Conventional Wisdom, Unconventional Oil

Guest Post by Willis Eschenbach

There’s a discussion over at Judith Curry’s excellent blog, about peak oil. I find the whole madness surrounding peak oil to be one more example of our human love for warnings of future disaster. Few people want to hear that tomorrow will be OK, that things will work out. Instead, most folks want to hear some terrible story about what tomorrow holds, whether it’s peak oil or climate meltdown or the coming ice age. Go figure.

conventional oilFigure 1. Conventional oil leaking out of the ground near McKittrick, CA.

One part of the discussion of peak oil that has always bothered me is the division of oil into “conventional oil” and “unconventional oil”. Here’s why I think that division makes no sense with regards to peak oil.

I’ve lived through much of the whole peak oil deal, which near as I can tell has turned into a half-century-long goat roping contest. During the earlier years, people were shouting that the oil would run out, that the top would be very soon now, we’d hit the peak and by gosh, at that point things would turn ugly. Of course, that still hasn’t happened, so the peak oilers were left with the question pondered by failed doomcasters throughout history, viz:

How the heck do I explain the cratering of my position and still maintain some shred of my reputation?

For the peak oil folks, salvation came in the form of “unconventional oil”. Now, we’re assured, oil is still running out, so they were right all along … You see, they say, King Hubbert was right, we’re running out of conventional oil, but as it runs out it is being seamlessly replaced by “unconventional oil”, so we still have oil even though we’re running out of oil. Got it?

The strange part is, when you open a barrel of unconventional oil to see what conventions were broken in its creation, you find it is indistinguishable from conventional oil.

What is unconventional oil? Well, we could start by considering the conventions regarding oil. For literally billions of years the convention was that oil was found in small pools and seeps like you see in Figure 1. Indeed, the discovery of oil in Oil Creek, Pennsylvania, the site of the first US oil well, came about because oil had been seeping out there for untold centuries, and had been known and utilized by the Early Asian Immigrants in the area before the later arrival of the melanin-deficient crowd.

So conventional oil, by ancient hallowed convention handed down through the millennia, is found in tar pits and oil seeps on the surface. Which means that people being so rash as to drill for oil, by definition, would be pumping up “unconventional oil” … but of course, life is not that simple.

As a result, “conventional oil” is not from the conventional method of dipping it up in a bucket from a seep, but by the decidedly unconventional and at that time unheard of method of drilling a hole in the earth to get it to come out …

Things went along just fine like that for years. Then “secondary recovery” methods started to come into use. These were a variety of physical and chemical methods used to squeeze more oil out of existing fields, including fracturing the rock to allow the oil to come out more easily.

Now, about this time, the whole “peak oil” story started to go south, because no matter how much peak oilers howled there was more oil discovered every year. Every year the proved reserves just kept growing. And that process has continued to this very day, with more proved reserves than ever. How were the peak oilers to explain it? Hey, “unconventional oil” to the rescue!

oil will peak in 2012

For example, thinner oils were “conventional”, but thicker, more tarry deposits, despite having been utilized by humans for centuries, were “unconventional” oil, so they weren’t counted regarding the peak.

The real laugher, however, the place where you can see the gears stripping, involves the “conventions” about fracturing the rocks to allow more oil to come out, what we call “fracking”. The fracturing technology was developed about forty years ago, and has been used ever since, mostly for secondary recovery. And for all those decades the oil coming from the fractured rocks has been “conventional oil”. But now people have learned to drill wells horizontally and fracture them … and now suddenly after forty years of fracturing the rock, which gave “conventional oil” when it was done from vertical wells, fracking now only delivers “unconventional oil” simply because the drill hole goes horizontally instead of vertically … does this make any sense to anyone?

