A Curious Tendency Toward Doom

...Peak Oil catastrophism is largely a manifestation of our primary cultural myth: that all things end with suffering, death, and then resurrection. Belief in apocalypse is programmed into western civilization. Given our heritage, “the end is nigh” is the nearly unavoidable personal and collective response to times of uncertainty and rapid change. _Pattern Literacy

Peak oil predictions go back at least to the 1850's. Predictions of "the end of oil" have been with us as long as oil itself.

Peak oil has a longer history than you think. Although the models that define the American peak oil hypothesis were first advanced in the 1950s, predictions of the imminent depletion of American oil reserves can be found much earlier. In fact, one of the earliest known warnings that the United States would run out of oil was released on Jan. 19, 1922, when the U.S. Geological Survey warned the public that only two decades of oil remained in the ground, if present consumption patterns held steady. _Motley Fool

King Hubbert is the originator of modern peak oil models, but most of Hubbert's real world predictions are proving wrong.

Most people acknowledge that the Earth's supply of petroleum is finite, and will one day become too expensive to extract. The problem, to many people, seems to be in timing the peak.

Modern history of peak oil predictions (Wikipedia)

But the issue of peak oil is secondary to the issue of peak affordable energy. Modern societies are slowly shifting much of their energy load to electrical power sources, which can be generated by multiple forms of energy besides oil.

Newer, safer, more scalable, reliable, and affordable forms of nuclear power would be the obvious goal of rational societies, in the pursuit of an electrical energy future. But ample supplies of natural gas, coal, gas hydrates, bitumens, kerogens, and eventually advanced biomass, could supply careful societies with power and heat for centuries to come.

The question seems to revolve around the issue of "liquid fuels," for powering airplanes, ships, trains, and other transportation vehicles. And yet we know that with the assistance of high temperature gas-cooled nuclear reactors (HTGRs) -- already well along in the design and development stage -- the world's massive supplies of gas, coal, hydrates, bitumens, kerogens, and biomass can be converted affordably into high quality liquid fuels, chemicals, polymers, lubricants, fertilisers, and other useful substances.

The problem, though, is neither "peak oil," nore "peak energy." The problem is "peak ingenuity," or the shortage of good ideas and the will the implement them.

For readers who have freed themselves from "the apocalyptic compulsion," and who are honestly looking for a path out of the apparent abyss, take a careful and open look at The Ultimate Resource.

As long as human minds remain free, solutions to problems can be devised. Whether governments and other powerful interests will allow problems to be solved, or not, is another question. Many of those governments and powerful institutions are led by people who are in thrall to the apocalyptic instinct.

But we will do what we can to find pathways to a more abundant future. Nobody said it would be easy.

Peak Oil As You've Never Seen It

Stuart Staniford provides an evolving look at oil production numbers in The Bumpy Plateau Tilts Upward. Using EIA numbers, Stuart breaks liquid fuel production down into crude + condensate, natural gas liquids, refinery gain, and other liquids. The composite picture shows a slow rise in overall production, including a slow but definite 0.33% rate of rise in crude oil + condensate production.

Early Warning

The recent Exxon energy outlook to 2040 indicates that both oil demand and oil supply are likely to rise. The Exxon report accounts for most of the coming rise in oil production by advances in unconventional oil production.

By 2040, only about 55 percent of the world’s liquid supply will come from conventional crude oil production. The rest will be provided by deepwater, tight oil and NGLs, as well as oil sand and biofuels, as technology enables increased development of these resources. As we look to the future, energy sources considered “unconventional” today are rapidly becoming conventional, thanks to the technologies available to produce them, giving them an increasingly significant role in the global energy mix. _Exxon 2040 Outlook

The Exxon report significantly understates the coming of synthetic fuels, which are likely to achieve a significant (10%+) proportion of overall liquids by 2030. The report's demand estimates to 2040 are likely to be overstated, due to overly optimistic assumptions about global economic growth.

All the same, global population growth is likely to continue for decades, creating its own rise in demand for new liquid fuel supplies as long as a significant global economic collapse can be avoided.

In the face of global political / economic mismanagement, oil has become a type of global quasi-currency and repository of wealth in its own right. Oil prices have come to occupy a much greater role to the global economy, financial systems, and geopolitics, than as a mere price of fuel. This importance to multiple key global systems and institutions provides more price support to oil markets than might be assumed.

As long as the greater part of conventional oil reserves are held by oil dictatorships and their national oil companies, the free-market oil producers will have to settle for unconventionals such as deep sea oil, tight oil, natural gas liquids, and synthetic fuels such as GTL, CTL, BTL, bitumens, kerogens, and the like. This growing dependency on more expensive sources of liquid fuel is another reason for higher oil prices than would have otherwise been expected at this stage of development of the global hydrocarbon complement.

Nevertheless, the prolonged production plateau is likely to continue to rise along with population growth and consequent demand growth -- as long as price signals are allowed to operate in markets.

A look at the ongoing oil production plateau by the Total Chairman and CEO

Peak Oil Doom? Perhaps One of the Great Delusions

The graphics below come from Louis Basenese:

The above graphic demonstrates that global oil reserves continue to grow at at a steady rate. As economical and clean methods of unconventional liquid fuels continue to be developed and perfected, potential reserves of all liquid fuels will rise even faster.

Global oil production is also rising, as a reflection of increased prices due to emerging world demand. At the same time, demand for oil from the advanced world is declining.

Peak Oil is the theoretical idea that the world will eventually reach a maximum rate of oil production, which will be followed by a terminal decline. No doubt, that’s a scary theory should it come to pass. However, as Yogi Berra famously, said, “In theory there is no difference between theory and practice. In practice there is.”

...After peaking briefly around 60 million barrels per day in the mid-1970s, global oil production resumed its upward march. And now it’s firmly above 90 million barrels per day, according to the latest data from Energy Intelligence Group. _Louis Basenese

The Bakken oil basin in North America is one of the reasons why US oil production is shooting upward -- at the same time that oil demand is declining in the US. Some think that Bakken is on the way to being a "supergiant" -- producing over 1 million barrels of oil per day!

Bakken is proving to be one of the most prolific oil-producing patches in the world. It continues to outstrip even the most optimistic forecasts.

At the moment the industry has completed just 5,000 wells in the Bakken at an average spacing of less than 1 well per 1,280-acre unit. But Continental estimates the core could support up to 52,000 wells with four to eight wells per 1,280-acre unit for full development.

...Conventional super-giants such as Ghawar may never be discovered again, although exploration is pushing into new areas offshore and in the Arctic. But that may not matter if oil and gas can be wrung from more commonly occurring continuous deposits.

Bakken has a long way to go before production overtakes Ghawar. But the play has already defied most expectations that it will slow. At the very least, Bakken will join the world’s largest oil-producing zones next year. In the process, it has changed the oil industry forever. _FinancialPost

Peak oil is a trivial truism. But "peak oil doom" is a form of brain rot, for people with nothing important to do but killing time for the rest of their lives. Try not to let it happen to you or someone you love.

Investors Look to Commodities for Yields and Safe Havens

Conventional investments in European and US bonds do not provide much of a yield these days. Investors might be forgiven for looking elsewhere in search of safe yields. Commodities are often considered a "no-lose" proposition, given growth in emerging nations over the past decade or two.

Crude oil has long been the darling of the commodity- shortage crowd, and when its price rose to $145 per barrel in July 2008, many became convinced that the world would soon run out of oil.

This “peak oil” crowd was sure that no big economically feasible oil fields remained to be found, so new finds would continue to fall short of demand increases. What they discounted is that reserves are often underestimated because oil fields produce more than original conservative estimates. Nor did they expect significant substitution for petroleum from conventional and shale natural gas, liquefied natural gas, the oil sands in Canada, heavy oil in Venezuela and elsewhere, oil shale, coal, hydroelectric power, nuclear energy, wind, geothermic, solar, tidal, ethanol and biomass energy, and fuel cells.

Yet human ingenuity and substitutes have always overcome shortages quickly. New extracting techniques cut the cost of mineral production. Caterpillar Inc. (CAT) recently introduced a mining shovel that lifts 120 tons, the equivalent of five pickup trucks. Joy Global Inc.’s new entry is even bigger, 135 tons.

