Lessons from the hysteria about peak oil (2005-2013)

By Larry Kummer, from the Fabius Maximus website

Summary: The peak oil hysteria provides rich lessons for us today about learning from activists and the value of listening to our major professional institutions. Easy cynicism led people to believe outlandish forecasts, wasting valuable time and resources. Worse, we have had many such barrages by doomsters — aided by their clickbait-seeking enablers in the media — which have left us almost immune to warnings, no matter how well-founded. We can do better.

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Where were you during the peak oil hysteria? It began in 2005 and died in 2013, marked by the opening and closing of The Oil Drum website. Despite their analysis and forecasts proving to be mostly wrong, most of their authors are still “experts” publishing elsewhere (see this bizarre example). That follows the pattern of modern American doomsters, such as those who in the 1970s predicted global catastrophes from pollution and famine. Perhaps the activists predicting a climate catastrophe will add their names to this list in the next decade.

It’s not just historical trivia. We must learn from these bouts of irrationality if we have any hope of regaining the ability to govern ourselves.

Maximum World Oil Production Forecasts

Memories have faded, but a decade ago the predictions of end of oil were hot news. Comment threads overflowed with people terrified of the future. Conferences were held and books sold trumpeting certain disaster as the lifeblood of our industrial civilization dried up. Many of the following names were highlighted in journalists’ Rolodexes as the go-to people for hot quotes. Then as now, the names least often consulted proved to have the more accurate forecasts.

  • 2005 – Pickens, T. Boone (Oil & gas investor).
  • 2007 – Bakhitari, A.M.S. Oil Executive ((Iranian National Oil Co. planner).
  • 2007+ – Groppe, H. (Oil / gas expert & businessman).
  • 2007 – Herrera, R. (Retired BP geologist).
  • 2008+ – Westervelt, E.T. et al (US Army Corps of Engineers).
  • 2009 – Deffeyes, K. (retired Princeton professor & retired Shell geologist).
  • 2009 – Simmons, M.R. (Investment banker; see the posts about his work).
  • 2010 – Goodstein, D. (Vice Provost, Cal Tech).
  • 2010 – Wrobel, S. (Investment fund manager).
  • 2010 – Bentley, R. (University energy analyst).
  • 2010 – Campbell, C.  (Retired oil company geologist; see the posts about his work).
  • 2010 – Skrebowski, C. (Editor of Petroleum Review).
  • 2011 – Meling, L.M.  (Statoil oil company geologist).
  • 2012 – Koppelaar, R.H.E.M. (Dutch oil analyst).
  • 2012 – Pang Xiongqi (Petroleum Executive, China).
  • 2015 – Husseini, S. (retired Saudi Aramco).
  • 2020 – Laherrere, J. (Oil geologist , France).
  • 2020+ – CERA Energy (consultants).
  • 2020+ – Wood Mackenzie (consultants).
  • 2025+ – Shell.
  • 2030+ – EIA and IEA.
  • No visible peak – Lynch, M.C. (Energy economist).

These predictions were made during 2003 – 2008 (collected by Robert Hirsh; most sources are listed here). Most were given with qualifying language expressing uncertainty about the dates. Some of these people, especially those associated with the Peak Oil movement, had given different dates — moving them out as time passed. Most of these are documented, but details of some have been lost over time.

The forecasts of major energy agencies’ look good a decade later. Much as with climate change, activists disparage (often contemptuously) analysis of the professional institutions — but in hindsight it is clear who we should have listened to.

Let’s look at these predictions in the context oil production history.

Forecasts of Oil Production made in 2008

The following table shows the actual production of crude oil and liquid fuels — and the IEA forecast for production in 2015 from their World Energy Outlook 2008, published as energy prices were on their way to a record high? Eight years later, how accurate was IEA’s forecast? It was eerily accurate — somewhat accidentally, as the IEA did not foresee the 2008-09 global recession and so over-estimated GDP growth.

The IEA and EIA use similar definitions for “liquid fuels”.

World Production vs. the WEO 2008 Forecast

(million barrels/day)

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Crude Oil 73,864 73,478 73,164 74,062 72,871 74,653 74,734 76,160 76,248 77,833 N/A
Liquid Fuels 85,099 85,135 85,130 86,515 85,703 88,099 88,532 90,466 91,014 93,201 97,900*
WEO 2008 86,000 96,000

Historical data from the EIA website.

* The 2015 total is for Q3.

The bottom line: liquid fuel production increased by 15% during the decade after 2005, so that prices have plunged (exacerbated by the Saudi price war). Prices will remain under pressure unless OPEC reestablishes its control, production coming online from investments in the giant fields of Iran and Iraq, the spread of fracking to other nations, and new tech (e.g., hybrid and electric cars).

Also note the increasing difference between production of crude oil and all liquid fuels. The rise in crude oil and, more broadly, liquid fuels were driven by new sources whose potential was mostly ignored by the Peak Oil doomsters). Crude production rose from deepwater and fracking wells, plus mining bitumen (aka oil sands, which technically does not produce crude oil). Liquid fuels production rose from production of natural gas liquids, biodiesel, ethanol, and those converted from coal and gas. Most numbers you see for “world oil production” are for all liquid fuels.

While in 2008 the IEA accurately estimated liquid fuel production for 2015, they over-estimated demand. As a result, the WEO 2008 price forecast for 2015 was too high.

“The era of cheap oil is over … The average IEA crude oil import price, a proxy for international prices, is assumed in the Reference Scenario to average $100 per barrel in real year-2007 dollars over the period 2008-2015 and then to rise in a broadly linear manner to $122 in 2030.”

Conclusions

As many of us predicted during the peak oil hysteria, high oil prices had three great effects — all predictable…

  • Increased efficiency of energy use — as consumers and businesses invested to increase the efficiency of the more expensive energy (and R&D produced more ways to do this).
  • Increased production of oil (boosted by R&D making more “resources” into usable “reserves”. Today’s $30 oil shows that production growth has exceeded demand.
  • New sources of liquid fuels — including both new hydrocarbon-based supplies (bitumen in Canada and Venezuela), new carbon-based fuels (e.g., coal to oil, although oil prices never rose to make this viable), and new carbohydrate-based supplies (e.g., ethanol from corn).

Only time will tell about the IEA’s forecast for 2030 of $122 oil (in 2007 dollars). But today’s oil glut gives us an opportunity to prepare alternative supplies in an inexpensive and orderly manner, not only reducing the risk of energy price shocks but also reducing pollution and the risk of unpleasant anthropogenic climate change. Let’s make use of the gift.

Equally important is that we learn from this experience with the peak oil movement. Activists and enthusiasts have terrible track records at long-range forecasting, despite their confidently loud predictions of doom — echoed by clickbait-seeking journalists . That does not imply that we should blindly trust major institutions (as the scandal about Flint’s water supply shows), but skepticism pays large dividends and allows more rational preparing for the future.

For More Information

For a deep look at these issues see Exxon’s new report “The Outlook for Energy: A View to 2040“. Also see these…

  1. Important: Recovering lost knowledge about exhaustion of the Earth’s resources (such as Peak Oil).
  2. When will global oil production peak? Here is the answer!
  3. The three forms of Peak Oil (let’s hope for the benign form).
  4. Peak Oil Doomsters debunked, end of civilization called off!
  5. Prepare now, for oil prices will rise again.

To learn about the minerals that power our world, and will for many years more, I recommend reading the IEA report Resources to Reserves 2013. Here is a brief slidedeck of its contents. For a deeper look, see the IIASA’s Global Energy Assessment (a widely cited source document, including by the IPCC’s AR%). Here is a 113 page summary.

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February 15, 2016 2:52 pm

The first reference to “Peak Oil” I ever came across came from the mid-19th century, when the shale oil industry made Scotland the World’s biggest petroleum producer and exporter.
http://www.scottishshale.co.uk/index.html
I have a WWII engineering textbook which asserts that the World’s oil would run out by the 1960s.
Some things never change.

ConTrari
Reply to  catweazle666
February 15, 2016 3:22 pm

There is Hubbert’s theory form 1956, and even older predictions:
“The idea that the rate of oil production would peak and irreversibly decline is an old one. In 1919, David White, chief geologist of the United States Geological Survey, wrote of US petroleum: “… the peak of production will soon be passed, possibly within 3 years.””
This is for US oil production though, not worldwide.
https://en.wikipedia.org/wiki/Peak_oil

Bulldust
Reply to  ConTrari
February 15, 2016 4:34 pm

Unfortunately what is true for one well does not extend effectively for an entire region, let alone the globe, especially when there are decades of improving technology and price incentives involved. This is not unlike people trying to build macro-economic models from micro theory … the system is simply too complex to model effectively. Too many unknowns, or poorly knowns, leads to a highly unstable and unrealistic model. I remember venturing to The Oil Drum a couple times to debunk some of their silliest comments but it was a feral echo chamber. Not unlike some warmist sites that spring to mind.
Substitutes for much of oil’s markets will arise long before depletion becomes a significant issue. It has always been thus and this time is no different. The onus is on the doomsayer to disprove the null hypothesis. So far, from Malthus to IPCC, they have all failed, at least in scientific terms. The latter has had some political success …

RWTurner
Reply to  ConTrari
February 15, 2016 9:07 pm

Likewise, the real experts have been proving them wrong since the early 20th century.
http://archives.datapages.com/data/bulletns/1949-52/data/pg/0036/0012/2200/2231.htm?doi=10.1306%2F5CEADBD8-16BB-11D7-8645000102C1865D
There is enough petroleum in the Green River Formation alone to make peak oil nothing but an economic issue. However, it is an economic issue. These cheap energy prices won’t last forever and when they do increase it could be ugly.
The US oil industry simply won’t be a very good swing producer. OPEC as the swing producer works (when they cooperate) because they have the ability to flip a switch and increase/decrease production. Operators in the US, however: receive capital, plan where to invest it, plan how to do it, ask the government permission, wait, drill, wait, complete, then hope the investment pays off soon.
Increasing oil production in the US, once the price starts to correct, will take longer than OPEC flipping a switch. It will be interesting to see how eager the nervous investors are to get back to drilling. I think it will need to look like it did while everyone was drilling, $80+/bbl. How far above the price correction will determine how fast the rigs get back to drilling.
I could see U.S. production dropping to 7.5 M/day sometime in 2017 and that is more than enough to turn the surplus into a deficit.

MarkW
Reply to  ConTrari
February 16, 2016 6:37 am

When oil does start to run out, it will do so gradually. We won’t go from $30/brl oil one year to $300/brl oil the next. We are pumping the cheap sources first, as those run out, we switch to more expensive sources. As the mix of sources gradually shifts from cheap to expensive, prices to will gradually rise.
As a result, we will adapt.

RWturner
Reply to  ConTrari
February 16, 2016 8:39 am

That ignores the history of the price of oil. It’s been volatile in the past, but as the U.S. acting as the swing producer, it will be more so.

c1ue
Reply to  ConTrari
February 16, 2016 9:42 am

@MarkW
Actually, while the literal text of your statement is correct, I don’t agree with the notion of “$300 oil” or “$30 oil”.
The price of oil, much as with real estate and many other assets, is priced at the margins. $147 oil occurred because emerging market oil consumption grew faster than oil production capacity; the fall since then is because of reduced demand from same *as well as* increased production.
The cure for cheap oil is…cheap oil.
The cure for high oil prices is…demand reduction and production increases.
This particular downturn in price, IMO, is because of US shale producers and Saudi Arabia both locked in respective junk bond and social spending traps – which prevent either from production cuts. Only if you posit that the Saudis are stupid would they be attempting a price war vs. a shale industry which *has* to pump to survive – it is far from clear that Saudi Arabia’s reserves can outlast the junk bond covenants of enough of the US shale industry to matter. Unlike Russia, Saudi Arabia cannot cut its imports to match export earnings due to its vast repressed majority. I’ve noted elsewhere that Saudi Arabia’s GDP per person and population have both increased 50% since 2000 – this gives Saudi Arabia a cost profile which is more than double what it was even 15 years ago.
The possibility of stupidity is non-zero – however – since Saudi Arabia’s historical gambits did work to affect oil major production and drilling.

allen
Reply to  ConTrari
February 16, 2016 11:47 am

One factor undermining the credibility of Hubbert’s ideas – one can scarcely dignify his views with the word “hypothesis” – is that among his many predictions he had exactly one success. U.S. oil production.
Of course with that single, successful prediction he needed no others but pointing out that Hubbert had no other successful predictions didn’t make me an especially popular fellow with Peak Oil adherents.
Since there wasn’t any substantive response to that shortcoming I was inevitably treated to a blizzard of invective each time I brought the subject up. At the time I didn’t see the response as a tacit admission of defeat but I do now.

MarkW
Reply to  ConTrari
February 16, 2016 1:44 pm

While the price of oil is volatile, it always swings above and below it’s true price. The true price will change gradually meaning the next absurd high will be a little higher and the next absurd low will likewise be a little higher.

MarkW
Reply to  ConTrari
February 16, 2016 1:46 pm

allen: And even that one “success” was only true for awhile. The current increases in production negates even that one “success”.

Phillip Bratby
Reply to  catweazle666
February 15, 2016 10:54 pm

My Children’s Encyclopedia from the 50s predicted that the world would run out of coal by 2000.

John Silver
Reply to  catweazle666
February 16, 2016 1:28 am

How about 1892:

Steve R
February 15, 2016 2:54 pm

the US oil industry brought us to within a stone’s throw of achieving the nation’s longstanding stated goal of energy independence, only to be thrown under the bus and vilified when foreign interests undermined the industry.

Steve Fraser
Reply to  Steve R
February 15, 2016 3:22 pm

It’s just a matter of political will.

Editor
Reply to  Steve Fraser
February 17, 2016 2:08 pm

I’ve advocated for a “Flexible Tariff” to prevent such predatory pricing.
The notion is to put a price floor under imported oil, but leave domestic prices open.
So you pick a price that prevents predation, call it $50/bbl. The Flex Tariff is set at:
( $50 – import market quote ).
Say Opec oil is trading at $40, the tariff would be $10/bbl.
Say Opec oil us trading at $80, since 50-80 is a negative number, the tarrif is zero.
That is, the tariff does nothing until a price war happens, then it protects the domestic producers from ruinous price wars and predatory pricing.
I’d either apply it to OPEC production since they are the cartel that does the predation, or alternatively, have it be NAFTA wide on all outside producers (protecting Canadian and Mexican producers too).
Fairly easy stabilization method, IMHO.

Reply to  Steve R
February 15, 2016 3:48 pm

US oil production peaked in the mid 1970s, and has never recovered compared to the demand requirements of the US. The US doesnt have any super giant fields left to give it energy independence.

Steve R
Reply to  J. Richard Wakefield
February 15, 2016 4:12 pm

“The US doesnt have any super giant fields left to give it energy independence”.
-not true, unless you limit your thinking to conventional production.

Reply to  J. Richard Wakefield
February 15, 2016 4:38 pm

Steve R, you need to read up on the USGS and EIA estimates of TRR from all unconventional US oil. TRR is technically recoverable reserves, AT ANY PRICE. Guess what. Only about 15-18Bbbl. It has nothing to do with political will. Its simple petroleum geophysics, which anyone should be able to comprehend if not calculate. If only they would bother to. You apparently have not. See more details downthread. Or read my two ebooks on this. Illustrated, like for elementary school.

Bulldust
Reply to  J. Richard Wakefield
February 15, 2016 4:41 pm

This could be said of any resource with a narrow definition of what constitutes the resource. Sulphide nickel will eventually give way to laterite (oxide) nickel deposits, but not so much at current prices. There are a few laterite producers on the brink right now, but nothing a price hike won’t fix. So it is with crude oil … heck convert coal to liquid fuel if the price is right and there is enough coal to do that for a long, long time. But there is not much point in doing this for the foreseeable future. Besides fusion can’t be that hard, right? Got to crack it eventually.
BTW as an aside, reps for Saudi and Russian are meeting shortly. They are probably going to discuss how to avert the crippling race to the bottom of the barrel.
http://www.wsj.com/articles/saudi-russian-oil-ministers-head-to-qatar-to-discuss-production-1455566388
Apologies for the awful pun…

Doug
Reply to  J. Richard Wakefield
February 15, 2016 4:47 pm

Define field. The entire Bakken shale could be called a field, and it is certainly super giant. We have not even tapped numerous other good frackable source layers. At $80 we can swim in oil a long time.

Reply to  J. Richard Wakefield
February 15, 2016 5:34 pm

It costs money to prove up reserves. This is a point that the academics missed when I was a senior in Chemical Engineering and was advised to avoid the oil industry as there was only fifty years of proven reserves. That was back in 1952. Who would spend money to prove up reserves more than fifty years in advance?
Similarly, TRR relies on studies that cost money to carry out. My guess is that the estimates fall far short of actuality.

Reply to  J. Richard Wakefield
February 15, 2016 5:44 pm

Doug. Let me give you two fairly precise definitions for different circumstances, so that you might learn. A ‘field’ within a basin is a stratigraphic overlying trap where oil ( or gas) might migrate and be trapped over geologic time. Big, small, tall, short, wide, narrow, fractured or faulted…usually identified by seismics based on ‘hollow’ echoes.
A basin is a source rock ‘pan’. North Slope, North Sea, Bazhenov, Permian in Texas. You would benefit by learning the oil production differences.

R Shearer
Reply to  J. Richard Wakefield
February 15, 2016 8:01 pm

Daily U.S. oil production set the record in 2015, however, the low price of oil will have a negative impact in 2016.

Reply to  J. Richard Wakefield
February 15, 2016 8:36 pm

Correct. It has capital destroying shale formations with just enough core areas to allow the scam to continue.

Reply to  J. Richard Wakefield
February 16, 2016 5:08 am

“heck convert coal to liquid fuel if the price is right and there is enough coal to do that for a long, long time. But there is not much point in doing this for the foreseeable future.”
Negative ERoEI. Interesting how so many people ignore this basic concept of physics because they dont understand it.
” Besides fusion can’t be that hard, right? Got to crack it eventually.”
Fifty years and counting, still no solution. Thorium Reactors is our best hope, yet completely ignored for political reasons.

Reply to  J. Richard Wakefield
February 16, 2016 5:12 am

“Define field. The entire Bakken shale could be called a field, and it is certainly super giant. We have not even tapped numerous other good frackable source layers. At $80 we can swim in oil a long time.”
Bakken will give up less than 3% of it’s in-situ oil. Plus the rate of extraction is pathetic. Unlike a conventional deposit, production from a tight shale well doesnt follow a bell curve. It follows a decay curve. That means you have to drill exponentially more wells just to keep the flow rate constant.