The classification of oil from fracking as “unconventional oil” shows clearly the ludicrous nature of the dividing line when we are discussing peak oil. Regarding the putative peak, why is oil from a horizontal well “unconventional” and oil from a vertical well “conventional”? It is all gotten by technology, and none of it is any more “unconventional” than the drilling of the first oil well, a most unconventional act …

Calling oil from horizontal wells “unconventional” is crucial for the peak oil folks, however, because if the oil from fracking were classified as conventional oil, the “peak oil” claims and the “peak gas” claims would sink of their own weight …

Look, folks, the ugly truth is that the world is awash with fossil fuels. To start with, The largest single concentration of fossil energy on the planet is the Powder River coal formation in the Northern US. The world has several hundred years worth of coal. The Canadians have huge amounts of oil … of course it too is called “unconventional” oil, because it alone is enough to blow the “peak oil” claims out of the water. Plus now we have the “tight oil”, oil in the rocks that is, of course, unconventional.

Then we have the discovery of the shale gas resources all around the planet. Even Israel finally has some domestic energy resources. How unconventional is that? Australia just announced a huge find. China has massive gas resources. A preliminary assessment says including shale gas we have enough gas for the next couple of hundred years.

And finally, we have the wild card, the methane hydrates, the “ice that burns”. Estimates of the amount of these are all over the map, but all of them share one feature—they are very, very large, on the order of quadrillions of cubic feet. This is rivals the size of the global natural gas resource …

methane hydrates

Finally, most of these forms of fossil fuels occur in combination and can be converted into one another. Coal, for example, can be converted to a liquid fuel, or to a gas.

Now, because there never was anyone hollering about “peak coal”, there’s no such thing as “unconventional coal”, despite huge changes in mining technology. Coal mining has changed as much or more than drilling for oil … so why isn’t there “unconventional coal”?

But in that case, since all of the coal on the planet seems to be “conventional” coal, if we convert coal to oil, are we making “conventional oil” or “unconventional oil”? Presumably it would matter whether we converted coal to oil horizontally or vertically …

In summary, once you get past the nonsense of “conventional” and “unconventional”, there’s enough coal and gas for a couple hundred years, and enough oil for a hundred years, just with what we know about now, and that’s not even counting methane hydrates. Which is why I pay no more attention to the peak oil alarmists than I do to the climate alarmists. One group claims we have too much oil and we’re gonna burn it all, the other group claims we’ll soon have too little oil to burn, and I treat those two impostors just the same.

Was the division between “conventional” and “unconventional” oil devised to cover up the failure of the peak oilers? No way. The distinction is useful in a variety of ways for analyzing the world of oil sources. I think that the concept was simply appropriated by the peak oilers because it was very useful to them, since it totally obscured the failure of their peak oil predictions. To me, oil is oil is oil, and if you claim the world will run out of oil, you can’t later say that you have redefined things, and that the oil that proves your prediction wrong is some other special kind of oil that doesn’t count as oil but walks like oil and quacks like oil …

w.

… Oh, yeah, the weather report. Late night again, two AM. The wind has changed and is blowing from the southwest, landcasting the fog and the smells of the ocean. The characteristic sea smells of iodine and dimethyl sulfide in the fog draw my thoughts back, back to the many mornings I spent getting out of bed here on the hill at 4 am and going down to the harbor, rigging the boat and setting out in the dark to have the commercial fishing gear in the water for the dawn salmon bite. Sliding out of Bodega harbor in the half-light with my gorgeous ex-fiancee and my good friend, once again motoring between the rock jetties at the harbor entrance, going out to discuss matters of life and death with the ocean. I love the ocean because it doesn’t give a damn about a man’s position and his power and his pretenses. Knowledge and experience mean nothing to the ocean. After a life at sea, if I put one foot wrong, I get just as wet as the landlubber falling off the dock … I take pleasure in that ultimate equality and justice of the ocean. I know that even if it is a California ocean it would kill me without first asking me to share my feelings, so leaving the safety of the harbor is always sobering moment …

rock and the hard place

… sneaking out between Bodega Rock and Bodega Head itself, the little shallow passage the fishermen call “between the rock and the hard place”, where once my heart almost stopped with fear, or at least it started with fear, but other emotions got involved. The channel there is shallow, the sport fishing boat “Mary Jane” was capsized in 1986 with the loss of nine souls by a sneaker wave, “full fathom five thy fishermen lie, of their bones are coral made”

So when I heard a wave break right behind our little fishing boat one afternoon as we were coming in between the rock and the hard place, my first thought was that we were about to join the folks from the Mary Jane.

