# Peak Oil: The Real Scoop?
**URL:** https://boards.straightdope.com/t/peak-oil-the-real-scoop/311124
**Category:** Great Debates
**Created:** [July 5, 2005, 7:53am UTC](https://boards.straightdope.com/t/peak-oil-the-real-scoop/311124 "2005-07-05T07:53:27Z")
**Posts on this page:** 20
**Page:** 5
### Author:  [@msmith537](https://boards.straightdope.com/u/msmith537)
#### Post date: [July 16, 2005, 2:41pm UTC](https://boards.straightdope.com/t/peak-oil-the-real-scoop/311124/81 "2005-07-16T14:41:16Z")
> [@coldie](#):
>
> For anyone who believe in peak oil nonsense, I suggest u buy some forward contracts. Then u will profit handsomely from ur knowledge.
>
> If u r not confident enough to bet own money, maybe is time for u to be quiet.
Because it doesn’t work that way. It’s not like buying a stock. You are agreeing to buy the asset (in this case oil) at a given point in time. The price of the contract already incorporates what the expected future price will be (discounted at the risk free rate), based on estimates of supply, production, risk, and so on. So in other words, it’s not a matter of guessing that the price will go up. It’s a matter of will the price go up more or less than specified the contract.
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### Author:  [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)
#### Post date: [July 16, 2005, 5:55pm UTC](https://boards.straightdope.com/t/peak-oil-the-real-scoop/311124/82 "2005-07-16T17:55:29Z")
> [@RTFirefly](#):
>
> It was around $2 just a few months ago, but prices are changing faster than usual. Prices will stay flat for several weeks, then in the course of a day or three, they’ll go up 10¢/gallon. Happened again at the beginning of the week: on Sunday, gas was $2.22, then on Monday, it was up by a dime.
Yeah. Since I left that message, gas here went from 87 cents/litre to 97. In some places in Canada it’s now well over $1.00/L
> [@](#):
>
> This would normally correct things over time, but you’ve got to remember, cars last a decade or so nowadays, so you’ve got to allow for that much time for market forces to play out in this arena. If we’re trying to replace 25 mpg vehicles with 40 mpg vehicles, two years from now the average of the originals and replacements will be 28 mpg.
Absolutely. I made the same point in another thread just a little while ago. The median age of cars in the U.S. is around 9 years right now, and going up dramatically. The quality of cars today is quite high. The scrappage rate last year was only 5% of the fleet. If that rate holds, it’ll take 20 years to turn the entire fleet over. And my guess is that it’ll take longer than that, because the scrappage rate today is based on decade old cars or older, and the quality was lower then.
> [@](#):
>
> In the past, we’ve had sudden increases in oil prices (1973-4, 1979-80) followed by long periods of stability that gave these slow-moving market forces a chance to catch up. I don’t think that’s a good model for what we’re starting to see happen: a continual escalation of oil prices. Once the _rate of increase_ in oil production is slower than what the rate of _increase in demand_ would be if prices stayed fixed (at whatever level they’re at, at the time), prices will go up.
That’s certainly possible. The big factor is is the rapidly increasing demand for oil in China and other emerging asian nations. China is expected to triple the number of cars on its roads in the next decade. China is currently the world’s largest consumer of concrete. They’re building like mad over there. It remains to be seen if oil production can ramp up around the world fast enough to keep up with the growth in demand. Even if we haven’t hit ‘peak oil’, we could still be in a position where the growth rate in supply can’t match the growth rate in demand.
Still, there are limiting factors. If gas gets high enough, you will see conservation start to really take off. High energy prices could put the brakes on development in China. And if energy gets expensive enough, I think you’ll see the opposition to nuclear power fade very quickly and we’ll see a rapid buildup of nuclear power plants.
> [@](#):
>
> Hey, it’s _my_ idea, and wouldn’t stand a chance, no matter how many exceptions, in America in 2005, or any time in the past 25 years, for that matter, so I’m just bemoaning the general lack of common sense and foresightedness that prevents proactive approaches like this.
I’m not convinced that people behave in a particularly irrational way with respect to energy today. After all, there is a futures market in oil, and it represents the best estimates we have for how expensive oil will be in the future. Perhaps we truly are using energy optimally today from an economic standpoint, and as the price rises we’ll adjust to the new reality in a rational manner. I can tell you I personally feel a lot more incentive to remember to turn off the lights if failing to do so is going to cost me $1.00 instead of a few pennies. And if wearing a sweater in the house will save me $200/mo in heating costs, I’ll do it. But I won’t live uncomfortably to save $5/mo. That’s just the reality of the way most people make such decisions.
Another example: As recently as two years ago, I didn’t much care what the mileage was of the cars I was shopping for. I knew I didn’t want a big hulking SUV that gets 10 mpg, and I didn’t want a tiny econobox that gets 40mpg. In the range between that, the difference in operating costs between vehicles where the mileage differs by 10% or 20% just wasn’t a big deal to me. I drive about 10,000 miles per year. A car that gets 20mpg would burn 500 gallons over that year. One that gets 25 mpg will burn 400. So the difference in operating cost was maybe $20/mo. When you’re looking at a purchase that will cost you $600/mo or more, that’s pretty trivial.
But now, the situation has already changed. Now I have to look at things like resale value, and the expected cost of gas over the entire life of the vehicle, assuming it increases constantly. If gas is $4/gallon, now I’m looking at a $40/mo difference. And if the lower mileage vehicle loses $2000 of its value more over five years than a higher mileage vehicle, suddenly the total cost of ownership might be $100/mo more for the vehicle with only slighly less mileage.
It’s calculations like that that will push widespread adoption of more efficient vehicles and of conservation. Not government regulation or the pleas of environmental groups.