Keith Willshaw
Reply to  J. Richard Wakefield
February 16, 2016 2:40 pm

You are incorrect, the development of unconventional oil has produced a resurgence in us oil production with production levels matching those of the 1970’s and current US oil consumption is LOWER than in 1970.

Dahlquist
Reply to  Steve R
February 15, 2016 7:00 pm

Off topic but of relevance to the Ocean climate and perhaps a few readers here:
According to the ‘Voice of Russia’:
“Radiation levels in Albacore tuna have tripled post-Fukushima, according to Oregon State University (OSU) researchers. The scientists came to that conclusion after conducting a study on fish caught off the coast of Oregon.
According to Delvin Neville, a graduate research assistant at OSU, these trace levels are too small to be a realistic concern. “A year of eating albacore with these cesium traces is about the same dose of radiation as you get from spending 23 seconds in a stuffy basement from radon gas, or sleeping next to your spouse for 40 nights from the natural potassium-40 in their body,” said Mr. Neville.
However, researchers with the National Oceanic and Atmospheric Administration (NOAA) and the GEOMAR Research Center for Marine Geosciences say the worst is yet to come and that the most highly radioactive water hasn’t reached US shores yet.
Regardless, all scientists apparently agree that the radioactive contamination is still traveling in ocean currents, the long-term effects of which remain to be seen.”

Leo Smith
Reply to  Dahlquist
February 15, 2016 10:09 pm

the radioactive contamination is still traveling in ocean currents, the long-term effects of which remain to be seen.
Yadda yadda. The long term effects of Hirosohima, Nagasaki and Chernobyl and decades of atmospheric testing have been seen. Or rather they haven’t.
Like the dog that barked in the night, the interesting fact is that there are no long term effects.

MarkW
Reply to  Dahlquist
February 16, 2016 6:42 am

Tripled, but from what level.
You seem to be one of those people who actually believes that any increase in radiation is by definition bad and will kill people.
Only a complete idiot would label those waters highly radioactive, even while they were off Japan, and they have been diluted by many orders of magnitude since then. Not to mention the effect of half-life decay.

Wayne Delbeke
Reply to  Dahlquist
February 16, 2016 11:32 am

This is just my opinion, but spread the rumour/news about “radioactive Tuna” far and wide. Maybe people will stop eating Tuna and other ocean fish and they will have a chance to increase their populations. I believe we are overfishing the oceans. (It makes Global Warming a non-issue.) A moratorium would be a good thing. Like turtles, we need to start farming fish and let the ocean recover. (I hope that doesn’t label me as a left wing econut – if it does, read some of my other posts. (I am a centrist) I think we need more protection of the oceans. End rant.

Keith Willshaw
Reply to  Dahlquist
February 16, 2016 2:45 pm

Three times miniscule is still miniscule. Fact is natural levels of radioactivity are very variable. In the UK there are areas where the old Central Electricity Generating Board realized they could never build nuclear power stations because the natural background radiation level exceeded the max level allowed for their nuclear workers.

Dahlquist
Reply to  Dahlquist
February 16, 2016 6:17 pm

@Leo Smith
You can say ‘Yadda, yadda’ all you want. It is still a relevant issue. To me, the issue carries some very personal relevance. In 1942 my grandparents moved from Minnesota to Tonopah, Nevada, where within a hundred miles, during the1950s and 1960s the U.S. Military and the Atomic Energy Commission conducted very many above ground atomic tests. This was prior to a full understanding of fallout and all the damage the various radioactive isotopes had on living organisms.
Both of my grandparents died of cancers, my grandpa at 47 and my grandmother first got uterine and bladder cancer in the 60s and died of it 15 years later. My uncle died of problems associated with thyroid cancer, my aunt has severe, unusual nerve problems now. Countless young kids died of leukemias and many ranchers in the area who weren’t themselves suffering from their own or their family members problems with various, sometimes mysterious illnesses had to deal with cattle, horses and sheep with all of the same, including burns from radioactive fallout on their backs… Milk tainted with radioactivity, etc, etc. There are stories of children who were simply just playing outside in their yards for a few minutes and who came inside with severe burns, like sunburn, on their backs or where any fine film of dust settled.
St. George, Utah, a place which was hit with fallout on a regular basis, was the site where a famous John Wayne movie was filmed and a very many of the cast and crew were exposed to the dust in the area by the winds and all the dust kicked up by the horses in the filming and all the wrestling in the dirt they did for the filming. Over a few years after the film was released, a very many of that cast and crew died from various forms of cancer and other unusual illnesses. Including, later, the man himself, John Wayne.
So, ‘yadda, yadda, Leo. I am a proponent of Nuclear energy as a wonderful source of power for us and believe it should be our main source of clean power here in the U.S. As long as all the safeties are in place. But I do have a good reason to be concerned about the consequences of accidental releases of radioactive isotopes traveling around in our food chain, and closer to our fishing grounds here on the Pacific coast.
And as far as your bonehead statement that exposures to radioactivity have no long term effects, that is just, simply ignorant. Go live in a house in an area where Radon is a problem and just laugh it off as a no consequence situation for as long as you can and then tell me it has no effects.
D

Gregg C.
Reply to  Dahlquist
February 22, 2016 12:05 pm

Dahquist:
You do realize you are comparing exploding dozens of fission bombs in the atmosphere with generating electricity with fission power and the few leakages that have happened? There is a difference.

Reply to  Steve R
February 15, 2016 8:35 pm

“the US oil industry brought us to within a stone’s throw of achieving the nation’s longstanding stated goal of energy independence,..”
Really? If that were true, why would the pure shale producers be showing large negative free cash flows even when prices were over $90? And note that when the North Slope production came on-line it was just a blip on the American production curve. Shale is exactly the same. A lot of scam artists made money by selling equities in money-losing operations and in the end the taxpayers will have to bail out the financial institutions that made loans that should never have been made. What gets to me is the fact that shale company managers were honest about the funding gaps all along the way but investors and analysts ignored them because production was going up and prices of the shares were doing well. Now that the balance sheets are impaired and restatements are on the way shareholders are about to get wiped out and bondholders will get pennies on the dollar of investment.

February 15, 2016 2:55 pm

“As many of us predicted during the peak oil hysteria, high oil prices had three great effects — all predictable…”
Great post. Thanks.
If I had to guess, I would wager the author understands the Austrian School of Economics. Heck, he may even have read Mises and Rothbard. (just a guess)

Reply to  markstoval
February 15, 2016 3:03 pm

Mark,
That’s a remarkable guess, and spot on. I’m in finance, so a basic understanding of economics is essential.

Reply to  Editor of the Fabius Maximus website
February 15, 2016 4:51 pm

Mark, I’ve been following your site for a while and I’ve learned a lot. Keep up the good work!

MikeFromAu
Reply to  Editor of the Fabius Maximus website
February 15, 2016 5:31 pm

We are nowhere near the ‘peak debt” that equals a peak reduction of CO2 emissions.
Look at Greece. This country will be the new ‘peak debt’ normal. Who in that country can now afford to buy the same amount of petrol for instance as they did before the crippling austerity measures were introduced.
We need to start talking about “peak debt” which is governed by ‘peak stupid’. 🙂
From http://finance.yahoo.com/news/us-rig-count-falls-both-190007032.html
“Analysis of the Data
Weekly Summary: Rigs engaged in exploration and production in the U.S. totaled 541 in the week ended Feb 12, 2016. This was down by 30 units from the previous week.
The current nationwide rig count is still less than half the prior-year level of 1,358. Notably, the count had risen to a 22-year high in 2008, peaking at 2,031 in the weeks ended Aug 29 and Sep 12.
From: https://mises.org/library/our-money-based-debt
” Marriner Eccles was the Governor of the Federal Reserve System in 1941. On September 30 of that year, Eccles was asked to give testimony before the House Committee on Banking and Currency. The purpose of the hearing was to obtain information regarding the role of the Federal Reserve in creating conditions that led to the depression of the 1930s. Congressman Wright Patman, who was Chairman of that committee, asked how the Fed got the money to purchase two billion dollars worth of government bonds in 1933. This is the exchange that followed.
ECCLES: We created it.
PATMAN: Out of what?
ECCLES: Out of the right to issue credit money.
PATMAN: And there is nothing behind it, is there, except our government’s credit?
ECCLES: That is what our money system is. If there were no debts in our money system, there wouldn’t be any money.2″

MikeFromAu
Reply to  Editor of the Fabius Maximus website
February 15, 2016 5:57 pm

Peak oil is governed by peak debt.
Money is created out of debt.
Whilst everything is funded by money printing with more than enough to go around, ‘peak oil’ demand is approached and thus ‘peak oil’ supply cannot match demand.
If the central banks stop supplying cheap debt/money, or are not able to print the debt/money fast enough, then the movement is ‘away’ from ‘peak oil’ and the supply increases outstripping demand.
And therefore, economic crisis equals a reduction in CO2 emissions. An economic boom equals an increase in CO2 emissions.
Peak oil demand is governed by the rate of money/debt printing. In turn, this governs anthropogenic CO2 production.
When the printing presses are turned on, CO2 emissions increase, and conversely, when the debt money printing presses are turned off, the CO2 emissions decrease.

Reply to  markstoval
February 15, 2016 5:35 pm

Well, I read (or, more accurately, tried to read) von Mises. Dry and too academic.

Reply to  JimB
February 15, 2016 8:18 pm

Let’s get back to economic reality. Money is debt when you can trade it for something of intrinsic value, like gold or silver, or oil, though it’s a bit slippery to put into your pocket. Money stuck out there with nothing backing it will eventually crash when people lose confidence in it. And Eccles was the village idiot on the Goon Show, the great British radio comedy in the 1950’s.

Reply to  JimB
February 16, 2016 12:30 am

JimB,
If von Mises is too academic (he was academic all right) then perhaps Walter Block would please you much more. (and he still lives and teaches)

Reply to  markstoval
February 15, 2016 8:47 pm

Rothbard never said that we would have unlimited amounts of whale oil. He just said that if the demand were there, investors looking to make a buck would figure out a way to come up with alternatives.
But that is the problem that you guys miss; Rothbard assumed a relatively unhampered market, not one that would starve investors of capital because a huge credit bubble created by the Fed sucked all of the available funds into malinvestments. The marginal producers need oil to be well over $100 and most producers can’t make an economic profit under $50. And if you know your Rothbard you would know that he did not think very highly of aggregate data. A barrel of light sweet produces a great deal more gasoline and jet fuel than a barrel of heavy oil, which is better at producing bunker oil and asphalt. Looking at the aggregates gives you a very different picture and muddies the waters. Looking at the SEC filings tells you a very different picture because it showed that shale was not profitable even when oil was over $90 a barrel. If you have a well in the core areas of the better shale formations you can make a lot of money. But those areas are a tiny percentage of those formations; when the rest of the formation is developed capital is destroyed.
The Austrians would benefit a great deal if they paid a bit more attention to the points that Strauss made about the nature of politics and the ruling class. It actually fits beautifully with Mises’ praxeology but for some reason the Austrians want no part. I guess that they have yet to figure out that Lebron James showed that Rothbard was wrong when he published his letter to Cleveland fans announcing that he was coming back.

toorightmate
February 15, 2016 3:00 pm

Rewind to 1986 when ALL the experts (CEO’s, geologists, geophysicists, etc) told us that the world’s gas resources would be TOTALLY EXHAUSTED by 1995.

Reply to  toorightmate
February 15, 2016 3:10 pm

Too Right, Mate,
“to 1986 when ALL the experts (CEO’s, geologists, geophysicists, etc) told us that the world’s gas resources would be TOTALLY EXHAUSTED by 1995.”
Can you give us some supporting citations for that? That’s an odd date for such a thing. In 1985 the Saudi’s opening the spigot and began the 1980s oil glut: https://en.wikipedia.org/wiki/1980s_oil_glut
More broadly, geologists have known for many generations that there is an inverse relationship between ore quality and quantity, so that once the world is fully explored costs will rise over time — offset by better tech that lowers the cost of extraction and refining (details here).
At some unknowable point in the future either the balance will tip so that rising prices force lower production (aka peak oil and demand destruction) — or new forms of energy replace oil. The EIA and IEA put that data at beyond 2030 — that is, beyond our visible horizon.

Marcus
Reply to  Editor of the Fabius Maximus website
February 15, 2016 3:19 pm

…” Despite their analysis and forecasts proving to be mostly wrong, “..shouldn’t that be ” proven ” not proving ?

Reply to  Editor of the Fabius Maximus website
February 15, 2016 3:24 pm

Marcus,
“proving to be wrong”
“Proving” is correct (or at least good enough), since the process of predictions being shown to be wrong continues today.

RD
Reply to  Editor of the Fabius Maximus website
February 15, 2016 3:27 pm

Hundreds of years away really. And we can always build nuclear and simply plug in our cars forever in a pinch with today’s tech.

Marcus
Reply to  Editor of the Fabius Maximus website
February 15, 2016 3:31 pm

…Your 2nd paragraph..

Marcus
Reply to  Editor of the Fabius Maximus website
February 15, 2016 5:10 pm

..Thanks Fabius, my bad ! lol

toorightmate
Reply to  toorightmate
February 15, 2016 3:35 pm

Editor of FM.
, I can not recall the publications, but I was a senior executive with ARCO at that time (retired soon after). Internally we found it amusing as Prudhoe Bay was going great guns and we knew the Ruskie territory was ripe, BUT that’s what the “EXPERTS” (and the press) were saying.
If you do a press search, they will give the names of the relevant “experts”.

toorightmate
Reply to  toorightmate
February 16, 2016 2:52 am

Editor,
Please note I am talking about gas, not oil.

Neo
February 15, 2016 3:04 pm

But isn’t “peak oil” the underlying basis for “Global Warming/Climate Change” and the IPCC ?
If “Global Warming/Climate Change” were truly about the atmosphere mix of greenhouse gases, why would any body ever consider bio-mass/ethanol/bio-fuels ?
It’s about sustainability and “peak oil”.

wws
Reply to  Neo
February 15, 2016 3:30 pm

That was then, this is now. But it does illustrate the modus operandi in situations like this: Hype the fear, publicize it endlessly, get political programs pushed through based on the fear, and then, when it all falls apart – change the subject and say “oh that’s old news, nobody wants to talk about that anymore.”
And ridicule anyone who does try to talk about it for “dwelling in the past”. The “Peak Oil” scare served exactly the purpose it was meant to serve, and now that its over the people who pushed it will just go on to a new scare.
We cannot say this enough – ALL of these scares, at their core, are about nothing but power, and those who seek to use them to seize power for their own purposes.

Editor
Reply to  wws
February 17, 2016 2:23 pm

Started by The Club Of Rome in the 70s via Limits To Growth by Meadows et al and continued by them into the UN IPCC and the Agenda 21 crowd (also UN driven).
It is an organized effort over generations to gain economic control, and has been succeding.

R Shearer
Reply to  Neo
February 15, 2016 3:33 pm

Definitely most at The Oil Drum were AGW catastrophists that didn’t see or understand the revolution of fracking. They lost the argument and went home.

Reply to  R Shearer
February 15, 2016 3:46 pm

They kicked me out because I always questioned and challenged their AGW stance.

MarkG
Reply to  R Shearer
February 15, 2016 8:32 pm

I was always amused by the number of people I met on the Internet who were simultaneously “Peak Oilers” and “Global Warmers” and didn’t even see how one contradicted the other.

Leo Smith
Reply to  R Shearer
February 15, 2016 10:13 pm

Odd, because the ones who were not AGW catastrophists are the ones still publishing.
Beware of bigotry – just because warmists are wrong about AGW, doesn’t make them wrong about everything.
I am sure even Mann can tell left from right. Mostly.

MarkW
Reply to  R Shearer
February 16, 2016 6:46 am

Being wrong about AGW shows that your judgment is at best questionable. Which in turn puts any other pronouncements in doubt.

Reply to  Neo
February 15, 2016 6:42 pm

If finally just occurred to me what to do about ethanol- The EPA must require that any ethanol produced from edible crops only be produced without using fossil fuels. That would put a cork in it!

Kevin
Reply to  philohippous
February 16, 2016 6:12 am

Leo Smith,
Thanks for that. Nothing is worse than meeting someone who stuffs a manifesto in your mouth after hearing you voice one opinion.
If I said something about rescue cats, it wouldn’t mean I’m against hunting.
If I were against hunting, it wouldn’t mean I’m against the second amendment.
If I were against the second amendment, it wouldn’t mean I voted for Obama.
If I voted for Obama, it wouldn’t mean I supported his plan for health care reform.
If I supported his plan for health care reform, it wouldn’t mean I’m a socialist.
People hop right over this s–t and assume that if I say something about rescue cats I have nude photos of Joseph Stalin in my wallet. Don’t assume! (or I won’t let you see the photos)

MarkW
Reply to  philohippous
February 16, 2016 6:48 am

If you support a socialist solution to a major problem, you might not be a socialist. You might just be an idiot.

RD
February 15, 2016 3:15 pm

Those milk toasts will really melt down with peak TRUMP…

MarkW
Reply to  RD
February 16, 2016 6:48 am

As will the country.

Green Sand
February 15, 2016 3:27 pm

The real issue is when we will see peak subsidy?

Reply to  Green Sand
February 15, 2016 4:30 pm

Yes, the sooner we stop spending on ‘unreliables’ such as solar and bird mincers the sooner we can concentrate on really feasible solutions such as in-situ coal gasification, molten salt, fusion, and more efficient extraction methods for the really huge quantities of methane hydrates that carpet the floor of the oceans.

richardscourtney
Reply to  catweazle666
February 15, 2016 11:39 pm

catweazle666:
If you think in-situ coal gasification will become technically feasible in any foreseeable future then please contact me because I know a bridge you may want to buy.
Richard

Menicholas
Reply to  catweazle666
February 16, 2016 2:33 am

The Macondo blowout and subsequent efforts to cap the well provided a very public and well known example of what industry insiders have known for a log time…methane hydrates are a nightmare to work with…they tend to be sticky and clog pipes and other devices.
Anyone have any update on recent progress in the Japanese effort to extract methane hydrates from the sea floor sediments?
Mining comets and asteroids may be easy compared to getting some stuff out of sea floor sediments that are under miles of very cold water.

MarkW
Reply to  Green Sand
February 16, 2016 6:50 am

Not until the entire system collapses.

