Peak Oil and the Magic Free Market

[aerius]

The reason why an established rate can't be established is two fold: First Economics is an (relative to, say, physics) imprecise science which has hundreds of socio-political variables which cannot be pinned down without a crystal ball. Second, in order to establish the rate at which prices will be raised in accordance to the drop in Oil supply you need to have an accurate model for the future of Oil and practically every prediction given on this in the past (from both ends of the spectrum, might I add) has been horribly horribly wrong.

No, but you can come up with a reasonably accurate upper limit based on the lead times it takes to build a given infrastructure. If the upper limit rate ends up lagging the oil decline curve, then it won't meet the claim of "replacing supply". If electricity demand is going to go up 10GW in 10 years, and you can only build a 2GW plant every 5 years, you're coming up short, period.

[Haminal10]

This discussion prompted me to look around for alternatives energy sources. Ironically, it was a pop-up ad which lead me to this: Shale Oil

For those who might find Wikipedia suspect, here is the U.S. government's 2006 report: http://www.eia.doe.gov/oiaf/aeo/pdf/0383(2006).pdf (can't get this to link properly). Page 53 on the right side.

Basically, the US has close to 1 trillion barrels of oil in the Green River basin. The only issue is that it is only economical to extract it if the price of oil is greater than $40 per barrel, and remains above $40 a barrel.

According to what I found, the recent spike in oil prices has made people interested in harvesting this oil again. I would contend that this is a perfect example of the free market at work: the price of oil goes up, and suddenly energy sources that were not economically feasible, suddenly are.

The best part (as I see it), this is a purely domestic source of oil. So we won't have to fight any wars in a far away land to get our energy needs.

[K. A. Pital]

The only issue is that it is only economical to extract it if the price of oil is greater than $40 per barrel, and remains above $40 a barrel.

This has been so for quite a time, man.

[J]

For those who might find Wikipedia suspect, here is the U.S. government's 2006 report: http://www.eia.doe.gov/oiaf/aeo/pdf/0383(2006).pdf (can't get this to link properly). Page 53 on the right side.

Basically, the US has close to 1 trillion barrels of oil in the Green River basin. The only issue is that it is only economical to extract it if the price of oil is greater than $40 per barrel, and remains above $40 a barrel.

Ah yes, the fabled oil shales. A long time ago they said that if oil hits $5 a barrel it could be economically developed, then that number became $8, then $15, and $25, then $30, and...well... you get the idea. I'll give even odds for achieving net energy gain from nuclear fusion before the oil shales are developed on a meaningful scale.

[Lord Zentei]

1)
I was asked to name alternative sources of oil that would take the bite out of the oil crisis and prevent a collapse of the economy. I was asked to provide such a source that we could afford in principle to upgrade our infrastructure to and that provided a net energy gain. I chose the South African oil liquification programme, since that is being used commercially and at profit.

We'll get back to this later, but if by "afford in principle" you mean spend 10% of GDP and the economy doesn't crash and there ain't any inflation and nothing that can go wrong does, then sure. In theory. Here's a $1,000,000 check post-dated to 14 years from now, in theory my bank account should have a million bucks by then.

Whose asshole did you pull those figures out of? Yours or J's? What's with this 10% of GDP shit?

3)
The South African programme provides 37% of South Africa's fuel needs, South Africa uses 1/50 of the oil the US does, and its total capital resources are about 10 billion dollars. This means 500 billion dollars over the next 34 years for a comprable programme.

Which neglects lead times again. 10 year leadtimes are actually very optimistic for a project of this magnitude. For production to hit the curve, the plants must be paid for and construction started 10 years before they're needed. That's 24 years

I am summarising the progress of the thread, and have included the lead times below you dishonest sack of shit.

4)
It was pointed out that new coal fields would be needed. Well and good, I found some prices for coal fields and the procetag went up to 1100 billion dollars over the next 34 years.

Lead times. Start digging a coal mine now and it won't hit full production for at least 15 years. Which means the latest that all the coal mines must be fully paid for and digging started is 20 years from now.

As above.

5)
Sure, whatever. (Even though I had also mentioned coal shale from Canada and Venezuela, which it is reasonable to assume would produce about that much - 2.5 million barrels per day for both countries total 34 years hence. But there would also be new transportation infrastructure needed, so whatever).

The existing heavy oil projects are worth hundreds of billions and can't be scaled up past 4-5 million barrels a day due to resource contraints. There's only so much water to go around, no water, no oil, and no amount of money will change the laws of physics.

I said 2.5 million barrels. Not only are you dishonest, but apparently illiterate as well. But you allow for 4-5 million barrels a day? Fine, I'll take that; that's about 20%-25% of what's needed, rather than only 13% as I allowed for. And for hundreds of billions? Sure, that's in the ballpark that I've been talking about.

6)1500 billion dollars is 12% of ONE YEAR of GDP at current rates. This is to be spread over 34 years: about 0.34% per year: well within what the market can handle. Even if you increase costs by an order of magnitude (absurd, but, for the sake of the argument lets grant it), its still 3.4% per year, less than current millitary expenditures, well within what society can handle.

Wrong. Spread over 20-24 years because of the lead times. Paying for a plant in 34 years means it comes online in 44 years, which is 10 years too late. 1.5 trillion is the capital costs for the mines & coal plants ONLY. It does not count any of the supporting infrastructure. The supporting infrastructure is almost always worth at least 10 times more than the capital cost of the final product.

Again with the lead times. You really are a moron. You are also failing to account for the possibility of use of existing steel mills and trasnportation infrastructure. And I DID allow for an order of magnitude increase in costs in the final assesment, you dishonest tard.

For instance the natural gas mines and gas refineries in the US are worth a few trillion bucks at most in capital costs. The pipelines which enable the system to work are worth 100-200 trillion bucks. Nevermind the worth of all the specialized steel mills & pipe fabricators who made it all possible. For reference, global GDP is around 45 trillion.

