Hypocracy

[Red Harvest]

Gawain,

The funny part about the links is all the boundless enthusiasm based on speculation, rather than science. The second article is counting on production from fields that have not been established. (It also appears to be about 3 million bbl/day in excess of current actual production levels...but never mind that.) The article also fails to mention the decline of many fields, such as the mature ones mentioned in the prior article. The mature ones continue to produce less each year. Contrary to what the article says, oil production has been declining outside of the Persian Gulf and Former Soviet Union.

At the rate things are going, we should have a pretty good indication in about a year (barring global recession whacking demand.) Afterall, we've used nearly a trillion barrels already, and are on course to use another trillion over the next 25 years. So even 3 trillion additional would run out in 60 years or so. Not to mention the CO2 impact on our lives.

Of course, it's not all about running out...it is more about how fast can you reasonably produce it and what happens to a resource when the end of it can be seen.

[Xiahou]

I see now that the 'sky is falling' crowd is now ignoring Greenspan once it was shown that he wasn't supporting your position- how convenient. He was an expert who we were fools not to believe when you thought he supported your view- now, well... look over here these experts still say what I believe. For every 'expert' you find, I can find another who takes a more level-headed view.

Look, obviously, there is a finite amount of oil out there- but the idea that we're going to wake up one morning and there will be no more gasoline is ridiculous. Every rational economist I know of expects oil prices to slide in the coming months due to the amount of the price that's due to speculation. Of course, prices aren't going to recede down to previous levels, but the fact is, even at today's prices, oil isn't expensive enough to justify transitioning many of the alternative forms of fuel that are currently available. The notion that we should further artificially inflate prices through additional taxation is counterproductive.

[Aenlic]

His facts haven't changed, his facts are the same facts used by all of the others, except the pie-in-the-sky everything's rosy crowd. His interpretation of the facts only speaks to the immediate future of oil prices, that's where he wanders off into speculation about possible technological advances that haven't happened yet. Economists don't have a very good record when it comes to technology and its effects on the economy. He doesn't address what will happen when the supply reaches the peak. I included his comments because they used the same figures of an increase from 1/3 of the oil to 1/2 of the oil - to 1 trillion available barrels in reserves. It seemed reasonable to expect that using any of the primary sources would just bring out the old "that's not a reputable source" excuse. My mistake in not foreseeing that you would instead focus on Greenspan's reliance on some as yet uninvented technology to save his economist bacon. But the numbers still stand as he used them to set up the speech.

Please feel free to argue instead with the Petroleum Equities site, or the Society for Petroleum Engineers or the Colorado School of Mines, all of whom have a very real interest in trying to be as accurate as possible - it's their job. I noticed you've been ignoring the other sources. You've focused solely on the predictions of Greenspan rather than the facts as I used them. That's fine. Here's something you might find enlightening, from WorldOil.com, the online version of the industry/trade magazine:

TABLE 1. Projections of the peaking of world oil production.
Projected Date Source of Projection Background & Reference

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2006-2007 Bakhitari, A.M.S. Iranian oil executive a
2007-2009 Simmons, M.R. Investment banker b
After 2007 Skrebowski, C. Petroleum journal editor c
Before 2009 Deffeyes, K.S. Oil company geologist (ret.) d
Before 2010 Goodstein, D. Vice provost, Cal. Tech e
Around 2010 Campbell, C.J. Oil company geologist (ret.) f

--------------------------------------------------------------------------------

After 2010 World Energy Council World non-government org. g
2010-2020 Laherrere, J. Oil company geologist (ret.) h
2016 EIA nominal case DOE analysis/ information i

