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The Forum > Article Comments > Whither peak oil at Rudd's 2020 Summit? > Comments

Whither peak oil at Rudd's 2020 Summit? : Comments

By Michael Lardelli, published 10/4/2008

It's widely accepted and little-talked-about that we are running out of oil. The 2020 Summit continues that silence.

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Fozz, this will answer your questions:

http://www.aph.gov.au/Senate/committee/rrat_ctte/oil_supply/report/report.pdf
Posted by rstuart, Sunday, 13 April 2008 8:46:18 PM
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You peak oilers should be able to make a lot of money if you have the courage of your convictions: the Nymex future for light sweet crude in Dec 2013 is priced at only $99!
Posted by OC617, Monday, 14 April 2008 1:37:14 PM
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OC617, "make a lot of money if you have the courage of your convictions ...".

That depends on what our convictions are, OC617. I can't speak for the others, but it appears oil peaked in 2006. Right now we are in the flat spot of the curve. From past articles here on OLO, we start sliding down the other side of the curve in earnest at around 2012.

I would indeed take the bet offered by Nymex future if that was what the bet was for. But what the availability of sweet crude will have to do with its price in 2013 is unclear. A couple of facts may illustrate why.

Fact 1: Conversion from coal to oil using the Fischer-Tropsch yields oil priced at around $50/barrel. Its not too difficult to come up reasons why we have not as yet taken up a way to produce oil at around 1/2 the price we pay for it now - but predicting if and when we will is beyond me.

Fact 2: To very roughly calculate the "price equivalent" for electricity, multiply the price of electricity in Kw/Hours by 2 to yield an equivalent price per litre of petrol, retail. So, if you are paying around 15 cents per Kw/hour, then it would take 30 cents of electricity to power your car for roughly the same distance as 1 litre of petrol. The first plug in hybrid cars will hit our shores in 2010.

Fact 3: We are on the peak of the oil availability curve, so supply is roughly flat. Ergo, the price increases we are seeing are being driven mostly by demand - from China and India I guess. Should that demand dry up, maybe because their best customer hit a sub-prime mortgage crisis, the price of petrol would stop rising for now.

So if demand remains flat, and we put the effort in now to do lot of oil substitution, the price of crude may go down. But if demand continues to rise, and we don't take steps to substitute, the price will go through a meteoric rise.
Posted by rstuart, Monday, 14 April 2008 6:51:22 PM
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rstuart has a point with oil substitution.
Personally I'd like to see some choices right now. Currently I use leg power and a coal powered train to get to work. For those other trips;
I'm in the market for a new car and don't want one that uses oil. That pretty much leaves me using LPG or gutting a hybrid on my own time and hoping the RTA here will let me register it.
I doubt my grand kids of the future will believe me when I tell them we used to just hop in a car and drive for a holiday.
Posted by T.Sett, Tuesday, 15 April 2008 2:58:59 PM
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rstuart, how could demand ‘remain’ flat with China’s, India’s and indeed the whole world’s rapid increase in per-capita consumption and/or population growth?

It will continue to increase rapidly.

Even with the best efforts to substitute liquid fossil fuel energy, oil prices would continue on their meteoric rise.
Posted by Ludwig, Tuesday, 15 April 2008 8:40:02 PM
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Unfortunately, our political and social systems will remain blissfully unprepared for the continuing rapid rise in oil prices. There will come a point when the political outcry to 'do something' about petrol prices will become loud, prolongued and impossible to ignore. Will the solution be climate friendly? Highly unlikely - we're more likely to see short term, knee jerk political reactions from a system that demands short attention spans - subsidies for fuel, reductions in taxes, and a push to produce oil from coal - cheap, available and requiring fewer systemic changes. Peak oil could be a great opportunity, but there is no evidence it will be.
Posted by next, Wednesday, 16 April 2008 6:39:11 AM
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