"perhaps for decades as we munch our way through the $125±25 slab of resource"

it this slab thats suprised some and lead to conclusions that a peak in resource , in this case oil, cannot happen.

Sadly in the minutae of everyday expirence this may look that way , but lets face it , if there was plentiful light sweet crude we wouldnt be even looking in the direction of these plays

still have fun ! there was apparently some good dancing on the Titanic before it sunk....

Forbin

Your text seems to suggest that this is less of a "nail in the coffin" situation (which implies the whole issue is dead and buried) and more of a "the expected arrival to rich western industrialised countries of peak oil's more disruptive aspects has been delayed for an indeterminable period, but not indefinitely"

If I understand the point of the article, which appears to be some sort of rationalization, I can offer this:

I don't think it is a failure of peak oil theory as much as it is a failure of "Peak Oil theory", which is the old-fashioned heuristics epitomized by poor approximations such as Hubbert Linearization (HL). This forced many into a trick-box in which they could not explicate themselves. What we observe is that few of the depletion curves seem to fit HL any longer, and so the old heuristics are failing. The final stake in the coffin was the adoption of multi-Hubbert peak analysis, which adds nothing at all to a deeper understanding, other than to say one can fit any profile given enough parameters.

The way to keep going is to adopt the more modern approaches to analysis, as illustrated by the shock model convolution techniques that are being used on Bakken oil, for example. But The Oil Drum shot its wad, so to speak, on loyalty to the Hubbert logistic and that is why "Peak oil theory" is going away, but the general idea of oil depletion is here to stay.

Eaun said his post should stir up some controversy, so this is is offered as my own perhaps controversial opinion to stir the pot.

The "nails in the coffin" title is misleading because your article goes on, actually, to prove peak oil has occurred with the bumpy plateau for C+C that started in 2005. All of the finncial problems and other issues you mention seem only to underpin the basic logic of the peak oil theory.

The idea that there would be a rapid peak and then gas lines and economic collapse following within months of each other (it may be what you mean by "peak oil") was never the mainstream view of the issue. And most who had studied and observed PO saw complex interactions, with governments, especially, involved as support.

Possibly the underlying human logic all along during the heavy growth years was (secretly, but for us all) "let the collapse be widespread and humongous and slow enough that I, personally, won't be badly affected". The personal bargaining went something like: "OK, the average lifespan may decline by 5 years. I may be able to afford fewer things. I will just rent an apartment.I will have one cat instead of three cats...I can live with these changes."

System-wide, global-wide slow collapse may have been the goal from the start for several reasons. 1) It would just be judged as general economic malaise by most, not a consequences of choosing energy sources without regard for the future in a blind and passionate way (i.e. sparing leaders embarrassment)
2) The consequeces (closed shops, empty buildings, etc.) would appear slowly, way after the initial builders and owners had died of natural old age, again, sparing everyone embarrsassment.

People don't like to be shown the consequences of their mistakes. People have enough embarrassing things to deal with, like mortality, thinning hair, or not scoring as high on math tests as their friends. Life is full of embarrassing mistakes. Adding "paving over the planet" to the list would just be cruel and vindictive. People were out to use oil to enjoy themsleves and make life better, to improve access to health care and education and goods and services.

Peak oil doesn't make sense as a short-term phenomenon, which may have been an initial image it had, rather like Y2K, or a Hollywood disaster movie. It only makes sense as a slow, progressive series of smaller events and battles occurring all over the globe. All of these events and battles together constitute PO.

You did not put a nail in the PO coffin in this article. Quite the reverse, I think.

Great! Now that TOD is shutting down and the final nails have been driven into the coffin of 'Peak Oil' we can all relax. Thank god for all the 'OIL' reserves in the tar sands and shales, let the kerogen flow. I'm sure if I join the right online blog I can also find confirmation that climate change is just one big hoax. Nothing more to worry about! So next I will be registering as a Republican, starting an MLM online business so I can milk those that don't understand the exponential function and will be looking for a new SUV! While I'm at it, maybe I'll get a big speedboat to tow behind it. Sailboats, kayaks, bicycles and solar panels are for those deeply misguided individuals who made the wrong bet that BAU could not continue forever and ever... of course it can. Amen!

Cheers!

Fred

P.S. Thanks, Euan, for letting us know that Peak Oil is really dead!

Hi Euan,

Long time, no see! I haven't said anything here at TOD for years.

Congratulations to you for writing this post. You've got balls, which is pretty rare in this world.

By far the most important thing you said is this --

All scientists should update their views and theories when new facts come to light.

And I might add, all non-scientists should do the same. Unfortunately, humans by and large are not capable of updating their belief systems, which are founded on other, more fundamental factors (e.g. social instincts like group membership & cohesion, etc.)

