Peak Oil: The Real Scoop?

[RTFirefly]

@Sam Stone

Well yes, but I was under the impression that the 175 billion barrel figure was generally accepted now.

Looks like Oil and Gas Journal accepts it, World Oil doesn’t count the oil sands at all, and BP counts the part that’s currently under development, attributing 16.8 billion barrels of reserves to Canada.

If the high figure is what can realistically be recovered, then that is good news for all of us. But still, they’re talking about eventual production of 2.5 million barrels a day, and each year, world consumption increases by almost that amount. So we’ve got a crunch coming that Alberta won’t be big enough, fast enough to avert. Really, the only thing between us and $200/barrel oil is if the Saudis can increase production like they say they can.

We’ll find out, this next year or two.

But I agree with you, Sam, that astronomically-priced oil will not wreck the U.S. economy. We’re paying $2.20 or so for gasoline right now. How much of that is the cost of crude, and how much of that is transport, refining, taxes? If it’s a 50-50 split right now (I honestly don’t know), then tripling the crude-cost half will double the overall price. It’ll drag things somewhat, and people with genuinely tight budgets will have to figure out where to economize, but most people will wince, pay, and drive. They’ll want more economical cars when they replace what they’re currently driving, but that’ll be the main change.

[RTFirefly]

@msmith537

Shit, we could invade a dozen Middle East countries with that kind of money!

Well, hell, invading is cheap. Controlling the invaded country’s resources is the expensive part, in more ways than just money. You ready to volunteer? Your country needs you!

Hey excuse me for assuming you meant the price of bread would increase 20% a year. Sure a 20% increase over the next 10,000 years won’t be a big deal.

Well, a rate is a change in quantity, divided by change in time. If you’re not bothered by the absence of a denominator in a fraction, then you can do some truly creative mathematics!

And an inflation rate is, of course, not determined solely by the price of a single commodity, no matter how essential.

The thing is, we’ve all experienced fluctuations in the prices of stuff we buy at the grocery store and elsewhere, on the order of that 20% hypothetical I tossed out. If the price of bread goes up 20%, what would that do to your grocery bill? Very little, unless you buy a lot of bread.

Now if everything in your grocery basket goes up 20%, then that’s a bit more noticeable. (Would that be true? I dunno. But let’s suppose it would, for sake of argument.) But still, if you’re spending 15% of your budget on groceries, that’s a 3% bump in your overall spending. So I’m casually tossing out the notion that the numerator of the inflation-rate calculation might go up by 3% over an undetermined time, due to the effect of petroleum price increases on food prices. This is what I consider to be “no big deal,” to use your term. And I’m scratching my head to figure out why it should be otherwise.

[wonky]

What would a tripling of oil prices do to packaging costs? I’m in the composities industry and the oil prices are wreaking havoc with plastics.

[Leaper]

@jsgoddess

What would a tripling of oil prices do to packaging costs? I’m in the composities industry and the oil prices are wreaking havoc with plastics.

Frankly, that might be a good thing, IMO, if it gets manufacturers to think about their often wasteful packaging practices. I think if plastic gets prohibitively expensive, they’ll probably return to paper and foam, but that’s just my uninformed opinion.

[wonky]

@Leaper

Frankly, that might be a good thing, IMO, if it gets manufacturers to think about their often wasteful packaging practices. I think if plastic gets prohibitively expensive, they’ll probably return to paper and foam, but that’s just my uninformed opinion.

Well, foam is a plastic, too. Paper has its own issues, and metal probably requires the most energy to manufacture.

I’d like to look forward to Coke in glass bottles again!

[kanicbird]

Cars can’t run on coal (which really pollutes by the way).

They can using WWII tech which converts coal to synthetic gasoline, also coal can be used in a external combustion engine, which cars can use for propulsion. Also I would wag that a using modern tech coal can be burned cleaner then oil was 20 yrs ago.

produce enough hydrogen (which lb per lb is not as energy efficient, safe, or easy to transport as gasoline)

Actually hydrogen has a higher energy density then gasoline, that’s why NASA uses it. Storing it under pressure may be problematic, but it can be stored in solution which is pretty safe. The biggest benefit would be using it in a fuel cell which can approach 100% efficiency, a IC engine can’t come close, perhaps 30%.

Are you kidding? We haven’t even been to the moon in 50 years.

IIRC the last time Americans walked in the moon was the early 70’s, which is more like 30 years. I would like to see a return to it, and I personally think the He3 available there will make fusion easy and fun.

About 200 nuclear plants. The Canadian atomic agency ran the numbers and proposed putting 175 CANDU reactors in Nevada, and that that would be enough. We can do that if we have to.

