IEA: We've Hit Peak

[The Duchess of Zeon]

Even the oil company evaluators are by this point admitting that any increases after 2022 will come from extremely heavy oils, oil sands, and oil shale. And that's pretty bloody optimistic. Since the technical challenges to those sources have been well documented, it's essentially "We'll pray to jesus that we get magic refineries" after 2020 even for Big Oil.

[Admiral Valdemar]

86 mega barrels by the end of next year, 86.5 by the end of 2009, 87 by 2010, 87.5 by 2011.

That's cutting it close. The IEA has already revised figures and is considering it again (their latest OMR neglects to show certain graphs on supply and growth expectations unlike previous years). We're already drawing down on OECD reserves at a dangerous pace now, which will only pick up when refineries start up again beyond 90% capacity and winter fuel supplies are demanded, which should be soon. Remember, by 2020 we should be well over 100 mbpd and rising even faster if growth in Chindia continues, or heaven forbid, increases.

Some say stagflation, others say hyperinflaton will result, which is it?

What concerns me most is when we'll start to see rationing. We all know that we won't see it until theirs literally no other choice but to ration gasoline, but how soon?

Matt Simmons expects the pumps in the US to run dry this year. It takes only one spark of panic to start something like that, which is how September, 2000 really got going here. Once the markets see prices are staying high and it isn't a temporary thing (no ME war like last year, no hurricane like 2005), then people will get a message they don't want. Iran has rationing now, and they get a gallon at 40 cents. Many other oil rich nations are switching to LPG cars now or tearing up the locale for bio-fuels.

It's one thing to say that peak oil will price the passenger car out of existence by the year 2020, quite another to say that by 2011 or so we'll institute 70's style alternate licence plate day driving or even complete oil hoarding by the government cutting off oil supply to the gas stations and instead only making petroleum available to agriculture, the military and public transit. When will this happen?

My 8 Ball says: future uncertain.

I realise how imprecise geology and economic predictions can be, but what will happen first, cars becoming unaffordable to drive or the government rationing oil so heavily that no one can drive anymore? Most importantly, when will this occur seeing as when it does, I assume it is the first step in the collapse of the modern economy, possible end of democracy (at least for a while) and institution of the command economy etc.

I expect people to pay higher prices. The US, despite their bitching over the horrendous strain of paying the cheapest petrol prices in the developed world, are actually doing not too bad with over $3 gas. I could see up to $6 before people start changing their ways, though there were reports of mass hardship for the poor after the near $4 hike in some areas.

When rationing comes into play is anyone's guess, since so much relies on politics and how people take it (the market is, frankly, too stupid to realise what's going on). I certainly don't expect public admission or command economy stuff this side of a major social uprising. You can't convince the US public climate change is a problem and you expect to liquidate their free market economy and take the reins? Have fun.

[The Duchess of Zeon]

Remember that someone with a car that makes 50mpg would, if gas prices quadrupled, still only be shelling out for gasoline what someone with a Yukon Denali shells out right now. And gas prices will quadruple, and fairly soon. We'll get quite used to fourteen or fifteen dollars a gallon--and that will be on the plateau.

[Admiral Valdemar]

True enough, prices will rise , often alarmingly, and people will just have to deal with it. Better fuel economy is a must, even if big, status symbol SUVs still sell well today. The issue isn't really price, but actual physical supply which, if cut, means no amount of credit or cash will magick more for you.

We've been on the plateaux for a few years now. Depending on the yet to be shown OMR production figures, we may be going down the slope.

And Bonny Light just smashed through $80.

[The Duchess of Zeon]

True enough, prices will rise , often alarmingly, and people will just have to deal with it. Better fuel economy is a must, even if big, status symbol SUVs still sell well today. The issue isn't really price, but actual physical supply which, if cut, means no amount of credit or cash will magick more for you.

We've been on the plateaux for a few years now. Depending on the yet to be shown OMR production figures, we may be going down the slope.

And Bonny Light just smashed through $80.

You're rather pessimistic about this, moreso than I, and I think it's important to remember that there is still disagreement among reputable scientists about whether or not the peak has happened. There is essentially no disagreement about the idea that it will happen by 2011 or sooner, however; so I feel reasonably justified in using conservative figures.

[Guardsman Bass]

When rationing comes into play is anyone's guess, since so much relies on politics and how people take it (the market is, frankly, too stupid to realise what's going on). I certainly don't expect public admission or command economy stuff this side of a major social uprising. You can't convince the US public climate change is a problem and you expect to liquidate their free market economy and take the reins? Have fun.

