Peak Oil

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tigersiskillers
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Mar 29 2007 10:45
Peak Oil

I went to the Haringey Independent Cinema last night. They screened the End of Suburbia, a documentary based on the impact of peak oil on the US way of life.

No one else there questioned its assumptions, which was a little disappointing. I don't want to get into the arguments for and against so much (there's a debate at anarkismo http://www.anarkismo.net/newswire.php?story_id=2672, and Greg Palast did a short but sweet refutation in his last book) - the thing I find worrying is the psychology behind its promotion. There seems to be a slight element of glee (the end of the world is nigh!) but more than that it's based on fear and and individualisation of the issue. It's all going to come crashing down because you've been greedy.

It reminds me of a couple of things - 80s style survivalists, and a crude marxist inevitable collapse of capitalism outlook.

One problem is that if you push the idea that we're running out of oil and civilisation will collapse, the moment someone says ok, we'll transfer to a more stable energy source (coal or nuclear) then the panic's over.

Also, the only time structural issues get mentioned, it's vague stuff about the oil companies being bad. Except none of them mention that the original Peak Oil paper was produced for Shell, or that it might be in the interests of oil companies to understate available oil.

I'm not dissing HIC by the way, it's a great local initiative.

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Steven.
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Mar 29 2007 10:49

Yeah, peak oil obsessives just seem like those catastrophists. As if capital will let something like that happen. There may be some "problems" but I don't think there's going to be any huge disasters...

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AndrewF
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Mar 29 2007 14:41

There is a fairly long critical examination of Peak Oil theory in Red & Black Revolution 12 which came out about a month back. We should be putting the articles online in the near future.

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Jacques Roux
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Mar 29 2007 14:43

Theres a long thread somewhere in this forum about it as well.

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JoeMaguire
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Mar 29 2007 15:57

Not meaning to derail but Rob Newmans 'History of Oil' seems similar, though of course hes funnier than most primitivists...

http://video.google.co.uk/videoplay?docid=7374585792978336967&q=rob+newman+history+of+oil

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AndrewF
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Apr 5 2007 11:07

That article I mentioned is now online at http://www.indymedia.ie/article/81815

tigersiskillers
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Apr 5 2007 14:57

Brilliant, thank you...

MalFunction
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Apr 6 2007 12:04

The follow-up debate is worth reading too ..

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AndrewF
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Apr 6 2007 12:56

Its also on infoshop
http://www.infoshop.org/inews/article.php?story=20070405061317169
and anarkismo
http://www.anarkismo.net/newswire.php?story_id=5296
now

mitr
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Apr 6 2007 13:45
Quote:
tigersiskillers wrote:

It reminds me of a couple of things - 80s style survivalists, and a crude marxist inevitable collapse of capitalism outlook.

That marxist outlook you mention, has and always has had, a sense of parousia to it (quite possibly inherited from Hegel and Protestantism) - it can be summed up as - peak oil is bad, but anything bad is a sign of imminent glory! What makes this interesting is that right-wing Christians in America are apocalyptic in a very literal sense, so its worrying if these two currents begin to overlap.

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powervacuum
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Apr 7 2007 16:15
Quote:
It reminds me of a couple of things - 80s style survivalists, and a crude marxist inevitable collapse of capitalism outlook.

A lot of people do give peak oil some sort of poorly considered eschatological status. It is definately going to be a significant factor in the political and social future of the world though as none of the proposed alternatives are looking all that viable. Using ethanol for transportation seems unlikely [given the mass amounts of land required] and reducing the price and ease of manufacturing hydrogen fuel cells to workable levels is also going to be very difficult to implement before the price of fuel becomes a serious problem. Peak oil wont be the death of capitalism but its definately a serious blow in my opinion. We shouldnt idolise an event that could cause suffering for millions but it would be foolish not to recognise its potential.

mitr
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Apr 7 2007 17:02
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We shouldnt idolise an event that could cause suffering for millions but it would be foolish not to recognise its potential.

