Great line philgene, with that definition of Peak oil. "An inability for the production capacity of future oil resources to adequately make up for the shortfall of the existing declining oil supply on a world scale."

That's the best, most concise defintion I've read so far. Maybe if I force my wife to read it enough times it will sink into her overly optimistic viewpoint. The other day she said the price of oil was due to speculators, then it was we will avert any problems by switching to hybrid vehicles. I couldn't bring myself to explain why that won't solve peak oil. I've just run out of steam to convert her to a peak oiler. Instead I'm going to just act as an observer, almost like a naturalist in the Serengeti observing animal behavior, to delight when that light in her head finally blinks on with clear recognition.

Right now, any hype about oil is about the price and not about the peak. When prices rocket up on any market, people look for news to support it, instead of the other way around, like it actually should be.

Once big names start toning in, it usually means the market is played out (if the movement has been going on a while). I'm waiting for Yergins to chime in. Or Buffet? Back at the end of 2004, for instance, the USDollar was setting records of $1.35/to Euro. Buffet came out with visions of Dollar collapse. One year later, it was back under $1.20. And why did the price of oil turn back down after Katarina?!? Any contrarian investor would see signs here (Smil's conversion) of oil price collapse.

Well, collapse might be too strong of a term, but the moment oil goes back under $90, there will once again be the "I told you so" voices, and the public will lose interest again.

Cheers, Dom

Hey come on - Dick Cheney and some anonymous intelligence and administration officials have told them there is a threat.

The fact that it can't be quantified is neither here nor there - we must wage war on Iran before it is too late - just imagine what would have happened if Saddam's drone planes had managed to land some of his chemical and nuclear weapons on downtown Oklahama City - you can be sure Iranian weapons are even more tangible and dangerous !

Plus they've got oil and rather a lot of gas, which they keep trying to sell to India and Japan, without any American involvement...

Yeah, Mouawad has been such a dewy-eyed slurper of energy-industry pap that it's been hard even to think of him as a "peak-oil skeptic" -- there's something too hard-nosed about the term "skeptic" to make it stick to his usual unresisting imbecility. And yet, he's now had two or three solid stories in a row in the NYTimes about oil. Something woke him up, I guess.

"How do most folks in Australia or New Zealand see the USA?"

As a threat. "Be our friend or we'll bomb you."

How do most folks in Australia or New Zealand see the USA?
Probably somewhere to travel or exploit.

Can you fear something and still like it?
All over the world there is a love of Hollywood, Coca-Cola, fast food and good cheap cigarettes.
None of which in any way has led to the betterment of humankind.
But.............
What developed country or undeveloped country for that matter can cast the first stone?

What fabulous markets the US has and had, which everyone seeks to directly or indirectly access.
Moslem counties are no exception. The use and over use of oil has led to great wealth in some countries. Who is to blame, the user or the dealer?

America owes it's meteoric rise to immigration and two world wars, which it did not start but greatly contributed to finish at great personal suffering and cost.
Most of the world owes a debt of gratitude for that.
If it is opined that if the US had stayed out of Europe and Asia, the world would be a better place, then maybe they have a case for resentment.

The rest of the world now, may not aspire to what America has become (but they once did) because they can see the proverbial writing on the wall.
The bigger you are the harder you fall and I think the world probably fears the many implications, of the mighty USA's implosion which may eventuate.

Argh, I just reread this and its a stupid rant with too many assumptions and opinions.................I'm posting anyway.

I would argue that we will be priced out before they are, because labor is so much cheaper over there, that is a serious factor for us being priced out before them. The dollar is falling and the Chinese would dump our bonds and securities on the market, basically calling us out on our debt which we can't pay back and hyperinflation will become rampant. Also by this time, which I would say would be within 5 years, oil will be bought in Euros and not dollars which will further screw us over. Our buying power in the world market is artificial for the most part. By here, I actually mean the United States, I think Australia, New Zealand and Europe will be better of than us.

