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Peak oil is alive and well, and costing the earth

You might have heard that peak oil - the theory that one day crude oil production will stop increasing, even as demand grows - is dead. Shale oil production is surging in the US. The premiere peak oil…

There’s plenty of oil, but at what price? arbyreed/Flickr

You might have heard that peak oil - the theory that one day crude oil production will stop increasing, even as demand grows - is dead. Shale oil production is surging in the US. The premiere peak oil website, The Oil Drum, is shutting up shop. Even notoriously left-leaning columnist George Monbiot has announced: “We were wrong about peak oil”.

But he’s wrong about being wrong.

Peak oil is very much alive, and squeezing its hands ever more tightly around the throats of oil-dependent economies. The new economics of oil also have alarming implications for climate change, as Monbiot acknowledged, suggesting this is a subject we dismiss at our own peril.

Peak oil, of course, doesn’t mean that the world is running out of oil any time soon. There is a vast amount of oil left. Over the last 150 years, however, we’ve picked the low hanging fruit, so to speak, meaning that the remaining oil is harder to find and more expensive to extract. This is making it more difficult to increase the “flow” of oil out of the ground.

When the rate of crude oil production cannot be increased, that represents peak oil. This is considered by many to signify a defining turning point in history, because oil demand is expected to increase as the world continues to industrialise. The theory goes that, as the supply of oil stagnates and the demand increases, the cost per barrel will rise, making the consumption of oil an increasingly expensive and debilitating addiction.

So is this theory alive or dead? Well, it’s not a theory, it’s a fact. Around 2005 the production of crude or “conventional” oil stopped growing significantly and has been on a corrugated plateau ever since. This plateau has been acknowledged even by mainstream institutions like the International Energy Agency, a position it recently reiterated through its chief economist, Fatih Birol. Global demand for oil, however, has continued to grow significantly, which has put upward pressure on the price of oil.

This upward pressure on price has changed the economics of several sources of unconventional oil, making them financially viable to produce when once they were not. Shale oil was not produced previously because the costs of getting it out of the ground and refining it were significantly more than the market price for oil, historically around US$25 per barrel.

But now that oil is above US$105 per barrel, producers can make money producing shale oil and other unconventional oils, even though their energy and economic returns on investment are considerably lower than conventional oil.

The fact that unconventional oil is much more carbon-intensive than crude oil – exacerbating an already intractable climate problem - doesn’t seem to trouble oil producers or most politicians.

Driven by high prices, this new production has meant total oil production (conventional plus unconventional oil) has been able to meet increasing global demand, even though conventional oil has shown almost no growth in recent years. Because total oil production has increased to meet demand, many commentators have declared that “peak oil” is dead. These declarations, however, are based on a misunderstanding.

The main reason unconventional oils are economically viable is because crude oil production has essentially stopped growing, causing the price of oil to jump. Geopolitical instability in oil rich regions of the world also keeps prices high, with the current situation in Syria being the latest manifestation of this dynamic. Our industrial economies, however, are addicted to oil - the world consumes 90 million barrels of oil every day - and when oil gets expensive, our economies suffer.

At US$25 per barrel – the historic average – 90 million barrels would be US$2.25 billion every day on oil expenditure. At US$105 per barrel, that amounts to US$9.45 billion per day. This is a difference of US$7.2 billion every day, an extra cost to the global economy which is primarily a result of crude oil having peaked. It lacks credibility to pronounce the death of something costing the global economy US$7.2 billion every day – or US$2.6 trillion every year.

The economic costs of peak oil are especially significant for oil importing nations. Due to the price of oil rising in recent years, the US is now spending an extra US$600 million every day on its net oil imports of 7.412 million barrels, which is money leaving the US economy. Had crude oil not peaked and prices remained low, every day the US would have that US$600 million to spend on things other than expensive, foreign oil. This is hardly a phenomenon to dismiss.

When oil gets expensive, everything dependent on oil gets more expensive: transport, mechanised labour, industrial food production, plastics, etc. This pricing dynamic sucks discretionary expenditure and investment away from the rest of the economy, causing debt defaults, economic stagnation, recessions, or even longer-term depressions. That seems to be what we are seeing around the world today, with the risk of worse things to come.

This should provide us all with further motivation to rapidly decarbonise the economy, not only because oil has become painfully expensive, but also because the oil we are burning is environmentally unaffordable.

If people had listened to the warnings of the peak oil school, we could have broken our addiction to oil and had this money to spend on other things. I, for one, can think of better things on which to spend US$2.6 trillion dollars per year – such as renewable energy, bike lanes, better public transport, and local food production.

We have entered a new era of energy and economics, one in which expensive oil is going to make it increasingly difficult for oil dependent economies to grow their economies. This is alarming because almost no attention is being given to this issue at the macro-economic and political levels. Economists and politicians are still crafting their policies based on flawed, growth-based thinking, but the growth model, which assumes cheap energy inputs, is now dangerously out-dated. The climatic implications of exploiting unconventional oils make the math more worrying still.

Granted, we’re not running out of oil any time soon, but we have already run out of the oil that is economically and environmentally affordable.

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131 Comments sorted by

  1. John Newlands

    tree changer

    Not only is the new oil more carbon intensive but the extra extraction effort means less net energy, perhaps none in the case of grain ethanol. Thus the current volume plateau of around 88 million barrels a day actually represents a steady decline in net energy.

    Perhaps the world can't afford for crude oil to stay over $105 a barrel with the result it will be rationed by various means such as high petrol prices. I've been driving on home made biodiesel for years but I see that is limited option. Electric cars need to come way down in price and to greatly increase their battery range. The new Australian government has promised to increase economic growth. I suspect the declining affordability of liquid fuel will gradually prevent that happening, certainly with a few years.

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    1. Peter Campbell

      Scientist (researcherid B-7232-2008)

      In reply to John Newlands

      "Electric cars need to come way down in price and to greatly increase their battery range."
      We are there now for many purposes: I have been driving a home-converted electric car since May 2009 since I couldn't get one for any price then. More recently they were still too pricey for me. Now you can get a 2 year old, off-lease Mitsubishi iMiev for $20K I believe. At that price they make an excellent town car.
      Even though my DIY car has less range than any of the commercial electric cars an ordinary…

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    2. Mike Stasse

      retired energy consultant

      In reply to Peter Campbell

      I have an old ute I'm planning to convert to electric...... being designed to carry more than a tonne, it's an ideal vehicle to stick a couple of hundred kilos of batteries in....

      I'm not concerned about range. I rarely do more than 30km each way trips, what I really need is a vehicle that can carry heavy loads of firewood, compost, hay, building materials.... stuff I need around the farm, and that I can charge up using my PVs instead of subsidising my neighbours' green energy..!

      http://damnthematrix.wordpress.com/2012/05/18/ive-bought-a-car/

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    3. Peter Campbell

      Scientist (researcherid B-7232-2008)

      In reply to Mike Stasse

      Converting a ute is one of the common options. As you say, they are generally designed to take some extra weight and have an easy obvious rectangular central location to put it. Converting a small hatchback like I did can be a bit more difficult when it comes to working out the layout of things. 150kg of battery, say 200kg by the time you have it well secured in a box would be sufficient for the range you need. The other bits you put in will be roughly balanced by the weight of the bits you take…

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    4. Mike Stasse

      retired energy consultant

      In reply to Peter Campbell

      The electric ute at the link was only used to show how one exactly like mine was converted...... I'm planning to use LiFePO4 batteries for starters, and no doubt in the time frame between when THAT ute was converted and my project goes ahead, lots more new technology will be available. I have to drive my ute to Tasmania before I start! But thanks for the heads up, I'll take all and any advice...