James Francisco
Reply to  Green Sand
February 16, 2016 1:51 pm

About the same time we hit peak stupidity.

PaulH
February 15, 2016 3:43 pm

I might add to this collection of peaksters one Jeff Rubin. Amazon describes Mr. Rubin, “Jeff Rubin is the chief economist and chief strategist at CIBC World Markets. He was one of the first economists to accurately predict soaring oil prices back in 2000 and is now one of the world’s most sought-after energy experts. He lives in Toronto.”
His book was published in 2009, and the partial description on Amazon says:
“What do subprime mortgages, Atlantic salmon dinners, SUVs and globalization have in common?
They all depend on cheap oil. And in a world of dwindling oil supplies and steadily mounting demand around the world, there is no such thing as cheap oil. Oil might be less expensive in the middle of a recession, but it will never be cheap again.
Take away cheap oil, and the global economy is getting the shock of its life.”
Oops.
http://www.amazon.com/Your-World-About-Whole-Smaller-ebook/dp/B0031TZ9QW/ref=sr_1_3?s=books

Steve from Rockwood
Reply to  PaulH
February 15, 2016 4:52 pm

Rubin predicted a minimum oil price of $150/bbl.

MikeFromAu
Reply to  PaulH
February 15, 2016 6:31 pm

incorrect:
The thing all those items have in common is private central bank money printing.
Central bank money printing controls everything including its price in printed money terms.

Unmentionable
February 15, 2016 3:43 pm

Thank you Eric for highlighting Gail Tverberg’s nefarious rubbish.
Gail Tverberg’s prediction:comment image?w=640&h=385
Nuttier than a scorched peanut bar.
But people sucked in by her were always going to sucked-in by someone like her. She just feeds them the extremist doom sludge they’re addicted to and amps the confirmation-bias feedback.
It’s evident from her record of postings, over years, that she promotes a twisted anti modernity agenda and is not the slightest bit interested in accurate oil production forecasting. Just a deplorable crank that gets off repeatedly screaming “Fire!” in a crowded theater, and acting-out histrionically to see if she can whip-up a stampede, specifically to cause as much needless harm for others as possible.

February 15, 2016 3:43 pm

Even the boy who cried wolf was eventually right. This article, though correct on the production side, failed to include issues of oil production, such as Energy Returned on Energy Invested. Simply, the net energy of a field. That has been dropping considerably since 2005. For example, the Alberta oil sands production is in the range of 1:8. That is, it takes one joule of energy to get eight back. (Natural gas consumption to make the oil from the bitumen is more than all heating requirements in all of Canada, homes and businesses). That’s one of the worst paybacks on the planet. A far cry from the 1:100 return in the 1960s. This is crucial as once a field drops below 1:4 you are no longer getting any return from the oil you extract.
Current oil prices is a geopolitical issue, coupled with a drop in world demand. The over production is only about a million barrels per day, compared to the 95 million barrels consumed. That can turn on a dime. What’s happening with production is a political game of chicken, waiting for someone to blink. Then watch the price swing entirely in the other direction.

Reply to  J. Richard Wakefield
February 15, 2016 4:02 pm

Richard – Thanks for this extremely important issue.
(Readers see papers on
Energy Return on Investment Oil Production)
Until this declining trend is solved, the future will grow bleaker.

Reply to  J. Richard Wakefield
February 15, 2016 4:32 pm

J. Richard,
“failed to include issues of oil production…”
Is this weird rebuttal day at WUWT? The world’s greatest energy expert could write ten thousand words — or a hundred thousand — and get that rebuttal. This is a thousand word post about one specific subject — not the Britannica’s entry on petroleum.
“The over production is only about a million barrels per day”
What is this “over production”, and where is it stored? World storage has not risen at anything close to a million barrels/day. US storage has increased 61 million barrels over the past 8 months (there are no reliable totals for world commercial storage). https://www.eia.gov/dnav/pet/pet_stoc_wstk_dcu_nus_w.htm
Spare capacity (the oil taps throttled below full) is unusually low, probably 1 – 2 m/b day.
http://wolfstreet.com/wp-content/uploads/2015/12/2015-12-08-Kummer-EIA-OPEC-spare-capacity.png
This is the first financial world war. Bet on the Saudi Princes to win. Before this is over, Alaska and Texas will be begging to join OPEC (exaggeration for effect).A revitalized OPEC could push spare capacity back up to 3 or 4 million b/d. That would jack the price up fast. To $80? $100? The Saudi princes need $100 to pay the bills, so that’s probably their goal.
Details here: http://fabiusmaximus.com/2015/12/08/saudi-arabia-oil-war-91758/

Menicholas
Reply to  Editor of the Fabius Maximus website
February 15, 2016 5:27 pm

They claim $80 as a stable price target. Above that price they have increasing competition from non-conventional sources.

Reply to  Menicholas
February 15, 2016 5:48 pm

Menicholas,
The Saudi Princes are playing high-stakes poker with us. I suggest not taking the other players too seriously when they tell you their plans.

Menicholas
Reply to  Editor of the Fabius Maximus website
February 16, 2016 2:19 am

Good Point. I only meant to note they have mentioned this price consistently for many years now.
If one believes what is said about peak oil, a good strategy would be for anyone with money to be buying up oil hand over fist and thee prices and pumping it into underground reservoirs.
I doubt it will stay cheap like it is now for very long…the problem is that in the investment world, one can never be certain just how long “very long” really is.
Many people who have accurately called trend reversals went broke because they erred in the timing.

Menicholas
Reply to  Editor of the Fabius Maximus website
February 16, 2016 2:20 am

Sorry, should be “…at these prices…”

Menicholas
Reply to  Editor of the Fabius Maximus website
February 16, 2016 2:25 am

$80 also seems to have been the most often quoted price at which many sources become profitable to produce, Athabasca tar sands for one.
An awful lot of people have lost their shirt in the current price decline, due to their believing that this factoid (if it even is one…I do not really know) meant that the price could never get much below this price unless demand dropped sharply.

Peter Sable
Reply to  J. Richard Wakefield
February 15, 2016 5:36 pm

For example, the Alberta oil sands production is in the range of 1:8. That is, it takes one joule of energy to get eight back. (Natural gas consumption to make the oil from the bitumen is more than all heating requirements in all of Canada, homes and businesses).
what’s the world average? You compare an anecdote (one of the worst cases) to a 1960s average. What’s 2015 average compared to 1960s average?

Reply to  Peter Sable
February 15, 2016 6:04 pm

World average is around 1:24.

commieBob
Reply to  J. Richard Wakefield
February 15, 2016 7:06 pm

J. Richard Wakefield says:
February 15, 2016 at 3:43 pm
… The over production is only about a million barrels per day, compared to the 95 million barrels consumed. That can turn on a dime. What’s happening with production is a political game of chicken, waiting for someone to blink. Then watch the price swing entirely in the other direction.

A couple of years ago I thought the lower limit was about $40/bbl because that was the cost of production for fracking. Indeed, with the lower price we’re seeing widespread bankruptcy of frackers. So, a bunch of oil and gas isn’t being fracked until the price goes over $40 again. A bunch more will come on stream at $50. And so forth …
IMHO it will be a very long time until oil approaches $100/bbl again, if ever. I note that the Chinese have made great progress in fusion. The stone age didn’t end because we ran out of stones and that may also be true for oil.

Reply to  commieBob
February 15, 2016 7:17 pm

Commie Bob,
“So, a bunch of oil and gas isn’t being fracked until the price goes over $40 again. A bunch more will come on stream at $50.”
That’s a natural opinion, since it’s often said in the news. It’s almost certainly wrong, for several reasons.
“I thought the lower limit was about $40/bbl because that was the cost of production for fracking.”
Articles about oil economics routinely cite as “costs” what are in fact “project operating costs” — ignoring other costs: capital costs (capex to develop the field), overhead (got to run the company) and the cost of capital.
Companies relying on fracking produced little free cash flow even with natural gas (Henry Hub) at $3.50 – $4.00 and WTI oil at $90 – $100 — as they were for most of 2013 – 2014. And that was with an absurdly low cost of capital provided by lenders (too low, as will be proven by the bankruptcies that are just starting).
Once the well is completed, they need only produce enough cash to cover its operating costs (shutting down the well often voids the lease) — so production continues at prices far below that needed to justify new wells. As well production declines (fracked wells have fast decline rates), then field production drops.
When prices rise again, exploration & production will increase — but requiring higher price points than during the past boom.
(a) Company CFO’s will write checks only for projects that will produce profits at current prices with conservative assumptions — no more “field of dreams” capex.
(b) Lenders will demand higher interest rates, as the memories of the coming defaults will last a long time. The coal bankruptcies, now starting to become serious, will further entrench the reputation of energy lending as high-risk.
Second, natural gas prices are more significant than oil for fracking — and for overall US hydrocarbon (in layman’s term, petroleum) production. See this EIA graph for 2014.

commieBob
Reply to  commieBob
February 15, 2016 10:51 pm

Editor of the Fabius Maximus website says:
February 15, 2016 at 7:17 pm
… Once the well is completed, they need only produce enough cash to cover its operating costs (shutting down the well often voids the lease) — so production continues at prices far below that needed to justify new wells.

Indeed. If oil were $100/bbl some of the Bakken wells might be economical for as much as thirty years. As it stands, many of them are good for less than one year because of high LOE (lease operating expense). In other words, even if you can get a bankrupt well for free, you still might not be able to economically run it.
So, production continues but maybe not for long. Here’s a link to a story that was written 133 weeks ago when they were still talking about $100/bbl. Here’s a link to a recent story where they are talking about $1.50/bbl for North Dakota sour.

Dav09
Reply to  J. Richard Wakefield
February 15, 2016 8:17 pm

EROI: the notion than one BTU is economically equivalent to every other BTU, regardless of its source. In other words, crackpot-ism on par with obsessing about the Federal Reserve being “privately” owned.

Groty
February 15, 2016 3:46 pm

I’ve been hearing about Peak Oil all of my life. You are right, though, that the hysteria really started ramping at the turn of this century when the BRICs embraced free enterprise to lift their people out of poverty. I remember reading at article about a decade ago in which Darla Moore talked about how her husband, Richard Rainwater, woke up every day and the first thing he did was see what had been published at the Oil Drum website. So some sophisticated people bought into it at the time. Matt Simmons used to come on CNBC all the time pushing how markets had always failed to properly price oil given its apparent scarcity.
One of the things you fail to mention, though, is that our estimates of reserves keep improving. The Atlantic article I link to below is mostly about the potential of methane hydrate, but one interesting tidbit the author mentions is about the Kern River an oil field 100 miles from Los Angeles that has been pumping oil for over 115 years. In 1949, after they’d been pumping oil from the field for over 50 years, analysts estimated the remaining reserves at 47 million barrels. That was wildly off. Over the next 40 years they pumped 945 million barrels from it and the new estimate in 1989 was that 697 million barrels remained in the ground. Well, over the next 20 years, from 1989-2009, the field produced an additional 1.3 billion barrels. And now with the best technology and knowledge available, they estimate there are still 600 million barrels remaining.
And that is just one field.
http://www.theatlantic.com/magazine/archive/2013/05/what-if-we-never-run-out-of-oil/309294/

Reply to  Groty
February 15, 2016 3:52 pm

Yet many major oil fields in the world that have been producing for 50 years are in terminal decline: Cantarell, Hyberia, North Sea, to name just a few.

Reply to  Groty
February 15, 2016 5:24 pm

Groty,
“One of the things you fail to mention, though, is that our estimates of reserves keep improving.”
There are a million things I “failed to mention”. If I wrote a billion words, would you have read this?
Resources are estimates of hydrocarbons in the ground. The classification of these into different kinds of reserves depends on the geological work done to estimate the find, the current level of extraction tech (to get it out), and the price of oil (is it worth extracting?).
To learn more about this see the IEA’s “Resources to Reserves”: https://www.iea.org/publications/freepublications/publication/Resources2013.pdf

February 15, 2016 3:52 pm

Editor LK, you confuse many things about peak oil PRODUCTION.
First, did you know that you have to subtract NGLs (natural gas liquids like butane and propane), which are useful for petrochem and barbicues but mostly useless for gasoline, diesel, and jet kerosine transport fuels, which is whatmis made of about 75% of crude oil?. Minus about 10% now; all liquids are not equal.
Second, did you know that Prof. Defyesse et. al. were calling peak conventional oil? Now, I have seen posts here saying oil is,oil, so lets be precise since the ratemof,production matters greatly,on the oil type. Conventional oil is sourced from some underlying source rock and resides in some overlying capped.porous reservoir (usually a sandstone or a fossiliferous carbonate). It has a viscosity >API 10 (higher API is lower viscosity), in a reservoir with porosity > 6% and permeability > 10 darcies. According to IEA, conventional oil production peaked in 2008 and is now declining at least 5.1% from existing fields. Roughly what was predicted by many. Essay IEA Facts and Fictions goes through the excruciating details. Oh, and creaming curves by basin (or, if you prefer, probit transforms) both say that about 75% of all the oil of all types that will ever be discovered already has been. Never confuse a price war with future production rates of a finite fossil fuel.
Now, unconventional oil is of four types not meeting the conventional oil criteria. 1. Orinoco belt tar. API<10. Largest part of Venezuela OPEC reserves. Except slow (steam flood) and very expensive to produce. So almost none is yet. 2. Athabasca bitumen, API<10. The 'tar sands' that are not even tar, just asphaltic remains of the world's largest natural oil spill. Slow (strip mining, SAGD) and expensive (ditto) to produce. Value after hydrocracking 2/3 of conventional oil for transportation fuels. So very costly to extract on the margin. 3. Source rock shale oil. Very light high API oil (a separate transport problem as Bakken trains unfortunately proved. But from rock with porosity <1%, and permeabilty in millidarcies. (A brick has water permability <10 millidarcies, for rhose who want a tactile sense). From which, after fracking long horizontals, we are lucky to recover over all time 1.5% of the oil in place. Darned low porosity and permeability.
The fourth unconventional source is called oil shale, a confusion since the shale contains no oil at all, only marine kerogen not yet into the catagenesis oil window. The Green River formation of Northern Colorado, southern Wyoming and Utah comprises about 60% of the worlds deposits. There is a small problem. Mining (or in situ extraction) plus retorting (to put the kerogen through artifical catagenesis) requires between 3 to 5 barrels of water per barrel of syncrude. In case you have not noticed, there is already water scarcity along the region fed by the Colorado River. So unless you want to wipe out Vegas, LA, Phoenix, and San Diego, doubt any,of themGreennRicer formation will ever produce any oil
Now, compound the amount of tar, bitumen, and shale oil to be extracted ever at anynprice, times the slowing rate at which it might be (at any price, TRR) then get back. Ignorance is no legal defense.
I wrote about this in two ebooks. Extensively. Illustrated for laymen. References for the technically imclined. Read them. What your peak oil (annual production only) post teaches is how imprecise and ill informed most public policy dialog is.

Reply to  ristvan
February 15, 2016 4:14 pm

ristvan,
Congrats on one of the oddest comments I’ve seen to one of my posts. That’s impressive given the stiff competition. Especially noteworthy are the rebuttals to things I didn’t say. You’ve learned much from the climate alarmists (it’s their favorite form of debate)!
Your 600 word (!) comment looks like a rant (half the length of my post, 1% of the evidence). Too much coffee today? Perhaps you should follow WIllis Eschenbach’s advice (from memory) and give rebuttal to quotes.
I know lots of stuff about energy, but don’t try to put all of it in a thousand word post. Most of the issues you raise are discussed in my 80 other posts about energy. See them here: http://fabiusmaximus.com/peak-oil/

Reply to  Editor of the Fabius Maximus website
February 15, 2016 5:25 pm

LK, you rant, not I. I posted a longish summary of basic petroleum geophysics for laymen, and conclusions therefrom. With lots of specifics. And backed by hundreds of pages of analysis (referenced elsewhere). Refute any specific therein with counterfacts? Please try.
Simple examples. Did, or did not, IEA call the conventional peak in 2008. Did or did not its head, Dr. Faith Birol, call the overall peak by about 2020? Google can be your friend if you dont want to read my stuff with footnotes. Like, what is the current EIA TRR estimate for the Monterey shale, the US largest?
Your claiming 80 posts reflecting fundamental lack of knowledge of petroleum geophysics is like Mann saying, ‘read all my paleoclimate reconstructions’. He has yet to deal with McIntyre, faulty centered PCS, and upside down varves. You have to deal with the reality of geophysics as laid out for you in my ‘rant’. As the late Justice Scalia siad re Gore v. Bush, “Deal with it”.

Reply to  ristvan
February 15, 2016 5:50 pm

Rust an,
What made it a rant was that it had no visible relevance to what I wrote, beyond your insult at the start.
Anyway, back to your rants! Onward!

Reply to  Editor of the Fabius Maximus website
February 15, 2016 5:53 pm

There is a simpler rebuttal to your ‘oddest comment’ Mann like toss off of my questioning your knowledge of geophysics. Just occured to me. LK, what is the capacity of the US Strategic Petroleum Reserve, in days of 2015 consumption? Is it still strategic? If not, what do you propose?

Reply to  Editor of the Fabius Maximus website
February 15, 2016 6:08 pm

Larry, if you want to continue replying, at least get my name right. Rud Istvan, hiding in plain sight at both Amazon and LinkedIn. Three ebooks on iBooks and Kindle plus more, according to my publisher.Do get back with some counterfacts. I am rather boored by nonfactual counter opinions.

Reply to  Editor of the Fabius Maximus website
February 15, 2016 6:36 pm

Ristvan,
My apologies about misspelling your name. My ipad substitutes what it thinks the text should be without notice to me. Sometimes it’s judgement is good, sometimes not so good.
Re: your questions
If you give a quote from the post plus question or rebuttal, I’ll reply (that’s foolish of me, but I’m weak). I provide consulting services for your other questions, if you are willing to pay.

Davidq
Reply to  Editor of the Fabius Maximus website
February 15, 2016 6:56 pm

ristvan,
If a doctor spoke like you, he’d tell a patient to “Shut up you know nothing about medicine, read a book before you come here and talk about your symptoms”. See how that doesn’t work?
We might go read your books, if you gave us a reference to them?

Reply to  Editor of the Fabius Maximus website
February 15, 2016 7:12 pm

well, I don’t pay consultants
and I use a keyboard, so all mistakes are mine

Doug
Reply to  ristvan
February 15, 2016 9:42 pm

Ristvan,
I have had the title of “Petroleum Geophysicist” for 35 years. Worked and consulted all over the world. Nothing in your rant falls under the field of “petroleum geophysics”. I see some confused petroleum geochemistry, some reservoir engineering, a bit of economics, but very little geophysics. Please stop abusing the term.

