PEAK OIL

[Lowlight]

hey all

i have been reading a lot recently about peak oil. M Rupperts site has great articles on it. here are some links. i cant believe i didnt know about this problem already. Its only just started to breach the public mind in the last few months.

http://www.fromthewilderness.com/free/ww3/031005_globalcorp.shtml

http://www.guardian.co.uk/life/feature/story/0,13026,1464050,00.html

http://www.fromthewilderness.com/free/ww3/042605_world_stories.shtml#0

Peace

[silentwolf]

For those of you who haven't already, best stock up on all the seeds you can find, most especially hemp and tomato...tomato dries well in the sun and it'll keep you from getting scurvy, and the hemp will cover the rest.

This is like staring into an oncoming sandstorm.

[Piers]

I've been following the Peak Oil thing for some time.........BEWARE -- THERE IS SOMETHING ROTTEN here. I HIGHLY RECOMMEND the following website:http://www.davesweb.cnchost.com/

Watch the Ruppert v. Dave McGowan battle as well as the Ruppert v. Alex Jones.

[ba caracus]

If you are really interested in the subject, you should watch a documentary called 'The End of Suburbia.' I have read a lot myself already, but this really gets a good grasp of the consequences, with regard to the peak. Particularly as a consequence to the US style of surburban living, grande malls, which has been heavy invested in since the second world war.

It mentions the reactions to canadian blackout, and just how much we depend on the oil and natural gas, and how the wars are based upon scrambling for what is left of these resources. One perspective, which interested me was, that oil is needed for pesticides, and other chemicals used for crops. If oil prices jump due to lack of supply, farmers will no longer be able to use them abundantly and profitably.... maybe organic will win afterall... all the large national supermarkets will fall, reinstating the local farmers and sellers, once a cornerstone of our society....perhaps even more local, our homes...

[craazyman]

Oh boy. The hedge funds have succeeded in scarring the piss out of everybody on this one. Personally speaking, I kind of wish we'd have $300 oil to usher in the new sustainable/ecological paradigm, renewable energy, localized economies, etc. But I'm not holding my breath. The hedge funds have piled big into leveraged commodity plays, the oil companies are rolling in $$$$, and they all like to sell high and buy low, and they have friends in the media, etc. etc. Don't mean to be a cynic or a cryptic know it all, just my humble and irrelevant discussion board bloviation. If it bleeds, it leads, as they say.

[Lowlight]

hedge funds? forgive my ignorance please explain.

the reality of peak oil may be in a way irrelevant to the fact the US foreign policy and military endevours (war crimes) are now being run as if peak oil were real. Thats the problem.

[ May 10, 2005, 04:51 AM: Message edited by: Lowlight ]

[dragonfly]

Got this in the e-mail today...

Source: The Oil Depletion Analysis Centre (ODAC)

NEWS ADVISORY
Thursday, 5 May 2005

Contact: Jim Meyer
Tel: +44 (0)20 7424 0049
E-mail: odac@btconnect.com

Global Oil Depletion Concerns to be Aired
at International Workshop in Lisbon

Thirty-six experts from 17 countries will take part in a two-day international workshop on oil and gas depletion at the Calouste Gulbenkian Foundation in Lisbon on 19-20 May 2005.

Amid mounting concerns about rising oil prices and the ability to expand production capacity to meet rampant demand, the speakers will assess the prospects for future oil and gas supplies. They will also address the economic, political and social impacts of global depletion.

Two Board members of The Oil Depletion Analysis Centre (ODAC) will be among the speakers: Colin Campbell on The End of the First Half of the Oil Age, and Chris Skrebowski on The Emerging Reality of Oil and Gas Depletion – Where Reality Meets Theory.

More than 300 people representing a wide range of interests are expected to attend the workshop. They include oil and energy industry leaders, investment analysts, consultants and government officials.

The full programme is available at: http://www.cge.uevora.pt/aspo2005/

This will be the fourth annual workshop organised by The Association for the Study of Peak Oil (ASPO), a network of European scientists from 14 countries. Previous workshops have been held in Berlin, Paris and Uppsala, Sweden.

# # #

Note to editors:

The Oil Depletion Analysis Centre (ODAC) is an independent UK-registered educational charity working to raise international public awareness and promote better understanding of the world’s oil-depletion problem. Further information is available at: http://www.odac-info.org

[fitz]

Kunstler's work on the topic is quite good as well. Here's a link to his interview on Coast-to-Coast Kunstler-Coast to Coast (http://www.coasttocoastam.com/shows/2005/05/08.html)

Also a link to his web site:
Kunstler (http://jameshowardkunstler.typepad.com/clusterfuck_nation/)

[craazyman]

Originally posted by Lowlight:
hedge funds? forgive my ignorance please explain.Hedge funds are lightly regulated investment partnerships that manage money for wealthy families and, increasingly, institutional investors such as large charities, universities, health care institutions, etc. Collectively, hedge funds manage over $1 trillioin in assets worldwide, but invest far more than that due to heavy borrowing (i.e. leverage) to increase the return on assets managed. Due to the very low interest rates in the bond markets, and the relative stagnation in the equity markets, hedge funds have piled heavily into commodities--such as oil, natural gas and fossil fuels, etc--in order capture rising prices and to juice portfolio returns. American economic growth and the boom in the Asian economies, including and especially China, has boosted world demand for energy and made for some very profitable trades going long (i.e. owning) oil, gas, etc. Many financial industry observers believe that hedge fund buying has contributed to the upward spikes in oil and other fossil fuels over the past year or so.

