 | Drumbeat: May 4, 2009 | The Oil Drum | Minerals scarcity: A call for managed austerity and the elements of hope |  |
| Review Response: Depletion and the Future Availability of Energy Sources | The Oil Drum: Europe | Minerals scarcity: A call for managed austerity and the elements of hope | |
23 comments on Europe Forum Lucerne: Energy – A Conflict Area, Trends and Horizons
Comments can no longer be added to this story.
| Show without comments | PDF version
23 comments on Europe Forum Lucerne: Energy – A Conflict Area, Trends and Horizons
Comments can no longer be added to this story.
| Show without comments | PDF version
User login
Personnel
Editors
Contributors
Peak Oil Primers
Archives
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- May 2009
- April 2009
- March 2009
- February 2009
- January 2009
- December 2008
- November 2008
- October 2008
- September 2008
- August 2008
- July 2008
- June 2008
- May 2008
- April 2008
- March 2008
- February 2008
- January 2008
- December 2007
- November 2007
- October 2007
- September 2007
- August 2007
- July 2007
- June 2007
- May 2007
- April 2007
- March 2007
- February 2007
- January 2007
- December 2006
- November 2006
- October 2006
- September 2006
- August 2006
- July 2006
- June 2006
- May 2006
- April 2006
- March 2006
Vital Trivia
License
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
GAIA Host Collective
Oil supply isn't the problem as BP repeatedly says, there is plenty of oil left in the world, and they are correct - the problem is affordable oil supply, which BP never mentions.
World peaking of demand for any commodity (not just oil) is caused by the consumers not being able to afford the price - if, in order to make a profit, the price of the commodity rises faster than wages (as oil has for ten years or so) it will become less affordable, and a peak and decline in demand will always eventually follow. Post-peak, oil supply will still be profitable but demand won't be sufficient for the expected BAU growth.
World oil peaking is a consumer caused problem, hence as BP only considers profitable supply they don't see a problem - they assume (despite much current evidence to the contrary) that consumers will always be able to afford the price BP needs.
I think it's quite a bit more than that.
If you look at conventional oil, we know how much we have found, and we can predict fairly well, how much more we shall find. We can even estimate, at what price this oil can be economically produced. If you look at Birol's graph, you see that with all of the conventional oil that we have already found, the oil still peaks within the next few years, and thereafter, we'll have a problem on the supply side. BP is simply not telling us the truth.
Of course, if you add the unconventional oil, we still have lots of oil available, at least theoretically. In fact, the theoretical supply of oil is infinite, because we can regrow the commodity in the form of biofuels.
However, some of this oil will never be producible, not because it is too expensive, but because its EROEI is too low. If the EROEI is at 1 or even below, it makes no sense to produce this oil irrespective of its cost. Furthermore, there is the problem of time constants. We can regrow oil from plants, but not at an infinite speed, only at the speed with which the plants will grow. Consequently, we have a bandwidth problem.
I agree with you, and many people here at TOD have already said so, that there is also a demand side problem. Demand destruction does set in when the oil becomes too expensive. Demand destruction may in fact obscure and soften the impact of the supply side problem.
We have said many times: if there were only 1 billion people living on this globe, peak oil wouldn't be a problem. Similarly, if the demand for the commodity continues to diminish more rapidly than the supply, we won't ever notice the shrinking supply at all.
Yet, I don't think that this is going to happen. Until now we are still at the flat top of oil supply. As time proceeds, the shrinking of the supply will accelerate, and I am pretty sure it will overtake the diminishing demand.
I agree, but unfortunately none of this data tells you what the affordable world daily flow rate will be - it tells you how much, but not how fast - for now that data is mostly irrelevent since 'how fast' is the peak oil problem.
In general I agree with the the EROEI concept except that liquid fuels from crude oil are so useful and energy dense with no real adequate alternatives at present, also oil feedstock is used for much more than just energy.
I expect that it will be financially viable to use other sources of Energy In to extract to the magical oil Energy out, and evidence from commodities like gold tells me some people are prepared to pay several hundred dollars per ounce for substances that have almost no unsubstitutable non-energy use.
IMO, for now from the peak oil point of view, the supply side problem is just a lack of available investment. It is just way too risky to invest in new sources of crude as expected future prices wouldn't be profitable - peak supply is assured by a lack of expected profitable demand.
I don't know whether the BP economists will turn out to be lying but in my experience they are certainly economical with the current known truth. I presume the reason economists are paid for by BP is to improve BP's profitability in some way - would denying peak oil be financially more profitable for BP's current directors and shareholders?
I think so.
First, BP needs to portray confidence to its shareholders that the company, as a business, has a future. That future depends on the availability/marketability of oil. Thus, it is indeed important for BP to let its shareholders know that there is still a lot of oil to be produced and marketed by them.
Second, the governments of oil exporting nations, OPEC, have a true interest in overestimating their reserves, as those determine how much oil they are allowed to export under OPEC regulations. BP probably has no choice but to accept these reported reserves at face value, even if they turn out to be hugely overstated.