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After 2020 CERA Energy consultants j
2025 or later Shell Major oil company k
No visible peak Lynch, M.C. Energy economist l

a Bakhtiari, A.M.S. "World Oil Production Capacity Model Suggests Output Peak by 2006-07," Oil and Gas Journal, April 26, 2004.
b Simmons, M. R., ASPO Workshop. May 26, 2003.
c Skrebowski, C., "Oil Field Mega Projects - 2004," Petroleum Review, January 2004.
d Deffeyes, K. S., "Hubbert's Peak-The Impending World Oil Shortage," Princeton University Press. 2003.
e Goodstein, D., "Out of gas - the end of the age of oil," W.W. Norton, 2004.
f Campbell, C. J. , "Industry urged to watch for regular oil production peaks, depletion signals," Oil and Gas Journal, July 14, 2003;
g "Drivers of the energy scene," World Energy Council. 2003.
h Laherrere, J. Seminar Center of Energy Conversion. Zurich. May 7, 2003
i DOE EIA. "Long- term world oil supply." April 18, 2000. See Appendix I for discussion.
j Jackson, P. et al. "Triple witching hour for oil arrives early in 2004 - but, as yet, no real witches." CERA Alert. April 7, 2004.
k Davis, G. "Meeting future energy needs," The Bridge. National Academies Press, Summer 2003.
l Lynch, M. C., "Petroleum resources pessimism debunked in Hubbert model and Hubbert modelers' assessment." Oil and Gas Journal, July 14, 2003.

(from http://www.worldoil.com/magazine/mag...ting-Hirsh.htm)

Note that in the general survey, only one source cited no date for a peak, an economist. Gee, go figure. All of those experts are "sky is falling crowd" and the one economist is the only true expert who knows what he's talking about, eh? Riiiight.

And, Gawain, you might want to read that article as well. It specifically states that the western oil shale resource in the U.S. amounts to a grand total of a possible 130 billion barrels. That's just 5 years worth of oil, without any increase in consumption. The article also says that current estimates for increased demand have it at 50% more than now by 2025, making your oil shale good for only 3.5 years.

[Red Harvest]

I've been ignoring Greenspan since he ignored the fiscal realities of budget projections to support a hairbrained scheme and supply side econ back in 2000/2001.

Since when was Greenspan an expert on oil? The "experts" you speak of are not independent ones. And those "experts" have been largely wrong for the past two years.

This looks like a rather common example of herd mentality, something the experts are just as prone to. Most "experts" try to follow the herd even when there are disconcerting signs ahead. It is predicting the path largely from looking in the rear view mirror, rather than developing a deeper understanding based on contradictory indications. This price run up has not been like the others. And we've burned about 500+ billion bbl's of oil since the last major spike in '79.

You might not like the other theories, but they certainly have done well in explaining U.S. production and the peak that occurred in 1970/1971. Despite vehement denials that this would be the case, efforts to "drill our way out" have failed and U.S. production keeps falling.

[BDC]

I doubt oil is about to run out, certainly hope not anyway.

I expect prices to rise though as India and China desperately try to get hold of as much as possible. And even more supply issues.

Hopefully someone will create a viable alternative pretty swiftly before things get really hot. Especially as the dollar is linked to the barrel of oil so strongly. America in recession doesnt sound too fun either.

[Xiahou]

Despite vehement denials that this would be the case, efforts to "drill our way out" have failed and U.S. production keeps falling.

Do you think that could have anything to do with bans on drilling? There are reserves off the west coast that are totally untouched due to drilling bans. Would they make the US energy independant? Of course not- but the fact that we can't even consider them is silly. And as Greenspan said- our global reserves are still growing faster than we are depleting them.

The "experts" you speak of are not independent ones. And those "experts" have been largely wrong for the past two years.

And your experts are totally independant and unbiased right? And for how many years have the "experts" in your crowd been wrong? How many times have they claimed with "incontravertable" evidence that we should have run completely out of oil by now?

It specifically states that the western oil shale resource in the U.S. amounts to a grand total of a possible 130 billion barrels.

Really? According to the DOE shale oil reserves are in excess to 2 trillions barrels. Quite a disparity don't you think?

[Red Harvest]

And your experts are totally independant and unbiased right? And for how many years have the "experts" in your crowd been wrong? How many times have they claimed with "incontravertable" evidence that we should have run completely out of oil by now?

I'm not aware of them actually predicting we would be out by now, nor are they saying we will run out in the near future. The case is really an economic one. However this clearly shows the fallacy in your thinking. Unlike you and some other "experts," they have an understanding of the impact oil demand's inelasticity to pricing. You believe we have to run out before we are in serious trouble. That's not what they are saying, nor is it what I am saying.

One of these days perhaps you will start to put the economic concepts together.

Right now, you are still stuck thinking about the artificial spikes of the 70's...trying to use that to discredit those predicting production peaks. I'm split as to whether you are being dishonest by trying that tactic, or if you are being dense. There is a lesson to be learned from those spikes, however. The lesson was that the 1970 peak in U.S. oil production (which was predicted--and scoffed at by people thinking much like you) made the spikes painful and possible. It illustrated how increasing U.S. demand had made it very vulnerable when its own supply could not meet internal demand.

[Gawain of Orkeny]

You believe we have to run out before we are in serious trouble. That's not what they are saying, nor is it what I am saying.

No were saying worry about it but dont panic were not close to running out while you take the opposite tac. You say were in serious trouble we say were not.

The case is really an economic one.

No its really an enviormental one and agan thats where the hypocricy comes in. Its all about stopping pollution and the fact that fossil fuels are seen as the biggest producers of this. The best thing that can happen for your side is for the price of gas to go up. It will spur alternative energy research, people will start buying more fuel efficient cars and it will make Bush look bad. What more could you ask for? Again stop trying to say were running out of oil although I now notice your backing away a bit from that position. Cant you admit the left is being hypocritical here?

[AntiochusIII]

I don't really see where the "left versus right" comes in when this is an economic issue about oil prices...

The environmental damage that the increasing consumption of fossil fuels cause is another matter, though, in my opinion, is a serious issue. Why would stopping pollution bad?

And why would anyone celebrate if the oil prices skyrocket and Bush looks "bad?" We will all be harmed, aren't we?

By the way, it's "hypocrisy" and not "hypocricy."

However, I am uninformed about the real picture of the issue therefore I'll reserve my opinion to myself. Though, looking at the facts presented in this thread, and the attitudes of the debaters and experts, I am inclined to agree with Red Harvest.

[Red Harvest]

No were saying worry about it but dont panic were not close to running out while you take the opposite tac. You say were in serious trouble we say were not.

We are past (or very near) the production peak, while the demand curve is continuing to rise. It's called a shortage...as in we don't have enough for all the customers...so prices will rise. With the inelasticity of oil it can be a very powerful jolt. This looks like a warm up.

Again you fail to recognize even the possibility of a production peak...one that was demonstrated in the U.S. 35 years ago, so the theory itself is sound. The primary uncertainties about the precise peak now are because of highly suspect inflation of reserves. There was a paper inflation of OPEC reserves some years back where a number of OPEC nation's added large amounts to their stated reserves so that they could receive a bigger share of the export quota. Iran, Iraq and Venezuela doubled their stated reserves in 1988 for example. Abu Dhabi and Dhubai tripled theirs the same year. From 1982 to 1995 there are nearly 400 billion barrels of "anomalous" reserve increases by OPEC.

No its really an enviormental one and agan thats where the hypocricy comes in.

No, it is not, and that is where *your* hypocrisy comes in. My livelihood depends on good economic decisions with respect to energy, and I'm not seeing them happen. With conservation and alternative sources we can exert some control, versus allowing the market to have even greater control over us. I see failing to act now as most likely resulting in a large economic hit later.

Good decisions can be environmentally friendly. This could easily be a Win-Win situation. Instead we have a president pursuing a Lose-Lose course. I would rather he made good choices. My being able to say, "I told you so" isn't real helpful if I have to go down with the ship. I don't want a $2 trillion dollar addition to the debt, or a rapid permanent inflation of energy prices, or for us to fail in Iraq or Afghanistan. I would rather have back the $2 trillion, have a progressive energy policy in place, not to have invaded Iraq on false pretenses, and not to have failed securing the nation at a critical time. Wouldn't matter to me if Bush, Gore, Kerry, McCain, or Cheney was in office if the individual was making sound desicions.

While we aren't going to run out of oil tomorrow we are going to run out of affordable oil in the relatively near future. And we are most likely going to have to replace the majority of traditional oil within my lifetime.

The alternative oils sources are not so nearly well developed as you think. Oil shale does not produce oil as we are accustomed to refining. It has a different character and it is going to have environmental costs associated with it that make oil look benign.

[Xiahou]

I'm not aware of them actually predicting we would be out by now, nor are they saying we will run out in the near future. The case is really an economic one. However this clearly shows the fallacy in your thinking. Unlike you and some other "experts," they have an understanding of the impact oil demand's inelasticity to pricing. You believe we have to run out before we are in serious trouble. That's not what they are saying, nor is it what I am saying.

