Again Great points
My Uncle is an oil and gas geologist out in Calgary Alberta, and I got from him the following info.
Existing Oil Sands Projects - profitable at $30/Barrel
new ones - $75/Barrel.
Can quote if you like..
Peak Oil as the theory that there will be a maximum production ration, which is located somewhere around the half of the total amount of oil we ever gonna use (*), is reached.
If we do not set the constraint on wether the peak should be exactly around half of the oil usage too strict, we can almost immediately conclude that peak oil is true, since if that were not the case, the production of oil would have to keep increasing untl the last drip of oil we ever gonna use, and that is very implausable, if not outright impossible.
This argument, and the truth of the conclusion, is of course indepenent of both how much physical oil there is and how large portion of that is recoverable. Of course, as technology progresses and prices rice, it can be expected that a larger portion of the total physical oil reserve still left, can be reovered.
So, the real debate is when the peak moment will be met. But apart from a production peak, note that there is also a discovery peak. The peak of oil discoveries already happened in the 60-ies.
What is an important indication for when we will meet peak oil is the ratio of total oil used every year versus the amount of new discoveries of oil. Total oil usage increases every year - just that economic crisis cause a temporary stagnation - and the amount of new discoveries each year, decreases.
Notice also that if at some point in time we have an alternative for oil which has a lower price and can technologically replace the oil we use, there will gonna be a shift in investments from oil exploration to developing that new energy source, and will lead to the fact that the fraction of oil that was economical recoverable is going to decline deeply, instead of increasing.
So it might turn out we will never have the sharp problems associated with peak oil, we would otherwise have. But then this is also partly thanks to the fact we already invested in alternatives and subsidized it to make them more economically viable at an earlier point in time in history, and thus avoiding the problems we could have otherwise have had.
Notes
- The amount of oil we ever gonna use (determined by technology and price) is not the same as the total physical quantity of oil that exists, as a portion of that oil will stay there as it is beyond technological or economical constraints to recover it.
Redmond said:
<<< Great points - Peak oil is a myth… >>>
No, peak oil is not a myth, since it does not happen that untill the very last drip, oil production keeps rising, so simply said, somewhere along the line (and expected from PO theory, somewhere half way) there will be a maximum production level of oil.
Although the above argument is rather abstract and purely mathematical, this is true, and is independend of the factual amount of oil there is (the physical quantity) and also independend of the da facto amount or fraction of that, that is ever gonna be used.
So peak oil is true. The only real debate is to find out or to predict, around when that is gonna happen.
But the furture might turn quit different, as it might be possible that at some point investments in oil production decline and are replaced by investments in other alternative sources that are cheaper and/or better. It could be nuclear fussion, or any kind of solar or geothermal, or whatever, but it is predicted that some forms of solar can compete with oil around 2020.
We won’t stop using oil immediately, but there will be a shift from oil to alternatives.
Rob, you happen to know exactly how much oil is currently available on planet earth?
Very simple explenation that shows that there must be a peak in oil production:
filc:
<<< Rob, you happen to know exactly how much oil is currently available on planet earth? >>>
No. Also, it doesn’'t matter for peak oil to be true, as I explained earlier.
But for the sake of discussion, let us not get into a theoretical debate, but go to the more practical, and ask ourselves is peak oil gonna be a problem we have to deal with within our life time?
I think it is, even when peak oil might be expected later as most scientific studies expect it to be (within a few decades, possible even within some years) at least it is something we need to be occupied and concerned with, because we know that since the oil discoveries, we have used oil at an ever increasing rate, which caused also the population to grow at an increasing rate, and not developing countries grow their economy and oil usage at an increasing rate, so in any scenario in which oil production is gonna decline, that is gonna be a problem.
So, yes, peak oil is a problem. We need to properly deal with it. And we can. Making oil less cheap artifically is one way, that drives other industries that increase efficiency of energy usage and develop alternatives.
There might be a way to solve it, if alternatives become cheaper soon enough, so that dependence on oil decreases, and if we do enough to prevent population growth (esp. by stimulating developing countries to develop fast enough so that they population growth declines) and find ways to use energy more efficiently.
filc wrote:
<<< Rob, you happen to know exactly how much oil is currently available on planet earth? >>>
Second comment.
We do of course no know exactly what amount in total, the total physical amount, is. But here is some way we might figure that out, even if we can not exactly now the quantity of not yet discovered oil reservoirs. We take into account the rate of discoveries found each year, and our increase in technological development to discover new oil reservoirs.
What we know is that:
-
The rate of discoveries already declined
-
Even when our technological means for discovering new deposits increased.
By these figures we can make some estimate of what the total amount of physical oil which is there might be.
So it is not something of a total unknown, we can make some estimate.
Here is an anology.
Suppose you have a haysteck, and hidden in there, there are some items in some unknown quanity, to be discovered.
Here also, from the rate of discovery of items we find in the haysteck, even when we have no searched completely the haysteck, we can figure out from statistical analyses what the total amount may be.
