Via press release: a forecast study of investor patterns from UC Davis.
Stock prices suggest a 90-year gap
At the current pace of research and development, global oil will run out 90 years before replacement technologies are ready, says a new University of California, Davis, study based on stock market expectations.
The forecast was published online Monday (Nov. 8) in the journal Environmental Science & Technology. It is based on the theory that long-term investors are good predictors of whether and when new energy technologies will become commonplace.
“Our results suggest it will take a long time before renewable replacement fuels can be self-sustaining, at least from a market perspective,” said study author Debbie Niemeier, a UC Davis professor of civil and environmental engineering.
Niemeier and co-author Nataliya Malyshkina, a UC Davis postdoctoral researcher, set out to create a new tool that would help policymakers set realistic targets for environmental sustainability and evaluate the progress made toward those goals.
Two key elements of the new theory are market capitalizations (based on stock share prices) and dividends of publicly owned oil companies and alternative-energy companies. Other analysts have previously used similar equations to predict events in finance, politics and sports.
“Sophisticated investors tend to put considerable effort into collecting, processing and understanding information relevant to the future cash flows paid by securities,” said Malyshkina. “As a result, market forecasts of future events, representing consensus predictions of a large number of investors, tend to be relatively accurate.”
Niemeier said the new study’s findings are a warning that current renewable-fuel targets are not ambitious enough to prevent harm to society, economic development and natural ecosystems.
“We need stronger policy impetus to push the development of these alternative replacement technologies along,” she said.
Additional information:
Full text of study, “Future Sustainability Forecasting by Exchange Markets” — http://pubs.acs.org/journal/esthag (paywall)
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So whats the date when oil will run out? are they going with the 2050 date?
Oh, please.
Let’s say the oil runs out in 20 years time. 90 years beyond that puts the date at which replacement technologies are ready at 2120.
Are we really saying that we can forecast what technology will be like in 2120? One hundred and ten years ago, we hadn’t even invented the aeroplane, and cars were still in their infancy.
This is good news. Every time I hear about one of these scary “Our supply of oil will dry up in XX years” stories, I am comforted by another story within a few weeks/months about a new discovery of oil somewhere that will provide another 20 or more years of oil at current consumption. This cry has been made for the last 70+ years and is just another attempt to scare people into paying more for energy to avoid some catastrophic nightmare that will not be coming any time soon if ever.
[The latest was Greenland. Robt]
Would this have been a problem if we hadn’t been throwing billions at a non-issue?
If we run out of global oil and prices soar to thousands of dollars a barrel, I wonder if the pace of research and development will speed up? Or will we sit around in the dark for 90 years? Hard to say.
Petroleum is the renewable and sustainable fuel we have been “looking for”.
http://www.gasresources.net/
I wonder what gap they would have predicted for electric lighting, before the invention of the lightbulb?
and how many reports have we seen like this since the ’60s all of them saying we should have run out years ago. And since when has the bourse been a good indicator? They missed the onset of this ‘great’ depression. Have these people got baked beans for brains or what?
[The bourse? Robt]
Well then, the whole CO2-Global Warming problem is solved!
/sarc
This is so stupid… This one piece is all that is needed to show what a bunch of crap “published” articles can be. If push came to shove replacement fuels could be in place in a decade. The Navy is already testing algae based oil.
No one knows how much oil there is. Any estimate on when it is gone is also garbage. There is lots of oil, but in places where people have restricted drilling.
Everything in this study is garbage. All of it.
John Kehr
The Inconvenient Skeptic
Sophisticated investors tend to put considerable effort into collecting, processing and understanding information relevant to the future cash flows paid by securities.
Pillocks. Thats why they missed the sub prime securities scandal, because they ‘put in considerable effort’.
The date is generally 30-40 years from now, always has been, always will be.
The stock prices of wind, solar, and electric car companies are tanking and generate huge losses, while the stock prices of oil companies remain high and produce respectable profits. Quick, gen up some “research”. There! That will show them! Now the price of my unico…wind power company stock will skyrocket just like my Carbon Futures. 🙂
Another bunch of idiots asking for more money! Some people never learn.
There is that word that the warmist continue to use “policy”. Lets get the govt. to make new polcys so these savy investors can reap the rewards.
Can anyone say “nuclear power”?
This “alternative” is a robust, fully developed, technique for energy production.
The fact that it is not being meaningfully pursued by the U.S. is not due to a lack of “availability”, it is due to the impediments put into its path by “environmentalists”.
