Peak oil production coming sooner than expected

Media, public, governments unprepared for the End of the World (As We Know It)

Source: Sweetnam, DOE, April 2009

The BP oil disaster reminds us once again of the many large costs of oil use not included in its price.  But because conservatives have blocked or rolled back all serious efforts to move us off of oil in the last three decades, peak oil will soon change that (see Deutsche Bank: Oil to hit $175 a barrel by 2016 and World’s top energy economist warns peak oil threatens recovery: “We have to leave oil before oil leaves us”).

Energy economics expert and long-time guest blogger Craig Severance, has a review of recent research in this important area, which is largely ignored by the status quo media.

Craig Severance is co-author of “The Economics of Nuclear and Coal Power” (Praeger 1976) and a former Assistant to the Chairman and to Commerce Counsel, Iowa State Commerce Commission.  This piece, “It’s the End of the World (As We Know It),” is reposted from his blog.  Bonus R.E.M. video at the end.

A storm is quickly approaching, and the world is not ready for it.

The permanent end of the era of cheap oil is coming as soon as next year, according to a raft of official reports that have made their way into energy media over the last few months.  Governments are now beginning to acknowledge the looming crisis. Yet, perhaps because they waited too long to prevent it, leaders are not yet alerting the public.

The entire world economy is built on cheap oil,  A permanent oil production shortage will thus lead to The End of The World (As We Know It).  What will come on the other side of this — will it be good or bad?

Public Unaware. Except for a few stories in financial pages such as London’s Financial Times, this earth-shaking news has yet to reach the Mainstream Media.  While “Peak Oil” researchers have long warned of approaching oil shortages, the difference now is these dire warnings are being validated by the highest government and oil company officials.  Yet, no political leader has had the courage to make a major announcement to prepare the public for what lies ahead.

This public blindness is tantamount to the isolationism that gripped the U.S. in the years preceding WWII.  While the highest government leaders did their best to prepare for inevitable war, they were hamstrung by the resistance of a public unable to accept what really lay ahead.  Similar to today, some politicians advanced their own careers by feeding on the public’s desire to believe no coming storm could ever reach them.  Yet, the storm came anyway.

The Limits of Oil. The looming crisis we now face is often referred to as “Peak Oil” — a status where global oil production will reach a plateau, then begin its irreversible decline.

Source: Peak Oil Primer

Oil fields follow a production curve where output increases at first, then reaches a plateau or “peak”, after which a steep decline occurs.   Because existing oil fields decline, oil companies must continually develop major new finds just to maintain existing production.  If these new projects do not exceed the decline of existing fields, it becomes impossible to maintain oil production, let alone grow oil output to fuel economic growth.

The problem in recent years is that new oil finds have been smaller, deeper, and in more difficult to reach places.  Cheap oil prices simply won’t support the investment needed to develop them, so oil companies have not invested heavily enough to keep up with demand.  Lester Brown of Worldwatch Institute notes that major oil companies, awash in cash, have instead spent billions buying up their own stock, aware their existing reserves will soon increase greatly in value.

Did Global Oil Production Permanently Peak in 2008? Until 2008, world energy forecasters had always assumed global oil production would keep up with economic growth.  According to classic economic theory, as world economies grew they would demand more oil, and oil companies would respond by investing in more exploration and development.  “Peak Oil” was considered decades away.

Beginning around 2005, however, world oil production began to hit a brick wall, and by 2008 global oil demand actually exceeded supply.  With only a 2% shortfall of supply compared to demand, oil spiked to $147/barrel, and U.S. gasoline prices soared to over $4/gallon.

That same year, the International Energy Agency for the first time published a “bottom-up” oil analysis, evaluating each of the world’s major oil fields to see if production actually could continue to increase.

After looking at the oil field data, the IEA revised its forecasts of future oil production downward, yet still took a very optimistic official view, by using rosy projections of as-yet-undiscovered oil fields.

Independent researchers, however, using IEA’s same “bottom-up” data, have now stated the IEA was wildly optimistic.  The Global Energy Systems Group has concluded the world actually reached Peak Oil in 2008, and global oil production will now begin to decline.   Investment alone cannot fix the problem as the decline rates of existing fields are accelerating.

Significantly, though IEA’s official forecasts remained rosy, IEA’s Chief Economist Dr. Fatih Birol began urgently telling anyone who would listen the era of cheap oil is over, and “we have to leave oil before oil leaves us“.  If we do not “leave oil” behind us fast enough, economic growth may be choked off as oil prices rise to unaffordable levels.

From “Tin Hat” Theory to “Crikey!” In the last few months, there has been a sea change in attitudes about global oil supply among top officials.  The UK government, the U.S. Department of Energy, and the U.S. Joint Forces Command, among others, have begun to acknowledge the seriousness of the situation.

On March 25th, the French publication LeMonde reported on a semi-private U.S. Department of Energy Roundtable held in April 2009, where top U.S. DOE energy analyst Glen Sweetnam presented the graph below summarizing prospects for world liquid fuel production vs. demand:

Source: Sweetnam, DOE, April 2009

The chart includes all known sources of supply, including undeveloped projects and “unconventional” sources such as tar sands.  It politely labels the expected gap as “unidentified projects”. The gap occurs very soon (beginning in 2011) and is very large — roughly 10 million barrels/day by 2016.  To put this in perspective, 10 mbd is roughly equivalent to the entire output of Saudi Arabia, and is well over 10% of total world demand. (Recall $147/barrel in 2008 occurred with only a 2% shortfall.)

DOE still avoids any use of the words “Peak Oil”, instead talking of an “undulating plateau” of oil prices & production.  Shortages will lead to higher prices and more investment, spurring more production and lower prices.  However, oil price volatility discourages new investment, so production plateaus.  Richard Heinberg of Post Carbon Institute asks “What’s the difference?”  in  “Quacks Like a Duck…”.

Whatever you call it, there is now a growing official consensus the world faces serious oil supply shortages beginning in the 2011-2015 time frame and continuing.  Rick Monroe of the staff of Energy Bulletin has provided links to the growing list of official warnings here.

Peak oil analyst Jeremy Leggett, who participated in a closed-door UK government summit on oil supply March 22, summarized the recent awakening of official realization: “Government has gone from the BP position – ’40 years of supply left, the price mechanism works, no need to worry’ – to ‘crikey’.”

The End of “As We Know It”. The coming oil descent can be seen as both a crisis and an opportunity.

The end of cheap oil will be the end of living life “As We Know It”.  Those who try to continue doing things in the old ways that depend on cheap oil will experience severe hardships.

Yet, there will be opportunities.  Those who prepare now will be better able to weather the storm, to see the rainbow on the other side.

The End of … Gas Guzzlers

To win WWII, Americans had to give up buying new cars, as auto factories were converted to weapons production.  The opposite will now be true — we will need to buy different vehicles that use little or no gasoline or diesel.

Think back to 2008.  When gas prices hit $4/gallon, families with gas guzzlers suddenly found they were paying $400/month for fuel.  Prices for very nice SUV’s and heavy trucks plummeted — you couldn’t give them away.  Meanwhile, buyers lined up to buy hybrids.  The time to unload your gas guzzlers and buy something else is now.

80 mpg motorcycle, 50+ mpg Prius

The End of … Cheap Food?