February 15, 2016 3:57 pm

Larry
Thanks for the helpful collected links.
I still find your evaluation overly optimistic by the logical fallacy of “moving the goalposts”. per my comment.) The models for conventional “crude and condensate” were not that far off. It is the alternative fossil resource development that was not accurately forseen. The date of a “peak” is insignificant compared to the generation long trends in crude oil vs other fuel production.
Outlook from Optimistic to Pessimistic
ExxonMobil’s 2016 Outlook for Energy Fig. 62 projects “crude + condensate” declining from a peak about 2006 to 2040. That after previously strenuously denying such predictions lest such admission harm its stock price.) Contrast as recently as 2010, ExxonMobil’e equivalent shows major growth in crude + condensate expected from OPEC while showing flat Non-OPEC.
Exxon shows the average strong decline in conventional fields that it does not expect new discoveries of “crude+condensate” to overcome. Even adding in “Deepwater production” and discoveries still does not bring future production up to a plateau or “no decline.”
All projected growth is from other resources – bitumen (aka “oil sands”), tight oil (from fracking shale), natural gas liquids (NGLs again from fracking), with small increases from “other” and “biofuels”. Yet the higher costs, especially conventional, deep water, bitumen, and tight oil, are dampening the economy and hindering growth in developing countries.
90% decline in growth
Actuary Gail Tverberg at OurFiniteWorld.com shows 7.8%/year demand growth for 1965-74, but only 0.8%/year growth for the last decade.
Evidence for State by State Peaking
In “Oil Prices, Exhaustible Resources, and Economic Growth,* Economist James D. Hamilton (UCSD) graphs the production of the US States. He shows almost ALL have already peaked and declined for their region. Geology-area still rules for the same type of resource and recovery technology.
Technology takes a LONG time to develop. Oil “Fracking” development began in 1862! Yet it was not until about 1990 that commercial oil fracking took off in the USA!
Potential CO2-EOR
Note that Tertiary and “Quaternary” production (from residual oil zones) via Carbon Dioxide Enhanced Oil Recovery (CO2-EOR) could nominally equal the production of conventional crude oil with secondary water/gas recovery – IF/When we capture/develop the CO2 resources.
To quantitatively understand hydrocarbons, we need to use “multi-Hubbert” modeling – where each resource-region and technology is separately modeled with its own growth, max, and decline. That will give a much better grasp on future production and challenges.
Short term oil price is a very POOR predictor especially in the global poker/chess game between Saudi Arabia, Iran, Russia and the USA. Even a 1% excess/lack in global oil availability sends prices skyrocketing/plummeting. e.g. from $147/bbl to $33/bbl to $110/bbl to $26/bbl. Focus instead on the long term geological constraints on each type of fossil fuel and the very long time it takes to develop and deploy new technology.

Reply to  David L. Hagen
February 15, 2016 4:40 pm

David,
Odd rebuttal day continues at WUWT! Your 500-word comment discusses lots of stuff — supposedly rebuttals — without showing any relevance to what I said.
Lesson learned! In the future I will follow Willis example and request that people reply to quotes.

February 15, 2016 4:06 pm

Along with my interest in CAGW, I also bought into fears concerning “peak oil”.
I now accept that I was mugged by fools. And that I myself was also a fool to attend to such WRONG predictions. Wrong is the kindest of words. Inaccurate does not describe the degree of divergence from what consequently happened.
And governments also attended to the prediction of future energy shortages and rising market prices. Especially the U.K. government, which has now committed to expensive energy prices long into the future, via expensive nuclear (9p/kwh) and expensive solar and wind (43p/kwh inflation adjusted and guaranteed until 2030).
The ongoing cost of this debacle is going to look like an extraordinarily poor deal for the British people IF oil and gas stay cheap and cheerful.
Now that oil is cheap, support for an expensive future for all seems to be evaporating:
http://www.fitariffs.co.uk/FITs/reviews/2015/
“Oil experts, economists, and government officials who have attempted in recent years to predict the future demand and prices of oil have had only marginally better success than those who foretell the advent of earthquakes or the second coming of the Messiah.”
Akins was speaking in 1973.
http://reason.com/blog/2015/02/10/oil-to-surge-to-200-per-barrel-or-maybe

bones
Reply to  indefatigablefrog
February 15, 2016 9:11 pm

Frog,
You would be well advised to pay attention to Rud Istvan. He laid out the basics of oils, fields and peaks. Conventional oil from older field has peaked. More volatile crudes and condensates have pushed world “crude oil” production up a couple of million barrels per day over the last decade. Most of the rest of the increase of liquids produced have been natural gas liquids that are not primary transportation fuels. Over the last decade, the U.S. horizontal drillers pushed the U.S. oil production up from about 5 million barrels per day to about 10 million/day. in a time of reduced demand. That oversupplied the oil market and destabilized it and also led the Saudis to decide to kill their competition. They went through this previously in 1985. They had allowed themselves to be swing producers for OPEC to keep the oil price high, but when their production had been cut back from 10 million/day to 2.5 million/day, they pulled the plug on their cheating OPEC friends. This is just the second verse of a familiar song for them. How long it will last this time depends on the economic growth rate, but eventually the world economy will outgrow the present supply of cheap oil. After the carnage of the ’86 price crash, it was a long time before lenders provided the capital for more oil field development. I would guess that oil prices will have to get back over $100/barrel before they would get back in the game. That might take a good while in a stagnant world economy. So the issue isn’t “peak oil” it’s peak cheap oil.

Reply to  bones
February 16, 2016 2:51 am

I’m not so sure that the Saudis run the show any more in the way that they used to.
Of course, I too can now look back and see who could be trusted to provide a good analysis and who turned out to be talking bull. But back in 2005, when I first took note of serious concerns and read widely on this topic, I backed the wrong predictions.
By about 2008/09 the world was paying $140/barrel (by recollection) and all the earlier concerns looked justified. But then look what happened.
I recall mention at the time of investors buying $200/barrel futures.
Luckily that wasn’t me.
Anyone betting on demand exceeding supply by 2016, lost that bet.
It’s easy to say who was right or wrong with the benefit of hindsight.
But seemingly solid analysis from the past seems to have lead to some very wrong predictions.
Do the Saudis still have control over the market? To some extent they can over-supply and lower prices.
But when they stop dumping then where will the new price settle?
If anyone could say exactly where we will be in 2026 – then I’m sure that they could make that bet and make a load of money.
That won’t be me – because I don’t know!!

Editor
Reply to  bones
February 17, 2016 2:58 pm

Natural gas liquids can be put through a reformer and made into gasoline and diesel fuel and jet fuel and… The cost to do this is low, but bottle propane has a nice fat markup…
While I prefer to use it in the BBQ, it is near trivial to use it for motor fuel and I have driven propane powered vehicles.
LPG is just a red herring argument in oil fuels costs.

M Courtney
February 15, 2016 4:10 pm

The root of the error is the belief that we live in a “Finite World”.
It assumes that nothing comes into the world (except a few insignificant meteorites). That non-physical things don’t exist.
It’s materialism run wild.
Ideas are new. Ideas change productivity. Ideas create new resources. Ideas reach existing resources cost effectively.
Who cares if Ancient Rome had uranium? They couldn’t use it.
Who cares if shale oil exists if we can’t reach it… but then invent fracking and…?
We have lots of new ideas. And we have lots of new people to have more ideas.
It is not a Finite World

Reply to  M Courtney
February 15, 2016 4:43 pm

M Courtney,
“The root of the error is the belief that we live in a “Finite World”.”
I think that’s too broadly stated. We live in a world with limits, but with work they can be transcended. But assuming that some invisible hand will pave an easy road for us puts us on the fast track to disaster.
America has prospered because for two centuries business and government have make wise investments in infrastructure, research, and education — which have paid off big-time. When we stop doing so, trusting to luck, we’ll quickly become just another big poor nation.

David A
Reply to  Editor of the Fabius Maximus website
February 16, 2016 12:05 am

Larry, if you have not read these links, I think you will enjoy them a great deal…
https://chiefio.wordpress.com/2009/05/08/there-is-no-shortage-of-stuff/
https://chiefio.wordpress.com/2009/03/20/there-is-no-energy-shortage/
https://chiefio.wordpress.com/2013/01/11/grains-and-why-food-will-stay-plentiful/
https://chiefio.wordpress.com/2014/12/21/unlimiting-resources-basalt-for-a-high-tech-stone-age/
I recommend E.M. Smith to anyone interested in the subject of earth’s resources, and how economics relates to resource production.

Ron M
February 15, 2016 4:38 pm

I thought peak oil had more to do about the price of extraction and if this is so, will we have to depend on middle east oil in North America?

Reply to  Ron M
February 15, 2016 5:13 pm

Ron,
Exactly! Price is what links supply and demand. As i said upstream, there is an inverse relationship between ore quality and quantity, so that once the world is fully explored (all deposits known) costs will rise over time — offset by better tech that lowers the cost of extraction and refining (details here).
At some unknowable point either the balance will tip so that rising prices force lower production (aka peaking production and demand destruction) — or new forms of energy replace it.
As for US imports of oil, successfully modeling for decades in the future that involves many factors of economics, technology, and geology. The record suggests that doing so lies beyond the state of the art.
My guess (emphasis on guess) is that new tech will produce cheap electricity and relatively inexpensive electric vehicles — slowly replacing use of liquid fuels for ground transportation — producing a demand-driven peak oil.

Menicholas
Reply to  Editor of the Fabius Maximus website
February 15, 2016 5:47 pm

It might as well be infinite.
I have calculated the volume of all of the oil ever produced anywhere in the world. This volume compares in size to a largish mountain. But a large mountain compares to the Earth as a bacterium compares to a cue ball.
Considering the volume of all of the sedimentary rock on the earth, and throw in the volume of all of the worlds oceanic sediments, we have barely begun to scratch the surface of what the world holds.
Future technological improvements should be considered nearly infinite, considering how quickly new technologies and techniques can be invented and evolve.
The biggest dangers we face, IMO, is crippling our ability to innovate by dismantling or crippling our economic and energy infrastructures, and discrediting our scientific institutions (or more accurately perhaps, allowing them to discredit themselves) so that progress slows to a crawl or becomes impossible.
Our political leaders and regulatory agencies are leading us rapidly astray.

Walter Sobchak
Reply to  Editor of the Fabius Maximus website
February 15, 2016 6:50 pm

“My guess (emphasis on guess) is that new tech will produce cheap electricity and relatively inexpensive electric vehicles”
Electricity can, and will be cheaply produced by nuclear reactors 4th and later generation fission machines, and fusion machines. But, the battery problem will make electric cars forever out of reach. The problem is driven by inorganic chemistry, which is a mature science, and the inherent engineering problems of electricity.
I wouldn’t worry. If you have have enough cheap electricity, you can make liquid fuel out of air and water.

MarkG
Reply to  Editor of the Fabius Maximus website
February 15, 2016 8:28 pm

“But, the battery problem will make electric cars forever out of reach.”
An electric car which can travel hundreds of miles and be recharged in minutes will be out of reach, but transport is going to decline dramatically over the next few decades. When you can make most of the things you need locally with the descendants of today’s 3D printers, and you can ‘travel’ anywhere you want by renting a VR drone at your destination, the demand for long-distance transport will collapse.
That doesn’t mean we won’t need oil, but it will be primarily a source of raw materials for manufacturing, not a fuel for transporting manufactured products.

Brandon Gates
Reply to  Ron M
February 15, 2016 6:13 pm

Ron M,
Peak oil refers to the point of maximum rate of extraction, followed by a decline. Hubbert’s 1956 prediction for the US lower 48 was quite good …comment image
… until shale oil production began to pick up due to market forces. According to the Wiki article containing the above graphic:
In 1956, Hubbert confined his peak oil prediction to that crude oil “producible by methods now in use.”[16] By 1962, however, his analyses included future improvements in exploration and production.[44] All of Hubbert’s analyses of peak oil specifically excluded oil manufactured from oil shale or mined from oil sands.
The same article notes that his worldwide forecasts called the peak around the year 2000, which has not happened.
This document from the USEIA contains information releavant to US import/export/domestic production:
https://www.eia.gov/totalenergy/data/monthly/pdf/sec3_6.pdf
Parent page with other statistics here: https://www.eia.gov/totalenergy/data/monthly/#petroleum

MarkW
Reply to  Brandon Gates
February 16, 2016 6:58 am

That’s like saying that the output of the climate models is quite good.

harrywr2
February 15, 2016 5:02 pm

Peak anything is an economic argument.
Peak conventionally extracted oil occurred…but 10 years of high prices produced an abundance of alternative inexpensive extraction methods and alternative fuels and substantial improvements in efficiency.

MarkW
Reply to  harrywr2
February 16, 2016 6:59 am

I thought he was talking statically. That is, conventional is defined as what is conventional at the time of the statement.

TCE
February 15, 2016 5:03 pm

Most Peak Oil projections assumed oil was a finite resource and one could calculate the date of Peak Oil by determining how much oil is in the ground or under water. I took a different approach. For me, the question has never been how much oil is potentially available, but rather how much affordable oil can we humans produce? It is important to understand the definition of “accessible” reserves: “Accessible reserves are those reserves of oil, coal or natural gas that can actually be found, produced, transported, refined, and distributed without disruption at a price the consumer can afford to pay.” Our fossil fuel resources are useful only if they can be produced and consumed, without disruption, at a price the consumer can afford to pay. We almost had an oil crisis in 2008 when there was a temporary lag in new oil production and there is ample evidence the production of conventional oil has already peaked. Hence, new oil production must come from resources that are largely more expensive to produce. Shale oil liberated by fracking is a good example, as are the cost of oil derived from sands, deep sea wells, and the arctic. Someone has mentioned EROEI – energy returned on energy invested. When that calculation approaches 1 for 4, as is happening, oil will become too expensive to use as resource for gasoline, diesel, and jet fuels, and – as shown in 2008 – will be too expensive to use as an agricultural liquid.

Steve from Rockwood
Reply to  TCE
February 15, 2016 5:19 pm

Imagine blue on the left side and red on the right. Blue represents tax and red represents subsidy. Right now oil is deep blue and other forms of energy (wind and sun) are deep red. When oil is deep red we have reached peak oil.

Editor
Reply to  TCE
February 17, 2016 3:10 pm
February 15, 2016 5:10 pm

Probably opening up Alaska to unlimited oil production (and not just ANWR) as Texas had many years ago, would provide many years of oil reserves and production if not for the USA, probably the world.
And many of the western US states have land owned by the government which will not allow oil production.

Walter Sobchak
Reply to  J. Philip Peterson
February 15, 2016 8:29 pm

Alaska? How about California?

MarkW
Reply to  Walter Sobchak
February 16, 2016 7:00 am

And Florida

Steve from Rockwood
February 15, 2016 5:11 pm

Peak oil was always about oil availability. Now it is about type, sub-type, price. Fact is, in 2016 there is a lot of oil. The world is swimming in oil. And it’s cheap. No one predicted that.

Reply to  Steve from Rockwood
February 15, 2016 5:17 pm

Steve,
That’s an important point! Long-term predictions about energy — and commodities — have a poor record of success. History shows large swings, which are often mysterious at the time.
I suspect this bear market cycle in commodities (it’s not just oil) is driven by a rising dollar and slowing global growth. On top of that the Saudi Princes started a price war to regain discipline among oil producers — just as they did in 1985.
As usual, all these factors produce grand claims about geology. Noise.

Steve from Rockwood
Reply to  Editor of the Fabius Maximus website
February 15, 2016 5:28 pm

My feeling is the Americans reopened Pandora’s box with the advent of tight shale fracking. Look at US oil & gas production since 2007. The nice thing about oil is the box is periodically reopened and that confuses a lot of people.

Reply to  Steve from Rockwood
February 15, 2016 5:46 pm

Steve,
Nicely said! The history of oil has been one of milestones of tech and discovery since the Drake well in 1859.
Eventually the entire world will have been explored, starting a new era of oil — in which the relationship of price, tech, and deposit quality-quantity play themselves out.

JamesD
February 15, 2016 5:18 pm

We should be investing in thorium and possibly fusion, because eventually we’ll have a problem. But we have time. I’ll be dead, and maybe even my kids before this is a problem. South America has barely been tapped. Venezeuala has a ton of crude sitting there due to politics. Colombia has vast reserves, but the commie rebels do cause a problem. Exxon just hit a huge field off Guyana. Argentina has vast shale reserves. We’re in good shape, but we do need to get going on thorium. Also, let us not forget about coal, which can be converted into diesel. Already being done, but shutdown by politics in the US.

Steve from Rockwood
Reply to  JamesD
February 15, 2016 5:30 pm

200 years of oil and 600 years of coal. Your children’s great-grandchildren will be dead. In the meantime, live long and prosper!

Reply to  Steve from Rockwood
February 15, 2016 6:10 pm

200 years of oil, 600 years of coal, but at what rate? If we assume a world average economic growth of 3%, with a doubling period of 25 years, 200 years has 8 doubling periods. That means the world economic activity will be 256 times today. We can extract 256 times the oil we are now today???
You are actually incorrect. Oil will last us for ever, because in 200 years society will be much lower than today. Horse and buggies dont need gasoline.

Reply to  Steve from Rockwood
February 15, 2016 6:29 pm

Steve,
“200 years of oil and 600 years of coal.”
First, that’s almost certainly wrong in any meaningful sense. Second, given the inverse relationship of ore quality and quantity, that coal in a hundred years will have the BTU content of Kitty Litter (that was a comment to me by one of EIA’s coal experts when I asked him about America’s vast coal reserves). Ditto for “oil” — we’re already mining bitumen (“oil sands”) and even small amounts of kerogen.(“oil shale”), that are barely oil.
Third, I find it difficult to imagine a future in which we’re burning large quantities of fossil fuels for energy 100 years from now. That’s unknowable, of course.

Dave Kelly
Reply to  Steve from Rockwood
February 15, 2016 10:29 pm

Editor of the Fabius Maximus.
Regarding the EIA experts comment “coal in a hundred years will have the BTU content of Kitty Litter” .
I can think of at least one Mississippi coal plant already burning a lignite that is essentially dirt (although it’d have to be shut down with Obama’s Clean Air Plan). And, given that the current cost incentive to simply take a derate and burn PRB. you’d think were already there.
However, I would be interested seeing in any projected heat content data the EIA might have? Have you seen any?

