Like Don Aitkin I have also tried to make sense of peak oil and the graph about says it all..

I use to think that peak-oil was sort-of correct when applied to easy-lift on shore oil, the stuff in the reservoirs in OPEC countries. A lot of more experienced analysts than me also thought this. But the apparent plateau in that production - as opposed to production from deep offshore and share oil etc - may simply be due to the general failure of OPEC countries to explore or invest in production facilities, and that failure is due to financial self-interest.

Nothing about the oil industry is simple but peak oil, as a concept, is a waste of time..

The IEA states we're already past peak Oil. As the body tasked to monitor this stuff, seems to me we should pay some attention to what they say. As you stated in the article, it's not the end of production, it just means Oil will become more and more expensive now the low hanging fruit has been extracted. They will find more Oil but not enough to replace production loss and it will be more and more expensive to extract. When it gets to $200+ a barrel people like Curmudgeon will be prattling on similarly.

Of course the IEA also say anthropogenic climate change (ACC) is a danger and not enough people accept the Science on that to Act to mitigate either.

Seems most people are happy to abandon facts when it doesn't coincide with their World view of how they want things to go forward.

Peak oil talk seems to be like invoking the wolf that never comes. According to some, we actually ran out of oil years ago; at least, we would have if we had believed them. There are always individuals and weird groups who get their kicks out of trying to scare people – peak oil, AGW, food shortages …. What next?

Couple of basic facts . . .
World oil production has been on a plateau for some years now with consistently high oil prices, Brent crude over $100 per barrel. If oil producers want to make money, why haven’t they produced more oil to take advantage of this price?
World conventional oil fields like Saudi Arabia where the vast bulk of oil is produced are in a state of permanent decline at a rate of something like 4.5%pa. By my maths, that means the cheap easy stuff will be half gone in about twelve years. Every year, this shortfall must be made up from unconventional sources, oil sands, arctic, ultra-deep and so on.
Valley Guy is absolutely correct in his conclusion.
Oil will become increasingly expensive, the environmental costs of producing it ever higher

" Oil was once very cheap, and its very cheapness was a basic cause of industrial expansion everywhere. Now it is much more expensive, but then GDP has risen a great deal everywhere, so we can still afford it. It's unlikely to be cheap again."

At risk of being accused of "shooting off on a tangent":

The price of oil products in Australia is manipulated to some extent by Coles and Woolies taking virtual oligopolistic control of petrol retailing. It is ironic that most, including the ACCC, forgive them for this, because consumers supposedly benefit by taking advantage of shopper dockets issued by the Big Two to purchase marginally discounted petrol. What consumers appear to overlook is that such petrol sales are subsidised by Coles and Woolies by their application of higher margins to grocery lines such as (allegedly) fresh fruit and vegetables.

Recent reports state that Australian oil production will virtually be exhausted. by 2020.
What this means is that ALL of our transport fuel will have to be imported by then
The price of oil will have risen so much that it is doubtful that we will be able to afford to import fuel for more than essential services.
There will also be a shortfall by our existing supplier countries as they also run low on supplies and husband what they have left for their own use.
http://anz.theoildrum.com/node/3657

Shale oil is a diversion to keep the stock price of oil companies up. It is running at no profit and will cease eventually.
It is also causing pollution and depletion of water stocks.

Imperial
you raise an excellent point but its been answered.. OPEC likes prices the way they are.. if they produce more oil then prices go down.. so they ignore investment in production and exploration and their production tapers off but they get good prices for what they have.. meanwhile production form other sources ramp up.. hence the plateau.. at least that's one story.. I do know that if the original peak oil doomsters had been right production from OPEC would have vanished entirely years ago..

Valley Guy
In fact I've seen through several oil price booms and busts and I'm still prattling because I have yet to be proved wrong, so I'll repeat what I said slowly, for your benefit.

Peak oil as a concept is a waste of time now, as much as it was when I first heard of it in the 1970s. It doesn't mean anything for prices - the market is such that disruptions and changes of supply can mean big swings in either direction - and it doesn't mean anything for production. The concept had some currency a few years ago but its past its use by date as the article makes clear..

Its not so much whether we should be worried about 'peak oil' but whether we should be worried about the limits to growth of which peak oil is but one subset.

There are a number of critical oversights in the article. Some of the major ones are:

- declining net exports from oil exporting countries. This is a trend that has been in place for seven or eight years now and shows no signs of changing direction. We can't all be oil importers. The reduction in oil consumption, largely due to economic difficulties rather than increased fuel efficiencies in developed nations post GFC has masked this problem. I guess as long as we all get poorer this isn't a problem.

- Oils aint oils. Most of the relatively slight increase in oil production since 2005 has been from sources other than conventional oil, such as Natural Gas Liquids. Whilst still useful products they are generally used for industrial rather than transportation applications.

