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The Forum > Article Comments > How unconventional oil changes the world > Comments

How unconventional oil changes the world : Comments

By James Stafford, published 14/12/2012

Michael Levi from the Council on Foreign Relations thinks oil prices could drop much further, amongst other things.

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So this is hardly psuedo information but rather detail you need to actually understand the situation. I make no apologies for focusing on oil, at the expense of other energy sources, because it is of course the predominant source of energy for transportation and not easily replacable.

The market view of an economy might see all energy sources as being interchangable but from a physical and practical perspective that is far from being the case. Yes a transition could theoretically be made to other fuels but this will take enormous capital investment and a timeframe measured in decades and I see no indication, other than at the margins (a few hybrid cars here, a few CNG light trucks there), to suggest that the necessary actions are being taken. And of course in switching the second and third order impacts of attempting such a transition also need to be considered.

I have to go so can't answer your specific questions but I will say that:

a. an industrial civilisation of the type we have now can't be powered by renenwable energy
b. shale oil/gas will no doubt be produced for a long time to come but not at rates that will offset the decline of conventional oil and gas production
c. as thermodynamics and not the market ultimately dictate energy supply, and we have exploited the easiest to exploit energy sources first; over the next 100 years, regardless of technological advances, we will need to get by with less energy. This is my whole point, we need to learn to get by with using less energy and other resources. We can do that and still live in reasonable comfort, different lifestyles yes, but that is far from being the end of the world! The crux of the problem is that our current economic system only works if consume ever more energy and resources.
Posted by leckos, Saturday, 15 December 2012 2:32:43 PM
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Thanks leckos,

The point I was making in relation to “ammo in the locker” is simply that you would be considered an “expert” on this subject. As such, a centrist rather than a narrow advocacy position might reasonably be expected. By centrist I mean that today’s market reality must be part of the assessment rather than what used to be.

By way of example, when you say in relation to the market that “The market view of an economy might see all energy sources as being interchangeable but from a physical and practical perspective that is far from being the case”. You are again recognizing only a single element, the product, even then only one of the many products in use. That market is changing all the time based upon a mixture of politics, energy type (product), demand, price, technology and availability and more rapidly now that ever.

The market, like any other market, sees these parameters in total because each element impacts upon every other element and by necessity, directs investment in that market.

You go on to imply that the market cannot respond within decades. You suggest “Yes a transition could theoretically be made to other fuels but this will take enormous capital investment and a timeframe measured in decades and I see no indication”. This statement fails to recognize that the market IS changing almost monthly let alone over decades.

You say “Oil's aint oil's Spindoc”. True, oil is just one of many oil products alone in the overall energy mix, see para two, last sentence. So when I say “This is an unforgivable abuse by pseudo-information” I mean precisely that, the omission of all other market parameters except one of the many products, plus the omission of the market distortions caused by green initiatives, is an unforgivable abuse by pseudo-information because it is incomplete. As an expert you have a duty to present all the issues not just that which suits your associations (ASPO Australia) and your advocacy.

Looking forward to more when you have the time. Thanks.
Posted by spindoc, Saturday, 15 December 2012 3:47:19 PM
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Geoff of Perth and leckos

One more go at making you two see reason. I'm not denying this 4 per cent decline rate you cling to, leckos, but simply pointing out that its IRRELEVENT. It certainly may be so for conventional oil reservoirs. The problem with the piece of propaganda Geoff of Perth linked was that it assumed the decline for all sources of oil and did not allow for the ongoing increase in reserves in the same field. Oil fields are far more dynamic that that idiodic graphic allowed for. It even made the same mistake for unconventional oil when the decline is for just that part of the resource they are using at the moment. Its a clear attempt to mislead, and should be treated with contempt. As for the idea that the energy revolution is some invention of mine, start reading. You'll find a review of the available material very helpful.

Geoff of Perth
I see the truth has stung sufficiently for you to indulge in silly abuse and hard left conspiracy theory fantasies which I won't dignify with a response. If you don't want to be shown to be wrong, don't link outdated propaganda. My advice would be to make some effort to acquaint yourself with what is happening in the oil industry. Bloomberg has some excellent material freely available. The oil world has moved beyond peak oil, so should you.
Posted by Curmudgeon, Saturday, 15 December 2012 4:35:37 PM
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leckos says

a. an industrial civilisation of the type we have now can't be powered by renenwable energy
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This is where a lot of people get it so wrong. Of course our civilisation could be powered by renewable energy. This is just simple physics, add up the energy available in any one renewable resource and and it soon becomes obvious that more than enough energy is available. For example solar energy works out at an average over 240 watts per square meter and the sun is always shinning somewhere. I really could not be bothered to do the maths but the amount needed to supply all the world's power needs would likely only be measured in tens of square kilometres.
The problem is cost put a high enough tax on CO2 emissions and the market will get you there quick enough.
Posted by warmair, Saturday, 15 December 2012 4:55:49 PM
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Warmair have you ever lived with solar, or any other alternate power? I very much doubt it.

Every one I know, who has ever had to "roll their own" power, can't get onto the grid quickly enough.

Be it a small one family set up, or one to service a 700 guest resort, they have all been prepared to spend huge sums to stop generating their own.

Your suggestions show you have no idea of how a power grid works.
Posted by Hasbeen, Saturday, 15 December 2012 8:46:41 PM
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Hasbeen
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Yes I have experience of solar power I helped to install a system for a club I am a member of. The system has been a great success and has saved us $20,000 by not connecting to the power grid and continues to save us money as we have no power bills. There is of course a need to set aside some money for batteries which will probably need replacing in about 10 years but we are still a long way ahead just counting what we saved on power bills.

I also have a number of friends who are on solar, and connected to the grid and this also works well. There is also an advantage to the power companies, because the systems are likely to be producing near maximum output during peak periods.

I do not know how much clearer I can be, the problem with renewables is they cost more compared to fossil fuel plants. No one form of energy is going to solve all our power requirements for example on its own coal, is not suitable because of the long lead times required to bring generators on line, resulting in the need for very expensive peek power generators such as gas turbine.

We could if we were prepared to pay the cost change over to reneables for electric power in about a decade. At this point in time that would be very expensive because first we would have to write off all the fossil fuelled generators and secondly under the present system the fossil fuel power is cheaper.

The practical answer is to retire fossil fuel plants as they reach the end of their lives and replace them with renewables. The cost of not reducing our CO2 emissions is the damage that it will, and is doing to the climate. Unfortunately it seems that we would prefer that someone else in the future pays for this problem, just so long as we can reduce our electric bills by a fairly minor amount.
Posted by warmair, Sunday, 16 December 2012 8:52:33 AM
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