Peak Oil - True or False

Discussion in 'In the News' started by Chuck, Mar 7, 2008.


Do You believe Peak Oil will happen by 2030?

  1. Yes

    33 vote(s)
  2. No

    4 vote(s)
  3. Unsure

    5 vote(s)
  1. Chuck

    Chuck just the messenger

    ...but Daniel Yergin's Cambridge Energy Research Associates (CERA) disagrees. Its analysis finds that "the remaining global oil resource base is actually 3.74 trillion barrels - three times as large as the (claimed) 1.2 trillion barrels by (peak oil) proponents."

    [xfloat=right][/xfloat]Stephen Lendman - Baltimore Chronicle & Sentinel - March 6, 2008

    The arguments are so one-sided, it's practically a given that "peak oil" is real and threatening. Or is it? This article examines both sides. It lets readers decide and deals only with supply issues, not crucial environmental ones and the need to develop alternative energy sources. First some background.

    The name most associated with "peak oil" is M. King Hubbert. He became the world's best known geologist when he worked for Houston-based Shell Oil Company from 1943 to 1964. His theory goes something like this. Oil is a finite resource. Peak oil, or Hubbert's peak, is the point at which maximum world production is reached, after which its rate terminally declines...[rm][/rm]
  2. pumaman

    pumaman Well-Known Member

    Wow. So everything we know may be wrong. I just wonder how it is possible that we don't know for certain whether oil is of biological origin or not. Or be able to prove that some is and some isn't....
  3. toastblows

    toastblows Well-Known Member

    They should really just call it peak light sweet crude oil...thats what we care about.

    If you look at the charts, we plateau'd in 2004 worldwide. Opec holds the secret to world wide it happening or not? I dont blame them either. Selling oil at $100/barrel buys a lot more gold toilets than $30/barrel
  4. JusBringIt

    JusBringIt Be Inspired

    we've reached peak oil, we're not producing as much as we're using (plateau). fossil fuels take a while to form, they will form again, however, it does take a while. unless some natural chemical action gives it a boost (GW). we better find our other sources and make use of them.
  5. Robert Lastick

    Robert Lastick Well-Known Member


    The article points to successes achieved by the Soviets using the abiotic origin theory.

    "The theory defies conventional science, but it's paying off. It let Soviet Russia develop huge oil and gas fields in regions previously thought unsuitable. In the 1990s, it was also successfully used in the Dnieper-Donets Basin between Russia and Ukraine in areas considered barren. Sixty-one wells were drilled of which 37 (60%) proved out. Engdahl compares this to US wildcat drilling that produces 90% dry holes".

    The article then goes on to say that if this new theory is correct, and it seems to be so, then the Russians hold,
    "a strategic trump card of staggering geopolitical import. It also explains why Washington surrounds the country with military bases and targets it with anti-ballistic missiles and radar for offense, not defense".

    The article you have found here, Delta Flyer, has clarified my oil eyesight, that had previously been murky and clouded. It explains incongruities in my personal theory.

    I did not know anything about Nikolai Kudryavtsev's deep abiotic oil origins theory. Now that I do, the puzzle becomes clearer, for the abiotic successes achieved in Russia;

    1. Tends to explain in my mind the seemingly irrational Auto/Oil cartel position they have maintained all these years, and still pushed to the max, that the manufacturing of energy inefficient vehicles and the conspicuous consumption of oil is really OK.

    2. Tends to explain economic advantages that accrue from allowing the world to continue to believe that limited oil supply, or "peak oil" is a ploy or "convenient mistake" to keep prices high.

    3. Tends to explain what I before saw as irrational political behavior. Washington's desire to "surround the country with military bases and target it with anti-ballistic missiles and radar for offense, not defense" is only one, mentioned in the article. I am now beginning to see other actions that have been taken by our country that this new theory could explain.

    This new theory, however, in no way minimizes our country's desperate need to reduce its oil dependence. Regardless of whether or not Kudryavtsev was right, our addiction is destroying our economy and our standard of living. Our dollars worth is crumbling. Our dealers are buying our country out from under us.

    I voted that "peak Oil" will happen before 2030 (above). I now change that vote to a definite "unsure".

    Thanks for the eye opener, Delta Flyer!
  6. swoon

    swoon Well-Known Member

    If we do hit peak oil, would the US and Canada become the new OPEC with the large reserves of coal and tar sands which can be converted? At today's prices, I would suspect these sources are starting to become very attractive.

