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Is “peak oil” the new end-of-the-world?
Backwoods Home ^ | 10-16-07 | John Silveira

Posted on 10/16/2007 6:11:57 PM PDT by 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.

(Excerpt) Read more at backwoodshome.com ...


TOPICS: Business/Economy; Editorial
KEYWORDS: energy; oil; peakoil
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To: SJackson

I think the Libs should just start killing themselves


61 posted on 10/17/2007 1:02:51 PM PDT by BurbankKarl
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To: SJackson
It would seem that Malthus has returned in a new suit of clothes.

As usual, the only hope for the future of mankind is to adopt some list of radical, leftist policies.

62 posted on 10/17/2007 1:06:59 PM PDT by TChris (Cartels (oil, diamonds, labor) are bad. Free-market competition is good.)
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To: RightWhale

Good point, RightWhale, it’s what I was saying earlier. Many of our “resources” are not easily exploitable. It’s all about building refineries and how we play the market now.

The U.S. will not and cannot achieve energy independence.


63 posted on 10/17/2007 1:11:06 PM PDT by La Enchiladita
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To: 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.

Exon and Shell said they could produce oil shale oil for $30 to $40 per barrel in the Rockey Mountain news. $50 a barrel on the north slope must be court costs with the wacko left.

64 posted on 10/17/2007 1:20:58 PM PDT by mountainlyons (Hard core conservative)
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To: mountainlyons

Heard that a thousand times. It’s been fundamentally wrong every time.


65 posted on 10/17/2007 2:39:21 PM PDT by RightWhale (50 years later we're still sitting on the ground)
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To: RightWhale
Heard that a thousand times. It’s been fundamentally wrong every time.

Exon and Shell have some new technology to heat the oil in place and tests have led to costs of $30. It is just a stop gap until ethanol can be made from cellulose and coal gasification looks good also. Lots of new stuff is not viable with crude prices where they are at.

66 posted on 10/17/2007 2:47:17 PM PDT by mountainlyons (Hard core conservative)
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To: mountainlyons

The cost of producing Saudi oil is still $2. Nobody will process oil for $30 plus. They can’t compete.


67 posted on 10/17/2007 2:51:51 PM PDT by RightWhale (50 years later we're still sitting on the ground)
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To: RightWhale

We will never get Saudi oil for $2 a barrel. $30 per barrel is about what oil costs out of the ground in Colorado so this is competitive. What the US does not have because of the wackos is enough refinery capacity.


68 posted on 10/17/2007 3:09:20 PM PDT by mountainlyons (Hard core conservative)
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To: southernnorthcarolina

Coal-to-gasoline conversion becomes economically worthwhile when oil is stable at over $35/bbl


69 posted on 10/17/2007 3:22:59 PM PDT by SauronOfMordor (When injustice becomes law, rebellion becomes duty)
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To: dennisw
I agree - "peak oil theory" was developed by an oil geologist in the 60's who noticed that peak production lagged peak discovery by 20-30 years. Very sensible. And we have passed peak discovery! The theory was well demonstrated in the US, where production has been falling since the mid 70's. Other regions have the same profile. Discoveries are likely in the future, but will be in more remote and much more expensive locations - 5 miles deep in the ocean, under the arctic ice, in the undeveloped tundra. It was cheap oil that led to the explosive growth of the first world economy. Energy was almost free, plentiful, and great reserves were available.

A confounding factor these days is that to the OPEC countries, oil reserves, production, well depletion, etc., are closely guarded state secrets. And since quotas are based on reserves, these stated figures have been inflated over the years, such that the Saudis have more reserves now than they had 30 years ago.

Right, watch the escalating price, and form your own conclusion. I've made lots of money in the oil/energy sector over the last five years. Anybody who looks at the exponential curve of the performance in this area would be aware of what is happening. Others are wearing rose colored glasses.

70 posted on 10/17/2007 4:51:31 PM PDT by GregoryFul (is a bear a bomb in a bull?)
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To: mountainlyons

Colorado shale oil might compete with Colorado pumped oil and with what’s left of Alaska North Slope oil, but not with most oil on the world market. So long as we can afford it we’ll pay for it if there is no cheaper alternative, but right now and for a while longer if war is averted cheaper alternatives are still available.


71 posted on 10/17/2007 4:56:22 PM PDT by RightWhale (50 years later we're still sitting on the ground)
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To: GregoryFul
And we have passed peak discovery!

