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The Forum > Article Comments > A revolutionary report on the future of oil > Comments

A revolutionary report on the future of oil : Comments

By Michael Lardelli, published 30/7/2007

The International Energy Agency, in a recent report, has predicted much higher oil prices within five years at best.

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Peak Oil denial is at the highest levels in Australia. Food and fuel prices are removed from 'core' inflation. Ford Australia builds gas guzzlers then asks for a handout when new car buyers get cold feet. The 'answer' to housing affordability is new subdivisions with an hour or two's commute to the CBD. The PM's good mate Steve Forbes assured us oil would be $20 a barrel around now. Carbon trading gets put off for several years.

Unfortunately I don't think there is any easy answer to Peak Oil for Australia. Smaller cars and compressed natural gas as fuel may help somewhat but the system is heavily locked into maximum road miles. That system needs a major redesign but unfortunately there will be casualties along the way.
Posted by Taswegian, Monday, 30 July 2007 10:16:25 AM
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I wondered when the IEA report would see light of day here. I'm a subscriber to the Peak Oil hypothesis although I think it should be called Plateau Oil in that the 'peak' will probably be bouncing around for a few years yet as prices affect demand and, as mentioned, new supply comes on-stream. The peak is more like Mount Kosciusko than a witches (or dunces, given the ignorance of it) hat.

A couple of points: finally the biofuel myth is being questioned. Anecdotal comments about the way biofuels have been corrupting other markets have been around for a while now.

Next is the 85million b/d number mentioned in the article. This number has been around for a few years now, but it ignores the almost 2% annual growth in demand. Here is an interesting set of numbers (it's a jpeg but worth keeping as it's updated each month)

http://www.worldoil.com/INFOCENTER/STATISTICS_DETAIL.asp?Statfile=_worldoilproduction

Okay, raw stats need to be taken with a grain of salt but the numbers are consistent with the thought that we are in the plateau stage now and continuing high prices support that notion. By the way, recently Mexico announced a move to lower production.

As for the affect of PO. In the US the housing market is coming off it's highs and the blame is on poor lending practices, but this misses the point that many borrowers have become stretched financially. Virtually every commentator includes in the reasons 'high gas prices'. Something to ponder. I've said before in my comments that food supplies are not the immediate nor medium term worry, falling asset prices are.

We economists have few tools at our disposal but elasticity of demand is one of them and is robust. The demand for food (after the overproduction has been stripped out) is inelastic so progressively we'll see a higher proportion of oil production going there as other activities dry up. I wouldn't like to be in the massage therapy business when oil is at $150/b or supplies intermittent. Our kids should choose their jobs (and debt levels) carefully.
Posted by PeterJH, Monday, 30 July 2007 10:24:22 AM
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Well written article Michale, but could you, or perhaps someone else explain to me that part of the article concerning shipping fuels?
I realise that when lighter oils are depleted and greater quantities of heavier and more sulfurous grades of oil are being processed, the price of heavier oils will rise accordingly, which in turn will have an effect on the price of shipping to some degree, but what I don't understand is just why shipping would therefore automatically change over to distillates? Surely it will be cheaper for the shipping industry to continue to use heavier oils that have not been subject to so much refining rather than change to distillates? Perhaps it's all about greater mileage per 'tank' by changing fuels?

I might hasten to add that I'm not indifferent to your article. It's simply that, as an ardent follower of the "end of cheap oil" scenario and one who is prepared to spread the message, I need to know all the facts. I must say, an increase in shipping costs is one area I haven't really thought too much about for the very reason that they use lower grades of oil. Michael, I hope you can enlighten me on this issue.
Posted by Aime, Monday, 30 July 2007 12:21:16 PM
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aime, i believe the point about 'distillates' in shipping is that improved refining will allow road transport to commandeer shipping oils through higher prices, thus driving up shipping costs even faster.

however, there is a bright spot in shipping: it is perfectly possible to run the worlds shipping on a combination of sail and sun screens. it'll need more ships because slower average journeys, but no technical problems.
Posted by DEMOS, Monday, 30 July 2007 1:54:48 PM
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Interersting question Aime, if the "global economy" starts to fail there will be less demand for shipping as well.

