Guest post by David Archibald
When I posted on peak oil’s effect on agricultural costs and food security, some comments questioned the idea of peak oil. What follows is a summary of the subject. We will start with what is considered to be the most successful economic forecast ever made – the prediction in March 1956 by King Hubbert of the Shell Oil Company that US oil production would peak in 1970. This was in a paper entitled “Nuclear Energy and the Fossil Fuels” presented at the Spring meeting of the American Petroleum Institute in San Antonio, Texas. The paper’s title reflects Hubbert’s view that nuclear power would have to replace fossil fuels on the latter’s exhaustion. The view hasn’t changed, but the replacement need has become urgent.
Figure 1: Logistic Decline Plot for the United States
Source: Al-Husseini 2006
Figure 1 shows the basis for Hubbert’s prediction. This is a logistic decline plot of annual production divided by cumulative production to that year against cumulative production. His original analysis anticipated that Lower 48 crude production would peak at 2.8 -3.0 billion barrels between 1966 and 1971 and then enter an irreversible decline. Production in the lower 48 actually peaked at 3.4 billion barrels in 1970. Under Hubbert’s original forecast of ultimate potential of 200 billion barrels in his 1965 assessment, 1991 crude oil output was projected to be 1.9 billion barrels. Actual 1991 production was, in fact, 2.0 billion barrels – a modest variation from Hubbert’s prediction made 35 years earlier (Smith and Lidsky 1993).
Figure 2: Logistic growth curve for US crude oil production
This figure is from Nashawi et. al. 2010. The blue line is the modeled projection to 2070. The purple line is cumulative production to 2008. The US has burnt through 84% of its original oil endowment.
Figure 3: World oil discovery by year
Source: Al-Husseini 2006
Figure 3 shows that oil discovery peaked fifty years ago in the early 1960s. Based on the well-established trend, not much hope can be held for positive departure from the forecast discovery profile.
Having shown how powerful Hubbert-style analysis is forecasting production, let’s go on to look at what the global oil production profile looks like.
Figure 4: Logistic Decline Plot for Global Oil Production
As Figure 4 shows, the world had consumed half of its original oil endowment by 2005. 2005 was the year that global oil production peaked. According to Hubbert theory, we will have a few years of near-peak production before the steep decline down the right hand side of the bell-shaped curve begins.
Figure 5: A 2004 estimate of the Global Oil Production Decline
Source of figure: Al-Husseini 2006
I have included Figure 5 because it covers a 120 year span and it has been accurate for production over the last seven years since it was published.
Figure 6: World Oil Production 1965 – 2030
This is another way of looking at the coming decline which will be 1.5 million barrels/day/year. The decline will go on for about three decades at that rate before flattening out.
Figure 7: Logistic growth curve for Non-Opec oil production
Source: Nashawi et. al. 2010
Discussion of oil prices and the tightening oil market tends to concentrate on just how much spare capacity Saudi Arabia has. As Figure 7 shows, whatever swing capacity Saudi Arabia has will soon be overtaken by events. The big story is Non-Opec production, which will almost halve by the end of this decade.
Figure 8: Oil price 1990 – 2016
Modelling the oil price in a tightening market is difficult because of the dampening effect on consumption of the increasing price. Plotted logarithmically, the oil price chart itself may reflect that effect and thus might be used as a predictive tool. What it shows is that the oil price is constrained by a parallel uptrend channel rising at 15.6% per annum. The current UK retail price for gasoline is indicated on the chart to show that civilisation, of a sort, can continue at very high oil prices.
Table 1: Oil price forecast by year and the concomitant effect on agricultural operating costs.
Table 1 shows how the oil price rise derived from the established trend in Figure 8 translates through to price per US gallon and agricultural operating costs relative to the 2009 level. There will be a severe departure from what Michelle Bachman has promised to achieve.
Figure 9: Energy-related inputs relative to total operating expenses, 2007-08 average
From: Sands and Westcott 2011
Based on the USDA figures and recalculating for the $200 per barrel oil price expected in 2014, wheat and corn operating costs will be 60% higher in 2014.
In 2009, the Chief Economist of the International Energy Agency, Fatih Birol, said that “we have to leave oil before oil leaves us.” Only one country is doing that, and of course it is the same country that is proceeding to commercialise the molten salt, thorium-burning nuclear reactor – China.
