6 ms·

The Imminent Crash Of Oil Supply: Be Afraid

36 points by malbs 16y ago

hotmind 16y ago
I think this will happen sooner rather than later, but man oh man is this going to ruin people's day.
ajscherer 16y ago
What good is being afraid going to do?
- ugh 16y ago
  What good is being happy going to do? I think it is very hard to make a convincing case that fear causes us to do less. It might lead to that reaction in some people, I’m not sure whether that is true of everyone. The kind of fear that stops you in your tracks seems rather like a overreaction – a misfiring – of your fear circuitry. You should, after all, run when you see the tiger, not stop. My guess would be that fear leads to inaction only in a minority of people. That’s only a guess, but I’m not exactly sure why having no emotional reaction or being happy upon hearing those news (and assuming there’s some truth to them) is better.
- steve19 16y ago
  Exactly. If the Department of Energy were truly worried about running out of oil they would be investing in nuclear power stations and a overhaul of the power grid to prepare for the day that we all have to plug our cars into the grid.
  - jerf 16y ago
    I was thinking the same thing when the author was hypothesizing about carbon credits being a secret scheme to prepare us for peak oil; if our government really was preparing us for this and really had our best interests at heart there's many other things they would be doing. Telling us, for one. ("Keep things secret so people don't panic" applies to acute crises, not gradual crises perceivable decades in advance. If indeed it applies at all.)
idoh 16y ago
Sort of interesting to see the peak oil meme spring up again and again for over a decade and always be right around the corner. Obviously at some point the production levels will gradually decline, but people will either boost efficiency or substitute away from oil.
- Alex3917 16y ago
  In 1956 it was predicted to be in roughly 2000, and the DOE is currently saying that we are right at peak oil now. So if the DOE and the military are correct, this means that they were dead on from the beginning.
  - idoh 16y ago
    I'm not contesting that we'll hit peak oil at some point. I am contesting that people have been able to predict it - lots of people have predicted a wide range of dates. Maybe some people will hit it, but that's luck (or indistinguishable from it). I'm also contesting that we need to be afraid. So long as the change happens gradually there are lots of things we can do to use energy more efficiently or generate more of it.
- stretchwithme 16y ago
  Exactly. Prices rise when demand outstrips supply and people respond by seeking alternatives and by doing more exploration. We'll never truly run out of oil as long as there is a free market. It will just keep getting more expensive. The runup in oil prices that finally turned around in 2008 had nothing to do with long term supply but was caused too much easy credit overheating the economy.
  - maxharris 16y ago
    Unfortunately, we don't have anything like a free market in America, and we haven't had it for over a century. The correct term for what we have is a mixed economy, meaning a mix of (increasing) regulation, control and (diminishing) market forces. Having said that, I do agree that oil will simply get more expensive, and that we won't simply run out of it.
incosta 16y ago
These predictions come since as long ago as 30 or 40 years ago (check 'The End of Oil' on Amazon: in 2004 when this book was printed, the 'end of oil' was predicted (once again) to happen... in just few years! Did it?) The thing is every time such prediction is made, new and new oil fields are discovered, technology of oil extraction improved and these folks have to revise their forecast again. Don't be scared:) It's all printed by folks who want to speculate on oil prices.
mynameishere 16y ago
The graph suggests strongly that in the worst case the price of oil will rise in a slow and predictable fashion, readily allowing alternatives to be introduced profitably, preventing the need for coercion.
- aarontait 16y ago
  Unfortunately the graph doesn't take the geopolitics of the situation into account. American oil reserves are long past their peak (about 40 years ago) and we are largely dependent on foreign oil. If demand begins to outstrip supply, what's stopping the Saudis from keeping their oil to themselves? Or better yet, what's stopping them from selling it to China for a much higher price than what American oil companies can bid.
  - cellis 16y ago
    An equilibrium will be reached.
  - ghshephard 16y ago
    Oil is fungible. As long as the product is sold into the market, it doesn't matter who is purchasing/selling it. So, if Canada were to switch it's contracts to China, then the people who were previously selling to China, would then sell to the US. The only possible concern would be an embargo, in which countries _refused_ to sell to the US at any price. That would be problematic - but it isn't related to Peak Oil and could occur at any time (and, in fact, has in the past) - see http://en.wikipedia.org/wiki/1973_oil_crisis http://en.wikipedia.org/wiki/1973_oil_crisis
    - david927 16y ago
      It's fungible until it becomes strategic.
      - gruseom 16y ago
        Interesting point, but oil is strategic, so by your logic it must not be fungible.
jfi 16y ago
This has the potential to cripple the economy and society (see Mad Max). There is a great book that discusses Peak Oil and the potential crash we are facing called "The Long Emergency" for anyone interested. I really hope we attempt to hedge this looming problem proactively instead of waiting until we have gone off the edge of the cliff. This has been discussed over and over for the past 30ish years though (if not longer) and many consider it a non-problem, but it is worth planning for and diversifying away from oil, be very very bad if we got this one wrong.
