Peak Oil: The Real Scoop?

Having just been introduced to this quite scary prediction, I wonder what everyone else knows about it and how you feel we’ll overcome this, and if it will be as bad as this website suggests (which has been referenced in Congressional hearings, and is cited to hell, leading me to believe its somewhat factual).

I wouldn’t know. But my favorite theory about the main real reason for the war in Irak is indeed the control (even if indirect) of its oil reserves, not to grant juicy contracts to american companies, as it is often stated, but in a long-term perspective, to ensure a constant flow of oil to the USA during the next 20-30 years.

Also, despite reading recently the same kind of articles all over the place, I still don’t believe, though, in the likehood of an imminent collapse. Take this as a completely uneducated guess.

A few to get you started:


I’m sure if you chew over those you should get a good idea of some of the arguments for both sides.

Peak oil is coming; the only questions are (a) when, and (b) whether we will have done anything to get ready.

There are a lot of people who are fearmongering about the consequences. For instance, I can’t see that food prices will suddenly skyrocket in a world of expensive oil. I’m speaking from ignorance here, but I’m willing to bet petroleum prices don’t play that large a role in food prices. (If 10% of the cost of a loaf of bread is due to the price of crude, and the price of crude triples, the price of bread goes up 20%.)

Some things we know:

  1. Nobody’s disputing the soundness of the theory of peak oil: at some point in time, long before all the accessible oil has been pumped out of the ground, worldwide production will peak, and then begin a slow, long-term decline.
  2. Since demand won’t undergo a similar decline at constant prices, prices will escalate when this happens - probably quite substantially.
  3. Most of the world’s known oilfields have already peaked, and are declining in production. This includes the Prudhoe Bay oilfields in Alaska, and the North Sea.
  4. The primary oilfields that may not have peaked are the currently-producing Saudi oilfields.
  5. Whether the Saudis can still increase production more than trivially is a matter of some debate.
  6. World oil consumption is currently at ~84.5 million BPD (barrels per day).
  7. World pumping capacity is about the same, unless the Saudis can ramp it up. (So we should soon resolve the debate of point #5.)
  8. The quantity of undiscovered accessible petroleum still in the ground is obviously an unknown.
  9. Discoveries of significant new fields have been declining for decades.
  10. Peak oil aside, we’re currently running up against the limits of the refining and distribution system as well: there’s a limit to how much crude we can move to refineries by pipeline and tanker, and there’s a limit to how much can be refined each year. Pipelines, oil tankers, and refineries are all significant capital investments, and a decision to increase capacity takes years to be implemented.

I’m sure that list can be added to, but that should hit a significant number of the high points.

One of the world’s oilfields which has not yet come close to its production potential are the oilsands in Alberta, Canada. By some estimates, known reserves in the Alberta oilsand are some five times the known remaining reserves in Saudi Arabia. Currently, the cost of production of Alberta oil is much higher than that in the middle east, due to the fact that mining and upgrading is more expensive than simply pumping the stuff out of the ground. When the middle east production peak occurs, the price will rise to come in line with the Alberta stuff. When that happens, I expect another phase of expansion in the oilsands as production focus shifts from Canada only to the export market. American companies (Imperial Oil, etc.) already own about half of the oilsands operation (Syncrude, Suncor et. al.), so I can’t guess at what the political ramifications will be. I suspect that one of the reasons that GWB wants to open Alaska to oil production, is to ensure a domestic supply of oil to the US that doesn’t require them having to take Canada seriously.

I think you would lose that bet. EVERYTHING that shows up on your plate is touched by petroleum products in some way - fertilizer, farm equipment, irrigation pumps, trucks. It all uses petroleum. Not only that, we wouldn’t even be able to produce the same level of crops without petroleum products. And for some reason you seem to think that an inflation rate of 20% is no big deal.

I’m not saying that without cheap oil, the world would turn into Mad Max…but then again it might. At the very least there would be a long period of adjustment until civilization reached a new equilibrium with a less oil dependent economy.

Keep in mind that civilizations do in fact collapse when they run out of critical resources. Our civilization is not immune to this just because we have cell phones and airplanes.

Increasing production is a matter of building more infrastructure - pipelines, refineries, tankers. Unfortunately all this will do is help us burn through our oil that much faster.


Peak Oil Guy predicts that resource wars will be a consequence of declining oil production.

The US needs a lot of oil.

The US has a strong military.

Canada has a lot of oil.

Canada does not have a strong military.

Canada is right next to the US.

I wonder how many stars will be on the flag in 2015? :wink:

Sometimes they do, sometimes they don’t. I understand that whales used to be a very important resource.

Canada is also an ally of the US. It is a stable country. It is dangerously low on religeous fanatics.

