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.

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.

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.

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.

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.

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.