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.

Comments

On the plus side!

[fuzzyfuzzyfungus]

We might manage to find some more oil if we all stick our heads far enough into the sand, that is basically where it lives...

Re:On the plus side!

[elrous0]

If my sources are correct, all we have to do is kill a bunch of dinosaurs then wait.

Re:On the plus side!

[u38cg]

The thing is, if you *really* believe we're sticking our collective heads in the sand, borrow a couple of billion dollars and buy oil on a long dated future. If the peak oil doom-mongers are right, in a few years we'll be paying a thousand dollars a barrel. The fact that the price of future-dated oil doesn't reflect this suggests that the smart money doesn't believe peak oil is as imminent as the heralds of doom suggest.

Re:On the plus side!

[Bertie]

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.

If True, Fascinatingly Bizarre Logic

[eldavojohn]

Reality A: No withheld data. Data is disseminated with some initial shock that by 20xx we will have oil shortages. People get a chance to plan accordingly. Private business gets a chance to cash in on better alternatives and more efficient products marketed to the consumer. California starts to look a little less crazy. Gasoline and fuel slowly becomes more expensive over the years as production slows. People adjust.

Reality B: It's 20xx, suddenly there's no oil. Mass panic. People flip out. People die. Fuel shortages lead to water/food/heating shortages lead to war. Private industry doesn't have a chance to adjust. People aren't prepared to buy a new vehicle on the spot. Californians ride the nearest comet to Heaven's Gate. Crime increases, lawlessness arises, civilization breaks down, I'm forced into a Thunderdome with Cowboy Neal for my right to live.

If the IEA is capable of any logic at all, they are not cooking the books or withholding data. What's the motive of retaining data or fixing charts?

Re:If True, Fascinatingly Bizarre Logic

[Maximum Prophet]

Reality C: No withheld data. Data is disseminated with some initial shock that by 20xx we will have oil shortages. People get into panic buying mode. Dogs and cats living together... Come 20XX, new supplies are found, and there are no shortages. People who bought oil future loose their shirts.

Re:If True, Fascinatingly Bizarre Logic

[jnaujok]

You forgot Reality C: There's over 3.2 Trillion barrels of known reserves around the world (1.5T of which are in the United States, 1T of which is in the Green River Oil Shales -- all of which is currently unaccessable only because we say it is [by government mandate]). Although some of this oil is more difficult to mine than it is in the middle east, where you can just about stick a pole in the ground and get oil bubbling up, as the price of oil increases, more of these reserves will be made available. As the price rises, some applications will become more cost effective to switch to other sources for power/raw materials/lubrication.

As each one of these applications turns away from oil, the price of oil will temporarily drop or stabilize. Eventually we'll either be 100% off oil, or at a level where it's sustainable for 1000's of years.

Oh wait, that's free market economics, and I forgot that our president has announced that "that doesn't work any more."

So, mandates, high taxes, and bans on exploration and new extraction will be the norm, the price of oil will skyrocket, people will be unable to adjust and will panic/starve/die. So we have scenario B, enforced by our "leaders" rather than a real crisis...

Re:If True, Fascinatingly Bizarre Logic

[GigsVT]

Reality B: It's 20xx, suddenly there's no oil. Mass panic. People flip out. People die. Fuel shortages lead to water/food/heating shortages lead to war. Private industry doesn't have a chance to adjust. People aren't prepared to buy a new vehicle on the spot. Californians ride the nearest comet to Heaven's Gate. Crime increases, lawlessness arises, civilization breaks down, I'm forced into a Thunderdome with Cowboy Neal for my right to live.

The only way Reality B can happen is if government artificially lower the price of oil through price caps or subsidies.

Oil producers have no motivation to lie about oil reserves. They need the price to rise as the supply falls so that they maximize their profits. This will inevitably lead to your Reality A, a slow increase in price as supply falls.

Re:If True, Fascinatingly Bizarre Logic

[Anonymous Coward]

People who bought oil future loose their shirts.

Why? Did they get too hot?

Re:If True, Fascinatingly Bizarre Logic

[orzetto]

You are thinking only in economic terms. At some point there is an absolute economic limit when you are using as much energy to extract and process the oil as the energy you actually get out of it.

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.