In other words,

You understand incorrectly. Whale oil was used for illumination, polishing wood, purfumes, bullshit luxury stuff like that. At no time did any nations entire industrial infrastructure run off of products derived from Free Willy. The depletion of luxury resources causes mild inconvieniences. When critical resources (agriculture, water, building materials, metals for tool and die making, fuel) are depleted, you now the same number of people but now there aren’t enough resources to support them. People tend to fight over scarce resources.

I just realized I said “in other words” and did not bother to write any other words.

In other words we would not invade Canada simply because there is oil there. We have troops in the Middle East because that is an unstable region that is unfriendly to us and we need their oil.

Gee, I just love end-of-the-world predicitions.
let’s compare :
In October 1973, oil prices suddenly went through the roof, and inflation was high. American society was shocked,both psychologically and financially.There was fear in the air, and there were long lines at gas stations.

So did civilization collapse? —or did we just buy smaller cars, cut down our lifestyle a bit, etc.

Now the question is what would happen if prices continued to double or triple every year indefinitely?

The obvious answer is we’ll switch to an alternative power/fuel source, one that is not currently cost effective but will become cost effective as the price of traditional oil rises. Either that or our civilization will collapse, billions will die and <fill in the blank for other dire predictions>. Personally I’m going with alternative power/fuel source long before the collapse. Because technology is a magic siliver bullet that will just save us? Not exactly. Because the person or persons who come up with a viable alternative and get it to the market first will be the next Bill Gates, and I have a lot of faith in greed as a motivator. That and I know that there are already companies (like Toyota and GM for hydrogen power as an example) who have alternative power vehicles waiting in the wings or ready for release in the near future IF the price of oil keeps rising.


So, how heavy is each ‘touch’? What do they sum to?

I’ll still take that bet, thanks.

For starters, what fraction of the cost of a loaf of bread is what the farmer gets paid for growing the wheat that went into it? I bet it’s not that big - and all the costs of agricultural uses of petroleum that go into that loaf are part of that fraction.

And even there, what fraction of the cost of the fertilizer is attributable to the cost of petroleum as a raw material? What fraction of the cost of the farmer’s wheat is due to his use of gasoline? A lot of those slices are going to be a lot thinner than you think.

I’ve read Kunstler and other scaremongers on this subject. They hand-wave a lot, but they don’t quantify. There’s good reason for this, I’m betting.

How, exactly, do you get an inflation ‘rate’ out of that? How do you get it to be 20%? (Do you know what an inflation rate means? An inflation rate of xy.z% means that, over the course of n years, the cost of a basket of consumer products increases by a factor of (^n.) Now, what’s our time period? (How do you know it’s a year?) What’s in the rest of the basket, and how much did it increase?

IOW, use terminology correctly if you must use it.

No. In the case of oil, ‘production’ refers to the step of pumping it out of the ground. The rest of the infrastructure, which you’re talking about here, is what was in my last point, the part that doesn’t have to do with production or peak oil.

But increasing production of oil isn’t something that can necessarily be done by drilling more wells or pumping more water in. That’s the debate - is there enough oil in the ground to enable more production?

I’ve got a thunderstorm right now; I’d better post before my computer gets zapped. Back with links later.

:eek: Metacom! Shush! The time is not yet ripe for the Canschluss!

While it is nice to think we can simply “will” new discoveries into existance, I am not so optimistic. Our economy can react to a slow rise in oil prices. A rapid rise would make the 70s look like the Dot-com boom. No our society would not collapse, but we could experience severe depression for a time until we adjust to the new reality.

Most likely a scenareo between “business as usual” and “destruction of the world” is the most realistic one.

Oh and RTFirefly - thank’s for the lesson on “inflation”. :rolleyes:

From what I’ve read, the problem with current alternative sources is that either they are derived from oil in some way or are so ineffecient that we simply can’t power our massive commercial transportation setup at our current size. Many sources are predicting we will feel the squeeze of the oil peak as early as 2007.

Someone needs to make fusion viable. Or start making a lot of nuclear plants (which take, irrc, a good 10 years each).

Not yet.



America runs on crisis management. We never actually plan for anything beyond the current monthly and quarterly reports.

Interestingly enough, today Chevron launched a massive advertising campaign in most mediums to raise awareness of this issue. Surely capitalists will say this is the market’s invisible hand and it sucessfully has begun the process of market adjustment. Fearmongers will undoubtably state that if things are to the point where massive oil corporations are encouraging conservation and alternative energy we must be on the brink of a catastrophe.

Personally, given what little I’ve read, I think we may not suffer the widespread gloom and doom of worldwide famine killing 90% of mankind as some predict, but rather we will face huge and necessary changes in our way of life that will be very difficult for most of us ‘developed’ folks. Whether this is better or worse for the generation going through it is up to debate, but surely its better for future generations, right?

Still, maybe technology will be too slow and we’ll get in a kickin’ land war in East Asia.

Forgot the link: