Peak oil a hoax? Prove it.

[erosoplier]

When I heard Colin Campbell speak - it must have been 1995 now that I think about it - I remember him talking about Russia, and how Russian oil was the only hope for us to avoid an oil crunch. But, he told us, Russian production was in decline, and not enough was being done to increase Russian production. (The graph which confirms this is on page 5 of this thread). So he was predicting an oil crunch. An oil crunch soon, and absolute peak oil in the year 2000.

Now, drumroll please, do you know what happened next? The "Asian economic crisis" happened next, in 1997. I can remember thinking at the time "Well that's one way to reduce demand for oil."

This is one of my wild and crazy ideas which I have no reason whatsoever to doubt being true - the main reason for the Asian economic meltdown in 1997 was to cut total demand for oil.

As for whether the crisis itself was intentional or not, Prime Minister of Malaysia at the time Mahithir Mohammad certainly thinks it was.

I'll leave you with some questions: Would industry insiders and associated filthy rich bastards upon being confronted with the prospect of peak oil*, decide to ignore it and let the whole world find out the quick and hard way that oil is a finite resource? Or do you think they might decide to hide the truth from the public at least until they can position themselves as favourably as possible? And if this involved a) A rush campaign to boost production in order to withhold the truth from the public for as long as possible; b) crippling asia's economy for a little bit, because production couldn't be increased fast enough to cover all new demand; and the all-important c) doing over the places which possess the most significant quantities of oil in order to gain control of said oil; then so be it??

*BTW, the survey that Campbell carried out was a one of a kind, most comprehensive ever, $30,000 if you want to have your own copy of the report kind of survey. There's no reason to doubt that it provided the whole industry with the best ever info on reserves

[isachar]

Stickdog, Wintler's reply following your post discussing marginal utility and other economic factors that effect the relationship between supply, demand, price, substitution and technology effect shows that he has yet to move beyond simplistic and straight-line extrapolation of other people's charts.

Price, substitution, technology. These are the factors that will determine the rate at which oil is used. If supply is fixed (which it is not), and demand is lower or displaced due to substitutes and/or technological improvements, then this is an effective extension of supply. Simply put, not using a barrel of oil is the same as finding one.

Adjustments as a result of oil 'shocks' (war, doubling of price, embargo, hurricane damaging Gulf wells, refinery closures, etc.) can be disruptive, particularly in the short term, but adjustments will be made.

And, until technology improves, shale and tar sands only offer the opportunity to convert one type of energy (say, coal, nuclear or natural gas) to a liquid fuel to be used primarily for transport. These resources require about as much energy input in the extraction and refining process as they produce.

But other viable substitutes for transport exist. Some fairly low tech, others higher tech. Others involve behavioral changes. And, technology will continue to yield other alternatives that do not yet exist or are not feasible at current prices or knowledge.

Some of the adjustments necessary will be influence or limited by political and institutional issues. It's certainly in the interest of certain countries, companies and politicians to keep consumers dependent on oil. These factors will insure that consumers choices will be limited, and that excess profits and oil wars will continue for some time.

Which is why the US should heavily tax oil to encourage greater efficiency, reduce greenhouse gases, direct investment in alternatives, particularly in the transport and heating sectors. I think a national program of distributed power production would address a large part of the transport and heating sectors which would displace a large part of oil, natural gas (and conventional electricity) usage. Green rooftops that incorporate solar and wind net metering and domestic hot water is one way to accomplish this, along with conservation. The goal should be to make every rooftop a power plant - beginning with large residential apartment complexes and commercial/office properties and then moving to single-family homes and other commercial and industrial properties. If most of these rooftops are grid-tied, we'd have a network of distributed and conventional power generation.

If the vehicle fleet were to also be changed over to batter/electric (like GM's EV-1 vehicle that they trashed a few years back), this would displace much of the demand for oil as a transport fuel. Improvements in batter and storage technology since then make this type of vehicle more feasible today than in the 1980's. This type of adjustment could be accomplished with an integrated program offering tax credits, targeted research and investment in solar, thin-film, nano- and other promising technologies

[slow_dazzle]

there is one school of thought that suggests the UK airline liquid explosive plot was aimed at reducing demand at a crucial time for oil supply. Granted, there were other reasons aimed at promoting the myth of lunatics trying to attack our "freedoms" but the whole affair had the effect of depressing airline travel and thus burning of aviation fuel.