> [@](#):
>
> But I’d have _no_ exceptions: my thesis is that prices will go up eventually, and businesses will have to deal with it sooner or later; this just makes it sooner. I’m just coupling good energy policy with a Dem-style tax cut, and a way of cushioning the effects of higher gas prices for those who’ll have the hardest time with them.
Except your tax cut may wind up being regressive, so it’s not really ‘dem style’. Without exemptions, you drive up the cost of food and transportation. For poor people, that’s a bigger chunk of their income than it is for rich people. A new BMW gets better gas mileage than the '74 Impala the poor guy is driving.
> [@](#):
>
> Our heavily-subsidized farmers would just have to get by on their usual subsidies. I’ve never figured out why Americans should subsidize one particular ‘lifestyle’ anyway. Nobody’s subsidizing people to keep their typewriter repair businesses afloat.
Right with you on that. Farm subsidies are ridiculous. As a class, farmers are generally wealthier than the average person anyway. One of the more obnoxious family spectacles I had to endure was going to a family reunion where all my farmer relatives were bitching about not getting enough subsidies - while the road in front of the house was lined with Cadillacs, new Buicks, or $55,000 luxury trucks. The net worth of the five relatives in the room with me was probably close to $5 million dollars, but man, they all claimed they were going broke unless they got more handouts.
Besides, subsidies hurt farming. They don’t help it. They distort the market and prevent it from being more competitive. New Zealand had one of the most subsidized farm industries in the developed world. Then the country nearly went bankrupt, and got rid of almost all their subsidies. Farmers kicked and screamed, and we heard all the same complaints about the family farm being lost, etc. Now, a couple of decades later, New Zealand farming is much healthier than it was in the old highly subsidized regime.
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### Author:  [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)
#### Post date: [July 16, 2005, 6:00pm UTC](https://boards.straightdope.com/t/peak-oil-the-real-scoop/311124/83 "2005-07-16T18:00:58Z")
> [@msmith537](#):
>
> Because it doesn’t work that way. It’s not like buying a stock. You are agreeing to buy the asset (in this case oil) at a given point in time. The price of the contract already incorporates what the expected future price will be (discounted at the risk free rate), based on estimates of supply, production, risk, and so on. So in other words, it’s not a matter of guessing that the price will go up. It’s a matter of will the price go up more or less than specified the contract.
The point is, if you think ‘peak oil’ has happened and prices are going to go up dramatically, and the futures market doesn’t agree with you, then you could make a killing. Since the future’s market in oil right now isn’t really showing a constant increase, you could make a killing if oil does skyrocket like you say it will.
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### Author:  [@coldie](https://boards.straightdope.com/u/coldie)
#### Post date: [July 16, 2005, 6:36pm UTC](https://boards.straightdope.com/t/peak-oil-the-real-scoop/311124/84 "2005-07-16T18:36:45Z")
Right now u can buy crude oil for delivery in December 2011 for $55.05/bbl. If u really are confident that oil prices will skyrocket, u should jump at the chance to invest every spare dollar in such a contract. Put ur money where ur mouth is.
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### Author:  [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)
#### Post date: [July 16, 2005, 7:25pm UTC](https://boards.straightdope.com/t/peak-oil-the-real-scoop/311124/85 "2005-07-16T19:25:14Z")
Coldie: I hope you don’t take this the wrong way, but you should really learn to type ‘you’ instead of ‘u’, and ‘you are’ instead of ‘ur’. Your messages will sounds much more intelligent and you’ll find you get a much better reaction to what you are saying.
And after a while, you’ll be able to bang out a ‘you’ just about as fast as ‘u’ anyway.
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### Author:  [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)
#### Post date: [July 16, 2005, 7:27pm UTC](https://boards.straightdope.com/t/peak-oil-the-real-scoop/311124/86 "2005-07-16T19:27:01Z")
Sigh…
> [@](#):
>
> Your messages will sounds much more intelligent
And in the meantime, I’ll continue sounding like Popeye.
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### Author:  [@XT](https://boards.straightdope.com/u/XT)
#### Post date: [July 16, 2005, 9:01pm UTC](https://boards.straightdope.com/t/peak-oil-the-real-scoop/311124/87 "2005-07-16T21:01:26Z")
> [@coldie](#):
>
> Right now u can buy crude oil for delivery in December 2011 for $55.05/bbl. If u really are confident that oil prices will skyrocket, u should jump at the chance to invest every spare dollar in such a contract. Put ur money where ur mouth is.
Actually I’ve invested in oil futures anticipating rising prices…and I don’t happen to think that the collapse is just around the corner.
And Sam is right…on this board its best to type out ‘you’ and ‘your’ if you are going to post, especially in this particular forum. Also, you should try and make a better arguement for why you think Peak Oil is bunk than to simply challenge folks who believe the theory that they should invest or they don’t REALLY believe it. Belief in Peak Oil being imminent, or its potential effects if/when it does happen (actually, I doubt there is much debate that someday oil production will peak…the debate is when and what effect it will have IMO) doesn’t necessarily translate into investment or non-investment. As I said, I don’t happen to believe that oil production will peak anytime soon, nor do I believe that peaking production will be the end of the world…or even a significant down turn…yet I’m still investing in oil futures. Funny how it works out.
-XT
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### Author:  [@coldie](https://boards.straightdope.com/u/coldie)
#### Post date: [July 16, 2005, 9:31pm UTC](https://boards.straightdope.com/t/peak-oil-the-real-scoop/311124/88 "2005-07-16T21:31:10Z")
> **[Simon–Ehrlich wager](https://en.wikipedia.org/wiki/Ehrlich-Simon_bet)**
>
> The Simon–Ehrlich wager was a 1980 scientific wager between business professor Julian L. Simon and biologist Paul Ehrlich, betting on a mutually agreed-upon measure of resource scarcity over the decade leading up to 1990. The widely-followed contest originated in the pages of Social Science Quarterly, where Simon challenged Ehrlich to put his money where his mouth was. In response to Ehrlich's published claim that "If I were a gambler, I would take even money that England will not exist in the ye...