Yeah, but climate change is/was a problem akin to the classic "boiling a frog slowly" deal; you don't really see it coming until the effects get really severe, and thus it's hard to take major action. For the post-peak crisis situation, you're talking about being slammed with immediate economic catastrophe and shortages, one right after another, and that's a recipe for heavy duty government management of petrol distribution, since then the danger is imminent even on a short timescale.

[Guardsman Bass]

EDIT: Change "you don't really see it coming" to "you don't really feel the effects of it, at least in the First World"

[tim31]

I have no place in this thread other than as an observer, but I have to ask: How many of you pessimists have children?

[Surlethe]

Do we yet have a link and repost for the article mentioned in the OP?

[Mr. T]

Do we yet have a link and repost for the article mentioned in the OP?

Oil supplies 'face more pressure'

World oil demand will rise faster than expected, while supplies will remain tight, the latest International Energy Agency (IEA) report has warned.
The IEA predicted demand would rise by an average 2.2% a year between 2007 and 2012, up from previous estimates of 2%.

It added that geo-political tensions and a lack of spare capacity in Opec production would also limit supplies.

Brent crude rose 16 cents to an eleven-month high of $75.78 a barrel although US light crude fell slightly.

It closed down 62 cents at $72.19.

'Uncertainty'

One analyst said a range of persistent economic and political factors meant that prices were on an upward curve.

"The oil price is at very high levels for good reasons," said David Dugdale, from MFC Global Investment Management.

"With Opec continuing to withhold oil from the market, the general picture remains one of tightness, with kidnappings in Nigeria, the upcoming hurricane season and ongoing geopolitical concerns all adding to uncertainty over the summer."

In its report, the IEA argued that biofuel production would hit 1.8 million barrels by 2012, more than double 2006 levels.

However, while supplies of the green fuel are set to surge, it is likely to remain marginal with just a 2% slice of the overall energy market.

It also echoed warnings issued in an Organisation for Economic Development report that rapidly growing biofuel market will increase the price of certain feedstocks - such as sugar and corn - over the coming year.

Demand pressure

But with forecasts predicting world economic growth to increase by 4.5% a year, the report argued that oil demand could soar to 95.8m barrels a day (bpd) in 2012 from 81.6m now.

At the same time it predicted production from oil cartel Opec would fall, slipping by 2m bpd in 2009, while it also cut supply forecasts for non-Opec countries by 800,000 bpd.

It added that other factors including rising refinery costs, engineer shortages and strong demand in other energy markets would also put pressure on oil supplies.

"Despite four years of high oil prices, this report sees increasing market tightness beyond 2010," the IEA said.

"It is possible that the supply crunch could be deferred - but not by much."

source

The fact that demand rises by 2.2% a year and it is now declining by 2% per year is where Valdemar is getting his 4% decline/ we need 20 million barrels right now figure from.

[Mr. T]

Edit: that is supply is declining by 2% per year

[Surlethe]

Ahh, thank you very much.

[Col. Crackpot]

I have no place in this thread other than as an observer, but I have to ask: How many of you pessimists have children?

every decade needs it's teotwawki conspiracy

[MKSheppard]

every decade needs it's teotwawki conspiracy

THANK YOU.

[Col. Crackpot]

every decade needs it's teotwawki conspiracy

THANK YOU.

Seriously if everyone in this thread was legitimately concerned about this, they'd shut off their computers and stop wasting electricity.

[Surlethe]

Do you gentlemen have rebuttals to contribute, or are you simply going to cry "conspiracy!" and snipe ad-hominems from the sidelines?

[Col. Crackpot]

Do you gentlemen have rebuttals to contribute, or are you simply going to cry "conspiracy!" and snipe ad-hominems from the sidelines?

why should I? It's another in a stream of whak o loon end of the world fantasies that emerges like clockwork every few years. People have even predicted this very event a half dozen times! The very study given to the UK government even concedes that this has been proposed before in the past. A few of those proposals had us running out of gas 25-30 years ago.

[Surlethe]

Do you gentlemen have rebuttals to contribute, or are you simply going to cry "conspiracy!" and snipe ad-hominems from the sidelines?

why should I? It's another in a stream of whak o loon end of the world fantasies that emerges like clockwork every few years. People have even predicted this very event a half dozen times! The very study given to the UK government even concedes that this has been proposed before in the past. A few of those proposals had us running out of gas 25-30 years ago.

Why should you rebut an argument? Did I hear you correctly? Try again.

It's trivial to see why the "argument from history" doesn't apply, unless you'd like to show that the arguments supplied back then are identical in logic and fact to the arguments being given here.

