Whatever happened to Peak Oil?

User Forum Topic
Submitted by EconProf on January 6, 2015 - 11:24am

Remember Peak Oil? A few years ago we were all told that oil prices, then over $100, would soon double and then double again, as the world's supplies became exhausted.
Then along came fracking. Good old capitalism harnessed technology to again stymie the doomsayers. Now the US will become an energy exporter to the rest of the world. In some previous years we imported about half of our oil. Soon we will produce more energy than Saudi Arabia. Once again the market system comes through.

Submitted by spdrun on February 10, 2015 - 4:19pm.

If the supply of an exchange medium is infinite and easy to obtain, then it has no value.

And no, the goal should be to maximize human happiness. Perhaps creativity, but not productivity, since a world with truly maximized productivity wouldn't leave time for the things that actually make life worth living.

Submitted by The-Shoveler on February 10, 2015 - 4:38pm.

FlyerInHi wrote:
spdrun wrote:

All joking aside, money does have to be rationed to make it useful. Unlimited amount of money in circulation would make money worthless, which would defeat the point of money. The question isn't whether to ration, but what level to ration it at.

For now. But who's to say that, with technology, we can't invent something better than money as a means of exchange?

What is importent is to maximize human productivity and creativity which are infinite. If people are willing and able to work because of lack of money then that's a self inflicted wound to human well-being. Aren't we smarter than that?

Conservation of fossil fuels is like putting them in the bank/storage for future retrieval and use.

That's the thing, they won't need it.

Submitted by FlyerInHi on February 10, 2015 - 8:27pm.

Spr, lack of money liquidity as a constraint to productivity is a lot easier to solve than lack of energy such as oil.

Productivity is not necessarily work, work, work making widgets. It could be travel, leisure and other services that enhance our well-being.

Submitted by FlyerInHi on February 10, 2015 - 8:35pm.

The-Shoveler wrote:

That's the thing, they won't need it.

I'm pretty positive about alternative energy. However, I have doubt that we can totally replace all uses of oil before we run out. we ought to transition to other forms of energy before we run out of oil.

Seems stupid to use up all the oil as fast as can without saving some for the unborn children and generations of the future.

Submitted by EconProf on February 10, 2015 - 9:14pm.

We will never run out of oil. Never.
What might happen is as we run low on it, its price will go up, forcing both conservation on the demand side and new exploration & extraction efforts on the supply side. Plus alternative energy efforts. Flexible prices are a signaling system. That's the beauty of free markets and the profit system--they encourage voluntary actions that efficiently allocate resources.

Submitted by phaster on March 3, 2015 - 3:16pm.

The-Shoveler wrote:
FlyerInHi wrote:
phaster wrote:

bottom line its not if but when average joe IMHO is sadly going to have a "crude awakening"

https://www.youtube.com/watch?v=7qGM9ypR-UI

Crude awakening. I love the pay on words.
I'll save it to watch later. I watch a little bit of the end.

I don't believe in the doom and gloom. Stock market collapse? Only the 1% being able to afford air travel? life like it was before oil?

No doubt oil will eventually run out and be in short supply.. but there are alternative and we can plan for it. If we don't plan now, it would be our own fault for not doing so. For example we would easily limit auto engine sizes and cut consumption in half. We'll have less automobile choices but our standard of living would not be affected.

I Still believe Skunkworks is about to put Big Oil out of biz, but anyway, if California would allow more fracking, we would put Texas and Dakota way down the list of biggest Oil producers in the US.

We could become energy independent in a few years, That's what's got OPEC running scared, We don't need them.

did ya also catch the AvLeak opinion about the skunkworks reactor?

http://aviationweek.com/technology/opini...

its been a real long time since I looked at the cross section math associate with cold fusion reactions, but my gut instinct is something similar, in other words the skunkworks reactor has an almost zero probability of working...

FWIW the peak oil curve (from which the theory of peak oil was derived from), was first used to identify production from an individual field

Submitted by ltsddd on December 17, 2015 - 8:36am.

Anyone else here think that OIL is oversold? I am thinking of bottom-fishing get scoop up some shares.

Submitted by The-Shoveler on December 17, 2015 - 8:52am.

Well I think just about every nation in the world that matters has just declared they are going fossil fuel free.
(well that's the goal anyway).

So not sure where Oil fits into that future.

Submitted by livinincali on December 17, 2015 - 8:57am.

The-Shoveler wrote:
Well I think just about every nation in the world that matters has just declared they are going fossil fuel free.
(well that's the goal anyway).

So not sure where Oil fits into that future.

