Sure oil's last peak was a high - or at least I won't argue the point - all the peaks I have know have been highs.. It is possible that the ongoing shift from easy-lift to more expensive oil may push up real prices for a time.. not sure on that point.. and the difficulty of finding major reserves may indeed be making supply more difficult .. and the Russians have not helped with major restrictions limiting investing in their industry - but again that does not change the argument.
The problem with forecasting oil reserves and prices is that events like tech breakthroughs can throw it all out the window.. this happened with the Canadian oil sands recently.
As for forecasting reserves in coal and LNG (both of which, can be made to substitute for oil if needs be).. energy forecasting is so complicated that everyone outside the green movement has given up (recent oil industry forecasts for the end to major reserves dealt with a specific case - and even then I don't think they got it right..) Anyway, hope your thesis goes well...

It seems to me that the base line, if you will excuse the pun, is that
oil production, all liquids, is stuck at around 85 Mbd since May 2005.
The last oil price spike occurred when demand leaned on the supply
rather hard and the price shot up with a bit of aid from speculators.

Unfortunately this coincided with the interest rate increase on all
those sub-prime loans in the US and up went food & petrol.
Many more than expected defaulted on their loans and the insurance
was inadequate and so here we are.

The recession pushed down demand and we await a recovery and another
increase in oil prices and what will happen when demand reaches the
production level again ?
This cycle will repeat several times hopefully and it will wake up
Kevin Rudd and company.

As it stands now Kevin Rudd is pushing to build more freeways (ABC TV)
and so we cannot hope for help from that quarter.
The policy makers in government simply do not understand.
The problem is that the money to do what is necessary to prepare for
energy depletion will have been spent on airports, 2nd airport for
Sydney, road tunnels for Brisbane, more freeways for Melbourne (ABC TV).
While public transport and projects like solar thermal power station
modifications go wanting.

Some experts think we may only get one or two cycles of the oil price
spike-financial crash so the politicians will have to be fast learners.
On the past pereformance I think thats a forlorn hope.

The real problem is that the victims of the bust side of these boom and bust cycles are the most vulnerable. The poor or marginally employable often have to travel far to get to work. Make petrol really expensive, and they are stuck at home when they could be out looking for work. Sure the market will eventually fix the problem – but at what cost? It's not as if we live in a pristine free market economy. Fossil fuels are heavily subsidised, and are getting more in the cause of "jobs" (in an industry that's increasingly capital rather than labour intensive, and has a history of shedding jobs fast on its down cycles).

If only we had the leadership the Americans are lucky enough to have now... so much depends on Obama actually delivering not so much because he is so good (which we can only really determine with hindsight) but because the rest of the world's leadership is so pathetic (which we can see now). If he fails, the consequences will be really scary.

Hi again Philip.

Regarding McKay's essay: McKay’s conclusion is to

1. electrify transport - this reduces oil consumption in favour of electricity production.
2. use heat pumps for air and water heating.
3. use clean coal and nuclear electricity – this translates into “use nuclear electricity” because clean coal doesn’t exist, and besides he advises it is only a “stop-gap” as coal will run out relatively quickly.
4. transmit renewable energy from other countries (eg solar power from deserts) – no mention is made of the enormous cost of this, in particular the cost of HVDC transmission systems.

McKay’s ultimate conclusion is this: Renewables cannot provide enough energy to satisfy current or future demand. But he concludes that nuclear fission (fast breeders with seawater extraction) can provide enough energy for all humans on the planet, and represents a major part of a sustainable long term solution.

McKay addresses the issue of intermittency in renewable energy by

1. promoting the notion of pumped storage. (highly inefficient, dependent on hydro resource availability - which Australia lacks) 2. suggesting that more geographically separated plants reduces the impact of intermittency (misleading)

The problem with renewables is that even though the more plants you have, the smoother the flow of power, there is still the small chance that there will be an extensive calm period on a cloudy day when tidal flows are slack. In which case, you must have a very large capacity of idle stand-by gas plants to kick in at a moments notice. Technically, this is not a huge problem, but it is a huge economic issue. It is very, very expensive. McKay, by failing to address the economics of the issue, glosses over the problem posed by intermittency in renewables. The reality is that the economic restriction created by the need for redundancy, and availability of hydro resource, limits renewable to a fraction of total capacity. The bulk of supply must come from reliable baseload sources such as nuclear power.

regards,

Greig

Greig, McKay was also a bit weak on the weaknesses of nuclear such as massive environmental damage from mining and fuel refinement, and the tendency for all the money to be focused on technologies with military applications.

Also be careful of taking his examples over wholesale to Australia. Heat pumps for example have a much easier time here because an air-source heat pump works well most of the year in most of Australia, whereas Europeans need much more expensive ground-source heat pumps to take them through winter. They also don't have much sunshine to work with, or much spare land on which to plant biofuels crops that grow on land unsuited to agriculture.

Back to nuclear ... Thorium for example can in theory be used for a process with much shorter half-life and no military potential, but it has hardly been explored. Most current work is in India. See more at http://en.wikipedia.org/wiki/Thorium_fuel_cycle – the theory looks good but not much has been done.

Uranium is not a great choice for fuel because the quantity available is too low and it will run out quickly if there's a massive building program. It also has largely been developed along lines that make weapons relatively easy to develop out of civilian technology.

Maybe some countries in Europe will go nuclear in a big way but it's not a general solution. Would you like every unpredictable police state to have access to significant nuclear resources? In any case the limited acceptability of nuclear is not just my opinion. The IEA's World Energy Outlook 2008 Edition http://www.worldenergyoutlook.org/docs/weo2008/WEO2008_es_english.pdf sees nuclear as dropping from 6% of primary energy production to 5% by 2030 (its share of electricity goes down from 15% to 10%).

Working out ways of managing load and matching to capacity is not an impossible problem, just very hard. We can manage a technology as chaotic at the basic architecture level as the Internet with remarkably few failures. Instead of saying "too hard" and giving up, we need to start working on these problems now. They will not go away, nor will they solve themselves.

Philip,

Could you please explain how an air-source heat pump works, and how it would be used for cooling in Australia.

I am glad that you have recognised that matching load and capacity is a difficult problem - in fact it is THE problem in energy production. I note you make no effort to present any solutions, but I'll have a crack...

In my opinion as renewables increase in Australia under the MRET, and energy supply becomes more and more variable and unstable, I can see small urban located gas turbines for peaking load becoming very popular. But in Australia the problem is that piped gas is not yet well developed ... as the Moomba gas fields will be exhausted in less than 20 years. We need new gas pipes from PNG or the NW Shelf or access to local coal seam gas, and we need to start building very soon or rolling blackouts wilol become very common.