6 ms·

Peak Oil Is Suddenly Upon Us

32 points by CarCooler 6y ago

pmoriarty 6y ago
"A year ago, if anyone in the petroleum business had suggested that the moment of Peak Oil had already passed, they would have been laughed right off the drilling rig. Then 2020 happened. ... Humanity's thirst for oil may never again return to prior levels." That's not what peak oil means. Peak oil is exactly the opposite: when demand for cheap oil outstrips supply. In this article they're talking about there being more supply than demand: exactly the opposite of peak oil. But, yeah, I guess if they redefine peak oil to mean what they want it to mean, they have a point. Update: I've thought about it some more, and I realized that what they describe is peak oil. It's not that the definition of peak oil has changed, but what counts as "cheap" has changed. So there are really two ways to achieve peak oil. The first way is for the definition of "cheap oil" to stay the same, but the supply of oil at that price level to permanently drop below the demand for oil at that price level. The second way is for the definition of "cheap oil" to drop while supply at the previous price level stays the same. The fact that "cheap oil" may be redefined shows that "peak oil" is a flexible concept, not something etched in stone. When the price at which oil seems "cheap" rises, then the supply could still be there, and when that price falls then it's no surprise there's not as much of it any more. Or maybe I'm confused again? What do you think?
- tonyedgecombe 6y ago
  According to Wikipedia "Peak oil is the year when the maximum rate of extraction of petroleum is reached, after which it is expected to enter terminal decline."
  - notfromhere 6y ago
    When this was big in the 2000s, maximum extraction is reached because supply is maximized, not because demand has entered terminal decline.
    - tharkun__ 6y ago
      So are you saying that if you set a target for someone to reach, if he doesn't reach it in exactly the way that you predicted he would, he didn't actually reach the target?
      - Supermancho 6y ago
        > So are you saying that if you set a target for someone to reach No > "Peak oil is the year when the maximum rate of extraction of petroleum is reached, after which it is expected to enter terminal decline." The maximum rate possible, was not reached. There has been a voluntary reduction in rate. This is not in dispute. The graph suggests a terminal decline in demand, for which you could say there is some form of an expectation (for the most optimistic? viewer), but the prefix condition was not met. Peak oil is not an statement about economics, but about practical conditions that have an economic effect. Re-interpretations withstanding, as mentioned, history has an inherent possibility of increased production in the future which also fails both conditions. There is no coherent interpretation that fits, at this time.
        tharkun__ 6y ago
        I would kindly suggest that yes you are then. The above is "how you predicted it would be reached". And to be fair how many others probably did and it might have been the original intention of the phrase even. I definitely thought of "peak oil" as the point after which there's just no more deposits we can tap to increase production. History will tell if this was really the "maximum rate" that humanity ever reached. As it will the terminal part of the decline. And maybe this was a local maximum. The article seems to want to predict that this was the global maximum. For now we can't prove either. Even if someone else in another article (like has happened before) predicts peak oil because there are no more known deposits to tap, it doesn't mean it's a global max. New deposits have been found after and were tapped while others hadn't run out yet and it turned out to be a local max. Why we reached the max is left open though. Maybe we reached the max now because this is the point at which demand never goes back up to previous levels, who knows. Still meats the definition. Edited for spelling.
- baxtr 6y ago
  Yeah, maybe you are confused indeed. Because if peak oil is a flexible thing, then we have seen it AND will see it again. Like the Schrödinger thing, you know? Now, I’m confused too...
valuearb 6y ago
Peak oil has now been reached, just as it has every year for the last 60.
akvadrako 6y ago
Why is every article from bloomberg that gets upvoted on HN based on lies and misconceptions? No, we haven't reached "peak oil" unless you redefine it differently than it's mostly been defined for decades.
- jdhn 6y ago
  Gotta get those clicks somehow.
deepnotderp 6y ago
That's... not at all what Peak Oil means
njarboe 6y ago