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  2. Mark Lawson

    senior journalist at Australian Financial Review

    I have no particular quibble with the article except to note that the plateau in conventional production does not necessarily mean that conventional oil is running out. The alternative explanation is OPEC has deliberately not invested in production facilities or further exploration for their own internal political reasons, and to maximise revenue from existing resources. But whatever the reason, production is certainly shifting to unconventional oil.

    I do have a question though. I was under the impression that the US had become a major producer again, but the author mentions a major deficit - is due to the much higher prices on somewhat lower oil imports?

    A quick not on John Newlands comments about ethanol. There is nothing more absurd the the US ethanol market. Studies have found that it cost more energy to create the ethanol that it does to use it, and they can't get rid of this nonsense.

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    1. David Arthur

      resistance gnome

      In reply to Mark Lawson

      Here's some of what you get if you Google "isobutanol" at site:sciencedaily.com

      Inexpensive biofuels: Isobutanol made directly from cellulose
      www.sciencedaily.com/releases/2011/03/110307124917.htm
      Mar 7, 2011 - In the quest for inexpensive biofuels, cellulose proved no match for a bioprocessing strategy and a genetically engineered microbe.

      Engineering cells for more efficient biofuel production -
      www.sciencedaily.com/releases/2013/02/130219121347.htm
      Feb 19, 2013 - Yeast typically produce…

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    2. Mark Lawson

      senior journalist at Australian Financial Review

      In reply to Mike Stasse

      Mike - sorry but your post is not relevant to the point I was making. I was asking about how the author calculated the drain on the US foreign reserves for last year. I wasn't worried about reserve figures or anything else. But to look at your point sources of varying reliability have been forecasting the end of shale oil boom in the US almost since it started and, while I don't necessarily disagree with many of the points in the article you cite, go back and look at it.. Its nearly hysterical in…

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    3. Mark Lawson

      senior journalist at Australian Financial Review

      In reply to David Arthur

      David - I've encountered that stuff about the cheap biofuels before. If someone can make it work good on them. I seem to recall reading that there were problems with scaling up the processes but no matter.. if they can make it work, good.. None of this has any relevance to the point I was making about ethanol harvesting of course..

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    4. The Universe

      logged in via Twitter

      In reply to Mark Lawson

      Mark,

      Banish the idea of, "running out," of oil from your mind. That isn't what peak oil means at all.

      The plateau isn't a conspiracy by OPEC. It is due to a function of physics, geology, politics and economics, in that order.

      The US has not become a major producer again. The US peak occurred in 1970-71 at around 10 million barrels per day.

      The US is only currently producing about 7 million barrels per day by mounting an enormous effort, spending enormous amounts of energy and water.

      A single shale oil well costs 8-12 million dollars to create. That single well will produce about 500,000 to 1,000,000 barrels of oil in its 30 year lifetime.

      The world consumes that much oil in less than 30 minutes.

      Plan ahead - Plant A Garden

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    5. Mike Stasse

      retired energy consultant

      In reply to David Arthur

      http://ergobalance.blogspot.com.au/2008/01/isobutanol-breakthrough-in-biofuel.html

      If we assume a good yield of 16 tonnes of "sugar" per hectare from beet or cane (corn sugar yields are nowhere near this), we need 1.74 x 10^10/16 = 1.09 x 10^9 hectares of arable land to grow it on, or 1.09 x 10^7 km^2. That's 10.9 million km^2 and should be compared with the total of 14.9 million km^2 there is available over the entire surface of the Earth.

      Hence we may deduce that the enterprise would require…

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    6. Chris Harper

      Engineer

      In reply to Mark Lawson

      Mark,

      The US is now a net energy producer, but that gain is from gas, not oil.

      The US has the oil reserves to become self sufficient, but the regulatory regime has so far prevented this from happening.

      It has known exploitable conventional reserves of 20 billion barrels. In areas where exploration or exploitation has been restricted it has an estimated further 100 billion barrels, giving a total of about half the Saudi reserves. Or, in other words, A LOT.

      In addition, it has about 2 trillion…

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    7. Mike Stasse

      retired energy consultant

      In reply to The Universe

      In fact most of the oil still in the ground will stay there, because it will be physically or economically impossible to pump out. we will in fact NEVER run out of oil. I haven't seen lifetime figures for shale oil wells of 30 years.... but I have seen that they peak out in 2~3 years, and become next to useless within less than ten. My understanding of the situation is that after 5 years, it's more economical to move on and drill another hole where production is better.

      But it seems they have already tapped out the low hanging fruit....

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    8. Mike Stasse

      retired energy consultant

      In reply to Chris Harper

      "The US is now a net energy producer, but that gain is from gas, not oil."

      FOR NOW..... production might decline by 50 percent or even more within the next twenty years. Fig 57 page 75 http://energywatchgroup.org/fileadmin/global/pdf/EWG-update2013_long_18_03_2013.pdf

      Oil shale is NOT like oil. it's ROCK. The Energy Returned on Energy Invested is maybe less than 10% of the oil we used to build modern civilisation with. in other words, we have to pump 10 times as much to get the same result. Seeing as most of the shale is uneconomical (energetically AND financially...), most of it will stay in the ground.

      I fail to see how you believe "the Russian economy is about to be fracked into oblivion", when oil is currently above $110, BECAUSE fracking is so expensive.... the Russians must be rubbing their hands in glee, being able to sell their cheap conventional oil for $110 a barrel!

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    9. David Arthur

      resistance gnome

      In reply to Mark Lawson

      Fair comments Mr Lawson; the work to which I refer you is all about current R&D.

      While dismissive comments about the current worth of biofuel industries are quite correct, all such considerations will be swept aside by technological progress over the next decade or so. Perhaps investors should consider such factors?

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    10. David Arthur

      resistance gnome

      In reply to Mike Stasse

      Isobutanol can be grown from more than just sugar crops. Agroforestry will also be a big part.

      Factor in renewable energy, energy efficiency, etc,

      BTW, I agree with the view that the maximum human population should be substantially less than 7 billion - my understanding is that ~4 billion is about as much as the world can support.

      Nevertheless, couching it in terms of throwaway lines lines like "we're all doomed, we're buggered, we're all gunna die" is the sort of alarmist bollocks that might sell an idea in Hollywood.

      Have you any more useful suggestions than "The party's still over ..."?

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    11. Mike Stasse

      retired energy consultant

      In reply to David Arthur

      It's a bit hard when we have a conundrum with no solution.......

      So now you want to cut all the remaining forests down to make Isobutanol...? Yeah, that could make a Hollywood blockbuster...