[J]

Perhaps you'd like to explain why world oil production is down about 1.2% from its peak in 2005 (DOE data, Excel spreadsheet), and in particular, why Saudi Arabia, the former number one oil producer has seen its production drop about 10% (DOE spreadsheet). While you're at it, feel free to enlighten us on why OPEC's production has been falling since 2005.

[brianeyci]

The problem isn't one of disbelief of figures. The problem is there's so many peak oil predictions, ranging from insane to conservative, and that in most of these threads you guys rattle off numbers without stating the consequences of less oil, which are far different than what another peak oil doomsday prediction says will happen with less oil. So I do not blame crackpot for claiming crackpot since there are some insane peak oil theories out there that say total fall of Western civilization (yah rite). There is not even agreement between AV and Duchess. For example Duchess thinks there can be a crash program of nuclear power plants to maintain industrial society. Tuxedo proposed such a solution and AV's response was you can't hire a bunch of guys from GM to build a nuclear power plant. Maybe you can and maybe you can't, but safety standards will be laxer when citizens scream their heads off for more energy and "a chernobyl a year is a good price to pay to maintain industrial civilization." In other words, there's not even agreement between the peak oil proponents on what the consequences and response will be. There is not even agreement on what the time frame is.

Yes, our society is dependent on oil. Yes, oil will run out. It's only a matter of when, and what happens when it does. Perhaps if Duchess and AV and J adapted their message to lay out the consequences of less oil, instead of repeating figures nobody can rebuttal without attacks on their sources, they would seem less like conspiracy freaks. For example, AV said that the IEA predictions are wrong several threads ago saying they were "pie in the sky." This time, in this thread, he's saying the IEA is admitting we are "slightly fucked." What if someone brings up figures from the IEA saying we are not slightly fucked? Then of course that someone will be attacked for using incorrect figures and abusing extrapolation.

In short anybody who wants to respond to all these peak oil threads will soon find himself the victim of moving goalposts, giving a rebuttal to one peak oil theory that may as well be conspiracy but called out on being insane for not believing in another peak oil theory. If you guys are serious about helping other people survive the crash and not just tooting your own horn, I suggest the three of you get together and present a concerted front, and try and retool your message into "what happens when oil runs out and what can I do about it" rather than "oil will run out and western civilization is finished." Carbier had to ask what this meant to her family and she is not stupid. There are also many different kinds of people, ranging from people with families to people with massive debt loads to people who are rich and can afford to do whatever they want to prepare. I suggest you guys take that into consideration before preparing your message for the masses, if you are really interested in getting people to survive the peak.

[K. A. Pital]

Hmm. If we want to present a more or less coherent Peak Oil extrapolation, we would have to have data and apparatus for a scientific analysis that we currently lack.

Therefore, even if people on SDN decide on some Peak Oil model and created some predictions, someone could easily smash that theory with a model from a scientific body. Such as the aforementioned associations and such.

The better solution would be for the posters to find a coherent quantative model of Peak Oil that would more or less adequately show the consequences of the energy crisis for the society. This would require analyzing the rates of growth of energy consumption by industrial societies and the societal effects of this growth stopping for a large period of time, at the very least.

[The Duchess of Zeon]

The problem isn't one of disbelief of figures. The problem is there's so many peak oil predictions, ranging from insane to conservative, and that in most of these threads you guys rattle off numbers without stating the consequences of less oil, which are far different than what another peak oil doomsday prediction says will happen with less oil. So I do not blame crackpot for claiming crackpot since there are some insane peak oil theories out there that say total fall of Western civilization (yah rite). There is not even agreement between AV and Duchess. For example Duchess thinks there can be a crash program of nuclear power plants to maintain industrial society. Tuxedo proposed such a solution and AV's response was you can't hire a bunch of guys from GM to build a nuclear power plant. Maybe you can and maybe you can't, but safety standards will be laxer when citizens scream their heads off for more energy and "a chernobyl a year is a good price to pay to maintain industrial civilization." In other words, there's not even agreement between the peak oil proponents on what the consequences and response will be. There is not even agreement on what the time frame is.

Yes, our society is dependent on oil. Yes, oil will run out. It's only a matter of when, and what happens when it does. Perhaps if Duchess and AV and J adapted their message to lay out the consequences of less oil, instead of repeating figures nobody can rebuttal without attacks on their sources, they would seem less like conspiracy freaks. For example, AV said that the IEA predictions are wrong several threads ago saying they were "pie in the sky." This time, in this thread, he's saying the IEA is admitting we are "slightly fucked." What if someone brings up figures from the IEA saying we are not slightly fucked? Then of course that someone will be attacked for using incorrect figures and abusing extrapolation.

