Declining oil reserves

Off Topic
41

I will admit that 4 years is not better than 6 months, but you are talking about production costs of oil. What about transportation and refinement? There are so much more costs involved with turning oil into a useable energy source than you are putting into your figures. Once a wind farm is built there is almost no transport costs and almost no matenence or refinement costs. It is turned directly into energy and sent to the grid.

Now you are correct that lifestyles will have to change, Big deal, Lifestyles have been changing since the beginning of time. So we have to drive around in hybrids or electrical cars. No more high horespower street rods. That is hardly gloom and doom, It is just another way to live. My car does not make me Happy. If I had an electric car and so did everyone else, my quality of life would be just fine.

And please don’t argue that electric cars are not good enough to work for the entire population. Sure they are crappy right now, there has not been that much attention spent on developing them. Once this crisis of yours hits, All the major manufacturers will be coming out with a new better electric car every month, just like they are doing with gas cars now.

Secondly With electric cars having admittadly less HP than a gas engine, Likely less accidents will occur and therefore less healthcare costs to the entire country, as well as less automobile deaths. Also an electric engine is far lighter than an internal combustion engine, this also means lighter cars and less severe accidents. There are so many factors that are involved when a system such as this changes. Nobody can know the ultimate impact it will have but I have a feeling that we as humans will overcome anything that is presented us as a challenge. Might things get bumpy, sure they will, change is always a tough pill to swallow. But we will get through it.

42

OK lets say it costs 50 bucks, and they can’t sell it for 50 bucks. say thay can get 35 for a barrel max. There are two options, the cost of production goes down. The cost of 50 bucks a barrel has to be going somewhere, thos people do not want the oil companies out of business or they themselves will have no more business, therefore they trim fat, work harder with less people and all of a sudden it cost 34 bucks to produce a barrell of oil.

You seem to bet on the fact that people will simply stop working go home and starve, this is not the case. If they have to get paid less money but still work, 99% of people will still do it. To be honest it may bring about some much needed corporate reform. Maybe executives will have to start living on 150,000 instead of millions. They could still lead happy healthy lives Yes?

If one factor in a system gets out of whack, the rest of the system will adapt to handle the change, nothing short of total world destruction will stop us from advancing ourselves. Will there be setbacks? Possibly, but we will continue on.

43

Vegita:

You’re not getting it. Energy is not just one factor in the world. It is the factor necessary for everything else.

Clearly, you have not read the excerpts on my site or you would realize that oil is much more important than just fuel for your car.

It is necessary to build the car, feed people, pump water, maintain hospitals etc. .

No cheap oil means your electric car doesn’t even get built in the first place.

You can’t even recycle something without a significant and continuous investment in fossil fuel energy upfront.

Not to mention natural gas is running out also. Coal prices are also skyrocketing. (Energy Profit Ratio of coal is dropping quickly - even though there is ton’s of it left). You get electricity from nat. gas and coal. So even if you scrapped together enough oil to construct electric powered cars, the cost of the electricity is going to skyrocket as we run into problems with nat. gas and coal supply.

Without an excess of energy, the economy can’t grow - jobs can’t be created.

Do you see where this is heading? Thus far, it doesn’t look like you’ve done the math. I say this with all due respect.

Email me privately and I will get you a free PDF version of the book.

Matt

44

Vegita:

You can only trim so much fat, downsize so much.

There are physical, geological realitie we are dealing with here.

It takes a certain amount of energy to get oil. Can it be made more efficient? Sure. But you don’t think the oil companies are already running things as efficiently as they possibly can? Of course they are. More efficieny = more profits.

In case you haven’t noticed, the oil industry has been downsizing, merging like there is no tomorrow.

Because they know there is no tomorrow.

Matt

45

Folks,

Fusion has been achieved at very small scales, but it is a long way from a viable energy source. The technical problems of utilizing the energy released cannot be solved with current technology.

Cold fusion has been largely discredited by the scientific community more than ten years ago.

It is true however that we can go back to making fission reactors and this is a viable energy source, although not popular. This is ultimately limited as well by the world’s supply of fissionable Uranium 238. But this limitation can be extended by using breeder reactors.

