Discussion:
Peak Oil Pandemonium Panics Planet (again)
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Byker
2018-07-05 21:05:04 UTC
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In 2007 crude oil demand touched 100 mbd and the oil price rose to about
$150/bb , this almost instantly touched off the worst economic crash for a
generation . Those arguing for ‘peak oil’ were accused of crying Wolf but
10 years later here we go again
Some folks have short memories. People like James Howard Kunstler have made
a cottage industry churning out books promoting the "peak oil" myth. I don't
hear much out of him anymore: http://kunstler.com/


-----------------------------------------------------------------------------------------------------
‘Peak Oil’ Debunked, Again

The world relearns that supply responds to necessity and price.

It has been 216 years since Thomas Malthus gave birth to the idea that
mankind’s appetite for natural resources would outstrip nature’s capacity to
supply them. There have since been regular warnings that the world is
running out of soybeans, helium, chocolate, tungsten, you name it—and that
population growth has become unsustainable. The warnings create a political
or social panic for a while, only to be proved wrong.

The latest reckoning with reality is the end of the obsession with “peak
oil,” which for years had serious people proclaiming that we were entering
an era of permanent fossil fuels scarcity. It didn’t work out that way.

That’s a central lesson from this year’s dramatic fall in the price of oil,
which reached $69.49 a barrel of Brent crude on Thursday from a June high of
$112.12. As recently as early November, when oil hovered at $80, OPEC
officials warned they would intervene to hold the price at $70. But Saudi
officials conspicuously refused to support an output cut at last week’s OPEC
meeting, and Saudi oil minister Ali al-Naimi has made clear that he’d be
comfortable with lower prices.

The short-term Saudi calculation is to drive oil prices down to squeeze
their geopolitical adversaries and higher-cost producers. That goes
especially for their adversaries across the Persian Gulf in Iran, which
depends on oil exports for over 40% of its revenues, and where the regime
had designed its budget based on $100 oil.

The Saudis also hope to slow the explosive growth of U.S. production, which,
thanks to the tapping of domestic shale resources through the combination of
horizontal drilling and hydraulic fracturing, has risen to some nine million
barrels a day from five million in 2008. By some estimates, the price of oil
needs to be as high as $90 a barrel for oil extracted from “tight” deposits
such as shale, though oil market research firm IHS believes most tight oil
wells have a break-even cost of between $50 and $69 dollars a barrel.

But even if the Saudi move slows U.S. drilling, the International Energy
Agency forecasts that U.S. production will still surpass Saudi Arabia’s
output of 9.7 million barrels a day, and overtake Russia’s 10.3 million,
perhaps sometime next year. This would make America the world’s largest oil
producer, which it was from the dawn of the oil age through 1974. Thanks to
the fracking boom, the U.S. surpassed Russia as the world’s largest
natural-gas producer in 2013.

All this is a useful reminder, as IHS’s Daniel Yergin told us the other day,
that “technology responds to need and to price.” It was the same story in
the 1970s, when the world responded to OPEC’s embargoes by exploiting new
resources in Alaska and the North Sea, and again in the 1980s and 1990s,
when offshore drilling became technologically feasible and economically
profitable at ever-greater depths. And expect more from where that came, as
the frackers continue to figure out how to drive down costs, and if new
shale deposits in places such as Mexico, Ukraine and Argentina start to be
exploited.

Also worth remembering is how spectacularly wrong some recent predictions of
doom turned out to be. This is shooting fish in a barrel, but here is Paul
Krugman in December 2010, declaring that “peak oil has arrived.”

“What the commodity markets are telling us,” Mr. Krugman averred, “is that
we’re living in a finite world, in which the rapid growth of emerging
economies is placing pressure on limited supplies of raw materials, pushing
up their prices. And America is, for the most part, just a bystander in this
story.” Far from being a bystander, America has been the main oil-market
innovator.

Such doomsaying is that much more embarrassing because warnings of peak oil
are nearly as old as the oil industry. In his book “The Quest,” Mr. Yergin
records that in 1885 the state geologist of Pennsylvania warned that “the
amazing exhibition of oil” was “a temporary and vanishing phenomenon—one
which young men will live to see come to its natural end.”