There is a company that logs the ships leaving the Gulf and knowing the
tonnage of each ship calculates how much oil is leaving each country.
That info is probably commercial but it would be interesting.
Posted by Bazz, Monday, 30 July 2007 2:04:19 PM
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It's high time for the Peak Oil discussion!

It is my hope and expectation that Peak Oil will drive the global "recession we had to have", turning the focus of investment from labour efficiency to resource efficiency.

Much of our inefficient energy use can be put down directly to the cheap availability of liquid fuels. The global economy reacts promptly and effectively to changes in the price of oil. A sustained increases in oil prices will divert investment from wasteful technologies to more efficient ones. Use of "stationary" energy for transportation will become more widespread (eg. rail, electric vehicles) and fuel-free power will come into its own, with prices spiralling down as technologies mature.

If, as hinted above, high fuel prices drove the "subprime mortgage" collapse, we may see a rapid change in urban planning priorities as a response, even sooner than I might have hoped.

I see the change in investment priority which will be driven by Peak Oil as our economically-sustainable path to ecologically-sustainable energy use. We'll never reach Peak Coal or even Peak Natural Gas, because Peak Oil will make them obsolete.

To Aime regarding shipping fuels : if/when high-tech refineries 'crack' the heavier fractions of crude to produce more light oil (gasoline) for automobiles, those refineries won't be producing any 'fuel oil' at all. At the moment heavy oil is abundant and cheap; a decline in its supply would quickly make shippers look at alternatives. Existing marine engines would run more efficiently and cleanly on regular diesel than they do on the heavy stuff, so if the fuel oil price goes up shippers will happily spend the same amount on better fuel. There's no need for a turnover in capital equipment before this could happen.
Posted by xoddam, Monday, 30 July 2007 2:05:27 PM
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aime, if refineries can lift shipping oil up to 'road transport' grade, it raises the price of shipping oil by putting it in the same market.

on the 'good news' front: a lot of shipping can be done in vessels driven by a mixture of sail and solar power.
Posted by DEMOS, Monday, 30 July 2007 2:12:39 PM
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Yes Xoddam, it is high time for a debate on the end of cheap oil between the public and the Governments of all persuasions, yet it doesn't seem to be happening for whatever reasons.

But back to shipping, my point is that if ships can run on heavier oils, won't those same heavy oils that require minimal or no refining be cheaper at all times pre-refinery rather than post refinery? In other words, diesel to run a Kenworth is produced at a refinery, yet I believe (and perhaps wrongly) that a ship can practically run on pitch, therefore pitch will always be cheaper than diesel, so why change.
Yes, granted the price of pitch will also escalate as oil supplies of all grades diminish, but a raw product, such as pitch, will always be cheaper than the refined product such as diesel, therefore won't shipping companies stick with whatever fuel they can in order to remain competitive?
Not meaning to be pedantic, just trying to get a handle on this issue.
Posted by Aime, Monday, 30 July 2007 2:26:22 PM
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Aime,

No liquid fuel is a "raw" petroleum product, except transportable crude itself, which is usually a rather lighter mixture than 'fuel oil'. "Pitch" might be taking it a bit far (AFAIK pitch & tar are only used as fuel to raise steam, not in internal combustion engines), but you're basically right, marine engines will burn practically anything as long as it can be pumped from the tank. Vaseline will do if you warm it up :-)

Heavy fuel oil is what is left after the light compounds have been extracted -- so it's definitely a post-refinery product, although it can sell cheaper than the raw material. Some ship engines can and do run on (filtered) crude oil, so if refineries stop delivering fuel oil below the price of crude, those that can will burn crude. I expect the effect on prices would be comparable to a switch to whatever the heaviest grade is that the refineries produce.

I reckon the existing markets are well-equipped to deal with scarcity. It's costs external to the market -- the price paid by people whose economies aren't measured in dollars, and the costs of pollution and climate change which go unpaid by polluters, which the market can't deal with.