Editor
Reply to  JamesD
February 17, 2016 3:21 pm

Thorium can already be used in present light water reactors (rods in burn testing now) and in CANDU designs. Yeah, molten salt would be nice to have in production, but it does not limit the use of thorium today.

TomG
February 15, 2016 5:27 pm

My Dad, who was a chemical engineer (ScDChE from MIT), had an engineering textbook (I forget which) from 1936 that stated we shouldn’t develop an economy based on fossil fuels (in particular oil) as we only had 10 years worth of reserves. Proving that the professorate has long had problems with distinguishing the difference and significance of ‘proven reserves’ and actual oil in the ground and what and how it is accessible.

mikegeo
February 15, 2016 5:33 pm

The author seems to have left out the really interesting predictions of President Jimmy Carter from the late 1970’s who was a peak oil believer. He gave lots of speeches to urge conservation, and a switch to massive coal and nuclear usage in order to save petroleum.
He was just as deluded then as Obama is now. Is it the office you think that makes them silly? Or were they that way when they moved in?

Reply to  mikegeo
February 15, 2016 6:21 pm

Mike,
“The author seems to have left out the really interesting predictions of …”
It was not a list of everyone who ever gassed a date for peak oil. It was a list of some predictions by some well-known experts about oil.
“Is it the office you think that makes them silly? Is it the office you think that makes them silly?”
My guess is that they sound silly because we expect them to have answers to every question. I plan to vote for the first guy or gal who frequently answers “I’ll get back to you on that” to the more inane or trivial questions in the debates and press conferences.

TCE
February 15, 2016 5:37 pm

Steve
It is highly unlikely your grandchildren will consume oil based products in the quantities we do now. There is a race to control the world’s remaining coal, oil and natural gas resources. Why? The political future of most nations depends on having enough accessible fuel.

Menicholas
Reply to  TCE
February 15, 2016 5:56 pm

For an amusing look at what the future may hold, give a read to Joe Haldeman’s “The Accidental Time Machine”.

Editor
Reply to  TCE
February 17, 2016 3:34 pm

IFF we were at Peak Oil now, and that is very unlikely, Hubberts theory says production fades roughly as it rose. The downside of the bell curve looks much like the entry.
The conclusion from that is just that with about 150 years of oil since Drake’s Well, we have about 150 years to last well, minimum.
As I have a new grandson, that means he will be driving in about 17 years. We will still be very near present oil production in 17 years (a bit over 1/10th the time to end, but at the flatter top area) even IF now were peak oil, which it isn’t.
So I am very comfortable saying my grandkids will live in an oil age much like I have.

TCE
February 15, 2016 5:47 pm

Where is ristvan when I need him?

February 15, 2016 5:47 pm

This is another of those useless posts where you tell us we should learn from someone’s hysteria but don’t tell us what they said.

Reply to  Nick Stokes
February 15, 2016 5:57 pm

Poor Nick. He comments but seldom seems to read the post, and so gives consistently weird “rebuttals”.
This was about the predictions of peaking, which I listed. It was self-explanatory (with a link to the source for more info), at least to people who read the newspapers.

Reply to  Editor of the Fabius Maximus website
February 15, 2016 6:54 pm

Editor,
You mainly listed a set of dates and names from a 2005 report of Hirsch et al. Their conclusion:
“Our analysis leads to the following conclusions and final thoughts.
1. World Oil Peaking is Going to Happen
World production of conventional oil will reach a maximum and decline thereafter. That maximum is called the peak. A number of competent forecasters project peaking within a decade; others contend it will occur later. Prediction of the peaking is extremely difficult because of geological complexities, measurement problems, pricing variations, demand elasticity, and political influences. Peaking will happen, but the timing is uncertain.”

Doesn’t sound so hysterical. But the key thing is, they are talking about conventional oil. That’s why it is important to quote what people actually say.

Reply to  Editor of the Fabius Maximus website
February 15, 2016 7:08 pm

Nick,
You are advancing — from ignoring to misrepresenting what I said. A true troll.
“Their conclusion … Doesn’t sound so hysterical.”
As any child reading this would see, by “hysteria” I referred to the list of failed peak oil predictions — not to the Hirsch report listing them (which is, imo, among the best analysis done to date about energy policy).
Also making this clear I said “Note that the forecasts of major energy agencies’ look good a decade later.” The Hirsch report was done for the DoE.
“they are talking about conventional oil.”
False, They were referring to different definitions from “conventional oil” (a term whose meaning has changed over time, and is seldom used by energy experts these days) to liquid fuels. Which is why I showed the table of production of both over time (i.e., narrow and broad definitions) — both have risen.
The peak oil people most often referred to the peaking of liquid fuels, hence the severe economic effects they predicted when that peaked. Not to a scenario with ample liquid fuels but peaked conventional oil — which would have had far milder effects.

Reply to  Editor of the Fabius Maximus website
February 15, 2016 7:46 pm

“Which is why I showed the table of production of both over time (i.e., narrow and broad definitions) — both have risen.”
No, you have listed “Crude Oil”. The EIA full title is ” Crude Oil including Lease Condensate” and they make an explicit note that it also includes Canada Tar Sands. That isn’t “narrow”.
” not to the Hirsch report listing them”
A subtle distinction. But that’s the problem. You don’t make clear who you are talking about or cite what they said.

Reply to  Editor of the Fabius Maximus website
February 17, 2016 8:32 am

Nick,
“No, you have listed “Crude Oil”. The EIA full title is ” Crude Oil including Lease Condensate” …. That isn’t “narrow”.”
Yes it is. The EIA does not collect information in any narrower form. The monthly report submitted by US oil producers, EIA-914, has them report “Crude Oil including Lease Condensate” (question 3.1). The EIA does not collect information on crude oil production without lease condensate, or on lease condensates as a separate category.
http://www.eia.gov/survey/form/eia_914/form.pdf
I don’t mind your criticism, misinformed as it usually is. What makes you a troll is that you seldom (ever?) acknowledge your errors, but come back confidently with still more ill-informed rebuttals.

Reply to  Nick Stokes
February 15, 2016 6:29 pm

Nick, I seldom agree with you. This is one of those times.

Reply to  ristvan
February 15, 2016 6:45 pm

ristvan,
“but don’t tell us what they said.”
Since you are agreeing to something obviously false, I see why your long comment didn’t cite — or even pertain — to what I wrote.
It’s the long tradition of climate almarists to give bold rebuttals without any contact with the content. Interesting to see that you join Nick in this.
I’m off to work. I’ll leave you and Nick to chat about “cheap shots”. Listen to him; he’s an expert.

MarkW
Reply to  ristvan
February 16, 2016 7:05 am

Wow, the trolls agree with each other.
Whoda thunk it.

Reply to  ristvan
February 17, 2016 8:34 am

MarkW,
I do not consider Rritvan a troll. He often makes insightful comments to my posts, although we often disagree.
I agree with you, his agreement with Nick Stokes’ typically trollish comments here is odd. Especially as he makes no specific criticisms of my post, just bold smears.
Perhaps he just had a bad day.

Menicholas
February 15, 2016 6:01 pm

Those people predicting peak oil may have been wrong, but the money that a lot of people made and lost was vast and very real.
And it extended way beyond energy to commodities such as copper. People who knew, at the time, when the commodity supercycle ended did well…and those who failed to get the memo and continued to invest did not.
I put the start of the turnaround and reversal as the completion of the Three Gorges dam and the end of the build-out for the Beijing Olympiad.

Reply to  Menicholas
February 15, 2016 6:48 pm

Menicholas,
Thanks for the reminder! I’ve been in finance for 38 years, and seen people lose fortunes betting on commodity cycles — usually betting that the current move will continue. That works until it fails, usually hard.
The cure for high commodity prices is high prices is high prices. The cure for low prices is low prices. The long-term trends are difficult to see, nor do we know that they’ll continue.

TCE
February 15, 2016 6:08 pm

Menicholas
Very true.

TCE
February 15, 2016 6:12 pm

There are many who believe the current excessive production is a strategy to stop fracking, particularly in the United States. I am not so sure. The Kingdom of Saudi Arabia is in a fight for its political life against Iran, backed by Russia and China. Low oil prices reduce the ability of Saudi Arabia’s opponents to fund war.
Just a thought.

Bob Burban
February 15, 2016 6:27 pm

As some wag once noted: the world will never run out of oil – it’s just that .nobody will be able to afford the last barrel

oildestiny.blogspot.com
Reply to  Bob Burban
February 15, 2016 6:32 pm

Great line. 🙂
[Please use only one screen name. -mod.]

TCE
February 15, 2016 6:33 pm

Nice line. 🙂

thingadonta
February 15, 2016 6:42 pm

peak anything is usually promoted by those who have an interest in something running out quicker.

MarkW
Reply to  thingadonta
February 16, 2016 7:07 am

Or those who are trying to get rich by manipulating prices.

Steve Oregon
February 15, 2016 6:50 pm

These are something to watch. The tone of certainty and all.

The End of Suburbia – 52 minute documentary on peak oil
and then Escape from Suburbia

https://www.youtube.com/watch?v=FbeC4AIIo7A

David Ging
February 15, 2016 7:04 pm

This is very tangentially related to this post, but I’m looking for some help. I’m arguing on FB against CAGW. Someone put up a graph of CMIP5 versus observations. It looks great and that the models have been correct.. But I think CMIP5 up until it was released 2011, 2012, 2013?) is a hindcast. Right? Does CMIP5 show any predictive value or does it show that we’re really good at fitting models to historical data? Can someone help me? Thanks.

davidmhoffer
Reply to  David Ging
February 15, 2016 7:24 pm

WUWT search bar, just enter CMIP5.
Same goes for any other topic you are being challenged on.
Warning though, the answer is never simple.
Here’s a good one to start with:
http://wattsupwiththat.com/2013/10/04/no-matter-how-the-cmip5-ipcc-ar5-models-are-presented-they-still-look-bad/

David Ging
Reply to  davidmhoffer
February 16, 2016 5:33 am

Thanks

Marcus
Reply to  David Ging
February 15, 2016 7:28 pm

Satellite and balloon observations or the heavily ” adjusted ” ground observations ? Big difference !

DesertYote
February 15, 2016 7:29 pm

Peak Oil is just a rehash of Peak Coal, and just about as significant.

Khwarizmi
February 15, 2016 7:31 pm

comment image
During the carbonaceous era on tiny Comet Halley, vast amounts of organic matter were preserved in the sediments of shallow inland seas. Today it is 1/3 kerogen, a.k.a. “oil shale”:
https://en.wikipedia.org/wiki/Oil_shale#Extraterrestrial_oil_shale
Impossible, but true!

February 15, 2016 8:24 pm

Two years ago we had our oil heater replaced by a new very efficient burner, our oil consumption was ( gratefully) cut over halve! I see technology in the coming years make the same if not better advances. To me all this talk is not relevant. i compare it to the advances in computer teck, astronomical and satellite advances, who would have seen those coming?

February 15, 2016 8:28 pm

The Peak Oil story is still correct because the math has not changed. Yes, we can produce more oil by destroying capital for a while but that is a fool’s game that has to end. The bottom line is that light sweet crude production peaked a few years back. Yes, we did spend hundreds of billions of dollars to develop expensive tar sands and totally uneconomic shale; we invested in water drive systems that would produce more oil now but at a cost later on as some of the recoverable gets left behind.
The only way to see what is happening is to look at the balance sheets and cash flow statements of the marginal producers and they are toast. The SEC filings for the pure shale producers show negative cash flows even when prices were near a barrel. And given the heterogeneous nature of shale formations, the rapid depletion rates, and very small core areas where production is very profitable but limited, we are looking at a small amount of economic production that is dwarfed by the credit induced levels of uneconomic production that we see today.
If we look at the latest report from the Bakken we see that in November 2015 there were 10,314 operating wells producing 109 barrels per day of oil. That compares to the November 2012 report when there were 4,918 operating wells producing 136 barrels per day. All those new wells provide us with the greatest flow rates but even doubling the number of older wells was not sufficient to offset the production decline from existing wells. That seems very strange given the assumption of hyperbolic decline curves where production stabilizes and stays somewhat constant for many years in the future. The peak for aggregate Bakken production was July 2015 even though the number of wells had increased by around 3% (270) over the four months from July 2015 to November 2015.
The shale story was made possible by a credit induced bubble that was created by the Fed to mitigate the effects of the economic contraction created by the popping of the housing bubble, which was created by the credit bubble created by the Fed to mitigate the effects of the popping of the tech bubble, which was created by the Fed’s creation of a credit bubble to offset the damage done by the Asian Flu and the Russian bond crisis. The Fed permitted billions in negative cash flows to be papered over as massive amounts of capital were ‘invested’ into unproductive shale production.
Note that in 2012, WTI averaged $94.05 per barrel while Brent was near $111. Yet, a supposedly great producer like Continental managed to report negative cash flow of $1.86 billion. If the supposedly ‘best’ producer in the shale space was unable to generate positive cash flows when prices were $94 what do you think is happening at $30?
What has been remarkable was the honesty of the CEOs of the shale companies. Every presentation that I can remember hearing has made it clear that there were funding gaps that needed to be closed by new borrowing, selling assets, or issuing new shares. The managers doing the presentations were clear that their reported earnings depended on certain assumptions about the depreciation rates, the shape of the decline curves, and the ultimate recoveries that were based on calculated on the basis of those assumptions. Analysts were taken in by the very profitable wells in the core areas and assumed that the rest of the formations would yield similar results. But that is not how the geology works and the actual production data shows very different results.
Before I end this I have to mention the problem with aggregating the production data. What we use as consumers is not the oil but the products that are made from that oil. And how much product is made depends on the type of oil that is produced. A barrel of heavy oil, the production of which has increased substantially thanks to massive investments in capital, produces a lot more asphalt and a lot less gasoline and kerosene than a barrel of light sweet crude. We can actually produce more oil and get a lot less high-value product. If we want to see what is going on we need a breakdown of production by oil type and that won’t happen because it does not fit the narrative being told by the authorities and Wall Street.
What I find most harmful is the dislocation that the credit bubble has created. It has allowed politicians and investors to pursue fantasy with one betting on inefficient alternative energy schemes like solar and wind energy and the other on a scam like shale-oil. In the meantime, we have seen natural decline rates of around 4% per year in the conventional fields and an increase of capital destroying marginal producing assets. If we took the uneconomic marginal producers off-line, global production would fall by several million barrels that would more than offset the decline in demand due to the collapsing economic activity in the EU, US, and even the developing world. The problem is that the malinvestments have prevented rational research into realistic solutions to our production problems.
Even worse is the status of the US dollar, which was supported by a myth of energy independence that will never happen. Once investors in American treasuries figure out that the shale miracle was yet another scam we could see a very sudden increase in poverty as purchasing power declines and jobs in industries that should never have developed are shed. You can choose to believe the mythology but I prefer to look at the real world data.
By the way, it is easy to prove me wrong. All any of you have to do is to show that the SEC filing for primary producers show positive cash flows during the periods of high oil prices. While you are searching through the 10-Ks I suggest that you do a word search for the phrase ‘funding gap’.

bones
Reply to  Vangel Vesovski
February 15, 2016 9:29 pm

+1

Javier
Reply to  Vangel Vesovski
February 16, 2016 3:00 am

+100

Grey Lensman
February 15, 2016 8:35 pm

Seeing as the number of words used is important on this thread is important, I will keep this short.
At peak oil, USD 150 per barrel Discovery channel did a detailed program on the oil sands development. They followed the building of two complete oil sands processing trains each 250,000 barrels per day capacity. One for Shell and one for Sun Oil ( I think). They expressed awe at the cost, USD 18 billion.
What they overlooked was at the then current oil price that was recovered in 66 days.
In the same way the BBC did a detailed report on the latest mega Saudi oilfield and waxed lyrical about its USD 10 billion cost. Looking at their cost figures this was repaid in 42 days and at an ongoing cost of USD 1.00 per barrel.
That is point one.
Next.’
there have been two technology breakthroughs, fracking and directional drilling. Oil shale is the subject of discussion but it has a very low oil density, that is yield per cubic metres of rock. Existing oilfields have a much higher yield even at forecast total production possible.
But if you apply those two technologies to existing proven and producing fields you unlock a massive global new supply of supply at virtually no cost. Apache demonstrated this in the Forties oilfield that they bought “dead” from BP.
So at current realistic Oil prices of USD 25, you dont spend billions on capital expenditure but you rework existing fields or just do nothing.
Its not rocket science.
The scam is not current prices but the stupid high prices humanity was forced to suffer. That the Saudis overspent their windfall profits concerns me not one iota.

Reply to  Grey Lensman
February 15, 2016 10:45 pm

Mr. Lensman,
You are confusing the various kinds of costs: capital, operating, overhead, and cost of capital.
Building the infrastructure to mine bitumen does not mean that it produces “a massive global new supply of supply at virtually no cost.” In fact the operating costs are roughly similar to other mines, plus the cost of running the refinery to turn bitumen into synthetic crude oil (among the costs is the considerable amount of energy required). Plus the ongoing cost for the equipment (mining equipment does not last forever).
Over a longer period of time, fields are exhausted and need to be replaced. Most of the available new fields require $80+ oil to be worth developing (including bitumen in Alberta, deepwater, arctic, etc). It’s not clear yet what price is needed to develop new tight rock fields (which are both oil and nat gas), but for most it is probably at least that of 2012-2014 (several times today’s prices) — since few companies were showing much free cash flow then — even with insanely low cost of capital.

Grey Lensman
Reply to  Editor of the Fabius Maximus website
February 15, 2016 11:02 pm

No i dont. If it costs ten billion to build a new oilfield with all its infrastructure and process facilities. That is the capital expenditure. If they then produce at 1.5 million barrels per day, the maths is very simple.
How they depreciate it and otherwise does not change the basic calculation.
And i am not talking about new, I am talking about existing proven fields with all facilities in place.

Reply to  Grey Lensman
February 15, 2016 11:09 pm

Mr. Lensman,
In your example, what is the operating cost per Barrel?
How long does the equipment last (depreciation period)?
What is the cost of capital for the project?

Grey Lensman
Reply to  Editor of the Fabius Maximus website
February 16, 2016 1:09 am

I have said in both cases what the capital cost is and that is what i wrote off in the required periods. Its just simple maths.
Operating costs, take usd 100,000 per day, at 1,5 million barrels per day that is only seven cents per barrel. How long does steel pipe last? How much maintenance does a gas separator need? or an oil tank?
For your peace of mind, i built two offshore production systems, on time and on budget and both operated way beyond their design specification.

