Peak Oil panic: Oil will run dry before substitutes roll out

Cartoon from from

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” — (paywall)

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November 9, 2010 8:17 am

So whats the date when oil will run out? are they going with the 2050 date?

November 9, 2010 8:23 am

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.

Josh Grella
November 9, 2010 8:25 am

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]

November 9, 2010 8:25 am

Would this have been a problem if we hadn’t been throwing billions at a non-issue?

November 9, 2010 8:27 am

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.

Ben W
November 9, 2010 8:28 am

Petroleum is the renewable and sustainable fuel we have been “looking for”.

November 9, 2010 8:28 am

I wonder what gap they would have predicted for electric lighting, before the invention of the lightbulb?

stephen richards
November 9, 2010 8:30 am

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]

November 9, 2010 8:30 am

Well then, the whole CO2-Global Warming problem is solved!

November 9, 2010 8:30 am

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

stephen richards
November 9, 2010 8:32 am

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’.

November 9, 2010 8:32 am

The date is generally 30-40 years from now, always has been, always will be.

November 9, 2010 8:32 am

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. 🙂

Frederick Davies
November 9, 2010 8:35 am

Another bunch of idiots asking for more money! Some people never learn.

November 9, 2010 8:35 am

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.

November 9, 2010 8:37 am

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”.

John W. Garrett
November 9, 2010 8:38 am

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.

November 9, 2010 8:40 am

Peak Oil is like Easter – a movable feast.

November 9, 2010 8:41 am

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”.

Mark Wagner
November 9, 2010 8:41 am

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.

November 9, 2010 8:43 am

— 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.

November 9, 2010 8:44 am

“market forecasts of future events, representing consensus predictions of a large number of investors, tend to be relatively accurate.” REALLY!

November 9, 2010 8:47 am

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)

November 9, 2010 8:48 am

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.”

November 9, 2010 8:51 am

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.

November 9, 2010 8:54 am

How stupid are these people? The reserve of oil will increase as the price goes up. They don’t know when it will run out. Other alternative technology may be available in 10 years or next year for all they know. It doesn’t explain the 90 year gap like they know how long it would take to develop alternatives. It is so stupid that it is hard to believe that it isn’t intentionally misleading. I guess they don’t understand the concept that necessity is the mother of invention or how free market economies work.

November 9, 2010 8:54 am

“To assess time T when technological innovations are likely to appear, we apply advanced pricing equations, based on a stochastic discount factor to those traded securities whose future cash flows critically depend on appearance of such innovations. […] This formula gives T ≈ 131 years for replacement of gasoline and diesel.”
I wonder what time constant these advanced pricing equations would give for the replacement of traditional telephone networks by a packet-based network if applied to prices of publicly traded securities in 1920.
This kind of madness surely belongs to the not even wrong category.
[What was the stock in cell phone companies worth in 1980? 1990? 1995? 2000? 2005? Robt]

November 9, 2010 8:54 am

Be afwaid . . . be vewy, vewy, afwaid.

kadaka (KD Knoebel)
November 9, 2010 8:55 am

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.
That’s okay, it was expected to run out 100 years beforehand due to Green obstructionism and NIMBY syndrome preventing construction of the facilities that would have made the replacements for fossil petroleum.

November 9, 2010 8:56 am

If oil ran out next year, I wouldn’t be stuck, and neither would you. No new technology is needed either. We have enough natural gas to last … depends on how you count it but it is a rather long time. The conversion for an automobile is a tad expensive. On the other hand, if the price of gasoline doubled or tripled, I would save money doing the conversion. (My wife drives way less than I do and converting her car might not pay off.)
Yes, I realize that the cost of natural gas would go up if we suddenly ran out of oil but it is really plentiful and it wouldn’t take much price increase to bring a lot more reserves on line.
Yes, I realize that all of the above is hypothetical because we aren’t going to run out of oil very soon. By the time it becomes a problem, NG and dual fuel cars will become available at a reasonable premium over gas models.

j ferguson
November 9, 2010 8:56 am

Are you missing something here? The authors’ method for projecting fossil-fuel runout and the gap before other forms take its place is INVESTOR SENTIMENT?
What investors think right now is based on their analysis of the opportunities and may include anticipation of what other investors may do, aberrations due to the economy, how they liked breakfast this morning, etc. To suppose that they can anticipate the effects of supply and demand far into the future is NUTS.
Is there no limit to this craziness? Or maybe the review above isn’t accurate.

Hector M.
November 9, 2010 9:01 am

What the study actually says is that today’s expectations are that such gap will occur. But today’s expectations are often wrong. By 1870 some eminent scientists were (wrongly) predicting the end of coal, and nobody forecast the appearance of oil or the widespread difussion of electricity. Nobody predicted personal computers.
If only the authors had limited themselves to say that they found investors BELIEVE certain things to happen in the future, instead of going as far as suggesting that those things WILL actually happen. The latter tells you something about future reality, which nobody knows and they didn’t investigate, while the former just tells you something about investors’ current beliefs and behaviour, which is the actual subject matter of the research.

R. de Haan
November 9, 2010 9:02 am

If there is a price for the biggest piece of garbage ever written, they have just earned it.

November 9, 2010 9:02 am

I enjoy reading nonsense conclusions such as this article reaches. Makes me real sad, though, seeing all those tax dollars being spent on university educations. And those that make such statements wonder why the people who actually do real stuff for a living, as most of us do, look sideways at ‘epidemics’ and understand why places of learning are frequently built on hills outside of town – so they are safe from the citizenry!

November 9, 2010 9:04 am

“market forecasts of future events, representing consensus predictions of a large number of investors, tend to be relatively accurate.”
Except when they aren’t. Sub-prime mortgage, anyone?

November 9, 2010 9:05 am

There really should be a “truth or consequence” associated with academics who engage in spouting scare stories. I can think of a bunch of appropriate penalties….

L Nettles
November 9, 2010 9:05 am

Same thing happened when we ran out of whale oil for lamps.

November 9, 2010 9:06 am

I don’t know how to post a chart. However, anyone can plot known oil reserves against annual production (the data is available from the IEA or BP) and they will find that the known reserves to production ratio has fluctuated around 40 years for well over half a century. This factoid illustrates a fundamental truth: companies don’t invest in developing reserves until they are reasonably sure there will be a market for those reserves.

November 9, 2010 9:12 am

Absolute nonsense. I know I have said this before, but we have methane hydrates off shore that can supply thousands of years of energy. We have pipeline companies that can carry gas all over the US. The only thing we need to do if necessary is retrofit vehicles and build dispensers for the gas. I use natural gas for heating so they could put one at my home and change me for a total bill of heating and driving. Silly people.

Charles Higley
November 9, 2010 9:13 am

Investors do not think 90 years out. This really stretches reality.
This should be interesting considering the Russian input which indicates that oil and gas are largely NOT fossil, but from much farther below, and constitute a renewable resource that is more prevalent than previously thought, coming up from below all over in effect. That would explain why my brother-in -law is drilling in the Midwest and finding gas everywhere and they are currently finding ridiculous amounts under West Virginia.
By the way, I now believe that the reason that our social justice leader canceled our moon plans was because the goal was to develop and retrieve helium-3 from the moon to allow viable fusion power. The race is on to see who controls the most valuable energy resource and he took us out of the race, with the general idea that he does not want us to be dominant or to prosper more than others. So, he thinks we need to be a second class country.

November 9, 2010 9:13 am

Currently accepted theory for the origin of oil is oceanic microorganisms in shallow seas. Most of the oil we’ve been tapping is only about 100 mya old, or less. Sedimentation started about 2.8 gya, so there is a lot of oil left to find..
If EBI is right, algae biofuel will at least need ten years to be economically competitive, allow thirty years for complete industrial scale rollout, and we’ll be off of petrochemicals in about 40-50 years.

November 9, 2010 9:13 am

So how much did this drive the oil prices on the market?

k winterkorn
November 9, 2010 9:14 am

Another blow for pseudo-intelligence.
Few academics seem to understand markets, even fewer “liberals”, and then there are “progressives”, who are so steeped in hatred that they prefer equality in poverty to success of the productive, and thus are blinded to every reality in this issue.
As already indicated in posts above, there are many substitute sources of energy and enhanced techniques for production of current sources. The market will price each source competitively according to scarcity and demand. When the price for a source rises above breakeven (income greater than costs of production and distribution) that source will be exploited. We will never run out of energy if the government allows the market to work.
There are practically infinite quantities of oil, gas, coal, nuclear, solar, wind, geothermal, tidal, and who knows what other potential sources of practical energy out there, each with its own ‘supply = demand at a price’ equations, equations that interact with each other in such complexity that, like climate, the energy is a chaotic system beyond the ability of academics, bureaucrats, and other pseudo-intellects to understand and predict.

November 9, 2010 9:15 am

Ha ha ha! This study seems to say – ‘the market knows best’, but the author then goes on to say – the solution is to DISTORT the market? I mean – really.
Let me tell you – there is a HUGE incentive for an entrepreneur to create the worlds next energy source. It doesn’t need to be mandated by Government….

November 9, 2010 9:18 am

Once again the price mechanism is totally ignored.
As supplies dwindle, demand pushes prices and supply investment up.
When supplies finally start ramping down, the price increases will lead to voluntary rationing and more innovation and investment in alternatives than Debbie and Nataliya could ever hope for.

George Turner
November 9, 2010 9:18 am

I’d also note that many alternate technologies, such as tar-sands and coal-to-gas, won’t get any significant investment while the long-term average price of oil is cheaper. What kind of fool would spend billions of dollars to build a plant that can only operate at a loss?

November 9, 2010 9:20 am

Frederick Davies 8:35am:
“Another bunch of idiots asking for more money!”
There’s nothing idiotic about asking for money – the idiotic bit is how we’ve allowed our money to be given to them. Best wishes, Dave.

George E. Smith
November 9, 2010 9:25 am

Well somebody better turn out the lights then; because silicon solar cells probably won’t be economically affordable when oil reaches those astronomical levels.
The most annoying thing about having the oil run out; is that to replace it you need sand; lots of sand to make all those solar cells.
Guess who’s sitting on all the sand ?
I saw what purported to be a NEWS bulletin over the weekend; that said that Thorium was the answer to all our energy needs; a piece the size of a ball mouse ball had as much energy as a ton of Uranium; and who knows how many million tons of coal; and it is “almost impossible to make a bomb out of Thorium.” Hey they said it; not me.
Then the pretty NEWS reporter turned the discussion over to an actual Nuclear expert; and he said it is “almost impossible to make a reactor out of Thorium.”
Well you get the idea; hey maybe we can import oil from the moon or Mars; come to think of it we haven’t discovered any dinosaurs there yet.
Hey I don’t know when the oil is going to run out or if it is; but I AM in favor of not wasting it; and also in researching all other CREDIBLE sources of energy.
Water and CO2 are NOT sources of (chemical) energy.

Charles Higley
November 9, 2010 9:26 am

BravoZulu said: “I guess they don’t understand the concept that necessity is the mother of invention or how free market economies work.”
So very true. In every case as resources for particular applications have become too expensive to use any more, we have always found replacements or an alternative strategies to do the same jobs.
With our computing power ramping up and our technology exploding logarithmically, solutions will be coming ever more rapidly. It is truly ingenuous to pretend that we will keep on doing something the same way for very long – we never have and never will.
Overall, there is a segment of the population who hates change. They want to learn something once and relaxt. The concept of having to keep learning and adapting to change all of one’s life scares them, as it means they have to actually do it, and is repugnant to them.
Back in the agrarian era, we were on the flat part of the technology curve, with changes still occurring, but slowly. One could spend their entire life farming and experiencing little in the way of change or progress. In the last 200 years we have clearly left the flat part of the curve and more recently hit the high steep part of the curve—we will see as much change in the next 5 years as we did in the last 10 years.
These predictions are meaningless.

Milwaukee Bob
November 9, 2010 9:35 am

Love the cartoon! Apeakolypse Now That is hilarious! Almost as funny as the study!
Using what market investors have done historically to determine/predict the timing of practical/usable, profitable technology? Is it possible there is a less productive use of ones time? No, not even in academia. If this was paid for with taxes, I want my money back!

November 9, 2010 9:39 am

I’d like to see Steve McIntyre audit this study. Shouldn’t take but a few minutes.

November 9, 2010 9:44 am

This is wrong on so many levels. If oil was more expensive other energy technologies would be viable. The market is telling them that other technologies are not currently viable and they twist it around in knots until they can come to the conclusion that they should be wasting our money on alternative energy. When oil starts to run out, coal gas and nuclear will tend to replace them. Electric vehicles may even become cost efficient. The only special thing about oil is that it is a liquid high density energy source. The only place where that is a significant advantage is motor transport and if it runs out it will be an awful lot more cost effective to switch to natural gas or some sort of coal than windmills or solar panels for the forseeable future. The fact that the media publish this nonsense with a straight face is testament to the extent political correctness has replaced common sense.

November 9, 2010 9:44 am

None of this is based on what peak oil is. Peak oil is not about what’s in the ground, it’s about flow rates (CodeTech, the tar sands will be never more than a trickle), and ERoEI (again, CodeTech, the surface mining is 6:1, close to break even).
Flow rates for oil is at max now. Older fields have dropping flow rates. It is a fact that the super giant fields are in terminal decline, and dropping fast. Newer fields can’t keep up with that lost supply.
ERoEI is also key. Soon as ERoEI goes below 4:1 then the deposit is essentually spent and useless to us. Currently the average is 25:1 which projected will drop to 4:1 in 25 years or so.
Doesn’t matter how much oil is in the ground, what matters is the flow rate and ERoEI.