We spun around, and aaaah, dear heavens, it wasn’t a breaking wave at all, although a wave was breaking, instead it was my old friend Missus Fishbreath breaking the surface just behind the boat, and breaking my heart with the slow-moving stillness of her majestic beauty, a great gray whale dancing her way three thousand miles from the tropics to Alaska. As we turned and gaped, we were looking her right in the eye, and then she rolled our way and opened her blowhole so close to the boat we could almost look down it, it was as big as a dinner plate, we were close, close enough to count the barnacles clinging to her hull, she was the very picture of natural wildness and glorious beauty and unimaginable power, my heart leapt to see it  … and she blew out a great cloud of gagging mist, a noxious enveloping adherent miasma reeking of the million vanished piscatorial souls of her most recent month’s meals, a clogging, thick effluvium that enveloped the boat and then drifted away to leeward as the lovely lady disappeared beneath the waves …

… leaving me in the strangest condition imaginable, with the boat wandering off course, my jaw hanging down to my umbilicus, a pulse rate well into the triple digits, adrenalin-shocked, awed beyond words, smelling like the dumpster behind a cheap fish restaurant, blasted by the natural beauty I had just witnessed, and uncertain whether I was going to vomit or not, but tending toward the former.

I’m not jonesing to visit that particular emotional place again, once was enough for any man. And on a cold night like tonight, I’m glad I’m not rolling out at four am. I fished the Bering Sea as well, and these days I’m just as happy to see the bergy bits and watch the Bering ice on the “Deadliest Catch” TV show from the safety of my couch  … but ah, dear friends, mostly I’ve just moved my ocean madness to warmer waters, and I wouldn’t have missed it for rubies and pearls …

Sports and gallantries, the stage, the arts, the antics of dancers,

The exuberant voices of music,

Have charm for children but lack nobility; it is bitter earnestness

That makes beauty; the mind

Knows, grown adult.

A sudden fog-drift muffled the ocean,

A throbbing of engines moved in it,

At length, a stone’s throw out, between the rocks and the vapor,

One by one moved shadows

Out of the mystery, shadows, fishing-boats, trailing each other

Following the cliff for guidance,

Holding a difficult path between the peril of the sea-fog

And the foam on the shore granite.

One by one, trailing their leader, six crept by me,

Out of the vapor and into it,

The throb of their engines subdued by the fog, patient and

cautious,

Coasting all round the peninsula

Back to the buoys in Monterey harbor. A flight of pelicans

Is nothing lovelier to look at;

The flight of the planets is nothing nobler; all the arts lose virtue

Against the essential reality

Of creatures going about their business among the equally

Earnest elements of nature.

Robinson Jeffers saw it … when you read those lists of famous last words, nobody ever says “I wish I’d spent more time at the office”. Don’t mail the envelope in, push the envelope, the journey will end long before any of us wish it to. Live your most impossiblessed dreams, my friends, because any other kind is just a dream. Chance the widdershins steps of the tarantella, lift the ancient curses and look under them for old coins and lost loves and dust bunnies with a vest and a gold pocketwatch, opt for an immediate increase in the uncertainty levels, stay away from the world of adrenalin deficit spending, hold your dearest warm under your heart while you dare the icy seas of life, for the night is assuredly coming …

My very best wishes to all, I’m off to sleep.

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February 4, 2013 7:37 am

vangelv excellent post explaining depletion rates from shale deposits.

vangelv
Reply to  jrwakefield
February 4, 2013 8:10 am

jrwakefield writes
vangelv excellent post explaining depletion rates from shale deposits.
Please explain to me how a guy who is smarter than I am (Willis) is not willing to deal with the depletion issue. How is it possible to argue about the effect of rising shale production when you can’t even figure out that shale fields are not economic and that they peak far too quickly to effect the peak oil arguments?