Reply to  Grey Lensman
February 16, 2016 5:19 am

Lensman,
Estimates for the operating costs for the process of mining and refining Alberta’s bitumen into synthetic crude were $25 to $30 per barrel in 2008.

Chris Hanley
February 15, 2016 9:40 pm

‘As many of us predicted during the peak oil hysteria, high oil prices had three great effects — all predictable… “.
==============================
None of the author’s predictions are mentioned in Peaking of World Oil Production: Recent Forecasts (Hirsch 2007) where Larry Kummer is acknowledged as a contributor:
http://www.netl.doe.gov/energy-analyses/pubs/Peaking%20of%20World%20Oil%20Production%20-%20Recent%20Forecasts%20-%20NETL%20Re.pdf
In fact the author, presumably with Mr Kummer’s concurrence, was advocating “taking decisive action well before the [enormity of the] problem is obvious”.
This vapid post is just another attempt to attract traffic to the Fabius Maximus website.

Reply to  Chris Hanley
February 15, 2016 10:35 pm

Chris,
It sounds like you are calling me a liar. Let’s examine your claims. They are all quite specious.
(1) “None of the author’s predictions are mentioned in Peaking of World Oil Production: Recent Forecasts (Hirsch 2007)”
Why would they be mentioned in that report, which was a list of oil production forecasts? I suggest you look in Hirsch’s 2005 “Mitigations” report. It does not discusses how price boosts supply, since it focuses on the post-peak world. It does discuss the other two predictions: improved efficiency and alt liquid fuels.

“the key to mitigation of world oil production peaking will be the construction a large number of substitute fuel production facilities, coupled to significant increases in transportation fuel efficiency…”
“a higher oil price outlook often means that more oil can be produced, but geology places an upper limit on price-dependent reserves growth”

(2) I wrote extensively about these three effects in 2008 — during the peak of the peak oil hysteria (as oil prices hit all-time record highs).
I suggest starting with “Peak Oil Doomsters debunked, end of civilization called off” from May 2008; it discusses the role of efficiency and new fuels in the post-peak world. Here’s one of many posts describing the development of new liquid fuels: “A snapshot of our engines of innovation, as they develop new energy sources“, May 2008.
Also see this about prices driving efficiency from “More good news about Peak Oil, on the demand side“, Jan 2008:

‘Higher oil prices will then work their magic in these countries as it has in the developed world, driving behavioral changes and capital expenditures which reduce oil consumption (i.e., conservation and increased efficiency). Price elasticity of demand — the “law” of higher prices forcing less demand — often catches even experts by surprise. Just as Newton’s laws of motion often seem counter-intuitive, both nonetheless work inexorability. The resulting change in demand might astonish us.”

To learn why high prices affect mineral production (for the foreseeable future, but not forever) see “Recovering lost knowledge about exhaustion of the Earth’s resources (such as Peak Oil)” from Jan 2011 — about the inverse relationship of ore quality and quantity. Higher prices allows exploitation of the larger supply of lower-quality ore.
There are many others, but this should give you someplace to start.
(3) “{I} was advocating “taking decisive action well before the [enormity of the] problem is obvious”.”
My posts all worked a consistent theme: the major energy institutions forecast peaking several decades from now. The Hirsch report showed that preparation will take 20 years on a crash basis. If we start now, efficiently and gradually, we can make an easy transition to a post-oil world — one with less pollution.
Persistent slower global GDP growth after the 2008 crash (which almost nobody predicted) has pushed out the time of peaking — and contributed to the crash in prices (more supply, but less than anticipated demand) — but that also makes us less able to pay for the necessary investments to prepare.
So nothing has changed the wisdom of my view imo. Certainly not yet another swing of commodity prices, one that will end with higher energy prices (as with every cycle since US production peak in ~1972.
(4) “In fact the author, presumably with Mr Kummer’s concurrence,”
That’s a bizarrely false claim. I did some research for Hirsch, hence the mention. I was not a co-author — so there was no “concurrence” of me with the text..

Reply to  Editor of the Fabius Maximus website
February 15, 2016 11:05 pm

Chris,
Follow-up note: when discussing these three predictions I was making commonplace observations. They were nothing special or unique. Hence I described them as “As many of us predicted … all predictable.”

Chris Hanley
Reply to  Editor of the Fabius Maximus website
February 15, 2016 11:27 pm

“It sounds like you are calling me a liar …”.
=====================================
Certainly not Larry, simply as you say “memories have faded, but a decade ago the predictions of end of oil were hot news”.
I guess an investment advisor must develop an aptitude for Delphic prognostications.

LarryFine
February 15, 2016 9:51 pm

Two of the major hoaxes presented by globalists today are mutually exclusive.
If the Peak Oil hoax were true, then it would cancel out the Global Warming hoax because there wouldn’t be enough of the stuff to cause runaway warming.

February 15, 2016 9:57 pm

I dunno. The world uses 36 billion barrels of oil a year, but does not find 36 billion in reserves to replace it. Doesn’t that suggest a peak?

mikegeo
Reply to  rokshox
February 15, 2016 10:33 pm

rokshox
That’s not exactly right. Each year of discovery can be a variation on previous years given the time needed to find and explore new fields. In 2004 they found about 80 billion new barrels, some 60 billion in 2010 and about 10 billion in 2014, according to energy info. It jumps around.
However, huge fields like the oil sands (in various countries) have hundreds of years worth now, so the annual discovery rate is not as useful as the current reserves/resources info.

Reply to  mikegeo
February 15, 2016 10:47 pm

Mike geo,
+1. Nicely said.

LarryFine
Reply to  rokshox
February 16, 2016 2:13 pm

Malthusians have always been wrong. The carrying capacity of the Earth is mind-bogglingly higher than they claim.
It’s their Luddite mindset that endangers health by endangering the engines of prosperity, Liberty and free-market Capitalism.

Leo Smith
February 15, 2016 10:04 pm

Very poor and biased article.
Peak oil is not about there being more oil left, or about there being new technologies to get it. Ultimately its about EROEI – that it takes too much energy to extract it (compared to some other source of fuel).
And that is the issue. WE dont use oil in power stations because its too expensive. We use gas. Peak oil for electricity generation has come and gone, as has peak oil for many many regions where oil is drilled. It hasn’t happened globally yet, but in a finite world, it is against common sense to say that it never will.
This article of the cornucopian persuasion reminds me of:
http://vps.templar.co.uk/Cartoons%20and%20Politics/Okay.png
Yes, we are okay so far…
Things that have peaked and declined
Slavery – we didn’t run out of slaves
Wood burning – we didn’t run out of wood
Ice age – we didn’t run out of ice
Horse drawn transport – we didn’t run out of horses
The Mayan civilisation – we didn’t run out of Mayans (to sacrifice)
The Roman Empire – we didn’t run out of Romans
The Islamic Caliphate. We didn’t run out of Muslims
The stone age. We didn’t run out of flints..
What is the issue with all these things is that at a given point a rising cost-benefit curve exceeds the cost-benefit of something else.
It has only been the massive use of government legislation that has basically piled cost on – say – nuclear, and piled negative cost on renewables, that has disguised the fundamental issue that in the case of power generation, ex of regulatory burdens nuclear power is probably the cheapest and most reliable way to generate power.
Gail Tverberg, who you pour ridicule upon, may not be right, but she makes a good case that today’s debt crisis and what amounts to the cessation of Western growth over the last 15 years or so is in fact linked to the rising cost of energy – the very energy that allowed us to expand from a rural economy to a post industrial one.
Evidence of the past is no guarantee of the future. I am not dead yet. That does not mean I never will be.

Reply to  Leo Smith
February 15, 2016 11:02 pm

Leo
“Peak oil is not about there being more oil left, or about there being new technologies to get it. ”
It’s nice that you have an opinion what “peak oil” means. I was benchmarking what well-known experts were saying during the peak oil days. This was not intended as the next Britannica entry on the oil industry, just a look at one facet of it.

verbiglia
Reply to  Editor of the Fabius Maximus website
February 16, 2016 12:35 am

Larry Kummer is trying to HIDE THE DECLINE in crude oil reserves.
Lol, sounds like a warmist hiding the decline in global temperature.

Leo Smith
Reply to  Editor of the Fabius Maximus website
February 16, 2016 10:36 am

Its not an ‘opinion’. Peak oil is when global production starts to decline permanently, for whatever reason.

Reply to  Editor of the Fabius Maximus website
February 16, 2016 10:47 am

Leo,
Yes, that is correct. Unlike your previous incorrect statement that “Ultimately its about EROEI.”
There are many factors which might force a peak in oil production. The balance of geology & technology yielding an uneconomic EROEI is one possible cause. Or, as Robert Hirsch explained in a 2007 presentation, production might peak due to political decisions by producers. It might peak because superior substitutes are created. It might peak due to political decisions by consumers, such as regulations limiting CO2 emissions.
Energy dynamics are complex, with their interplay of geology, technology, politics, and economics.

Unmentionable
Reply to  Editor of the Fabius Maximus website
February 16, 2016 5:40 pm

Has no one heard of Synthetic oil?
If you have a late model car you’ll find your engine is already full of synthesized oil.
Don’t hold you breath waiting for it to run out, or become super expensive, it’s price-competitive right now, has been for years.

Reply to  Unmentionable
February 16, 2016 6:03 pm

Unmentionable,
Synthetic Oil — made by the Fischer-Tropsch process usually from natural gas, CO, and CO2 — is in most ways better for your car than conventional motor oil. It is, however, more expensive.
Natural gas is much cheaper than oil per BTU in the US. If the F-T process was more efficient then this gas to liquid (GTL) process would replace crude very quickly! But it is not, so natural gas has not replaced oil on a large scale.
When oil was spiking over $100/b there was talk of large-scale use of GTL. Natural gas is expensive to transport except by pipe (not always feasible), so GTL would allow much more nat gas to be sold. — by converting it to an easily shipped liquid. But oil prices collapsed before GTL could get rolled out on a large scale.
Note: coal can also be converted to oil using F-T. The NAZI’s did so on a modest scale during WWII.

Unmentionable
Reply to  Editor of the Fabius Maximus website
February 17, 2016 4:50 am

TO: Editor of the Fabius Maximus website February 16, 2016 at 6:03 pm
Thank you “Ed”, I’m reasonably well read on most of those processes, and others related.
I think the bottom line to highlight, is that there are multiple paths available to mitigate the “peak sludge”, sorry, I meant the peak oil boogie-man.
Maybe you could consider condensing some of those paths, to illustrate how they mitigate various doom scenarios, and the alleged debt-cycle collapse havoc to come (yet to transition, no to end of world lol), and post them back in here also when done, including economic change making new economic technical pathways viable, and how they interact.
I intend to give your links a proper read, haven’t digested them, only grazed through so far.
At a baseline I’d say the only prior possible hydrocarbons ‘problem’ we’ve faced, until recently that is, was the inability to provide sufficient heavy lubricants and for engines and grease, if oil production declined fast, but synthetics and present copious long-chain feed stock has negated all that, as well.
As for actual energy release, so many (economic and technical) options exist, we’re spoilt for choice, actually. Coal to liquid, Coal to Gas, and nat-gas driving auto engines, all INEVITABLY viable, depending on demand level and price level.
We’re good for both mechanical lubricant and energy for a very long time, I’d say it’ll turn out to be an indefinite supply of both from here. And that’s before you also take into account that electric vehicles will be taking over, the newer hydrogen battery technology is already well past lithium technology, that are presently used in hybrid drive trains.
Electric engines don’t use lubricant past production point. NONE!
If your batteries are energy-dense enough and rechargeable fast enough, then say goodbye to inefficient reciprocating combustion engines, and their issues as well. Suddenly the entire picture is transformed. Frankly, it’s an intriguing time we’re in, the options and possibilities are much more impressive now, than in 1916.
Given the relative situation, it’s appropriate to be confident of our technologies, present and future, from here.
Thank you for posting here.

Reply to  Editor of the Fabius Maximus website
February 17, 2016 6:38 am

Unmentionable,
I don’t see believe the energy situation is unusually complex to describe. It’s just impossible to predict. Note the comments here show that it’s not well understood, with much of people’s knowledge consisting of myths. That is the real problem
There is an inverse relationship between ore quality and quantity. So we’ll never “run out” of hydrocarbons. Once the world if fully explored (i.e., no new discoveries) than prices will rise as we tap ever lower quality resources. This trend is offset by improving tech, which lowers the cost of production.
For details see: Recovering lost knowledge about exhaustion of the Earth’s resources (such as Peak Oil).
This takes place in a larger context: the speed of this process (i.e., burning through Earth’s resources) depends on the rate of economic growth and the development of new tech to boost efficiency and provide new sources of energy. Price shows the interplay at any moment of these factors, and influences how they develop.
Over shorter time horizons we will have the usual boom-bust commodity price cycles, driven by the interplay of demand changes and capital investment cycles — plus efforts to create cartels.
Looking far ahead, our descendants (in 2100? 2150?) will regard the burning of coal and oil like we regard the burning of cow as for fuel. The goal is to get there with a minimum of trouble.
All this is easy to describe this but impossible to make reliable predictions. Given the importance of energy, imo it is prudent to prepare for future problems rather than trust to luck. We could easily have a decade of recession in the 2020s. Cheap energy afterwards would not erase that suffering.
In my 80 posts about this I try to help people see through specific myths. As we see in the comments here, people love their misinformation — and tend to react by closing their eyes and screaming. Just as we see in the climate wars.
If you have any specific questions, I can provide cites to more information.

Reply to  Editor of the Fabius Maximus website
February 17, 2016 2:20 pm

I think that you are just trying to generate interest by misrepresenting what was said and what the real argument is. Peak Oil is about peak daily production and nothing else. It is not about how much oil is in the ground because that has not changed. It actually isn’t even about reported reserves because those have more to do with accounting rules than they do with discovery. The increased reserves that many of the naive optimists try to use to divert attention from what really matters are mostly a fiction. Most of the ‘new’ oil that was reported was not new at all. It was found many decades ago but due to reporting requirements was never reported properly. If we move the reserve charts back to the time that those reserves were discovered we will find that there is a serious problem with the discovery process.
If we look at the figure in the link below we see a huge jump in reported reserves for the Middle East during the 1980s. That was not due to drilling or new recoveries. It was done with the stroke of the pen as OPEC members decided to ration production based on reported reserves. Two of the countries that reported a large increase in reserves were Iran and Iraq. They certainly were not drilling at the time because they were busy fighting each other in a war.comment image
Worse are the SEC rules that allow producers to assume that the formation between productive wells contains as much oil as the areas where the wells are. But we know that is not to be true. Shale is not homogeneous and porosity, permeability, and organic content varies greatly. While it is possible to make a profit in shale, that is only true for the tiny core areas that are close to being tapped out. The massive write-downs of resources and reserves should be coming in the next few years as the curtains are pulled on the shale myth and most of the players wind up in bankruptcy.
Peak Oil is about one thing. Peak Production. Not just of barrels but of total petroleum products. The most recent data muddies the waters because it includes natural gas plant liquids (NGPL) together with the production of crude, which is an aggregate number that is made up of several different grades of oil, each with a different yield of high-value petroleum products. The numbers are not very clear and nobody seems interested in presenting a clear picture, mostly because the Western oil companies can no longer replace reserves and because the data shows that the production of economic light sweet crude peaked more than a decade in our past. I suggest that you will seem more credible if you deal with the specific points being brought up. You might want to start by showing us how we can continue to produce al of that shale and tar sands oil at a loss for much longer. Note that I have not even mentioned that many of the marginal fields even in countries like Saudi Arabia are unable to generate a profit even at $50 oil.
How many shale gas and oil companies do you expect to go bankrupt in the next six quarters? And how many of the drillers. Surely the Editor of the Fabius Maximus website should be able to answer such a question.
************************************
[Reply: Please identify to whom your replies are directed. -mod]

Unmentionable
Reply to  Editor of the Fabius Maximus website
February 17, 2016 3:03 pm

Editor of the Fabius Maximus website February 17, 2016 at 6:38 am
Thanks again ‘Ed’, familiar with the issues you replied with, geology being profession, but thanks again, appreciated. Agree re potential for stagnation and relative depressions, declines, in many states, due govt refusal all over western world to close broke bank’s and write down bad loans and stop pouring public taxes and retirement funds into crooked pockets. Another story. How the doomers like to conflate that with peak oil non-issue is quite devious and misanthropic of them (oh dear, that word again). Cheers.

Reply to  Editor of the Fabius Maximus website
February 17, 2016 3:09 pm

Vangel,
(1) It would be helpful to tell us to whom you are speaking, or give a quote. There are 358 comment here. Who are you arguing with? For example…
Leo said: ‘Peak oil is when global production starts to decline permanently, for whatever reason.”
http://wattsupwiththat.com/2016/02/15/lessons-from-the-hysteria-about-peak-oil-2005-2013/#comment-2147791
I replied: “Yes, that is correct.”
http://wattsupwiththat.com/2016/02/15/lessons-from-the-hysteria-about-peak-oil-2005-2013/#comment-2146774
You said: ” Peak Oil is about peak daily production and nothing else.”
(2) A small correction to your comment.
“The most recent data muddies the waters because it includes natural gas plant liquids (NGPL) together with the production of crude,”
The EIA does not include NGPL as “crude oil”. It is included with “Liquid Fuels”. See the table I provide, or click through to the EIA website and see the notes.

Unmentionable
Reply to  Leo Smith
February 16, 2016 1:48 am

“… to a post industrial one.”
Dream on Leo, Gail Taverberg is not only not right, she’s beyond wrong. If you’re defending her you’re in a world of delusion, or a fellow traveler with that ideological slime she pours into her posts.
I don’t know where you lot get the nerve to still want to be taken seriously when you go on about a “post-industrial earth” coming this century. It’s not coming this century, or any other. Sorry, you were badly misled. Please be more careful.
De-Industrialization is and will continue to be another epic no-show.
Take that devil-device you’re reading this on and destroy it, right now, for the greater good. And don’t ever buy another! Do away with all modern technology, every bit of it. Anything with plastic, get rid of it, ban it completely from you life. Avoid touching plastic ever again, as a rule. It’s made out of evil oil. Do it for the children! No driving in cars either, not even taxis. No combustion engines at all, no watch, no evil solar panel industrial technology and demon batteries! And no more evil telephones or radios.
That might snap you out of la-la land long enough to notice that your lifestyle really blows.
But you wont do that, because when all is said and done, Leo, guys like you are really just boutique pretenders, acting-out a crock of warped ideology, as overwrought boutique prophets of doom (Like Miss Taverberg) and typically calling people who reject the thoroughly unrealistic doom message, as “cornucopian”.
You must get a lot of that.

