without ever growing cheap energy our “growth” model is severely challenged, dare I say it, dead? Recessions will become a permanent recurring feature. It probably marks the high water mark of globalisation we are in for relocalization, simplification of systems and probably resource wars. Australia’s energy rich north will be a target.

    • One thing I am always curious to ask: why are “Green” politicians and advocates to a man, agnostic on defence spending, when they are the first to argue that resources are running out and this will cause wars?

      Are they agents of enemy powers that they want to get to use our resources instead of us?

      • One thing I am always curious to ask: why are “Green” politicians and advocates to a man, agnostic on defence spending, when they are the first to argue that resources are running out and this will cause wars?

        Because they’re also usually the same kinds of people who believe in negotiation and diplomacy rather than war.

        • And they are the same kind of people who allow Australian farm land to be sold to the Chinese. If the farming land is not the most strategic resource then, please, tell me what else is.

          • Farming land as a strategic resource, is “enough to feed your own population”. There is nowhere near as much point in being an exporter of agricultural products, as there is in feeding your own URBAN workforces that export VALUABLE stuff that is in demand around the world, which happens to be where ALL the wealth creation has occurred in the world economy for the last 60 years.

            Name me one nation whose relative incomes have risen over the last 60 years because they are an exporter of agricultural products, rather than because of their URBAN industries. NZ is a classic case of a nation sliding down the OECD rankings over this period, because of stupidly relying on agricultural exports.

        • Oh, Green Neville Chamberlains then?

          And this is still consistent with their position of alarmism on “resource wars”?

  2. Very interesting. There are also some good charts in the EIA annual report on production volumes of various energy resources.

    http://www.eia.gov/

    But the key implication for economic growth is how quickly we adapt, and how easily other fuels can substitute to provide similar types of energy services.

    • Exactly, Cameron, you’re not a raving lunatic like some of the environmentalists I encounter in the blogosphere.

      Many alternative technologies and indeed even known fossil fuel reserves, sit waiting until investors are SURE that the price of oil HAS gone PERMANENTLY high enough to guarantee a return on their investment. There was a wave of this sort of investment in the 1970’s and it came a serious cropper because oil prices dropped again.

      I am not only a technology optimist, I regard it as irrational and a character flaw to NOT be a technology optimist. Or to dismiss what free markets can do when adaptation is required. Not that “running out” of capacity or “taxing” telegraphs and faxes “caused” the invention of email.

      • “I regard it as irrational and a character flaw to NOT be a technology optimist”

        Woah, not sure where that came from…

        I come from a scientific and engineering background and would be the first to admit that technology has limits. And of course there’s that pesky 2nd law of thermodynamics…

        PhilBest, how can someone like you who’s so intelligent that you can spot the causes of our housing bubble not acknowledge the possibility that the last 200 years (the industrial age) is also a bubble?

        • Very well said, straight to the point. It was a bubble, because the world lived on a greater and much faster growing debt towards the nature, much greater debt than the one causing GFC, that is why deflating it will be much more painful than deflating the financial debt.

        • The industrial age is a bubble because we discovered how to refine oil and use it as a source of motive power?

          By that standard, ALL progress is a bubble. Even discovering uses for trees.

          So what about the 2nd law of thermodynamics? If you applied that to energy from trees and dung 1000 years ago, as an excuse to ban progress, where would humanity be today?

          How does the 2nd law of thermodynamics apply to biomass that has been decomposing long enough to turn into a refinable fuel?

          There are abundant reasons to be optimistic about “biotechnology” today. A physics specialist might be left gaping in amazement at the possibilities. Especially one whose whole career has been preceded by a particular worldview that determined what would be cherry-picked by its expertise to support its political agenda. This sort of stuff is ruining the world today – I bet there is not a SINGLE CAGW alarmist who is politically a “classical liberal”, for example.

          • “The industrial age is a bubble because we discovered how to refine oil and use it as a source of motive power?”

            Yes. Oil is a non renewable resource (or so slowly renewing that for all intents and purposes it is non-renewable).

            We came a largely agrarian based economy using animals for transport. There’s no reason why we can’t return there over the next few hundred years.

