Report Blasts "Peak Oil" Theory

Rei writes "Today, the Cambridge Energy Research Associates released a report dismissing the Peak Oil theory, suggesting that world oil production will continue to increase for the next 24 years, and then only level into a plateau. The report, which suggests that world reserves are enough to last 122 years at our current rate of consumption, also blasts Peak Oil theorists for repeatedly making unscientific predictions and then shifting them whenever their predictions fail to materialize."

Comments

Who pays their bills?

[John Jamieson]

Does anyone know who they really speak for? Do they have an agenda?

Re:Who pays their bills?

[SEMW]

I doubt anyone can prove who funds them, but past keynote speakers at their annual conference have included the energy secretaries of both Saudi Arabia and Iraq, and Rilwanu Lukman, the Secretary-General of OPEC (the Organization of Petroleum Exporting Countries).

Make of that what you will..

Re:Who pays their bills?

[Red Flayer]

Well, they do research and provide lots of data to industry. Their agenda is to make money, typically by selling the results of their research, and by providing consulting services.

Peter M. Jackson, one of the authors of the report, is (was?) a professor of economics at MIT... I believe it's the same Peter M. Jackson, anyway.

Re:Who pays their bills?

[NeutronCowboy]

Please stop. Now. This entire crap about who is paying who is completely useless and counter-productive. If you play this game, nothing will happen, as everyone is paid by someone, and it is impossible to prove that someone is completely disinterested and unbiased. Not only that, but it is utterly impossible, and irrelevant to boot.

The only thing that really matters is whether what people say holds up under scrutiny. Is the data they use accurate? Are their conclusions valid? Do their theories agree with their data? Can their theories be falsified? Did they use proper methodologies when testing their theories and collecting their data? Did they cherry-pick?

What's that you say? That's hard? Tough shit. If you can't handle a rigorous discussion, shut the fuck up. You're not contributing. No matter what your mom or your school teacher told you.

Re:Who pays their bills?

[thrillseeker]

Make of that what you will..

I can't imagine why an energy research organization would actually seek out and listen to national energy secretaries in developing energy analysis - can't they just publish some near-term doom-and-gloom conclusions with only selective data like everyone else?

Re:Who pays their bills?

[cnelzie]

It's most definatly usefull.

    The past has proven time and time again that reports provided by people backed by certain corporations, such as Cigarrette Manufacturers, Oil Firms and both the RIAA and MPAA are filled with half-truths, straight lies, clear misrepresentations of data (once the data is brought out into the public space), as well as a number of other "Dirty Pool" tactics.

    Simply because of who is backing this report, the publishers of the report have a tremendous amount of work that they must perform in order to be taken as anything other than what any "corporate shill" will say.

    If they are not 100% open with the methods they used, the data they collected as well as with the stastical analysis they performed, their work is going to be suspect. Perhaps their first line would be to see if they can get their report published in a peer reviewed scientific journal.

    Personally, I would be far less skeptical of a piece that could make it into a peer-reviewed medical journal.

Re:Who pays their bills?

[LWATCDR]

Everyone has an agenda.
Even Slashdot does. For example why was this story classified as HARDWARE and not Science or Politics?

The people that say oil will run out have an agenda. They have a world view that colors everything that see. They may believe everything they say or believe that they must put everything in the most dramatic way so everyone so that they can move people to action.
The people that say that we have a lot more Oil feel exactly the same way and act exactly the same way.

The truth is that the "Peak oil" group is probably wrong.
Oh and these people are probably being overly optimistic as well.
In other words they are probably both lying but believing every word they say.

Re:Who pays their bills?

[joto]

What's that you say? That's hard? Tough shit.

Well, instead of just saying "tough shit", and giving up, some of us have come up with better metrics to judge what "experts" say. (And given the nature of experthood, we can't evaluate their arguments independently without becoming experts ourselves).

One of the methods people use to evaluate the statements of experts (without becoming experts themselves) is to try to find out if they have an agenda beyond educating people about stuff. If they are paid by some organization, such as the catholic church (the earth is the center of the universe), the tobacco industry (smoking is healthy and makes you look good), the oil industry (burning fossil fuels is a long-term environmentally sustainable practice), or someone else with big money and questionable motives, many people rightfully become skeptical to the statements, even without having become experts enough to evaluate the science behind it themselves.

You're not contributing. No matter what your mom or your school teacher told you.

I'm sorry. The people who are not contributing, are the people who are getting paid to spread misinformation (i.e. lie). The people who try to find out if misinformation is spread, are meta-contributing. You and I are meta-meta-contributing.

Re:Who pays their bills?

[SEMW]

>I can't imagine why an energy research organization would actually seek out and listen to national energy secretaries in developing
>energy analysis - can't they just publish some near-term doom-and-gloom conclusions with only selective data like everyone else?

So when a single company with stated links to oil-producing countries comes up with the conclusion that we should continue to rely on oil, that's "seeking out and listening... in developing energy analysis", but when "everyone else" (and that does include pretty much everyone) comes to opposite conclusion, that's "doom-and-gloom... with only selective data"? That's some good, objective critical thinking skills you got there...

Re:Who pays their bills?

[awggie]

OPEC (the Organization of Petroleum Extorting Countries). fixed.

Re:Who pays their bills?

[syphax]

These guys are legitimate. I'm quite sure their client list includes big oil, coal, etc, but their business is selling information to these companies, not shilling for them. The energy companies have plenty of alternatives for that.

That's not to say that CERA is right, but they certainly are worth paying attention to.

Re:Who pays their bills?

[Doc Ruby]

Some of ">the company's largest clients include international energy companies, governments, utilities, and financial institutions.

Past keynote speeches have been given by the energy secretaries and ministers of Saudi Arabia, Iraq, Mexico, Norway, and the United States.

Which of those stakeholders will tell the public that the oil is running out, and they've planned their geopolitical economies around that curve for decades? Which of those people would avoid lying, manufacturing fake pseudoscience and cooked statistics, in the interests of truth, rather than their corporate profits?

Maybe if CERA were to say something contrary to the petrofuel industry's vested interests, they might be worth listening to - to investigate their facts, logic and conclusions. Until then, they're about as reliable as an oil slick.

Re:Who pays their bills?

[Kohath]

It's most definatly usefull.

Yeah, come on! Ad hominem attacks against people work great! They are super useful! And they're sooooo much easier than thinking.

We've had a lot more success since we started appealing to the fear and hatred of people than when we appealed to their intellect. Fund-raising is way up! And we can convince our followers of anything we want. We just tell them that Tobacco companies lied to promote the other side and the cash rolls in.

The press loves us too. You can't teach people economics in a 15-second sound byte, but you can scare them. "Why the tobacco companies lied about Peak Oil and DRM and how it'll kill your children tomorrow morning! Tonight on the 11 o'clock news. Don't miss it!"

Re:Who pays their bills?

[RexRhino]

It doesn't matter who pays their bills.

http://www.nizkor.org/features/fallacies/circumsta ntial-ad-hominem.html

Re:Who pays their bills?

[Sheik Yerbouti]

Interesting you should bring this up. Let us suppose for a second there is a study put forth by an environmental charity that says peak oil is real. Or says global warming will be then end of us all or what have you. Since their funding is enhanced by environmental crisis. Does that mean we should immediately disregard their study and data as biased?

Often scientist are funded by someone with an axe to grind. Or funded by someone that presupposes they know the answer to the question at hand. Does that then mean all their data and their science is bunk? Can not someone be funded by an oil company and do real science? Are you implying this is not possible and does not happen. There ideas are inconvenient so let us just paint them as paid shills? I don't doubt that many of these industry funded scientists and environmentally funded scientist are trying and in many cases doing real science with honorable intentions. And it is reactionary and completely unfair to assume anyone you don't agree with a is a paid shill.

Re:Who pays their bills?

[electroniceric]

The implicit analogy here is clearly to the "controversy" over whether human activity is substantively affecting global warming, and I think it's a bad one.

In the case of global warming, you have a set of scientific questions which have been asked and much progress has been made on answering them. The scientific findings have been willfully distorted by outsiders, but nearly all credible climate scientists agree that human activity is an important driver of climate change. Disagreers include a few credible scientists and a lot of shills, hacks and some journalists brazen and arrogant enough to claim to know James Hansen's argument better than Hansen himself (paging Mr. Crichton...). A settled scientific consensus about the facts on human impact on warming does not answer exactly what pathway that warming will take, much less presume to decide what the best policy for addressing that will be. And the debate has nothing to do with Earth making up its mind how much to warm - the warming is reactive to the activity, not the activity itself. So scientists are answering a question about a system that is basically independent of them and their activities. They want to be right, but they don't directly affect its functioning.

In the case Peak Oil, there is still considerable disagreement among reputable oil geologists, industry analysts and academicians. Not only that but the amount of produceable oil is a direct function of how industry behaves - the activity itself directly governs how the phenomenon plays out. CERA and its clients directly affect the functioning of oil extraction. So the right question is not whether CERA has an interest in presenting the data a certain way, but whether they are credible industry analysts. Despite the fact that what I've read leads me to believe Kenneth Deffeyes over CERA, I don't think it's fair to suggest that they're trying to take an established conclusion and misrepresent it. And to understand their biases, you need a pretty thorough understanding of how the oil industry and oil markets work.

The only question I've ever seen presented that comes close to the question of misrepresentation is about proven reserves. There have been a number of claims of Saudi Arabia and other vastly overstating their claims. If that's true, should CERA know that? If they do know are they misrepresenting what they know? I don't know CERA, but I know that those are heavy accusations to make, and I'm not ready to make them.

Re:Who pays their bills?

[Moofie]

Excellent question. Let's ask the same one of the Peak Oil crowd, and the oil companies' studies as well.

Here's the fun part of this oil shenanigan. Who benefits from the perception of an oil shortage? "left wing" environmental crowd and "right wing" oil companies. Who funds all of these he-said, she-said studies proclaiming the oil shortage? Same groups.