Figure 10: Chinese oil production, imports and coal-to-liquids production
This figure shows Chinese domestic oil production, imports and a projection of coal-to-liquids production assuming that demand follows its established trajectory.
China currently has three Fischer-Tropsch coal-to-liquids (CTL) plants and one liquefaction plant commissioned with a further three Fischer-Tropsch plants under construction. Total planned production from those seven plants is in excess of 600,000 BOPD. A journal earlier this year reported that “Chinese CTL investors will pay active efforts in preliminary works for mega size CTL projects starting from 2011 and may realise commissioning of such projects before the year 2015”. By comparison, in the United States, Section 526 of the Energy Security and Independence Act of 2007 blocks the Department of Defense from using CTL fuels because the life cycle greenhouse gas (GHG) emissions from those fuels would be much larger than the GHG emissions from conventional petroleum.
The economic effect of continuously rising oil prices will be to continuously cause economic contraction.
Table 2: Compilation of studies on the Oil Price – US GDP Effect
Source: Sauter and Awerbuch 2003
At the 1.5% average estimate of growth decrease per 10% oil price increase, the 15.6% per annum oil price rise expected over the next few years will shrink the US economy at 2.2% per annum. The fastest way to reduce this effect would be to install CTL capacity in the US. To replace all of the US’ oil imports with home-grown CTL would take more coal than is currently burnt in US power stations. It follows that what is also needed is a good, safe nuclear technology to replace coal in power generation, bearing out Hubbert’s observation of fifty-five years ago.
References
Al-Husseini, M., The Debate over Hubbert’s Peak: a review”, GeoArabia, Vol. 11, No. 2, 2006
Nashawi, I.S,, Malallah, A. and Al Bisharah, M., Forecasting World Crude Oil Production Using Multicyclic Hubbert Model, Energy Fuels, American Chemical Society 2010
Smith, A.L. and Lidsky, B.J., 1993, King Hubbert’s analysis revisited: Update of the
Lower 48 oil and gas resource base, The Leading Edge, November 1993
Sands, R. and Westcott, P., Impacts of Higher Energy Prices on Agriculture and Rural Economies, United States Department of Agriculture, Economic Research Report Number 123, 2011
Sauter, R. and Awerbuch, S., Oil Price Volatility and Economic Activity: A Survey and Literature Review, IEA Research Paper, August 2003.
October 2011
Jeff L,
Here is the Woods Mackenzie report on US Supply Economics 2012 – 2030.
Their conclusion is:
Wood Mackenzie’s analysis found that U.S. policies which encourage the development of new and existing resources could, by 2030, increase domestic oil and natural gas production by over 10 million boed, support an additional 1.4 million jobs, and raise over $800 billion of cumulative additional government revenue.
http://www.api.org/Newsroom/upload/API-US_Supply_Economic_Forecast.pdf
The report is 57 pages and was released in Sept 2011.
Max Hugoson: Input? I didn’t not observe the elments of that directly, but I understood it involved a standard watt meter/watt hour device.
Indeed. The device can be started with a battery bank. It doesn’t need a grid connection at all. The batteries can be recharged from a generator powered by a Stirling engine, with excess electricity used to power a lot of appliances like water pumps. air conditioners, Jaccuzzis and so forth. They could have done this 6 months ago, and there would be no doubt that the device worked.
Other people have created similarly designed devices that unambiguously generate ~2 watts. Rossi claims that his “catalyst” enables the device to produce ~100 times that amount. If he is correct, he could have had a protoype in a kitchen running appliances for the last half year. It would not be hard to end all scepticism.
Maybe Rossi’s device will produce useable power, but he has avoided doing so. If he does, I’ll believe in the device.
Why is this not more self-evident to more ppl?
If the above quoted section is not true, cam someone please provide some insight was to why not? (Perhaps the CO2 was ‘locked’ within compounds within the world’s liquids/oceans?)
.
Why not let a real oil giant weigh in? Here is a link to a 2007 speech by:
Abdallah S. Jum‘ah, President & Chief Executive Officer, Saudi Aramco. His remarks were made at the Third OPEC International Seminar Vienna, September 12-13, 2006.