The other things you wrote -- the actual data and their reasonable interpretation -- are only footnotes to that one important statement.

My experience with humans is that they believe some story and then they stick with that story, no matter what. Thus, generally speaking, people learn nothing.

-- Dave Cohen

Peak oil is just fine. As with this article, people simply changed the discussion by changing definitions. If you'll notice, production rates are ignored as the author rattles on with talk of "massive" reserves. Wonderful adjective but leads the discussion far, far from the concept of production and, certainly, is based on the assumption that technology will save us. Bit of faith based thinking there. The faith, of course, is the technology will arrive on time, in sufficient quantities to save us and cheap enough that we aren't all huddled in a shack trying to stay warm. Adding in the kitchen sink of carbon based energy is a clever one. The discussion started with oil and now includes gas, coal, etc. The addition of "changes in human behavior" is a very good one. Won't happen of course but makes nice words which certainly appeals to many right now. And increased efficiency is another one. With the population increasing at light speed, efficiency is already far behind. There's more, of course, but useless.

Actually, if one sits down with a hand held computer and takes a serious look at the increases in production versus global consumption, the increases are a pittance. But if one jiggers the figures enough, a very sensible sounding argument can be made. We're in a lull that will not last. Bit of rest before the next battle.

For me, the article is simply one more in the frantic "all is well" hype I see everyday.

Peak oil is dead? Oh thank God! We're saved!

"...some have been squeezed out of the labour market, perhaps forever, and will live out their lives on dwindling State handouts, in poverty. The new higher oil / energy prices are here to stay but I believe they will stay range-bound in $100 to $150 / bbl bracket, perhaps for decades as we munch our way through the $125±25 slab of resource."

Wait... what? Are you fricken joking? What sort of twisted psychotic sadist-pervert would write pages of text claiming peak oil was dead and then basically say "not really"? It's not fricken April Fool's Day you know.

I suppose these new discoveries around the world are not so costly. I look at the Bakken statistics, though, and wonder if shale oil is in Stage 4 cancer. I mean $1,000,000,000 in new wells in a month for 1.3 million barrels? I'll keep looking at the data.

The comments crack me up. Good job and good luck, EM.

The new higher oil / energy prices are here to stay but I believe they will stay range-bound in $100 to $150 / bbl bracket, perhaps for decades as we munch our way through the $125±25 slab of resource.

Ninety-one percent certain that this prediction will be wrong. It will be below $60 in the next few years as governments continue austerity measures and the money supply deflates OR it could be above $300 if Saudi Arabia has a revolution OR ...

Thanks Euan, for this post and for all of your posts, many of which have been particularly memorable for me.

Almost the entire post is objective, empirical, well-argued and well supported. Most of these points are very hard to dispute, but...

...personally I was a little disappointed to see this comment:

"Capitalism was founded on growing supplies of cheap fossil fuels."

It's at this point that objectivity and empiricism have given way to outright proclamation.

Forgive me for starting with an absurdly literal objection, but most people consider capitalism was founded in Britain during the industrial revolution. As a fellow Brit you surely know that the major sources of power during the British industrial revolution were water, wind and muscle. The Watt engine was not invented until 1775, and steam engines did not really take off until the second decade of the 1800s.

More germanely, there is no reason given why capitalism should require fossil fuels to operate. Arguably capitalism does require growth, and ultimately that growth must be fuelled, but it could just as well come from nuclear power or renewables. Since energy has been used inefficiently there is actually a period where economic growth without growth in primary energy consumption is possible (by efficiency gains), although obviously this is limited.

You say that financial losses in shale gas prove that capitalism is unsustainable, but I find there to be no plausible link. Was the dot-com bust the end of capitalism? Was the South Sea Bubble? Capitalism admits failure - particularly of judgement. It always has, this is no different.

The bigger challenge to growth, and therefore capitalism, will come later this century when the global population will (inevitably now) peak. I would be much more interested in seeing arguments developed around that.

Personally I am satisfied that existing renewable energy technology can already achieve an annual rate of energy return of 20%(for PV) and upwards and still has huge potential for further gains. Considering this, limits to growth should not come from energy returns. I don't want to rehearse the arguments about storage and transmission yet again, I have never fully subscribed to those issues as show stoppers (except that the current high use of personal vehicles won't be able to continue indefinitely unless vehicle battery technology improves dramatically) load profiles can be managed by a combination of demand management and using biomass and reservoir hydro for load following.

None of this is to deny the drama or import of the transition that we as society now have to make as, for the first time, we are forced to confront the reality of slowly leaving fossil fuels behind us. But to stand here now and condemn elements of our functional society to failure is not only unnecessarily defeatist, but it pollutes the real message (the objective, empirical one) which you yourself have made so well - that the transition MUST soon begin, whether we like it or not.