November 9, 2010 9:45 am

Do you know what happens when sea living beings die? …Yes! you got it!, they fall to the abyssal waters at the bottom of the seas and there they decompose to methane (CH4): Calthrates, HYDROCARBONS. Then FOSSIL FUELS are constantly produced at the bottom of the seas. Not only that but, Global Warmers’ blessed CO2, reacts with Calcium IN LIVING BEINGS as Oysters, You and Me, etc to form calcium carbonate CaCO3 (“lime”) which when under pressure (in those depths Al Gore likes so much for being HOT) reacts with water to form, again, HYDROCARBONS, i.e. NOT SO “FOSSIL” BUT BRAND NEW FUELS.
Then, you guys have succeeded in making fools believe oil is running dry….so, instead, OUR WALLETS are running dry, with an oil price that should be about US$10/barrel and it is artificially, at US$85/Barrel. You won babies!, be happy!

November 9, 2010 9:46 am

It’d be great if oil, coal and natural gas all ran out. Then we’d finally get to building the nuke plants along side synfuel plants to manufacture all the hydrocarbons we’d ever conceive of using what with the known resources of uranium and thorium and such. If we’re smart (highly unlikely) we’d build them alongside the pipelines and just valve over into the existing infrastructure.
We may get to “peak” oil via refusing to extract and refine it but we’re along way from “peak” hydrocarbons. However, we might beat the windmills and solar panels into nuke plants and start producing extraordinarily clean hydrocarbon fuels. Fat chance.

November 9, 2010 9:47 am

These guys never learn…
“In a televised address on April 18, 1977, president Jimmy Carter delivered a chilling prediction: “Unless profound changes are made to lower oil consumption, we now believe that early in the 1980s the world will be demanding more oil that it can produce. … Within 10 years we would not be able to import enough oil from any country, at any acceptable price.”
Instead, within 10 years the price of oil collapsed. In mid-1986, the price of a barrel of oil tumbled to US$10 a barrel. Prices struggled upward in the later 1980s, but except for a brief spurt upward during the Gulf War, oil remained cheap until the end of the century. “

Bengt A
November 9, 2010 9:47 am

If you’re into Peak Oil here are some real good peer reviewed papers:
I especially recommend this one, trashing IPCCs scenarios:

November 9, 2010 9:54 am

Milwaukee Bob says:
November 9, 2010 at 9:35 am
Love the cartoon! Apeakolypse Now

Apocalypse (Greek: Ἀποκάλυψις Apokálypsis; “lifting of the veil” or “revelation”) is a disclosure of something hidden from the majority of mankind in an era dominated by falsehood and misconception,…
Fortunately IT IS happening now, but LITERALLY…andHERE IN WUWT!!!!:
a disclosure of something hidden from the majority of mankind in an era dominated by falsehood and misconception

John Day
November 9, 2010 9:58 am

Ok, everyone assumes that oil and coal are not renewable resources. So I’ll throw this idea out: maybe petroleum comes from abiogenic , continuously renewing sources, i.e. not squished dinosaur meat and ferns, but very deep carbon/methane deposits that go back to the creation of this planet (and are still creating “new oil” every day)
Yes, a very controversial theory, but the skeptic in me is strongly attracted to this idea. Certainly explains why the oil never seems to run out when predicted, and also explains other curiosities, such as the presence of helium in petroleum, certainly not there for biological reasons.
And don’t show me pictures of prehistoric ferns and dinosaur bones embedded in coal deposits. As Thomas Gold pointed out, those embedded fossils actually prove petroleum could not have been biological in origin.
[Yes, and I do have to admit that Tom Gold, in his younger days, did somewhat resemble Lex Luthor (with hair) :-]

November 9, 2010 9:59 am

They have been saying we are “running out” for as long as I can remember. We *may* be running out of CHEAP oil. There is PLENTY of more expensive, harder-to-get-to oil out there, much of it located in North America.
I do not think there is anyone alive on this planet that will still be alive the day the planet officially runs completely out of oil…

November 9, 2010 10:00 am

Its a lot like using insurance premiums to predict global warming or climate change.

Jay Curtis
November 9, 2010 10:08 am

Peak oil has to to with two very real problems. First, as oil becomes harder to extract, it eventually reaches a point where the amount of energy to extract the oil is equal to or greater than the amount of energy derived from the oil extracted. That’s called EROEI (energy return on energy investment). When the two are equal, there is no longer any point in using available energy to extract the same amount of energy, and you might as well start selling the energy you already have. Did you ever wonder why you see some oil pumps idle in a field while others are pumping? It’s about the cost of extraction versus the current value of the oil. As any oil man knows, eventually wells become too expensive to operate energy wise, and so do whole fields. This is not an economic thing, it’s an energy-in versus energy-out thing. Yes, there is still oil in the ground, but you have to calculate the amount of energy needed to get it out against the energy derived from it. New, more efficient, extraction technologies may help, but ultimately you still bump up against the same problem.
The second problem has to do with the exponential growth of world economies and their resulting use of energy. You have to think about doubling times in exponential growth. Gradually oil and coal become harder to extract, but before you ever get to the point where EROEI is equal, you have such a demand upon fossil fuel use, together with the increased costs due to the energy used in extraction, that fossil fuel becomes prohibitively expensive.
Don’t get me wrong, I’m not a warmist, and I am not a “pie-in-the-sky” person who believes we can supplant fossil fuel with windmills, solar cells and ethanol. People who follow that line of thinking are naive. We need to build nuclear plants, and we need to build them fast. We also need more hydrothermal and hydroelectric plants, and because the development of these technologies is energy intensive, we need to start now before we reach “Peak.”
Peak is going to occur, sooner or later, and when that happens, I wouldn’t want to bet on what things will be like, since our whole economy (in fact, virtually everything in modern culture) is completely dependent upon “cheap” energy. Did anyone happen to notice that the current recession was PRECEDED by a huge jump in fuel costs? I believe that was an early symptom.

November 9, 2010 10:10 am

Twitter predicts the stock market:
Stock market predicts 90 year energy drought and the end of life as we know it.
Therefore all you need to do is watch Twitter and it will predict the end of the world as we know it.
The other option is just to get on with life …

November 9, 2010 10:19 am

Not to mention coal. It has been estimated that there are over 847 billion tonnes of proven coal reserves worldwide.
Proven reserves are those which, like oil and gas, are economic with current technologies and prices. They are not the total of what is known, nor do they include what has not yet been been discovered. What has not yet been discovered is not because it is hard to find but because there is no need to look yet as the proven reserves are sufficient: coal for 119 years, gas 63 years, oil 43 years. There are also the reserves that are not accessable due to green policies.

November 9, 2010 10:20 am

90 years? They’re ridiculous. Anyone who’s seriously talking about technology and haven’t noticed the accelerating pace of the progress should be ignored. Crackpots.
What do they think will be going on during those 90 years? Reinventing wheel the first 80 and actual science the rest? Or maybe they think that the AGW movement will be succesful afterall.

Henry chance
November 9, 2010 10:28 am

In a private board room at the international Headquarters of Mobil, they told me we would run out by 1992. This was in 1981. Today I can tell you were there is an incredible amount of oil that is nearly untouched. I can also admit that even Oklahoma has not even produced 15% of their known reserves.

November 9, 2010 10:35 am

j.pickens says:
November 9, 2010 at 8:37 am (Edit)
Too true blue . . the problem with the greens is that their real agenda always shows through. They don’t have issues with CO2 , they have issues with industrialization and prosperity.
Nuclear power is cheap and safe and easy to manage. Hell the whole third world could be dragged out of the dark ages by ubiquitous power but those idiot greens don’t want that, they just want global poverty ( except for themselves of course).
IMHO the greens are pure fascists who harbor delusions of adequacy beyond their pay grade.

j ferguson
November 9, 2010 10:37 am

Jay Curtis
What interesting observations. Wouldn’t you agree that it isn’t really the amount of energy required for extraction, processing, and delivery, but the cost of that energy? Cost relative to price received for delivered processed product? Pumping oil with cheap hydroelectric energy is one thing, pumping it with pricey #2 is another thing altogether. Delivery by cheap electric pump – different from truck delivery.
There’s also the issue of cost of alternative energy for different purposes. Load following major generation facilities are one market, short haul delivery trucks are another. Where there is no practical alternative, and the trip is necessary, oil can cost a lot and still make sense as vehicle fuel. But maybe not in other uses.
I can see you don’t think this thing is simple either, but maybe it isn’t beyond belief that so called fossil fuels could be with us for quite a long time to come and that the constituency of the demand and its total will adjust as the stuff becomes scarcer.

Snake Oil Baron
November 9, 2010 10:42 am


Henry chance
November 9, 2010 10:43 am

Last year the world bank lent South Africa a couple billion for a coal to liquids processing plant.
We have little to spend to convert vehicles to natural gas. Natural gas condensate or liquids can be used for gasoline refining. We always need to conserve. We don’t worry about waste because we will run out tomorrow.
The presenting problem is a political movement to demonize the oil industry.

Martin Mason
November 9, 2010 10:45 am

How do these simpletons get into positions where they can publish garbage like this? There is never any peak oil and it never runs out just gets less affordable. There are 3 laws that govern things if the dead hand of the state stays out of things. The first is that oil will get more expensive as supply decreases; secondly oil will be replaced when the cost of replacement becomes less than the cost of oil; thirdly supply and demand will always be balanced by price and it will be a case of people buying what they can afford. As cost increases, manufacturers will make ever more efficient vehicles something that they don’t need to do yet but will do when required. Supplies of oil will be extended by drilling in ever more hostile environments and shale oil won’t be sneered at. We have doubled reserves twice since 1970 and we will do it again but with ever increasing difficulty and reflected costs. The market is perfect and will handle energy transition perfectly as it always will as long as it is left to it without distortion by subsidy. Eventually in 2-300 years we may go back to 1950’s living when most didn’t have cars, there will be less people on the planet and maybe life will be better but make no mistake we have and will see more of the most incredible period of human ingenuity and generation of prosperity ever seen or imagined. Incredible times indeed, ever cleaner and ever more sustainable and I am massively cup half full not only on now but the ever forseeable future. The only impediment I see is the mindleless destructiveness of the green fly in the ointment. I believe though that they themselves are now self destructing.
We do have environmental problems such as deforestation and we need to solve them but not on the extreme green agenda, we need to divert the AGW billions into stopping poverty and child deaths from hunger and bad water, we need to bring Africa and Asia up to our levels of prosperity and to do that we need an optimised energy philosophy and a realistic one free of green shackles.

Gary Hladik
November 9, 2010 10:47 am

Actually, I think the conclusion of this study (90 year gap between peak oil and replacement of oil by “renewables”) is a serious underestimate. IMHO the “gap” will be made pretty much infinite by nuclear/thermonuclear technology.

November 9, 2010 10:47 am

Ah, the heartbreak of proctocraniosis.

November 9, 2010 10:50 am

Ho hum. I was working on Das Island in the Persian Gulf in the late 1960s and was reliably informed, many times, that oil would run out in 25 years.
I also believe in abiogenic oil.

Ben D
November 9, 2010 10:50 am

Jay Curtis says:
November 9, 2010 at 10:08 am
It’s about the cost of extraction versus the current value of the oil. As any oil man knows, eventually wells become too expensive to operate energy wise, and so do whole fields.

Very true, but as energy costs go up, that makes more fields open up, which supplies the demand. If oil prices raise enough, the EROEI doesn’t mean as much since eventually it could even be worse then 1:1 and you could still make a profit since other energy sources will not go up as much in your scenario. Even if oil costs more energy to extract then it supplies, you can still make a profit if the market will bear it. Son in the end, if we never change, we could end up draining every oil field basically dry.
To put it into perspective: more demand will cause prices to rise, but it will be across the board, and we will continue to grab every bit of oil until it really is dry. Ecomically today its not feasible to pump the well dry, but let the field rest, and come back in 10 years when prices rise….And this process continues pretty much until the well is dry. Or other options open up that are cheaper.

The second problem has to do with the exponential growth of world economies and their resulting use of energy. You have to think about doubling times in exponential growth.

Energy costs are an issue for growth ecomically speaking. I would agree with that, however, you are assuming first that demand for oil will keep being exponential, which is a very big assumption because as oil gradually rises in price, this leads to other sources such as biofuels to become effective, and their costs go down versus oil. So oil usage drops *if we do reach the peak oil stage. The question is, does the demand continue being exponential at that point? I very much doubt it personally. We might see demand or consumption continue to rise, but it will slow down and perhaps become linear at some point. Who knows? Forcasting the future is difficult to say the least.
On the other hand, I think its very possible that we have already reached that point (peak oil) a few times, but as history shows, we adjusted our habbits and moved on. Yes, the economy hurts everytime energy costs go up, but this is the nature of the beast…the economy can not always be great. There will always be something that causes the economy to go from boom times to recession. Energy can be a cause, but other factors will play into this as well.
Did anyone happen to notice that the current recession was PRECEDED by a huge jump in fuel costs? I believe that was an early symptom.

Yes, and I do agree this was probably one of many causes of the recession. What really caused the issue was that gas prices went up high enough to cause people to change their habbits. People started selling their homes to move closer to the city to save money on commutes and other driving. As the home market started to get hurt, the economy started feeling the pain as well. We all know how that went from there. With less people buying gas, cars, houses, those sectors of the economy each took a hit which became even larger as the recession did arrive…but I digress.
The point is that we can guess at what the future holds, but economics in general tells us that even when we reach the point of peak oil, other options open up and society continues its course. Some things change, but this is the nature of life in general. You can’t expect society to be the same in 40 years as it is today.

