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For years, many expert geologists have been warning us that we’re rapidly approaching a point where we can no longer wring enough oil out of the Earth to feed our ravenous economies. The theory is called Peak Oil, and it indicates that once we have exhumed 50% of the oil from our planet, the remaining 50% will be become more and more difficult to extract. At the same time, demand for oil will continue to increase along with global population, which will result in a situation where demand for oil— an economically critical resource— rapidly overtakes the supply. This scenario would make the oil crisis of the 1970s look like a cakewalk.
When most people think of the price of oil going through the roof, they think of the price they see on the gas pumps. They think they’ll have to keep the SUV in the garage more often, and maybe ride their bike once in a while when the weather is nice. But oil is used in every facet of modern life, such as farming; transporting food and goods; making plastics; and manufacturing everything from computer chips to cars. Consequently, a permanent shortfall in oil supply would make the price of everything increase significantly, assuming one could afford the gasoline to go buy anything.
This rapid increase in prices and decrease in transportation would theoretically cause a sharp decline in sales, and reduce the modern world economy to a twitching, demoralized ruin. Wars would be fought over the precious few resources remaining, and countless people would die, unable to afford food, and lacking the skills to produce it themselves.
But is this joyless theory based on facts, or misinformation? The chaps over at LifeAfterTheOilCrash.net make some very well-reasoned arguments for data indicating Peak Oil, along with many citations and sobering observations. But then they throw all of those well-constructed arguments into doubt by trying to make money from them, selling post-peak-oil preparedness guides. That doesn’t mean their points are invalid, but it does mean that they have ulterior motives in their effort to convince the public of the threat of peak oil.
From the website:
Oil will not just “run out” because all oil production follows a bell curve. This is true whether we’re talking about an individual field, a country, or on the planet as a whole.Oil is increasingly plentiful on the upslope of the bell curve, increasingly scarce and expensive on the down slope. The peak of the curve coincides with the point at which the endowment of oil has been 50 percent depleted. Once the peak is passed, oil production begins to go down while cost begins to go up.In practical and considerably oversimplified terms, this means that if 2000 was the year of global Peak Oil, worldwide oil production in the year 2020 will be the same as it was in 1980. However, the world’s population in 2020 will be both much larger (approximately twice) and much more industrialized (oil-dependent) than it was in 1980. Consequently, worldwide demand for oil will outpace worldwide production of oil by a significant margin. As a result, the price will skyrocket, oil-dependant [sic] economies will crumble, and resource wars will explode.
The issue is not one of “running out” so much as it is not having enough to keep our economy running. In this regard, the ramifications of Peak Oil for our civilization are similar to the ramifications of dehydration for the human body. The human body is 70 percent water. The body of a 200 pound man thus holds 140 pounds of water. Because water is so crucial to everything the human body does, the man doesn’t need to lose all 140 pounds of water weight before collapsing due to dehydration. A loss of as little as 10-15 pounds of water may be enough to kill him.
The Peak Oil scenario is certainly worth paying attention to, given the potential consequences. Part of the problem is that the continual bombardment of dire warnings such as ozone depletion, Y2K, global warming, SARS, avian flu, and Peak Oil can cause disaster fatigue, and dull a society’s sense of urgency to the point of uselessness. How do we separate the signal from the noise, so we can address the truly critical problems?
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Jerome Corsi and Craig R. Smith, the co-authors of Black Gold Stranglehold, shared the contention that oil is continually created deep inside the planet, and doesn’t stem from dinosaurs or decayed matter (i.e. fossil fuel). Accordingly, there is an abundance of this material and the so-called scarcity is a marketing ploy to charge higher prices, they said.
The Russians developed the “abiotic” (non-biological) theory of oil back in the 1950’s and the idea in recent years was put forth by Dr. Thomas Gold, a professor at Cornell University. Corsi and Smith also argued that global warming is unrelated to the burning of hydrocarbon fuels, citing that carbon dioxide is less than 1% of the atmosphere. We haven’t had a new oil refinery built in the U.S. in the last 30 years, said Smith who blamed environmentalists for discouraging these efforts.
