I think it is very hard to make a convincing case that fear causes us to do less. It might lead to that reaction in some people, I’m not sure whether that is true of everyone.
The kind of fear that stops you in your tracks seems rather like a overreaction – a misfiring – of your fear circuitry. You should, after all, run when you see the tiger, not stop. My guess would be that fear leads to inaction only in a minority of people.
That’s only a guess, but I’m not exactly sure why having no emotional reaction or being happy upon hearing those news (and assuming there’s some truth to them) is better.
Exactly. If the Department of Energy were truly worried about running out of oil they would be investing in nuclear power stations and a overhaul of the power grid to prepare for the day that we all have to plug our cars into the grid.
I was thinking the same thing when the author was hypothesizing about carbon credits being a secret scheme to prepare us for peak oil; if our government really was preparing us for this and really had our best interests at heart there's many other things they would be doing. Telling us, for one. ("Keep things secret so people don't panic" applies to acute crises, not gradual crises perceivable decades in advance. If indeed it applies at all.)
In 1956 it was predicted to be in roughly 2000, and the DOE is currently saying that we are right at peak oil now. So if the DOE and the military are correct, this means that they were dead on from the beginning.
I'm not contesting that we'll hit peak oil at some point. I am contesting that people have been able to predict it - lots of people have predicted a wide range of dates. Maybe some people will hit it, but that's luck (or indistinguishable from it).
I'm also contesting that we need to be afraid. So long as the change happens gradually there are lots of things we can do to use energy more efficiently or generate more of it.
Exactly. Prices rise when demand outstrips supply and people respond by seeking alternatives and by doing more exploration.
We'll never truly run out of oil as long as there is a free market. It will just keep getting more expensive.
The runup in oil prices that finally turned around in 2008 had nothing to do with long term supply but was caused too much easy credit overheating the economy.
Unfortunately, we don't have anything like a free market in America, and we haven't had it for over a century. The correct term for what we have is a mixed economy, meaning a mix of (increasing) regulation, control and (diminishing) market forces.
Having said that, I do agree that oil will simply get more expensive, and that we won't simply run out of it.
Don't forget a lot of the run-up in prices was due to a fall in the USD, which the oil prices are quoted in. Countries with resource-exporting economies (like Canada) did not see anything like the percentage increase in fuel prices at the pump that the USA saw.
The fall in the US dollar IS the same problem. When the Federal Reserve pumps too much money into the economy, the value of the dollar drops and prices rise. Inflation is the economy overheating.
/We'll never truly run out of oil as long is there is a free market/
That is a completely absurd statement. Oil is a finite resource that cannot be reused (at least when it is used for its main purpose). By definition it /must/ run out someday. We can hope to keep pushing that date back, but not forever.
The meme has been around a lot longer than a decade. http://en.wikipedia.org/wiki/Peak_oil Calling the meme "peak oil" is (I think) relatively more recent. As early as the Kennedy administration the U.S. government implemented "conservation" efforts which put a lot of wild-catters out of business, thus hastening a self-fulfilling prophecy.
The meme has been around a lot longer than a decade. http://en.wikipedia.org/wiki/Peak_oil Calling the meme "peak oil" is (I think) relatively more recent. As early as the Kennedy administration the U.S. government implemented "conservation" efforts which put a lot of wild-catters out of business, thus hastening a self-fulfilling prophecy.
These predictions come since as long ago as 30 or 40 years ago (check 'The End of Oil' on Amazon: in 2004 when this book was printed, the 'end of oil' was predicted (once again) to happen... in just few years! Did it?) The thing is every time such prediction is made, new and new oil fields are discovered, technology of oil extraction improved and these folks have to revise their forecast again. Don't be scared:) It's all printed by folks who want to speculate on oil prices.
The graph suggests strongly that in the worst case the price of oil will rise in a slow and predictable fashion, readily allowing alternatives to be introduced profitably, preventing the need for coercion.
Unfortunately the graph doesn't take the geopolitics of the situation into account. American oil reserves are long past their peak (about 40 years ago) and we are largely dependent on foreign oil. If demand begins to outstrip supply, what's stopping the Saudis from keeping their oil to themselves? Or better yet, what's stopping them from selling it to China for a much higher price than what American oil companies can bid.