I love my big burgers, but this too may come to an end if corn-fed beef gets too pricey.  To replace a paltry 6% of U.S. gasoline, we already feed 1/3 of the entire U.S. corn crop to the corn ethanol industry, with impacts worldwide on crop prices, conversion of rain forest to cropland, and ocean dead zones from fertilizers. Ethanol corn use is projected to increase to 1/2 of the entire U.S. corn crop by 2015 under Congressional mandates.

If you actually had to raid your refrigerator to fuel your car, you would see the obscenity of feeding food to machines. Yet this is exactly what we are doing.  One of the worst decisions ever made was to build the infrastructure to convert food crops to fuel, because we have now directly tied the price of food to the price of fuel. As oil prices rise so will the price of food.

Even if we were not directly feeding our food supply to our machines, our very production of food is heavily dependent on petroleum. There may be hope — a study just released by Iowa State University shows farmers could be just as productive using half their present fuel use. Yet, lower fuel use depends on crop-rotation away from fuel-intensive corn, a move unlikely to happen if corn prices are tied to skyrocketing oil prices.

It is unlikely Congress will find the sanity to eliminate taxpayer subsidies of ethanol.  Therefore, a switch away from gasoline to electric vehicles may be the only way to keep food prices affordable.

My big burger days may soon end — but at least my waistline could be better for it.  Those whose waistlines are already too thin — the billions of hungry people in the world — will feel the impact of higher grain prices much more.  In 2008, food price riots broke out worldwide the last time oil prices skyrocketed.  We must stop feeding food to cars.

The End of … Globalization?

Higher oil prices mean the world is about to get a lot smaller, as the cost of transporting goods halfway around the world will no longer be cheap.  Jeff Rubin, former chief economist at CIBC World Markets, argues “a lot of long-lost jobs are going to be coming home”.

Rubin has written a book Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization. He notes that already in 2008 high oil prices began to make U.S. steel and furniture producers competitive again.  Rubin expects China’s economic growth to be fueled more by growth in their own consumption.

Walmart may once again carry products labeled “Made in USA”.

The End of … Pristine Wilderness?

Arctic National Wildlife Refuge (FWS) Avatar promo clip

Millions of us are now viewing once again the movie Avatar  — James Cameron’s wonderously beautiful tale of a pristine world.  This time, however, we are not magically transported to Pandora in a theater by the magic of 3D.  Instead, we may notice ourselves driving a small DVD home from the store in a 3,000 lb. vehicle, to view it on our big-screen TV.

If we truly look at ourselves, we will see that we are the voracious society in search of our own “unobtanium “. Our unobtanium is oil, and shouts of  “Drill, Baby, Drill!” have shown there are those among us who are willing to do anything, and destroy anything, to acquire it.

As oil becomes scarce and prices skyrocket, these shouts will grow louder, coupled with skapegoating tactics to lay blame for the oil crisis at the feet of those who wish to preserve our most precious natural areas.

There will once again be pressures to open to drilling Alaska’s pristine wilderness, the Arctic National WIldlife Refuge.  If this is done, it will not solve the crisis, as EIA projected ANWR would likely reduce oil prices only 30-50 cents per barrel (about a penny per gallon of gasoline).  Yet, hunters take note, a wildlife area critical to scores of species of North American migratory birds would be violated.

Despite the British Petroleum oil gusher in the Gulf of Mexico, expanded offshore oil development in all U.S. coastal waters will likely be approved.   Whether another Deepwater Horizon event occurs may be determined by whom we elect — those most beholden to the oil companies, or those willing to strictly regulate them.

Canada has already begun the rape of its northern forests to exploit tar sands, the surface mining of which results in a landscape of complete devastation.  SImilarly, there will be calls to utterly devastate the forests and water resources of Western Colorado to exploit oil shales.

Alberta Tar Sands Project

Only a move away from oil as quickly as possible can save these pristine areas from the destructive forces of a desperate society.

Image: We Can Do It

We Can Do It. Though Americans resisted the recognition that WWII was coming, once it came they rose valiantly to the call to action. A similar can-do spirit is needed now for the transition to a post-oil world.

This crisis is coming soon.  It is too late to prevent it, so we simply need to get used to it.  Peak Oil is happening.

We will need to adapt — but we can do that.

Craig Severance

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71 Responses to Peak oil production coming sooner than expected

  1. WastedEnergy says:

    Ah, why worry, we all know Saudi Arabia will be able to keep closing that gap!

    The gap between their production and their domestic consumption, that is.

  2. Wit's End says:

    Let’s see, we’ve got Peak Oil catastrophe, Gulf oil volcano catastrophe, climate change catastrophe and…another tin foil hat about to become “Crikey!”

    Ozone causing massive crop failures and ecosystem collapse:

  3. fj2 says:

    Yes! Greate piece!

    A very important part of the first wave of an accelerating “Environmental Pearl Harbor”.

  4. les says:

    yes, Great piece.

    You might also like to factor in the stuff here:

    “It’s possible the day of “peak oil” has arrived – but not in the way everyone expected. Instead of peak oil, we’re looking at a peak in demand for oil,”


  5. Bob Wallace says:

    Scuttlebutt says that Nissan’s battery costs for their Leaf EV are a small fraction of what people expected ($375 per kWh vs. the $1,000 that was being thrown around).

    12,000 average US mileage with a 30 MPG and $5 a gallon is $2,000 per year. In about 5 years you would save the cost of the 24 kWh Leaf battery pack in fuel savings. And based on the World Liquid Fuel graph that Craig posts who is going to be willing to assume that pump prices will not go higher than $5 per?

    Roughly half of all US driving is done in cars five years old or newer. 24,000 annual driving, twice the average miles driven, done exclusively in five days is about 90 miles a day. The Leaf has a 100 mile range and can be quick recharged to 80% in 20 minutes.

    Nissan states that they are prepared to make 500,000 Leaf EVs per year.

    BYD is bringing their e6 with its 200 mile range to market in the US in the next few years.

    How long do you think it will be before higher mileage drivers are shopping for EVs?

  6. Chris Dudley says:

    We actually already have a congressionally approved standby gasoline rationing plan prepared to deal with supply issues. There is no difficulty in keeping oil cheap if we simply use the plan. Expensive oil is very detrimental to our economy so we should really have a cheap oil policy. By cutting consumption using our rationing plan we can have the economic benefits of cheap oil even as we transition off of oil as a fuel. We don’t need oil, we need cheap energy and we have a good set of substitutes for cheap oil as oil’s availability declines. Let us not scam ourselves with high oil prices, which can only encourage intrinsically expensive kinds of oil production such as deep water drilling, while we finish off the cheap oil. Give Saudi Arabia 6 million barrels a day of spare capacity and oil will cost less than $20/barrel. That is all we need to do. We can keep using cheap oil if we just use less.

    [JR: This makes no sense. Most demand growth is now elsewhere.]

  7. fj2 says:

    It may not be the end of globalization since much better transportation is possible with hybrid human-electric vehicles something that Lester Brown probably does not fully understand yet.

    Elimination of both rolling and air friction — using magnetic levitation and evacuated tubes — and simple mechanical controls in the form of rails and guide ways (maglev), and linear induction motoring (LIM) allow for speeds many times faster than practical for automobiles also eliminating much of the practicality of airplanes; as do modern designs for lighter-than-air vehicles with speeds faster than ocean liners.

    In fact, automobiles are really not practical and current transportation practice is as corrupt as the insurance and finance industries with associated health, economic, and environmental drains.

