Peak Oil (was "petroleum geologist explains US war policy")

[Dr Jon]

I hear what you're saying: not all large-scale initiatives will fail. I was more mindful of the constraints we now face:

We have the equivalent of 6 hours left – a known production rate, a known depletion rate, a known volume of additional production from known and plausible unknown conventional and unconventional sources. We will be 60% short of 20th Century “business as usual” volumes by 2030. Capitalism and the global economy will crash long before then.

We can’t do both – all available production is now fully employed keeping the lights on. To make any substantial contribution to the energy mix from other energy sources would require massive quantities of energy to build the infrastructure. Switching that volume of energy out of the economy will crash it.

link

 

[elbows]

I have some issues with that article. For a start, building a new energy infrastructure is not some weird thing that exists completely separately from the economy - much of the energy etc that will need to go into the task is the same as energy used for any other economic activity, it will employ people and be seen as an investment that some will profit from eventually (or immediately via the right incentives from government), etc etc. And I do not recognise the idea that all available production is fully employed to keep the lights on - there is still a buffer, and lots of waste, and lots of production capacity that can be shifted without destroying the entire economy.

Dont get me wrong, I dont think its going very well so far, and I certainly am not in the 'tech will save us' camp, although I am unwilling to write off all technological solutions as being implausible and a waste of energy to try. It may very well be that substantial effort & resources ends up wasted and misdirected, but in many cases I dont think anybody alive right now can seriously claim to know for sure which ones are worth it.

As for the 24 hour option vs the 6 hour option in that article, I really dont think thats its an either/or choice. I see lots of signs that powers that be are aiming for somewhere in between. The carbon emissions targets are not a million miles away from the likely availability of fossil fuels. The financial crisis and the era of cuts shows us some of the ways that demand can be curtailed, resources reallocated to different sectors. Bets are being hedged, I dont think the balance is at all right yet, and its been left rather late, but more can likely be salvaged than the prophets of complete doom suggest.

The biggest unknown for me is how people react to the new realities as they emerge. In some ways the future realities have been of the radar of our societies for nigh on 40 years. In other ways we've been hiding even further away from these realities over the same time period. We've a long way still to travel, and quite a few major wakeup call events to come, and then we may get a greater sense of how much people will be prepared to deal with change without reacting in counterproductive ways.

As for capitalism, I think its a tad more adaptable than some of the doommongers would have it with their foregone conclusions. Certainly I believe that capitalism has contributed greatly to the delays in getting started on the transition, and is likely responsible for the rather murky and incomplete way that the impending issues are being presented to the public. But depending on exactly what we end up with once the transition is complete, capitalism could survive. Im sure it will have a crisis, and the likely horror and poverty that masses of people will face could lead to a complete collapse of it, but theres also lots of middle ground to explore. It might just about get away with it, or survive by stick alone rather than the carrot stick mix that many have grown up with in recent times. On the face of it it doesnt look like its left enough time for a completely orderly transition, but even if the entire existing structure blows up the idea of capitalism could live on in a variety of other forms. Concepts of freedom and democracy are probably at far greater risk than capitalism, depending on how people react.

Throw in the big questions about whether this will all be handled ok internationally or whether we will end up with lots of armed conflict, and a lack of clarity as to how well we'll really adapt to a real war on waste, and I'll stick with my world of uncertainty rather than firm proclamations of exactly what we should be aiming for.

 

[laptop]

Quite likely a captialism could ensue.

After all, the form of social organisation represented by mill-owners and railways and coal-owners and their actual shareholders was rather different from that represented by Google and Air France and BP and their institutional shareholders.

 

[Dr Jon]

Elbows: I guess you're thinking of something like the Green New Deal?

How people react is certainly going to be interesting...

 

[paolo]

A bit off topic, but thought I'd ask here - anyone heard from David Dissident lately?

 

[Dr Jon]

Just seen on this thread that Matt Simmons has died.