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    12. David Arthur

      resistance gnome

      In reply to Mike Stasse

      "So now you want to cut all the remaining forests down to make ..."

      Err, you miss the point, which is that forests grow back. It works like this:
      1) trees grow on an area, A ha, at rate T' tonnes biomass per year per hectare.
      2) Each year, you harvest (T'A) tonnes of biomass, and make youyr biofuels.
      3) As a clever trick, you also have solar panels, windfarms, tidal and wave generation.
      4) As another clever trick, you only have 4 billion people.

      So you see, we don't have a conundrum with no solution: we have limits to growth determined by the finite size of our planet.

      As it happens, we may well have already exceeded those limits. The issue for us is whether we sit around waiting for some cataclysm, writing throwaway lines at each other with every comment ended with .. or ..., or whether the human population returns to more sustainable levels through "natural attrition" (a phrase popular with incoming Australian governing parties).

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    13. Mike Stasse

      retired energy consultant

      In reply to David Arthur

      "we're all doomed, we're buggered, we're all gunna die"

      I've thought some more about replying to this........

      First, we ARE "all gunna die", no ifs no buts........

      And we will all be "doomed and buggered" IF we do nothing to prepare. THAT is the crux of the message I have been spreading for years now, there are NO solutions to keeping business as usual going, so we have to switch to business as unusual....

      Either we do it ourselves and manage it, or pretend it will all go away and be "doomed and buggered"

      Our choice. Business as UNUSUAL has actually nothing wrong with it. i can vouch for that because I've been at it for about eight years now.

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    14. Mike Stasse

      retired energy consultant

      In reply to David Arthur

      3) As a clever trick, you also have solar panels, windfarms, tidal and wave generation.

      For starters, these do nothing to lower oil consumption. in fact, MAKING those things increases it......

      Secondly, we currently use 88 million barrels of oil equivalent per day, and I for one don't believe for one minute... no make that a nanosecond, we can grow trees fast enough to cover this demand.

      There is a solution, as Steb Fisher pointed out at https://theconversation.com/our-sustainability-crisis-didnt-start-and-doesnt-stop-at-climate-change-17471 and it's "a reduction to about 6% of what we currently consume in energy and materials in Australia. That is 16 times less than we now use."

      If I can do this..................

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    15. David Arthur

      resistance gnome

      In reply to Mike Stasse

      Mr Stasse, the agreement we're in is getting louder by the hour.

      I've known for some decades that the way humanity goes about its business (interaction with its life support system) needs to change.

      My expectation is that the proportion of the population that acknowledges this will increase to ~100% before the end of this century, by which time detrimental environmental changes will be clarifying the issue for the slower folk among us.

      I see the major difference between you and I as I am less alarmed than yourself, and anticipate rather more adaptation and development by our heirs and succesors than I draw from your remarks.

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    16. David Arthur

      resistance gnome

      In reply to Mike Stasse

      I'm less alarmed, Mike, because I'm confident that nature will attend to any and all of our mistakes in its own good time.

      I'm increasingly confident that my carelessness in not having children will make my own old age less guilt-ridden.

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    17. Jenny Goldie

      population and climate activist

      In reply to David Arthur

      Good on you David. Your carelessness in not having children makes you a modern day hero!! Well done.

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    18. David Maddern

      logged in via Facebook

      In reply to Mike Stasse

      Didn't it make you cry seeing them burning plantations planted under the MIS when the operators went bust.

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    19. David Maddern

      logged in via Facebook

      In reply to Mike Stasse

      You have been misinformed Mike

      "For starters, these do nothing to lower oil consumption. in fact, MAKING those things increases it......"

      No not true, solar panels live for 25 years or more and multi crystalline cells take 2-3 years to make up for embodied carbon, and thin film solar it is 1-2

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    20. Mike Stasse

      retired energy consultant

      In reply to David Maddern

      No I haven't. I have solar panels on my roof. But that doesn't stop the factories making more!

      I can sit pretty knowing my panels have repaid their embodied energy, but should I tell everyone else to get stuffed...?

      And come the day all fossil fuels stop being extracted..... it's bye bye renewable energy.......

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    21. Mark Lawson

      senior journalist at Australian Financial Review

      In reply to The Universe

      While the points you make about the shale oil field's lifetime and world consumption are valid.. the shale oil fields themselves are only a part of the shift.. you have to wave away gigantic deep oil fields, Canadian oil sands production and so on.. then producing oil from coal and so on and on.. don't bother with the garden, unless you happen to like gardens.. ..

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    22. Mike Stasse

      retired energy consultant

      In reply to Mark Lawson

      It's not the size of the tank that matters Mark...... it's the TAP..!!

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    23. Jenny Goldie

      population and climate activist

      In reply to Mark Lawson

      Mark

      Yes, there's plenty of oil down there but we now know that if are to keep within 'safe' levels of global warming, we have to keep four-fifths of fossil fuels in the ground and that includes oil. The other factor is EROIE (Energy Returned On Energy Invested). If it gets much below 10, it is difficult to maintain industrial civilisation as we know it. If it gets below 5, it's not worth doing unless infrastructure is already in place. A lot of the unconventional sources have EROIEs below 10.

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    24. Peter Campbell

      Scientist (researcherid B-7232-2008)

      In reply to Mike Stasse

      Believe it or not but some solar panel factories have their roofs plastered in solar panels they made earlier providing much of the energy required!

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    25. Doug Hutcheson

      Poet

      In reply to David Arthur

      "While dismissive comments about the current worth of biofuel industries are quite correct, all such considerations will be swept aside by technological progress over the next decade or so." David, I'm not so sanguine about the chances of inventing ourselves out of trouble, but I admire your certainty. I hope you are right, but I'm not banking on it ...

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    26. Doug Hutcheson

      Poet

      In reply to David Arthur

      "4) As another clever trick, you only have 4 billion people." So how do we convince the other 3 billion to top themselves? I expect Nature will step in and solve the population problem for us, when we hit the possible ceiling. Ebola Mk II, anyone?

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    27. Doug Hutcheson

      Poet

      In reply to Jenny Goldie

      " ... if are to keep within 'safe' levels of global warming, we have to keep four-fifths of fossil fuels in the ground ..." Unfortunately, that 'safe' level is an artificial target arrived at by politicians, not scientists. Even the much-touted 2°C limit is likely to see many unpleasant results: just look at what we have seen with less than 1°C to date.

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    28. David Arthur

      resistance gnome

      In reply to Doug Hutcheson

      "So how do we expect the other 3 billion to top themselves?"

      I shan't be topping myself, Mr Hutcheson; that said, I am fairly confident that I shall cease being a burden on the earth within a half century of this moment.

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    29. David Arthur

      resistance gnome

      In reply to Doug Hutcheson

      Doug, between biofuel developments over the next couple of decades, developments in electromotive technology and various efficiencies (eg bicycles instead of Toorak Tractors) the present use of hydrocarbons for transport fuels will be all but eliminated. (This won't do Australia's trade balance any harm, either, and may indeed be something of an incentive). I suggest you follow some of the links I provide for Mr Lawson for more information.