  8. Stuart says:

    I’ve been reading about peak oil at The Oil Drum and other sites for several years, but if I try to talk to people their eyes just seem to glaze over and they start talking about untapped reserves or abiotic oil or oil shale.

    Post-peak could get very ugly.

  9. fj2 says:

    Referencing Joseph Romm’s “The crisis is coming soon. It is too late to prevent it, so we simply need to get used to it.”

    [JR: This post is by Craig Severance.]

    The crisis is here. No doubt and in the short term we will have to get used to it.

    In the long term, an advanced array of nanotechnologies may help us dig our way out of it.

    Einstein’s math teacher Minkowski about 100 years ago once said to the effect: “We are in an age of technological metamorphosis. Mechanics is rapidly changing into electronics.”

    This trend will persist along with the advanced development nanotechnologies potentially reducing human civilization’s environmental footprints to significantly less than one percent of current values.

    A potential example
    With commercialization of carbon nanotubes 100 to 200 pounds stronger than steel and wood per weight, a 1,000 pound-per-foot steel beam can be replaced with a 10 pound-per-foot carbon nanotube beam where a 10 foot beam would only weigh 100 pounds and easily carried by 2 or more laborers.

  10. LucAstro says:

    Really great summary of the topic. Giving a talk this week on this. Thanks

  11. Chris Dudley says:

    Joe in #6,

    There is a limit to how quickly demand can grow elsewhere which is set by how quickly roads are built and cars made to drive on them. Keeping ahead of that is well within the reach of the US for a decade or so owing to our high consumption starting point. That is enough time to transition our transportation off of oil with a low world oil price. Trying to transition with a high oil price is just stupid. If we intend to transition, lets be smart about it and not have the price of oil above $80/barrel for a decade.

    Further, this is a way to have less total emissions from oil. There will be a decade of little or no investment in new oil supplies since we will force the price low. Once we are out of the market, no longer consuming, the price shock if world demand should rise will be dramatic and all other consumers will shift to our new model. There will never be sustained high prices so no further investment in tar sands or deep water or oil shale or other expensive ways to produce oil will occur.

    There were about 3 trillion barrels of conventionally recoverable oil in the ground originally and we’ve already produced about 1 trillion (WEO2008). But there are 7 trillion barrels of unconventional oil, including CTL and GTL. We are tapping into unconventional oil now owing to high oil prices. We need to put a stop to that globally because it is a huge climate disaster if we don’t: Venus Syndrome according to Hansen. A low oil price looks like the most effective means to do so. The US is the only single player that can make that happen unilaterally and within weeks based on executive order.

  12. Bob Wallace says:

    Worth noting…

    “In what could set the stage for a fundamental shift in commercial aviation, an MIT-led team has designed a green airplane that is estimated to use 70 percent less fuel than current planes while also reducing noise and emission of nitrogen oxides (NOx).”

  13. RoySV says:

    Thanks for again covering this massive story. Re the headline: Well TEOTWAWTI is coming sooner than a *some* people expected. Those paying attention could have known Ten years ago. Most are oblivious and many smart people are in denial. Sadly, people in groups just aren’t very smart about adapting to change that’s outside the usual bandwidth. Same for climate change.

  14. Ron Broberg says:

    Annual global oil production peaked in 2005.
    July 2008 saw a peak in monthly global oil production.
    Although the numbers for recent years are still subject to change.
    Make of that what you will.
    Source: xls 4.1d

    For readers who wish to follow the peak oil story and analysis on a daily basis:

  15. SecularAnimist says:

    Joe wrote: “I love my big burgers, but this too may come to an end if corn-fed beef gets too pricey […] If you actually had to raid your refrigerator to fuel your car, you would see the obscenity of feeding food to machines.”

    [JR: Craig Severance wrote that.]

    With all due respect, it is ALREADY an “obscenity” to feed corn and soybeans to cattle so that you can eat those “big burgers”.

    A 2006 report by the United Nations Food and Agriculture Organization estimated that 18 percent of annual worldwide GHG emissions are attributable to raising cattle, buffalo, sheep, goats, camels, pigs, and poultry – an amount comparable to the entire transport sector.

    And a more recent study published by WorldWatch Institute in 2009 found that livestock and their byproducts actually account for more than half of annual worldwide GHG emissions.

    And a 2006 study by the University of Chicago found that switching from the “standard” meat-heavy American diet to a vegetarian diet will reduce your carbon footprint MORE than switching from a standard “gas guzzler” to a Prius.

    On top of its environmental impacts, animal agriculture diverts resources that could produce large amounts of wholesome plant-based food for the many, to produce unwholesome meat for the well-off few.

    If diverting corn into ethanol production is unethical in a hungry world, is not diverting corn and soybeans into meat production — thereby reducing the protein available for human consumption by as much as 90 percent — also unethical?

    And I won’t even get into the ethics around the hideously cruel treatment of animals raised for meat in industrial factory farms.

    Frankly, it seems to me that using corn to produce ethanol is, if anything, an improvement over feeding it to cattle to mass-produce “big burgers”.

  16. Ron Broberg says:

    Venus Syndrome according to Hansen

    I don’t know what Hansen said, but this is nonsense.

    The Earth has been much warmer than it is now without triggering the kind of runaway greenhouse that would bake the CO2 out of the rocks. The rate of the warming is what will cause much of the biological impacts. The change in hydrology – changes in precipitation, aridity, snow melt, evaporation – are likely to cause the biggest economic impacts.

  17. mike roddy says:

    I recommend James Kunster on the subject, especially his blog, Clusterf*** Nation. He lays out the real world problems we will face, and how every element of our lives is going to have to be rearranged. Not always for the worse, either.

  18. Scatter says:

    From “Tin Hat” Theory to “Crikey!”

    Ironically, many in the truly tin hat brigade perceive peak oil as a manufactured hoax, much like their perception of climate change.

  19. Sally Soma says:

    “the rainbow on the other side”

    “We can do it!”

    Can the renewable energy sources of Industrialism 2.0 maintain our modern affluence?  The looming steep decline in EROEI – “energy returned on energy invested” – strongly indicates that our ability to maintain modern industrialism is a myth.

    But this blog and most of the “progressive” advocacy from Washington are strangely silent on this crucial issue.  And if their authoritarian responses to criticism are any indication of what to expect from a wind-powered utopia, then it’s just as well that industrialism falls on its face and puts the myth-makers out of business.  The future will be decentralized, and that is good.

    “In the end, we are left with the disturbing conclusion that all known energy sources are subject to strict limits of one kind or another….  And contrary to the hopes of many, there is no clear practical scenario by which we can replace the energy from today’s conventional sources with sufficient energy from alternative sources to sustain industrial society at its present scale of operations.  To achieve such a transition would require (1) a vast financial investment beyond society’s practical abilities, (2) a very long time – too long in practical terms – for build-out, and (3) significant sacrifices in terms of energy quality and reliability.

    Perhaps the most significant limit to future energy supplies is the “net energy” factor – the requirement that energy systems yield more energy than is invested in their construction and operation.  There is a strong likelihood that future energy systems, both conventional and alternative, will have higher energy input costs than those that powered industrial societies during the last century.We will come back to this point repeatedly.”

    — “Searching for a Miracle,” by Richard Heinberg, Nov 2009

  20. Ron Broberg says:

    Okay – found Hansen quoted here:

    After the ice is gone, would Earth proceed to the Venus syndrome, a runaway greenhouse effect that would destroy all life on the planet, perhaps permanently? While that is difficult to say based on present information, I’ve come to conclude that if we burn all reserves of oil, gas, and coal, there is a substantial chance we will initiate the runaway greenhouse. If we also burn the tar sands and tar shale, I believe the Venus syndrome is a dead certainty

    I believe Hansen has gone past what the science can support in this piece.

