Peak Oil is Now!

[MASTERMIND + 7]

17 hours ago, Tom Kirkman said:

Clearly, we totally disagree about Peak Oil.  You are unlikely to change my mind, and I am unlikely to change your mind.  Ever.  So I'll stop trying.

However, pease feel free to try to convince others that Peak Oil has already happened.  Good luck with that.

Why is the price of oil more than triple its 20th century average price of 19 dollars (inflation adjusted)? 

Answer: Scarcity, caused by peak oil

Source: Reuters 

https://imgur.com/a/8wITHVC

 

 

 

[MASTERMIND + 7]

1 hour ago, JHM said:

The question is whether oil will ever be worth the price needed to fully replace produced oil. To say that the price of oil has been too low to support exploration and discovery is to say that demand for oil reserves is insufficient. Is oil really worth spending $20/b just to find more of it? Maybe not.

Nobody is claiming oil will "run out'..That is a straw man..They are claiming oil will "run short"..

And that is what happens when you run an oil defect for 34 years..Duh

[MASTERMIND + 7]

28 minutes ago, Sebastian Meana said:

Peak light crude very likely did happened like six months ago

you still have HeavyCrude, Oil sands, and Shales

Let me educate you 

Coal cannot work without crude, crude cannot work without coal, natural gas cannot work without both oil and coal, Shale oil and heavy oil cannot work without any of those, and so on…etc.

[NickW + 2,714]

55 minutes ago, Epic said:

My bad.  $7 per barrel?!?  Why do we not have fields and fields of them built already?

Thats just the cost of building the plant. You got to provide the coal, the manpower, process energy etc. 

CTL has only ever really been tried on a large scale in Nazi Germany, South Africa and more recently China. The driver was the actual or potential  loss off access to conventional supplies of oil. 

In SASOL's case the plants were virtually built for free using govt money. Nazi Germany speaks for itself. I wouldn't be surprised if the Chinese plants are underpinned by some government lolly. Still when fossil fuels are being subsidised that's ok 😉

[Wally + 7]

Coming soon, how to interpret your crystal ball affectively and the best place to buy one.

Please do try to maintain at least a thin grasp on reality.

[Gerry Maddoux + 3,627]

I don't know how much a gallon of oil made in a factory should cost, but I do have a good comparison. Have I made this before?

To make a cup of oil, a certain mass or organic material had to be mashed under tremendous force and then heated to the temperature of a hot cup of Starbucks coffee . . . and held there for over a million years. Slightly cooler and only kerogen will result (immature oil). Slightly hotter and it will cook the oil. 

Figuring cups per gallon and gallons per barrel, an oil field barrel of Starbucks latte goes for about $3800. Compare that to what nature required a million years and ideal laboratory standards to make. The price of oil is laughable . . . it always has been, even when it spiked dramatically. Coffee beans are reproducible. Any idiot can roast them. But oil . . . well, it has to be done just right. 

I don't see it raining down from the heavens, nor do I see it being made in a laboratory. But I do see the damn price going up. Not to where it should be, but perhaps to $200/bll. My personal opinion? I thought King Hubbard was right when he wrote the piece, and I also thought Mr. Simmons was right when he reiterated it a couple of decades ago. The shale oil, a Ponzi though it may be, is our last best hope. Though $400 oil would sure as heck would end some of these long commutes.

[Rodent + 1,424]

22 hours ago, MASTERMIND said:

 

The easy oil is gone

Oil discoveries peaked in the 1960’s.

Every year since 1984 oil consumption has exceeded oil discovery.

In 2017 oil discoveries were about 7 billion barrels; consumption was about 35 billion barrels

Of the world’s 20 largest oil fields, 18 were discovered 1917-1968; 2 in the 1970’s; 0 since.

 

Source:

https://imgur.com/a/6dEDt

https://www.chron.com/business/energy/article/Oil-discoveries-in-2017-hit-all-time-low-12447212.php

 

I guess it's possible that we've reached peak oil. I mean, I guess it's impossible for anyone to say this with any certainty, either way. I certainly wouldn't presume to know. But I also wouldn't assume that anyone else knew, and therefore wouldn't be eager to subscribe to any peak oil theories. 

I will say this, though. Using historical oil finds and pairing that with oil consumption to determine the existence of more oil seems illogical. 

The Rystad graph is conventional oil only. And some of those really early oil finds were HUGE-- as much as 10 times what was produced in some years. So maybe there is no more oil to find. Maybe the current economics (and current discoveries) are not prompting companies to find more at this time.

Maybe. Maybe not.

 

[Robert Ziegler + 121]

Deepwater is practically unexplored, as is the Arctic. Both contain huge quantities of hydrocarbons. We had peak cheap oil quite a while ago, so use it wisely. Peak oil? No.

