Is “peak oil” the new end-of-the-world?

Backwoods Home ^ | 10-16-07 | John Silveira

[SJackson]

“Peak oil” is becoming the latest doomsday buzzword. What is it? It’s a well-thought-out theory that predicts that the rate at which we find and recover oil is soon going to fall behind the rate at which we consume it. The point at which that happens is the “peak.” Prior to this peak, prices will have been relatively stable and reasonable, and the economies of the world have grown because the supply of energy outpaced the demand. But there is coming a time, and some say it’s here now, when the world’s oil fields cannot produce as fast as we consume. Demand will exceed supply, oil prices are going to skyrocket, and the world’s economies are going to begin to fail as the oil fields themselves fail.

Oil today is important to civilization. We use it to produce electric power and to make gasoline, heating oil, fertilizer, chemicals, plastics, and more. Eighty-four percent goes to power and fuel, and only 16% to other things. What happens if we run out? Tidy little doomsday scenarios have been woven and show how transportation will stop running, food production will drop because of less fertilizer and pesticides, currency markets will fail, prices of everything will take off, and this will mean both the end of civilization as we know it and an irreversible decline in the human condition. It’s all very neat, but that doesn’t mean it’s accurate.

[dennisw]

That was the best line for me too!!!

You were clever enough to read my link so you now have a better education about what BS free markets are and how the real players grab whatever they can. Real players in oil/energy that is

[Mount Athos]

Some libertarians and capitalists have bought into peak oil theory, it isn’t just socialists.
It looks like a good theory if you stare narrowly at mexico, or maybe saudi arabia, but falls apart when you look more broadly.

I don’t buy into peak oil theory at all, though mexico is an an interesting localized question.

Natural gas however is a very different story. Supplies really aren’t increasing much at all, despite big investments to try to make it happen. A lot of infrastructure being build to ship existing supply, but not much new supply. Big problem for those that depend too heavily on natural gas to make electricity.

[redpoll]

We’re going to die! It’s the end! We’re all going to die!

Actually, that’s all true. The other truth is that the world will continue without us just fine.

[CharlesWayneCT]

Oil’s gone up, but my gas price has gone down. I guess it will go back up eventually. With the dollar down oil was going up, with the Democrats trying to start a war between Turkey and Iraq the price went up.

I read a liberal Virginia blogger tonight who was trying to argue that MARKETS run the oil prices. Of course he’s saying that, now that the democrats are in charge and the oil prices are skyrocketing.

But while it was clearly true that it wasn’t Bush’s fault the oil prices were going up, it is clearly partly the Democrat’s fault, as they are stirring up unrest in the middle east, are blocking new oil drilling.

[Professional]

Hemp is the answer. It either solves all of this mess, or dulls the pain of dealing with it. It is hard to logic with that argument.

Actually, it is time for whale oil again, as we have reached peak with whales. F’n things are everywhere these days, some don’t even have jobs.

[Eric in the Ozarks]

I think we’ll see more gas on the market because more of it is being captured and brought to market. The battle is over the big off-shore unloading facilities for LNG ships along the US coast.

[jpl]

Agreed. I’ll also add that it probably isn’t helping much that the U.S. dollar is around its lowest level of value in our history.

[utherdoul]

not to sound like a dick here but if you do bussiness in Russia you deserve what you get. Frankly I don’t care how much oil they have there, I still wouldn’t touch it with a nine foot pole. Everything In russia ends up nationalized, its just a matter of how much you can squeak out before it happens.

If I ever do get into the oil bussiness in one of those commie countries one the of the things I’ll do is plant explosives at key points and set them off the moment troops land in my property. Send them right back to square one.

[dennisw]

your take is 100% legit

I believe Royal Dutch Shell has been involved in Sakhalin Island oil/energy for 15+ years. They got in before that savage Putin ruled Russia

[RightWhale]

• their beliefs are correct, they can make a killing

  They are.

[RockinRight]

Well...since all the Biblical, Science, and Conspiracy based end-of-the-world scenarios fail to come true time and time again...why not try “peak oil” for a second time?

[LIConFem]

I’m still waiting for the bird flu pandemic. I was promised that I’d have gotten it by now. No one ever keeps their promises anymore.

[RightWhale]

• Colorado-Utah oil shale is over 36 Trillion barrels. Alaska has huge reserves.

  Not really. One oil company just gave up some of their Alaska leases on the North Slope because they weren't worth developing at $80 a barrel. If it is not economic to produce, it is neither a reserve nor a resource.

[RightWhale]

The bird flu won’t happen here because so many don’t believe in evolution.

[LIConFem]

So we’ve been saved by the Creationists?

[RightWhale]

The Alaska-Siberia Tunnel committee had a meeting today in Anchorage. Russian businessmen who want the 68 mile tunnel and the sooner the better are working hard on the project. The railroad route from Nome to Fairbanks is being surveyed now. The birds won’t have to fly, they can ride.

[OregonRancher]

I will say most posters are full of crap.

Totally agree: VGPMX, OPGSX, PRNEX

[dennisw]

EWZ

Brazil is selling tons of soy and raw materials to China

http://moneycentral.msn.com/detail/stock_quote?ipage=qd&Symbol=EWZ

http://moneycentral.msn.com/detail/stock_quote?Symbol=US%3AFXI

http://moneycentral.msn.com/detail/stock_quote?ipage=qd&Symbol=MOO

[dennisw]

We just want a fair market for energy supplies.

With all due respect that is a pathetic plea undergirded by a child like faith in free markets backed up by rule of law. These markets exist here in USA but not in the world wide energy markets

Russia doesn't play your "free market" game. Nor does China Venezuela or Iran. Powerful thug-ocracies move the market. Not free consumers and free suppliers of energy in the fair market you yearn for

[businessprofessor]

I have no expertise or inside information about energy markets. To me, it is clear that cartels are operating on part of the supply side. In the past, OPEC has been undercut by non OPEC countries and cheating inside of OPEC. Perhaps the cartels have increased their influence on the supply side.

The supply side cartel does not directly determine the price for crude. Crude contracts are traded on world wide energy markets. There is evidence that OPEC does not want the price of crude too high because it will encourage alternative energy sources and additional exploration. Russia is a more secretive and sinister player than OPEC.

I am strongly opposed to energy cartels as I am to labor and producer cartels. There should be a way to bring actions against the energy cartels using international trade agreements. I am surprised that energy cartels have not been targeted in trade agreements.

I am not sure what policies can be taken to combat the energy cartels. Our current policy of energy mandates on renewables and ethanol is clearly not the answer. I would prefer to increase domestic exploration and development of oil and natural gas. I would also let the market determine the proper mix of energy sources. Our current policy will only increase the influence of the energy cartels leading to high energy prices and shortages.