Have We Really Hit Peak Oil?

[Orwellian_Ghost]

Have We Really Hit Peak Oil?
By Richard Heinberg, TruthOut.org. Posted May 20, 2008.

And if we have, we had better prepare to change the way we live.

Last week, Senate Democrats introduced legislation that would halt a U.S. arms sale to Saudi Arabia worth $1.4 billion. The implication is clear: no more war toys for the Saudis unless they agree to up their oil output.

The same day, the House approved a Senate plan to suspend oil deliveries to the Strategic Petroleum Reserve in hopes of diverting that oil to the market, thus lowering the pump price a tiny amount. A week earlier, a handful of Senators proposed a bill threatening a trade dispute with members of OPEC if the organization doesn't stop "its anti-competitive practices and illegal export quotas on oil."

It's understandable that our elected leaders would want to do something about the meteoric rise of gasoline, diesel, and heating oil prices that are now bankrupting independent truckers and forcing many folks in colder states to choose between being able to stay warm and being able to drive to work. Yet efforts like the ones just mentioned are based on a profound misperception of why oil prices are rising. The real problem is summed up in the phrase "Peak Oil."

Petroleum is a finite substance and we have reached the inevitable point at which it simply isn't possible to increase the rate at which we extract it from the ground. Most oil producing countries, including the US, have already seen their glory days and are now watching output from their wells gradually dwindle. Only a few nations are early in the production cycle and able to ramp up the rate of flow. Here is a concise definition of Peak Oil from my colleague Chris Skrebowsi, the editor of Petroleum Review in London. He says: "Global oil production falls when loss of output from countries in decline exceeds gains in output from those that are expanding."

...

http://www.alternet.org/environment/85842/

[Fovea]

1. It appears to be so.

And part of that is demand. But the greater part of that is the depletion of the actual resource.

Added- June future contracts for oil gained $2.20 this am. \
contract price - $129.45 as of noon EST.

James Howard Kunstler is the Cassandra of his age.

[Mountainman]

2. If we drilled in more places like ANWLR where would that oil go?

I have always wondered what the route is for oil from the well to the gas pump. My guess is that it is taken from the ground and stored somewhere. Then it is sold to the highest bidder or who ever holds the futures contract on it. That could be anyone anywhere in the world. It is more than likely sold and resold before it ever gets to a refinery. And that refinery could be anywhere in the world.

The right is always saying we need to drill for more oil in the U.S. and build more refineries but that will not bring about lower gas prices. It will just create more inventories for speculators to profit from by buying more futures contracts.

The price of gas is connected to the amount of profits made by the middlemen. The more it is traded the more middlemen make profits and the higher the cost is thus the higher the gasoline prices.

I may be close to being right. But I know high gas prices have nothing to do with environmentalists preventing drilling and building refineries.

We have oil wells off the cost of Santa Barbara and a refinery at Goviota just down the coast a few miles and gas prices are over $4.00 a gallon. Also last year Shell closed down a refinery in Bakersfield just as the MSM was telling us environmentalist are preventing more gasoline production by making it hard to build new refineries.


During the gasoline shortages in the 70's my ex-wife's cousin was and engineer for the Chesy System in Lima Ohio. Standard oil had a giant refinery there. He told us that he was on loan full time to the refinery moving tank cars full of refined gas into rail yards for storage all the while people could not buy gas!

[Solon]

11. Daily Oil Production, and Daily oil consumption are, more or less, the exact same number...

There is little to no surplus to put in storage, and what is put in storage, such as in the strategic reserve, is literally a drop in the bucket compared to what is consumed per day.

Not to mention that oil field discovery itself peaked in the 1960s, all the huge fields are already discovered, and have been developed and tapped for over 30 years. All potential fields that people harp upon, such as ANWR, contain less than a year's worth of oil at current consumption rates for the United States alone, and that's the optimistic estimate, the pessimistic estimate is that its a dry hole.

[DJ13]

3. No, we've hit a period of deliberately restricted supply & unrestrained speculation

The oil industry PR calls it peak oil (same as they were saying in the 70's), but this is nothing more than an artificial construct to make an unreasonable increase in profits palatable to consumers.

Its a con game.

[Individualist]

6. Correct. It's peak greed rather than peak oil.

[chaska]

8. Based on what?

They know that peak is real and imminent and are therefore holding back their supplies in anticipation of higher prices. This has been pridicted for years. Doesn't mean it's not a real phonomenon. It's a part of it, DJ.

I keep hearing this ridiculous "We're never gonna run out of oil. It's just a con." conspiracy theory. What is with this? It's absolutely assinine.

I'm so sick of conspiracy theories.

[Terry in Austin]

9. Denial narrative #1

Addicts in Denial:

#1: "It's the greedy oil companies"

That's the chart-topper left of center, anyway. Elsewhere, it might be "the weak dollar" or "the OPEC monopoly." Actually, the oil companies control only about 20% of the oil supply. Not enough to manipulate prices.