[JHM + 30]

15 hours ago, MASTERMIND said:

Why is the price of oil more than triple its 20th century average price of 19 dollars (inflation adjusted)? 

Answer: Scarcity, caused by peak oil

Source: Reuters 

https://imgur.com/a/8wITHVC

 

 

 

Thanks. The inflation adjusted oil price chart was in the back of my mind when I questioned whether new oil reserves are worth spending $20/b to find. Historically, oil is only worth about $20 a barrel full produced. Prices above that set in motion forces to increase supply and decrease demand relative to growth in the economy.

This is why a few years ago oil needed to drop below $40 just to stimulate enough demand to work out of a glut, which took several years. Now with oil around $70 we are seeing the fault lines in global demand. 

So let's say we need a price below $60 to have moderate growth in demand. Does this price afford spending $20/b just to replace every produced barrel with fresh reserves? Put another way, if you are offered reserves that cost $40/b to produce, would you be willing to pay $20/b for that field? 

The key issue is whether you can find enough cheap oil. Expensive oil just does not pencil out and cannot afford a price low enough to sustain growth in demand. 

Even those who would like to dismiss peak oil freely admit that you can't find enough cheap oil. Fair enough, but sustained growth in demand for oil depends on oil being cheap. This is why we cannot separate peak oil into exclusively a geological supply problem or consumer demand problem. Peak oil is simply an economic problem. Growing the supply requires an oil price that is higher than what long term demand can support.

The threat of renewable energy, batteries and EVs is merely that they are coming to replace about 2/3 of the barrel (gasoline and diesel) at parity prices below $30/b. The problem is not that these technologies will displace oil at scale anytime soon (red herring), but that their presence in the market places downward pressure on oil prices. They are already dragging the price of oil down. Why do we think China is pushing so hard on EVs? They know that they can cut oil import prices just by ramping up electric bus sales. China absolutely does not have to pay more than $60 a barrel for the next ten years. They can double their EV fleet every 12 to 18 months if necessary. China can substitute manufacturing of renewables and EVs for fossil fuel imports. So the total expenditure on fossil import needs to be based on prices low enough to avoid this growing substitution. Sure, oil producers can get away with tightening oil supply for a year or two to fetch higher prices, but this cannot stand over the span of one or two decades. If oil producers cannot sustainably grow the supply of oil at prices below $40/b or so, then renewables and EVs will eventually fill the gap. 

 

So yes, oil production will peak, and oil producers will complain about the price of oil. They'll go into retirement saying, "Hey, we could've produced more if only the price had been higher." But this is exactly what peak oil means, the world moves on. 

[BillKidd + 139]

On 8/22/2018 at 10:57 AM, Jan van Eck said:

Interesting that only one person has given an "upvote" tick to my lengthy post on the possibility of oil having arrived on the planet in vast sheets from Outer Space, same as water did.  I am chalking that up to a certain lack of curiosity in science.  I remember running into that in high school, where the interest was in football and nobody went into the science labs (I was buried in there).   Even at Yale the guys were more interested in drinking and chasing women at Vassar than basic physics.   Oh, well. 

I'm open but it's hard to wrap my head around oil not being the product of sedimentary basins. And supposedly, 'we' know where all those are and they have been largely explored. But what do I know. The shales are a big mystery. Organic shale deposition is prevalent in every sedimentary basin. Just about wherever there is or has been conventional oil production, there are organic shales waiting to be exploited. But if shale oil production is a big ponzi scheme in the USA, how could it possibly work anywhere else, since we have vast infrastructure in place in the USA? And it would not surprise me at all to wake up some day in the next 20 years to learn that a MAJOR invention had occurred to dramatically boost alternative energy production. The computer age changed everything, in ways we can't even fathom yet.

I would be interested in reading a detailed article about your oil-from-space theory.

[Jan van Eck + 7,558]

32 minutes ago, BillKidd said:

I'm open but it's hard to wrap my head around oil not being the product of sedimentary basins. And supposedly, 'we' know where all those are and they have been largely explored. But what do I know. The shales are a big mystery. Organic shale deposition is prevalent in every sedimentary basin. Just about wherever there is or has been conventional oil production, there are organic shales waiting to be exploited. But if shale oil production is a big ponzi scheme in the USA, how could it possibly work anywhere else, since we have vast infrastructure in place in the USA? And it would not surprise me at all to wake up some day in the next 20 years to learn that a MAJOR invention had occurred to dramatically boost alternative energy production. The computer age changed everything, in ways we can't even fathom yet.

I would be interested in reading a detailed article about your oil-from-space theory.