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### Author:  [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)
#### Post date: [July 17, 2005, 1:11am UTC](https://boards.straightdope.com/t/peak-oil-the-real-scoop/311124/89 "2005-07-17T01:11:40Z")
> [@coldie](#):
>
> [http://en.wikipedia.org/wiki/Ehrlich-Simon\_bet](http://en.wikipedia.org/wiki/Ehrlich-Simon_bet)
One more bit of board convention: a cite _supports_ an argument; it doesn’t _substitute_ for one. Your post should speak for itself; links should back up assertions and factual statements in your post.
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### Author:  [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)
#### Post date: [July 17, 2005, 8:10pm UTC](https://boards.straightdope.com/t/peak-oil-the-real-scoop/311124/90 "2005-07-17T20:10:19Z")
> [@Sam Stone](#):
>
> Yeah. Since I left that message, gas here went from 87 cents/litre to 97. In some places in Canada it’s now well over $1.00/L
Ouch. That’s all I’ve got to say. That’d be like a 32¢/gallon price hike down here, if I’m doing the currency and liquid measure conversions right - and believe me, a price hike like that would grab people’s attention if it happened that quickly.
> [@](#):
>
> Absolutely. I made the same point in another thread just a little while ago. The median age of cars in the U.S. is around 9 years right now, and going up dramatically. The quality of cars today is quite high. The scrappage rate last year was only 5% of the fleet. If that rate holds, it’ll take 20 years to turn the entire fleet over. And my guess is that it’ll take longer than that, because the scrappage rate today is based on decade old cars or older, and the quality was lower then.
The _median_ age is 9 years?! Wow. I’m having a hard time seeing that, though - that there could be as many 1995-and-earlier cars on the road as there are 1997-2005 cars.
> [@](#):
>
> That’s certainly possible. The big factor is is the rapidly increasing demand for oil in China and other emerging asian nations. China is expected to triple the number of cars on its roads in the next decade. China is currently the world’s largest consumer of concrete. They’re building like mad over there. It remains to be seen if oil production can ramp up around the world fast enough to keep up with the growth in demand. Even if we haven’t hit ‘peak oil’, we could still be in a position where the growth rate in supply can’t match the growth rate in demand.
>
> Still, there are limiting factors. If gas gets high enough, you will see conservation start to really take off. High energy prices could put the brakes on development in China.
The problem (as you’ve pointed out) is, the only _quick_ way to conserve gasoline is by _not driving_. And it will take scary-high gas prices for that to happen enough to make a difference. I’m reasonably sure people will drive less when gas hits $7/gallon than when gas is $2.33/gallon, but my bet is that we’ll have the stagflation of the ‘70s return - higher prices due to increased transport costs; decreased economic activity as a result - before we get enough change in drivers’ habits to make a difference.
> [@](#):
>
> And if energy gets expensive enough, I think you’ll see the opposition to nuclear power fade very quickly and we’ll see a rapid buildup of nuclear power plants.
I’m ready for more nuclear, as soon as we figure out how to safely transport the waste across the country to Yucca Mountain. But we’re still a good ways away from getting the power from _any_ sort of power plant to fuel automobiles.
> [@](#):
>
> I’m not convinced that people behave in a particularly irrational way with respect to energy today…I can tell you I personally feel a lot more incentive to remember to turn off the lights if failing to do so is going to cost me $1.00 instead of a few pennies. And if wearing a sweater in the house will save me $200/mo in heating costs, I’ll do it. But I won’t live uncomfortably to save $5/mo. That’s just the reality of the way most people make such decisions.
Well, yeah, I can’t disagree with that. But those decisions are rational _at the micro level, at present prices_. And that’s what one can reasonably expect out of consumers, in quantity. I’m not going to berate consumers for buying gas guzzlers that are perfectly affordable now, but might not be two years from now; I’m going to berate the people running this country for ignoring the trouble approaching.
> [@](#):
>
> It’s calculations like that that will push widespread adoption of more efficient vehicles and of conservation. Not government regulation or the pleas of environmental groups.
But in the meantime, you have 10-20 years’ worth of old, inefficient vehicles out on the road that will take that long to phase out. Sure, it’ll all eventually come to pass, but we coulda planned ahead, included all 4+ wheel vehicles marketed to the noncommercial-user market in the CAFE standards, and then raised the CAFE standards. That would have eased the demand side considerably, and bought us a bit more time to figure out how to power cars with fuel cells or something.
> [@](#):
>
> Except your tax cut may wind up being regressive, so it’s not really ‘dem style’. Without exemptions, you drive up the cost of food and transportation. For poor people, that’s a bigger chunk of their income than it is for rich people. A new BMW gets better gas mileage than the '74 Impala the poor guy is driving.
Which is why I (in my fantasy) have created a tax cut that gives everyone the same actual amount of money, so the tax cut is also a much bigger chunk of the poor person’s income than the rich person’s.
And how many '74 Impalas are on the road anyway?
> [@](#):
>
> Right with you on that. Farm subsidies are ridiculous.
Glad we can agree on that, at least!
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### Author:  [@msmith537](https://boards.straightdope.com/u/msmith537)
#### Post date: [July 17, 2005, 11:21pm UTC](https://boards.straightdope.com/t/peak-oil-the-real-scoop/311124/91 "2005-07-17T23:21:24Z")
> [@Sam Stone](#):
>
> The point is, if you think ‘peak oil’ has happened and prices are going to go up dramatically, and the futures market doesn’t agree with you, then you could make a killing. Since the future’s market in oil right now isn’t really showing a constant increase, you could make a killing if oil does skyrocket like you say it will.