javanix 16y ago
Look at this graph and be afraid. It does not come from Earth First. It does not come from the Sierra Club. It was not drawn by Socialists or Nazis or Osama Bin Laden or anyone from Goldman-Sachs. If you are a Republican Tea-Partier, rest assured it does not come from a progressive Democrat. And vice versa. It was drawn by the United States Department of Energy, and the United States military's Joint Forces Command concurs with the overall picture. I hate to break it to the authors, but just because something comes directly from the government does not necessarily make it "correct" or even "free from bias".
- stretchwithme 16y ago
  you mean the same people who completely agree with whatever plan Bush or Obama have had about Iraq or Afghanistan? And here I was thinking they were totally independent.
- tokenadult 16y ago
  Here is a direct link to some of the governmental figures. http://www.eia.doe.gov/oiaf/ieo/liquid_fuels.html http://www.eia.doe.gov/oiaf/ieo/liquid_fuels.html
justinph 16y ago
So, basically we should be looking at ways to reduce our dependency on oil? If I buy a car today, I should buy one that gets really good mileage, because oil is going to be more expensive in the future? <sarcasm>This is just total news to me. </sarcasm>
- crpatino 16y ago
  Not at all. You do not reduce your oil dependency by buying a car with good mileage. You'd rather keep your gas guzzler and find a telecommuting job. Then you take the money you saved from the car loan, and stop buying shit made in china (by finding properly priced local substitutes). That's pretty much it. Oh, yes... and forget about that vacation across Europe. Cheap air travel is going to be an early casualty in this ride. :>
Sukotto 16y ago
The crude traders don't seem that worried. Look at light sweet http://www.cmegroup.com/trading/energy/crude-oil/light-sweet-crude.html http://www.cmegroup.com/trading/energy/crude-oil/light-sweet... or Brent http://www.cmegroup.com/trading/energy/crude-oil/brent-crude-oil-last-day.html http://www.cmegroup.com/trading/energy/crude-oil/brent-crude... If they seriously though there was going to be a major shortage in the moderately near future (5~10 years) the December prices for 2012~2018 would be higher.
brc 16y ago
I would be a lot more supportive of this kind of thinking if it hadn't been going on for more than 40 years. Obviously there is a finite supply of oil, and it will start to run low sooner or later. But I would question any forecaster's ability to make pinpoint accurate judgements on this, given that so many have tried over the last 40 years, and so many have gotten it wrong. In general, I think that it is very dangerous to pivot thinking around a particular data point or graph. It ascribes a lot of importance to a set of data, that, in summary view looks very concrete and real, but might be made up of a lot of layers of uncertainty and plain old guesswork. I'm not suggesting that this graph is necessarily wrong, but you'd have to be pretty idealistic to believe any simplified piece of information about something has chaotic and complicated as all of the conventional and unconvential oil still in the ground, and able to be extracted, with timeframes and technologies thrown in. There's not even any uncertainty bars in the information.
steve19 16y ago
Sigh. We have been hearing for decades that we have only a decade left.
- lowkey 16y ago
  Not exactly, We have been hearing for A decade that global peak oil was coming. The original Peak Oil Theory reference a peak in US oil production which we hit somewhere around the 1970's - just as was predicted. (I guess you are hoping if we ignore the problem long enough maybe it will go away?)
davidmathers 16y ago
I've decided to start flagging all posts with headlines that promote social fear. A nice side effect: they're usually written by ignorant people for ignorant people and aren't worth reading.
- brazzy 16y ago
  I see one person wallowing in ignorance here, and it's not the author of the article or the one who posted it...
whyme 16y ago
Same old story. Same old BS. I've heard it for over ten years. 1. Oil companies have a variety of categories for reporting reserves. 15+ years ago companies used to regularly report liberal reserve numbers for the sake of stock price boosting. Since then the regulators have pushed companies to be conservative in their "findings". The historical shift makes it look worse than it is -which doesn't look bad to me (33 years of known resources is so much frikin oil).... There are so many companies sitting on thousands of drill opportunities and they simply don't have the upfront capital or even people to work on them. 2. Even if CONVENTIONAL Oil is harder to find there's plenty of Natural Gas and Non-Conventional resources to move towards without it being a big deal. This is how the market works - when the price of oil is too high due to supply constraints then technology/infrastructure will shift. This seems fairly normal to me - certainly not a panic situation. And quite frankly it's great for our economy to make these shifts - more jobs, new jobs. 3. > "Although there are large deposits of "unconventional" oil such as the Canadian tar sands, most are making only slow progress at development and consume as much or more energy in their production as they can generate." What a load of Malarky. There's absolutely no truth to this what so ever. Canadian Oil Sands are the most poorly understood commodity on the market. It doesn't consume more energy to produce - there's no substance in the article for me to even bother counter stating (and all the environmental concerns, relatively speaking, are just completely unfounded).