RIP Matt

 

[elbows]

RIP Mr Simmons. He was extremely informative to me some years back when there wasnt a lot of proper analysis of the industry and data, and some of his presentations were extremely concise and useful. I never read his book and tried to keep an open mind about quite how correct his analysis was and some of his possible motives. Id not been keeping up with his words recently so had no idea about some of the strange stuff he was saying about the BP disaster.

The Bloomberg obituary seems like a fairly good guide to where we are at in terms of how the business press treat the issue of peak oil, a heck of a lot better than 5 years ago but still a fair amount of ambivalence to be found.

http://www.bloomberg.com/news/2010-...nker-peak-oil-theory-advocate-dies-at-67.html

 

[elbows]

Elbows: I guess you're thinking of something like the Green New Deal?

Well yeah that sort of thing is certainly quite a part of what I was talking about earlier. I still find it rather frustrating that whilst the words spouted from on high about these things have gotten a lot better and more realistic in recent years, the actual action on a scale that would be fitting of the term 'new deal' is still nowhere to be found. All the same its a lot better than the very unreal magic painfree greenwashing era that we had to sit through earlier this century.

At this stage I find it far from clear whether the economic woe will mostly benefit the transition task, by buying some more time and keeping demand depressed, or whether the downside of possibly damaging investment in crucial new infrastructure etc will do more harm than good for the transition. Looking coldly at some of the potential benefits from being in this economic predicament, as well as casting people into a woeful situation which will force them to adjust to austerity, less consumption, it will also lay a foundation where people can really be promised something better in the future. By this I mean that it always looked like a very hard sell to attempt to get people to curtail their lifestyles voluntarily during 'the good times'. Its much easier to sell people on an idea that governments and central planning and business can help build a brighter future, if the present sucks by being so stark, hideous, hopeless and scary. Much like the horrors of world war 2 and the destruction was probably a fair part of the reason why the following few decades were filled with a sense of optimism and utopian ideas about what could be done through sensible planning and reconstruction.

Of course this does not mean that I advocate either war or financial horror, simply that I tend to find it far more likely that we'll be able to confront the issues sanely and do something real about it only once some real nasty damage has been done, once everyone has had a really prolonged wakeup call.

 

[Crispy]

Trouble is that there was plenty of cheap easy energy to power all that recovery 60 years ago.

 

[elbows]

Yes so Im not really trying to suggest a very strong correlation between those times and the coming times, nor the practicalities of doing it then compared to now, merely some stuff about the mindset of people and how it is easier for people to embrace change and hope for better times when the current times are pretty shitty.

 

[Dr Jon]

Matthew Simmons: a tribute

 

[elbows]

A fairly useful summary of 3 reports that have emerged this year, all of which have been previously discussed here as best I remember, but still useful to be reminded of their conclusions:

http://www.energybulletin.net/stori...point-oil-supply-turmoil-and-price-volatility

The Oil Crunch: The world will experience peak oil at 91-92 million barrels per day “by end 2010/early 2011. Global capacity will then remain in the 91-92Mb/d range until 2015 from which time depletion will more than offset capacity growth. . .”

The Joint Operating Environment: “By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD.”

Sustainable Energy Security: “A supply crunch appears likely around 2013…given recent price experience, a spike in excess of $200 per barrel is not infeasible.”

Taken together, then, these reports suggest the world will be entering into a period of turmoil due to oil supply issues as early as the beginning of 2011 or as late as 2013. This will be marked by a time of rising oil prices, simply due to demand. By 2015 oil output will be in decline and the world will collectively have to make structural changes, or else face outright economic decline, because less oil will be coming to the market at any price.

 

[yield]

Two big "Peak Oil" stories from the last couple of weeks. Not sure if they've already been posted?

