Via press release: a forecast study of investor patterns from UC Davis.
Stock prices suggest a 90-year gap
At the current pace of research and development, global oil will run out 90 years before replacement technologies are ready, says a new University of California, Davis, study based on stock market expectations.
The forecast was published online Monday (Nov. 8) in the journal Environmental Science & Technology. It is based on the theory that long-term investors are good predictors of whether and when new energy technologies will become commonplace.
“Our results suggest it will take a long time before renewable replacement fuels can be self-sustaining, at least from a market perspective,” said study author Debbie Niemeier, a UC Davis professor of civil and environmental engineering.
Niemeier and co-author Nataliya Malyshkina, a UC Davis postdoctoral researcher, set out to create a new tool that would help policymakers set realistic targets for environmental sustainability and evaluate the progress made toward those goals.
Two key elements of the new theory are market capitalizations (based on stock share prices) and dividends of publicly owned oil companies and alternative-energy companies. Other analysts have previously used similar equations to predict events in finance, politics and sports.
“Sophisticated investors tend to put considerable effort into collecting, processing and understanding information relevant to the future cash flows paid by securities,” said Malyshkina. “As a result, market forecasts of future events, representing consensus predictions of a large number of investors, tend to be relatively accurate.”
Niemeier said the new study’s findings are a warning that current renewable-fuel targets are not ambitious enough to prevent harm to society, economic development and natural ecosystems.
“We need stronger policy impetus to push the development of these alternative replacement technologies along,” she said.
Additional information:
Full text of study, “Future Sustainability Forecasting by Exchange Markets” — http://pubs.acs.org/journal/esthag (paywall)
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.
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. http://www.worldcoal.org/home/”
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.
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
http://www.eia.doe.gov/ipm/supply.html click on 4.4
“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.
with the exception of 2008
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.
Which if it holds up is a pretty good prediction from 1956 52 years vs “about half a century”
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…
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?
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.
Years ago, a lot of sophisticated investors thought railroads were a good investment too.
@Karl Horrex 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.
“”””” DesertYote says:
November 9, 2010 at 1:25 pm
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Jim G says:
November 9, 2010 at 12:57 pm
“Davis was never, and still ain’t, Cal Tech.”
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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.
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.
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.
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 theoildrum.com a lot. Too much. And they all LOVE Jim Hansen over there. Ipso facto, peak oil is BS!
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hstad says:
November 9, 2010 at 1:41 pm
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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.
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.
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.]
“”””” Jim says:
November 9, 2010 at 12:52 pm
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George E. Smith says:
November 9, 2010 at 12:04 pm
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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 !
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.
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 ?
The Russian references to abiotic oil are the best – the US work is derived from them.
There are some good articles – in English! http://www.scribd.com/doc/8226835/The-modern-theory-of-abiotic-genesis-of-hydrocarbons-Experimental-confirmation (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!
http://www.esa.int/esaSC/SEMCSUUHJCF_index_0.html
@ur momisugly 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!
This is on target with my new book. It’s called “Everything you wanted to know about phobias but were afraid to ask”.