36 points by malbs 16y ago

hotmind 16y ago

I think this will happen sooner rather than later, but man oh man is this going to ruin people's day.

ajscherer 16y ago

What good is being afraid going to do?

ugh 16y ago
What good is being happy going to do? I think it is very hard to make a convincing case that fear causes us to do less. It might lead to that reaction in some people, I’m not sure whether that is true of everyone. The kind of fear that stops you in your tracks seems rather like a overreaction – a misfiring – of your fear circuitry. You should, after all, run when you see the tiger, not stop. My guess would be that fear leads to inaction only in a minority of people. That’s only a guess, but I’m not exactly sure why having no emotional reaction or being happy upon hearing those news (and assuming there’s some truth to them) is better.
steve19 16y ago
Exactly. If the Department of Energy were truly worried about running out of oil they would be investing in nuclear power stations and a overhaul of the power grid to prepare for the day that we all have to plug our cars into the grid.
- jerf 16y ago
  I was thinking the same thing when the author was hypothesizing about carbon credits being a secret scheme to prepare us for peak oil; if our government really was preparing us for this and really had our best interests at heart there's many other things they would be doing. Telling us, for one. ("Keep things secret so people don't panic" applies to acute crises, not gradual crises perceivable decades in advance. If indeed it applies at all.)

idoh 16y ago

Sort of interesting to see the peak oil meme spring up again and again for over a decade and always be right around the corner. Obviously at some point the production levels will gradually decline, but people will either boost efficiency or substitute away from oil.