The new higher oil / energy prices are here to stay but I believe they will stay range-bound in $100 to $150 / bbl bracket, perhaps for decades as we munch our way through the $125±25 slab of resource.

Decades? A mix of conventional and non-conventional will last that long in that price bracket? I liken peak oil to a fast spinning well oiled wheel. As we work our way through the light sweet crude to the tar sands the oil being applied to the wheel is getting thicker, gumming up the economy slowing the wheel. At some point the flow thickens enough to cause the wheel to begin heating up and once it starts smoking it's not long until it ceases up like our economy will. Decades for that to happen? I think it will more likely be in the 2015-2020 time period.

Peak oil is simply a logical outcome of extracting a finite resource. It will therefore prove to be impossible to put a final nail in the peak oil coffin. No matter how hard anybody treis debunk (or redefine) peak oil, it will always resurrect itself.

Good postmortem, I think a broad production plateau is likely with lots of prices volatility. After all those years, I still feel that we are navigating in the dark, how long can the shale oil boom last? the default forecast seems to be "+10% a year forever", really? nobody seems to have the answer.

Peak oil is not dead and therefore should not be buried. Rather, PO is a wakeup call.

Here are a couple of data points:

The moment you start depleting a non-renewable resource, no matter what the rate of extraction is, there is less then there was.

There is the issue of the chronic mismatch between human's horizon of analysis and human lifespan. We can look at millions of years worth of data and use that to create certain theories and then wonder why it doesn't pan out in the next decade.

We also don't have a sense of time which has passed. It took 100's of years for the roman empire to melt away but in a history book it covers 5 minutes worth of reading. My guess is that the people who lived during those days were not very aware that the empire was on the way out. We think we have the ability to take the long view but who here knows the names of their great grand parents?

We're don’t process extremes. What is 230 billion light years? How much is 88 million barrels per day? It is something we don't relate to and therefore not truly incorporate into our thinking or actions. Large numbers are intellectual and won't trigger action - we can't truly process it.

Underestimating rates of change. Unlike lots of other process in nature humans don't act or develop randomly along multiple dimensions. We have the ability to selectively breed, a process which significantly speeds up natural selection. That is probably the main attribute which sets us apart from the rest of nature. We are able to build on knowledge exponentially, and it is very easy to underestimate the rate of change.

We're ok with setbacks. When a millions of people die we barely pause - we keep moving.

Energy to a significant extend is a societal choice. We choose to use resources to make SUVs and cruise ships rather than say PV. From a pure energy capturing POV PV is a vast improvement over the efficiency found in nature - compare it to a plant. Should we choose to do so we could use PV to make ammonia/methanol and use that as either a fuel or an input. But we don't. We build cruise ships instead. And no, EROEI has almost nothing to do with it because it is an allocation of resources decision, not a presence of resources question.

PO is not dead but, if we play our cards right, pretty much irrelevant.

Rgds
WP

Some largely self-explanatory charts, mostly from my recent article on what I call the Export Capacity Index (ECI):

GNE & ANE, as defined above, were at 96% and 86% respectively, of 2005 values (EIA).

The Six Country Case History consists of combined production, consumption and net exports from the UK, Egypt, Indonesia, Vietnam, Argentina and Malaysia, which, insofar as I know, are the six major net exporters that have hit or approached zero net oil exports since 1980 (except for China).

Link to article:
http://peak-oil.org/2013/02/commentary-the-export-capacity-index/

Having been a long time TOD lurker and occasionally poster I figure it is time to throw a few zinc coins of dubious value into the ring...

I have seen many debates play out here, e.g. the famous HL debate. Where I think that TOD went astray is the same place that Hirsch went wrong. There was no fast peak, the plateau has been a drawn out affair. It is also clear that when the plateau has runs it course, the drop will be even faster because of the transition to lower quality reserves. While it does seem to some to be a painful drawn out affair, a plateau of 15-20 years is still a blip in the grand scheme of things. Pulling out a cliche, Rome didn't fail in a day...

I think the real tell is that on a net BTU basis we have basically gone nowhere in 8 years despite trillions in new CAPEX... How long is that really sustainable? The world was saved by the Bernank in 2008, but that trick can only be played once. Despite historically cheap cost of capital, no significant (at the global level) source of supply has emerged... At other sites I have referred to the Bakken and shales as the equivalent of scraping a hash pipe for resin; the first few scrapes seen great but it soon becomes pointless..

As a final note I would like to thank Euan for all his work and posts here at TOD. He has contributed greatly to my understanding of the oil trade and I look forward to reading his future missives....

Excellent post, Euan. I have to assume that 'nails in the coffin' is meant sarcastically though because as important as these developments are all they do is delay peak oil. Peak oil is a fact like gravity, the only issue is when and it is certainly very very true that the date of peak oil has been pushed years away by the three things that you mention.