February 4, 2013 7:46 am

“Kopits, you too need to learn to read. My early posts here, a brand new Saudi Super field, fully documented by the BBC. Building to two million barrels per day, cost of production, now USD 1.00 per barrel. ”
I cant find a link to this. I follow this stuff pretty closely, any new deposits in SA tend to be very small. Most wells sunk in SA produce nothing. Most of the deposits are clustered around the east seaboard. http://www.eia.gov/cabs/saudi_arabia/images/Oil%20Gas%20Fields%20Map.gif

vangelv
February 4, 2013 7:48 am

The Alberta Oil sands is just one new suoerfield, it is bigger than all the old ones put together. Live with it.
It is being developed and operated now

But the tar sands will never produce more oil than Saudi Arabia are producing today. And we are losing a Saudi Arabia worth of production every year through depletion. How will you replace that production next year? And the one after that?
The super-fields being talked about are Ghawar, Cantarell, Daqing, Burgan, Rumaila with Oseberg, Kirkuk, and a few smaller fields around the periphery. I believe that the attempt was made to inform you that all of these fields have peaked. New production from unconventional sources cannot offset the depletion from these fields as well as the much higher depletion of those unconventional sources. As such there is not much of an effect on the peak oil date.

February 4, 2013 7:51 am

Grey Lensman see:
http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/crude-glut-price-plunge-put-oil-sands-projects-at-risk/article4230759/
“New oil sands mines, for example, require prices of around $80 (U.S.) a barrel to break even, Wood Mackenzie found. Add an upgrader, the “pre-refinery” that transforms heavy oil into a lighter crude that can be further refined into diesel and gasoline, and the needed break-even rises to above $100. So-called “in situ” projects, which use wells and underground steam injection to extract oil sands crude, are less vulnerable, with a break even of about $60.”

February 4, 2013 7:55 am

“The Alberta Oil sands is just one new suoerfield, it is bigger than all the old ones put together. Live with it.”
That deposit is currently producing about 1.5mb/d. To do that they consume ONE THIRD of all natural gas used in Canada. More than is used to heat every home in the country. Plans are to get the oil sands to 3mb/d in 20 years. So that means 2/3s of all NG consumed will be at that deposit. The Energy Trap.

vangelv
Reply to  jrwakefield
February 4, 2013 12:06 pm

That deposit is currently producing about 1.5mb/d. To do that they consume ONE THIRD of all natural gas used in Canada. More than is used to heat every home in the country. Plans are to get the oil sands to 3mb/d in 20 years. So that means 2/3s of all NG consumed will be at that deposit. The Energy Trap.
You are correct but there may be a solution that makes the tar sands viable even if it is not the solutions that the peak oil critics think it is. There is a lot of gas in the Mackenzie River Delta. Some of that gas can be used in the tar sands as a low cost fuel because it would not have to travel all that far. There is also the possibility of building a large coal or a nuclear plant to help make the process more economic.

February 4, 2013 8:10 am

Jeff L says:
February 2, 2013 at 1:19 pm

What is fair to say is we are running out of barrels that we can develop economically at $20/bbl. If that weren’t the case, oil would still be $20/bbl.

Jeff, I’m not sure I agree with this, the prices started increasing when the turmoil of the Mideast rattled the financial markets, and the commodity traders added a “lack of stability” cost into a barrel, that has had only a minor impact on the cost of production. I’ll also note about 5 years ago, the variable rate for a MCF of Nat gas was ~$15, it’s now under $5, and only that high because they’re starting to slow the pumping of all of the wells they’ve drilled. The era of cheap Nat gas, will drive down the cost of transportation fuels (whether we see a big uptick in Nat gas vehicles, or syn fuels) they will put downward pressure on oil.