15-20 trillion for the entire coal liquifaction project is a very optimistic estimate.

You're claiming that oil pipelines amount to up to four times the world GDP, and you call me a liar below? Wow.

7)
It was claimed that panic would set in immediately at the onset of the decline, destroying the validity of these predictions. Sorry, no. The most pessimistic forecasts set the start of the decline a decade hence. Besides, I have already added an order of magnitude to the requirements.

Outright lies. The more pessimistic estimates say that we've already hit peak and the decline will start in the next 3-5 years depending on how big the plateau at the top is. As for adding an order of magnitude, if you're really lucky you've just accounted for the costs of the supporting industries and infrastructure.

You are a liar yourself. The forecast shown in the graph J provided is pessimistic. Optimistic forecasts add another decade or two to the top. Fuck off.

Incidentally, it was at this point also claimed that we would be faced with a 5%-10% decline rate. This too is nonsense. If the decline starts in 2015, halving the oil production by 2040, that's 50% in 25 years: TWO percent per year. Where did this 10% come from? And this is from the pessimist graph!

It's actually an optimist graph which assumes we'll somehow get another 10 million barrels a day before the peak hits, and that the mid east can keep up current production for a good 30 years. Both of which are bullshit. It also assumes large deepwater & polar finds and production, neither of which exist. Plus gas condensates don't count, they ain't oil, nor can you use'em in your car. Take all that away and the curve gets a lot steeper and starts earlier. The chart is accurate for past production, but not for future projections.

Oh, and you know what future projections are going to be moreso than the industry? And J's graph is optimistic? Wow, just wow.

[Haminal10]

For those who might find Wikipedia suspect, here is the U.S. government's 2006 report: http://www.eia.doe.gov/oiaf/aeo/pdf/0383(2006).pdf (can't get this to link properly). Page 53 on the right side.

Basically, the US has close to 1 trillion barrels of oil in the Green River basin. The only issue is that it is only economical to extract it if the price of oil is greater than $40 per barrel, and remains above $40 a barrel.

Ah yes, the fabled oil shales. A long time ago they said that if oil hits $5 a barrel it could be economically developed, then that number became $8, then $15, and $25, then $30, and...well... you get the idea. I'll give even odds for achieving net energy gain from nuclear fusion before the oil shales are developed on a meaningful scale.

And I could counter by pointing out that Peak Oil was supposed to occur in 1989, and then in 1995, and then in 2004...

This isn't a completely new form of power production like Nuclear Fusion. Its still just crude oil. We know where it is and we know how to extract it (either by mining or in-situ processing). All that remains is for the price of oil to rise to the level where it is economically feasible to extract it. By your own assertion, we are nearing Peak Oil. This will cause prices to rise, which will make Oil Shale profitable.

[GrandMasterTerwynn]

This discussion prompted me to look around for alternatives energy sources. Ironically, it was a pop-up ad which lead me to this: Shale Oil

For those who might find Wikipedia suspect, here is the U.S. government's 2006 report: http://www.eia.doe.gov/oiaf/aeo/pdf/0383(2006).pdf (can't get this to link properly). Page 53 on the right side.

Basically, the US has close to 1 trillion barrels of oil in the Green River basin. The only issue is that it is only economical to extract it if the price of oil is greater than $40 per barrel, and remains above $40 a barrel.

According to what I found, the recent spike in oil prices has made people interested in harvesting this oil again. I would contend that this is a perfect example of the free market at work: the price of oil goes up, and suddenly energy sources that were not economically feasible, suddenly are.

Just because something is deemed to have "economic feasibility" does not mean they're doing anything more than talking out of their asses. The most we've done with the Green River deposits is construct a dinky test plot demonstrating the basic feasibility of extracting oil from the shale. That's right, it's still barely in the R&D phase. None of that delightful infrastructure exists to employ extraction on anywhere the scale needed to even begin to make up for the upcoming conventional oil shortfalls. None of the mining, cooking and refining equiment exists. Nor does the infrastructure to get the products out of the area and into the fuel supply. All of this shit takes years to build, and Shell's in-situ heating process takes something like four years from the time you start heating before you can start extracting meaningful quantities of dead dinosaur juice. And we're in the R&D phase . . . nowhere near the point where it'd be anywhere near ready for the limelight.

Worse still, we can only speculate on the amount of potentially recoverable oil (which will end up, optimistically speaking, being some fraction of the supposed trillion barrels of oil locked up in the shale.) Nor is it likely that such an operation would produce substantial amounts of oil per day without covering the entire basin in wells. Holy Superfund, Batman! Not to mention that the energy payback on shale oil is, by Shell's estimate, just 3.5 to 1. Or, roughly a third as much energy gain as suckng the oil out from under camels in the Arabian desert.

[Straha]

For those who might find Wikipedia suspect, here is the U.S. government's 2006 report: http://www.eia.doe.gov/oiaf/aeo/pdf/0383(2006).pdf (can't get this to link properly). Page 53 on the right side.

Basically, the US has close to 1 trillion barrels of oil in the Green River basin. The only issue is that it is only economical to extract it if the price of oil is greater than $40 per barrel, and remains above $40 a barrel.

Ah yes, the fabled oil shales. A long time ago they said that if oil hits $5 a barrel it could be economically developed, then that number became $8, then $15, and $25, then $30, and...well... you get the idea. I'll give even odds for achieving net energy gain from nuclear fusion before the oil shales are developed on a meaningful scale.

And I could counter by pointing out that Peak Oil was supposed to occur in 1924, 1952, 1964, 1989, and then in 1995, and then in 2004...

Edited for accuracy based on previous official government predictions. (Well, not quite Peak Oil but the end of oil reserves.)