    Just based on the economics of oil, I would guess that the low oil prices in the '80's and '90's really drove down exploration investment and now, it has probably been ramping up like mad. The easiest places to drill have been found, but the economics are now such that deeper sea ventures may now be worthwhile. It will take a number of years for the exploration investment to get new sources up and running which could certainly make it appear that we've hit peak until new supply comes online. Of course, this is just pure guessing. I really have no idea if we have hit peak and I'm not sure we will know for some time.
  7. toastblows

    toastblows Well-Known Member

    I think abiotic oil is possible, but that the majority of light sweet that we use has been proven to have carbon markers....making it not from a subteranian source rather from decay of something that was alive once. The abiotic theory is discussed in great detail if you google Eugene Island 330... a well that peaked, almost went dry then started another peak of production with no intervention. I have my theories as to why, but they believe its the best example of abiotic oil to date.

    The tar sands and unconventional oil is a nice warm fuzzy to make sure we all know oil will last forever. The truth is we could just conserve oil easier than producing oil from tar sands etc. What a waste of resources just to get a slight gain in more oil. Reminds me of that other scam, E85. We can use 1 gallon of fuel to make 1.3 gallons. Or...we can just conserve that 1 gallon of fuel by efficiency gains or non use and not burn up the last of a great resource like oil for an inferior product like E85.
  8. Shiba3420

    Shiba3420 Well-Known Member

    Well if we haven't actually reached peak, it doesn't really matter because the effect is the same. Demand is going up a rate faster than production can/will keep up with. Prices zoom skywards. At this point it doesn't matter how much oil can still be pulled because it isn't getting out of the ground fast enough to keep up with society so society suffers.
  9. psyshack

    psyshack He who posts articles

    I think mother earth is always producing the stuff. I honestly think we have no idea how or why its made.
  10. desdemona

    desdemona Well-Known Member

    If we get to looking in shale, going to really deep wells, etc. that's peak. I don't think we have reached it, but that doesn't mean we won't get there. Yeah nature makes more but it is in geologic and not our time. Wait a few million years and we'll have some.
    Hopefully the planet will be off the stuff by then.

  11. Dan

    Dan KiloTanked in post 153451

    I'll go with the "Alien Theory". They left it here eons ago and are gonna be pi55ed when they return to find it missing. They were counting on it for their return trip.


    Cred. to Bob for the Theory.
  12. Earthling

    Earthling Trying to be kind to Mother Earth

    Abiotic Snake Oil

    What is disturbing is that these abiotic oil arguments are presented in the mainstream media (MSM, here CNBC) without any critical analysis. In the short interview format TV allows, Simmons was unable (or unwilling) rebut Smith's claim. Many fantastic and unbelievable claims are being put forward now as people scramble around to dispute oil depletion--abiotic oil is one of these. It is perhaps the most insidious of these false claims with its implicit promise that, to paraphrase Duffeyes, everything is OK because "God [the deep hot biosphere] will put more oil in the ground".

    There are some good rebuttals to abiotic oil in the comments following the article.

  13. Earthling

    Earthling Trying to be kind to Mother Earth

    The current price of crude oil on the world market, ~ $105 would support Peak Oil arguments.

    If there is so much oil available to be located, I doubt the price would be this high. The incentive is there to find it. Unfortunately, we're using it up faster than we're finding it, which is the definition of Peak Oil.

  14. cuchulain

    cuchulain He who posts articles

    99.999% of all oil discovered to date has come from sedimentary layers. (laid down at shallow anoxic sea bottoms with organic component in place to form oil)

    It is sometimes found in other layers i.e granite but (quote from above TOD link)

    The bottom line is that the fractured basement granite containing the oil has been lifted up due to rifting and is now underlain by sandstone source rock. This is the source of the oil, which has migrated up into the basement granite.

    I am sure oil is being formed and will continue to form in the future when we are long gone but the oil that we used in the last 100 years took millions of year to be laid down and form. The oil that we are using has given us our quick energy high but now we have to move on to something sustaineable.

    Good Luck
    Last edited: Mar 8, 2008
  15. desdemona

    desdemona Well-Known Member

    I have heard that some of the price is due not to supply/demand and usual economic pressures but to speculation in the oil market.
    Since I am not an economics person, I couldn't really evaluate this.

  16. Tochatihu

    Tochatihu Well-Known Member

    One could visit the EIA wabsite and find (on different pages) that the global proven reserves are X and the daily consumption is Y. X/Y is 33-37 years, depending on which numbers you prefer.

    Maybe we will find a bit more X (possible -> probable), or maybe we can reduce Y (highly desireable but the short term outlook is not favorable). I am very sympathetic to the arguments that $100/bbl should be smoking out any new major finds.

    So, basically, X is what it is, and we would be well advised to work on Y. This of course is the main purpose of this group.

  17. diamondlarry

    diamondlarry Super MPG Man/god :D

    Des, I've heard the same thing. It's got more to do with stock speculation than supply/demand.
  18. Earthling

    Earthling Trying to be kind to Mother Earth

    Some of the price rise is speculation. If you believe most of it is, you are sorely deluded.