-Crews

The order in which countries will be priced out of the market will probably be as follows:
The very poorest nations are already being driven to bankruptcy.
The next to really have to reduce demand heavily are likely to be the Western nations, as they use most oil and so that is about the only place where the requisite demand reduction can take place to balance the numbers.
This will not take the form of no more oil, but of very heavy price increases and a large reduction in demand.
I would suggest that the BRIC countries would be relatively resistant to demand reduction for a couple of reasons:
They have something to trade for the oil in the way of actual physical goods, and the use of oil is a lot more essential to them than it is in the West at the margin - not going out so much in the evening or accepting a lower paid job is a lot more acceptable than not having kerosene to cook with.
I would however see the recent rise in consumption flattening in those countries.
Lastly there are the oil exporters, who will rapidly follow West Texas's ELP model, but should keep right on with large increases in oil use right up until the time that they can't do that any longer.

The fundamental weakness in the simplistic version of the peak oil hypothesis is that it is based on physical resources without sufficient regard to the economics.

I don't think you understand Peak Oil. Since you are speaking in support of an economics point of view, I am not surprised. The argument is that once decline sets in, it will accelerate more quickly than economies can adjust. There have also been tons of discussions about the effects of price on demand, etc.

Economics are not being ignored. They are being given their rightful place at the children's table, however.

http://www.sciam.com/article.cfm?id=the-economist-has-no-clothes

Cheers

Gloom: Are you aware that it is 2008 not 1978? Tell me the fundamental value of the Yuan in US currency and then we can discuss when the rice bowl dwellers will be "priced out".

Your assertion is the very realization I came to even before becoming aware of the Peak Oil issue. It is why I named my blog A Perfect Storm Cometh. It was just so obvious to me.

We had massive problems with the budget in the US. We had the massive spending on the Iraq and Afghan invasions. We had an economy already teetering. We had a fascist cadre running the country and too few people and no nations willing to stand against them. We had an administration actively agitating against GW being an issue, let alone doing something to stop it. We had GW beginning to wreak havoc around the globe... How in the hell was any of the mitigation going to occur with a fractured world populace and a massive economic downturn coming?

Add to all that the additional collapses in housing and the rest of the economic mess that goes with it, add PO, and add a general rotting from within of the societal core on a global scale...

How can there be people that don't see this?

The world has never seen the likes of what is coming.

A perfect storm, indeed.

Bravo!! Someone else trying for what I call holistic, what you call systems, approach. i've argued we must transition to a new paradigm. Most here agree in priciple but seem too caught-up in the moment watching and analyzing the train wreck to think beyond it. NOw I get to read more of your comments, visit your sites, and provide a more detailed commentary.

As the price of energy is now rising rapidly, the price of steel and copper are rising just as fast, and those resource prices have more then doubled in the last few years.

For a different mindset, consider whether or not the price of steel and copper was temporarily very low because the price of energy to extract it was temporarily low. Nor am I convinced that no matter the price of energy, a block of steel or copper has the same embedded energy. My guess is that at low and high levels of production of those steel and copper blocks the emergy is highest - marginal and then diminishing returns.

I'd guess that the emergy is additionally a function of the technological infrastructure - like the proportion of the economy given over to producing energy. Things get more expensive, but they also require increasing portions of the economic pie and the economic pie is limited. As processes all across society start requiring more and more energy for less and less return the results will be catastrophic. When FedEx, UPS and the truckers can no longer make their routes the economy will have to change qualitatively overnight. Skilled people working in factories to make goods that cannot be shipped cannot be replaced by unskilled people working in non-existant factories in your local community.

There is no nail, but nor is there a horse if there were a nail.

cfm in Gray, ME, Milliways

The string of comments on “If you think the oil situation is bad..” begins with a comment by philgene in which he says,
“It is possible that the mainstream media will never truly grasp the concept of Peak Oil and continue to lay blame with whatever event or series of events has led to the latest price shock. The unfortunate thing about that is, it keeps people from standing back and seeing the issue with perspective where people may gain an extra insight into the broad conditions which have set the current events in motion.”

