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Peak Oil Perspective

physics.ucsd.edu

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Re: Peak Oil Perspective

#51

Post by nostrademons »

jofer wrote: post #32
rayiner wrote: post #11

Earlier quoted context omitted.

The concept "peak oil" to me seems to misdirect the debate right off the bat. Obviously the question isn't "when do we run out of oil" but "how does oil supply given continually increasing demand affect oil price" and "what does rising oil price do to the rest of the economy? Inflation-adjusted, the price of a barrel of crude oil was $23 in 1960, and has been averaging almost $88 in 2013. What does that do to, e.g.,…

Well, the debate often gets off track, but the definition of the term "peak oil" is "when production stops increasing due to market demands and starts decreasing due to geologic control". In other words, "when does long-term demand outstrip long-term supply?" The concept isn't to blame, it's just misinterpretation of it in the popular media. At any rate, as you pointed out, the interesting question is "what does risi…

In a free market, long-term demand will never outstrip long-term supply. Why? Because prices will rise to equalize them. As prices increase, long-term demand drops, and long-term supply increases, until they eventually equilibrate.

Re: Peak Oil Perspective

#52

Post by jarito »

fleitz wrote: post #27
rybosome wrote: post #21

Earlier quoted context omitted.

This makes sense economically, but that doesn't address the difficulties we will face as oil becomes too expensive for common, important uses. Our fleet of oil-consuming vehicles won't magically convert themselves. The oil-backed electrical grid will take a hit. Food will become incredibly expensive (or more scarce) since the vast majority will come from far away, and have been transported via oil.

Oil backed electrical grid? Where do you live exactly? No one uses oil to generate any significant amount of electricity, most gas turbines are powered by natural gas, since it's cheap and plentiful. Gas turbines are only used to peak load not base load since coal is even cheaper than natural gas. Most people spend more in fuel getting their groceries home than transporting them to the store. Food miles should be cal…

Not entirely true. Hawaii, for example, uses oil as the basis for most of their electric generation. They regret this now and are trying to move to renewables / natgas, but right now, they use oil.

Re: Peak Oil Perspective

#53

Post by matthudson »

toomuchtodo wrote: post #6
jofer wrote: post #4

As a geologist in the oil industry, this is one of the few articles I've seen on peak oil that absolutely nails the salient points. (And even gets the geology correct.) To quote: "Most simply, peak oil is about rates, not amounts." Yes, there are a lot of unconventional resources. They're just a lot harder, more expensive, and most importantly in this context, slower to produce. On the upshot for me, and the downshot…

> However, we haven't developed a viable alternative to liquid fossil fuels in terms of energy-density fast enough. That very, very deeply scares me. Electric cars are getting there, and there is always domestic natgas production in the US. It won't be fun, but that's what we get for dragging our feet. The US had this happen in the 70's (oil embargo). It's been 40+ years. Its our own damn fault.

Consumer vehicles are definitely getting there, at least for high income and/or high net-worth people.

And while that is a relief, it is still very troubling to think about the implications for our transportation infrastructure as a whole (where consumer vehicles represent a minority fraction.)

How will we power our ocean freighters, our freight trains, our 18-wheelers, and our high capacity airplanes without high energy-density hydrocarbons (or with prohibitively expensive hydrocarbons)?

I can imagine nuclear and electric solutions (hand-wavy or hypothetical) to some of these modes, but could they be implemented on a global scale in time?

It makes me wonder what our transportation infrastructure will look like 100 or 200 years from now.

-In what non-obvious ways will we look backwards to people of the future?

-Will these people envy how cheaply we moved goods across the globe?

-Will they laugh at how expensive it was to move things across the globe?

-Will they even have the luxury of thinking about these things?

Re: Peak Oil Perspective

#54

Post by jofer »

matthudson wrote: post #53
toomuchtodo wrote: post #6

Earlier quoted context omitted.

> However, we haven't developed a viable alternative to liquid fossil fuels in terms of energy-density fast enough. That very, very deeply scares me. Electric cars are getting there, and there is always domestic natgas production in the US. It won't be fun, but that's what we get for dragging our feet. The US had this happen in the 70's (oil embargo). It's been 40+ years. Its our own damn fault.

Consumer vehicles are definitely getting there, at least for high income and/or high net-worth people. And while that is a relief, it is still very troubling to think about the implications for our transportation infrastructure as a whole (where consumer vehicles represent a minority fraction.) How will we power our ocean freighters, our freight trains, our 18-wheelers, and our high capacity airplanes without high en…

Exactly. A huge portion of the global economy is currently based on cheap transport of goods. What happens when transport is no longer cheap?

Re: Peak Oil Perspective

#55

Post by spikels »

jofer wrote: post #32
rayiner wrote: post #11

Earlier quoted context omitted.