The title should be "Peak Oil Will Never Happen" "Peak Oil" theory is about running out of oil supply. With all the fracking oil sources now available to tap in the US at relatively short notice, the world of oil is very different now. OPEC used to be able to control supply, demand was inelastic, and thus they could control the price. Fracking is expensive, but you can produce a huge amount of oil by just spending more $/barrel to get it out of the ground. A lot of the oil is owned privately in west Texas and will be available for extraction for the foreseeable future. For the first time since the 1970's(maybe earlier/never?) oil pricing will closely follow classic supply and demand curves. Another interesting thing is that the US is now producing more oil than it is consuming. It will probably be a net exporter going forward. This changes the realpolitik view of the Middle East. The US could definitely get the hell out of there militarily and just keep a lookout for nuclear weapons production projects (or even just leave that to the Israelis who we already massively support). This is a huge deal that I don't see discussed at all.
- deleted 6y ago
  [deleted]
- paulryanrogers 6y ago
  There won't always be low hanging fruit or a reliable rate of breakthroughs. Peak oil doesn't mean all possible supply on Earth. But rather the point at which one must spend so much energy to extract and develop a barrel of crude that it's net negative, or even just less optimal than alternatives. Physics has hard limits and the rate of crude accumulating naturally is far below extraction. Besides the oceans have enough acidity and mercury already, they certainly don't need more. Edit: there not they're
  - whatshisface 6y ago
    Solar panels, at their present and sustained rate of price decline, will obsolete oil in a number of decades. The peak oil prophecies will come true only if they can come true on a timeline. "It has to run out eventually," as an argument, only hold water if we're going to be needing it for an infinite amount of time.
okareaman 6y ago
I have no idea why people in this thread are arguing about the definition of peak oil when the relevant topic is peak demand. I find it interesting that energy companies are struggling with the idea of leaving it in the ground.
OneGuy123 6y ago
If there are 5000 peak oil articles spread out across 100 years one of the will get the chance to gloat that "I got it right!!!!"
foundart 6y ago
"Peak Oil" was originally about supply problems. The article reports, eventually, that the usage has shifted in recent years. What they say makes sense to me, but I think the article would be better had they mentioned it sooner. The term “peak oil” didn’t always refer to demand. It started with the premise that the world’s supply of crude was finite. Eventually no matter how hard drillers tried, they wouldn’t be able to pull more oil out of the ground. A transportation crisis would ensue. The peak oil hypothesis dominated economic thinking for decades. But it turned out that with fracking, deep-water drilling, and oil sands, there’s a lot more oil than we once thought. More recently, the idea of a demand-driven peak took hold. Petrostates fear it, environmentalists pray for it.
- dragonwriter 6y ago
  > The term “peak oil” didn’t always refer to demand. It started with the premise that the world’s supply of crude was finite. Eventually no matter how hard drillers tried, they wouldn’t be able to pull more oil out of the ground This is false. The hypothesis was not that there was a hard limit on rate of extraction, but that the economics of extraction would result int a production peak due to what was economically profitably extractable. Demand was always a part of the consideration, though the original papers and predictions didn't so much consider decreasing demand due to new alternatives.
  - foundart 6y ago
    Yes, the hypothesis was that as the supply of readily accessible oil dwindled, the economics of extracting the remaining oil would be prohibitive, so their quote is not perfect. On the other hand, a sentence that could be fixed by appending "in an economically feasible matter" to the end of it does not seem like a significant problem in a brief comment about what the term "peak oil" used to mean in an article that is all about a newer usage of it.
    - SAI_Peregrinus 6y ago
      Well, it's becoming economically infeasible to extract oil not because the cost of extraction has increased, but because the cost of alternatives has decreased enough to reduce the price of oil. So it's still the case that oil production is peaking due to being too expensive.
pcdoodle 6y ago
Another example of alarmists being wrong. Sad thing is, it takes almost half a human life span to laugh at them.