As I write my comment, the string of comments was at a post containing this comment by Cslater8:
“Let's presume there is a tipping point for a barrel of oil (in April 2008 dollars), that when exceeded, it causes a chain reaction of panic and riots that undermines and concludes civilization as it is currently experienced, causing it to have to later reinvent itself into a new form.”
If anyone asks why it is that the “mainstream media” keeps it’s distance from the “peak oil” crowd, I think you can ask for no better example than the type of hyperbole and hysteria that you see implied in Cslater’s question. And it was a question, despite the “presumption” that was made to pre-load the argument, and despite Cslater’s understanding that some of us would “extrapolate complications” to the question. Cslater’s question was “What is that tipping point price per barrel, coupled with the date that it will occur?”

The price could easily go to $160 per barrel and would create not much more than a yawn in the developed countries. We have to ask whether the “chain reaction of panic and riots” have any more than a marginal chance of occurring? Given that many people can cut their yearly consumption of oil in half without real sacrifice of health or safety, but some reduction of choice and luxury, we can roughly double any “tipping point price” for a fair number of people before they are into real danger of loss of anything more than entertainment.
So let’s take the above $160 and double it out to $320 per barrel, just for laughs. But wait, that means oil is going to have doubled some 3 times since the days of $40 per barrel oil, not that long ago (admittedly that was a very low price compared to general inflation in the economy), but are we to assume that no alternatives will be economically viable at such a price? I will leave it to others to laugh at the possibility of alternatives to burning oil in engines a 20 or 30 percent efficiency. After all, what scientist or technician can believe that any real improvement on that is possible? We know that the attempt to improve on that would “concludes civilization as it is currently experienced”, right?

Of course the most horrible fear is held to last: The civilization would “have to later reinvent itself into a new form.” Shivers go up the spine! Of course, when the age of the great sailing ship ended, the civilization had to reinvent itself, that was considered “progress”. When the age of whale oil had to end, it had to reinvent itself, but that was considered “progress”. When the age of steam ended, it had to reinvent itself, but that was considered “progress”. When the age of the computer was born, I have seen older women cry because they knew they could never learn to operate them well enough even to work in a store. Some didn’t, but most did, and the civilization had to reinvent itself, and that was considered “progress”.

But we talk around this same circle every day, every day, over and over. The labs continue to develop batteries and solar cells with efficiency levels that were regarded physically impossible only a few years ago. The costs continue to drop. The same people who claim low EROEI from fossil fuels spell the end of them are the same people who refuse to even admit to the rising EROEI of the renewable new energy industry. Just as the fossil fuel status quo sector relies on a dedicated band of volunteers to laugh at the “myth” of climate change, they also rely on a dedicated band of volunteers scattered throughout the world to expose the “myth” of the alternatives. In both cases the goal is to slow the will of the people to change.
The ally of the neo-primitive luddites in this fight is the horrific scientific education of most of their fellow citizens. If I describe a concentrating mirror solar plant that can be fitted on the corner of an abandoned airbase that can produce some 177 megawatt
http://www.renewableenergyworld.com/rea/news/story?id=50850
it will be laughed at because very few people have a mental comprehension of what 177 megawatt of power is. It’s over a quarter of a million horsepower for you minions of the car culture. A quarter million horsepower with no fossil fuel input once it is built, no water or topsoil loss as one would face with ethanol. A quarter of a million horsepower from 1 square mile of desert. But of course the fossil fuel companies and their volunteer army are all for renewable energy, but we know (wink, smile) that is marginal as a potential producer of power for the rest of our lives (wink, smile).

Csliver is right though, we are nearing a tipping point. There are professional technicians, professional investors who have spent their lives doing technology and math and making billions of dollars at it. These are people who can count, and they have done some counting on this energy problem. What is the result? They are pouring billions of dollars into renewable energy, and they are just getting started. We have already reached a tipping point, the point at which the fossil fuel industry and the volunteer army of oil defenders can no longer rely on the gullibility of the average American to stop the progress we should have been making for thirty years. The culture will indeed “reinvent itself into a new form.” But it won’t be later. Despite the slander and misinformation by the status quo fossil industry, it is beginning now.

Despite the attempts to sow stark terror, the advances that should have been made in our youth are being made in our midlife. We will only be around long enough to see the beginning of a great age. Our children will live to build and enjoy a prosperity that is cleaner, more democratic, and more safe and sustainable than any our generation could dream of. We are indeed on the edge of “a new form.” I only wish I had born later so I could see it reach fruition. It is all that we dreamed of in the 1070’s, but were denied building and seeing by a reactionary and retrograde leadership. Forgive them Lord, they knew not what they were doing.