  21. mike roddy says:

    You may be correct, Ron Broberg, but I prefer to believe James Hansen on this subject.

  22. Matt says:

    One thing I’ve never understood about peak oil theory: How can demand continue to rise while production tapers off? Increased oil demand is the result of economic development; once peak oil hits, what could possibly continue to develop? Peak oil is a serious problem, but I don’t believe we could ever see a 40-million barrel gap between production and demand, as the top graph pictures.

    I don’t believe peak oil is the end of industrialized civilization – yet. I think something like Robert Rapier’s “Long Recession” scenario is most likely, where higher oil prices drive developed countries into recession. Demand for oil drops, and prices back off. Just when a recovery seems underway, oil prices rise again and the recession is back on.

    Ultimately, peak oil is worse for the environment than for civilization. Once the squeeze starts, it’s only a matter of time before Coal-To-Liquid technologies are used to fill the gap. When/if that happens, any chance we had at mitigating climate change is dead. I hope it never comes to that.

  23. Bob Wallace says:

    Say Sally, great site you found there. Let’s put it to the smell test just based on your C&P…

    “…we are left with the disturbing conclusion that all known energy sources are subject to strict limits of one kind or another….”

    “The Earth receives an incredible supply of solar energy. The sun, an average star, is a fusion reactor that has been burning over 4 billion years. It provides enough energy in one minute to supply the world’s energy needs for one year. In one day, it provides more energy than our current population would consume in 27 years.” And the sun is expected to hang in there for another five billion years or so.

    Now, we aren’t going to power our future with nothing but solar, but mix in a lot of wind, tidal, geothermal, biomass/gas, etc.

    (And I have it on good authority that within the next five billion years we will finally bring fusion to the grid.)

    So how about we give this bit a grade of “Stinker”.

    “…there is no clear practical scenario by which we can replace the energy from today’s conventional sources with sufficient energy from alternative sources to sustain industrial society at its present scale of operations.”

    Read Mark Jacobson’s article in Scientific American, November 2009. You can get it in your library or buy it on line. He lays out exactly what we need to build/install and how quickly. And shows that there are no important barriers, including cost, to getting there in the next 20 years.

    So, “Stinker #2”.

    “There is a strong likelihood that future energy systems, both conventional and alternative, will have higher energy input costs than those that powered industrial societies during the last century.”

    Are you aware of how inefficient autos and trucks are? Do you realize that ~80% of the energy in a gallon of gas is used to produce waste heat? Do you realize how efficient electrical motors are?

    OK, “Stinker #3”.

    Final grade? “Total Stinker.”

  24. Joe1347 says:

    Unfortunately, most people (Americans) still think that there’s plenty oil offshore, in Alaska, or under some other cute little woodland creature. It’s just those left wing treehuggers stopping the saintly oil companies from providing all of the oil we’ll ever need (for eternity). Drill, Baby, Drill. Of course when pressed, some Americans are rational and recognize that there just ‘might’ not be enough oil close by – but many of those same Americans will immediately say that we should just take the oil the ‘belongs’ to us from those terrorist Middle Eastern countries.

    So how can you even consider discussing ‘rational’ policy to prepare the American public for the end of cheap oil in this type of climate? As just one example, remember the nonsense that Obama took for having the nerve to suggest that Americans should check their tire pressure.

  25. paulm says:

    You’ve got the music dead on the button. Much more appropriate than tick tick Eaarth is burning ….

    “The permanent end of the era of cheap oil is coming as soon as next year,..” this is why you can see the frustration in Obama on this Gulf Crisis.

    All hell is about to break loose in the next 5yrs due to peak.

  26. paulm says:

    Ron #20 Have you found any other scientific commentary on this? It seems like a very real possibility to me a casual observer just mulling over the data ….

  27. fj2 says:

    The waste of transportation running on primitive mechanical systems is mind boggling.

    Just picture the mountain of worn automobile tires that Americans go through each year not required by small single-person vehicles on magnetic levitation linear induction motor systems.

  28. catman306 says:

    Great piece, Joe.

    “Higher oil prices mean the world is about to get a lot smaller, as the cost of transporting goods halfway around the world will no longer be cheap.”

    Could you have meant that the world is about to get a lot BIGGER?

  29. Greg says:

    Just in case anyone thinks this is a Good Thing for climate change, as the price rises it becomes profitable to use more carbon-intensive production methods like the ‘tar’ sands mentioned by Craig, and the Coal to Liquids mentioned by Matt in #22.

    Peak Oil probably means more carbon dioxide, not less, at least in the short term.

  30. Mike #22 says:

    Some fraction of tropical forest destruction has been driven by cheap available fuel for vehicles and equipment. Shrinking fuel supplies and spiking fuel prices might halt a lot of ungoing destruction.

    Farmers the world over will find it harder to make a profit in marginal cropland (where farming isn’t sustainable anyway), and those fields will revert in many areas.

    All those green acres of mown turf will look more and more like the gas, fertilizer and water hogs they are. Suburbia is going to change. More trees, more meadows, and more vegetable gardens–less mowing and less leaf blowing.

    Peak oil will be good for trees.

  31. Bob Wallace says:

    Don’t you expect that a lot of tropical forest will fall to create land on which to raise crops for biofuel? Marginal croplands which aren’t that good for food crops may be sites for more valuable biofuel crops. And with an improvement in cellulose ethanol production won’t trees fall?

    I suspect that there’s more than one way this may play out. Peak oil might not be at all good for trees.

  32. WastedEnergy says:

    #29 Mike: it will be good for trees unless the deceivers have their way and sell us on Tar Sand.

  33. Lore says:

    Globally less oil, as in heating oil, and pressure on other fossil fuels for similar uses will mean more wood will be burned for fuel. A quick search about our pioneering past in the U.S. will show that vast areas of forests were cleared by early settlers for crops, building and fuel to the devestation of much of the local environment.

  34. David B. Benson says:

    Not news to me.

  35. fj2 says:

    31. Lore, “more wood will be burned for fuel”

    What were those things called “Stanley Steam Engines?”

    Keeping vehicles small and light optimally less than human weight means that you will not have to rustle up too much energy to run them and even use human power if necessary or desired.

  36. Wit's End says:

    Mike @ 29 said:

    “Some fraction of tropical forest destruction has been driven by cheap available fuel for vehicles and equipment. Shrinking fuel supplies and spiking fuel prices might halt a lot of ungoing destruction.”

    I have to agree with Lore #31. Almost all of North America was clear cut – more than once – a couple of centuries before any mechanical equipment existed. Even today, the pistachio trees in Afghanistan are being felled for fuel. It reminds me of Easter Island! You would think we would be more sophisticated by now but, apparently not. The willful extinction of tuna to avoid harming markets is another case in point. Crazy!

  37. David says:


    The end of that world can’t come soon enough, as the Gulf oil disaster shows.

  38. Lore says:

    Returning to the age of wood fired steam is obviously out of the question, although much of the wood left will be used for other domestic purposes. In a world where the population is approaching 7 billion, there simply is not enough timber to sustain any kind of industrialization as it was back when there were only 1.5 billion people inhabiting the planet.

    Nothing we know of today can replace the cost, transportability or energy density of oil.