My Respect and regards,,,,,,C.D. “Smokey” Belveal
The linked website addresses these very issues, among others:
A handful of people believe oil is actually a renewable resource continually produced by an “abiotic” process deep in the Earth. As emotionally appealing as this theory may be, it ignores most common sense and all scientific fact. While many of the people who believe in this theory consider themselves “mavericks,” respected geologists consider them crackpots.
Moreover, the oil companies don’t give this theory the slightest bit of credence even though they are more motivated than anybody to find an unlimited source of oil as each company’s shareholder value is based largely on how much oil it holds in reserve.
…and…
Some people believe that no new refineries have been built due to the efforts of environmentalists. This belief is silly when one considers how much money and political influence the oil industry has compared to the environmental movement. You really think Ronald Reagan and George H. Bush were going to let a bunch of pesky environmentalists get in the way of oil refineries being built if the oil companies had wanted to build them?
The real reason no new refineries have been built for almost 30 years is simple: any oil company that wants to stay profitable isn’t going to invest in new refineries when they know there is going to be less and less oil to refine.
Like everyone else, they’re operating under assumptions and bias, but they do make some interesting points.
“The real reason no new refineries have been built for almost 30 years is simple: any oil company that wants to stay profitable isn’t going to invest in new refineries when they know there is going to be less and less oil to refine.”
That sounds so nice, but is actually untrue. The real reason new refineries have not been built has been the cost to build those refineries. That cost is determined by materials and labor AND by rules and regulations which the oil companies must comply with in order to build their refinery. These rules and regulations mainly come from the EPA which was created by the government, but now has the ability to regulate without consent from the government which created it. The EPA has become increasingly dominated by an environmentalist viewpoint of the world and therefore the regulations that they impose are increasingly harsh, uneccessary and costly for companies to comply with.
Finally, if oil companies really believed they were going to be running out of oil anytime soon I would think they would be heavily involved in R&D to develop new sources of energy. The oil companies do have some monies going to these efforts, but the majority of their dollars is still going to refining oil BECAUSE it is still the cheapes and most available source of energy.
Gregory Givens said: “
That sounds so nice, but is actually untrue. The real reason new refineries have not been built has been the cost to build those refineries.
Exactly. And the cost is too great when they KNOW there will be a small return BECAUSE of less oil! I’m quite sure the oil companies can foresee a huge future demand for oil as world population increases and depends more and more on the stuff. Why wouldn’t they want to be there to meet the demand with more refineries? Believe me. The oil companies have better information than we do.
“Life after the oil crash” makes some good points, and overall they are quite correct. BUT, there are flaws in their arguments. The oil production as a bell curve model does not quite work for me. Oil production does not drive supply, the demand drives supply. The economic/technical explosion in China and India (and the US and Europe) has driven demand up, so production is increasing. It will hit the wall someday. LATOC is working from a point of view, so I suspect that they are slanting their arguments, ignoring contradictory evidence, cherry-picking their examples, etc. They also have too much of a anti-governemnt, anti-big business, paranoid-conspiracy mindset. I do not think that politicians and the government look 5 years into the future, much less 20. And business is driven too much by immediate profit needs to look much beyond 2 years. (The stock price must perform well, lest upper-management get sacked.)
In 2085, the world’s supply of natural gas is scheduled to run out. (According to a poster in my high school)
Originally posted on another site, and i’m too lazy to edit it right now :
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The Oil “crisis”, or “Stop with the –Oh My God, we’re all gonna die!– cr*p, and get on with your lives !”
Since about 20 years ago, there are discussions about the fate of mankind after all the fossil fuel deposits are depleted.
Most opinions are centered on the “Oh My God, we’re all gonna die !!!” side.
Collapse of civilisation, famine, cannibalism, and so on, and so on.
Books were written on the subject, movies were made on the books, and independent, and many people are afraid.
Now, let’s take this “oil apocalypse” idea, and “kill it ’til it’s dead”.
There is at least one solution to this “crisis” that nobody thought about, apparently.
It doesn’t involve magic, advanced technology, aliens, gods, or other sci-fi ideas exploited.
What is it ? Read on.
No “post-apocalyptical” movie writter ever thought about the inventivity and rapacity of the human being – not just when the odds are against it, but mostly when there’s something to gain.
And in this capitalist economy there is something to gain everywhere. So basically until this sistem falls – and it’s doubtfull that anything other than a nuclear or even world-scale conventional war could change this economic system – nothing like the “Soilent Green” world, for example, is to be feared.