Keep in mind that already now extracting only 50% of the oil of a reservoir is not considered that bad (and that's secondary recovery already, when you flush with water to get more oil out).

Re:If True, Fascinatingly Bizarre Logic

[oldspewey]

Oil producers have no motivation to lie about oil reserves.

Oil producers have ample motivation to lie about oil reserves. Who has more geopolitical and economic clout:
a) A country with 50 billion barrels in proven reserves, who publicly state they have 50 billion barrels in proven reserves, or
b) A country with 50 billion barrels in proven reserves, who publicly state they have 125 billion barrels in proven reserves?

Who is better able to attract foreign investment in port facilities or refineries? Who has more influence over the large oil-consuming nations?

Re:If True, Fascinatingly Bizarre Logic

[cheesybagel]

Oil shale is not petroleum. It can be processed into fuel, but so can coal and natural gas. Shale is not processed more because it is expensive and environmentally harmful to to convert. Even tar sands are cheaper.

Here is what you probably don't know: Ronald Reagan stopped funding research on coal to liquids and extraction from oil shale by abolishing the Synthetic Liquid Fuels Program in the 80s.

Re:If True, Fascinatingly Bizarre Logic

[Vintermann]

We will not "suddenly" run out of oil. What will happen, is that prices will become high, and stay high - even in the face of things which would previously send them into the cellar, such as, I don't know, a global recession.

Re:If True, Fascinatingly Bizarre Logic

[cfulmer]

Both your setups (and, from what I've seen, everybody else's) miss a fundamental fact: There's no on/off oil spigot. It's a gradual process. If there really isn't much oil left, then oil will slowly become more and more expensive as the remaining oil becomes harder and harder to extract. We will never truly run out of it -- it will just get so expensive that it will be used for only a few things. Along the way, as the price goes up, alternatives will develop. People will switch to more fuel-efficient cars, perhaps plug-in hybrids, substituting nuclear and hydro energy for oil energy. Similar innovations will happen through every place that oil is used today. We have nuclear-powered aircraft carriers, why not nuclear-powered super cargo ships? You will see a slew of new battery technologies as companies realize that there's a lot of money to be made in replacing oil. In fact, the more expensive oil gets, the more alternatives become viable. The only real shortage would happen if some government put a price cap on oil or gasoline, perhaps saying "You cannot sell gas for more than $5 a gallon" at a time when market forces would set the price at $10. In that case, there would be shortages. Otherwise, there would just be a bunch of people refraining from buying oil because the prices are too high.

Re:If True, Fascinatingly Bizarre Logic

[Vintermann]

> 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.

Re:If True, Fascinatingly Bizarre Logic

[crmarvin42]

Reality D: No withheld data. IEA not lying, but the whistleblower is simply a dissenter who was unable to convince the others as to his fuzzy math vs. everyone else's fuzzy math or he is a liar. Press automatically believes the worst, gives free advertising to the whistleblower. Whistleblower writes book, makes lots of money, and possibly receives the Nobel Prize for going to a book signing. Oil prices jump all over the place, everyone panics and the global recession kicks back into high gear for another couple of years.

Re:If True, Fascinatingly Bizarre Logic

[orzetto]

You must be new here to OPEC. Let me be your guide.

OPEC exists to maximise the profits of its member countries. To avoid countries from competing against each other and thus lowering the price, there are production quotas.

Quotas are determined for each country based on its reserves.

Reserves are, however, only a rough estimation, because no one can go kilometres underground and survey the oil fields. They only have a few holes, pressure vs. flow data, composition and little more.

As a result, a geologist from Whatsamatterstan is asked from his minister: how much oil reserves do we have? If you say X, we make Y. If you say 2*X, we make 2*Y, and I will be happier. If you say X/2, I will hire another geologist.

So, as a result, reserve estimates within OPEC have a strong incentive to be exaggerated. In order to maximise profits, a country has to put a straight face until oil is really not flowing any more: if they let out the news that they cheated about reserves, they cannot sell oil at the same rate any more, and (not sure about OPEC by-laws) may face fines. So they will always deny any exaggeration in estimates until the bitter end.