Ummm yeah, good luck with that. You better start building an awful lot of nuclear power plants to power that plan. You ain't going to accomplish it with wind and solar.

Submitted by The-Shoveler on December 17, 2015 - 9:13am.

I am still hoping Skunkworks comes through on their fusion reactor (if it was anyone else but skunkworks I would not).

But that said, utility companies are starting to panic over rooftop solar (and companies like WalMart) cutting into their revenue.

Submitted by poorgradstudent on December 17, 2015 - 10:44am.

ltsdd wrote:
Anyone else here think that OIL is oversold? I am thinking of bottom-fishing get scoop up some shares.

What's your timeframe?

Chinese demand has definitely fallen in the short run. In the long run, demand should bounce back at least somewhat.

Although it's all but impossible for us to really know what the Saudi's are thinking, there's some speculation they are intentionally keeping production high and prices low to try to drive some competitors like oil sands out of business.

Long term there's way more upside to OIL than downside. But there's little reason to think prices are going to bounce back strong in the next six or twelve months.

Submitted by ltsddd on December 17, 2015 - 11:04am.

poorgradstudent wrote:
ltsdd wrote:
Anyone else here think that OIL is oversold? I am thinking of bottom-fishing get scoop up some shares.

What's your timeframe?

Chinese demand has definitely fallen in the short run. In the long run, demand should bounce back at least somewhat.

Although it's all but impossible for us to really know what the Saudi's are thinking, there's some speculation they are intentionally keeping production high and prices low to try to drive some competitors like oil sands out of business.

Long term there's way more upside to OIL than downside. But there's little reason to think prices are going to bounce back strong in the next six or twelve months.

I am mainly interested in the supper short-term (bounce). I wouldn't call it day-trade but more like opportunistic trade. Get a bunch of shares and hope for it to go up for a few pennies and get out. Regardless of price movement, I would unload them in a week or two. I would have been happy had I bought this morning instead of posting on Pigg and missed that chance.

Submitted by ltsddd on December 17, 2015 - 11:13am.

a bit ot here, but has anyone tried to "arbitrage" by buying both uvxy & xiv at the same time?

Submitted by livinincali on December 17, 2015 - 1:20pm.

The-Shoveler wrote:

But that said, utility companies are starting to panic over rooftop solar (and companies like WalMart) cutting into their revenue.

Well yeah because power companies have to build expensive natural gas turbine peaker plants to provide electricity when the sun isn't shining. Or are you ok with rolling blackouts and brown outs during the evening hours and when the sun isn't shining.

That's the problem with solar it's expensive to store in batteries and it's expensive to build a power plant that is only used part of the time. The cost of the natural gas to fuel that reactor is cheap in the grand scheme of things. Building a 200MW reactor for a couple hundred million dollars to be turned on in an instant when the sun isn't shining isn't cheap. It means the cost of power is close to doubled. You had to buy all the solar panels and you had to buy the natural gas fired power plant to be a backup.

Submitted by FlyerInHi on December 17, 2015 - 2:52pm.

Some analyst mentioned $20/barrel.

Also, if the goal of drill-baby-drill and Keystone XL are to lower the cost of fuel for American consumers, then why are we allowing the export of oil from our Red White and Blue shores? Supply and demand, duh!

Submitted by FlyerInHi on December 17, 2015 - 2:32pm.

Peak oil, dollar debasement, and hyper inflation all go together.

Submitted by FlyerInHi on December 17, 2015 - 3:09pm.

livinincali wrote:
The-Shoveler wrote:

But that said, utility companies are starting to panic over rooftop solar (and companies like WalMart) cutting into their revenue.

Well yeah because power companies have to build expensive natural gas turbine peaker plants to provide electricity when the sun isn't shining. Or are you ok with rolling blackouts and brown outs during the evening hours and when the sun isn't shining.

That's the problem with solar it's expensive to store in batteries and it's expensive to build a power plant that is only used part of the time. The cost of the natural gas to fuel that reactor is cheap in the grand scheme of things. Building a 200MW reactor for a couple hundred million dollars to be turned on in an instant when the sun isn't shining isn't cheap. It means the cost of power is close to doubled. You had to buy all the solar panels and you had to buy the natural gas fired power plant to be a backup.

I guess they are working on solving the intermittent nature of renewals.

For the scientifically minded:
http://www.pbs.org/newshour/bb/how-build...
http://www.ambri.com/

Submitted by Escoguy on December 17, 2015 - 9:43pm.