- Energy Return on Investment (EROI). As we get closer to the bottom of the barrel so to speak, we classify more and more marginal sources of liquid fuels as reserves. Hence it appears that reserves are remaining around the same or increasing. What this doesn't consider is the EROI for these marginal sources (e.g. tight oil and tar sands) is far lower (it takes a lot more energy in to get a smaller amount of energy out). This is the biggest oversight of most 'economic' arguments against peak oil. When your average EROI is 50 to 1 (e.g. for an investment of one unit of energy you get 50 out) or thereabouts a globalised industrial economy can function, when it drops to single figures, not so much.

- the relationship between money/credit and oil. As James Howard Kunstler argues, one of the biggest impacts of peak oil will be on capital formation. Look around at the financial shenagigans around the world (Quantitative Easing anyone...) and it seems that he might be onto something.

Robert LePage we have plenty of our own oil, & more gas than most, all we have to do is tap it.

The oil reserve in the Rundle shale, & under that area alone would supply Oz for the best part of a centaury. It is too politically difficult to harvest it right now, but just as with water, when things get tight the green menace will evaporate, like water in the desert. Dams were no problem, when city water supply was threatened.

Apart from the few radical ratbags, people are only green when they are comfortable, & have nothing to worry about. If they can't afford, or get petrol for the car, the Great Barrier Reef can go to hell, they will want that oil.

Of course, we can also turn all that black stuff under most of Queensland into liquid fuel, any time the need arises.

Yep, no trouble with liquid fuel in the lifetime of anyone alive on Oz to day, unless we are taken over by a stronger country.

What Don Aiken failed to mention was that US oil production did peak in 1970 !
It has never reached that level since. The current surge in tight oil
comes no where near the 1970 peak.
Also it will be a comparative flash in the pan as average decline rates
for tight oil wells varies between 40% & 60% PER YEAR !

A few things to remember;
1. The amount of oil discovered each year peaked in 1964.
2. The first year that production exceeded discovery was 1983 & always since.
3. At present we use about 5 times the amount each year than we discover each year.
4. Conventional oil, about 90% of all oil, is declining at 4.5% per year.
5. To offset that decline we need to find another Saudi Arabia every 3 years.
6. Half of Australia's refineries have closed, rest in few years.
7. 100% of petrol & diesel will be imported.

The implications of these figures could only be missed by those who do not wish to see.
Or is a politician.
These figures are what I meant the other day when I said it is simple arithmetic.
It is not like global warming, anyone can do the arithmetic.
Check it yourself.

Regardless of whether or not 'Peak Oil' is real or not, Australia needs to develop an energy security policy. We are in the fortunate position of having plentiful natural resources.
Why do cars in Australia run in imported oil only, when they can run on locally produced gas? It is possible to legislate for all cars sold in Australia after a certain future date to have dual fuel capability.
Base load electricity is best produced from coal, with peak load being provided by gas and solar. Solar is useful on hot days as it increases input to the grid at the same time as demand increases

Yes Lib of Upway, we should be starting on the big job of converting
our truck & car fleet to gas.
One problem is that the owners of the Gladstone LNG plants are already
refusing domestic contracts for CNG.

It would require the government to legislate and government, both
Labour & Liberal do not believe there is a problem anyway.

Hasbeen;
The Rundle shale, is it oil shale or shale oil ?
If it is oil shale, it has never been possible to do a process that
does not use more energy than it produces. Ask Shell, they gave up.

If it is shale oil, better known as tight oil, this is the process
used in the US on the Bakken & Eagle Texas fields & others.
It has very poor EROI and is very expensive and fraught with fracking
difficulties.

There is a very big tight oil field near Coober Peady the lease rights
are held by Linc Energy and they will probably operate there.

Its big problem is very high decline rates 40% to 60% per year.
It becomes a giant Ponzi scheme in that more & more money is needed
to keep drilling & production up. The Red Queen syndrome.
As they more away from the best spots decline rates increase and more
and more drilling is needed.

Is there plenty of water in the area of the tight oil, hundreds of
road water tankers each day would be needed. Would the roads stand up to it ?

I suggest that you do some reading on tight oil, it is an eye opener.
In the US it will stop overnight if interest rates rise.
No easy solutions are there ?

And through all of this discussion and article, no one pays even a single thought to the still very rapidly increasing demand for oil, and what we might do to slow that down, attempt to stabilise it… or heaven forbid, even reverse it to some extent!

As usual, it is all about the supply side.

The thing that really matters is whether the supply capability is going to be able to keep up with demand, which of course it won’t be, without the price rising continuously and a whole bunch of huge negative consequences resulting from that.

It is not peak oil that we should be concerned about, it is the total lack of demand / supply balance.

The main message that should have come out of the whole peak oil (and climate change) issue is that we need to STOP EXPANDING and to stabilise the overall demand!

This is every bit as important as everything put together on the supply side of the equation!!

But, we have just so totally failed to heed that message.

So…. If we aren’t going to do anything about the demand side, then how are we ever going to deal with this issue?

In fact, in the absence of any meaningful action on reducing demand, or I should say; on reducing the rate of increase in demand, all our efforts to find more oil and develop alternative energy sources really are just adding to the problem, because they are facilitating this continuous growth!