Who gets screwed? That'd be you and me, compadre.

Does that mean that there's not an oil shortage? No. But I certainly doubt the integrity of the research.

Re:Who pays their bills?

[NeutronCowboy]

Err, no. Meta-contributing is not contributing. It's doing squat. This form of meta-contributing simply assumes that someone in a specific group will cause others to lie.

some of us have come up with better metrics to judge what "experts" say.

ROFL. Better metrics? You've got to be kidding me. Better metrics than understanding the subject matter? Like what? How much money someone pays someone else? Who pays whom? All you're doing is identifying whether someone draws money from someone you don't like. At that moment, you're politicizing what should be a scientific debate. At that moment, you become part of the problem that surrounds the Global Warming debate.

I'm not saying that you should blindly trust anything that a tobacco company says about the effects of smoking. What you should do is not blindly trust anybody, and instead verify what's being said. Sadly, that seems to be too much work for some people.

Re:Who pays their bills?

[DerekLyons]

I can't imagine why an energy research organization would actually seek out and listen to national energy secretaries in developing energy analysis - can't they just publish some near-term doom-and-gloom conclusions with only selective data like everyone else?

So when a single company with stated links to oil-producing countries comes up with the conclusion that we should continue to rely on oil, that's "seeking out and listening... in developing energy analysis", but when "everyone else" (and that does include pretty much everyone) comes to opposite conclusion, that's "doom-and-gloom... with only selective data"?

The problem with that theory is that "everyone else" doesn't uniformly come to the [near term] "doom-and-gloom" conclusion that Peak Oil advocates do. Estimates vary (wildly) as to exactly how much oil remains that is extractable economically at current prices - and even more wildly when it comes to the amounts economically extractable as prices rise.
 
 

That's some good, objective critical thinking skills you got there...

Pot, kettle...

Re:Who pays their bills?

[Pfhorrest]

ROFL. Better metrics? You've got to be kidding me. Better metrics than understanding the subject matter? Like what? How much money someone pays someone else? Who pays whom? All you're doing is identifying whether someone draws money from someone you don't like. At that moment, you're politicizing what should be a scientific debate. At that moment, you become part of the problem that surrounds the Global Warming debate.

I'm not saying that you should blindly trust anything that a tobacco company says about the effects of smoking. What you should do is not blindly trust anybody, and instead verify what's being said. Sadly, that seems to be too much work for some people.

I believe his point was that people can't be experts on everything, and thus can't form properly reasoned opinions on everything by purely rational, scientific means.

There's lots of information out there. I can't verify the accuracy of all of it myself. I can try to rely on as little unverified information as possible (and manage to do so fairly well in my every day life), but when I need to make a decision (like a political decision, who or what to vote for or otherwise support) about which there is relevant information which I am pragmatically unable to verify myself, I've got to decide whose word to trust on that information.

I'm not interested in smoking at all, just because smoke bothers me and I find it a disgusting habit. So for me, I can just ignore the whole "does smoking cause cancer" issue and not trust anybody's word, because the answer it doesn't affect me. But if I was a smoker, then it would be very relevant to me whether or not smoking causes cancer. I can't conduct a vast and statistically relevant controlled study of smokers myself - I just don't have the time, money or knowledge to do so, and while I could probably get the knowledge to do so fairly easily, the time and money problems are pretty insurmountable.

So if I want to know about that, I've got to trust someone else's study. Whose am I going to trust? The tobacco companies? You seem willing to say 'no' there - why? Because they may be a biased source? Because they have financial motivations to fudge the data or even outright lie if they can get away with it?

That's the point. You're right, don't trust anybody if you don't have to. Verify everything you can. But when you *can't* verify something, and it's still relevant to you, and you need an answer... whose answer do you trust, and why?

I personally don't care

[the_humeister]

And I don't know why anyone else should either since I'd like to think that we as a species are smart enough to come up with an alternative fast enough to avert this. And even if we don't, we'll come up with something really really fast. We run out of oil, we'll use the shale in Colorado. We run out of that, something else will pop up. Fusion should be viable long before then, we'll have better solar energy, etc.

No increase in oil demand?

[greg_barton]

Today, the Cambridge Energy Research Associates released a report dismissing the Peak Oil theory, suggesting that world oil production will continue to increase for the next 24 years, and then only level into a plateau.

And, if our demand for oil increases?

The report, which suggests that world reserves are enough to last 122 years at our current rate of consumption...

Oh, I see. They assume our demand for oil will never increase. The developing world's demand for oil will never increase. China's demand for oil will never increase.

I'm usually not this blunt, but this seems like a good time: are the authors of this report FUCKING IDIOTS?

Re:No increase in oil demand?

[AutopsyReport]

If I'm not mistaken, Hubbert's theory was based on historic and current data, not futuristic estimates of production and consumption methods. They are not assuming the world's demand for oil will be stagnant, but rather suggesting that at our current rate, reserves will last 122 more years. This is more accurate than an estimation based on future practices.

It's pretty hard to predict future consumption and production patterns. The best evidence we have is historic, which has naturally formed the basis for their argument.

Re:No increase in oil demand?

[dch24]

Okay, this is not a flamewar. In the article they have a graph which I thought showed the increasing supply matched by the steadily increasing demand in China. What did you get out of that graph? Am I missing something?

Re:No increase in oil demand?

[From A Far Away Land]

I like how they accuse Peak Oil theorists of delusion, and then they pretend that demand for oil isn't increasing in order to make their unlikely target realistic.

"world oil production will continue to increase for the next 24 years, and then only level into a plateau."

Yeah, a plateau is NOTHING like a "peak". Oh, they expect it to ever again INCREASE after 24 years? It sounds like the wonks that pegged the peak as far off as 24 years, [which seems unlikely due to their constant demand criteria which we know is wrong] can't even twist the numbers into something that means my kids will live to the age I am now before their world is shattered by transportation and energy crisis.

Re:No increase in oil demand?

[IgnoramusMaximus]

This is more accurate than an estimation based on future practices.

"Accurate" theoretically but practically useless. That is like saying: "If I keep saving a dollar a year, I will be a BILLIONAIRE in just a billion years!".

Re:No increase in oil demand?

[MightyTribble]

And, if our demand for oil increases?

Production will cope. It's in the report.

Oh, I see. They assume our demand for oil will never increase. The developing world's demand for oil will never increase. China's demand for oil will never increase.

No, they don't assume that. You're conflating their position. They make two seperate points:

1. That if our consumption levels remain flat, there's 122 years of conventional reserves left. They make this point for illustrative purposes to counter the 'peak oil' argument.
2. That consumption will rise (the "Asian Phoenix" scenario) but that total oil output (conventional and unconventional ; tar sands, new extraction techniques, etc) will rise to cope.

They're not idiots.

Re:No increase in oil demand?

[IgnoramusMaximus]

Peak oil theorists always seem to assume that we will never find new reserves,

There have been no new discoveries of major fields since the 1970s, despite of near continuous exploration by all the major oil companies and many smaller explorers.

When gasoline is $10/gallon..

That is the whole point of the "peak oil" prediction. No one expects the oil supply to run dry completely, merely the mismatch between demand and supply to result in prohibitive prices, which in turn will make production of plastics, international transportation and local commutes impractical from the cost point of view. This of course will result in a huge cascade of events since so much of the Western economes depend so foolishly on oil for nearly all of their transportation and manufacturing needs. The resulting economic upheavals is what "peak oil" is all about.

Re:No increase in oil demand?

[hamburger lady]

actually, it's more like some dude in 1880 saying "if i just save $41 a year, i'll have $5000 in 122 years! $5000 will buy me a huge house!"

Public perception.

[hal2814]

Peak Oil theory is a big reason why a lot of folks don't take environmental issues like global warming or ozone layer depletion seriously. I still remember our science book in high school saying the world would run out of oil by 1982. (It was already 1994.) When people see that sort of crap side by side with other environmental issues, I can see why they don't always take the other issues seriously.

Unfortunately, not every agrees with CERA

[MajorBurrito]

http://energybulletin.net/22442.html

I got news for these people

[jbrader]

122 years ain't shit. The way things are going with medical research we might all still be around and wanting to gas up our Hummers in 122 years won't these guys be pissed then.

Alternate energy sources and fuel conservation are a good idea under any conditions.

Just delaying the inevitable

[c0d3h4x0r]

You Peak Oil conspiracy theorist! How dare you suggest the world is running out of oil? We'll have enough for the next 120 years! How dare you suggest we change our ways or find alternative sources of energy?!?

(Oh, well, nevermind that we really are going to run out sometime, and that all this means is our children or grandchildren will be stuck with the problem instead of us, or that this now gives us more time to think up solutions that we should take advantage of immediately. You're still a conspiracy nut and you're wrong. So there.)

I wonder...

[chipset]

How long it will take for people to blast this as Industry fallacy.

I say there's been so much doom-and-gloom about oil, every prediction I can remember about oil running out has been proven wrong time and time again. As our technology increases, we will find ways to get more oil out of existing locations and find new ones. Hmm. Go figure.

Hell, in 1879 Edison invented the light bulb. Who would have thought after 100+ years, the only thing a house from 1890 and 2006 would have in common is a lightbulb? And now the idustry is changing with LED bulbs for just about everything these days. I bet the next advancement doesn't take 100 years.

In oil, there's money. And a ton of it. So, advancement will happen much faster. We will use it more efficiently and get it from places we never thought possible.

Re:I wonder...

[Qzukk]

will find ways to get more oil out of existing locations and find new ones.

And when we use up those, we'll find more, right? And when we use up those, we'll find more, right? And when we use up those...

The fact that at some point we will run out of oil is obvious (after all, how many times the mass of the planet can we possibly burn in oil?) People are just really bad at guessing when.

Re:I wonder...