Two years ago we bought a Nissan Leaf and a Plug in Hybrid, cut our gasoline use by 80%, added solar. Just added a second system so our electric bill is minimal. Now adding solar on four rental properties here to get the cash flow of about 12%/year on average. I think there are thousands of others who are in some stage of doing the same. The total economic impact between additional revenue +$500 month and savings of $400 /month is about 33% of our mortgage plus our tenants get some savings too.

I think the transition to renewables will be faster than many expect.

Submitted by livinincali on December 18, 2015 - 7:46am.

Escoguy wrote:
Two years ago we bought a Nissan Leaf and a Plug in Hybrid, cut our gasoline use by 80%, added solar.

When do you plug those cars in during the day when the sun is shinning or at night when you get home from work. If it's at night where do you think the power is coming from.

Escoguy wrote:

Just added a second system so our electric bill is minimal. Now adding solar on four rental properties here to get the cash flow of about 12%/year on average. I think there are thousands of others who are in some stage of doing the same. The total economic impact between additional revenue +$500 month and savings of $400 /month is about 33% of our mortgage plus our tenants get some savings too.

I think the transition to renewables will be faster than many expect.

The financial part only works because of net metering, without it you'd be lucky to get 1/5th the retail price for selling power to the power company. If you're going to install solar to get the benefit you better do it soon and pray that they don't somehow retroactively change the rules. SDGE and other power companies are going to cut net metering off at some point, but they may grandfather it in. They need somebody to pay for the capital intensive project of providing power when solar isn't actually generating it. Whether that's solar storage technologies or some other generating technology. Peak power in the most urban areas is about 5-9 PM and solar output from 5 to 9 PM is relatively low. You need to solve the problem of power demand times versus renewable supply times and it won't be cheap or easy.

Submitted by phaster on December 20, 2015 - 6:29pm.

The-Shoveler wrote:
I am still hoping Skunkworks comes through on their fusion reactor (if it was anyone else but skunkworks I would not).

But that said, utility companies are starting to panic over rooftop solar (and companies like WalMart) cutting into their revenue.

having some connections with individuals who worked on black projects associated w/ skunk works back in the day as well as having an interest in aviation designs like the SR71 and also being very interested in the subject of physics IMHO what was accomplished by "Kelly" Johnson

http://www.wvi.com/~sr71webmaster/kelly1...

IMHO aircraft/powerplant design is childs play compared to figuring out and building a working fusion reactor

the not so trivial problem with fusion, is understand and building a device that can contain very high temperatures

in the SR71 for example the device design needed to deal with temperatures something on the order of 3000 degrees max WHEREAS a controlled fusion reaction device needs to consider a device that has a reaction temperature something on the order of a million degrees!

not too long ago there was a news of a new german fusion rector that uses unique geometry (time to build a basic device about 20 years)

http://news.sciencemag.org/physics/2015/...

NOW consider the geometry/time/effort of using CFD (computational fluid dynamics) to figure out the materials and shape of a turbine blade in a new GE engine high-by-pass turbofan (its taken about 20 years for design)

SO if skunk works can come up with a new small portable fusion reactor (and bring it to market) I'm guessing that would mean there really is some truth to aliens helping out our engineers at area 51

Submitted by ltsddd on December 23, 2015 - 8:26am.

nice bounce in OIL this week.

Submitted by barnaby33 on December 23, 2015 - 12:03pm.

You are trolling! I suppose it's winter and you need a hobby.

Remember Peak Oil? A few years ago we were all told that oil prices, then over $100, would soon double and then double again, as the world's supplies became exhausted.
Then along came fracking. Good old capitalism harnessed technology to again stymie the doomsayers. Now the US will become an energy exporter to the rest of the world. In some previous years we imported about half of our oil. Soon we will produce more energy than Saudi Arabia. Once again the market system comes through.

I remember Peak Oil, I remember it well. No serious proponent of it forgets that the core of the theory was merely extrapolating the curve of a well's production life, can be used to predict when a given well or field of wells will become unproductive, in an economic sense.

So who said a few years ago that doubling and doubling again was the course of our future? Certainly not I. Nor anyone who's analysis I've read.

Then came along fracking? Came along, really? It's existed for years. It wasn't economically viable and still isn't unless you ignore all the externalities. Capitalism is REALLY good at ignoring externalities. I'd say the only reason we even have an EPA is because capitalism you love so much is great at ignoring externalities.

The US an energy exporter? Wow now you're into troll country. It probably doesn't look anything like those Marlboro ads, but bless yer heart fer tryin! Yes we export a lot of coal and we always have. That too, we are past the peak on, but that's a totally different discussion. We aren't in any danger of being a net oil exporter anytime soon and if we are it's because holy shit our economy is collapsing. That's one place in which capitalism does work, until it doesn't. You know when we can no longer get energy cheap enough to heat our homes, we don't rely on capitalism, we go to war.