They are facilitating the schism between supply and demand a little bit further down the track, and hence exacerbating the consequences.

I just don’t get it. Most people just seem to think in a totally one-sided and unbalanced manner about this sort of thing. I see it all the time on OLO.

You are right Ludwig, dampening demand is most helpful.
The US since the GFC has reduced its demand by about 3 Mbd.
Europe has also reduced its demand.
Australia has slightly increased its demand.
China has markedly increased its demand.

Unfortunately it takes a lot of economising on fuel to offset 3.5Mbd
of decline in world crude oil year after year after year.
Thats why we have to find another Saudi Arabia every three years.
Our chances of doing that are astronomical.
The real experts say we will NEVER find another Saudi Arabia.
Saudi = 9 Mbd. Divide 9 by 3.5 you can see the problem.
Forget tight oil, the writing will be on the wall this year.

The writing will say "Beware the Ides of 2017 !"

Luddy old mate, the balls in your court.

If you want to decrease demand you have to stop population growth, worldwide. To do that someone is going to have to come up with an incredibly addictive form of sex aversion therapy.

Are you working on it? You could achieve so many of your desires with something so simple.

Get stuck in, & report back in a couple of months.

I don't think OPEC can be blamed for high prices. OPEC is not new. High prices are (with the exception of a spike during several years around the oil crisis of 1979-81 period. Did OPEC all of a sudden get greedy? I have heard people talking about how greedy OPEC is for decades.

I am afraid that high prices are a result of supply not keeping up with demand.

It is for the psychologists to explain why virtually everyone, or at least, virtually every male adult, is convinced that there has to be plenty of oil. Enough oil that there will be no problem ever - ever being the rest of their life.

One of the worst ways to try and debunk Peak Oil is by saying that someone in the past made a prediction about "running out of oil" and it didn't come true. If oil were not finite, if oil were not depletable, you might be able to make that work. But oil IS finite and it IS depletable.

Another one for the psychologists is how it can be that oil has tripled in price in the last decade, production has only increased by growing the production of more expensive unconventional sources like tar sands and oil trapped in shale (tight oil), and yet the Cornucopians and some Optimists are crowing about the death of Peak Oil.

Hazza, you make light of a very serious subject. Just about the most serious in the world actually!

You agree that population – the rate of growth and overall size – is of major importance, and that we need to work on that issue very very VERY much!!

Well….. I think you agree with me to that extent….. …… ….. ??

This needs to be a FUNDAMENTAL part of the formulation of a sustainable energy regime.

It is just DAFT to be talking about peak oil, renewable energy, nuclear, AGW, etc, without including the population factor!

There is a great deal that governments could do to address this…. if they just put their minds to it.

Yes Hollywood Dan, it is amazing the number of times you get stories
that there is plenty of oil here or there.
If there was you would be knocked down in the rush by drilling rig trucks.
There is so much oil available that they would rather drill in 5000 ft
of water and 5000ft below the sea floor just for fun.
They think that they might go drilling in the Artic because the skiing is better there.

Or better still go drilling in tight shale so they can throw all that
spare cash they have down wells that won't last past lunch time.

I thank those who have commented, through whom I have learned more. Population growth rates have declined a great deal pretty well everywhere (see gap minder.org), but there'll still be a population increase to about 9 bn by mid-century, after which it should decline.

For those following this thread here is an article that says better
than I can pretty much what I have been saying for sometime.

http://www.forbes.com/sites/jamesgruber/2014/01/26/shale-oil-charlatans/

The "establishment" of economists are now just starting to realise the
difference between the money economy and the real economy.

This is the TinyUrl equivalent.

http://tinyurl.com/mq6my8n

That's a good article Bazz. It explains the basics of the whole business very well.

It's not peak oil we should worry about, but rather the extraordinary amount of disinformation the oil cartels are selling us.
Imagine if there were new fields that could rival or even eclipse the known reserves of the Middle East.
Suppose we who may well own this reserve, set aside rusted on ideological objections, and as pure pragmatists decided to explore and exploit it?
Well, given the industry expert prognostications are born out, it would render the Russian reserves uneconomic, as the depth of Russian reserves, makes them very expensive to recover! Ditto Gulf of mexico and Brazilian reserves. (Hence the resistance and virtual commercial terror?)
Ditto shale oil and Canadian tar sands! (Hence the deafening, headline grabbing, anti Australian, foreign based and inspired oil activism, merely masquerading as environmentalism)
Heavy crude/tar sands/shale oil produce much more carbon than Australian sweet light crude, which only requires a little insitu chill filtering, to produce a very superior diesel; meaning this product produces four times less carbon from well head to harvester. And our reserves exploited for sound environmental reason as given, could also earn the nation Annual trillions.
Only the mindless green element, (which makes up around 7% of the voting public,) would object to the necessary removal of the heritage listing, that currently handcuffs essential exploration.

One notes Shell oil wants to sell both it's refinery and retail outlets!
We should buy both as an off budget money earning investment, and a already ready made distribution system to place our own Australian sourced products!
Rhrosty.

I found this blog very interesting.