Peak oil could be used as a Sorelian myth to create greater discontent among the working classes - but it could be used by the Establishment as well, the same way nuclear war and Islamic terrorism are, I can see governments subjecting people to harsh laws under the guise of protecting them from environmental problems very soon (I wonder if it hasn't already started?). For this reason we need to counter the Establishment's portrayal of the environment crisis as an inevitable trial caused by nature, work on building a consciousness that peak oil, global warming and the rest are entirely man-made problems, and that refers to a very specific group of men.

ralfy
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Apr 1 2014 02:04

Here's recent news on the issue:

"World crude production 2013 without shale oil is back to 2005 levels"

http://www.resilience.org/stories/2014-03-26/world-crude-production-2013-without-shale-oil-is-back-to-2005-levels

In short, crude oil production peaked in 2005. What is meeting oil demand is unconventional oil, which has lower energy returns and will not last.

The reason why this is happening is simple: even through estimated reserves are high, most of the oil is too deep or requires more processing, leading to lower energy returns.

alb
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Apr 1 2014 17:40

Hi again ralfy. We two have discussed this before here, but I still don't know what you think should, or even can, be done about it.

ralfy
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Apr 3 2014 10:41

I don't think anything can be done about this issue because there's no more "easy oil" available.

alb
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Apr 3 2014 20:28

So we are all doomed then?

ralfy
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Apr 4 2014 12:39

Localization and sustainability will be important, and will certainly involve skills related to permaculture, renewable energy, water management, etc.

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ocelot
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Apr 4 2014 13:33

Personally I would be fecking delighted if we ran out of fossil fuels before we destroyed our environment. Sadly that's just not going to happen. The current estimation of known exploitable reserves is more than enough to raise global temperatures to catastrophic levels. Now the maniacs are planning to set fire to coal seems underground and recover gas that way*. Peak oil? I wish!

Until we end the law of value/capitalism, the profitability of fossil fuel exploitation looks set to continue to crowd out any investment in renewables. After all, once you've built renewable generating plant, the power it produces is free - and where's the profit in that? Sustainable capitalism is a pipe-dream, as is any idea of a transition to a post-fossil fuel economy that doesn't pass through the overthrow of capitalism.

* https://en.wikipedia.org/wiki/Underground_coal_gasification

Quote:
...as an article in the Bulletin of Atomic Sciences pointed out in March 2010, UCG could result in massive carbon emissions. “If an additional 4 trillion tonnes [of coal] were extracted without the use of carbon capture or other mitigation technologies atmospheric carbon-dioxide levels could quadruple,” the article says, “resulting in a global mean temperature increase of between 5 and 10 degrees Celsius.”
ralfy
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Apr 5 2014 10:29

Global oil discoveries peaked in 1964. U.S. oil production peaked in 1970. Global oil production per capita peaked in 1979. Conventional production peaked in 2005. Production for the five major players has dropped by 25 percent.

These are happening because peak oil involves production rate, which is affected by energy return. Also, global demand has been going up.

As shown earlier, we are now using unconventional oil to meet demand, but this has low energy returns and steep decline curves, which means it will not last:

"The Myth of 'Saudi America'"

http://www.slate.com/articles/health_and_science/science/2013/02/u_s_shale_oil_are_we_headed_to_a_new_era_of_oil_abundance.html

S. Artesian
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Apr 5 2014 16:32

What Ralfy argues has been argued every year since 1970, with the "end of days" reportedly at 1979, then 1986, then 1999, then.....Campbell, Deffeyes, and other peak oilers keep pushing out the date for the depletion of hydrocarbon reserves below recover-ability ; and consistently, petroleum companies have been able to get more production from fields than predicted in the initial discovery and access. Where are those reserves coming from? From the drill bit.

What is unconventional oil? Unconventional happens to be an economic category, not a geological one, just as reserves are an economic category-- defined by the USGS and others-- the amount of oil that can be recovered using current technology and at a know profitability. Really.