      For stationary energy, there are any number of other proposals, from the work of the Beyond Zero people to Mark Diesendorf and colleagues, even the Climate Change department (I got all excited when I saw they've got a Strategic Brief for the incoming government until seeing it's dated 2010).

      For the dreamers among us, there's even the nuclear option.

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    30. Trevor S

      Jack of all Trades

      In reply to Jenny Goldie

      "Your carelessness in not having children makes you a modern day hero!!"

      I have been for sometime advocating that free vasectomies be available to all men (I have had one and am sans children), free over the counter pill available to all women, along with free condoms

      That aside,

      I think Mike and David are conflating two very serious issues, over population / sustainability and climate change.

      I don't think there are any solutions to either that are palatable to the majority which…

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    31. Trevor S

      Jack of all Trades

      In reply to Mark Lawson

      "gigantic fields and completely unexpected - off Brazil "

      You mean like the massive Lula field ? I think a little context is in order and while it's only Wikipedia, here's a quote:

      http://en.wikipedia.org/wiki/Lula_oil_field

      "It is considered to be the Western Hemisphere's largest oil discovery of the last 30 years"
      ...

      "The upper estimate of 8 billion barrels (1.3 billion cubic metres) of recoverable oil would be enough to meet the total global demand for crude oil for about three months"

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    32. Mike Stasse

      retired energy consultant

      In reply to David Arthur

      I probably only have 15 years to go....... I'm cynically looking forward to TSHTF so I can tell everyone I told you so....... but I'm glad I won't be around to witness the full blown carnage. At least I will have done everything humanly possible to set our kids up for survival.

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    33. David Arthur

      resistance gnome

      In reply to Trevor S

      Trevor, you're right that CO2 emissions and population are two different issues, of which both need to be addressed. Let's put it this way: 100% cessation of fossil fuel use is necessary to avert further divergence of climate from the conditions that have prevailed for all recorded human history.

      Whether or not it is possible to live off 100% non-fossil fuel, it is necessary. As the stats you present show, clearly it is possible to live without fossil fuel use because many people already so…

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    34. JC Fool

      farmer

      In reply to David Arthur

      "Err, you miss the point, which is that forests grow back."

      Well, they do for a while. A big percentage of the macro and micro nutrients in a forest are contained in the trees themselves. By harvesting the trees you diminish those nutrients. Eventually the forest will not return. While this is a bigger issue on eluviated soils in wet areas (ex. British Columbian and South American rain forests) it is true for all areas. Not only that but when forests are replanted (if they are!) then there is…

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    35. David Arthur

      resistance gnome

      In reply to JC Fool

      JCFool righty raises a valid point, which is nutrient retention within forests.

      In the long term, this is essential for sustainable forestry, and I'm not suggesting that clearfelling practices have a place in sustainable forestry; I'm not. Instead, I understand coppicing and selective logging are somewhat more labour intensive, but more sustainable (a sometime participant in these discussions, Mark Poynter, would probably have some useful points to add here).

      I'd also expect that nutrient…

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    36. Jonathan Maddox
      Jonathan Maddox is a Friend of The Conversation.

      Software Engineer

      In reply to Mark Lawson

      Mark,

      The USA has been an importer of crude oil non-stop since the 1950s, 20 years before its domestic supply peaked. It was *always* a major producer, that never changed, but for 60 years American consumers have burned more oil than American oil industry has been able to produce. Recent shale oil investments, while they have significantly increased US production since its recent low circa 2007 (as did the discovery of major deposits in Alaska in the 1980s, though Alaskan oil production is in…

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    37. Jonathan Maddox
      Jonathan Maddox is a Friend of The Conversation.

      Software Engineer

      In reply to Mike Stasse

      I cannot comprehend this insistence that there's something magical about fossil fuels that means we can't manufacture things using other feedstocks and other forms of energy. Most energy used in high-tech manufacturing is electric and is not tied to any specific power source.

      That fossil fuels are used for this purpose *today* is because fossil fuels are fit for purpose and (by some measures) still the least expensive way to do it. However the majority of energy consumed in making solar panels…

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    38. Jonathan Maddox
      Jonathan Maddox is a Friend of The Conversation.

      Software Engineer

      In reply to Trevor S

      "... if we started tomorrow down the renewables road by the time anything substantive is achieved its way too late. ie if you think renewables are the answer you don't understand the question. The ONLY thing that could work is demand side reduction and that's not going to happen."

      But Trevor, we started down the renewables road long, long ago, and demand side reduction has always happened every time there is a price hike or a recession or both. And that's with minimal incentive, the vast majority of the population and the money men being either in denial or completely indifferent to environmental concerns. With a real incentive -- you know, a carbon price, or god forbid a "war footing" -- these things would happen in earnest.

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    39. Mike Stasse

      retired energy consultant

      In reply to Jonathan Maddox

      Obviously, what you don't comprehend is that the stuff made with oil is made OF Carbon and Hydrogen atoms. Electricity is not made of 'stuff'. And you can't pour it into a tank and carry it around to use later......

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    40. Mike Stasse

      retired energy consultant

      In reply to Jonathan Maddox

      And then the debts can't be repaid, because without GROWTH, the whole monetary/capitalist system collapses. Which is fine by me BTW....

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    41. Jonathan Maddox
      Jonathan Maddox is a Friend of The Conversation.

      Software Engineer

      In reply to Mike Stasse

      What a strange conclusion to draw, that I don't comprehend chemistry because I suggested that electric energy can be used to synthesise chemicals. Why do I always have to spell it out?

      Hydrogen atoms are readily obtained from water by electrolysis. Carbon atoms are readily obtained from carbon dioxide, which is available cheaply from a number of sources (including cement making and the "upgrading" of biogas or fossil gas) or at higher costs by capturing it from a fuel-burning process or even…

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    42. Jonathan Maddox
      Jonathan Maddox is a Friend of The Conversation.

      Software Engineer

      In reply to Mike Stasse

      Debt isn't my area. Gail Tverberg, I'm sure, understands it much better than I do. However I do know that neither the universe nor human civilisation hit some singularity and evaporate when debt becomes unpayable. Debtors default, creditors write down a loss, firms declare bankruptcy, nations devalue their currencies, and life goes on. Physical capital is not destroyed in the process, though it may change hands, fairly or unfairly, or become disused for a time. Knowledge is not lost. Human labour capacity is undiminished.

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    43. Mike Stasse

      retired energy consultant

      In reply to Jonathan Maddox

      There are grand proposals to do it on a much larger scale -- when fossil fuel prices are high enough:

      One that happens....... NOTHING will be affordable. THAT is the whole point of peak oil.

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    44. Jonathan Maddox
      Jonathan Maddox is a Friend of The Conversation.

      Software Engineer

      In reply to Mike Stasse

      "One that happens....... NOTHING will be affordable. THAT is the whole point of peak oil."

      Oil fetishism. Consumers in places like China and the Philippines will pay double, quintuple what they do now, and think it cheap at the price. We westerners will find ways to make do too, even at Dick Smith's arbitrary ten bucks a litre, even if it makes us feel shitty and impoverished, by doing exactly what people have always done in less wealthy countries and piling more people and stuff into fewer vehicles for slower trips. And those prices will continue to drive new means of production for energy and liquid fuels, including non-fossil production.