[Haminal10]

This discussion prompted me to look around for alternatives energy sources. Ironically, it was a pop-up ad which lead me to this: Shale Oil

For those who might find Wikipedia suspect, here is the U.S. government's 2006 report: http://www.eia.doe.gov/oiaf/aeo/pdf/0383(2006).pdf (can't get this to link properly). Page 53 on the right side.

Basically, the US has close to 1 trillion barrels of oil in the Green River basin. The only issue is that it is only economical to extract it if the price of oil is greater than $40 per barrel, and remains above $40 a barrel.

According to what I found, the recent spike in oil prices has made people interested in harvesting this oil again. I would contend that this is a perfect example of the free market at work: the price of oil goes up, and suddenly energy sources that were not economically feasible, suddenly are.

Just because something is deemed to have "economic feasibility" does not mean they're doing anything more than talking out of their asses. The most we've done with the Green River deposits is construct a dinky test plot demonstrating the basic feasibility of extracting oil from the shale. That's right, it's still barely in the R&D phase. None of that delightful infrastructure exists to employ extraction on anywhere the scale needed to even begin to make up for the upcoming conventional oil shortfalls. None of the mining, cooking and refining equiment exists. Nor does the infrastructure to get the products out of the area and into the fuel supply. All of this shit takes years to build, and Shell's in-situ heating process takes something like four years from the time you start heating before you can start extracting meaningful quantities of dead dinosaur juice. And we're in the R&D phase . . . nowhere near the point where it'd be anywhere near ready for the limelight.

Of course the infrastructure doesn't exist. Why would it? Extracting oil from the area was not economically feasable! Companies would have been stupid to build it before they could make money. I am aware that it will take years to develop. However, this is where I believe we disagree: I believe that we do have the necessary years for the infrastructure to be built. It looks like you believe that we are facing a studden and unexpected sessecion of global oil production, as opposed to a slow decline.

Worse still, we can only speculate on the amount of potentially recoverable oil (which will end up, optimistically speaking, being some fraction of the supposed trillion barrels of oil locked up in the shale.) Nor is it likely that such an operation would produce substantial amounts of oil per day without covering the entire basin in wells. Holy Superfund, Batman! Not to mention that the energy payback on shale oil is, by Shell's estimate, just 3.5 to 1. Or, roughly a third as much energy gain as suckng the oil out from under camels in the Arabian desert.

I am not surprised that the net energy gain from Shale Oil is lower than conventional oil wells: pumping oil out of the ground is easier. Companies will continue to refine the process of extraction, which should make the process cleaner as more research is done.

[Lord Zentei]

It looks like you believe that we are facing a studden and unexpected sessecion of global oil production, as opposed to a slow decline.

Tsk, tsk! You are doing it wrong! You are supposed to assume a sudden and precipitous collapse, even if Hubbert's model states that the peak is reached when only half the oil is extracted and the most outrageously pessimistic forecasts assume that we are on the peak or only just past it. For shame.

[GrandMasterTerwynn]

Of course the infrastructure doesn't exist. Why would it? Extracting oil from the area was not economically feasable! Companies would have been stupid to build it before they could make money. I am aware that it will take years to develop. However, this is where I believe we disagree: I believe that we do have the necessary years for the infrastructure to be built. It looks like you believe that we are facing a studden and unexpected sessecion of global oil production, as opposed to a slow decline.

And we don't. We're at peak oil right now. We're sitting on what is effectively the oil production plateau. The decline begins within the decade. Again, building up infrastructure of the magnitude required is going to take heaps of investment capital and a reasonably stable economy. Both of which will be hard to come by when terminal production declines and growing shortfalls between output and demand start to drive prices off towards Alpha Centauri.

Worse still, we can only speculate on the amount of potentially recoverable oil (which will end up, optimistically speaking, being some fraction of the supposed trillion barrels of oil locked up in the shale.) Nor is it likely that such an operation would produce substantial amounts of oil per day without covering the entire basin in wells. Holy Superfund, Batman! Not to mention that the energy payback on shale oil is, by Shell's estimate, just 3.5 to 1. Or, roughly a third as much energy gain as suckng the oil out from under camels in the Arabian desert.

I am not surprised that the net energy gain from Shale Oil is lower than conventional oil wells: pumping oil out of the ground is easier. Companies will continue to refine the process of extraction, which should make the process cleaner as more research is done.

Cleaner, maybe, but the EROI is still just 3.5 to 1. You're still looking at major overshoot in the energy needs of our economy and the number of people in it versus what unconventional oil and other alternatives can supply. And this overshoot will persist until you either cut back our per-capita energy needs to a sustainable level (which will be something like a tenth to a third of what it is now,) cut back the number of capita you're supplying energy to (kill 200 to 270 million people in the United States alone,) or hope some fanciful high EROI power technology comes about, like nuclear fusion or space-based solar (neither of which are less than 50 to 100 years away from the point where we'd be able to start building up the supporting infrastructure.)

[aerius]

Whose asshole did you pull those figures out of? Yours or J's? What's with this 10% of GDP shit?

Total project costs of around 20 trillion if we're lucky, spread out over a 20 years. Trillion bucks a year, a bit under 10% GDP.

I am summarising the progress of the thread, and have included the lead times below you dishonest sack of shit.

And then you handwave them away, harping on the 34 year figure. Fucknut.

Again with the lead times. You really are a moron. You are also failing to account for the possibility of use of existing steel mills and trasnportation infrastructure. And I DID allow for an order of magnitude increase in costs in the final assesment, you dishonest tard.

US steel production capacity is about 100 million tons a year. It imports clost to 40 million tons a year of steel. Even a moron like you can figure out the implications, but let me help you out anyway. It means the US can't ramp up steel production without refurbishing mothballed steel mills and/or building new ones. And all those coal mines and liquifaction plants will miraculously be located near existing rail lines and oil pipelines, and many of those lines which haven't been used since the age of steam locomotives will somehow be in useable condition. Gotcha. Dumbass.

