Peak Oil- what it is and how it will impact your life

You are certainly not making a fool of yourself. The only stupid questions are the ones unasked. Learning is always the right path. I think, especially as a newcomer to this topic, you should forget about the peak part of it. The peak is a certainty, it will happen, or has, and we will inevitably begin to produce less and less of the life blood that fuels this world. That is simple mathematics, when you use more than you produce you are going to eventually run out.They realized this by the late 1800's. However, the TEOTWAWKI scenarios are years past any peak.
The most immediate thing you are going to need to watch for, and prepare for is higher energy costs. Yes there are lots of alternatives out there but it takes energy to produce them and at this time they are decades at least from having any significant impact on the costs we will be paying in the future.

We will still be using fossil fuels well into our children and grandchildren's lifetimes, but who knows what they will be paying for it. So some practical things to do today is to buy fuel efficient vehicles, use solar and wind power as much as possible. Go into the alternative energy industry, help come up with the solutions that may prevent the most dire of the TEOTWAWKI scenarios.

Be a part of the solution not the problem. As long as the world is addicted to oil and consumes it faster than it can be extracted, we are going to have a problem.

You ask where I see us in 5 years. Not much different than today. We will probably have seen a few new highs for gasoline and heating oil prices. As the fields that are being exploited today start to deplete, which all indications are that they will in much less time than conventional fields, we will see prices start to rise again. It will get to a point where many people have to change and adjust their lifestyles to accommodate. We saw this when gasoline was running at $4 a gallon.
People were quitting better paying jobs that they had to commute to for lower paying jobs closer to home. The large gas guzzling SUV's were practically unsellable. People began to car pool and to use public transportation more.
I expect to see all of that again but on a much larger scale.

Eventually, when who knows, but eventually, if we do not reverse the trend of the last 60 years and start discovering new mega fields, if some new technological advance does not come along, if some new energy source is not developed, and not just to run cars, but airplanes, electrical generation, and to replace fertilizer, plastics, the list goes on, then we will see a day when only the rich can afford air travel, when only the more wealthy among us are able to drive gas using vehicles, when we struggle to make enough money to just keep the lights and the heat on in our homes. A time when multi-generational living will be the norm. Co-ops where many people live together and share the energy costs will be common place. Those things we will probably see. If things continue as they are. Not in 5 years but in our lifetimes.

 

Good on you Kingfish. Like I told Micro Farad, be part of the solution not the problem. Our gluttonous consumption of finite resources is going to eventually land us in a place we don't want to be. It should make all Americans hang their heads in shame that we are the number one consumer, and wasters, of energy on the planet. I would have to look back in this thread but the exact numbers are there. We are only IIRC, 6% of the world population yet we consume, again IIRC, 60% of the worlds energy. That is an enormous amount for our population size. And the only way to cut that gorging use will be extravagant prices. As long as fuels are relatively cheap to use we will continue to burn them up as fast as we can.

 

@Micro Farad What I would do in that situation, is build a small Studio, out back, by the Barn, somewhere. Maybe two rooms, with a loft. Super Insulate it, and use it for a Guest Cabin, for now. Then if you lose your Heating Supply Energy, you move into the Studio, and heat it with the Wood Stove, from the barn. In that situation, it then becomes the Lifeboat, till things either stabilize, or you work out alternate Heat Sources, you can afford, for the Main House.... ...... YMMV....

 

You might want to consider insulating the concrete Floor with foam board, and then lay down a grid of PEX Tubing, and the flowing a 2" slab over the top. This then can be fed Hot Water from a Water Jacket, or Stack Coil attached to the Wood Stove. This uses the floor as a HeatSink to heat the Guest Living Space as well as heating the Air, in the space. Remember to build an outside Air Intake for the Wood Stove, so it does NOT use Room Air to combust the Fuel. (Wood) That makes a very cozy LifeBoat, if you Super Insulate the Walls and Ceiling.... ....

