Requiem For The Oil Drum

[BrotherBart]

"The decision to shutter "The Oil Drum," the leading website devoted to peak oil, has come to symbolize the end of an era - and sparked a furious debate about whether the theory was all along based on a fundamental mistake.

http://www.thefiscaltimes.com/Articles/2013/07/22/The-Death-of-Peak-Oil-End-of-a-Flawed-Theory#page1

 

[firebroad]

Interesting article, my two cents worth, whether educated or not:

Peak Oil elicits the same reaction from society as Overpopulation. One faction denies it, another affirms it, and the majority simply ignore it.

The IEA could predict confidently that oil, gas and coal resources "are sufficiently abundant" to fuel the world until cleaner alternatives have been developed.
Read more at http://www.thefiscaltimes.com/Articles/2013/07/22/The-Death-of-Peak-Oil-End-of-a-Flawed-Theory#ZlYWbBPAClPSQt4F.99

This is the sort of mentality that keeps us lazy. As soon as some authority makes such a statement, the persuit of alternative energy falls by the wayside.
Even if oil is found in incredible abundance, I would lay odds that the price will not go down any lower than it is today. Greed will out.

 

[StihlHead]

No fundamental mistake. Its just that peak oil has just been eclipsed by peak energy, with NG/fracking, coal, nukes and other "cheap enough" energy sources allowing for continued energy expansion, as well as more expensive oil sources. The basic premise remains the same, but has been shifted out a few more decades. There is also the new issue of the obvious effects of burning FF (climate and global warming) and the old issue of the swelling global human population. At some point the population will strip global resources. It is just a matter of time.

 

[woodgeek]

In a simple culture, an organism grows exponentially until it runs out of an essential, limiting nutrient OR some waste product accumulates until it limits further growth. These organisms are not simple or stupid, and can often adapt their biochemistry to run on different foods, or to adapt to the waste accumulating in their environment.

In beer, yeast run out of sugar before the EtOH rises to toxic levels, they live in a 'peak sugar' world. In sweet wine, the EtOH reaches a concentration where the yeast die before the sugar runs out, they live in a 'pollution apocalypse' world.

For humans, 'Peak Oil', or Peak Energy or Peak Whatever is the beer case. Excess CO2 destroying the biosphere, agriculture and then us via global warming, drought and ocean acidification is the 'wine case'.

Over the last few years, the 'wine case' for human limits to growth has started to look more likely than the 'beer case'. Mastering renewable energy and sustainable industry/food (all technically feasible) suggest that, unlike yeast, we can decide to evolve into photosynthetic algae and live the good life a LOT longer. The question is how many of us get to come along for the ride, e.g. equality of distribution.

 

[btuser]

The water is muddied by the petro-dollar. Nixon was a smart cookie.

I'll know things are getting back to normal when the CASH-4-GOLD places start closing down.

 

[Grisu]

No fundamental mistake. Its just that peak oil has just been eclipsed by peak energy, with NG/fracking, coal, nukes and other "cheap enough" energy sources allowing for continued energy expansion, as well as more expensive oil sources. The basic premise remains the same, but has been shifted out a few more decades. There is also the new issue of the obvious effects of burning FF (climate and global warming) and the old issue of the swelling global human population. At some point the population will strip global resources. It is just a matter of time.

I could not agree more. Despite massive investments in renewable energy they are still a minuscule fraction of worldwide energy production. The bulk are still fossil fuels with some uranium sprinkled in which all will be depleted at some point. I am even wondering whether we really will reach peak energy in a few decades or not much earlier. The current complacency reminds me of the stock market in 99 and 06/07 when we were "in a new era and the economy will go up forever". When looking at the fracked NG boom for example I am pretty sure we will see double the current prices within two years. I also doubt that we will really get 100 years worth of NG from fracking. Maybe 30 years if we are lucky and use it wisely. In any case, my kids will certainly see life beyond peak energy; I don't envy them.

 

[woodgeek]

The Peak Oil call has happened several times since oil was first developed in the 19th century. And in each time, the price signal has lead to the development of new resources, sometimes relying on new geographical exploration, and sometimes relying on new tech for extraction. In all the earlier cases, as that new region got developed or new tech matured, the price fell back to something cheap (i.e. cheaper than milk). Will the price fall back this time? Are the new technologies really so fundamentally difficult that they won't get cheap too?

