The important piece is conventional oil, which still peaked. If we discount the NGL by energy content and subtract 2/3 of the tar sands (which is reprocessed NG) then we are far past peak. Personally, I would like to see the NG and Coal derived fuels taken out, because they need a different analysis to predict peak. There is no simple math model that is going to include the US corn crop size in it's all liquids prediction.....
Agree. The input discovery profile is much more accurate for conventional crude due to periodic backdating. The problem with non-conventional oil is that the discovery inputs come from other sources, e.g. NG fields, which have never been factored into an equivalent backdated discovery profile. Certainly the conventional crude has hit a peak already.
Whatever ounce of reserve growth there might be I added to the Dispersive Discovery model and came up with this: http://www.theoildrum.com/node/3287
Which takes it to the current date. Not allowing any reserve growth or an extrapolated discovery profile tail puts the peak back at 2004/2005. I think the key is in unknown discoveries and having a good model to predict the decay.
The optimistic view is to use the BP Discovery data which uses a BOE (Barrel of Oil Equivalent) discovery dataset, which must take into account the NG fields, etc. This can push the peak to 2010.
Personally, I would like to see the NG and Coal derived fuels taken out, because they need a different analysis to predict peak
Deduct bio fuels and processing gains as well.
The Dec 2007 peak is a biofuels, processing gains and OPEC NGLs peak.
We have:
July 2006:
Total liquids: 86.13
biofuels .15
processing gains 1.88
OPEC NGLs 4.73
Subtotal oil 79.37
December 2007:
Total liquids: 86.95
biofuels .46
processing gains 2.11
OPEC NGLs 4.89
Subtotal oil 79.49
So the base oil production for these 2 months is only 120 kb/d apart. That's within the accuracy of statistics. We are kidding ourselves if we think that was a lift off from the plateau. The difference to the July 2006 peak is that we have now higher production for 3 months, while the 2006 peak was a one-off month only. However, there where 4 months in 2007 with much lower production, so part of the Oct-Dec peaks was a compensation for that.
And by the way, the November figure was revised downwards from 86.55 (reported in December 2007) to 86.08. So let's see how the December data will change in the next 2 months.
What we see here also are desperate attempts to add whatever can be added to hide the peak and confuse us. What next? Re-processed cooking oil? It's coming: http://www.theoildrum.com/node/3531#comment-295916
What we see here also are desperate attempts to add whatever can be added to hide the peak and confuse us. What next? Re-processed cooking oil? It's coming:
If re-processed cooking oil begins to be used in significant quantities then I hope it is included. This distinction between "crude oil" and other liquids is lost on me. If "other liquids" can be used in place of crude then by all means include them in the reporting. Forget the "energy cost to produce" disclaimers. Do we distinguish crude pumped from deep sea wells as compared to easily obtained land based crude? No. It's all crude that gets used for transportation, just as the "other liquids" are. It's all the same to me. But then I'm not invested in "being right" on some prediction I made. The Peak is coming. It might already be here or it might not. But it's coming. If we get more production of "other liquids" be it cooking oil or anything else, I see that as good news. More time to prepare for the post peak world and to pour money into eneregy services stocks at these low levels.
In the peak oil camp we have two competing arguments:
1. Pessimistic geological inevitability states that the peak will happen and there is nothing we can do about it. Declines are inevitable and will happen soon. The Geological inevitability argument favors a pure peak model focusing on 'easy oil' or 'crude + condensate.'
2. Optimistic economic market adaptability states that high prices will cause a wealth of new supply we never saw before inevitably delaying the peak to some remote future date. The economic marketers will, likely focus on 'all liquids.'
In my opinion, both views are valid. The geologic side points to old supply and its inevitable decline, the economic side points to increasing incentives to bring new supply online with each jump in price.
I think that's what we're seeing now. On the conventional crude side, former shut in capacity is opened as the high price makes it economical again. Furthermore, previously unconventional crude such as heavy oil is being added to the mix as the world demands for any oil of any kind. So in conventional crude, the decline is mitigated by innovation in pursuit of profit.
Also, on the unconventional side, the same thing is happening. Tar sands, oil shales or oil from shale basins, biodiesel, recycled cooking oil, ethanol, gas to liquids, and coal to liquids are all doing their best to come to market and make a profit.
Peak market inevitablists state that all these new liquids don't have a good EROI and more energy goes into them than ends up coming out. They claim that this will hasten the peak by resulting in rapidly crashing economic systems as the high EROI model puts a breaking strain on the world economy. In my opinion, the inevitablists are, for the most part, wrong. Long term, unmatched EROI does result in crashing systems. But the new fuels don't have negative EROI, just a worse EROI than conventional oil. But with the high EROI priced into the market, the new fuels become viable. So the adjustment results in economic slowdown as opposed to crash -- at least for the time being.
Now I'd like to make some observations given this new paradigm that's slowly coming to fore:
1. Biofuels adds a viable new fuel and feedstock for the market. Biofuels may not be as flexible or as good as oil. But with oil struggling or running out, it makes a worthwhile addition. Furthermore, innovation will push biofuels to improve on a long timescale. Look at biofuels to add around 300,000 barrels per day to world supply on a year on year basis for the forseeable future. With algal biofuels, switch grass other and cellulosic ethanol it may be possible to expand this growth on a year on year basis at a 3-5 year horizon.
2. Unconventional oil will continue to grow so long as the price of oil remains high. Tar sands in Canada will continue to expand. Natural gas needed to produce the sands will be imported or nuclear reactors will be built on site. Canada is too dependent on export of oil sands crude to the US to lose its engine for economic growth. It will make the needed investment. Other unconventional basins in the US, Venezuala, and around the world will also be expanded. Look at unconventional oil to add around 300,000 barrels per day to the world supply on a year on year basis for the next 15-20 years.
3. Conventional oil still has a few cards left to play. The most visible is Iraq. This country is the least developed of the Middle East and, probably, has the most realistic reserves estimates. It is possible that Iraq could add as much as 400,000 barrels per day for each year for the next ten years IF geopolitical conditions in the country allow for further development. Also, continued high prices will push producers to find every drop of supply available. As stated before, previously uneconomic conventional crude will come onstream slowing decline rates as well.
4. High prices will incentivize consumers to conserve fuel either by purchasing less consumptive vehicles and appliances, or by reducing the amount they travel and use energy. It will also create increasing pressure for corporations to make available new technologies that are more efficient and reduce and/or eliminate structural dependence on oil and gas. Hybrid autos, Plug in hybrids, electric autos, smaller cars, more energy efficient light bulbs and the continued increasing viability of wind and solar to meet grid demand and then grid to transportation demand will help to reduce demand growth in fossil fuels and shift demand to other energy sources. Ironically, we are most likely to see these changes first in the United States as that country has the most to lose from structurally high oil prices. In fact, we have seen a flattening in demand in the US over the past two years. It is possible that this will continue despite predictions US demand will increase in 2008. Analysis of consumer behavior already shows a strong consumer bias away from large vehicles (SUVs and other trucks) to smaller more fuel efficient models. New technology may well enhance the ability of US consumers to shift demand away from oil. Also expect these trends to begin to take hold in Asia and around the world as all countries try to answer the problem of high or increasing energy costs.
Pessimists deny the resilience of the world economy. Optimists overstate it. Often it is the pessimist's argument that these mitigating factors will be overwhelmed by the massive structural inertia of peak oil. Optimists state that these factors will, almost magically, facilitate a smooth transition. And therein lies the rub. It is likely that both sides are wrong. In my opinion, there will be a crisis. Optimists will be shocked that peak oil actually happened and put a crimp on global economic growth and impacted geopolitics for decades. Pessimists will likely be shocked that the world didn't end, there wasn't a mass die off, and the world economy did survive in some form -- albeit one radically altered from the one we see today.
