| Soliton ( @ 2005-04-02 04:39:00 |
| Current music: | Aha- Take On Me |
Oil! Oil! A kingdom for some oil!
SUMMARY: It has been brought to my attention that this post is very long, and most of you are too fucking lazy to read long posts.
Well, fuck you, you lazy sons of bitches. If you're not aware of peak oil (or if you think it's a bunch of horse shit), this post may be one of the most important posts you'll ever read. But nevertheless, I will sum up it's entirety right here. If you plan on reading this entire post, you may skip this summary. There's nothing new here.
Peak Oil is an issue that refers to the point at which world oil production peaks and declines. This decline causes oil to become increasingly expensive and scarce will be a time punctuated with war, famine, and lots of death.
Many countries' productions have already peaked and it is merely a matter of time before total world production does. It's not "if" but "when".
We are not going to discover any new oil wells that will hold the peak off for very long. Predictions for when the peak is coming range from 2006-2025. The majority are sooner than later.
Relying on the market to save us from this is not going to work. Waiting until the actual peak before we start to invest heavily in alternative fuels is not going to work either.
There are many alternatives, but only if we combine them will it do us any good. And any useful alternatives would take at least 15 years to come online. So, we must get to work on them 15-20 years BEFORE oil peaks. That means now. it is possible that we may be too late to avert a disaster. If oil peaks before 2010, our civilization may be fucked forever.
I say if you're prepared for the worst, you're prepared for anything. The absolute worst that could happen, as nature and history shows, is a 90% die off of the human population within one generation (ours).
So, here's how to prepare: research, research, educate, change your lifestyle to a less oil/economy dependent one, begin accepting death, chill.
Now, as a warning, I will not tolerate anybody commenting on this entry saying "well I heard we have so and so fuel alternatives" or "well the oil in the arctic/caspian sea will save us" unless you haveA) read my ENTIRE ARTICLE, and
B) have your sources of information ready to give me.
Happy reading! ;D
[EDIT 4.27.07: I haven't updated this thing in 2 years. Things have changed since I first wrote this, and not necessarily for the better.]
So, I’ve been talking an awful lot about something called Peak Oil for a while now. The past several weeks, I’ve been spending a lot of time sitting in front of my computer reading as much about it as I can, so I’ve become quite the little expert. Peak Oil is an issue that is very important to me, and indeed, should be to all of you as well. It is probably the single most important political/economic issue in over 100 years, yet very few people outside the oil trade and government are aware of it. Why? Because the possible implications of Peak Oil are so god damn terrifying to most people, that if the media were to publicly announce it, investment in the stock market would evaporate, the economy would plunge, and chaos would ensue. The average American is not emotionally prepared to deal with Peak Oil. So, let this serve as a warning to those who wish to read on. And if you choose to ignore this warning, please don’t kill the messenger (me). Jimmy Carter found out in 1980 that making something like this into an issue is political suicide. So if after reading this post, you are frightened, don’t blame me. If it motivates you to do something about it, then be glad. This post may have saved your life.
There is a saying that goes “The truth will set you free, but first it will make you sick.” Well, here we go:
First, what is “peak oil”? Peak Oil is the point at which total world oil production reaches it’s halfway point. It is not about running out of oil, it is about reaching the halfway point. I wish it were as comforting as that sounds. Once total world oil production reaches it’s halfway point, the remaining oil in the wells become increasingly harder to extract. It takes longer, uses more energy, and thus costs more. Exit Mundi (fun website) has a great analogy for this phenomenon, “Think of it like eating yogurt out of a carton. At first, you’ll have no trouble to bring out spoonfuls of yogurt at all. But after a while, you’ll carefully have to maneuver your spoon around along the sides and corners of the carton to bring the last bit out. In oil wells, it goes the same way.”
Once again, it must be stressed, this so not about “running out of oil”. It is about running out of CHEAP oil.
As oil becomes more difficult to extract, the rate at which we are able to produce it declines at roughly the same rate at which it grew. Oil production currently rates grow every year because of increasing demand. However, soon, our ability to produce oil will not be able to keep up with the growing demand. Excess production capacity will shrink. The stability of the oil market will begin to disappear. Prices will begin to rise drastically and fluctuate. Production rates will begin to decline. Once oil becomes too expensive, demand will begin to shrink as people are forced to use less of it. Under normal circumstances, within 4-5 years of such a sink in demand, the oil market would stabilize, and production would be able to continue to rise again. However, the peak of world oil production is not a normal circumstance. Production would continue to decline, prices would continue to rise, and oil will no longer be a viable energy source.