Saudi Arabia, in particular, has an enormous incentive to lie about their cheap oil: they have a leadership position in OPEC because they have the largest reservoirs and the cheapest oil (used to be $2/barrel at production), which means they can keep everybody else who may disobey them in line by flooding the market, thereby sinking price, thereby hitting their profits. If they were to hit peak oil, that country would suddenly be powerless, useless to the US as a strategic ally, and will lose its position of prominence (most likely) to Iran, which you may guess will start a long domino effect.

Re:If True, Fascinatingly Bizarre Logic

[CensorshipDonkey]

Some of us do not want the companies to do whatever they want with their own money, it is true! They cannot mine everywhere, because we prefer unmined land, and they cannot pollute as much as they want, because we prefer unpolluted land! So, how do we decide how much companies get to exploit the world for their own profit? We get together and vote. It turns out the current majority of our population does NOT WANT more CO2 producing fossil fuel extracted, while creating a non-trivial mess in the process. The free market is a means to an end, and that end is a good life with personal liberty etc. The free market itself is not the end.

Re:If True, Fascinatingly Bizarre Logic

[CensorshipDonkey]

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.

Re:If True, Fascinatingly Bizarre Logic

[gestalt_n_pepper]

Yes, there's plenty of oil, and there always will be, because we'll end up leaving most of it in the ground.

Those oil shales you mentioned, and the Bakken oil formations a bit farther north, have more oil in them than all of Saudi Arabia, and might as well be on Alpha Centauri, for all the good it'll ever do us.

The problem is this. Regardless of what available technology you choose, the majority of this stuff is neither energy positive, nor economical to produce. It's in *shale.* You know, rock. It's not some nice big pool of spongy liquid you can put a straw in like the Ghawar fields in Saudi. You have to dig the rock, grind the rock, and *heat* the rock to get the oil out. Depending on how much oil is in the rock and how finely you ground it, you may, or more often not, get as much oil energy out of the rock as you put into it.

Which is why all those new finds so breathlessly reported by those with journalism degrees don't mean squat.

A deep water find that only yields sulfur-laden, heavy crude (i.e. tar) in multiple scattered reservoirs is NOT equivalent to some nice little civilized shallow well in porous rock that yields light sweet crude. The first is cheap to get, cheap to process, cheap to ship and it all can be done quickly. The latter is NOTHING like that. The latter is a decade from well to the tank in your car, if then.

Bottom line? Cheap oil is a thing of the past. Our expanding economy depended on an ever expanding supply of cheap, portable energy. That goes away when oil goes away. We will transition, no doubt, but a few, maybe more than a few will starve to death before we do and more than a few governments may fall.

Cheers!

Re:If True, Fascinatingly Bizarre Logic

[Volante3192]

Maybe the problem is too complex/expensive, but that doesn't mean you should prevent people from even trying to solve it if they want.

I'm confused how they're being prevented. Many oil companies have setups in Utah and Colorado mining shale oil, it's just not economically feasible now for them to develop the process further. That's the free market at work.

Real shame we can't pass legislation to force the oil companies to dump billions into oil shale research, but I guess that'd be socialism.

Re:If True, Fascinatingly Bizarre Logic

[Rei]

I like to call it the "Reverse Cassandra Effect" (stole the term from Simon). People *love* to listen to doomsayers, far more than people who tell you that things are going to be fine. The doomsayer can have the flimsiest of evidence and the dissenter a solid case, but the very notion of doom itself seems to make the audience more receptive to what they have to say.

A classic example is the Simon-Ehrlich Wager. Julian Simon, a libertarian-leaning business professor, bet Paul Ehrlich, a biologist who had published a series of books about imminent resource scarcity in the 1970s, that the inflation-adjusted price of five commodity metals -- of Ehrlich's choosing -- would average dropping over the course of the 1990s. Simon won -- bigtime. All five metals dropped in price, some by huge amounts. The aftermath? Despite Ehrlich's loss and his similar forecasts of huge famines, resource wars, etc all failing to materialize, Simon remained in relative obscurity, while Ehrlich received a MacArthur Foundation Genius Award for "greater public understanding of environmental problems" in his doom-preaching books.

And when I say this, note that I in general am *not* fond of libertarian ideals, and consider myself an environmentalist. But these doomer notions of secret imminent scarcity are just plain hokum.

Re:If True, Fascinatingly Bizarre Logic

[IamTheRealMike]

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.

