Peak Oil?

[onthefly7]

Do you think peak oil will occur in the relatively near future? Are environmentalists blowing it out of proportion or is this a very real threat? If you believe peak oil will occur in the next 20-50 years, do you think the developed world is doing enough to prepare for this impending crisis?

[Guest Sundancefisher]

Do you think peak oil will occur in the relatively near future? Are environmentalists blowing it out of proportion or is this a very real threat? If you believe peak oil will occur in the next 20-50 years, do you think the developed world is doing enough to prepare for this impending crisis?

 

what is your definition of peak oil? There are many different interpretations.

 

 

[Nick0Danger]

If you belive Jeff Rubin, its come and gone. Interesting read is "why your world is about to get a whole lot smaller". I dont agree with everything but interesting, and if you buy into everything he says, your f'ed if you are not rich.

[onthefly7]

what is your definition of peak oil? There are many different interpretations.

 

I'm just talking about whether you think petroleum reserves will begin declining in the near future. And don't just mean easily and conventionally attainable petroleum, I'm talking about all reserves including unconventional ones like your oil sands etc. When will it run out?

 

Interesting read is "why your world is about to get a whole lot smaller".

 

Ya I just finished a book called The World is Flat by Thomas Friedman and he painted a pretty scary picture of things as well. It seems reasonable enough to me that with the way demand is exponentially rising with China and India developing so rapidly that oil could run out sooner than it seems like the media/general populace cares to acknowledge.

[onthefly7]

@nick0danger, I just read what your book was about, and a reviewer said that its premise is basically the opposite of friedman's so never mind.

 

"The World is Flat" is about the expansion of globalization and "Why Your World is About to get a Whole Lot Smaller" is apparently about the death of it. I'll definitely read it though, sounds intriguing!

 

didn't mean to hijack my own thread, carry on

[jksnijders]

It seems reasonable enough to me that with the way demand is exponentially rising with China and India developing so rapidly that oil could run out sooner than it seems like the media/general populace cares to acknowledge.

 

 

I saw a stat once detailing the number of cars hitting the road every week in China, (this was a couple years ago when things were a little better economically, mind you) but the figure was astonishing. Something else that really caught my eye recently was in a box of National Geographic magazines I got from a relative, all quite old, the one of which was from around the time of the oil price shock of the 70's. The article, aside from the dated pictures, could have appeared when oil spiked recently. All the same talk of alternate energy sources, etc. etc. I agree totally that we have to wean ourselves off fossil fuels eventually, but even then nothing drastically changed. Oil prices dropped, the panic was over, and everything went back to business as usual. As far as "Peak Oil", by Hubbert's definition, its quite obvious (from what we get told) that production is declining, but technology keeps up at a pretty rapid pace. Wells that no one would really try to drill say 10 years ago are commonplace now. Horizontal multi stage wells are the big thing nowadays, gas production in the US has increased a pile because of it. Also, I've read that current oil prices are out of line with economic fundamentals, considering you can hardly get a tanker to just hold the stuff at sea. There is alot of it just sitting around at the moment, yet the price is holding around $80/barrel, perhaps largely driven by speculation? One thing to remember is that there are alot of largely unexplored regions on this planet, both on land and underwater, in terms of oil and gas. I would assume that a best guess in terms of "proven" reserves (a term that always makes me laugh) is drawn from seismic data, yet there are no shortage of places that haven't even been looked at yet.

[Guest Sundancefisher]

Off the top comments...just a few thoughts...I am sure there are more.

 

1. Most explorationists believe the major easy to oil pools have been found. That does not mean a few don't lurk out their and there are also dangerous places and hard to explore in places that have not been explored thoroughly as of yet. New smaller pools are being found all the time and geologists etc. are having to be smarter to find it using all tools available.
2. Natural gas is being newly discovered as it was never as sought after as oil and now with the liquification process of making LNG's readily marketable this has opened up a lot of fossil fuel markets.
3. Supply and demand principles will slow any future impact of declining reserves by increasing the costs to use them and making conservation paramount. Efficiencies will increase and innovation will abound.
4. Also coalbed methane and shale gas becomes more economic with increasing prices...which lead me to comment there are a lot of reserves that are un exploited or under exploited purely based upon economics.
5. We have huge methyl hydrate opportunites in various places around the world.
6. We have huge coal stocks which people have developed a way to extract the hydrocarbons. We can burn coal for power or generate oil from coal.
7. Then you need to realize many reserviors have been under exploited due to existing technology. Some reservoirs have only recovered 11% of the oil in place. New technology get developed and over the years additional oil in place gets produced. Still...it the price is high enough and it is needed...some enterprising child of our generation will find a way to get it out.
8. Also as additional energy sources get exploited from nuclear, to solar, wind to tidal, hydrogen cell to something totally new...that will decrease demand and lengthen supply.