Never mind that the entire global energy complex is only made possible by the largest socialist enterprise in American history, our military. It safeguards all of that energy we so capitalistically want.

So when I accuse you of trolling, I'm being quite accurate. Peak Oil is still with us, no super giant has been discovered or exploited since Cantarel and the cost of extracting most of the new discoveries is high enough that our globalized system can't afford it. So to speak in Capitalistic terms. Energy cheap enough to maintain our status quo kills the energy companies. Energy expensive enough to generate a consistent profit for those companies, kills their consuming economies. That sir in a nutshell is Peak Oil and it is absolutely with us today.

Unless somebody gets a fusion reactor working we are going to keep living with declining EROEI. Symptoms may include temporary gluts of oil as economies collapse and temporary shortages as we all fight over the scraps at the table. Your mileage may vary.

Josh

Submitted by livinincali on December 23, 2015 - 12:20pm.

barnaby33 wrote:

Unless somebody gets a fusion reactor working we are going to keep living with declining EROEI. Symptoms may include temporary gluts of oil as economies collapse and temporary shortages as we all fight over the scraps at the table. Your mileage may vary.

A fission reactor specifically Thorium nuclear is probably the only realistic short term solution. You can always work on that for now until you possibly figure out a workable fission design. Every unit of GDP has a unit of energy behind it and if you don't figure out something to handle base load power generation that isn't fossil fuel we will likely have a a declining standard of living. I suppose it's theoretically possible to cover a vast majority of the Mohave dessert with solar thermal plants and giant molten salt reservoirs to continue producing power in hours where there's no sun. We could even get by with new traditional nuclear BWR and PWR's uranium reactors but we ain't going to replace and grow what we need with efficiency/conservation, wind, and solar panels. Unfortunately those that advocate for that don't really have the scientific background to understand what they are saying.

Submitted by EconProf on December 23, 2015 - 1:05pm.

barnaby33 wrote:
You are trolling! I suppose it's winter and you need a hobby.
Wow. So many mistakes I don't know where to start.
"Our economy is collapsing". Really? It is muddling along at about 2%, which isn't great, but is the envy of Europe, Japan, South America, etc.
"The core of the theory (of peak oil) was extrapolating the curve of a well's production life." No it wasn't. It was the idea that the world will exhaust nature's supply of easily obtainable oil such that prices will rise drastically, to way above existing prices (then over $100 per barrel). How is that working out?
"Peak oil is still with us." Oil is now about $40 and many predict it will go to $20.
Fracking: "...its existed for years." True enough. Fracking on a small scale has been around for many decades. But with the improved technology of the last few years, we can squeeze much more oil and gas out of weak sources such that fracking gives America at least ten times more oil and gas than a decade or so ago. That's technology and the profit system at work for the good of the consumer.
I stand by the idea that America will become a net energy exporter, and I never said we would become a net oil exporter. But in the last week congress, in a bipartisan vote, ended the 40-year old ban on oil exports, so who knows?

Remember Peak Oil? A few years ago we were all told that oil prices, then over $100, would soon double and then double again, as the world's supplies became exhausted.
Then along came fracking. Good old capitalism harnessed technology to again stymie the doomsayers. Now the US will become an energy exporter to the rest of the world. In some previous years we imported about half of our oil. Soon we will produce more energy than Saudi Arabia. Once again the market system comes through.

I remember Peak Oil, I remember it well. No serious proponent of it forgets that the core of the theory was merely extrapolating the curve of a well's production life, can be used to predict when a given well or field of wells will become unproductive, in an economic sense.

So who said a few years ago that doubling and doubling again was the course of our future? Certainly not I. Nor anyone who's analysis I've read.

Then came along fracking? Came along, really? It's existed for years. It wasn't economically viable and still isn't unless you ignore all the externalities. Capitalism is REALLY good at ignoring externalities. I'd say the only reason we even have an EPA is because capitalism you love so much is great at ignoring externalities.

The US an energy exporter? Wow now you're into troll country. It probably doesn't look anything like those Marlboro ads, but bless yer heart fer tryin! Yes we export a lot of coal and we always have. That too, we are past the peak on, but that's a totally different discussion. We aren't in any danger of being a net oil exporter anytime soon and if we are it's because holy shit our economy is collapsing. That's one place in which capitalism does work, until it doesn't. You know when we can no longer get energy cheap enough to heat our homes, we don't rely on capitalism, we go to war.