Regarding Kunstler's thesis--it is articulate, engaging, flamboyant and cinematograhic in a hellfire and brimstone way. It reminds me of a sermon that might have been given in a revivalist tent in Missouri before the Civil War, one that Mark Twain might have chronicled. We Americans have always loved to be told what sinners we are, and scared to heck by hellfire preachers, and we love Malthusian scenarios. Hollywood has made a fortune on them.

Personally, though, I don't buy it. Oil is, even now, only one-half the inflation adjusted price of the late 1970s. We're still a long way from where we were then, as bad as it now seems. If China's economy fades (as it probably will) and hedge funds pile out of the long energy trades, oil could go way back down. It was a Saudi oil minister who once made the apposite comment "The stone age did not end for lack of stone, and the oil age won't end for lack of oil." But an even handed, sober, boring, technical assessment of oil supply & demand, and the forces that drive oil prices, won't sell magazines. At best, it will appeal to technocrats and industry executives.

[Lowlight]

thanks for the info. Im not sure hedge funds are soley behind the price hike tho clearly they contribute. There is some very improtant evidence for peak oil tho -

January 25, 2005, PST 1300 (FTW) - Three key facts are of overriding importance to world events today.

FACT ONE - If the actions - rather than the words - of the oil business' major players provide the best gauge of how they see the future, then ponder the following. Crude oil prices have doubled since 2001, but oil companies have increased their budgets for exploring new oil fields by only a small fraction. Likewise, U.S. refineries are working close to capacity, yet no new refinery has been constructed since 1976. And oil tankers are fully booked, but outdated ships are being decommissioned faster than new ones are being built.

- Mark Williams, Technology Review, February 2005

LONDON -- Major oil companies are replacing dwindling reserves by acquiring other oil companies instead of exploring for new fields, a strategic shift with implications for global oil supplies, investment bank Credit Suisse First Boston said in a report Monday.

Integrated oil companies are spending only 12% of their total capital expenditures on finding new oil fields, down from nearly a third in 1990, the report said. Integrated oil companies like U.S. super-major ExxonMobil Corp (XOM) have upstream oil exploration and pumping and downstream refining and marketing operations.

In addition, with the world's biggest oil companies convinced exploration is too costly and risky, the steady growth of the world's total oil reserves has fallen sharply, the bank said. Global oil reserves are being replaced at a rate of 1.2% a year in the last three years, compared to 2.3% over the last 20 years, even as oil demand growth is hitting new records with China and India becoming industrial powers, the bank said.

-- Dow Jones Newswire, January 17, 2005

FACT TWO - Let's forget about economic growth, how about just offsetting declines. If Mr. Raymond's curve reflects reality we would still have to find about 30 Gb/yr. How are we doing?

From http://www.ems.org/rls/2004/01/28/oil_supply_short.html we find the following:

The rate of major new oil field discoveries has fallen dramatically in recent years. [Global discovery peaked in the 1960s. Per capita energy production peaked in 1979. -Ed] There were 13 discoveries of over 500 million barrels in 2000, six in 2001 and just two in 2002, according to the industry analysts IHS Energy. For 2003, not a single new discovery over 500 million barrels has been reported. Key findings of a recent Petroleum Review report are:

Between 2003 and early 2007 some 8 million barrels/day of new capacity is expected to come on stream.

In 2005, 18 projects with a potential peak capacity of 3 million barrels a day are due to come on stream, slowing in 2006 with 11 new projects followed by 3 in 2007, and 3 in 2008 adding a cumulative 4 million barrels/day of potential new capacity at their peak.

It appears likely that from 2007, the volumes of new production will fall short of the need to replace lost capacity from depleting older fields.
Further confirming this trend, recent E&D results strongly support the expectation of a near term peak in oil production. The net present value of all discoveries for the 5 oil majors during 2001/2/3 was less than their exploration costs.

-- Murray Duffin, Energy Pulse, November 17, 2004

(These calculations were confirmed by the Oil Depletion Analysis Centre of the UK in November 2004 and by FTW's Dale Allen Pfeiffer's independent calculations in February of 2004. There was not a single discovery of a 500 Mb field in 2003 and - as far as we know (as of this writing) the same holds true for 2004. The world is currently consuming a billion barrels of oil every eleven and one half days.)

Fact Three -- Look at this imbalance: The average American consumes 25 barrels of oil a year. In China, the average is about 1.3 barrels per year; in India, less than one…

The challenge is huge. For China and India to reach just one-quarter of the level of US oil consumption, world output would have to rise by 44 percent. To get to half the US level, world production would need to nearly double. That's impossible. The world's oil reserves are finite. And the view is spreading that global oil output will soon peak.