 

Therefore...panic? No way. We are probably 500 years away from worrying about it.

 

Cheers

 

Sun

[CTownTBoyz]

A short article I read in the Guardian a few weeks back.

 

US military warns oil output may dip causing massive shortages by 2015

• Shortfall could reach 10m barrels a day, report says

• Cost of crude oil is predicted to top $100 a barrel

 

The US military has warned that surplus oil production capacity could disappear within two years and there could be serious shortages by 2015 with a significant economic and political impact.

 

The energy crisis outlined in a Joint Operating Environment report from the US Joint Forces Command, comes as the price of petrol in Britain reaches record levels and the cost of crude is predicted to soon top $100 a barrel.

 

"By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day," says the report, which has a foreword by a senior commander, General James N Mattis.

 

It adds: "While it is difficult to predict precisely what economic, political, and strategic effects such a shortfall might produce, it surely would reduce the prospects for growth in both the developing and developed worlds. Such an economic slowdown would exacerbate other unresolved tensions, push fragile and failing states further down the path toward collapse, and perhaps have serious economic impact on both China and India."

 

The US military says its views cannot be taken as US government policy but admits they are meant to provide the Joint Forces with "an intellectual foundation upon which we will construct the concept to guide out future force developments."

 

The warning is the latest in a series from around the world that has turned peak oil – the moment when demand exceeds supply – from a distant threat to a more immediate risk.

 

The Wicks Review on UK energy policy published last summer effectively dismissed fears but Lord Hunt, the British energy minister, met concerned industrialists two weeks ago in a sign that it is rapidly changing its mind on the seriousness of the issue.

 

The Paris-based International Energy Agency remains confident that there is no short-term risk of oil shortages but privately some senior officials have admitted there is considerable disagreement internally about this upbeat stance.

 

Future fuel supplies are of acute importance to the US army because it is believed to be the biggest single user of petrol in the world. BP chief executive, Tony Hayward, said recently that there was little chance of crude from the carbon-heavy Canadian tar sands being banned in America because the US military like to have local supplies rather than rely on the politically unstable Middle East.

 

But there are signs that the US Department of Energy might also be changing its stance on peak oil. In a recent interview with French newspaper, Le Monde, Glen Sweetnam, main oil adviser to the Obama administration, admitted that "a chance exists that we may experience a decline" of world liquid fuels production between 2011 and 2015 if the investment was not forthcoming.

 

Lionel Badal, a post-graduate student at Kings College, London, who has been researching peak oil theories, said the review by the American military moves the debate on.

 

"It's surprising to see that the US Army, unlike the US Department of Energy, publicly warns of major oil shortages in the near-term. Now it could be interesting to know on which study the information is based on," he said.

 

"The Energy Information Administration (of the department of energy) has been saying for years that Peak Oil was "decades away". In light of the report from the US Joint Forces Command, is the EIA still confident of its previous highly optimistic conclusions?"

 

The Joint Operating Environment report paints a bleak picture of what can happen on occasions when there is serious economic upheaval. "One should not forget that the Great Depression spawned a number of totalitarian regimes that sought economic prosperity for their nations by ruthless conquest," it points out.

 

http://www.guardian.co.uk/business/2010/ap...oduction-supply

[Ayr]

Other books of possible interest on this subject;

 

Peter Tertzakian,

 

"A thousand barrels a second."

 

And his recent follow up; "The End of Cheap Oil"

 

Matthew Simmons, "Twilight in the Desert"

 

Good reads, in between catching fish, of course B)

[Nick0Danger]

The more the price of oil goes up the more all that natural gas we have will just end up in oil sands bitumen to make it possible to flow, and then more to crack it.

 

One thing that Jeff said in his book, is that Supply and demand rules are not working with oil, and he sites some good examples like countries offsetting the cost of gas. The other one is as things become more efficient, they also become cheaper, his big example is air conditioning most homes in the us have it back 15 years ago it was about 50%. More households have 2 or even 3 cars. Americans are driving more miles, per year than ever before as well.

 

A couple things i do like about his book is how he predicts, that jobs will become more local as the cost of shipping goes up, it will become more economical to produces products closer to home.

 

Although i like Sundancefisher's post better predicts a better future for everyone economically and i can keep my truck longer.

[Guest Sundancefisher]

The more the price of oil goes up the more all that natural gas we have will just end up in oil sands bitumen to make it possible to flow, and then more to crack it.