In conclusion, it seems the world has reached a plateau in conventional oil resulting in a price shock. The structure has changed to produce all economically viable liquids of any type. This first scramble, in my opinion, will likely push the overall liquids peak date out a couple of years. ASPO is betting on 2010 and this seems a good estimate to me at this time. Despite the peak date likely falling back, I wouldn't bet too much on a price contraction. There is far too much market control by OPEC and far too much likelihood of new demand from Asia to result in much relaxing in price even if there are large quantities of new liquids on the market. I'd expect OPEC to start defending the price of oil at around $80 per barrel. So, regardless, the next two years are still likely to see high prices.
Despite my relative optimism as opposed to the pessimists, I am not a 'magical economy' optimist either. I do think that oil will struggle to make any gains it does in overall liquids. The decline rate and expanded consumption in producing nations will take a serious toll. So I don't expect to see a long term, decisive, rally in supply. More like marginal gains struggling to reach an overall top of around 88-99 million barrels per day in the range of 2010-2020 with best possible cases adding 1mpd per year at a year on year average until finally succumbing to the decline rate.
In my opinion, the 88-90 mbpd top is the most likely scenario putting the peak in the 2009-2010 range. Of course, I could very well be wrong. As this is only an opinion based on a little better than back of the napkin analysis.
I think that's what we're seeing now. On the conventional crude side, former shut in capacity is opened as the high price makes it economical again. Furthermore, previously unconventional crude such as heavy oil is being added to the mix as the world demands for any oil of any kind. So in conventional crude, the decline is mitigated by innovation in pursuit of profit.
Give me an estimate of the amount of shut in oil to current reserves that would become available if price, say, doubled. This is easy to add to any model to figure out the change it will make to the production profiles. I contend that if it is small in comparison to the reserve growth that already occurs, that it won't make much of a difference.
I agree that it probably won't make a huge difference and that it probably is at the margin when compared to reserve growth. If, for example, in the US it is something on the order of +15,000 - 30,000 bpd per year all it does is bite into the decline rate. But if you slow the decline rate on aggregate across the world it provides more opportunity for unconventional + biofuels to make up the difference. By itself, it is small. When considered on aggregate it contributes. That's all I'm saying.
For my part, I agree that we've likely hit the plateau/peak in conventional oil. So my analysis is based on the viability of new fuels/efficiencies.
I guess I have two issues:
1. Is that both Deffeyes and Staniford have shown a very tight correlation between the US oil production and the logistic curve, which leaves no unexplained variation for price. Essentially what determines how much oil will be produced tomorrow is about 98% how much oil was produced last year, last decade, etc (where you are on the curve). This may not be intuitive, but there it is. I don't believe that WHT's model has price as a variable either (unless he changed it recently).
2. All the substitutes that are being proposed are conversions of other energy sources. Meaning if we try to switch to biofuel, we need more natural gas (or coal). But NG in much of the world is also in decline. And coal is nearing peak and will be just as difficult to ramp up. You mention the tar sands, but where will the NG come from to power the process?
Energy and GDP are tightly correlated. 98% in a study I am reading right now. We could easily see a drop of 50% in energy supply over the next 20 years. That would be a 50% drop in GDP. Is that Armageddon? No, it does not have to be. But the political and economic stress is going to push people. Imagine every single person getting a 50% pay cut. We are seeing poor choices from politicians (turn the food into fuel) and poor choices from those impacted (truck drivers blockading refineries). I have to say I am quite worried.
Overall decline in the US did not follow a smooth graph or even a cliff scenario that most refer to here. Yes, we found oil elsewhere (Alaska, offshore) but that oil did contribute to the economy and round out the shocks so they were not as severe. I don't think it's likely we'll find zero significant new oil or even fail to use oil we already know is in place (for example North Slope). Now I know this cannot stop an inevitable peak. But it can buy time and soften the decline.
In a real sense, Hubbert was correct. But the details did not dance perfectly to his prediction. US production slid down a rather gentle slope on the downside.
Not all substitutes are complete conversions of fossil fuel. And though there is a natural gas input into synthetic fertilizer and insecticide feedstocks not all biofuel crops must rely on synthetic fertilizer and insecticides. So, yes, there is an input. But the solar input, for example, is far greater. Ethanol is a net gain and though not as good as oil it is still a net gain.
Canada will have to import LNG for tar sands. No way around it if they use gas plants to heat the bitumen. If there's no NG, they'll build nuke plants in the production basin. Yes, coal and NG will probably peak too. But the timeframes are not quite as close as oil so we have a little wiggle room.
So, yes, world conventional oil will probably go into decline. But I think there are factors both in conventional, unconventional, new tech, and efficiencies that will help slow the fall rate and squeeze more productivity out of each barrel while shifting to other energy sources. I also think it's possible with new projects, Iraq, and others that overall liquids can still grow a bit. As I said before, I don't think it will be much more than 88-90 mbpd.
We must calculate all the NG, oil, and energy used to run equipment used to grow the crops, produce the seeds, the fertilizers, harvest, and make the ethanol production.
This amount of energy must be subtracted from the ethanol produced before we add any figures of ethanol production to any figures of world liquids production.
.
If we do not do this, we are double counting the ethanol production figures.
If it takes an equivalent of 70 barrels of oil to make 100 barrels ethanol, we are only adding 30 barrels of liquids to world production, not 100 barrels.
According to the US Department of Agriculture in a 2004 study, ethanol returns energy at the rate of 1.67:1 over the course of its entire supply chain so the net energy gain, in 2004, was 167% vs energy invested. The USDA study was confirmed by follow-on studies by Argonne National Laboratory and the University of Nebraska among others.
Those against ethanol development often cite studies from the 1970s and 80s that don't take into account modern efficiency gains, technological advancement, and economies of scale for current ethanol production. Energy return on energy invested increased from 1.25:1 in 1995 to 1.67:1 in 2004 according to USDA studies. It is reasonable to assume that with continued scaling, ethanol EROI will continue to increase rapidly until the market matures.
This issue met heated debate in Congress in the period of 2002 - 2005. The debate resolved many issues underlying ethanol and due, in part, to strong gains in EROI a major initiative to increase ethanol production was supported.
Energy return on energy invested increased from 1.25:1 in 1995 to 1.67:1 in 2004 according to USDA studies. It is reasonable to assume that with continued scaling, ethanol EROI will continue to increase rapidly until the market matures.
That's not actually what happened. They changed the way they were accounting for the energy. The 1.67 ratio came from them assigning more of the energy inputs to the co-product credits - just sleight of hand.
First, I just want to say that I think a grid supported transportation system is the most preferable option. So I'm a major supporter of an electric based transportation system and bridge energy systems like hybrids and PHEVs. I see ethanol and other biofuels, which I don't believe will ever be produced in volumes great enough to match current oil production, as part of the solution. At best, I can't see biofuels ever topping more than 10mbpd. But if a high cost fuel can delay the peak a little longer while incentivizing the transition then I'll support it as a practical option.
That said, I want to address your statement directly and I'm not doing it out of any disrespect whatsoever for your research. Just to say it seems strange that you'd attribute this increase to an accounting change. Can you show me, in the report, where they changed the accounting? Otherwise, it's your word against the USDA.
Some state the USDA's findings. Others support the debate.
And Robert, I saw your R2 blogs, so you needn't repost them here. I guess I fall in the camp that supports ethanol as a bridge fuel and doesn't agree with the negative EROEI arguments.
So for my part, here is my opinion/analysis:
1. Biofuels help mitigate the peak.
2. Corn ethanol eeks out a net energy return with more positives in sugar cane, and potential cellulosic.
3. All biofuels help lead us away from oil and promote energy independence which is, overall, a good thing.
4. Energy diversity is, in my opinion, the best way to deal with contracting supply. IMO the preference should be on the options that move us away from fossil fuels.
5. The US is strong in agriculture and, long term, can win with biofuels.
6. I think that all sides of the field are likely to have skewed their reports to bias their respective interests. A shame, really.