Re:If True, Fascinatingly Bizarre Logic

[Ibag]

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?

Re:If True, Fascinatingly Bizarre Logic

[PPH]

Reality D: Data is being withheld. Different forecasts of peak oil are generated and released, prompting suckers to buy, then sell, then buy back, etc, etc. oil futures. The people handling the transactions make out like bandits.

Re:If True, Fascinatingly Bizarre Logic

[dangitman]

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).

peak oil clarification

[je ne sais quoi]

As a point of clarification, the issue is NOT when we will run out of oil. There's enough oil left in the subsurface to last a long time. The issue is how fast we can get it out of the ground. When an economical oil deposit is first discovered, there is a substantial amount of pressure on the oil (think spindletop) and it comes up to the surface of it's own accord. As the oil from the deposit is produced, the pressure drops and the oil ceases eventually coming up by itself all together. After that, you can still get it out of the ground, but you have to pump it and you never get back to the same flow rate.

World population is continually increasing, China and India are rapidly industrializing so demand for oil is going up and up, but the flow rate isn't. This is why we had $147/barrel oil a few years ago, not speculators. It's all supply and demand, but in this case the supply is limited. No amount oil shale or tar sands or deepwater deposits will do us much good because we can't achieve the same flow rate with these deposits as the traditional ones.

Re:peak oil clarification

[jfengel]

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.

Re:peak oil clarification

[Tumbleweed]

It's all supply and demand

It's really not. OPEC deliberately (and publicly) slows production to keep prices high. They've gotten used to the profits that $70+/bbl oil brings. We're never going back to pre-Katrina oil prices. In the long run, though, this is good - it merely ensures the rise of much more fuel efficient vehicles.

Re:peak oil clarification

[epine]

Oil is a strange good. The wealthiest economies are those which consume the most of it. Under present conditions, each unit of oil consumed generates wealth. It's extremely hard to argue that oil is not significantly underpriced, to the greater benefit of those who monopolize its consumption.

If the price of oil doubles or triples, the western world would grouse so loudly, the internet might collapse under the collective groan, but in other respects, life would go on. We'd finally have to rationalize our consumption, a project long overdue on any number of other grounds.

I have trouble grasping Chicken Little squawking out of one beak "we're running out of oil, we're all going to freeze" while simultaneously squawking out of the other beak "we've already burned too much, we're all going to roast". Even if the GHG scenario fails to unfold with the anticipated drama, there's still the issue that we are potentially damaging ocean chemistry and wiping out global shellfish ecosystems.

My own position is that we already have more carbon at hand than we can prudently burn and release into the atmosphere, so peak oil is mostly about traders hoping to pump and dump amid a global stock panic.

My sceptic says: I'll believe the world is suffering a major food shortage when nobody grows tobacco. I'll believe the world is suffering a major energy shortage when we can no longer afford to throw a cell phone away because it's so yesterday.

The Afterlife of Cellphones

Regardless, recyclers say that from their vantage point it's obvious that most phones are retired because of psychological, not technological, obsolescence. "There's some fashion driving all of this and, by its nature, fashion is not eternal," says Mark Donovan of M:Metrics, which tracks the wireless industry.

This is a dead giveaway that our society is not yet anywhere close to energy stress, as much as the masters of markets in chaos wish us to fear this.

Re:Dont believe it.

[pixelpusher220]

I doubt it. raise the price too high and even addicts will find another drug....

Certainly the Saudi's will get much richer, but 'Big Oil' business is mostly a middleman these days. They make a good profit, but the vast bulk of the cost is for the crude from producers.

Not a good argument

[The_Wilschon]

an analogy with the (marginalized, demonized) economists who warned of a coming economic collapse in 2007.

Great. This argument boils down to "Someone who we were told was wrong turned out to be right. Therefore, this other person who we are told is wrong (and by extension everyone who we are told is wrong) must also be right." I have no idea whether or not these whistleblowers are correct or not, but this "argument" by analogy is worse than useless, because it encourages fuzzy thinking.

Give it a rest, will you?

[bartyboy]

These popular conspiracy theories about group X holding back product/information Y are all debunked by a single thought: IF these people are truly smart enough to rule the world (or an aspect of it), they know better than to try to control every single individual in it.