[miskatonic alumnus]

You seem to be missing one of the key points of the "doom and gloom" scenario: The problem isn't getting to the oil --- the problem is the COST of getting to the oil. Once you consume one gallon of oil to pump one gallon of oil out of the ground, you might as well pack up and go home. Game over.

Re:I wonder...

[johnbr]

a) That is only true if you use oil to run the pumps. Wind, Solar, Geothermal, Hydro, Nuclear power are all viable options. Or even, *gasp*, coal and natural gas!
b) People are tricksy things - some of them will find ways to clear the oil of the wells more efficiently.

I know that many of you out there are young, and you probably find the prospect of the mundane existence that we all share to be terrifyingly bland. Many of you are hoping, in your secret hearts, that *something* changes and the world becomes a much different place, where a 9 to 5 existence in a cube farm is no longer a possibility. So you latch on to disaster scenarios, like Catastrophic Global Warming and Peak Oil, because they offer the kind of dramatic "world-changing" catastrophe you hope to bear witness to - to be one of the survivors, one of the pioneers of the new, simpler Earth.

(and for those of you who read this and say "That's not me", that's fine. I'm not talking to you)

But Peak Oil is not the catastrophe you might hope it will be. It will result, at worst, in a gradual increase in oil prices, causing people and countries to shift slowly away from oil-consuming technologies. It might be messy, and there might be shortages (although virtually all shortages will be caused by government price caps), but the fundamentals of the market have not changed just because Peak Oil is capitalized.

Many people criticize CERA, and claim they are industry shills. Fair enough, I make no claim as to their veracity and ethical fiber. However, don't forget that the Peak Oil advocates are also receiving money and attention for their claims, and the more catastrophic a picture they paint, the more money and attention they receive. For a professor or a scholar, notoriety is as valuable as cash in terms of book deals, speaking engagements, etc.

Let's review:

• Demand for a good causes the price to rise.
• The rising price gives businesses the incentives to supply that good to the market.
• As the supply increases to meet the demand, the price levels off, reducing the incentives for new entrants.
• Changes in supply may cause existing suppliers to fall short.
• This causes other businesses to enter the market, and provide supply, possibly in a variety of new ways. Many of the world's paradigm shifts happen because a businessman discovers a novel and unusual way to solve a problem.
• This causes the supply to increase, or causes the demand to fall.

There is nothing about the oil industry that does not fit this model. We know that we don't capture all the oil from the existing wells. We know there are lots of alternatives, both in terms of oil-like solutions and solutions that are completely unrelated to oil (solar, nuclear, telecommuting). We know that as the price rises, people will drive their cars less (we saw that after Katrina, for example) *You* know that if the price of gas was $10 a gallon, you would find ways to reduce the number of trips you took, take public transportation, carpool or walk, or find other ways to reduce your personal gas costs.

Well, everyone else can take those options as well.

There is no catastrophe here. It is not going to happen. If you want to fret about a catastrophe, contemplate supervolcanos and asteroid strikes, and how much the survival of every living thing on earth depends on humanity's ability to advance technologically as rapidly as possible.

Peak Impact More Important

[DigitalRaptor]

The world doesn't have to run out of oil before we have to feel it's effects dramatically.

The fact is that if the United States were cut off from foreign oil we would last 2.87 years at our current consumption.

But we wouldn't remain at our current consumption. Rationing and hording would be quick, which we got a taste of in the 70's IIRC.

Very little new oil is being found, but consumption is going up very quickly in countries like China and India. The rest of the world wants to live like Americans, and as they do there simply won't be enough. Period.

That may not happen today, and it may not happen in the next few years, but it will happen in the next few decades. And in my opinion that will be the cause of WW3 if it hasn't already taken place and no alternative energies fill the vacuum.

Re:Peak Impact More Important

[Chacham]

Very little new oil is being found

Correction. Very little of the new oil that has been found is being allowed to be drilled for.

You think conservatives are big oil? The liberals ban oil exploration and than claim a shortage. Methinks the liberals must have lots of oil stock.

Great...

[TheSam]

...so now we have 122 years to procrastinate finding a solution our limited fueld supply rather than 24 years...

Speaking as a climate change pessimist....

[Angostura]

I hope they are wrong. I simply don't believe that unprompted, the world population will change their oil consumption behaviour sufficiently to avert catastrophic climate change. Running out of oil is the only way that we will be able to avoid a very nasty fate by forcing the pace of innovation in alternative energy sources.

Sorry to be depressing, but I find the prospects very depressing.

Well, let's take a look at the speakers

[Channard]

who are going to be at their next conference. We have..

H.E. Mohamed Bin Dhaen Al Hamli, Minister of Energy, UAE and President of the OPEC Conference (2007), David Crane, President & CEO, NRG Energy, Incorporated, David J. O'Reilly, Chairman & CEO, Chevron Corporation

John G. Rice, Vice Chairman of GE, President & CEO, GE Infrastructure, John W. Rowe, Chairman, President & CEO, Exelon Corporation, Charles W. Shivery, Chairman, President & CEO, Northeast Utilities

Neil H. Smith, CEO, InterGen, Jeff Sterba, Chairman, President & CEO, PNM Resources, Rex W. Tillerson, Chairman and CEO, ExxonMobil Corporation

Jake S. Ulrich, Executive Director, Centrica plc, Don Voelte, Managing Director & CEO, Woodside Energy Ltd, Theo H. Walthie, Business Group President, Dow Chemical Company

Daniel Yergin, CERA Chairman

H.E. Mohamed Bin Dhaen Al Hamli, Minister of Energy, UAE and President of the OPEC Conference (2007), David Crane, President & CEO, NRG Energy, Incorporated

David J. O'Reilly, Chairman & CEO, Chevron Corporation, John G. Rice, Vice Chairman of GE, President & CEO, GE Infrastructure

John W. Rowe, Chairman, President & CEO, Exelon Corporation, Charles W. Shivery, Chairman, President & CEO, Northeast Utilities

Neil H. Smith, CEO, InterGen, Jeff Sterba, Chairman, President & CEO, PNM Resources, Rex W. Tillerson, Chairman and CEO, ExxonMobil Corporation, Jake S. Ulrich, Executive Director, Centrica plc, Don Voelte, Managing Director & CEO, Woodside Energy Ltd, Theo H. Walthie, Business Group President, Dow Chemical Company, Daniel Yergin, CERA ChairmanH.E. Mohamed Bin Dhaen Al Hamli, Minister of Energy, UAE and President of the OPEC Conference (2007)

David Crane, President & CEO, NRG Energy, Incorporated David J. O'Reilly, Chairman & CEO, Chevron Corporation John G. Rice, Vice Chairman of GE, President & CEO, GE Infrastructur John W. Rowe, Chairman, President & CEO, Exelon Corporation

Charles W. Shivery, Chairman, President & CEO, Northeast Utilities Neil H. Smith, CEO, InterGen Jeff Sterba, Chairman, President & CEO, PNM Resources Rex W. Tillerson, Chairman and CEO, ExxonMobil Corporation

Jake S. Ulrich, Executive Director, Centrica plc Don Voelte, Managing Director & CEO, Woodside Energy Ltd. Theo H. Walthie, Business Group President, Dow Chemical Company

Daniel Yergin, CERA Chairman

I'm detecting an air of possible bias there. Not just is there no-one on the speaker list with an environmentalist bent, but most of the speakers apart from those employed by CERA are heads/employees of major oil/chemical companies.

Re:Well, let's take a look at the speakers

[Ferretman]

In other words, people who would actually KNOW....are you implying that environmentalists wouldn't have a bias as well?

Steve

Re:Well, let's take a look at the speakers

[drinkypoo]

I'm detecting an air of possible bias there. Not just is there no-one on the speaker list with an environmentalist bent, but most of the speakers apart from those employed by CERA are heads/employees of major oil/chemical companies.

In other words, people who would actually KNOW....are you implying that environmentalists wouldn't have a bias as well?

In other words, people with a REASON to LIE.

Sure, environmentalists would be biased as well. However, since there are going to be none present, it's going to be biased entirely the other way. +5 + -5 = NO SPIN ZONE! No but seriously, the point is that there's no balance, and that is damning evidence on its own.

Re:Well, let's take a look at the speakers

['nother poster]

+5 + -5 = NO SPIN ZONE

No, that means all spin and no truth. Bullshit + diametricly opposed bulshit is still bullshit. Adding the other side just changes it from a far to a fertilizer factory.

Re:Well, let's take a look at the speakers

[Gospodin]

The difference being an environmentalists bias isn't based on making money...

Mod parent +1 Funny!

Oh, wait, were you serious? You've heard of the government giving money to people and corporations for environmental causes, maybe? Hmmmmm.

Re:Well, let's take a look at the speakers

[Rei]

Yeah. I mean, imagine those people, at an oil conference! Here's who I'd expect to show up at a conference about oil production:

John Denver, American folk singer-songwriter, Poet Laureat of Colorado, author of "Take Me Home, Country Roads" and "Leaving on a Jet Plane"

Don Pearson, management consultant and executive of Folsom, CA's "eRepublic"; trainer of Allstate Insurance Company managers and salesmen in the tenets of L. Ron Hubbard's "management by statistics" approach.

Frederik "Fred" Deburghgraeve, shoe salesman; former Belgian olympic swimmer and olympic gold medalist in the 100 meter breaststroke in the 1996 Olympic Games

Gerald Mosse, principle horse rider to the Aga Khan IV; former apprentice of Patrick-Loiuse Biancone and rider for Francois Boutin. Rode Arazi to five straight wins in France.

Arazi: A thoroughbred chestnut colt who won the 1991 Breeders' Cup Juvenile. Has crooked white blaze on forehead.

Ficus carica: the Common Fig; small tree native to the eastern Mediterranean and southwest Asia; deciduous, with 3-5 cm fruit.

Vanadium: A chemical element of the periodic table, with atomic number 23. A rare, soft, ductile element used in alloying; good resistance to sulfuric acid.