At maximum we could get 10% of our liquid fuels at a cost of billions starved. The energy returns are marginal, so biofuels buy us very little time for a huge capital investment. Far better, cheaper, and more ethical to require more efficient vehicles by law.
The fairest way to state ethanol's EROEI is as follows:
Pimentel and Petzak's original studies used old averages for productivity and inputs. That would be about the equivalent of bringing currently unfarmed marginal land into corn production and old conversion technology. Pimentel's first studies didn't even include an accounting for the value of the co-product. Figure EROEI in the range of .9 to 1.2
Using average farm productivity and average technology, figure between 1.2 and 1.75 EROEI.
Using the latest technology AND setting up a system where the ethanol plant is next to a feedlot, so the distiller's grains don't need to be dried for transport purposes, and you can reach 1.9 EROEI or so. The drying of distiller's grains sucks a lot of natural gas, so if you can eliminate that step, efficiency is improved. You can truck distiller's grain wet, but only for short distances due to economics. You cannot ship distiller's grains by rail while it is wet.
As to the problem of accounting for co-products, part of the difficulty is that the corn is transformed from largely a starchy source of calories, to a source of protein (DDG). Probably the best ways to account for the change in composition would be to either use the relative feed value ratings, or examine the monetary value of the input corn to the value of the output distiller's grain (dried or not) and use the ratio of the prices to determine what percentage of the corn was "used up" in the ethanol conversion.
On the basis of what your talking about you right. However you do something that all of us tend to do; that is forget to look at the entire picture. Biofuels have a direct link to food production. If youv'e been paying attention to receant news in the grain markets you'll notice that biofuels have pushed up food prices, in combination with oil. Along with the price increases the overall stockpiles of grain have fallen to roughly a thirty year low. So actually biofuels will simply add to the coming problem of food production. The largest risk of peak oil is it's affect upon food production. Which is already being streched thin by demand, and with climate change negativly affecting it; peak oil could be the straw that finnaly caused global food production to collapse.
There are no peak oil denialists. Everyone concedes the reality of peak oil, even uber-cornucopians like Mike Lynch, CERA and Yergin.
The people you call "denialists" are actually realists who believe in a delayed peak, and don't buy into the "we've already peaked" advocacy hype. This is partly due to the sorry track record of all the mainstream peak oil forecasters. Campbell, Deffeyes and Pickens have, between them, incorrectly identified the peak more than a dozen times. So it's no surprise that you folks blew it again. This keeps happening because you are more concerned with hyping peak oil for advocacy purposes than with soberly looking at the facts.
Spin it all you want. This time, the late peakers were right. :P
Can you supply an energy equivalency comparison for the peaks in '05 and '06 with the apparent current one? I suspect on that basis there may not have been a new peak at all.
If the total energy is not higher, there is no new peak in any useful sense. Total barrels of liquids means nothing.
Brilliant. Of course, that will take a thoughtful and deep analysis of energy conversion and efficiency factors. Unfortunately, I think that is beyond the realm of JD's expertise, which largely resides in the sophistry field.
WebHubble Telescope asks,
"But WTF is a "late peaker"? I assume that someone has a model for that and that the depletion shows a more severe downslope after a "late peak".
That's actually a very good question, and an important one as it pertains to the Peak Oil debate and how it is portrayed in the public (ala MSM).
I am not speaking for JD here, but let me take a shot at this and why it is of great interest:
If we take a "peak now" or early peaker, we would now be talking about those who believe that crude oil plus NGL (i.e., strictly liquid crude, not counting all liquids which would include ethanol, or tar sand, which is not liquid) peaked in 2005.
Late peakers would be those who take the peak to or past what any useful projections can go, about 2030 or later, making it effectively a "non-issue" because the construction of the exploration/extraction and consumption paradigm cannot be estimated without major amounts of conjecture.
Mid-range would be about halfway between these two extremes, half twenty five years plus 2005, or around 2017, so say 2015 to 2020 as a rough guess.
Why is all this guesswork important?
In the course of a modern technical culture the size of the U.S., Europe, Japan and China coming on fast, it is not important. Any of the estimates save the post 2030 one would require emergency mitigation effort NOW. If the "peak now" crowd is right, mitigation would be pretty much pointless, we would just have to see where the broken glass lands and work from there. So in the big picture, peak now or peak anwhere before 2010 or 2012 does not amount to a grain of sand worth of difference.
If we take the mid range of 2017 however, we get a different picture. A great deal can change in 10 years. For an example, think of the difference between 1972 and 1982 during the last major energy crisis period. It is like two different worlds.
For the individual investor/consumer planning his daily investments and life, the difference between "peak now" and peak around 2017 is all the difference in the world.
If it is "peak now" (meaning anywhere between 2005 and 2012) we are pretty much in "hang on tight mode", the time for mitigation at even a personal level becomes very difficult. One sees this in the "scaler" pattern of thought put forth by those who accept "peak now" ranging from let's move to the farm and homestead...no, wait, the future is in dense packed cities close to public transit....let's go solar, no wait, it will take too long, let's lobby for nuclear, no wait, that will take as long and cost too much in concrete and money, no wait, let's switch to natural gas...no, that's no good, the demand will drive the price up and we can't trust the infrastrure, but we could go to LNG...but the market is going to be stressed....
If the peak is percieved as closer to 2017, one can plan in a "vector" and not a "scaler way, carefully planning investments and life choices to come out at the right place in 10 years.
Both of these scenarios are of course completely different than "late peak" i.e., post 2030. If that projection is accepted, for many of us here on TOD it would occur effectively at the end of our life on Earth, and woud be viewed as a "legacy" issue, that is, what kind of world we want to leave to our offspring.
As for the "downslope" after peak, whenever peak occurs, I tend to agree with Simmons and the Hirsch report. The timing of the peak does not seem to have much effect on how steep the downslope is. Due to the modern way in which we try to extract as much oil as possible on the "first sweep" and the methods of water injection now used, the downslope will probably be steep, no matter whether it's peak now or peak 2030. That is a real concern. There will be little or no advance warning.
The reason that many of us are so opposed to predicting the exact timing of peak is due to fear of the damage that false alarms will do to preperation and mitigation. It is for this reason that I have always said that mitigation, i.e., consumption reduction, must be sold on multiple fronts, not just fear of peak.
Carbon reduction, national security, economy security, appropriate and modern energy production for the region, all are great selling points that accomplish the same goal that is needed to face peak oil: Reduction of fossil fuel consumption, scaling of alternatives and efficient and elegant engineering. Peak fear is only one factor. If we put all of our eggs in the "peak now" basket, and turn out to be correct in principle but wrong in timing, it could undercut the efforts that must be made toward mitigation and taking our first steps toward leaving a carbon based energy system behind could be crippled. Then when peak comes (as it surely will) we would be far past the point of no return.
Some argue that we already are past the point of no return, that the first major false alarm occured in the 1970's and destroyed the idea of the possibility of real and ongoing oil shortages being accepted for a generation. People now believe that, like the 1970's, this is just another logistical and political crisis, and will resolve itself soon enough. It can be argued that we have never recovered the momentum we had toward a post carbon world we had in those crisis days of the 1970's.
I must respectfully disagree. There really cannot be such a thing. The alarm, and it is a real one, has already sounded. Your own logic tells us this.
Anything before 2030 equals serious problems for which we do not have solutions. (Solutions meaning the combination of tech + funds + will + organization.) But even that misses the real nail head: regardless of PO's existence or not, we still have climate change. We must act with regard to climate change if we wish to survive and/or avoid severe discontinuities. Truly, any discussion of one without the other is chasing one's tail. The only real advantage to understanding PO and acting on it is that it is slightly more urgent in either the peak now or peak '17 scenarios, so will bring changes faster.
So, in any real sense, the only sensible thing to do is to act as if PO is here.