Douglas Field
November 9, 2010 10:52 am

“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.
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.
What I can’t reconcile is why a professor of civil engineering is messing with a study of marketing. Seems like a square peg in a round hole to me.

kadaka (KD Knoebel)
November 9, 2010 10:57 am

With the changeover to digital TV, the local broadcast stations have been creative with the new “add-on” programming they can stick on their additional channels. One has settled on RTV (Retro Television Network) which shows the “classic” TV series. It’s acceptable background noise.
There was an episode of The Rockford Files where a would-be deep sea explorer was really excited about using kelp to make replacement petroleum. (You know, back in the days of President Carter when the EVIL Arabs in OPEC were threatening our oil supply?)
Now over 30 years later, the cutting-edge research involves using algae to make replacement petroleum.
At which point will we have an oil crisis that lasts long enough for replacement petroleum to be developed and become economically viable before more subsurface petroleum is suddenly “found” and the crisis passes? Currently the crises don’t seem to last long enough to keep the research funding going long enough for significant developments. Heck, the best stuff recently done was as an offshoot of the Genetic Modification research.
As an estimate looking straight-forward at the pace of the research, with blinders on and ignoring everything else, “90 years after the oil runs out” isn’t that bad. But realistically, we’ve been less than 10 years from deploying an acceptable substitute for nearly a century. Actually that’s the “from renewables” figure, we’re making equivalent petroleum from coal right now.

Dr T G Watkins
November 9, 2010 11:00 am

Russian Abiotic Theory of Oil suggests oil is a renewable resource formed at much deeper layers in the crust and not from organic life forms.
Charles Higley mentioned this earlier and I have suggested in Tips and Notes that a post on this would be very informative for some of us who read but are essentially ignorant.
Climate Realists produced a piece on this with links on 8th Sept. 2010.

Kum Dollison
November 9, 2010 11:03 am

Actually, Crude oil “Peaked” in 2005, and we’ve been on a “plateau” ever since. We will, probably, “officially” fall off of it in late 2012.
Prices are one thing, but “Geology” rules.

November 9, 2010 11:03 am

We have another Oil will run dry article which analyzes investor actions in commodity markets to predict technology achievements 90 years hence. Do the authors of this intellectual work run in the same social circles as the people who told us that Carbon Trading Markets would become a 10 trillion dollar a year enterprise?
To get a perspective of technology advancement, consider a person who gets their first introduction to the writings of Jules Verne on an IPAD pondering technology advancement possibilities for the next 90 years. When the replacement for liquid fuels arrives, it will be well before we run out of petroleum, and in all possibilities will not even be a liquid.

November 9, 2010 11:06 am

Just a silly question; suppose that we stop using petroleum based fuels for transportation and energy, what are we going to do with the stuff? I mean it is not good for anything else, that is why we burn it.

November 9, 2010 11:13 am

This smacks of computerized climate modeling. Garbage In, Garbage Out.
It also says a lot about peer-reviewed scientific articles.

November 9, 2010 11:23 am

Jimmy Carter beat you by 35 years. His prediction was the world would be out of oil, the last drop by the year 2000. Gone, kaput, none left sorry. How close did he come?
Especially if we follow the Obama no drill policy.

November 9, 2010 11:24 am

You might get a few enlightening answers to your question.☺

November 9, 2010 11:28 am

It’s a pity the article is behind a paywall. I would have loved to see their equations. So i don’t know how the reach their 90-year gap prediction. Nor when they expect when oil will run out.
“For more than 100 years, UC Davis has engaged in teaching, research and public service that matter to California […]” – Ah, California.
Here, found the formula and a description:
“This formula gives T ≈ 131 years for replacement of gasoline and diesel. ”
So they expect oil to last for 40 years from now. That sounds like current known reserves. So they seem to assume that no new reserves at all will be found.
Quite an assumption.

November 9, 2010 11:30 am

The question they are playing around is what is the vehicular fuel after oil. The answer as has been suggested in other comments is synthetic diesel via CTL or GTL.
Locals up here believe they can make money on the Fischer – Tropsch process as long as the per bbl price of oil remains above $40 US. And we have enough coal and natural gas in Alaska to produce and sell it for centuries to a worldwide market. BTW – the technology is a mere 70+ years old. Properly size the molecule and your end up with the same process manufacturing diesel, kerosene, JP-8, AVGAS, Jet-A and RP-1.
The new diesels are pretty efficient and we have a century of infrastructure out there that handles gasoline and diesel for vehicular use. Much better – and more economically viable solution to the problem than CNG, biofuels, hydrogen, ethanol or anything else on the green wish list.
Easy, affordable solution and it doesn’t matter when or if oil becomes scarce – as long as we can keep from shooting ourselves in our foot via more green rules and regulations that keep it from happening.

November 9, 2010 11:34 am

George E. Smith says:
November 9, 2010 at 9:25 am
Wow, George. Looks like you did an incredible amount of research on thorium (NOT!).
Take a look at

November 9, 2010 11:34 am

Oil reserves are not the problem. The reason we’re still hooked on foreign suppliers is almost entirely due to political obstructionism by eco-luddites.

November 9, 2010 11:36 am

“forecasts of future events, representing consensus predictions of a large number of climate scientists investors, tend to be relatively accurate.”

John Day
November 9, 2010 11:38 am

@Dr Watkins
> Russian Abiotic Theory of Oil suggests oil is a renewable resource
> formed at much deeper layers in the crust …
That Climate Realist link is here:
But it overlooks the work of Thomas Gold (who may have been inspired by earlier Russian work), one of the great scientists of the 20th century
One of the objections to the abiogenic theories was the presence of microbes in the petroleum. But it was Gold who pointed out the “deep hot biosphere”,including microbial life deep in the Earth that does not depend on solar insolation for energy.

John Day
November 9, 2010 11:42 am

@Kum Dollison
> Actually, Crude oil “Peaked” in 2005, and
> we’ve been on a “plateau” ever since.
Are we on a “plateau” because the oil is diminishing? or because we’re not drilling as much as we would like to?

November 9, 2010 11:43 am

I give the abiotic oil formation theory a good chance of being accurate. That is also why the big oil companies may be the big money behind AGW. If oil was in nearly unlimited supply what would happen to their profits? The companies may be ones who want out of the business before that loss happens, IMO. (Al Gore is Occidental Oil and who funds the Sierra Club,etc? Foundations run by money from big oil. And why have they closed so many refineries and capped so many wells? Also aren’t there just too many news stories out recently that try to infer that oil and gas are so dangerous?) Looking for the ruse in the ruse in the ruse, usually ends up making more sense than what is taught to us by the medias — books, textbooks, newspapers, TV or radio. Please don’t misunderstand as I am against AGW but it is a manipulated theory from both sides — and it is just one of many.

Billy Liar
November 9, 2010 11:44 am

[The bourse? Robt]
French word for stock exchange.

November 9, 2010 11:46 am

DirkH says:
November 9, 2010 at 11:28 am
“Here, found the formula and a description:
“This formula gives T ≈ 131 years for replacement of gasoline and diesel. ””
I have the feeling that they used a formula – that might even be right – that says we’ll probably be replacing oil in 131 years. But their assumption that petroleum will run out in 40 years does not come from that formula, but they just use the currently known reserves for that. We all know that that is wrong – new reserves will be found (if your opinion is different, wanna bet?).
So, assuming the formula does really give us a peek into the future, what it says is only that it will take 131 years to replace petroleum – from which i would deduce that the market seems to say: Don’t worry about petroleum for the next 131 years.
And that’s how i read the market as well, so the formula might even be useful.

November 9, 2010 11:48 am

“Peak Oil panic: Oil will run dry before substitutes roll out”???
Don’t you mean
“Peak Oil panic: Oil will run dry before subsidies roll out”
Otherwise, why would the green energy people be worried, running out of oil would be nirvana, not panic.
Having to wait for 2000 years before getting another green energy subsidy, now that would be a reason to panic.

November 9, 2010 11:51 am

This is nonsense. We already have replacements — they just aren’t cost competitive. For example, compressed natural gas is already used on many vehicles, and there are no indications that we’re at Peak Natural Gas. Combine that with biofuels, and there you go. Fuel problem solved until an even better breakthrough technology comes online.

Matt Beck
November 9, 2010 11:57 am

I see a lot of people dismissing this article as ridiculous, but they are mistaken. Unlike global warming, peak oil is a legitimate problem. It’s not really the supply of oil in the earth’s crust that forms the limiting constraint, it’s the geopolitical and financial situation.
Look: Modern oil extraction is an immensely complex affair. The amount of infrastructure, investment capital, engineering expertise, and labor required to keep the oil flowing is simply staggering. Any minor interruption in the flow of oil is immediately felt around the world. We have an unstable Middle East, a demographic timebomb ticking away in the West, a global financial system teetering on the verge of collapse, and a well-documented dearth of qualified petroleum engineers. Given these data, it is only reasonable to expect that oil supplies will not flow smoothly in the future. This will result in economic hardships and wars which will knock the standard of living down even further, making it that much more difficult to assemble the capital and talent required to go after what remains of the world’s oil (or to discover and implement an effective substitute).
Sure, Western Civilization could solve the technical problems it faces, provided it was virile and healthy and willing to sacrifice; but it is none of those things. The rot has already set in, and once our material supports are kicked out from under us we will tumble like a house of cards. The end of cheap oil will mean the end of our way of life regardless of whether or not the supply has literally “peaked.” Oceans of oil located deep within the earth do us no good unless we can get it, refine it, transport it, and use it efficiently. This is the real threat implied by peak oil concerns, and there is no way to avoid it.

November 9, 2010 11:57 am

tj says:
November 9, 2010 at 11:43 am”
“[…]If oil was in nearly unlimited supply what would happen to their profits? The companies may be ones who want out of the business before that loss happens, IMO.”
Very good – but they would not want out of the business. By artificially creating scarcity, they could keep the price higher, and vastly increase their margins. This explains why the CRU is partially oil-funded.

November 9, 2010 12:01 pm
John T
November 9, 2010 12:03 pm

I remember being told in the ’70s that we’d be out of oil by 2010 and coal by 2050. And we still don’t have those flying cars yet, though the Dick Tracey watch phone did pretty much come true (cell phones).

November 9, 2010 12:03 pm

Comments above about the peak always rolling back, and reserves continuing to increase are clearly based on ignorance of the facts. Hubbert made the first peak oil prediction in 1956, msinly for the USA, and predicted a range of dates based on then uncertainty abnout reserves. His prefered date was 1970, and guess what. USA production peaked in 1970. Since then major discoveries have been made in the Fulf of Mexico and Alaska, and technology has been developed to exploit Athabasca oil sands, the Baaken shales and tertiary recovery. All of these have only served to slightly slow the rate of decline. Conventional oil reserves world wide have been in decline for more than 2 decades, with production more than double discovery during that time. The last big bump in reserves, about 5 years ago was when Canada decided to reclassify oil sands as reserves, it was not due to new discovery. there have been no “giant” discoveries since 2003. Production increases since 2004 are “all liquids” increases due to natural gas liquids recovery and refinery recovery, and some biofuel production. Conventional oil increases have been almost entirely heavy sour crude for which there is quite small refinery capacity. Light sweet crude is already in terminal decline.
Existing conventional oil production declines about 4%/yr, is accelerating, and must be offset by bringing new capacity on stream. All known new projects at this time will not offset decline past 2013, and only that late if all the projects perform as well as planned, which is rarely the case. Growing reserves of non conventional oil and tertiary recovery are meaningless, because they only increase stocks, not flows. Peak oil is almost here, and that is “baked in the cake”. The big risk is sharp declines well before 2030, when maximum reserves contact wells water out. Saudi Arabia has been using MRC almost exclusively for nearly 2 decades. Most of OPEC has been claiming flat to slightly up reserves for about 3 decades, with constant production and almost no new discoveries, so their claimed reserves are certainly overstated. The world has been on an undulating or bumpy production plateau since late 2004, with the highest bump in Q3 2008. The terminal decline from the plateau starts by late 2013, at the latest. However, if “ignorance is bliss”, keep on believing.

George E. Smith
November 9, 2010 12:04 pm

“”””” Jim says:
November 9, 2010 at 11:34 am
George E. Smith says:
November 9, 2010 at 9:25 am
Wow, George. Looks like you did an incredible amount of research on thorium (NOT!).
Take a look at “””””
No I didn’t ! Where the heck did you get that idea. I simply gave a brief non-verbatim precis of what I just caught in passing while watching a foreign T&V presumably news pprogram; and what two people had to say about it.
I didn’t and don’t intend to spend another minute on researching it. If it happesn it will happen with or without me.
PS I don’t think I said before that I started out as a Nuclear Physicist; found it very interesting; but too confining because of the security issues around it (about which I don’t complain; just decided to not choose that as my long term career.)
I believe I said it was their words and not mine !

November 9, 2010 12:05 pm

Read “maximum reservoir contact”. Typing too fast.

Jeff L
November 9, 2010 12:12 pm

This idea is not very well thought out & totally ignores the laws of supply & demand. If we truly hit a peak (or more likely, we can’t supply the daily demand – should occur before the peak), the price of oil will skyrocket to ??? (fill in your number) & alternative forms of energy will A) become cost competitive / economic & B) tons of money will pour into alternative energy as there will be substantial profits to be made in that sector. To assume the pace of development will stay constant in the face of the inability to supply energy with current sources is just simply wrong.

November 9, 2010 12:14 pm

The planet is constantly replacing it’s own oil supplies. Oil is not going to run out. We just need to drill where it is. Even if oil ran out, we still have an overabundance of coal and natural gas.
The control freaks are always coming up with these manufactured fairy tails to scare people so they are willing give up more of their money, rights, and freedoms.
I would love to see what Saudi Arabia looks like when it runs out of oil.
Burn all the fossil fuels you want, the plants love it.

a reader
November 9, 2010 12:16 pm

While reading about the spreading desert areas a while ago, here’s a quote I found:
“Desert weed, if farmed, could shorten gas lines. Dr. Melvin Calvin studies a common California shrub called a gopher plant, Euphorbia lathyris. The latex it yields can be refined into crude oil and gasoline. Dr. Calvin, who won a Nobel Prize for his photosynthesis research, estimates the production cost at $30 a barrel, a price that seemed noncompetitive…until recently.”
NatGeo mag. November 1979 p.617

November 9, 2010 12:16 pm

One further thought – the issue is not one of “when the oil runs out”. that is very far in the future. At present production rates Athabasca sands will not run out before 150 years. The issue is peak production and the world adjusting to a decreasing supply of oil. Total Exports from the oil exporting countries have been in decline since 2005, which is what has been pushing up prices. At current prices, most of these suppliers are producing flat out, but almost all of them subsidise domestic consumption at a price in the order of 50 cents/gal, and all of them have increasing domestic consumption, not offset by increasing production. Only the world economic meltdown, accompanied by oil demand destruction, especially in OECD prevented a major problem to now. With Chindia demand growing rapidly, and OECD demand recovering, look for prices north of $150./b in 2012, possibly followed by another temporary demand decline, and north of $200./b by the end of 2014. Substitutes aren’t the issue either. The issue is the economic impacts of a major scarce resource, especially on food production (Leibigs Law).