    Small energy efficient vehicles in mass would still require huge amounts of energy to produce, deliver and maintain. All our efficiencies today, whether on the farm or in the factories that give us so much of the good life we enjoy are geared towards expenditures of great amounts of fossil fuels that cannot be traded off in man hours to sustain current population levels.

  39. Bob Wallace says:

    “Nothing we know of today can replace the cost, transportability or energy density of oil.”

    Ever heard of electricity?

    Much cheaper to run a vehicle using electricity than oil.

    Transportation, much easier than moving oil around the country, just stick it in the grid and take it out where you want it.

    Energy density, oil wins but electricity is plenty good enough.

  40. Mike #22 says:

    30,31,32,35, All good points.

    I am suggesting that when the ‘return on energy invested’ becomes marginal, investment dries up.

    At the pointy end of forest destruction there is a lot of fossil fueled equipment. Camps, trucks, skidders, cranes, more trucks, saws, sawmills, boats. Double the fuel cost, what happens? The whole infrastructure is based on cheap (nearly free) gasoline and diesel. Changing that over, especially in a third world country, won’t be easy.

    Farming marginal land is only profitable if fuel, fertilizer and water are based on cheap fossil energy.

    Real shortages or high prices for gasoline will certainly impact all the turf out there. Less grass means more trees.

  41. villabolo says:

    As far as fuel efficient vehicles go please realize that the very body of a car, electric or otherwise, consumes a moderate proportion of the energy that it consumes throughout it’s lifetime before it even goes out of the assembly line. That being a result of the energy required to melt and form the metal.

    Making enough electric vehicles within a short period of time to avoid the consequences of peak oil and perhaps ameliorate the nastiest Global Warming effects will have the paradoxical effect of driving oil and coal usage up tremendously (as will also making a lot of energy intensive windmills and photovoltaics/concentrated solar power systems).

    The problem with the automobile is the large mass of metal it consumes for transporting a fraction of its weight in passengers. Radical reduction of the weight, let’s say an order of magnitude (ten fold) will circumvent the obvious dead ends in energy availability and/or CO2 release of the only energy source we got to work with in the near future.

    There simply won’t be enough time as well as oil and coal to increase production of windmills and solar to power both the jumpstart of both industries and well as to surpass our current oil/coal generation in order to “fuel” electric vehicles. It simply won’t happen.

    I therefore recommend the following: as well as

    Yes, I am perfectly serious (and please no Shirley jokes). These vehicles can be electrically powered and have usable range of 100+ miles at 20 mph (maximum “safe” speeds). Yes, I am perfectly aware of its implications but when every thing else is a dead end you might be forced to go through the narrowest alley.

    By the way, going only slightly off topic, what about the synergy between Peak Oil and the Arctic Ice Cap meltdown? If total meltdown is 10-20 years away and a substantial area of ocean opens up in only half that time range, 5-10 years, how will they interact together?

    I can predict that food prices will obviously go up with Peak Oil and that will synergize with increasing food prices due to Arctic Ocean opening -> absorbing more heat and increasing evaporation and intense rain activity/droughts -> crop damage.

    I think it’s time to get your Rhoades Car, nitrogen packed (10 year shelf life) non hybrid seeds as well as nitrogen packed grains (20+ years shelf life at room temperature) and become a Survivalist.

    No, I’m still not kidding.

  42. catman306 says:

    Lore, the answer to some of our future energy needs might be based on growing trees everywhere they will grow. Harvested wood is converted to charcoal and buried in the ground. Or plowed into fields as fertilizer. Old quarries and open pit mines could be refilled with sequestered carbon. Some of the charcoal becomes fuel for small, charcoal-fired, steam turbine-generator, electric vehicles. Dead wood from the forest would be the first harvested with charcoal powered electric vehicles. Unemployed people everywhere could be hired to aid in the tree planting. The charcoal plan removes CO2 from the atmosphere, helps temper the climate change with more forests, doesn’t require very much petroleum based fuels, and provides employment for millions. No petroleum based fuels needed with the charcoal plan.

    This is not Stanley’s Steamer. Stanley was a reciprocating engine manufacture. They were fine cars in the early days (1902) but became expensive and obsolete by 20 years later, and were replaced by cheap automobiles powered by cheap gasoline.

    Fast forward 110 years.

    Steam turbines can be designed with high efficiency, much higher than piston gasoline engines. I envision electric vehicles of all descriptions powered by charcoal. If charcoal has a sufficient energy concentration, then this becomes a very sustainable plan.

  43. Raul M. says:

    Some narrative style history lessons may be found in the literature
    just before WW1 & WW2 about the travels of the various corporations
    as they changed many locations from the pre-industrial type chaste
    systems to the more modern ways and the subsequent troubles when
    easy profits dried up and the corporations and stock holders had to send
    troops of soldiers to
    go get those profits that had not been brought back home, as they thought,
    it should have been.

  44. n5galsooner says:

    While I agree with the need to transition away from fossil fuels as fast as possible, I don’t see any acknowledgement of the precarious position that the human race is in. We have about 7 billion people who are dependent on energy for food production. If the rug is suddenly pulled out from under us energywise, we are looking at a huge percentage of the human race starving to death. Both sides of this debate ignore this fact– to peril of the human race.

  45. Lore says:


    You’re friendly government knows full well about the advent of Peak Oil and Climate Change. The dilemma facing them is do you create a panic by confirming the suspicions? I suspect our leaders see that it’s better to soft pedal the problems and deal with the hands given then to become the next Jimmy Carter.

    When full public realization happens, there will be a lot more then just the Tea Party types upset. Imagine a life where all your future dreams just became impossible to attain. One where you will live much harder, shorter and in more uncertainty and fear. That kind of talk doesn’t get votes or sell advertising on your nightly news.

  46. David Doty says:

    This article provides a much needed perspective, though it errors a bit on the side of pessimism. The Chinese have been investing furiously all around the world in oil production – to the tune of about $100B over the past several years .
    This significantly softens the crunch for the next decade. That said, I still expect to see oil above $200/bbl by 2016 and production peaking then at a level of about 92Mbpd. The world will deal with prices at that level, and prices will continue to rise for the rest of this decade, as more sustainable alternatives can not penetrate the market fast enough to reverse the upward trend in the price of oil before 2020.

    Fortunately, a scalable alternative is coming – WindFuels. We’ve shown that it will soon be practical to make all the standard fuels we need (diesel, gasoline, jet fuel, alcohols…) at competitive prices from CO2, water, and off-peak wind and/or nuclear energy. We’ve focused on off-peak wind energy because it is so cheap and rapidly becoming plentiful. The capital cost of the Windfuels plant will be about 1% the capital cost of an algal-fuel facility of similar capacity.

    NREL has recently dramatically increased estimates of the domestic wind resource. There is sufficient off-peak potential wind and sufficient point-source CO2 in the U.S. to synthesize over twice our current domestic liquid fuel consumption. The U.S. could supply half the world with affordable, sustainable, carbon-neutral gasoline, diesel, and everything else we’re accustomed to using by mid-century.

    There’s an enormous amount of detailed technical information on our website , and we’ll be presenting four new papers at the ASME ES conference in Phoenix this week. We’ll post these papers at our website after the conference.

    So no, the transportation fuel future is not nearly as bleak as it appears to most rational observers today, as there will be no shortage of affordable, sustainable, carbon-neutral hydrocarbons of all types by mid-century. This source will never run out, and it will be cheaper than what we’ll be accustomed to within a few years.