The money quote is “…we are looking at more than four and a half trillion barrels of potentially recoverable oil. That number translates into more than 140 years of supply at today’s current rate of consumption. To put it another way, the world has only consumed about 18 percent of its conventional and non-conventional producible potential*, even leaving aside oil shale potential.”
http://www.opec.org/opec_web/static_files_project/media/downloads/press_room/Abdallah_Jumah.pdf
Now it is certainly possible that Mr. Jum’ah was trying to be political with the members of OPEC, but to what end? It seems to be an honest assessment of world oil reserves, both conventional and unconventional, as seen by Saudi Aramco engineers and geologists.
For a fuller treatment, Bill Kovorik’s site at http://www.radford.edu/~wkovarik/oil/, provides a well referenced view of the subject of oil reserves, both proven and unproven, conventional and unconventional.
pbh
http://online.wsj.com/article/SB10001424052970204226204576602524023932438.html
Peak oil is a hoax, if oil is really running out, why do the Saudis cut supply?
http://allafrica.com/stories/200906020555.html
Your entire premise just doesn’t hold up. We’re not short of oil reserves, that’s the point you’re missing. The supply of oil available on the market is an entirely different thing.
Consider – Why are diamonds so expensive? They really aren’t that rare. The supply of diamonds, like oil, is controlled by a cartel. Why would OPEC want to flood the market with an oversupply of oil?
As for hand-waving about solutions, get the government and the environmental watermelons out of the way and we will produce more oil. We don’t need central planning to make it happen, we need less central planning to make it happen. Allow the free market to work. The oil companies know how to produce more oil.
Call this Economics 101, day 2.
I am aware that we can’t outproduce OPEC. In the past, when OPEC’s domination is threatened, they have increased supply so as to put the threat out of business. Still, we can increase our domestic supply and production and move some of our oil use to LNG.
Peak Oil is just a bunch of hand-waving, based upon a specious argument that oil production and oil reserves are the same thing. They are not.
Dave
No offense, but I see some key problems with the analysis presented above
Background: Former oil field engineer (Halliburton Services) & chemical engineer with background: agricultural chemical production R&D (fertilizers), fertilizer economic analysis/price projections, coal gasification R&D, and electrical production (strategic planning).
Key problems with the analysis are:
1) The U.S. peak oil chart (Figure 2) fails to account for oil reserves the U.S. failed to tap due to political considerations. Had we tapped those reserves the chart would look quite different.
2) Hubbert-like charts, like the World peak chart in Figure 3, tend to underestimate the amount of untapped reserves out there. In large part because, in the 1960s, it was believed that oil was entirely fossil derived. There is considerable evidence that this is not the case. Consequently, finds are being made in places oil is not supposed to be.
3) The U.S. Department of Energy’s is very conservative in its estimates of world reserves. Private companies know that there is a lot more crude oil out there than the DOE figures suggest. When one talks to industry experts, privately, one comes away with an entirely different picture. (No criticism of the DOE. Conservatism is a good think when doing strategic planning – for say defense purposes)
4) Hubbert-like evaluations are of no value whatsoever in projecting the discovery, use, and depletion of alternate oil sources such as: coal, shale, and tar sands. And the current shale gas boom shows just how fragile the Hubbert assumption is when directed to non-crude resources in similar formations.
5) When considering sources for transportation fuels, one has to consider the break point of alternate oil sources. The break-even point for coal is about $100/barrel. This is a major reason U.S. crude oil prices don’t tend to stay high for too long. With a 400 year supply of coal, the U.S. can produce a lot of coal-derived oil. The break-even point for tar sands is much lower. Consequently, I don’t think should one should get overly exercised about crude-oil field depletion projections.
6) Contrary to popular opinion, it matters not one whit how much energy is needed to get economic value out of a transport fuel. The value of transport fuels is in the ability to facilitate transportation. (i.e. the value is not in the heat produced).
7) The analysis showing the linkage of agricultural price to crude-oil prices look wildly out of date. Specifically, the analysis operates on the long-established assumption that natural gas prices will track with the price of oil. This was a safe assuumption until recently. However, in the new age of abundant shale gas, it looks like the oil/gas linkage may well have been broken. Simply put, the price of natural gas appears to have de-linked from the price of oil. In practical terms, you can see this by the recent renaissance in U.S. ammonia production (which uses natural gas as a feedstock). Since the majority of agriculture energy usage is in fertilizer…well you can see the implications.