Peak oil alarm revealed by secret official talks
The Observer, Sunday 22 August 2010

Speculation that government ministers are far more concerned about a future supply crunch than they have admitted has been fuelled by the revelation that they are canvassing views from industry and the scientific community about "peak oil".

The Department of Energy and Climate Change (DECC) is also refusing to hand over policy documents about "peak oil" – the point at which oil production reaches its maximum and then declines – under the Freedom of Information (FoI) Act, despite releasing others in which it admits "secrecy around the topic is probably not good".

Military Study Warns of a Potentially Drastic Oil Crisis
Der Spiegel 01/09/2010

A study by a German military think tank has analyzed how "peak oil" might change the global economy. The internal draft document -- leaked on the Internet -- shows for the first time how carefully the German government has considered a potential energy crisis.

The term "peak oil" is used by energy experts to refer to a point in time when global oil reserves pass their zenith and production gradually begins to decline. This would result in a permanent supply crisis -- and fear of it can trigger turbulence in commodity markets and on stock exchanges.

The issue is so politically explosive that it's remarkable when an institution like the Bundeswehr, the German military, uses the term "peak oil" at all. But a military study currently circulating on the German blogosphere goes even further.

 

[elbows]

Cheers those are very interesting stories. Ive never bought into the idea that governments were ignorant about these issues, they've taken it seriously for many years Im sure, they've just chosen not to talk about it much in public for quite a variety of reasons.

 

[elbows]

Here are 2 quotes from the German paper which consider possibilities Ive long been interested in:

Market failures: The authors paint a bleak picture of the consequences resulting from a shortage of petroleum. As the transportation of goods depends on crude oil, international trade could be subject to colossal tax hikes. "Shortages in the supply of vital goods could arise" as a result, for example in food supplies. Oil is used directly or indirectly in the production of 95 percent of all industrial goods. Price shocks could therefore be seen in almost any industry and throughout all stages of the industrial supply chain. "In the medium term the global economic system and every market-oriented national economy would collapse."

Relapse into planned economy: Since virtually all economic sectors rely heavily on oil, peak oil could lead to a "partial or complete failure of markets," says the study. "A conceivable alternative would be government rationing and the allocation of important goods or the setting of production schedules and other short-term coercive measures to replace market-based mechanisms in times of crisis."

Crisis of political legitimacy: The Bundeswehr study also raises fears for the survival of democracy itself. Parts of the population could perceive the upheaval triggered by peak oil "as a general systemic crisis." This would create "room for ideological and extremist alternatives to existing forms of government." Fragmentation of the affected population is likely and could "in extreme cases lead to open conflict."

 

[ferrelhadley]

Cheers those are very interesting stories. Ive never bought into the idea that governments were ignorant about these issues, they've taken it seriously for many years Im sure, they've just chosen not to talk about it much in public for quite a variety of reasons.

Governments widening motorways and building third runways are not governments overly bothered about near term peak oil. I see nothing to suggest that they have been planning for a spike in the price of energy together with a long term downward movement in the volume of available liquid energy.

The oil megaprojects list is reasonably accurate out to about 2015 as that is the sort of timescale for really big new fields to be brought online (although for many it can be much longer hence the 2018 number)
http://en.wikipedia.org/wiki/Oil_megaprojects

This suggests we will be struggling to replacing current depletion rates over the next couple of years, only already shuttered in capacity in Saudi will prevent a drop in production of C&C over a 5 year timeframe. And with the exception of Hardh III I am not sure that capacity exists other than running fields at above there sustainable rates (this has been done a few times in the past like GulfWar I) but that damages the total recoverable volume of a field.

Its all getting rather late in the day now.

 

[elbows]

Im not suggesting that governments have long had a cunning plan for dealing with this stuff, after all many of the solutions/coping strategies are 'unthinkable' under current economic and ideological conditions. What I am suggesting is that its been on their radars for ages, a minimum of 10 years and more likely somewhere in the region of 35 years. This has not translated into a sane and sustainable policy direction, but I really think it has shaped their worldview and expectations for the future, and some policy. Unfortunately any chance to have a really sane policy shaped by these views has ben hampered by the overriding desire to keep the party going as long as possible, and the waters will be further muddied by our division into nations that have a position to uphold.