Is deep drilling "unconventional" oil? Only until advances in technology made it "conventional." Is shale oil "unconventional"--not any more because the economics of extraction have made it practical, i.e. profitable.

Its all well and good to point out that minus shale, global production is at 2005 levels-- however, it's not good enough, because that too is not a geological argument-- it's an economic one. Look at the industrial output from the advanced countries over the last five years; look at the amount of energy required per unit of production, say for the US, it has declined. Over all production of crude oil (a different category than petroleum and petroleum liquids) increased 24% between 1980 and 2010. Production of petroleum and petroleum liquids has steadily increased every year since the downturn in 2009. (This data is all freely available from the US Energy Information Agency Website eia.gov

Ocelot's right. Capitalism will poison and destroy the planet before it runs out of coal, petroleum, gas. One of the "newer" "unconventional" technologies is to tap into methyl hydrates-- huge deposits of methane gas under the sea that are "frozen" by the intense pressure and low temperatures at the depths of the deposits. And where do the bourgeoisie find the perfect "test" plot to tap into this "greenhouse gas"? Why off the coast of Japan, in the earthquake zones that surround those islands.

Best book I've read on the issue of peak oil is Steven Gorelick's Oil Panic and the Global Crisis

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Noah Fence
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Apr 5 2014 17:25
ralfy wrote:
I don't think anything can be done about this issue because there's no more "easy oil" available.

Not so sure about this. Kurdistan has oceans of the black stuff including both heavy and 'sweet'. There's a big pipeline built/being built and the established majors - Genel, Chevron - are operating along with explorers like Gulf Keystone who may soon be a major themselves. It may not be easy oil politically but capital isn't going to let that stop it, not when there are millions of BPD to be had.

S. Artesian
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Apr 5 2014 18:12

With the cost price of oil for the US producers at about $10 a barrel, and the market price around $100 a barrel, there's plenty of "cheap oil" for the capitalist producers.

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boozemonarchy
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Apr 5 2014 20:55

I've had enough of this crap. I've got otherwise pretty clever folks back home that equate oil-crisis with the destruction of capitalism. Ugh.

ralfy
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Apr 7 2014 14:05
S. Artesian wrote:
What Ralfy argues has been argued every year since 1970, with the "end of days" reportedly at 1979, then 1986, then 1999, then.....Campbell, Deffeyes, and other peak oilers keep pushing out the date for the depletion of hydrocarbon reserves below recover-ability ; and consistently, petroleum companies have been able to get more production from fields than predicted in the initial discovery and access. Where are those reserves coming from? From the drill bit.

The "end of days" was not reported, and the dates were not pushed forward except once. Hubbert argued in 1976 that due to the 1973 oil shock the peak for conventional oil production moved forward from 1995 to 2005.

In 2010, the IEA confirmed that conventional production peaked in 2005. More details can be found in my first link.

Oil companies have not been able to produce more. Again, check my first link.

Finally, the problem isn't getting reserves but getting reserves for a high energy return. That's why even with lots of conventional oil available we are now resorting to unconventional oil, as most of reserves are too deep to extract economically.

That's also why the oil price has tripled and oil production cost now reaching that.

For more details, check the IEA Outlook 2010 report.

Quote:

What is unconventional oil? Unconventional happens to be an economic category, not a geological one, just as reserves are an economic category-- defined by the USGS and others-- the amount of oil that can be recovered using current technology and at a know profitability. Really.

Unconventional oil is given in the EIA glossary.

Also, unconventional oil has lower energy returns.

Quote:

Is deep drilling "unconventional" oil? Only until advances in technology made it "conventional." Is shale oil "unconventional"--not any more because the economics of extraction have made it practical, i.e. profitable.

Again, check the EIA glossary for details. Also, energy returns for unconventional oil and deep sea drilling are low. That's why conventional production can no longer catch up with demand and we are now using shale oil.