            Political ideology is irrelevant to peak oil. I for one share your capitalist/libertarian attitude.

          • Oil is non-renewable, but we won’t ever run out of it. It will just get so expensive to extract that investment will be stimulated in alternatives. I don’t know when that will happen or what that will be… oh wait, it’s already happened… We have at least a century of cheap natural gas at out feet. Oil and gas are not close substitutes in the short run, but if oil remains at elevated prices sufficient investment will take place that allows gas to supplement it.

            Yes, just as it was ‘impossible’ to extract shale gas two decades ago, it is ‘impossible’ for humanity to remain in the Information Age without fossil fuels. As long as the sun burns, humans have energy. You may scoff at humanity’s capacity to innovate its way towards continued prosperity, but history scoffs infinitely more loudly at you.

      • ‘I will have what she is having’

        the belief in technology and magical
        thinking will create all sorts of environmental
        disasters in the futrure… ah sorry ahem
        almost forgot BP’s deep horizon well in the gulf of mexico

        if there were real energy alternatives we would
        not be drilling to a vertical depth of 10kms in the gulf of mexico

        • Ahhh, POOOOR Gaia…..

          The effects of the Gulf oil spill was drastically over-rated by a bunch of wailing eco-religion loonies. As with almost all impacts of modern human life on “the planet”. Never mind that things were always worse under previous technological paradigms. eg horses, wood, dung, whale oil. Never mind that communist governments have been the worst destroyers of the environment by an order of magnitude. It is profit making capitalism that we must focus our daily 5 minutes of hate upon.

          • We are having a dramatic effect on the planet Phil…yes, there are bunches of wailing eco-religion loonies out there…but we are having a dramatic effect on the planet all the same…its a consequence of converting the biomass of other organisms into ever increasing numbers of humans. Every kilogram of extra humans is paid for by a combination of the energy from fossil fuels and biomass of other species…..and we are not so efficient that it’s a one to one ratio. Do you care? I suspect not…but it’s not sustainable in the long run.

        • i) 10km is not deep drilling. In fact it is cheap to extract.

          ii) The spill at deep horizon was caused by a (then) unknown basin of oil being blocked back up to prevent oil supply coming on line, thus increasing the price.

  3. What a load of twaddle. Humanity has been running out of fuel since the cave men finished burning up the first tree that had fallen over. Then they figured out they could knock other trees down and get more fuel.

    • This is important because we have over a century of infrastructure investment, mostly in transport vehicles (trucks and cars, ships, planes etc) that is exclusively dependent on oil as a fuel source, the cannot easy or quickly modified to run on other fuels.

      You are right that over time we will figure out other ways of producing things without relying on oil. But the speed of the transition is important.

      • Energy/liquid fuels cannot be created.
        Techno sources of energy have a poor EROEI.
        These have there own complexity issues and feedback problems.
        The need to increase complexity in a system is a sign the easy fruit has been
        picked. (BP’s deep water horizon oil spill – limits to engineering, hubris etc)
        Declining sources of cheap energy will render current debts
        impossible to pay. The industrial economy relies upon expanding
        cheap sources of energy to fuel the growth economy and the repaying of debts
        going forward.
        As far as the industrial growth economy is concerned the party is over. 90% of the recessions since WW2 were preceded by an oil spike of $80 + a barrel adjusted for inflation.
        What politician is going to sell a modest future to its constituents. That is LESS – less energy, stimulation and stuff.
        On ya bike

      • Cameron – we won’t have time, the growth in demand will mean that we will run out much faster than anyone realises. Once producers understand the finite nature of their source they will have to increase prices to maintain profits. Costs at the bowser will probably increase perhaps twofold over the next 4 or 5 years, and that is really our only hope.

        Until alternate energy sources (forget corn based ethanol) become economic no solutions will be found.

        • Would you believe I just starting writing a more detailed post on this topic and made that exact point. That the uncertainty is in the timing, and that if we get lucky and the peak is a long plateau, we might find that economic disruption is far less than many imagine (but far more that the cornucopians believe).