What does this mean? That they are smart enough to follow free markets. They are smart enough to know that they can't predict the future of the stock market, even if they can control an aspect of it. This assumes that these groups do have a level of involvement high enough to control the government, financial and religious institutions WITHOUT being exposed. You really think that a large group of people is capable of holding a secret so large for so long? A president gets a blowjob from an intern and the whole world hears about it. I doubt an army of engineers, scientists and politicians would be quiet about what really goes on in Area 51, killing people with vaccines, peak oil conspiracies or whatever bullshit is popular that day.

So give your conspiracy theories a rest and please report some real news.

Re:Give it a rest, will you?

[Vintermann]

There's one thing classic conspiracy theory conspiracies very, very rarely have, and we're looking at it right now: Whistleblowers. It's not the first time either, that insiders have complained about political pressure.

So we're not exactly talking chemtrails-style conspiracies here, rather the kind of modest conspiracy that happens from time to time - such as a conspiracy to deny a link between smoking and cancer, or a conspiracy to deny that there's anything wrong with Iceland's economic situation. Not generation-spanning, all-encompassing conspiracies, just a couple of interest groups getting together and see if the can postpone inconvenient revelations (or their impact) a couple of more years.

Re:Give it a rest, will you?

[Monkeedude1212]

Exactly. The only thing more annoying then a Conspiracy Theorist is someone who believes conspiracies don't exist.

Just because its not a huge, elaborate ploy, doesn't mean that there isn't SOMETHING underhanded going on, even if its just 1 individual.

Re:Give it a rest, will you?

[raddan]

How about a conspiracy to build a devastating new weapon that will wipe Japanese cities off the map? I'm not a conspiracy theorist, but I can't see how you can say that the Manhattan Project was not a conspiracy. Not to mention other recent and well-documented conspiracies. What about political coups? Political assassinations? For something as visible as oil, probably not, but conspiracies can and do happen.

Probably overblown

[Toonol]

Whistle Blowers have agendas too, sometimes. But it's a moot point, because the proper response is the same either way: fast track nuclear plants. There is no other reasonable solution to the inevitable energy problem. We will switch to nuclear at some point or our civilization will collapse.

Re:Bah!

[Captain Splendid]

Yeah, but we aren't allowed to exploit domestic energy supplies. The NIMBY crowd and enviro-nazi's will see to that, aided by the current political overlords in Washington.

Congrats, you just described supply and demand. Oil is cheap, so no one wants to pollute for marginal gains*. Check back in a couple of years or so, and I think you'll find the balance has changed somewhat.

Hopefully, by that point, you'll have learned how not to Godwin yourself.

*There's also a whole commentary about how smart exactly is was for the US to basically outsource everything. Cost of living is cheap, but the blowback's a bitch.

Aren't "known reserves" all fucked up?

[Anonymous Coward]

I'm pretty sure OPEC allocates allowed production levels by each country's "known reserves", giving the rulers of those countries all kinds of incentive to exaggerate their reserves.

The medieval Saudi despots and thugs like Hugo Chavez want to grab all the money they can while THEY'RE alive.

Re:Bah!

[Shakrai]

By the time that happens we won't have any money left to exploit them with and it will be the Saudi's pumping oil out of the Midwest.....

Not worried

[hatemonger]

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.

Re:Not worried

[bdeclerc]

Maybe you don't realise, but the price of "gas" is factored in in pretty much everything else you buy... That video game, how do you reckon it's transported to the store? That dinner, how do you think its ingredients are harvested, and possible, with what it is cooked?

Price of oil/gas rises --> price of all manufactured goods & services rises --> cost of living rises... This effect is far, far bigger than the "very small part of your recurring bills" that is you directly buying gas...

Re:Bah!

[postbigbang]

You say "environmental extremeists" as though it's one word.

Environmentalism has a long grey scale that you might be unfamiliar with. And like both current political leanings, there are a lot of other vectors to understand, too.

FWIW, I firmly believe that there's far more oil, pumpable at low cost, than we even know about. The problem isn't exporting oil dollars. The problem isn't exploiting domestic sources. The problem is that burning it blows carbon-oxygen atoms out tailpipes, where they pollute, and ultimately cause atmospheric damage. You can't tell me all of that soot is a good thing.