-Dutch

46

Dutch,

What you say is true, but to illustrate a point:

What do you need to build and maintain a reactor? What do you need to power your uranium extraction efforts?

You guessed it - oil.

No cheap oil means no reactors. (or at least ver few)

Matt

47

Matt what did the world survive on before oil? oil is not the end all be all. How did we possibly make the first oil retreiving system without actually having oil to fuel the production of such equipment. Dude you need to get a grip on reality, humans will not be beat by something so easily championed. You can stockpile your food and gas in a bunker somewhere if you like, I think you are missing something.

48

Matt:

Please feel free to cite some references to “tens of thousands” of injured soldiers. While it is true there are casualties in this conflict, in a historical context they are tiny numbers. While each is a tragedy, they must be taken in context of the fight going on.

And also, if Fallujah is not the only trouble spot in Iraq, why is it that all the trouble reports are from Fallujah of late – with perhaps a very few others from the Sunni Triangle area, which is around Fallujah? And by trouble I mean Mad Max fightin’ trouble, not a terrorist bombing.

49

Only 1.5 billion people were on the planet prior to oil.

Coal was used to power the initial stages of the oil age.

Coal is becoming very expensive. Its EPR is getting close to 1, which means it will no longer be a viable energy source as it will take more energy to extract than it carries.

This is all based on easily verifiable facts - to which I provide extsenstive links too.

REad the site, will ya?

Matt

50

Also Matt –

There seems to be a flaw in your rejection of nuclear power (I am, and have been, referring to fission). While it may take some measure of energy to construct a nuclear power plant, that need not come from “cheap oil”. It could very well come from expensive oil or any other source. Doesn’t much matter. Because once you get past the sunk cost, which is not prohibitive, you’re golden. Once the nuclear plant goes up, it no longer needs any oil to produce its energy, cheap or otherwise, and it produces energy more cheaply than oil.

In addition, even granting your presumption that ANWR and other Alaskan oil is not enough, you didn’t address off-shore oil, which is abundant. Deep-sea oil is thought to be the most abundant source there is, although it has not been economically feasible up to this point to extract it. If prices were to rise, however, the impetus would be there to develop cheap technologies for extraction. There would also be the impetus to develop better technologies for extraction of the reserves in Alaska – as has been the case for known reserves for the last century with all reserves, “reserves” would expand with the technological advance. There are companies making very good money right now by buying rights to “tapped out” oil fields and extracting all sorts of oil via new technologies.

As was pointed out above by Mage (I believe), these doomsday scenarios have been around for a long time, and we’re still running strong.

Side note on the Julian Simon bet: I believe the bet was controlled for inflation. Also, commodities are priced on a worldwide basis, not just in the U.S., so while U.S. monetary policy would have some effect on nominal prices, commodity supply and demand issues would be far more important.

51

Boston Barrister,

Our leaders have been telling us pretty much every day that the war on terror is a worldwide war. That it will last 40, 50, 60 years. That it may not end in our lifetimes

A 50 year worldwide war. If that is not Mad Maxish, what is?!

Regarding the casualty rate - given the small number of troops we’ve had (relative to other conflicts), the number of casulties has been quite high.

There will be lots of other Fallujah type situations - some in Iraq, others wherever the war on terror is faught.

Matt

52

Boston Barrister:

I do address those - they are abundant, but they are very expensive.

Almost no nuclear plant has ever turned an energy profit when you account for the amount of energy it took to construct and maintain the plant. Nuclear has only existed because it has been subsidized by cheap oil.

The companies will make money, but the products that come from deep sea, offshore, polar, and shale oil will become much more expensive then they are now.

The more expensive food gets, the more people who don’t eat.

You and I, as attorneys may be able to afford it. But most of the average Americans won’t.

Matt

53

BB-

One more thing - as far as doomsday theories having been around for a while, a couple points :

Oil production has been in a plateau since 1999.

Per capita production has dropped every year since 1979.

99 percent of world oil production comes from 44 countries. 24/44 of these countries are now in decline.

If you disregard the mid east, world production peaked in 1997.

As Matt Simmons stated several times, “The doomsayers have turned out to be correct. We wasted 30 years ignoring them.”