Three: A number, numeral, and glyph; the natural number following 2, but preceeding 4; the first unique prime; the second triangular number; integral divisor of natural numbers whose digits add up to a multiple of three.

Re:Well, let's take a look at the speakers

[Dan Ost]

and the end result can only be a cleaner planet

You must be talking about different environmentalists than the ones I see interviewed on TV. The ones I see interviewed are dangerously short-sighted or naive and offer no solutions, just religious arguments.

Re:Well, let's take a look at the speakers

[drinkypoo]

+5 + -5 = NO SPIN ZONE! No but seriously

No, that means all spin and no truth.

Yes, and it was a joke, which is why the very next words were "No but seriously". I love it how you ignoranuses will stop reading my comments at a certain point, and then only quote up to that point, so I know when you stopped reading, and why you misparsed my comment.

Next time, try reading to the end of the statement. Kthx. Oh, and have your funny bone X-rayed.

Re:Well, let's take a look at the speakers

[bheer]

John Denver, American folk singer-songwriter, Poet Laureat of Colorado, author of "Take Me Home, Country Roads" and "Leaving on a Jet Plane"

John Denver is no better than those oil company heads. "Leaving on a Jet Plane"? Do you have *any* idea how much carbon that emits?

Real Greens *walk*. Okay, I take that back, *real* real Greens practice Tantric arts to breathe as little as possible, thus reducing their carbon footprint to the bare minimum.

Re:Well, let's take a look at the speakers

[hb253]

I'd be impressed if John Denver showed up. He died in an airplane crash in 1997.

Re:Well, let's take a look at the speakers

[reverseengineer]

Three: A number, numeral, and glyph; the natural number following 2, but preceeding 4; the first unique prime; the second triangular number; integral divisor of natural numbers whose digits add up to a multiple of three.

Five is RIGHT OUT, however.

Re:Well, let's take a look at the speakers

[Shadow Wrought]

He died in an airplane crash in 1997

All the more ironic since he crashed while trying to reach the fuel selector knob...

Re:Well, let's take a look at the speakers

[Gospodin]

I give up. How many?

Re:OK...

[hitchhikerjim]

No, Peak Oil has never predicted that we'd "run out".

They predict that the demand will outstrip the supply of cheap oil, forcing us to shift to more expensive supplies and creating shortages that drive the price beyond a reasonable means. They draw a standard set of supply and demand curves, and show where they cross. What's most interesting to me is that it's not the supply curve that's the issue -- it's the demand curve.

And they're less worried about cars than they are about what that steep rise in prices will do to all manufacturing and industry in the west.

Statistics

[simpl3x]

Looks pretty unscientific to me: http://en.wikipedia.org/wiki/Peak_oil

I smell an agenda. Of course much of the Peak Oil writing can be exaggerated, but my feeling is that the truth lies somewhere in the middle. The statistics have also been reasonably accurate, and with so many oil companies over estimating reserves, how exactly are we to know what is cost effectively extractable?Hubbert estimated using the tried and true "what gets taken out of the ground" numbers. Saudi Arabia has not been able or willing to prove that they can draw more.

Like global warming it's an argument taking away from the real issues. With a bit of attention and care with most resources we can do just fine. We are simply not respecting our general environment.

Re:From the first link

[s20451]

I'm not seeing the incentive for an energy company to pretend peak oil doesn't exist.

In fact, the scarcer oil seems, the higher the price goes, and the more money the oil companies make.

About CERA and Daniel Yergin

[Comp_Lex86]

http://www.theoildrum.com/story/2006/8/12/114231/2 81
http://www.theoildrum.com/story/2006/8/17/11737/18 12

Wonder who's putting out this report?

[indytx]

From Answers.com:

"CERA was acquired by IHS Energy in 2004. . . . Some of the company's largest clients include international energy companies, governments, utilities, and financial institutions."

http://www.answers.com/topic/cambridge-energy-rese arch-associates

"IHS is one of the leading global providers of critical technical information, decision-support tools, and related services to customers in the energy, defense, aerospace, construction, electronics, and automotive industries. We have developed a comprehensive collection of technical information that is highly relevant to the industries we serve ."

http://www.ihs.com/About-IHS/

In other words

[Kohath]

In other words:

"I don't like what they're saying. Is there a way we can slur them with a phony conflict-of-interest implication or some other kind of ad hominem? Dealing with arguments on their merits is too hard."

Re:In other words

[yasth]

You obviously haven't played around the energy field much. Oil companies and cartels use lots and lots of shell companies to counter global warming and other "negative" press. It is certainly a valid question to figure out where this entities loyalties are. A government funded entity (assuming those governments aren't OPEC members) is generally considered more reliable then, a private study paid for by interested parties. This is true on both sides.

In this case it seems to be estimating peak oil at 24 years out, instead of the now - 25 years out peak oil people are saying. They assume a clean shift away from oil at the "plateau" is all. There isn't a whole lot to dispute or refute. Their undulating plateau actually looks like it heads down quicklike around where the graph cuts off as a matter of fact. The best that can be said for it is that it is an optimistic peak oil aligned estimate.

Unfullfilled predictions

[amightywind]

Fair enough.

Unfullfilled climate predictions:

• Disruption of the gulf stream current
• Deep freeze in Europe
• Desertification of the US midwest
• US crop failures
• More frequent/severe Atlantic hurricanes (were there any this year?)
• Inundation of coastal cities
• Decline of coral reefs
• Disruption of Antarctic ice shelves
• Pandemic skin cancer outbreaks (remember the ozone crisis?)

Can you think of any prediction that has come true?

Re:Unfullfilled predictions

[JebusIsLord]

Good troll.

Disruption of the gulf stream - not predicted to happen just yet, so this prediction hasn't been refuted.

Deep freeze in Europe - same. That's like saying that the theory about the sun gobbling up the earth when it becomes a red giant is wrong because it hasn't happened yet.

Desertification of the US midwest - underway. I live in Alberta (Canada), and we expect to run out of glacial runoff in the next 15-20 years, leaving our river and main source of water bone dry for half the year. On top of that, the climate is getting dryer, and the water shelf is dropping. These are known to most residents here.

US crop failures - we'll see. Technology is improving all the time to offset this. Its happened before, though.

More frequent/severe Atlantic hurricanes (were there any this year?) - Nope, but again they expect a trend towards stronger storms, and last year it was certainly evident.

Inundation of coastal cities - Once again this is something that will happen down the road. No one thought we'd be under water in 2006. And we aren't. So the predictions are correct thus far.

Decline of coral reefs - underway. Most of the reefs affected by El Nino (Belize's great barrier reef in particular) are almost completely dead. Scuba diving was a lot more interesting about 15 years ago.

Disruption of Antarctic ice shelves - underway. There has been massive breakups of ice shelves in the last few years. Actually the predictions were mostly wrong; this is happening faster than we thought.

Pandemic skin cancer outbreaks (remember the ozone crisis?) - are you disputing the ozone hole now? That's a separate issue, but one that governments at least took significant steps towards solving around 15 years ago. The hole is larger this year than ever before, btw.

Re:OK...

[antifoidulus]

Huh? Hubbert's peak said that production in the UNITED STATES would peak in the 1970's, and decline thereafter. And he was right(he said global peak would come about 50 years after the peak in the US). Outside of Alaska and the Gulf of Mexico there aren't very many huge oil producers in the United States anymore.

There used to be a lot more, but they ran out of oil. In fact, take a look around Western PA to see what devastation running out of oil can wrought on communities. Oil City is an aptly named example.

Re:OK...

[Rei]

Even this report is rather pessimistic.

Technologies that exist and are already economical at current oil prices:

* Coal liquifaction (we have several hundred years of coal in the US alone)
* Thermal depolymerization (~$70/barrel from almost any organic waste).
* Bitumen (huge Canadian deposits)
* Ethanol (both corn and sugarcane)
* Biodiesel (soybeans)

Borderline technologies or technologies that exist but require higher oil prices to be cost efficient:

* Cellulose-derived ethanol
* Farmed plankton biodiesel
* Oil shale
* Methane hydrates/clathrates
* Direct Fischer-Tropsh synthesis from any CO (or even CO2, indirectly more lossy), and H2 (which can come from H2O). I.e., as long as there is power (do you see any "peak electricity" theorists out there? Not many), there can be oil (prices vary depending on component sources). As for H2:
** Electrolysis from any electricity source
** Nuclear power thermolysis
** Direct solar H2 production
** Farmed bacterial H2 production
* Direct utilization of H2 (or other fuels produced from common ingredients + "power") in vehicles.

As for those who say, "Well, sure, there are alternatives, but we don't have time to switch," this isn't true either. It takes much less time to bring a new field or plant online than it takes to drain an oilfield. About the worst time to bring an oilfield online is about 10 years, in the case of a remote field in an inhospitable location with no existing infrastructure. Expanding an existing field into less economical deposits can be as little as a year or two.

Peak Oil is a nonsense theory, and deserves to be exposed for what it is. There've been dozens of predictions since Hubbert, and not a one has been correct.

If the price is predicted to increase

[Colin Smith]

People start looking for alternatives sharpish. Business as usual is a much better proposition for the oil suppliers. If that happens to fuck over the customers as the price soars 5-10 years down the line, that's just tough for them.

Re:Hardware?

[matthew.thompson]

Fuelling it?

Re:From the first link

[Chris Burke]

To prevent people from getting serious about switching away from oil, of course.

They want the current supply of oil to seem scarce so prices are high, but they want the hypothetical, future supply to seem infinite so that you never have to stop using oil.

Which is pretty much what we have now. The price of oil goes up based on fears about Middle East stability, damage to refineries on the Gulf Coast from Katrina, and so on, threatening the immediate supply. On the other hand, off-shore oil deposits and ambiogenesis promising that the oil supply will never actually run out. They make massive profits, but everyone still feels comfortable with their oil-based ICEs.