The real issue is and always has been price. Even if we completely ran out of oil (which will never really happen), we will be able to chemically synthesize it if we really want it. What truly matters is the price of oil since that determines how much we can really benefit from it. I am completely persuaded that the current sluggishness of the world economy is largely due to the higher price of oil. People have less money to spend on food, housing, entertainment, and other things because a larger percentage of their budget has been consumed by the need to pay for oil. We pay for that higher priced oil both directly (in the form of higher gas prices) and indirectly (in the form of higher food prices, higher material costs, higher shipping costs, etc.).

And the peak oil deniers can deny peak oil they want by pointing to the higher C&C production. However, they cannot deny that since 2000, the price of oil has risen steeply and at a rate that is much higher than the base rate of inflation. And that higher price has very significant consequences.

First attempts to arrange newly discovered elements into some form of orderly manner that *must* exist based on the little knowledge that early chemists had were incomplete and unsuccessful, but good enough to drive new discoveries (new elements predicted to exist)...

This series of discoveries of new elements led to ever more successful arrangements (Mendeleev's table based on weight and chemical properties)...

... which led to the discoveries of radiation and of the distinctions between protons and neutrons in the nucleus, and the importance of the difference between atomic weight (P+N; i.e. isotopes) and atomic number (P only)...

... which ultimately led to the ability to completely and accurately predict the atomic number, valency, and chemical behavior of "missing" elements constituting gaps in the periodic table (e.g. Hafnium).

This is the apotheosis of the scientific method.

The evolution of "Peak Oil" hypotheses (NOT THEORY, GOD DAMMIT!!!) follows a similarly winding path with many dead ends. The basic science underlying the original hypothesis remains sound, but it was incomplete then, and our knowledge remains incomplete. The addition of distinctly non-linear, non-deterministic, "irrational" behavior (i.e. markets, economics, politics) makes the delineation and description of an all-encompassing, predictive, testable set of linked hypotheses very, very difficult.

As such, the original work, the following work with different schema designed to address holes or questions raised by and about the original hypothesis, and the current work are all part and parcel of the development of a successful scientific paradigm.

Peak Oil is dead... Long live Peak Oil.

Resources remain finite. Energy required to extract, process and distribute those resources will continue to eat larger and larger bites of those lesser and lesser resources.

Humans are clever and our technological abilities are staggering... (which is good and bad), and we will continue to find ways to try to test and disprove the predictions of a set of hypotheses that present fairly dire choices, out of basic stubbornness, necessity, greed, desire, and survival instinct.

That said, most of the data presented indicates that the original predictions of peaks in conventional oil, costs and consequences of "alternative" hydrocarbon fuels... were not so far off, time wise, and not so far off slope/sharpness wise.

Remember, what we call "The Hundred Years War," to which a section of a chapter of most history books is devoted... was NOT called that back then, and was NOT studied the same way then... history is a large compression filter. 200 years from now, what we agonize over on a month by month basis... will be called "the era of peak energy output" or something.

The essence of this article is:

1. Conventional oil production has peaked
2. High oil prices are bringing new unconventional sources on line.
3. Private credit markets have not yet collapsed in spite of the doomster’s predictions.
4. There might me enough high priced non-conventional oil to last for a few decades and therefore see me comfortably into my grave.

I think that your hope that the collapse of private credit markets can be delayed for decades is likely to be disappointed, but, what the heck? The future is hard to predict, and you can convince yourself that there is chance that you will avoid the personal inconvenience of a major social discontinuity. In the long term it appears that humanity will be extremely inconvenienced (Can you say climate change? Can you say resources wasted in propping up private credit markets that should have been used to build a sustainable infrastructure?), but that is apparently no concern of yours. I realize that you are not actively indifferent to humanity’s fate. You just have blinkers on: Extract more oil, be more energy efficient, keep private credit markets healthy for a few more decades. Anything outside of this field of vision is unimportant.

It seems to me that "peak oil", climate change, health of the oceans, availability of fresh water, etc. are not so much environmental, geologic, or even scientific problems (or predicaments if you prefer). In reality, they are problems of human behavior. Unfortunately, that makes them much harder to deal with.

I have yet to see a problem of human behavior that is positively affected over the long term by more of the same human behavior that originally caused the problem. Yes, sometimes more of the same may put the worst consequences off for some time, or it may simply raise other problems to the fore, allowing us to forget about the old problem for a time while we face a new, more imminent crisis. Over the long term though, the same type of behavior will tend to get us the same type of results, although, generally speaking, often trending worse with time.