I posted Matt Savinar's talk in the hope that his narrative would be considered on an item by item basis and the evidence he put forward would be analysed to see if it stood up to scrutiny (this is not aimed at you BTW isachar - your commentary is considered and focused) Regretably, it resulted in a flurry of information that lacked the focus I had hoped for and an ad hominum attack on Savinar that does not address his considered opinions. Whilst he might be wrong it is the antithesis of intellectual rigour to simply diss the man as some kind of doomsayer without actually addressing his contentions.

An analysis of the underlying economic issues emanting from PO are just as important, if not more so, than the physical implications.

[stickdog99]

isachar,

I agree 100% with everything you posted.

slowdazzle,

I didn't attack Matt Savinar in any way. All I did was correctly characterize his status as one of Peak Oil's most vociferous chicken littles. If you have any doubt about this, just look at his website: http://www.lifeaftertheoilcrash.net/

Almost every paragraph on his website contains some distortion, bizarre leap of "logic" or fundamental ignorance of economic principles. Of course, you can buy a solar oven from him to cook the rats you manage to trap after the impending economic crash:

http://www.lifeaftertheoilcrash.net/Ite ... Store.html

wintler2,

Big Oil = The Big Five

Americans don't look at charts. They look at gas prices. And when they see them doubling for no good reason (or for "reasons" they can't understand), they start to ponder about the long history of Big Oil price setting conspiracies. And they look at Big Oil's record profits. When they further see none of these profits sunk into production or refineries in the face of increasing demand, they get mighty suspicious. They write angry letters to their Congressmen, then clean their guns. Americans have been trained to consume cheap gas in huge quantities, and they consider cheap gas to be part of their manifest destiny. While this is a huge long term problem for the environment and world oil supplies, in the shorter term it is even a bigger problem for Big Oil's plan to keep the Americans hooked on crude oil even as they quadruple the prices of petroleum end products. This is where you Peak Oil chickens littles come in. You have been tasked with convincing Americans both of their complete dependence on oil as a resource as well as the "natural" inevitability of steeply rising prices.

In order to be most effective, your propaganda first needs to be skillfully directed at those who -- because of their political proclivity to interfere with "free markets" -- would be most likely to actively agitate for state control of the gas and heating oil market in the face of widespread popular discontent with petroleum end product prices. This is why Peak Oil as a meme is initially being proselytized through progressive venues like Pacifica radio and progressive internet message boards.

Traditionally, far left groups have raised the specter of a looming economic collapse in their attempts to promote the importance of better ecological stewardship to the less ecologically inclined. Combine this with the fact that all progressives wish to lower oil consumption in the favor of conservation and alternative renewable energy sources, and you have an audience that is highly susceptible to the sirens of Peak Oilers.

The idea is to create an impassable ideological gulf between those most inclined to regulate the energy marketplace out of the hands of Big Oil and the political force of populist anger about ever increasing gas and heating oil prices. In the face of Peak Oil true believers, the left will instead confine themselves to advocating for state promotion of alternative energy sources. State funding will invariably flow to unworkable technologies and the minor renewable technology sectors that have already been co-opted by Big Oil. Meanwhile, right wing activists will advocate that Americans simply use their military might to "take" oil in a series of more and more disasterous military adventures.

[wintler2]

..This is one of my wild and crazy ideas which I have no reason whatsoever to doubt being true - the main reason for the Asian economic meltdown in 1997 was to cut total demand for oil.

As for whether the crisis itself was intentional or not, Prime Minister of Malaysia at the time Mahithir Mohammad certainly thinks it was.

Economic downturns are certainly a great way to cut demand. If i remember correctly it was currency & bond speculation that triggered the Asian financial crisis (Goldman Sachs et al) but the underlying problem was mountains of dodgy loans and bad debt (Goldman Sachs et al again?). Mahathir is no fool, his disdain for IMF prescriptions saved Malaysia from the worst. Do you have a link for him suggesting oil-demand motive for runs on currencies in 97?