First of all, I didn’t say it will do anything in particular. I don’t know if and when peak oil will happen. I just know that with the information I have today, at some point we will reach a production peak. Technology or whatever might offset that, but I don’t have a crystal ball so I can’t make any predictions.
Second of all, I don’t believe that oil contracts extend for more than a year or so at the most. Too short a time to show the long-term increases passing a production peak would cause.
Third, I’m also pretty sure one does not buy some generic contract in “oil”. Crude oil is classified and priced by the region it comes from and regions peak at different times.
Fourth, I pretty sure the oil companies have a pretty good idea as to the size of the fields they are drilling, their production ability and all of the other factors that contribute to setting the price of oil.
So in other words, you can’t get rich doing what you say because in the near term (at least as it is relevant to oil futures) we can estimate how much oil we have and can produce, and that price is already incorporated - adjusted for risk- into the price.
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### Author:  [@Blake](https://boards.straightdope.com/u/Blake)
#### Post date: [July 17, 2005, 11:40pm UTC](https://boards.straightdope.com/t/peak-oil-the-real-scoop/311124/92 "2005-07-17T23:40:25Z")
But msmsith your information also told you that we would be totally unable to build infrastructure without using oil and that we’d be totally unable to maintain current food production levels without oil and that all societies collapse when rerquired resoucres are depleted and that thelast time people were on the moon was 50 years ago. All of those statements were pure bunkum with no basis in reality.
I’m assuming here, and feel free to say otherwise, that your information comes from the numeporus peak oil scare websites. That isn’t a reliable source of information as you can tell.
Nobody doubts that oil has to peak one day. Even if those who believe that oil is a geological and not a biological product are correct we are still extracting it far faster than it is being generated. It requires pretty simple mathematics to se that oil production will have to peak eventually.
The thing is that a pek in poil production won’t mean inevitable starvation and societal collapse as you said in your opening posts. There are simply to many alternatives open to us for that to ever be a possibility.
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### Author:  [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)
#### Post date: [July 17, 2005, 11:47pm UTC](https://boards.straightdope.com/t/peak-oil-the-real-scoop/311124/93 "2005-07-17T23:47:41Z")
> [@RTFirefly](#):
>
> Ouch. That’s all I’ve got to say. That’d be like a 32¢/gallon price hike down here, if I’m doing the currency and liquid measure conversions right - and believe me, a price hike like that would grab people’s attention if it happened that quickly.
Gas prices fluctuate wildly here. I’m not quite sure why. One week it’ll be 82 cents a litre, the next week 90. Then 85, then 92. Only a handful of years ago in Alberta it was around 50 cents.
> [@](#):
>
> The _median_ age is 9 years?! Wow. I’m having a hard time seeing that, though - that there could be as many 1995-and-earlier cars on the road as there are 1997-2005 cars.
[From this cite:](http://www.autosalvageconsultant.com/eNewsletter/february%202005.htm)
> [@](#):
>
> The U.S. passenger car fleet is the oldest in history with a median age of 8.9 years, a survey by Southfield, Mich.-based R.L. Polk & Co. said. For trucks, the median age was 6.6 years because of the record 9.8 million new trucks registered in 2004. Passenger cars comprised 59 percent of all vehicles on U.S. roads last year and trucks 41 percent. “Since vehicles are lasting longer, and new light truck registrations around 9 million, we will see a noticeable change in the proportion of cars versus light trucks in the near future,” said Marty Miller, product manager of the automotive information service. The percentage of total U.S. vehicles scrapped in 2004 was 5.3 percent, the lowest in two years. The passenger car scrappage rate was 4.8 percent, the lowest in 56 years. The overall rate of trucks heading to the junkyard fell to 6 percent from 7.7 percent in 2003.
There’s some good news in there. The truck scrappage rate is much higher than the passenger car scrappage rate. Trucks are disproportionately responsible for lower fleet mileage, so as people turn away from trucks and large SUVs, the CAFE average should increase a little faster.
It’s also important to remember that the median age of 9 years does not mean that 9 years from now half the fleet will be 2005 cars or newer. Part of the scrappage rate is due to accidents and other vehicle damage, and that applies across all years. So if the median age of the fleet is 9 years, that implies that the operational lifespan of a vehicle is significantly higher. And that stat is based on today, when the cars retiring were generally built in the late 80’s - early 90’s. Cars today are built much better. I wouldn’t be surprised to see the average lifespan of a car built in the last five years be twenty years or more.
On yet another hand, if fuel really does go through the roof, that will push more of these cars out of service faster.
> [@](#):
>
> The problem (as you’ve pointed out) is, the only _quick_ way to conserve gasoline is by _not driving_. And it will take scary-high gas prices for that to happen enough to make a difference.
This is true.
> [@](#):
>
> I’m reasonably sure people will drive less when gas hits $7/gallon than when gas is $2.33/gallon, but my bet is that we’ll have the stagflation of the ‘70s return - higher prices due to increased transport costs; decreased economic activity as a result - before we get enough change in drivers’ habits to make a difference.
I have no idea. I don’t think we’re going to see $7/gallon gas for a long, long time, if ever. I think the change will be gradual enough to give people time to adjust. As was pointed out above, the current contract price for a barrel of oil in 2011 is about the same as it is today. If you don’t believe that’s true, you should buy up a whole bunch of those contracts. For gas to hit $7/gallon at the pump, oil would probably have to be $200/bbl. You could quadruple your money. The fact is, the people who are in the best position to know this are not snapping up these contracts. With a commodity like oil, the market is generally extraordinarily good at predicting future value.