I appreciate your analysis, I just don’t happen to agree.
Regards,
Kforestcat
This is utter nonsense. First, Hubbert also predicted that the peak would be reached in the 50s, 60s, and 80s. Second the world can never run out of petrochemicals because burning them changes a few valence bonds, but destroys nothing.
And, most obviously, known reserves have increased in every year for which records exist – what has changed is the set of conditions, regulatory and economic, under which we access those reserves. “Recoverable reserves” have therefore fallen off a bit – but because of government rules, not because the oil isn’t there or isn’t reachable.
There will be a peak, but I believe the calculations are early. I believe they are for conventional oil. The shale gas boom is simply amazing. Out in gas country the land looks like a porcupine with all the rigs. The big problem is moving it, we have so much. Producers are currently cut back. NGLs are certainly limited. All those condensates and butane can easily end up in the gasoline pool. The shale oil boom is just getting started, and it is amazing. Eagle Ford is HUGE, and we all know about Bakken. Alaska hasn’t even been tapped, nor the Rockies. We also have the oil/tar sands. The big one will be Venezuela, but Chavez currently has that screwed up. And Ven also has enormous gas deposits, I mean enormous, that are not being tapped due to political risk. Colombia has huge deposits, but they are in very remote areas. Still $100/bbl will get the infrastructure built. And what about other countries? We also have the oil companies tacitly admitting that abiotic theory is correct, pulling up oil at over 30,000 feet, outside the “hydrocarbon window” in the Gulf. Now some peak oil buffs think abiotic oil is wishful thinking. However, abiotic oil will still “peak”, when we hit the natural seep rate from the mantle. Anyhow, peak oil is a ways off. I think we need a government that gets us off of oil eventually. Just opening up Yucca mountain would be a big step. From what I’ve read, liquid salt Thorium is very promising technology. But who wants to invest the money with Obama in office?
Kforestcat says:
October 28, 2011 at 1:26 pm
Dave
No offense, but I see some key problems with the analysis presented above….
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Thank you very much for the analysis. It is what I love about this site. – “Insider information”
Lately the price of hay and livestock feed has been tracking the at pump price of fuel. When it doubled the costs also doubled. This does not always translate into a higher cost of food in the store (doubling) because farmers are often forced to “eat the cost” due to the problem of just one buyer.
This “elasticity” has a long term down side. Over 50% of US farmers lose an average of $15,000 per year farming. 90% have off site jobs that cover that loss. The average age of US farmers is about 55. Sooner or later (I think sooner) the independents who are holding the food prices artificially low are going to be forced out. When that happens the economic dynamics becomes an entirely different ball game. This is especially dangerous because of the consolidation and vertical integration within the food cartel. Generally you are talking between four to ten players within each sector and no more.
I think Dave is certainly correct to worry about our food supply but the major problems are The Global Land Grab combined with coldly calculated Over Regulation and Food Speculation where grain contracts are turned into “derivatives” If this sounds familiar it is what happen in the US housing market with some of the same players (See: http://www.guardian.co.uk/business/2011/may/06/goldman-sachs-set-contentious-agm)
This is going to cause sky rocketing food prices all over the world well before anything like “peak oil” or “climate Change” gets a chance to kick in.
I have been following this with mounting horror for several years.
If you set that EIA Databrowser on “Crude + Condensate” (oil,) and not on “total” (which gives oil, plus Ethanol, Natural gas liquids, refinery gain, etc,) you will find that Global production has increased by 0.0068 (call it seven tenths of one percent) since 2005, while price has essentially, I guess, Tripled.
http://www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=50&pid=57&aid=1&cid=ww,&syid=2005&eyid=2011&freq=M&unit=TBPD
Lessee, Price has Tripled, and Production is up 0.7%.
What were you all saying about “Supply, Demand, Economics, yada, yada?”
Of course we’re at “Peak Oil.” Are you dummies out of your cotton-picking minds?
I’m, seriously, starting to doubt the “Skeptical” side of the AGW argument, now. I’ve been giving you people a lot of slack, but now I’m really starting to wonder.
@Dave Springer says: October 28, 2011 at 4:57 am and October 27, 2011 at 11:57 pm
and
I’m not sure I’d be talking about who hasn’t a clue, Dave. EBR II, Idaho Nuclear Engineering Laboraory, ran with liquid sodium coolant for 30 years. http://en.wikipedia.org/wiki/Experimental_Breeder_Reactor_II Hardly a case for “insurmountable engineering difficulties.”
