Darth Wong wrote:Don't the more apocalyptic "Road Warrior"-style scenarios require that the drop-off in oil availability be precipitous? Why won't oil get more rare and expensive over a period of 20 years, thus allowing time for people to adjust? Some of these scenarios seem to assume that it happens virtually overnight, like people are happily filling up their SUVs on Monday and starving in a medieval wasteland by Friday.
I'd be lying if I said I knew the global drop-off point. No one does. What we can do, though, is extrapolate what it could be like with current trends. The population is ever growing globally, and within another decade or two, we'll have three-billion more people, each wanting power themselves.
Industry worldwide is still growing and with it the energy needed to run it. China alone is a massive user, far outstripping analysts' predictions.
All of this, along with average oil consumption increases of a couple percent every year, means things get tighter even if we conserve more. By 2020, the world will need a minimum of 120 Mbd. To put that into perspective, the globe uses 85 Mbd now, and we've struggled to reach that point and maintain it since around 2004. Some reckon Saudi Arabia can pump out an extra couple million barrels daily, rising from 8.5 to over 10 Mbd. That the KSA hasn't done this yet, despite the incentive, is a bad sign. If Ghawar, the largest oil field in the world, has peaked, then the world is beyond peak for sure. Despite the billions being pumped into newer fields, most will barely pump more than a few hundred thousand more barrels a day. The likes of Mexico's Cantarell are dropping at
25% year-on-year. The oil those fields produce makes 60% of Mexican gov't funding and they're the third largest exporter for the US. The North Sea's Brent has also been dropping around 20%, so much so, that the UK now imports oil again for the first time since around 1975.
There is only so far the markets can be pushed before they collapse. In 1979, output globally dropped 4%, yet this translated to a 500% increase in price for oil, a price threshold still to be topped, but we're getting there.
This only takes into account geological factors. If people start using secondary and enhanced recovery technologies developed over the past few decades, you extract oil far faster and that means you run out faster too, so it doesn't do anything but make the issue far harder to prepare for. Other factors involve mercantilism as China is trying to build huge reserves, attacks on oil infrastructure for political gain such as the attack in Chinese oil assets in Ethiopia and today's KSA intel. forces arresting 170 members of al-Qaeda ready to fly planes into oil refineries. There is also the problem of lower EROEI and export cancellations. Iran, in a few years, will export no oil at all because their population is growing at an alarming rate and oil that would normally wind its way to the EU or US and China, is now being used to power Iran's every thirstier economy. This is now seen happening in almost all the OPEC exporters and most of the OECD ones too. The KSA has often voiced it will keep production below certain levels, so as to extend the life of their oil assets and pump that money into the economy for building up the nation's industry for a post oil world. They know when they run out the game is up, so they plan on not running dry anytime soon, even if it means charging us $500 a barrel for oil (which, by the way, is the absolute limit before everyone goes bankrupt).
Hurricanes affecting the Gulf of Mexico, as are forecast this year to be quite active given no El Niño effect to sap energy from storm systems, will also play hell with off-shore rigs, especially the likes of Thunder Horse and Jack-2. Those deep-water oil rigs cost tens of billions to build and even more to simply invent the technology needed to access oil 10 klicks below them. That they can barely pump a million barrels daily and have run into constant cost overruns and technical difficulties makes these sources just as likely as oil sands, oil shale and tar sands at replacing shrinking production at conventional fields (in fact, these supposedly revolutionary sources of oil will not even replace lost production capacity over the next few years, let alone add production capacity for growth in industry). Such projects are suckers for investors who are often told these will save us in the future and contain more oil than the whole of the Middle-East. As the joke goes, heavy oil is the oil of the future... and always will be. The cost of converting refineries from light, sweet crude to heavy, sour will also be sky high and no one wants to build extra capacity today as it is. If we're so confident of new oil supplies, then why has no one invested in new refinery capacity and new tankers in years to the point of making Zurich Re and Goldman Sachs nervous?
Arthur_Tuxedo wrote:Usually they point to the huge price spikes in the 1973 embargo to show that the first small drops will drive the price into the stratosphere and cause the collapse of modern society, but what actually happens is that prices do spike for a while, but then they settle.
The reason the KSA and OPEC stopped the embargo was because they saw their actions were not only punishing the West, but the whole world. Had they kept up with their cute demonstration, the world would have gone into severe depression. As it was, we went into a nice recession which also helped bring about lower oil consumption and even Americans started buying more fuel efficient cars (actually more efficient than anything they drive today).
By the way, I just watched the documentary A Crude Awakening a couple of days ago, and it was very eye-opening. Seemed to make a pretty strong case that the beginning of the decline is not decades in the future, but only a few years, and may have actually happened already in 2005. It did say a few things that I know to be false, though, like nuclear not being a viable alternative because you'd need so many reactors that the uranium would run out in ten years (I think it's because they specified U235 instead of U238).
The arguments against nuclear in
A Crude Awakening were down to feasibility of replacing lost output from fossil fuels today. The US would need 900 such reactors of decent size to off-set the decline in energy from other areas, and since half of that number equals the global total of nuke plants, I don't see how that is even remotely feasible. Uranium won't run out if you use breeder reactors and then go on to use thorium and so on, but it won't help international security having everyone convert to fissile power (just look at the furore over Iran now and you can see why they want fission power with their oil and NG problems). The same argument can be levelled at renewables too. It's all very well to say several thousand wind turbines and a few thousand square klicks of PV cell will help fund a hydrogen economy or some such, but did anyone notice that to build that massive amount of generation industry, you need to expend an even larger amount of oil and money today not to mention steel, copper and so forth which are already going through the roof in price?
What a lot of people don't grasp too well, is that to do anything, you need to use energy. If you want your shiny, green economy, you need to pump a vast amount of energy into creating it, which is easier said than done when prices go up regardless of demand and EROEI is always going down. People assume demand destruction will be a better idea. To do that, it means cutting back on energy somewhere, which we haven't seen. If you want people to cut back on using their car, they have to do something else which still uses energy. People who don't use any energy are
dead people, and simply shifting a workforce from a carbon based job to a non-carbon one doesn't alter anything. Making things more efficient by getting people who lost jobs from making gas guzzling cars, means those workers then go and expend energy in another sector, likely more if you have to do it within the tiny amount of time we have before major cracks start appearing in the system. That is why, when demand destruction happens, it will not be pretty at all.