I'll leave you with some questions: Would industry insiders and associated filthy rich bastards upon being confronted with the prospect of peak oil*, decide to ignore it and let the whole world find out the quick and hard way that oil is a finite resource? Or do you think they might decide to hide the truth from the public at least until they can position themselves as favourably as possible?

Well some industry insiders are obviously not trying to hide the truth, hence Youngquist Magoon Bahktiari Campbell Leherrere etc (see http://www.hubbertpeak.com/experts/ for one list) pushing the oil-will-peak message. But the concienceless fucks who do cost benefit analysis showing terrorism by militia as cheaper option than paying honest royalties, absolutely, they will try to game it so they keep/increase their wealth as long as possible. Keeping us in the dark is surely part of that plan.

And if this involved a) A rush campaign to boost production in order to withhold the truth from the public for as long as possible; b) crippling asia's economy for a little bit, because production couldn't be increased fast enough to cover all new demand; and the all-important c) doing over the places which possess the most significant quantities of oil in order to gain control of said oil; then so be it??

Mmm, not impossible at all, would dearly love to prove it so we know who to hang. Just to be clear, such a plot supports more than disproves peak oil, yes?, otherwise why go to such trouble unless demand was outrunning production.

[wintler2]

..Price, substitution, technology. These are the factors that will determine the rate at which oil is used. If supply is fixed (which it is not), and demand is lower or displaced due to substitutes and/or technological improvements, then this is an effective extension of supply.

Of course supply isn't immovably fixed, it depends on how much effort we can apply to extract oil and the limits of technology, but all that efforts costs energy and is by no means guaranteed or an unending improvement.

US Dept of Energy
..But only about 10 percent of a reservoir's original oil in place is typically produced during primary recovery. Secondary recovery techniques to the field's productive life generally by injecting water or gas to displace oil and drive it to a production wellbore, resulting in the recovery of 20 to 40 percent of the original oil in place.

However, with much of the easy-to-produce oil already recovered from U.S. oil fields, producers have attempted several tertiary, or enhanced oil recovery (EOR), techniques that offer prospects for ultimately producing 30 to 60 percent, or more, of the reservoir's original oil in place. Three major categories of EOR have been found to be commercially successful to varying degrees:

* Thermal recovery, which involves the introduction of heat such as the injection of steam to lower the viscosity, or thin, the heavy viscous oil, and improve its ability to flow through the reservoir. Thermal techniques account for over 50 percent of U.S. EOR production, primarily in California.
* Gas injection, which uses gases such as natural gas, nitrogen, or carbon dioxide that expand in a reservoir to push additional oil to a production wellbore, or other gases that dissolve in the oil to lower its viscosity and improves its flow rate. Gas injection accounts for nearly 50 percent of EOR production in the United States.
* Chemical injection, which can involve the use of long-chained molecules called polymers to increase the effectiveness of waterfloods, or the use of detergent-like surfactants to help lower the surface tension that often prevents oil droplets from moving through a reservoir. Chemical techniques account for less than one percent of U.S. EOR production.

Each of these techniques has been hampered by its relatively high cost and, in some cases, by the unpredictability of its effectiveness.http://www.fossil.energy.gov/programs/o ... index.html

You'll note the page describes the projects US gov is funding to improve recovery, which is a) a little weird if govt is faking peak, & b) an obscene use of taxpayers money, corporate socialism at its most galling.

Simply put, not using a barrel of oil is the same as finding one.

Not to the economy, B52 bombers or car enthusiasts its not. We must, can and will save lots, but savings will not be unnoticable. Here in Aus petrol consumption fell 5% last year on higher prices, and regional tourism operators are screaming for govt aid cos fewer ppl drove their SUVs off into the bush for long weekend holidays.

Adjustments as a result of oil 'shocks' (war, doubling of price, embargo, hurricane damaging Gulf wells, refinery closures, etc.) can be disruptive, particularly in the short term, but adjustments will be made.

And, until technology improves, shale and tar sands only offer the opportunity to convert one type of energy (say, coal, nuclear or natural gas) to a liquid fuel to be used primarily for transport. These resources require about as much energy input in the extraction and refining process as they produce.