Agricultural productivity increases as nations develop better seeds and fertilizers to be used on larger fields with efficient mechanized equipment. Improved breeding and veterinarian care reduce the cost of producing meat. The advent of plentiful natural gas from shale, the collapse in U.S. prices, and new crude oil finds have shattered the theory of a near-peak in global energy output. _A Gary Schilling

The Peak Oil belief in perpetual oil shortages was put to the test in the summer of 2008 and found wanting. Millions of investors lost huge portions of their portfolios and life savings, losing that wager. You might think that people would learn from that rapid bust.

In science, when predictions fail, theories must be revisited and often overhauled or rejected outright. In mass movements such as religions and the Peak Oil movement, when predictions fail believers often double down on their beliefs.

But life is full of surprises. And since "chance favours the prepared mind," if the mind accepts uncertainty and learns to deal with it, the owner of that mind will be in a better position to adapt and prosper.

A firm belief in doom is simply one manifestation of a clinging for life to certainty in a tormented sea of uncertainty. For those unwilling to subject their beliefs to a constant and merciless criticism and test, the future will be less kind.

Everyone needs a reason to get up in the morning and do the things that have to be done. Most people do these things for their families, or for their self-respect. But many require a sense of "deeper purpose" in life, in order to go on with things. This is typical for members of mass quasi-religious movements such as peak oil.

More: A better way to find your purpose.

Remember: Peak oil websites and similar sites are simply online mausoleums where weak minds go to zombify. If you want your mind to come alive to the possibilities, you will seek out new mind-stretching and innovative ideas.

Goldman Abandons Peak Oil, Enters the 21st Century

In an abrupt break from its earlier peak oil-esque predictions of near-future astronomical oil prices, giant wall street investment bank Goldman Sachs now predicts an end to the bullish oil price super-cycle.

Goldman was a lead forecaster during the 2003-2008 oil price boom when unexpectedly robust demand in Asia outpaced global supply and prices soared as spare capacity in the Organization of the Petroleum Exporting Countries fell close to zero and the refining industry struggled to meet demand.

But just after the bank predicted a "super spike" to $200 a barrel in 2008, financial crisis hit the global economy. Oil prices collapsed from a peak of $147 in July 2008 to below $40.

This year, Goldman was slow to acknowledge bearish trends in U.S. light crude, closing its trading recommendation to buy September 2012 U.S. light sweet crude futures at loss on paper of 10.8 percent.

"Goldman was a little out of kilter with their $130 (Brent) call. We have nudged up to that level on occasion but that's when you see U.S. gasoline go above $4 a gallon and that has a behavioural response," said Will Riley, who helps co-manage $284 million at the Guinness Global Energy Fund.

Gregory Cain, portfolio manager of Ebullio's eFED Commodity Fund, agreed that the market was becoming more and more aware of increasing supplies. _Reuters

In making this change, Goldman abandons other peak oil analysts making wild predictions, such as Canadian Jeff Rubin, to fend for themselves against the oil bears and wolves.

In a related story, we see an economy awash in oil, with "political peak oil" as the only type of peak oil to be seen over the next few decades.

As the U.S. defies oil-patch decline, the prestige of global peak oil theory must inevitably evaporate. Fracking has, as yet, barely gotten a toehold abroad; it faces high regulatory hurdles and exaggerated fears in many places. But no one really believes that China, to take only the most obvious example, will let itself be influenced by a few low-budget documentaries. The new talk of increasing American energy self-sufficiency sets a much more powerful example, as do the environmental numbers. China is just beginning to apply Western technology to its large reserves of shale gas and shale oil.

Academic economists never did buy into peak oil. It is hard to get them to accept a model of resource extraction that doesn’t give at least an implicit role to price signals. The University of Calgary’s John Boyce is one of the few economists who has put the Hubbert model to serious statistical tests. They are fairly obvious ones that, if peak oil had been taken more seriously by his profession, would have been performed 40 years ago. Hubbert’s curve turns out to be not much use as a source of predictive power—the ultimate test of any scientific hypothesis. It is not only that Hubbert’s own 1956 estimate of remaining U.S. oil was much too low—this turns out to be a general feature of his oil-extraction model, no matter where you look in the past and no matter what region you study.

...Part of the reason the peak oil hypothesis keeps hanging around, Boyce showed, is that Hubbert’s doomsaying successors operate with a pretty movable set of goalposts. When estimates of future oil reserves increase, theorists like Colin Campbell are quick to claim jiggery-pokery on the part of OPEC. (It is not that OPEC is above that sort of thing, and individual exporters have been caught red-handed fudging reserve estimates, but in general it is in the interests of folks sitting on oil for everyone to believe that it is scarce.) Less justifiable is the tendency to simply discard inconvenient data from the distant past that would throw off the model. Hubbert’s estimate of the U.S. peak was calculated using production figures beginning only in 1930, though he had access to a longer series, and later theorists have repeated the practice.

What is most comical about the popular peak oil phenomenon is that Hubbert was much more of a natural optimist than his acolytes. You would never know, seeing the uses to which his theory is applied, that his grand-scale vision of the human energy future originally had a happy ending. In the 1956 paper, he discussed both shale oil and the Canadian oil sands, showing that he understood their scale and promise. Moreover, he noted that “by means of present production techniques, only about a third of the oil underground is being recovered . . . secondary recovery techniques are gradually being improved so that ultimately a somewhat larger . . . fraction of the oil underground should be extracted than is now the case.” That is a clumsy but otherwise excellent description of fracking.

But all of that, Hubbert observed, is small potatoes. The title of the paper he delivered, which is something else his fans often skip over, was “Nuclear Energy and the Fossil Fuels.” Hubbert gave his talk in March; the world’s first commercial nuclear reactor, Calder Hall, would not be switched on by Queen Elizabeth II until October. But the geologist’s discussion of uranium and thorium was well-informed, and even at that early date it was clear “that there exist within minable depths in the United States rocks with uranium contents . . . whose total energy content is probably several hundred times that of all the fossil fuels combined.” On the scale of millennia, Hubbert said, “the discovery, exploitation, and exhaustion of the fossil fuels will be seen to be but an ephemeral event.” _Macleans

I was interested to learn how much of an energy optimist M. King Hubbert happened to be. One would never know that from listening to latter day peak oil doomers and their apocalyptic predictions.

But peak oil doomers -- much like carbon hysterics and resource scarcity catastrophists -- are pretty much in it for the doom, rather than for any rational reasons. Much less did the doomers join their particular movements of doom out of any ability to marshal facts, master trends, and put them all together in logical arguments and realistic scenarios.

So, should you be worried? Sure. But not about any type of peak oil other than "political peak oil."

Worry instead about the abysmal state of government leadership and bloated government bureaucracies and exploding government debt. Then go do something about it.

Poor Hubbert: He Just Didn't Know . . .

[M. King Hubbert's] estimate for the world's total reserve was only 1.2 trillion. We know today that estimate was woefully wrong. Today, the proven world reserves are more than 1.6 trillion barrels, despite 56 years of increasing production. Just one example of the supplies Hubbert didn't foresee: The average estimate of the Orinoco heavy oil reserve in Venezuela is more than 500 billion barrels.

Why Hubbert was (and still is) wrong has nothing to do with the price system – although that explains why we will never actually run out of oil. Hubbert was wrong because he didn't understand how technology would greatly increase the size of the total reserves. As Hubbert's own calculations would show you, increasing the size of the known reserves has the impact of pushing off Peak Oil.

Today, known reserves are larger than they were in 1956, when he first published his theory. Thus, Peak Oil is, at the very least, decades away.

But the reality is, our ability to discover new reserves continues to increase. That means it's much more likely the risk of Peak Oil will continue to recede.

...As long as the oil industry has been tracking known reserves, we've seen that reserves tend to keep pace with, or slightly exceed, production. That's counterintuitive. You'd think that as production increases rapidly, reserves would get consumed and the total amounts would fall. But that's simply not what's happened. That's why we have more reserves now than we did 56 years ago, despite the huge increases to production. _Peak Oil is Intellectual Fraud

One version of peak oil states that humans are running out of oil. That particular version of peak oil is certainly an intellectual fraud.

Another version of peak oil which is growing more popular, states that humans are running out of cheap oil, and that increasing prices for oil will make it difficult or impossible for modern societies to sustain economic growth and prosperity.

But in a world where economic decline has multiple causes, it is an intellectual fraud to claim that your model of the world is able to compress all of those causes down to a single cause: the price of oil. Such an endeavour is all the more dishonest when looking at the multiple causes for why the price of oil is what it is, and compressing all of those causes down to one cause: depleted reserves.