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    45. Dave Kimble

      retired botanist

      In reply to Jonathan Maddox

      > "Consumers in places like China and the Philippines will pay double, quintuple what they do now"

      The oil companies have not invested enough to provide enough oil even at a price of $500 /barrel, and it takes over 5 years to bring new projects on-stream.

      The experience of 2007-8 is that business models based on $70 /b don't work when oil shoots up to $140 /b - transport costs in this globalised economy rise so quickly that transport-intensive businesses go broke, and this has knock-on effects to the resilience of the supply chain. This also impacts the price of coal exported from Australia and Indonesia to China, Japan, South Korea and India.

      We have also seen protests, strikes and violent demonstrations around the world when petrol costs rise too quickly. For those countries that import a lot of their food, food price rises also cause big problems.

      So your argument doesn't hold water.

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    46. Mike Stasse

      retired energy consultant

      In reply to Jonathan Maddox

      That's called a DEPRESSION...... remember what happened in the 1930's? Money lubricates the gears of enterprise. Back in 1930, we were still pumping 100:1 ERoEI oil, most of the planet's resources hadn't even been touched, and we STILL had a depression...

      This time around, we will run out of money AND cheap/abundant energy.

      Your optimism knows no bounds......

      If you want to see what happens next, just look at Egypt and Syria...
      http://damnthematrix.wordpress.com/2013/08/17/is-egypt-about-to-ignite-the-collapse/
      http://damnthematrix.wordpress.com/2013/07/21/more-on-egypt/
      http://damnthematrix.wordpress.com/2013/07/08/egypt-the-peak-oil-petri-dish/

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    47. Jonathan Maddox
      Jonathan Maddox is a Friend of The Conversation.

      Software Engineer

      In reply to Dave Kimble

      "The oil companies have not invested enough to provide enough oil even at a price of $500 /barrel, and it takes over 5 years to bring new projects on-stream."

      Define "enough"? The portion of current oil consumption that goes to essentials -- agriculture, medicine, and the energy industry itself -- rather than frivolity or gross, correctible inefficiency is quite small. We could keep civilization ticking along on a small fraction, 15 or 20%, of current oil production.

      Neither oil companies…

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    48. Jonathan Maddox
      Jonathan Maddox is a Friend of The Conversation.

      Software Engineer

      In reply to Mike Stasse

      Actually we agree. Certainly a sudden collapse in conventional oil production would cause a depression, perhaps a much deeper one than that of the 1930s. However it wouldn't force the other energy industries to collapse with their higher EROEI values (quite the contrary!), nor would it cause oil production to cease altogether. There will always be some residual demand able to pay silly prices, as long as there's energy available to make it happen.

      My optimism doesn't extend to the belief that…

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    49. Doug Hutcheson

      Poet

      In reply to Jonathan Maddox

      "A conceivable dystopian future is one where pollution and economic devastation reduce humanity to a state where we no longer have the technical sophistication to manufacture such a sophisticated device as a solar photovoltaic panel or inverter. I consider such a profound collapse vanishingly improbable." Jonathan, add global warming to the mix, making some areas all but uninhabitable and the dystopian becomes less improbable.

      I hope to be proven wrong by a future where AGW is found to be a hoax and infinite growth is a realistic condition of our existence. Given current knowledge and conditions, I consider such a profound survivability vanishingly improbable. Nature doesn't care about us and Nature bats last.

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    50. Doug Hutcheson

      Poet

      In reply to Jonathan Maddox

      "That's hardship. It is not the end of civilisation." Jonathan, it will be intriguing to see what form civilisation takes as these extreme stresses bear down on us.

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    51. Dave Kimble

      retired botanist

      In reply to Doug Hutcheson

      And add in financial collapse and supply chain problems, which exacerbate each other, and maintenance of the electricity grid and gas pipelines, which can't be done without diesel, and suddenly the power goes out and there's no communications, no reticulated water, no sewerage, no banking and nobody you can call for help.

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    52. Jonathan Maddox
      Jonathan Maddox is a Friend of The Conversation.

      Software Engineer

      In reply to Doug Hutcheson

      "Jonathan, add global warming to the mix,"

      That was explicitly mentioned as part of the "pollution" I was talking about. I *do* think that climate change bodes for a very dystopian future indeed -- agricultural collapse, the worst famine ever seen, refugees and wars and police states -- but I doubt it will be so profoundly devolved as to lose modern energy technology.

      But since it's modern energy technology which *creates* climate change, it's up to us to bowl properly and not give the game away.

      When nature eventually comes along and chucks an asteroid at us later, I want to be ready. There's no rematch.

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    53. Jonathan Maddox
      Jonathan Maddox is a Friend of The Conversation.

      Software Engineer

      In reply to Dave Kimble

      Energy is fungible. You don't need *diesel* to maintain infrastructure, you don't even necessarily need liquid fuels.

      Even if you did need one or the other, petroleum production will never collapse all the way to zero (even at NEGATIVE net energy!) unless one of the following becomes true:

      (a) there's no net-energy-positive energy source available to run the extraction process -- in other words, civilisation has already collapsed,

      or (b) a cheaper, cleaner, all-around better substitute…

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  3. Stephen Ralph

    carer at n/a

    Oh well....another nail in a coffin with seemingly more nails than wood already.

    Is there any light at the end the tunnel?

    Politics and big business will cosy up and gather the mega bucks while the rest of us huddle around the camp fire.

    Ironically there was a documentary on Easter Island last night - now there's an omen.

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  4. Peter Evans

    Retired

    Essentially you are saying that the "peak" will keeping shifting as price rises and we are able to pay that higher price. Sounds like pretty basic supply and demand interaction. Of course a question for Australia is how long we can pay those higher prices as we import more and more oil both in response to demand and to having past our own peak production some time ago. Substitutes such gas and biofuels can help but gas is also priced at internal rates and biodiesel on a commercial scale expensive. This is a real emergency for any national government in Australia that is being ignored.

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    1. Mike Stasse

      retired energy consultant

      In reply to Peter Evans

      The only thing that shifts the peak is more modern technology, not price. Like horizontal drilling, which has made the plateau last longer than originally anticipated. However, horizontal drilling does not affect the area under the curve..... lengthen the plateau, and the back of the curve looks like a cliff...!

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  5. Paul Richards

    integral operating system

    Samuel Alexander wrote; "Economists and politicians are still crafting their policies based on flawed, growth-based thinking, but the growth model, which assumes cheap energy inputs, is now dangerously out-dated."
    Economic modelling based on another fallacy; that of recovering then exporting or growing raw commodities fast and cheaper than they fall in value. Because the long term trend is commodities we export have been falling ROI, despite temporary spikes that are highly profitable. The parallel form of income generation has seen an increase in value of manufactured goods. Interestingly being highly profitable and increasingly automated for those economies set up for them. Germany has over fifty percent of workforce in small to large manufacturing. While projecting a long term public policy of sustainable energy use.
    That fact alone raises more questions around our geopolitical policies, their sustainability and redundancy.

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  6. Mark Pollock

    Analyst

    I guess we will have to start being serious about the nuclear option then.