 

A couple of recent articles. I think that they are fairly accurate. It has been hard to continue the discussion of peak oil lately when all we see is these rosy, grandiose proclamations of how our production is rocketing. I suppose it is human nature to latch onto anything positive but to do so without a critical look at the big picture is dangerous. The recent upswing in our production levels is great but it is a false hope as it cannot be sustained. How far have fuel costs dropped due to this increase?
I have stated so many times that it is almost a mantra, peak oil does not mean the end of oil, it means the end of CHEAP oil. When the price to produce this vastly expensive product exceeds the profit to be made from it, or most likely price it out of the range of most, then we will feel the impacts of it.
I see this current production and, relatively, mild fuel prices, as a brief reprieve from the more dire consequences of peak oil. A reprieve that we need to exploit while we have time. Unfortunately it tends to have the effect of increasing consumption, negating serious efforts to develop alternative fuels, to increase fuel efficiency, to promote fuel conservation.
I was asked in a previous post where I saw us in 5 years. I stand by that prediction and fear that it may prove to be prophetic.

America: You’ve got three more years to drive normally!


Oil prices falling, but maybe not for long: Jefferies - Yahoo Finance



"Fracking production has temporarily held down driving costs, and has thus bought us a few more years of energy crisis denial; for now, driving is expensive but commonly affordable (our global warming denial can still go on for a little longer).

However, driving as usual will probably have to end with the end of the current fracking boom, as soon as its mounting profit losses kill new investment in production. The reason we can’t frack our way out of our oil addiction is that fracking really doesn’t pay off very well. The drilling costs are high compared to conventional oil production, since fracking involves a lot of lateral drilling, plus the great additional energy expense of breaking up a lot of underground rock using high pressure water.

You can produce oil at about $100 a barrel this way, but this tight oil commonly contains a lot of volatile but less valuable condensates like butane. Fracking wells also tend to mostly deplete in just a few years, much faster than old-fashioned conventional oil wells. Although the best fracking wells can still be profitable, the most profitable parts of the major U.S. fracking fields have already been drilled and produced since the low hanging fruit always gets picked first.

Today most energy companies are actually losing money on their oil and gas production.

Today most energy companies are actually losing money on their oil and gas production. This lack of profit, even at the current high price of $100 per barrel, is the way that the world of energy investment tells us that we are reaching peak oil. Peak oil is not exactly geological, although geology has a whole lot to do with it. Peak oil is actually reached when people can no longer afford what it costs to to produce it.

The official U.S. Energy Information Administration recently released a chart which shows that the top 127 oil and gas companies are currently losing money."

 

What's the breakdown of payroll look like for the oil corporations, from bottom up? I'm not a betting man, but I would wager the top 1/3rd echelon wouldn't be hurt one bit, and the oil business is quite profitable no matter what the stories are about it being "so darned expensive it can't be done for profit" any longer. It's trickle-down economics at its best. Oil cartels run up the prices, control the oil supplies, the economy tanks because mom and pop Joe and every business on the planet is digging deep just to drive, and the U.S. is highly dependent upon transportation, not to mention the incessant wars drive up usage, so the bottom line is these oil cartels have to keep pumping more and more oil out and they pay more because everything else costs more, too. It's insanity.

Sure, oil is tougher to get to in some places, but not everywhere. Sure, oil cartels are seeking out more ways to get even more oil, and sure we are using WAY MORE than we ought to. But, I know (and I also hope you know) that we have had technology in place to make cars far more gas efficient for decades. I am not just talking about hybrid technology nor am I thinking about pure solar. We all know the corporate influence on this issue is disgusting, and the lobbyists continue to have their way in the political arena.

Just in my lifetime I have seen oil go from less than a dollar a gallon (many of you can remember when it was little more than a quarter) up to nearly $5, and it's only going to continue to rise. The dollar has lost its value, folks -plain and simple. And, the ONLY way they can keep this ship from sinking is to continue siphoning the oil and controlling that petro-dollar crude market.