 

One thing that Jeff said in his book, is that Supply and demand rules are not working with oil, and he sites some good examples like countries offsetting the cost of gas. The other one is as things become more efficient, they also become cheaper, his big example is air conditioning most homes in the us have it back 15 years ago it was about 50%. More households have 2 or even 3 cars. Americans are driving more miles, per year than ever before as well.

 

A couple things i do like about his book is how he predicts, that jobs will become more local as the cost of shipping goes up, it will become more economical to produces products closer to home.

 

Although i like Sundancefisher's post better predicts a better future for everyone economically and i can keep my truck longer.

 

Just look how badly demand was hit when oil went to $140. People couldn't give away big trucks and motorhomes. People drove less. Airlines jacked fuel surcharges. Transit usage increased significantly. With higher pirces we will see strong erosion of demand. When gas prices are high enough...nuclear power will feed the oil sands versus natural gas...or innnovation will take hold.

 

As for your truck...I never said prices would be low :-) They will increase such that you and every other consumer will have to decide where best to spend their money.

 

People retrofitted their homes to improve heating and cooling efficiencies...or buying a more fuel efficient vehicle.

 

With increasing oil prices...lake communities will increase in value as a result.

[CTownTBoyz]

With increasing oil prices...lake communities will increase in value as a result.

 

I'm curious, why? And what other types of communities will increase in value?

 

 

[Guest Sundancefisher]

I'm curious, why? And what other types of communities will increase in value?

 

 

Thanks for asking.

 

I have a feeling that as the cost to travel increases...so will living in areas that provide bountiful recreational benefits and their cooresponding improved quality of life...if that recreational aspect is important to your family. Paying $100 - $200 in gas to go fishing for the weekend for instance will be out of range for many. Walking 5 blocks to go fishing...may be more palatable even though it is not a clear mountain creek or a high mountain lake. The occasional treat to go to those places will require more careful planning and car pooling.

 

Those that like to lounge on the beach in Southern BC will find traveling 3-6 hours to get their more and more expensive. Camping is already getting not only ridiculously priced..so to is the shortage of camping.

 

Unfortunately for many of us... we may not be able to afford to travel as much in the future as costs rise. Therefore vacationing "at home" may become more and more popular with a larger and larger demographic.

 

I would also say communities along the BC coast will increase as well as some communities closer to the mountains.

[slingshotz]

Spend $50 in gas money to get to the nearest lake each week or walk down to the lake for a swim/fish... It's definitely a nice alternative, I can't wait to move into Lake Bonavista. Doesn't mean I still won't head out to fish but gives me an cheaper option. I know when gas prices were at the peak, it was getting tougher to swallow the cost of gas just to get out to camp/fish.

 

The really scary part of high oil prices is the affect on transport, truckers had a hard time with the fuel costs and we pretty much rely on everything being transported in. If the high prices had continued for a few years we really would have seen an impact on our food and our beloved fishing gear.

 

I wish Alberta would invest more into getting more refineries started in this province, it's annoying to see our raw product get shipped to the US to get refined only to have it shipped back up here. If we were more self sufficient, we would be partially insulated from any huge oil spike. Unfortunately that's how our country seems to operate, rape our raw resources for pennies to have a foreign country add huge value so we can buy it back.....

[CTownTBoyz]

Thanks for asking.

 

I have a feeling that as the cost to travel increases...so will living in areas that provide bountiful recreational benefits and their cooresponding improved quality of life...if that recreational aspect is important to your family. Paying $100 - $200 in gas to go fishing for the weekend for instance will be out of range for many. Walking 5 blocks to go fishing...may be more palatable even though it is not a clear mountain creek or a high mountain lake. The occasional treat to go to those places will require more careful planning and car pooling.

 

Those that like to lounge on the beach in Southern BC will find traveling 3-6 hours to get their more and more expensive. Camping is already getting not only ridiculously priced..so to is the shortage of camping.

 

Unfortunately for many of us... we may not be able to afford to travel as much in the future as costs rise. Therefore vacationing "at home" may become more and more popular with a larger and larger demographic.

 

I would also say communities along the BC coast will increase as well as some communities closer to the mountains.

 

Prices will go up in desirable locations; I'd say with the above logic Deer Run, Deer Ridge etc. would probably go the same way.

 

I guess if the is a massive transition (and development) towards alternative energy sources then maybe the cost of travel won't be so great.

 

Or the other option is to by a less expensive house in a less expensive neighborhood - and fish on weekends wherever you want......

 

But if were to put money on it; the human race will wean itself off oil towards alternative energy; if we can keep the every-growing power of lobbyists in check.

