Stories in topic "Demand/Consumption"
The Oil Intensity of Food
Posted by Prof. Goose on July 4, 2009 - 3:06pm
Topic: Demand/Consumption
Tags: consumerism, contamination, economics, food, food shortages, peak oil, soil erosion, water contaminaton [list all tags]
Today we are an oil-based civilization, one that is totally dependent on a resource whose production will soon be falling. Since 1981, the quantity of oil extracted has exceeded new discoveries by an ever-widening margin. In 2008, the world pumped 31 billion barrels of oil but discovered fewer than 9 billion barrels of new oil. World reserves of conventional oil are in a free fall, dropping every year.
Discoveries of conventional oil total roughly 2 trillion barrels, of which 1 trillion have been extracted so far, with another trillion barrels to go. By themselves, however, these numbers miss a central point. As security analyst Michael Klare notes, the first trillion barrels was easy oil, “oil that’s found on shore or near to shore; oil close to the surface and concentrated in large reservoirs; oil produced in friendly, safe, and welcoming places.” The other half, Klare notes, is tough oil, “oil that’s buried far offshore or deep underground; oil scattered in small, hard-to-find reservoirs; oil that must be obtained from unfriendly, politically dangerous, or hazardous places.”
This prospect of peaking oil production has direct consequences for world food security, as modern agriculture depends heavily on the use of fossil fuels. Most tractors use gasoline or diesel fuel. Irrigation pumps use diesel fuel, natural gas, or coal-fired electricity. Fertilizer production is also energy-intensive. Natural gas is used to synthesize the basic ammonia building block in nitrogen fertilizers. The mining, manufacture, and international transport of phosphates and potash all depend on oil.The Psychological and Evolutionary Roots of Resource Overconsumption Revisited
Posted by Nate Hagens on June 25, 2009 - 10:15am
Topic: Demand/Consumption
Tags: addiction, aspiration gap, conspicuous consumption, discount rates, endowment effect, evolution, impulsivity, neuroscience, novelty, oil addiction, original, ratchet effect, reward, salience, status [list all tags]
This post examines our own history on the planet, outlines how the ancient-derived reward pathways of our brain are easily hijacked by modern stimuli, and concludes that in very real ways, we have become addicted to the 'consumptive behaviors' linked to oil.

Gold Plated Porsche
Editor's note: I have learned a great deal more on the twin drivers of consumption - relative status and habituation/addiction since what follows was first written. However, despite best intentions, I am personally even more habituated to stimulation offered in modern American culture and my life still has about the same physical dependence on oil's emergent properties as it did back then. On the bright side however, I have continued my decade long shift of 'competition for status' away from pecuniary metrics...
Could $30/bbl Oil Happen Before New Year’s Eve?
Posted by Rune Likvern on June 18, 2009 - 9:45am in The Oil Drum: Europe
Topic: Demand/Consumption
Tags: contango, iea, natural gas, oecd oil consumption, oil prices, original, us oil consumption, uso, world oil supplies [list all tags]
In this post last month, I described how the recent storage build might serve as a good proxy for describing a well supplied oil market. I also presented data suggesting that actual physical oil consumption may have been running 2 - 3 Mb/d beneath supplies.
In this post, I will present further evidence that oil markets have for some time been well supplied. Furthermore, it appears to me that both the run up last summer and the more recent run up in oil prices bear the hallmarks of an oil market now being heavily influenced by speculative forces.
The chart above shows how IEA (The International Energy Agency) have estimated total supply (blue line) and total demand (red line) in their monthly OMR’s (Oil Market Reports). The diagram also shows the development of the oil price (black line).
As a result of these forces, I believe that there is a substantial chance that oil prices may again experience a rapid drop to perhaps as low as $30 barrel before Christmas. One reason I believe this is likely is based on my research with respect to US Oil Fund USO. In February USO held 100 000 WTI contracts (1 contract = 1 000 bbls), but this had dropped to 50 000 WTI contracts recently, as ETF purchasers increasingly switched to Natural Gas. Strange as it may seem, the sale of these USO contracts may be part of what is holding WTI prices up, and natural gas prices down. As the number of WTI contracts reaches a minimum, this influence may turn around the other way.
The Trouble With Energy - Part 3.
Posted by aeldric on June 16, 2009 - 10:04am in The Oil Drum: Australia/New Zealand
Topic: Demand/Consumption
This is part 3 of a series of posts co-authored by phoenix, who is an Engineer heavily involved in the energy sector. It will be based on a submission we made recently to the Australian Government.
Part 1 is here.
Part 2 is here.
Introduction
In part 2 we introduced a model for looking at energy use over the next few decades and applied it to the Australian situation. This model:
- Estimates how much time will be needed to achieve a transition to alternate and renewable energy sources.
- Estimates how much energy will be needed to achieve this.
- Estimates the cost of this transition.
- Calculates (based on industry figures) how much energy we have left in our remaining energy reserves and how long this will last.
The model shows that:
- If Business As Usual is the assumed paradigm, the energy required may exceed the energy available.
- If Business As Usual is the assumed paradigm, the cost of the transition is likely to place an untenable strain on GDP.
The market can be counted on to deal with this problem, but over the last few months we have seen that the market can be brutal. BAU is not an option. Our choice is to manage the problem, or let the market manage it for us.
There is a gap between our current expectations and the reality we will experience over the next few decades. In developing this model we are quantifying that gap. This allows decisions to be made based on hard numbers.
In this post we apply the model to the larger picture.
Peak Oil, Sustainability and the Problem of Freedom
Posted by Nate Hagens on June 7, 2009 - 10:22am
Topic: Demand/Consumption
Tags: freedom, isaiah berlin, john nash, kurt cobb [list all tags]
The following is a guest essay by Kurt Cobb exploring the concept of freedom via a resource depletion filter. Kurt speaks and writes frequently on energy and the environment and is featured on many sites including Energy Bulletin and EV World. His personal weblog is Resource Insights. Previously on TheOilDrum, Kurt wrote Peak Oil and Mass Communication.