Again, are you listening to what the Bush administration is telling you in plain and simple English.

Bush declared an energy crisis within months of entering office.

His energy advisor Simmons says the only solution is to pray.

We’re going to be in a 50 year world wide war.

You’re an attorney. These people are all advised by attorneys. They are using very specific language for a reason.

Why aren’t you listening?

Matt

54

The world will never run out of anything. We were suppose to run out of oil by the 80’s.

55

Matt,

I looked over your website.

I have a physics background and have worked at Argonne labs, where they do a good bit of energy research. So i have some insider’s knowledge.

Having said that, i pretty much agree with the facts and arguments presented. I am not sure yet whether i agree with some of the conclusions, and am still turning it over in my mind. In particular, whether the outcome of “peak oil” will be as dire as you predict. I also don’t see any causitive link between some current events (such as CA energy blackouts and current oil prices) and peak oil.

It got me thinking though, which is the important thing.

-Dutch

56

Dutchmo,

Have you read Goodstein’s book, “Out of Gas” - he’s a physics professor at Cal Tech, and the vice provost.

His book was one of the things that got me going. In fact, alot of the facts/arguments I use I got from his research.

His book and my site are pretty much in harmony with each other, at least in regards to the essential thrust which is this is going to be extremely painful for the avergae American, it is already happening, and that anybody with half a brain should be taking Peak Oil extremely seriously.

To those who say I am a “doomsayer” - fine, I am. But the vice provost of Cal Tech? The presdent of the biggest energy investment firm in the world (Simmons)?

Not likely.

Wake up folks.

Matt

57

You should stop telling us to wake up! As a lawyer you should know that you cannot persuade someone by being condescending. Give us the info let us read and interperet it for ourselves and if we do not draw the same conclusions that you do move on. Why the need to convert people into this line of thinking. Is your goal to give everyone ulcers?

Lets say for example we all believe you, what then, stop using oil? write a letter to congress? what is the solution? Give me a better alternative than “there is nothing we can do we are all going to die” Because if someone tells me that than I don’t even care, If I am going to die anyways I’m going to continue to live my life to the fullest and continue to be happy all the way until some biker gang in black leather masks with spike all over kill me for the fuel in my lighter.

58

Vegita,

  1. What do you think the leather clad biker gang is going to do to you before they take your fuel? =) Not that there is anything wrong with that. . .

  2. The actions you take (or don’t take) will effect the rest of us. This is a problem so multifaceted, that it’s going to take all of us contribuing to fix it.

So your failure to do something will effect me. And everybody else.

Where did I say you shouldn’t live your life to the fullest? Please indicate where on my site, or where in any of my posts I have said that.

If you’re so bothered by what I have to say, I have a solution for you:

Stop reading this thread.

Matt

59

That was you on Coast to Coast? Ah, I caught parts of it.

I cannot agree with you that nothing can replace oil. But I do agree that at this time it is the cheapest form of energy. Maybe not in the future, but right now it is. Although I believe that it will last longer then you think.

Will solar power work? I don’t think on it’s own, but as a supplement it wouldn’t hurt. And as the technology gets better, it will improve.

Now you talk about wind power taking 4 years to make back the oil used to produce the windmill, but ignore the fact that the next 4 years it is saving that same amount.

A good example is when I read about the cost of a front load washing machine. Very expensive. Actually more expensive then I thought it should be. But it completely paid for itself in ten years because of the savings in the cost of heating water. That is a 10% return on investment, and energy savings to boot.

That windmill would be like a 25% savings on the oil.

Do I think the windmill and solar power are ready to replace our current energy production? Not yet, but it is becoming more and more feasible.

My biggest argument is that oil will fluctuate in price, of course, but will remain viable for a while. When we start to actually see the price rise, people will start conserving more and more. Sure oil is used to produce cars, but rather then producing gas-guzzlers, it will produce more economical cars.

Or make cars that run completely on ethanol. And I do believe that they had stills, and were making alcohol long before there was oil. Once the price of gas is more then the price of ethanol (based on the energy produced that is) it becomes viable. Although I do believe that the biggest reason cars are not made to burn alcohol is because people can make it in their back yard.