  47. Chris Dudley says:

    Ron (#20),

    I, like you, think of the Venus Syndrome as coming to completion with nearly all hydrogen removed from the planet and much of the oxygen bound to carbon rather than hydrogen. Irreversible. I’m not sure that that is what Hansen means though. He may mean a runaway water vapor greenhouse only. That is presumably how things got started on Venus.

    I have difficulty removing the hydrogen before weathering of rock sequesters carbon and perhaps the Earth returns to something that has oceans. Perhaps I have my calculations wrong but I think the Earth would not lose hydrogen to space very quickly even with a water vapor atmosphere all the way up.

    But, in the shorter term, where questions of that sort can be left to one side, a runaway water vapor greenhouse seems likely if we burn everything.

    By the way, there is no need, in the presence of plate tectonics, to cook the carbon dioxide out of the Earth using a hot atmosphere. Volcanism will do the job over time. But, boiling the oceans would provide a lot of rain so accelerated weathering of silicate rock ought to provide a substantial carbon sink during the runaway which might out pace the volcanic additions.

    There is quite a lot to the question.

    On out present course, we do burn everything. Cheap renewable energy assures it since $0.25/Watt PV can easily be used to cook oil out of oil shale at not too high a price. And, we will surely see PV that cheap. We very much need to just say no to oil now because it will get harder to do as soon as very cheap renewables are broadly deployed. Same goes for coal-to-liquids and gas-to-liquids. Very easy to make with unlimited cheap renewable energy.

    Placing djinn back in bottles, a difficult problem….

  48. Leif says:

    The Carbon Stomp: Nature does not allow exceeding the capacity of an ecosystem.
    Over-consumption coupled with technological and scientific advancements has enabled
    each person in large segments of the first world to have a carbon stomp of a thousand or
    more third-world folks. Give even a million of those carbon stompers access to
    sustainable energy, and you have removed the impact of one billion third world folks
    from the planet. It is not the masses from the third world who are wholesale poisoning
    the water, air and oceans or destroying the life support systems of earth. It’s us. We are
    changing the chemistry of the oceans and destroying the base of the food chain. We are
    covering the seas with plastics and raw hydrocarbons. We first-world folks create the
    demands that pluck species to extinction. We’ve stratified society with our riches, at the
    expense of increasing the numbers of poor. Capitalism and corporations can be valuable
    allies in changing the way we live on earth. Currently they both are actively engaged in
    self-preservation at the expense of humanity, sustainability and earth’s life support
    systems. It is we who must justify our existence and use our technology and science to bring equality to everyone. The world over!

  49. prokaryote says:

    16# Ron Broberg “The Earth has been much warmer than it is now without triggering the kind of runaway greenhouse that would bake the CO2 out of the rocks.”

    “The last time carbon dioxide levels were apparently as high as they are today — and were sustained at those levels — global temperatures were 5 to 10 degrees Fahrenheit higher than they are today, the sea level was approximately 75 to 120 feet higher than today, there was no permanent sea ice cap in the Arctic and very little ice on Antarctica and Greenland,” said the paper’s lead author, Aradhna Tripati, a UCLA assistant professor in the department of Earth and space sciences and the department of atmospheric and oceanic sciences.

    “We have shown that this dramatic rise in sea level is associated with an increase in carbon dioxide levels of about 100 parts per million, a huge change,” Tripati said. “This record is the first evidence that carbon dioxide may be linked with environmental changes, such as changes in the terrestrial ecosystem, distribution of ice, sea level and monsoon intensity.”

  50. Barry says:

    Re: Hansen and Venus Syndrome.

    First, if anyone is qualified to talk about Venus’ climate it is Dr James Hansen. That was his specialty in his early career and he even designed and was in charge of the part of the NASA mission to Venus that studied its atmosphere.

    Second, Hansen explains all his reasoning in detail in his excellent book “Storms of my Grandchildren.” Part of the Venus syndrome driver would be the firing of the methane hydrates “gun”…which as he shows is now fully loaded. Water vapour then becomes a runaway forcing loop. The climate sensitivity to forcing is a U-shaped curve that gets extremely sensitive at high and low temps. None of this is “models”…it is based on past Earth history and direct study of Venus.

    Hansen is a world expert in both Venus and Earth climates who surely knows more about both climates than anyone commenting on this blog. People might want to read what he has to say before dumping on the notion.

  51. Bill R says:

    Mother Gaia sez “Peak-Oil? Bring it on….not a moment too soon!”

    Some say that Peak-Oil will make environmental issues worse as we dig for tar-sands and deepwater oil at a more frenetic pace.


    Or maybe like the financial crisis and the ridiculous debt and financial products that precipitated it we will continue to ignore all the obvious signs that something is terribly wrong until its too late. If we’re too late to ramp up a response to peak oil I think massive projects to obtain millions of barrels of oil from rock will actually not be at the top of our “to-do” list in the discontinuities that follow.

    In the absence of a “wise-sapien” that can forsee our sustainability crises and change course, I’ll take the risk of the trauma of mother nature pulling out the rug from underneath our hubristic towers of “progress”.

    Nature bats last. If we can’t get ourselves back to understanding that civilizations don’t exist without obeying limits and maintaining functioning ecosystems, then I’m all for us learning by getting knocked over. Sorry to feel like that, but a habitable planet is the most important thing we have going for us, and I just don’t see us mounting the will yet to really address the problems at hand…. we have not even critically looked at the assumptions of capitalism… that growth, debt, and progress will continue unchecked into the future….

  52. climateprogressive says:

    What does need to be taken into account re – Venus/Earth comparison is the geologically fairly recent late Cretaceous. This was part of a lengthy period of Hothouse conditions (tens of millions of years) with CO2 levels 200-300+ ppm higher than today (various studies). The key question must be, “why did that not runaway towards Venusian conditions”?

    The question is academic though so far as we are concerned right now: a transition into a late Mesozoic/early Cenozoic-style Hothouse over a few centuries would be catastrophic enough, even if the climate then stabilised at Hothouse. Often, a new stable state of existence for an ecosystem (e.g. Earth) is not the issue: it is the rate of change from old to new that does the damage. That is certainly the case with AGW which is a regime-change that, in terms of geological time, is occurring within the blink of an eye.

    Regarding Peak Oil – yes I would go along with it being at some point in the 2007-2017 period. The fact that, despite high prices (=profits) the supply end could not physically keep up with demand in 3 out of 4 quarters in 2007 did not go unnoticed here!

  53. climateprogressive says:

    Re – tar sands: the Canadian Association of Petroleum Producers reckoned a year or three back that a flat-out tar-sands development programme could bring production up to 5 million barrels a day by 2020. With current oil consumption being over 85 million barrels a day, this does not look like much of an effective substitute to me!

  54. Whatshisname says:

    An old smoker once told me that if the cigarette factory burned to the ground he’d probably smoke the ones in his pocket two at time, then go mad.

    The especially-crazed wildcatting in these parts leaves little doubt that Big Oil knows the jig is up. They are repeatedly going back to known dry holes as if expecting a different result. I cannot confirm this, but there are also reports that even very old, mined-out coal mines are being reopened in Eastern Oklahoma. (Maybe somebody dropped a wallet, but that’s probably wishful thinking.)