How much uranium reserves do we have, are we short changing ourselves by not using breeder reactors?

How could it ever be in the U.S.’ interests to cause oil prices to increase?! It would be like the '70s fuel crises, only many times worse. Even if there weren’t gas lines, the price of everything shipped by petroleum-fueled vehicles would go up, everybody would have to spend more of their personal/household budget on gasoline, and we would all suffer.

• BrainGlutton It’s a pet theory of mine. Basically it a this will hurt you more then me thing. China is rising in power in many ways, and is becoming a great producer of products, while we (US) have lost our manufacturing base and are mainly ‘service’ now. The US Military advantage has a lot to do with high tech, and space superiority. China has a pretty aggressive space program (thank you Pres Clinton) and are advancing rapidly in the tech field. This (IMHO) posed the greatest potential threat to the US ever (OK the war of 1812 was pretty bad too). We can’t openly challenge China, but we can make things difficult for them. By increasing the cost of energy we should slow their industrialization, also it will raise the price of their goods (since the price to ship them is now more), which will slow their economy.

[Ice_Bear_Brian]

In other news…
OPEC officially announces they can’t meet demand within as little as 10 years. So much for your hopes of Saudi’s great expansion in drilling.

http://www.forbes.com/business/feeds/afx/2005/07/07/afx2126990.html

[BrainGlutton]

@kanicbird

We can’t openly challenge China, but we can make things difficult for them. By increasing the cost of energy we should slow their industrialization, also it will raise the price of their goods (since the price to ship them is now more), which will slow their economy.

That’s cutting off your nose to spite your face – the principal customers for those Chinese goods are in the U.S. You wanna have to pay more at Wal-Mart?

[kanicbird]

hat’s cutting off your nose to spite your face – the principal customers for those Chinese goods are in the U.S. You wanna have to pay more at Wal-Mart?

I know the US is the customer of the chinese goods, that is part of the problem, it’s hard to find alternatives. We are paying more, since the price of fuel has gone up. And yes this plan hurts both, but hopefully more them then us.

[msmith537]

@BrainGlutton

That’s cutting off your nose to spite your face – the principal customers for those Chinese goods are in the U.S. You wanna have to pay more at Wal-Mart?

I agree this is a stupid plan. We use far more oil than any other country and thus will be far more inconvienienced than developing countries, which by the way, have the ability to start with the most energy efficient equipment instead of having to retrofit all the old stuff.

It’s a pet theory of mine. Basically it a this will hurt you more then me thing. China is rising in power in many ways, and is becoming a great producer of products, while we (US) have lost our manufacturing base and are mainly ‘service’ now.

First of all, why is “manufacturing” a more important sector of the economy that “services”? You seem to have fallen for the misconception that something only has value if you can physically pick it up in your hand.

This (IMHO) posed the greatest potential threat to the US ever (OK the war of 1812 was pretty bad too).

I would say Islamic fundamentalism is up there as well

We can’t openly challenge China, but we can make things difficult for them. By increasing the cost of energy we should slow their industrialization, also it will raise the price of their goods (since the price to ship them is now more), which will slow their economy.

We certainly can and do, but our economies are inextricably linked together. Raising the price of their goods means raising the price of OUR goods because that’s where we buy them from.

[zenith]

Con Agra foods is producing synthetic petroleum from turkey processing waste at a pilot plant in Missouri. Other food wastes can be composted to produce methane to run this process, as well. Even if “food oil” turns out to be better for producing lubricants and heavy boiler fuels than for gasoline, at least a large chunk of these needs can be provided domestically.

The world may have reached “peak oil” in the sense that the traditional underground pools of the stuff are diminishing, but tar sands and shale have not been fully exploited. Technology will find alternatives.

As to the higher costs of these technologies, as these technologies become more commonplace the costs will come down. After all, who’s paid $500 for a VCR or $5000 for a 1Mhz PC lately ?

[kanicbird]

First of all, why is “manufacturing” a more important sector of the economy that “services”? You seem to have fallen for the misconception that something only has value if you can physically pick it up in your hand.

I’m sorry you misunderstood me, I was referring to a state of war when one country has grown dependant on goods from it’s enemy and has very little capacity to produce their own goods, and is isolated from potential allies by a very big ocean, and the enemy is building attack subs (with your money you are using to buy their goods, which means you are buying less domestic items, further reducing our manufacturing ability, making us more dependant on their goods, rinse and repeat).

I would say Islamic fundamentalism is up there as well

It has some potential, but it’s not up there (yet), but it is a vastly different form of war, so only time will tell.

One thing I remember A-Q stating, perhaps O.B.L., I forget but it was something like we will use you democracy to destroy it, which with loss of personal liberty I think it’s more like it that they will use our democracy so we destroy it.