You're claiming that oil pipelines amount to up to four times the world GDP, and you call me a liar below? Wow.

Actually I goofed and put in an extra zero, didn't catch it till just now.

You are a liar yourself. The forecast shown in the graph J provided is pessimistic. Optimistic forecasts add another decade or two to the top. Fuck off.

Whatever asshole, feel free to believe the USGS estimates which claim oil for everyone till 2050. Or maybe you'd like to use the oil sheik propaganda of 5 trillion barrels of oil giving us another hundred years till peak.

It's actually an optimist graph which assumes we'll somehow get another 10 million barrels a day before the peak hits, and that the mid east can keep up current production for a good 30 years. Both of which are bullshit. It also assumes large deepwater & polar finds and production, neither of which exist. Plus gas condensates don't count, they ain't oil, nor can you use'em in your car. Take all that away and the curve gets a lot steeper and starts earlier. The chart is accurate for past production, but not for future projections.

Oh, and you know what future projections are going to be moreso than the industry? And J's graph is optimistic? Wow, just wow.

It ain't my fault that you don't understand geology.

[Haminal10]

And we don't. We're at peak oil right now. We're sitting on what is effectively the oil production plateau. The decline begins within the decade. Again, building up infrastructure of the magnitude required is going to take heaps of investment capital and a reasonably stable economy. Both of which will be hard to come by when terminal production declines and growing shortfalls between output and demand start to drive prices off towards Alpha Centauri.

Again, what makes you think that the decline of oil production is going to be drastic? Even Hubbert's own graph shows a gradual decline.

I also disagree that investment capital is going to be hard to find. Once the oil companies are convinced that oil's prices are going to be consistantly above $40 per barrel, why wouldn't they invest? It looks like there is more oil under the Rockies than in all of Saudi Arabia.

Cleaner, maybe, but the EROI is still just 3.5 to 1. You're still looking at major overshoot in the energy needs of our economy and the number of people in it versus what unconventional oil and other alternatives can supply. And this overshoot will persist until you either cut back our per-capita energy needs to a sustainable level (which will be something like a tenth to a third of what it is now,) cut back the number of capita you're supplying energy to (kill 200 to 270 million people in the United States alone,) or hope some fanciful high EROI power technology comes about, like nuclear fusion or space-based solar (neither of which are less than 50 to 100 years away from the point where we'd be able to start building up the supporting infrastructure.)

So it isn't as good a return as regular oil wells. DUH! Thats why we don't harvest Shale Oil yet. But by your own admission, there is still a net gain in energy from mining it, ergo we will be able to use it for our energy needs. As the price of regular crude climbs higher, companies will have an even stronger incentive to invest in Shale Oil ($$$).

If the Germans were able to switch to Synthetic Oil while the Red Army was bearing down on them, why will we not be able to do the same? Remember, this is a 100% domestic source of oil. We don't have to do something silly like conquer Venezuella or Iran to get at it.

[Rocker5150]

Like the Hirsch Report said, it's all about timing. The report came to the conclusion that a crash program would need to begin 20 years before peak in order to avoid a possible liquid fuel shortage worldwide. Start 10 years prior to peak and it predicts about a decade of fuel shortage for the world. If peak occurs before the crash program is put into place, it would:

"leave the world with a significant liquid fuel deficit for more than two decades"


Gore is the only politician-type that I've actually heard on television use the phrase "peak oil". Maryland Congressman Roscoe Bartlett (R) from Maryland has addressed Congress as recently as May. This has links to speeches he has given:

http://www.bartlett.house.gov/EnergyUpdates/

From his website:

"Congressman Bartlett is leading efforts to change U.S. energy policy to address the challenges of peak oil. U.S. oil production peaked in 1970 and is in permanent decline. World oil production will also peak - perhaps disastrously soon"

"Congressman Bartlett is discussing how the U.S. can overcome the threat to America's economic prosperity and national security posed by growing world demand for oil and consensus projections of future declines in world oil production."


From his May 2,2006 Special Orders Speech:

"What I would like to do for the first few minutes is to look at some of the comments and recommendations in these two reports; and I would like to keep asking the question, why have these two government agencies which paid for these reports done essentially nothing to promulgate this information across the country? Rather, it would seem that there was an intent to keep this information from the public, because the Hirsch Report was bottled up inside the Department of Energy for several months, and the Army Corps of Engineers report is dated September of 2005, and it says on the cover here, "Approved for public release. Distribution is unlimited.'' But there was essentially no distribution of that until just about 2 months ago. As you will see, Madam Speaker, if the content of these two reports is correct, if their observations and recommendations are correct, you would have expected these two government agencies to be using every vehicle at their disposal to get this information out
to the public."

"Now I would like to read a few of the quotes and recommendations from the Corps of Engineers study just out about 2 months ago, although the date was September of last year. "Historically, no other energy source equals oil's intrinsic qualities of extractability, transportability, versatility and cost. The qualities that enabled oil to take over from coal as the frontline energy source for the industrialized world in the middle of the 20th century are as relevant today as they were then. Oil's many advantages provide 1- 1/3 to 2 1/2 times more economic value per million BTUs than coal. Currently, there is no viable substitute for petroleum.''
Madam Speaker, that is a startling statement. If in fact the world is peaking in oil production and there is no viable substitute for petroleum, wouldn't you think that the agencies paying for these studies would have used every vehicle available to them to get this word out to the American public and to articulate a rational program for dealing with this emergency?"



-Kevin

[J]

Cleaner, maybe, but the EROI is still just 3.5 to 1. You're still looking at major overshoot in the energy needs of our economy and the number of people in it versus what unconventional oil and other alternatives can supply. And this overshoot will persist until you either cut back our per-capita energy needs to a sustainable level (which will be something like a tenth to a third of what it is now,) cut back the number of capita you're supplying energy to (kill 200 to 270 million people in the United States alone,) or hope some fanciful high EROI power technology comes about, like nuclear fusion or space-based solar (neither of which are less than 50 to 100 years away from the point where we'd be able to start building up the supporting infrastructure.)