    The potential environmental backlash of oil wildcatting alone is appalling. Even when they don’t find oil it is a huge mess. They will cut long roads to isolated sites then leave behind large pools of all types of fluid that often turns up in aquifers, streams and distant public water supplies. The water itself has been known to disappear, in fact.

    A lot of old-timers reading this are nodding their heads, then shaking them because of the unprecedented environmental clashes ahead.

  55. Neven says:

    If I may I’d like to add that I’ve recently uploaded a torrent of an excellent documentary called Blind Spot that explains why business-as-usual will inevitably lead to societal collapse. It features some excellent speakers such as Al Bartlett, Richard Heinberg, William Catton and James ‘Venus was her Name’ Hansen (just a short segment).

    You can download the torrent HERE.

  56. Lewis Cleverdon says:

    Chris Dudley at #11 –

    “There is a limit to how quickly demand can grow elsewhere which is set by how quickly roads are built and cars made to drive on them. Keeping ahead of that is well within the reach of the US for a decade or so owing to our high consumption starting point.” . . . . “The US is the only single player that can make that happen unilaterally and within weeks based on executive order.”

    While I share your aspiration to manage the inevitable energy descent as oil supply declines, your prescription seems to focus on global demand growth while overlooking the relevance of the global rate of decline.

    Starting from a notional 86 mBbls/d global usage, a 4%/yr cut is around 3.4 mBbls/d, which would be a unilateral cut for the US of over 17%/y, year on year.
    In fact the graph’s curve shows the 4% cut starting around 2016, with usage at 80 mBbls/d. If oil prices had by then reduced US consumption to say 18 mBbls/d, meeting that 4% cut in global supply unilaterally would mean cutting 3.2 mBbls/d from US demand, which would still be a cut of over 17%, year on year. Theoretically this could continue for 6 years before US oil consumption reached zero.

    This is not to question the need for or feasibility of a managed retreat from oil dependence, but simply to point out that it cannot be done by any nation’s unilateral action.

    Having studied the issue of peak oil since the twin towers event, (for a while being a senior moderator at a leading broad-spectrum forum on the issue), I’d say that your interest in finding means of effective governance is pretty rare. Doomers, isolationists, confused and ‘techno-cornucopeans’ have thus far made most of the running, to no discernable good effect in formulating global strategy.

    Given the scale of dependence on oil usage, its supply can be treated as a proxy for economic growth, meaning that the US authorities’ prediction of a terminal decline is already hitting confidence in long-term investment. If the decline gets under way as a chaotic global rationing-by-price then not only will investor confidence be fragmented, ending global economic co-operation and coherence, but also many nations will be left heavily armed with rising internal dissent and diminishing prospects. The probability of wars of resource seizure, or one of general global dominance, are all too clear, for all these would not alter the geological reality one jot.

    The alternative to these outcomes of global rationing-by-price is allocation by global agreement to ensure at least a subsistence supply to all nations, at prices that allow economies to continue to function.
    Given that the contraction of supply is ultimately a geological imperative, the national allocations could not (for reasons of negotiability) be merely pro-rata off present national usage figures, but would need to converge over an agreed period to a metric of equity, specifically the per capita parity of (tradable) usage rights. Those doing most to end their fossil oil dependence would thus find the transition least disruptive and would also benefit from the sales of non-fossil tech and of surplus oil-usage rights.

    Such an arrangement is a rather novel concept, far-fetched even, but the prospect of the chaotic demise of the capitalist economy will no doubt focus minds quite effectively on this issue. But to put an end to the global free market in fossil oil will plainly require massive pressure from civil society.

    Given the inextricable intertwining of oil-dependence and climate destabilization, and the already untenable development of unconventional fossil energy sources (CTL, tar-geologies, methyl hydrates etc) it seems very clear that treaty agreements on climate have to be fully integrated with those on the allocation of oil supply to fuel the transition to non-fossil energies. Failure to integrate these requirements, like failure to address either one or other of them, would seem a sure-fire recipe for failure to resolve both of them.



  57. Hi folks,
    I’m the French journalist who published the graph from the DoE :
    Washington considers a decline of world oil production as of 2011

    The story has continued since I published that paper :

    And I recently learned that Glen Sweetnam has left the EIA :
    “Sweetnam has since left the EIA on a yearlong reassignment: a development unrelated to the interview he gave Le Monde, according to Lauren Mayne, a liquid fuels analyst at the agency.”

  58. BBHY says:

    The well that is spewing oil into the Gulf of Mexico right now is in water 5000 ft deep, and was then drilled another 15000 ft below that. BP didn’t go to all that trouble just for the fun of it. There is no more cheap, easy to reach oil.

  59. Andy says:

    Today’s Houston Chronicle (Sunday) has an article by Loren Steffy titled “In Deep and Falling Short”. This should be posted on their web site tomorrow ( In it Steffy discusses how the oil business once thought that deep water in the Gulf was the next frontier, but that the fields have been producing much less than initially announced estimates. Much less. Very interesting read.

  60. WastedEnergy says:

    Bob Wallace on EV’s: what about range issues? Costs? Peak lithium?

    I agree in the long term we may need some electric vehicles and they will be better off than ICE-dependency, but a lot of technical and economic problems remain to be surmounted. (and semi-related: pumped storage hydro is much more scalable and is proven already as far as energy storage goes, compared to battery storage – check out the latest couple of posts on my site for more info)

    The REAL alternative is not cars of any type, the real alternative is TRANSIT. Not to mention biking, walkable communities…cars are out, LIVING is in!

  61. Chris Dudley says:


    A few things:

    1) There is no free market in oil. There is a supply consortium which attempts to fix prices and there is one player, the US, which can break the will of that consortium.

    2) When citing a 4% decline in production starting in 2016, you have not considered the effect of forcing 6 million barrels a day of oil production capacity off the market from 2010 through 2016. That delays the physical decline by taking a cut in production now. It also softens it so it would be more like a 2% decline. Thus, this is completely within the grasp of the US acting unilaterally on a transportation fleet turnover timescale.

    3) Insisting on international action is foolish. It will take too long and the oil supply will become too contaminated with expensive sources of oil so that we cannot reap the economic advantages of cheap oil during our transition. I think that other countries will join us in our efforts, but we should not wait for their agreement to act. We hold the key so we must open the door.

  62. Rick DeLong says:

    It seems clear that short of an absolutely heroic multi-national attempt to coordinate a rough transition to a post-oil world, ignoring corporate interests in the process, the best thing to happen would be for financial crisis to strike to such a degree that further large-scale resource extraction projects become impossible and we slide rapidly towards national default with a loss of 50-80% of GDP, lowered birthrates (think post-1991 former USSR) and a painful reduction to subsistence farming and human-powered local initiatives. If large companies remain intact and solvent, they may undertake oil extraction projects that do much greater damage to the global ecosystem.

    It will be an interesting decade. . .

  63. Rockfish says:

    For one thing, “peak” is not a pointy moment in time, it’s a state of existence. At that (this?) point, the price/supply relationship becomes more volatile (as we’ve seen) and we will be on a bumpy plateau for quite a while. As oil prices rise, investment increases, demand falls, etc. Over time that price trend will be up, the demand trend down.
    However, I think the war metaphor everyone is using is incorrect. The war we will wage is against our planet, not for it. As stated, “The entire world economy is built on cheap oil.” Do you really think we will go quietly into the oil-free night? Hardly. I think a very likely scenario is a global frenzy to get out every last drop of the stuff we can, trashing and pillaging whatever is necessary. No politician will be able to resist the demands to drill, dig and ransack when people can’t afford food. Sure, at first, the end of cheap plasma TV’s will seem painful, the inconvenience of commuting by bus will be unbearable. But when people can’t buy food, it’s pitchforks and torches time. When oil gets more expensive, only the rich will have oil. They will pay for the privileges it provides. At the very end, the military will be the oil consumer of last resort, able to pay infinite $/gallon and defend the sources it needs.
    We are in for an ugly ride. Techno-triumphalism ain’t gonna do it….