Alex3917 16y ago
In 1956 it was predicted to be in roughly 2000, and the DOE is currently saying that we are right at peak oil now. So if the DOE and the military are correct, this means that they were dead on from the beginning.
- idoh 16y ago
  I'm not contesting that we'll hit peak oil at some point. I am contesting that people have been able to predict it - lots of people have predicted a wide range of dates. Maybe some people will hit it, but that's luck (or indistinguishable from it). I'm also contesting that we need to be afraid. So long as the change happens gradually there are lots of things we can do to use energy more efficiently or generate more of it.
stretchwithme 16y ago
Exactly. Prices rise when demand outstrips supply and people respond by seeking alternatives and by doing more exploration. We'll never truly run out of oil as long as there is a free market. It will just keep getting more expensive. The runup in oil prices that finally turned around in 2008 had nothing to do with long term supply but was caused too much easy credit overheating the economy.
- maxharris 16y ago
  Unfortunately, we don't have anything like a free market in America, and we haven't had it for over a century. The correct term for what we have is a mixed economy, meaning a mix of (increasing) regulation, control and (diminishing) market forces. Having said that, I do agree that oil will simply get more expensive, and that we won't simply run out of it.

incosta 16y ago

These predictions come since as long ago as 30 or 40 years ago (check 'The End of Oil' on Amazon: in 2004 when this book was printed, the 'end of oil' was predicted (once again) to happen... in just few years! Did it?) The thing is every time such prediction is made, new and new oil fields are discovered, technology of oil extraction improved and these folks have to revise their forecast again. Don't be scared:) It's all printed by folks who want to speculate on oil prices.

mynameishere 16y ago

The graph suggests strongly that in the worst case the price of oil will rise in a slow and predictable fashion, readily allowing alternatives to be introduced profitably, preventing the need for coercion.

aarontait 16y ago
Unfortunately the graph doesn't take the geopolitics of the situation into account. American oil reserves are long past their peak (about 40 years ago) and we are largely dependent on foreign oil. If demand begins to outstrip supply, what's stopping the Saudis from keeping their oil to themselves? Or better yet, what's stopping them from selling it to China for a much higher price than what American oil companies can bid.
- cellis 16y ago
  An equilibrium will be reached.
- ghshephard 16y ago
  Oil is fungible. As long as the product is sold into the market, it doesn't matter who is purchasing/selling it. So, if Canada were to switch it's contracts to China, then the people who were previously selling to China, would then sell to the US. The only possible concern would be an embargo, in which countries _refused_ to sell to the US at any price. That would be problematic - but it isn't related to Peak Oil and could occur at any time (and, in fact, has in the past) - see http://en.wikipedia.org/wiki/1973_oil_crisis http://en.wikipedia.org/wiki/1973_oil_crisis
  - david927 16y ago
    It's fungible until it becomes strategic.
    - gruseom 16y ago
      Interesting point, but oil is strategic, so by your logic it must not be fungible.

jfi 16y ago

This has the potential to cripple the economy and society (see Mad Max). There is a great book that discusses Peak Oil and the potential crash we are facing called "The Long Emergency" for anyone interested. I really hope we attempt to hedge this looming problem proactively instead of waiting until we have gone off the edge of the cliff. This has been discussed over and over for the past 30ish years though (if not longer) and many consider it a non-problem, but it is worth planning for and diversifying away from oil, be very very bad if we got this one wrong.

javanix 16y ago

Look at this graph and be afraid. It does not come from Earth First. It does not come from the Sierra Club. It was not drawn by Socialists or Nazis or Osama Bin Laden or anyone from Goldman-Sachs. If you are a Republican Tea-Partier, rest assured it does not come from a progressive Democrat. And vice versa. It was drawn by the United States Department of Energy, and the United States military's Joint Forces Command concurs with the overall picture. I hate to break it to the authors, but just because something comes directly from the government does not necessarily make it "correct" or even "free from bias".

