Category Archives: Peak Oil

What happens after the gold rush?

Peak Oil in the New York Times

Thanks to alert reader Tad L.  This article shows again that peak oil is moving into the mainstream.  However I may be too sensitive, because I think this makes the people who understand the realities of peak oil to seem….kooky.  And I think the article focuses too much on the truly nutty survivalist aspect of peak oil.  No one survives on guns and beans and gold. The article does relate the gap that exists bewteen the people who can see what’s happening and those who can’t/don’t want to.

What do you think?

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Imagining Life Without Oil, and Being Ready

By JOHN LELAND, New York Times June 5, 2010

As oil continued to pour into the Gulf of Mexico on a recent Saturday, Jennifer Wilkerson spent three hours on the phone talking about life after petroleum.

For Mrs. Wilkerson, 33, a moderate Democrat from Oakton, Va., who designs computer interfaces, the spill reinforced what she had been obsessing over for more than a year — that oil use was outstripping the world’s supply. She worried about what would come after: maybe food shortages, a collapse of the economy, a breakdown of civil order. Her call was part of a telephone course about how to live through it all.

In bleak times, there is a boom in doom.

Americans have long been fascinated by disaster scenarios, from the population explosion to the cold war to global warming. These days the doomers, as Mrs. Wilkerson jokingly calls herself and likeminded others, have a new focus: peak oil. They argue that oil supplies peaked as early as 2008 and will decline rapidly, taking the economy with them.

Located somewhere between the environmental movement and the bunkered survivalists, the peak oil crowd is small but growing, reaching from health food stores to Congress, where a Democrat and a Republican formed a Congressional Peak Oil Caucus.

And they have been resourceful, sharing the concerns of other “collapsitarians,” including global debt and climate change — both caused by overuse of diminishing oil supplies, they maintain.

Many people dispute the peak oil hypothesis, including Daniel Yergin, the Pulitzer Prize-winning author of “The Prize: The Epic Quest for Oil, Money and Power” and chairman of IHS Cambridge Energy Research Associates, a company that advises governments and industry. Mr. Yergin has argued that new technology continues to bring more oil.

Andre Angelantoni is not taking that chance. In his home in San Rafael, Calif., he has stocked food reserves in case an oil squeeze prevents food from reaching market and has converted his investments into gold and silver.

The effects of peak oil, including high energy prices, will not be gentle, said Mr. Angelantoni, a Web designer whose company, Post Peak Living, offers the telephone class and a handful of online courses for life after a collapse.

“Our whole economy depends on greater and greater energy supplies, and that just isn’t possible,” he said. “I wish I could say we’ll quietly accept having many millions of people unemployed, their homes foreclosed. But it’s hard to see the whole country transitioning to a low-energy future without people becoming angry. There’s going to be quite a bit of social turmoil on the way down.”

Transition US, a British transplant that seeks to help towns brace for life after oil, including a “population die-off” from Continue reading

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Everywhere I look I see cheap oil

This is from Charles Hugh Smith over at http://www.oftwominds.com/blog.html

The foundation of the American lifestyle and economy is cheap oil. Remove that prop and every aspect of that lifestyle becomes questionable.

Not to sound too cinematic, but everywhere I look, I see cheap oil. The results, of cheap oil, actually; or more precisely, a complete and total dependence on cheap, abundant oil.

When I see expansive, well-manicured lawns, I see cheap oil.

When I see busy airports and taxiing aircraft, I see cheap oil.

When I see news about the latest “surge” in Afghanistan, I see cheap oil.

When I see goods from China on sale for less than a dollar, I see cheap oil.

When I see branded water in plastic bottles, I see cheap oil.

When I see inexpensive meat in supermarket coolers, I see cheap oil.

When I walk through aisles of frozen food, I see cheap oil.

When I see vast swaths of America dotted with rural mini-estates, I see cheap oil.

When I see the “free” Internet, I see cheap oil.

When I see retirees walking their dogs, I see cheap oil. (Ultimately, all pensions are based on cheap oil.)