Now, now, let's not pretend to misunderstand ThatsItImout's meaning. In all the major consuming countries, even China, the governments are somewhat responsive to wishes of the population, whether through fear of voters, fear of rioters, or both. That makes false alarms a crucial factor in whether the actions of the sort you advocate by implication are actually taken, or not; as repeated false alarms normally come to be ignored. Actions are a political matter so they are normally initiated by ignoramuses and jobsworths. They are not a scientific, mathematical, statistical, or engineering matter.
"'we cannot risk another false alarm'...................... can we afford to assume infinite resources ?" The average voter will not have the foggiest notion what that rhetorical question is about. He or she barely squeaked through algebra, has long since forgotten it anyhow, and never went any further into analytical math or calculus. For example, and with all due respect to Albert Bartlett, the phrase "the exponential function" will be entirely meaningless noise, nothing more.
"Barclay's estimates that the investment banks alone are holding as much as $615 billion of structured securities guaranteed by bond insurers. If the insurers default, hundreds of billions will be lost via downgrades.
So, in practical terms, what does it mean if the bond insurers go under?
It means that the system will freeze and the stock market will crash."
"From CNBC: Bond Insurers Face Downgrade Despite Call for Delay
Wall Street bond rating agencies are poised to downgrade two big bond insurers, Ambac Financial Group and MBIA ... the downgrades could come as early as Wednesday."
Can anyone imagine getting paid in BTU's?
Of course not. Because there would be no way to game the system.
The US Empire is crumbling now. It's doing so because it's
run out of a growing supply of BTU's.
This is the evidence that we've peaked in energy. The creation of
more debt is impossible.
"Can anyone imagine getting paid in BTU's? Of course not. Because there would be no way to game the system."
Oh, dear. Sit down in a comfortable chair, relax with a cuppa, and think again. I propose that you seriously misunderestimate the gaming capabilities of your fellow human beings, especially the politicians among them. Nobody's literally going to get paid in BTUs. Ever. A BTU is an abstraction. I can't hand one to you. I can't even measure one out without first installing a great deal of complex context and instrumentation. All I can do is to pay you in paper or electronic notes said to be backed by BTUs. That's it. So soon enough, there would be redeemable notes and not-quite-so-redeemable notes. There'd be special gilt-edge notes for members of politically-correctly favored groups. There might be fast-expiring notes for not-so-favored individuals. Eventually, on the excuse of "stimulus", more notes would be issued than could ever be redeemed. At some instant, the pennny would drop. The "BTU window" would immediately be slammed shut...
"The US Empire is crumbling now. It's doing so because it's run out of a growing supply of BTU's.
Maybe. Maybe not. You cite a news/opinion piece that blames excessive deregulation without even mentioning BTUs. The only oil in the whole piece is "snake oil", which fuels only human foolishness. Fools have been inflating financial bubbles for centuries now, and coming to grief when the bubbles burst. That predates fossil fuels and will surely outlive them. And we know perfectly well that in the USA, the authorities have inflated bubbles, one from another, for a very long time now. Alan Greenspan and Ben Bernanke don't even bother to dispute this, they just claim it's not their problem. However, while all this is interesting and may well prove disastrous, it isn't even evidence, much less proof, that the bursting of the latest bubble is anything to do with BTUs.
Be all that as it may, none of it responds to the original point, which was simply that actions take place in a political arena run mainly by ignoramuses and jobsworths who tug at emotions and play Queen for a Day. Actions hardly ever take place in a scientific or mathematical arena run by experts who value facts. Anyone who wishes to succeed at promoting any particular action needs to take due heed.
Hysterisis-It describes a system where the starting point is no longer available because of what the system did to reach its current state. In other words, walking the path has changed the travelers, but it has also changed the path. The travelers cannot return the way they came.
PaulS-
"Nobody's literally going to get paid in BTUs. Ever. A BTU is an abstraction. I can't hand one to you. I can't even measure one out without first installing a great deal of complex context and instrumentation. All I can do is to pay you in paper or electronic notes said to be backed by BTUs. That's it. So soon enough, there would be redeemable notes and not-quite-so-redeemable notes. There'd be special gilt-edge notes for members of politically-correctly favored groups. There might be fast-expiring notes for not-so-favored individuals. Eventually, on the excuse of "stimulus", more notes would be issued than could ever be redeemed. At some instant, the pennny would drop. The "BTU window" would immediately be slammed shut...
"The US Empire is crumbling now. It's doing so because it's run out of a growing supply of BTU's."
Thank you very much. That's exactly the system we've had since
the Fed pulled "gold" dollars in 1930 and Nixon divorced gold from
the $ in 1971. Both Oil Watersheds.
"Eventually, on the excuse of "stimulus", more notes would be issued than could ever be redeemed. At some instant, the pennny would drop. The "BTU window" would immediately be slammed shut..."
See Fed intervenes in MBIA AAA ratings for details.
""Can anyone imagine getting paid in BTU's? Of course not. Because there would be no way to game the system."
Oh, dear. Sit down in a comfortable chair, relax with a cuppa, and think again. I propose that you seriously misunderestimate the gaming capabilities of your fellow human beings,"
LOL if you need proof just have a look at how the Russian Pipeline system is set up. Yulia Tymoshenko is not known as the GAS princess for nothing. She and others have been rorting that system for years, They were only found out when Putin tried to take control of the rort, He did not know how to steal the gas and got caught.
Notice how easily Putin pulled Yulia up by her short hairs?
Yulia wasn't taking money from Russia, she was taking it from her fellow Ukes.
Notice how the Orange Revolution has died?
And I bet the Odessa/Brody pipeline has still not been reversed.
Here's a guy better able to explain than me:
"
Our world is facing two fundamental and interlinked challenges: fossil fuel depletion and global climate change caused by greenhouse gases. These are monster issues and lurk behind each and every major political, economic and strategic decision, from revamping transportation infrastructure to overhauling pension systems and making war.
While there are still entrenched interests that wish to muddle the issue, the Chairman of Shell Oil has just released a statement which begins:
By 2100, the world’s energy system will be radically different from today’s. Renewable energy like solar, wind, hydroelectricity, and biofuels will make up a large share of the energy mix, and nuclear energy, too, will have a place.
Further down, he states:
After 2015, easily accessible supplies of oil and gas probably will no longer keep up with demand. As a result, we will have no choice but to add other sources of energy – renewables, yes, but also more nuclear power and unconventional fossil fuels such as oil sands. Using more energy inevitably means emitting more CO2 at a time when climate change has become a critical global issue.
____________________________________________________
(*) This is a proposal I made some time ago in a comment to The Oil Drum. It was in response to calls for the re-instatement of the gold monetary standard, which I regard as ill-suited to an era of resource depletion and climate change.
Interesting, entering unchartered territory here. Either random plateau fluctuations can account for this or are we hitting The Overshoot Point?
1. Maintaining a plateau by increasing extraction rate gradually (time scale arbitrary)
http://mobjectivist.blogspot.com/2005/12/top-overshoot-point.html
2. Creating new peaks by rapidly increasing extraction rate
http://mobjectivist.blogspot.com/2005/11/can-we-delay-peak-by-upping-ext...
gradual
fast
Get ready for the Peak Oil Denialists to re-emerge. We need lots of ammo to bat them away.
The important piece is conventional oil, which still peaked. If we discount the NGL by energy content and subtract 2/3 of the tar sands (which is reprocessed NG) then we are far past peak. Personally, I would like to see the NG and Coal derived fuels taken out, because they need a different analysis to predict peak. There is no simple math model that is going to include the US corn crop size in it's all liquids prediction.....
Agree. The input discovery profile is much more accurate for conventional crude due to periodic backdating. The problem with non-conventional oil is that the discovery inputs come from other sources, e.g. NG fields, which have never been factored into an equivalent backdated discovery profile. Certainly the conventional crude has hit a peak already.