32 points by CarCooler 6y ago

"A year ago, if anyone in the petroleum business had suggested that the moment of Peak Oil had already passed, they would have been laughed right off the drilling rig. Then 2020 happened. ... Humanity's thirst for oil may never again return to prior levels." That's not what peak oil means. Peak oil is exactly the opposite: when demand for cheap oil outstrips supply. In this article they're talking about there being more supply than demand: exactly the opposite of peak oil. But, yeah, I guess if they redefine peak oil to mean what they want it to mean, they have a point. Update: I've thought about it some more, and I realized that what they describe is peak oil. It's not that the definition of peak oil has changed, but what counts as "cheap" has changed. So there are really two ways to achieve peak oil. The first way is for the definition of "cheap oil" to stay the same, but the supply of oil at that price level to permanently drop below the demand for oil at that price level. The second way is for the definition of "cheap oil" to drop while supply at the previous price level stays the same. The fact that "cheap oil" may be redefined shows that "peak oil" is a flexible concept, not something etched in stone. When the price at which oil seems "cheap" rises, then the supply could still be there, and when that price falls then it's no surprise there's not as much of it any more. Or maybe I'm confused again? What do you think?

tonyedgecombe 6y ago
According to Wikipedia "Peak oil is the year when the maximum rate of extraction of petroleum is reached, after which it is expected to enter terminal decline."
- notfromhere 6y ago
  When this was big in the 2000s, maximum extraction is reached because supply is maximized, not because demand has entered terminal decline.
  - tharkun__ 6y ago
    So are you saying that if you set a target for someone to reach, if he doesn't reach it in exactly the way that you predicted he would, he didn't actually reach the target?
    - Supermancho 6y ago
      > So are you saying that if you set a target for someone to reach No > "Peak oil is the year when the maximum rate of extraction of petroleum is reached, after which it is expected to enter terminal decline." The maximum rate possible, was not reached. There has been a voluntary reduction in rate. This is not in dispute. The graph suggests a terminal decline in demand, for which you could say there is some form of an expectation (for the most optimistic? viewer), but the prefix condition was not met. Peak oil is not an statement about economics, but about practical conditions that have an economic effect. Re-interpretations withstanding, as mentioned, history has an inherent possibility of increased production in the future which also fails both conditions. There is no coherent interpretation that fits, at this time.
      - tharkun__ 6y ago
        I would kindly suggest that yes you are then. The above is "how you predicted it would be reached". And to be fair how many others probably did and it might have been the original intention of the phrase even. I definitely thought of "peak oil" as the point after which there's just no more deposits we can tap to increase production. History will tell if this was really the "maximum rate" that humanity ever reached. As it will the terminal part of the decline. And maybe this was a local maximum. The article seems to want to predict that this was the global maximum. For now we can't prove either. Even if someone else in another article (like has happened before) predicts peak oil because there are no more known deposits to tap, it doesn't mean it's a global max. New deposits have been found after and were tapped while others hadn't run out yet and it turned out to be a local max. Why we reached the max is left open though. Maybe we reached the max now because this is the point at which demand never goes back up to previous levels, who knows. Still meats the definition. Edited for spelling.
baxtr 6y ago
Yeah, maybe you are confused indeed. Because if peak oil is a flexible thing, then we have seen it AND will see it again. Like the Schrödinger thing, you know? Now, I’m confused too...

valuearb 6y ago

Peak oil has now been reached, just as it has every year for the last 60.

akvadrako 6y ago

Why is every article from bloomberg that gets upvoted on HN based on lies and misconceptions? No, we haven't reached "peak oil" unless you redefine it differently than it's mostly been defined for decades.

jdhn 6y ago
Gotta get those clicks somehow.