Wherever one looks, one sees such intellectual frauds being perpetrated by vested interests who have much to gain. From carbon hysteria to peak oil to frack-hysteria to nuclear hysteria -- all of these have the effect of intentionally limiting the human future, of compressing the future into a tiny cubby hole which will satisfy the lefty-Luddite green dieoff.orgiast regressives.

I suspect these latter day crusaders will run into a number of surprises along the way to their great green garden of Eden utopia.

Creeping Peak Oil, or Peak Oil Lite: 3 Arguments Worth Reading

Peak Oil is difficult to pin down, with as many definitions as there are believers. But the most credible version of "peak oil" asserts that over the long run, oil prices are most likely to jack themselves up as every new source of oil becomes more expensive to produce.

Proponents of this view do not argue that the world is running out of oil -- merely that it is running out of "cheap oil." This "creeping peak oil" or "peak oil lite" is a far cry from the dieoff.org style of cataclysmic collapse of oil supplies, which many other branches of the peak oil belief system tend to favour. It is worth looking at some of the arguments promoting this view:

In "Peak cheap oil is an incontrovertible fact," writer Ambrose Evans-Pritchard asserts that oil demand from China will soon explode through the roof, that old oil wells are depleting faster than is being claimed by oil optimists such as Leonardo Maugeri, and that new sources of oil are too expensive to allow oil prices to fall very far below current prices.

In "Oil's Rising Baseline," Casey Research argues that oil prices are following a series of upwardly ratcheting baselines which are only likely to ratchet upward even further. The article goes on to predict that Russia is moving into a position to control world oil & gas prices. The author suggests that a new baseline of $200 to $300 a barrel is not out of the realm of possibility for the near future.

In "The Re-pricing of Oil," Gregor MacDonald provides the most comprehensive argument for creeping peak oil, of this group of three. He makes the point that marginal oil producers operate on tight margins, and cannot tolerate significant drops in oil prices. He also points out that surplus oil production is not particularly high at this time -- compared to historical levels in periods of "oil glut" -- which influences oil markets to price oil higher in anticipation of tighter future supplies in the face of higher future demand. And he asserts that new oil discoveries will be more and more expensive to produce over time.

These articles are part of a coalescing concept of peak oil centered around an extended undulating plateau rather than a sharp peak and drop-off model. According to this concept, oil prices will rise higher and higher from now on, while global oil supplies will gradually grow tighter and tighter. Oil will be available, but at higher and higher prices.

The problem with all of these views, is that they make predictions. It is very hard to make accurate predictions, particularly about the future. And these particular predictions are being made about the future.

The same arguments as these were made 5 to 10 years ago. Many institutional investors who bet the money of their clients according to the logic of these arguments, created spectacular losses for university endowments, institutional and governmental pension funds, mutual funds, and more, when their expectation of a monotonically increasing price of oil failed to hold up from 2008 onward.

In other words, these are all fine and reasonable arguments as long as they remain in the abstract, and one is not being held to any particular prediction results.

We will return to these ideas in the near future, to determine whether there is any solid basis for timely prediction, beyond the vague generalities.

A Peak In World Oil Production Just Isn't Going to Happen Soon

A peak in world oil production -- due to supply limits -- just isn’t going to happen anytime soon, perhaps not even in our lives or the lives of our children. _Alex Wilson

Despite multiple failed predictions by peak oilers such as M. King Hubbert, Colin Campbell, Jean Laherrere, Matt Simmons, and the rest of the usual suspects -- living and dead -- peak oilers continue to adhere to their one true faith.

Why are peak oil-ers like Jehovah’s Witnesses? Answer: When the definitive JW prediction of the ‘Day of Wrath’ failed in 1914, they did what false prophets have done in every generation: shifted the goalposts (to 1975 in the case of JW’s—and wrong again). It’s what false prophets do to save face, enabling them to keep fleecing the inherently gullible. Peak-oilers do likewise. _Peter C. Glover

Peak Oil is a religious cult, and like all religious cults it is resistant to objective reality and the changing facts on the ground.

A USGS report of 171 global regions in 2012 further estimates that the world’s undiscovered conventional and technically recoverable oil resources, much of it in deepwater, stands at 565 billion barrels of oil (BBO). That’s a figure that only represents known conventional resources. But it pales in significance when unconventional resources, such as heavy oil, oil sands and shale oil, are taken into consideration. As the USGS reports, the mean estimate for recoverable heavy oil from the Orinoco Oil Belt in Venezuela alone stands at a mammoth 513 BBO. The shale oil potential of Russia’s Bazhenov Formation in Western Siberia may well prove to be 80 times larger than America’s Bakken Formation. At present six of the world’s largest oil fields in Ghana, Mexico, Kazakhstan, Iraq, Brazil and Venezuela (the Orinoco Field) all still await development—the last directly due directly to President Chavez’s anti-West politics. _Peter Glover

As technology of unconventional hydrocarbon production and refinement improves, the distinction between conventional and unconventional oil will continue to diminish on all levels -- technical, economic, and practical.

....the once all-important distinction between "conventional" and "unconventional" oil will break down over time. As technologies improve for very deep drilling (measured in miles rather than feet), such wells will become more common. Fraking will become more common as a strategy for rejuvenating oil fields that had been considered depleted. _Alex Wilson

More and more people who formerly belonged to the peak oil cult, are getting tired of being slammed over the heat time after time with contrary evidence from the real world. Much "backsliding" and slipping away from the one true faith is to be expected in such an environment of cognitive dissonance.

There are conditions under which peaks in world oil production could happen, however. Most of them would be due to political decisions and events, such as war or top down policy change.

But the most hopeful likely cause of a long-term or permanent peak in world oil production would be if humans developed advanced, new generations of nuclear power that allowed them to abandon hydrocarbons for everything except chemicals, plastics, other materials, lubricants, etc.

A large scale move to an electrical infrastructure based upon safe, clean, cheap, scalable, and quickly implemented new generation nuclear power reactors, is the most logical choice that humans could make, if they wish to provide an abundant future for everyone on the planet -- and not just a few.

The current course being plotted by Obama, Putin, the EU, and China's CCP leads to a great deal of suffering, violence, and death.

Kuntsler's Magical Dreams of Apocalypse

James Howard Knustler's new much-publicized critique of humanity, Too Much Magic, predicts peak oil, the death of the automobile and the fall of the global economy as we know it.

Of course, the strangest thing about this post-apocalyptic obsession is that the post-apocalypses we see are almost always beautiful. Knustler predicts the repopulation of quaint old ports like Troy, New York, as the riverboat and rail trade revive. In his post-apocalypse, the beautiful buildings will be saved, while the strip malls and superhighways will fall. And indeed, there is more than a tinge of romanticism in many of these visions; some combination of Burning Man-style, radical self-reliance and the slow show of the old steamboat culture, before iPhones and the 24-hour election cycle.

In many ways, this is reminiscent of the culture that spawned the Whole Earth Catalog: late sixties conviction that society was on the verge of collapse, combined with a liberal, oddly techno-utopian sentiment that this didn't have to be so bad; we could isolate ourselves from the ugly world and build our own farmsteads of geodesic domes. It's an odd kind of wishful thinking, to fantasize the beauty of a slower world while at the same time trusting technology to forestall the true, ugly disasters of the traditional post-apocalypse: disease, lacking sanitation, mass famine. A clean slate is always romantic, after all, and it's lovely to think of a world where electronic isolation and a scenic train trip are more than just decadence. But there's a hypocrisy to Knustler's charge that we're a society more mired in fantasy than reality, when the art that surrounds his post-apocalyptic world plays off precisely our desire to envision ourselves in a world other than the real. _Isaacson

Peak oil doomer and apocalyptic, James Howard Knutsler, has written a book detailing his magical dreams of apocalypse, "Too Much Magic." Kuntsler has long predicted the collapse of civilisation, with blood running through suburban streets. And he is not discouraged that his predictions seem a bit slow in taking form. More from Peakoil.com:

In his new book Too Much Magic, Jim [Kuntsler] attacks the wishful thinking dominant today that with a little more growth, a little more energy, a little more technology — a little more magic — we’ll somehow sail past our current tribulations without having to change our behavior.

Such self-delusion is particularly dangerous because it is preventing us from taking intelligent, constructive action at the national level when the clock is fast ticking out of our favor. In fact, Jim claims we are past the state where solutions are possible – instead, we need a response plan to help us best brace for the impact of the coming consequences. And we need it fast.