This is no minor issue. Nearly everything our way of life depends upon comes from oil. Your food comes from oil (fertilizers, gas to bring food to your grocery store), oil is needed to deliver your fresh water, health care relies upon oil, sewage disposal, garbage disposal, street maintenance, police, fire services, national defense. Drastic rises in oil price effects much more than just how much you pay for gas.
Now that I’ve gotten your attention, here’s a colorful picture:
I compiled this graph from 3 separate graphs, plus a bit of my own doodling for the sake of illustration. I’ll explain.
The Various Non-OPEC history/projection was pulled from a report by the Department of Energy on the strategic significance of oil shale resource. Their graph stopped at 2010, so I had to add my own projection. Pardon me if it’s inaccurate or something...
The history/projection of the rest of the world’s oil production was pulled from ASPO’s (Association for the Study of Peak Oil) March 2005 Newsletter.
The red line representing the history/projection of growing oil demand was taken from Exit Mundi’s article on peak oil. As entertaining as that site is, the author has the unfortunate habit of never citing his sources. So really, it’s not the best place to get information and graphs from. So sue me. Judging by the fact that it lines up perfectly with ASPO’s graph, and the fact that it accurately depicts the International Energy Agency’s projection that world oil demand will reach 32.7 billion barrels in 2010 (1), I’m going to guess it’s pretty reliable.
Anyhow, here we are in the year 2005. Everything on the graph that you see before the “now” marker is actual history (don’t believe me, you can look up plenty of the data on the Energy Information Association’s web page). For now, ignore everything past the “Now” marker, as it is only projection. Cover that side of the graph up with your hand if you like.
Now, as you can see, world oil production as a whole in on an increase. However, the oil production of many nations is in decline. Their production has already peaked. US oil production peaked in 1970 and is now in perpetual decline. The Middle East peaked in 1974, although that major decline was artificially generated (2) and not due to geological constraints, which is the case with all other production peaks. Russia peaked in 1988, although as of around ’99, their production as been increasing slightly. Various non-OPEC and European countries peaked in 2000. The other countries have been declining since last year. This does not mean that they have reached their peak yet. Unfortunately, we cannot know when a country (and indeed the world) has actually peaked until 4-5 years after the fact, since for all we know, any decline could just be a temporary one. History has shown that no temporary decline lasts longer than 5 years, because demand lowers in order to compensate. But if a decline continues longer than 5 years, it’s a pretty sure sign that the production has officially hit peak. This inability to see a peak even when we are right on top of it is a major problem, which I will discuss later.
[EDIT 4.27.07: Here's an updated version of this graph from the latest Assiciation for the Study of Peak Oil newsletter
]
I have been researching critique on the Peak Oil theory, and one of the weaker arguments against it is that oil production does not actually peak and we will continue to be able to extract the same amount of oil as we do today for many decades to come. Well, the people who this simply do not know much about oil production. It is a well known that the amount of oil you can physically pull out of a well over a certain amount of time does indeed begin to decrease at or around the halfway point. Production peaks happen, no doubt about that. So, will world oil production reach a peak and begin to decline at some point in time? Yes.
The dispute lies not in if global oil production will peak, but in how much time we have before it does. When will we hit peak? Many people believe that if we discover more major oil wells, we will be able to hold off the peak for a very long time to come. They believe the earth is still full of vast, undiscovered wells. Unfortunately, the likelihood of that is very low judging from the fact that the discovery of large oil wells is declining fast, despite the current sweaty scramble to find new oil sources. Oil preserves are being depleted 3 times as fast as they are being discovered (1).
We are consuming much more oil than we are discovering.
(This graph’s data ended in 2000, so I updated it according to information found in these places 2001-2005 production update, 2001-2004 discoveries, and 2005-2009 discovery estimations)
[EDIT 4.27.07: Here's an updated version of that graph, from the latest ASPO newsletter.