When I see bakeries which sell only dog treats, I see cheap oil.

When I see jammed freeways, I see cheap oil.

When I feel air conditioning in desert cities, I see cheap oil.

When I see new fiberglas boats with large inboard engines, I see cheap oil.

When I see boxes of “free clothing” set on the curb, I see cheap oil.

When I read about vast bureaucracies dedicated to regulating complex industries, I see cheap oil.

When I see a new iPad, I see cheap oil.

When I meet an enthusaistic young person who is jetting to a distant land to work for an NGO (non-governmental organization), I see cheap oil.

When I see auto rentals, I see cheap oil.

When I see college graduates applying to graduate school, I see cheap oil.

When I see electric bicycles, I see cheap oil.

When I see a Prius, I see cheap oil. (Mining and processing all that lithium into complex batteries requires a lot of energy.)

When I see well-dressed people filing into a corporate meeting, I see cheap oil.

When I see imported furniture, I see cheap oil (and clear-cut native forests).

When I see adverts for cosmetic surgery, I see cheap oil.

When I see a stadium full of sports fans, I see cheap oil.

Virtually all of the things which characterize the “American way of life” are utterly and completely dependent on cheap oil, cheap coal, cheap natural gas and cheap uranium (as long as the waste products of which can be “cheaply” stored).

Once liquid petroleum is no longer abundant and cheap, the “American way of life” will change in ways that few seem to anticipate. Continue reading

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Peak Oil and Freedom of Mobility

This is another review of Charlie Maxwell’s vision of the consequences of peak oil. From early 2008. from energytechstocks.com

Dean of Oil Analysts’ Maxwell: U.S. Pump Prices to Hit $12 to $15 a Gallon

Posted: February 5, 2008

As America enters a world of ever-increasing oil scarcity, there is going to be a “horrific” rise in the price Americans pay for gasoline, Charles T. Maxwell, senior energy analyst at Weeden & Co., told EnergyTechStocks.com.

Think $3 a gallon is high? Get ready for $12 to $15 a gallon within a few years, the “dean” of energy analysts predicted during a discussion about the future of energy that sounded like a preliminary draft of a valedictory address.

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Maxwell said it will take $12 to $15 a gallon to get Americans to let go of what he called the “precious freedom of mobility.” As much as Maxwell laments the loss, he sees no other way for the U.S. to impose enough conservation to deal with the growing imbalance between oil demand and supply that he sees developing around 2010 and getting worse in 2012 or 2013, as the world hits a “peak” in conventional oil production.

Because he expects Americans to hang on for dear life to their freedom of mobility, Maxwell says there will have to be a “stomping exercise” to “get them to let go.” Basically, Maxwell said, Americans’ freedom of mobility will have to be stomped on by allowing the supply-constrained price of oil to steadily rise starting in 2010, reaching $180 a barrel in 2015 and $300 a barrel in 2020.

Maxwell doesn’t see how this stomping exercise can be avoided. While he sees great promise in oil demand-reducing technologies such as cellulosic biofuel and plug-in electric vehicles, he says there just isn’t enough time left to displace the upwards of 1 billion oil-consuming cars and trucks that are expected to be on global highways when oil production peaks and starts down early in the next decade. Even if the world were suddenly to find a number of huge new oilfields – an unlikely possibility – it would still take too long to develop them to head off this crisis, he noted.

One can only imagine the anger Americans will feel if and when they are staring at $15 a gallon pump prices. (In Europe, presumably, prices might be even higher, unless European nations decide to remove some of their gasoline taxes, which they financially can ill afford to do.) While Maxwell’s “Nightmare on Main Street” scenario may sound far off, the fact is whoever wins the White House this November will face the voters’ wrath, especially if he or she wins reelection.