          If, on the other hand, the decline is surprisingly sharp, we will find the world unable to resume anything like the growth trajectories seen over the previous half century. Then, there is how financial markets and political systems deal with this new condition.

          • Cameron with demand doubling every decade and peak production reached (that is one point I’m not 100% certain on) then the shortage of supply will hit us like a bomb.

            As you say timing is the only uncertainty, but from the above graph there doesn’t appear to be much more.

            Gas will sustain us because it has to and it is in abundant supply, but then what – peak gas?

            How do we feed a growing global population without energy for primary producers? Really how do we do everything without energy. In the next decade man will use more oil than we have ever used since the beginning of oil production – it just can last forever at that rate of useage.

            It really is almost a fait accompli.

          • As Peter pointed out Supply is one thing. Demand is another.

            We, including Aus US Europe etc, can expect to be competing in a tight market, with declining currencies, against a very strong and growing China (and perhaps India et al) with a very strong currency for this scarce resource.

            No inflation on the horizon?

      • I think that most large petrol cars less than say 3 years old could be economically converted to, and most new cars built to use LPG/LNG and that would buy 20 years for conversion to electric (for city use)/hybrid (for longer trips).

        I understand that metals for batteries and maximinsing the efficiency of petrol saved per unit of battery points to hybrid rather than electric vehicles.

        • I’ve been converting cars to LPG for 20 years now and am ready to give the game away but strongly believe that CNG conversions for light vehicles and attendant filling stations should be mandated, LPG and CNG can be retrofitted to nearly all vehicles and we are self sufficient in the stuff

          LPG injection to current and future diesel trucks can save 20% off running costs right now AND reduce particulate emissions; although interstate rail with a fleet of small CNG trucks at either end would be the sensible option

          As for electric cars
          http://www.altenergystocks.com/archives/2011/08/its_time_to_kill_the_electric_car_drive_a_stake_through_its_heart_and_burn_the_corpse_1.html

        • There is considerable potential even within current technological limitations, to double our vehicle fleet efficiency. Look at the numbers of V8’s and SUV’s that have still been selling new right up till recently.
          The price of crude oil per barrel has until recently only ever had minimal effect on the price MOBILITY relative to incomes. This is because most of the cost of petrol is refining and distribution, and most of the cost of mobility is car depreciation, repairs, licensing, etc.

          Europe has been taxing their petrol for years to make it twice the price, and the result has been what, 10% less actual miles driven (than the USA) but a LOT more small 4 cylinder cars sold as a proportion of the total.

    • “Anyone who believes exponential growth can go on forever on a finite planet is either a madman or an economist”
      Ken Boulding

      • Anybody who thinks technological change has been and always will be “LINEAR”, is the REAL “madman”. I meet these lunatics in the blogosphere all the time.

      • He is absolutely right, but not for all economists, just the ones who are servants and apologetic and have never be able to see the invisible before it happens. Of cause the man who first suggested there are natural limits for the capital growth wasn’t an economist.

        • The economists biggest mistake over the last few decades doesn’t concern natural resources, but the effects of anti-growth regulations on urban land prices. Most of this mistake is “error of omission” on the part of the great mass of non-specialists, but the culprits are a small number of experts who have got their theory 180 degrees round the wrong way concerning “supply” and how it inter-relates to demand, for land.

          There are some great debate threads on here where Cameron Murray has kindly taken the erroneous position to test the arguments I have derived from the clearest thinkers, such as Alan W Evans.

  4. And flatlining global supply means shrinking global exports, as exporting countries continue to grow consumption. So big importers (US and Europe) are suffering. Lets hope the situation with Iran can be resolved, or gradual adaptation may turn into brutal change

  5. We can not create energy/liquid fuels.
    Other techno sources of energy have a poor EROEI.
    Increasing complexity in this regard
    will be somewhat self defeating/create
    its own feedback problems.

    As far as the industrial growth economy is concerned the party is over.

    Many current debts will simply not
    be paid. A growing energy/liquid fuel supply is required to simply keep
    the growth economy chugging along.