The amount of C below ground is vast. Unless you have a complete CAT scan of the Earth's crust and a crystal ball for future tech, I don't know how anyone can call a peak for anything.

The problem with FF is CO2, not limited supply.

 

[Grisu]

The Peak Oil call has happened several times since oil was first developed in the 19th century. And in each time, the price signal has lead to the development of new resources, sometimes relying on new geographical exploration, and sometimes relying on new tech for extraction. In all the earlier cases, as that new region got developed or new tech matured, the price fell back to something cheap (i.e. cheaper than milk). Will the price fall back this time? Are the new technologies really so fundamentally difficult that they won't get cheap too?

The amount of C below ground is vast. Unless you have a complete CAT scan of the Earth's crust and a crystal ball for future tech, I don't know how anyone can call a peak for anything.

The problem with FF is CO2, not limited supply.

When would have been those other times when there was a production shortfall that was overcome by new technologies? Oil spikes in the 70ies were not due to insufficient reserves but politically motivated. Just looking at what we put our hopes on now (oil shale, tar sands, offshore drilling in the arctic, deep sea production) should tell everyone that we are currently going for the scraps. I doubt that there is much beyond that. Certainly not enough to power a growth-dependent economy.

 

[begreen]

Agreed, there is still oil out there, but the extraction is getting a lot harder. Fracking can and does fail at times. Human nature being what it is, corners will be cut in some cases. When there is a large, catastrophic aquifer failure due to fracking that process may grind to a halt. The tar sands in Alberta makes some of the epic Soviet era environmental messes seem tame. There will still be oil, but at what cost?

 

[firebroad]

All boils down to SHOULD WE rather than CAN WE.
And fracking can keep prices down, but I have read so many horror stories about it, I am not sure it is a viable alternative.

 

[btuser]

What I see is a lack of motivation. You can't own the sun, or the wind, and uranium\thorium are too widespread a resource to monopolize. How are you going to make money that way?

 

[begreen]

Money talks, nobody walks.
(broken link removed)

 

[woodgeek]

When would have been those other times when there was a production shortfall that was overcome by new technologies? Oil spikes in the 70ies were not due to insufficient reserves but politically motivated. Just looking at what we put our hopes on now (oil shale, tar sands, offshore drilling in the arctic, deep sea production) should tell everyone that we are currently going for the scraps. I doubt that there is much beyond that. Certainly not enough to power a growth-dependent economy.

Oil started out being pulled out of hand dug wells like old fashioned water wells. The first oil crisis was when that stopped working in the 19th century.

The situation in the 70s was complicated....there were two spikes, a short one led by OPEC, and a longer one later due to a supply/demand imbalance, due to the tapping out of the then developed, onshore conventional reserves (remember, the US 'peaked' in the 70s). So what happened... offshore (Gulf), Alaska, North Sea, African onshore and offshore, and enhanced oil recovery EOR tech everywhere. All of which were developed from the profits on the second (longer) price spike, and which brought so much new supply on line, the price crashed for 20 years afterward (until many of those new resources in the early 80s started to peak, like the UK in the 2000s). Those major corporations that poured into renewable energy in 1980 then lost their shirts, and they still remember to this day....they won't invest big capital until they are convinced that the current high prices are a new permanent condition.

At the time offshore was seen as prohibitively expensive, marginally profitable, and A lot of folks thought EOR was also too expensive or ineffective vapor-ware. None of that proved to be true, and all that stuff is now 'conventional' too and plenty profitable.

No one knows (yet) how much can ultimately be collected from fracking, or even how to avoid dry holes. And yeah, the US lower 48 shales won't power the US or world for 50 or 100 years. But all the continents have shales, and our overseas trading partners and competitors are also eyeing their shale resources greedily, many of which have not been surveyed yet. How much oil and gas can we get if we fracked all the continents? Enough to keep all the engines of capitalism going for the next 20-30 years (easy), but also enough to break the climate.

 

[StihlHead]

The problem with FF is CO2, not limited supply.

You actually believe that there is an unlimited supply of FF?

 

[woodgeek]

Not at all. Just that FF is well in excess of that required to lead to a v bad global warming outcome. IOW, I think we will end up deciding to leave some/most FF in the ground AND prob resort to geoengineering to moderate the worst effects of current and future CO2 emissions.