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Lexington 2030 – A Vision

What will we be like in 20 years?  20 years ago this summer, the first Bush war for oil began its intial stages.  Tim Berners-Lee was formulating his idea for the world-wide web – yeah the web as we know it hadn’t been born.  The world’s population was 5.2 billion humans.  (Today, it’s 6.8 billion. When I was born in 1964, it was 3.2 billion)

This vision acknowledges the imminent threats of energy descent, and climate change, and the end of globalization.  It accepts the fact that “local” is the path to independence.

This is based on Portland’s climate action plan primarily, as well as other peak oil plans such as Bloomington’s.

I’ve been thinking about what Lexington should be doing to prepare for its next comprehensive plan.  I’m betting on business as usual – denial is very strong here – but I’m also beginning now to sound the alarm:  business as usual will not improve or even maintain our quality of life.  And that’s really all we have, isn’t it?

This is not about my values.  This isn’t a choice between values.  The world is changing rapidly to the negative. We must act now to protect ourselves and our place.

Here’s the goal:  An 80% reduction in carbon usage by 2030.   

An 80 percent reduction of carbon emissions by 2030 will entail re-imagining the entire community— transitioning away from fossil fuels and strengthening the local economy while shifting fundamental patterns of urban form, transportation, buildings and consumption.

A vision:

■ In 2030, Lexington and Fayette County are at the heart of a vibrant region with a thriving economy, rich cultural community and diverse, ecologically sustainable neighborhoods.

■ Personal mobility and access to services has never been better. Every resident lives in a walkable and bikeable neighborhood that includes retail businesses, schools, parks and jobs. Most people rely on walking, bicycling and transit rather than driving. Pedestrians and bicyclists are prominent in the region’s commercial centers, corridors and neighborhoods.

Public transportation, bikeways, sidewalks and greenways connect neighborhoods. When people do need to drive, vehicles are highly efficient and run on low-carbon electricity and renewable fuels.

■ Green jobs are a key component of the regional economy. Products and services related to clean energy, green building, sustainable food, green infrastructure, and waste reuse and recovery providing living-wage jobs throughout the community, and Lexington is one of North America’s  hubs for sustainable industry and clean technology.

■ Homes, offices and other buildings deliver superb performance. They are durable and highly efficient, healthy, comfortable and powered primarily by solar, wind and other renewable resources.

■ The urban forest and green roofs cover the community, reducing the urban heat island effect, sequestering carbon, providing habitat, and cleaning the air and water.

■ Food and agriculture are central to the economic and cultural vitality of the community, with backyard gardens, farmers’ markets and community gardens productive and thriving. A large share of food comes from farms within the region, and residents eat a healthy diet, consuming more locally grown grains, vegetables and fruits.

■ The benefits of green infrastructure, walkable and bikeable neighborhoods, quality housing, and convenient, affordable transportation options and public health services are shared equitably throughout the community.

■ Residents and businesses use resources extremely efficiently, minimizing and reusing solid waste, water, stormwater and energy.

■ The Bluegrass region has prepared for a changed climate, making infrastructure more resilient, developing reliable supplies of water, food and energy and improving public health services. Policies, investments and programs are in place to protect the residents most vulnerable to climate change and rising energy prices.

What do you think?

If you care about these issues at all, the City of Portland and Multnomah County Climate Action Plan is a must read:  http://www.portlandonline.com/bps/index.cfm?c=49989&a=268612

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Peak Oil and the Financial Crisis

This is an interview from early 2008 – read it and see if it’s not dead on.  And if you dont know Charlie Maxwell, you should.  google him.  This is from energytechstocks.com

‘Dean of Oil Analysts’ Maxwell: Oil Crisis Will Lead to 10-Year Financial & Political Crisis

Posted: February 7, 2008

A growing chorus of voices is screaming for the United States to undertake a Manhattan Project-type program to wean America off its oil dependency. But as Charles T. Maxwell, the “dean” of Wall Street’s energy analysts, looks into the future, he deeply fears that Washington won’t do anything to head off the oil crisis he sees rapidly developing starting in 2010. He says this will make the financial crisis he fears even worse. Also, because Washington will be seen by angry voters (who will be paying $12 to $15 for a gallon a gas) as the cause of their “Nightmare on Main Street,” Maxwell sees the American political system being shaken to its roots.