[We now live in] this weird, peculiar period in American history when the delusional thinking has risen to astronomical levels — predictably, really — in response to the stress levels that our society feels. And it is expressing itself as sort of “waiting for Santa Claus and the Tooth Fairy” to deliver a set of rescue remedies to us so that we can continue running Wal-Mart, Walt Disney World, Suburbia, the U.S. Army, and the Interstate Highway System by other means. That is the great wish out there. It is kind of understandable because that is the stuff that we have, and people tend to defend the stuff that they have in any given society and the systems and platforms that they run on. But it is probably a form of collective behavior that is not really going to benefit us very much and really amounts to simply wasting our time, and wasting our dwindling resources, and even our spiritual resources when we could be doing things that are a lot more intelligent.

Here is something I have detected as I travel around the country: there is a clamor for “solutions”. Everywhere I go people say “Don’t be a doomer, give us solutions.” And I discovered that the subtext to all that is they really want solutions for allowing them to keep on living exactly the way they are living now. To keep on running Wal-mart, and keep on running suburbia, and keep on running the highway system, and the whole kit of parts. And what that really means is, that they are looking for ways to add on additional complexity to a society that is already suffering from too much complexity.

So I am trying to propose something a little different. Rather than so-called solutions, I am proposing that we use the term “intelligent responses”, which is not so grandiose. It does not come with a whole grab bag of promises that life is actually going to work out exactly the way you wish. A lot of the intelligent responses that we could be making to our predicament would have a lot to do with decomplexifying and with simplifying. But we do not want to do that; we just want to add more complexity, and that is what some of the wishful thinking and vanities about technology are all about.

We are discovering more and more is that the world is comprehensively broke in every sphere, and in every dimension and in every way. The governments in every level are all broke, the households are going broke, the banks are insolvent, the money really is not there. And the pretense that the money is there has been kept going simply with accounting fraud. And accounting fraud really accounts for most of the so-called “innovation” that we chatter incessantly about – this is at the heart of Too Much Magic and the wishful thinking about technology. We are so intoxicated with this idea that we can create new and wonderful things. And we have absolutely no sense that the new and wonderful things that we created in the money system are destroying the money system.

One of the lessons that used to be at the center of a liberal education, and no longer is, is that life is tragic. And by that I do not mean that happy endings are impossible or that bad outcomes are guaranteed. What I mean is that there are consequences to the things that you do and that everything has a beginning and a middle and an end. And we have to get real with those.

It seems to me that the whole capital issue is going to accelerate hugely over the summer. I really do not see how the Europeans can get out of the box they are in – it really does not look like they are going to be able to form a European fiscal union. And it really does not look like the Germans are going to be willing to print money into a hyperinflation. And so I think that the disappearance of money is going to accelerate, and it is going to be all getting sucked into a black hole over the next six months. And that is going to be the beginning of a broad-based social awareness of the nature of this problem.

_Peakoil.com

The excerpt above is only a brief glimpse into Knutsler's thinking, but it is revealing all the same. Increasingly frustrated that his dreams of doom have not yet come to pass, the apocalyptic prophet inserts more and more urgency into his magical dreams of doom. Much like a magical conjuring, Kunstler seeks through repetition to find the most powerful spell of death, which will finally bring the overblown and crumbling edifice to the ground.

There are many other opportunists who have settled into this economic niche, in an attempt to satisfy the appetite for bloody wishful magical thinking scattered through a dumbed down population. For those who are only serving out their time, without a purpose or dream of their own, the doomer-dreams of others may seem quite compelling. Particularly if they are infused with a self-righteous sense of payback and comeuppance against their enemies.

This quasi-religious apocalyptic feeling which pervades every capillary of such doom cults, is a powerful draw. The more powerful the quasi-religious appeal, the more strongly the true believers deny any sense of religiosity or cultish thinking.

How long can these grifters fool others into giving them money and respect? You might think that as peak oil doom grows less and less likely the grifters would be discredited. But just as in the Y2K hysteria, doomers always find another source of imminent catastrophe. Whether climate hysteria, overpopulation hysteria, pollution hysteria, water scarcity hysteria, collapse of capitalism hysteria -- it all amounts to the same idea: Humans have risen too far in their utter hubris, and will certainly be brought low by the pure force of nature, balance, justice, or whatever you wish to call it.

The sentiment underlying all of the doom hysterias is essentially the same, which makes the particular dooms rather interchangeable. This is very convenient for the doom-sayers, and allows them to shift from one doom to another with minimal inconvenience.

You, of course, have a choice. And you probably have something else to do than to hang on the words of opportunistic doom grifters.

Some People Are Serious About Peak Oil

Among those who warn about energy shortages and peak oil, there are a few who present their ideas in a particularly clear and logical manner. These are serious people who are serious about peak oil, and they deserve to be taken seriously.

Let's look first at Robert Rapier, chemical engineer and respected energy writer, book author, and columnist. Robert predicts the peak of world liquid fuels (as reported by EIA) production within the next 5 years, at about 90 mmbpd.

This prediction contrasts sharply with predictions from a recent Harvard Belfer Center report, which predicts liquids production in the year 2020 at 110 mmbpd.

Another generally respected peak oiler, Robert Hirsch, is predicting the onset of a significant decline in oil production within the next 4 years. This prediction is not based upon expectation of "peak demand," but instead anticipates peak production in the face of rising demand.

Both Hirsch and Rapier understand the potential importance of oil substitutes, such as CTL, GTL, bitumens, and other alternative liquids -- as well as the importance of enhanced oil recovery and increased efficiency of energy use. But they simply feel that these alternatives, substitutes, and mitigators are not likely to compensate for a shortfall in production.

Finally, we should look at blogger and peak oiler Fabius Maximus, who has been quite careful over the years in his analysis of the prospects of peak oil. In a recent article: A look at forecasts for peak oil – and the end of civilization, FM considers the prospects for a near term peak in oil production which might bring on the end of civilisation. FM recommends caution in predicting a peak:

First, there is insufficient publicly available information to forecast peaking with reasonable reliability. Data about the oil fields of many nations with large reserves is either sketchy & old (ie, Iraq) or secret (eg, Russia and most in the Middle East).

And there are too many variables: economic growth, expenditures on projects to increase both supply and efficiency, and technology (eg, as fracking disproved the many confident forecasts of an imminent “cliff-like” crash in North American natural gas production.

Which is why forecasts for peaking range from now through 2020 — and beyond.

Prices are set by the cost of marginal sources. As we tap lower grade (in a broad sense) sources, the marginal price rises over time — offset by improved technology (reducing cost to find, extract, and refine). (last paragraph -- FM in comments) _FabiusMaximus on Peak Oil

FM goes on to explain that the quantity of low grade hydrocarbons is much higher than the quantity of high grade hydrocarbons -- which are nowhere near being depleted, since year on year reserves continue to grow.

FM and Robert Rapier are given particular respect as bloggers because they take the time and effort to logically reply to arguments raised by reader's comments. As peak oilers, they tend to stand out in that regard.

So of the three analysts above, two predict peak "all liquids" production in the face of rising demand, within the next 5 years. FM is the lone holdout, recommending caution when prognosticating.

On the issue of EROEI -- energy recovered from energy invested -- both Rapier and FM have stated that EROEI is granted much too much importance, particularly among peak oil doomers. As long as cheap energy can be used to produce more highly valued energy, the EROEI question is not being properly framed for a market economy.

And in that regard, there is likely to be an over-abundance of extremely cheap energy in the form of "process heat" from advanced nuclear reactors within the next 10 years. This deluge of high quality, high temperature process heat from scalable -- even portable -- advanced nuclear reactors, is likely to set EROEI so far back on its heels that it is unlikely to ever recover.

Among the doomers, none are considered serious enough to be taken seriously. The top doomers tend to be rent-seekers and opportunists who see a good scam, and are willing to ride it as far as it will take them. Fortunately for them, there is no shortage of suckers in the world.

As for people like Michael Lynch, Leonardo Maugeri, Vaclav Smil, Daniel Yergin, Robin Mills, and the dozens of other analysts, scholars, engineers, writers, and energy experts who feel that peak oil is not likely to be a problem -- they are all peak oilers at heart. They will all admit the trivial truism that "the earth is a finite planet, with finite resources."

The only difference between them and the doomers is that they are willing to look more deeply and dispassionately at the details, where the devil of the problem resides.

Al Fin was once something of a superficial peak oil doomer, as well as someone who dabbled in greenhouse gas global warming. But time and study in depth can reveal complexities which remain hidden to the emotionally bound cultist, permanently confirmed within his "one true belief."

