Hypocracy

[Gawain of Orkeny]

Your cutesy attempt to point the other way aside, the folks you gripe about wanting alternative energy development and conservation are being progressive

Well Im one of them.

while the approach you embrace is regressive

Oh so increasing supply is now considered regressive?

You want to invest more in early 20th century tech, while many of us see more potential in investing in later 20th century tech.

I want to use what works now and plan for the future.

After all, it is amusing that you will say we need to be drilling like mad in one sentence, and then in another say this is a refining issue and there is no shortage of oil. Those are contradictory statements.

Somday yhou will wake up and realise this is a balancing act. The reason they dont drill more is because they couldnt refine it anyway. We need to both drill and build new refineries,

What is so awful about developing solar, wind, and other technology (including long range fusion work.)

Nothing again Im all for it.

Seems a lot more intelligent to be investing in these than in a declining resource.

First off we have to live now. Secondly once more there is plenty of oil left. We havent even gotten half of it yet at best.

We trumpet productivity improvements as driving our economy, why can't other efficiencies also improve it?

They can but let the market drive it.

Do you think we suddenly started running out of oil around a year ago? Oil is a commodity and its pricwe is whatever they think they can get away wiith. Their predicting shortages in supply and thats why the prices are going up just like they did in the 70s when we were "running out of oil"

[Aenlic]

The current best estimate for total oil reserves world-wide, both discovered and as yet undiscovered, is about 1 trillion barrels.

Current consumption world-wide is about 25 billion barrels per year.

You do the math. That's 40 years of oil left at current consumption levels. But consumption is not steady. It's increasing. So, we have less than 40 years of oil left. But the shortages will start occurring much sooner than that as sources become harder to reach. That 1 trillion barrel estimate includes a rosy view of undiscovered sources. The last major oil reserve find was in the Caspian Sea off the coast of Kazakstan - 30 years ago. The idea that oil production will reach a peak in spite of still-existing reserves, because of a combination of increasing consumption and decreasing finds, is called the Hubbert Peak Oil Thesis.

What are we doing about it? What are we doing to prepare for something we've known about, in essence if not detail, for at least the last 20 years?

Not a damn thing. Not really.

Sources:

Petroleum Equities

Speech by Alan Greenspan to the FRB on this topic in 2004

[Gawain of Orkeny]

The current best estimate for total oil reserves world-wide, both discovered and as yet undiscovered, is about 1 trillion barrels.

You do the math. That's 40 years of oil left at current consumption levels. But consumption is not steady. It's increasing. So, we have less than 40 years of oil left.

Hey look the sky is falling


They have been saying that for how long now?


You dont even take into consideration shale oil. This is a their best quess it says. Well twenty years ago they were saying the samething. 20 years from now the same claims will still be being made. No matter what happens the market and free enterprise will handle it. There is no need for panic and extreme methods.

[Aenlic]

So, Alan Greenspan, the Wall Street Journal, British Petroleum, Shell, Exxon-Mobile, Chevron-Texaco, the UN, The American Petroleum Institute, the Energy Institute, The Colorado School of Mines (Hubbert Center for Petroleum Supply Studies), The Society of Petroleum Engineers and many, many more - all of whom accept the basics of the Hubbert Peak hypothesis - are all wrong and you, the revered and perfect and oh so highly acquianted with the subject Gawain are right. Got it. No thanks, I'll take my chances with the experts instead of someone who thinks a "the sky is falling" sneer is an appropriate response to a real problem.

[Xiahou]

So, Alan Greenspan, the Wall Street Journal, British Petroleum, Shell, Exxon-Mobile, Chevron-Texaco, the UN, The American Petroleum Institute, the Energy Institute, The Colorado School of Mines (Hubbert Center for Petroleum Supply Studies), The Society of Petroleum Engineers and many, many more - all of whom accept the basics of the Hubbert Peak hypothesis - are all wrong and you, the revered and perfect and oh so highly acquianted with the subject Gawain are right. Got it. No thanks, I'll take my chances with the experts instead of someone who thinks a "the sky is falling" sneer is an appropriate response to a real problem.

Did you actually read the article on the federal reserve site? Greenspan said nothing at all about the world running out of oil anytime soon. He actually makes a very level-headed assessment and supports what I've been saying. There are lots of reasons for high oil prices, none of which are that we're going to run out.

While there are concerns of seeming inadequate levels of investment to meet expected rising world demand for oil over coming decades, technology, given a more supportive environment, is likely to ensure the needed supplies, at least for a very long while.