The US has because we have set aside many of our promising area and will not allow exploration of them. The world proved reserves still continue to grow in average every year in spite of meeting an increasing demand.

72 posted on 10/17/2007 7:37:01 PM PDT by thackney (life is fragile, handle with prayer)
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To: GregoryFul
the Saudis have more reserves now than they had 30 years ago

So does the Alaskan North Slope. Continued exploration and changes in technology create more recoverable reserves.

73 posted on 10/17/2007 7:38:21 PM PDT by thackney (life is fragile, handle with prayer)
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To: Professional
Hemp is the answer

Don't know about peak oil or peak hemp, but I've been hearing about peak antifreeze for decades now.


74 posted on 10/17/2007 7:41:31 PM PDT by Larry Lucido (Hunter 2008)
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To: businessprofessor

My quick answer is lots of oil/gas purchases are not in your precious markets. China has long term contracts with Iran some at 36$ per barrel. China pays Iran with weaponry and consumer goods. China also just might defend Iran in a confrontation with the USA. This also figures into how much China “pays” for Iranian oil

China has similar deals with Venezuela plus Chavez sell his oil at a discount to his Latin allies and has deals with Cuba where he sends oil and they send doctors for the Venezuelan poor


75 posted on 10/18/2007 8:03:19 AM PDT by dennisw (France needs a new kind of immigrant — one who is "selected, not endured" - Nicholas Sarkozy)
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To: GregoryFul

very good-—thanks


76 posted on 10/18/2007 8:04:33 AM PDT by dennisw (France needs a new kind of immigrant — one who is "selected, not endured" - Nicholas Sarkozy)
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To: dennisw

Long term contracts are part of the market. There may be political issues that influence the contracts but the contracts are still between a willing buyer and seller. I think we agree that energy markets are manipulated primarily on the supply side.

I am not sure what energy policies you favor. I think that you would agree that we should develop our own energy supplies. Other countries outside of these cartels are also trying to develop their own supplies. I think that we should use the tools available to pressure the cartels. I am confident that the market will adjust if we do not interfere with development of our own energy supplies. Given the trend of our current energy policies, we are heading for a situation in which our energy costs will be much higher than the rest of world. This situation will lead to less investment, low job growth, and low tax revenues.


77 posted on 10/18/2007 8:57:54 AM PDT by businessprofessor
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To: businessprofessor
Given the trend of our current energy policies, we are heading for a situation in which our energy costs will be much higher than the rest of world.

Western coal is very clean and is my favorite. Burn it for electric and convert it into diesel for automobiles and heating oil for homes and jet fuel for airplanes. All three of these are pretty much kerosene which is easier to make from coal than is gasoline

We should have a crash program to develop  and promote Western coal but this is stalled by our greenies. Coal has more carbon than oil or natural gas so when you bun it your get more CO2. Global warming is bullshit but this is what prevents us from developing coal and getting way from foreign oil

I despise our trade deficit and energy imports are the fastest growing part of it, Not our China/Asian imports

78 posted on 10/18/2007 1:33:39 PM PDT by dennisw (France needs a new kind of immigrant — one who is "selected, not endured" - Nicholas Sarkozy)
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To: businessprofessor
Long term contracts are part of the market. There may be political issues that influence the contracts but the contracts are still between a willing buyer and seller.

You minimize these long term contracts at your own peril. This is the kind of stuff that nations go to war over when oil is at $88 like today

In other words China has long term contracts with Iran and if we attack Iran they attack Taiwan. If China can size Taiwan that adds Taiwan's GDP to China's. Taiwan has a very very excellent technological base and China will harness some of it for exotic new weaponry for the China military.

What is Taiwan's GDP?

TaiwanGDP: $680.5 billion (2006 est.) (purchasing power parity)


79 posted on 10/18/2007 1:40:13 PM PDT by dennisw (France needs a new kind of immigrant — one who is "selected, not endured" - Nicholas Sarkozy)
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To: dennisw

I am not minimizing the non competitive nature of energy markets. The issue is the policies that we can make and pursue. We cannot stop Iran from agreeing to sell China oil below market prices. We can oppose Iran for its terrorist support and nuclear ambitions. Please indicate the policies that we should support given the non competitive nature of the energy market and the danger of rogue states like Iran.


80 posted on 10/18/2007 2:00:37 PM PDT by businessprofessor
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