Given this 130-year record of predictive failure, why does the end-of-oil
myth persist? Part of it is that peak oil is more wish than prediction—a
desire to see the end of fossil fuels to serve a larger political agenda. It
is also a way of scaring governments into pouring money into alternative
energy sources that can’t compete with oil and natural gas without subsidies
and mandates. Predicting disaster can also be a profitable business and a
path to speech-making celebrity.

The happy ending is that the notion that the world is running out of
resources always fails because the ingenuity of entrepreneurs, spurred by
necessity and incentive, always exceeds the imagination of doomsayers. So we
are learning again, and let’s hope memories will be longer this time.

http://www.wsj.com/articles/peak-oil-debunked-again-1417739810
Lions Growl of Butchers Foul
2018-07-06 07:05:18 UTC
Permalink
Raw Message
Post by Byker
In 2007 crude oil demand touched 100 mbd and the oil price rose to about
$150/bb , this almost instantly touched off the worst economic crash for a
generation . Those arguing for ‘peak oil’ were accused of crying Wolf but
10 years later here we go again
Some folks have short memories. People like James Howard Kunstler have made
a cottage industry churning out books promoting the "peak oil" myth. I don't
hear much out of him anymore: http://kunstler.com/
http://youtu.be/4bHZRSlhJxY
-----------------------------------------------------------------------------------------------------
‘Peak Oil’ Debunked, Again
The world relearns that supply responds to necessity and price.
It has been 216 years since Thomas Malthus gave birth to the idea that
mankind’s appetite for natural resources would outstrip nature’s capacity to
supply them. There have since been regular warnings that the world is
running out of soybeans, helium, chocolate, tungsten, you name it—and that
population growth has become unsustainable. The warnings create a political
or social panic for a while, only to be proved wrong.
The latest reckoning with reality is the end of the obsession with “peak
oil,” which for years had serious people proclaiming that we were entering
an era of permanent fossil fuels scarcity. It didn’t work out that way.
That’s a central lesson from this year’s dramatic fall in the price of oil,
which reached $69.49 a barrel of Brent crude on Thursday from a June high of
$112.12. As recently as early November, when oil hovered at $80, OPEC
officials warned they would intervene to hold the price at $70. But Saudi
officials conspicuously refused to support an output cut at last week’s OPEC
meeting, and Saudi oil minister Ali al-Naimi has made clear that he’d be
comfortable with lower prices.
The short-term Saudi calculation is to drive oil prices down to squeeze
their geopolitical adversaries and higher-cost producers. That goes
especially for their adversaries across the Persian Gulf in Iran, which
depends on oil exports for over 40% of its revenues, and where the regime
had designed its budget based on $100 oil.
The Saudis also hope to slow the explosive growth of U.S. production, which,
thanks to the tapping of domestic shale resources through the combination of
horizontal drilling and hydraulic fracturing, has risen to some nine million
barrels a day from five million in 2008. By some estimates, the price of oil
needs to be as high as $90 a barrel for oil extracted from “tight” deposits
such as shale, though oil market research firm IHS believes most tight oil
wells have a break-even cost of between $50 and $69 dollars a barrel.
But even if the Saudi move slows U.S. drilling, the International Energy
Agency forecasts that U.S. production will still surpass Saudi Arabia’s
output of 9.7 million barrels a day, and overtake Russia’s 10.3 million,
perhaps sometime next year. This would make America the world’s largest oil
producer, which it was from the dawn of the oil age through 1974. Thanks to
the fracking boom, the U.S. surpassed Russia as the world’s largest
natural-gas producer in 2013.
All this is a useful reminder, as IHS’s Daniel Yergin told us the other day,
that “technology responds to need and to price.” It was the same story in
the 1970s, when the world responded to OPEC’s embargoes by exploiting new
resources in Alaska and the North Sea, and again in the 1980s and 1990s,
when offshore drilling became technologically feasible and economically
profitable at ever-greater depths. And expect more from where that came, as
the frackers continue to figure out how to drive down costs, and if new
shale deposits in places such as Mexico, Ukraine and Argentina start to be
exploited.
Also worth remembering is how spectacularly wrong some recent predictions of
doom turned out to be. This is shooting fish in a barrel, but here is Paul
Krugman in December 2010, declaring that “peak oil has arrived.”
“What the commodity markets are telling us,” Mr. Krugman averred, “is that
we’re living in a finite world, in which the rapid growth of emerging
economies is placing pressure on limited supplies of raw materials, pushing
up their prices. And America is, for the most part, just a bystander in this
story.” Far from being a bystander, America has been the main oil-market
innovator.
Such doomsaying is that much more embarrassing because warnings of peak oil
are nearly as old as the oil industry. In his book “The Quest,” Mr. Yergin
records that in 1885 the state geologist of Pennsylvania warned that “the
amazing exhibition of oil” was “a temporary and vanishing phenomenon—one
which young men will live to see come to its natural end.”
Given this 130-year record of predictive failure, why does the end-of-oil
myth persist? Part of it is that peak oil is more wish than prediction—a
desire to see the end of fossil fuels to serve a larger political agenda. It
is also a way of scaring governments into pouring money into alternative
energy sources that can’t compete with oil and natural gas without subsidies
and mandates. Predicting disaster can also be a profitable business and a
path to speech-making celebrity.
The happy ending is that the notion that the world is running out of
resources always fails because the ingenuity of entrepreneurs, spurred by
necessity and incentive, always exceeds the imagination of doomsayers. So we
are learning again, and let’s hope memories will be longer this time.
http://www.wsj.com/articles/peak-oil-debunked-again-1417739810
That article is completely stupid.
As the 1885 prediction said, those young at the time were around to see the plentiful Texas oil dwindle away.
The fact the USA has to drill for "tight" oil proves that the peak is here. In fact peak oil in the USA was a long time ago, it's just some of the deposits overseas that still have plenty of life in them that is allowing the kind of idiots who wrote this article to pretend it isn't happening.
Niska Hubot
2018-07-06 09:34:07 UTC
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Raw Message
Post by Lions Growl of Butchers Foul
Post by Byker
http://www.wsj.com/articles/peak-oil-debunked-again-1417739810
That article is completely stupid.
As the 1885 prediction said, those young at the time were around to see the plentiful Texas oil dwindle away.
The fact the USA has to drill for "tight" oil proves that the peak is here. In fact peak oil in the USA was a long time ago, it's just some of the deposits overseas that still have plenty of life in them that is allowing the kind of idiots who wrote this article to pretend it isn't happening.
Not surprising Byker would crosspost this shit. He comes from OK City,
where you'll find Conocophilips and lots of small oil companies.
You would meet geologists and loggers in any bar there spouting this
sort of opinion-as-fact.