Tight storage may lead to huge oil price drop
Posted by Rune Likvern on May 12, 2009 - 10:00am in The Oil Drum: Europe
Topic: Demand/Consumption
Tags: backwardation, china, china oil storage, contango, oecd, oil prices, original, tanker storage, us oil consumption, us oil storage [list all tags]
The present contango in oil prices bears all the hallmarks of an oil market where supplies are well above present fundamental physical consumption.
The recent large inventory build of petroleum, under a steep contango which now is flattening, within the big oil consumers (like the OECD countries and China) have left some with the expectation that major economies soon will begin to grow again, and that the contango now signals increased oil demand and higher oil prices in the future.
My analysis indicates that in recent months, as much as 2 -3 Mb/d of global petroleum supply has been used to build inventories. This is about to come to an end, because available storage is getting closer and closer to full and contango has begun to flatten. When additions to storage cease, the resulting drop in demand can be expected to lead to substantial downward pressure on oil prices.
The chart above shows one component of inventories--US inventories. The chart indicates that US oil inventories (green) have been increasing since after the September 2008 hurricanes, and, in fact, started increasing as early as May 2008. Brent oil prices (red) decreased between June and December, but recently have been slightly increasing.
Below the fold I give a summary of US, OECD and China petroleum inventories, inclusive of oil stored on tankers, and indicate what I expect will happen to near term oil prices.
Weathering the storm: making it through a natural-gas crisis
Posted by Engineer-Poet on May 6, 2009 - 6:09pm in The Oil Drum: Campfire
Topic: Demand/Consumption
Tags: appropriate technology, clothing, insulation, natural gas [list all tags]
The gas situation in a number of places world-wide isn't looking good. Britain especially has storm clouds looming; as production from the North Sea declines and imports fail to make up the difference, something has to give. The island cannot switch back to heating homes with coal; that door was closed some time ago. Cutting industry or commerce can easily make problems worse. If electric power generation loses, everything else collapses. This leaves home heating, but if people get too cold or damp, many will get sick and quite a few will die.
Spot the logical error in that last sentence?
The Risks of "Cap and Trade"
Posted by Heading Out on April 29, 2009 - 9:43am
Topic: Demand/Consumption
Tags: allocation costs, cap and trade, carbon dioxide, electricity supply, jevons paradox, montana, steven chu [list all tags]
When discussions arise about Climate Change, and the possibility that carbon dioxide and the other greenhouse gases are responsible for the rise in global temperatures, one prevailing argument is that “we cannot afford to take the risk of the AGW argument being right, without doing something.” However, in that discussion, there is rarely any mention of possible negative consequences to mitigating against increased levels of carbon dioxide in the atmosphere. The only positions mentioned are frequently the projections of dramatic rises in sea levels, the promise of worse storms, droughts and climate conditions and other projected severe costs of inaction. The costs of the actions themselves are not addressed, and the implications are that the world will be a better place if some of the current trends in Climate Change are, if nothing further, stopped from progressing further.
But there are costs to the required changes in lifestyle that a reduction in carbon dioxide production will require, and those potential impacts are rarely spelled out to the public, or to the politicians who must enact the legislation to put new laws in place. However politicians, particularly in those districts that are likely to be impacted by the changes in regulations, are already showing some sensitivity to the potential negative aspects of “cap and trade” and so it might be worth exploring the topic in a little more depth.
Healthy Addictions
Posted by Jason Bradford on April 23, 2009 - 10:20am in The Oil Drum: Campfire
Topic: Demand/Consumption
Tags: consumerism, social behavior, sustainability [list all tags]
I want to discuss the notion of “healthy addictions.” Really, this is an important topic. Our brain likes 'happy' chemicals and we tend to find ways to effect their release. Trouble is, we become quickly habituated to stimulation and then seek novelty in order to get that same old feeling. Our modern society gives us so many opportunities to be rewarded, but many people can’t handle it. They gradually become addicted to unhealthy things.
Electricity - No Easy Answers
Posted by Gail the Actuary on April 21, 2009 - 9:52am
Topic: Demand/Consumption
Tags: electricity [list all tags]
Electricity is something we are coming to depend more and more on as liquid fuels become less certain. At the same time, big changes are planned for electricity, both in terms of fuel mix and in terms carbon treatment. In this post, I show a few graphs relating to US Electricity, and offer some comments on how what I see relates to the challenges at hand.

This graph shows that US electricity generation has been growing fairly steadily since 1970, unlike petroleum use. To the extent there was change from the long-term trend, it was between 1981 and 1990, when production from natural gas was lower due to a change in regulation. The other dip was in 2008, when net generation is down about 1%.


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