Robert Hirsch expects significant hardship from peak oil before 2020. Robert Rapier expects the issue of peak oil to take on much greater importance before 2020, but suggests that the level of associated hardship depends upon political factors. Fabius Maximus seems to suggest that any hardship between now and 2020 will owe infinitely more to political stumblings than to a shortage of energy supplies. Three serious peak oilers, with somewhat diverging expectations.

We are living through exciting times, somewhat dampened and depressed by incompetent political leadership, biased media, and an indoctrinating -- rather than an educating -- academia. Still, it is best to keep one's eyes open. Things can still change quickly, despite the uber-stasist effect of a culture that is incompetent from the top downward.

Peak Oil: After the Deluge

Obsolete cults often linger long after all rational justification for them has fled. Cult leaders often flog the dead horse long after time for proper burial, for reasons of personal monetary gain, popular acclaim of the faithful, and a sense of self-worth and something to do.

True cult believers may find themselves in a worse position, psychologically, than their inconvenienced-by-reality leadership. Threatened by disillusionment and a nihilistic despair, true believers fly from rationalisation to justification to tautological argument, desperate for another fix of true belief and its consequent sense of self esteem.

This phenomenon of a moribund cult that refuses to die can be clearly seen in the peak oil doom cult.

Like it or not, the world is not running out of oil or natural gas — contrary to doomsday forecasts that have been spectacularly wrong for a good century.

Most famously, “peak oil,” a concept around since the 1950s, has failed to materialize, despite repeated predictions of its imminent arrival.

Peak oil refers to the theoretical point when oil production hits its “peak,” afterwards inexorably slipping downward due to dwindling supplies of the fossil fuel.

People have been predicting “peak oil” for decades. The problem, or good news, depending on your point of view, is that we just keep finding more and more oil, whether from unconventional sources like shale oil deposits or via use of new technologies that allow for the economical exploration and exploitation of previously inaccessible fields.

Ditto for natural gas, which has also been subject to predictions of its demise due to resource exhaustion.

The U.S. now has such large reserves of oil and natural gas — thanks in large part to fracking — that it’s forecast to soon pass Russia to become the world’s second-largest fossil fuel producer, behind Saudi Arabia.

Large oil fields have been discovered — just to name a few places — in Africa, off South America and, in what’s sure to shake up the Middle East even further, in Israel.

The fact Canada and Israel signed an agreement on energy co-operation late last month is directly tied to last year’s discovery of massive shale oil deposits, possibly up to 250 billion barrels, southwest of Jerusalem. Israel is now also believed to have extensive — in excess of 15 trillion cubic feet — offshore unconventional natural gas resources.

So what does this all mean?

First, the price of oil — though it likely won’t crash, as a Harvard University researcher recently predicted — is quite unlikely to soar to the stratosphere as some have feared.

It’s Supply and Demand 101. As oil prices rose, they spurred more exploration — and more technological innovation — leading, in turn, to increased supply. That’s dampened further price spikes, though of course the global recession has also played a key role. _CH

Peak oil doomers have been predicting peak oil since the mid 1800s. Modern peak oilers have been forced to surreptitiously slide their dates of doom backward from the 1980s to around 2000 to 2005 to 20010 to 2015 and on and on it goes.

Some leading peak oilers are wallowing in self pity. Others are lashing out with a renewed fury.

These cultish dukes of doom understand very well that they are being pushed to the limits of their own credibility. But they have no options left other than to double down on repetitious bluster and empty bombast.

The near-term future of this doom cult depends upon whether energy starvationists currently in power in the US, the EU, Australia, etc. can continue to win re-election. Once the energy starvationists are driven from power, the great game of make-believe is over, for all practical economic purposes.

Meanwhile, a wide range of new technologies are being developed to reduce societal dependencies on crude oil. And that trend of substitution has just gotten started.

In hindsight, there will always be a point where production of any commodity will be seen to have peaked -- at least up to that moment of observation. The reasons for such production peaks are likely to be multiple, and often not the reasons which were expected ahead of time.

To doom cultists, there is only the one true faith. Go easy on them in their rigid mindedness. Time and history are not on their side.

Innovating an Entire New World of Energy Resources

Every exciting new tool of exploration, discovery, production, and recovery opens up huge new fields of energy which were previously unknown or inaccessible. What was once impossible becomes the routine.

Take the Macondo field drilled by BP. Yes, a disaster in the Gulf: but also the deepest well ever drilled. Having developed the technology to drill so deeply we have not only discovered one new oil field – we've also discovered a whole new Earth that we can explore for oil. That part of the entire globe that between 4,000 and 5,000 feet below the surface.

Inventing fracking does not mean just extracting gas from Pennsylvania or oil from the Bakken. It means prospecting the whole planet again for such deposits. New technologies mean we have invented whole new planets to explore for resources.

This does not apply only to peak oil or peak gas. There are those out there who worry about peak copper, peak indium and even peak tellurium (an odd one when we use 125 tonnes a year and there's 120 million tonnes in the crust). None of these are geological problems, they are all plain and simple economic ones. _Tim Worstall -- The Telegraph

Worstall is right that problems with oil, gas, and minerals are not primarily geologic problems. But Worstall is wrong when he says these problems are "all plain and simple economic ones."

The problems are primarily problems of limited human imagination & invention, as well as a key problem of bad human government.

Societies with declining demographics ruled by idiocratic governments drowning in an exponential swell of debt, are likely to experience "peak ingenuity." When that happens, even nominally soluble problems begin to pile up and appear unsolvable.

Such problems often grow to acquire aspects of doom, with large quasi-religious followings.

And sometimes phantom problems of the imagination are blown up into monstrous amorphous catch-all entities, the repositories of all human fear. They can even merit entire agencies under the United Nations and national governments, be taught to schoolchildren as part of the required curricula, and be falsely presented by the news & entertainment media as established scientific fact.

Razib Khan Looks at Peak Oil

Razib Khan is one of the founders of the renowned GNXP (Gene Expression) blog, and a prolific blogger on the Discover Magazine Blog "Gene Expression." Khan is trained in biochemistry, biology, and genetics, and despite his famous prickly nature, is a well-respected blogger on a wide range of topics.

Razib could not help but notice a recent brouhaha over oil price dynamics between the peak oil doom camp and energy analysts such as Leonardo Maugeri. He brings his unique insights into play in examining the situation:

Despite evolutionary ecology, the reality is that ecologists seem to be characterized by a mindset which posits limits to growth and a finite set of responses to the challenges of scarce resources. That is, the Malthusian paradigm. I bring this up because despite the similarities between ecology and economics it strikes me that ecologists often have a difficult time admitting that the parameters of the model which they think they have a good grasp of may not always be fixed.

Incentives and innovation can shift the dynamics radically. Consider George Monbiot’s about face on “peak oil,” We were wrong on peak oil. There’s enough to fry us all:

A report by the oil executive Leonardo Maugeri, published by Harvard University, provides compelling evidence that a new oil boom has begun. The constraints on oil supply over the past 10 years appear to have had more to do with money than geology. The low prices before 2003 had discouraged investors from developing difficult fields. The high prices of the past few years have changed that.

Maugeri’s analysis of projects in 23 countries suggests that global oil supplies are likely to rise by a net 17m barrels per day (to 110m) by 2020. This, he says, is “the largest potential addition to the world’s oil supply capacity since the 1980s”. The investments required to make this boom happen depend on a long-term price of $70 a barrel – the current cost of Brent crude is $95. Money is now flooding into new oil: a trillion dollars has been spent in the past two years; a record $600bn is lined up for 2012.

Let’s take Monbiot’s assertion as a given, that we are not entering an era of hydrocarbon scarcity. Why? As he outlines increasing demand, flat supply, and higher profits, stimulated exploration and innovation, generating more supply. This isn’t rocket science, critics of peak oil were pointing out this likelihood back in the mid-2000s. What this reminds me of is evolution. A eternal and circuitous race across a fluctuating ‘adaptive landscape,’ with fitness target constantly shifting.