]
So when ARE we going to peak? The Gloomy Gusses at the Association for the Study of Peak Oil (according to my colorfully terrifying) graph up top), say it’s coming some time next year [4.27.07: Indeed, they believe oil peaked some time 2006]. Let’s hope they’re wrong. There are many different estimations (4):
But those last two are oil companies, who have vested interest in denying developments that might increase demand for alternatives to oil, as the last article points out. So who can blame them, really.]
Anyway, average those predictions together and you get about 2011-2012 (hey, maybe on Dec 21st LOL!).
Although it is widely agreed that the peak is coming at some point, not everyone is very worried about it. Among economists and the like (such as Charles H. Featherstone), I have found a popular claim is that a Market Solution will save us.
What is a Market Solution? Well, economics is kinda confusing for those not familiar with it, but I’ll try to make it plain to the best of my ability. First, take a look back at the graph way up top. See the red line? That represents global demand for oil. Notice how in the graph, when oil starts to decline, demand is not affected and keeps climbing? Well that's not what would really happen. If demand for oil was "perfectly inelastic", then people would demand the same amount of oil no matter how expensive or scarce it gets. However, oil demand is not perfectly inelastic. And neither is it perfectly elastic (i.e. demand lowers as soon as prices rise). As we speak, oil prices are getting higher and higher, But our demand for oil is increasing at a relatively constant rate. Prices are not effecting demand. YET. Eventually, say the economists (and they are correct), when oil prices get too high, demand will be reduced. But how high do the prices have to go before demand begins to drop? Goldman Sachs Investment Group says, "Based on our analysis of gasoline spending and the economy... we estimate that U.S. gasoline prices may need to exceed $4 per gallon," before the average citizen starts to cut down on fuel. That's about $105 per barrel. And they won't do it because they decide to, they'll do it because they have no other option.
Ok. So at some point, when prices get too high (thus a drop in oil production), say market solution advocates, it will motivate people to start investing more in energy alternatives and start conserving fuel. And when we start conserving fuel (lowering demand), oil prices will go down, thus lowering prices again, and production will start to climb again and everyone will be happy and the sun will be shining and birds chirping, blah blah chirp chirp blah.
Well, it's true that when prices get too high, demand will decrease because people won't be able to afford it. Economists are very optimistic people. In the economic world, there are always alternatives. An economist believes that a group of the 5 smartest humans on earth, when locked in an empty vault, will find a way to make a sandwich if the demand for one is great enough. They believe that high oil prices will send people looking for alternatives. This is true. They believe that as alternatives WILL be found if demand is great enough, and when they begin to come online, demand for oil will comfortably go down. This is silly.
That's not a very realistic view, as I will soon discuss. By the time we are already thirsty for oil, it may be too late to start looking for alternatives. We have to start investing in them long before high oil prices force us too. The real reason our demand would drop if prices got too high, is because people would be forced to not use as much. Some call it rationing. But that's like calling famine "food rationing".
There are definitely alternatives and ways that we can ease out of our dependence on conventional oil. There are many, many methods people have talked about. Some of them realistic, some not. Because this journal entry isn’t meant to be comprehensive, I’ll omit discussing the unrealistic options. You can figure out which ones they are, cause they’re the ones I’m not going to mention. If you’re curious though, ask me about them.
The best and most realistic options for cushioning the fall of conventional oil include:
All this information, by the way, was taken from a study for the Department of Energy by Dr. Robert L. Hirsch entitled The Mitigation of the Peaking of World Oil Production.
Anyhow, even with these realistic options, there are a couple catches. Devastating catches:
EU biofuel push my damage rainforests,
Oil from palms: scientists weigh the downside of a once-popular alternative,
Biofuels won't dent fossil fuel use: Report
Ethanol-blend auto emissions no greener than gasoline: study]
Which brings me to an important point. As I said in the beginning, our inability to see Peak Oil even when we are right on top of it is a major problem. We don’t know when it is coming. Could be next year, could be in 20 years. If we want to avoid a worldwide energy crisis unlike anything seen before, we must act immediately. Because the cushion plans take about 20 years to come into full effect (including the planning process), we would need to get to work ideally 20 years before the peak actually arrives. Dr. Hirsch’s study proposes 3 scenarios; a scenario for beginning the crash program 20 years before the peak, 10 years before the peak, and one for beginning it during the peak.
We would manage to avoid any major oil supply shortfalls for a significant time, allowing more time to develop renewable fuel alternatives.