Bill, it is not "my" theory, but one that was advanced by some scientists.  It has some logic.  If hydrocarbons were formed during or after the Big Bang, or later from various collisions, then logically there would be vast masses of the stuff, perhaps balls dozens or hundreds or even thousands of miles across, hurtling through space.  Remember that we live in a very quiet corner of the Universe, where not much happens.  In the rest of deep space, it is a violent place, with these unimaginable collisions, entire galaxies being ripped apart and crashed together, stars exploding, vast amounts of radiation spewing out, and all manner of mayhem. 

So:  take some gigantic comet of oil hurtling around, then it and the course of Planet Earth proceed to intercept.  The ball of oil starts tearing apart due to gravitational forces, and large sheets of the stuff crash down onto the earth.  The outside of the envelope will burst into flames, as air friction ignites the outer surface.  The inside solid  (keep in mind that, in outer space at absolute zero temperature, oil would be a hard solid, such as ice) now crashes down onto the planet surface, converting into a liquid if not already, and seeping in vast pools into the ground.  Would this account for Oil-sands in Alberta, lying on the surface, where vast rotting vegetation matter would be unlikely?  Hey, could be. 

Can oil be formed, in parallel to this external crashing, by forces of decay and pressure on the earth itself - in a high-CO2 atmosphere?  Probably.  Just because you have one form does not exclude the other.  But if oil came down from outside, it would account for the Old Testament texts of "fire and brimstone" raining down from the heavens. Hard to account for those ancient texts in some other construction.  As those texts are Middle Eastern, it would account for the vast pools of oil found in the desert in the Middle East today.  Hey, could be.  Maybe not, but to discount a new thought simply because it was not taught in school, that is foolish.  Scientists don't do that, not if they are worth their salt.   Cheers.

Edited August 23, 2018 by Jan van Eck

[BillKidd + 139]

12 minutes ago, Jan van Eck said:

Bill, it is not "my" theory, but one that was advanced by some scientists.  It has some logic.  If hydrocarbons were formed during or after the Big Bang, or later from various collisions, then logically there would be vast masses of the stuff, perhaps balls dozens or hundreds or even thousands of miles across, hurtling through space.  Remember that we live in a very quiet corner of the Universe, where not much happens.  In the rest of deep space, it is a violent place, with these unimaginable collisions, entire galaxies being ripped apart and crashed together, stars exploding, vast amounts of radiation spewing out, and all manner of mayhem. 

So:  take some gigantic comet of oil hurtling around, then it and the course of Planet Earth proceed to intercept.  The ball of oil starts tearing apart due to gravitational forces, and large sheets of the stuff crash down onto the earth.  The outside of the envelope will burst into flames, as air friction ignites the outer surface.  The inside solid  (keep in mind that, in outer space at absolute zero temperature, oil would be a hard solid, such as ice) now crashes down onto the planet surface, converting into a liquid if not already, and seeping in vast pools into the ground.  Would this account for Oil-sands in Alberta, lying on the surface, where vast rotting vegetation matter would be unlikely?  Hey, could be. 

Can oil be formed, in parallel to this external crashing, by forces of decay and pressure on the earth itself - in a high-CO2 atmosphere?  Probably.  Just because you have one form does not exclude the other.  But if oil came down from outside, it would account for the Old Testament texts of "fire and brimstone" raining down from the heavens. Hard to account for those ancient texts in some other construction.  As those texts are Middle Eastern, it would account for the vast pools of oil found in the desert in the Middle East today.  Hey, could be.  Maybe not, but to discount a new thought simply because it was not taught in school, that is foolish.  Scientists don't do that, not if they are worth their salt.   Cheers.

Without a doubt, one must be open, I am all for science and always have been. First thing I told my daddy when he asked, "What do you want to be when you grow up, son?" I said, "Scientist." He laughed, didn't expect that one. That Christmas, I got a "chemistry set," lol.

However, regarding the biblical stories of fire and brimstone... it would seem that since that would have probably been within the last few thousand years, science would have more on this.

It seems that a possible bug in the idea is that... doesn't science propose the the movement of hydrocarbons through sedimentary rock is painstakingly slow? Not talking about a fault plane. Or maybe the oil-from-space theory proposes that it could have occurred only a few thousand years ago but also millions and hundreds of millions of years ago.

It's certainly an interesting abiogenesis oil theory. And, as you say, one does not exclude the other.

[Jan van Eck + 7,558]

1 minute ago, BillKidd said:

 

It seems that a possible bug in the idea is that... doesn't science propose the the movement of hydrocarbons through sedimentary rock is painstakingly slow? Not talking about a fault plane. Or maybe the oil-from-space theory proposes that it could have occurred only a few thousand years ago but also millions and hundreds of millions of years ago.