Whatever ounce of reserve growth there might be I added to the Dispersive Discovery model and came up with this:
http://www.theoildrum.com/node/3287
Which takes it to the current date. Not allowing any reserve growth or an extrapolated discovery profile tail puts the peak back at 2004/2005. I think the key is in unknown discoveries and having a good model to predict the decay.
The optimistic view is to use the BP Discovery data which uses a BOE (Barrel of Oil Equivalent) discovery dataset, which must take into account the NG fields, etc. This can push the peak to 2010.
http://www.theoildrum.com/node/2712
Deduct bio fuels and processing gains as well.
The Dec 2007 peak is a biofuels, processing gains and OPEC NGLs peak.
We have:
July 2006:
Total liquids: 86.13
biofuels .15
processing gains 1.88
OPEC NGLs 4.73
Subtotal oil 79.37
December 2007:
Total liquids: 86.95
biofuels .46
processing gains 2.11
OPEC NGLs 4.89
Subtotal oil 79.49
So the base oil production for these 2 months is only 120 kb/d apart. That's within the accuracy of statistics. We are kidding ourselves if we think that was a lift off from the plateau. The difference to the July 2006 peak is that we have now higher production for 3 months, while the 2006 peak was a one-off month only. However, there where 4 months in 2007 with much lower production, so part of the Oct-Dec peaks was a compensation for that.
And by the way, the November figure was revised downwards from 86.55 (reported in December 2007) to 86.08. So let's see how the December data will change in the next 2 months.
What we see here also are desperate attempts to add whatever can be added to hide the peak and confuse us. What next? Re-processed cooking oil? It's coming:
http://www.theoildrum.com/node/3531#comment-295916
And let's not be surprised to see not only December reported levels taken down a notch, but November again as well.
If re-processed cooking oil begins to be used in significant quantities then I hope it is included. This distinction between "crude oil" and other liquids is lost on me. If "other liquids" can be used in place of crude then by all means include them in the reporting. Forget the "energy cost to produce" disclaimers. Do we distinguish crude pumped from deep sea wells as compared to easily obtained land based crude? No. It's all crude that gets used for transportation, just as the "other liquids" are. It's all the same to me. But then I'm not invested in "being right" on some prediction I made. The Peak is coming. It might already be here or it might not. But it's coming. If we get more production of "other liquids" be it cooking oil or anything else, I see that as good news. More time to prepare for the post peak world and to pour money into eneregy services stocks at these low levels.
In the peak oil camp we have two competing arguments:
1. Pessimistic geological inevitability states that the peak will happen and there is nothing we can do about it. Declines are inevitable and will happen soon. The Geological inevitability argument favors a pure peak model focusing on 'easy oil' or 'crude + condensate.'
2. Optimistic economic market adaptability states that high prices will cause a wealth of new supply we never saw before inevitably delaying the peak to some remote future date. The economic marketers will, likely focus on 'all liquids.'
In my opinion, both views are valid. The geologic side points to old supply and its inevitable decline, the economic side points to increasing incentives to bring new supply online with each jump in price.
I think that's what we're seeing now. On the conventional crude side, former shut in capacity is opened as the high price makes it economical again. Furthermore, previously unconventional crude such as heavy oil is being added to the mix as the world demands for any oil of any kind. So in conventional crude, the decline is mitigated by innovation in pursuit of profit.
Also, on the unconventional side, the same thing is happening. Tar sands, oil shales or oil from shale basins, biodiesel, recycled cooking oil, ethanol, gas to liquids, and coal to liquids are all doing their best to come to market and make a profit.
Peak market inevitablists state that all these new liquids don't have a good EROI and more energy goes into them than ends up coming out. They claim that this will hasten the peak by resulting in rapidly crashing economic systems as the high EROI model puts a breaking strain on the world economy. In my opinion, the inevitablists are, for the most part, wrong. Long term, unmatched EROI does result in crashing systems. But the new fuels don't have negative EROI, just a worse EROI than conventional oil. But with the high EROI priced into the market, the new fuels become viable. So the adjustment results in economic slowdown as opposed to crash -- at least for the time being.
Now I'd like to make some observations given this new paradigm that's slowly coming to fore:
1. Biofuels adds a viable new fuel and feedstock for the market. Biofuels may not be as flexible or as good as oil. But with oil struggling or running out, it makes a worthwhile addition. Furthermore, innovation will push biofuels to improve on a long timescale. Look at biofuels to add around 300,000 barrels per day to world supply on a year on year basis for the forseeable future. With algal biofuels, switch grass other and cellulosic ethanol it may be possible to expand this growth on a year on year basis at a 3-5 year horizon.
2. Unconventional oil will continue to grow so long as the price of oil remains high. Tar sands in Canada will continue to expand. Natural gas needed to produce the sands will be imported or nuclear reactors will be built on site. Canada is too dependent on export of oil sands crude to the US to lose its engine for economic growth. It will make the needed investment. Other unconventional basins in the US, Venezuala, and around the world will also be expanded. Look at unconventional oil to add around 300,000 barrels per day to the world supply on a year on year basis for the next 15-20 years.
3. Conventional oil still has a few cards left to play. The most visible is Iraq. This country is the least developed of the Middle East and, probably, has the most realistic reserves estimates. It is possible that Iraq could add as much as 400,000 barrels per day for each year for the next ten years IF geopolitical conditions in the country allow for further development. Also, continued high prices will push producers to find every drop of supply available. As stated before, previously uneconomic conventional crude will come onstream slowing decline rates as well.
4. High prices will incentivize consumers to conserve fuel either by purchasing less consumptive vehicles and appliances, or by reducing the amount they travel and use energy. It will also create increasing pressure for corporations to make available new technologies that are more efficient and reduce and/or eliminate structural dependence on oil and gas. Hybrid autos, Plug in hybrids, electric autos, smaller cars, more energy efficient light bulbs and the continued increasing viability of wind and solar to meet grid demand and then grid to transportation demand will help to reduce demand growth in fossil fuels and shift demand to other energy sources. Ironically, we are most likely to see these changes first in the United States as that country has the most to lose from structurally high oil prices. In fact, we have seen a flattening in demand in the US over the past two years. It is possible that this will continue despite predictions US demand will increase in 2008. Analysis of consumer behavior already shows a strong consumer bias away from large vehicles (SUVs and other trucks) to smaller more fuel efficient models. New technology may well enhance the ability of US consumers to shift demand away from oil. Also expect these trends to begin to take hold in Asia and around the world as all countries try to answer the problem of high or increasing energy costs.
Pessimists deny the resilience of the world economy. Optimists overstate it. Often it is the pessimist's argument that these mitigating factors will be overwhelmed by the massive structural inertia of peak oil. Optimists state that these factors will, almost magically, facilitate a smooth transition. And therein lies the rub. It is likely that both sides are wrong. In my opinion, there will be a crisis. Optimists will be shocked that peak oil actually happened and put a crimp on global economic growth and impacted geopolitics for decades. Pessimists will likely be shocked that the world didn't end, there wasn't a mass die off, and the world economy did survive in some form -- albeit one radically altered from the one we see today.
In conclusion, it seems the world has reached a plateau in conventional oil resulting in a price shock. The structure has changed to produce all economically viable liquids of any type. This first scramble, in my opinion, will likely push the overall liquids peak date out a couple of years. ASPO is betting on 2010 and this seems a good estimate to me at this time. Despite the peak date likely falling back, I wouldn't bet too much on a price contraction. There is far too much market control by OPEC and far too much likelihood of new demand from Asia to result in much relaxing in price even if there are large quantities of new liquids on the market. I'd expect OPEC to start defending the price of oil at around $80 per barrel. So, regardless, the next two years are still likely to see high prices.
Despite my relative optimism as opposed to the pessimists, I am not a 'magical economy' optimist either. I do think that oil will struggle to make any gains it does in overall liquids. The decline rate and expanded consumption in producing nations will take a serious toll. So I don't expect to see a long term, decisive, rally in supply. More like marginal gains struggling to reach an overall top of around 88-99 million barrels per day in the range of 2010-2020 with best possible cases adding 1mpd per year at a year on year average until finally succumbing to the decline rate.