Would help considerably (compared to what would happen if we did nothing), but would still leave roughly a 10 year period of oil supply shortfalls. The situation would be 2-3 times as bad as the energy crisis in the 1970’s, but after about a decade of world-wide economic recession, things would begin to get better (if we didn’t kill each other in a world war during that time).
This would leave the world with severe oil supply shortfalls for 2 decades or longer. This could result in permanent damage to our world’s economy. You thought the Great Depression was fun, try this on for size. It is even possible in this scenario, that the price of energy may become so expensive, the crash mitigation programs themselves could grind to a halt due to lack of funding. After all, in a depression on this scale, who has the money to replace their engines with diesel, or buy a hybrid? And what government struggling to keep its citizens alive has the economic power to build hundreds of tar sand and oil shale refineries? It would be much cheaper to go to war to get the oil.
Let’s look at a hypothetical application of all this. First, let’s pretend that later this year, the peak oil issue gains enough attention that in 2006, the governments of the world begin to earnestly take action. Mitigation officially beings in 2006 [4.27.07, lookin' good so far]. In this case, the only wild card remaining is WHEN will oil peak.
If oil peaked in 2025, like Shell Oil company predicts, then we’d be right as rain. Hooray, we saved civilization!
If oil peaked in 2016, like the Department of Energy predicts, then we’d be up for some moderately rough times 15-20 years down the road. Refer to Scenario 2.
…However, if in this scenario where the world gets cracking RIGHT AWAY, and oil peaks within the next 5 years [or last year], like the majority of the predictions say, refer to scenario 3…
BUGGER! In other words, it is indeed possible that we are already too late. But since there’s no sense in worrying and peeing our pants, let’s take the optimistic road and pretend oil will peak in 2025 or later. Nevertheless, we need to get started yesterday.
"Is anyone taking any serious actions?" you may ask. Before 2005, the answer would have been no. However, on February 28, this year, the International Energy Agency (who’s members include the US, Japan, Germany, UK, France and more) are proposing drastic policy measures to cut back on car usage in the event of an oil supply disruption. These measures range from making public transportation free, to police-enforced driving bans. You can read a news article about the proposition a here, and I managed to find a PDF of the actual 120-page proposal here. According to the information in the proposal (pg. 84), the amount of gasoline IEA member countries use is around 26% of the world’s total petroleum consumption. And even the most rigorous and draconian plans they propose (such as banning even/odd numbered license plated cars from being on the road every other day, and enforcing it with an enlarged police force), would reduce the IEA countries’ fuel usage by 10%. That means world-wide, a 3% cut in petroleum usage. But then again, this isn't really meant to be a mitigation tactic anyway, simply a response to a possible sudden supply shortfall.
[4.27.07 Other actions are now being taken. As you are probably aware, since 2005, the ears of the public have definitely swiveled in the direction of energy concerns. Bush seems to know what's up (after all, his energy adviser believes oil is possibly peaking this year), and I suspect this to be the primary reason for the recent attempts to loosen the US dependency on foreign oil. Yet of all the countries in the world, Sweden seems to be the most dedicated to ensuring a sustainable future free of oil.]
This shit-fest is getting shittier every day. In March, 2004, a report by the department of energy noted that most of the world’s oil production has already peaked, but "World production has not peaked yet because output from Russia is growing and, at this point in time, OPEC has excess capacity." (1 pg. 8)
Well, bad news. On March 16, 2005, OPEC announced that they have run out of excess capacity (5 ). OPEC, which produces 40% of the world’s oil is no longer able to keep up with demand. [4.27.07, well, OPEC hasn't lost all its excess capacity, just most of it. They pretend now that everything is rosy, and yet they refuse to increase production in anticipation of the summer driving months, which they usually do. This is because they simply can't. The fact that many experts are now saying we've already passed peak isn't very comforting either.]
Shush sush now, calm down, it's not the end of the world. (Just civilization.) Breathe. Go for a walk around the block. I’m about to talk about the worse case scenarios versus the most realistic scenarios here, so if you're freakin the hell out, you might wanna calm down a bit before you read on.
How bout some funny pictures:
HEHEHE! Lookit him with the bag over his silly little head! HEHEHE!
And HERE is a happy little dwarf! Hey look! He is probably made out of plastic, which is a petroleum product! HEHEEHE! 