Princeton and Oxford-educated Maxwell believes that if the Democrats are in power, their core constituencies – farmers, workers and intellectuals – will be ranged against one another, resulting in an impasse. If the Republicans are in power, he expects whatever “solution” they come up with to be politically untenable because it will be premised on people with money continuing to consume as before, with the have-nots expected to do without.

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Seeing no chance of a timely political response to America’s looming oil calamity, Maxwell, senior energy analyst at Weeden & Co., expects an oil-induced financial crisis to start somewhere in the 2010 to 2015 timeframe. He said that, unlike the recession the U.S. appears to be in today, “This will not be six months of hell and then we come out of it.” Rather, Maxwell expects this financial crisis to last at least 10 or 12 years, as the world goes through a prolonged period of price-induced rationing (eg, oil up to $300 a barrel and U.S. pump prices up to $15 a gallon), while waiting for new technologies that can wean nations off their oil dependency to take hold in the marketplace. (It will take time to change over the world’s one billion or so oil-consuming cars and trucks.)

As this combined oil and financial crisis worsens, Maxwell would not be surprised if the U.S. government started functioning the way it did in World War II, when the democratic dialogue was often put on hold so that unilateral decisions could be made by people given special powers. He described them as little tyrants who will be able to cut off debate, effectively weakening the democratic process. Not a pleasant prospect, Maxwell emphasized, but one that may be unavoidable in the oil-scarce world that’s coming.

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Oil Price Paradox – demand down, prices up

Bloomberg Businessweek has a typical MSM reaction to peak oil:  (scratching head) “How can prices be up while demand is down?”  In fact, according to the magazine “demand has peaked” in the advanced western economies, while high prices have spurred new exploraiton that is bringing new supply on-line.  So, how can it be that prices are still high?  Well, the magazine thinks that the market is going to correct itself soon.  More traders have bets on $50-$60 oil than $100 oil.   So rest easy American drivers, “The current imbalance between supply and demand will likely lead to increasing storage levels and lower prices going into the summer,” says Goran P. Trapp, global head of oil trading at Morgan Stanley in London.  Yep, high oil prices are nothing but a bubble that’s getting ready to pop. 

Ah, that’s good news.  Except that oil rose over $86 on Friday.  Really, the cost isn’t going to go down again until the recession deepens.   We’re trying to claw out of the economic hole that peak oil has put us in, and as we do prices are rising.  When they rise high enough, WHAM, recession again, and oil prices will drop.  This will be the pattern from now on.  The only thing that will keep a lid on high oil prices is a permanently crippled economy.  Which is the same as saying that we’ve hit peak demand because we’ve hit peak supply. 

Bloomberg Businessweek cannot admit this new reality – if it did, it would mean acknowledging the end of their reason for being…..

Oil Price Paradox: Firm Prices, Weak Demand

Some traders bet a recovery will strain supply by yearend

By Mark Shenk, Stanley Reed and Alaric Nightingale

• “Slower rates of…growth mean that OECD demand has peaked”

Riding on the blue-green waters off the tiny emirate of Fujairah is a growing fleet of Iranian supertankers. Some 15 of the monster ships, which hold 2 million barrels each, are loitering around the Gulf in hopes that now depressed demand for Iranian crude will pick up. Much the same is happening off the U.S. Gulf Coast, where nine tankers holding some 19 million barrels of oil, a day’s U.S. consumption, are idling. At the oil depot in Cushing, Okla., the largest in the U.S., storage tanks are filled to near-record levels.

Tankers on a trip to nowhere are symptomatic of today’s paradoxical oil market. Current demand looks weak, but prices remain firm, recently testing the highest levels since October 2008. Many traders argue the world economy will stage a strong recovery that strains supply by yearend. “We’re heading for $100,” says John Kilduff, a partner at Round Earth Capital, a New York hedge fund. “The industry is going to get caught flat-footed again.”