Stranger wrote:
<<< Peak oil seems to be a theory for geology, not economics. So long as new oil is being discovered and appropriated, the supply of oil is for all purposes limitless. Once oil discoveries stop, then oil preservation becomes a rational choice. >>>
No. We know of course oil is not limitless. But apart from this theoretical fact, we can also make a fairly good estimate what the total amount of oil reserves are, by analyzing past data of recovery and production rates.
Now, if oil recovery rates already peaked sine the 60-ies and ever since been declining, although not impossible, how probable you guess it is that discovery rates are gonna increase again?
What problems will we have with an hypothetical peak oil production?
There is bound to be peak production in everything.
Richard Heinberg explain peak oil:
DD5:
<<< What problems will we have with an hypothetical peak oil production? >>>
That is the same question as asking what problem you have when hypothetically your house going to burn to ashes.
Popthech says:
<<< Ask any proponent of the Peak Oil Theory what the exact amount of fossil fuels the earth contains. Without knowing this amount no rational claim of Peak Oil can be made and it is thus a Myth as currently proposed. >>>
That’s not true, since we can make statistical estimates about that total quantity.
Is your expectation that this unknown quantity might be any figure and that all estimates are same probable as others?
Same as with a haysteck which contains an unknown amount of hidden items. It might be there is theoretically an enmormous amount of those items left in the part of the haysteck you have not searched through, but then the probability of that being the case might be substantially low, because you have info on what number of items you found in the haysteck you already searched through.
If the data shows you that the more you research the less you find new items, does that indicate something about the probability of there being enormous quantities left in the part you have not searched through, yes or no?
Ok then your whole argument is self refuted.
Also has anyone one read up on abiogenic oil?
filc wrote:
<<< Ok then your whole argument is self refuted. >>>
Have you read my whole post?
Do you hold on to the idea that oil is in some way unlimited??? If not, then you must admit peak oil.
<<< Also has anyone one read up on abiogenic oil? >>>
Oh, come on. That is too ridiculous for words!!!
No it is not because new production techniques allow increased production from existing wells.
Oil Innovations Pump New Life Into Old Wells (The New York Times)
No kidding I already said this and the free-market takes care of this without government.
Subsidizing something does not make something economically viable, are you sure you are on the right website?
here’s a product that had reached its peak production over 25 years ago.
Oh no, my house is burning down!
Poptech wrote:
<<< No it is not because new production techniques allow increased production from existing wells. >>>
Yes, so? And therefore the peak oil theory is false?
It is already incorporated within the peak oil theory that due to technological and economical reasons a bigger fraction of the natural existing sources of oil can be exploited, yet this does not in any way deny peak oil.
And one other thing, how do you imagine that oil is gonna decline, what will the production curve look like, it will increase until the very last drop of oil and then all oil wells at the exact same moment stop producing, or what?
Either you admit that this unlikely scenario becomes true (oil production keeps increasing and then all of a sudden drops to zero), or you admit that we will face the peak oil scenario in which after a peak the production keeps declining.
Either of these two must be true, and the probability that peak oil is true is far greater then all oil production stops at the same time.
<<< No kidding I already said this and the free-market takes care of this without government. >>>
Yeah, yeah. The “invisible hand” will take care of everyhting, people don’t worry…
<<< Subsidizing something does not make something economically viable, are you sure you are on the right website? >>>
Why not? It is the same as doing an investment on a longer time scale. All capitalist do the same, yet on far shorter time scales.
So, the capitalist may invest and have a return on investment, but the government may not do that?
That is nonsensical.
If peak oil theory is so untrue, and there are so many barrels of oil below the US surface, then please explain me why the US is importing increasingly (both in absolute as relative fashion) more oil?
Oh, yeah. Peak oil happened to US production since the 70-ies and since then declines…
Also you forgot to mention: for tar sands you need 1 or 2 units of oil to produce three. So those quantities are not really that big.
Also explain me, at what price is that oil going to be economically viable?
So if oil becomes scarce, its price gets bid up and that makes more expensive and/or long term projects profitable. Current oil futures reflect speculator’s best guess of the real scarcity of oil. They are putting their money where their mouth is.
Oh please cite evidence for this. Big oil corporations expect to be around for the next 50 years. If you ask me, that’s too long. Some major technological advancements with very high impact could absolutely destroy plans longer than 10 years.
The government doesn’t have real inputs. It does not sell a service. Its “investments” do not reflect consumer demand. Its agents also cannot go bankrupt or lose money. There is no market check on government investment.
I am back!
Any ways - the Alberta tar sands have 3 billion barrels of oil in them - Venezuela has 1.2 - 150 years at current usage rates.
Existing tar sands are profitable at $30 a barrel - new ones are profitable at $80.
Extraction technology will almost certainly improve, leading to reduced costs.
If every oil company made extracting tar sands oil their top priority, production could essentially climb as high as they would like it to.
The best geology off the coast of Alaska is currently barred from exploration and drilling.
Drilling and exploitation has been of reserves withing the Continental USA have had restrictions for 30+ years.
There has been almost no drilling/exploration in the Arctic.
Production coulds easily increase - and in any case, the “peak” does exist, but it will not be a shock, like all of the catastrophists claim it will be, unless Governments spend too much time interveneing with quotas and price controls.