Hey look! It’s New York in 35 years! So funny! HEHEHE!
Anyhow, that ends the interlude.
So, if hard times ahead are very possible, what is it that we’re most likely going to experience? And how bad could it possibly get?
To tell you the truth, right now, I don’t know what the “most likely” future is. All I can say is that the majority of the predictions say the peak is coming within the next 5 years [or has passed]. In that case, things could get very hectic. Very, very hectic. But it truly is hard to say since there are so many wild-cards. For instance, there is a chance the Middle East oil reserves are much larger than publicly stated [4.27.07 such as Iraq having twice as much oil as previously thought]. This would hold off the peak maybe a couple years to a couple decades, depending. There is also the chance some catalyst in years to come creates more political instability in major oil producing countries, resulting in unexpected, artificially generated oil shortages [Hello Iran]. But the boy scout motto is “be prepared.” And if you’re prepared for the worst that could happen, you’re prepared for anything. So, I’d say keep reading.
Worst case scenario. Oil peaks in 2005 or 2006. 1-5 years post peak, we begin to see an economic recession comparable to those seen during the energy shortages of the ‘70s [4.27.07, Consumer confidence crumbled in April, GAO Chief Warns Economic Disaster Looms]. Many people will say world oil production has peaked, many will say the recession is temporary. Strict fuel rationing and driving bans could be put into place. According to the Olduvai Theory, in 2012, "an epidemic of permanent blackouts spreads worldwide, i.e. first there are waves of brownouts and temporary blackouts, then finally the electric power networks themselves expire." But that’s pretty extreme. Assuming that doesn't happen, 5-15 years post peak, we could see the recession worsen into a second Great Depression. Maybe as it becomes evident that our mitigation programs aren’t going to help, people begin to resort to burning coal for energy, which greatly increases CO2 levels in the atmosphere, not doing our worsening environmental situation any good. In any case, we could see major economic collapse, world war(s), widespread famine (from high food prices as well as climate-change related crop losses). 15-20+ years post peak, banditry, pandemics, war, war, civil war, cannibalism. Yum yum! A mass die-off of the human population. And by “mass die-off” I mean 70%-90% of our current human population could die within our lifetime. And I’m not pulling this information from my ass. Read about what happened to the Easter Islanders when they depleted their key resource. Or how bout the St. Matthew Island reindeer Herd. Or the Irish Potato Famine. [Or the Mayan civilization. Rather simple mathematics are involved in general population models which succinctly demonstrate that when a population is near its top capacity, and a something disrupts the source of such a high birthrate (in our case, oil), the population is going to crash pretty hard. Ask me about this subject if you want more detail/want to discuss.]
So there’s the worst it could get. No wait, that’s not the worst. If legions of undead aliens from Dimension X with foot-long dongs and a hankering for some sweet human ass showed up just as we're scampering about like starving rats and decided to film a genocidal snuff porno starring our rear ends, that would probably by worse. Especially if it was like, raining acid on us at the time and a 20-foot tall resurrected cyborg Hitler shouts into a megaphone that he just killed God. WORSE THAN PEAK OIL! MAN!
Anyway, back to being serious. This all sounds pretty terrible. And unless you’ve already dismissed me as some silly apocalypse nut who doesn’t know what he’s talking about, you’re probably feeling pretty helpless about this whole situation. Well don’t. There are things you can do. Buying some guns and canned food and hiding in the woods is not one of them.
peak_oil
so_very_doomed (an optimist's community, for sure.)
Here's a useful website that can help get you started.
[4.27.07. "Treat matters of great concern lightly, and matters of small concern greatly."
The more menacing and formidable the adversary, the greater one's triumph must be. Whether one lives or dies is immaterial. The true winners are those who remain happy in spite of physical discomfort- in spite of death even. Living in despair is no life at all.
Don't despair over the possibility that you'll never own a massive house with a 3 car garage and a white picket fence. People focus far too much on the "great rewards" that they think lie in the future. With their eyes fixed only on the horizon (which never nears), they forget completely that all the rewards you ever need are right here in this moment. Everything is beautiful. You just have to quiet yourself.
"Remember all ye that existence is pure joy; that all the sorrows are but shadows; they pass & are done; but there is that which remains."
-Liber Al vel Legis
"Love, and do what thou wilt."
-St. Augustine.]