Take a hard look at the oil market and such fears seem unfounded. Some forecasters, including the International Energy Agency in Paris, believe this downward shift could be long-lasting. The big price surge of 2008 helped dampen demand while encouraging investment in new wells and increasing supply. Consumption in the industrial countries that belong to the Organization for Economic Cooperation & Development will average 45.4 million barrels per day this year, down a hefty 8.8% since 2005, when OECD oil consumption hit an all-time high. “Slower rates of economic growth mean that OECD demand has peaked,” says Rick Mueller, director of oil markets at Energy Security Analysis in Wakefield, Mass. Demand in China may be rising by a brisk 7%, but in the U.S., which consumes twice as much oil, inventories are well above the closely watched five-year average.

While demand in developed markets levels off, global oil output keeps rising. The Organization of Petroleum Exporting Countries, which helped put a floor under prices last year with sharp production cuts, is now opening the valves. Production has risen by 1.5 million barrels per day from the low in March 2009.

Producers outside of OPEC are getting in on the act. The U.S., long dismissed as an energy weakling, produced 5.5 million barrels in March, the highest since 2005, according to the American Petroleum Institute. The world also has a healthy margin of six million barrels per day of spare capacity, largely thanks to a huge Saudi investment program. “The current imbalance between supply and demand will likely lead to increasing storage levels and lower prices going into the summer,” says Goran P. Trapp, global head of oil trading at Morgan Stanley in London.

How low? BP (BP) CEO Tony Hayward expects prices to stay in the $60 to $90 range for the medium term. A hard core of skeptical traders has a darker perspective on prices than Hayward’s more mainstream view. The New York Mercantile Exchange has 130,000 put options for June sales in the $50 to $60 per barrel range compared with just 51,000 calls to buy at $100 per barrel. Says Eugen Weinberg, senior analyst with Commerzbank in Frankfurt: “It’s a bubble, and it’s just a question of time” before it bursts.

The bottom line: The Saudis are the key to where prices will settle. They like $80 a barrel but could cut output fast if prices drop.

http://www.businessweek.com/magazine/content/10_19/b4177013129633.htm

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Peak Oil: Read The “Prediction” from 2004

HOLY SHIT – this is the first time I’ve come across this….6 years ago a wise old oil man simply predicted what is happening right now.   He calls it exactly right…..we mistook an energy crisis for a financial crisis….Folk’s, I’m not making this shit up….And you MUST get to know Charlie Maxwell….google him

The Gathering Storm

By CHARLES T. MAXWELL

Barron’s

MONDAY, NOVEMBER 15, 2004

(The dean of energy analysts sees a difficult futureTHE ENERGY CRISIS WE ARE IN today is entirely different from the temporary problems we experienced in 1973-74, 1979-86, 1990-91 and 2000. Then, there were political issues: Some nations were willing and able to produce oil for our use and some were not. There was always sufficient worldwide geological capacity to produce additional barrels of crude oil to meet the world’s needs.
No longer. In the next major energy crisis, that capacity will likely be eroded. So the crisis should have a severe impact, be global in scope, and be difficult to solve. Plainly, it will be unprecedented. What may emerge could well be a restructured world, as well as a restructured oil industry.)

Over the next 25 years, a new world energy economy will arrive in three waves. We are near the top of the first and smallest one, a warning wave. A second more powerful wave likely will hit in the 2009-2010 period when the non-OPEC world may reach its all-time highest output of crude oil, subsequently declining to become ever more dependent on OPEC for incremental barrels of production. The final wave should break around 2020, or earlier, as even OPEC’s vast reserves are tapped at a maximum rate of production. After that, oil volume should head down and keep falling, never to revive.

Then the world’s energy companies and governments finally may begin to address new sources of energy to replace oil, and this issue should become the principal economic and political preoccupation for the rest of the century.

An international economic disturbance of this magnitude will create potential conflicts between nations and civil competition within societies. These could be a trial for us and for our children, made worse in the early years by our lack of preparation and our failure to understand what is Continue reading

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