In my opinion, the 88-90 mbpd top is the most likely scenario putting the peak in the 2009-2010 range. Of course, I could very well be wrong. As this is only an opinion based on a little better than back of the napkin analysis.
Best wishes to all!
Rob
I think that's what we're seeing now. On the conventional crude side, former shut in capacity is opened as the high price makes it economical again. Furthermore, previously unconventional crude such as heavy oil is being added to the mix as the world demands for any oil of any kind. So in conventional crude, the decline is mitigated by innovation in pursuit of profit.
Give me an estimate of the amount of shut in oil to current reserves that would become available if price, say, doubled. This is easy to add to any model to figure out the change it will make to the production profiles. I contend that if it is small in comparison to the reserve growth that already occurs, that it won't make much of a difference.
I agree that it probably won't make a huge difference and that it probably is at the margin when compared to reserve growth. If, for example, in the US it is something on the order of +15,000 - 30,000 bpd per year all it does is bite into the decline rate. But if you slow the decline rate on aggregate across the world it provides more opportunity for unconventional + biofuels to make up the difference. By itself, it is small. When considered on aggregate it contributes. That's all I'm saying.
For my part, I agree that we've likely hit the plateau/peak in conventional oil. So my analysis is based on the viability of new fuels/efficiencies.
Hi Rob,
I guess I have two issues:
1. Is that both Deffeyes and Staniford have shown a very tight correlation between the US oil production and the logistic curve, which leaves no unexplained variation for price. Essentially what determines how much oil will be produced tomorrow is about 98% how much oil was produced last year, last decade, etc (where you are on the curve). This may not be intuitive, but there it is. I don't believe that WHT's model has price as a variable either (unless he changed it recently).
2. All the substitutes that are being proposed are conversions of other energy sources. Meaning if we try to switch to biofuel, we need more natural gas (or coal). But NG in much of the world is also in decline. And coal is nearing peak and will be just as difficult to ramp up. You mention the tar sands, but where will the NG come from to power the process?
Energy and GDP are tightly correlated. 98% in a study I am reading right now. We could easily see a drop of 50% in energy supply over the next 20 years. That would be a 50% drop in GDP. Is that Armageddon? No, it does not have to be. But the political and economic stress is going to push people. Imagine every single person getting a 50% pay cut. We are seeing poor choices from politicians (turn the food into fuel) and poor choices from those impacted (truck drivers blockading refineries). I have to say I am quite worried.
Overall decline in the US did not follow a smooth graph or even a cliff scenario that most refer to here. Yes, we found oil elsewhere (Alaska, offshore) but that oil did contribute to the economy and round out the shocks so they were not as severe. I don't think it's likely we'll find zero significant new oil or even fail to use oil we already know is in place (for example North Slope). Now I know this cannot stop an inevitable peak. But it can buy time and soften the decline.
In a real sense, Hubbert was correct. But the details did not dance perfectly to his prediction. US production slid down a rather gentle slope on the downside.
Not all substitutes are complete conversions of fossil fuel. And though there is a natural gas input into synthetic fertilizer and insecticide feedstocks not all biofuel crops must rely on synthetic fertilizer and insecticides. So, yes, there is an input. But the solar input, for example, is far greater. Ethanol is a net gain and though not as good as oil it is still a net gain.
Canada will have to import LNG for tar sands. No way around it if they use gas plants to heat the bitumen. If there's no NG, they'll build nuke plants in the production basin. Yes, coal and NG will probably peak too. But the timeframes are not quite as close as oil so we have a little wiggle room.
So, yes, world conventional oil will probably go into decline. But I think there are factors both in conventional, unconventional, new tech, and efficiencies that will help slow the fall rate and squeeze more productivity out of each barrel while shifting to other energy sources. I also think it's possible with new projects, Iraq, and others that overall liquids can still grow a bit. As I said before, I don't think it will be much more than 88-90 mbpd.
We must calculate all the NG, oil, and energy used to run equipment used to grow the crops, produce the seeds, the fertilizers, harvest, and make the ethanol production.
This amount of energy must be subtracted from the ethanol produced before we add any figures of ethanol production to any figures of world liquids production.
.
If we do not do this, we are double counting the ethanol production figures.
If it takes an equivalent of 70 barrels of oil to make 100 barrels ethanol, we are only adding 30 barrels of liquids to world production, not 100 barrels.
.
DocScience
http://www.angelfire.com/in/Gilbert1/tt.html
According to the US Department of Agriculture in a 2004 study, ethanol returns energy at the rate of 1.67:1 over the course of its entire supply chain so the net energy gain, in 2004, was 167% vs energy invested. The USDA study was confirmed by follow-on studies by Argonne National Laboratory and the University of Nebraska among others.
Those against ethanol development often cite studies from the 1970s and 80s that don't take into account modern efficiency gains, technological advancement, and economies of scale for current ethanol production. Energy return on energy invested increased from 1.25:1 in 1995 to 1.67:1 in 2004 according to USDA studies. It is reasonable to assume that with continued scaling, ethanol EROI will continue to increase rapidly until the market matures.
This issue met heated debate in Congress in the period of 2002 - 2005. The debate resolved many issues underlying ethanol and due, in part, to strong gains in EROI a major initiative to increase ethanol production was supported.
Energy return on energy invested increased from 1.25:1 in 1995 to 1.67:1 in 2004 according to USDA studies. It is reasonable to assume that with continued scaling, ethanol EROI will continue to increase rapidly until the market matures.
That's not actually what happened. They changed the way they were accounting for the energy. The 1.67 ratio came from them assigning more of the energy inputs to the co-product credits - just sleight of hand.
First, I just want to say that I think a grid supported transportation system is the most preferable option. So I'm a major supporter of an electric based transportation system and bridge energy systems like hybrids and PHEVs. I see ethanol and other biofuels, which I don't believe will ever be produced in volumes great enough to match current oil production, as part of the solution. At best, I can't see biofuels ever topping more than 10mbpd. But if a high cost fuel can delay the peak a little longer while incentivizing the transition then I'll support it as a practical option.
That said, I want to address your statement directly and I'm not doing it out of any disrespect whatsoever for your research. Just to say it seems strange that you'd attribute this increase to an accounting change. Can you show me, in the report, where they changed the accounting? Otherwise, it's your word against the USDA.
In the interest of fairness, I'm going to post a number of related reports:
http://www.calrenewablefuels.com/pdfs/Energy%20Balance.pdf
http://www.nytimes.com/2006/06/25/business/25ethanolside.html
http://www.carbohydrateeconomy.org/library/admin/uploadedfiles/How_Much_...
Some state the USDA's findings. Others support the debate.
And Robert, I saw your R2 blogs, so you needn't repost them here. I guess I fall in the camp that supports ethanol as a bridge fuel and doesn't agree with the negative EROEI arguments.
So for my part, here is my opinion/analysis:
1. Biofuels help mitigate the peak.
2. Corn ethanol eeks out a net energy return with more positives in sugar cane, and potential cellulosic.
3. All biofuels help lead us away from oil and promote energy independence which is, overall, a good thing.
4. Energy diversity is, in my opinion, the best way to deal with contracting supply. IMO the preference should be on the options that move us away from fossil fuels.
5. The US is strong in agriculture and, long term, can win with biofuels.
6. I think that all sides of the field are likely to have skewed their reports to bias their respective interests. A shame, really.
Biofuels are going to be remembered as a great tragedy. Read Stuart's "Fermenting the Food Supply" and this article:
http://www.earth-policy.org/Updates/2008/Update69.htm
At maximum we could get 10% of our liquid fuels at a cost of billions starved. The energy returns are marginal, so biofuels buy us very little time for a huge capital investment. Far better, cheaper, and more ethical to require more efficient vehicles by law.