In short anybody who wants to respond to all these peak oil threads will soon find himself the victim of moving goalposts, giving a rebuttal to one peak oil theory that may as well be conspiracy but called out on being insane for not believing in another peak oil theory. If you guys are serious about helping other people survive the crash and not just tooting your own horn, I suggest the three of you get together and present a concerted front, and try and retool your message into "what happens when oil runs out and what can I do about it" rather than "oil will run out and western civilization is finished." Carbier had to ask what this meant to her family and she is not stupid. There are also many different kinds of people, ranging from people with families to people with massive debt loads to people who are rich and can afford to do whatever they want to prepare. I suggest you guys take that into consideration before preparing your message for the masses, if you are really interested in getting people to survive the peak.

Part of the problem is that my evaluations are based entirely on the United States, and Valdemar's on the UK. Let's make it clear, the UK couldn't feed itself with its population and farmland of 1914, let alone 2014. When Valdemar is talking he is talking about the arguably most absolutely-fucking-screwed population on the planet.

Furthermore, the level of ability to survive peak oil varies considerably. France should ride it out with very few problems, for example; almost all of their electricity is nuclear/renewable and they're adding more of both. They also have a vast rail and canal network (canals will be quite important), they have extremely large food production viz. their population, and they have a decent industrial mix. France will probably have one of the healthiest economies of the period, right up along with the Scandinavian states and Switzerland. They very well may see extremely few changes in how they live their lives, just suffering from the consequences of a great depression from the worldwide economic collapse rather than anything more serious, and with governments well-able to institute central control. Their exact ability to survive is highly dependent, however, on what happens in the rest of the EU, particularly in Eastern Europe.

The nation with the best potential to maintain a solid economic position is Canada because of its very large food exporting resources; but it is much more oil dependent than France, even with its own nuclear and hydro resources, and that must be dealt with.

The United States has plenty of resources to allow it to ride out peak oil--it is just not reacting in time and using them. Those resources will be used afterward, but it's unlikely that political circumstances mean they will be directed with any humanitarian dictates. On the positive side, even under a dictatorship, if you made your own preparations, you're unlikely to be bothered in this country; we will certainly have an industrial base when this is done no matter what, but the population may will suffer like there isn't one for some time because it will be directed to many things other than improving their position.

Another thing to remember is that in my estimates I'm assuming usually about a middle-case scenario as the one that'll actually happen. Valdemar seems to go for consistently reminding everyone of the worst case, which is understandable, but I think counterproductive. If he succeeded in convincing everyone, ironically, what he'd just convinced them of wouldn't become remotely true, since measures would be taken. Even then the basic argument is over whether or not the peak has already taken place--he thinks 2005 - 2006 was when it occurred. I say it won't happen until 2011 - 2012. It is currently impossible to tell which opinion is right and both have a fair number of supporters behind them.

Another thing is of course the potential length of the plateau. Generally this is thought to be around ten years, but it's possible it could be extended with unexpected new finds and/or desperation measures. And even in the worst case scenario Valdemar is speaking as a Briton; if you live in another country, there's more hope.

[Starglider]

While I do not subscribe to the catastophe-soon notions some posters here do, I do think things are going to get steadily worse for most of the world's population, starting at best 10 years from now and continuing until technology can dig us out of it (ultimately, only technology ever makes a lasting difference). There will probably be some dieoff in the third world before alternate energy sources and extremely efficient infrastructure become practical and widespread, the first world should avoid that but will see plenty of poverty, crime and oppression.

This is a significant motivation for myself and many people I know to devote everything we can to working on (very) high-risk high-reward technologies that could avoid the whole mess, if we can develop them in time. That said we already had plenty of motivation from the desire to get the beneficial and protective applications in place before the destructive ones, and to reduce the already substantial amounts of death and suffering in the world, so peak oil while worrying (in terms of cutting resources available for research) doesn't really change the outcome of any key decisions.

[Gigaliel]

In short anybody who wants to respond to all these peak oil threads will soon find himself the victim of moving goalposts, giving a rebuttal to one peak oil theory that may as well be conspiracy but called out on being insane for not believing in another peak oil theory. If you guys are serious about helping other people survive the crash and not just tooting your own horn, I suggest the three of you get together and present a concerted front, and try and retool your message into "what happens when oil runs out and what can I do about it" rather than "oil will run out and western civilization is finished." Carbier had to ask what this meant to her family and she is not stupid. There are also many different kinds of people, ranging from people with families to people with massive debt loads to people who are rich and can afford to do whatever they want to prepare. I suggest you guys take that into consideration before preparing your message for the masses, if you are really interested in getting people to survive the peak.

