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View Diary: Peak oil and peak silliness (111 comments)

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  •  Data on the issue. (2+ / 0-)
    Recommended by:
    Ender, bigjacbigjacbigjac

    2012 was another record year in world oil production

    My question is, how many consecutive years can the Peak Oilers be wrong and still get media coverage?

    The world is now producing more oil at under $100/barrel than we were when it was $140/barrel, and we're barely at the beginning of the oil shale era.

    •  And how many times (9+ / 0-)

      will the oil industry ignore rapidly growing global demand driven by Asia that keeps prices high, along higher production costs from unconventional sources? And how many times will the industry ignore well depletion rates for shale wells? And how many times will the oil industry ignore the number of active rigs necessary to maintain production? And how many times will the oil industry ignore rapidly falling levels of energy return on energy invested?

      Be radical in your compassion.

      by DWG on Fri Apr 05, 2013 at 12:19:04 PM PDT

      [ Parent ]

    •  There is not much of a slope (3+ / 0-)
      Recommended by:
      NoMoreLies, bluegrass50, mightymouse

      after 2004.  Yes, there is a 3 year run of slight increases, but on the order of 2% recent average production rates.  A decade ago or so we saw a 5% increase from year to year.

      And how much of this production is dependent on newer technologies - some of that oil will fit in the "not cheap oil" bucket.

      And if you look at the 30 year trend it seems we are in a period of slight production gains, but it seems to be a slower pace than previous production increases, and could easily be rendered as statistical noise if rates go down of level off again for 4 or 5 years.

    •  MGross, your facts don't matter! (0+ / 0-)

      Because Asia is using more oil!

      Never mind that oil production increases every year. Repeat after me, "Asia is using more oil!"

      There was never any evidence that we were at peak oil production. That is the cool thing about the peak oil doomsday scenario; It requires no evidence whatsoever.

      We were not at peak oil last year. We won't be next year. It is unlikely to happen in our lifetime.

      •  According to MGross' link (11+ / 0-)

        2005: global C+C production 74.6 MMb/day
        2012: global C=C production 75.5 MMb/day

        Price: 2005 = $40-$50 per barrel
                  2012 = $90-$100

        So, let me get this straight.  The price goes up by 100%, yet production increases by 1.2%.  You're telling me this is no sign of a problem?  

        If there were "no peak in sight" and that the entire peak oil scenario was bunk, shouldn't a doubling of price bring on a lot more new production than that?  

        I think the data is stating the obvious: the price is staying high precisely because the only new production that is available is THAT EXPENSIVE.  Expensive fracking, deep water, tar sands... they are low grade sources being chased now because that's all we got.

        You know what: THAT is precisely the peak oil thesis.

        Please, try again with your sophistry.  I ain't buying it.  I'm going to trust my own common sense and what my lyin' eyes are telling me.

        The intrinsic nature of Power is such that those who seek it most are least qualified to wield it.

        by mojo workin on Fri Apr 05, 2013 at 03:55:49 PM PDT

        [ Parent ]

        •  I guess that you slept through the great recession (0+ / 0-)

          Hello! There was a drop in demand.

          The U.S. is now the largest oil exporter in the world.

          We will produce more oil next year than this year.

          Your predicted peak is nowhere to be seen.

        •  Mojo, the world doesn't have to obey your equation (0+ / 0-)

          You might think that if the price goes up by 100% that production should go up by 100%, but that's just not how the world works.

          Oil production follows demand for oil.

          If you double oil production, who is going to buy it?

          If oil production increases by 1.2%, then oil production has increased and we are not at peak oil.

          •  I Partly Agree... (0+ / 0-)

            ...but again, we're talking about a big system here--basically, the entire world economy.  Global oil production has been up and down since 2005, and is only a few percent higher now than then.  Meanwhile, oil prices have continued to stymie most beginnings at economic recovery since 2008, and prices remain around $100.  There is little doubt that, if oil were available at $50/barrel, there would be ample market.  But oil is not available in sufficient quantity to justify that much of a price cut.  In other words, price is by and large well-adjusted to demand.  And price over the last decade has increased fourfold, while production has ticked up only incrementally.  So yes, scarcity is increasingly upon us.  Why do you think China is becoming so belligerent over the Senkaku Islands and the South China Sea?

      •  Wrong. You ignore a basic tenet of Peak Oil. (11+ / 0-)

        Hitting peak oil doesn't state that oil production itself immediately decreases. Rather it states that every subsequent barrel of oil requires more and more extreme extraction processes.  We are clearly there. Example: Obliterating countless acres of wilderness for tar sands as opposed to poking a glorified straw in the ground.