Leo Smith
Reply to  Unmentionable
February 16, 2016 10:40 am

You have completely misunderstood the point .
But I cant be bothered to try and make it again

Unmentionable
Reply to  Unmentionable
February 16, 2016 5:37 pm

Appreciate it.

Reply to  Leo Smith
February 16, 2016 3:08 am

EROEI
It doesn’t matter how much energy it takes to extract, refine and transport fossil fuels. EROEI (Energy Returned on Energy Invested) is even dopier than AGW and Peak Oil. I don’t spend energy to fill my tank. I don’t give energy back to the gas & electric companies in exchange for them being nice enough to heat and light my home. My company doesn’t drill for oil & gas to make energy.
I spend money to fill my tank. My company drills wells for oil & gas to make money. My gas & electric bills are paid for with money. My pay check, ExxonMobil & Shell credit card statements and checks to the gas & electric companies aren’t denominated in joules, kilowatts or btu – They are denominated in $.
I don’t give a rat’s @$$ if 1 barrel of amoeba farts uses less energy to produce than 1 barrel of crude oil… Because the barrel of amoeba farts costs $1,100 and can’t be produced in sufficient quantities to be waiting for me at the Exxon or Shell station when I need it.
If oil companies (or any businesses) used EROEI to guide their investment decisions, they would go out of business (unless the gov’t was footing the bill).
And, for that matter, most fossil fuels actually have better EROEI than most alternative sources do.comment image?zoom=2
Oil, natural gas and coal are concentrated biofuels. They represent thousands to millions of years of condensed solar energy.

Leo Smith
Reply to  David Middleton
February 16, 2016 10:39 am

First of all EROEI reflects the point at which its not worth extracting oil for use as an energy source at any price.
And what it costs represents how much human activity is involved in it.,
They are different things., In general one is not an exact analogue of the other, but they tend to have some relationship.

Unmentionable
Reply to  David Middleton
February 17, 2016 5:22 am

“And, for that matter, most fossil fuels actually have better EROEI than most alternative sources do.”
A massively under-appreciated fact, thanks for putting it in those straight, easy to understand terms.
What’s the EROEI on synthetic grease, synthetic oil, syn-gas or synthetic gasoline?
It’s completely irrelevant, if its both economic and the feed-stocks are virtually unlimited, which it is, and they are – and the technology and processes are mature, proven, and already industrialized and reliable – which they are.
The peak oil plus EROEI ideology, like the hysteria of pending ‘post-industrialization’, are all rendered irrelevant.
It really just amounts to obnoxious trolling of humanity by some very dull people.

Editor
Reply to  David Middleton
February 17, 2016 6:59 am

David:
You may find this POV useful in the EROEI discussions.
We use oil for transportation fuels because it works very well for that purpose. Oil is just the feed stock.
EVERY refinery has negative EROEI, yet we refine oil to fuels. EROEI is simply irrelevent to the topic of FUEL production. The form of the fuel matters, a lot.
Long after lift cost exceeds oil BTUs we will be lifting oil to make convenient energy dense fuels, right up to the point wher some other synthetic path becomes more efficient.
Right now we have wells in California with electric pumps lifting oil. Some of that electricity from nuclear plants. Since there is a functionally infinite supply of uranium from sea water at acceptable prices, we never run out of energy to do the lifting, so EROEI is a red herring. What matters is cost of nuclear (or wind or solar) electricity to do the lift vs cost of alternative paths to transportation fuels.
The FORM of the energy matters more than the energy in it for transportation fuels. That is the lesson of the negative EROEI refineries.
https://chiefio.wordpress.com/2009/05/29/ulum-ultra-large-uranium-miner-ship/
As long as oil gives cheaper transport fuels than the alternative paths, it will be lifted, even at negative EROEI via using electric lift pumps. Effectively turning nuclear energy into motor fuel.

Reply to  Leo Smith
February 16, 2016 5:25 am

“Wood burning – we didn’t run out of wood”
Actually, that happened several times in human history in several places. One of the causes of the Roman Empire is contributed to running out of wood locally. Taking too much energy and time to import it. It happened in England when they ran out of oak trees for ship building. Easter Island another example.
The “OK, so far” is exactly what the CEO of the Deutsches Bank sent to their employees last week. They are the largest bank in the EU and are sitting on some 25% of non-performing or under performing loans.
Our biggest threat to our way of life isnt peak oil, it’s peak credit. Socialist government borrowing is going to come to an abrupt end. Have a look at Venezuela today. Notice it’s deliberately being kept out of the news.

Dave Kelly
Reply to  Leo Smith
February 16, 2016 8:20 am

Regarding your comment “ex of regulatory burdens nuclear power is probably the cheapest most reliable way to generate power”
Well… not quite. Nuclear is inexpensive source of base load power, but, it can’t handle the swings associated with daily load variation. So, from a practical point of view, nuclear is only good from producing power up to the daily low at max. The rest is made up from fossil assets.
Adding to this problem, is the fact that you can’t simply shut down all the fossil plants at the daily system low – for technical and economic reasons. Specifically, the cycling would destroy the plant equipment and, to pay for the plant, the fossil pant has to be operated at least 80% capacity factor until fully depreciated.
Solving that problem is one of the reasons nuclear technologies like the small modular reactor are being perused. But that technology is 20-30 years away.

Leo Smith
Reply to  Dave Kelly
February 16, 2016 10:47 am

Nuclear is inexpensive source of base load power, but, it can’t handle the swings associated with daily load variation.
Actually, it largely can.
Especially if designed for it.
http://www.templar.co.uk/downloads/0203_Pouret_Nuttall.pdf
Its not currently economic. Operated at low capacity factors the high capital cost of nuclear power renders it pretty expensive in load following mode, but technically it can, and France at least does.
France is in fact a good example, where nearly all the baseload and a lot more is covered by nuclear, with some load following,. and then they use a lot of hydro for peaks and most of the load following and some pumped storage, with a very little thermal fossil plant to cover extreme demand.
The decision to not have dispatchable nuclear is not a technical one, its an economic one. At about 70% capacity factor gas becomes cheaper.

Michael J. Dunn
Reply to  Dave Kelly
February 16, 2016 1:20 pm

Oh, for Pete’s sake. If you have baseload nuclear power, it can be used to synthesize hydrocarbon fuels from water and any carbonaceous feedstock. These fuels can be used for the powerplants needed for the diurnal load variation. There is no better battery, joule per kilogram, than a long-chain hydrocarbon. Nothing new need be invented.

Dave Kelly
Reply to  Dave Kelly
February 16, 2016 5:03 pm

Leo Smith,
Regarding your statement “Actually, it largely can” – in reference to nuclear’s capability to load follow.
Your U.K. literature source points to a theoretical capacity for nuclear to load follow.
I originally pointed out the theoretical capacity for nuclear to load follow using the Small Modular Reactor design – other designs are possible. But… as I said, actual load-following nuclear capacity is roughly 20-30 years away.
To quote Yogi Berra (also attributed to Albert Einstein).
“In theory here is no difference between theory and practice. In practice there is”.

Reply to  Leo Smith
February 16, 2016 11:03 am

Leo,
“Gail Tverberg … may not be right, but she makes a good case that today’s debt crisis and what amounts to the cessation of Western growth over the last 15 years or so is in fact linked to the rising cost of energy ”
Only if you know little about economics. She was wrong about oil consumption, and her economics are just making stuff up. To give one of many examples, in her oft-quoted July 2014 post she says…
“The reason why the price of oil has stayed as high as it has in the last several years is because of the effects of quantitative easing and ultra low interest rates. If it weren’t for these, oil prices would fall, because consumers would need to pay much more for goods bought on credit, leaving less for the purchase of oil products. … Because of the expectation that Quantitative Easing will end by October 2014 and the pressure to tighten credit conditions, my expectation is that the affordable price of oil will start dropping in late 2014,”
That is almost entirely wrong. To mention just a few things …
Neither the start or end of QE3 had much effect on Treasury interest rates, and no visible effect on the rates charged to consumers (the riskless rate plus a credit spread). Determining the “tightness” of lenders’ is complex (there’s no single metric), but there is little evidence of tightening in consumer credit since QE3 was phased out.
The bottom line: the rate of growth of consumer credit increased as QE3 was phased out (Sept 2013 to October 2014) — and remained stable (and rapid) after QE3 ended. Outstanding consumer credit grew at 6.1% in 2012, 6.0% in 2013, 7.0% in 2014, and 6.9% in 2015.
http://www.federalreserve.gov/releases/g19/current/default.htm
So her prediction about credit was wrong. Prices fell for other reasons – fairly obvious ones to people not wearing “peak oil” blinders.
Also, there is little evidence that the price of oil has much effect on inflation (it’s “always and everywhere a monetary phenomenon”, more or less), let alone for “goods bought on credit”.

Sten Dec
February 15, 2016 11:46 pm
February 15, 2016 11:53 pm

Când ştii că eşti acasă?
// event.2parale.ro/events/click?ad_type=product_store&aff_code=036a3f65e&campaign_unique=ca8f8ce30&unique=070afad5f
2016-02-16 0:37 GMT+02:00 Watts Up With That? :
> Guest Blogger posted: “By Larry Kummer, from the Fabius Maximus website > Summary: The peak oil hysteria provides rich lessons for us today about > learning from activists and the value of listening to our major > professional institutions. Easy cynicism led people to believe outl” >

Larry Wirth
February 15, 2016 11:53 pm

We had best hope that ristvan @ 4:38 is off by a couple of orders of magnitude. Not taking any position here, but merely pointing out the math. 18 billion bbls of reserves, if fully extracted would provide the USA, at it’s current consumption of 18 million bbls per day, with 1000 days of supply- something less than three years. What’s wrong with this picture?

Menicholas
Reply to  Larry Wirth
February 16, 2016 1:58 am

Just look at the long long history of such estimates. We always seem to have had no more than about twenty years worth of oil in the world, despite increasing production and depletion of existing reserves.

richardscourtney
Reply to  Menicholas
February 16, 2016 2:24 am

Menicholas:
Yes. Oil producers pay for more reserves to be found when they have less reserves than their planning horizon. Oil producers don’t pay for more oil to be found when they have sufficient reserves to fulfill their needs within their planning horizon.
Richard

Ed Zuiderwijk
February 16, 2016 1:05 am

We had “peak flint” and the end of the Stone Age, but not because we ran out of stones.
We had the Bronze Age which ended but not because we ran out of tin and copper.
We had the Iron Age which ended but not because we ran out of iron ore.
We are now in the Steel, Oil, Neodymium, Aluminium, Silicon (take your pick) Age and when this epoch ends it will not be because we run out of the stuff, but because something better has come along.

Leo Smith
Reply to  Ed Zuiderwijk
February 16, 2016 10:49 am

Exactly. OIl/gas up at $200 a barrel would not be competitive with nuclear: at $600 synthetic fuel made with nuclear power becomes competitive (wet finger estimates).
Oil is already uncompetitive with coal and gas in power stations.

Editor
Reply to  Leo Smith
February 17, 2016 7:21 am

And oil is uncompetitive with gas for making “petro” chemicals. Oh, and they were first made from coal… Eastman Chemical still does use coal. There are also folks making chemicals from garbage. I doubt we will ever run out of garbage.
The notion that we need to save the oil to make plastics is just daft and ignorant of chemistry and history both.

Mark
February 16, 2016 2:10 am

Peak oil has passed in terms of energy put in to energy got out.
We just have more finds and more types of oil. We have kept exploration up and up to keep the rate of oil production up.
We are not running out, not for another 100 years and as it runs out the price goes up and up so, maybe twice that time actually.
And that’s without massive new finds, of which there are some I am pretty sure.
For all the talk of the arctic, and Antarctica, and Greenland, if big reserves are found they WILL be drilled, end of story. Civilisation is built on oil and there is nothing to replace it. Biofuels HA Solar HA wind and tide HA.
Can’t make toothpaste or fertiliser with biofuel, cant make types and plastics, and the billion other pretro chemical products.
Green militants are mentally ill, no oil no cities.
The only way solar could work, is to shove everyone into huge cities designed to run on solar, literally the only way as things stand. I hear the UN are planning just that

Reply to  Mark
February 16, 2016 5:32 am

Again with the mistake of understanding what peak oil means. It DOES NOT mean we run out of oil. It means world production will start to slow at some point, and never recover. It doesnt have to be a geological reason for slowing the world’s oil production. It could be economic reasons, or geopolitical reasons. It could also be because of net energy returned drops significantly. That slowing of production will force a slowing of consumption. But some will be able to out bid others for that lower production of oil, that in turn means someone who needs that oil will have to do without. Those who will have the hardest time trying to out bid others will be those who are most in debt.

R Shearer
Reply to  Mark
February 16, 2016 8:26 pm

Virtually all organic chemicals can be made starting from synthesis gas (CO and H2) regardless of its source, whether it be natural gas or biomass. Now we could argue whether there is enough biomass certainly.

Editor
Reply to  R Shearer
February 17, 2016 7:42 am

Also coal and garbage are currently being used too.
There are tons of “waste” biomass per person per year. There is way more than needed for plastics and other synthetics. A couple of examples:
Roughly 10% of US gasoline is ethanol from corn. Turn that into plastics instead, you get a few gallons of plastic per person per week. We don’t need anywhere near that much… There is greater mass in the stalks and husks and cobs, but we don’t need it either. BTW, there are folks making bioplastics today from corn.
Henry Ford with George Washington Carver made plastic parts for cars out of soybeans decades ago. We throw out tons of “waste vegetable oil” every year since it is cheaper to use natural gas as feed stock. Still, if desired, we can grow plastics via corn, soy, or even trees. (Rayon is made from cellulose, as is your ‘viscous sponge’ at the kitchen sink… )
Look at the piles of “yard waste” hauled away from suburban homes. No way we can use that much plastic, so we dump it in landfills to rot, or compost it.
There is no feedstock limit. Only a cheapest cost choice.

Mark
February 16, 2016 2:13 am

Moreover, I’d like to see the US military running on solar, that would be hilarious.

richardscourtney
February 16, 2016 2:14 am

Larry Kummer:
You title your essay Lessons from the hysteria about peak oil (2005-2013).
“Hysteria”? No, that is pure hyperbole.
A few self-agrandising ‘experts’ self-publicised by publishing twaddle about ‘peak oil’, and a few ‘useful idiots’ responded by posting rubbish on the web. Meanwhile, the public ignored ‘peak oil’ while the oil industry glanced at the evidence for ‘peak oil’ and decided it was not worth bothering about.
Eugenics, ‘acid rain’, and anthropogenic (i.e. man-made) global warming (AGW) did cause hysteria. Only AGW remains a problem and it, too, is fading away.
Richard

Reply to  richardscourtney
February 16, 2016 6:24 am

Richard,
““Hysteria”? No, that is pure hyperbole. ”
Not correct. Presentations at conferences at the American Society for Study of Peak Oil (ASPO) routinely predicted decades of depression and hyperinflation — plus “resource wars” — following peak oil — coming quite soon. And those were the more professional of the peak oil community.
Apocalyptic predictions were commonplace. Here are a few of the thousands available from a brief google search.
Olduvai theory
“The Olduvai theory claims that exponential growth of energy production ended in 1979, that energy use per capita will show no growth through 2008, and that after 2008 energy growth will become sharply negative, culminating, after a Malthusian catastrophe, in a world population of 2 billion circa 2050.”
https://en.wikipedia.org/wiki/Olduvai_theory
Matt Savinar‘s Life After the Oil Crash — “wholly shatter an oil-dependent economy and reduce its citizenry to poverty. …”
http://www.lifeaftertheoilcrash.net/Index.html
Peak Oil explains the lack of UFOs, Salon (6 May 2008) — Civilizations all die.
http://www.salon.com/tech/htww/2008/05/06/peak_oil_and_ufos/index.html

Reply to  richardscourtney
February 16, 2016 6:47 am

Richards Courtney,
My reply has not appeared, so I’ll reenter — taking a different perspective.
““Hysteria”? No, that is pure hyperbole. ”
Not so. Apocalyptic predictions were common in the peak oil community. Which was the subject of this article. It was more than “a few” people. The Oil Drum and ASPO has large followings, and were quoted as expert sources in the major media — which gave lavish coverage to the doomsters.
This had an affect on the general public: “Gallup surveys conducted in 2007 and 2008, for example, indicated at the time that 53% (2007) and 62% (2008) of Americans believed that the United States would face a severe energy shortage in the next 5 years and that 43% (2007) and 47% (2008) of Americans worried “a great deal” about the availability and affordability of energy”
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3154229/
As I said, the major climate agencies (and, as you note, the oil companies) provided sober analysis throughout this period. The contrast between the two is the relevant point of my post.

Reply to  Editor of the Fabius Maximus website
February 16, 2016 8:42 am

Richards Courtney,
To learn more about the Peak Oil movement — the large number of people who were extremely worried about what they saw as an imminent doom — I recommend reading Peak Oil: Apocalyptic Environmentalism and Libertarian Political Culture by Matthew Schneider-Mayerson (University of Chicago Press, 2015). He is an assistant professor at Yale-NUS (a joint project of Yale and the National University of Singapore).
The interviews with these deluded people are quite sad. Some of them restructured their lives to prepare for the End.

richardscourtney
Reply to  Editor of the Fabius Maximus website
February 16, 2016 9:01 am

Editor of the Fabius Maximus website:
I repeat, a few self-agrandising ‘experts’ self-publicised by publishing twaddle about ‘peak oil’, and a few ‘useful idiots’ responded by posting rubbish on the web. Meanwhile, the public ignored ‘peak oil’ while the oil industry glanced at the evidence for ‘peak oil’ and decided it was not worth bothering about.
But you stand by your assertion of ‘peak oil’ “hysteria” which you support by
(a) you cite that an Assistant Professor wrote a book (yawn)
and
(b) several people were worried such that you say

The interviews with these deluded people are quite sad. Some of them restructured their lives to prepare for the End.