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    1. Simon Jowitt

      Research Fellow in Economic Geology at Monash University

      In reply to Mike Stasse

      Not sure I agree with this. The mining industry operates in a very different way to the oil and gas industry, in that while hydrocarbon reservoirs are easily delineated using 3D seismic imaging, the same is not the case for ore deposits, including those of uranium, as these have to be delineated using expensive close-spaced drilling. More often than not, mining companies drill only enough to delineate enough resource to last say 15-20 years worth of mining, and will follow up this drilling with additional…

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    2. JC Fool

      farmer

      In reply to Mark Pollock

      Nuclear is the worst of the worst. The full life-cycle costs per MW are astronomically high. Not only must the energy involved in mining, transport, refining, building, distribution, and decommissioning be accounted for but also the cost and energy of long-term (in human time-scale, permanent) waste storage and monitoring. Inevitable accidents and the resulting loss of resources can be added to the total as well. For example the total cost of the Japanese meltdown will be orders of magnitude more…

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    3. Jonathan Maddox
      Jonathan Maddox is a Friend of The Conversation.

      Software Engineer

      In reply to Simon Jowitt

      ''However, note that "social and environmental concerns could be the most important restrictions on future copper production" - this is equally applicable to uranium, and indeed to oil and gas, as the author of the main article states.''

      Absolutely. If all we had to worry about were "resources", the resource economists known as "cornucopians" in peak oil circles would be mostly right. Scarcity drives price increases which drive substitution, enable new prospecting and extraction techniques, and the size of the resource becomes *larger*, not smaller.

      The reason they're wrong is not because of decline in net energy yields (that certainly would become a limit in time if it weren't for renewable energy, but even in terms of fossil fuels the energy return on energy investment is still very high on gas and coal), it's because of pollution and land degradation.

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    4. Mike Stasse

      retired energy consultant

      In reply to Jonathan Maddox

      Sorry, but you are completely wrong on this.......

      "My major point when I gave my talk at the Fifth Biophysical Economics Conference at the University of Vermont was that our economy’s overall energy return on investment is already too low to maintain the economic system we are accustomed to. That is why the US economy, and the economies of other developed nations, are showing signs of heading toward financial collapse. Both a PDF of my presentation and a podcast of the talk are available on Our…

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    5. Jonathan Maddox
      Jonathan Maddox is a Friend of The Conversation.

      Software Engineer

      In reply to Mike Stasse

      I read this when it was first published. I admire Tverberg's work in general, but I do firmly believe it is she who is completely wrong on the subject of net energy available to civilisation.

      She is not wrong on the fundamentals of physical resource economics and diminishing returns. These are not really negotiable; but it is certainly probable that she has the timescale of those limits wrong because she is mistaken about the gross EROEI of civilization's energy sources.

      Tverberg is probably…

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    6. Mike Stasse

      retired energy consultant

      In reply to Jonathan Maddox

      Tverberg's oil fetish is something which has bothered me for as long as I've been reading her work (which is five years or more). She will grudgingly acknowledge that today's wind turbines achieve an impressive 50:1 EROEI, and that even solar PV has an EROEI over 10:1 now, but continues to claim that renewable energy is utterly dependent on oil

      Funny that...... can you show me how anyone mines the lime for concrete, the iron ore for steel, the bauxite for Aluminium, the silica for making glass…

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    7. Jonathan Maddox
      Jonathan Maddox is a Friend of The Conversation.

      Software Engineer

      In reply to Mike Stasse

      We use diesel today because it is cheap (in gross terms, not net of externalities) and convenient.

      A lot of mining equipment is electric-drive, usually powered by on-board diesel engines, but not always or exclusively.

      "five kilometre long electric lead":

      It's called a catenary, same as trains and trams use:

      http://minesupport.blogspot.com.au/2008/01/mining-truck-applications.html

      http://www.komatsuamerica.com/092208-860E-1K

      Battery storage is not yet considered economical at the…

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  7. Garry Baker

    researcher

    "Over the last 150 years, however, we’ve picked the low hanging fruit,""

    A good call on most things, however the 150 years claim is a bit off the mark. Try 100 years or so, when William Knox Darcy used his money from the Mt Morgan diggings in QLD to seek and find oil in Persia - Say by 1908, the modern oil age was founded - and he was the father of it.

    When Marion Hubbert proposed his peak theories in 1956, he pretty much predicted to the year, that US oil production would peak by 1970…

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    1. Doug Hutcheson

      Poet

      In reply to Garry Baker

      "in Australia a global fuel stoppage would see all petrol stations closed within three days - and our supermarkets the same week." Indeed. Various parties have forecast that we are a few meals away from anarchy (http://www.inquisitr.com/135667/any-society-is-three-square-meals-away-from-anarchy-suggests-researchers/), making an interesting prospect for urban dwellers when the food trucks stop running. Growing a garden - and keeping your produce safe from marauding bands of starving oicks - will become a necessity, not a greenie pursuit.

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  8. Ute Foster

    Retired

    Not only is the 'unconventional' oil and gas more expensive to extract, but it's vastly more damaging to the environment.

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  9. Stephen Ralph

    carer at n/a

    There is much written about shale oil & CSG.

    As a layperson I know very little about the possible environmental damage from the "mining" of these resources. There is a lot of comment in this forum about these processes, mostly negative.

    Is The Conversation able to provide us with some EXPERT articles that outline the pros and cons of the issue/s?

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  10. Jenny Goldie

    population and climate activist

    Thanks for telling it as it is. What are the implications? Worsening climate change as we maintain oil supplies through environmentally dirtier methods of extraction; and a diminished human carrying capacity. Can we only carry 4 billion people? If we combine peak oil with climate change we'll have - as oil analyst Ian Dunlop says - a planet of one billion, not seven, let alone 9-10 billion. The spectre of famine looms unless we can ration oil properly and direct it to farmers to maintain their tractors, pumps and trucks. We can probably move to renewables (well, we would have but with Abbott, probably not) for electricity production in a decade but what we use for transport is another matter. I'm already finding $1.68 for unleaded petrol at the pump expensive and am having to modify my life-style somewhat. And the food gardens are going in, that's for sure.

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    1. JC Fool

      farmer

      In reply to Jenny Goldie

      Hi Jenny, as an organic farmer I do not see the solution as rationing the oil so as to keep tractors running but rather returning to a way of farming that would be recognizable to the vast majority of people since the inception of civilization. That means more farmers in more places, not more tractors. Using only hand tools I can generate considerably more and better food per acre than any mono-cropper. Not only that but my soil is healthier at the end of every year than at the beginning.

      In a similar way the very idea of transportation, electrified or otherwise, is irrelevant. In a low energy world we will walk or possible cycle. The human migration to areas where food can be produced will be absolutely unprecedented. Non-productive areas will have to largely abandoned. Regardless of what we do we will not be able to sustain the present global population.

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  11. David Maddern

    logged in via Facebook

    What is relevant although small is that there is a pilot plant near Canberra that is a simple process turning I think 3 kilos of sawdust into 1 litre of crude oil, and any organic fuel can be used. A very thin wedge.