The fairest way to state ethanol's EROEI is as follows:
Pimentel and Petzak's original studies used old averages for productivity and inputs. That would be about the equivalent of bringing currently unfarmed marginal land into corn production and old conversion technology. Pimentel's first studies didn't even include an accounting for the value of the co-product. Figure EROEI in the range of .9 to 1.2
Using average farm productivity and average technology, figure between 1.2 and 1.75 EROEI.
Using the latest technology AND setting up a system where the ethanol plant is next to a feedlot, so the distiller's grains don't need to be dried for transport purposes, and you can reach 1.9 EROEI or so. The drying of distiller's grains sucks a lot of natural gas, so if you can eliminate that step, efficiency is improved. You can truck distiller's grain wet, but only for short distances due to economics. You cannot ship distiller's grains by rail while it is wet.
As to the problem of accounting for co-products, part of the difficulty is that the corn is transformed from largely a starchy source of calories, to a source of protein (DDG). Probably the best ways to account for the change in composition would be to either use the relative feed value ratings, or examine the monetary value of the input corn to the value of the output distiller's grain (dried or not) and use the ratio of the prices to determine what percentage of the corn was "used up" in the ethanol conversion.
On the basis of what your talking about you right. However you do something that all of us tend to do; that is forget to look at the entire picture. Biofuels have a direct link to food production. If youv'e been paying attention to receant news in the grain markets you'll notice that biofuels have pushed up food prices, in combination with oil. Along with the price increases the overall stockpiles of grain have fallen to roughly a thirty year low. So actually biofuels will simply add to the coming problem of food production. The largest risk of peak oil is it's affect upon food production. Which is already being streched thin by demand, and with climate change negativly affecting it; peak oil could be the straw that finnaly caused global food production to collapse.
There are no peak oil denialists. Everyone concedes the reality of peak oil, even uber-cornucopians like Mike Lynch, CERA and Yergin.
The people you call "denialists" are actually realists who believe in a delayed peak, and don't buy into the "we've already peaked" advocacy hype. This is partly due to the sorry track record of all the mainstream peak oil forecasters. Campbell, Deffeyes and Pickens have, between them, incorrectly identified the peak more than a dozen times. So it's no surprise that you folks blew it again. This keeps happening because you are more concerned with hyping peak oil for advocacy purposes than with soberly looking at the facts.
Spin it all you want. This time, the late peakers were right. :P
Can you supply an energy equivalency comparison for the peaks in '05 and '06 with the apparent current one? I suspect on that basis there may not have been a new peak at all.
If the total energy is not higher, there is no new peak in any useful sense. Total barrels of liquids means nothing.
Cheers
Brilliant. Of course, that will take a thoughtful and deep analysis of energy conversion and efficiency factors. Unfortunately, I think that is beyond the realm of JD's expertise, which largely resides in the sophistry field.
JD I guess you are not a Peak Oil Denier, but just suffer from a severe case of mathematical modeling anxiety.
But WTF is a "late peaker"? I assume that someone has a model for that and that the depletion shows a more severe downslope after a "late peak".
WebHubble Telescope asks,
"But WTF is a "late peaker"? I assume that someone has a model for that and that the depletion shows a more severe downslope after a "late peak".
That's actually a very good question, and an important one as it pertains to the Peak Oil debate and how it is portrayed in the public (ala MSM).
I am not speaking for JD here, but let me take a shot at this and why it is of great interest:
If we take a "peak now" or early peaker, we would now be talking about those who believe that crude oil plus NGL (i.e., strictly liquid crude, not counting all liquids which would include ethanol, or tar sand, which is not liquid) peaked in 2005.
Late peakers would be those who take the peak to or past what any useful projections can go, about 2030 or later, making it effectively a "non-issue" because the construction of the exploration/extraction and consumption paradigm cannot be estimated without major amounts of conjecture.
Mid-range would be about halfway between these two extremes, half twenty five years plus 2005, or around 2017, so say 2015 to 2020 as a rough guess.
Why is all this guesswork important?
In the course of a modern technical culture the size of the U.S., Europe, Japan and China coming on fast, it is not important. Any of the estimates save the post 2030 one would require emergency mitigation effort NOW. If the "peak now" crowd is right, mitigation would be pretty much pointless, we would just have to see where the broken glass lands and work from there. So in the big picture, peak now or peak anwhere before 2010 or 2012 does not amount to a grain of sand worth of difference.
If we take the mid range of 2017 however, we get a different picture. A great deal can change in 10 years. For an example, think of the difference between 1972 and 1982 during the last major energy crisis period. It is like two different worlds.
For the individual investor/consumer planning his daily investments and life, the difference between "peak now" and peak around 2017 is all the difference in the world.
If it is "peak now" (meaning anywhere between 2005 and 2012) we are pretty much in "hang on tight mode", the time for mitigation at even a personal level becomes very difficult. One sees this in the "scaler" pattern of thought put forth by those who accept "peak now" ranging from let's move to the farm and homestead...no, wait, the future is in dense packed cities close to public transit....let's go solar, no wait, it will take too long, let's lobby for nuclear, no wait, that will take as long and cost too much in concrete and money, no wait, let's switch to natural gas...no, that's no good, the demand will drive the price up and we can't trust the infrastrure, but we could go to LNG...but the market is going to be stressed....
If the peak is percieved as closer to 2017, one can plan in a "vector" and not a "scaler way, carefully planning investments and life choices to come out at the right place in 10 years.
Both of these scenarios are of course completely different than "late peak" i.e., post 2030. If that projection is accepted, for many of us here on TOD it would occur effectively at the end of our life on Earth, and woud be viewed as a "legacy" issue, that is, what kind of world we want to leave to our offspring.
As for the "downslope" after peak, whenever peak occurs, I tend to agree with Simmons and the Hirsch report. The timing of the peak does not seem to have much effect on how steep the downslope is. Due to the modern way in which we try to extract as much oil as possible on the "first sweep" and the methods of water injection now used, the downslope will probably be steep, no matter whether it's peak now or peak 2030. That is a real concern. There will be little or no advance warning.
The reason that many of us are so opposed to predicting the exact timing of peak is due to fear of the damage that false alarms will do to preperation and mitigation. It is for this reason that I have always said that mitigation, i.e., consumption reduction, must be sold on multiple fronts, not just fear of peak.
Carbon reduction, national security, economy security, appropriate and modern energy production for the region, all are great selling points that accomplish the same goal that is needed to face peak oil: Reduction of fossil fuel consumption, scaling of alternatives and efficient and elegant engineering. Peak fear is only one factor. If we put all of our eggs in the "peak now" basket, and turn out to be correct in principle but wrong in timing, it could undercut the efforts that must be made toward mitigation and taking our first steps toward leaving a carbon based energy system behind could be crippled. Then when peak comes (as it surely will) we would be far past the point of no return.
Some argue that we already are past the point of no return, that the first major false alarm occured in the 1970's and destroyed the idea of the possibility of real and ongoing oil shortages being accepted for a generation. People now believe that, like the 1970's, this is just another logistical and political crisis, and will resolve itself soon enough. It can be argued that we have never recovered the momentum we had toward a post carbon world we had in those crisis days of the 1970's.
We cannot risk another false alarm.
RC
I must respectfully disagree. There really cannot be such a thing. The alarm, and it is a real one, has already sounded. Your own logic tells us this.
Anything before 2030 equals serious problems for which we do not have solutions. (Solutions meaning the combination of tech + funds + will + organization.) But even that misses the real nail head: regardless of PO's existence or not, we still have climate change. We must act with regard to climate change if we wish to survive and/or avoid severe discontinuities. Truly, any discussion of one without the other is chasing one's tail. The only real advantage to understanding PO and acting on it is that it is slightly more urgent in either the peak now or peak '17 scenarios, so will bring changes faster.
So, in any real sense, the only sensible thing to do is to act as if PO is here.
"we cannot risk another false alarm"...................... can we afford to assume infinite resources ?