RC

Hmm, previous reply got lost. I'll change my prediction. $1000 per barrel in May 2013. Before Nov 2012, $400 oil will cause an actual depression, reducing demand, and possibly prices. This will lead to the US electing some demagogue or other, who will launch some stupid attack and then everyone dies.

$225 oil will cause everyone to complain, but it won't be much worse than the 70's.

I've said numerous times there're too many variables to predict the future course of events. For example, if Obama is elected and is able to start the rollback of the US Empire, which would immediately entail ending the economic war against Iran and withdrawing from Iraq, I would expect oil price to fall to somewhere around $75-100/bbl and supply to increase faster than the rate of decline for the next 6-10 years and the $ saved from Imperial rollback used to finance an aggressive program of alternatives other than food-based ethanol. Such a series of steps I view as in the interest of the dominant class/power structure and thus a possibility.

Of course, there are many other alternative scenarios I might descibe which are worse than above, but I will not put any energy into them. Being an historian, I will draw on the past experience of the Great Depression. If the next president is Hoover-like and just muddles through continuing the current status quo, then an economic crisis will be lull-blown by first term's end regardless of the price of oil, which I fully expect to continue its rise as muddling through implies nothing done to mitigate. Thus 2012 will see a political tipping point caused by many factors, of which Peak Oil is one.

The $100 billion, or so, spent developing liquid production over the past few years is about to bare fruit. Over the next several years, there will be a rise in net production of about 10 million barrels per day (about 3.5 million in 2008 and again in 2009). This series of increases will continue for a while as investments of another $100 billion, over the next few years, are already planned. Canada will spend $15 billion in 2008 and Brazil is just getting started developing its new fields. Thunder Horse and many others are still under development. The peak is still a long way off. My guesstimate is that at least a trillion barrels that were considered unrecoverable a short time ago are now economically recoverable.

Also, in just the past few years, another $100 billion, or so, has been spent on alternatives and there are at least another $100 billion worth of projects on the drawing boards. The state of California will spend $2.9 billion just to subsidize roof top solar. No less than 90 nuclear power plants will be constructed over the next 12 years. The list is long enough for the ultimate transition to be relatively smooth. At some point, some alternative will offer a higher return on investment than drilling for black gold. From that point, new drilling will stop but the existing wells will pump until dry.

.

We will always have electricity

Grids in the poorer parts of the world are dying now, because they can not afford fuel to run their generators. This will increase to continuously more areas as energy becomes more scarce and expensive. Have you not read many of the peak oil writers ?
check the news items at-
http://www.energybulletin.net/

It may take more then a decade, but we also will be affected. Some local areas with hydro power will not be as effected. If enough solar and wind is built some areas, local grids can be maintained. The majority of areas will be in severe crises as they loose their grids.

Would People please put email addresses in your profile, so repeat postings would not have to be continually repeated. We could email you directly , reducing postings.

.

Gilbert.
http://www.angelfire.com/in/Gilbert1/tt.html

That's the wierd thing; It's so obvious what needs to be done.

But we are not doing it: talking about it now at least.

Might go and harvest the corn from my tiny urban garden.
Try and decide which company to order our solar power system from.
Hammer off 50 rounds of 357 magnum at the gun club.
Pump some iron, dig some dirt. Harvest a barramundi from my fish pond.

Life is so good.

It's always tempting to explain everything in terms of the bits we think we have a grasp on, so for us that means energy costs.
In fact, the general public, which is often rather contemptuously referred to here as sheep who need educating (by the person who is patronising them) and so on probably have a better grasp of the overall picture than those who are interpreting everything in energy terms.
Unfortunately that is only for the moment, and concerns about the long term energy future appear well-founded.
For the moment though, although events cannot be dissociated from the shortage of fossil fuels, the financial circumstances are much more complex than that and are considerably influenced by other factors - for instance, although bio-fuels will not have helped, the rise in fuel prices have not solely or perhaps even as a major factor influenced food prices.