 

[yield]

Here are 2 quotes from the German paper which consider possibilities Ive long been interested in:

The Der Spiegel article was surprising. Especially the realpolitik at the end.

The relationship with Russia, in particular, is of fundamental importance for German access to oil and gas, the study says. "For Germany, this involves a balancing act between stable and privileged relations with Russia and the sensitivities of (Germany's) eastern neighbors." In other words, Germany, if it wants to guarantee its own energy security, should be accommodating in relation to Moscow's foreign policy objectives, even if it means risking damage to its relations with Poland and other Eastern European states.

Peak oil would also have profound consequences for Berlin's posture toward the Middle East, according to the study. "A readjustment of Germany's Middle East policy … in favor of more intensive relations with producer countries such as Iran and Saudi Arabia, which have the largest conventional oil reserves in the region, might put a strain on German-Israeli relations, depending on the intensity of the policy change," the authors write.

Makes me wonder, in the worst case scenario, how long Israel could rely on the USA?

 

[Backatcha Bandit]

Hi peoples Nice one for keeping the thread alive, interesting and relevant.

Dimitri Orlov (author of 'Reinventing Collapse: The Soviet Example and American Prospects') now reckons that 'Peak Oil' is bunk!

I feel that the time is ripe for me to weigh in on the subject and declare, unequivocally, that Peak Oil is indeed bunk.

http://www.culturechange.org/cms/content/view/674/66/

It's an interesting look at the downside of Hubbert's curve with reference to 'exportland', the dynamics of complex systems, economics and human behaviour with plenty of that slightly twisted, dark humour:

As EROEI decreases from 10:1 toward 1:1, the oil industry comes to resemble an obese but famished wet-nurse ravenously sucking her own breast at the crib of a starving infant.

On a similar note, Nicole Foss (stoneleigh) provides her 'big picture' in an interview for 'Financial Sense'. (1hr/17mb MP3)


-- Bringing you quality doom since 2001 --

 

[Barking_Mad]

where've you been?!

 

[Bernie Gunther]

Bloody hell. Hiya BB, hope you're doing well

 

[Shevek]

Just got upto date with the thread. Interesting and informative.

 

[ferrelhadley]

Iran jacks up its P95 ahead of OPEC quota meet

Just a little tickle mind, less than 10%. Iraq jacked its 'proven reserves' by about 25% earierl in the month. There have been a couple of billion barrel fields found in Iran over the past decade but nothing to account for this and reserve growth was all factored in (with whistles and bells and invsible pink unicorn fields) back in the 80s. I dont know the calculus but Iraq has been substantially improving its infrastructure and has an expected capacity to hit maybe 5 million barrels a day, so if they are getting their shit together in the southern fields as all the glowing reports are saying then they may have the excess capacity and needed the reserve bump to get up their so the Iranians are just working out how much reserve they need to declare to keep there max output as a quota setting.

 

[elbows]

Iraq isnt presently subject to Opec quotas, hasnt been since 1990 Kuwait invasion, but if their production grows then this will likely change at some point.

http://www.ft.com/cms/s/0/69fe7be2-d604-11df-94dc-00144feabdc0.html?ftcamp=rss

Iraq produces 2.5m barrels per day, compared with Iran’s 3.7mbd. Mr Shahristani says that Iraq can achieve 12mbd by 2017, a level that would rival Saudi Arabia, but analysts are sceptical.

“We don’t believe that’s achievable,” says Patrick Gibson, oil supply analyst at Wood Mackenzie, a consultancy, adding that the main constraints are simply logistical. Iraq lacks the infrastructure and export facilities to make such a quantum leap.