I especially like the "given a more supportive environment" bit. He's so understated.

[Aenlic]

Did you actually read the article on the federal reserve site? Greenspan said nothing at all about the world running out of oil anytime soon. He actually makes a very level-headed assessment and supports what I've been saying. There are lots of reasons for high oil prices, none of which are that we're going to run out.

I especially like the "given a more supportive environment" bit. He's so understated.

Apparently, you didn't read it.

During the past decade, despite more than 250 billion barrels of oil extracted worldwide, net proved reserves rose in excess of 100 billion barrels. That is, gross additions to reserves have significantly exceeded the extraction of oil the reserves replaced. Indeed, in fields where, two decades ago, roughly one-third of the oil in place ultimately could be extracted, almost half appears to be recoverable today. I exclude from these calculations the reported vast reserves of so-called unconventional oils such as Canadian tar sands and Venezuelan heavy oil.

He notes, quite specifically, the exact figure used by the peak theorists. That we now have access to roughly 1/2 of the total amount of oil in the earth's crust. The total amount is estimated to be 2 trillion barrels, the accessible reserves at 1 trillion barrels. The other trillion which is considered inaccessible includes oil shale (a pipe dream, pardon the pun), heavy oil and the rest, such as the possibility of as yet untapped Siberian and East Siberian Sea reserves.

And, as Greenspan says, in a decade the proven net reserves increased by a whopping 100 billion barrels! Wow. Awestruck, I am. That's all of 4 years supply at current demand levels. Woohoo! Demand might as much as double in the next decade, if China's economy really gets cooking. You do the math.

Yep, given a more supportive environment, technology "may" be able to access the other trillion barrels that is currently inaccessible. What he fails to mention is that all that does is double the supply, increasing the run out date from 40 years to 80 years from now. And that's only if some unmentioned and as yet undiscovered technology suddenly appears.

At the absolute rosiest of rose-tinted glasses optimistic, 80 years is it. And that's only if technology in the next 40 years somehow comes up with an as yet undreamd of way of getting to much of the rest of the oil. For it to be any longer demand has to go down. And that isn't going to happen as long as people keep putting their wishful thinking in pipes and smoking it.

I really recommend doing a little research into the issue of the peak oil hypothesis. Maybe it'll loosen up a few calcified brain cells.

[Gawain of Orkeny]

He notes, quite specifically, the exact figure used by the peak theorists. That we now have access to roughly 1/2 of the total amount of oil in the earth's crust

This cant be.

You see this is the little fact you keep ignoring. From your own qoute.

Indeed, in fields where, two decades ago, roughly one-third of the oil in place ultimately could be extracted, almost half appears to be recoverable today

You see we cant even get at half of it now. If you had looked at it that way 20 years ago when we could only get a third we would be out of oil now. Its just a matter of it being profitable to go get. This is what were trying to tell you. Again we havent even tapped into the shale oil deposits yet. There is NO shortage of oil. By the time there truly is we will not need it. Have some faith in science other than those enviormentalist wacko ones.

[Xiahou]

Apparently, you didn't read it.

Apparently you didn't even read the part you quoted.

During the past decade, despite more than 250 billion barrels of oil extracted worldwide, net proved reserves rose in excess of 100 billion barrels. That is, gross additions to reserves have significantly exceeded the extraction of oil the reserves replaced. Indeed, in fields where, two decades ago, roughly one-third of the oil in place ultimately could be extracted, almost half appears to be recoverable today. I exclude from these calculations the reported vast reserves of so-called unconventional oils such as Canadian tar sands and Venezuelan heavy oil.

Do you know the difference between net and gross?

Demand vs current production is fairly tight and no doubt it's playing a role in our oil prices- things such as the war in Iraq and the mess that is Venezuela have cut into supply. But, speculation is also responsible for a large part of the current price. The question is, how much? Here's a recent article from Yahoo Financial that talks some about it.

Also, for our reader's perusal is an informative article from wikipedia on the current oil situation. Here are a few excerpts, but I recommend reading it in its entirity.

Compared to two years ago demand is not significantly higher nor is supply significantly lower.