Quote:

Its all well and good to point out that minus shale, global production is at 2005 levels-- however, it's not good enough, because that too is not a geological argument-- it's an economic one. Look at the industrial output from the advanced countries over the last five years; look at the amount of energy required per unit of production, say for the US, it has declined. Over all production of crude oil (a different category than petroleum and petroleum liquids) increased 24% between 1980 and 2010. Production of petroleum and petroleum liquids has steadily increased every year since the downturn in 2009. (This data is all freely available from the US Energy Information Agency Website eia.gov

It's a geological argument. The main reason we are using shale is because conventional production can no longer meet demand. That's peak oil.

Obviously, what affects crude oil will also affect shale oil. More details in my previous posts.

A 24-pct increase for two decades has to take place because demand has to go up by at least 2 pct a year to maintain economic growth; that's been the case for the last three decades. More details are given in the IEA Outlook 2010 report.

The problem is that the IEA forecasts a 9-pct increase for the next two decades with all oil and gas production put online and at maximum depletion rates. Demand increase per annum is expected to increase further as more people worldwide join the middle class, especially from BRIC and emerging markets (up to 50 pct of the world's population).

In short, we will need the equivalent of one Saudi Arabia every seven years just to meet economic growth.

Finally, the data presented in my first link comes from the EIA.

Quote:

Ocelot's right. Capitalism will poison and destroy the planet before it runs out of coal, petroleum, gas. One of the "newer" "unconventional" technologies is to tap into methyl hydrates-- huge deposits of methane gas under the sea that are "frozen" by the intense pressure and low temperatures at the depths of the deposits. And where do the bourgeoisie find the perfect "test" plot to tap into this "greenhouse gas"? Why off the coast of Japan, in the earthquake zones that surround those islands.

Peak oil is not about running out of oil.

Unconventional oil has lower energy returns. Given that, we face the effects of peak oil and global warming. More details can be found in the IEA Outlook 2010 report.

Quote:

Best book I've read on the issue of peak oil is Steven Gorelick's Oil Panic and the Global Crisis

This one is also helpful:

"Global Oil Market Forecasting: Main Approaches & Key Drivers"

https://www.youtube.com/watch?v=dLCsMRr7hAg

ralfy
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Apr 7 2014 13:53
Webby wrote:

Not so sure about this. Kurdistan has oceans of the black stuff including both heavy and 'sweet'. There's a big pipeline built/being built and the established majors - Genel, Chevron - are operating along with explorers like Gulf Keystone who may soon be a major themselves. It may not be easy oil politically but capital isn't going to let that stop it, not when there are millions of BPD to be had.

Consider reserves vs consumption rate. 45 billion barrels of reserves divided by 80 million barrels of oil consumed daily is 562 days, or less than two years' worth.

And that's assuming that all 45 billion barrels can be extracted at the same price, which isn't the case. And that oil consumption per day won't go up.

Finally, see the lecture shared earlier in light of capital expenditures.

ralfy
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Apr 7 2014 13:56
S. Artesian wrote:
With the cost price of oil for the US producers at about $10 a barrel, and the market price around $100 a barrel, there's plenty of "cheap oil" for the capitalist producers.

I think the oil production cost globally is now above $85 a barrel.

ralfy
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Apr 7 2014 14:04
bozemananarchy wrote:
I've had enough of this crap. I've got otherwise pretty clever folks back home that equate oil-crisis with the destruction of capitalism. Ugh.

The IEA hopes that it will not, i.e., if the world can replace over 70 pct of oil demand increase with renewable energy. But that will be very difficult as transition to renewable energy involves both an energy trap and a lag time.

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Apr 7 2014 16:23
ralfy wrote:
In 2010, the IEA confirmed that conventional production peaked in 2005. More details can be found in my first link.
[...]
Peak oil is not about running out of oil.

Unconventional oil has lower energy returns. Given that, we face the effects of peak oil and global warming. More details can be found in the IEA Outlook 2010 report.