Of course evolutionary process is not such that anything is possible. This is still science, and science has limits. But evolutionary process is often surprising in its ingenuity. Similarly, over the past 250 years or so human ingenuity has been surprising. This doesn’t mean we should bet on this lasting forever, the Malthusian condition has been the norm for almost all of human history. But, we should never forget the power of innovation and incentives when we consider policies at the intersection of the environment and economics. I don’t get irritated when the general public operates with Malthusian assumptions. But I do get irritated when biologists, and especially ecologists, seem to act as if human economic history since 1800 simply hadn’t happened. _Razib Khan in Discover

Amazing Shale Revolution

Monbiot (climate alarmist) on "A New Boom in Oil"

The NYT's Andy Revkin and his little green friends join the commiseration over the new energy supplies

Green academics, activists, journalists, bureaucrats, and politicians often get caught up in a fantasy world of models, imaginations, and nightmare scenarios which generally have nothing to do with the real world -- because they rarely subject their models to real world criticism and validation. Most ecologists of the green persuasion have very poor conceptions of the actual world as it is, and are almost always unprepared to deal with actual developments and real inflection points.

Climate alarmism is viewed scornfully by most competent scientists who do not make a living promulgating climate disaster porn. And yet it is the climate pornographers who are held before the public as the face of science in the rapidly building climate debate.

The same is true for peak oil doomerism. Those who make a living promoting peak oil doom have absolutely no doubt in their (public) minds as to what is coming. More objective analysts, on the other hand, see a wide range of possibilities for future supplies of energy, power, and fuels.

It will be a wild ride. For your own sake, don't limit your sweep of possibilities to those narrow ranges provided by vested interests of one type or another.

The Lesson of $147 a Barrel Oil

Peak oil doom theories are falling out of favour among the smarter set of investment bankers and energy analysts. While doomers took the lesson of $147 a barrel oil to mean that peak oil doom and civilisational collapse were right around the corner, smarter people decided to sit back to watch and see what would happen on a longer time scale than the doomers' typical 30 seconds of attention span.

Lo and behold, $147 oil brought a lot of ideas and technologies out of the woodwork.

That is the lesson of $147 oil. It propelled shale oil technology and drilling more rapidly than anyone expected. And if you top off shale oil technology with the arrival of more fuel-efficient car technology, ditto on the possibility that oil prices will moderate over time. Experienced futures brokers like Andrew Lebow of Jeffries Bach agree: Shale is already taking the wind out of the sails of long-term oil futures prices. _NYT

As in past decades, technology is increasingly upending fears of impending oil scarcity, causing the costs of unconventional oil and gas development to fall dramatically. Indeed, the technology costs of converting one form of hydrocarbon to another and the costs of providing alternative automotive engine technologies are also likely to fall. So I feel at peace with my original contention that, in the long run, oil prices are cyclical, and that high prices invite the creation of new technologies, ensuring that the upswing of the cycle is eventually followed by the downward slope.

...With the shale oil boom promising over one million barrels a day of new oil production within a year in the United States, analysts are coming out of the woodwork to embrace falling oil prices. The new word on the street when it comes to oil is “sell.” Already, the long oil price, that is, futures prices going out past a year, has fallen to $85 a barrel, down from over $100 a barrel earlier this year.

Citigroup Global Markets took the lead last week with predictions of a cyclical shift that could cause prices to slide in the long term to as low as $50 a barrel. In their latest publication, “Zeroing In On the Long-Term Oil Prices,” Citi analysts state: “Signs are abounding that the escalation in upstream capital spending is bearing fruit, with a surge in discoveries and reserve bookings that is already being converted into new production, particularly in North America.

“There are no reasons to believe the supply boom in Canada and the United States is about to end,” they write. “To the contrary, it appears likely to start spreading across the world.” _NYT

It is best not to assume that shale oil & gas will be the most revolutionary energy technology of this decade. There are likely to be other surprises in store which will overshadow tight oil & gas technologies, in terms of expanding available energy supplies. It is only a question of when.

Peak Oil Stutters, Stammers, Blusters On

Everything You Think You Know About Peak Oil Is Wrong
Oil reserves continue to grow year on year for a number of reasons. New technology has placed several large sources of oil within the reach:

1. Increasingly large amounts of oil from "depleted wells" can suddenly be produced due to better extraction technologies.
2. Much more oil under the deep sea is being discovered, and is becoming more economical to produce.
3. Multiple large deposits of tight oil which were previously difficult or impossible to produce, are now producible using new technologies.
4. As the price of oil remains inflated, the incentive to develop new technologies and new oil fields expands -- particularly in view of largely stagnant economic activity in other sectors.
5. More efficient and economical methods of producing and substituting liquid fuels from unconventional sources such as natural gas, coal, biomass, kerogens, bitumens, and gas hydrates, expand the liquid fuel base
6. Increasing substitution of natural gas in place of crude oil in chemicals, plastics, fuels, fabrics, and more create a de facto expansion of "oil reserves"
7. The effect of mass production of highly efficient, economical, and safe, scalable new generations of nuclear power, will facilitate a massive and ecnomical substitution of CTL, GTL, BTL, etc. in place of petroleum.

As you can see below, the price of oil has been unbelievably stable over the past 50 years when measured in gold -- as opposed to the US dollar, which is constantly losing value.

What Peak Oil?

The oil in the ground will run out some day. But as the discovery of proven reserves continues to significantly outpace the rate of extraction, the claims that we’re facing immediate shortages looks trashy. _What Peak Oil?

Here is more from Leonardo Maugeri:

First, oil reserves are finite. This is incontrovertible. But even so, no one knows how finite they are. And since we don't know the total amount of oil resources existing underground, it's impossible to calculate the curve of future supply.

The inadequate data we rely on today are from the U.S. Geological Survey, and put the stock of conventional oil resources at least seven to eight trillion barrels. More than two trillion of these are currently deemed to be recoverable, while "proven" reserves are around 1.2 trillion barrels. (The world consumes around 30 billion barrels of oil per year.)

Unconventional oil resources (including ultra-heavy oils, tar sands, shale oils, etc.) may equal the amount of conventional ones, thus doubling the overall figure.

Yet, the concept of resources and reserves is dynamic. Throughout history, new exploration and the development of new technologies have allowed to discover new oil frontiers and to develop them. What's more, the U.S. Geological Survey's figures may well be underestimated. In spite of the one trillion barrels of oil that we have already consumed, the total available reserves continues to grow.

Second, new technologies allow us to extract much more oil than initially assumed. Today, we recover on average less than 35% of the oil contained in known fields, up from 20% in 1980. Even the most mature oil country, the United States, still holds huge volumes of unexploited oil underground. Although the country's proven oil reserves are now only 29 billion barrels, the National Petroleum Council (NPC) estimates that 1.124 trillion barrels are still left underground, of which 374 billion would be recoverable with current technologies. _WSJ

Peak Oil: Pro and Con

Pro: Peak Oil is Happening and Oil Will Cost $180 a barrel by 2020

The IMF model predicts that growth in demand will put continual upward pressure on price, with the inflation-adjusted price of oil headed for $180/barrel by the end of the decade. According to their estimates, those price increases would be sufficient to keep global production increasing at about the same reduced rate we have seen since 2004.

...The IMF team propose modifying the Hubbert-Deffeyes model to allow for a response of supply to the price of oil, where higher oil prices will (with a lead time of 4-6 years) stimulate higher production levels. They combine this with a traditional model in which demand for oil depends on growing GDP and the price of oil. The model strikes a compromise between the EIA and Hubbert-Deffeyes approaches, and has a better track record than either in simulated out-of-sample predictions over the last decade. _James Hamilton

The IMF working paper (PDF) which predicts oil prices in constant 2011 US dollars to rise to $180 a barrel by the year 2020.

Image Source _ taken from IMF Working Paper PDF

Con: Why We'll Never Run Out of Oil

The notion that world oil production had reached its summit and would soon begin a decline -- bringing with it shortages, economic collapse, resource wars, and general ruination -- was in vogue not so long ago.

"Is global oil production reaching a peak?" asked the BBC in 2005. "We are approaching peak oil sooner than many people would have guessed," said The Houston Chronicle three years later. Two years after that, The New York Times reported on a group of environmentalists who "argue that oil supplies peaked as early as 2008 and will decline rapidly, taking the economy with them."

Government agencies also bought into the idea. In 2010, the U.S. Joint Forces Command warned that "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." Just this spring, seemingly every other report warned that $5-a-gallon gasoline -- or worse -- was just around the corner, and certainly would arrive by summer.

Well, here we are at summer, 2012. The Chicago Tribune reports that the nationwide price for a gallon of regular "has fallen well below $4 a gallon." The term "peak oil" seems to have been completely forgotten. Not only that -- it is beginning to look as though the U.S. could largely cease to depend on the Middle East as its principal supplier.