I expect that Peak Oil will help us turn our technology around, cut the waste, cut pollution, reduce CO2 emissions to sustainable levels. It will hurt in the short term if prices increase sharply, but big changes always hurt someone. At least volatility and net increase in oil prices hurt people who waste the stuff, more than they hurt those who already can't afford it.
Posted by xoddam, Monday, 30 July 2007 3:04:31 PM
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Excellent news about impending higher oil prices. The sooner the better. Staving off price hikes will only increase the hardships later on.

Much unnecessary trade and transport happens only because energy prices are so dirt cheap. Thus local produce can't compete with the same goods imported from thousands of kilometres away - and so forth. Higher energy prices will automatically increase the efficiency of energy use many times over.

Xoddam, I agree with you on most points, except that people at the bottom will suffer more generally, not less. When getting to work becomes unaffordable and there is no alternative to driving there....

For these reasons anticipation of impending high energy prices is needed urgently so that governments have the time and space to look at social equity implications and appropriate policies to protect those sectors of society that will suffer undue hardship.

There is no getting away from pain that comes with unavoidable social change, but certain sectors of society will bear the brunt of energy price hikes without much of a shrug, for others it is make-or-break.

The oil depletion issue has many similarities with the climate debate - there is much denial that it is happening, or will happen, or that we should respond even - though the writing is clearly on the wall on both issues.

We live in interesting times.
Posted by gecko, Monday, 30 July 2007 4:50:11 PM
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Calm down folks.
There is still plenty of known recoverable oil out there and exploration techniques are continually improved.
Natural gas as CNG and LPG is used to power vehicles throughout the world and is abundant.
Liquified coal fueled the Wehrmacht and Luftwaffe during WW2 and the same process is used in South Africa by Sasol (Sasol is listed on the New York Stock Exchange).
I hate to be a wet blanket here but the end of the fossil fuel economy is nowhere in sight.
Posted by Admiral von Schneider, Monday, 30 July 2007 7:56:19 PM
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I don't think anyone is arguing that oil is suddenly going to run out. The point of the article is that demand is going to outstrip supply which will result in higher prices.

Technology (recovery, distillation and discovery) techniques will obviously get more out of the earth's crust but the 'low hanging fruit' theory would tell you that the easily accessible sweet crude has been taken out of the ground already.

I think what many overlook is that higher oil prices will be reflected in a lot more than those cost of transport. We may all be forced to give up our cars and be more local community oriented - but remember that in Australia our Agriculture is highly dependent on oil dependent farming technology (machinery, transport and petrochemical based fertilser). In hot, dry, salty conditions you cannot a population of 20+ million people without oil. Skyrocketing oil prices will mean much more than just less cars on the road.
Posted by c-bearup, Monday, 30 July 2007 8:08:09 PM
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So, why is a report “revolutionary”?

Keeping a pool of unemployed high round a globe -and in “civilized developed countries” at a steady level, is a poor attempt to get inflation that is a direct indicator of a national currency's worth stable both in absolute value at local market and a relative relation (foreign exchange).

Dependence on both oil and goods imported as worldwide growing population is to put a strong increasing demand on energy supply, eventuates the meeting of nation’s consuming expectations by the most powerful only,of having own currency accepted and paying more (again, either directly or indirectly) than others could afford for.
Posted by MichaelK., Monday, 30 July 2007 10:16:40 PM
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Admiral, if there's so much oil can you please tell the Federal peak oil inquiry where it is? I'm sure they'd like to know, because they concluded...

3.132 The concept that oil production will peak and decline, and there will be a post-oil age, is well accepted. The argument turns on when the peak will come, and how serious its economic effects will be.

3.133 'Early peak' commentators have criticised what they regard as overoptimistic official estimates of future oil supply with detailed and plausible arguments. The committee is not aware of any official agency publications which attempt to rebut peak oil arguments in similar detail.