Oil is fungible. As long as the product is sold into the market, it doesn't matter who is purchasing/selling it. So, if Canada were to switch it's contracts to China, then the people who were previously selling to China, would then sell to the US.
The only possible concern would be an embargo, in which countries _refused_ to sell to the US at any price. That would be problematic - but it isn't related to Peak Oil and could occur at any time (and, in fact, has in the past) - see http://en.wikipedia.org/wiki/1973_oil_crisis
How I'm using the term strategic here is to indicate that certain resources, those that are most critical to be able to function, such as water and oil, will not always respond to market forces.
So the flatness of suppliers, that it is fungible, is rendered irrelavent once it becomes critical, because that is an aspect of the market to which it no longer strictly applies.
No. It's always fungible. Crude oil is crude oil is crude oil.
Now, problems could still arise where many countries refuse to sell to us or where China just buys a bunch of oil and starts a huge strategic petroleum reserve that's mainly meant to give us more of a shortage (but that would get expensive quickly, even for China.). But that has nothing to do with whether oil is fungible.
Fungibility means that it makes no difference if Saudi Arabia decides they won't sell to us and instead sells the 100B barrels/day that they would have sold to us (made up number) to China, and because of that, China buys 100B fewer barrels/day from Canada, who sells that 100B to us instead.
You don't understand. America, for example, needs a minimum amount of oil per day to function.
If oil becomes very scarce, very quickly, then most countries will see it as a strategic resource. They may sell, to be sure, but not at a volume or a price that will ensure a level of functional viability.
This may not happen, of course, but America isn't stupid: it has spent hundreds of billions ensuring that Iraqi oil will be that source when others fail.
Do you see? It's not just a simple matter of being fungible, because all suppliers are also consumers, and the resource has the potential to be strategic, in which case trumps market forces. If suddenly water became scarce, I may not sell to you at any price because I want to ensure that I have enough for me and my family. It doesn't matter that water is the same everywhere -- if everyone feels that way, you're not going to get some at a price or volume of any certainty. Period.
they don't work when we try them on other countries.
Embargoes really only work when we help those that are embargoing us by setting price controls.
We did that in the 70s and it worked like a charm. Normally, the price we would pay would just go up and third countries would sell us the commodity or cartel members would cheat themselves.
The 70s embargoes wouldn't have worked if the US government hadn't shot itself in the foot. We even had shortages of natural gas and ALL of it was coming from the US!
The market works. The law of supply and demand functions, unless the government decides to break it.
And suddenly, there was oil panic. Because while oil is fungible, that's an attribute of market dynamics. You have 18 suppliers? Great. Oil is fungible. If one won't sell there are 17 more. But what happens if all 18 won't sell?
Without oil, some countries, like America and its military, can't function. That makes it also strategic.
According your logic, the 1973 crisis wouldn't have happened. Yet it did. And it could again. Oil is fungible until it's strategic. End of sentence.
Your last point is what makes a market. If the oil is worth more to the Chinese than it is to American oil companies, the Saudis ought to sell it to them; whether you're Saudi, Chinese or American, capitalism works the same.
That's a very interesting article from the heart of the American foreign policy establishment. Back in 2002-03 during the runup to the Iraq war, I had long conversations with an office mate trying to figure out what was really going on (the asinine fiction of WMDs being obvious propaganda, ineptly executed at that). One theory that we came up with was that the US were doing it to gain leverage over the Saudis. It's interesting to see that articulated so plainly in the pages of Foreign Policy magazine:
the emergence of Baghdad as a rival to Riyadh
Couldn't have put it better myself!
(I'm not saying that's why, of course. I don't know why. But "it has nothing to do with oil" always struck me as a tad naive, and by "a tad" I mean "maximally".)
It will also be interesting to see what happens to the peak oil fear-mongering when some of the new US shale gas reserves start coming on line. It turns out that there is a hell of a lot more natural gas available than anyone ever suspected (or at least thought we could get our hands on) and these new techniques have not really been applied outside of the US yet; the geopolitical consequences of potentially large shale gas deposits in Poland could be quite significant.
Natural gas is a very good substitute for most uses of crude oil. Not as good for plastics, but for just about every other purpose it is far better than oil. If oil actually does start to get as scarce as the peak oil proponents suggest I think that the first alternative you are going to see take over is natural gas.