[Ice_Bear_Brian]

@zenith

Con Agra foods is producing synthetic petroleum from turkey processing waste at a pilot plant in Missouri. Other food wastes can be composted to produce methane to run this process, as well. Even if “food oil” turns out to be better for producing lubricants and heavy boiler fuels than for gasoline, at least a large chunk of these needs can be provided domestically.

I remember reading about this, and thinking it was an amazing innovation. Quite honestly, it is, but it still faces issues of if it could take on the task of producing 30 million gallons daily. I myself don’t know all the technicalities of the process, for example when you put in a barrel of organic waste do you get a gallon, ten gallons, or a barrel of oil? Issues like this are vital, since you must have adequate returns. I recall that the primary return was distilled water, but don’t quote me on that.

One thing I am fairly confidant that I read was that the net energy gain was negative. That is, to run all this machinery which does all this process takes a hypothetical ten barrels of oil, but the end result is only seven barrels of oil. You also get all those nifty minerals and such, but you’ve lost energy so what’s the point of using it as a solution? Granted, you needn’t use oil to power the machinery if you have something else to generate massive amounts of electricity, but these have their own issues.

Also, something that people seem to skim over is that economics will magically master everything. I’m a few months from receiving my undergraduate degree in economics and moving onto a doctoral program, and from my impressions mostly with professors and graduate students there aren’t a lot of universal models that are universally applicable. I know graduate students who have some of the most amazing sounding theories that prove correct in just one country, region, feild of business, etc, and fail horribly elsewhere.

Also, it is important to remember that when people are talking about economic adjustment, its not on a day to day deal, its in the short, medium, and long runs. So sure, we get a major energy hit and in the short run we can do stuff like ration, carpool, etc, but what makes you so sure you hit the long run. After all, as most of my professors like to say, we’re all dead in the long run.

Just my thoughts, I’m by no means a expert on the subject but I get the impression few other people here are, so take everyone’s posts, ‘facts’, and opinions with a grain of salt.

[Spectre_of_Pithecanthropus]

@Sam Stone

Even if it doubled in a year, the economy would absorb it handily. The U.S. increased defense spending by several percentage points of GDP in short periods and just suffered deficits or higher taxes.

I’m not seeing the collapse of civilization in this.

I’m not seeing collapse either, but there are aspects of lifestyle affecting huge numbers of people that will simply not be sustainable. Megacommuting by private car will not work; my rule of thumb is that if you can see your commute on a 12-inch globe, you are commuting too far. So people will start to give up McMansions in exurbia, only, no one will want to buy them for just the reasons I’ve outlined, and the economic dislocation could be severe.

I’ve noticed something of a paradox in these end-of-oil collapse scenarios. Now, if you live in a big city and can rely on public transportation, and don’t have a long commute, you’re better off than someone who has to drive in from a distant suburb. As the dislocations from the end of cheap oil mount, this will become more true in the short term. However, if total collapse does arrive, than the cities, as they say, are the last place you’d want to be.

[kanicbird]

I’ve noticed something of a paradox in these end-of-oil collapse scenarios. Now, if you live in a big city and can rely on public transportation, and don’t have a long commute, you’re better off than someone who has to drive in from a distant suburb. As the dislocations from the end of cheap oil mount, this will become more true in the short term. However, if total collapse does arrive, than the cities, as they say, are the last place you’d want to be.

Interesting paradox. Also note that AlQuada likes to attack mass transit systems, which tends to get people back into their car, fortunately they have not been able to make sustained attacks.

Loss of the exburbs will be a great blow to the US middle class, it is the ability to move further out and endure longer commutes that allow M.C. families to live on the level of the upper classes.

I’m not so sure that cities are the last place you would want to be in a total collapse, as it seems the place that Gov’t will use it’s last resources on (or the military depending on the situation). Away from the city you are much more on your own, which is OK if you stay in good health and have a way of getting your own food (hunting), but that doesn’t stop the gov’t from knocking on your door and taking what you have. I can even see emergency situations where people with private wells have gov’t water trucks hooked up to them to get water for the city and the well owner is forbidden from using their own well.

[Spectre_of_Pithecanthropus]

@kanicbird

I’m not so sure that cities are the last place you would want to be in a total collapse, as it seems the place that Gov’t will use it’s last resources on (or the military depending on the situation). .

But remember, if we’re talking complete collapse, there no longer is any government. Interestingly, a similar paradox exists regarding money: The site linked in the OP apparently also sells gold, which you would use for money after the collapse of the banking system, but again, in the event of total collapse, gold would be useless, as would anything that doesn’t keep you warm, fill your stomach, or slake your thirst.