  64. John McCormick says:

    Rick DeLong

    Think abaout your comment:

    an absolutely heroic multi-national attempt to coordinate a rough transition to a post-oil world

    and what you are wishing:

    financial crisis to strike to such a degree that further large-scale resource extraction projects become impossible

    I assume you are referring to a post- (conventional) oil world. That being the case, you are ignoring US oil shale and tar sands reserves and remaining Western coal deposits that will be tapped to meet increased demand despite diminishing supply of conventional oil. As supplies diminish, price goes up and synthetic fuels projects become economically feasible. The fed will jump in, if required, with guaranteed loans, a price floor…whatever is needed to keep the synfuels petroleum products available.

    If you think the average American, in the space of about a decade or maybe, will accept gasoline rationing, long lines, odd-even days, or worse, no oil-no driving, you are not looking at Americans rationally.

    All the welcomed alternatives to driving internal combustion cars are common sense goals but America is a generation away from invesing in the societal, economic, land use planning, mass transit, etc, etc. requisites sufficient to eliminate the demand for a synfuels option.

    I strongly support your sentiment but the sad fact remains that Americans will burn their furniture if that is what it takes to drive their car.

    The rough transition to unconventional oil supplies will mean more atmospheric CO2, ecosystem destruction and pollution.

    John McCormick

  65. Lewis Cleverdon says:

    John at #65 –

    I wonder if you may have read the Hirsch Report into the prognosis for peak oil supply. For the sake of discussion I must assume you may not have done.
    Hirsch is a supremely authoritative figure in the field who lead the team researching the document for the DOD (in about 2005 ?). I’ve yet to hear of any serious refutation of its findings, so they appear to warrant substantial credence.

    One of its central observations is that to avoid very serious global economic turbulence in losing global oil supply, we should need to launch a crash program of alternatives 20 years before the peak. This timescale is not only due to technology development taking time, but also to the physically massive, technically complex and financially huge inputs required to replace energy production and usage infrastructure at relevant scales. Bottlenecks in materials, equipment and skills are further cause of this long transition period. Rather than 20 years, we now have perhaps 20 months.

    The problems post peak are compounded not only by the disruption to normal business by fuel costs and shortages worldwide, but also by the impoverishment, even of formerly wealthy nations, as a result of extreme oil prices imposing serial recessions, with intervening spikes of oil prices collapsing notional recoveries.

    Rather like the much-hyped CCS, the very scale of the task precludes techs like CTL, tar geologies etc, from achieving more than marginal supplies. To put their projected scale into context, here are some rough annual decline volumes lifted from the DOE graph above:

    Year — Global MBbls/d Cut

    2012 — 1.3
    2013 — 1.7
    2014 — 2.5
    2015 — 1.5
    2016 — 3.5
    2017 — 3.2
    2018 — 3.3
    2019 — 3.0
    2020 — 3.2

    It should be noted here that these are the decline from the peak at about 87 MBbls/day; allowing any growth of supply to permit any global economic growth would require a far larger scale of alternative capacity.

    It is also worth noting that even with enormous funding, >$70 oil, and highly sophisticated corporate operations, the best expectation of Canada’s tar sands’ output is around 3.0MBbls/day by 2020. As many have said, it is achievable flow rates, not the size of reserves, that count post peak. What is more, the troughs between spiking oil prices are a critical deterrent to investor confidence in dirty unconventional fuels.

    While those societies most accustomed to unlimited energy consumption may certainly find the transition hardest, particularly if good leadership is lacking or is ousted by demagogues, the idea of people “not accepting” the immutable limits of oil resources seems strange. Yes, warmongers could be elected to try to seize additional oil reserves, but that strategy has a recent, lousy and counter-productive track record. Fighting over dwindling resources is a sure-fire recipe for global collapse.

    Unconventional home energy resources, such as forests, with their potential for over 100 gls of petrol-equivalent per tonne of fuelwood, may well be utilised – but whether that is merely mining out that strategic national resource, or rather maintaining its limited output via sustainable forestry practice, is again a matter of political leadership.

    The cogent message – that we all do better if we share nurtured resources rather than fighting over rights to their consumption – is not complicated; it is just rather unfashionable at present.

    For this reason I’d differ with your forecast of worsening destruction and pollution post peak. Given appropriate leadership, the appearance of this fundamental limit to growth, coming on top of the ever more obvious climate destabilization and its impact on food security, could well form the wake up call that societies now stupefied with the propagandas of consumption have been awaiting.

    After all, intentionally reducing global oil usage to keep marginally ahead of the decline shown above is precisely what is also required as a necessary component of the resolution of global warming.



  66. Whatshisname says:

    About that old smoker (#55): he quit before the cigarette factory burned down and is now a healthy, feisty old man merrily traveling the world with his wife, who happens to be my sister.

  67. John McCormick says:

    Lewis, thank you for your comments at #66.

    I do have some followup points I would like to make later today. I hope you will have a chance to stay tuned to this CP topic today.

    And, I have the Hirsch Report, other docs and his presentation and have spoken with him. He is a valuable expert though he should reassess his earlier natural gas projections.

    John McCormick

  68. Mike says:

    2 Trillion barrels of oil (from the US alone) from shale have been left off the table, this is nearly twice the know reserves of the world. Tap this and oil is as plentiful as seawater.

  69. Lewis Cleverdon says:

    Mike at #69 –

    The US Department of Energy have not left 2 trillion tonnes of tar shales “off the table”. The fact is that there are no projects known within a 10-year development horizon that promise yields visibly significant on the graph’s scale.

    Beside the numerous hindrances to the development of unconventional liquid fossil fuels on a significant scale, as described at #67, the lousy EROEI [Energy Return On Energy Invested] of tar shales is particularly obstructive, and most especially so under conditions of increasingly scarce energy supplies.

    Once more: “It’s about achievable flow rates, not the mere scale of a reserve.”



  70. Bob Wallace says:

    WastedEnergy #66

    Bob Wallace on EV’s: what about range issues?

    Nissan Leaf, 100, miles 80% recharge in 30 minutes.
    BYD e6, 200 miles, 50% recharge in 10 minutes.
    Chevy Volt, 40 miles on electricity and then the fuel engine kicks in and you can drive until the gas runs out. Most people would need the fuel engine <15% of the time.


    Affordable. Nissan Leaf should sell for ~$32k, coming down to ~$25k with the federal subsidy and ~$20k with the CA subsidy. Then add in the fuel/oil change/maintenance savings.

    12,000 average annual miles @0.3 kWh @$0.105 per kWh = ~$380 per year/$32 per month to fuel your EV.

    EV costs will decrease as scale of battery production increases and EVs will become even better financial options to ICE vehicles.

    Peak lithium?

    A non-issue. People have confused overall lithium in the ground/ocean with the amount of lithium now being processed. We process only what will sell and if demand increases more processing plants will be opened.

    Bolivia, alone has enough lithium to manufacture lithium-ion batteries for 4 billion cars. And lithium is recyclable.