November 9, 2010 12:17 pm

I thank God for the complete and total economic collapse of the USA so the subsidy money can get cut off for everything.

November 9, 2010 12:18 pm

If I understand the article correctly it says that today’s alternatives to oil will not be economically feasible until 90 years after the oil runs out.
90 years, much less 90 years after the oil runs out is the same as “NEVER”.
More accurately, article’s lede should be “Long term investors believe today’s alternatives to oil will NEVER be economically feasible.”

November 9, 2010 12:24 pm

Clathrates and abiogenic oil!! And you guys think warmers have a problem with religious beliefs!

Douglas DC
November 9, 2010 12:25 pm

2150-that’s about the time Warp Drive and Anti-matter reactors will be around…

Jay Curtis
November 9, 2010 12:42 pm

J Ferguson & Ben D;
“Wouldn’t you agree that it isn’t really the amount of energy required for extraction, processing, and delivery, but the cost of that energy?”
That is the point. It isn’t about the financial (i.e. “dollar” cost of the energy). It is about the ENERGY cost of the energy. The dollar cost is simply an expression of the (real) energy cost. (Money is nothing more than stored energy.) You can substitute other, i.e. cheaper, sources of energy to extract oil, coal or natural gas, but ultimately there is always an energy cost to the extraction process. If natural gas is cheaper than pumping and processing crude, then why are you wasting time with crude? SELL THE NATURAL GAS you control, because there will ultimately be more of a demand for that.
Think about how markets operate. Sooo, you go to natural gas, then that becomes expensive to extract (energy wise and financially). You go to coal liquification, etc., etc. They all end up in the same place. There is an energy cost to extracting any fossil fuel, and eventually, when it zeros out, you are done. Yeah. You could use geothermal or hydroelectric to pump oil, but why are you selling oil at a premium given the tremendous amount of energy it costs to get it out? You are better off putting that geothermal energy into the grid and encouraging people to drive electric cars. Maybe we will find highly efficient means of extracting oil, coal and gas. If we do, why not simply use that technology to supplant everything we’re doing now? It’s still energy.
Other commodities are different. You could theoretically continue to extract gold as long as the price goes up, putting in as much energy as you could find while the price was right. Commodities other than fossil fuels bare a different relationship than energy for energy. (It is scary to think about what happens to food prices as the dollar cost of energy goes up.) Ultimately, once EROEI is equal, it makes no sense to do anything but sell the energy you already have or find sources other than fossil fuels.
When do we get there? I don’t know, but the exponential function continues to operate and ACCELERATE. That’s what exponential functions do. That is why we now have 6.5 or 7 billion people in the world – all seeking energy. There were only about 3.5 billion when I was in college 40 years ago. So, we’ve nearly doubled in 40 years. In the absence of a world-wide pandemic or nuclear holocaust, will we double again in 20?

November 9, 2010 12:49 pm

Murray Duffin says:
November 9, 2010 at 12:24 pm
Clathrates and abiogenic oil!! And you guys think warmers have a problem with religious beliefs!

yeah, what he said. peak oil is just another scam to take your money and freedom.
50 years ago the dinosaurs bones crowd told russia they had no oil. now russia is the number 2 producer of oil in the world. not only have they found oil in russia, but several moons in the solar system as well. hydrocarbon from dinosaurs, on…hyperion?

November 9, 2010 12:51 pm

DirkH says:
November 9, 2010 at 12:34 pm
DirkH says:
November 9, 2010 at 11:57 am
“This explains why the CRU is partially oil-founded.”
Sorry, typo – funded, not founded.

founded is still correct!

November 9, 2010 12:52 pm

George E. Smith says:
November 9, 2010 at 12:04 pm
Why did you post this garbage, then? As you admit, you didn’t research it. So you post it anyway, knowing there is no basis in fact for it? Getting bored? What?

November 9, 2010 12:56 pm

peak oil is just another scam to take your money and freedom.
50 years ago the dinosaur bones crowd told russia they had no oil. now russia is the number 2 oil producer in the world. besides russia, they have also found hydrocarbons on numerous moons around the solar system…let’s see, dinosaurs on…hyperion?

Jim G
November 9, 2010 12:57 pm

ZT says:
November 9, 2010 at 8:32 am
“The date is generally 30-40 years from now, always has been, always will be.”
Yep, kinda like the bar that has the “free beer tomorrow” sign up and it’s still up today cause tomorrow never comes and there is never any free beer. Kind of surprised, though, since UC Davis is such a conservative place! Knew a professor from there back in the 60’s. He was into sensitivity training. Nice guy. Smoked too much grass, though, which diminished his cognitive abilities somewhat. Davis was never, and still ain’t, Cal Tech.

November 9, 2010 12:58 pm

allright. one post appears and one post dissapears…twice
[I have no idea. 8<) Robt]

November 9, 2010 1:02 pm

commieBob “We have enough natural gas to last … depends on how you count it but it is a rather long time.
Global shale gas reserves are estimated to be 456 trillion cubic meters
world energy use
2007 495 quadrillion btu
2035 739 quadrillion btu
Using 10^15 for a quadrillion, shale reserve 456 tr cu m = 2.7 tr boe = 14.9 * 10 ^ 18 btu, equivalent to 20.1 years’ world energy use [2035 level]
[1 boe = 5.55 m btu = 6000 cu ft gas = 170 cu m gas
Please check the calcs.
NB. That’s shale gas only (not natural gas (187 tr cu m ~8yrs), oil, coal, uranium, thorium, etc), vs all energy use.

November 9, 2010 1:20 pm

Over 2/3 rds of the world’s proven oil reserves are heavy crude, tar sands, bitumen. There is a Canadian company called Ivanhoe (disclosure: I own a few thousand $$$ of their stock) that has developed a way of turning that heavy crude into medium to light crude (allowing it to be shipped by pipeline and processed in a refinery). Their method has none of the drawbacks of previous methods:
There is no requirement for natural gas or rare earth metals in the process.
Waste product generated (coke) is burned as part of the cycle to power the operation, with waste heat used to generate steam.
The steam can then be pumped underground to reduce the viscosity of the oil, allowing it to be pumped to the surface. This eliminated the need to tear apart the landscape with earth moving equipment to get at the oil.
They already have an operation in Ecuador with another waiting for permits in Canada. The process requires that oil be over $40 per barrel for the Ecuador project to be viable.
We aren’t running out of oil any time soon. I am not saying we shouldn’t be developing other sources (Gas to liquids and thorium power come to mind), but don’t count petroleum disappearing anytime soon.

November 9, 2010 1:25 pm

Jim G says:
November 9, 2010 at 12:57 pm
“Davis was never, and still ain’t, Cal Tech.”
I investigated them decades ago when I still wanted to be a wildlife biologist or an ichthyologist. Took one look around and went running for the hills. Scary place but not as scary as Berkley!

November 9, 2010 1:29 pm

Crock, meet S**t!

November 9, 2010 1:38 pm

Smokey says:
November 9, 2010 at 11:34 am
Oil reserves are not the problem. The reason we’re still hooked on foreign suppliers is almost entirely due to political obstructionism by eco-luddites.
You nailed it on the head with that statement! I’d like to add that Political machinations have so distorted the market, that the natural interactions between supply, demand, and investment, no longer work. That means this entire study is invalid.

November 9, 2010 1:41 pm

DesertYote says:
November 9, 2010 at 11:06 am
“Just a silly question; suppose that we stop using petroleum based fuels for transportation and energy, what are we going to do with the stuff? I mean it is not good for anything else, that is why we burn it.”
DesertYote try this on for size:
A partial list of products made from Petroleum (144 of 6000 items)
One 42-gallon barrel of oil creates 19.4 gallons of gasoline. The rest (over half) is used to make things like:
Diesel fuel
Motor Oil
Bearing Grease
Floor Wax
Ballpoint Pens
Football Cleats
Food Preservatives
Vitamin Capsules
Panty Hose
Life Jackets
Rubbing Alcohol
TV Cabinets
Shag Rugs
Electrician’s Tape
Tool Racks
Car Battery Cases
Insect Repellent
Oil Filters
Hair Coloring
Toilet Seats
Fishing Rods
Denture Adhesive
Ice Cube Trays
Synthetic Rubber
Plastic Wood
Electric Blankets
Tennis Rackets
Rubber Cement
Fishing Boots
Nylon Rope
Trash Bags
House Paint
Water Pipes
Hand Lotion
Roller Skates
Surf Boards
Paint Rollers
Shower Curtains
Guitar Strings
Safety Glasses
Football Helmets
Ice Chests
CD’s & DVD’s
Paint Brushes
Sun Glasses
Heart Valves
Artificial Turf
Artificial limbs
Model Cars
Folding Doors
Hair Curlers
Cold cream
Movie film
Soft Contact lenses
Drinking Cups
Fan Belts
Car Enamel
Shaving Cream
Golf Balls

November 9, 2010 1:56 pm

I wonder how the smart investors positioned themselves to take advantage of that lengthy switch from wood to coal, then coal to oil? They must have had remarkable foresight to have foreseen just how “slowly” the market found substitutes….
It’s amazing the things that people, even educated people, can find that seemingly correlate – but don’t. I think this fits rather nicely into the round file as a prognostication of substance.

November 9, 2010 2:02 pm

The current price of oil has little to do with supply and demand. Here is an article with a lot of interesting charts that explains the situation.

November 9, 2010 2:07 pm

Simpleseekeraftertruth says:
November 9, 2010 at 10:19 am
“Not to mention coal. It has been estimated that there are over 847 billion tonnes of proven coal reserves worldwide.
Take coal reserves with a big grain of salt. USGS re-estimated ‘economically recoverable coal’ in the Powder River Basin in 2008. Instead of 200 Billion tons the new estimate was 10 Billion tons. A lot of the worlds coal reserves are a long way from major markets, transportation costs make them uneconomic. The Chinese are currently trucking coal from Mongolia. One of the reasons they just upped their planned nuclear build program from 70 Gigawatts by 2020 to 122 gigawatts by 2020.

Karl Heuer
November 9, 2010 2:10 pm

In his 1956 paper M. King Hubbert Predicted US Peak Oil production would happen in 1970, it did.
Hubbert also predicted in 1956 that World Crude Oil production would peak “in about half a century” — putting it at 2006.
World Crude Oil Production 2000 – 2009 in Thousand Barrels/day
2000 77,768
2001 77,686
2002 76,988
2003 79,593
2004 83,098
2005 84,589
2006 84,652
2007 84,535
2008 85,478
2009 84,391
World Oil Production Including Lease Condensate, NG Liquids, Other Liquids, and Refinery Gains has declined every year since World Oil Production had its most prolific year in 2006 click on 4.4

November 9, 2010 2:11 pm

“At the current pace of research and development, global oil will run out 90 years before replacement technologies are ready”
QED, the pace will therefore accelerate in future.

Karl Heuer
November 9, 2010 2:18 pm

with the exception of 2008

Dave Cochrane
November 9, 2010 2:19 pm

On the one hand it’s: Panick! Fossil fuels are causing catastrophic global warming!
On the other hand it’s: Panic! Fossil fuels are running out!
Either way, it seems, we should be wetting the bed. Well, I for one will be sleeping in a dry bed tonight.

Karl Heuer
November 9, 2010 2:19 pm

Which if it holds up is a pretty good prediction from 1956 52 years vs “about half a century”

L. Bowser
November 9, 2010 2:20 pm

Pardon me if I decide not to panic.
Last time I checked Coal-To-Liquids (specifically DME production) puts us another 400+ years beyond this time-table. And I believe that is with “proven” reserves of coal. Nothing to say of known deposits or further yet undiscovered deposits. Color me less than impressed with this particular work coming out of UC Davis…

November 9, 2010 2:26 pm

Seeing as we seem to have a fair few peak-oilers in this thread, can anyone explain to me what the concept actually represents? This is a serious question, because either I’m missing something, or ‘peak oil’ is an utterly trivial statement that, as finite resources become closer to exhaustion, the price will rise. The semi-mystical pronouncements surrounding it don’t seem to make any sense to me, because people seem to talk about tipping points and the like.
Anyone care to take a stab at explaining for me?

November 9, 2010 2:29 pm

Ah, nice to see a thread on Peak Oil holding its place. The thread on Abiotic Oil was the only one at WUWT I’ve ever seen disappear.
It always seemed to me, Anthony, that you didn’t feel at that time that you had enough handle on the issue to run a “safe” exploration of readers’ issues. But now it seems you can – with a slightly different standpoint.
If this is correct, thanks this time. I think it’s important to get the debate out in the open, just as with Climate Science.

November 9, 2010 2:29 pm

Years ago, a lot of sophisticated investors thought railroads were a good investment too.

November 9, 2010 2:32 pm

@Karl Heuer, re Hubbert’s predictions.
Hubbert was right re the US but only coincidentally – he was lucky. The U.S. has suffered many issues, including government meddling, that led to the decline in oil production. The lower price of imported oil also played a big role. So much for Peak Oil alarmism.
The World Peak Oil is coincidentally again at 2006 – one should wait about another decade and check that again. Oil consumption and production are increasing as the global recession ends.
There’s no such thing as Peak Oil.
The Earth, for purposes of discussing oil production, is a lot like a stack of pancakes. We have barely stuck a fork in the top pancake. Only in very limited areas have we punctured the lower pancakes.