And suffer from trivial flow rates - by 2010 oil sands production is projected to reach 2 million barrels per day
http://en.wikipedia.org/wiki/Athabasca_Oil_Sands
- whoop de do. Shale oil is producing globally less than 1mbd last time i looked.

But other viable substitutes for transport exist. Some fairly low tech, others higher tech. Others involve behavioral changes. And, technology will continue to yield other alternatives that do not yet exist or are not feasible at current prices or knowledge.

Some of the adjustments necessary will be influence or limited by political and institutional issues. It's certainly in the interest of certain countries, companies and politicians to keep consumers dependent on oil. These factors will insure that consumers choices will be limited, and that excess profits and oil wars will continue for some time.

Which is why the US should heavily tax oil to encourage greater efficiency, reduce greenhouse gases, direct investment in alternatives, particularly in the transport and heating sectors. I think a national program of distributed power production would address a large part of the transport and heating sectors which would displace a large part of oil, natural gas (and conventional electricity) usage. Green rooftops that incorporate solar and wind net metering and domestic hot water is one way to accomplish this, along with conservation. The goal should be to make every rooftop a power plant - beginning with large residential apartment complexes and commercial/office properties and then moving to single-family homes and other commercial and industrial properties. If most of these rooftops are grid-tied, we'd have a network of distributed and conventional power generation.

If the vehicle fleet were to also be changed over to batter/electric (like GM's EV-1 vehicle that they trashed a few years back), this would displace much of the demand for oil as a transport fuel. Improvements in batter and storage technology since then make this type of vehicle more feasible today than in the 1980's. This type of adjustment could be accomplished with an integrated program offering tax credits, targeted research and investment in solar, thin-film, nano- and other promising technologies

Excellent summary of the measures i and many other peak oilers support. Discussing which/where is how i prefer to spend my time.

[Infernal Optimist]

I may regret jumping in but I think we need some definitions. Obviously, the amount of oil in the earth is finite. Even if the entire earth is made out of oil, if you keep pumping it out and burning it, eventually you'll run out.

So, what is a Peak Oiler (PO)? I propose that a PO is someone who believes we're dangerously close to "running out". Now I'm going to define "running out" as meaning for all the oil that's left in the earth it takes at least N units of energy to extract/refine/transport N units of energy worth of oil.

Now I need to define what "dangerously close" to running out means.

I propose a Strong Peak Oiler (SPO) to be someone who believes that we will have run out (as defined above) within the lifetime of adults living today (say the next 20 years).

I propose a Weak Peak Olier (WPO) to be someone who believes that we will have run out within the lifetime of someone born today (say the next 100 years).

I propose a Weak Non-peak Oiler (WNPO) to be someone who believes that, even if consumption patterns remain the same as today, we may run out but it will be at least outside of the lifetime of anyone now alive (say 150-200 years).

I propose a Strong Non-peak Oiler (SNPO) to be someone who belives that, even if consumption patterns remain the same as today, running out may happen but it will be so far out in the future (> 200 years) that other events which may occur would make worrying about this meaningless.

I strongly suspect that wintler2 is a WPO and stickdog99 is a WNPO so their views may not be as far apart as it would seem. I also strongly suspect that those two share common ground as far as long term energy policies.

[JoseFreitas]

Infernal Optimist pretty much brought into play the primary argument of Peak Oil, namely, thermodynamics. If it costs 1 barrel of oil (in terms of energy expended) to extract 1 barrel of oil, then oil no longer is a net provider of energy to the economy. It doesn't mean it's gone but it means it is no longer interesting as an energy source. So, at some point, regardless of wether it costs 100$ or 300$ per barrel, there is no substitution possible.

If you see that a large part of the technological processes of modern industry are based on hydrocarbons, and that a lot of modern "growth" is predicated on availability of a cheap energy source, you see the quandary. Sure, even at thermodynamically uninteresting ratios people will still extract oil - we need it for plastics and for a ton of other applications (where in fact it may be much more needed). But what will substitute oil as a cheap source of energy? Or put another way: say that the world needs 100 units (and growing) of energy, and oil (providing, say, 50% - I am making numbers up just to show a point) decreases at 10% per decade (5 units). If other sources can only provide a growth of 2 units, there will be a diminishing of the total energy used by 3 units per decade. This is an UNPRECENDENTED event in human civilization (which might be described as the continuing growth of the available energy).