It's certainly an interesting abiogenesis oil theory. And, as you say, one does not exclude the other.

You have to assume that if there are these comets of oil out there, many more than one would have hit over the eons.  And, since those comets would have been far more numerous millions of years ago, more hits (thus a drenching of the planet in oil) would have taken place very long ago.

To support that, remember that the staggering volume of water all came from ice comets.  How many ice comets have hit the earth in the last five thousand years of recorded history?  Not many.  Again, the universe was much more violent eons ago.  More stuff out there to go crash. 

Bet that chem set was fun!  My dad gave me one (of course), but tossed in a separate full-face mask.  Didn't want me to burn my face off or cost myself my vision at age ten.  Good thinking. 

[entertenter + 24]

It really depends on what you think peakoil is. Since peakoil concept was invented, sources of crude oil have become much more diverse. Deep sea oil drilling, oil sands, tight oil. Also, some oil usage is replaced with alternatives, or will be replaced if oil price will go up. It is highly probable, that there will be no sudden depletion of oil reserves. Oil prices will regulate it all. If price goes up, more alternatives that are more expensive will come online and oil will be replaced with alternatives. 

[Johnny Margo + 5]

I heartily agree with our distinguished moderator. Peak Oil not reached. Recall that Venezuela significantly below available to produce. Iran & others also below capacity. New field such as Guayan being discovered. Countries like India, China, Africa economy requiring more energy every year. The industry still dynamics & can withstand encroachment of alternative supplies.

[Epic + 390]

On 8/22/2018 at 3:39 PM, NickW said:

Thats just the cost of building the plant. You got to provide the coal, the manpower, process energy etc.

Nick, could you possibly estimate for me the cost of producing a barrel of oil at a plant like this, factoring in the $7 costs per barrel to build the plant over the course of the of the plant's life?  The reason I am asking is two-fold.  First, I noticed that SASOL had been planning to build one of plants these back in 2014 before oil prices crashed, but then they postponed it after the crash.  Even at today's higher prices, they still have not posted on their website any plans to restart the plant (at least not that I could find).  So I am guessing it would be somewhere between $75 and $115 per barrel?  

Secondly, this price is an important price of information because it puts a permanent maximum on oil prices in the long run.  If oil prices ever reach that number, sell, sell, sell!

[markslawson + 1,042]

On ‎8‎/‎22‎/‎2018 at 8:54 AM, MASTERMIND said:

As M. King Hubbert (1956) shows, peak oil is about discovering less oil, and eventually producing less oil due to lack of discovery.

Mastermind SJ - sorry to burst your bubble but I glanced at some of your links and I realised what you're looking at. Non-OPEC oil production, read US shale, has been fighting with OPEC in what is in effect a glut in production. You recall that prices plunged a couple of years back because of the shale revolution? Prices have since recovered but rig counts have been well down while the shale sector weathers the storm, and OPEC has been trying to pump less.. in other words, the reason there have been fewer discoveries is because no-one has been looking for the stuff. Discoveries are sort-of correlated to price - as they are in almost all the other resources. Hubbert has some relevance for onshore easy-lift crude in the US, but not for the oil industry as a whole. Peak oil was abandoned during the shale revolution. This point about prices and discoveries/reserve has been made every time someone tries to revive the peak oil/resources scarcity story but the memo never seems to be widely circulated. Always there is someone who hasn't heard of it.   

[NickW + 2,714]

9 hours ago, Epic said:

Nick, could you possibly estimate for me the cost of producing a barrel of oil at a plant like this, factoring in the $7 costs per barrel to build the plant over the course of the of the plant's life?  The reason I am asking is two-fold.  First, I noticed that SASOL had been planning to build one of plants these back in 2014 before oil prices crashed, but then they postponed it after the crash.  Even at today's higher prices, they still have not posted on their website any plans to restart the plant (at least not that I could find).  So I am guessing it would be somewhere between $75 and $115 per barrel?  

Secondly, this price is an important price of information because it puts a permanent maximum on oil prices in the long run.  If oil prices ever reach that number, sell, sell, sell!

No idea but anecdotes I have heard are that you would need sustained prices above $100 to make this a worthwhile commercial venture.

I suspect all existing plants have been built using government cash. Nazi Germany, South Africa for sure and I suspect China funded their plants because they are now worlds biggest importer of oil. If they ended up in a war with the USA the first thing USA will do is cut off their seaborne oil supply so I suspect the subsidising of these plants would be a way to evaluate the potential to produce fuels from home grown coal. At this point they are interested in fuelling tanks and aircraft - not domestic use.