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  12. Kym Afford

    Population activist

    In reply to Mike Stasse
    I have a brother in law who said everything is in God's plan.
    I have always disagreed with him as I am an atheist, but I'm having second thoughts now that with his help the Liberals are in and they know that business knows best.
    There is nothing to worry about.
    Thank you God!

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    1. Mike Stasse

      retired energy consultant

      In reply to Kym Afford

      Hmmmmmm.......... must be a malevolent god that one......! LOL!

      We are in Gaia's hands now.....

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  13. Doug Hutcheson

    Poet

    "The fact that unconventional oil is much more carbon-intensive than crude oil – exacerbating an already intractable climate problem – doesn’t seem to trouble oil producers or most politicians." The only politicians sounding a warning are those not fettered by financial ties to Big Oil. Big Oil, in turn, is running an expensive campaign to hide the truth, a campaign that would be ruinously expensive for realists to rebut. We are the victims of our political system, in which the looney Right is free to peddle whatever line they think the Great Unwashed will swallow.

    "Economists and politicians are still crafting their policies based on flawed, growth-based thinking, but the growth model, which assumes cheap energy inputs, is now dangerously out-dated." Given that the world economic system depends on tomorrow's growth to pay for today's borrowings, there will be hell to pay when that growth fails to materialise. Resource wars are likely. Luck us!

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  14. Kym Lennox

    logged in via LinkedIn

    Another insightful hindsight analysis for the costs of the 'do nothing approach'.

    Too often we do not consider the cost of non-action correctly. It is such a gap in the focus of decision support processes and what is taught in many a related course. Today is purely point along a continuum of change resulting from historic choices, actions and pre-existing constraints - do nothing doesn't exist. Practices for the formation of policy in both government and private sectors would do so much better if this truism were correctly engaged with.

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  15. Michael Ekin Smyth

    Investor

    Citing the amount that oil costs without putting it into the context of overall energy costs lacks credibility. Energy costs, measured as a percentage of overall economic activity, have been declining reasonably steadily since the industrial revolution. Energy is, of course, vital but it now only makes up about 8 per cent of the overall global economic pie, and it is declining. Oil, gained a special role following the invention of the internal combustion engine, and now contributes somewhere between…

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  16. Chris Harper

    Engineer

    Sheesh, listening to this lot almost makes me want to suicide. Depressing or what.

    Look, Oil is important because it is a convenient source of energy, but the attitude on the part of sum seems to be if the oil runs out we ain't got no more energy. Doom ,doom doom.

    Sigh, well it ain't so.

    So what are the alternatives? Nuclear? Sure. Ok, so the don't have a lot of uranium ore reserves, but in the last year or so there was a breakthrough in the cost of extracting the stuff from seawater. Doing…

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  17. Alan Powrie

    Apprentice Polymath at Writer

    A very interesting discussion. It make me wonder how the intellectual contribution of our nation (as evidenced by the posts on this site) can expediently bypass or disregard our political process. Have we reached peak intelligence? The latent problem as I see it is that "human survival" must depend on a different social structure, a different energy source and a different economy to that which underpins the "oil/gas" economy which supports the affluent Australian lifestyle.

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    1. Mike Stasse

      retired energy consultant

      In reply to Alan Powrie

      Have we reached peak intelligence?

      No........ but we have reached peak stupidity.....

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    2. Dave Kimble

      retired botanist

      In reply to Alan Powrie

      Exactly. We have seen how the world's economy responded to Peak Oil's first squeeze in 2008 - the New York price shot up to $147 per barrel and business plans based on $25 /b failed, causing the biggest worldwide recession we have ever seen. The effects of this are still with us, while Peak Conventional Oil is getting worse and will get worse faster in the next decade. There is no way that Unconventional Oil can overcome this.

      In the past we have always built our way out of problems using cheap…

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    3. John Armour

      logged in via email @bigpond.com

      In reply to Mike Stasse

      "No........ but we have reached peak stupidity....."

      Priceless, Mike !

      No better illustrated than by this observation by Gail Tverberg in that thebull.com.au link you posted:

      "There is considerable evidence that we are already reaching the situation where governments are encountering financial distress of the type shown in Figure 17. With wages being depressing in recent years (Figure 15), it is difficult to collect as much taxes as required. At the same time, expenses are elevated to…

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    4. Doug Hutcheson

      Poet

      In reply to Mike Stasse

      "... we have reached peak stupidity...". Mike, I think you are being charitable. I see no end to the potential stupidity of our species. Homo Stupidus stupidus.

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    5. Mike Stasse

      retired energy consultant

      In reply to Doug Hutcheson

      Darn...... and here I was thinking of selling the idea to Matercard after John Armour thought it was priceless.....

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    6. Chris Harper

      Engineer

      In reply to Doug Hutcheson

      It really is beyond any question, people who don't agree with you have to be stupid. It really is just a matter of definition, isn't it? It can't possibly be hubris or ignorant sanctimony.

      Why doe we even allow these people to vote? After all, if they are so stupid their opinion can't be allowed to overwhelm yours. That would be an act of stupidity in itself, wouldn't it?

      Gee, I wish I were both as smart, and as humble, as you.

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    7. Doug Hutcheson

      Poet

      In reply to Dave Kimble

      "Peak Oil means Peak Energy, and that means Peak Civilisation and Peak Population." Dave, whether we have reached Peak Civilisation depends upon what we do next. If our civilisation can think of a way to safely and creatively move beyond Peak Energy, perhaps it can continue to evolve. I am pessimistic about our chances, but a miracle may occur ...

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    8. Doug Hutcheson

      Poet

      In reply to Chris Harper

      Chris, "people who don't agree with you have to be stupid". No, but people who wilfully refuse to investigate threats to our civilisation and continue the ludicrous mantra "eternal growth is possible and fossil carbon in the atmosphere is good for us" are, indeed, stupid.

      "Why do we even allow these people to vote?" Because we are fortunate to live in a democracy, where every vote is equal. People who lodge a donkey vote are entitled to do so and people who don't vote at all are entitled to abstain…

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    9. Dave Kimble

      retired botanist

      In reply to Doug Hutcheson

      While Peak Oil, Energy and Population have an agreed quantifiable measures, Peak Civilisation is not so clear unless you take it to mean "Civilisation as we know it today", with its strong emphasis on economic growth and consumption.

      David Attenborough said recently humans have ceased to evolve (in the Darwinian sense), but that will soon change as oil-powered food and health-care becomes increasingly difficult to supply.

      I see things playing out along the lines described in David Korowicz's "“Financial system / supply-chain cross contagion – a study in global systemic collapse”" http://www.feasta.org/wp-content/uploads/2012/06/Trade-Off1.pdf in which he says "collapse happens when a system crosses a tipping point and is driven by negative feedbacks into a new and structurally and qualitatively different state, one with a different arrangement between parts and a fall in complexity."

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    10. Doug Hutcheson

      Poet

      In reply to John Armour

      John, "When a poet knows more than most economists" is interesting, but he was clearly light-years ahead of me in erudition and influence. Sigh.

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    11. Chris Harper

      Engineer

      In reply to Doug Hutcheson

      Doug,

      So let me rephrase what you wrote.