    As the cheap energy supply stalls,
    the debts will become crushing.

    Our whole way of life needs to ratchet
    down. What politician is going to sell
    a modest future of LESS (less energy, stimulation and stuff) to its constituents?

    on ya bike

  6. The explosion in gas is rendering the peak oil discussion, if not irrelevant, then certainly less urgent. It is changing the whole “we are all dependent on oil” assumption.

    • Exactly. What people who argue against peak oil fail to recognize is that substitution is a gradual process. As oil gets more expensive, substitutes become more attractive. Substitution of gas for oil in home heating, and of gas or coal for oil in electricity production, began decades ago. These processes are now gathering serious momentum. High oil prices are also leading to more efficient use of existing supply. Notice how car fuel efficiency has improved dramatically lately?

        • So you think car fuel economy hasn’t improved lately? Bizarre.

          I have indeed heard of Jevons Paradox (note spelling). It says that higher efficiency can lead to increased usage. However, this depends on both price effects and supply constraints as well.

          Jevons certainly did not say that higher prices would not lead to more efficient usage.

          • Arn’t you forgetting the biggest problem?? Population growth…So will our extra efficient fuel supplies be enough to supply an ever growing population??

          • Arn’t you forgetting the biggest problem?? Population growth

            Well for those they consume lots of energy, it isn’t necessarily ‘our problem’.

            Other than India, which has a steep decline in birthrates in the last two decades anyway, virtually every other high energy consuming nation has a birthrate of less than 2.1.

          • So why is it more MORAL to enact policies that do real harm to humanity now, than it is to “just let it happen” – IF it does? Who wants to play Hitler and decide who gets topped?

            Theodore Dalrymple said when he was young and idealistic, he regarded the PRICE system of rationing scarce resources as “immoral” – until he had traveled a bit and seen OTHER methods of rationing scarce resources, and seen human beings grovelling to local Komissars.

            He concluded that people who starve to death having given survival their best shot under conditions of freedom, have retained more humanity than people who have been selected against by the local Komissar.

      • If you look at history, humanity has always (ALWAYS) been divided in to two camps. There’s the mob that reckons people are wicked and are destroying the planet. Then there’s the mob who lets their natural curiosity and creativity loose, and gets on with life. One of those mobs tends to believe in self-imposed limits, and the other doesn’t… I’ll let you figure it out.

        • There’s nothing self imposed about planetary limits.

          You sound like a real estate spruiker: “It hasn’t happened yet so it will never happen”.

          • Some resources are effectively infinite (eg iron, aluminium) because they never leave the planet. Others (eg fossil fuels) are clearly finite.

            What we don’t know is whether human ingenuity is finite or not. We won’t know until we get there.

          • Alex, even burnt carbon molecules go back into biomass and will ultimately become “fuel” again in a few milennia. And technology might just find a workable way to speed this process up. (I know “biofuels” are not it, at the moment).

          • Quite true, Phil, but I think you’d agree with me that fossil fuels are effectively finite, given the long time required for them to be regenerated.

        • … and then there’s the middle ground between those camps. Pretty sure that’s always been there, too.

        • Peak cheap oil has passed, I agree.

          I don’t see that as a reason to throw up my hands and say “we’re all rooned”.

          There are alternatives to oil.

          Peak oil and climate change seem to be issues that are very emotional. Everyone has their religion, so to speak. So time to live and let live on this one.

        • dumb_non_economist

          Is it just me, or do others here see a lot of sand and ostriches?

          The markets we should rely on are they the ones that got us to where we are now and in response to a comment further down isn’t it a bit lame to wait to to find out if human ingenuity is finite, what to do if it is when we get there!

    • You can also turn gas into liquid fuels if need be, and if we truly are hitting peak oil, all these alternatives will start making financial sense.

      • We hit peak oil in 2005. Oil prices climbed to $147 a barrel in 2008 and crashed our economies.

        Where were all the alternatives in 2008?

        • Waiting to be sure that prices were going to STAY that high so that investors in alternatives didn’t get wiped out like they did after the 1970’s spate of alarm-driven investing.