No fossil fuel deposits exhaustion, global warming, shifting poles, ice age, and other non-extinction events could affect this “hunt” for profit.
And while most people still hunt for profits, instead of ideals like “greater good”, comunist type “equality” (that was really nice in theory, a really good system – but s*cked in practice in all countries where it was tried), and so on, we’re ok in terms of resources.
Everything is decided in this world’s economy by Profit.
The money you get in something, and the money you get out of that something, that normally should give you as much “extra” as possible.
And people would do anything to get that profit.
Now, oil is plenty, more than plenty actually. There are oil deposits under seas and oceans that we’re charted, but never actually drilled.
Why ? It is not technologically impossible to do it – The costs are high. Not “all lose” high, but simply the profits are way lower than those that come out of “surface” drilling.
So for oil anyway, when the going gets tough, people will start exploiting the underseas deposits.
And if it’s all finished – or the profits become too low – everybody will turn to alternative energy sources.
These exist, and some are even now somewhat refined and cost-efficient.
Why aren’t they used ? Again, profit margins. For now, it’s cheaper to drill for oil, than to invest in alternative energy sources technology and infrastructure.
Stop thinking about big company conspiracies, bribery, and so on.
Yes, bribes are given, yes, facts are hidden away – but this is because there are alternative sources that could be made cheaper, and so kill many oil companies – and oil is still pretty cheap and easy to drill, and in large quantities.
When oil will be scarce on the surface, and will cost too much to drill from other deposits, not only the government officials will stop being bribed, but the oil companies themselves will stop giving bribes and start investing existing funds from oil into alternative sources.
Everything will balance itself, using the “magical power” of capitalist economy.
Techonology – getting the same, or better results, with lower costs, smaller sizes, increased efficiency. Think of the first cars that ran on gasoline, how “primitive” they were, and then think of the rafinement of today’s cars. It took 100 years, yes, but from a different head start – nowadays technology evolves faster.
It will be the same with electric or hydrogen or any other viable alternative source – when one company will get a good result, another will strive to get a better, cheaper result to get more money. And then another, and then another, and so on.
It’s not magical technology that will drive us forward, it’s human greed and spirit of competition.
Infrastructure – think of today’s gas stations – you find them anywhere almost. But for a hydrogen car, for example –
(i’ve seen a really good model 2 years ago, fast, nice looking – friggin expensive, had platinum filters that cost as much as the rest of the car combined almost ; but that would change after some tinkering in some years)
For an electric car, you would need recharge points.
So it’s not all this bleak.
Stop imaginning of how the future would look – the one thing everyone can be sure of about the future, is that it will be different in so many ways than everything ever imagined about it. Different as in better, different as in worse, we cannot know. Just, different.
Think of how late 1800’s people imagined dirigibles and balloons flying with speeds of over 500 miles/h, but never thought of airplanes, think of how around 1985 people in computers predicted for the year 2000 PC’s with 225 kilo-hertz processors (i think by that year 2000 the first 1.1 giga-hertz processor was built), and so on, and so on.
In 1985 people were not predicting 225 kilohertz processors, common computers had passed that point. In about 1987 I was tooling around in my 1.6 MHz Apple IIgs, and that was well below the high end of what personal computers could do at that time.
Dirigibles and balloons faster than 500 mph? In the 1800s people would be amazed at speeds of 50 mph. Where are you getting your figures?
Off the top of my head, no real source. I didn’t actually bother to check my sources (sorry), just wrote what i remembered.
You got the point of it, though ?
Thats a nice theory, the only problem is, what happens if the crash hits faster than human greed and competition can react? The oil companies will delay any new development until the last possible moment, and by the time that hits, it is fully possible that it will be too late. It’s rather hard to develop alternate sources of energy while the main source of energy is being funneled exclusively into survival, farming, etc. Its possible that we’ll be able to react in time, but you can’t say its certain that nothing seriously bad will happen.
wallie79r said: “The oil companies will delay any new development until the last possible moment, and by the time that hits, it is fully possible that it will be too late.”
