Did anyone predict this? What was it, less then two months ago they were predicting $200.00 oil. Right now it's in a free fall, already at $92.00 a barrel, OPEC cut production by over 500,000 barrels a day to try to stop the free fall. It reached a record high of almost $150.00 in July, that is almost a $60.00 drop.
This is a huge example of how "experts", "professionals", whatever title they use to make us think they know what they are doing, do not know squat!!!
If people have been around long enough, paid any sort of attention and kept a open mind, this would just be old news in the long line of junk they constantly try to shove down our throats.
The latest is the economy is in a depression, yeah right, GDP is up in the second quarter, unemployment is a measly 6%, people are overweight from eating too much, everyone has at least one car and five TV sets... They went through a real depression in the 30's, 30% unemployment, soup lines, real poverty, Black Tuesday when the stock market dropped like 40%, millions of people had their savings wiped out, 5,000 banks failed, mass migration...
Deron.
I hope they don't fall much more than 90 a barrel. If they do, we'll soon forget about ev's and chevy will scrap the volt, etc etc. Congress will decide not to extend tax break for solar power, the list goes on and on the stupid stuff we'll do if oil is 50 a barrel again.
On the other hand, it shows you how artificial last springs prices were. And you know that gas prices did not help people keep up those house payments. I wonder how much of the wild speculations in the oil market were these same bankers trying to cover thier losses at the horse track. Suddenly they are gone, and bingo oil goes down.
Be the pack leader.
36 volt sla schwinn beach cruiser
36 volt lifepo4 mongoose mtb
24 volt sla + nicad EV Global
In the short term prices may go up or down due to short term events.
In the long term the price is only going up. The phenomenon is called 'peak oil' but it is an inevitable consequence of a limited size resource (in this case oil) being used at an ever-increasing rate. There's a great book about this, Peak Everything, which goes over this territory very well. The inevitable decline in the availability of oil will inevitably cause a skyrocketing of oil prices.. that is unless the people realize the trap we're in and work to avoid the trap.
- David Herron, The Long Tail Pipe, davidherron.com, 7gen.com, What is Reiki
I know my local observations of my little corner of the world is not a comprehensive sample, but...
At any given moment I can cut out about 20% of my driving. When there's a sudden spike up in fuel prices, I get groceries on the way home instead of making a special trip. I also rent videos instead of going to the theater, plus if we don't go out to restaurants to save money, thats also less fuel used.
When fuel goes up, people don't don't know if its going to go down in a month or stay "up" at the new level, so they seem hesitant to make any sudden big changes (for a while at least).
Since the general consensus seems to be that (even with continued fluctuations) the general long-term trend is still up (no new refineries, instability in the mideast, recurring hurricane damage to oil infrastructure, continued oil thirst in China/India in oil commodities auction markets, etc...) People here seem to recently be making big changes.
My wife works at a car dealer. Customers are buying 4-cylinder cars in large numbers, and are trading in big V8 trucks (which are being shipped for sale to several areas of the country where oil and mining are booming).
I have seen more of the new 150cc scooters this last year, than I ever have in my previous 50 years.
People are driving and flying less on vacations (remember just "going for a drive" on the weekend?).
People are changing either where they live, or where they work, to shorten their commute.
Plus, a good 20% of the price spike was commodities speculators. People know that if you buy a stock and it goes up, you make a profit. It is less well known that you can position yourself to profit from a stock going DOWN. This means although the country benefits from slow steady growth, securities brokers profit from FREQUENT spikes and drops in values.
Plan for the long term... (No debt, short commute, E-bike, Bio-diesel, etc)
dogman
Yeah, if the price falls low enough and stays there long enough, people will change their habits once again. The spike in gas prices took a while before people reacted to them, but once they got rid of the guzzler and made a purchase of economy car, I can imagine they will hang onto the economy car for several years.
Now the government is a different thing, if they have set up a agency to help get photovoltaic panels on peoples houses, like they have done here in California, that agency will still be around trying install those panels even after PV panels have become obsolete.
I swear all these run ups in everything seems just like the pyramid schemes of the 1970's. There was the gold run up (I made money on that one) before it went bust, Tech run up (a few people I know took a hit on that one) before it went bust, the housing run up (we are all suffering because of the deadbeats that walked) before it went bust, now the oil run up has gone bust. If you can spot the trends, get in and out before it goes bust, you can make some money. I wonder where the next one will be?
reikiman
I took a look and the introduction is goblety gook. There are no declines. Oil production is up, natural gas is up even more and coal production is going through the roof. I mean the guy even contradicts himself in the first paragraph. How can there be a unprecedented growth in energy "consumption" without the growth in energy "production". First he says there is unprecedented growth in population and then he says there are declines in it. He says there are declines in the yearly grain harvest, wrong, Grain harvest has nearly tripled in the sense 1961.
Can anyone make any sense out of this introduction?
"The twentieth century saw unprecedented growth in population, energy consumption, and food production. As the population shifted from rural to urban, the impact of humans on the environment increased dramatically. The twenty-first century ushered in an era of declines, in a number of crucial parameters:
* Global oil, natural gas, and coal extraction
* Yearly grain harvests
* Climate stability
* Population
* Economic growth
* Fresh water"
World oil production graphs.
http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/oil_market_basics/sup_image_worldprod.htm
Grain harvest up.
http://www.worldwatch.org/node/5539
Deron.