        Gentlemen, you can't fight in here! This is the War Room!

        by bigtimecynic on Fri Apr 05, 2013 at 05:01:18 PM PDT

        [ Parent ]

        •  Increasing Marginal Costs For Us, Profit For Them (1+ / 0-)
          Recommended by:
          peregrine kate

          There’s always free cheddar in a mousetrap, baby

          by bernardpliers on Fri Apr 05, 2013 at 08:05:55 PM PDT

          [ Parent ]

          •  So, competition, rather than lowering the price (0+ / 0-)

            will cause reduced production? That's not how they tell us The Free Market is supposed to operate.

            Because of the high production costs associated with fracturing shale formations to squeeze out a few barrels of oil, the industry is only going to produce when oil prices are high enough to guarantee a decent profit margin.

            -- We are just regular people informed on issues

            by mike101 on Fri Apr 05, 2013 at 08:34:12 PM PDT

            [ Parent ]

        •  News flash: Oil doesn't bubble out of the ground (0+ / 0-)


          You can't just walk up and fill your bucket like you could a hundred years ago.

          Oil has been getting harder to extract for a century. And yet we keep extracting more each year.

          You doom sayers don't have a leg to stand on.

          Things are the same as they ever were.

          •  Ho Hum... (0+ / 0-)

            Yet another head-in-sander.

            Global production has been largely flat--fluctuations within a few percent, and certainly no monotonic upward trend--since 2005.  

            Glad to see you're hip to the basic premise of peak oil, though--that oil is in fact getting more difficult to extract.  A few numbers? A century ago, EROEI was roughly 100-to-1. Now it's roughly 10-to-1.  Energy-intensive oil types like tar sands are more like 3 or 4-to-1.  In other words, overall production only tells part of the story, when much of that production is effectively reinvested immediately just to keep up production. There isn't going to be some miraculous reversal of this tred.

            If you haven't paid any attention to reports on the economics of shale oil and shale gas, you should. They're not nearly as profitable as initially assumed.  

            The fact that oil prices have quadrupled or quintupled in the last ten years, while production has risen perhaps ten percent, should be a clue to you. We are relying increasingly on coal again, because there is not enough oil supply worldwide to feed our economic engines--this should be another clue.  The cycles of recovery, oil price spike, and renewed recession of the past several years should be a third.

            •  If we produce ever more oil, then peak oil is bunk (0+ / 0-)

              Here is the history of US oil production from EIA:

              See how it has been increasing since the economy bottomed out? See how it has been increasing at ever greater rates?

              All that I could find on world oil production is a table for 2007 to 2012:

              72,873.0      73,698.5      72,306.8      74,073.7      74,143.8      75,553.1

              What does it matter what the return on investment is as long as we keep producing more and more oil?

              Profit is profit. The oil companies are the most profitable industry in the history of mankind.

              You might theorize that it is unsustainable, but you can't back that up with any evidence. If you find a hundred dollar bill lying on the ground, but you had to pay ninety dollars to pick it up, you still have ten dollars of free money! Don't you think that you are going to go back tomorrow for another ten bucks?

              Oil prices and oil production are two separate things. Oil production changes very slowly while oil prices can change in a second. The fact that Goldman Sachs owns more oil contracts than the producers or consumers of oil tells me that oil prices are not a good indicator of oil supply.

        •  Wow. That's some sophistry right there. (0+ / 0-)

          You just said that hitting peak oil doesn't mean that oil production decreases.

          You realize that your peak oil theory is therefore impossible to disprove.

          According to your argument, your conclusion that we are at peak oil implies nothing about the present or future.

          The fact that next year it will take more effort to extract a barrel of oil than it did this year is not a prediction of peak oil theory. It is common sense. You are going to harvest the low-hanging fruit first. It is the history of oil drilling, mining, etc.

          •  you do realize that you just said (0+ / 0-)

            that peak oil is common sense, right?  Well I am glad you cleared that up.

          •  There's a Sophist in the Room... (0+ / 0-)

            ...and it's not bigtimecynic.

            I would disagree with him (her) on one thing: peak oil does in fact mean that production rate has peaked, and then enters a period of terminal decline.

            I don't disagree entirely with Yergin's premise that there might be a plateau of oil production, which lasts for a number of years.  In my opinion, we've been at just this plateau since 2005, in which time production has increased only marginally (1.7%, after adjustment for natural gas liquids--see Gail the Actuary's latest post on the Oil Drum).  Prices have increased far more during that time, and show no signs of going down.  

            In fact, economic repercussions of high oil prices are being increasingly felt around the world.  The crown prince of Saudi Arabia has said more than once that $100/barrel is an adequate price for its own economy.  The Egyptian revolution began because of food scarcity.  As the energy basic to our entire economy becomes progressively more expensive, the effects are increasingly obvious in every basic feature of our lives, including the price of food (which is a very energy-intensive industry).