While total consumption has increased [6], the western economies are less reliant on oil than they were twenty-five years ago, due to substantial growths in productivity. In the United States, for instance, each $1000 dollars in GDP required 2.4 barrels of oil in 1973 when adjusted for inflation this number had fallen to 1.15 by 2001

Economists say that the substitution effect will spur demand for alternate energy sources, such as coal or liquified natural gas. The increased price of oil also make previously impractical sources of oil attractive to businesses. The most prominent example of this are the massive reserves of the Canadian tar sands. They are a far less cost efficient source of oil than crude, but at 60 dollars a barrel have recently become very attractive to businesses. Recent months have seen billions of dollars invested in the oil sands.

The increased price of oil might also encourage greater fuel efficiency. Recent years have seen a move towards more fuel hungry sport utility vehicles in the United States and Canada, and this may be stopped by the high price of gas. There is an increasing market for hybrid vehicles since they are more fuel efficient; since the 1973 energy crisis, the front-wheel drive passenger car has replaced rear-wheel drive as the preferred layout for energy efficient cars. There is an increasing demand of crossover sport utilities which are more fuel efficient - especially for those based on passenger car platforms.

[Red Harvest]

Hey look the sky is falling


They have been saying that for how long now?


You dont even take into consideration shale oil. This is a their best quess it says. Well twenty years ago they were saying the samething. 20 years from now the same claims will still be being made. No matter what happens the market and free enterprise will handle it. There is no need for panic and extreme methods.

And you and I are going to die. Is that the sky falling? No, it's reality. We just hope it won't be any time soon. You might not agree with Hubbert, many thought he was a fool in 1956 when he predicted US lower 48 production would peak in 1970, but he turned out to be right. The interesting notes of late have been the overestimates in the reserves (not underestimates that you are counting on), and the fact that production is falling (as expected) except for in what were artificially constrained regions...Persian Gulf swing producers, who are now out of swing.

There is reason to panic, although panicking is not what we really need. Why have a sense of panic? It's like watching a movie where you can see something bad developing, but the victim cannot. There is nothing you can do in the audience but watch in horror. It is your lackadaisical attitude towards the increasing energy problem that gives me concern. It is also the general public's complete ignorance of what is going on, and stupid obsession with gasoline prices, which illustrates that people like to remain blissfully ignorant.

Free enterprise will handle it? How, like it handled the S&L crisis, or the Great Depression, or the '73 oil crisis, or the Iran-Iraq war oil crisis, or U.S. airline security before 9/11, or the stock market bubble? Did free enterprise put enough lifeboats on the Titanic...or properly train her crews into how to organize abandoning ship? Free enterprise is largely reactive in matters of public crisis. There is not a market for free enterprise to respond to until AFTER the event has hit.

This isn't something free enterprise is going to effectively prepare us for without govt encouragement to prepare. It sure as hell won't be on time, it will LAG badly, because U.S. enterprise is in crisis reactive mode anymore. The president claiming "conservation is not the answer" sure doesn't help and hasn't helped. It's like facing a bear with a double barrel shotgun, only to pluck one round out and throw it on the ground saying, "one barrel is all I'll need!"

More importantly, free enterprise might react properly somewhere...but the odds are that it will not be in the United States. Why? Because we are letting others take the lead while we sit in denial. Almost all other developed nations have been more progressive on energy issues. If two folks have to outrun a bear (since they failed to drop it with that single barrel) who do would you put your money on? The couch potato who routinely put off exercise and never left a buffet line until stuffed? Or the lean one who runs a few miles each day to stay fit?

Oil running out completely in short order isn't the problem. Peak oil is, where production can not keep up with demand...and especially growing demand. The assinine view is that we should put most of our efforts into pumping more, while continuing to use more. The result of this assinine policy is rapidly rising oil prices. The solution proposed: accelerate the assinine policy by trying to pump out faster still. Brilliant, brought to us by the same folks that made the $2 trillion dollar shortfall in budgeting...the very problem that many of us indeed predicted...those same ones you want to discredit.

And this of course completely ignores the massive technical hurdles and environmental aspects of the other fossil fuels you mention. Like it or not, carbon dioxide presents problems, and shale will make those problems accelerate in a way that will likely be beyond our control.

[Red Harvest]

Current consumption world-wide is about 25 billion barrels per year.

This number is likely a bit low, because there are various things being put on an oil equivalent basis (including the reserves.) There are so many factors I won't claim to understand a number of them, but I can see the forest for the trees. It depends also on what you couple it with.

Current production and use is at ~84 million bbl/day for a total of 30.7 billion bbl/yr. Growth over the past 20 years has been about 2% (this is used in various estimates...although it is often more like 1.6% actual.) Demand picks up when the world economy is strong, and flattens out when the economy is weak.

That is how I predicted the extended rise in prices by the way...it was elementary economic principles. We were emerging from a downturn so the industry numbers based on recent downturn influenced past were obviously bogus. Any one with the ability to read cyclic charts should have been able to see it. It was hilarious, I wish I still had all those reports now. They were all wishful thinking crap or worse yet, telling the gullible customers exactly what they wanted to hear. Doesn't mean I could get managers to listen...they think more like your average conservative in this forum, no I'm not kidding.

The true independent experts who study this have pointed out that the appropriate limitation estimates are *geological* and that tech reaches its limits.

[Aenlic]

This number is likely a bit low, because there are various things being put on an oil equivalent basis (including the reserves.) There are so many factors I won't claim to understand a number of them, but I can see the forest for the trees. It depends also on what you couple it with.

Yes, I know it's low. I've been trying to be extra conservative on the number, using the most optimistic of the groups in my initial post, Greenspan and a corporation whose sole interest is in advising petroleum traders. And yet, the ostriches continue to plant their noggins in sandy holes and play silly word games so they don't have to consider the truth.

I have deliberately avoiding using site like this, http://www.hubbertpeak.com/, even though the experts listed on that site are some of the top experts in the field, including the guy who heads the Hubbert Center at the Colorado School of Mines.

So, who are we going to believe on the matter? Those who toe the corporate conservative party line and get their news from dubious sources at best so they won't have to hear anything which makes them uncomfortable, or those whose job it is to know these very subjects? I'm not willing to put my trust for the future of the oil supply solely in the hands of corporations who make their entire profit from the negative side of the supply/demand equation, and would lose money from sensible planning and greatly decreased consumption to delay the inevitable.

[Red Harvest]

I want to use what works now and plan for the future.

No, you want to look at the past and continue to do what worked then. You are a mirror of corporate America at the present. Planning for the future is exactly what you try to discount. You dismiss it as a bunch of lefties and environmentalists. (Tempting to start an ozone/CFC discussion here.) That's why we haven't had a working energy policy. The energy bill that finally made it through was a mere drop in the bucket.

Somday yhou will wake up and realise this is a balancing act. The reason they dont drill more is because they couldnt refine it anyway. We need to both drill and build new refineries,

I'm wide awake. We haven't been doing a balancing act. The alternative energy investment fell to a trickle after the supply based crises of the 70's ended. Energy conservation has been nearly absent in industry since then--didn't seem to matter how good the rate of return was on my energy savings based projects, the managers were not interested. We have tech now that can start shifting our consumption, but it takes time, and we aren't making use of it. Our President openly ignores at least 2/3rds of the tools at his disposal.

Refineries? We've been over that popular piece of nonsense ad nauseum. It fails to explain today's market. In fact, there are efforts in the industry to shut down older refineries still--and I can think of one closure that is being opposed by the very "greenie" populations you complain about. Refinery capacity is added as needed...I should know, I've worked on several recent projects.

Your circular logic does not match the data.

First off we have to live now. Secondly once more there is plenty of oil left. We havent even gotten half of it yet at best.

Stick your head in the sand, poke your fingers in your ears. You want to go on PRETENDING that there is no problem. You have no solution other than to keep doing what we've been doing, despite real changes to the nature of the market and supply. We can live just fine now, but we can also invest in the future, rather than working on the wrong end of the beast.

Do you think we suddenly started running out of oil around a year ago? Oil is a commodity and its pricwe is whatever they think they can get away wiith. Their predicting shortages in supply and thats why the prices are going up just like they did in the 70s when we were "running out of oil"

You still can't get it...how many times do I have to explain the difference? That was an artificial supply reduction, this one is about demand outstripping supply, and not in an artificial way. It would not have mattered so much...but the U.S. no longer had excess supply, it hit its limit in 1970...as Hubbert predicted. But hey, you don't believe that approach. If you did, then you might understand what is wrong with your theories.

We've been running out of the lighter varieties of oil for decades (despite efforts to bolster production and "drill our way out") and now we're starting to fill the crunch. However, yes, we did start running out of production capacity about two years ago. If you go back and look at the "excess" supply capacity numbers I posted in the other thread the change is obvious (unless you are Helen Keller.) With excess supply capacity at less than 1% of total usage, there is no swing buffer, and growing production is critical just to prevent a major shortage. The Saudi's admit they are trying to keep up by putting in new production capacity. Everyone else is already tapped out.