The graph suggests strongly that in the worst case the price of oil will rise in a slow and predictable fashion
Um, no. No, it doesn't. The gap between decreasing production and increasing demand will widen not nearly slow enough to come up with and implement alternatives on the almost unimaginable scale that will be needed. Furthermore, demand for oil is very, very inelastic. That means that the price will increase very fast, even for a small gap.
This has the potential to cripple the economy and society (see Mad Max). There is a great book that discusses Peak Oil and the potential crash we are facing called "The Long Emergency" for anyone interested. I really hope we attempt to hedge this looming problem proactively instead of waiting until we have gone off the edge of the cliff. This has been discussed over and over for the past 30ish years though (if not longer) and many consider it a non-problem, but it is worth planning for and diversifying away from oil, be very very bad if we got this one wrong.
Look at this graph and be afraid. It does not come from Earth First. It does not come from the Sierra Club. It was not drawn by Socialists or Nazis or Osama Bin Laden or anyone from Goldman-Sachs. If you are a Republican Tea-Partier, rest assured it does not come from a progressive Democrat. And vice versa. It was drawn by the United States Department of Energy, and the United States military's Joint Forces Command concurs with the overall picture.
I hate to break it to the authors, but just because something comes directly from the government does not necessarily make it "correct" or even "free from bias".
you mean the same people who completely agree with whatever plan Bush or Obama have had about Iraq or Afghanistan? And here I was thinking they were totally independent.
So, basically we should be looking at ways to reduce our dependency on oil? If I buy a car today, I should buy one that gets really good mileage, because oil is going to be more expensive in the future?
<sarcasm>This is just total news to me. </sarcasm>
Not at all. You do not reduce your oil dependency by buying a car with good mileage. You'd rather keep your gas guzzler and find a telecommuting job. Then you take the money you saved from the car loan, and stop buying shit made in china (by finding properly priced local substitutes). That's pretty much it.
Oh, yes... and forget about that vacation across Europe. Cheap air travel is going to be an early casualty in this ride. :>
I would be a lot more supportive of this kind of thinking if it hadn't been going on for more than 40 years.
Obviously there is a finite supply of oil, and it will start to run low sooner or later. But I would question any forecaster's ability to make pinpoint accurate judgements on this, given that so many have tried over the last 40 years, and so many have gotten it wrong.
In general, I think that it is very dangerous to pivot thinking around a particular data point or graph. It ascribes a lot of importance to a set of data, that, in summary view looks very concrete and real, but might be made up of a lot of layers of uncertainty and plain old guesswork. I'm not suggesting that this graph is necessarily wrong, but you'd have to be pretty idealistic to believe any simplified piece of information about something has chaotic and complicated as all of the conventional and unconvential oil still in the ground, and able to be extracted, with timeframes and technologies thrown in. There's not even any uncertainty bars in the information.
Not exactly, We have been hearing for A decade that global peak oil was coming. The original Peak Oil Theory reference a peak in US oil production which we hit somewhere around the 1970's - just as was predicted. (I guess you are hoping if we ignore the problem long enough maybe it will go away?)
Same old story. Same old BS. I've heard it for over ten years.
1. Oil companies have a variety of categories for reporting reserves. 15+ years ago companies used to regularly report liberal reserve numbers for the sake of stock price boosting. Since then the regulators have pushed companies to be conservative in their "findings". The historical shift makes it look worse than it is -which doesn't look bad to me (33 years of known resources is so much frikin oil).... There are so many companies sitting on thousands of drill opportunities and they simply don't have the upfront capital or even people to work on them.
2. Even if CONVENTIONAL Oil is harder to find there's plenty of Natural Gas and Non-Conventional resources to move towards without it being a big deal. This is how the market works - when the price of oil is too high due to supply constraints then technology/infrastructure will shift. This seems fairly normal to me - certainly not a panic situation. And quite frankly it's great for our economy to make these shifts - more jobs, new jobs.
3.
> "Although there are large deposits of "unconventional" oil such as the Canadian tar
sands, most are making only slow progress at development and consume as much or more
energy in their production as they can generate."