stretchwithme 16y ago
you mean the same people who completely agree with whatever plan Bush or Obama have had about Iraq or Afghanistan? And here I was thinking they were totally independent.
tokenadult 16y ago
Here is a direct link to some of the governmental figures. http://www.eia.doe.gov/oiaf/ieo/liquid_fuels.html http://www.eia.doe.gov/oiaf/ieo/liquid_fuels.html

justinph 16y ago

So, basically we should be looking at ways to reduce our dependency on oil? If I buy a car today, I should buy one that gets really good mileage, because oil is going to be more expensive in the future? <sarcasm>This is just total news to me. </sarcasm>

crpatino 16y ago
Not at all. You do not reduce your oil dependency by buying a car with good mileage. You'd rather keep your gas guzzler and find a telecommuting job. Then you take the money you saved from the car loan, and stop buying shit made in china (by finding properly priced local substitutes). That's pretty much it. Oh, yes... and forget about that vacation across Europe. Cheap air travel is going to be an early casualty in this ride. :>

Sukotto 16y ago

The crude traders don't seem that worried. Look at light sweet http://www.cmegroup.com/trading/energy/crude-oil/light-sweet-crude.html http://www.cmegroup.com/trading/energy/crude-oil/light-sweet... or Brent http://www.cmegroup.com/trading/energy/crude-oil/brent-crude-oil-last-day.html http://www.cmegroup.com/trading/energy/crude-oil/brent-crude... If they seriously though there was going to be a major shortage in the moderately near future (5~10 years) the December prices for 2012~2018 would be higher.

brc 16y ago

I would be a lot more supportive of this kind of thinking if it hadn't been going on for more than 40 years. Obviously there is a finite supply of oil, and it will start to run low sooner or later. But I would question any forecaster's ability to make pinpoint accurate judgements on this, given that so many have tried over the last 40 years, and so many have gotten it wrong. In general, I think that it is very dangerous to pivot thinking around a particular data point or graph. It ascribes a lot of importance to a set of data, that, in summary view looks very concrete and real, but might be made up of a lot of layers of uncertainty and plain old guesswork. I'm not suggesting that this graph is necessarily wrong, but you'd have to be pretty idealistic to believe any simplified piece of information about something has chaotic and complicated as all of the conventional and unconvential oil still in the ground, and able to be extracted, with timeframes and technologies thrown in. There's not even any uncertainty bars in the information.

steve19 16y ago

Sigh. We have been hearing for decades that we have only a decade left.

lowkey 16y ago
Not exactly, We have been hearing for A decade that global peak oil was coming. The original Peak Oil Theory reference a peak in US oil production which we hit somewhere around the 1970's - just as was predicted. (I guess you are hoping if we ignore the problem long enough maybe it will go away?)

davidmathers 16y ago

I've decided to start flagging all posts with headlines that promote social fear. A nice side effect: they're usually written by ignorant people for ignorant people and aren't worth reading.

brazzy 16y ago
I see one person wallowing in ignorance here, and it's not the author of the article or the one who posted it...

whyme 16y ago

Same old story. Same old BS. I've heard it for over ten years. 1. Oil companies have a variety of categories for reporting reserves. 15+ years ago companies used to regularly report liberal reserve numbers for the sake of stock price boosting. Since then the regulators have pushed companies to be conservative in their "findings". The historical shift makes it look worse than it is -which doesn't look bad to me (33 years of known resources is so much frikin oil).... There are so many companies sitting on thousands of drill opportunities and they simply don't have the upfront capital or even people to work on them. 2. Even if CONVENTIONAL Oil is harder to find there's plenty of Natural Gas and Non-Conventional resources to move towards without it being a big deal. This is how the market works - when the price of oil is too high due to supply constraints then technology/infrastructure will shift. This seems fairly normal to me - certainly not a panic situation. And quite frankly it's great for our economy to make these shifts - more jobs, new jobs. 3. > "Although there are large deposits of "unconventional" oil such as the Canadian tar sands, most are making only slow progress at development and consume as much or more energy in their production as they can generate." What a load of Malarky. There's absolutely no truth to this what so ever. Canadian Oil Sands are the most poorly understood commodity on the market. It doesn't consume more energy to produce - there's no substance in the article for me to even bother counter stating (and all the environmental concerns, relatively speaking, are just completely unfounded).