The concept "peak oil" to me seems to misdirect the debate right off the bat. Obviously the question isn't "when do we run out of oil" but "how does oil supply given continually increasing demand affect oil price" and "what does rising oil price do to the rest of the economy? Inflation-adjusted, the price of a barrel of crude oil was $23 in 1960, and has been averaging almost $88 in 2013. What does that do to, e.g.,…

Well, the debate often gets off track, but the definition of the term "peak oil" is "when production stops increasing due to market demands and starts decreasing due to geologic control". In other words, "when does long-term demand outstrip long-term supply?" The concept isn't to blame, it's just misinterpretation of it in the popular media. At any rate, as you pointed out, the interesting question is "what does risi…

The problem with this description is that neither long-term demand nor supply is fixed but depends on long-term expected price.

In normal usage in economics the "long-term" refers to an equilibrium where supply matches demand. Demand never outstrips supply but instead drives up prices until a new equilibrium is reached at a lower quantity and some current petroleum users are forced into alternatives.

This is the essence of economics: the study of the allocation of scarce resources. Notice "study" as this is a completely natural process.

Re: Peak Oil Perspective

#56

Post by sergiosgc »

joe_the_user wrote: post #38

There is one thing I always like to mention with the usual peak oil math (and resultant fear/glee concerning "the end of civilization" and such). The traditional "Hubbert curve" shows exponential growth and decline in a any particular region of oil production. Peak oil theorists generally extend this to a world exponential peak/decline (the article doesn't directly say but it take the "we have to plan for the peak" p…

Large evolutionary jumps in mankind's history have always been associated with use of more energy per capita. The stabilization of oil consumption, visible since 2000, means one of two things:

a) Humanity has plateaued in its energy usage; or

b) Some other energy source is increasing.

Any of these means oil has hit a peak (there'll be no cliff, though, as you explained). The alternatives are not acceptable (evolution stopped or, for the first time in five thousand years, stopped requiring more energy use).

Re: Peak Oil Perspective

#57

Post by thrownaway2424 »

fleitz wrote: post #48
thrownaway2424 wrote: post #13

Earlier quoted context omitted.

Yeah. Last time I was in Europe the local gas tax was more than the entire price of gas in the USA. Our low gas tax is, in effect, a subsidy, because we (as a society) choose to ignore the externalized costs of burning gasoline. Gas is currently 2CHF per liter (about $8 per gallon) in Zurich, in case you haven't been out of the USA lately.

You could call it externalizing the costs of burning gasoline, or you could call it internalizing the profit of burning gasoline. The rest of the world burning gasoline results in cheap credit for the US. http://www.newyorkfed.org/research/current_issues/ci12-9/ci1...

The result of burning all that fossil fuel will indeed by internalized in the end, but when it comes around I doubt you'll call it a profit.

Re: Peak Oil Perspective

#58

Post by gshubert17 »

fleitz wrote: post #33
gshubert17 wrote: post #26

Earlier quoted context omitted.

Not just that. Most corn production heavily depends on oil-based inputs, such as fertilizer, fuel for machinery, and natural gas for drying and storage. Corn from the same county will become much more expensive, even without transportation costs.

Fertilizer does not come from oil. This is a myth. Natural gas is not an oil-based input. http://en.wikipedia.org/wiki/Fertilizer#Inorganic_commercial...

Right. Hydrocarbons, then. Natural gas and petroleum have similar geologic and economic characteristics.

Re: Peak Oil Perspective

#59

Post by michaelt »

joe_the_user wrote: post #38

There is one thing I always like to mention with the usual peak oil math (and resultant fear/glee concerning "the end of civilization" and such). The traditional "Hubbert curve" shows exponential growth and decline in a any particular region of oil production. Peak oil theorists generally extend this to a world exponential peak/decline (the article doesn't directly say but it take the "we have to plan for the peak" p…

I agree, of course, that when production gets harder, prices go up and consumption declines.

The problem is a portion of that consumption is agricultural vehicles, employees getting to work and vans of food getting to wal-mart; and real-terms food price rises can lead to political instability, especially in poor countries.

So, one reason to put effort into alternatives to oil is to maintain food price stability and political stability.

Re: Peak Oil Perspective

#60

Post by dharma1 »

jofer wrote: post #4

As a geologist in the oil industry, this is one of the few articles I've seen on peak oil that absolutely nails the salient points. (And even gets the geology correct.) To quote: "Most simply, peak oil is about rates, not amounts." Yes, there are a lot of unconventional resources. They're just a lot harder, more expensive, and most importantly in this context, slower to produce. On the upshot for me, and the downshot…

I think batteries with the help of nanotech will eventually reach energy density approaching liquid fossil fuels, will probably be another 10 years though.

BTW - A couple of my friends recently started a recruitment company for scientists in the Oil & Gas industry, I'm helping them out with their branding/site and hosting. Would love to get your insight on what they're doing right and wrong - http://discoverinternational.com

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