"3.134 Affordable oil is fundamental to modern economies. The risks involved are high if peak oil comes earlier than expected, or if economies cannot adapt quickly enough to the post-peak decline. The 2005 ‘Hirsch report’ for the US Department of Energy argues that peak oil has the potential to cause dramatically higher oil prices and protracted economic hardship, and that this is a problem ‘unlike any yet faced by modern industrial society.’ It argues that timely, aggressive mitigation initiatives will be needed:

Prudent risk management requires the planning and implementation of mitigation well before peaking. Early mitigation will almost certainly be less expensive that delayed mitigation.[113]"
http://www.aph.gov.au/Senate/committee/rrat_ctte/oil_supply/report/c03.htm

As for easy coal liquefaction, the Hirsch report concluded that Coal to liquids programs was one of the mitigating "solutions" for peak oil except that it would take 20 years of a major program to scale it up to the volumes we are using. We are talking about hundreds of billions, possibly trillions of dollars of infrastructure that takes TIME TO BUILD!
http://en.wikipedia.org/wiki/Hirsch_report

Besides the time to build coal to liquids programs comes another surprise. Much coal reporting is out of date. Exponential growth in the consumption of coal has undermined the normal cozy assumptions people have about coal lasting centuries. Google "peak coal" to see what I mean. Remember, peaking does not mean "running out" it means having used the best and cheapest concentrated stuff. We could be 20 years away from peak COAL!
Posted by Eclipse Now, Monday, 30 July 2007 10:56:47 PM
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As one commentator pointed out "light" or "fuel" oil and "heavy" oils are a post-refining process, typically a distillate. See the wiki article:

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

However, what I believe Aime was asking was about the differences in light and heavy crude. "Light" crude is generally less viscous than it's heavy counterpart, and has a lower wax content. "Light" oil is typically easier and hence cheaper to refine, but are typically more expensive to extract because they are found at deeper depths.

"Heavy" oils also generally contain larger amounts of sulfur and other impurities. This makes them more expensive to process than "light" crude, but, due to the wonder of economics, are often sold at a discounted price due to the presence of impurities. These impurities cause "heavy" crude to have a larger environmental impact than "light" crude, both when processed and burned.

As the supply of "light" crude dries up (oil companies generally favour extracting this oil first as it fetches a higher price on the market), it is likely that we will begin producing more products from "heavy" crude. What the exact implications are, I don't know. But it is likely that producers will no longer discount the heavy stuff, which will put upward pressure on fuel prices.
Posted by ChrisC, Monday, 30 July 2007 11:02:05 PM
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Just a little whimsy.

Only four or five years ago, a discussion of this sort would not have been had amongst polite company. The MSM for their part would not hear a word of it - taboo - heresy! How appropriate then that they are being dragged into the present by websites such as this. The ripples will spread.

I was only ever able to produce yarns of an anecdotal nature, so it is a great pleasure to see younger people bring their brains, yardstick and compass to the problem. I look forward to learning from you as you go.

- and I somehow rather fancy that my grandkids will be in good hands.
Posted by Chris Shaw, Carisbrook 3464, Tuesday, 31 July 2007 7:56:39 AM
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Hi Chris,
I also am glad the online discussion is happening here in earnest. It does show a sea-change in attitude to the subject.

However, when are the government going to implement rezoning our cities around Transit Orientated Developments (TODS)?

this should be an election issue!

On 26 July 2007 the ABC "Difference of Opinion" screened, "What will we do when the oil runs out?"
http://www.abc.net.au/tv/differenceofopinion/

In late June 2007 Dr Roger Bezdek spoke at the "Smart Conference" think tank for Aussie CEO's as the co-author of the Hirsch report into peak oil. Federal Labor Candidate Maxine McKew introduced him, and this was just 3 days after I gave a very short brief to Maxine on our Monday night Labor meeting. 51 minute video available in Quicktime http://fundraisingconcepts.info/spo/bezdek_keynote.mov

On 24th May 2007 the ABC science unit released a fantastic DVD you can now buy from ABC bookstores called Crude — announcing both peak oil and a new theory of "Super-Greenhouse" effect that could poison our oceans and plunge us into a new kind of food challenge.
http://abc.net.au/science/crude/

On on 24 April 2007 SBS screened the EXCELLENT "Crude Impact".
http://www.sydneypeakoil.com/phpBB/viewtopic.php?t=4828

All of this occurred in the last few months — yet where is the debate this Federal election? It simply cannot happen. They cannot discuss what to do about peak oil, because that would mean announcing it. This would trigger a market crisis of confidence and bring on some of the effects earlier than they had to — and so we are in the perfect catch 22.
http://www.fcnp.com/index.php?option=com_content&task=view&id=1088&Itemid=33

Our group http://www.sydneypeakoil.com has met with a number of politicians. Most of them now KNOW the data. Yet... where is the debate?