What a load of Malarky. There's absolutely no truth to this what so ever. Canadian Oil Sands are the most poorly understood commodity on the market. It doesn't consume more energy to produce - there's no substance in the article for me to even bother counter stating (and all the environmental concerns, relatively speaking, are just completely unfounded).
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[ 901 ms ] story [ 297 ms ] threadI think it is very hard to make a convincing case that fear causes us to do less. It might lead to that reaction in some people, I’m not sure whether that is true of everyone.
The kind of fear that stops you in your tracks seems rather like a overreaction – a misfiring – of your fear circuitry. You should, after all, run when you see the tiger, not stop. My guess would be that fear leads to inaction only in a minority of people.
That’s only a guess, but I’m not exactly sure why having no emotional reaction or being happy upon hearing those news (and assuming there’s some truth to them) is better.
Obviously at some point the production levels will gradually decline, but people will either boost efficiency or substitute away from oil.
I'm also contesting that we need to be afraid. So long as the change happens gradually there are lots of things we can do to use energy more efficiently or generate more of it.
We'll never truly run out of oil as long as there is a free market. It will just keep getting more expensive.
The runup in oil prices that finally turned around in 2008 had nothing to do with long term supply but was caused too much easy credit overheating the economy.
Having said that, I do agree that oil will simply get more expensive, and that we won't simply run out of it.
the real estate bubble and its collapse were certainly caused by a perfect storm of market distortions, many of which are still with us.
but prices for many things, including oil, are set freely and that is the element of the market relevant to the existence of the supply of oil
That is a completely absurd statement. Oil is a finite resource that cannot be reused (at least when it is used for its main purpose). By definition it /must/ run out someday. We can hope to keep pushing that date back, but not forever.
Believe me, if gasoline costs you $50 a gallon, you'll be walking everywhere by choice. You'll pay $10 for a bus ride and love it.
R&D will be in overdrive.
This is not the first time human beings have encountered a scarce resource.
http://dieoff.org/page143.jpg
True, the peak is predicted to have been a few years before now, but I believe production IS falling today?
The only possible concern would be an embargo, in which countries _refused_ to sell to the US at any price. That would be problematic - but it isn't related to Peak Oil and could occur at any time (and, in fact, has in the past) - see http://en.wikipedia.org/wiki/1973_oil_crisis
How I'm using the term strategic here is to indicate that certain resources, those that are most critical to be able to function, such as water and oil, will not always respond to market forces.
So the flatness of suppliers, that it is fungible, is rendered irrelavent once it becomes critical, because that is an aspect of the market to which it no longer strictly applies.
Now, problems could still arise where many countries refuse to sell to us or where China just buys a bunch of oil and starts a huge strategic petroleum reserve that's mainly meant to give us more of a shortage (but that would get expensive quickly, even for China.). But that has nothing to do with whether oil is fungible.
Fungibility means that it makes no difference if Saudi Arabia decides they won't sell to us and instead sells the 100B barrels/day that they would have sold to us (made up number) to China, and because of that, China buys 100B fewer barrels/day from Canada, who sells that 100B to us instead.
If oil becomes very scarce, very quickly, then most countries will see it as a strategic resource. They may sell, to be sure, but not at a volume or a price that will ensure a level of functional viability.
This may not happen, of course, but America isn't stupid: it has spent hundreds of billions ensuring that Iraqi oil will be that source when others fail.
Do you see? It's not just a simple matter of being fungible, because all suppliers are also consumers, and the resource has the potential to be strategic, in which case trumps market forces. If suddenly water became scarce, I may not sell to you at any price because I want to ensure that I have enough for me and my family. It doesn't matter that water is the same everywhere -- if everyone feels that way, you're not going to get some at a price or volume of any certainty. Period.
they don't work when we try them on other countries.
Embargoes really only work when we help those that are embargoing us by setting price controls.
We did that in the 70s and it worked like a charm. Normally, the price we would pay would just go up and third countries would sell us the commodity or cartel members would cheat themselves.
The 70s embargoes wouldn't have worked if the US government hadn't shot itself in the foot. We even had shortages of natural gas and ALL of it was coming from the US!
The market works. The law of supply and demand functions, unless the government decides to break it.