The primary problem is that the only historical examples of energy supply shortages are mostly earlier agrarian societies who cut down all their trees. The most famous of this is Easter Island and understandable their civilization suffered a massive die-off.

The 1970s oil embargo gives us a better example of what the early signs will be like for a modern industrial society i.e. stagflation, rationing, etc.

Really, the primary problem of peak oil for North America is that we decided making our entire infrastructure dependent on gasoline was a fine idea. This happened through the massive subsidies that the industry gets from public roads and subsidies. The fact that when various cities privatized their electric public transportation the automobile companies snatched them up, tore them apart, and replaced them with poorly maintained buses didn't help.

This infrastructure problem did not exist for previous energy shortages. When we switched from wood to coal, we just stuck the coal in the same damn furnace. Coal supplied power via steam and then electricity. Coal provided transport via rail, which was doing a fine job. Petroleum was primary used for lighting at this point, but with electric lighting this was becoming a shrinking market. Then the automobile was invented that could use a combustion engine or an electric motor a slight disadvantage. Through the wonders of short term free markets, guess who won!

So, in short, the main problem is that anything dependent on a combustion engine is going to be facing increasing costs to operate. Europe has maintained nice rail transport, so they'll probably face the least problems. For some insane reason China and the rising third world decided to mimic the U.S. combustion engine dependent transport infrastructure and will face very similar problems.

This is the primary problem of Peak Oil- the various ways agriculture and manufacturing are dependent can be sidestepped with poorer and/or more energy intensive substitutes. Since transport makes up a third of energy usage, replacing that with electric rail or buses is no laughing matter.

This is where all the "we're fucked" talk comes from: the U.S (and a lot of the world, actually) has to increase baseline electricity by 1/3 with infrastructure that is getting more expensive every year due to shrinking oil production. Hell, the problem is even worse when you remember that natural gas and coal are running out, that's about 75% of the U.S.'s energy right there. Replacing all that will take decades of construction and will be one of the largest engineering feats in quite some time.

France managed to do it (if in a more economically favorable time period), so should we. It just isn't going to be very fun. People have been predicting the consequences of exponential growth in a finite world, urban sprawl, and overpopulation for decades, so the fact that oh hey they were RIGHT isn't very odd.

And to end this stream ramblings, I always find it amusing when people assume life will be like it was in the past (ie lulz doomsday whackos). Past meaning 1950-2000. Every century had some seemingly catastrophic event occur, why should this one be any different? It's not as if human nature has fundamentally changed, we are shortsighted and fallible. Someone will always have to pay for mistakes made, even if it isn't the person who did it.

[brianeyci]

Nobody thinks that things will be like the way they were before (1950's to 2000). Anybody working realizes there's no such thing as job security and the future will be very different, based on you marketing yourself as if you were a vender to an employer and being an absolute expert on one thing, rather than jack-of-all trades. When the depression comes around whoever's hiring won't be looking for "well-rounded" people but people with specific skills to meet their specific needs. Specialization will be more important than ever.

When people mention the early 80's or 70's they are saying, if things went back to that way, we'd be a far less wasteful society and the effects of peak oil would be mitigated. Not that things will never change.

This is a significant motivation for myself and many people I know to devote everything we can to working on (very) high-risk high-reward technologies that could avoid the whole mess, if we can develop them in time. That said we already had plenty of motivation from the desire to get the beneficial and protective applications in place before the destructive ones, and to reduce the already substantial amounts of death and suffering in the world, so peak oil while worrying (in terms of cutting resources available for research) doesn't really change the outcome of any key decisions.

One is reminded of this: "But I tell you, that if you now won't work on weapons, the freedom of the world will be lost."

But are you really a scientist? . I would caution about letting this idea get to your head. The world will always need weed wackers, and Mike has said before about a lot of science grads wanting "glamour work" when in reality very few get there. A lot of sciencey people are looking forward to the "death" of the "marketing" and "no skill" types, but when the depression comes they'll be very little money to go around for research that will take decades and everything will be devoted to securing the status quo and using proven technologies. In other words, I don't see the depression being good for academic or science types at all. A lot of academics have huge student loans now that universities are more like corporations, and unless they're on a fixed interest rate the depression and rising prime will bankrupt them. You can't study science if you're having trouble paying the rent or buying bread.