This is surreal.
Posted by Eclipse Now, Tuesday, 31 July 2007 9:53:27 AM
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The pollies won't discuss it out loud although they are taking some
actions that point the right way. They might disguise them as global
warming reasons. Peter Costello is the only one that has said it out loud.
The Queenslad senator (I forget his name) has also spoken on it.
The State NSW government is mothballing their replaced busses instead of selling them.
There are little hints like that but if they say it out loud they will
have to start talking petrol rationing and you can see what an election
no no that would be.
Posted by Bazz, Tuesday, 31 July 2007 11:19:31 AM
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The revolutionary aspect of this report is that this is the first time one of the major international energy agencies has admitted that oil supply will become tight in the near future. To date they have all said the usual nonsense about that there is abundant oil and you don't have to worry, leave to us.

This report combined with more reports and articles in the media suggest that peak oil or peak plateau is getting traction. However, as one of the earlier contributors said, why aren't the politicians taking about it. A simple answer from the US Senator, Bartlett one of the few politicians to speak up on the issue, is that no political party would get elected if they stated that the standard of living is going to drop and that the price of fuel is going to skyrocket due to peak oil.
Posted by C3837, Tuesday, 31 July 2007 4:41:14 PM
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........."is that no political party would get elected if they stated that the standard of living is going to drop and that the price of fuel is going to skyrocket due to peak oil."

C3837. That's probably a very good reason why we're not hearing more about tightening oil supplies from our political leaders and possibly why we haven't hear a peep on "peak oil" from any of the Labor hopefuls. Could also be why both major parties are keen to do nuclear business. Perhaps they see nuclear as being the only viable means to shore up energy production when oil becomes prohibitively expensive.

Oh, thanks to those who attempted to answer my shipping question. Perhaps my question should have been.... "what do large cargo ships use for fuel?"
I was led to believe that they ran on pre distillery fuels such as unrefined oil, hence I couldn't understand why they would want to switch to diesel. As to the rest of the article, I have a fairly good grasp of the theory of peak oil and it's implications on the future of mankind. I also believe this is one of the most important issues we will have to face. One thing private transport owners are going to have to come to terms with is the loss of personal freedom we've enjoyed for over 100 years as one by one, people decide it's simply too expensive to drive any more.
Posted by Aime, Tuesday, 31 July 2007 5:38:57 PM
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Aime:

Check the wikipedia article:

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

Maritime Gasoil is primarily a distillate of fuel oil (fuel oil number 2).
Posted by ChrisC, Tuesday, 31 July 2007 9:17:50 PM
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Can anyone enlighten me regarding how this will affect the airline industry over the next decade or two?
Posted by JONAH, Thursday, 2 August 2007 5:08:58 PM
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Jonah;
I have read few articles about the effect on airlines.
The general opinion is the airlines will be the canary in the mine.

I note that QANTAS has increased its fuel surcharge to $187 for
London each way, just yesterday. We will see this each time there is a
significant jump in oil prices. The airlines hedge their fuel prices by
forward buying. I read somewhere just recently that QANTAS has hedged
its fuel for sometime ahead, but Virgin Blue got caught out and had to
pay a much higher price.

When we start seeing a considerable number of airlines in trouble with
falling traffic and rising fare prices we will know peak oil is here.
The rising prices will hit the tourist trade at the same time.

I thought on the private buy out of Qantas, we should have sold it
while the going was good. Would you want to be buying 20 odd Airbus
380s and 84 Boing Dreamliners at this stage of the game ?

Even if they are doing ot through a leasing company, they will probably
still have some financial commitment.
Which reminds me QANTAS is setting up a aircraft leasing company.
That would be one way to insulate the liability from QANTAS itself,
just let the leasing company go broke.

BTW I sold my Qantas shares a couple of months back.