Engineering issues MIGHT exist for a different type of reactor – e.g., not a molten salt cooled reactor as you imply, but a very high temperature molten salt cooled reactor. You can find various papers about this, but here’s the first I ran across: http://arss.ornl.gov/reactor_design/icapp_2005_fast_reactor_Paper.pdf Even here, it’s not presented as anything close to ‘insurmountable engineering difficulties” but rather that testing is needed to verify that various alloys under consideration will work safely and to determine which are the best options. High temperature Brayton cycle designs increase the efficiency, but aren’t necessary for a thorium reactor.
Meanwhile, misposting links doesn’t indicate that someone doesn’t know what they’re talking about wrt to a particular issue, just that they made a mistake in how they posted links. Frankly, you claim two of his links don’t work and the third doesn’t talk about a particular aspect – for me, his first link worked fine. The third didn’t, yet you imply it was the only link working. Even so, I did a simple search of theregister on thorium and easily found the article: http://www.theregister.co.uk/2011/02/01/china_thorium_bet/
I don’t see anywhere in William’s post where he claims all three links discuss thorium use in CANDU reactors. None the less, the fact is that they have developed one: http://www.world-nuclear.org/info/default.aspx?id=528&terms=candu%20AND%20thorium Scroll about halfway down the page to “heavy water reactors.”
Jack H Barnes says:
October 28, 2011 at 12:50 pm
Jack,
Interesting read. I guess you don’t find any of this slightly political. Call me cynical, but Woodmac is hardly a unbiased 3rd party. They make money by doing O&G deals. So, they put out a release like this saying we are going to create heaps of jobs , make all these tax revenues & free ourselves from oil imports. All sounds good, especialy given the current crappy economy. If they are lucky, some of it sticks & the politicians ease restrictions & they end up doing more deals. Don’t get me wrong – I do hope it has that effect – I would love to see greater access, but I think it is important to understand the source of the analysis.
Look at some of the data. Atlantic OCS production to 1.5 MMBOED. The wells drilled to date have been anything but encouraging & modern seismic data analysis (ie offset data) has not given any encouragement that there are significant reserves out there. 1.5 MMBOED from ANWR – hmmmm …. maybe if it is mostly gas. Having worked these areas, it is my opinion that these numbers are wildly optimistic. I have no reason to believe the rest of their #s aren’t also wildly optimistic.
The other key for you (or anyone else reading the report ) to understand is these production rates are projected to 2030 – 19 years from now. What’s the rest of the world going to do decline-wise?? How about just 2%, which, since I assume you are in the business, you know is a very optimistic assumption. The current ~ 80 MMBOPD being produced outside the US drops to 53.4 MMBOPD. Add in that additions 7 MMBOPD (can’t add in the gas equivalent) from the US from complete deregulation and you are at ~ 60 MMBOED, unless the rest of the world has added another ~ 20 MMBOEPD in the mean time – just to stay flat – which would the equivalent of 10 times the peak production of Prudhoe Bay – which means finding a Prudhoe equivalent (on rate) every other year.
Jack, all I am saying is when you do the math, the task is daunting at best, if not impossible, to keep continue producing at ever increasing rates worldwide (with the definition of peak oil being that your rate peaks, then starts to decline). I could be wrong, but I am betting I am not.
Also understand that just because we have a peak, the rest of the alarmist hysteria does not necessarily follow. I don’t believe it will. It is important to separate the alarmism from the science.
Realize that lower 48 production produces heavy crude. Furthermore, labor costs have gone up and up over the past 50 years. Those factors combined with increasing enviro regs have resulted in fewer and fewer active exploration and extraction operations. The poster child is California, where we are literally leaving massive quantities of perfectly good oil in the ground, especially offshore. Well, the good news is, years from now, once the Green Religion has been discredited, smarter folks than current denizens will get back to work, and I reckon the US crude will be highly valued.
More Soylent Green! says:
October 28, 2011 at 1:22 pm
“Peak Oil is just a bunch of hand-waving, based upon a specious argument that oil production and oil reserves are the same thing. They are not.”