Now, now, let's not pretend to misunderstand ThatsItImout's meaning. In all the major consuming countries, even China, the governments are somewhat responsive to wishes of the population, whether through fear of voters, fear of rioters, or both. That makes false alarms a crucial factor in whether the actions of the sort you advocate by implication are actually taken, or not; as repeated false alarms normally come to be ignored. Actions are a political matter so they are normally initiated by ignoramuses and jobsworths. They are not a scientific, mathematical, statistical, or engineering matter.
"'we cannot risk another false alarm'...................... can we afford to assume infinite resources ?" The average voter will not have the foggiest notion what that rhetorical question is about. He or she barely squeaked through algebra, has long since forgotten it anyhow, and never went any further into analytical math or calculus. For example, and with all due respect to Albert Bartlett, the phrase "the exponential function" will be entirely meaningless noise, nothing more.
"Barclay's estimates that the investment banks alone are holding as much as $615 billion of structured securities guaranteed by bond insurers. If the insurers default, hundreds of billions will be lost via downgrades.
So, in practical terms, what does it mean if the bond insurers go under?
It means that the system will freeze and the stock market will crash."
http://www.lewrockwell.com/orig8/whitney6.html
(and this is Mike Whitney, not Lew Rockwell)
"From CNBC: Bond Insurers Face Downgrade Despite Call for Delay
Wall Street bond rating agencies are poised to downgrade two big bond insurers, Ambac Financial Group and MBIA ... the downgrades could come as early as Wednesday."
Can anyone imagine getting paid in BTU's?
Of course not. Because there would be no way to game the system.
The US Empire is crumbling now. It's doing so because it's
run out of a growing supply of BTU's.
This is the evidence that we've peaked in energy. The creation of
more debt is impossible.
Huh? That is, how does this fit here?
"Can anyone imagine getting paid in BTU's? Of course not. Because there would be no way to game the system."
Oh, dear. Sit down in a comfortable chair, relax with a cuppa, and think again. I propose that you seriously misunderestimate the gaming capabilities of your fellow human beings, especially the politicians among them. Nobody's literally going to get paid in BTUs. Ever. A BTU is an abstraction. I can't hand one to you. I can't even measure one out without first installing a great deal of complex context and instrumentation. All I can do is to pay you in paper or electronic notes said to be backed by BTUs. That's it. So soon enough, there would be redeemable notes and not-quite-so-redeemable notes. There'd be special gilt-edge notes for members of politically-correctly favored groups. There might be fast-expiring notes for not-so-favored individuals. Eventually, on the excuse of "stimulus", more notes would be issued than could ever be redeemed. At some instant, the pennny would drop. The "BTU window" would immediately be slammed shut...
"The US Empire is crumbling now. It's doing so because it's run out of a growing supply of BTU's.
Maybe. Maybe not. You cite a news/opinion piece that blames excessive deregulation without even mentioning BTUs. The only oil in the whole piece is "snake oil", which fuels only human foolishness. Fools have been inflating financial bubbles for centuries now, and coming to grief when the bubbles burst. That predates fossil fuels and will surely outlive them. And we know perfectly well that in the USA, the authorities have inflated bubbles, one from another, for a very long time now. Alan Greenspan and Ben Bernanke don't even bother to dispute this, they just claim it's not their problem. However, while all this is interesting and may well prove disastrous, it isn't even evidence, much less proof, that the bursting of the latest bubble is anything to do with BTUs.
Be all that as it may, none of it responds to the original point, which was simply that actions take place in a political arena run mainly by ignoramuses and jobsworths who tug at emotions and play Queen for a Day. Actions hardly ever take place in a scientific or mathematical arena run by experts who value facts. Anyone who wishes to succeed at promoting any particular action needs to take due heed.
PaulS, you have a fan club. I respectfully ask permission to use your above post to educate.
Thank you.
"ccpo on January 30, 2008 - 4:42am | Permalink | Subthread | Comments top
We cannot risk another false alarm.
I must respectfully disagree. There really cannot be such a thing. The alarm, and it is a real one, has already sounded. Your own logic tells us this.
The alarm, and it is a real one, has already sounded.
My above post is to demonstrate that the PO crisis is here, now.
"Why was MBIA given AAA rating?"
You might say that this has nothing to do with PO.
I say it does because the most secure debt in the world is AAA rated.
And EROEI is totally based on wealth creation.
The world creates wealth thru energy growth, based entirely
on debt creation, energy monetized.
If the highest rated debt is called into question, it means that wealth never existed.
Where will you/we then get the EI to get the ERO?
The finacial markets freeze/collapse is the Black Swan
heralding PO now.
Asking better questions
by Brandon Marshall
http://www.energybulletin.net/39729.html
Hysterisis-It describes a system where the starting point is no longer available because of what the system did to reach its current state. In other words, walking the path has changed the travelers, but it has also changed the path. The travelers cannot return the way they came.
PaulS-
"Nobody's literally going to get paid in BTUs. Ever. A BTU is an abstraction. I can't hand one to you. I can't even measure one out without first installing a great deal of complex context and instrumentation. All I can do is to pay you in paper or electronic notes said to be backed by BTUs. That's it. So soon enough, there would be redeemable notes and not-quite-so-redeemable notes. There'd be special gilt-edge notes for members of politically-correctly favored groups. There might be fast-expiring notes for not-so-favored individuals. Eventually, on the excuse of "stimulus", more notes would be issued than could ever be redeemed. At some instant, the pennny would drop. The "BTU window" would immediately be slammed shut...
"The US Empire is crumbling now. It's doing so because it's run out of a growing supply of BTU's."
Thank you very much. That's exactly the system we've had since
the Fed pulled "gold" dollars in 1930 and Nixon divorced gold from
the $ in 1971. Both Oil Watersheds.
"Eventually, on the excuse of "stimulus", more notes would be issued than could ever be redeemed. At some instant, the pennny would drop. The "BTU window" would immediately be slammed shut..."
See Fed intervenes in MBIA AAA ratings for details.
Why buy insurance for AAA securities?
""Can anyone imagine getting paid in BTU's? Of course not. Because there would be no way to game the system."
Oh, dear. Sit down in a comfortable chair, relax with a cuppa, and think again. I propose that you seriously misunderestimate the gaming capabilities of your fellow human beings,"
LOL if you need proof just have a look at how the Russian Pipeline system is set up. Yulia Tymoshenko is not known as the GAS princess for nothing. She and others have been rorting that system for years, They were only found out when Putin tried to take control of the rort, He did not know how to steal the gas and got caught.
Notice how easily Putin pulled Yulia up by her short hairs?
Yulia wasn't taking money from Russia, she was taking it from her fellow Ukes.
Notice how the Orange Revolution has died?
And I bet the Odessa/Brody pipeline has still not been reversed.
Here's a guy better able to explain than me:
"
Our world is facing two fundamental and interlinked challenges: fossil fuel depletion and global climate change caused by greenhouse gases. These are monster issues and lurk behind each and every major political, economic and strategic decision, from revamping transportation infrastructure to overhauling pension systems and making war.
While there are still entrenched interests that wish to muddle the issue, the Chairman of Shell Oil has just released a statement which begins:
By 2100, the world’s energy system will be radically different from today’s. Renewable energy like solar, wind, hydroelectricity, and biofuels will make up a large share of the energy mix, and nuclear energy, too, will have a place.
Further down, he states:
After 2015, easily accessible supplies of oil and gas probably will no longer keep up with demand. As a result, we will have no choice but to add other sources of energy – renewables, yes, but also more nuclear power and unconventional fossil fuels such as oil sands. Using more energy inevitably means emitting more CO2 at a time when climate change has become a critical global issue.
____________________________________________________
(*) This is a proposal I made some time ago in a comment to The Oil Drum. It was in response to calls for the re-instatement of the gold monetary standard, which I regard as ill-suited to an era of resource depletion and climate change.
Posted by Hellasious"