            Again--for what seems like the dozenth time--it is impossible to say that "we are now at peak oil", or will be in the very near future.  This is because production and reserves information from many of the world's leading producers are highly unreliable (look at any history of the OPEC nations--notice what happened to KAS' official reserves estimates after the US left in the late 70's).  These countries have powerful incentives to misrepresent production and reserves, and we have no good way to verify their claims.  So any prediction is of necessity fraught with great uncertainty.

            But a simple observation cannot be avoided: global production has been largely flat, and global exports have decreased, over the past near-decade, while Asia's appetite for oil has dramatically increased and oil prices have gone up by a factor of about 4.  If there were sources of oil to ease this bottleneck and better supply the world, so that prices would fall, those sources would be tapped.  Instead, we are going ever deeper, squeezing ever harder, just to maintain the production we're already used to, never mind increasing it.  It really requires a special kind of blindness to think that's not an indicator of the future trend.

            •  Another ad hominem attack. Imagine that. (0+ / 0-)

              In the table that I posted below to correct bluegrass50's numbers, I show a decrease in production during the Reagan recession in the early eighties. That was the worst recession since WWII, until the current one that is. Any increase in oil production during the current recession should be a miracle and yet you are belittling it by saying that it is too small.

              I will make the prediction that once the economy recovers and we get back to late nineties conditions, you will see oil production ramp up like crazy.

              You seem to agree with me that we are not now at peak oil and will not be in the very near future. You don't define what very near future means.

              At least you have the courage to try to make a prediction, poor as it is. You say that oil production is stuck at a plateau, but you use a screwy definition of plateau such that increases in production are allowed. What definition of plateau are you using?

              You say that other nations are not very open about their oil reserve figures or they are downright deceptive, therefore we cannot predict when peak oil will occur. That reinforces my conclusion that Peak Oil theory is good for nothing!

              The biggest error in logic that you keep making is to jump to the conclusion that since oil is ever more difficult to extract that therefore we are running out of oil. The facts do not support your conclusion. Oil has been ever more difficult to extract every since they started doing it! What is so different now? When did it change?

              I can't believe how you ignore all of the untapped reservoirs of oil that we now have available. They have found huge reservoirs off South America. Due to global warming, the arctic is now open for exploration. Look at all the tar sand!

      •  100% Dead Wrong. (2+ / 0-)
        Recommended by:
        Calamity Jean, bluegrass50

        Production has fluctuated since 2005, and as mojo pointed out, price has doubled in that time.

        Coal production is increasing to help fuel much of China's economic rise, along with increased oil imports.  In that same time span--from 2005 onward--global net exports have fallen.  (Available charts seem updated only through 2009.)

        One limitation on predicting peak oil is unreliability of production statistics from OPEC and other nations, like Russia.  For example, Saudi Arabia's official production statistics are a national aggregate, not broken down into field-by-field statistics.  It is impossible to verify their accuracy.  But the country's stated reserves have remained almost unchanged since 1980, despite the billions of barrels produced in that time.  That type of accounting is, to say the least, suspect.  Without accurate production data it is impossible to make reliable predictions of future trends--hence the vagueness in peak oil predictions.  The basic fact of a global peak in oil production is, however, physical reality.  The only question is when it will occur, and a many lines of evidence suggest that we are at it now or soon will be.

        Ultra-deep offshore and tight oil would hardly be touted as revolutions and game changers if easier-to-produce oil were available.  And it's becoming increasingly clear that tight oil is hardly a game changer.

        •  You didn't state one thing that I am dead wrong (0+ / 0-)


          It's hard to refute your argument when you don't make one.

          •  Oh, There You Are. (0+ / 0-)

            "We were not at peak oil last year. We won't be next year. It is unlikely to happen in our lifetime."

            Just your conclusion, that's all.  We will most certainly see peak oil in our lifetime.  Perhaps we're at it right now, perhaps not quite yet.  It's hard to be certain since so much information on production and reserves is unreliable--basically national security secrets for the likes of Saudi Arabia and Russia.

            Hey, you did get it right that Asia is consuming more than ever.  The economic rise of the BRIC nations has been a main driver of rising oil prices.  Yet per-barrel price has risen so much more quickly than production...perhaps you should wonder why this is so.

            •  So, you want to have a crystal ball fight? (0+ / 0-)

              My crystal ball says:

              1) There will be a major earthquake in California.
              2) Stock prices will fall.

              You know that I am right. Those things have to happen eventually.

              Notice what I left out?

              The predictions are useless without saying when these things will happen!

              It's the same with Peak Oil.

              •  Nope. (1+ / 0-)
                Recommended by:

                Evidence is all around us, if you choose to pay any attention to it, that the oil market has tightened immensely in the last ten years.  Simply comparing change in price per barrel to change in production is a very big indicator.  Increasing reliance on alternatives to oil, whether coal, natural gas or others, is another.  A definite prediction isn't possible because much of the production and reserve data isn't reliable.