Ultimately, there is a renewable amount of energy which is fixed. This comes from the sun (I can add a a few other geological processes but bear with me, since they are generally insignificant). The amount of energy the sun provides yearly is at current conversion ability, VASTLY inferior to the 100 units we currently use. Let's say that it is 30 units, and might become 40 with big advances in technology. What about the other 60? That is the challenge, how to transition to a "steady state" of using 40 units that allows for the maintenance of civilization. I can see numerous problems:

Perhaps current population can only be sustained by 100 units, and 40 can only support 2 billion at less than current standards (say, at half). Who chooses which 4 billion goes away? What do we mean by half standard: that we take 2 billion that live on a tenth and upgrade them? That we take the rich ones and cut their standards by half? Something in between?

And who pays for the effort of upgrading to 40 from the current 30 conversion rate? What if the cost of upgrading means less people can make it to the stable rate? Who makes these decisions?

Ultimately, if there are fixed limits to resources and obstacles to substitution, I believe that "the market will in fact NOT provide". Bearing in mind the above, which seems a plausible scenario, give or take a decade or two of delay - it is fair to say that it is probably the biggest challenge that mankind has met.

And as I said in an earlier post, I do not think that Peak Oil is actually the true problem. It might even be a beneficial crisis, since it may postpone global warning crisis by a long shot (after all, if there is no oil to burn.... but perhaps coal will come back and it'll be worse). "Growth" is, and the fact that oil is (by far) not the only finite resource for which the market will not ultimately provide. Overpopulation is the problem, as is the ideology of growth.

Best

[JoseFreitas]

Duplicate. Sorry.

[wintler2]

wintler2,

Big Oil = The Big Five

Is it so hard for you to name them? Is this some Voldemort thing where you're not saying who for deep strategic reasons? This nebulous Capital Letter Enemy habit of yours is ridiculous.

Americans don't look at charts. They look at gas prices. And when they see them doubling for no good reason (or for "reasons" they can't understand), they start to ponder about the long history of Big Oil price setting conspiracies. And they look at Big Oil's record profits. When they further see none of these profits sunk into production or refineries in the face of increasing demand, they get mighty suspicious. They write angry letters to their Congressmen, then clean their guns. Americans have been trained to consume cheap gas in huge quantities, and they consider cheap gas to be part of their manifest destiny. While this is a huge long term problem for the environment and world oil supplies, in the shorter term it is even a bigger problem for Big Oil's plan to keep the Americans hooked on crude oil even as they quadruple the prices of petroleum end products.

Eh? So PO is to keep yanks buying despite much higher prices? Can you confirm that is (finally) the nub of your argument.

This is where you Peak Oil chickens littles come in. You have been tasked with convincing Americans both of their complete dependence on oil as a resource as well as the "natural" inevitability of steeply rising prices.

Still with the misrepresentation eh stickdog? Nowhere have i argued for 'complete dependance' OR the 'inevitability of rising prices', and i never will.
If you're too lazy to go out and at least find links for other peak oilers saying what you claim i say, then just admit it - i'm willing to follow your train of thought, but not when the gratuitous ''you chicken littles' insults keep appearing in most of your posts.

In order to be most effective, your propaganda first needs to be skillfully directed at those who -- because of their political proclivity to interfere with "free markets" -- would be most likely to actively agitate for state control of the gas and heating oil market in the face of widespread popular discontent with petroleum end product prices. This is why Peak Oil as a meme is initially being proselytized through progressive venues like Pacifica radio and progressive internet message boards.

Ah, 'initially' dates back to the 1950s, or maybe the SciAmerican article by Campbell and Leherrere in 1998. The US Left has only in last few years met the ghost of a clue, so its plain false for you to argue (without evidence as usual) that the PO meme is being "initially .. proselytised through .. Pacifica etc".