The Washington Post reports that U.S. imports from OPEC countries have declined by 1.8 million barrels a day. Last year the top American source of crude oil by far was Canada, which supplies 29 percent of U.S. imports. By contrast, the No. 2 supplier, Saudi Arabia, supplies only 14 percent. "Production has risen strikingly fast in places such as the tar sands of Alberta, Canada," The Post says, "and [in] the 'tight' rock formations of North Dakota and Texas -- basins with resources so hard to refine or reach that they were not considered economically viable until recently. Oil is gushing in once-dangerous regions of Columbia and … Brazil."

But that's not all: "A host of new discoveries or rosy prospects for large deposits also has energy companies drilling in the Chukchi Sea inside the Arctic Circle, deep in the Amazon, along a potentially huge field off South America's northeast shoulder, and in the roiling waters around the Falkland Islands."

So what the heck happened? It's no great mystery. As supplies tightened and prices rose, producers were motivated to find new sources and develop new technologies. When you hear that only X trillion barrels of "recoverable reserves" of oil exist, remember: The term does not refer to all the oil that there is. It refers to those reserves that are neither too costly to tap at present, nor off-limits because of government policy. Both of those factors can change. _Alaska Dispatch

In a sense, both the "pro" and the "con" viewpoints are looking at much the same phenomena, and seeing a different future based upon what they see.

Both the IMF and Barton Hinkle clearly see that the Hubbert - Deffeyes - Campbell predictions of peak oil have failed. And both "pro" and "con" viewpoints perceive that higher oil prices lead to greater production of oil -- for various reasons.

And, interestingly, both viewpoints comprehend the eventual physical limits to large scale oil production -- the finite nature of the oil resource.

But, the IMF group thinks that there will be no valid substitutes for crude oil, so that as demand for energy rises, the price of oil will inevitably rise along with it. Barton Hinkle, on the other hand, thinks that ingenious humans will devise economical substitutes for crude oil which will allow economies to move relatively smoothly from one energy source to another.

Economist James Hamilton judges the IMF paper to be a useful -- but imperfect -- look at future oil prices:

My view is that the IMF researchers’ approach is clearly better than the simple Hubbert-Deffeyes linearization, but may still be subject to some of the other problems documented by Boyce (2012), as well as the familiar challenges of statistically distinguishing supply and demand effects. Notwithstanding, the IMF research should help raise awareness of an issue that remains underappreciated by many economists, which is that we will eventually reach a point, and may have already, at which quite significant increases in price and improvements in technology can produce only modest increases in production, or may be insufficient to prevent outright declines in annual crude oil production levels. _James Hamilton

In other words, both Hamilton and the IMF group think that we will see a "peak supply" in oil production before we see a "peak demand."

Barton Hinkle believes that we will see "peak demand" first, as a result of incoming substitute energy sources which become more economical than the most expensive sources of crude oil.

Al Fin energy analysts feel that whether we see "peak supply" first, or "peak demand," depends entirely upon political decisions being made in global governments and inter-governments. Political peak oil has always been a possibility, if governments and inter-governments prohibit the development of a wide range of economical energy sources.

But if humans can develop cleaner, safer, more affordable gen III and gen IV + nuclear reactors at all scales -- which burn 99% of nuclear fuel instead of the approx. 2% currently utilised -- the entire calculus of global energy balance suddenly changes. Particularly with the coming of an unconventional liquids boomfacilitated by high temperature industrial process heat from HTGRs -- which demolishes the EROEI boogeyman.

Peak Oil Might Best Be Seen as a Religion

This article was previously published on the Al Fin central blog

Life can be frighteningly uncertain, even in the most placid of times. In times of rapid change, uncertainty about the future can drive many people to the breaking point. Religious myths and beliefs have been very helpful for tens of thousands of years, in fending off uncertainty. Paradoxically, many of the most attractive and popular of these religious movements, have been religions of doom.

Modern times seem particularly uncertain -- perhaps because of the misplaced confidence modern humans have placed in their technology and science. Surely, they feel, if humans can walk on the moon, they can master the global economy, heal the environment, provide sufficient food and energy for all, and make the world a safe and certain place for everyone?

But as if to mock the scientific and technological prowess of humans, that great evil "uncertainty" continues to lurk outside the firelight, haunting our dreams.

Once one understands the disconcerting nature of uncertainty, it becomes easier to understand why so many people turn to doom as a shield and comfort. Doom has been the central strut of many religious movements because a firm belief in doom can vanquish uncertainty better than almost any other belief or attitude.

Here is a look at the religion of peak oil doom, as revealed at a recent "Age of Limits" convocation of believers:

The Age of Limits conference held at the end of May offered some new insights on how religion, as an organized institution, could play a key role in helping people deal with the collapse that the conference’s speakers think has already hit many parts of the world, including much of the US.

The speakers, collapsitarians all — Dmitry Orlov, John Michael Greer, Gail Tverberg and Carolyn Baker...

To paraphrase Orlov, if you want the government and your neighbors to leave you alone in the future, especially in America, then start a church. And that’s just what the sponsors of the Age of Limits conference did. _Peakoil.com

More at the link.
Below, old-time religious doomer and archbishop of the mass movement of peak oil doom, Colin Campbell, speaks at the New Energy Era Forum, another religious convocation of believers.
New Energy Era Forum 2012 - Dr. Colin J. Campbell by LocalCampus Archbishop Colin Campbell at a Sacred Peak Oil Convocation
This 2012 talk by revered peak oil leader Colin Campbell -- who declared in 1989 that world oil production had already peaked -- illustrates the quasi-religious nature of a peak oil gathering.

One can get a good feeling for the "one true faith" nature of the true believers gathered together, huddled against the ignorance and uncertainty in the world beyond.

For these good disciples, doom is far preferable to uncertainty. Doom gives them special knowledge and a sense of purpose. Not to mention a sense of superiority.

For many people, religions of doom are addictive, and become integral to who they are as individuals. Attempting to reason with such a person is almost always futile, since reason is simply not in it.

Just accept the fact that such mass movements of doom give such people something to do, and a sense of self-worth and self-importance. That is better than having them sell crack cocaine on the corner to school children.

Those, on the other hand, who have something important to do, should probably get on with it, and leave the doom worshipers to their litany.

The Face of the Green Doomer EcoFascist Cult?

Green doomer eco-fascist cultists all follow similar guidelines: Slash the human population of the planet, although they themselves are unwilling to go first.. Blame free markets and western civilisation for most of the world's problems. Eschew all viable forms of large-scale energy in favour of those which are exorbitantly expensive and innately unreliable. Hate advanced technology, and want to push the world toward primitive lifestyles and global poverty. They are essentially anti-individual and pro-collective.

Members of any doomer cult will recognise the litany, whether from the climate change catastrophe cult, the peak oil doomer cult, the overpopulation doom cult, the global pollution doom cult, the biodiversity doom cult, etc.

Here is more from one of the horses' mouths:

This is Finnish writer Pentti Linkola — a man who demands that the human population reduce its size to around 500 million and abandon modern technology and the pursuit of economic growth — in his own words.

He likens Earth today to an overflowing lifeboat:

What to do, when a ship carrying a hundred passengers suddenly capsizes and there is only one lifeboat? When the lifeboat is full, those who hate life will try to load it with more people and sink the lot. Those who love and respect life will take the ship’s axe and sever the extra hands that cling to the sides.

He sees America as the root of the problem:

The United States symbolises the worst ideologies in the world: growth and freedom.

He unapologetically advocates bloodthirsty dictatorship:

Any dictatorship would be better than modern democracy. There cannot be so incompetent a dictator that he would show more stupidity than a majority of the people. The best dictatorship would be one where lots of heads would roll and where government would prevent any economical growth .

We will have to learn from the history of revolutionary movements — the national socialists, the Finnish Stalinists, from the many stages of the Russian revolution, from the methods of the Red Brigades — and forget our narcissistic selves.

A fundamental, devastating error is to set up a political system based on desire. Society and life have been organized on the basis of what an individual wants, not on what is good for him or her.

As is often the way with extremist central planners Linkola believes he knows what is best for each and every individual, as well as society as a whole:

Just as only one out of 100,000 has the talent to be an engineer or an acrobat, only a few are those truly capable of managing the matters of a nation or mankind as a whole. In this time and this part of the World we are headlessly hanging on democracy and the parliamentary system, even though these are the most mindless and desperate experiments of mankind. In democratic coutries the destruction of nature and sum of ecological disasters has accumulated most. Our only hope lies in strong central government and uncompromising control of the individual citizen.