> [@](#):
>
> I’m ready for more nuclear, as soon as we figure out how to safely transport the waste across the country to Yucca Mountain. But we’re still a good ways away from getting the power from _any_ sort of power plant to fuel automobiles.
If you are building nuclear plants for the purpose of providing hydrogen for cars, you don’t have to transport the waste - you build the plants right at Yucca mountain, create hydrogen there, and pump it around the country. The waste never leaves the secure area.
But I think the problem of transporting waste has been greatly exaggerated. We already ship nuclear waste around, and have for decades. As far as I know, there has never been a transportation accident leading to a major contamination. The containers used are engineered and tested to survive any conceivable accident, and these convoys are hard targets and not likely to be attacked by terrorists. And if they are vulnerable, well, we just work harder to remove the vulnerability. Guard them with bleeming tanks and gunships if you have to. Besides, these containers weigh many tons. A terrorist isn’t going to be able to make off with one. It’s just not going to happen.
> [@](#):
>
> Well, yeah, I can’t disagree with that. But those decisions are rational _at the micro level, at present prices_. And that’s what one can reasonably expect out of consumers, in quantity. I’m not going to berate consumers for buying gas guzzlers that are perfectly affordable now, but might not be two years from now; I’m going to berate the people running this country for ignoring the trouble approaching.
Again, the people with the best information today don’t seem to think there’s a near-term problem, and the looming ‘crisis’ today looks no worse than the energy crisis of the 70’s. Who would have predicted in 1975 that 30 years later gas would be cheaper in constant dollars than it was then? Good thing the alarmism of the time didn’t spur the government into taking draconian action.
> [@](#):
>
> But in the meantime, you have 10-20 years’ worth of old, inefficient vehicles out on the road that will take that long to phase out. Sure, it’ll all eventually come to pass, but we coulda planned ahead, included all 4+ wheel vehicles marketed to the noncommercial-user market in the CAFE standards, and then raised the CAFE standards. That would have eased the demand side considerably, and bought us a bit more time to figure out how to power cars with fuel cells or something.
If you waved a magic wand tomorrow and converted every SUV in America into a car that got the CAFE average fuel economy, do you know how much you would lower oil consumption in the U.S? By something like 1.5-3%. Since demand is growing by more than that per year, even in the U.S., the net effect would be to simply push the ‘problem’ down the road by a year. SUVs aren’t the problem. That’s why Dick Cheney was right when he said, “Conservation is a personal virtue, but not a basis for a sound energy policy.”
Conservation will help flatten the demand curve, but it won’t turn it negative. Even if we could somehow cut our current energy consumption by 20% (which would be a herculean task), we’ll be back to consuming as much as we do today in about 10 years.
> [@](#):
>
> Which is why I (in my fantasy) have created a tax cut that gives everyone the same actual amount of money, so the tax cut is also a much bigger chunk of the poor person’s income than the rich person’s.
I think an overall tax on energy coupled with tax credits is just inefficient. You’re punishing high-energy products and services and rewarding low energy ones. That’s fine from a conservation standpoint, but not necessarily from the standpoint of what’s best for the country. You just distort markets, drive companies under, cause dislocations of capital, and distort the price system. You could easily kick off the very recession you’re worried is coming when energy prices go up on their own.
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### Author:  [@msmith537](https://boards.straightdope.com/u/msmith537)
#### Post date: [July 18, 2005, 1:39am UTC](https://boards.straightdope.com/t/peak-oil-the-real-scoop/311124/94 "2005-07-18T01:39:37Z")
> [@Blake](#):
>
> But msmsith your information also told you that we would be totally unable to build infrastructure without using oil and that we’d be totally unable to maintain current food production levels without oil and that all societies collapse when rerquired resoucres are depleted and that thelast time people were on the moon was 50 years ago. All of those statements were pure bunkum with no basis in reality.
They are bunkum because:
a) Societies never collapse when their resource usage outstrips their availability?
b) Our society is not dependent on oil?
c) Oil is not an infinite resource?
d) We are not confined to this planet and the area just around it?
e) Relatively minor disruptions in the supply of oil don’t cause big problems (like in the 70s)?
f) Most people can afford to pay an extra $1000 a month in heating and fuel costs?
shall I go on? No, I don’t think all of society will collapse. But I can see a lot of really big potential problems if we as a society choose to ignore the fact that some day we will run out of oil.
---
### Author:  [@Blake](https://boards.straightdope.com/u/Blake)
#### Post date: [July 18, 2005, 2:07am UTC](https://boards.straightdope.com/t/peak-oil-the-real-scoop/311124/95 "2005-07-18T02:07:43Z")
Well I’m glad you can see a lot of problems msmith.
The problem is that your opening post wasn’t full of you pointing out potential problems. The problem is that your opening post was full of ignorant rubbish. And we know that it was ignorant rubbish because I’ve asked you to support the claims with something and your are totally unable to do so.
Your claim that societies always collapse when essential resources are depleted? Ignorant rubbish.
Wood, and the charcoal it produced, was an essential resource for the production of steel and hence essential for the western world. The usage of wood for charcoal led to massive deforestation and the depletion of Europe’s forest resources. Yet European civilisation did not collapse, it merely switched to a new resource; coal.
Your claim that it has been over 50 years since people were last on the moon? Ignorant rubbish.
People didn’t first get to the moon until 36 years ago, and the last manned mission was in 1972, a mere 33 years ago.
Your claim that current food production will be impossible without petroleum? Ignorant rubbish.
There is nothing essential for food production that is found in petroleum. Anything in petroleum can be readily extracted from coal or if necessary form the air itself.
Your claim that we cannot build pipelines and refineries without using oil? Ignorant rubbish.
We can build pipelines and refineries using nothing but coal electric or nuclear electric power. Petroleum is not required for one single part of pipeline or refinery construction.