        • this is plain wrong. i agree conventionals are plateauing but to say that’s what caused price rises is incorrect. if so why did it fall to around 30 bucks so rapidly. massive new supply? no it was speculative dollars. i am in the substitution and efficiency camp. this discussion frustrates the hell out of me because i work in energy markets and am soft rock geo by training (hydrocarbons specialist). get on with the innovation and sustainable GDP path instead of bubble after bubble. hydrocarbons are not an issue. nothing to see here.

    • The explosion in gas is rendering the peak oil discussion, if not irrelevant, then certainly less urgent. It is changing the whole “we are all dependent on oil” assumption.
      There are bigger issues around peak oil than not being able to drive a car to work every day. Like, say, not being able to make plastics and synthetic fibres, or fertilise crops.

    • SoN, any thoughts on the geopolitical implications of this shift? Maybe a weekend musing…

  7. Marrying into a geologist and scientific family, I must stress the term should be “peak cheap oil”.

    There’s plenty of oil, the question is the economic and energy requirements to extract it.

    Then, as others have noted, the change in infrastructure to adapt to cheaper or other sources of energy as these dual costs (remember its now taking more fractions of a barrel of oil expanded to get out 1 barrel of oil – Chris Martenson’s chart explains this well) rise over time.

    Add speculation and loose monetary policy (but I repeat myself!!) and price volatility in crude oil will continue…

    • “Peak oil” is a precise term relating to flow rates and is the correct term.

      “Peak cheap oil” is confusing. When oil fell from US$147 a barrel in 2008 to $30 did it get more expensive?

      If we go into a severe deflationary spiral oil could end up at $10 – is that cheap or expensive?

      • darklydrawlMEMBER

        Whilst I don’t speak for TP, I believe he is refering to the cost of extraction, not what you pay on the market / at the pump.

        He is right, the ‘Easy Oil’ (cheap to extract) is mostly all gone, expect for perhaps parts of the middle east (which has some other issues that make it complicated).

        When you get companies effectively mining tar sands for oil (and costly and complicated process) you know you are getting near the dregs.

        There is plenty of oil there, but it is not cheap or easy to get to anymore.

        Oil is one of the most valuable resources we humans have. It is not about using it as fuel to get from A to B so much – althought that seems to be what most people think.

        Look around you. Everything you see, all of it has oil in it somewhere. More importantly our food supply it totally dependent of cheap oil, as is our supply chains required to get that food to market.

        If oil stopped tomorrow, some of humanity would survive, many of us would die, and those left who remember the old days wouldn’t like what they have left.

        • I agree with you that the easy oil is mostly all gone.

          But that doesn’t mean it’s getting more expensive i.e. costs more. A deflationary spiral will cause demand destruction, unemployment and falling wages. So the cost of extraction might fall (even as oil becomes harder to extract).

  8. Thorium Molten salt reactors! Energy problem solved… although atleast 20 years away, we should make it until then?

    • My favourite author on all this sort of stuff is Jesse Ausubel. He is a technology optimist.

      It is a sad indictment on our civilisation that people like him are unknown but doomsayers like Paul Ehrlich, Lester Brown et al are celebrities. And that youth reads “Ecologist” magazine now rather than “Popular Science”. These things have consequences for a civilisation.

  9. We already run cars and buses on LPG. So if a shortage all cars, small transport vehicles and buses can be converted. We would have to devise some ways to power large trucks.
    South Africa has for some 60 years produced oil from coal. Its expensive but as oil becomes more expensive so this process becomes more competitive.
    Maybe any taxpayer funds to Australian vehicle assemblers should be to produce effecient gas powered vehicles?

    • darklydrawlMEMBER

      But it is not about fuel for transport. We use oil for EVERYTHING – especially food production (fertilisers), plastics, medicines, refigeration etc.

      Driving from A to B in a 2 tonnes car burning oil is a luxury that is going to go. And that isn’t such a problem as alternative as viable and easy.

      But imagine world without fertiliser and plastics. Wanna try and live there with the current population we have?

      • “Driving from A to B in a 2 tonnes car burning oil is a luxury that is going to go.”