-- The Christian Science Monitor, January 20, 2005

[dragonfly]

Source: The Oil Depletion Analysis Centre (ODAC)
Posted on: May 10, 2005 @ 6:57 pm

NEWS ADVISORY
Wednesday, 11 May 2005

Contact: Jim Meyer
Tel: +44 (0)20 7424 0049
E-mail: odac@btconnect.com

Kyoto-style Protocol for Global Oil Depletion
to be Debated at International Conference in Lisbon

Current and former elected officials will debate a proposed international agreement to avoid global conflict over the world’s depleting oil supplies during a conference at the Gulbenkian Foundation in Lisbon on 19 May 2005.

Loosely modelled on the Kyoto Protocol for climate change, the proposed ‘Oil Depletion Protocol’ would provide a framework for major consumers to use less oil and develop alternatives, while preventing major producers from profiteering as oil supplies become scarce. It would also help poorer nations share more equitably the world’s remaining oil to meet their developing needs.

The panel will include:

- Yves Cochet, Member of the French National Assembly and former Minister for the Environment and Regional Planning

- Michael Meacher, British Member of Parliament and former Environment Minister

- Rudolf Rechsteiner, Member of the Swiss Parliament and lecturer on energy and environmental policy at Basel University

- Edward Schreyer, former Governor General of Canada and Special Advisor on Energy, Science and Technology to the Government of Manitoba

More than 300 people are expected to attend the two-day conference, including oil and energy industry leaders, investment analysts, consultants and government officials.

“Huge adjustments will have to be made to improve energy efficiency and bring in renewable sources as world oil production inevitably begins to decline, possibly within the next few years,” Colin Campbell, a Board member of the London-based Oil Depletion Analysis Centre, said.

“To prevent an incoherent, destructive global free-for-all for the world’s remaining oil, we need a managed approach through international agreement,” he said.

Under the proposed Protocol, oil-importing countries would be required to reduce their imports to match the overall world depletion rate and oil-producing countries would agree not to produce above their current rates of depletion.* Such an agreement would moderate world oil prices and help stimulate locally the development of renewable energy sources.

“The alternative is ever-soaring oil prices with destabilising effects on the world economy,” Dr Campbell said, “which clearly would be in no one’s interest.”

A draft of the Oil Depletion Protocol can be found at: http://www.odac-info.org/bulletin/DepletionProtocol.htm

# # #

Note to editors:

Full details of the conference are available at: http://www.cge.uevora.pt/aspo2005/

The Oil Depletion Analysis Centre (ODAC) is a UK-registered educational charity working to raise international public awareness and promote better understanding of the world’s oil-depletion problem. Further information is available at: http://www.odac-info.org

[craazyman]

I'm somewhat reluctant to prolong this thread because I'm not an oil industry expert & the topic (while interesting) isn't in the sweet spot of the editorial direction of this discussion board, but I am well aware of all of the concerns (the "bearish case" if you will, as expressed in the links and clips above) about the emerging disconnect between world supply/demand, industrializing third world economies, "Hubbert's Peak" for those that follow this topic closely, lack of E&P on part of major oil companies, etc. I don't disrespect any of it, and it's all important. And yes, in truth the hedge funds are only one moving part in a very large machine.

To be honest, this topic does really interest me though. My pay-the-rent day job is in financial research/writing/consulting. I am no finance big shot, and a decidedly non-materialistic and distracted intellect has prevented me from doing what is required to become wealthy, but for over two decades I have followed financial markets and the booms and busts of various asset classes and the way it all relates to fear and greed in the human psyche. I have seen this same story repeat itself--in various incarnations--over and over again.

The problem with these kinds of predictions is that they seem to inevitably assume a given that isn't necessarily true, and that is "if we keep going in the direction we're going . . . "

But it doesn't work that way. I suspect that persistently high oil prices (and yes, I do think they're at a new higher trendline level than the low prices of the late 1990s) will cause a transformation in energy efficiency as people re-structure their spending/buying habits. SUV's are an emerging has-been, Toyota is kicking GM's rear with fuel efficient cars, energy efficiency is being increasingly incorporated in home & building design, in the utility sector the big trend now is for states to mandate renewable portfolio standards (wind, geothermal, solar, etc.) for power generation. I am aware of emerging breakthroughs in solar power technology that could revolutionize the economy of solar power farms. I could go on and on -- and bore the board to tears.

In the late 1970s everyone was predicting Malthusian panic scenarios for oil prices, when they were twice the level they are now. But the economy became much more energy efficient in response to those high prices, oil demand fell instead of rose, OPEC disintegrated, and prices collapsed.

I don't believe prices will collapse this time. But I do think that these higher prices, through the agency of the free market and technology entrepreneurs, will produce transformations in technology, energy production, industrial energy use, transportation technologies, and household energy use that will limit rising oil demand and prevent any wholesale disaster scenario (just as in the 1970s). And that the oil age will end in some future decade, gently and with a whimper, and not in a global crisis. Just my humble and irrelvant opinion. Of course, I may be horrendously wrong.