Peak oil has nothng to do with the environment

[Colin Smith]

Not just is there no-one on the speaker list with an environmentalist bent

It's an economic issue. How expensive is energy going to be. And the peak oil people aren't saying oil is going to run out, it simply gets more and more expensive to extract as the conventional supplies go into decline.

It doesn't matter what anyone reports anyway, that's just market manipulation from one side or the other. What matters is the actual amount pumped. If it declines or remains static then prices are going up.

Re:Peak oil has nothng to do with the environment

[Mr Z]

The way I see it, whether we suck the world's oil reserves dry quickly or we suck them dry slowly, we're still going to suck them dry. There's more profit associated with large demand than small demand, however. Indeed, for a fixed supply, the price vs. demand curve is anything but linear. Furthermore, the time value of money indicates that a given sum of money is more valuable the sooner you have it. If we proactively shift energy demand away from oil, this lengthens the timespan across which we'll deplete the world's oil reserves. This will reduce demand, reduce average prices, and the money will arrive later (and therefore not be as valuable).

Thus, oil companies have strong economic reasons for wanting to keep demand high. They want to maximize their total profit.

Peak oil and alternative energy proponents seek to move energy demand away from oil, either by increasing efficiency or by drawing energy from other sources. Either approach reduces the demand for oil, which is what the petroleum industry wants to avoid.

Question I asked during peak oil lecture

[FleaPlus]

(This is from something I wrote up earlier this year, regarding a question I asked Professor Kenneth Deffeyes (a proponent of peak oil ideas) during a Q&A session after a talk he gave at my university. If anybody has a better answer, I'd honestly be interested in hearing it.)

Today there was a talk in Beckman Auditorium by Kenneth Deffeyes, Princeton professor emeritus and author of one of the more popular books on that ever-popular meme, peak oil. He discussed his belief that we had hit peak oil sometime around this past Thanksgiving, and that oil prices are going to fluctuate wildly and rise in the next 5 years of so.

During the Q&A period I went up to the microphone and asked the following: During your talk you briefly mentioned the futures market. Currently on the oil futures market, you can purchase a contract for a barrel of oil to be delivered in, say, the year 2010 or 2011 which is actually cheaper than a barrel of oil today [edit: nowadays it's actually slightly higher, 62 vs. 58]. What are your thoughts on why this is the case?

In his response, he had mentioned that he had been asked a similar question after he gave his talk at Merrill Lynch, basically: "If you really think oil prices are going to rise, why don't you put your money where your mouth is and buy up futures contracts?" He said to them that he wasn't too knowledgeable about futures contracts, and afterwards read up on them a little and found some of their intricacies bewildering. He said that he would want to purchase futures options for the coming few years, due to the extreme price fluctuations he expects, followed by regular futures in the longer term.

I'm not sure I bought his answer. Although I'm not sure about how far ahead one can purchase futures options, regular futures can definitely be purchased for 2012, which should be well into the period of soaring prices he predicts.

Re:Question I asked during peak oil lecture

[TheWizardOfCheese]

According to Bloomberg, today's dated Brent spot was $57.95 and WTI spot was 58.76. On the other hand, The Dec 2008 Nymex light sweet crude future is at 68.20. So in fact, oil prices have to rise substantially for you to break even on your long futures position.

But let's say that you firmly believe that by Dec 2008 oil will be trading around $80. If you are right, does that mean you will make a big profit by going long the Dec 2008 future?

No. The reason is that futures contracts have daily settlement to mitigate default risk. It is not good enough for the price of oil to end up where you want it on Dec 2008; it must also not decline on the way there. If it goes down to say $40 on the way, you will have to close out your position at a loss or else face bankruptcy (assuming that your position is large enough to have significant gains in relation to your wealth.)

This is not just a theoretical risk: a famous example is Metalgesllschaft. In their case, they didn't have to guess what the future price of oil would be because they had already sold it! They wanted to lock in their profits by hedging in the futures market, but they miscalculated the forward/futures basis when applying their hedge. The result was that they were killed by margin calls - even though their overall position was above water.

Re:OK...

[EL_mal0]

No, Peak Oil has never predicted that we'd "run out".

Actually that is precisely what peak oil predicts. Peak oil is ONLY about the fact that oil production will peak out at some point and will thereafter decline. It will keep declining until there is no more oil that can be economically extracted -- in essence, we will run out. Peak oil doesn't really say anything about demand; it is all about oil production.

See this link for a much more detailed, less biased analysis of the pros and cons of peak oil theory. Down at the bottom you'll find a table with predictions of when we'll reach the global production peak. Note that some of the predictions putting peak production in the next few years are from people who work (or worked) for oil companies.

This group CERA has a prediction on there, too; in 2004 they believed in peak oil theory and thought the world would peak in 2020. Their new "oil plateau" idea basically says that as traditional oil becomes more scarce, technology will bring new sources (tar sands, oil shale, etc.) on line, thereby increasing reserves. Whoever they work for, they have some interesting, if not compelling, points.

Huge find in Utah

[thule]

Their point is valid. There recently was a huge find of oil in Utah. It was previously overlooked because our understanding of where to find oil was wrong. We have better tools now. We can drill deeper.

Also, remember when the price of oil is sufficiently high that other types of oil that are not as pure are viable for processing.

Even if we run out of the liquid stuff, we could turn to coal liquification. North America has huge reserves of coal. We could become the Middle East of coal liquification. We have enough to last quite a while. By this time I could hope that technology would advance enough to make alternative way to propel a car compelling and cheep.

We also need to understand where oil comes from. We have never been able to reproduce oil in a lab under the circumstances that we understand to be natural. Maybe our whole assumption on oil is wrong (see Abiogenic petroleum origin.

Read the Hirsch Report

[thatguywhoiam]

The Hirsch Report

Its the best rebuttal to Yergin and CERA.

The Hirsch report, written by Robert Hirsch of SAIC, was commissioned by the Department of Energy in 2005. To try and avoid some of the controversy around the exact date of 'peak', he sidestepped it, and rather tried to perform an objective analysis of what effort would be required to mitigate such a peak, in three scenarios.

Re:Read the Hirsch Report

[radtea]

The Hirsch Report is full of gems, including clarification of exactly what "peak oil" means:

"It is important to recognize that oil production peaking is not 'running
out.' Peaking is a reservoir's maximum oil production rate, which typically occurs
after roughly half of the recoverable oil in a reservoir has been produced. In
many ways, what is likely to happen on a world scale is similar to what happens
to individual reservoirs, because world production is the sum total of production
from many different reservoirs."

And some information on CERA's past record:

"In 2001 Cambridge Energy Research Associates (CERA) stated 'The
rebound in North American gas supply has begun and is expected to be
maintained at least through 2005. In total, we expect a combination of US
lower-48 activity, growth in Canadian supply, and growth in LNG imports to
add 8.95 Bcf per day of production by 2005.'"

In 2005 CERA "now finds that 'The North American natural gas market is set for the
longest period of sustained high prices in its history, even adjusting for
inflation. Disappointing drilling results ... have caused CERA to revise the
outlook for North American supply downward ... The downward revisions
represent additional disappointing supply news, painting a more constrained
picture for continental supply. Gas production in the United States (excluding
Alaska) now appears to be in permanent decline, and modest gains in
Canadian supply will not overcome the US downturn.'"

For all the thoughful, deeply informed people who have dismissed peak oil with the claim that "the stupid enviros can never get it right, Club of Rome, blah blah blah...", I strongly suggest looking for the beam in your own eye before complaining about the mote in ours.

Peak oil theory is based on a very simple idea: the best first order measure of future oil supply using any technology at any price is the amount of oil still in the ground, and that amount can be estimated based on the amount already extracted. If this theory is true, then we expect the current production rate (P) divided by the cummulative production (Q) to be a straight line when plotted against the cummulative production.

It is an undisputed although often ignored fact P/Q vs Q is a straight line to a good approximation over the past fifty years, both in the continental United States and worldwide. It does not deviate in war or peace, in recession or oil crisis, by more than a small amount. The deviations are significant, but the undoubted fact remains that to first order we have an exceptionally good model for world oil production that is consistent with the past half century of extraction data.

If you want to deny peak oil, you have to claim either:

a) There is some other factor that dominates the first-order term in world oil production

or

b) The higher-order terms are at some point going to dominate.

Of the two, the latter is clearly the only really plausible move, and it is not really denying peak oil but rather accepting that economies will adapt to the very real fact of peak oil.

Oil sands, coal derviatives and non-geologic sources may both become significant factors at some future price with some additional technologies. My own favourite is algal biodeisel, which seems like just about the perfect source of liquid fuels, as it is essentially solar->liquid hydrocarbon conversion at very high efficiency. But there is very little investment going into it for some reason.

Re:OK...

[kgskgs]

Peak Oil has less to do with actually running out of oil and more to do with oil being viable source of energy and a case for profitable business. Having oil available is small part of the picture. Consider following points in this regard.

1. Once you consume the "sweet oil" which is the first thing you extract from the new well, and which is easier to refine and is more profitable, you are left with heavy oil at the bottom. This needs more infrastructure to extract, more energy to refine. Once you are spending one gallon of oil (or equivalent energy) to extract and refine one galon of oil, oil is not fuel any more.

2. Also there is a rate of oil production a oil well can sustain. If you try to extract oil faster, you end up damaging the well and end up at a point where the well has oil but still you cannot extract it. Many peole suspect that's what is going on in Saudi Arabia. They are pumping oil at more rate than their oil wells can sustain, just to make profit.

3. OPEC rule is if you have more reserves, you get rights to produce and sell more oil. So any country that furnishes estimates has reason to bloat it. Their information is as reliable as car salesman's information about the car. I would not bet my life on it.

4. When you are claiming that oil production technology will just get better and better, you are making lots of asssumptions. It will make progress if it is worth investing there. Oil exploration was starved for funding when Nasdaq was flirting with 5000. Because that's where you could make more money using your money. Also it is not true that more research will lead to more breakthroughs. Research on fuel injection systems has been effectively abondoned by all car companies. People have miliked the almost the last drop. Can you make improvements in fuel injection? Yes, but the improvement will be so small that it will not be worth millions you will have to spend.