But Mr Gibson says that 7.5mbd by 2017 is possible, while 5.3mbd is a “fully risked estimate”. Meanwhile, he added: “We don’t see Iranian production going anywhere in the next five years.”

 

[Falcon]

It does no harm to keep looking at this. The green is everything we have ever discovered and are ever likely to discover - Iraq and *net* tar sand (our last best hopes) will be about the size of one of those little bumps on the downslope (Northsea/Alaska and FSU recapitalisation respectively).

The 2% production growth line isn't a "nice to have" - even if the World/UK economy grows at 2% per annum for the next 35 years, the UK public Pension fund will still be short by £2.2 trillion.

The 4.7% production decline rate is the current aggregate depletion rate of the world's installed production capacity. It's the rate we'd get if we stopped spending money today.

The gap is the amount we need to fill. There isn't enough existing or undiscovered reserve to fill it. Even if there was, we would have had to start spending capital on it a decade ago (it takes 10 years to mobilise reserves at a scale large enough to influence global production). Even if we had, there isn't enough capital in the system.

You can convert the energy equivalent of that gap into renewable energy capacity, and derive a timescale at which you need to add it in terms of GW/year. The growth rate is equal to the growth rate of oil production for the first seven decades of the industry (doubling every decade). It took 100 years to build the current oil infrastructure, and we had surplus energy and capital available throughout. We now need to build infrastructure equivalent to twice today's oil capacity (half of all primary energy), from sources offering an order of magnitude lower net energy surpluses, in 30-40 years, with no surplus energy capacity and insufficient capital.

 

[elbows]

The 2% production growth line isn't a "nice to have" - even if the World/UK economy grows at 2% per annum for the next 35 years, the UK public Pension fund will still be short by £2.2 trillion.

Not to take issue with your wider point, but 2% economic growth doesnt necessarily equate to 2% oil demand growth. Also I doubt we can accurately tie growth rate to pension pot predictions, too many other factors.

The 4.7% production decline rate is the current aggregate depletion rate of the world's installed production capacity. It's the rate we'd get if we stopped spending money today.

I doubt our knowledge of the decline rate is a complete picture. In many places it is relatively easy to get an accurate picture of decline, but I cant really tell precisely whats going on with Saudi Arabia because of the way they cut their production for OPEC/price reasons. Again I doubt it alters the overall picture very much at all.

 

[Shevek]

Its like watching a car crash in slow motion

 

[Shevek]

I think I asked this on another thread but can we build a socialist-libertarian (i.e. anarchist society) in the face of peak oil. Maybe it is actually neccesary to build such a society.

 

[littlebabyjesus]

I don't want to sound complacent here, because I don't dispute the broad thrust that running out of oil is a major challenge, but billions, and ultimately trillions of pounds will be invested in research into new sources of energy. And there are potentially some very promising leads – nuclear fission that leaves waste that degrades in decades rather than thousands of years, nuclear fusion is still not an impossibility, all kinds of improvements in photovoltaic cell technology, harnessing the power of waves, etc, etc. Even beaming energy down to earth that's been collected from huge solar panels in orbit around the planet (the Japanese are developing this one).

It is impossible to say what throwing billions of pounds at and dedicating the best brains to developing these leads could bring, but I think we can safely say that advances would be spectacular and many unforeseen. And who is leading the way with this research? China. They know they're fucked eventually if they can't replace coal. The west is way behind on this. But imagine what an Apollo-scale research programme could bring in terms of rewards.

 

[elbows]

I think I asked this on another thread but can we build a socialist-libertarian (i.e. anarchist society) in the face of peak oil. Maybe it is actually neccesary to build such a society.

At this stage its hard to even have such a discussion. Usually dont get past arguing about the terms you use. If we do get past it, there is too much entrenched thinking, people with quite a variety of political stances dont buy into this vision of the future to the extent necessary to focus minds on how we could order the world in a way that will cope.