                Hey, I'd love to be wrong about this.  But the recent flatness of global oil production, and the steady decline in global net exports, screams otherwise.  If, like Yergin, you want to repose in an evidence-free assumption of a 3- to 4-decade plateau, feel free.  But keep your eyes on production stats for shale gas and shale oil.  We've been drilling the sweet spots at a manic pace for the last several years, and the industry is still losing money.  How likely is that situation to reverse?

                •  The oil companies are not losing money (0+ / 0-)

                  They are enjoying record profits. They know a lot more about this stuff than we do.

                  Shifts to non-fossil fuels should cause a decrease in oil demand or at least a decrease in the rate of its increase. This should cause oil production to increase more slowly. This has nothing to do with the amount of oil in the ground, the supposed scarcity of which is the very basis of peak oil theory.

                  I have tried to show in my other comments that oil price and oil production are only loosely coupled. I feel that reaching conclusions based on their ratio is a fool's errand.

                  •  they are enjoying record profits due to (0+ / 0-)

                    a) monopolistic control in some markets
                    b) tax advantages other industries do not have
                    c) subsidies other industries do not have
                    d) relative price inelasticity of demand in certain uses and markets (billions of gas powered vehicles, oil fired electric plants, airplanes, use of plastics etc etc)

              •  nonsense. Apples and oranges (0+ / 0-)

                Peak oil is based on observable trends and the finite nature of the resource.

                It cannot be compared to unrelated systems that can be predicted to a lesser extent because they are completely different in nature.  Again, this demonstrates either ignorance on your part or willfill disregard of logic and facts.  Either way, not good.

                •  Peak oil belief is just a doomsday cult (0+ / 0-)

                  Peak oil theory cannot produce a single testable prediction about anything. Therefore it is not science.

                  Belief in peak oil could be replaced with belief in an invisible goblin with its hand on the valve that controls the world's oil supply.

                  Peak Oil theory says that one day the goblin is going to start closing the valve and there will be mass hysteria, dogs and cats living together, etc.

                  How is that scientific?

    •  you should look at longer trends (2+ / 0-)
      Recommended by:
      mightymouse, helfenburg

      and not overstate small increases in production in a single year as evidence of a trend or lack of a trend.

      From your source:

      2012 was 2.6% more than 2004

      2004 was 9.9% more than 1998

      1998 was 11.5% more than 1991

      That looks like a trend, one you should think about.

      •  You are just changing the subject (0+ / 0-)

        Oil production is increasing, therefore we are not at peak oil.

        The fact that oil production is not meeting your preconceived levels has nothing to do with it.

        •  how is it changing the subject to point (0+ / 0-)

          out that the rate of increase in oil production is slowing dramatically over the last 20 years?  That is what peak oil is about.  If you want to argue we are not quite at the peak yet, fine, but there are comments in this thread suggesting that a small increase last year means no peak oil.  

          •  Suppose we disagree over the speed of a vehicle (0+ / 0-)

            I say that it is speeding up. You claim that it is slowing down.

            I show you the speedometer and point out that it is reading a higher value than it was a few minutes ago.

            Then you say, "But the rate of acceleration is less than it was before."

            You just changed the subject. We were never discussing acceleration before that. The value of the acceleration is immaterial to your original argument about the vehicle's speed.

            •  I'll play that game (0+ / 0-)

              Peak oil says it is going to stop accelerating because it is using up a finite resource.  it will reach a peak and then slow down.  That is what it is.

              You were never discussing acceleration because
              a) you don't understand peak oil, or
              b) you are willfully ignoring ideas and facts to make your point based on a simple and simplistic data point

              •  Why do you have to resort to ad hominem attacks? (0+ / 0-)

                You are only making yourself look foolish.

                Your acceleration argument is a red herring. If you don't know what that means, please look it up.

                Besides that you have a faulty red herring. Your figures are wrong. (Strangely, 11.5 is correct for 1991 - 1998)

                You cherry picked the years. Percent increase in world oil production using half decades:

                1980 - 1985   -9.4%
                1985 - 1990   12.1%
                1990 - 1995     3.2%
                1995 - 2000     9.7%
                2000 - 2005     7.5%

                These figures signify nothing and are still a red herring.

                •  I see you left out the last 7 years (0+ / 0-)

                  of course you did, it would demolish your point

                  •  Still flogging that dead horse? (0+ / 0-)

                    The numbers are publicly available. Do your own math.

                    Your point is the one being demolished. My only point is that you don't know what you are talking about.

                    You somehow look at this table that shows that we are extracting ever more oil, year after year and then jump to the totally illogical conclusion that we are running out of oil.

                    Your conclusion is not supported by the facts.

                    Now if you could somehow make a graph of these figures and make a testable prediction, I would love to be proved wrong.

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