Your claim that any transition away from oil must inevitably be slow and may well be impossible? Ignorant rubbish.
There is nothing at all that makes it impossible to make the transition away form oil in a matter of decades.
Mssmith since you didn’t challenge it I’m assuming that I hit the nail on the head when I said that you take all your ‘information’ from alarmist peak oil websites. They aren’t good sources of information, as you have just proved.
This place is supposed to be about fighting ignorance, not propagating it. If those websites want to make BS claims that the world can’t produce food without oil that’s there affair, but it doesn’t really belong on this website unless you can back the claim up with something. Those sorts of claims are alarmist rubbish and ignorant in the extreme.
See, the problem is msmith that you didn’t claim that societies sometimes collapse when resources are depleted you said they always did.
You didn’t claim that minor disruptions in the supply of oil cause big problems, you said that we couldn’t possibly even maintain food production without oil.
You didn’t claim that oil isn’t infinite, you claimed that we couldn’t build pipelines and refineries without oil.
And so on. You posted a lot of statements that were ignorant and verging on the hysterical. I asked you politely for something to support the claims and instead of simply admitting that you made the whole lot up you insisted on pretending to actually address the questions. Well mate you haven’t. You have dodged around the issues repeatedly and made it quite clear that you have no ability at all to back up those claims you made.
So I’m calling bullshit. msmsith those comments are clearly and provably bullshit with no evidential support. Why should anyone reading this thread believe anything you say on this topic now that you have proven that you are willing to post ignorant rubbish on the subject to try to drum up support for your position?
> [@](#):
>
> Our society is not dependent on oil?
That depends entirely on what definition of ‘dependent’ you are using.
If you mean that our society is conditioned by but not always attached to oil then yes, it’s dependent. But Note that this definition specifically precludes reliance. We can do without it and would do if that was convenient or merely desired.
If you mean that our society is reliant on oil for support then no, we are not dependent on oil. There is no possible way that our society will cease to support itself simply because we don’t have oil. Even you admit that.
---
### Author:  [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)
#### Post date: [July 18, 2005, 4:26am UTC](https://boards.straightdope.com/t/peak-oil-the-real-scoop/311124/96 "2005-07-18T04:26:45Z")
> [@Blake](#):
>
> Your claim that any transition away from oil must inevitably be slow and may well be impossible? Ignorant rubbish.
>
> There is nothing at all that makes it impossible to make the transition away form oil in a matter of decades.
Heads up, **Blake.** In this situation, “a matter of decades” = “slow.” **Too** fucking slow. View this table showing expected post-peak decline in global oil production: [http://en.wikipedia.org/wiki/ASPO](http://en.wikipedia.org/wiki/ASPO) According to this, by 2020, global production should be back down to where it was in 1990 – when global demand for it was significantly less, since India and China were less developed – and by 2030 it will be down where it was in 1970. You really think we can get from here to there without a global economic crisis?
---
### Author:  [@Blake](https://boards.straightdope.com/u/Blake)
#### Post date: [July 18, 2005, 5:03am UTC](https://boards.straightdope.com/t/peak-oil-the-real-scoop/311124/97 "2005-07-18T05:03:35Z")
A few points that need clarifying BrainGlutton.
First, what does that graph actually show? There is no legend whatsoever, which makes it effectively meaningless. Are those billions of barrels of oil refined from all sources? Or is it billions of barrels from only conventional liquid reserves? Or is it in fact billions of barrels used? The graph is so vague that it doesn’t even make it clear whether that is production or usage that’s being shown. It’s meaningless.
Now assuming that it’s production it’s only showing liquid oil production. It doesn’t even include oil shales, tar sands and so forth. Don’t you think it’s reasonable that oil prices will rise concomitant with production decline? And if that is the case won’t non-liquid reserves come into production once the production of liquid reserves drop to pre-1190 levels? And if so won’t that produce an effective price freeze for the next few hundred years? And if that is the case why is 20 years to slow?
The next thing is that you are saying that demand will remain static even when production declines. How does that work? How can production decline and demand remain static when demand is so closely tied to cost? Surely at some point people will move to alternative resources like oil shales or coal electric won’t they?
And most importantly, that shows a gradual decline. The US was an oil based economy in 1950, and according to that graph we have seem to have over 200 years before production drops below 1950 levels. So we won’t actually have to make our changes in 20 years will we? We’ll have at least 10 times that won’t we? That is why nobody cares. My point was that if the necessity existed we could make the change in matter of decades. But the necessity doesn’t exist does it? We won’t actually _need_ to move away from oil as the primary transport energy and chemical feedstock for the next century will we?
And that being the case why is 20 years too fucking short?
And heads up: Campbell, who you just cited, is very much in a minority on those figures and in disagreement with every major organisation in the world from the USGS to the WEC. Campbell is, amongst other things, an investment broker to the fuels industry. He makes money out of encouraging investment. He has a vested in interest in publicising the value of oil in the coming years. That doesn’t make his work wrong but we should make sure that the facts on Campbell are on the table so we know how to view them. While you have a figure from Campbell there are numerous other far more respected and independent bodies that say that no such decline in production will occur for the foreseeable future.
It’s a choice between someone who gets financial reward for convincing people of a looming shortage in the commodity he sells and indepdendent organisations who say that there is no reason to believe in such a shortage. That’s not to say that Campbell is wrong, but where do you think the smart money is? People say we shouldn’t blindly trust the private sector on these issues because they have a finacial stake, which is a fair enough position. But what is surprising is they are often the same people who are most willing to accept Campbell over the USGS or WEC or WEO.