Re:Bah!

[theaveng]

My understanding of Godwin's law is not that referencing Nazis is bad (after all, they were a part of history). He just observed that eventually, if a fight goes on long enough, someone will make reference to them. He did not opine if that was bad or good.

Personally I think it's rather silly we can't talk about tyrants or their tyrannical governments. Even if I invoke a different tyrant to make my point, like Communist Dictator Nicholae Ceasescu, I still get accused of Godwining myself. It's like a blatant censorship of history, and the willful decision to put blinders over your eyes and deny that governments can, from time to time, be destructive to their own citizens.

Foolishness.

Re:Bah!

[Gerzel]

It doesn't matter if there is more or not. The total determines the price. THe more simply means we'll be the last to fall, assuming an equal rate of use. However we use a lot more oil than other similar countries so that oil is a mitigating factor and if you think it's going to be sold at a discount to those in the US w/o some sort of government intervention then you are going to be in for a rude surprise.

Re:Bah!

[ichthus]

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?

Humbug!

[NoYob]

Yeah, but we aren't allowed to exploit domestic energy supplies. The NIMBY crowd and enviro-nazi's will see to that, aided by the current political overlords in Washington. Apparently it's better that we keep sending hundreds of billions of dollars overseas than it would be to exploit our own resources and keep some of that money within our borders.

Don't worry though, I'm sure our overlords in the Federal Government will come up with a solution. All we need is more energy conservation and investment in key primary states^W^W^Wethanol to save the day.

The NIMBY crowd and enviro-nazi's will see to that....

People complain about the NIMBYs until someone wants to put something in their neighborhood.

"enviro-nazi's"?? Where did you get that name from??

Every environmentalist group that I know of has a goal of basically improving human environments. Clean air, clean water, balanced ecosystem, etc....

Whatever we do to the environment always comes back to us one way or another. It's real easy to be Laissez-Faire when you live in a rich country but it'll only insulate us for so long - that' s assuming we stay rich.

Re:Bah!

[Shakrai]

On the other hand it's possible the EU and China might get mad, and decide to just declare war and take the oil by force.

How exactly do you invade a country with thousands of nuclear warheads and enough firearms to arm every adult citizen, should the need arise?

Re:Bah!

[theaveng]

Peak oil is not about "running out" of oil. Yes there's plenty under the ground of the Dakotas, but that's not the issue.

Peak oil is about when the consumption exceeds the discovery of new fields, which means the "warehouse" of oil is emptying out instead of filling. Initially nobody will notice, but soon they will and there will be a drive-up in prices due to the rapidly-dwindling reserve. It's similar to what has happened with Gamecube games. It's still possible to buy brand-new copies of, for example, Mario Sunshine but because no new copies are being made, the price has risen from $30 upto $80 (or more).

Rising scarcity resulted in rising prices, and the same will happen with oil in the very-near future (2011 or 2012). If you've got money to spare, buy oil stock NOW.

Re:Bah!

[Golddess]

So, until we have a viable alternative, why not use our domestic resources?

From a strategic standpoint, wouldn't it be better to wait till we've exhausted the oil supplies from everyone else before we start using our own?

Missing the point

[fiannaFailMan]

America, with 5% of the world's population, consumes about 25% of its resources. Reason? Single Use Zoning. The silly settlement pattern that puts housing neatly in one area, shopping in another, office space in another, and industry in another, and then forces people to drive between all these areas throughout the course of the day. Okay, it makes sense to zone off industry in certain cases where noise and pollution is an issue. But making it illegal to open a corner store in a residential area? No wonder so many journeys are made by car in the USA, bus journeys in that kind of sprawl take forever and mass transit gets a bad reputation (deservedly so). Induced traffic is another symptom of this problem - roads get wider, developers develop farther out to allow people to take advantage of the faster commute and lower property prices, roads get filled with cars belonging to these new commuters, and we're back to square one again with people demanding that the road gets widened even more!

As long as American settlement patterns are so screwed up, the problem will exist even if we aren't in a state of world peak oil. The problem is a hopeless addiction to petroleum that no magic wand nuclear power solution (mentioned by someone above) will be able to fix.

Re:Bah!

[postbigbang]

What soot? Are you blind, man?