Anyway, it's time to move on through the other stages, get to acceptance and start dealing with the decline of oil and its consequences.

[Andy823]

12. I agree with you.

If we were at "peak oil" then one would think that governments all over the world would be "rationing" fuel, not allowing it to be used for anything that was not essential to survive, at least till the came up with an alternative fuel. You hear about the oil sands in Canada, the rock shale in the U.S. and how they make mid east oil fields look small in comparison. They say that in a few years the will be putting out all kinds of oil from oil sand and oil shale. Oil had to get over something like $60 a barrel to make it profitable, and it's twice that now.

I agree it's more greed than peak oil! As long as they can keep on screwing the people, big oil will keep on raising the price to fill their own pockets, and keep on making excuses for why they are doing so. Hell, when their "PROFITS" are 36 BILLION, you know they are screwing us and laughing all the way to the bank. It's like the Enron scandal, they manufactured the "energy shortages", and the oil companies are doing the same damn thing, but on a bigger scale!

[Strelnikov_]

16. "oil industry PR calls it peak oil"

What PR? The petroleum industry 'official' position, along with that of the current administration (is there a difference), is that peak oil is decades away.

Why? You don't want the addicts making other arrangements when just entering the peak profit years of shortage.

Also, the standard Reich-wing meme is that peak oil is a liberal fabrication, and that we would be swimming in oil if the environmentalists would just let the petroleum companies drill where they wanted.


So which is propaganda? Peak oil awareness, or peak oil denial? The evidence points to denial IMHO.

[chaska]

4. "End of the World As We Know It"

Guy McPherson:
http://www.azcentral.com/arizonarepublic/viewpoints/articles/0406vip-mcpherson0406.html
http://blog.ltc.arizona.edu/naturebatslast/2008/04/an_overdue_explanation.html

The world peaked at 74.3 million barrels per day in May 2005. The two-year decline to 73.2 million barrels per day produced a doubling of the price of crude. Later this year, we fall off the oil-supply cliff, with global supply plummeting below 70 million barrels/day. Oil at merely $100 per barrel will seem like the good old days.

Within a decade, we'll be staring down the barrel of a crisis: Oil at $400 per barrel brings down the American Empire, the project of globalization and water coming through the taps. Never mind happy motoring through the never-ending suburbs in the Valley of the Sun. In a decade, unemployment will be approaching 100 percent, inflation will be running at 1,000 percent and central heating will be a pipe dream.

In short, this country will be well on its way to the post-industrial Stone Age.

[End Of The Road]

17. McPherson's piece is just way over the top

e.g.: "If you're alive in a decade, it will be because you've figured out how to forage locally."

We won't enter a post-industrial Stone Age, but the world will slow down to a pace more like the early 20th century.

[Zywiec]

19. No such thing as over the top here

This place lives and breathes on pessimism and the worse outcome of any situation.

[End Of The Road]

20. Ain't that the truth!! nt

[Lasher]

5. I think cheap oil has peaked.

Now we're starting to get at the oil that's more expensive to produce.

[CK_John]

7. Yes. It is time to buy, build or invest in rickshaws and learn to weld. n/t

[Javaman]

22. What are you going to weld with?

I have stated in other posts, if we are to survive peak oil as an industrial nation, we have to figure out two things.

1) smelt metal without the use of fossil fuels

2) create lubricants with the use of fossil fuels.

figure those two things out and you can, continue industrialization.

Instead of welding, blacksmithing would be a better option.

[robertpaulsen]

10. Crude & condensates peaked in 2005.

Unconventional oil & ethanol is what's meeting the gap between the flat supply of world oil production and the increased world demand. Once the total production of all liquid fuels declines, prepare for shortages.

[CANDO]

13. The wing-nuts think we have enough oil for two hundred years!

It's all up and down our shoreline, but we eco-wackos on the left won't let the oil companies get it. And we also won't let them build more refineries! And we won't let them get it in ANWR either! I go round and round with my brother on this stuff and these are the talking points/excuses they regurgitate in the right-wing delusional state of mind. To them, Peak Oil is on par with the "hoax" of Global Warming.

[Lex]

15. same type of people who were flat-earthers

nt

[Strelnikov_]

21. Yep

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3313554#3314192

[CANDO]

23. No matter what, it is a FINITE resource.

When it runs out, we're screwed! And it won't be life as usual until it reaches that point. Once we go past PEAK, it's time to throw mankind into overdrive developing alternative, sustainable energy resources. Look around. We are already at or just past PEAK. We ignore PEAK OIL at our own peril. The answer is not to keep digging. There is only so much there.

[Strelnikov_]

14. Yes, but don't let anyone know

That way there will be less of a run on the resources needed to build your lifeboat.

To me, the evidence is overwhelming.

[NickB79]

18. You're still building your lifeboat?

Damn, you're falling behind! Hammer faster! :D