Keitho
Editor
February 4, 2013 8:44 am

I am not sure why this is such a big deal. Firstly we have been told that peak oil will arrive and then enter a decline leading to our ruin, which is obviously not true as this has been predicted for over half a century now. All that does happen is that the price of our liquid hydrocarbons has risen somewhat in constant dollars, but not in any significant way. However should the price rise beyond the price of other technologies leading to liquid hydrocarbons or alternative fuel types then a transition will take place.
Talk of companies going bust trying to exploit shale oil or other technologically difficult and costly sources also leads to a “so what” moment. They are big boys and they are acting in what they perceive as their own best interests. If they go bust, well that happens in business.
What is it we are supposed to do with the peak oil theory? Are we to stop using oil right away because it will run out sometime. Are we supposed to invent new ways of fueling our engines and plastic factories with something else right away? Surely there are any number of business enterprises doing that every day in the hopes of hitting the jackpot but so far they bump up against the actual unavoidable fact that liquid hydrocarbons are still a better option.
They are a better option because the oil boys are constantly upping their game because even though oil is a mature industry it still has plenty of room for improvement as we see almost every day. Willis points out this quite effectively in his article. Those of you decrying him are probably very accurate in all that you say but the irony is the continuing and increasing supply of oil.
All the points about production are well made, however you can’t store a lot of oil or refined products around the world and so output must be quite closely coupled to demand. I know that the producers, particularly OPEC, manipulates output to a minor extent in the margin so as to achieve optimum prices for themselves. Sometimes the manipulation takes on a political dimension, particularly when you know that the majority of oil extraction is done by state or quasi state companies. As demand rises so will output, at a price, and those who make the most effective use of the fuel will do well. Others not so much.
The refining story is another red herring as technology is easily put to work handling different qualities of crude. Likewise the power in vs power out story. It is an irrelevance because the liquid hydrocarbons are basically a store of energy, electricity in this case, and that can’t be stored in another way.
Like I said at the top, why should we, the great unwashed, care about peak oil when it absolutely will not affect us in any measurable way. We will still have to work the same amount of time, relatively, to buy a gallon of gas.

Grey Lensman
February 4, 2013 8:59 am

Wakefield
Stop
Look at facts not your delusions. Look at them using their own fuel, why buy natural gas. They have a multitude of ways to go, they choose. They have paid for one million barrels of production train. Most probably all the current capital costs. If they use natural gas, it because its cheap, handy and available. All oil refineries use oil/gas to run process, heat and generate electricity, big deal
But as they process on site, a multitude of costs can be hidden or double counted.
I gave you the actual figures above which confirmed my top estimate of USD 35. Compare that with your USD 90 and rising. Same with the nut going on About trillion per million barrels.
Are you guys incapable of reading, learning, of understanding that oil production technology has advanced since 1960. Is that concept so difficult to understand?

More Soylent Green!
February 4, 2013 9:41 am

We have plenty of oil. Here in the USA, we’ve made a political decision to not use many of our natural resources. Where does that fit into the Peak Oil theory?
No matter how you try to fudge it, we have more oil in the world than anybody ever dreamed. Every year, we discover more. Every year, technology advances and more and more of it profitably recoverable.
So much for Hubbard. Unfortunately, Hubbard must have a (postmortem) position advising Obama and the Energy Department, because the facts just aren’t getting through.

February 4, 2013 9:55 am

“We have plenty of oil. Here in the USA, we’ve made a political decision to not use many of our natural resources. Where does that fit into the Peak Oil theory?”
Care to list those deposits? No the US doesnt have plenty of oil. Those “reserves” you mentioned arnt extractable at any price. What is discovered are small pockets that will have low flow rates and short lives.
Please understand that we are not talking about geological peak oil. We are talking about flow rate peaking and not meeting demand.

February 4, 2013 9:58 am

“If they use natural gas, it because its cheap, handy and available. All oil refineries use oil/gas to run process, heat and generate electricity, big deal.”
You clearly do not understand the process of turning bitumen into synthetic crude.
Natural gas, injected at high pressure and high temperature, is required to crack the long carbon chains and attach hydrogen at the ends. They can’t use anything else but NG for that process. That’s were the bulk of NG is consumed, in the cracking chemical reaction.

February 4, 2013 10:01 am

“Firstly we have been told that peak oil will arrive and then enter a decline leading to our ruin, which is obviously not true ”
Tell that to Egypt, Indonesia, and other countries who used to export oil, but due to their own peaking of production now have to import. They have higher food prices because of that, causing rioting in the streets. Egypt will be bankrupt within a few years.

February 4, 2013 10:09 am

jrwakefield says:
“Care to list those deposits?”
Under this Administration it is illegal to even look for oil. So how can we possibly know what deposits we have?
This map shows the areas where oil exploration is illegal. Every ‘peak oil’ prediction has turned out to be wrong. Every one of them. Why should we believe the latest peak oil prediction?