We can agree the idea that “oil production & oil reserves are not the same thing” on but it appears to me based on your comments that you think peak oil is a theory about reserves but it is a theory about production rate. What peaks is rate.
Have you looked an initial rates & decline curves for resources being developed today vs in the past ? If you make plots of these vs time , you will see that collectively (industry-wide) initial rates are trending lower & decline rates are getting steeper. Why is this? Because we are moving lower & lower on the resource triangle – ie all the low hanging fruit is basically gone. Thus, for an equivalent reserve today, it comes out slower initially & declines to lower rate faster. This gets to your point – because of this, even though we may have vast reserves, the rates from these reserves will never match the rates of fields from the past , high on the resource triangle. As such, with rates from these reserves being lower & declining faster, it becomes progressively harder to overcome the decline of all wells producing – resulting in a peak in your production profile. It’s just basic math that’s unavoidable.
I hope this helps your understanding of what the peak oil theory is all about.
In fact, if you go from July, 2005 to July 2011 Oil Production is DOWN 20,000 Barrels/Day.
And, btw, you all keep overlooking that little e, as in BOe. That little e means is’s a combination of oil, and nat gas; and nat gas ain’t oil. And, a lot of it in the “shale” plays is just being vented off, not collected (because there’s not going to be enough of it, long enough, to bother laying the pipeline to get it.)
I have no idea how you people can look at the price of oil almost tripling over a 6 yr period, leading to a drop in production, and not come to the conclusion that we’re probably pumping about as much on a daily basis as we’re ever going to. But, I would consider a nice, quiet room, and some serious contemplation might be in order.
Jeff L says:
October 28, 2011 at 12:19 pm
As someone who explores for oil for a living, I will be very interested in the SPECIFICS (no arm waving) of how the industry will accomplish it.
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As someone who also explores for oil for a living, and has found so much of it that I can sit back and watch the checks and consulting jobs roll in, I have no question that Jeff L is missing the big picture.
Liquids are always tough to find, There are many, many, Bakken and Eagle Ford type type plays available world wide. Here in the US, in some of the most peaked out, explored out places on the globe, production is soaring. Don’t compare Bakken and Eagle Ford to world wide demand without considering world wide potential, Take a look at a core of the Banuawati shale in Indonesia, or the La Luna of Venezuela for starters.
Gas is being found everywhere. For entertainment, google “peak gas”, or “Hubbert curve gas” and read some stuff a few years old. Recently 748 TRILLION cu feet were found in one field in Turkmenistan. Add that to the 40 TCF found offshore Mozambique, the western Australian gas, and all the shale gas you could ask for, Convert recently proven gas reserves to BOE and stick it on any of the figures in the article, and you see that all those curves and graphs are out of date and irrelevant. Conversion of cars to CNG (as all the buses in New Delhi already have), or electric, powered by gas fired power plants, will shift the demand from liquids to gas.
Who do you work for, Jeff L? How can a pessimist find anything?
RE: “I suspect when denominated in gold, the price is flat or declining.”
Bingo!
Doug says:
October 28, 2011 at 4:08 pm
“How can a pessimist find anything?”
Nice ad hom Doug. That really added a lot to the conversation.
I guess you missed the point though. I didn’t say there was nothing to find.
Best of luck in your consulting business.
As far as I can see, and I’m open to correction, peak oil had broad similarities to AGW. Just as there’s no physical mechanism for CO2 to cause runaway warming, similarly, there is no physical/chemical mechanism to turn highly oxidised waste matter/detritus into highly reduced/high chemical potential matter like hydrocarbons. If the fossil theory is true, surely it would be pretty easy to replicate in a lab? They can’t do it, but hydrocarbons can be made by pressurizing some fairly elemental compounds and heating them up. I was a dyed in the wool peak oil doomster until I read Thomas Gold’s book on it. It was like someone switching on a light. In fact it was a very similar feeling to when Climategate broke.
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MarkW says:
October 28, 2011 at 9:32 am
“However, absolute power corrupts absolutely, regardless of whether it resides in government or free market corporations.”
The problem with this analysis is that free market corporations can never achieve absolute power. Without govt stepping in to close a market, there will always be competitors waiting to take advantage of any mistakes (including over charging for product) that the big companies make.
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When you think about it, big companies are at a disadvantage. They have a few advantages.