As a former analyst for an institutional investor, I assure you that I am rolling all over the floor in laughter. This study has all the hallmarks of one of those academic finance eructations required for academic promotion while simultaneously wasting the rest of the world’s time.
I hope and trust that the Journal of Irreproducible Results will be informed of the existence of this study.
Peak Oil is like Easter – a movable feast.
Dear Peak Oil Panickers:
Don’t worry, we have hundreds of years of current consumption sitting around on the ground here in Alberta. Please tell your ulterior-motive overlords to stop their ill-informed and childish blocking of oilsands development.
Anyway, there is more than enough petroleum to last our society for a long, long, LONG time yet. Maybe instead of wasting time and effort fighting it they could be working on REAL solutions. PS: windmills, solar panels and food-to-oil are not real solutions.
Personally, my favorite is the Mr. Fusion from “Back to the Future”.
Unlikely. Every time peak oil has been predicted, new technologies have emerged to increase producible reserves.
Full disclosure: as of today I am an investor (part owner) in numerous wells either drilling or in production in Texas. The cashflow is about 8,000 x what my stock portfolio is doing in my IRA. So I’m good with being one of those “selfish big ahl bastahds.”
For example, “back in the day” it was thought that a single vertical well would “drain” 1,000 acres of field. Then it was reduced to 800. Then 400. Today it is expected that a single well will drain as little as 40 acres. This is important because it means that a lot of oil has been left in the untapped space between existing wells. This is exactly the areas we are currently drilling; practically zero risk of a dry hole.
Then we have the advances in horizontal drilling, which allows a single hole to tap as much oil as it used to take as many as 9 or 10 wells to produce. Huge efficiencies of scale.
Then we have the advances in “treatment” options, including the controversial hydrofracking. For those who don’t know, this is where a section of the well is temporarily capped off and high pressure water, along with various chemicals to make the water “slippery” are is pumped in to crack the rock in the producing zone. In some wells with a long horizontal leg, as many as 40 separate “stages” are fractured independently of each other. Along with the water, “proppants” (small ceramic beads -think poppyseeds) are pumped in to hold the fracture open when pressure is removed. All this effort is undertaken because it vastly increases the amount of oil or gas that is recovered.
The controversy is over the chemicals used in the fracturing process getting into groundwater. This is practically impossible because the upper zone of the hole is sealed off to prevent water table contamination, and the lower parts of the hole are well sealed by layers of impermeable rock – the same rock layers that hold back the oil. Whatever water exists at that depth isn’t potable and can’t be used for consumption anyway In my opinion this controversy is vastly overblown, but I’ll give those opinions some other time.
But I digress.
I just wanted to point out how technology has historically pushed back the “peak oil” limits. There is no reason to expect that it would not continue until alternatives are available.
— The date is generally 30-40 years from now, always has been, always will be.
—
that reminds me… first “Mad Max” was released about 31 and a half years ago…. makes sense then.
“market forecasts of future events, representing consensus predictions of a large number of investors, tend to be relatively accurate.” REALLY!
Peak Oil has really been a fantasy – every year, the date moves out further as the known reserves have significantly expanded. At some point it is expected it will run out. If we were serious we would already have all freestanding power generating plants moving to nuclear to allow the use of oil for mobile applications.
Eventually the fuel cell probably replaces it all for residential power as well as mobile uses. As oil gets scarce and its real price – not the silly weak dollar driven phenomenon we have today – increases, the alternatives will become more attractive and technology will drive the winner.
This article from UC Davis is just an attempt to maintain their green investment’s value in their endowment portfolio. (well I don’t know that, but it fits the normal workings of the green advocates, so why not)
And the big oil discoveries just keep on coming 🙂
New ultra-deep pre-salt offshore find confirms Brazil an oil giant
“Brazil’s oil industry regulator announced Friday that a recent ultra-deep offshore find is estimated to hold between 3.7 billion and 15 billion barrels of oil equivalent, which could make it the largest crude accumulation in the country’s pre-salt region and the biggest discovery in the Western Hemisphere in more than three decades.”
http://en.mercopress.com/2010/10/30/new-ultra-deep-pre-salt-offshore-find-confirms-brazil-an-oil-giant?utm_source=newsletter&utm_medium=email&utm_campaign=daily
But investment won’t remain at this level. As oil reserves begin to run out, whenever that is, prices will rise. That’s the role speculators play. Rising prices will provide incentive to research alternatives. The invisible hand works. The last thing we need is government to interfere. All that does is create problems.