[kanicbird]

But remember, if we’re talking complete collapse, there no longer is any government. Interestingly

I don’t know if there will ever be no gov’t. Someone will take control and act as a gov’t, much like the feudal system.

, a similar paradox exists regarding money: The site linked in the OP apparently also sells gold, which you would use for money after the collapse of the banking system, but again, in the event of total collapse, gold would be useless, as would anything that doesn’t keep you warm, fill your stomach, or slake your thirst.
Reply With Quote

During the start of the situation I could see that gold would be sort of useless, as people would require ennormace amounts of it to part w/ that can of chunky soup if they didn’t know where the next can was coming from, far too much gold to buy ahead of time. But gold most likely will be the 1st currency to re-emerge.

[Spectre_of_Pithecanthropus]

@kanicbird

I don’t know if there will ever be no gov’t. Someone will take control and act as a gov’t, much like the feudal system.

During the start of the situation I could see that gold would be sort of useless, as people would require ennormace amounts of it to part w/ that can of chunky soup if they didn’t know where the next can was coming from, far too much gold to buy ahead of time. But gold most likely will be the 1st currency to re-emerge.

That’s a good point, one that I hadn’t considered. It’s all moot for me anyway. If things ever got half that bad, I’d probably pop a cyanide capsule. I have no wish to be a hunter or farmer, or to spend my life camping out and living in rags.

[Sam_Stone]

@Spectre of Pithecanthropus

I’m not seeing collapse either, but there are aspects of lifestyle affecting huge numbers of people that will simply not be sustainable. Megacommuting by private car will not work; my rule of thumb is that if you can see your commute on a 12-inch globe, you are commuting too far. So people will start to give up McMansions in exurbia, only, no one will want to buy them for just the reasons I’ve outlined, and the economic dislocation could be severe.

I’ve noticed something of a paradox in these end-of-oil collapse scenarios. Now, if you live in a big city and can rely on public transportation, and don’t have a long commute, you’re better off than someone who has to drive in from a distant suburb. As the dislocations from the end of cheap oil mount, this will become more true in the short term. However, if total collapse does arrive, than the cities, as they say, are the last place you’d want to be.

[/quote]

I’m not seeing a collapse of the suburbs, either. Let’s do the math here. Let’s be really, really extreme and say that the price of gas goes to $5/gallon. In that case, if you own a car that get 30mpg, and you have a 30 mile commute, it’s going to cost you $10/day in gas, or $200/mo. Hell, most people who drive in to a big city from the suburbs probably pay that much in parking, and most people have car payments higher than that.

The net result of this might be a slight bias against suburban living, leading to an increase in population pressure in the city, which will drive up rents until we reach a new equilibrium. Also, think of other coping mechanisms:

[ul]
[li]hybrid vehicles take off in popularity.[/li][li]car pooling becomes really popular[/li][li]Companies that offer telecommuting gain significant market advantage.[/li][li]plug in hybrids’ are all the rage[/li][li]huge pressure on companies to find alternative energy source. Big companies start thinking about massive investment in new infrastructure and alternative energy sources[/li][li]Perhaps companies start opening branch offices in the 'burbs, leading to even more decentralization of America, instead of less.[/li][/ul]

etc. The suburbs are here to stay. People like living in them. Americans want the room. They want their big houses, their parks, and the suburban lifestyle. Hell, if you need an example of that just look at the outrageous commutes people are willing to put up with now in order to live in the suburbs. You think that people who are willing to give up two hours a day of their lives in traffic are suddenly going to flee the suburbs because of an extra five or ten bucks a day in energy costs? Not going to happen.

However, they WILL drop their attachment to gas guzzling vehicles if they are forced to pay an extraordinary premium for it. Or more likely, auto makers will come up with new ways to provide increased performance along with awesome fuel efficiency. The Lotus Elise used a modern ‘bathtub’ frame that is extremely light. The car only weighs something like 1900 pounds. That means you can get outrageous performance on 180HP. Perhaps that’s the new model for the future of cars - new lightweight materials leading to 1500 lb plug-in hybrid econo sedans that get 100 mph, and 200 hp hybrid sports cars that do 0-60 in four seconds and still get 40 mpg.

And at $5/gallon, we can afford hydrogen or pure electric power if we need it, so even if oil vanished society will keep trucking along relatively unchanged.

[Spectre_of_Pithecanthropus]

Sam, I hope you’re right about telecommuting, because in recent years I’ve seen only retrenchment and resistance by management. I’ve worked at the same company for nearly seven years. Five years ago, I thought nothing of saying I needed to work from home to deal with some emergency there, but now it’s not allowed. I can still stay home for the emergency, and work if I feel so inclined, but I have to count it as time off!