Let’s see about those bets. Gas will hit $3.50 later this year in California. Actually I believe later this year that will be the tax on a gallon of gas in California later this year. Including tax into the equation throws things off. The government doesn’t care what inflation is, they will increase taxes however much they can without being thrown out of office.

Besides such a short term investment is closer to day trading. Anything can happen in a few days, weeks, or months. But over the long term you see the actual trends.

Draft? Political suicide. Just like they are afraid to touch social security. I am more worried about the effects of social security on the future then oil.

Fallujah actually looks like a war zone, not a Mad Max movie, which is supposed to be post global holocaust. And I don’t think 700 Americans have died in Fallujah alone, although the way you state it, it sounds like that. But as far as people dying, it’s a war, what do you think happens in a war? Would I prefer nobody died? Yeah. But that is not they way war works. Even the Gentleman’s war style of the American Civil War didn’t prevent bloodshed.

Now if I remember your talk with, was it George, or Art on the weekend? Anyway, you had a list of countries America was going to attack based on some oil figure. What are the next three countries we are going to attack?

Actually since we are fated to be hit by an asteroid in 2012, should we really worry?

Oh yeah, what is your solution to the oil crisis? I have always heard spend 10% of your time on the problem, and 90% of your time on the solution.

(You’re having fun arguing this, aren’t you?)

60

Sorry Matt –

But this all sounds an awful lot like Y2K to me.

Stepping back to the 30,000 foot view, I still have several problems with all of this.

Firstly, I don’t understand the rationale for the people in charge, whom you are implying know this big fall is coming, to not do things right now, right away, to attempt to fix the problem. Even according to your theory, right now, and for the last several years, there have been people at the top of things who knew what was going on. During this time, we have had cheap oil. If those people were certain there was a problem, why not invest “cheap oil” resources now into constructing nuclear power plants, or into technology to extract the more expensive oil resources from deep sea and other sources?

With all your comparisons on the energy value per unit extracted, and even with time comparisons for various energy sources – which I won’t dispute, as I’m no expert and only saw the conclusions at any rate – there didn’t seem to be any projections for how investing “cheap oil” dollars now, into sustainable nuclear energy, would affect those future prices by altering the demand functions for oil. This would be basic economics – invest a cheap resource now to produce what will be a dear resource in the future. And this is irrespective of any problems I have with pricing in current technological boundaries into projections years into the future, and with taking the cost of building 1 unit of something (a reactor) and not lowering it for efficiencies of scale if many were to be built.

Not to mention that (and correct me if I am wrong on this) I am presuming your assumptions on the cost of nuclear power are based on taking the previous costs and simply carrying them forward to current dollars, and not pricing in new technologies, cheaper materials, and the fact that the government can get rid of layers of bureaucratic (i.e. regulatory) costs if it wants to do so, which, one would presume, it would were such an emergency imminent.

So, if there were a crisis, what is the reason for the government, which you imply has a knowledge of the impending oil shock by your interpretations of current policies toward the middle east, to not take action? Why wouldn’t they invest resources now, with “cheap oil” resources easier to come by, to convert to nuclear power.

And please do not tell me that it is because it takes oil to mine uranium. It does not necessarily take oil to mine uranium. It takes energy. And on the scale on which uranium is mined, it would be relatively cheap to use natural-gas powered equipment – or even liquified coal – in order to extract the uranium with its much-higher energy capacity.

From the 30,000 foot level, I can’t see a reason why the government would bury its head in the sand and not go hard and fast to nuclear power. If the facts are as cut and dried as you seem to imply, it should be an easy sell to the American people as to the need to construct the nuclear power plants – or to invest money into all sorts of technological research on other energy sources that would undoubtedly lead to discoveries that would change your projected price explosions.

As we know, there hasn’t been a new nuclear power plant in approximately 30 years. And we can’t even get the government to agree to go extract the easy oil in Alaska and right off shore. And the Russians are sitting on huge, untapped oil fields, the precise extent of which are unknown, in the Caspian Sea area – which it doesn’t seem anyone is in a huge rush to develop. Why?

In a nutshell, that’s my problem – it just doesn’t seem to make any sense.