 

I well understand your skepticism. And yes there is a very sordid history of oil companies suppressing competing technologies. If it weren't for JD Rockefeller we would have a nationwide train service like most of Europe has. But that was mainly in the day of the mega monopolies and the big oil boogeyman today just doesn't wield that kind of power and influence anymore. The shadow of JDR stretches over much of the perception of the oil business to this day.

As for the breakdown of payroll it is again a matter of seeing the big picture. We hear these stories of the fantastic, record setting profits made by big oil companies but what most people fail to realize is that the oil industry also has the highest return of those profits of any other industry. Meaning they have to reinvest, if I recall correctly, as much as 60 cents of every dollar of profit back into the exploration, production and delivery of their product to produce the next dollar.
As for return on investment they are not even in, again IIRC, the top 5. The highest return of profit for dollar invested is in the pharmaceutical industry.

And just as JDR's monopoly could manipulate the price of oil in his day, that to is a specter of history. Oil today is a global product produced and sold the world over by thousands of different companies in dozens of different countries. The lobbyists in the USA have little impact on trade in Asia or the ME. If Exxon wants to raise the price it charges for it's product the Russian oil companies will gladly sell there's at a lesser amount. It just simply isn't plausible that all of these companies, cartels, etc. can get together and agree on a grand global strategy to somehow inflate the price of their product. They can't agree to disagree on anything. We have seen that with the once all powerful OPEC nations. They undercut their partners, over inflate their reserve figures, lie and cheat on export numbers. The idea of some global consensus to falsely inflate the price of oil is conspiracy theory of the highest order.

So yes, believe it or not the cost of producing oil is rapidly approaching the point to where it is not economically viable to do so. Not at today's prices. And yes many companies are producing fields right now that are putting their profits in the red. They do so in hopes of the price rising in the future so they can make a profit then on the reserves they produce today.

If you were aware of the oil situation in the 80's it is much the same as today. When oil dropped to $4 a barrel (forced down by overproduction by OPEC, the last time they ever wielded that kind of power) it forced American producers to start shutting in their wells. They simply cost more to produce than they could make. And of course then you had the cry that they were intentionally shutting in wells to dry up supply and drive up the price. Again the specter of the all powerful JDR loomed large and of course "Dallas" was a hit at that time and JR Ewing didn't help the public image of oil companies.

The big picture, the truth of the matter, is that oil is becoming much more scarce and invariably much harder and ergo expensive to produce. And there will come a point when it costs more to produce than the public is willing or more apt, able to pay.

 

How are cartels working together? It's simple...everything is a corporation. Certainly, some international corporate cartels compete, and that's why there's war. For example, Russia, China and the United States are all fighting over the oil in the Middle East. My point is, the cartel which fuels our country (namely Shell, Exxon, and BP along with Texaco, Gulf, Mobil, and Chevron) will stop at nothing until they control as much of the oil reserves as they possibly can. They do this because it's all they have to keep this destructive economy going and it's all they have to perpetuate their own existence.

The oil provides a great incentive to control the Middle East -of course it is profitable!


I think you and I are on the same mode of thinking when we discuss the oil situation, for the most part. We can both agree it's running out, and we can agree we are using increasingly more oil with each year. This all equals a zero sum conclusion, and the oil corporations are scrambling to get as much of it as possible. Our economy relies upon oil, plain and simple. It's a struggle against Russia and China for supremacy, and war is only a means to secure control of the oil and thus the continuation of our broken society. I am sure we disagree on the "conspiracy" aspect, but that's fine.

Yes, oil is running out, it's tougher to get to sometimes and yes, it costs more to make it into gasoline and everything costs more as a result. Plus, we add in taxation and all the fat guys in the middle, it's a no-win situation.

Anyway, here's a great documentary on the oil cartel, the "Seven Sisters" researched by Al Jazeera. It covers the history and recent cartel development.