1. The ability to BUY politicians and therefore political advantages like skewed regulations.
2. “Cheap” loans of fiat money from Fractional Reserve Banking.
3. Deep pockets – maybe
The disadvantage is a large unwieldy management system where “team playing” and “paper pushing” are valued over innovation. The need for documentation to bring order out of chaos. A need to please the “stockholders” (normally mutual fund managers) every quarter.
With smaller companies there is usually a direct line of communication between the owner and the customers and workers making a small company a lot more responsive. Since small companies are privately owned, long term plans can be made and implemented without worrying about “pleasing” the stockholders.
Here is an example of what I mean:
“Produce 13 to 14 times more patents per employee than large patenting firms. These patents are twice as likely as large firm patents to be among the one percent most cited.” http://www.smallbusinessnotes.com/small-business-resources/how-important-are-small-businesses-to-the-us-economy.html
Allowing monopolies or cartels to form is, in my opinion, a really bad idea in terms of the health of an economy.
“Peak whale oil” occurred sometime in the 1880s. It took huge government subsidies, punitive taxes, and rationing to enable our country to switch to other light sources.
NOT!!!
And the government has been predicting “no more oil in 20 years” since the first oil was produced.
When is the public going to wise up and stop believing people who stand to profit by having us believe the sky is about to fall?
…..Lessee, Price has Tripled, and Production is up 0.7%.
What were you all saying about “Supply, Demand, Economics, yada, yada?”
Of course we’re at “Peak Oil.” Are you dummies out of your cotton-picking minds?
I’m, seriously, starting to doubt the “Skeptical” side of the AGW argument, now. I’ve been giving you people a lot of slack, but now I’m really starting to wonder.
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Part of “economics” is the formation of “cartels” who set prices and stomping out competition. If you do not think all these people talk to each other and cooperate then what in heck do you think OPEC, WTO and the yearly Bilderberg Conference are about???
Since this is about food, also follow IPC– the International Food and Agricultural Trade Policy Council and its handy work the World Trade Organization Agreement on Agriculture.
The world DOES NOT have “Free Trade” it has trade dominated by a few very rich corporate cartels. If you are not part of those cartels you get squashed. I watched it happen to my old company. It took me years to figure out what actually happen and why and the truth will never be know except to a very very few. (It is too long and involved to get into here.)
Peak Oil is not about “no more oil,” or “running out of oil.”
It’s about reaching maximum “flow rate.”
From 2002 till 2005 Global Oil Prices increased, and Global Oil Production increased.
After 2005 Prices continued to rise, but Global Oil Production leveled out. Flatter’n a pancake.
This is called, “Peak Oil.” It is Not “Peak Ethanol,” or “Peak Nat Gas,” or “Peak Cow Patties.”
It is “Peak Oil.” The point at which “flow rates” flatten out, gasoline gets more expensive, and Recessions come, and go with greater frequency.
re: SteveE says: October 28, 2011 at 6:59 am
I believe we’re a long way away from the end of the ‘age of oil’ unless some revolutionary technical discovery is made. Others here have already metioned other resources along with shale oil, and I’ve posted this numerous times in various places: 2004 study for Fed. Gov: http://tinyurl.com/3r92rha
IIRC, basically says that the USA is the Saudi Arabia of shale oil, with over 2 Trillion in technically recoverable oil commercially competitive at about $80. Enough to cover ALL of America’s oil needs at 2004 levels of consumption for the next 100 years. Like anything else, ramping up takes some time and I suppose there could be some supply/demand mismatches over time, but I can’t see how we’ve got anything to worry about in terms of “peak oil.”
Unless it is to worry about government interferance causing huge problems – now THAT’S something that is already occurring in spades and has cost us dearly. That is well worth worrying, complaining, and trying to do something about – which primarily means contacting your state and federal representatives and complaining, and voting out of office those who keep further and further restricting our ability to use our own resources.
As to fusion – it’d be great, I’d love to see it happen – but frankly we’ve been “about 10 years away from commercial fusion power” according to some of the most optimistic best experts for about 50 decades now. Last I knew we’d only managed to sustain a fusion reaction for something like 6 seconds, and we’ve yet to reach “ignition” (the point at which the reaction produces more energy than is put in to start/maintain the reaction). Until that occurs, unfortunately fusion is still pie in the sky for all intents and purposes.