---
### Author:  [@Uzi](https://boards.straightdope.com/u/Uzi)
#### Post date: [July 18, 2005, 7:20am UTC](https://boards.straightdope.com/t/peak-oil-the-real-scoop/311124/98 "2005-07-18T07:20:22Z")
> [@Fat Cat](#):
>
> Wired mag recently had a long article on the Canadian oil sand thing. To keep this short the quality was poor and the process expensive.
While the process is expensive relative to places like Saudi Arabia, it isn’t much more expensive than extracting heavy crude. It will become less expensive due to technological advances and new infrastructure. I know the company I work for is hoping for a cost to produce at around $10 a barrel. So, ~$50 barrel of oil - $10 = ~$40 in you pocket (yes, a whole other pile of costs are involved, but they apply to all oil produced not just oilsands).
[Article from Shell way back in 2003](http://www.shellchemicals.com/magazine/1,1098,896-article_id=156,00.html)
Quality is based upon how much you refine it before sale. This add to the cost of producing it. This link relates to Syncrude. They produce a high quality light crude.
[Syncrude](http://www.cos-trust.com/asset/)
---
### Author:  [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)
#### Post date: [July 18, 2005, 7:41am UTC](https://boards.straightdope.com/t/peak-oil-the-real-scoop/311124/99 "2005-07-18T07:41:11Z")
This seems like an appropriate moment to link some news:
[quote]
[http://www.prnewswire.com/news/index\_mail.shtml?ACCT=ind\_focus.story&STORY=/www/story/07-14-2005/0004067431&EDATE=THU+Jul+14+2005,+11:02+AM](http://www.prnewswire.com/news/index_mail.shtml?ACCT=ind_focus.story&STORY=/www/story/07-14-2005/0004067431&EDATE=THU+Jul+14+2005,+11:02+AM)]Daimler Chrysler Delivers Fuel Cell Vehicle
> [@](#):
>
> AUBURN HILLS, Mich., July 14 /PRNewswire-FirstCall/ – Today,
> DaimlerChrysler and Inergy Automotive Systems made another achievement in fuel
> cell technology. Inergy became the first Michigan F-Cell customer since the
> DOE Hydrogen Learning Demonstration Project kickoff in Washington, D.C.
> Inergy will use the DaimlerChrysler F-Cell in daily use to provide further
> knowledge on operational capabilities and to help conduct research on hydrogen
> storage.
> Daily use of the F-Cell will supply technical data that will help improve
> the next generation of fuel cell vehicles (FCV)s. DaimlerChrysler’s efforts
> are continued proof that the company is committed to fuel cell vehicles.
> “Through government programs and more than one billion invested in fuel
> cell technology, DaimlerChrysler continues its mission to move zero-emission
> vehicles from the laboratory to the open road,” said Mark Chernoby, Vice
> President, Advance Vehicle Engineering - Chrysler Group. “Inergy Automotive
> Systems is among DaimlerChrysler’s first customers in the DOE Hydrogen
> Learning Demonstration Project.”
> Inergy will refuel the F-Cell at the DTE Energy Hydrogen Technology Park
> in Southfield, Michigan, with a BP hydrogen dispenser. A community event at
> the Technology Park this Saturday, July 16th will give the public a chance to
> see how hydrogen is produced, stored and utilized. Attendees will also have
> the opportunity to see a UPS fuel cell-powered Sprinter Van and the Inergy F-
> Cell, both built by DaimlerChrysler.
> The largest fleet of fuel cell vehicles in the world is managed by
> DaimlerChrysler. The F-Cell delivered today is part of DaimlerChrysler’s 100-
> plus fuel cell vehicle fleet that the Company has put into service around the
> world. The Inergy F-Cell also will contribute to the DOE Hydrogen Learning
> Demonstration Project.
> The F-Cell is a reflection of DaimlerChrysler’s leadership in fuel cell
> technology. The entire fuel cell system is housed in the floor of the
> vehicle, leaving full use of the passenger and cargo spaces. It has a range
> of approximately 100 miles and a top speed of 85 mph. The electric motor
> develops 88 hp (65 kW), enabling acceleration from 0 to 60 mph in 14 seconds.
> The stack is developed by DaimlerChrysler’s cooperation partner, Ballard Power
> Systems.
> Inergy Automotive Systems is a tier one full service supplier of the
> complete fuel systems. The world leader provides breakthrough solutions in
> integrated fuel systems to the automotive world.
> Through the DOE Controlled Hydrogen Fleet and Infrastructure Demonstration
> and Validation Project, DaimlerChrysler will place more fuel cell vehicles in
> the hands of customers, who will provide valuable feedback about performance
> under different conditions. DaimlerChrysler is testing over 100 fuel cell
> vehicles under varying weather, traffic conditions and driving styles in
> different locations worldwide. This experience will benefit the development
> of the fuel cell automobile and how it will be refueled. BP is the energy
> partner of DaimlerChrysler in the project. The DTE Energy Hydrogen Technology
> Park is the first public hydrogen refueling station in Michigan.
> DaimlerChrysler has been involved in fuel cell technology for more than 10
> years. Fuel cells release energy from the reaction of hydrogen and oxygen
> with a catalyst. This clean technology operates to a high level of efficiency
> and is true zero emission. Hydrogen-powered fuel cell vehicles emit only pure
> water vapor as exhaust. Fuel cell vehicles are part of DaimlerChrysler’s
> advanced propulsion technology umbrella, which also includes exceptionally
> efficient gasoline engines, advanced diesels, alternative fuels and hybrid
> powertrain systems.
Apparently, this car uses an older technology fuel cell. The new ones can put out about 70% more power, and the range increases to 250 miles.
A car with the equivalent of 134 HP and a range of 250 miles is a very practical car. And you could augment that with battery power as a hydrogen hybrid.
We’re starting to see actual daylight in the hydrogen car field. Cost is still prohibitive, both for the hydrogena and for the hardware in the car. But it seems things are getting better with each year that passes.