One of these days perhaps you will start to put the economic concepts together.

Oh Red, you do make me laugh sometimes.
Oil is only inelastic in the short term. History has shown that in the long haul there is indeed elasticity in demand- if prices stay high for a prolonged period people will begin to buying more fuel effecient vehicles such as diesel or gas/electric. In the mean time, work can continue on alternative fuels- I read that fuel cells could be ready for primetime in another 10-15 years. Now, even if we buy into the 'doom and gloom'ers (which I think are clearly underestimating reserves), we still have another 40-80yrs worth of oil and these predictions are even taking into consideration consumption growth rates are they not? Now, explain again to me why I need to fork over more of my hard earned money to a government sponsored corporate welfare plan?

I'm split as to whether you are being dishonest by trying that tactic, or if you are being dense.

Maybe I'm stupid and lying? That's certainly a mature way to handle an argument regardless.

There is a lesson to be learned from those spikes, however.

Yep, and that is that when cost spikes- consumption eventually drops as it did.

[Red Harvest]

Oil is only inelastic in the short term. History has shown that in the long haul there is indeed elasticity in demand- if prices stay high for a prolonged period people will begin to buying more fuel effecient vehicles such as diesel or gas/electric. In the mean time, work can continue on alternative fuels- I read that fuel cells could be ready for primetime in another 10-15 years. Now, even if we buy into the 'doom and gloom'ers (which I think are clearly underestimating reserves), we still have another 40-80yrs worth of oil and these predictions are even taking into consideration consumption growth rates are they not? Now, explain again to me why I need to fork over more of my hard earned money to a government sponsored corporate welfare plan?

You are still fooling yourself. Nothing will be ready if we aren't more active in working on it. That's the rub. The gap between what corporate research and what many believe it to be is enormous. U.S. research in general has been in a state of decline.

No, the 40-80 year supply estimates are not realistic. Why? They imply that oil will be pumping at near full rates to meet demand the whole time then just shuts off. They ignore the truth that production will be declining which is what peak oil is about. They ignore the price inelasticity--which is why it is not mentioned in their articles. The adjustment that is achieved comes at the expense of the economy through recession to support the vastly increased price. I remember the economic malaise of the 70's and early 80's. I would prefer not to repeat the experience.

Unfortunately, we are all in this together. I wish there was a way to let you have your extra 18.4 cents per gallon in Federal gasoline taxes in gas taxes, and for you to lose access to the interstate highway system, and other things Federal gas taxes support. Unfortunately, it isn't practical so you'll have to live with the massive burden of an extra $100/year or so in operating expense. Be thankful you aren't using local toll roads, that can run you into thousands per year and is very inefficient--with a bunch of extra employees and effort to maintain a few miles of road.

Yep, and that is that when cost spikes- consumption eventually drops as it did.

We had a major recession and hyperinflation. Whole industries failed. The decline in consumption was slight for the magnitude of the spikes. It took a decade to start to respond meaningfully. That is the reason for getting in front of this. You want to save a few cents per gallon and perhaps $100/yr so that you can spend several dollars per gallon more indefinitely. No, thanks.

[Red Harvest]

The notion that we should further artificially inflate prices through additional taxation is counterproductive.

Counterproductive to what? It will end up decreasing future demand, which makes us less dependent on oil imports, it also means lower U.S. prices longterm (see the inelasticity part again.) It should move us closer to where we need to be long term--with investment in long term solutions rather than short term. It will bolster U.S. research, education, and leadership...it is investment in ourselves. If you see that as counterproductive then you live in a mighty strange place.

The idea of additional taxation is to reduce the economic burden later through investment today. It isn't general funds or social programs and such a tax should not be used for those. Sheesh... Of course, too many Americans like you have the compulsive consumption disorder, max out the credit cards, max out the national debt, all for "ME, ME, ME TODAY, TODAY, TODAY" with zero sense of the future.

The trends and theory indicate the oil prices on average will inflate faster than the rest of inflation and we are putting ourselves in a position where our economy and security are at risk. Seems worthy of investment.