And you think that catalytic converters all are in fine condition, and none of the trucks and trains and airliners in this country exhaust rosewater?

For a moment, let's just say that all of that CO2 and water are healthy emissions. We'll ignore using coal to generate electricity. The long term effects are here.

Would nuclear generation of power be useful? Yes, save we haven't figured out how to deal with the waste products, contamination, and safety issues. I invite a cogent redesign of nuclear power. I'd love it. I'd enjoy better hydro generation. Better and more efficient batteries.

The soot issue isn't solved. Just because you can't see the particulate matter doesn't mean it's not there, and that's only in the case of passenger autos fueled in the North American and Brazilian market by gasoline and ethanol (a better but weaker choice). Diesel autos fuel the EU and Asia, as well as much of Africa. Yes, they're improving, but on the whole, not by very much.

From Peak to Asymptote

[Geoffrey.landis]

Once we have reached the "peak", how long will it take to actually "run out"?

Forever.

We don't "run out." What happens is that the production decreases, and the price increases, so production heads asymptotically toward (but never reaching) zero production rate. As the price rises it becomes economically feasible to extract harder and harder to recover oil, and production never stops.

Re:wind

[calmofthestorm]

Uh...the IEA is saying that everything is fine and dandy and it's some random person in the IEA who is saying the sky is falling...not sure what you're driving at, I'm sure claiming things are fine as they are is a massive conspiracy to bring about a big scary bad world government.

Re:Bah!

[Shakrai]

Would nuclear generation of power be useful? Yes, save we haven't figured out how to deal with the waste products, contamination, and safety issues.

You lost me at "safety issues". The worst accident in the history of American nuclear power resulted in zero fatalities. You'll forgive me if I don't see safety issues as a reason to abandon nuclear power.

The waste issue is a real one, but one that can be mitigated by nuclear reprocessing. In any case, if global warming is actually being driven by mankind's emissions of CO2 then I should think that the choice between a few thousand tons of low-level nuclear waste (the only kind that requires long term storage, high-level waste decays on much shorter timescales) and a few billion tons of CO2 should be an obvious one.

Thanks for demonstrating my original point though. As an environmentalist you find every single option that's currently on the table to be unacceptable. That makes for great politicking but horrible engineering.

Re:Bah!

[ultranova]

How exactly do you invade a country with thousands of nuclear warheads and enough firearms to arm every adult citizen, should the need arise?

Offer its industry leaders cheap labour, thus tempting them into moving their manufacturing capacity to your country, letting your enemy run up a debt it has no hope of ever repaying, use threats of not giving more credit to force it to devote more and more of its remaining manufacturing capacity to paying you while driving up taxes and weakening social services until the brightest young minds leave it. When it has been bled dry, cut the supply of goods, discard the hollow husk of your enemy, and keep the manufacturing plants they so graciously gave you.

It's working rather splendidly, judging by the financial crisis.

Re:Bah!

[Bigjeff5]

What we've seen in past year is that high oil prices destroy economic growth which destroys high oil prices.

That's not what happened at all, the oil prices had nothing to do with economic growth, and the oil prices also had nothing to do with supply/demand which would ordinarily govern such things.

The oil prices were artificially inflated by the OPEC cartel, which is unmaintainable. They reset prices before the bubble burst on them (which would be very bad for OPEC), and for a little while oil was priced a little lower than it should have been.

The economic crisis was a completely separate issue, caused by funny business in the housing markets - particularly the insurance markets.

In fact what was remarkable about the period of extremely high oil prices was consumption of oil did not change much, people simply got a little angry, and put MPG higher on their list of "things I want in a car" for their next purchase. A lot of companies used oil prices as an excuse, but for most of them it was a complete crock.

Re:Bah!

[servognome]

Offer its industry leaders cheap labour, thus tempting them into moving their manufacturing capacity to your country, letting your enemy run up a debt it has no hope of ever repaying, use threats of not giving more credit to force it to devote more and more of its remaining manufacturing capacity to paying you while driving up taxes and weakening social services until the brightest young minds leave it. When it has been bled dry, cut the supply of goods, discard the hollow husk of your enemy, and keep the manufacturing plants they so graciously gave you.