February 4, 2013 10:14 am

“Please explain to me how a guy who is smarter than I am (Willis) is not willing to deal with the depletion issue. How is it possible to argue about the effect of rising shale production when you can’t even figure out that shale fields are not economic and that they peak far too quickly to effect the peak oil arguments?”
I wish I knew. Believe me, when I first started to read up about peak oil I was not a happy person. I happen to very much like our modern civilization as it is, and want it to continue advancing.
I guess they look at the petroleum industry and think they have the answers and the market place will solve all our problems. True that has been the case (which is why they always bring up the whale oil argument). The problem is we do not have a viable replacement for oil. They also seem to think that there is no economic consequences when energy costs go up. It’s not the absolute costs that’s the problem, it’s the relative cost increasing that’s the problem. Soon as the price of energy reaches a threshold of GDP, it throttles the economy, people cut back spending to pay for the increase in energy, and we slide into a recession. That in turn drops the price of energy because of reduced demand, and funding for expensive sources dries up.
Peak oil and peak natural gas isnt just about the energy. It’s a complex interaction of energy and economics.
Personally, my bet is on LFTR. I’m hoping that technology, which will make every wind turbine and solar panel obsolete, will stave off some effects of lost oil production. Then we can move to things like electric trains, and get trucks off the road. Heat homes with geoexhange instead of natural gas. (I converted a few years ago. BTW, I don’t regret that because of shale gas as I know it wont last.)
One other new advancement is going to be a game changer even for energy consumption. And that’s 3D printing. Manufacturing will return to the US from China. Transportation costs will be the one driving factor.
Get the popcorn out, the future is going to be one helova ride.

February 4, 2013 10:18 am

“This map shows the areas where oil exploration is illegal. Every ‘peak oil’ prediction has turned out to be wrong. Every one of them. Why should we believe the latest peak oil prediction?”
The USGS knows where every deposit is, those were discovered decades ago. (if they havent been found, how do YOU know what there is?) You do realize there is a long list of countries who are now in terminal decline? Egypt, Norway, the UK, Argentina, Mexico, Indonesia, Iran. Even China consumes more oil than they produce.

February 4, 2013 10:31 am

jrwakefieldsays:
“The USGS knows where every deposit is…”
Not really.
There is ample fossil fuel energy waiting to be found. The only thing keeping it from being located and used is government. If the market is allowed to properly function, the market and new technology will take care of the problem. It always has in the past, why should it be any different this time?
Don’t be such a pessimist.

Matthew R Marler
February 4, 2013 10:45 am

richardscourtney: The Liquid Solvent Extraction (LSE) process has been capable of producing synthetic crude oil (i.e. syncrude) from coal at competitive cost (n.b. cost and not price) with crude oil since 1994.
We proved the technical and economic abilities of the LSE process with a demonstration plant at Point Of Ayr in North Wales.
However, prior to LSE it was always more costly to mine, transport and convert coal to syncrude than to drill and transport crude. LSE has reversed those relative costs.

I googled “Liquid Solvent Extraction” and “Point of Ayr” and didn’t find anything on the economics of making syncrude from coal. I got 204,000 and 200,000 search results each, so perhaps I did not page far enough. Could you provide a reference? I would appreciate it.

Stanb999
February 4, 2013 11:14 am

IF money is thrown at production more is produced. This is the main thrust of the arguments presented. Did that work for whales? Oil is a finite resource, like water, stone, air. It is all finite. The earth isn’t growing.
Can you produce Dinosaur meat to feed us a single dinner? If you threw enough money at the issue? If not why not? How about albino bangle tiger meat for everyone? These items have already crossed the threshold of wide availability. Oil will be the same in time. Such is the nature of a finite system. Money is but one side of the equation.