_azizonomics.com

H/T Zerohedge

This fellow is not actually so extreme, for a green. He may be a bit more honest and open about his convictions than most, but that is changing. Even the WWF -- which has written many of the supporting "studies" for the IPCC climate change reports -- has come out in support of policies which would ultimately result in a large scale human dieoff.

Is this also the face of the peak oil doomer cult? Certainly you find a lot of peak oil cult wankers fixated on doom porn, compulsively getting their doom fix whenever possible. It would be easy to assume that they actually want to see suburbia burning, that they would like to see the end of civilisation as we know it.

Not that most of the incompetent athols would survive very long after such an event.

Crude Oil: Peak Demand 2020?

A small number of analysts forecast that oil production will start to fall by 2020 – not because we are running out, but because we just won’t need it. They argue that the world will wean itself off oil voluntarily, through major advances in...technology. Peak oil will not be a supply-side phenomenon brought about by shrinking reserves...If they are right, this shift will start the long-term transition from oil to electricity as the main transport fuel, reduce economies’ vulnerability to spikes in the oil price, and cap greenhouse emissions from crude oil. _DavidStrahan

Strahan is thinking mainly about a shift from fossil fuel transportation to electricity powered transportation. Other people thinking along similar lines of "peak demand" expand the concept to total energy conservation leading to a drop in demand for oil.

A major plank in my golden age scenario for the 2020’s is the collapse of the cost of energy. This won’t occur because of a single big discovery, but from a 1,000 small ones that aggregate together to create a leveraged effect. The upshot is that we may be free of OPEC in 3-5 years, and completely energy independent not long after that. The impact on financial markets and global standards of living will be huge.

...Some 75% of the electricity generated powers buildings, three fourths of the oil fuels transportation, and the rest goes to industry. Demand for Texas tea is already falling dramatically. Since 1975, the amount of oil needed to produce a dollar of GDP has plunged a stunning 60%. Coal production peaked in 2005 and has since lost 25% of the market for power utilities, mostly to natural gas. “Peak oil” is becoming a reality, not in supply terms, but in demand. _madhedger

The mad hedger makes the mistake of expecting solar and wind to be part of the solution -- instead of a big part of the problem -- but nobody's perfect.

The common thread in the two articles is optimism over the prospects for energy conservation and conversion. But there are also grounds for optimism in terms of energy production.

Technology has allowed the industry to cut the cost of production, increase the volume of fossil fuels captured, reduce environmental impacts and reach previously inaccessible deposits of oil and natural gas.

Global reserves of oil and natural gas have grown 130 percent since 1980 and more than 30 percent since 2000, Pryor said.

New methods for extracting more oil and natural gas from the ground have been particularly important to growing production volumes, Pryor said.

The natural flow of oil from wells only accounts for 15 percent to 20 percent of the total volume produced today, he said. Easing the flow of fossil fuels using water, carbon dioxide and other methods can enhances production by as much as 25 percent.

“And now the combined application of horizontal drilling and fracking can add another 10 percent,” he said. “Each of these technology advances unlocks more resource and reserves.”

Deep-ocean drilling holds among the greatest promises for expanding oil and natural gas production, Pryor said. He noted that in the 1950s, the industry was limited to drilling in water depths less than 100 feet. Today, wells are being completed 10,000 feet below the ocean’s surface. _FuelFix

Of course there will be many more discoveries of new oil & gas fields -- both conventional and unconventional -- over the decades. And there will be significant progress in terms of other forms of energy production. After all, the current energy starvationist regimes controlling many western nations, cannot stay in power forever.

But what will make it "game over" for peak oil, is the perfection and licensing of HTGRs -- high temperature gas cooled reactors. The power of clean, cheap, abundant industrial process heat will be a game changer -- to say nothing of the abundant electrical power generation from safer, cleaner, more efficient new nuclear reactors.

One way or another, humans will reduce their use of conventional crude oil. But it is not likely to come about the way the doom-porn wankers of the peak oil catastrophe cult expect.

What if Peak Oil Died and Nobody Noticed?... and Other Energy Stories

A lot of hucksters are making a good living from peak oil doomerism. It has gotten to the point that it no longer matters whether peak oil has any intrinsic importance or not -- it is the symbolism of peak oil doom and devastation that matters. It is the catastrophic image inside the minds of the believers which drives the apocalyptic movement.

In the real world, things are not nearly so clear cut as in the mind of a cultist:

Apparently something terrible happens when we get to peak oil. I've never really quite understood the argument myself, but when we've used half of all the oil then civilisation collapses or something. I'm not sure why this should happen: we don't start starving when there's only half a loaf of bread left. But I am assured that something awful does happen.

That oil fields do get pumped out is obviously true – and also that you can have a good guess at when the ones we're currently pumping will run out. The part I don't get is the catastrophe. Some people seem to think that "peak oil" is when we can't actually pump out a higher amount: that if we've got 70 million barrels a day, then that's the most we can ever have, 70 million a day. Which is also called a disaster. Apparently this means that demand will move ahead of supply, which is simple sheer ignorance of the price system. There is no such thing as "supply" or "demand". There is only either of them at a price. So, if there really is a limit on how fast we can pump the stuff up, the price will rise.

Like it is at the moment. There's a lot more demand for $50-a-barrel oil than there is supply of it, which is why the price is $100 a barrel. It's true that if we really do reach some production plateau, then it's likely that the price will rise. But I still don't even see the catastrophe there. What with the taxes we pay, oil in the UK is around $300 per barrel at present. It is indeed a bit of a strain filling up the car, but other than that I don't see any more signs of the imminent collapse of civilisation than we normally have with politicians in charge.

Even if we accept the geological conventional wisdom, then there's still no cause for panic. Prices will rise, yes, so people will go off and do other things. Either use something else instead of oil (that ever cheaper shale gas for example) or simply doing things that require less energy. That's what a price system is for, after all, providing the signals that a certain resource is in scarce supply.

But the thing is, we really shouldn't be accepting this geology either.

The Green River Formation—an assemblage of over 1,000 feet of sedimentary rocks that lie beneath parts of Colorado, Utah, and Wyoming—contains the world’s largest deposits of oil shale. USGS estimates that the Green River Formation contains about 3 trillion barrels of oil, and about half of this may be recoverable, depending on available technology and economic conditions. The Rand Corporation, a nonprofit research organization, estimates that 30 to 60 percent of the oil shale in the Green River Formation can be recovered. At the midpoint of this estimate, almost half of the 3 trillion barrels of oil would be recoverable. This is an amount about equal to the entire world’s proven oil reserves.

Yes, we do know how to get this out: these reserves are similar to the Bakken shale in North Dakota that is spurting out oil as you read. _Telegraph

The author of the piece -- like many others recently -- may be understating the challenges of clean and economical extraction of the Green River kerogen oil shales. But that may be because we are not even close to the point that we need to extract oil shale kerogens to use in place of crude oil.

The best tool for clean, economical extraction of oil shales, oil sands, and conversion of gas, coal, and biomass to liquid fuels -- is high temperature gas cooled nuclear reactors of the generation IV variety. Areva and other engineering firms are working on perfecting that gen IV reactor technology, and although it may take the US government another 10 to 20 years to approve and license the designs, that is just about the time that we will need to start cleanly converting oil shale kerogens to crude.

In other energy news, the African nation of Ghana is looking for ways that it can integrate nuclear power into its overall energy mix. Nigeria is another African nation that is pushing to develop its own nuclear power industry.

Intermittent unreliables such as big wind power, are finding it more difficult to get lucrative subsidies from governments. Perhaps it is the fact that intermittent unreliables such as big wind and big solar are so unreliable and expensive, which is causing some governments to step back from the abyss.

And yet, tech powerhouse Google persists in its green energy dreams. Is it possible that for all of its brainpower, Google has allowed political activists to grab control of its energy plans and blueprints? That might explain Google's green energy idiocy.

Does anyone have access to the medical records of climate hack James Hansen? His recent attacks against Canada show the friend of Al Gore to have jumped the shark, right over a cliff. When a person confuses a computer model for the actual climate, he no longer deserves to be called a scientist.

There is a difference between educating oneself and indulging in self-indoctrination into a doomsday cult. It may be too late for this generation of peak oil doomer cultists, but if we hurry we may be able to save at least some of the newer generations -- and turn them into truly competent, independent, and very dangerous children. Which is precisely what the future needs.