Here's an example of another type of corporate cartel, more of a monopoly, really. It's a bit of an aside, but further proves my point that much of what transpires is beyond the comprehension of most people because they don't know how so many corporations could possibly exist under one umbrella. It's happening everywhere. It's all a corporation, the whole world...

 

This is a pretty fairly presented article. There are many industry "experts" who have always downplayed peak oil and there are always the naysayers. I have said before that I hope they are right. Who wants to see some of the more dire consequences envisioned by peak oil theorists? I think the last part is a nice summation.


Hubbert's Take
If M. King Hubbert were alive today—he died in 1989—would he admit defeat? Probably not, says Mason Inman, who has written a biography of Mr. Hubbert that will be released next year. He argues that the recent shale boom is just a temporary respite in a long march downward. U.S. oil production could be about to hit a second peak, and then return to its terminal decline.

The production boom "makes things better for a while, but it doesn't change the long-term picture," Mr. Inman says.

If Mr. Hubbert were around, he might be dumbstruck by what he sees, Mr. Inman says. Mr. Hubbert, he says, advocated turning to solar power and energy efficiency to break the dependency on oil.

As for the power of innovation to reach new oil reserves, Mr. Hubbert believed that technology would help extend the limits of oil production, but thought its impact was exaggerated, Mr. Inman says. He felt people would invoke technology as a kind of panacea—which it isn't.

There will eventually be diminishing returns, Mr. Inman says, since oil is a finite resource, even though we don't really know its limits. "He would probably say, 'You guys are crazy to be drilling this so fast and using it up and pretending it's a solution,' " says Mr. Inman.

A couple of statements stood out to me;

"No mineral, including oil, will ever be exhausted. If and when the cost of finding and extraction goes above the price consumers are willing to pay, the industry will begin to disappear,"

"So at some point, the cost of getting more and more oil likely will get so high that buyers can't—or won't—pay."

"To the peak-oil adherents, this is just a respite, and decline is inevitable. But a growing tide of oil-industry experts argue that peak oil looks at the situation in the wrong way. The real constraints we face are technological and economic, they say. We're limited not by the amount of oil in the ground, but by how inventive we are about reaching new sources of fuel and how much we're willing to pay to get at it."

I think this last quote sums up the peak oil cornucopians attitude. "We will find more sources and better ways to extract it". This is a dangerous attitude in that it pins our hopes on a maybe/maybe not, wishful thinking future. I believe they are the ones who are looking at it the wrong way. Peak oil is not about running out of oil, it is about running out of cheap oil. And even this quote recognizes a critical factor, " how much we're willing to pay to get at it."

The current increase in production and the resulting drop in prices is a catch 22. The reason there is a glut is due to the high price of oil that spurred these new technologies and methods. As the prices decrease so does the profit margin for these highly expensive recovery methods. So we look at "Peak Price" now instead of "Peak Oil". At what price is it more expensive to produce than it can be sold for? At what price do consumers get priced out of the market?



http://online.wsj.com/articles/why-...t-come-true-1411937788?ru=yahoo?mod=yahoo_itp

Crude Oil Price Crashes, Gasoline at 4-Year Low - Yahoo Finance

 

This thread may become interesting again. Minuteman is a company man that has been (and still is) in the patch for decades, and Collapsenik with some proclaimed experience, as yet unsubstantiated, tho' he might do so soon.

Then there looks to be a bit of a definition problem between "conventional" and "unconventional" wells. In some areas, the definition refers to straight forward, straight bores (even if inclined) and those that take horizontal turns as they do in the gas patch (and oil shales). Undoubtedly, there will be some differentiating discussion between decline and depletion, too, and there is a big difference in meaning.

Then, there's the wet gas vs. dry gas to be touched upon. (Wet, of course, dealing with gas INCLUDES recovery of all components that remain liquid at the gas pressure found in the strata. Typically, they yield more revenue than dry gas). Up thisaway, the volatile fractions are caught and sold ---

Then there are the few remaining wildcatters that can afford to lead the charge into the unknowns by drilling exploratory wells. Oh, wait!! The big boys are doing that.