George E. Smith
November 9, 2010 2:53 pm

“”””” DesertYote says:
November 9, 2010 at 1:25 pm
Jim G says:
November 9, 2010 at 12:57 pm
“Davis was never, and still ain’t, Cal Tech.”
I investigated them decades ago when I still wanted to be a wildlife biologist or an ichthyologist. Took one look around and went running for the hills. Scary place but not as scary as Berkley! “””””
And even Beserkely ain’t nearly as scary as Pasadena; which is where Ca-lTech actually is.
But if NASA can move land based Weather stations off shore or 300 km from where they were when they were built; and you can use your backyard thermometer to read the Temperature 1200 km away; then I suppose it is easy to get Cal-Tech soemwhere around Berkeley.

Tim Clark
November 9, 2010 2:56 pm

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,”
It is based on the same MO of the theory that a rise in CO2 precedes temperature increase. They got it arse backwards.
A discovery tomorrow would change all the assumptions. You cannot predict technological advancement. And who cares. Renewables won’t be investment grade (without Goverment subsidies) until we run out of the nuclear option.

November 9, 2010 2:59 pm

I have not bothered reading this article. Simply because its about investor sentiment.
However, reading many of the comments suggest it is time to put a few myths to bed.
1. Oil runs out. No. That is not what PO is about. PO is the point at which you cannot maintain flow rates to meet demand.
2. The abiogenesis of hydrocarbons. Look, if you want to believe this, its up to you. A brief search on the web should put you right. However consider this: If abiogenesis occurs and has done so throughout the the life of the earth, why are we not knee deep in oil? Abiogenesis doesnt really stack up if you are in the business of oil and gas exploration. We find oil where we have three prime ingredients. Source rock, reservoir, cap rock. Without the kerogen rich source rock, you dont get the oil. If deep earth abiogenesis is true, why do we not see seeps at the constructive margin in the Atlantic or on Iceland?
3. ”Brazil and Greenland and the Falklands proves there is still oil to get”. These are nice – to – haves, but they are not supergiants such as Ghawar, Burgan, Samotlor, Cantarell. The supergiants were all found between ca. 1940 – 1970. Since then, supergiants have been few and far between. The North Slope and the North sea are oil provinces made up of various sizes of fields that kind of add up to a basinal supergiant, Both , I hasten to add are post-peak. Note also: Greenland and the Falklands suggest feasible hydrocarbon systems, but neither are proven. Its all about flow rates and reserve replacement.
To maintain reserve replacement and flow rates, we will need another two KSA sized provinces in the next two decades.
4. ”We have enough coal and can turn this into oil” . The Fischer Tropsche process is fine if: You are desperately finding ways to keep the Tigers moving after you have lost Ploesti to the Russians and the USAF has bombed your refineries flat, but it does not easily scale up and the EROEI is very poor. CTL technology is useful, but not entirely scaleable to meet flow rates.
5. ”Its all a big plot by government’ . Actually, nothing is further from the truth. Governments hate this subject being brought up. For years they have brushed it off and so too have government agencies , (USGS, IEA ) etc. There has been some modification of their stance since about 2005, but really, they would prefer you to look the other way .
– An aside: I often wondered if CAGW / CO2 curtailment policies were merely a tacit acknowledgment of PO…:-)
6. ‘Its all a plot by hippies and the greens’. Now this is where it gets seriously weired. If, during the nineties or early noughties, you were to get in to a discussion with any representatives of Greenpeace, FOE, WWF etc, they would flatly refuse to accept the possibility of PO as a concept. Why? – Not much mileage in a dead boogey man is there? If PO is real, then where will the CO2 come from. The green movement therefore has assumed unlimited access to Hydrocarbons so as to maintain the CO2 boogey man.
Overcoming PO is an operational management problem. A technical issue. I have always maintained Nuclear Power is the best way forward, but curiously, the greens have delayed this in my country and the US. It is the delays in the deployment of available, current technology that will hurt us in the medium term.
Rgds etc.

Dr Chaos
November 9, 2010 3:09 pm

Like others above, I think the abiotic theory has a ring of truth about it:
a) The solar system is chock full of hydrocarbons, and yet the oil/methane on earth came from fossils??
b) Thomas Gold/Fred Hoyle and all the Russian theorists argue that with the fossil theory, you are putting a load of essentially oxidised waste matter in the ground, heating it up a bit, and getting these super duper highly reduced compounds with enormous chemical potential. Hard to believe – but perhaps some thermodynamicists out there can set me straight.
c) We are using a cubic mile of oil every year – so what volume of fossils was required to produce this? I know we have millions of years to work with, but still !
d) All of the recent oil discoveries are dubbed “unconventional”. This is code, and it means they’ve been discovered in places where they should not exist according to the fossil fuel theory.
e) I used to read a lot. Too much. And they all LOVE Jim Hansen over there. Ipso facto, peak oil is BS!

November 9, 2010 3:11 pm

hstad says:
November 9, 2010 at 1:41 pm
That was exactly my point. The stuff we burn is a wast product from the refining process used to create the precursors for all that cool stuff you listed. If we stop burning petroleum based fuels, we will still be using petroleum at the current rate we are now. The only difference is that we will now have all this useless gasoline that we will still need to get rid of.

November 9, 2010 3:11 pm

Peak Oil is a myth. For every year since 1859 when drilling for oil began in Titusville PA, people have been predicting demand would outstrip supply. The fact is supply has always been keeping up with demand. It’s economics! Will we eventually run out of reserves? Sure! Will it happen next year? No! Next decade? No! Next Century? Not Likely! Next Millenium? Maybe!
Enough, already, with the alternative energy nonsense. It is unsustainable. Just ask for the EROEI analysis on the next solar or wind project – IN WRITING. You won’t get the analysis from the developer, because the EROEI is about 0.48 for solar and 0.29 for wind.

November 9, 2010 3:12 pm

Karl Heuer ,
Remember that 2006 was the peak for just about everything, not just oil consumption.
As you can see here, the Great Recession was beginning. House prices were at their peak, industrial production was at its peak, financial speculation bubbles were beginning to burst, etc. The fact that oil production dropped after 2006 had nothing to do with supply, and everything to do with weak demand.
There is more than enough fossil fuel energy for the planet’s population, both current and projected. The only thing standing in the way is eco-politics. This map shows the Obama Administration’s obstructionist tactics. Domestic drilling is off limits almost everywhere. The direct result – as Obama admitted before his election – will be much higher energy costs.
Alternate energy sources are very inefficient compared with the gold standard of fossil fuels, and they will never be able to compete without taxpayer subsidies. Cheap oil is available domestically if the government simply gets out of the way, only regulating particulate emissions and other proven pollutants. As we understand here, CO2 is harmless and has resulted in increased agricultural productivity. More CO2 is better, and nothing is more efficient than fossil fuel energy.
The peak oil story is like the CAGW story; always trying to scare people about a future event that will not happen. In the unlikely event that all the oil sources begin to dry up, and no new oil is discovered, the free market will provide cost-effective alternatives, as it always has.
[For those who doubt that the free market is the reason the West is so wealthy compared with the rest of the world, this story will surely help. And for those with indoctrinated teenagers at home, it will open their eyes.]

George E. Smith
November 9, 2010 3:15 pm

“”””” Jim says:
November 9, 2010 at 12:52 pm
George E. Smith says:
November 9, 2010 at 12:04 pm
Why did you post this garbage, then? As you admit, you didn’t research it. So you post it anyway, knowing there is no basis in fact for it? Getting bored? What? “””””
Why are you dumping on me Jim; what did I do to get you so jumpy ?
I said I heard it on a “NEWS” program; at least I presumed it was a NEWS program; actually it is more correct to say I SAW it on a NEWS program since it was on TV and it was on a Chinese Station; so I couldn’t understand a word of it. But the program did have English language subtitles; and since I do read English; I simply posted here an approximation of what I read. And no; I didn’t get the name of either the NEWS anchor person or of the “expert” who commented on the story. I can tell you that he (the Expert) was NOT Chinese; and I read nothing that said the project or proposed project was even Chinese.
And I said in my original post that I was posting about a NEWS report; and I NEVER waste my time doing research on everything that comes over the “NEWS”. That is actually what we have NEWS reporters for; that is their job to research a story before publishing it.
And evidently you didn’t understand that I simply (saw) read it on a “NEWS” report; which is why I then had to post that I did not research the subject; even though nothing in my original post would lead one to believe that I DID research the subject.
So the answer to your question; why did I post this garbage; is because you made an assumption about what I posted that was not in evidence.
And as to the use or non-use of Thorium power plants or Thorium bombs; if you think that is garbage; then you should say that.
Lemme guess; you didn’t post that because YOU haven’t researched the “NEWS” story I posted either !

November 9, 2010 3:27 pm

Dr chaos>
I’m skeptical although open-minded about abiotic oil. I really need to read some in-depth details to have a proper opinion. Whilst we’re just speculating, though:
“c) We are using a cubic mile of oil every year – so what volume of fossils was required to produce this? I know we have millions of years to work with, but still !”
I’m unconvinced by this argument. Imagine an ocean full of plankton, dropping out of the water to the seabed as it dies. It’ll accumulate in depressions and deeps. If you have just a thousand square miles of ocean, that cubic mile of oil represents a layer with the same dimensions as the ocean, and five feet thick. In fact, though, we have at least 100 million square miles of ocean, so even allowing for 100 years of oil extraction at the same rate, you’re talking a layer 5 thousandths of an inch thick, give or take.

frederik wisse
November 9, 2010 3:35 pm

In my youth there was the club of rome predicting we would run out of oil before the year 2000 , in my grandfathers youth there was s story that public transport would collapse because the world would run out of hay to feed the horses so my grandgrandfather made a ton of money by supplying this scarce item to the london horse-carriages . To my limited knowledge the lack of hay never ocurred and the lack of oil has no true relation towards reality , but they have been very favourable to make the traders very wealthy . So the scare stories are playing the money into the pockets of the manipulators . This is exactly the trick of the global warming hysteria.
Without it Al Gore , Michael Mann and even Barack Obama would be paupers . The idea that the country would get richer by flooding the market with dollars is absolutely false and will devaluate the money – value of the dollar . The only way to create more value for the dollar is to create scarcity and shortage in the real cash flow and demand will propell the value forward . This exactly what big oil is doing right now by postponing projects like the 2nd canadian tar sand factory by Shell and the natural gasproject in Siberia canceled by the Russians . Well if a barrel is costing to produce 4 or 5 dollars and a shortsupplied market may give a hundred dollars per barrel , would you refuse it when you were the oil-supplier yourself ?

Dizzy Ringo
November 9, 2010 3:39 pm

The Russian references to abiotic oil are the best – the US work is derived from them.
There are some good articles – in English! (From GFF (journal published by Geologiska Föreningen, Sweden) No. 126, pp 156-157: Abstract of speech by Vladimir G. Kutcherov 08.01.2004 at the 26th Nordic Geological Winter Meeting in Uppsala, Sweden
I understand that the petrified dinosaurs etc only go down to a certain level so that it is not possible that the very deep oil wells could come from petrified vegetation and dinosaurs. There is an anecdotal story that this explains the longevity of some of the Gulf of Mexico wells but I can’t vouch for this.
Apropos the reducing production of oil – in our little corner of the world, the consumption of oil as fuel has dropped significantly even tho’ the number of cars has risen significantly. This would suggest that cars are so much more efficient that less petrol is required. Just a thought.
And then, apparently there are a lot of hydrocarbons on Titan and I sure as blazes have never seen any dinosaurs and forests up there!

Dr Chaos
November 9, 2010 3:40 pm

@ Dave
I take your point, and I don’t have a clue whether the abiotic theory is right or not.
But am I right in saying that most oil is found in a few fairly concentrated spots – and I assume that the fossils/plankton needs to be squashed down by some large ratio? So to get 1 cubic mile of oil in Saudi Arabia say, you would have required 100 cubic miles (perhaps) of fossils? That’s an awful lot of plankton – would fish etc not have eaten them? Are the seabeds currently piled up with plankton? Why or when did this process of creating fossil fuels stop, or is it still ongoing?
So many questions, and I haven’t seen any satisfactory answers to them!

David Ball
November 9, 2010 3:45 pm

This is on target with my new book. It’s called “Everything you wanted to know about phobias but were afraid to ask”.

November 9, 2010 3:54 pm

Just to show that there is a significant (i.e. non-zero) probability that abiotic processes also produce hydrocarbons in Mother Earth. Hmm, something about carbonates, water, temperature and pressure, at least it’s been proven with measurements in a lab setting that it can occur – directly to methane. It also appears that certain polymers also can occur.
Wouldn’t that be the pits? As fast as we could burn it, Gaia would be making it.

November 9, 2010 3:59 pm

For the previous commenters, there is nothing that requires the carbon to be sourced by plants and animals. Inorganic carbon sources are also viable – in fact – it would appear that we might want to rethink the whole idea of organic vs. inorganic, at least where carbon is concerned. An example of an inorganic source for carbon would be sodium bicarbonate. Nature is sometimes kind.

James Barker
November 9, 2010 4:03 pm

I believe we will “run” out of oil in about 50 years, right after Fusion energy becomes commercially available. Of course, I could (may) have made this prediction 50 years ago 😉

November 9, 2010 4:03 pm

Dr Chaos,
Unconventional also means “we didn’t know how to extract it from shale before.” It doesn’t necessarily mean abiotic. Deep wells, drilling through “basement rock”, that’s getting close to abiotic. Finding gas in fractured granite just a couple of miles above the moho, that’s probably abiotic.
We’ve got a lot to learn in a lot of areas.