So, the question that probably needs to be answered (perhaps the only question) is can humans really change their fundamental behavior permanently, especially if such change requires any meaningful sacrifice on the part of those same human beings (as opposed to future generations or some other set of human beings)? I think the situations that we all face over the next number of decades will require this type of change in human behavior if we are to have any chance of navigating these challenges without enduring really harsh consequences. Personally, I see little evidence of such an ability for behavioral change in human history. And this is what worries me because I think it matters not at all whether we hit resource limits first or climate limits first or water limits first or see the oceans essentially collapse first. Either we manage to change our behavior in time to prevent any of these from happening, or we don't and the first one that happens will likely render the discussion of the others largely moot.

Can we do that? Again, I really hope so, but I see little in the way of evidence. Hopefully, some new facts will come to light that will force us all to change our views, and then our behaviors.... if we can.

Am I the only one who feels that Euan is being a little tongue in cheek, ever so slightly sarcastic, at least with the title of this post? He outlines the three nails in the coffin and then under the heading "Points" goes on to expand on why the three nails aren't really nails. Nice!

Of course, there are those who see what they want to see and that goes for both sides of the coin. I am on the side of those who believe that the decline in the shale plays is going to overwhelm the new production within the next couple of years. If I'm right, the "peak oil is dead" crowd will not know what hit them when TSHTF. If I'm wrong, I'll have missed a whole lot of opportunities to enjoy the party!

Alan from the islands

Quote: "Oman would have been a classic case of a country peaking. But the fortunes were reversed by rolling out an array of enhanced oil recovery strategies."

Why using an oil-irrelevant country to proof that technology will save us?
How about using oil-relevant Mexico as a counter-example that production is declining since years despite new technology?

The question not addressed in this, or any other analysis I've seen is, "How high can oil prices climb before the the world's interdependent web of supply chains (including those involved in oil production), which are based on cheap transportation fuel, are no longer economically viable.

Even assuming that the activities necessary for petroleum location, extraction, refining and distribution are the last economic activities to go, there will be a limit, after which, industrial activity based on cheap, petroleum based transportation fuel is no longer possible.

Enough Already! What facts have changed? Have you guys completely forgot about declining world oil exports. They are declining because producing nations are consuming more and more of their oil. Export nations are growing their economy. Import nations are importing less and less oil.

Below is import data from the EIA. The EIA labels it "Net World Exports" but it is really only all OECD nations. That is largely the developed world. It is in kb/d with the last data point March 2013.

Oil imports by OECD nations are down almost 8 million barrels per day since 2005 and 2006. And in case no one has noticed Europe is getting mighty sick and the cause just might be found in that chart above. I think some folks are just giving up the battle way too soon. Peak Oil is alive and well.

Ron Patterson
Peak Oil Barrel

Euan,

Are you willing to make your PP available?

Euan,
Thanks for a nice summary.

Those 4 nails came with a price tag.
One interesting exercise would have been to look into how world C + C supplies would have developed with some price trajectories, say $30, $60, $90/bbl.

Chart from http://mazamascience.com/OilExport/

Europe looks to me like it has hit peak oil and is on the downslope, together with the predicted social unrest, crumbling infrastructure etc.

It's not a neat peak, more like a 40-year undulating plateau. But unless some unimaginably huge oilfield is discovered in Europe, I don't see consumption ever getting back to its former peak.

We must remember, peak oil won't be the same for everyone, everywhere. I estimate Europe is over the peak, America on the peak, Chindia approaching the peak, and Africa and South America still ramping up to the peak.

We need a crowbar to get rid of these ridiculous nails and keep the site open.

"Europeans are being saddled with expensive and less reliable electricity supplies and increasingly loss making energy industries. Only time will tell if the European strategy bears fruit in the long run. The need to increase indigenous primary energy production in Europe does make expansion of renewable energy a sensible option, but I can't help feeling that 100 GW of new nuclear capacity may better serve the people of Europe."

I can only speak for my own country, which is Switzerland. We are not trying for the new renewables at all, due in part to having the Alps and 60%+ of hydro. We are, on the other hand, having a public debate about nuclear energy. The current plan is to replace our old nuclear power plants by - gas. Yes, gas. This would seem to confirm Euan Mearns' observations about European CO2 emissions. It also confirms something else, though: People neither know nor care. The problem is not cost. It is information and willingness to look at the problem. If any country in Europe could afford to push for better solutions, it should be ours. Yet Germany's percentage of electricity generated from the sun is ten times higher than ours. Those "expensive" electricity supplies probably refer to the German law about renewables, the EEG or Erneuerbare-Energien-Gesetz. If we had to pay as much for our electricity as our German neighbours, it would cost our household of three about a hundred euros more a year. A YEAR, for goodness' sake. That is the price of one family dinner at a decent restaurant in these parts, or health insurance for an adult for just a few days a year. Stuff almost all of us can afford without thinking twice about it. And yet it would be political suicide to suggest what John Doe considers... well, "expensive electricity supplies." I put it to you that most folks in Central and Northern Europe could invest their money better. As somebody here has already said, we choose to buy SUVs and build airports instead.