 

[jharkin]

Thing is, the arguments put forth by the oil drum was never so simplistic as to claim oil would simply dry up. The argument was about flow rates- that unconventional sources, even if total reserves are huge, can't keep increasing the daily production rate much longer.

Looking at it that way, is the theory really dead? Or rather have high prices served to moderate demand to fit stagnant daily supply growth?

 

[woodgeek]

Can't move the goal posts. Many predictions from the PO crowd were for falling production and prices so high that oil was not usable at a level needed to maintain civilization functions, resulting in a 'die off' of most of humanity. Some predicted this was to occur in a time frame that has already been exceeded. Can we make a new theory called 'supply and demand determines price', and 'price modulates demand'? Yup. That is what predated PO theory, its called economics.

 

[Frozen Canuck]

Agree that current thinking is that we will run out of clean air/water long before FF. Going to be interesting to see how what remains will be divided.

 

[Frozen Canuck]

Thing is, the arguments put forth by the oil drum was never so simplistic as to claim oil would simply dry up. The argument was about flow rates- that unconventional sources, even if total reserves are huge, can't keep increasing the daily production rate much longer.

Looking at it that way, is the theory really dead? Or rather have high prices served to moderate demand to fit stagnant daily supply growth?

Yes it would have been interesting if the recession had not happened & growth/demand had continued on the curve they were on. Up here we were getting close to the limit of production given what's in the ground for pumping capacity. It was hard to keep up with demand for everything here. Kinda scary to imagine what it would have looked like without a small break in the action. Add to that continued growth at unheard of rates in China & India & well????

 

[woodgeek]

Of course, to be fair to Jeremy, there were also Drum authors who favored a long 'bumpy plateau' in oil production, with swings in price in a high to higher range, and demand destruction, and a slow (decades long) decline in production. Usually, these are not 'die off' folks, just that the whole system will slowly decay and come apart (and become less pleasant and more brutish).

I don't suppose that has been ruled out yet.

In the alternative scenario the entire oil price behavior (including triggering the great recession, arab spring, etc) from say 2005-2015? is just a bump or swing in the normal oil market function, not unlike the one from 1975-1985. People forget that oil is a capital heavy business with huge sunk costs....to make money you may need to run your rig/pump/refinery for 30 years. When the price falls (to a 1990s price), you all hunker down, keep running what equipment you have, and hope the stuff doesn't rust out before the price goes back up. Eventually the lack of development (and field depletion) leads to a supply crunch, a price spike and THEN a whole wave of new development (drilling and tech). I.e. oil is a cyclical industry.

So, perhaps if the price of oil bottoms out nearer $50/barrel for an extended period, we can say the latter explanation makes more sense. This is a tough scenario for many reasons....it would wipe out some unconventional oil producers (who failed to reduce costs in time, or were too debt heavy), could lead to increased consumption (esp in developing countries) and new fleets of lower mileage cars, EVs might tank, RE development might tank in a cheap NG environment. IOW, the oil companies are 'worried' that it will be the 1990s all over again.

 

[Circus]

Anyone really think fossil fuels are going to last forever? The troubling question is how will the population, fossil fuels made possible, survive? Kind of gives a sense of urgency for answers from our little forum.

 

[begreen]

Anyone really think fossil fuels are going to last forever? The troubling question is how will the population, fossil fuels made possible, survive? Kind of gives a sense of urgency for answers from our little forum.

We have vast reserves of coal, but this is a dirty fuel. Regardless, there is the simple case of the doubling factor that will have us spending a whole lot more for whatever fuel in a shorter time than perhaps we realize. Population growth is a key issue here.


a worthwhile watch if you have the time:

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[woodgeek]

Pop growth is def slowing, and most projections have 'peak humans' in the next 50 years.

 

[Frozen Canuck]

I will have to do some reading on how resources fair with world pop of 10 - 11 billion. I also noted that most areas with large projected growth are already having substantial habitat destruction. Interesting times indeed, I will miss it but the grandkids will be right in the thick of it.

 

[Grisu]

Pop growth is def slowing, and most projections have 'peak humans' in the next 50 years.

Like this one?
(broken image removed)
(broken link removed to http://www.smithsonianmag.com/science-nature/Looking-Back-on-the-Limits-of-Growth.html)