Karl Heuer
November 9, 2010 4:19 pm

@Smokey —
the majority of major producers hit peak production long before 2006-2008 — the only reason production world wide is still (possibly) increasing is smaller players increasing production
Crude Oil and lease Condensate – does not include other liquids/NG/Refinery Gains
Peak production
UK 1999
Saudi Arabia 1981
Norway 2001
Syria 1996
Oman 2000
Indonesia 1991
Iran 1974
Libya 1970
Kuwait 1972
Nigeria 2005
Mexico 2004
Malaysia 2004
regions of world
Persian Gulf — 1977
North Sea –1999

November 9, 2010 4:22 pm

Just looked up Hubbert on the wikipedia…
and guess what you find under “See also”?
Limits to Growth (book)
I sense GM incoming in 3… 2… 1…

Alex Heyworth
November 9, 2010 4:29 pm

Mark Wagner says:
November 9, 2010 at 8:41 am

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.

To quote one of my all time favorite books on energy, The Bottomless Well,

Oil extracted today from beneath 2 miles of water and 4 miles of vertical rock, with 6 additional miles of horizontal drilling beyond that, costs less than the 60-foot oil Colonel Drake was extracting a century ago and about the same as one-mile oil in 1980.

Just to underscore how persistent this myth has been, another quote from the same book,

A paper published in Science in 1981 predicted that by the year 2000 it would require more than a barrel of oil’s worth of energy to extract a new barrel of oil from a U.S. well,.

November 9, 2010 4:42 pm

If one makes kerogen conversion from shale and oil sand illegal, illegalizes coal to liquid conversion, bans Arctic drilling, bans horizontal drilling with in-situ fracturing, and generally discourages oil exploration, then YES, the end can come quickly.
But only idiots and environmentalists would commit that kind of suicide.
Oh.. wait…

Kum Dollison
November 9, 2010 4:43 pm

Whether it’s from biotic sources, non-biotic sources, unicorn droppings, or dust left by Pixies: We’ve been using a lot more of it than we’ve been finding for several decades, now.
Prices were rising like a rocketship from 2005 to 2008, but the “production” of crude oil was flat (and, inventories were declining.)
It’s generally accepted that we have to bring somewhere between 3.5 Million, and 4.0 Million Barrels Oil/Day online every year just to “stay even” with declining production from existing wells. If you will go here
you will see that we have about 3.1 million bpd coming online in 2011, and a little over 2.2 million bpd in 2012. That won’t get it.

Ben D
November 9, 2010 5:24 pm

I have to post this again, if oil prices go up enough, other sources that can replace oil (biofuel for instance) become economical. Then less people want to buy oil since they sunk $600 into their car for the converter to use it or $50 for recent diesel engines. Most diesel engines older then 10 years can run on just about anything. This decreases demand…and the cycle continues until oil demand once again reaches a plateau and once again the cycle continues. Other sources of fuel can power vehicles and perform a number of things that oil does. The reason they generally do not is because they cost more.
Trust me, there is no peak oil emergency on the horizon. Just economic hurdles that we need to deal with in a sane fashion. Fear in itself is the issue…if we are afraid of everything that could go wrong, we live our lives from disaster to disaster. Its better to simply live life and enjoy it then worrying about “maybe possible problems”.

Richard Sharpe
November 9, 2010 5:36 pm
November 9, 2010 5:42 pm

As a geologist who has explored for oil for the last 25 years, I think I can add some light to the subject. First of all, I subscribe to the statement that the “past is the key to future” and I believe that this applies to this debate. Many countries have already hit peak oil ( and there is absolutely no reason to think that the others won’t follow. We are all in awe of Saudi Arabia and other middle eastern countries but the fact is, we had a version of Saudi Arabia in West Texas and it finally peaked along with other great oil provenances in the U.S. and the world. My biggest eye opener was when I got to work Libya when it opened up a few years ago. I thought there would be some really big opportunities, but after exploring the country, I learned that, yes there are many opportunities but on a very small scale compared to the heydays of the 50’s where billion barrel discoveries were the norm.
As has been mentioned on other posts, there is a big difference between reserves found and flow rates. I do think there is a huge amount of reserves in oil sands, oil shales, etc. but it is very difficult to get large flow volumes from them. Peak oil is not about reserves but about how fast you can produce it. As I see it, the only way to reverse this is for prices to go up a lot to spur huge operations in extracting oil from shales, etc.
Finally, there is good evidence that peak oil of conventional crude already occured in 2004. Even with oil prices nearly tripling from that point, there was no uptick in conventional crude volumes.

November 9, 2010 5:45 pm

Several of you said it; oil companies don’t waste time looking for more resources than they can use in 40 years. It’s a waste of their time and resources.
This can be fixed. Put a woman in charge of searching for oil. If she’s like my wife, having found the right outfit doesn’t mean she stops looking for another one. And another one. Until we are guaranteed to be late to whatever she’s dressing for. If enough oil companies put women in charge of exploring for oil, we’ll have such a glut no one will ever say we need nuclear.
I think I should just hit the delete key….

Alberta Slim
November 9, 2010 5:55 pm

Like the debate between CAGW alarmists and skeptics, the abiotic and biotic oil controversy continues.
here is one report:

November 9, 2010 5:57 pm

Best books on the topic in my opinion:
The Age of Oil by Leonardo Maugeri
Oil Panic and the Global Crisis by Steven Gorelick
Peak oil can be defined over a dozen different ways, with completely different implications for real world events. Whenever conversing with a believer, always make sure you know what their particular defined dogma is.

James Allison
November 9, 2010 5:58 pm

Peak Oil – Yeah Right.
Here is a fine example of “experts” inability to accurately predict the future. The construction of an early calculator, the Electronic Numerical Integrator And Computer was completed in 1946. It weighed in at approximately 30 tons, and used about 18,000 vacuum tubes.
About 1947 NewScientist said that in the future we may see calculators that use only 1,800 vacuum tubes and weigh as little as 3 tons.

November 9, 2010 6:06 pm

Dr Chaos says:
November 9, 2010 at 3:40 pm
You are right, your logic bone must have been itching. I am an organic chemist of some 40+ years, and have come to realize that the Ukrainians were right 30 years ago—most oil and gas is abiogenic. How can highly oxidized plant and animal life be reduced, losing most of its weight in water and much more oxygen than it has carbon? What is the mechanism for the removal of all of the oxygen? Where does the hydrogen come from to reduce every single carbohydrate and fat? Why is there helium in the gas and oil? If there is a mechanism, it has to overcome a huge potential energy barrier, as the Russians proved using thermodynamic theory.
Besides, the Russians have made oil from carbonate, ferrous element catalysts such as iron, and water in the laboratory, under conditions existing only a few miles down under the crust. Germans made synthetic gas and oil from CO and water in WWII. It is the opposite of “far-fetched”!
Just like on Titan that has seas of ethane and higher hydrocarbons. I have even heard some peak oilers try to explain that away by saying that there was lots of life on TITAN in the past, and the ethane is “fossil fuel”.
Peak oil is another religion that does not tolerate dissent. Oil geologists do not want to hear about it lest the futures price drops and people don’t listen to them when they say, “drill here”. Prices will drop as natural gas and oil is “found” in abundance. The Russians are happy, as are the Vietnamese who are now extracting petroleum from very deep wells where geological theory said it could not exist. Russia has gone from net importer to exporter just, coincidentally, after the Ukrainian abiogenic theory emerged.
I agree, though, that the “consensus” is that oil is “fossil fuel”, as our grammar school textbooks have proclaimed for a century.

November 9, 2010 6:27 pm

A bunch of hogwash — we can make oil substitutes now, but they are expensive. When gets more expensive, oil substitutes from coal, algae, etc., will be relatively more affordable.
Plus, as oil becomes more expensive, more known oil reserves become available. In other words, we have known oil deposits that are too expensive to drill for. But they become economically viable when the price of oil goes up.
I’ll also second the notion that we have no clue what new technologies will or will not be available decades in the future.

Walter Sobchak
November 9, 2010 7:23 pm

Good news in here. You can either have Peak Oil or you can have Fossil Fuel induced AGW. Pick your poison.
For me, this is better than television. Make some popcorn and let’s watch the hysterics duke it out.

James F. Evans
November 9, 2010 7:26 pm

Oil is abiotic — a product of chemical mineralogical formation.
How much oil exists? — No one knows.
How fast do these natural mineralogical processes take?
Again, no one knows.
But there are vast untapped sources of oil. Yes, much of it is in ultra-deep deposits in ultra-deep waters, below the seafloor, but it is there and it can be developed & produced.
In fact, some of these oil deposits are being developed & produced now.
Already, large deposits of deep sea oil are being produced.
More will come online for production & consumption.
So-called “peak” oil is over thirty years away, if then.
But “peak” oil within the next five years?
Not a snow ball’s chance in hell.

November 9, 2010 7:30 pm

George E. Smith says:
November 9, 2010 at 3:15 pm (Edit)
“”””” Jim says:
November 9, 2010 at 12:52 pm
George E. Smith says:
November 9, 2010 at 12:04 pm
Why did you post this garbage, then? As you admit, you didn’t research it. So you post it anyway, knowing there is no basis in fact for it? Getting bored? What? “””””
Why are you dumping on me Jim; what did I do to get you so jumpy ?
I said I heard it on a “NEWS” program; at least I presumed it was a NEWS program; actually it is more correct to say I SAW it on a NEWS program since it was on TV and it was on a Chinese Station; so I couldn’t understand a word of it. But the program did have English language subtitles; and since I do read English; I simply posted here an approximation of what I read.

Interesting. A Chinese “news” station is broadcasting a “science and technology” items about thorium reactors and thorium power production. While they are really building hundreds of coal plants, hydro projects, and pushing more conventional (uranium) power plants.
But the US “news” stations are playing up who is the latest “hit” in Hollywood and – if they mention energy at all – it is about how many alternative energy projects (like URI’s energy from heated asphalt) our “Dept of Energy” and government and legislative experts want to fund based on CAGW exaggerations and a fear of capitalism.
Gee. I wonder who is more accurate? Who really believes in energy production? The country that is doing it? That is planning on the next fifty to 100 years of production? Or the culture that (now) fears it?

Amino Acids in Meteorites
November 9, 2010 8:16 pm

It’s still not certain that oil is an exhaustible fossil fuel, or is from a natural process in the mantle of the earth.
Freeman Dyson talks about it in the second half of this video:

martin mason
November 9, 2010 8:32 pm

Poor Murray, it must be very distressing to you that man keeps managing all of the catastrophic scenarios that you screamers keep predicting for us? Also for you to see positivity rather than the grinding negativity that dominates the very sad lives of people like you. What is your point? That is in what you say and of the very existence of people like you in general.

November 9, 2010 9:01 pm

In WWII, the USA bombed the german synthetic oil plants, making feul and lubricants from coal, this is a so well recognized a fact that it is impossible to cover up, however, it seems that people can forget it (some selectivly). If the germans could do it 65 years ago, is our technology today so backward and promitive that we can no longer do what they did so many decades ago? There is a LOT of coal, a lot more than oil. The only reason we do not make synthetic oil is that it is more expensive, and because our masters have chosen to “forget” any technology that actually works.
And that is just one of the currently available alternate feul technologies, there are also other ways to make synthetic feuls, plus space beamed solar power (about 5 times better than land based solar) which has been blocked by “environmentalists” on the thin excuse that it might maybe do something harmfull in some desert somewhere to something, and of course there is nuclear, and hydroelectric which is being attacked by “environmentalists” (despite it being “renewable”) as harmful to something somewhere.
And that is just a partial list of technologies we know we can build right now. The idea that alternatives do not exist is invented simply by reducing the list of alternatives to only those that do not currently work. It is also done by reducing the list to only those that are funded or otherwise under total control of our new masters. After, all, if “the government” is not in control of it, it must not be important, right?
The reason is simple, if we have limited feul, our masters can control us by rationing it, taxing it, regulating it, etc. They like that. If we have unlimited (effectivly) feul, they cannot. It is all about the revolt against the idea “that all Men are created equal, that they are endowed by their Creator with certain unalienable Rights”. The new idea is that “some are more equel than others”. In other words, a return to the old idea that there are the nobles, and the peasants (thats you). In other words, a return to feudalism.
Welcome to the new dark ages, literally.

Smoking Frog
November 9, 2010 9:06 pm

Brady 11/9/2010 at 8:48 AM
That the Brazilian find is estimated to be between 3.7 billion and 15 billion barrels has very little bearing on the peak oil argument. World crude oil consumption is about 31 billion barrels per year, and it’s been growing by 1.76 percent per year. The following link shows consumption in barrels per day. Just multiply by 365.
USDOE Petroleum Statistics

November 9, 2010 9:08 pm

Some awfully silly ideas expressed above.
One character thinks that since oil production has leveled off in recent years this is proof that “peak oil” is here. As though the oil industry should be pumping unmarketable oil from the ground into endless storage capacity.
Another thinks that human industrial capacity is somehow maxed out and that we could never muster the wherewithal to increase infrastructure. As though China is going to soon quit manufacturing pipes and ships.
As many commentators above have noted, energy of many types is not only abundant but our technologies for producing them, especially oil and gas, are making them less costly to produce.
One important element has not been commented upon; the price of oil has been set by what the market will bear, not by an operational supply and demand relationship.
Over the decades oil pricing has shifted from administrative, to cartel influenced, to manufactured strategic glut, to manipulated speculative bubble.
The cost of current marginal production is well below the current market price of oil. This shows that production capacity is being withdrawn so as to maintain higher prices.
There simply is no energy “crisis” at all.
Here’s an economist’s take on the question:
The Recurring Myth of Peak Oil

Smoking Frog
November 9, 2010 9:08 pm

Just posting again because I forget to check the Notify box. Sorry.

November 9, 2010 9:13 pm

Amino Acids in Meteorites says:
November 9, 2010 at 8:16 pm
Freeman Dyson is a great scholar, though a “lukewarmist” octagenarian with a relatively open mind, but his is not the last word on AGW or futurism. His focus recently has been on removing CO2 from the atmosphere, whereas many scientists, in increasing numbers, have turned this premise on its ear, asserting that we are CO2 starved compared to an optimum environment. He is not open to this side of the issue, at all.
In spite of his overall position, that CO2 is a threat, his agnostic stance on oil abundance vs. peak oil speaks volumes. I suspect, as he is a physicist with a thorough knowledge of thermodynamic processes, that he skews his agnosticism toward the abiogenic oil position, simply because if it were not plausible, he would be able to state that without equivocation.