As I've understood it, there's never been anything wrong with Peak Oil theory -- as modified by the realization that an arbitrarily-long plateau can extend the bell curve's decline further to the right -- since M. King Hubbert first proposed it.

Peak Oil theory never claimed to be able to predict when the peak would occur. As Matt Simmons and others said repeatedly (as in "over and over and over") we can't and won't know that the peak has occurred until we've quite clearly ID'd it in the "rear view mirror." All Mr. Hubbert's theory can tell us now is that an irreversible peak in global crude oil extraction will happen at some point in the future. Nothing has happened yet that disproves this.

The tragedy, of course, is that by the time the theory has routed the deniers and proven itself beyond any reasonable doubt, we will have collectively forfeited the chance to prepare for the consequences of that peak. Whoever's still around will have to pay for that failure, deniers and believers alike.

Excellent post. Well worth the read. Thank you.

I am heading to Aberdeen on Saturday - it's a quick trip but I will wave toward the University as the plane approaches Dyce.

I hardly ever post as I often don't have the time and when I think of something good to say and come back - some other very smart poster has beat me to the point. But I spend a great deal of time reading.

This sight (site) will be sorely missed. All the best and thanks again.

Doug

Friends, ‘Muricans, countrymen, lend me your ears;
I come to refute Peak Oil, not to confirm it.
The wrongs that models predict lives after them;
The good is oft ignored by all.
So let it be with Peak Oil. The noble Yergin
Hath told you Peak Oil was fictitious:
If it were so, it was a grievous fault,
And grievously hath Peak Oil answer'd it.
Here, under leave of Yergin and the rest--
For Yergin is an honourable man;
So are they all, all honourable men--
Come I to speak at Peak Oil's funeral.
The basis was self-evident, intuitive and clear to me:
But Yergin says it was heuristic;
And Yergin is an honourable man.
The model predicted rising prices
Whose ransoms did the general coffers empty:
Did this in Peak Oil seem mistaken?
When that the poor have cried, Peak Oilers have wept:
Schadenfreude should be made of sterner stuff:
Yet Yergin says recessions are temporary;
And Yergin is an honourable man.
You all did see that with nuclear, wind, and solar
Were thrice presented renewable options,
Which could postpone a peak: was this replacement?
Yet Yergin says still demand will fall;
And, sure, he is an honourable man.
I speak not to disprove what Yergin spoke,
But here I am to speak what I do know.
You all did waste oil once, with mindless inefficiency:
What cause compels you then, to demand it cheaply now?
O judgment! thou art fled to brutish beasts,
And men have lost their reason. Bear with me;
Climate change is in the archives there with Peak Oil,
And I must pause till it too fades from memory.

Great essay, Euans. I just want to make a comment about this:

To be fair, the UK does have a raft of sensible measures such as...and is rolling out smart meters at a snail's pace.

I am personally unpersuaded that "smart meters" are a brilliant idea. I assume we are talking about the smart meters that make it possible to charge higher rates for power consumed during peak hours, as distinguished from smart meters that just make it possible for the power company to save labor on meter readers (by having the meter phone home).

To the average home owner, a smart meter will probably just result in paying higher prices, and will save little or nothing. If I had a smart meter, I can't imagine that it would change my power consumption pattern by one iota. For example, I am not going to use my electric lights from midnight to 8 am (rather than 6 pm to midnight) just because power is cheaper at that time. I am not going to use my electric fan in summer from midnight to 8 am (when it is relatively cool) rather than in the daytime when it is hot. Possibly I could put off doing the laundry until bedtime, but that would save a drop in the bucket - I only do laundry once a week, and I dry clothes on the line. My refrigerator will remain plugged-in 24 hours, not just plugged-in late at night even if power is cheaper then. If I want to run my toaster oven to make breakfast, I'm not going to wait until midnight.

Some commercial users might be able to shift production to graveyard shift, but more likely they will just move the operation to China if power rates are too high at home. I can't imagine companies only opening their offices from midnight to 8 am because it will save them on their electric bills - I bet the electric company itself will not do that.

In short, I think that the "savings" from smart meters will prove to be illusory.

Kudos, appreciation, and an invitation to help build on this fine synopsis

While much of the data and concepts are familiar and scattered about The Oil Drum and elsewhere, much appreciation to Euan for "tying it all together" so well at a pivotal point in the history of the issue. I especially appreciate the artifice of the title and coffin/nail theme which makes it unclear which way his thesis is heading (as evidenced by many responses) and focuses attention on the finer details.