I think competition between companies will keep development as far ahead of the crash as is possible. Companies will have to keep developing their own alternatives for fear of a competitor having an alternative that they are in a position to deliver first. If they don’t, then they’ll lose out to those competitors when the time comes, and that’s not a point I can see them missing or ignoring. Of course, it’ll have to be hushed up until they need it for fear of leaks and backlash, so we’ll probably never know until it’s rolled out.
It will be interesting to see how increased CO2 levels affect (or are affected by) average global temperature. In a few mathematically fundamental cases, causal relationships are not interdependant. Republican scientists argue that increased CO2 levels are caused by increasing global temperatures. Democratic scientists argue that our current, unprecidented CO2 levels will lead to a dramatic cycle and eventual ice-age.
A clear interdependence exists between CO2 levels and mean global temperature that has nothing to do with politics, business or other forms of personal interest; people are naturally concerned with self-preservation in many forms: greed, aknowledgement, self-righteousness and general bias; but these passions and concerns drive men to point out potential catastrophies and to feel the motivation to act on perhaps righteous presumptions.
Beyond economic reprecussions of an oil crunch, there may, in fact, be other significant dangers in buring an excessive amount of fossile fuels. To address both economic and environmental concerns, a very simple and very practical solution already exists.
EFFICIENCY. EFFICIENCY. EFFICIENCY… Should I say it again?
I’m not talking about anything ridiculous here. You don’t need to wash dishes with bath water or flush the toilet once a month. Nothing idiotic like that.
I’m just saying that many industries need a good, swift kick in the ass with some very progressive government-imposed regulation. And it starts with efficiency.
Sullykid wrote:
“The oil production as a bell curve model does not quite work for me. Oil production does not drive supply, the demand drives supply.”
Well, that’s not entirely true. The oil and auto industries have had a mutual understanding for years. So long as the US auto companies kept making gas guzzlers, OPEC would keep U.S. oil costs down. For over 40 years now, the fuel efficiency of cars has not changed a bit. Do you think 40 mpg is pretty good? Would you say 70 mpg is more than impressive? How about 300 mpg? Ridiculous? Unheard of? NOT SO! We’ve the technology and the production expertise to affordably produce 300 mpg full-sized sedans. I should know. I am a mechanical engineer with experience in the area. And we’ve known how to do it since the 70’s. The technologies (nothing all that impressive) have not been implemented because of the various types of vehicles that use gasoline and the upper limit on their efficiency (boats, semis, trains)… think about it and consider inelastic demand.
So, Sullykid, demand does not necessarily drive supply here. Big oil controls both, but they are slowly losing their grip.
The problem here is monsterous, which is why it has been addressed so pussily (new word to describe congress – they act pussily). The stability of muslim nations, the auto industry, the plastics industry … almost all industries, and global economies hinges on the modest health and stability (beta) of the energy markets.
While a think another Great Depression is possible, and it could cause WWIII, I don’t think it has to. We’re smart. We already have alternative fuels and we know how to make efficient products efficiently. I think our present problem is the fact that we have so many frickin viable alternatives. We need to outline a course of action and go with it.
I recently wrote my capstone research paper for my Economics degree on a cost benefit analysis of ethanol bio fuel feed stock sources. I can honestly say after 6 months of research there really is no need to fear “the crash”. As the price of gasoline continues to rise ethanol production becomes more and more feasible, not just from corn but also from cellulosic ethanol production. Or to put it in words that don’t involve “cellulosic”, anything organic that is not used as a food crop, or non-edible portions of a food crop. Think timber waste, plant stalks, etc. These means of production were prohibitively expensive ten years ago, not so now.
Wow, controversial topic. I doubt anyone will read this all the way down here.
Damn interesting. The reason my environmental science teacher provided as to why no refineries have been built is because of the EPA. The Clean Air Act and other regulations make it very expensive to run new refineries (and power plants). I’m not sure if it applies to refineries as well, but only power plants built since the Clean Air Act have to obey all the rules.
The EPA definitely makes it very expensive for businesses to turn a profit. I’ve done this analysis myself in a ‘Capital Investment and Economic Analysis’ course I took. Frikking difficult course too, and I fully expected to fail it (I didn’t!). However, I will say that the ideal solution to this is a worlwide acceptance of higher environmental standards that makes it easier for American industries to compete. Merely ignoring the impacts of industrialization on the environment will be, well, disastrous.