Paul Kielpinski
November 9, 2010 9:25 pm

Anyone ever read History books! When Adolf Hitler”s oi8l supply was cut off, the Germans made synthetic Gasoline from coal (The totally politically incorrect black chunks of carbon dug out of the ground.) Long before the oil runs out there will be an abundance of ways to make it

November 9, 2010 10:58 pm

So it takes 90 years to start converting coal to oil?
Funny. The Germans did it in less than one.
Are we less capable technologically than Germany during WWII?
Did none of these “experts” and “professors” behind this “study” know about this?
Stuff like this makes me wish the college bubble would pop. I would like to see all college related government spending, assistance, and aid withdrawn. I would like to see the law changed so that all student loans past, present, and future could be discharged in bankruptcy. And I would like to see professors working at McDonald’s or standing in soup lines.
There is so much idiocy and wasted time and money in higher education that we could close half the schools and fire 3/4ths of the professors and the country would be better off.

Kum Dollison
November 9, 2010 11:10 pm

Let’s make it so simple that even an “economist” can understand it.
1) Oil hit $147.00/barrel in 2008, and crashed the global economy.
2) We don’t have any more oil now than we had then.

November 10, 2010 12:20 am

stephen richards says: November 9, 2010 at 8:30 am
“and how many reports have we seen like this since the ’60s….”
Well Hubbert predicted US oil production would peak about 1970, that was a pretty good ‘guess’. No matter what you think the consequences of peak oil are, we are almost certainly near/on the production peak now. As pointed out even with new reserves being found there is a limit to how quick you can get it out. It is a lot easier to dig down a few metres in Texas than drill in miles of water in the Atlantic (EROEI again).

November 10, 2010 12:21 am

Anthony Anthony Anthony..
How can you be an oracle of common sense on the global warming issue.. and yet.. be ‘just another alarmist‘ on the oil issue?
On a previous post I have asked that you look into this issue so that that ridiculous phrase ‘fossil fuel’ could be at least be used with an asterix on your site.. but here you are being a drama queen over nothing.
But just because we will never run out of oil.. that doesn’t necessarily mean that we should continue to use it.
Just because we can.. doesn’t mean we should.
So as for alternatives.. Zero Point Energy is a fact.. I have seen lectures in universities about this subject.
Cold Fusion is a fact.. they have had conferences each year for over 10 years on this technology.
Energy from sea waves is also another fantastic option.. especially for coastal cities. (most big cities are coastal anyway)
Please let this site not become just be a one trick pony.. please let the site grow and learn so that all of us that have enjoyed the intelligence of this site can continue to enjoy it for many years to come.. thanks
Thomas Gold’s website as it was before he died.. and before Cornell took it down.
It is supposed to be here too.. but I cannot access it due to the robots.txt file apparantly.. can anyone else see it?

Alex the skeptic
November 10, 2010 12:22 am

I’m 58 years old and my memory tells me that this peak oil theory has been banded about since I can remember. End of society had been predicted for 1970, then 1980, then 1990………
There are two types of people: The optimist and the pessimist. I bet it was the optimist ape that went down of the tree and started walking upright and I bet it was the optimist who went out of the cave and discovered the world. The optimists are always discovering things while the pessimists are watching fearfully, afraid of that explosion that may be caused by the unknown. Greenies are like that and worse. Having seen the optimist discover technology, they would want to destroy that technology to ‘save the planet’.
Someone once wrote: ‘The stone age era did not end because man ran out of stone’. Similarly, the oil era will not end because we would have run out of oil, coal or gas, but because we would have dicovered a CHEAPER WAY TO PRODUCE ENERGY.
Then there’s the biotic/abiotic oil discussion. I look at it this way: Carbon, in the form of CO2 gas, has been emanating from volcanoes/geological activity since before any life forms existed on or below the surface of this planet: THERE’S A LOT OF CARBON DOWN THERE. So why cannot carbon be coming out of the planet’s bowels under other chemical compounds? There’s a lot of pressure and temperature and humidity down in those depths that may be causing the right chemical reactions to produce hydrocarbons besides CO2. From where does the oxygen atoms that combine with the carbon one come from? And the hydrogen atom? Think about it. It’s simpler to conceive mentally than believing that all that oil and gas is a product of dead amoebas.

Alex the skeptic
November 10, 2010 12:25 am

And I forgot: Besides peak oil supply theory, then there’s also peak oil demand theory. And the combined theory goes like this: Which would come first?

November 10, 2010 12:26 am

aletho says: November 9, 2010 at 9:08 pm
Why did the US decide to cut down what it produces 40 years ago while continuing to burn more oil?? You would have at least thought ‘big oil’ would have extracted more during the middle east oil embargoes of the 70’s.

November 10, 2010 12:45 am

James Allison says: November 9, 2010 at 5:58 pm
“Peak Oil – Yeah Right. Here is a fine example of “experts” inability to accurately predict the future.”
Hubbert, an oil expert did predict the future, especially if you give him a bit of slack with 2000 as world peak. I’m not sure if everyone understands what ‘peak oil’ is, it is just the amount of oil we get out of the ground every day which from these conventional sources hasn’t increased since about 2005. You can add in whatever biofuel gas to liquids etc you want. It is hard to see how these conventional extraction rates can increase significantly now.
I haven’t read this article though, which does sound a bit nonsensical..

November 10, 2010 2:01 am

IEA predicts possible peak oil for 2035 in their latest report.
Could be another scare story, of course..

November 10, 2010 2:19 am

Fred says:
November 9, 2010 at 8:54 am
Be afwaid . . . be vewy, vewy, afwaid.

November 10, 2010 2:34 am

For second there I thought it said that they were predicting peau oil by studying investor patterns. Wait, not that IS what said.
So did they validate their model? Use it to hindcast the collapse of the tech bubble? The collapse of the Dutch tulip craze? How about the stock market crash of 1939? What? Hanson adjusted it based on temperature adjustments?
Well I suppose. There’s no reason you can’t replace studying actual reserves and actual consumption and actual efficiency programs with a chart from the DJIA. Why would you study something when you can study a prosy instead? Way cheaper, less work, and if it stops giving the information that supports your theory, you can just switch to something else. Don’t know what you would do with the left over data though. I’d suggest hiding it but those financial dudes keep retty close track of where their stuff is. I heard something about diggin a hole that they let you decline into, and just when you think it is a trick, it turns out it is just a clever way of burying you in cement. Then again, they might want to investigate this technicque the climate dudes have of adjusting number downward in the past. My work for investors too.

Dr Chaos
November 10, 2010 3:07 am

@ Bubbagyro
Thanks for confirming my suspicions!
On Freeman Dyson – he was a friend of Thomas Gold’s and wrote the foreword to Gold’s book “The Deep Hot Biosphere” on abiotic oil. I can’t remember his exact words, but he left the reader in no doubt that he believed Gold’s and the Russian abiotic theory was likely to be correct.

Dave from the "Hot" North East of Scotland
November 10, 2010 3:49 am

@Ben W
got here too late to read the bulk of the thread…but thanks for the link
This is more like my field and I really appreciated some of the very elegant papers on that site. I can’t refute them with my own knowledge and experience. The opposition seems quite mute really. Then again I haven’t had time to read the whole thread – pressure of work! Lol!

November 10, 2010 4:23 am

What a silly “report”. Unlimited nuclear power is already available any time society wants it. Bio-oil grown from algae will be available in quantity & cost matching conventional oil in 10 yearsso the surprsiingly specific 90 year forecasr is nonsense.
Beyond that it shows an ignorance of how the supply & demand curves work in economics – if oil really was becoming scarce the price would go up so less would be used & it would last longer & the higher price would mean more investment would be available for hurrying up replacements. Like so much of eco-fascism it depends on a total ignorance of the price system combined with an assumption that government can organise everything better.

Kirk W. Hanneman
November 10, 2010 4:56 am

The problem with studies like this is they only take into account what is today, and have a devil of a time figuring out what will be. The people doing the study can only work with what they know, but going out decades or centuries what they don’t know will, inevitably, be a much bigger factor than what they know now.
What will be the next breakthrough? Super-efficient solar? Algae? Fusion? Do the authors of the study really claim to know, and know when? “Hubris” is the word I’m looking for.

November 10, 2010 4:56 am

“L Nettles says:
Same thing happened when we ran out of whale oil for lamps.”
No, we did not run out of whale oil, the successful production of drilled petroleum caused the price of whale oil to crash and the industry quit whaling just for oil for lamps.
If you think about it for a moment, that is what really saved the whales!

November 10, 2010 6:02 am

Well spotted Anthony, that prediction goes to the opposite extreme to some of the greenies. You can’t use the stock market to forecast like that. The stock goes up after that idiot Ben Bernanke speaks. The market is good at dealing with some mid term capital demand fluctuations but that’s all its good for. Long term oil projections are based on those who don’t understand the alternatives. Short term fluctuations are always quick fools taking money from slower fools.
Most of the best alternative energy projects are privately traded and so don’t show up. To work they need finance at the share issue: random trading of the stocks a year later is irrelevant. The current banking crisis has that messed up borrowing but not ventia capital. One shot in the straights of Hormuz and millions will poor back into biofuels and the solar hydrogen economy.
All most all the technical barriers to solar hydrogen are now gone. We have very good hydrides and carbon based storage, so expensive and dangerous liquid hydrogen is not needed. Honda is selling a home hydrogen system for fuelling the car.
solar and wind need 16% storage. We have many basic storage systems blocked by cap and trade. The cap and trade stands in the way Governments wont price power with hourly demand making buy low and sell high electricity storage viable. Grid Storage companies don’t get certificates to trade.
I know of dozens of projects that will be competitive with oil and coal in 5 to 10 years. If we get rid of the subsidies then the solar and wind capital will go to the technology that can be as cheap as oil and coal not to the stuff that’s “almost ready some of the time”. If the financial crisis is still going by then forget energy prices; you’ll be burning barrow loads of dollars but there wont be anything left to cook.

November 10, 2010 6:09 am

Any prediction of future technology for the next 100 years is nonsense.
The Singularity is a postulate that as technology advances exponentially, from our perspective, looking towards the future, there is a cutoff point at which the rate of rise of technology is so steep, the consequences, for us, are unimaginable. Depending on who you talk to, that cutoff point is probably around 50 years into the future.
The Singularity is an inevitable consequence of the exponential rise in computing power – an exponential curve which has been unbroken for at least 50 years, and shows every sign of continuing indefinitely.'s_law
Consider the Human Genome Project. It took well over a decade to create the first map of the human genome. Now a new genome can be rattled off in about two weeks. This is due to the enormous increase in computing power – a vital resource for knitting the broken fragments of the genetic jigsaw puzzle created by genome analysis machines into a consistent map of the whole.
Consider that the iPhone in your pocket is a more powerful computing device than the computer you had on your desktop less than a decade ago.
But its not just the ability to do things faster. Deep Blue, the chess computer which finally conquered human domination of the game of Chess, when it defeated Gary Kasparov, is just the start.
Many problems in Artificial Intelligence become easy if you have enough computing power to throw at the problem. That power is becomming available, in effectively unlimited supplies. Dont have enough computing power for this year’s problem? Wait a year, and see what the next generation of computers can do.
The DARPA Grand Challenge and Urban Challenge was only possible because of an enormous increase, in just a few years, in the capabilities of artificial intelligence systems. .
This encroachment of technology into our lives will change our lives beyond recognition, in a time far shorter than we imagine.
Well before we run out of oil.

November 10, 2010 6:33 am

Much has already been said, but as an investment advisor the above extrapolation seems an overreach. I would agree that a plurality of investor sentiment is as good as any because you get a large number of people voting with something that’s important to them, their money. But I can’t get how you extrapolate that 90 years into the future.
Try to extrapolate Apple Computer’s value 20 years ago based on some model how many Mackintosh or personal computers there will be. If you don’t know what a Mackintosh is, it’s a computer that’s made by the same company that makes IPods and IPhones and IPads. The companies value is also a judgement of Steve Jobs ability to adapt and evolve. Wells Fargo didn’t go out of business when the world stopped using Stagecoaches.
Leaning a little closer to the energy industry, it’s a good bet that GE could be profiting from LED lights, or whatever comes after that, long after Thomas Edison’s Incandescent lights only exist in a museum.
Because of Edison, Proctor and Gamble dropped Candles from their core business and focused on its other core product Soap.
Another problem is that future values far into the future have much less value nearer term future values. For example, what if I told you that you could have $1 million today or $10 million in 5 years. I suspect many would wait five years and rack up those credit cards in the interim. Now what if I told you, you could have a $1 million now or a $100 billion dollars 100 years from now. How many people would actually do the math on that one before they figured out that there kids would be dead before the money came. The current share price of a stock has much more to do with what the company is doing now and in the next five years let alone 20 or 90 years into the future.
Oil Co’s have been rebranding themselves as Energy Co’s. As alternative comes along that can displace oil they’ll switch their tremendous resources of capital, production and brain power to that. That’s just not the case yet and likely will not be for another 20-50 years or more.

November 10, 2010 7:02 am

“If oil prices raise enough, the EROEI doesn’t mean as much since eventually it could even be worse then 1:1 and you could still make a profit since other energy sources will not go up as much in your scenario. Even if oil costs more energy to extract then it supplies, you can still make a profit if the market will bear it. Son in the end, if we never change, we could end up draining every oil field basically dry. ”
ERoEI isn’t about money, it’s about thermodynamics. Soon as it takes more energy to extract the energy you get from the deposit, you have run out of net energy. Society runs on net energy.
Second, it’s not possible to run a field dry. Oil is held in rock like a sponge. A typical field leaves from 40-60% of the oild behind, that is physically impossible to extract. Unconventional fields can leave as much as 90% of the oil in ground unable to be extracted.