In efforts to educate more and more influential people--not just about peak oil but its broader implications, it is critically important to be able to step back and retrace the story, linking the past, present, and future as Euan has skillfully done here.

ASPO-USA, as part of its efforts to ramp up and strategically focus its outreach to key decision-makers, has been working toward a synthesisized and relatively standardized presentation that reviews the "big picture" of oil, energy, the economy, environment etc. Of course, there are already many such presentations that attempt this task. Our goal is weave together the best of them and represent the different perspectives and people that have characterized the history of scholarship and discourse on these issues.

This is a tall order any way you look at it, but we think it will be an essential and valuable tool in bringing along partner organizations and engaging mainstream audiences. The challenge has seemed overwhelming at times, but Euan's presentation is a timely and darn good baseline to work from.

Once we have the presentation we are aiming for, our plan is to coordinate and support people who are willing and able to deliver the presentation to different audiences. Naturally, some people are more qualified than others, or more knowledgeable in some aspects of the issue than others, but those issues can be addressed as needed.

If you would be interested in learning more or being part of an informal network of presenters, please feel to contact ASPO-USA at info@aspousa.org.

Also, if you are wondering about ASPO-USA's plans for a website to succeed The Oil Drum, an update with more details is pending to be posted this week. We certainly hope to have a live site before the end of the month and doing the best we can to make that happen.

Thanks, Jan

Hi Euan, I haven't submitted a proper comment in years, but this post woke up that urge again. This is perhaps a brilliant post, but most importantly, explains to a great extent why you have decided to close down the site.

TOD has shown how detached science has become from common people, but bringing both together requires some backing by formal science. This is where TOD/ASPO clearly failed, after all these years peer reviewed publications are still dominated by the flat-earth economics of the likes of IIASA and the IPCC. And it is precisely that lack of formal scientific foundations that lead you to the pitfalls in this post, or allow for nonsense such as "peak demand" and "peak supply".

In any event, after this post I'm pretty sure institutions like the IIASA, CERA or Harvard University will be avid to hire you. Take care.

With respect the above misses the point.

1/What matters is the flow of useful energy from oil and oil related activity.

2/The key concept in Energy is EROI. The new developments, shale, tar-sands etc have a much lower EROI. This means there must be much more activity to get the same flow. That is as unconventional sources replace crude oil a larger proportion of investment must be diverted to oil production, and correspondingly a lesser proportion to consumption whether or not the flow is increasing or decreasing.

3/My understanding is that the marginal cost (USD) of production for companies like Shell is increasing at 12% a year. If true of other companies the EROI must be falling.

4/An estimate of this EROI change could be made by taking the approximate EROI's of the components in the fuel mix,sweet crude, heavy sour crude, shale condensates..., working out the ratio for the mix and also the rate the EROI is rising/falling for the individual components weighted by the (changing) proportions used.

5/Assuming the 12% rate of increase in marginal cost is standard and assuming this is a fixed percentage and does not change then in 6 years the cost of a barrel of crude equivalent is USD$ 200

6/ An electrified economy using nuclear or alternative sources such as hydro is possible but the conversion will take decades. (Electric within city trolley freight, intercity electric rail, etc)
Let alone the building of nuclear or windpowered ships etc

7/Many alternative technologies rely on the mining of rare earths, low concentration minerals. The question is there enough readily mine-able over the next decade to say allow a 30% replacement of current production.

8/Whilst there are alternatives such as destructive distillation of wood etc These would need to be at scale.

Is Europe not helping itself via its gradually declining birthrates? For all the breast-beating about the need for "more workers" - where would they work, in light of increasing automation and Europe's increasing costs of fuel. How are young workers receiving small unemployment benefits going to be paid enough to support both themselves and those pensioners that seem to be the chief worry?

Europeans have done amazingly well lowering their overall rate of energy draw even while incorporating half the continent into a more capitalist economy.

A gradually falling population in Europe, with a higher employment rate and a lighter draw on resources - and allowing once again an increased role for natural processes to work their slow magic - that seems like such a good thing to me!

In a comment I left on Phil Harts post a couple of days ago I pointed out that in any polarised controversy the reality often lies somewhere in the middle ground. I think The Oil Drum has played an important role defining one of these poles.

I agree, TOD has been a beacon of sanity sandwiched between screaming Cornucopians and Gloom and Doomers. TOD will be sorely missed, but fortunately I have learned to be realistic about the future of energy and not listen to the loud rhetoric spewing from poorly informed pundits. As to the content of this post, I don't necessarily feel that PO is dead but it's definition has surely changed. Indeed we cannot predict future oil output from simple linearization with much accuracy, nor can we really predict demand with much accuracy either. However, developing new tools and methods for predicting energy futures will be an important endeavor that we as a species should engage in if we plan on surviving on a geological timeframe. I feel that as the definition of oil has changed in the past decade the definition of PO has also been changing commensurately, and this is in large part due to the frank discussions that have happened at TOD. Where production and consumption will be in 10 years is difficult to predict. What we can predict is the big picture outcome; that non-renewable energy sources will ultimately decline in availability and quality resulting in significant impacts on social and economic structures and activities. Sometimes I feel like we lose sight of the big picture around here. Thanks for the great post!