What I have not seen any real advise about is what investments
will be the best as peak oil arrives ?
Posted by Bazz, Thursday, 2 August 2007 7:03:35 PM
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Remember that "peak oil" does not mean all the oil suddenly disappears - it just becomes more scarce. So if the peak is 2010, then in 2040 we have as much oil being produced as we had in 1980.

BUT - demand for oil in 2040 will be much greater than it was in 1980. What happens when demand is much higher than supply? Why, prices go up and up...

So for the aviation industry, I think what we'll see happen is that it'll become more and more expensive. In 20 or 30 years we'll find that the only people travelling on planes at all are the same as those who travel first or business class today.
Posted by Kyle Aaron, Thursday, 2 August 2007 7:04:07 PM
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Except that some peak oil experts are saying the depletion rate is likely to be accelerated much faster than the original rate of increase because of damaged fields.

So think more like 30/13... down 30% in 13 years, by 2020. That's about somewhere around 50 mbd, which is more like 1970's levels by 2020. Just look at Cantarelle!
Posted by Eclipse Now, Friday, 3 August 2007 9:35:19 AM
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Eclipse & others;
Then the export depletion rate (that is the rate at which exporting
countries ship their product) is worse than the production depletion
rate because they will keep their domestic market fully supplied.

An additional depletion factor has been suggested that they might fully
supply their friends and allies.
Thats when we will find out who are our friends.
Posted by Bazz, Friday, 3 August 2007 12:54:01 PM
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There's no reason why, in 2040, global demand for oil should be higher than it is now. Demand for the services provided by energy will certainly be higher, but those services can easily be provided using less energy, less oil and more of other energy sources.

Read the book, _Winning the Oil Endgame_!

http://www.oilendgame.com/
Posted by xoddam, Friday, 3 August 2007 3:17:55 PM
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I partly agree and partly disagree Xoddam.

I know there are other things that can substitute for oil, like adopting TODS (Transit Orientated Developments) and New Urbanism, which will do away with our need for oil in the first place. However, as Matt Savinar says in "Crude Awakening", if we waved a magic wand and every truck and car became a hybrid, it would only delay the crisis by 5 to 7 years because of economic growth creating more demand.

A serious crisis is coming soon. It will be here within a few years (or even months) and society has not even begun the discussion about what to do, let alone agreeing with everything in Oil Endgame. Just because something might be technically possible does not mean a smooth transition. Where is the political willpower on this?
Posted by Eclipse Now, Friday, 3 August 2007 8:10:12 PM
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If suggestion “the revolutionary aspect of this report is that this is the first time one of the major international energy agencies has admitted that oil supply will become tight in the near future” was utterly right, this international organization deserves none credibility as it’d admitted a fact others knew ages and following this conclusion, this discassion was absurdity too.
Posted by MichaelK., Saturday, 4 August 2007 2:24:09 AM
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I'm not clear what you are saying Michael K. The fact that peak oil is GROWING in respect and reports around the world means that it is bunk? I don't follow.

1. The most oil we ever discovered was back in the mid 1960's.
2. The last time we discovered more oil than we burned was in 1983.
3. That's 25 years we have progressively been living off the older discoveries. Even Exxon Mobile admit this.
4. 54 out of 65 oil producing nations have already peaked.
5. Since I started following this story in 2004, peakniks have predicted concerns about the worlds top 4 super-giants, and 3 of them have peaked (Cantarelle in Mexic catastrophically, and Burgan in Kuwait leading to a Parliamentary inquiry into exactly why their oil reserves have been doubled on paper which does not seem reflected in reality).
6. Growing international recognition of the problem. Australia's "Dr Karl" thinks we are at peak oil. ABC's Catalyst interviewed Australian geolgists, and at a now famous convention a chief geologist asked the audience of geologists "Who thinks we are at peak oil?" and half the geologist put up their hands. HALF! Chevron state we are at peak oil, and a growing body of international geologists are moving from the skeptics camp to the early peak pessimist camp.
7. The USA's GAO has raised concerns.
8. Our Federal Senate sided with the early peakers.
9. And your reply to the IEA report is that because it's the first time an international body has raised this concern, it should not be taken seriously? That flag won't fly because:-
a/ it's not true... there are stacks of government and organizational references to peak oil now, so it's just not true
b/ the fact that the IEA — the hard corps skeptics — are now willing to discuss it means the debate is over. They STILL try to hide that it's below ground factors and insist its above ground investment problems, but time will show that you simply can't burnt oil if you can't find it in the first place!
Posted by Eclipse Now, Saturday, 4 August 2007 10:21:37 AM
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Now it is my turn of being confused, Eclipse Now.