deepnotderp 6y ago

That's... not at all what Peak Oil means

njarboe 6y ago

The title should be "Peak Oil Will Never Happen" "Peak Oil" theory is about running out of oil supply. With all the fracking oil sources now available to tap in the US at relatively short notice, the world of oil is very different now. OPEC used to be able to control supply, demand was inelastic, and thus they could control the price. Fracking is expensive, but you can produce a huge amount of oil by just spending more $/barrel to get it out of the ground. A lot of the oil is owned privately in west Texas and will be available for extraction for the foreseeable future. For the first time since the 1970's(maybe earlier/never?) oil pricing will closely follow classic supply and demand curves. Another interesting thing is that the US is now producing more oil than it is consuming. It will probably be a net exporter going forward. This changes the realpolitik view of the Middle East. The US could definitely get the hell out of there militarily and just keep a lookout for nuclear weapons production projects (or even just leave that to the Israelis who we already massively support). This is a huge deal that I don't see discussed at all.

deleted 6y ago
[deleted]
paulryanrogers 6y ago
There won't always be low hanging fruit or a reliable rate of breakthroughs. Peak oil doesn't mean all possible supply on Earth. But rather the point at which one must spend so much energy to extract and develop a barrel of crude that it's net negative, or even just less optimal than alternatives. Physics has hard limits and the rate of crude accumulating naturally is far below extraction. Besides the oceans have enough acidity and mercury already, they certainly don't need more. Edit: there not they're
- whatshisface 6y ago
  Solar panels, at their present and sustained rate of price decline, will obsolete oil in a number of decades. The peak oil prophecies will come true only if they can come true on a timeline. "It has to run out eventually," as an argument, only hold water if we're going to be needing it for an infinite amount of time.

okareaman 6y ago

I have no idea why people in this thread are arguing about the definition of peak oil when the relevant topic is peak demand. I find it interesting that energy companies are struggling with the idea of leaving it in the ground.

OneGuy123 6y ago

If there are 5000 peak oil articles spread out across 100 years one of the will get the chance to gloat that "I got it right!!!!"

foundart 6y ago

"Peak Oil" was originally about supply problems. The article reports, eventually, that the usage has shifted in recent years. What they say makes sense to me, but I think the article would be better had they mentioned it sooner. The term “peak oil” didn’t always refer to demand. It started with the premise that the world’s supply of crude was finite. Eventually no matter how hard drillers tried, they wouldn’t be able to pull more oil out of the ground. A transportation crisis would ensue. The peak oil hypothesis dominated economic thinking for decades. But it turned out that with fracking, deep-water drilling, and oil sands, there’s a lot more oil than we once thought. More recently, the idea of a demand-driven peak took hold. Petrostates fear it, environmentalists pray for it.

dragonwriter 6y ago
> The term “peak oil” didn’t always refer to demand. It started with the premise that the world’s supply of crude was finite. Eventually no matter how hard drillers tried, they wouldn’t be able to pull more oil out of the ground This is false. The hypothesis was not that there was a hard limit on rate of extraction, but that the economics of extraction would result int a production peak due to what was economically profitably extractable. Demand was always a part of the consideration, though the original papers and predictions didn't so much consider decreasing demand due to new alternatives.
- foundart 6y ago
  Yes, the hypothesis was that as the supply of readily accessible oil dwindled, the economics of extracting the remaining oil would be prohibitive, so their quote is not perfect. On the other hand, a sentence that could be fixed by appending "in an economically feasible matter" to the end of it does not seem like a significant problem in a brief comment about what the term "peak oil" used to mean in an article that is all about a newer usage of it.
  - SAI_Peregrinus 6y ago
    Well, it's becoming economically infeasible to extract oil not because the cost of extraction has increased, but because the cost of alternatives has decreased enough to reduce the price of oil. So it's still the case that oil production is peaking due to being too expensive.

pcdoodle 6y ago

Another example of alarmists being wrong. Sad thing is, it takes almost half a human life span to laugh at them.