---
### Author:  [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)
#### Post date: [July 18, 2005, 8:53am UTC](https://boards.straightdope.com/t/peak-oil-the-real-scoop/311124/100 "2005-07-18T08:53:31Z")
> [@Blake](#):
>
> First, what does that graph actually show? There is no legend whatsoever, which makes it effectively meaningless. Are those billions of barrels of oil refined from all sources? Or is it billions of barrels from only conventional liquid reserves? Or is it in fact billions of barrels used? The graph is so vague that it doesn’t even make it clear whether that is production or usage that’s being shown. It’s meaningless.
You can find a color version of the same chart at this page: [http://www.peakoil.org/](http://www.peakoil.org/) It has a legend stating that this is “Regular Oil and Natural Gas Liquids – 2003 Base Case Scenario.” If that helps. Note that U.S. oil production (the green field on the bottom) peaked around 1970 (as M. King Hubbert predicted back in the '50s), and has been on the downslope ever since.
> [@Blake](#):
>
> The next thing is that you are saying that demand will remain static even when production declines. How does that work? How can production decline and demand remain static when demand is so closely tied to cost? Surely at some point people will move to alternative resources like oil shales or coal electric won’t they?
IANA economist, but I think I have a basic grasp of these concepts – and I think you are obfuscating the important difference between the way consumers change their behavior in response to supply changes in the short term, and the much, much slower process by which governments and industries change policies or develop new technologies to adapt to changed circumstances.
In the short term, demand for a good is elastic, and responsive to price changes, only when the consumers have a **choice.** WRT to our most important uses for petroleum, neither individuals nor national economies have any choice. I, personally, **must** be able to obtain a certain amount of gasoline in a given year to meet my basic transportation needs in the built environment within which I live. If gas prices go up, I’ll have to cut other things out of my budget – and if that’s impossible, I’m fucked. We, as a country, **must** have X amount of oil available in a given year in order to continue running our economy the way we have been running it. Those are basic conditions.
In the medium- to long-term, new technology might provide a way out of this problem – or it might not. Never assume a given technology will emerge, or can be made to work, just because we need it really bad.
> [@Blake](#):
>
> The US was an oil based economy in 1950, and according to that graph we have seem to have over 200 years before production drops below 1950 levels. So we won’t actually have to make our changes in 20 years will we? We’ll have at least 10 times that won’t we?
No. Because in 1950 the U.S. was using less than nine billion barrels of oil per day, and now we are using more than 21 billion. See this chart [http://photos1.blogger.com/img/243/2888/640/USOil.jpg](http://photos1.blogger.com/img/243/2888/640/USOil.jpg) – from this page, [http://angrybear.blogspot.com/2005/04/oil-impact-on-us-economy.html](http://angrybear.blogspot.com/2005/04/oil-impact-on-us-economy.html). (See also this chart from the same page – [http://photos1.blogger.com/img/243/2888/640/oilsector.jpg](http://photos1.blogger.com/img/243/2888/640/oilsector.jpg) – showing how much of that oil and how much for other purposes.)
> [@Blake](#):
>
> And heads up: Campbell, who you just cited, is very much in a minority on those figures and in disagreement with every major organisation in the world from the USGS to the WEC.
Cite?
From [http://en.wikipedia.org/wiki/Colin\_Campbell\_(geologist):](http://en.wikipedia.org/wiki/Colin_Campbell_%28geologist%29:)
> [@](#):
>
> **Current debate**
>
> However, oil discovery did peak in the 1960s, and since the early 1980s oil production has outpaced new discoveries. The world currently consumes oil at the rate of 82 million barrel per day (151 m³/s), and consumption is rising, particularly in China. None of this is particularly controversial; the oil industry itself is spending less than half as much on exploration as a decade ago.
>
> According to Campbell:
>
> There are no new potential oil fields sufficiently large to reduce this future energy crisis.
>
> The reported oil reserves of many OPEC countries are inflated, to increase their quotas, or improve their chance of getting a loan from the World Bank.
>
> The practice of gradually adding new discoveries to a country’s list of proven reserves, instead of all at once, artificially inflates the current rate of discovery.
>
> Campbell predicts that this peak will cause a catastrophic world-wide economic depression.
>
> The dominant theory, held by the oil industry and other agencies like the United States Department of Energy, is that oil production will continue to increase, due to technological advances and the geopolitical pressure caused by rising oil prices. They argue that:
>
> Much of the world’s oil reserves come from areas that have not been fully explored because they are politically unstable, like Russia and Iraq. Nobody knows how much oil is really left in those areas, and economic pressure could result in a new exploration boom.
>
> New methods of extracting oil from existing fields are currently being developed. This may even expand the definition of “oil”: Hydrocarbons exist in shale and tarry sands, and as a result companies like Exxon predict that there are up to 14 trillion barrels (2,200 km³) of exploitable hydrocarbons left in the world, which could fuel the oil industry for another century.
>
> The current debate revolves around energy policy, and whether to shift funding to increasing fuel efficiency, and alternative energy sources like solar and nuclear power. Campbell’s critics, like Michael Lynch, argue that his research data is sloppy. They point to the date of the coming peak, which was initially projected to occur by 1995, but has now been pushed back to 2010. However, Campbell and his supporters insist that when the peak occurs is not as important as the realization that the peak is coming.
Doesn’t sound like a one-sided debate, as you describe. And no mention of the USGS’ or WEC’s position. The US Department of Energy is mentioned – but that’s a lot more political than the USGS, isn’t it?
> [@Blake](#):
>
> Campbell is, amongst other things, an investment broker to the fuels industry. He makes money out of encouraging investment. He has a vested in interest in publicising the value of oil in the coming years.
Cite?
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