Slashdot Mirror
Whistleblower Claims IEA Is Downplaying Peak Oil
Yesterday the Guardian ran a story based on two anonymous sources inside the International Energy Agency who claimed that the agency had distorted key figures on oil reserves. "The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the [IEA] who claims it has been deliberately
underplaying a looming shortage for fear of triggering panic buying. The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves." Today the IEA released its annual energy outlook and rejected the whistleblowers'
charges. The Guardian has an editorial claiming that the economic establishment is too fearful to come clean on the reality of oil suppplies, and makes an analogy with the (marginalized, demonized) economists who warned of a coming economic collapse in 2007.
This is why we had $147/barrel oil a few years ago, not speculators.
If the world population were the only factor, oil would still be at $147/bbl, because the world population hasn't gone down.
I suspect that there was rampant speculation going on, and that a great many speculators lost their shirts when the bubble they'd created burst. But I don't know who the winners and losers were.
If you "smooth out" the spike, the price of oil is still going up pretty fast since its trough in the late 90s, even if not quite as fast as the speculation-fueled spike. That would suggest that you're correct: we are looking at a price rise, possibly just based on the supply and demand, and the current dip is just the spike evening itself out.
If that's the case, we'd expect to see oil continue a gradual rise of roughly 5% per year over inflation. But the spikes make it tricky to observe that with anything less than a five-year window.
Maybe I'm the exception, but gas is a very small part of my recurring bills. If gas prices double or triple, maybe I'll skip a new video game or dinner out every month. Whoop-de-do. And the price of shipping goods will increase. So I'll pay $0.79 instead of $0.59 for a potato. I'm just not quaking in my boots. The biggest overlooked fact of peak oil is that it will be a gradual decline as more oil recovery methods become economically feasible. So over the rest of my life, I suspect there will eventually be a cheaper mode of transportation than gas-powered cars. But for now, I'll stick with the convenience of 400 miles/fill-up, gas stations everywhere, and transportation costs (including car payment) below 15% of my income.
> So, there are reserves that are "unattainable" because it is not energetically sane to extract, and they will never be economically feasible no matter the price.
As one witty peak oiler explained it: If I want an apple, I may pay a dollar for it. If I really want and apple, I might pay a thousand dollars for it. But no matter how much I like apples, there's one price I will never pay for one, and that is twoapples.
xkcd is not in the sudoers file. This incident will be reported.
A lot of people hate mass transit in general. See Arlington, Texas, the largest city in the US without even a bus service. They have the Cowboys stadium, seating for 110,000, and absolutely no mass transit. It's a nightmare of parking, and yet the council was cheered as the most recent effort to create a bus line was defeated. They believed, as documented in local media, that busses would attract "the wrong sorts of people" to their town. Not all mass transit advocates want to force you to use it or artificially raise automobile prices. It's not always a war or a zero sum game, and don't pretend your side doesn't have a very large irrational population.
I'm sorry, but I think you've only served to reinforce my statement. You offered nothing in the way of argument against the premise that many environmentalists act as nazis. Further, you simply repeated the Godwin claim in an attempt to avoid meaningful rebuttal.
Also, the fact that "enviro-nazi" is a meme certainly applies here. The original post could have said "enviro-droids", "envirotards" or "envirobabies" and the argument would have held all the same. Does replacing one meme with a different one change the Godwin status of a statement?
sig: sauer
Indeed. And in fact Kuwait has already been caught lying about its reserves red handed. Anyone who runs the numbers on Saudi Arabia also finds they are highly suspicious. It's almost certain in fact that OPEC members routinely lie about the size of their reserves and this is acknowledged by the IEA as well.
The thing is, while there will be more economic incentive to use alternative energy sources, and even though necessity is the mother of invention, there are technical hurdles to overcome, and we need to set of new infrastructure, and the science and engineering feats that must be accomplished will not just happen because we want them to. Maybe we can overcome the problems given enough time, but depending on how fast the price increases (thanks to increased development in countries like China and India, demand will be increasing even as supply drops), we may not be able to afford to wait.
Yes, the laws of supply and demand will prevent there from being real shortages, but when the economy slows because people can't afford to drive places (like work) or buy things that were shipped (like most food), when people are forced to make hard decisions, when the market for luxury goods disappears because people are spending most of their income on necessities because the next big thing in affordable fuels is still "just around the corner," will it matter that it isn't a shortage in the truest sense of the word?
But it absolutely is going to run out one day, nobody but a crackpot would argue otherwise. So if you buy some and stockpile it indefinitely until it does, you absolutely are going to make a fortune, unless all demand for oil suddenly and miraculously goes away. So why isn't everybody doing just that? There must be a reason.
Turns out there is, and it's really simple.
The problem with trying to do that is there's nowhere to store it. Buying billions' worth of oil and putting it away for a rainy day just isn't possible unless you're, say, the US government with (allegedly) underground caves you can fill up with the stuff. So you have to just keep buying it as it comes out of the ground.
And because we don't know exactly when the oil's going to run out, thanks in part to the sort of misinformation talked about in this article, the market price can't reflect how things are going to go in future. So people have to assume things are going to carry on as normal until they hear otherwise.
If I knew oil was going to run out to all practical intents and purposes in, say, 50 years, and could store significant quantities of it for that long, then yeah, I'd do it. But I don't know when it'll run out, and I don't know how much I can store, and for how long. So I'll carry on paying the spot price or something not too far in the future, like everybody else.
There's general agreement in the industry that we're near peak oil. The peak may have happened already, in 2006-2008. The most optimistic view is that the peak will be around 2020. That's not far away.
Prices aren't that good an indicator of availability. Because supply and demand are both relatively inelastic and change slowly. So small variations in supply or demand produce big changes in price. The worldwide recession has cut demand a bit, which brought the price way down. Supply did not increase.
All the easy places have already been drilled. US oil production peaked in 1970. Look at this list of countries where production has peaked.
Then there's France. Back in the 1970s, France decided to go nuclear. France has 59 nuclear power plants and exports electricity. It's good to plan ahead.
People *love* to listen to doomsayers, far more than people who tell you that things are going to be fine.
Really? What about the global financial collapse, where the doomsayers were ignored or ridiculed, and everybody wanted to hear about how great things are financially? Or the dot-com bubble, where everybody was listening to the market bulls who said we had a "new economy" that was just going to keep on growing and growing - while the bears and those who predicted a burstijng bubble were ignored?
I think you've got this one backwards. most people want to hear everything's fine, and don't want to hear negatives. That's why there's such a culture of yes-men in business. You tell the boss what s/he wants to hear if you want to keep your job (unless you have a more enlightened boss).
... and then they built the supercollider.