November 10, 2010 7:11 am

Kirk W. Hanneman says:
The problem with studies like this is they only take into account what is today, and have a devil of a time figuring out what will be. The people doing the study can only work with what they know, but going out decades or centuries what they don’t know will, inevitably, be a much bigger factor than what they know now.

Yeah, the inherent unpredictability of the future.
Some people usually counter, “but that’s no excuse not to use what we know”.
Well, as you say, we know that the future unknowns are the far bigger factor. So let’s use that. Let’s imagine scenarios, imagine what if, but not treat any of it as if it is real.

Richard Sharpe
November 10, 2010 7:48 am

Neil Craig says on November 10, 2010 at 4:23 am

What a silly “report”. Unlimited nuclear power is already available any time society wants it. Bio-oil grown from algae will be available in quantity & cost matching conventional oil in 10 years so the surprsiingly specific 90 year forecasr is nonsense.

While I agree that the report was nonsense, because most prognostications are over optimistic in the sort term and under optimistic in the long term and the people making them have little understanding of the nature of “breakthroughs,” on what basis do you make the above claim (that I have bolded)?
I suspect you simply have no rational basis for making that claim and wonder if I should write you off as just another wanker?

Jose Suro
November 10, 2010 7:49 am

My Lord! Saying that investors and brokers can predict future events 100 years from now is even worse than saying that paleo scientists can predict the climate in the same span of time! Then these people grab this investment nonsense and tie to what? To how much oil is left? Please forgive them for they are ignorant of their sins……..

November 10, 2010 7:54 am

“Peak Oil” is no more truthful than “peak whale”. In a recent article on another blog, we are told that the break-even price for oil made from algae is now about $200 per barrel. With a little googling, we can find that the break-even price of oil made from converting coal is about $75. We can also find out that the company in Carthage, Missouri that made biodiesel from the waste of processing Butterball turkeys went bankrupt because the market price of oil was not high enough to cover its costs.
The truth is that we don’t burn crude oil, we burn refined products that are presently made from crude oil. What counts to the public is the price and availability of these refined products. “Peak Oil” is more often the means to further an agenda of energy stoicism. (notice how these folks relate to nuclear power). If left alone, the free market is perfectly capable of making the transition from providing fuel products for our needs no matter what the source of hydrocarbons. When whale oil got too expensive, the transition to other sources was peaceful, orderly and did not require government intrusion nor compulsion.
The truth about our planet is that we are awash in hydrocarbons that can be converted into fuels. We are also awash in nuclear fuels, particularly thorium, that can be used to generate power. I look forward to ongoing innovation and adaption to supply the energy needs of all of humanity, which the free market can do where government will allow it.

November 10, 2010 8:09 am

I recall way back when I was about to graduate with a BS in ChE: I was advised to stay out of the O&G business, as there was only fifty years of oil left in the ground. Lemme see: that was back in 1952, so we must have pumped dry eight years ago.
Cassandras have always been around. And wrong.

Alan F
November 10, 2010 8:10 am

In Saskatchewan we have known oil reserves below the Potash layer and until that resource is depleted, none of that oil will flow. I’m doubtful any prediction of shortages takes this and all the other “off the table, for now” known fields. So is Big Green now pitching better panic profits for Big Oil? Nice to know that they are at least playing together.

November 10, 2010 9:09 am

Dr Chaos says:
November 10, 2010 at 3:07 am
You’re welcome. My logic bone has been itchin’ since I was about 12 years old. I remember I had a textbook called “Our Environment and the Living Things in It” as our science curriculum in Middle School. I practically memorized that book, and it contributed immensely to sparking my 40 year career as a life scientist.
To show evolution in action and on display, the book showed pictures of a petrified forest in California. It had layer upon layer of trees, the bank that contained them exposed from an earthquake in the near past that were “fossilized” (they meant mineralized, of course). You could see about 8 layers of trees in the photo, separated by layers of strata. The sign placed by the National Park Service was displayed in front of the trees—it read “Petrified Forest: Millions of Years of Evolution”.
Each tree stood upright in place, like an 8-story building. Each tree was approximately the same size. The page-long explanation was that this petrified forest represented countless millions of years of “evolution”, where successive forests were buried and replaced, the earlier one becoming petrified.
I never forgot that…my logic bone said, “Does Not Compute!” How could a tree remain intact while millions of years slowly covered it? Where were the stumps, or just roots? Why were the trees transfixed across layers of strata? Why did not any of them fall over? “Curiouser and curiouser”, exclaimed Alice…
I did not think consciously about this until some creation scientists had an hypothesis: they decided to look at tree rings. Lo and behold, all of the trees had the same tree rings, no matter what layer they represented! They were all among the same forest, according to these people! The result was not published widely, of course, the hypothesis ignored, and the “millions of years” sign remained.
Then Mt. St. Helens erupted. It turns out that when the trees were blown into the nearby lake, which was made into a mud slurry by the event, the trees floated until they were waterlogged. Since they were root heavy, with the center of mass in the roots, assisted by rock ballast, the trees slowly sank, but at different times over a couple of years.
As they sank, they imbedded in the mud. Upright. The silt and mud sank, and stratified around the trees. The silt continued to settle and more trees, now higher and higher, climbing the mud strata, covering each tree in turn. The trees are partially “petrified” now, having been absorbing the mineralization over time.
The sign, declaring “millions of years of evolution” in the petrified forest of California is gone now, having been quietly removed, without explanation, I’m guessing.
“Our Environment and the Living Things In It” has helped foster my healthy skepticism over the years. I wish I could find a copy of that book, circa 1959 or so. I turned out to be a pretty good scientist, inventing lots of stuff, so I am grateful. I also discovered that much of what was in that book was totally wrong.
The moral of the story is “Question everything—Use your ‘Spider-Sense’ to form hypotheses—Experiment—Look again—Listen to alternative explanations. In so doing, QUELL your curiosity.
Because everything you’ve been told may be wrong!

Richard Sharpe
November 10, 2010 10:48 am

Looks like we might be in for some peak food scares too.

kadaka (KD Knoebel)
November 10, 2010 11:34 am

From Kum Dollison on November 9, 2010 at 11:10 pm:

1) Oil hit $147.00/barrel in 2008, and crashed the global economy.

Actually the crash came from underlying weaknesses. Didn’t you hear about the mortgage crisis? People with marginal finances got homes. Then gasoline prices rocketed up. Those who drove long commutes were hit hard. A few were actually losing money by keeping a job (figuring in day care expenses along with transportation, etc). More figured out they’d have more money on hand collecting unemployment and staying home, I heard of a few who volunteered to be laid off first. Then there were the higher home energy costs. Mortgages didn’t get paid, foreclosures went up… And the housing bubble didn’t burst, it exploded, as it was formed from the smelly gas coming from a rotting mass that shouldn’t have been allowed to form from the start.
And with the mortgage crisis, plus other exposed weaknesses, the US economy went down, the world economies went down as demand collapsed, etc.
The oil prices triggered it, but it was inevitable it would have happened sometime. Before it blew up, analysts were saying the market could bear the higher prices, and we were headed to $4 a gallon gas and $200 a barrel crude looked possible to likely.
Meanwhile, assorted Green activists and politicians were (and still are?) pointing to how well US drivers bore those higher prices for so long as proof we can withstand a $1 a gallon tax to fund Green projects and more social spending while reducing consumption to reduce carbon emissions….

2) We don’t have any more oil now than we had then.

In the ground, we actually have less since we’ve been pumping it out. But we have discovered more of it, drilled more wells, done more research on extracting it from pump-able and non-pump-able sources (shale, tar sands etc). We’re making it from coal and other sources (Fischer-Tropsch etc).
In real terms of the amount of oil available to us for immediate use, we have more now than we did fifty years ago, may have more in the future than we do now, might even have more now than we did in 2008.
Less in the ground, sure. But as technology moves on, we may end up “creating” more oil and oil products than was ever in the ground. It’s possible, and getting more possible all the time.

November 10, 2010 11:53 am

Charles Higley says:
November 9, 2010 at 9:26 am
“With our…technology exploding logarithmically…”
Why does it mean to explode logarithmically? Are you down on our technology?

Kum Dollison
November 10, 2010 12:48 pm

The fact is: oil has, basically, doubled in price since 2005, and we can’t pump a drop more now than we could then.
The DOD “Joint Operations Environment” Report says we’re in deep doo-doo. The German Military says the same. Both the EIA, and the IEA state that the only way we can keep production at current levels is by utilizing “Undiscovered” Fields. “Undiscovered!”
It takes Years from “discovery” to “Pumping.” We know what’s coming in the next few years. Not enough.
Take “Reserves” with a grain of salt. It was 1989, I think, that OPEC decided to base “quotas” on “proven reserves.” Within two years all OPEC Nations had “Doubled” their “proven” reserves.
Last month the USGS lowered its estimate of “proven” reserves in the National Petroleum Reserve – Alaska from 10 Billion Barrels to 1 Billion Barrels. A -90% revision.

November 10, 2010 1:41 pm

Oil producing countries could be pumping a hell of a lot more oil than they are — otherwise why does OPEC go through all the motions of meeting regularly to enforce and update its production quotas?
The danger to OPEC is pumping too much oil, so as to reduce the price below desired levels. The history of “crash and burn” of oil prices due to over-production goes all the way back to the mid 1800s. Modern oil producers have learned a lesson from all those boom-bust cycles.
It comes down to basic economics, which is neglected in almost every student’s education these days. Producers restrain production in a cartel, in order to maintain higher prices.
Demand is what is peaking, not supply. The assumption of exponential increase in demand for the indefinite future is faulty. It is the weakest of many weak links in the peak oil doomers’ arguments.

November 10, 2010 2:04 pm

All I can say is that there must have been a butt-load more dinosaurs on the earth than my Science teacher let on…

Smoking Frog
November 10, 2010 6:40 pm

Al Fin 10/10/2010 1:41 PM Oil producing countries could be pumping a hell of a lot more oil than they are — otherwise why does OPEC go through all the motions of meeting regularly to enforce and update its production quotas?
Because, when demand doesn’t change much with price, a small mismatch between supply and demand creates a big difference of price. There’s no necessary implication “could be pumping a hell of a lot more oil.”

November 10, 2010 9:25 pm

Myth: The World is Running Out of Oil (Video) (5min) (ABC News)

Tilo Reber
November 10, 2010 10:09 pm

“As a result, market forecasts of future events, representing consensus predictions of a large number of investors, tend to be relatively accurate.”
I’m an investor. This is not true beyond roughly six month. And even to six month it is dicey. If you think that it is true, take your money and buy stocks according to the consensus predictions. If you are right, you’ll make far more money that way than you will writing papers at UC Davis. Do you know why Warren Buffett buys Coke and Sees Candy instead of high tech. Because high tech is too hard to understand, making it too hard to predict.

November 11, 2010 1:27 am

Oh geez… They market has voted “it’s junk” on the alternatives because they are not CHEAP enough to compete with oil, so these folks then use that to say that they are technically deficient? They are not technically deficient at all. They are fully “ready to roll out” and highly developed (see South Africa where they make their oil from coal and Brazil where they make alcohol fuel from sugarcane). And whenever oil starts to run LOW (it never does run OUT) the price will rise and alternatives will be used (provided dumb politicians have not so bollixed up the market so as to kill it…)
At present, a “depleted” field still has about 1/2 the oil in the ground. We never ‘run out’ because we could always get some more out at a high enough price. (And that whole Energy ROI thing is just bogus. We could use nuclear electricity to raise the oil if it made economic sense to use if for fuel rather than change batteries).
On the issue of markets being such good predictors. There is an old saying that traders know and academics don’t seem to remember: “Markets can stay irrational longer than you can stay solvent”. The whole field of Value Investing is based on taking advantage of longer term market irrationalities. The “Efficient Market Hypothesis” is simply wrong, but taught as God’s Own Truth in schools. Existence proofs of it being wrong are legion. Like every successful trader out there…
BTW, the world tends to have a constant number of years of reserves left (and has since at least 1919 – I’ve got a petroleum engineering book from then with the reserves quote in it of ’50 years’…) due to the price setting the point at which oil is held to be a ‘reserve’. If you get more than that, prices drop and some ‘goes away’.
There is no oil crisis. There is no energy crisis. There are a bunch of very stupid folks running the government and stupider folks panicking over nothing.
We can turn TRASH into oil products at about $3 / gallon. There is no shortage of trash. But bulk gasoline sells for $2 / gallon. So our trash mountains do not count as “reserves”… Yet.

November 11, 2010 8:28 am

This is for the “OMG we’re running out of hydrocarbon energy!” mob:
From: The Times November 10, 2010
Robin Pagnamenta, Energy Editor
A glut in global supplies of natural gas over the next decade threatens to blunt investment in alternative sources of energy including wind, nuclear and solar power, the International Energy Agency said yesterday.
Speaking at the launch of the IEA’s annual World Energy Outlook report, Fatih Birol, its chief economist, said that the world was entering a “golden age of gas” because of surging production of shale gas using new technology developed in the United States. He said that the IEA, the Paris-based agency that advises the Organisation for Economic Co-operation and Development on oil and energy issues, was now predicting a global surplus of the fuel of about 150 billion cubic metres annually in the years ahead.
That’s equivalent to nearly double Britain’s annual gas consumption of 86 billion cubic metres, or 5% of world demand – 2,940 billion cubic metres.

Vincent Lee
November 11, 2010 11:00 am

Peak Oil seems to reside next to the pot-o-gold that the leprachaun keeps an eye on.

Wolf Wolf
November 11, 2010 10:14 pm

We are going to run out of oil at about the same time that the earth ceases to exist.
This is more of the little boy crying wolf… too many times!
The Fission reaction at the earth’s core seems to be a major factor in replenishing the supply of the ‘fossil fuel we call oil’ – hence the name abiotic – NOT a fossil fuel – we are NOT running out of it!

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