So it isn't as good a return as regular oil wells. DUH! Thats why we don't harvest Shale Oil yet. But by your own admission, there is still a net gain in energy from mining it, ergo we will be able to use it for our energy needs. As the price of regular crude climbs higher, companies will have an even stronger incentive to invest in Shale Oil ($$$).

EROEI isn't the entire picture. The EROEI for tar sands is about 2:1, lower than the estimates for oil shale. Research into tar sands and oil shale projects both started decades ago, but tar sand have been in commercial production for about a couple decades while oil shale is still mired in the R&D phase. For oil shales, there are still many technical problems and issues of scale left to iron out, and large scale production is still 10-15 years in the future, as it has been for the last four decades.

If the Germans were able to switch to Synthetic Oil while the Red Army was bearing down on them, why will we not be able to do the same? Remember, this is a 100% domestic source of oil. We don't have to do something silly like conquer Venezuella or Iran to get at it.

Fat load of good it did them. The vast majority of their army vehicles ran out of fuel, their fuel trucks ran out of fuel on the way to the front, many of their planes were grounded, and they were using pack animals to haul supplies. Meanwhile back at home things weren't going any better.

[GrandMasterTerwynn]

And we don't. We're at peak oil right now. We're sitting on what is effectively the oil production plateau. The decline begins within the decade. Again, building up infrastructure of the magnitude required is going to take heaps of investment capital and a reasonably stable economy. Both of which will be hard to come by when terminal production declines and growing shortfalls between output and demand start to drive prices off towards Alpha Centauri.

Again, what makes you think that the decline of oil production is going to be drastic? Even Hubbert's own graph shows a gradual decline.

I also disagree that investment capital is going to be hard to find. Once the oil companies are convinced that oil's prices are going to be consistantly above $40 per barrel, why wouldn't they invest? It looks like there is more oil under the Rockies than in all of Saudi Arabia.

Because we can point to a time in history (the Arab Oil Embargo of the 1970s) when output effectively declined by a modest 3% or 4% and caused the biggest global economic slowdown since the Great Depression. Those piddling little, temporary drops caused 400% spikes in the price of oil. And assumptions of a gradual decline never took into account the fact that we're using what are usually secondary or tertiary-recovery phase techniques to maximize immediate output (to meet escalating global demand for the stuff.) The price of that present high throughput is that you significantly reduce the total percentage of the field that can be recovered. End result, optimistic estimates of the decline are on the order of 2% to 5% annually, not taking into consideration the fact that demand won't shrink immediately since we currently have no feasible alternatives to dead dinosaur juice that are anywhere near ready to step in at the rate production is expected to decline. The rate of decline may actually be rather worse. Not to mention the rate of decline will accelerate until you reach the other side of that downward S-curve.

And the quantity of oil locked up in shale under the Green River basin doesn't matter, not one goddamned bit. Given how much everyone on the planet needs oil, what matters is how fast you can pull the oil out of the ground. The United States consumes the next best thing to twenty million barrels per day. Unless you can produce twenty million barrels of useable oil per day from oil shales to meet consumption, you're going to have a shortfall. And a shortfall in a commodity we use in virtually every area of technological civilization is going to hurt.

Cleaner, maybe, but the EROI is still just 3.5 to 1. You're still looking at major overshoot in the energy needs of our economy and the number of people in it versus what unconventional oil and other alternatives can supply. And this overshoot will persist until you either cut back our per-capita energy needs to a sustainable level (which will be something like a tenth to a third of what it is now,) cut back the number of capita you're supplying energy to (kill 200 to 270 million people in the United States alone,) or hope some fanciful high EROI power technology comes about, like nuclear fusion or space-based solar (neither of which are less than 50 to 100 years away from the point where we'd be able to start building up the supporting infrastructure.)

So it isn't as good a return as regular oil wells. DUH! Thats why we don't harvest Shale Oil yet. But by your own admission, there is still a net gain in energy from mining it, ergo we will be able to use it for our energy needs. As the price of regular crude climbs higher, companies will have an even stronger incentive to invest in Shale Oil ($$$).

You seem to have missed my point. That net energy gain is what you use to drive your oil-based infrastructure. It's the energy you use to drive your trucks, freighters, airplanes, farming machinery and powerplants. Our economy is reliant on the fact that it takes so very little energy (ergo cost) to produce a given barrel of oil. Right now, we put a little energy in and we get a lot of fuel out. With these nonconventional oils, you put the same energy in, and you end up getting out a lot less fuel. And with some alternative fuel technologies, like hydrogen, you always get much less energy out than you originally spent teasing the stuff out of water molecules.

If the Germans were able to switch to Synthetic Oil while the Red Army was bearing down on them, why will we not be able to do the same? Remember, this is a 100% domestic source of oil. We don't have to do something silly like conquer Venezuella or Iran to get at it.

What the Nazis did has already been discussed in these threads. I believe the exact process is called "coal-gasification." That also has an EROI significantly lower than standard oil, so once again you're getting much less energy back for each unit of energy you put into making the stuff. This lower production output came back to bite them in the ass, since the Nazis suffered chronic fuel shortages even with their miracle synthetic oil, as has been mentioned before.

[Lord Zentei]

Whose asshole did you pull those figures out of? Yours or J's? What's with this 10% of GDP shit?

Total project costs of around 20 trillion if we're lucky, spread out over a 20 years. Trillion bucks a year, a bit under 10% GDP.

You did not answer my question. You are still pulling figures out of your ass.

I am summarising the progress of the thread, and have included the lead times below you dishonest sack of shit.

And then you handwave them away, harping on the 34 year figure. Fucknut.

No, I based the 34 years on J's graph, as you would know if you had been paying attention.