 

Fingers-crossed.

 

[Guest Sundancefisher]

Prices will go up in desirable locations; I'd say with the above logic Deer Run, Deer Ridge etc. would probably go the same way.

 

I guess if the is a massive transition (and development) towards alternative energy sources then maybe the cost of travel won't be so great.

 

Or the other option is to by a less expensive house in a less expensive neighborhood - and fish on weekends wherever you want......

 

But if were to put money on it; the human race will wean itself off oil towards alternative energy; if we can keep the every-growing power of lobbyists in check.

 

Fingers-crossed.

 

Your best bet for alternative energy is $200/bbl oil and $4 litre gasoline and $20 mcf natural gas. We saw huge increase in interest for alternatives when oil went to $140/bbl.

 

Otherwise...right now...there are no economics in it and no one wants to pay tens of thousands of their own money to develop something they technically can live without.

 

Plus my biggest concern is a total lack in credible alternatives.

 

1. Solar is expensive and has a massive foot print unless we can outfit roofs and change community designs to maximize solar value. Then you still need lots of infrastructure dollars to cycle power into the grid from homes. Then you still need night time power which means start and stopping power plants daily.
2. Wind takes a huge foot print. It is locally distributed and not a wide spread constant power source. Cyclical energy is the bane of power suppliers. It is also shown to kill migratory birds and bats. Many NIMBY issues.
3. Nuclear...probably the best of the choices due to cost and benefits but NIMBY issues crush it and toxic waste and melt down fears is a poliltical hot potatoe.
4. Hydrogen is not yet truly proven and has limitations which is why it was a boom and the mega bust investment for many.
5. Geothermal...we don't have any.
6. Hydro...deemed environmental friendly unless you are being displaced or you are the wildlife or fish that gets destroyed or migration routes blocked. Costs to make they environmentally friendly has it problems. Many north american dams are coming down. The Oldman Dam still does not allow fish migration. Upper Kananaskis dam fluctuates water so wildly during the year that no littoral zone can develop... Third world breaches have been disasters.
7. My favorite of them all is tidal power. Too far from us and probably not capable of supplying a huge amount.

I think right now about 5% of North America's power is from alternatives. Correct me if I am wrong...but the footprint needed for anything other than Nuclear is to vast to consider feasible.

 

I like the idea of solar panels but the cost benefit analysis sucks. Show me that paying $5000 or $10,000 for solar panels now will pay off in 5-8 years and provide me free energy for 50 years and I will take out a loan and do that in 2010! As of last year a solar panel would break down and need replacement prior to paying out. Factoring in the power to manufacture...it really does no good IMHO.

 

Cheers

 

P.S. If you like to sit by the river and fish and picnic and relax and therefore you can vacation at home then yes...river side communities may give you that. Lake Communities have that and more as everyone in Calgary lives close by. The point being...if you travel for vacation...when prices get high enough...you need an alternative to maintaining your quality of life.

[onthefly7]

It sucks that the baby boom generation got to enjoy all the benefits of affordable petroleum, and now inevitably my generation will have to be the one to cut back. If prophesies of peak oil are true, I will probably never be able to experience the glory of driving a gas-guzzling pickup truck, going on an affordable cross-country road trip, or even driving to fish a remote river! I hope you guys are right about the shock of high oil prices forcing us to tighten our belts and find alternative means, but I fear that it will be a very uncomfortable few years before the transition is complete. In the worst case, energy wars might even break out as the economic giants (namely china and the US) who have become so reliant on the black gold struggle for the remaining reserves. I know I probably sound like a melodramatic doomsday prophet but I just now have started reading about this stuff and its really scaring me how little the general public seems to acknowledge/realize the extent to which we will have to cut back.

 

My dad who works for an oil company in calgary assures me that unconventional sources and improved technology will allow us to avoid this crisis for quite a long time and help ease the weaning from fossil fuels, but I'm not so sure.....

 

Ya I agree sundancefisher, there really seems to be no real viable alternative at this point. If only they could figure that fusion business out..

 

 

Any other opinions? Sorry about the rant and I appreciate the responses

[Ricinus]

Seeing as there are no alternatives to oil and gas ( at least according to some ), I think we should declare the industry as essential to life and nationalize all assets. They are way too valuable to be left in the hands of the Oil Barons and subject to manipulation.

 

Regards Mike

[CTownTBoyz]

Seeing as there are no alternatives to oil and gas ( at least according to some ), I think we should declare the industry as essential to life and nationalize all assets. They are way too valuable to be left in the hands of the Oil Barons and subject to manipulation.