As I understood, a presence of oil at a planetary scale physically rather than ratio between already and might potentially be consumed volumes is the most.

And I feel rather oil consumption than CO2 is the beginning and the end of an existing civilization, of which climate change bell rings for.
Posted by MichaelK., Saturday, 4 August 2007 7:43:37 PM
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Michael Lardelli:

Your chimerical quasi-pessimistic snap shot of the future of Oil - relevant to Oz covers nothing new. An earlier debate by Professor Fells, et al, failed to generate the expected ructions. People in general dont care a fig one way or another.

Silvertail, Peter Costello, in full pre-election mode sanctioned yet another inquiry into high prices at the petrol-bowser.His minders evidently forgot to mention it's ONLY the 48th attempt.

Aust only went banana's in the 50/60's when Caltex, Mobil, Shell & Ampol began Refineries in NSW, QLD, SA, VIC and WA. Of the eight Refineries in toto, we produce 32 mtpa, less then 1 % of Global capacity, compared to Singapore Island's 25% which caps excess production because of stagnant World demand - yet another OPEC furphy. 700,000 b/d when demand is only 650,000 b/d ( USA gas guzzler's notwithstanding )

The patronising Oil giants are mostly US owned. BP SHell being the exception. Despite AOG, Ampol, Boral, H C Sleigh professing to the contrary50 % is Exxon owned - lock, stock and barrel.

It was the post War discoveries of Moonie, Bass Strait and the Timor Gap that spurred Oil exploration and engendered the creation of wealth to the Lucky Country. Fortunately, we are 75% self supporting in oil production; our vast shale oil deposits guarantees we are well placed into the new millennium. Advances in Technology, and the Anzac spirit of entrepreneurship is a fait accompli.

Credulous Gerry Harvey recently announced if prices reached $ 2.00 he would be travelling by rickshaw ! CEO BP's John Brown also dispelled the myth " we have plenty of capacity not just for today but for the next decade ".APPEA Director Belinda Robertsson " peaked in 2000 ? No way. By 2015 we will see a 30% surplus capacity ". BMI Economic 5 year forecast predicts a growing surplus. More doomsday reporting, plain blame game or wishful thinking ?

Spruiker from Benelong, PM JWH recently injected a $25 B assistance plan to keep the Industry alive, spur innovation, employment, develop markets and hopefully consumer dissatisfaction at the bowser.

continued..
Posted by dalma, Sunday, 5 August 2007 4:43:25 PM
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Previous largesse include Auto Giant Ford's Geelong Plant, GMH and Misubishi. All, stridently laying claim to a viable Industry ?Kidding, apparently Canberra lobbyist are much alive and thriving.

Non-efficacious Shell's Clyde Refinery is on notice. It cannot justify the Investment expense. New fuel Euro4 Standards, on low sulphur content, and structural reforms is squeezing margins. Poor returns over the past decade is generating margins of mere 50 cents a barrel @ 3.50 / $5.00 each. In perspective, profitibility is LOW and decreasing annually. Historically, Refineries are operating at only 86% capacity. It's no wonder Port Stanvac.SA. and Bulwer. QLD ( Ampol) areprepared to spend top dollar of between $ 250/ 100 M on infrastructure expansion despite the doom and gloom.

In the meantime, eye-picking Aust latest love de amour embracing climatic change, envioronmental issues, microeconomic reform, greenhouse gases and other Government/ Industry links is counter productive to Oil Industry aims. Intransigent Greenies want their proverbial cake and whinge all the way to the Polling booth for a larger slice of the pie ? Double standards has become a way of life.
Poor fella, my Country.
Et tu Brute ?
Posted by dalma, Sunday, 5 August 2007 5:02:45 PM
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Is it just me, or was Dalma so flowery in his communications that he lost people as well?