Now add politics and crazy fundamentalist leaders and pollution and global warming to this picture.
You will immediately see that you will be better off with alternative energy, no matter how much oil is available in earth.

Then you don't understand

[Kohath]

You don't understand the argument. The argument is this:

Oil companies are evil. Their objective is to hurt people no matter how much it costs them.

Some of them are motivated by money. They are still evil. They are also extremely stupid and less informed about the oil business than your average Internet message board poster. The Internet message-board guys and the bloggers know more about how much oil is available than the oil company executives.

The oil price is going to skyrocket in the very near future because of Peak Oil (tm). The oil companies have oil in the ground. They could just stop pumping it for a year or two and sell it for $300 a barrel at that time. But they don't, because they're stupid and evil, unlike us message board posters and bloggers.

Now do you understand?

Re:From the first link

[rsilvergun]

The incentive is to keep people from doing something about it. If peak oil is going to hit in the next 5 or 10 years, or if you can even convince a large number of people that it is, then oil consumption would drop dramatically as we begin to conserve. That means less profits in the short run. Plus, if oil companies hasten the path the peak oil, that means a quicker route to the ungodly profits that they'll see when it happens.

How does this "blast" peak oil theory?

[DragonWriter]

While details about when vary between different predictions, the theory of peak oil (and it applies to peak X where X is any extracted, non-renewable resource) is simply that at some point a maximum rate of production will be reached and after that never exceeded. (And, as a common corollary, providing there are no adequate substitutes, that increases in demand after that point will lead to extreme increases in price in the long term rather than increases in quantity consumed, as the rate of production is a long-term limit on the rate of consumption.)

This report claims that after 24 years, an extraction plateau will be reached which will never be exceeded.

This reports idea is slightly different from that suggested by peak oil in that the "peak" in peak oil refers to the idea that production will actually fall at some rate, while this report suggests a plateau, but that doesn't really change the fundamental dynamic is that increasing demand for energy and other products of the oil industry (plastics, etc.) cannot, whether with a peak or a plateau (which is merely the "best-case" limit of a peak) be met with increased production, but instead higher prices.

While it certainly diverges sharply from the timeframe predictions of many peak oil theorists, it fundamentally confirms that principal problem envisioned by peak oil: a production limit that will be reached in a fairly short time.

(Of course, since the supply of oil is finite, unless the rate of extraction is lower than the rate at which geological processes create oil, it is clearly impossible for a plateau to hold in the longest term, so it seems unlikely that any "plateau" will be a long-term state rather than merely a transitional period before a decline.)

Should Have Previewed

[Doc Ruby]

Working link to Cambridge Energy Associates.

Re:Should Have Previewed

[xmedar]

From the link to the Chairman Daniel Yergins wikipedia page-

Daniel Yergin also wrote and hosted a PBS production called "Commanding Heights: The Battle for the World Economy". This 3-part television production was an advomentary (advocacy documentary) which made the case for free markets by interpreting the economic history of the 20th Century from a capitalist perspective. Yergin interviewed many high profile free-market advocates such as Dick Cheney, Bill Clinton, Newt Gingrich, and Robert Rubin who presented economic history as a battle between centralized command economies and free market economies.

If he is seriously suggesting that Dick Cheney is interested free markets why does Halliburton get no-bid contracts... DOH! Next they will be telling you the 30% water cut on the Saudi Ghawar oil field is nothing to be concerned about, oh and remember Saddam has WMD and is helping AQ and global warming doesnt exist, oil companies don't conspire with corrupt governments and oh yes fairies and elves really do exist. /sarcasm

Re:Should Have Previewed

[Monsuco]

If he is seriously suggesting that Dick Cheney is interested free markets

I notice that during the Bush/Cheney administration, the US economy is ranked as being less restricted than it was during the Clinton/Gore administration on the economic freedom scale.

why does Halliburton get no-bid contracts

Reason #1. Halliburton is far more efficient than the US government (even though Halliburton is commonly seen as inefficient, it still takes 2 to 3 Government employees to do the amount of work 1 Halliburton employee does.). #2. Halliburton does have a reasonably good company, the Left-Wing (and the media is left wing, 40% of reporters are liberal, while only 15% are conservative) media just overplays every tiny mistake they make.

oh and remember Saddam has WMD

Actually, Saddam did have WMDs. Few people heard about this, but there were hundreds of canisters of sarin and mustard gas artilery shells found in Iraq. Not as impressive as the WMDs we suspected him of having, but still WMDs none the less.

and is helping AQ

To a limited extent Saddam did provide some aid to AQ (though not much, it was mostly that Saddam knew AQ was there and offered them protection) and look who we are fighting in Iraq right now, AQ. Oh, but wait, there are no AQ in Iraq.

and global warming doesnt exist,,

Few have said that it doesn't exist, but many have said that GW is overblown. Truth is, it is extreamly overblown. Sure, the Earth is warming a little, but we aint exactly gonna melt. The earth was still in the little Ice Age less than 200 years ago. So yeah, the earth may warm up a tad. Second, we can adapt to global warming, and doing so would probably be easier than fighting it. We will have a longer growing season. We will have the Artic Ocean open during the summer for ships to cross. We will be able to live further north. So what is so horrifying? Also, do you really think we can just suddently change our entire energy economy overnight? The use of alternative fuels is too costly. Nuclear is probably the best alternative to coal, but it had gotten death by fud over the years. Ethanol may be a replacement for gas, but it will take time to develop. Hibrids may work better. They are cheaper to run (for power, florecent lights are kind of the equivolent). But hibrids are still sorta Beta technology. Hydrogen cars simply shift CO2 emmisions from gas to the coal plants we need to produce the energy to get hydrogen. Bush has also put a lot of effort into these technologies, but he is a realist. He knows this wont happen on a whim.

oil companies don't conspire with corrupt governments

And what governments don't have corruption? In the US both parties have a very long history of it. Most other nations are worse than we are. Oil prices aren't really that high. If you adjust for inflation, they were far higher in the 20s. Oil also is rediculously cheap compaired to other products when you consider the cost of making the product. Bottled water, coffee, ice cream, and many other products are pricier. Yes oil has to be discovered using very expensive equitment, then it has to be drilled for deep benieth the earth (and sometimes this is done out on the ocean were hurricanes can destroy millions worth of equipment) or in hostile areas of the middle east were you have cartels that hate America. The oil must be brough up. Shipped to a refinery at the cost of millions, then it must be refined, also costing massive amounts, then it again must be shipped in very expensive trucks at a cost of thousands more. Then gas stations must sell it and they take a cut. Then the government taxes the hell out of it. It amazes me that gas is so cheap. Starbucks overcharges you several times more than ExxonMobil.

Re:A festival of confusion

[Russil Wvong]

Regarding the Antarctic ice sheet: the article was from 2002.

More recently (March 2006): NASA Mission Detects Significant Antarctic Ice Mass Loss. "The researchers found Antarctica's ice sheet decreased by 152 (plus or minus 80) cubic kilometers of ice annually between April 2002 and August 2005."

Personally, what I find most convincing is graphs of current and historical CO2 levels.

WTF

[Captain Splendid]

Jeezus, instead of arguing the merits of TFA, can we instead discuss TFA instead?

Like, for example, the report pretty much dovetailing nicely with Peak Oil theorywith the only majot difference being when the peak happens?

Or how about that he report talks about ALL know oil sources, when in fact Peak Oil theory is based around EASILY recoverable sources, basically making this report an apple and oranges thing.

This is what Peak Oil sceptics don't get: Yes, we have a shitload of oil, but when you eliminate the stuff that's a PITA to recover, it doesn't leave a whole lot. It will probably take us a few decades at least to run out, but that downward slide is going to be a bitch.

Re:WTF

[LordRobin]

This is what Peak Oil sceptics don't get: Yes, we have a shitload of oil, but when you eliminate the stuff that's a PITA to recover, it doesn't leave a whole lot.

Right. Because we'll never, EVER invent newer and better technologies that make it easier to get at that "hard to recover" oil.

------RM

Re:WTF

[WilliamSChips]

No, but the chances of our getting said technology before the economic collapse grows smaller every day.

Re:WTF

[mOdQuArK!]

The "Peak Oil" theory describes the effects of new technology as well - the only thing that new technology that does is put off the "Peak" a little longer (and uses up R&D resources that could've been directed toward a sustainable energy infrastructure).

Unless we discover a source of oil that is infinitely-renewing (and renewed in a time period that is useful to our society), we _will_ eventually hit the "Peak Oil" doom-and-gloom scenario. It's inevitable no matter what kind of oil-recovery technology keeps on getting developed.

Re:WTF

[Mr. Slippery]

Because we'll never, EVER invent newer and better technologies that make it easier to get at that "hard to recover" oil.

Maybe we will; but public policy should not be based on asumptions that a technological deus ex machina will come forth.

Re:WTF

[Pharmboy]

Right. Because we'll never, EVER invent newer and better technologies that make it easier to get at that "hard to recover" oil.

Or use current, PROVEN technologies like biofuels (biodiesel and ethanol/methanol) to stretch the reserves out for a longer period while we develop those new and better resources.

Re:WTF

[feepness]

Right. Because we'll never, EVER invent newer and better technologies that make it easier to get at that "hard to recover" oil.

It's like that old tube of toothpaste. You keep squeezing carefully and yeah, you'll get the last bits out only slightly slower than when you started... but when it's gone... it's really gone.

But on the other hand, the sooner it's gone the better right? I'm not scared of peak oil (or whatever the daily hand-wringing is about)... when the price of energy gets high enough other things will replace it and maybe my company will stop leaving the damn air-conditioning on 68 degrees ALL THE DAMN TIME.