 

Regards Mike

 

Indeed, there's no alternatives to oil and gas....I mean look at the foot-print wind and sun power would make if people were to start putting these things up on their homes! The impact would be equivilant to a massive oil spill in the Gulf! And just think if one of those wind turbines busted! Think of all the wind that would leak everywhere, and all the hydrocarbon's they'd produce; we'd be heading to another ice-age in no time!!

 

I actually looked into putting two wind generators on our home in Calgary through a company called Windterra. The quote I got was 16k for two generators capable of producing 4000 watts /hr. with only a light wind. At 16k it's really nothing, less that most people's second, third or fourth car. You can even have them hooked up to the grid (for no additional cost), and legally in Canada; electric companies have to buy any excess power you produce. The generators are only 6 feet tall and designed to work at low wind speeds (they are stationary and require no adjusting for wind direction). They're also almost silent.

 

 

Too bad it's illegal to have a wind generator in Calgary. That said, I'm thinking of breaking the law kind of like CLUCK.

 

You just gotta wonder why they're illegal?

[Ricinus]

I watched a guy being interviewed on BNN who worked for an Investment Group specializing in Alternative Energy. The jest of the interview was that individually the Alternative Energy Sources cannot stand alone, but integrated into a national energy grid with investment in Infrastructure, conservation, etc everything becomes a lot more viable.

 

Regards Mike

[Nick0Danger]

Seeing as there are no alternatives to oil and gas ( at least according to some ), I think we should declare the industry as essential to life and nationalize all assets. They are way too valuable to be left in the hands of the Oil Barons and subject to manipulation.

 

Regards Mike

 

We would end up paying more for all the useless people they would hire. That said im for socialism just not to that extent.

[slingshotz]

As of right now there is nothing that comes close to the energy density of oil. That is the ultimate key for any alternative energy, the portability of something that energy dense. Until we discover something as dense and portable, we are unfortunately stuck with using oil. What a lot of people don't realize about the alternative technologies is that it takes oil to produce them. Solar panels/wind generators/nuclear uranium/hydro, something has to mine those minerals out of the ground to manufacture them and transport those materials. Don't get me wrong I'm a pretty diehard greenie but I also realize the realities/limitations of the current world.

 

I do believe that oil reserves won't run out due to advances in technology for at least a century but all that means is we're as bad as the previous generation to leave all the crap for the future inhabitants to deal with.

[trailhead]

The gist of oil is cars, we drive, the Chinese are starting to drive, the Americans drive. As for when will people cut back? In Europe gas is already 4 Euros a liter, and I saw plenty of Audi A6's blowing down the autobahn at Mach 10. Peak oil is like fishing, possible reserves = someone told you there's a river, probable reseves = you see the river, proven reserves = you see fish in the river, producing reserves = you have caught and landed a fish. People keep finding new rivers and new ways to catch fish.

[Ricinus]

The gist of oil is cars, we drive, the Chinese are starting to drive, the Americans drive. As for when will people cut back? In Europe gas is already 4 Euros a liter, and I saw plenty of Audi A6's blowing down the autobahn at Mach 10. Peak oil is like fishing, possible reserves = someone told you there's a river, probable reseves = you see the river, proven reserves = you see fish in the river, producing reserves = you have caught and landed a fish. People keep finding new rivers and new ways to catch fish.

 

And to continue your analogy, if you only fish the prime runs(oil and gas) and not the pocket water(alternatives), you'll miss alot of fish.

 

Regards Mike

[fisher26]

Point of clarification: Many people refer to oil "running out", oil will never run out in the same way gold, iron, or coal will never run out. There will always be some (however small) in the ground somewhere. The issue is of the rate of extraction.

 

The issue is of a "peak" in production. Currently world markets rely on an expanding amount of energy to conduct business as usual. That means that roughly every year there is more energy on the market than the last (factoring out economic cycles - this true as a general trend). The problem thus is when the world hits a peak in production and the RATE of extraction begins to decrease. This starts out as minor, but soon becomes severe as produces resort to more costly options (like the oil sands). Eventually the amount of available oil on the market decreases per year - and that's when the brunt of the blow is felt.

 

For those of you who propose alternatives, or more costly extraction methods as a solution, this shows a misunderstanding of how economies work. The sheer scale of supply and demand is staggering, and the issue is not being able to get energy on the market (via different extraction methods, or alternatives), its about being able to maintain an INCREASING supply of energy.

 

There is certainly some wiggle room with peak oil. The reality is that currently there is a huge amount of waste in our economies so merely by waning down on the waste people (and by people I mean gov.'s, individuals and business) can pick up the slack for a period of time.