Traditionally, far left groups have raised the specter of a looming economic collapse in their attempts to promote the importance of better ecological stewardship to the less ecologically inclined. Combine this with the fact that all progressives wish to lower oil consumption in the favor of conservation and alternative renewable energy sources, and you have an audience that is highly susceptible to the sirens of Peak Oilers.

Susceptible, yes, because PO is one face of the sustainability problems hippies, greenies and diggers have been warning of for centuries - was that all part of Big Oils plan too?

The idea is to create an impassable ideological gulf between those most inclined to regulate the energy marketplace out of the hands of Big Oil and the political force of populist anger about ever increasing gas and heating oil prices. In the face of Peak Oil true believers, the left will instead confine themselves to advocating for state promotion of alternative energy sources. State funding will invariably flow to unworkable technologies and the minor renewable technology sectors that have already been co-opted by Big Oil. Meanwhile, right wing activists will advocate that Americans simply use their military might to "take" oil in a series of more and more disasterous military adventures.

This has been the pattern for decades, why is PO needed to justify it now?

I reject your claim that knowledge of limits on oil extraction will create an 'impassable ideological gulf', indeed it would strengthen the hand of those who say its time such a critical resource was taken from the wasteful hands of private profit - indeed thats what is happening now in Russia, has already happened in Venezuela, happened decades ago in Mexico. Its only in the economically fundamentalist West that "The Market Will Provide" is accepted as a credible idea.

[Infernal Optimist]

Ok, now I'm really going to regret jumping in:

wintler2,

What exactly is it that you believe? That the amount of oil is finite? I think everyone agrees with that. Are you arguing that we are right now past peak production of oil? Are you then a Strong Peak Oiler and believe that we will run out (see definition above) in the immediate future? Do you believe that we will have $50/bbl oil (and up) for as far as the eye can see until we run out?

The chief owners of oil in the ground belong to a cartel. Cartels often control the supply of their resource to maximize profits for the cartel. And yet the cartel member with the most oil acts and talks as if they have plenty of oil. They are on record desiring the price of oil to be lower. Why would they if we are currently running out of oil?

The remainder of the supply chain for oil and primary oil products is owned by a handful of vertically-integrated transnational companies. $50/bbl has gotten them record profits. Certainly if they forsee the price of oil rising into the forseeable future they would have invested record amounts in exploration. And yet they haven't. Why not?

Surely $50/bbl and up oil forever would cause investment in alternative energy sources and alternative technolgies to soar. And yet this hasn't happened either. Why not?

I'm not qualified to argue the geology of oil but it seems to me there are a lot of people who are thinking oil will not stay at $50/bbl (and I haven't even investigated commercial hedging in the futures markets yet).

[JoseFreitas]

Infernal Optimist: you make a few good points, exactly the ones that make me a Weak (or Average) PO, rather than a strong one. Though:

The remainder of the supply chain for oil and primary oil products is owned by a handful of vertically-integrated transnational companies. $50/bbl has gotten them record profits. Certainly if they forsee the price of oil rising into the forseeable future they would have invested record amounts in exploration. And yet they haven't. Why not?

...is incorrect. They have in fact invested tons of money into exploration of oil. But discoveries of new oil fields peaked in the very early 60'w (61 maybe, can't remember exactly one) and the cost to develop a new oil field has exploded over the last 15 years (the brasilian govt has been developing offshore deep drilling sites that will not be profitable at prices below 45$ or so).

I think that PO is a simple restatement of the law of diminishing returns. How it will play out exactly, in geological and production figures, is unknown. But play out it will.

[Infernal Optimist]

Jose,

Thanks for the feedback. I guess I should have worded this so it made what I was talking about clearer (or clear at all!) When I said:

Certainly if they forsee the price of oil rising into the forseeable future they would have invested record amounts in exploration.

what I meant was (can't blame you for not being able to read my mind): from 2002 at $25/bbl to 2004 at $40/bbl there was no increase in the previous rate of exploration expenditures. That's still pretty much true from 2004 to present, too, although it may have increased in the last several months. This leads me to believe that they are not expecting the price to stay as high as its been. They're treating current prices as caused by a disruption in supply not a long term shortage.