Re:WTF

[RockDoctor]

Speaking as someone who deploys those newer and better technologies (I specialise in extended reach and horizontal drilling, much of which uses advanced sand management, expandable screening and/ or electrical submersible pumps, drilled with minimally invasive drilling fluids, tight control of equivalent circulating density and high-precision geological optimisation of well placement), what restricts the impact of those "newer and better technologies" are 2-fold:
- many reservoirs have poor to crap permeability characteristics, which reduces maximum (let alone optimum) flow rates, and severely impacts the economics of projects. That's inherent to the rock that the oil is in, and is only improved as the square root (approximately) of the pressure differential that you put across the reservior. At best.
- most new discoveries are small. A couple of hundred million barrels in place, maybe 40~60 million produceable. That's 5 to 8 days of consumption at todays rates. Which means that you can't justify the cost of pipelines and infrastructure to produce the stuff.

Look at, if you care, the "Last Great Hope" oil province of the late 1990's - the Falklands province. Review it's history - a significant war fought over it's control delayed exploration drilling for a decade and a half. There's a basin, source rocks (second best in the world), and reservoirs of moderate quality; tectonics and timing of thermal events within the tectonics are good for producing accumulations, and indeed accumulations have been found. But they're not big enough to justify building the necessary platform-based infrastructure, and the distance to shore is too long to flow the oil in a pipeline (we're back to the back-pressure as anything flows ; it all adds up from the valve at the surface separator all the way back through the pipes to the reservoir-completion interface). Net result - a "stranded" oil province. OK - that's one province I've had a professional interest in. Oddly enough, that's a common set of problems. Same goes for the potential stuff in the Arctic outside Alaska : no route to market, and building the necessary railway lines and pipelines across Siberian tundra is a 20-year project (don't suggest using the - - (sorry for my spelling, my atrocious Russian is getting rusty) line - it's stuffed to capacity already (as anyone who's used it would know) and it doesn't get within 2Mm of the necessary areas.) with a very uncertain prospect of success at the end.

Some of the biggest components of the "anticipated reserves" part of the future oil extrapolations are based on finding whole provinces with similar productivity to their geological counterparts elsewhere in the world. But there is no (zero, nil, zilch) well control on a lot of these anticipations. It's an easy mistake to make - I tried to get involved in the Falklands drilling campaign (first job application I'd written for 4 years), on that basis. Thought there was a big potential. Busted after the second well (of 6 in the campaign). East Greenland is "booked" as a huge gas province, extrapolating from the geological and thermal history of the Norwegian coast; zero well control. Laptev sea is "booked" as a light oil and gas province; one well and only 14000km of seismic. East Siberian-Chukchi Seas similarly booked; zero wells and 7000km. Sea of Okhotsk, several pinprick wells with no discoveries on the best prospects from the very limited seismic. Sea of Japan I haven't received data on, yet; some political difficulties over exploration. Sea of Bohai has proven prospects, but similar political difficulties.

You can look at models of reserves projected, but you've got to read the definitions of "proven", "likely" etc that go for the different classes of "reserve". As Shell discovered publicly a couple of years ago (and everyone else knew privately), a reserve isn't a reserve until it's been drilled, tested and produced. And e

I will believe this ....

[Aging_Newbie]

I will believe this when I hear that the oil companies have built enough new refinery capacity to process all this oil for the next 14 years. Let them put their money where their mouth is. If the oil companies actually believed that peak oil were not the case, they would be building capacity so they could sell all that they could pump. Instead, we hear about limited refinery capacity. Believe me, a refinery can make lots of money if there is lots of crude feeding it. I hope they reveal all the facts behind their assertions in a traceable form since available capacity in oil fields is always held pretty close by the companies that own them. It sounds to me like propaganda since the US finally has reacted to the price shocks that precede peak oil and if we give up SUVs etc. it could really rain on the oil company parade. There is a lot of money to be made by the current glut/shortage mentality. Let the glut make people insensitive to the cost of their actions and then collect lots of money with a shortage from the inflexible deamand that results. Also, read another view which challenges some of their assumptions.

Re:I will believe this ....

[sean_ex_machina]

The lack of new refineries has nothing to do with peak oil or a bunch of oil companies conspiring to rip you off. Instead, it has everything to do with the fact that, thanks to environmentalists (specifically, their lawyers) and government regulation, it's been nearly impossible to get this sort of thing approved in the last few decades. Oh well.

Re:I will believe this ....

[DerekLyons]

I will believe this when I hear that the oil companies have built enough new refinery capacity to process all this oil for the next 14 years. Let them put their money where their mouth is. If the oil companies actually believed that peak oil were not the case, they would be building capacity so they could sell all that they could pump.

If an oil company did this - I'd think they'd gone stark frigging insane.
 
Why?
 
Because refineries are horribly capital intensive - it takes decades (under the best of circumstances) to repay the investment. Why would you do something that risky when you know that Americans aren't going suddenly to start driving 'x' times as much just because you refine 'y' times as much. (Ditto for the other uses of petrochemicals, fertilizers, drugs, plastics, etc... etc...) The market is pretty inelastic, the demand fairly steady, and the changes fairly predictable. (And its not just the refinery you have to upsize - its also your distribution network etc...) Even worse - any additional income comes after a decade or more of design, construction, and lawsuits from NIMBY's and greens.
 
Its nowhere near as simple as you seem to believe.

/. proves at least one point

[Anonymous Curmudgeon]

If you read the article, Peter M. Jackson's call for "rational and measured discourse" is especially telling, when compared to this discussion. As usual, we have frothing-at-the-mouth comments from "both" sides of the issue. Here are a couple points which I think may have been missed by some /.ers:

1) This article is about oil production, not oil consumption. We could very well be heading for the collapse of oil-based civilization, due to Hummers and China's booming thirst for oil. That doesn't mean this report is wrong, because it is about supply, not demand.

2) Contrary to the article's (somewhat) misleading title, the report isn't disputing that there will be a global peak in oil production. Instead, it disputes the (oft-rescheduled) temporal location of that peak, and the shape of the resulting down-turn (predicting a plateau and gradual decline, rather than a rapid drop-off).

It seems to me the root questions debated by the report are whether or not hard-to-extract oil should be included in our oil reserve estimates, and how much new technology will delay and soften the inevitable oil decline. Agree or disagree, we could all use a little more "rational and measured discourse".

Slashdot refused to print this story

[Travoltus]

I wonder why...

Exxon-Mobil announces that PEAK OIL is coming in 5 years:
http://www.thebulletin.org/article.php?art_ofn=mj0 5cavallo

Mind you, this is a major oil corporation, not some environmentalist "whacko" group...

Re:Slashdot refused to print this story

[A beautiful mind]

According to this:

The OPEC countries decided in 1985 to link their production quotas to their reserves. What then seemed wise provoked important increases of the estimates; in order to increase their production rights. This also permits the obtainment of bigger loans at lesser interest rates. This is a suspected reason for the reserves rise of Iraq in 1983, then at war with Iran.

In fact, Dr. Ali Samsam Bakhtiari, a former senior executive of the National Iranian Oil Company, has stated unequivocally that OPEC's oil reserves (notably Iran's) are grossly overstated. In a recent interview he stated that world oil production is now at its peak and predicted that it will fall 32% by 2020.

The rest of the section is too long to include here, but please read on if you need further proof. The table including the already peaked and peaking countries, the detailed information about how OPEC members inflated their oil numbers, etc. are worth reading.

Oil company ads in 1973,

[Jerry]

at the height of the Arab oil embargo, exclaimed that there was "no energy shortage" and said that "at the current rate of consumption we have 600 years of oil left."

Fifteen years later, during the 1987 oil crisis, they ran a similar ad but this one said "at the current rate of consumption we have 200 years of oil left".

Amazing. In 15 years we lost 400 years worth of oil!!!

Both statements were right, of course, but what the oil companies were COUNTING on was that most folks would NOT understand that "at the current rate" doesn't mean that the rate wouldn't INCREASE. It seems that most folks STILL DON'T UNDERSTAND.

Now, we have politicians running for office with the promise that they will "replace oil fields with corn fields". To make matters worse, the US government is subsidizing corporations who make and run Ethanol plants, which immediately begs the question "If Ethanol is capable self-sustaining energy production sufficient to replace oil, why does it need subsidies?"

Independent studies by academic agricultural and environmental experts report that Ethanol requires an input of 54,725 BTU more for each gallon produced than you'd get by burning it. On the other hand, Ethanol industry sponsored studies claim Ethanol has a net energy of 17,058 BTU per gallon. Whose right?

Let's look at the problem in another way. Assuming pro-Ethanol groups are correct, how much Corn will it take to replace gasoline as a source of energy?

From http://www.farmdoc.uiuc.edu/marketing/grainoutlook /html/012306/012306.html we have the following facts:
1) The USDA's January estimate of the size of the 2005 U.S. Corn crop came in at 11.112 billion bushels.
2) Planted acreage of Corn in the U.S. in 2005 totaled 81.759 million acres, with a calculated yield of 135.9 bu/acre.

From Ethanol industry sources we find that the more efficient Ethanol plants can generate 2.68 gallons of Ethanol from each bushel of Corn. Therefore, 11.112 billion bushels of Corn can supply 30 billion gallons of Ethanol.

A fact of chemistry that economic theory cannot change is that Ethanol supplies 76,000 BTU/gallon and gasoline supplies 120,000 BTU/gallon. In other words, it takes 1.5789 gallons of Ethanol to replace the energy in 1 gallon of gasoline. That COULD mean that 30 billion gallons of Ethanol will replace 19 billions gallons of gasoline. But, in reality, Ethanol produced from Corn replaces even less. From a pro-Ethanol website, http://www.ethanol-gec.org/corn_eth.htm#concl:
"We conclude that the NEV of corn ethanol is positive when fertilizers are produced by modern processing plants, corn is converted in modern ethanol facilities, farmers achieve normal corn yields, and energy credits are allocated to coproducts. Our NEV estimate of 16,193 Btu/gal can be considered conservative, since it was derived using the replacement method for valuing coproducts, and it does not include energy credits for plants that sell carbon dioxide. Corn ethanol is energy efficient, as indicated by an energy ratio of 1.24, that is, for every Btu dedicated to producing ethanol, there is a 24-percent energy gain. Moreover, producing ethanol from domestic corn stocks achieves a net gain in a more desirable form of energy. Ethanol production utilizes abundant domestic energy supplies of coal and natural gas to convert corn into a premium liquid fuel that can replace petroleum imports by a factor of 7 to 1."