I never thought the oildrum would formally hammer nails into its own coffin

>We will of course one day run out of planet to explore but that day does not seem to have arrived yet.

That day is already dawning.

Drilling is taking place off-shore Greenland and the Falkland Islands. The maximum water depth that is being drilled is very near the deepest known sedimentary basins. In the Gulf of Mexico, surprisingly cool geological strata are the only reason oil, and not natural gas, is being found at such depths. Similar depths elsewhere will likely be gas discoveries - or dry holes.

Outside Antarctica, I have difficulty imaging more physically challenging sedimentary basins to drill in.

Canada drilled their Arctic and found very little. They ran out of prospects before they ran out of budget to drill. Russia has a major natural gas find in the Arctic Ocean and more may follow.

Iraqi Kurdistan was off-limits for political reasons Libya has just recently been freed of political constraints to drilling so something that Occidental Oil missed may show up..

Today, political constraints hinder exploratory drilling in Iran (China still drills there though), North Korea (a poor prospect), the Yellow and South China Seas (excellent prospects), Myanmar (middling prospect) and Antarctica (a middling prospect).

Brazil has found substantial reserves at the extremes of it's sedimentary basins (Angola et al may find comparable), but they cannot produce enough to meet their own domestic demand.

So we humans are at the bottom of the barrel when looking for new frontiers for petroleum exploration. We have run out of planet.

Best Hopes for Reality,

Alan

So far, this unilateral EU action has achieved essentially zero on the emissions front, any savings made in Europe being wiped out by increased emissions else where.

This is a fallacy.

If Denmark has not cut their per capita emissions by -26.5% in five years, and France by -14.8% in the same five years (2007-2012), then China, India and the United States would have emitted just about as much as they did.

EU carbon emission reductions did not create new carbon emissions elsewhere, with the exception of supply constrained oil.

The increasing speed of Climate Chaos would just have been accelerated a bit more with a larger EU contribution.

Although I think new nuclear has a limited place in the future of Europe, renewables and efficiency are simply cheaper.

ATM, the UK government and EDF are haggling over the guaranteed price for two new British nukes, Reports are that the wholesale price (before transmission & distribution) will be between £93 and £97 per MWh, inflation adjusted, for 40 years. And nuclear power brings with it inherent unreliability, contingent liabilities and risks that "wind all over the countryside" simply does not have.

Offer the same price through a Feed In Tariff for wind (and other renewables) and see renewable generation bloom across Britain - and efficiency take hold at the higher prices for power.

The UK faces a shortfall in electrical capacity. Start a new nuke tomorrow and one cannot know when it will come on-line, and for how long before it is forced off-line. Just ask the Finns. New wind farms have excellent records for on time, on budget completion in marked contrast to new nukes.

Best Hopes for Keeping the Lights On in Britain,

Alan

Sorry to see The Oil Drum call its own time, but a great source of inspiration spawning great individuals such as Nicole Foss (Stoneleigh) to carry on and expand the message of sustainability to other forums such as TAE or via its readers such as Gallinazo onwards to the doomsteaddiner and beyond.

So the TOD has acted as a cradle of inspiration to a much wider public than it might appear, with each of us contributing what they can to what may turn out to be a gentle energy descent if we're lucky. Here at Advance Heating it often feels surreal to be creating Wood Safety Kits and designs for the UK domestic wood-burning stove boilers (that heat radiators and hot water even during power black outs) when the normal press would make you think there is no demand for them.

But it surprises me over and over when I meet strangers, how an increasing number really are becoming aware, dimly or acutely, that not all is well and that there is a need for a new economy and for new services to rise to tomorrow's challenges. Even better, many people are already abandoning any impulses to go out and compete for unrealistic roles within the American Dream.

George Robinson.

I am clearly just a layman, and might get carpetbombed for this, but I noticed a conspicuous lack of the words, "depletion rates" here, especially in light of the fact that uncoventionals are what's driving the growth of current exploration. Doesn't this mean a much higher amount of capital investment to get the oil out? How long can this be sustained, if at all, past the depletion of this first round of really intense drilling? I mean, our entire growth as a global economy is really based on an energy return much higher than what we're getting here. Returning to even modest growth requires exponentially more energy than that same rate required even 10 years ago. This Christian Science Monitor piece sums this up pretty well, I think: http://www.csmonitor.com/Environment/Energy-Voices/2013/0222/The-shale-p...