    Peak Oil is real. There are too many people on the planet using oil, and the amount is limited. It is not a renewable resource.

  19. diamondlarry

    diamondlarry Super MPG Man/god :D

    I do believe we use too much. What makes me tend to agree with the oil speculation thing is when you hear analysts talking about prices going up and they can't figure out why since supply is essentially the same or greater than the same period in the past. Supply and demand can also be manipulated by those that have the supply. OPEC?
  20. worthywads

    worthywads Don't Feel Like Satan, I am to AAA

    Here's an article that places a large part of the current high prices on speculation. Condensed below.,1518,druck-538412,00.html

    "Supply and demand cannot explain the high prices," says Fadel Gheit of Oppenheimer & Co., a leading commodities analyst. Like many in his profession, Gheit believes financial investors are driving up prices.

    Enormous amounts of money are currently changing hands in the business of oil contracts. With the American real estate debacle infecting ever larger segments of the capital markets, from stocks to bonds, investors are seeking alternatives worldwide. Oil, with its supposedly straightforward market rules and ever-rising prices, seems to be a perfect tool for spreading risk and maximizing profit. But many investors will have a rude awakening when they realize that an investment in oil, though it may look different, is no less a gamble than other types of investments.

    "I trade in news," says Chris Motroni, 29. He earns his money as a small, independent trader on the NYMEX, with smaller trades and a lot of self-confidence. "The prices will increase to $115,"

    The same holds true for the big players, the banks, hedge funds and pension funds, which all trade by computer nowadays. Business on the NYMEX has exploded. The world consumes 86 million barrels of oil a day, but trading volume is 15 times as high. The difference represents bets on future price developments.

    The upshot of all this trading is that speculators now hold up to 45 percent of all oil contracts -- three times as many as at the turn of the millennium. "Prices are being distorted," says Senator Carl Levin, the ranking Democrat on the Permanent Subcommittee on Investigations, which is investigating the speculative trading of oil futures. If supply and demand were the only factors, the price of oil would be at least $20 lower.

    One of the world's 10 largest energy trading companies, Mercuria, is headquartered on Place du Molard in Geneva, Switzerland...CEO Daniel Jaeggi, a former futures trader for Goldman Sachs, knows exactly how the business changed in the late 1990s. "The big pension funds began to diversify their investments, increasingly putting their assets in oil," he says. The pension funds, according to Jaeggi, became the "driving factor in the market."

    Wall Street banks were only too happy to service this demand, and Goldman Sachs was at the head of the pack. "They invented a new commodities index that also included oil," says Jaeggi. The new index was wildly successful, and the more major investors put money into it, the more oil contracts Goldman bought and the higher the prices went. An enormous market force had been created.

    Everyone jumped into the game. Morgan Stanley, Deutsche Bank and many other financial giants dramatically expanded their trading volume in oil contracts. Investment banks like Goldman even established their own oil reserves, acting as if they were energy companies like BP. They hoped to gain better insight into market events.

    As a result, the trading volume in crude oil has almost tripled in the last five years, while demand for the liquid itself grew by only 1.9 percent per year.

    Goodbye to Supply and Demand

    Once upon a time, all that counted in the oil business was production volume and consumption in the industrialized nations. Those days are gone. Oil is now part of every well-structured portfolio -- as was the case, until recently, with those abstract securities meant to enable the investor to secure a slice of the American real-estate boom.

    Strange price distortions are fairly normal. All the oil reserves of the United States have long run higher that the five-year average -- yet for historic reasons, prices on the commodities exchanges are based solely on the levels in Cushing and the type of oil stored in the tanks there, West Texas Intermediate.

    "It's astonishing that a type of oil that is produced at a level of only about 300,000 barrels a day serves as the benchmark for the whole world," says Eugen Weinberg, an analyst at Germany's Commerzbank. He even believes that market players "attempt to influence" the key Cushing statistics "through their targeted actions."

    "The traders use every excuse in the book to drive up prices," he says, "it's pure hysteria." On some mornings, when he arrives at his office in Manhattan, London traders have driven up prices by $4 a barrel overnight, perhaps because a pipeline burst somewhere in the world...The damaged pipeline was probably repaired even before Gheit found out about it -- but after the traders made their profits.

    The question is, how long can these galloping prices continue without doing permanent damage to the US and world economies? Rising prices for gasoline, heating oil and airline tickets will increase inflationary pressures and stifle demand in the short to medium term.

    "In the end it's a straw that breaks the camel's back," says Gheit, a native Egyptian. Or it's like a weightlifter hefting weights, he says, until someone places a pencil on top and he crashes to the ground.

    "This is a bubble," he insists, "and it will burst."

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