Dalma, for all your words I'm not sure what you are pontificating about. Clearly... do you calculate that peak oil is upon us or not? What do you make of all the points I've made in the global search for conventional oil? You raised Australia's shale oil deposits... but I'm not sure how to read your tone, and whether or not you were being sarcastic?

The "Growing gap" chart is the one that convinced me, and then a little further reading about the difference between shale oil + tar sands with the sweet conventional oil that gushes up a pipe at you, and even with my non-technical background I can see that there's significant reason to believe there is a problem.

In late June 2007 Dr Roger Bezdek spoke at the "Smart Conference" think tank for Aussie CEO's as the co-author of the Hirsch report into peak oil. Federal Labor Candidate Maxine McKew introduced him (this was just 3 days after very briefly introduced Maxine to peak oil).

The 51 minute video available in Quicktime below, where Bezdek simply points out that the crisis occurs when conventional oil peaks because "oil's ain't oils" as the old add used to say.

So Dalma, if you were quoting shale oil as some kind of quick-fix, please watch this 50 minute mpeg. (If you get Firefox and the "Unplug" add on, you can download it to your hard drive and watch it repeatedly there.)

http://fundraisingconcepts.info/spo/bezdek_keynote.mov
Posted by Eclipse Now, Sunday, 5 August 2007 11:32:29 PM
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What are you talking about, Dalma and Eclipse?

Since 1996, stitching Australia to an overseas crown balloons foreign debt in 4.5 times and a half of oil Australia needs is already being imported recently.

Have a nice day.
Posted by MichaelK., Monday, 6 August 2007 1:19:21 AM
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Let's leave the nit-picking and focus on what can be done. Given that there is consensus that oil is depleting and there is the potential for economic disaster and social chaos by mid-century, should concerned citizens be urging their governments (or maybe thru the UN) to implement some form of conservation similar to Richard Heinberg's oil depletion protocol ("The Oil Depletion Protocol: A plan to avert oil wars, terrorism and economic collapse")? In other words, do we want to leave a little oil in the ground so that future generations can access a very scare and valuable resource? Should part of that effort be the phasing out of the airline industry? Monbiot (in his book "Heat") indicates that air transport and air tourism probably cannot switch to a viable alternative within any kind of realistic time frame before huge quantaties of oil have been burned by aircraft and put huge amounts of GHGs into the atmosphere. Monbiot urges that we should stop building roads and airports, and stop encouraging industries that will progressively be out of time and step with the new directions that are urgently needed.

Is it useless to try to affect the future of oil depletion? Should we just go on debating the minutiae of "if and when"? Can anyone make a sensible comment on what should be done in the light of the known facts? Is it useless to try? Or is it better to try, even if it is unlikely to make any difference?
Posted by JONAH, Monday, 6 August 2007 9:07:54 AM
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Eclipse;
I have searched all around the Firefox web site including
the mozdev.org site and I cannot find "Ünplug" anywhere.
Can you help please ?
Posted by Bazz, Monday, 6 August 2007 9:11:07 AM
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Bazz,
Unplug for Firefox is here.
http://unplug.mozdev.org/

Jonah, good point.

I just couldn't tell what on earth the last 2 posters were actually talking about... whether they were dissing peak oil, trying to make some obscure point, or what.

I agree with all your points Jonah because if we prepare for peak oil "too early" we'll end up with a sustainable city plan and an economy that's solving global warming and leading to energy independence for most nations, whereas if we leave preparing for peak oil too late the consequences could be turning to foul unconventional oils in a big way (an environmental disaster), the possibility of conflict between nations, and massive economic collapse.

Yet everywhere I look I see more suburbs springing up, more highways being built, more road tunnels boring under cities, airport expansions, and Quantas fleets upgrading.

We're REALLY prepared for this thing! (Not)

So I for one agree that it would be great if we could put the quibbling aside and get on with the job, but personally don't believe anything is going to change until we are already in the Greater Depression and people are hurting.
Posted by Eclipse Now, Monday, 6 August 2007 9:40:56 AM
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