Actually, without fracking, there is a lot of oil available, but in deep
water. Nobody is going to tap it until the price settles above $120 a
barrel.
Byker
2018-07-06 17:50:26 UTC
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Raw Message
Post by Byker
Some folks have short memories. People like James Howard Kunstler have
made a cottage industry churning out books promoting the "peak oil" myth.
Peak oil was never a myth. It's a guaranteed outcome to any non-renewable
resource. Oil makes it complicated in that it has less to do with supply
than production. But, even if you eliminated the production issues
entirely -- oil came out at a constant rate, instead of at a diminishing
rate -- there would still be a "Peak Oil."
And if oil production peaked and then SLOWLY declined and no one told you it
was declining, how long would it be before you noticed?
Lions Growl of Butchers Foul
2018-07-07 05:41:25 UTC
Permalink
Raw Message
Post by Byker
Post by Byker
Some folks have short memories. People like James Howard Kunstler have
made a cottage industry churning out books promoting the "peak oil" myth.
Peak oil was never a myth. It's a guaranteed outcome to any non-renewable
resource. Oil makes it complicated in that it has less to do with supply
than production. But, even if you eliminated the production issues
entirely -- oil came out at a constant rate, instead of at a diminishing
rate -- there would still be a "Peak Oil."
And if oil production peaked and then SLOWLY declined and no one told you it
was declining, how long would it be before you noticed?
It's the price that tells you what's going on. That's why your article was talking about "tight" oil. The easy oil is gone already.
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