Again with the lead times. You really are a moron. You are also failing to account for the possibility of use of existing steel mills and trasnportation infrastructure. And I DID allow for an order of magnitude increase in costs in the final assesment, you dishonest tard.

US steel production capacity is about 100 million tons a year. It imports clost to 40 million tons a year of steel. Even a moron like you can figure out the implications, but let me help you out anyway. It means the US can't ramp up steel production without refurbishing mothballed steel mills and/or building new ones.

Blah, blah, blah. Since you claim that there is not enough steel production, mind providing some kind of proof as to how much of this will be required? No, of course not. You're just making vague insinuations.

And all those coal mines and liquifaction plants will miraculously be located near existing rail lines and oil pipelines, and many of those lines which haven't been used since the age of steam locomotives will somehow be in useable condition. Gotcha. Dumbass.

Strawman bullshit. Not "all" the coal mines have to be "miraculously" located next to existing infrastructure, but neither will all of it have to be revamped.

But regardless of that, I guess that you either can't or won't accept that I have already added an order of magnitude to the top, even after rounding several hundred billion dollars in your favour. Whatever.

You are a liar yourself. The forecast shown in the graph J provided is pessimistic. Optimistic forecasts add another decade or two to the top. Fuck off.

Whatever asshole, feel free to believe the USGS estimates which claim oil for everyone till 2050. Or maybe you'd like to use the oil sheik propaganda of 5 trillion barrels of oil giving us another hundred years till peak.

I used J's graph, as I have said, moron. What does oil sheik propaganda have to do with anything? This is a classic strawman distortion.

Oh, and you know what future projections are going to be moreso than the industry? And J's graph is optimistic? Wow, just wow.

It ain't my fault that you don't understand geology.

Cute. So much rhetoric, so little evidence.

[Arthur_Tuxedo]

I don't intend to get into the discussion too much as I don't have anything to say that I haven't said multiple times in the other thread, but I wanted to point out that every generation thought that civilization as we know it would come to a crash in the next few decades, and it never happens. I don't see this as any different.

To predict the decline in oil to have the effects described in this thread, you have to ignore basic economic principles by assuming the price will spike to absurd levels and stay that way indefinitely, assume that the political climate won't change at all after an economic catastrophe, assume that people will continue to consume oil at current rates even if it exceeds their ability to pay for it, assume that the richest people in America will knowingly bankrupt themselves in order to enjoy a decade or two of prosperity, assume that investors are not interested in seeing large returns on their money, and misrepresent the worst case scenarios to seem worse than they are.

If you accept all that as reasonable, then yes, modern society is doomed. Otherwise you see that we're headed for some hard times for up to a decade, possibly rivaling or exceeding the Great Depression, but that the economy will recover and we won't see the number of cyclists exceeding the number of drivers, people reading by candlelight instead of watching TV, or other such profound changes to the way we live our daily lives.

[Darth Wong]

Why exactly are we blase about "hard times" which could exceed the Great Depression? I agree that we're not going to revert to Amish living; that's an exaggeration of the problem. But at the same time, the whole point here is to minimize the economic upheaval, and that's not going to happen. It's going to be severe, because the free market does not specialize in long-term thinking. And simply assuming that everyone will do the logical thing presumes that everyone is logical: a demonstrably false assumption. You live in a country where 80% of the population believes in angels, 45% of the population believes God really did create the Earth in six days, and politicians can actually talk about the Second Coming of Christ without being laughed out of office. You have presidents who get advice from psychics, presidents who think God talks to them, secretaries of the Environment who think that Jesus will solve environmental crises, etc. You can seriously tell me that you trust this group to do the right and smart thing?

[aerius]

Total project costs of around 20 trillion if we're lucky, spread out over a 20 years. Trillion bucks a year, a bit under 10% GDP.

You did not answer my question. You are still pulling figures out of your ass.

Based on supporting infrastructure costs for every major project & system from powerplants, computers, the space program, current oil, gas, coal, uranium, copper, aluminum, and metal mining infrastructures, the auto industry, and damn near everything you can name.

No, I based the 34 years on J's graph, as you would know if you had been paying attention.

Bullshit. 34 years is when everything has to be finished, online, and ramped up to full production, not when we start the building of the last of the infrastructure.

US steel production capacity is about 100 million tons a year. It imports clost to 40 million tons a year of steel. Even a moron like you can figure out the implications, but let me help you out anyway. It means the US can't ramp up steel production without refurbishing mothballed steel mills and/or building new ones.

Blah, blah, blah. Since you claim that there is not enough steel production, mind providing some kind of proof as to how much of this will be required? No, of course not. You're just making vague insinuations.

You need to move 11 million tons of coal a day, each hopper car carries about 50 tons and weighs maybe 25-30 tons. About 7 million tons right there. But trains ain't going to load, unload, and make it back to the load point in one day, 3-4 trains are needed on each run, 3-4 times the rolling stock. You have a train loading, one unloading, and some in transit. Then add spare cars for downtime & maintenance. Call it 25 million tons of steel for the trains alone. Rails have a cross sectional area of about 0.01 square metres. Figure on 40,000 to 50,000km of railways, quite possibly more depending on where they put everything. 2 rails per railway, that's 6.4 million tons of steel, plus the spikes, sidings, switching hardware, probably 7 million tons minimum. Mega size 400 ton dump trucks. You'll need thousands, possibly tens of thousands of them. I've already added 35 million tons. Plus all this shit is going to break down and require replacement. And you still have seriously expand and build the factories that are going to build all this shit. That's going to take even more steel & concrete.

Strawman bullshit. Not "all" the coal mines have to be "miraculously" located next to existing infrastructure, but neither will all of it have to be revamped.