February 4, 2013 11:31 am

rockdoc says:
February 4, 2013 at 6:39 am
You (and others) speak well from experience. it is interesting that the voice of economic and physical practicality seems to be restricted to Canadian geologists; the American geologists involved in the Bakken, or the Brits/Autralians in the shale basins seem very quiet.
There has been a paper by a brokerage house that seems to say that, in real dollars, oil has stayed flat (except for spikes like ’73) since discovery in the late 1800s. That being the case (which I dispute), you cannot say that the costs have stayed flat since then. So, using my previous analysis here, if we look at how many barrels of oil it takes to justify getting any out of the ground, the “cost” has definitely increased, or, one could equally say, the return of oil volume vs oil consumption to get that volume, has come down.
We are in a time of “peak” oil in a practical way.
The future is expensive.

February 4, 2013 11:41 am

Don’t forget the Fischer-Tropes process. Even if all of the fossil fuels evaporate completely, we still have the ability to convert any carbon mass into synDiesel.
We aren’t about to run out of liquid fuels.

February 4, 2013 11:42 am

johanna says:
February 3, 2013 at 9:55 pm
“…even if the real cost of the stuff that we put in cars has gone up, what matters is our willingness and ability to pay it. ”
That is true only in a limited sense. Both individuals and societies have a limited amount of disposable capital. But neither individuals nor socieites are vibrant when most of their disposable capital is spent on either survival or the business of making capital. Which is why socieites do no develop until after wars (though technology develops during wars).
It is the art galleries, bookshops, cinemas and lattes that create a vibrant society and civilization. When you defer monies for those to monies for driving around or heating/cooling your house, you are starving the purpose of life (other than making money, which even rich people recognize when they buy mansions and powerboats).
We need cheap energy to do all the things we really want to do. We could be spacefaring peoples already if it weren’t for expensive energy: getting to the moon is about energy, not so much the technology of an airtight tin can.

vangelv
Reply to  Doug Proctor
February 4, 2013 7:32 pm

It is the art galleries, bookshops, cinemas and lattes that create a vibrant society and civilization. When you defer monies for those to monies for driving around or heating/cooling your house, you are starving the purpose of life (other than making money, which even rich people recognize when they buy mansions and powerboats).
Culture is always funded out of surplus production. Even cave men painted on walls when food was not scarce and time and resources could be diverted towards other activities.
On this note I would like to recommend something that I found both surprising and fascinating. If you have an i-Tunes account you might want to look at the free iTunes University Collection, Commerce and Culture, by Paul A. Cantor. As an engineer I found Cantor’s approach fascinating. My wife, who is a musician, and many of her friends, found it even more fascinating and kept asking why it was that they were never exposed to these concepts during their art school days. Cantor’s books are very high on my list and (getting back to this topic), his essay Hyperreality and Hyperinflation, is must reading given the times that we live in.

Editor
February 4, 2013 1:59 pm

vangelv – “The super-fields being talked about are Ghawar, Cantarell, Daqing, Burgan, Rumaila with Oseberg, Kirkuk, and a few smaller fields around the periphery.“.
Another that doesn’t get mentioned much is Abu Dhabi’s Upper Zakum, and it’s not in decline yet.
http://www.ogj.com/articles/2010/11/artificial-islands.html
http://zadco.ae/en/Media/News/Pages/NewsDetails.aspx?NewsID=39
It’s a 50bn bbl field, and it is costing well over $10bn to increase production by less than 250k bpd to 750k bpd. That’s economically viable at today’s oil price, but not by a large margin. This illustrates how oil is getting much more expensive and difficult to produce. [By comparison, Cantarell production rate has fallen by about 1.3m bpd since 2004].
Keitho – “I am not sure why this is such a big deal. Firstly we have been told that peak oil will arrive and then enter a decline leading to our ruin“.
Peak Oil means that the oil production rate will reach a peak and subsequently decline. No more than that.
Keitho – “why should we, the great unwashed, care about peak oil when it absolutely will not affect us in any measurable way“.
You shouldn’t. It almost certainly won’t.

More Soylent Green!
February 4, 2013 2:00 pm

Willis,
Abraham Lincoln is quoted as saying “Most people are about as happy as they make up their minds to be.”
Corollary #1 — Some people just aren’t happy unless they’re miserable. If they don’t have a good reason, they will make one up.
Corollary #2 — And they won’t be happy until you’re as miserable as they are.