Gentlemen, Start Your Engines

[4dsc]

http://dailyreckoning.com/Featured/King021406.html


Bloomberg writer Matthew Lynn just published an article entitled "Cancel That Apocalypse - The Oil Crisis Is Over." Oil prices have recently pulled back, and the auto industry is re-tooling to manufacture smaller cars that get better gas mileage. Hence, presto-chango, "The Oil Crisis Is Over." For a minute, I thought he was kidding. But no, this Bloomberg-man is serious.

This is exactly why amateurs should not fool around with issues of Peak

Over the next 20 years, the absolute quantity of petroleum available to the world on any given day will decline. We should only hope, and perhaps be so lucky in a Star Trek future, that fuel efficiency on a global scale will be able to make up for the decline in availability of liquid fuel. But that idea is fanciful if you understand the depletion curves that are out there. What we consider today as the "normal" state of the world transportation system will be a distant memory by 2025, possibly a hated past as people look back and come to realize how their forbears squandered an irreplaceable Earthly inheritance. The idea is ludicrous, if not dangerous, that we will simply create an alternative future of never-ending, care-free driving based on soybean ethanol or some other such by-product of composted dead plants. Those who think that way are fooling themselves and others.

[phantom power]

1. Typical rhythm.

Gasoline shoots up to $3/gallon: "There is no crisis, it's temporary!"

Gasoline goes down by $0.75: "The crisis is over! Hummers forever!"

rinse, repeat...

[hatrack]

2. Yes, it's almost like a sine wave . . . hypnotic, elegant, beautiful . . .

And on and on and on . . .

[Dogmudgeon]

3. Like sine waves in the brain

They're the brain waves that occur right before death.

--p!

[Strelnikov_]

4. Article Is A Good Summary Of The Challenge We Are Facing

. . .

At a relatively modest depletion rate of, say, 4% per year (which is very, very conservative...the North Sea is depleting at 8% to 10% per year by comparison), today's 84 million barrels per day of world oil production from existing reserves will be all of 37 million barrels after 20 years. To obtain the same level of production as today's 84 million barrels per day - and just to keep even with that current production and not to increase production by one extra barrel - the global oil industry (or whatever succeeds it as a "hydrocarbon" industry in the tar sand, oil shale or coal gas, etc. biz) will have to "discover" and produce the fossil fuel equivalent of a good deal more than half of all of the world's present oil reserves.

Let me put it another way. Within the next 20 years we need to find the petroleum or other energy-equivalent of another Saudi Arabia, plus another Kuwait, plus another Iran, plus another Russia. And this is just to keep even with the present requirement to run the global economy at current energy prices, not allowing for future increases in demand. And this also does not even get into the increasing global demand for natural gas, the numbers for which are worse than those for the oil supply.

[megatherium]

5. Is 4% decline per year really "conservative"?

Yes, individual fields drop quickly, but there are many fields out there under production and some of them aren't quite to their own peaks yet. My recollection concerning the Hubbert-peak theory is that the downhill-side of the curve will resemble the uphill-side. Thus, assuming that we just reached peak now (as declared by Kenneth Deffeyes), our production in (say) 15 years will resemble our production 15 years ago. That would be a 10-15% drop, if memory serves. This is still an extremely disturbing prospect, however: we will have recurring and deepening recessions. Every time we reach an accomodation to petroleum depletion (e.g., we all drive cars that get 50mpg), it will then soon tighten another notch.

[4dsc]

6. And still the sheeple sleep

What's even further amazing is that even with this information, the shortsighted Americans will ignore the upcoming crisis and wait for the replay on the nightly news..