        +1

        • People will abandon the 2 tonnes many many times more easily than they will abandon “automobility” per se. Expect a LOT of downsizing as energy prices DO rise. Do NOT expect a lot more train riding and bicycle riding.

          • Singapore has already abandoned the car for the train. What are you getting at?

            In another world some people sacrificed there private jets for the boeing 747.

          • Singapore is unique, due to being a sovereign city-state with very small government and low taxes, hence very high density of PROSPEROUS people.

            It is simply impossible to replicate Singapore or Hong Kong or Manhattan or Tokyo or London anywhere and everywhere in the world, just because they are “sustainable”. You can no more turn any old city into Singapore than you can turn Ugly Betty into Claudia Schiffer – centuries of DNA is involved. Cities have DNA and evolutionary paths too.

          • Patrick Troy calls it “physical determinism” when planners think they can ignore centuries of evolution and impose policies on urban form and transport hoping to turn their city into Hong Kong. This is like expecting the makeup Claudia Schiffer uses, to actually turn ugly Betty into Claudia Schiffer, rather than just ugly Betty with Claudia Schiffer’s makeup.

            This is why imposing high density and rail transport on MOST cities just drives them broke rather than turns them into Manhattan. It turns MOST cities into Northern Britain’s rust belt, not Manhattan or London.

    • When will we wake up to the impact of fossil fuel use on the planet and understand that it is no way to treat our life support system – the biosphere’s buffers have been spent and its ability to provide clean air, water and food are diminishing daily.

      Avid chartist talks about markets providing as though they are a benevolent deity! Markets are powerful systems but until we correct the market failures that allow for externalities to continue market participants will continue to push those costs on to others until something breaks (sound familiar?).

      The current market system has resulted in the mother of all tragedies of the commons.

      In terms of peaks, IEA confirmed the peak in conventional oil production occurred in around 2006! http://www.energybulletin.net/stories/2010-11-11/iea-acknowledges-peak-oil

      Every additional barrel comes with diminishing EROEI, which with increasing demand means extreme volatility in prices as demand smashes into supply and then falls back only with recession because supply will not be able to respond. That cycle will continue until we substitute.

      Oil from coal is an environmental disaster waiting to happen. Already coal’s life-cycle (mostly externalised) costs are greater than its value add as an energy source, converting it to liquid fuel makes it even worse because it is inherently less efficient.
      http://www.aeaweb.org/articles.php?doi=10.1257/aer.101.5.1649
      http://onlinelibrary.wiley.com/doi/10.1111/j.1749-6632.2010.05890.x/full
      http://www.nrel.gov/docs/fy99osti/25119.pdf

      And then what of peak coal?
      http://www.nature.com/nature/journal/v468/n7322/full/468367a.html

      The supply of gas is almost limitless with deep ocean methane hydrates being an enormous source of energy – but at what cost? While at least gas burns cleaner than oil and gas and so has less human health impacts at combustion, climate change and ocean acidification continue as long as the concentration of CO2 in the atmosphere keeps rising. Downstream impacts are perhaps worse still with environmentally risky techniques (like fraking) needed to extract and process it.

      We need to quit the ever descending spiral into more damaging and more expensive fossil fuels and realise that renewables, supplemented with nuclear (preferably thorium) need to be the backbone of our energy infrastructure. EVs, hydrogen and fourth generation bio fuels from algae can provide the needed transport fuels.

      Sadly that won’t happen as long as the biggest companies in the world continue to be oil companies and people and governments obsess over short term price increases needed to build out the new infrastructure while ignoring the inevitable price increases from trying to squeeze oil from every last pore of the planet. And the longer we wait the harder it is!

      Cheap energy is the heart of our current prosperity. Unless we can think longer terms and build infrastructure that supplies renewable energy (i.e. stable prices through fixed fuel costs) with low environmental and public health impacts the cheap energy growth paradigm is finished.

        • I generally like your posts AV, but I don’t agree with you on this issue. People are people, the market is where they come together to transact. If the rules of the market allow for people to increase profits by pushing costs on to uninvolved bystanders (sadly) most will do it.