      You don't believe that people who don't agree with you are stupid, unless they willfully disagree with you, in which case they are stupid.

      Right?

      You said: "What is lacking in our system is a means of ensuring the voting public are well informed before they vote."

      It is possible that some people might disagree with you AND have reason to believe that they are well informed, but even then they are still stupid, right?

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    12. Chris Harper

      Engineer

      In reply to Doug Hutcheson

      "Peak Oil means Peak Energy, and that means Peak Civilisation and Peak Population."

      This is based on the assumption that if oil = energy then the reverse must also be true, that energy = oil.

      Sorry, not true. Oil = energy, but energy = (a whole lot of things, including oil).

      Peak oil does not = peak energy. In fact, I agree with Sheikh Yamani, Peak oil will occur when when demand drops as a result of developing cheaper alternatives, not as a result of supply dropping.

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    13. Doug Hutcheson

      Poet

      In reply to Chris Harper

      No, Chris, you are deliberately obfuscating. People are stupid, if they make important decisions without first studying the topic in question. I am relaxed about people becoming informed and arriving at a conclusion different from mine, but I am depressed about all the people who study nothing, know little and yet say much. In a democracy, that is their right, but it does not improve the human condition. I think people who agree with me in spite of their lack of knowledge on the subject, are a silly as those who oppose on principle, rather than from knowledge.

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    14. John Armour

      logged in via email @bigpond.com

      In reply to Doug Hutcheson

      You obviously aren't smoking the same brand as STC, Doug.

      Could be a good career move.

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    15. Chris Harper

      Engineer

      In reply to Doug Hutcheson

      Doug,

      That makes sense, and I have no problem with it, but that is not what you were originally saying.

      I was nor obfuscating, rather pointing out your failure to make an argument before labeling everyone who disagreed with you as stupid.

      This clarification I can get behind.

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    16. Dave Kimble

      retired botanist

      In reply to Chris Harper

      Technically you are correct, Peak Oil does not equate to Peak Energy. I was using shorthand by leaving out why in practice this is so, having explained this point at length many times.

      To build infrastructure like electricity generating stations, including renewables and nuclear requires a lot of energy to be invested first. A lot of that is required in the form of oil products for transport and to operate heavy machinery. It also takes a lot of oil to mine coal and to drill for and pipe gas…

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    17. Mike Stasse

      retired energy consultant

      In reply to Chris Harper

      I wish you'd done as much research as us...... you'd soon change your tune.

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    18. Mike Stasse

      retired energy consultant

      In reply to Chris Harper

      In my experience, the people who disagree with me are very very very badly informed...... You'd have to study this issue for ten years to have the same level of understanding I have come to reach.

      In any case, the US and German military, among many other illustrious authorities, agree with me. That's good enough for me.

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    19. Doug Hutcheson

      Poet

      In reply to Chris Harper

      "I was not obfuscating ..." In that case, my bad for posting an ambiguous (or incomprehensible) comment originally. Let peace be declared! "8-)

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    20. Jonathan Maddox
      Jonathan Maddox is a Friend of The Conversation.

      Software Engineer

      In reply to Dave Kimble

      So much of present-day oil consumption is wasteful, frivolous and discretionary (I'm talking about single-occupancy commutes, short-haul commuter air flights and the like) that when there is a real petroleum supply crisis, a major recession, or genuine urgent action on pollution, such demand can be dispensed with in short order, and the remainder of the liquid fuel supply (including biofuels and synthetic fuels) can be diverted to the emergency services and the securing of other, more rewarding…

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  18. Mark Renfrow

    logged in via email @swbell.net

    "We have entered a new era of energy and economics, one in which expensive oil is going to make it increasingly difficult for oil dependent economies to grow their economies. "

    This statement is the conventional view, but I would like the author to consider another view.

    We have seen large advanced economies decrease their fossil fuel to GDP ratios over time. In other words, they make money with less energy intensity than lesser developed nations.

    Given that, wouldn't higher oil prices in…

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    1. Mike Stasse

      retired energy consultant

      In reply to Mark Renfrow

      For goodness sake........ you can't eat money! Without oil, we CANNOT continue farming the mostly useless land we currently farm. The only reason we had a population explosion was because of ever increasing amounts of cheap and abundant oil..... NOT MONEY!

      "the economy" is a totally human construct, not worth the paper it's written on. Furthermore, make no mistake, the day the oil 'disappears', your precious economy is FINISHED.

      And you seem to be unaware that many things are made OF oil..... like roads, plastics, drugs, in fact the list is very very long... things that you cannot make with money alone.

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  19. Kym Afford

    Population activist

    In reply to Mike Stasse (and Gaia,)

    It was brave of James Lovelock to put forward the theory, Murdoch's messy media pilloried (can't think of his name, but Abbott, the believer, is about to sack most climate scientists in Australia and put Christopher Pyne in charge) the theory. From your research you must have come to the same conclusions - the universe is an entity, just like our bodies which are made of many living organisms but we are the new rats- the purge is about to happen.
    As someone else said, "You cannot eat money!"
    No God is going to step in, he did not for the Mayans, the German slaughter, Hiroshima, Pol Pot!
    But, my bro in law still thinks he has a plan.
    Maybe Abbott will be the second coming. Ha! Ha! bet he does not get two goes!

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    1. Doug Hutcheson

      Poet

      In reply to Kym Afford

      "Maybe Abbott will be the second coming." What a dismal thought, if Tony is the pinnacle of human evolution. Is he still the suppository of all wisdom?

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  20. Alex Cannara

    logged in via LinkedIn

    It's always interesting to see "price" of this or that bandied about. Yet, few prices include the carefully-avoided external real costs.

    Let's examine oil -- as an investment executive recently explained, oil companies' equity is 'valued' at prices that reflect not their shipments but their known reserves.

    These known reserves are about 10x their shipments. These known reserves cannot be fully or even mostly combusted, as explained below later.

    This means that oil companies' stocks are…

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    1. Stephen Ralph

      carer at n/a

      In reply to Alex Cannara

      Well thanks Alex - that ruined a nice Saturday arvo.

      Still at least it confirms why I'm a pessimist about practically everything.

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    2. Dave Kimble

      retired botanist

      In reply to Alex Cannara

      > "From Nixon on ..."

      Yes, Peak US Oil was in 1970 and in 1971 Nixon closed the gold window, a technical default, thus rendering the US Dollar a fiat currency, which then could be printed in any quantity to pay for imported oil.

      This worked for 37 years, by which time the US was in debt to the tune of $14 trillion. Then it all blew up in their faces, as it was always bound to do.

      Note though that the up side of Peak Oil-Coal-Gas is that the IPCC's predictions of climate change have been based on unrealistic forecasts of the fossil fuels that will be burned in the decades ahead. In next year's AR5 report there will be a scenario modelled which follows peakists forecasts, and I anticipate this will result in "only" +1.4 C degrees of warming in 2045 and decreasing thereafter.

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    3. Paul Richards

      integral operating system

      In reply to Alex Cannara

      Alex Cannara wrote: "Some refs... " Thanks for the sales brochures, always good to keep up with the unbiased view of transnational corporate elite.

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