Wrong, wrong, wrong. The Hubbert Peak is an absolute peak in oil production - here are the EIA figures for world oil production (from here)

So far, no peak, not in 2005, nor since.

The energy returns are irrelevant (other than meaning the actual CO2 release rates go up per unit combusted). Capitalism will keep producing oil as long as it keeps being profitable. Its the monetary returns, not the energy returns that matter to capitalism.

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Apr 7 2014 16:28

And just on this:

ralfy wrote:
Quote:
What is unconventional oil? Unconventional happens to be an economic category, not a geological one, just as reserves are an economic category-- defined by the USGS and others-- the amount of oil that can be recovered using current technology and at a know profitability. Really.

Unconventional oil is given in the EIA glossary.

Here is the definition from the EIA glossary:

Quote:
Unconventional oil and natural gas production: An umbrella term for oil and natural gas that is produced by means that do not meet the criteria for conventional production. See Conventional oil and natural gas production. Note: What has qualified as "unconventional" at any particular time is a complex interactive function of resource characteristics, the available exploration and production technologies, the current economic environment, and the scale, frequency, and duration of production from the resource. Perceptions of these factors inevitably change over time and they often differ among users of the term. For these reasons, the scope of this term will be expressly stated in any EIA publication that uses it. For example, see International Energy Outlook, Table E4 for the list it currently uses for unconventional oil and natural gas production.

Which makes S. Artesian's point that its an economic category.

S. Artesian
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Apr 7 2014 16:53

The average daily global oil supply has exceeded the 2005 so-called peak every year since 2009. It makes no sense to claim that the peak occurred in 2005 if we discard the output of the shale fields. Either those fields are part of the total "endowment" of reserves, the endowment being one of the key parameters for Hubbert to make his calculations, or there is no basis for making the calculations of peak.

The "oil endowment" includes the estimated oil resource (resource being a "concentration in or near the earth's crust in such form and amount that economic extraction of a commodity is currently or potentially feasible") plus all the oil that has already been extracted. A "reserve" is a portion of a resource that can be economically extracted or produced at the time of discovery.

Clearly, we can the basis for the changing estimates of reserves, and resources-- they are economic functions,not geological. That there exists a finite supply is not the issue. Everyone agrees that there is a finite supply. The issue is economically and thermodynamically can the extraction process yield a surplus? If the answer is yes, then the next question, "for how long" depends not solely on the resource or the reserve, but the technology and social organization of extraction

Hubbert made various projections for the global peak of production, with the last ones centering around the year 2000. His "heirs" Campbell, Deffeyes, Laherrere have all made predictions that haven't come to pass, and of course, many of the Hubbertists have revised their estimates of the oil resource.

As for "unconventional sources"-- here is the criteria utilized by the USGS:
The oil and natural gas resources that exist in geographically extensive accumulations.
[nothing different there]
The deposits generally lack well-defined oil/water and gas/water contacts and include coalbed methane, some tight sandstone reservoirs, chalks, and auto-sourced oil and gas in shale accumulations.
[what of this is a specific geological category?]

The assessment methodology and production practices vary from conventional resources.
[Finally, we get to the nitty gritty-- which is a function of technology; and technology is a function of economics]

Finally, Ralfy should check the reports filed by the major oil producing companes-- which provide the average cost-price for the company of a barrel of oil. $10, not $85, is the number. Certainly, that is an increase-- from the $2.50 it was not so long ago; but it's not that much of an increase given rates of inflation.

Now we need to examine the notion that the shortage of "cheap oil" has driven the price upwards-- the usual evidence cited for this is the fact that the application of greater investments in the technological apparatus of production are required to access the less accessible supplies, and because oil is a limited resource, we have the classic Ricardian rent syndrome, where the most expensive producer determines the price of the commodity for all other producers.