Thanks for your contradicting data point about Brazil offshore development. They, at least, are anticipating long term prices > $45/bbl it would seem!

[wintler2]

wintler2, What exactly is it that you believe?

How long have you got, and who is buying the beer?

That the amount of oil is finite? I think everyone agrees with that.

Unfortunately not: Osculum Infame posted on abiotic oil and has replied to none of my questions, others have waved that particular red herring too.

Are you arguing that we are right now past peak production of oil?

On this thread i'm arguing nothing except that PO is not a Big Oil hoax, as at least four pretty active posters were claiming a few weeks ago.

Are you then a Strong Peak Oiler and believe that we will run out (see definition above) in the immediate future?

Impossible to know the future - thermonuclear war or runaway climate change could see oil never 'run out'; i believe that we've passed peak of the good oil, the sweet light onshore/shallow water crude oil, and on current trends of pig-ignorant complacency and victim mentality in Western nations, the decline in oil products will lead to ever more counterproductive resource wars.

Do you believe that we will have $50/bbl oil (and up) for as far as the eye can see until we run out?

No, high prices destroy demand, enabling prices to retreat for a while. Barring other events (such as bigger wars, economic depression, or citizens chiselling their democracy and control of resources away from private wealth) i'm guessing we will see a jagged rising trend.

But thats not my agenda in this thread. RI is not an energy focussed site, and in years of reading and posting i've not felt the need to push any PO argument except 'show me the money' whenever sceptics parrot 'its a hoax'. That apparently makes me a 'useful idiot of Big Oil' (and worse).

The chief owners of oil in the ground belong to a cartel. Cartels often control the supply of their resource to maximize profits for the cartel. And yet the cartel member with the most oil acts and talks as if they have plenty of oil. They are on record desiring the price of oil to be lower. Why would they if we are currently running out of oil?

Why would they at all? You need to separate talk and walk - Saudi Arabia (no longer worlds largest producer incidentally, Russia is) says whatever needs to be said, yet they're reducing production to 'protect prices', which 18months ago were 'too high'. Here in Aus there has i think been an uptick in exploration, starting about when John Howard gifted Oil Corps a 150% tax concession on costs. Oil Cos instead are buying smaller co's oil fields, investing in tar sands or renewables, or flushing their cash out to shareholders and management - which of those cast doubt on PO?

The remainder of the supply chain for oil and primary oil products is owned by a handful of vertically-integrated transnational companies. $50/bbl has gotten them record profits. Certainly if they forsee the price of oil rising into the forseeable future they would have invested record amounts in exploration. And yet they haven't. Why not?

Several reasons: high prices increase oil co costs too, making once-too-expensive projs not automatically feasible; price fluctuation makes investment a gamble (eg. $80mil price of Woodsides latest dud well (1) off Mauritania); and simply lack of prospects - they have been looking hard for decades.

Surely $50/bbl and up oil forever would cause investment in alternative energy sources and alternative technolgies to soar. And yet this hasn't happened either. Why not?

Investment has soared - wheres the Rigour?
http://home.businesswire.com/portal/sit ... ewsLang=en
http://energy.seekingalpha.com/article/25063
http://www.renewableenergyaccess.com/re ... y?id=47208
http://southeastfarmpress.com/news/0125 ... -biofuels/
Uneveness in oil & gas prices is a major issue for renewables - major investments need confidence in economic fundamentals, market turbulence undermines that.

I'm not qualified to argue the geology of oil but it seems to me there are a lot of people who are thinking oil will not stay at $50/bbl (and I haven't even investigated commercial hedging in the futures markets yet).

For the n'th time, peak oil is not falsifiable by price.

[wintler2]

...I think that PO is a simple restatement of the law of diminishing returns. How it will play out exactly, in geological and production figures, is unknown. But play out it will.

Diminishing returns is the problem for sure, but am uncertain if the LoDR analogy holds up all the way thru - at some point the problem becomes less about capital applied than amount of raw material available.

I hope you and other constructive posters aren't slighted by my focus on the sceptics, theres only so many hours in the day. Maybe another thread on how PO will/might/could play out might be in order; i wont be authoring one (who wants to be typecast?) but be glad to contribute my 2c.