And if you're going to reuse existing infrastructure, the mines and plants will have to be located near existing infrastructure, and the infrastructure will have to be able to handle the increased loads. Have you looked at maps of coal deposits, rail lines, and pipelines lately? Here's a hint, no matter what you do, you'll need to build shitloads of railways and pipelines.

[Arthur_Tuxedo]

Why exactly are we blase about "hard times" which could exceed the Great Depression? I agree that we're not going to revert to Amish living; that's an exaggeration of the problem. But at the same time, the whole point here is to minimize the economic upheaval, and that's not going to happen.

The crux of the disagreement is that some feel that there will be no mitigation of the problem whatsoever, and that flies in the face of history, basic economic principles, and common sense. I don't disagree that the problem won't be mitigated to the degree it should be and could be, and certainly won't be "minimized", but it won't make the Great Depression seem like a pleasant day in the countryside like some are suggesting.

It's going to be severe, because the free market does not specialize in long-term thinking. And simply assuming that everyone will do the logical thing presumes that everyone is logical: a demonstrably false assumption. You live in a country where 80% of the population believes in angels, 45% of the population believes God really did create the Earth in six days, and politicians can actually talk about the Second Coming of Christ without being laughed out of office. You have presidents who get advice from psychics, presidents who think God talks to them, secretaries of the Environment who think that Jesus will solve environmental crises, etc. You can seriously tell me that you trust this group to do the right and smart thing?

As I said in the other thread, I trust the rich as a group (not necessarily as individuals) to know how to stay rich. Companies are short sighted, but they're not so incredibly short sighted that they'll engage in activities which are guaranteed to bankrupt the company and personally bankrupt the decision makers. When the prices start to really go up, it will be patently obvious to every CEO of every oil refining company that they either diversify or lose every cent they have. They'll almost undoubtedly wait to act until it's several years too late, but not twenty years.

[Darth Wong]

As I said in the other thread, I trust the rich as a group (not necessarily as individuals) to know how to stay rich.

Based on what? The fact that there have never been businesses which stubbornly ignored warning signs before? Like Ford signing a generous and incredibly short-sighted deal with the UAW in the early 90s in order to put the screws to GM, based on their utter conviction that the SUV boom would last forever? Despite more than a decade of knowing that the Japanese were going to steamroll the American auto industry unless it got its act together? How about Enron? If you're going to put your faith in rich people to be smarter than everyone else just because they're rich, you're relying on a faith-based plan, and faith-based plans are not too fucking reliable.

[Lord Zentei]

Total project costs of around 20 trillion if we're lucky, spread out over a 20 years. Trillion bucks a year, a bit under 10% GDP.

You did not answer my question. You are still pulling figures out of your ass.

Based on supporting infrastructure costs for every major project & system from powerplants, computers, the space program, current oil, gas, coal, uranium, copper, aluminum, and metal mining infrastructures, the auto industry, and damn near everything you can name.

And all of these projects cost 20 trillion dollars or about 10% of GDP?

No, I based the 34 years on J's graph, as you would know if you had been paying attention.

Bullshit. 34 years is when everything has to be finished, online, and ramped up to full production, not when we start the building of the last of the infrastructure.

No. we do not need to have replaced 100% of the infrastructure 10 years from now, because 100% of primary oil will not have been gone 10 years from now. Hubbert predicts that the peak occours when HALF the oil is used up, not when the oil is about to run dry. As I have already pointed out to J, we need to make up for the shortfall rate, and that is according to the graph she provided about 2% per year, not 10% per year.

You need to move 11 million tons of coal a day, each hopper car carries about 50 tons and weighs maybe 25-30 tons. About 7 million tons right there. But trains ain't going to load, unload, and make it back to the load point in one day, 3-4 trains are needed on each run, 3-4 times the rolling stock. You have a train loading, one unloading, and some in transit. Then add spare cars for downtime & maintenance. Call it 25 million tons of steel for the trains alone. Rails have a cross sectional area of about 0.01 square metres. Figure on 40,000 to 50,000km of railways, quite possibly more depending on where they put everything. 2 rails per railway, that's 6.4 million tons of steel, plus the spikes, sidings, switching hardware, probably 7 million tons minimum. Mega size 400 ton dump trucks. You'll need thousands, possibly tens of thousands of them. I've already added 35 million tons. Plus all this shit is going to break down and require replacement. And you still have seriously expand and build the factories that are going to build all this shit. That's going to take even more steel & concrete.

And all these figures are less than the yearly production you named, and will be spread over three decades for reasons I have already mentioned.

Strawman bullshit. Not "all" the coal mines have to be "miraculously" located next to existing infrastructure, but neither will all of it have to be revamped.

And if you're going to reuse existing infrastructure, the mines and plants will have to be located near existing infrastructure, and the infrastructure will have to be able to handle the increased loads. Have you looked at maps of coal deposits, rail lines, and pipelines lately? Here's a hint, no matter what you do, you'll need to build shitloads of railways and pipelines.

No, not all of them have to be located next to existing infrastructure for the same reason that you don't need new interstate highways when you build a new town. Obviously new infrastructure will have to be built, but to assume that all the heavy load infrastructure has to be built from scratch because existing resources are not going to be any use at all is retarded.

[aerius]

Based on supporting infrastructure costs for every major project & system from powerplants, computers, the space program, current oil, gas, coal, uranium, copper, aluminum, and metal mining infrastructures, the auto industry, and damn near everything you can name.

And all of these projects cost 20 trillion dollars or about 10% of GDP?

The auto industry & its supporting infrastructure is well into the trillions. The current oil industry is in the tens of trillions, as is the gas industry. The others aren't quite as big but they're stil larger than the GDP of most countries.

Bullshit. 34 years is when everything has to be finished, online, and ramped up to full production, not when we start the building of the last of the infrastructure.

No. we do not need to have replaced 100% of the infrastructure 10 years from now, because 100% of primary oil will not have been gone 10 years from now. Hubbert predicts that the peak occours when HALF the oil is used up, not when the oil is about to run dry. As I have already pointed out to J, we need to make up for the shortfall rate, and that is according to the graph she provided about 2% per year, not 10% per year.