First, let's ask ourselves, if this is the case, what has been the experience with other limited fossil resources that have required greater applications of technology.......like coal (the "approaching peak" in coal production was also a concern of Hubbert). Has the production of coal been driven by a "bell shaped curve" and if not, why is coal different from oil? Fossil fuel, under the ground, so what's the difference. Has the depletion of fields and the introduction of new technologies driven the price of coal relentlessly upwards? Not hardly.

I would argue that the price spikes and collapses of oil have nothing to do with supplies or "ease of extraction." Let's remember, fixed capital, increases in the application of fixed capital do not and can only be passed along over the life of the apparatus, and tend to reduce the cost of unit production. BUT what can occur is that profit, value, gets distributed according to the size of the capitals deployed. There is no greater mass of capital concentrated in a single sector of capitalist production than the mass concentrated in petroleum. And that massive capital demands a share of the profit proportionate to its size. This distribution is accomplished through the price mechanism.

Short version: If OPEC didn't exist, the bourgeoisie would have had to invent it. OPEC did exist, and the bourgeoisie still had to invent it.

We might ask ourselves what is the basis for Hubbert's analysis-- that there is a finite quantity of oil available, and that extraction of that oil follows a predictable path which reaches a limit that cannot be overcome. Well who can argue with that? I mean after all, what's he arguing really? Nothing but the laws of thermodynamics; the law of entropy. The issue is are we at the edge of the cliff now? Soon? In the near future? All available evidence is that that answer is no.

What is evident, however, from the writings of Hubbert and his followers, is the strong Malthusian bias to the analysis (with at least one or more of these Hubbertist followers likening human beings to a "virus" on the body of the earth) which uses predictions of catastrophe to make an indeterminate process appear as an immediate threat.

ralfy
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Apr 8 2014 08:05
ocelot wrote:
Wrong, wrong, wrong. The Hubbert Peak is an absolute peak in oil production - here are the EIA figures for world oil production (from here)

https://24.media.tumblr.com/dcf223268808980fde4c6b34e261d662/tumblr_n3o5a8QxE81svbv3mo1_500.png

So far, no peak, not in 2005, nor since.

The IEA confirmed this in 2010:

"IEA acknowledges peak oil"

http://www.resilience.org/stories/2010-11-11/iea-acknowledges-peak-oil

but the peak for crude oil production began in 2006 and not 2005.

For the 2005 peak, Hubbert was referring to crude oil production. Data from the same EIA is presented in the second chart here:

http://www.resilience.org/stories/2014-03-26/world-crude-production-2013-without-shale-oil-is-back-to-2005-levels

Crude oil production peaked in 2005, leading to an ave. of 73.4 Mb/d. Shale oil is adding 1.2 Mb/d to that to meet demand.

From what I remember, it was argued before 2005 that by 2010 crude oil production would exceed 90 Mb/d and that the oil price would drop to less than $30 a barrel.

Finally, production per capita is more logical because production meets a growing population. That peaked back in 1979:

"Peak oil? What peak oil?"

http://cassandralegacy.blogspot.com/2013/07/peak-oil-what-peak-oil.html

Notice that multiple sources lead to the same conclusion.

Quote:

The energy returns are irrelevant (other than meaning the actual CO2 release rates go up per unit combusted). Capitalism will keep producing oil as long as it keeps being profitable. Its the monetary returns, not the energy returns that matter to capitalism.

Energy return is relevant for obvious reasons:

"Why EROI Matters (Part 1 of 6)"

http://www.theoildrum.com/node/3786

In fact, that's the reason why crude oil production has peaked at 73.4 Mb/d, why the world is now resorting to shale oil, why shale oil will also not last:

"The Myth of 'Saudi America'"

http://www.slate.com/articles/health_and_science/science/2013/02/u_s_shale_oil_are_we_headed_to_a_new_era_of_oil_abundance.html

why production for the five major players have dropped by 25 pct:

http://www.theoildrum.com/node/9946

and why oil production cost is rising.