There are always people worried that ‘The End Is Nigh’. This is a report of five different reasons why the world will end this year. The minority who fear such things are hysterical and always exist, but their fears mean nothing.
I see no evidence that society has been hysterical about ‘peak oil’.
Richard

Reply to  Editor of the Fabius Maximus website
February 16, 2016 9:09 am

Courtney,
OK, so you’re indifferent to the evidence about the peak oil conferences, the websites, the books– and the public opinion polls that showed their influence. Esp got to love your “so an assistant professor wrote a book” (it’s called “research”).
“I see no evidence that society has been hysterical about ‘peak oil’.”
I never said that society became hysterical. In fact I said the opposite by pointing to the sober analysis by the “major energy agencies”. This was about a hysterical minority that for several years had a disproportionate influence in the US — an all-too-common phenomenon in recent US history.

richardscourtney
Reply to  Editor of the Fabius Maximus website
February 16, 2016 11:56 pm

Kummer:
You say

I never said that society became hysterical. In fact I said the opposite by pointing to the sober analysis by the “major energy agencies”. This was about a hysterical minority that for several years had a disproportionate influence in the US — an all-too-common phenomenon in recent US history.

There was a “hysterical minority” that “had a disproportionate influence in the US”?
But you admit that minority had NO “influence in the US”: the “major energy agencies” rejected the minority’s attempt to generate a scare. The most the minority achieved was to raise awareness of a need for energy security.
As I pointed out, there are always insignificant minorities who are hysterical about something, and – as illustration – I linked to five different reasons why the world will end this year. They affect nothing and – as supporters of ‘peak oil’ demonstrate in this thread – they don’t understand the issues which cause their panic.
Richard

Editor
February 16, 2016 3:02 am

The problem with Hubbert’s “Peak Oil” hypothesis was his vast underestimation of the original oil in place (OOIP).

Reply to  David Middleton
February 16, 2016 5:34 am

I have to wonder how many times we have to explain this. Peak oil is not about what oil is in place. It’s about how fast we can extract it.

Reply to  J. Richard Wakefield
February 16, 2016 6:47 am

The peak oil calculation is dependent on the OOIP and economic recovery factor. All reservoirs have a “peak oil” point. “Peak oil” generally occurs early in a well’s production life…
morgan-kovar-1-rate-vs-cum-lg
Decline curves are generally plotted as rate vs cumulative production. A decline curve is dependent on original oil in place and the recovery factor. Hubbert simply calculated a hypothetical decline curve for the world.
Hubbert’s “Peak Oil” prediction was based on the assumption that the total recoverable reserves in the US and our OCS (offshore) were only 150-200 billion barrels. The current DOE estimate is 400 billion barrels – And that estimate was before 2006 and the shale boom and it didn’t include unconventional resource potential (which dwarfs the conventional potential). Shale oil like the Bakken and Eagle Ford is not unconventional oil. It is plain old crude oil. The recovery is unconventional because it’s different than the prior norm; hence they are described as unconventional resources. Oil shale (Green River) and tar sands (Athabasca oil sands) are unconventional oils because they are bitumous kerogens – essentially incompletely formed crude oil.
Here’s a link to Hubbert’s 1956 paper… http://www.hubbertpeak.com/hubbert/1956/1956.pdf

Reply to  J. Richard Wakefield
February 16, 2016 10:47 am

“Oil shale (Green River) and tar sands (Athabasca oil sands) are unconventional oils because they are bitumous kerogens – essentially incompletely formed crude oil.”
Wow, you really have no clue. Kerogen is the precursor for oil. It’s what oil is made from once cooked long enough. Bitumen is the opposite. It’s what’s left of oil after it has been cooked too long and all the light molecules have been boiled off. Do yourself a favour before you post too much more and read Oil 101.
Unconventional oil is vast, but difficult to extract, hence a low flow rate, and have a low ERoEI. Which makes their net enery output lower. That means more energy has to be diverted from society to get that oil. It’s called the Energy Trap. Google it.

Reply to  J. Richard Wakefield
February 16, 2016 1:58 pm

J. Richard Wakefield February 16, 2016 at 10:47 am
“Oil shale (Green River) and tar sands (Athabasca oil sands) are unconventional oils because they are bitumous kerogens – essentially incompletely formed crude oil.”
Wow, you really have no clue. Kerogen is the precursor for oil. It’s what oil is made from once cooked long enough. Bitumen is the opposite. It’s what’s left of oil after it has been cooked too long and all the light molecules have been boiled off. Do yourself a favour before you post too much more and read Oil 101.

From Wikipedia

General composition of oil shales constitutes inorganic matrix, bitumens, and kerogen.

 
Bituminous” means contains bitumen.

Most of the organic matter in oil shales is derived from various types of marine and lacustrine algae. It may also include varied admixtures of biologically higher forms of plant debris that depend on the depositional environment and geographic position. Bacterial remains can be volumetrically important in many oil shales, but they are difficult to identify.
Most of the organic matter in oil shale is insoluble in ordinary organic solvents, whereas some is bitumen that is soluble in certain organic solvents. Solid hydrocarbons, including gilsonite, wurtzilite, grahamite, ozokerite, and albertite, are present as veins or pods in some oil shales.
http://pubs.usgs.gov/sir/2005/5294/pdf/sir5294_508.pdf

The “oils” (technically high-grade refinery feedstocks) in oil shales are generally bitumous kerogens or kerigenous bitumens.

Unconventional oil is vast, but difficult to extract, hence a low flow rate, and have a low ERoEI. Which makes their net enery output lower. That means more energy has to be diverted from society to get that oil. It’s called the Energy Trap. Google it.General composition of oil shales constitutes inorganic matrix, bitumens, and kerogen.

EROEI is a meaningless phrase. It has no bearing on resource economics. It doesn’t matter how much energy it takes to extract, refine and transport fossil fuels. EROEI (Energy Returned on Energy Invested) is even dopier than AGW and Peak Oil. I don’t spend energy to fill my tank. I don’t give energy back to the gas & electric companies in exchange for them being nice enough to heat and light my home. My company doesn’t drill for oil & gas to make energy.
I spend money to fill my tank. My company drills wells for oil & gas to make money. My gas & electric bills are paid for with money. My pay check, ExxonMobil & Shell credit card statements and checks to the gas & electric companies aren’t denominated in joules, kilowatts or btu – They are denominated in $.
I don’t give a rat’s @$$ if 1 barrel of amoeba farts uses less energy to produce than 1 barrel of crude oil… Because the barrel of amoeba farts costs $1,100 and can’t be produced in sufficient quantities to be waiting for me at the Exxon or Shell station when I need it.
If oil companies (or any businesses) used EROEI to guide their investment decisions, they would go out of business (unless the gov’t was footing the bill).

Javier
February 16, 2016 3:22 am

What an odd timing for this article, Larry Kummer.
If there is something worse than to predict a Peak Oil that doesn’t take place is to miss a Peak Oil that has already taken place.
As some people have explained to you, conventional oil has been on an undulating plateau since 2005. This is easily seen by anybody because all the growth in oil production since then has come from US and Canada. The rest of the world together has been flat producing to this date.
See for example Matt Mushalik’s “World outside US and Canada doesn’t produce more crude oil than in 2005“.
The best comment in this page is from Vangel Vesovski. He has explained to you why the unsustainability of unconventional oil cannot continue, but you have nothing to answer to him.
Peak Oil has taken place in the summer of 2015. Since then oil production is going down and will continue going down in 2016. The lack of investments in E&P due to the oil price crisis means than projects delayed or cancelled are going to significantly affect future production and we are going to have a gap by 2020 projected at 3 million barrels per day. Weak economic conditions or outright global recession will do the rest by crashing demand. Since the world less US and Canada has been unable to increase production for 10 years despite billions invested in capex, what comes next is decline.
You are at the uncomfortable situation of calling hysteric to Peak Oil prognosticators right after Peak Oil has taken place. Well done.

Reply to  Javier
February 16, 2016 6:52 am

The Bakken, Eagle Ford and other shale oil plays are not “unconventional oil,” They are regular crude oil. The recovery method is unconventional.
Hubbert underestimated the volume of crude oil in place and could not have accounted for recovery methods not even imagined in 1956.

Javier
Reply to  David Middleton
February 16, 2016 8:45 am

Hubbert is irrelevant nowadays. The decline of Light Tight oil is like nothing Hubbert ever saw. The decline in US oil production over the next two years is going to be spectacular. The decline in the rest of the world is going to add up to that. Peak Oil was always a physical inevitability and the scene was set up when consumption overcome discoveries decades ago. The 2014 oil price crisis has brought it forward, but less not forget that we had Peak Conventional Oil in 2005, and Peak Oil Exports in 2007, so it is not as if this should have caught up by surprise. Peak Oil is already in the rear mirror, yet most people still don’t see it nor understand why.

Reply to  Javier
February 16, 2016 8:54 am

The decline in US oil production over the next two years is going to be spectacular.
What else would you expect, with the price under $30/bbl?

Reply to  David Middleton
February 16, 2016 2:01 pm

dbstealey February 16, 2016 at 8:54 am Edit
The decline in US oil production over the next two years is going to be spectacular.
What else would you expect, with the price under $30/bbl?

Proved reserves will also decline… Even though the oil will still be there.

Reply to  David Middleton
February 16, 2016 4:05 pm

David Middleton,
So much for proof, eh?

Reply to  David Middleton
February 18, 2016 2:35 am

dbstealey on February 16, 2016 at 4:05 pm
David Middleton,
So much for proof, eh?

Proved reserves vary with product prices, independently of resource volume.

Editor
Reply to  Javier
February 17, 2016 8:16 am

Javier,
Oil production is limited by cartels to maximize profit, not limited by ability to produce. Lately one producer, Saudi, got pissy at Russia and Iran having a war in their back yard. The result? They opened the taps a bit and crashed oil prices to $25 / bbl. The collateral damage to the USA is shutdown of our exploration, that isn’t a technical issue, but a geopolitical economic war issue.
Don’t confuse deliberate control with technical limits.
Note, too, that China is hitting an economic wall and slowing fast, while Europe is very slow. Oil demand does not grow in slack economies. USA wages have been flat to down for a decade. Folks don’t buy more gas when they have less money.
https://chiefio.wordpress.com/2016/02/13/why-us-voters-are-angry-and-why-the-economy-is-stagnant/
Don’t confuse economic slowdown with limited oil avaiability.
The whole world population growth is slowed, especially in advanced economies that drive cars. Fewer drivers driving less (millennials especially drive less).
Don’t confuse less demand (slow or no growth) with inability to produce.
Companies do not produce inventory in excess of demand, that costs a lot of money. The markets are just reflecting prudence in supply creation in the face of a flattened global economic growth. Similarly you do not see GM building millions of cars to sit in lots unwanted.
Oil is a product, subject to all the usual rules of making products and inventory management.

Reply to  E.M.Smith
February 17, 2016 8:25 am

Mike Smith,
Excellent analysis.

Javier
Reply to  E.M.Smith
February 17, 2016 1:14 pm

E.M.Smith,
I do not confuse those things.
You have a nice narrative about oil price wars and aggressors and victims, that the press has been pushing and a lot of people have bought. The evidence however shows that oil supply increased faster than oil demand, and oil price followed the demand/supply ratio as it usually does.
http://i1039.photobucket.com/albums/a475/Knownuthing/fig2_zpsbx7cyxsu.gif
Occam razor says it was the demand/supply ratio not a conspiracy. But people like a good conspiracy even if imaginary.
As oil supply is no longer growing, if demand is able to keep growing prices will stabilize and start increasing. But the damage to future production has already been done:
27 Billion Barrels Worth Of Oil Projects Now Cancelled
Oil price rout forces companies to slash $170 billion in projects from 2016-2020
TPH: Canceled projects could draw down 19 million daily oil barrels
We have reached the end of cheap to produce oil. Every increase in oil production is from expensive to produce oil. As we are in debt saturation and demand crisis that manifests as a deflationary crisis, we are not able to afford expensive oil. If oil is expensive, demand will go down and production will follow down. If oil is cheap expensive production will be shut down.
We have reached this point through decades long trends:
– Preferential consumption of cheap to produce oil in increasing amounts, until all giant fields are old and nearly depleted.
– Increase in debt to pay for consumption and growth when the economy was not able to grow enough, expending future wealth in the past. Now that future from where we took the wealth has arrived.
– A reduction in labor compensation due to population excess including globalization and outsourcing, that has increased capital compensation and promoted inequality. Now consumers cannot afford much and they are no longer credit worthy. A consumer or demand crisis manifests as a deflationary crisis.
Oil is not a product is a source of energy used to leverage work. We do not currently have a good substitute for it and we have reached peak production. The manifestations of this liquid fuel crisis are so far reaching that we might observe the symptoms (poor economic performance) without understanding the cause.

Reply to  E.M.Smith
February 17, 2016 1:28 pm

Javier says:
We have reached the end of cheap to produce oil.
That’s what Mike Smith said, in different words. And:
Peak Oil is already in the rear mirror, yet most people still don’t see it nor understand why.
You know things that people still don’t see or understand? So in addition to being an expert on the ‘climate’ (which correctly applies to regions, not to the globe), you’re a petroleum expert, too? I’m impressed.
In what other fields are you an expert? No need for all these different points of view, we can just rely on your comments. That will save lots of time reading.
BTW, ‘peak oil’ has been predicted repeatedly, since at least the 1920’s. Now you have it pegged to a single year. That couldn’t have anything to do with the global economy, could it? Nah. Because then your argument would be wrong.

Editor
Reply to  E.M.Smith
February 17, 2016 5:04 pm

Javier,
Saudi is the swing producer. They control that demand supply ratio. You show the graph of the result of their actions as ‘proof’ that their action doesn’t matter. Strange, that.
It is no grand conspiracy theory to describe the religion war truth of 1000 years. Sunni Shia conflict is well documented and the war with Iran fighting in Syria and Russia bombing Sunni is visible on most news channels. Russia Today has nice video, as does Al Jazeera America.
Then there is the oil shock history of the last time Saudi did this as clear precident.
The only speculative bit is motivation. It is remotely possible Saudi is ONLY acting from pecuniary motive and dosen’t care at all that this damages their chief rival and the Russian backers who are killing and bombing their fellow Sunni Arabs. But the much more likely motive is a “two fer” of both motives. Discipline OPEC cheaters and damage rivals.
BTW, we’ve seen this movie a few times already. The 70s Arab Oil Embargo, the 80s oil glut, wash and repeat.
It is simply not possible to say anything about production costs based on oil prices. Price is determined by the swing produce in OPEC. That might change, if Saudi runs out of cash before the frackers do. If not, Saudi continues to set prices for a couple of more decades.
BTW, the present $1.30 / gallon price of gasoline in Ok. pretty much proves there is no shortage of oil production, nor can there be until Saudi closes their taps.
We have LOTS of alternatives to oil as motor fuel (it is almost entirely used for transport fuel). From biodiesel to ethanol (already 10% substituted for gasoline here) to natural gas (many large trucks already use it and Love’s truck stops have CNG pumps – checked them out on a recent road trip) to GTL plants to CTL as done for decades in South Africa by Sasol company. And that doesn’t even start to scratch the surface. There are dozens more, from bacterial produced butanol drop in replacement for gasoline to DME injected diesel busses (in partial use / testing) and, back in the 70s Arab Oil Embargo, V.W. did an analysis design showing coal to methanol and methanol engines at about $4 / gallon of gasoline equivalent in todays dollars if nuclear process heat were used. Very livable.
Oh, and IIRC, Syntroleum corp had / has a trash to diesel facility running in California so LAX could be carbon PC.
We just don’t have any CHEAPER than dirt cheap oil. But they do put a lid on price at about $3 – $4 /gal.
You then wander off to some odd economic theories with cheap oil somehow causing an economic crisis.. We’ve had higher and lower fuel prices in real inflation adjusted prices in the past, so ‘existance proof’ kind of makes that point moot.
BTW, I’m an economist by degree and computer project manager for a living. I know a bit about economics and business and such. Your econ thesis ‘needs work’. The real causes of the global malaise are largely too much government regulation, too much taxation, too much crony socialism crony capitalism, and profligate debt (mostly by governments buying votes). Seasoned with a too fast attempt to move both India and China into modernity in less than one generation (screwing the developed economies with too rapid globalization). Oh, and a bit too much funny money pushing by central banks based on ‘Modern Monetary Theory’, which is wrong.
Get the stupids in governments out of the way and the economy would be fine.
https://chiefio.wordpress.com/2016/02/13/why-us-voters-are-angry-and-why-the-economy-is-stagnant/
In short, too much socialism / 3rd Way Economics , not enough free markets, and a severe lack of financial discipline. Oil just not relevant to the problem.

Javier
Reply to  E.M.Smith
February 18, 2016 7:04 am

E.M.Smith,
Saudi Arabia “was” the swing producer. When Libya came off line in 2011 it became clear that Saudi Arabia no longer had the capability of acting as swing producer. Saudi Arabia has been pumping oil as much as possible, increasing tremendously its number of rigs for the past years, yet since January 2012 it has only increased peak production by 0.35 mbpd.
Looking at past oil prices and economic conditions tells you little about present capacity of the economy to withstand high oil prices. When the economy is growing strong is capable of withstanding much higher oil prices than when it is weak and barely not growing despite low oil prices.
Every economist has a recipe to cure the economy. Few are capable of recognizing that we are reaching the limits, and that means the end of economic growth. Free markets cannot solve a problem of limits.
We will certainly have to do with oil substitutives. That doesn’t mean that we are going to do well with them. Some are more expensive, some have less energy, some cannot be scaled enough, and some have all those problems.

Reply to  Javier
February 17, 2016 11:19 am

“Peak Oil has taken place in the summer of 2015. ”
As much as I agree with you, I think that you are being fooled by the aggregate number that is being reported. We don’t really use much crude in our daily lives. We use petroleum products. And as you know, a barrel of heavy oil does not produce as many of the high-value products as does a barrel of light sweet. The aggregate also includes refinery gains and condensates that were not really reported accurately in years where there was no concern about peak production. As such, we are ignoring the fact that economic light sweet production is in our past and has been for almost a decade.
In his great book, Human Action, Ludwig von Mises has a section where he discusses the error made by the Classical Liberals, who assumed that people would not choose a system that did not work over the system that they created. It is ironic that the very people who can understand how the Fed’s easy money policies the best have fallen for the shale story and disregarded the actual evidence or the theory. I understand that Julian Simon is held in high regard because I hold him in high regard as well. But the Straussians are also right about this. They point out that when we pull back the veil on all societies we find people in the background manipulating the game. And that is what is happening today. Had we lived in a system where people were able to pursue their interests in a free market there is no way that a capital destroying industry like shale would have attracted as much investment for as long as it did. We would have seen more investment in drilling for natural gas in locations that should have plenty of it but never received much attention and even in something like the recovery of methane hyd