Well it looks like you've bullshitted so much you can't even keep your numbers straight. The numbers I'm putting forth are what's needed to replace roughly half of US oil consumption, which offsets the 50% decline in 34 years. All of the infrastructure needed to do that has to be done, period, in 34 years. You've fucked the numbers so much that you don't even know what you're talking about.

You need to move 11 million tons of coal a day, each hopper car carries about 50 tons and weighs maybe 25-30 tons. About 7 million tons right there. But trains ain't going to load, unload, and make it back to the load point in one day, 3-4 trains are needed on each run, 3-4 times the rolling stock. You have a train loading, one unloading, and some in transit. Then add spare cars for downtime & maintenance. Call it 25 million tons of steel for the trains alone. Rails have a cross sectional area of about 0.01 square metres. Figure on 40,000 to 50,000km of railways, quite possibly more depending on where they put everything. 2 rails per railway, that's 6.4 million tons of steel, plus the spikes, sidings, switching hardware, probably 7 million tons minimum. Mega size 400 ton dump trucks. You'll need thousands, possibly tens of thousands of them. I've already added 35 million tons. Plus all this shit is going to break down and require replacement. And you still have seriously expand and build the factories that are going to build all this shit. That's going to take even more steel & concrete.

And all these figures are less than the yearly production you named, and will be spread over three decades for reasons I have already mentioned.

You're a dumbass. The US is already a net importer of 37 million tons of steel. When oil prices go up, a lot of that steel ain't coming in since it'll cost too damn much to ship. The US will already be in a shortage situation while needs have gone up thanks to the "the great coal project".

It doesn't matter if the increase in demand is smaller than the total installed capacity. What matters is total demand, existing total demand currently equals production plus imports. The increase in demand adds to the total demand while production & imports remain the same, it doesn't matter if the increase is smaller than production capacity, the fact is you now have a shortage. The increase in demand added to the existing demand means the new total demand is now greater than total production. I can't believe I have to explain something this simple to you.

And if you're going to reuse existing infrastructure, the mines and plants will have to be located near existing infrastructure, and the infrastructure will have to be able to handle the increased loads. Have you looked at maps of coal deposits, rail lines, and pipelines lately? Here's a hint, no matter what you do, you'll need to build shitloads of railways and pipelines.

No, not all of them have to be located next to existing infrastructure for the same reason that you don't need new interstate highways when you build a new town. Obviously new infrastructure will have to be built, but to assume that all the heavy load infrastructure has to be built from scratch because existing resources are not going to be any use at all is retarded.

False analogy. Towns can exist in relative isolation. People can trickle into a new town, breed, grow the town, and when it gets big enough build a bigger connection to the rest of the country. A town doesn't and doesn't have to pop up full-blown and fully connected to the outside world. The proposed coal mines & plants do.

Fact remains, take a look at a rail & pipeline map, then look where the coal deposits are. There's some possible reuse but a lot of new infrastructure will have to be built.

[Lord Zentei]

Based on supporting infrastructure costs for every major project & system from powerplants, computers, the space program, current oil, gas, coal, uranium, copper, aluminum, and metal mining infrastructures, the auto industry, and damn near everything you can name.

And all of these projects cost 20 trillion dollars or about 10% of GDP?

The auto industry & its supporting infrastructure is well into the trillions. The current oil industry is in the tens of trillions, as is the gas industry. The others aren't quite as big but they're stil larger than the GDP of most countries.

And of course ALL the auto industry has to be revamped from scratch, and ALL the oil and gas industry also. Bullshit.

Well it looks like you've bullshitted so much you can't even keep your numbers straight. The numbers I'm putting forth are what's needed to replace roughly half of US oil consumption, which offsets the 50% decline in 34 years. All of the infrastructure needed to do that has to be done, period, in 34 years. You've fucked the numbers so much that you don't even know what you're talking about.

I misconstrued your post, I have my own numbers perfectly clear. You referred to the 50% shortfall needing to be met in 34 years? Well and good.

And all these figures are less than the yearly production you named, and will be spread over three decades for reasons I have already mentioned.

You're a dumbass. The US is already a net importer of 37 million tons of steel. When oil prices go up, a lot of that steel ain't coming in since it'll cost too damn much to ship. The US will already be in a shortage situation while needs have gone up thanks to the "the great coal project".

It doesn't matter if the increase in demand is smaller than the total installed capacity. What matters is total demand, existing total demand currently equals production plus imports. The increase in demand adds to the total demand while production & imports remain the same, it doesn't matter if the increase is smaller than production capacity, the fact is you now have a shortage. The increase in demand added to the existing demand means the new total demand is now greater than total production. I can't believe I have to explain something this simple to you.

And I can't beleive that I need to explain to you that if you distribute an increase that is roughly equal to current production over two to three decades that the yearly increase will be on the order of 3%-5%. Moreover you assume that all existing production will remain as-is without any shifts between sectors as people re-prioritise. You were claiming that there was no way that the shortfall could be met, that's nonsense.

False analogy. Towns can exist in relative isolation. People can trickle into a new town, breed, grow the town, and when it gets big enough build a bigger connection to the rest of the country. A town doesn't and doesn't have to pop up full-blown and fully connected to the outside world. The proposed coal mines & plants do.

It is not a false analogy: that towns can exist in isolation is irrelevant, that was not my point. The point was, even if you want your town to be connected, you only need to connect it to existing communication hubs rather than build a new network entirely.

Fact remains, take a look at a rail & pipeline map, then look where the coal deposits are. There's some possible reuse but a lot of new infrastructure will have to be built.

No-one ever claimed that new infrasructure would not have to be built; your assumption that one should use the price of all exisiting infrastructure as an estimate is nonsense regardless.