Well that’s what everyone thought up until the 1970’s, when America’s oil fields went into rapid decline. Here’s how it went down:
US> Hello, Saudi Arabia? We would like oil.
SAUDI> No.
US> That's ok! As Jacko says, oil is fungible! Hello, UAE? Oil please.
UAE> No.
US> That's ok! As Jacko says, oil is fungible! Hello, Bahrain, Egypt, Iraq, Kuwait?
> No.
US> Fungible! It's fungible! Hello, Libya, Qatar, Algeria, Syria, Tunisia?
> No.
And suddenly, there was oil panic. Because while oil is fungible, that's an attribute of market dynamics. You have 18 suppliers? Great. Oil is fungible. If one won't sell there are 17 more. But what happens if all 18 won't sell?
Without oil, some countries, like America and its military, can't function. That makes it also strategic.
According your logic, the 1973 crisis wouldn't have happened. Yet it did. And it could again. Oil is fungible until it's strategic. End of sentence.
(I'm not saying that's why, of course. I don't know why. But "it has nothing to do with oil" always struck me as a tad naive, and by "a tad" I mean "maximally".)
-- Alan Greenspan
Natural gas is a very good substitute for most uses of crude oil. Not as good for plastics, but for just about every other purpose it is far better than oil. If oil actually does start to get as scarce as the peak oil proponents suggest I think that the first alternative you are going to see take over is natural gas.
Um, no. No, it doesn't. The gap between decreasing production and increasing demand will widen not nearly slow enough to come up with and implement alternatives on the almost unimaginable scale that will be needed. Furthermore, demand for oil is very, very inelastic. That means that the price will increase very fast, even for a small gap.
43mbpd shortfall(about half of current usage) in 20 years is not that slow.
Predictable, well, these predictions could be off and possible we make another big discovery.
Personally, I am not pessimistic, we will make alternatives as prices rise, but it will be rather painful.
I hate to break it to the authors, but just because something comes directly from the government does not necessarily make it "correct" or even "free from bias".
http://www.eia.doe.gov/oiaf/ieo/liquid_fuels.html
<sarcasm>This is just total news to me. </sarcasm>
Oh, yes... and forget about that vacation across Europe. Cheap air travel is going to be an early casualty in this ride. :>
Obviously there is a finite supply of oil, and it will start to run low sooner or later. But I would question any forecaster's ability to make pinpoint accurate judgements on this, given that so many have tried over the last 40 years, and so many have gotten it wrong.
In general, I think that it is very dangerous to pivot thinking around a particular data point or graph. It ascribes a lot of importance to a set of data, that, in summary view looks very concrete and real, but might be made up of a lot of layers of uncertainty and plain old guesswork. I'm not suggesting that this graph is necessarily wrong, but you'd have to be pretty idealistic to believe any simplified piece of information about something has chaotic and complicated as all of the conventional and unconvential oil still in the ground, and able to be extracted, with timeframes and technologies thrown in. There's not even any uncertainty bars in the information.
A nice side effect: they're usually written by ignorant people for ignorant people and aren't worth reading.
1. Oil companies have a variety of categories for reporting reserves. 15+ years ago companies used to regularly report liberal reserve numbers for the sake of stock price boosting. Since then the regulators have pushed companies to be conservative in their "findings". The historical shift makes it look worse than it is -which doesn't look bad to me (33 years of known resources is so much frikin oil).... There are so many companies sitting on thousands of drill opportunities and they simply don't have the upfront capital or even people to work on them.
2. Even if CONVENTIONAL Oil is harder to find there's plenty of Natural Gas and Non-Conventional resources to move towards without it being a big deal. This is how the market works - when the price of oil is too high due to supply constraints then technology/infrastructure will shift. This seems fairly normal to me - certainly not a panic situation. And quite frankly it's great for our economy to make these shifts - more jobs, new jobs.
3. > "Although there are large deposits of "unconventional" oil such as the Canadian tar sands, most are making only slow progress at development and consume as much or more energy in their production as they can generate."
What a load of Malarky. There's absolutely no truth to this what so ever. Canadian Oil Sands are the most poorly understood commodity on the market. It doesn't consume more energy to produce - there's no substance in the article for me to even bother counter stating (and all the environmental concerns, relatively speaking, are just completely unfounded).