<Oilwatch Monthly - July 2007 The Oil Drum British MP interviews David Strahan, author "The Last Oil Shock">

142 comments on Peak Lite Revisited

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oilmanbob on July 16, 2007 - 10:28am Permalink | Subthread | Comments top

Robert:

Surely $90 in '09 has important numerolgical significance!

Thanks for your hard work. I think I like Steve's sound bite, "Its not the size of the tank, its the size of the tap". I think we passed the peak in crude plus condensate in 2005. And, call it what you will, supply isn't keeping up with demand these days, even counting ethanol and the synthetic crude from Canada.

Schlumberger, whose opinion I value highly, suggests that we will experience an 8% rate if decline, leaving us with around 50mbpd by 2020, Matthew Simons figure of estimated world production.
Bob Ebersole

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rainsong on July 16, 2007 - 3:55pm Permalink | Subthread | Parent | Comments top

If the U.S. oil + liquids production in the past 35 years has fallen less than 50% from peak production, then you have a model of a large system decline of less than 2% per year.

At that rate, it might be possible to switch to natural gas cars in some cases and conserve some without widespread panic.

As OPEC is likely holding some production back, and other areas are below maximums due to narrow pipelines, you might get more of a flat gentle deline than a steep cliff. If you put more lines per inch on your chart it seems like a crisis of unprecedented proportions. 1-2% declines are less dramatic.

A number of people refuse to account for NG liquids in their speculative peak predicitons. NG liquids production is expected to grow with a number of NG projects being brought towards completion.

Price spikes might cause people to go without the oil. Whether or not that want gasoline, they will buy it.

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jkissing on July 16, 2007 - 5:03pm Permalink | Subthread | Parent | Comments top

The us has indeed declined at a low rate, but this is because we were blessed with deep water in the gom plus arctic reserves to tap. On a % basis the world cannot do what we did.

A 2%/y world decline may be possible, but anyway represents 2x the decline rate since 05... and we are continuing to see a geometric increase in demand from china and the exporters. The us decline came during an era when other countries were able to fill the gap, thereby allowing world and us consumption to continue climbing 2%+ even as our supply declined at the same rate. A world declining at 2%/y will have serious affects, and meanwhile NA/europe are quickly running out of ng.

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rainsong on July 16, 2007 - 6:34pm Permalink | Subthread | Parent | Comments top

If you add a U.S. inflation rate of 2-4%, then you get some more appreciation of the value of oil. There were technological advances all along the way since 1932 when it was estimated there were 10 billion barrels left in the United States. They did not have horizontal or offshore drilling yet. The technological advances to come might reduce the decline rate of some mature areas, but cannot restore the hundreds of billions of light oil gone from the world.

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BaSE on July 17, 2007 - 3:47am Permalink | Subthread | Parent | Comments top

The problem in my opinion is not so much that oil is getting expensive. In fact if the increase were slow and steady I think we would adjust well enough and in time learn to live without. But it is the financial response that is likely to be the most dramatic. Will lenders continue to lend in a collapsing ecomony? I have heard many excuses for the dotcom debacle, but I really think it was banks upon realizing that the North Sea was in permanent decline that pulled capital from the market that killed the dotcom. If I recall correctly it was a Bank of America guy that first called the downturn and was met with ridicule, for a few days anyway. If oil is determined to be beyond peak, then I think we will see money dry up and rather quickly as those that have, move to shore up their wealth and find ways to protect it. Gold is relatively flat, so I don't think the time is upon us yet. Housing today is sort of like the dotcoms in that it relies on an increasing supply of money. I expect that the housing bust will excelerate over the next year or so, if we are well and truly beyond peak, and Kunstler will be able to finally say "I told you so". It was interesting to watch the exchange rate with the Euro drop again last week just before wall street made its heroic jump. I expect they are related since the DOW is more a reflection of the M3 money supply, than the relative health of the economy. But of course when the DOW is doing well, we tend not to dwell on other matters that are less propitious.

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totoneila on July 16, 2007 - 6:40pm Permalink | Subthread | Parent | Comments top

Hello Rainsong,

Your conjecture for slow decline has merit, but I suggest you are not giving enough weight for deleterious blowback cascading into ever greater supply disruptions. Expect ever greater amounts of pipeline explosions [Nigeria, Iraq, Mexico, etc], burning of utility company offices and maintenance vehicles [Bangladesh, Pakistan, etc], theft of copper wires and other essential equipment [now occuring worldwide], and so on.

IMO, universal Peakoil Outreach is the best way to make people understand that enhancing blowback by criminal action is a sub-optimal goal. Community protection of existing infrastructure plus rapid community conversion of these assets to relocalized permaculture is the best path.

Rioting is counterproductive: recall my earlier posting whereby the Bangladeshi people should be peacefully collecting bottles for solar hot water setups instead of making Molotov cocktails when the blackout occurred. If they want to act stupid: the Grim Reaper will gladly mow them down. Their choice.

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

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totoneila on July 16, 2007 - 7:59pm Permalink | Subthread | Parent | Comments top

For example:

http://online.wsj.com/public/resources/images/ED-AG121_sethi_20070715160...

"Daddy, I sure am tired of walking everywhere. Why don't we try Not-Blowing-Up the buses and trains so we can ride them instead?"

Taken from this WSJ commentary on Pakistan:

http://online.wsj.com/article/SB118454710945867204.html?mod=googlenews_wsj

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

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Matt on July 17, 2007 - 7:14am Permalink | Subthread | Parent | Comments top

Apparently you have never lived or worked in Bangladesh. Strikes, called hartals, which normally include putting fire to something, at least old tyres, are quite common on a number of standard occasions whether this be an increase of bus fares or brownouts. The average Bangladeshi has no choice at all. Some of the riots are even paid by politicians. Why don't you take a plane and go there to tell them that their behaviour is counterproductive? Good luck.

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rainsong on July 17, 2007 - 9:05am Permalink | Subthread | Parent | Comments top

War is chaos, and the chaotic will die off. There was also an end to war. Columbia was going insane with madness for some time. Have not read of any recent pipeline explosions there. One might have to accept that a percentage of production will always be down due to maintenance, break-downs, storms, violence, and inefficiency. One does not need these things, but must consider they happen and factor that into the equation.

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SailDog on July 16, 2007 - 7:13pm Permalink | Subthread | Parent | Comments top

This is the rule of tens - in 2002 oil was in the $20's, 2003 $30's, etc....2007 $70's etc. I wonder how long it will hold for?

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totoneila on July 16, 2007 - 8:39pm Permalink | Subthread | Parent | Comments top

Hello Saildog,

Once people have to start the daily lugging of two 5 gallon water jugs a mile to their houses-- I would expect FF-prices to rapidly escalate thereafter.

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

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142 comments on Peak Lite Revisited

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