That "7 to 1" is 7 gallons of Ethanol are needed to replace 1 gallons of gasoline! Here is how it is figured: about 58,942 BTUs must be supplied from external energy sources for each gallon of Ethanol produced. To be self-sufficient Ethanol must return that energy, leaving only 17,058 BTU/gal available as excess energy. Or, dividing 120,000 by 17,058 shows that it will take 7.0348 gallons of Ethanol to replace eac

They are supposed to be debunking peak oil theory?

[AmazingRuss]

Looking at that chart, the only difference I can see between their line and the one they are "debunking" is that their line wobbles for a while before the downtrend is clear.

Both theories look equally valid, as presented, and both have pretty much the same implications, with a 20 year time difference. Short term thinkers are the only ones that will be impressed by this.

OPECs reserves are all overexaggerated

[chocolateeater]

I wonder what data they based their report on? I think it is widely understood that the OPEC countries are all overestimating their oil reserves. You see, their quotas are proportional to their reserves. The larger their reserve, the bigger their quota, the more oil they are allowed to sell, the more money they make. So they have a strong incentive to lay claim to more oil than they actually have.

Also, did anyone notice the graph? Supply plateaus around 2030. Yet the demand curve goes straight up. Hello? Doesn't that mean oil will peak in 2030?! (And the graph even included alternative sources like liquid coal).

Valuable sources for futher reading.

[SlideGuitar]

http://www.energybulletin.net/ and in particular: http://www.energybulletin.net/22442.html

http://www.theoildrum.com/ and in particular: http://www.theoildrum.com/story/2006/11/14/18285/6 47

Whether we will ever exceed current production levels is an entirely open and empirical question. Even if we do, that doesn't prove that "Peak Oil" is "wrong"... just that we haven't hit it yet. The evidence I read suggests we're approaching the top.

Read this too:

http://www.theoildrum.com/story/2006/11/2/204936/5 16

http://www.energybulletin.net/22213.html

Check peakoildebunked.blogspot.com

[mckyj57]

Check out http://peakoildebunked.blogspot.com/ -- he has hundreds of articles that little by little debunk Peak Oil scare theorists. He makes an excellent case, and when I had a moment's concern about peak oil (for my daughter), I saw that and was greatly reassured.

what exactly is meant by peak oil

[gordona]

There are perhaps a couple of things to consider about peak oil that may not have been considered. One is that at any given price point, there will be a peak in oil availability. As the price of oil goes up, the oil that is more expensive to obtain becomes more economical, such as oil from oil shale or heavy crude. However, that oil is much more difficult to produce and the production of that oil is probably not at the same rate as for the lighter crude that is easier to produce. Thus the peak for oil production is different than the peak for oil availability. One may peak while the other may not. The market factors may inhibit the production of the more expensive oil because fewer people may be willing to pay for it. In addition, other forms of energy will become more economical for R&D as the price of oil rises which may also inhibit the production of that oil. There are also other factors such as a producer wilfully withholding production to keep the price up. What is very interesting to me here is that with the high price point of oil, Venezuela's reserves of heavy crude is probably the largest in the world making them the de facto leaders of OPEC, something tp which the Saudi's and the US are rather resistant.

"Current rate of consumption" fallacy

[gtmaneki]

Disclaimer: I am a member of the Society of Petroleum Engineers.

While making estimates based on the "current rate of consumption" may be easy, it's a fallacy. Consumption never stays constant, and will increase unless we do something.

One of the reasons the price of oil has shot up in the past few years has been the increased demand for oil in China and India. More demand for a finite supply. And the world's population grows exponentially. More consumers all the time.

The good news is we are still finding reservoirs, and we are developing better ways of getting hard-to-reach oil from existing reservoirs. But it's all just methadone for our addiction. We need to accellerate R&D of new sources storing and transporting energy. Let's not get complacent here just because we've gotten a reprieve.

Where are the new dinosaurs coming from?

[jay si]

I am loathe to draw conclusions fom a blurb about a report, but three things strike me: 1. The blurb stipulates "at current levels of consumption." And i feel pretty good that global population will stabilize and that India and China will immediately cease industrializing. Because otherwise, "current consumption levels" become sort of irrelevant. 2. Even in this scenario, we're hearing that we have 24 years before production plateaus, and then 100-odd years before there's a problem. So really, we're really just quibbling about dates, not the phenomenon itself. 3. With regard to fossil fuel, good to remember that no one is making any new dinosaurs.

Trick question!

[douglips]

It's a trick question! They don't have jobs!

Re:OK...

[Sparohok]

You seem to be debunking a strawman that has nothing to do with the peak oil theory.

Peak oil is a theory regarding future rates of conventional oil extraction. It is not a prediction of impending doom or a crude oil price forecast, nor does it have anything to do with unconventional oil or alternative energy. Should some futuristic technology make petroleum obsolete, that would neither contradict nor prove peak oil; it would simply make it irrelevant.

Many people use peak oil as a foundation for their predictions of impending doom. Those predictions may or may not be nonsense. But debunking such predictions, as you seem to think you have done, hardly contradicts peak oil theory.

Their study actually undermines itself

[brit74]

Cambridge Energy Research Associates said in a report that the world has some 3.74 trillion barrels of oil left -- enough to last 122 years at current consumption rates and triple the amount estimated by "peak oil" theorists.

Sounds like their analysis is rather simplistic. They looked at the *current* consumption rates, assumed that consumption rates would be static for the next 122 years, and then said we've got plenty of oil for 122 years. Nevermind the fact that places like China and India are quickly increasing their oil consumption.

China's petroleum imports are expected to grow fourfold from 2003 to 2030 Source: http://www.eia.doe.gov/oiaf/ieo/oil.html

World oil consumption rose by about 1.2 million barrels per day in 2005, after an increase of 2.6 million barrels per day in 2004. Source: http://www.eia.doe.gov/oiaf/ieo/oil.html

Overall, global oil consumption is expected to grow by about 1.4 percent each year over the next 25 years - roughly a 40% increase. If those rates hold steady, we'll be using twice the oil in 50 years. Based on increasing oil consumption, that 122 years shrinks down to something like 80 years.

Further, their report assumed a bunch of new oil discoveries, and that we'll be extracting known, but expensive-to-extract oil deposits in shale and other places. Nevermind that these alternatives routinely rank in the $70-$100 per barrel range. Here's a graphic of their sources of oil: http://www.realcities.com/mld/krwashington//160120 61.htm

It says:
1.08 trillion barrels already consumed
0.76 trillion barrels available from conventional sources
1.07 trillion barrels yet to be discovered
1.91 trillion barrels available from unconventional sources

In other words, of the 3.74 trillion barrels they're talking about, 30% is assumed to exist (we just haven't found it yet), and 50% is from unconventional sources (ranging from expensive to extremely expensive). Only 20% of their 3.74 trillion barrel estimate comes from known, economical sources! That means that known, conventional sources are expected to run out in 24 years - and that's according to current consumption rates, so 24 years is an overestimate. We'd better hope that lots of new oil is discovered and put into production before then (it takes about 10 years to get a new oil well up and running to full capacity), and we'll be switching to more and more expensive unconventional sources in the meantime.

Remember - peak oil doesn't say when the oil will run out, it talks about the interplay between cost, consumption, and economics.

A plateau not good enough

[homer_ca]

Demand is growing because capitalism requires constant growth, and one of the essential inputs into economic activity is energy (in the form of oil). If production rate is flat while demand is growing, you get a supply crunch. Buyers bid up the price, and sellers make out like bandits. That's the whole point of Peak Oil theory, not that we run out of oil, but when demand outstrips supply we'll run out of cheap oil. Markets are cyclical, so we'll still get highs and lows in oil prices, and prices will spike high more often because producers are tapped out and can't crank up more production to take advantage of high prices. Because of the volatility of financial markets, we won't get much warning about it either.

Re:More misunderstanding

[Russil Wvong]

There's definitely been discussion of the economic costs of trying to stabilize atmospheric CO2 at 550 ppm or so. (If we proceed with business as usual, it's predicted to hit 800 ppm by 2100; it's never been higher than 300 ppm at any time in the previous 800,000 years.) According to the Economist:

... Sir Nicholas [Stern] has tried to assess the future costs of climate change--drought in Africa, floods in Europe, hurricanes in America, rising sea levels around the world--and has set them against the costs of cutting fossil-fuel usage enough to stabilise carbon-dioxide concentrations in the atmosphere. His answer to the second part of this calculation is fairly uncontroversial. The costs of switching away from carbon should not be huge because of the rise in fossil-fuel prices and the fall in alternative energy prices. Sir Nicholas reckons that the world could stabilise concentrations at a reasonable level at a cost of 1% of GDP by 2050. Many other economists have looked at the matter, and most agree with Sir Nicholas.

If you think climate change is just pseudoscience, you may want to take a look at Spencer Weart's The Discovery of Global Warming.

Re:Various forms of solar power

[mOdQuArK!]

In the context of a discussion about "Peak Oil", I am referring specifically to a source of oil.

Biodiesel and/or thermal depolymerisation might qualify as a "sustainable" oil-creating process as long as the net costs to create new oil through those processes are low enough to satisfy a significant part of our society's oil hunger, otherwise we will experience the full force of societal change that the Peak Oil theory is predicting.

At the moment, I don't believe our alternative energy infrastructure is large or efficient enough to blunt the effects that a worst-case Peak Oil scenario will have on our society.