Never mind that the entire global energy complex is only made possible by the largest socialist enterprise in American history, our military. It safeguards all of that energy we so capitalistically want.

So when I accuse you of trolling, I'm being quite accurate. Peak Oil is still with us, no super giant has been discovered or exploited since Cantarel and the cost of extracting most of the new discoveries is high enough that our globalized system can't afford it. So to speak in Capitalistic terms. Energy cheap enough to maintain our status quo kills the energy companies. Energy expensive enough to generate a consistent profit for those companies, kills their consuming economies. That sir in a nutshell is Peak Oil and it is absolutely with us today.

Unless somebody gets a fusion reactor working we are going to keep living with declining EROEI. Symptoms may include temporary gluts of oil as economies collapse and temporary shortages as we all fight over the scraps at the table. Your mileage may vary.

Josh

Submitted by EconProf on December 23, 2015 - 1:22pm.

Barnaby: Wow. So many mistakes I don't know where to start.
"Our economy is collapsing". We continue to muddle along at about 2% real growth per year, which is the envy of Europe, Japan, South America, etc.
"Peak oil is still with us..." And I suppose it always will be. The term was popular 2 - 4 years ago when oil was consistently above $100 per barrel. It is now around $40, and many say headed for $20. If that is peak oil, let's have more of it.
"The core of the theory (of peak oil) was merely extrapolating the curve of a well's production life." No it wasn't. It was the idea that accessing nature's limited supply of oil will get increasingly expensive such that world oil prices will rise inexorably.
Fracking: "Its existed for years..." True enough. It existed, I believe, in the 1920's. But in the last decade or two technology has enabled fracking to be so much more efficient that we can extract oil and gas from weak fields. Result: cheap oil and gas for the consumer thanks to technology and capitalism.
Yes, America is destined to be a net energy exporter. And no, I never said we would become a net oil exporter. But a week ago congress passed a bi-partisan bill revoking our 40-year ban on exporting oil, so who knows?

Submitted by FlyerInHi on December 23, 2015 - 2:19pm.

Econprof, I suppose if capitalism can do its magic for oil and energy, it should do its magic for other desired goods too.
So no hyperinflation or currency debasement, at least not for a top economy with a reserve currency.

I've watching things in the past 30 years. Products that were luxury eventually become widely available commodities. What is valuable is services to put those products to use.

Granite and marble were products of kings when the rock had to be chiseled and polished by hand. Now, thanks to innovation, we install it, replace it and throw it away by the tons.

Another example, everyone can by a large flatscreen tv. But installing it beautifully could easily cost several thousand $.

Submitted by spdrun on December 23, 2015 - 6:52pm.

In an ideal world, Congress would pass a law mandating the death penalty for the crime use of fossil fuels for ground transport after 2030. Sadly, we're too stupid to do such a thing.

Submitted by EconProf on December 25, 2015 - 4:08pm.

FlyerInHi wrote:
Econprof, I suppose if capitalism can do its magic for oil and energy, it should do its magic for other desired goods too.
So no hyperinflation or currency debasement, at least not for a top economy with a reserve currency.

I've watching things in the past 30 years. Products that were luxury eventually become widely available commodities. What is valuable is services to put those products to use.

Granite and marble were products of kings when the rock had to be chiseled and polished by hand. Now, thanks to innovation, we install it, replace it and throw it away by the tons.

Another example, everyone can by a large flatscreen tv. But installing it beautifully could easily cost several thousand $.


Yes, FIH, goods are getting increasingly cheap and of better quality, like your examples of flat screen TVs and granite, while services get expensive. Goods production can be automated and offshored. But services have a high labor content and are more difficult to automate and offshore (but not impossible).

Submitted by phaster on December 26, 2015 - 11:50am.

spdrun wrote:
In an ideal world, Congress would pass a law mandating the death penalty for the crime use of fossil fuels for ground transport after 2030. Sadly, we're too stupid to do such a thing.

congress (like the communist party in china) is only interested in remaining in power, therefore there is no economic incentive to admit there own past/present corruption

http://www.bbc.com/news/world-asia-china...

and because various political whores are addicted to champaign contributions of special interests

https://www.opensecrets.org/industries/m...

sadly it might be too late...

Submitted by justme on December 28, 2015 - 5:19pm.

Peak oil means Peak VOLUME extracted, not Peak PRICE.

Hence, it is quite possible that Peak Oil is happening right now, with the price being low and all the producers pumping like crazy. This may be the last gasp before production drops permanently.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.