          I do agree with you on somethings though. Fossil fuels are an issue that require a transition to substitutes, and so I agree with you to the extent that if we were to continue BAU, the prices for fossil fuels will rise and the cost of renewables will decline until there is a cross over where people will choose a cleaner option just because it’s cheaper.

          The bigger question is whether that will happen in time for the externalised costs to be contained to a manageable level or whether some intervention is required/preferable. Added to that is who pays for the damage done because I’m sure shareholders/executives of Exxon mobile won’t be giving any money back.

          Unlike energy, peak phosphorous and peak top soil are different issues because there is no substitute and we rely on them for the industrial food system.

          PS I meant upstream in my post not downstream re gas, I got too carried away to check.

          • Pabster, your post above is quite well informed, but I think you are unnecessarily pessimistic. You understand all that stuff about potential sources of energy and you are pessimistic? I don’t get it. I think “what the free market can do” will surprise you in the next decade or 2.

            I disagree with you about the “more harmful” sources of energy. Nuclear has been the LEAST harmful on net, so far. Natural gas is less harmful than oil, which is less harmful than coal, which is less harmful than wood, dung, and whale oil. Hydrogen has huge “low harm” scope.

    • Exactly Anton!

      Given my attitude to foreign debt etc I have not been able to understand why LPG for Aus cars was not made mandatory years ago.

      I think there is actually a technology to add gas to the fuels of large trucks. I think it results in gas being 20% of fuel usage. Not sure of the economics but I’d have thought pretty good. Also not sure of the adoption of it.
      I don’t know much 🙂

      • I am actually favourable to suggestions that whole economies in developed nations should just give the finger to the oil exporters and run with the alternatives from now, regardless of episodes in the future where oil will still be a cheaper option.

        South Africa has kept its “coal to petrol” infrastructure going since the end of apartheid embargoes, because it will make sense one day.

  10. Diogenes the CynicMEMBER

    Just chart fossil fuel use and compare it with population. We are already in overshoot territory.

    At a minimum there will be a lot more people growing food than there is today. There will be a lot more walking and riding as well.

    At least plastics last a long time…we can simply reuse and reuse them…fertilisers on the other hand…

  11. The movie “Collapse” talks at length about Peak Oil and it’s negative repercussions.

    EVERYTHING is made out of oil (basically :P)

    All Plastics are made out of oil. Rubber is, your car tyre. Basically your entire vehicle is made out of oil and is run on oil.

    everyone needs to start producing food locally!!!! famers unite! haha

  12. The figures on that chart are quite different to those produced by the IEA.

    If you look at the IEA chart annual supply tends to remain just at or below annual demand, the giveaway is 2008 to 2009 to 2010. In 2008 you have demand of 86.6mbd and supply of 86.7mbd. You then see a drop in demand to 85.6 mbd and supply also drops to 85.6mbd. Supply then rebounds to 87.5mbd compared to demand of 88.3mbd.

    I’m yet to be convinced that the supply is actually as limited as is being portrayed; the ordinary behaviour of a cartel is to restrict supply to obtain better pricing outcomes for its members. You also have some significant political interference.

    Its very difficult to separate those influences from any actual constrictions in supply.

  13. Peak oil hand-wringing has been a good laugh for a long time. Oil production is 5 times greater today than it was in the late 50s, when concerns first started seriously surfaced about the end of fossil fuels and a return to the caves (or at least the fields). What the fearful fail to factor in was, is and will always be human ingenuity. The shale gas bonanza, running in concurrence with the birth of a truly global seaborne natural gas market, will provide this century with all the dirt-cheap energy it needs (and completely skullfuck the Russians, as an added benefit)

    • Ironically, the entrepreneur who was working on “fracking” for 30 years, George P Mitchell, was also a huge funder of environmental activism. He even funded the original “Club of Rome” talkfest.

      That’s a guy who walks the walk as well as talks the talk. He can die knowing that he 1) did his bit to warn humanity about the preciousness of resources
      2) gained humanity another few centuries of energy (and an improved form, at that) with a tech breakthrough.