You ignore the fact that China must purchase US dollars to keep its currency pegged and maintain the advantage of cheap labor. Their wealth is therefore built upon the value of the paper the US gives it. Make that paper worthless and the value of those holdings dissolves. Further, many of those shiny manfuacturing plants will be left idle and the value of goods made depreciates since the chief purchaser can no longer afford them.
The massive foreign holdings of the dollar has made the United States into the equivalent of a "bank too big to let fail." Just like the corporate fat cats cashing in millions while the economy around crumbled, the US continues to happily give pieces of paper to enjoy cheap goods, finance it's wars, and feed its appetite for oil.

Re:Bah!

[burnin1965]

The gravel roads have to be a certain thickness (generally about 6 ft high) so that, when areas are eventually decommissioned and the permafrost underneath will not have been affected. Buildings are built up off the tundra so animals can walk under them, etc.

Actually those construction methods have nothing to do with any evil greenies impinging on some poor picked on corporation's profitable endeavors. Construction on top of permafrost presents unique challenges to the long term viability of any project be it roads or buildings. What you are describing are hard earned engineering techniques that were preceeded by many construction failures on Alaska's permafrost and have zilch to do with greenies or environmental protection.

Re:Bah!

[Xaositecte]

Whether it will run out in 20 years, or in 100 years, Oil WILL run out eventually. Whether we make the investment to retool our entire civilization now or in 100 years, we WILL have to do so.

I'd rather we rush ahead right now and find out we had decades of leeway than sit on our asses right now and wake up tomorrow to find out we didn't have as much time as we thought we had.

Re:Bah!

[ichthus]

Now, don't be a Godwin nazi.

J/K. That sounds like a good plan. Draw up a petition and I will sign it.

Re:Bah!

[burnin1965]

A few notes, banks are not forced into lending to anyone, the CRA only applies to banks who sign up for FDIC coverage and even then only some banks fall under the CRA regulations. There are ways that banks can work around the CRA and guess what, they did.

http://www.mcclatchydc.com/251/story/53802.html

"More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions."
"Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year."
"Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics."
"Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance"
"only commercial banks and thrifts must follow CRA rules. The investment banks don't, nor did the now-bankrupt non-bank lenders such as New Century Financial Corp. and Ameriquest that underwrote most of the subprime loans."
"private non-bank lenders enjoyed a regulatory gap, allowing them to be regulated by 50 different state banking supervisors instead of the federal government. And mortgage brokers, who also weren't subject to federal regulation or the CRA, originated most of the subprime loans."

GW Bush was calling for reforms until they arrived...

http://www.presidency.ucsb.edu/ws/index.php?pid=24851
Statement of Administration Policy: H.R. 1461 - Federal Housing Finance Reform Act of 2005
October 26, 2005 "H.R. 1461 fails to include key elements that are essential to protect the safety and soundness of the housing finance system and the broader financial system at large. As a result, the Administration opposes the bill. "

http://www.presidency.ucsb.edu/ws/index.php?pid=74353
Statement of Administration Policy: H.R. 1427 - Federal Housing Finance Reform Act of 2007
May 16, 2007 "Any efforts to weaken the existing portfolio language contained in H.R. 1427 will threaten the Administration's support for this bill. "

The house actually passed H.R. 1461 but was never cosidered by the Senate and McCain's support for S190 came only after the report of corruption and bad management of Fannie and Freddie came out. And then what did he do? Nada, the Senate let it slide.

There is plenty of blame to go around but this idea that some how the Democrats in concert with lower income earning U.S. citizens caused the current economic crisis is dumb founding idiocy.

Peak oil.

[Animats]

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.

Re:Bah!

[risom]

China is fully aware of that fact (its mostly still a planned economy, and these are the kind of things planned economies excel at). For a few years now China does three things to change this :

• It's lobbying heavily for a new artificial world currency (a mixture of all popular currencies, I can't remember the name right now), to force the US to buy with real value.
• It's massively investing in domestic infrastructure. Already in 2008 the exports were not the major GDP driver anymore. Relative to the income per person in each country the US anticyclical investments of the last 2 years dwarfed in comparison to that of China.
• It's buying tons of companies in the US (for a few years now, but the real shopping spree started with the US crisis, therefore exchanging these "pieces of paper" with real products.

Your point was valid in the 1990s though.