Deron, the text you read on that linked page was marketereese text describing a book. It's the book I'm recommending. The book does an excellent job explaining the scientific model behind peak oil.
The issue is that for any resource with a fixed size and an increasing rate of extraction, you're going to run into a situation where the extractors of that resource will be unable to increase production.
For oil this has happened in country after country around the world. The U.S. hit our oil peak in 1970/1 and there's no way no how that the U.S. can do any significant increase in oil production. When the republicans promote drilling our way out of the mess they are lying. But these are republicans so I suppose lies is their habit and all we can expect from them.
The world oil peak is due to happen "soon" with various estimates of when "soon" is. Some estimate the world oil peak may have happened in 2005.
- David Herron, The Long Tail Pipe, davidherron.com, 7gen.com, What is Reiki
Oil prices are down and gas prices are still up. Why exactly is that worth celebrating unless you work for Chevron?
andys
I know, it always sucks the way the price of gasoline moves. The price has no problem going up really fast, but it always takes quite a while before it drops.
I paid like $4.50 at the peak, the last time I bought gas it was $3.75, that helps, but it should slowly keep coming down if the price of oil keeps falling and stays down. It really needs to be under $3.00 a gallon to be back to where it was before it shot up.
Deron.
The gas prices are spiking right now mainly due to the impact of hurricanes on oil refineries. Oil may be cheaper, but if there isn't enough refining capacity to produce enough gas to meet the supply, then prices will go up. Even with cheaper oil, I am not sure if that necessarily leads to the conclusion that gas will become cheaper. The price of gas is controlled by the laws of supply and demand-- the petrol producers will charge whatever they need to in order to maximize profits, usually by setting the price at just below the point at which people might cut back enough on their petrol demand to leave the producers with excess supply. The price for a barrel of oil doesn't have anything to do with this... it just means that the oil companies can make more profit, and presumably they may consider investing in more refinery capacity so the supply will increase to meet demand.
The price of many commodities is falling quickly... uranium and natural gas have seen drops in price similar to oil. Coal prices haven't dropped as much, but they have definitely stopped rising quickly. A lot of people are trying to unload their investment in such commodities due to the way the market is looking. One thing that really bites about the boom-and-bust nature of the market is that it really wreaks havoc with long-range planning, since so many people start thinking short-term and the price signals from the market get distorted, so nobody really knows where the investments should go in order to be efficiently utilized in the long run.
My hope is that gas prices continue to rise, because that is the only way that people will be encouraged to move to alternatives.
Well that's just what I'd expected:
The moment the first snowflakes fall certain people will scream: "Hey, it's freeeezing! Where's your Global Warming now, huh?"
It's in the complexity, (Up, Down, Up, Up Up, still means Up - check the charts on www. theoildrum.com)
Just wait and see till we're done with the elections.
What was the price of a barrel again 4 yrs ago??
In the meantime, fill up to your hearts content and celebrate that, too!
Yeeehaaaah!
As for me, I'm staying put and using as little of this stuff as I can ;-)
Close to getting the Vectrix anyhow...
GC
Whatever the price gets to be, I'm liking the ebike, improved fitness and such, that I doubt I'll go back to the car to get to work. I did however, buy a bike rack for the car so I can drive to some nice riding spots with my peadler bike. For the first time in years, I'm fit enough to ride the local trails in the hills. Fortunately, they aren't too far off, like 5 miles. Not quite fit enough to ride there, ride the trails and ride back yet.
My gas use is about 25% of what it used to be, and I really like the idea that big oil gets so little of my money.
Be the pack leader.
36 volt sla schwinn beach cruiser
36 volt lifepo4 mongoose mtb
24 volt sla + nicad EV Global
reikiman
Is your name David? I see David Herron written down below, if it is I will use David when I reply to you.
Well anyways, as far as peak oil for the US, the graph I took a look at it looks like the peak was right around the mid 80's at 13 million barrels a day, it dropped to around 11 million barrels a day and has been around that level for like 15 plus years. As far as "North America" the US went down, Canada and Mexico went up. What this means is, as far as oil production in North America, it has been flat for like 30 years.
Also, US oil production has not been restricted by how much oil is out there, it has been restricted by environmentalism, the government, the marketplace... Right now it's cheaper and easier to get our oil from outside the US. If they ever loosen up getting oil here it is estimated that we could get 10% of a yearly needs from ANWR, north of the Arctic there is a estimated 90 billion barrels of oil we could tap into, western oil shale is estimated at 800 billion barrels of oil...
Anyways, have you though about what "Peak Oil" means, or "Peak Anything". When something that is being used starts to run out, what happens? First, the price goes up, this will cause other things to happen. One of them is (lets use oil) oil is not so attractive as a transportation fuel. This causes consumption to go down (consumption was down 800,000 barrels a day in the US for the first half of 2008), what does this do to peak oil, lower consumption means "Peak Oil" will be pushed further into the future. The rate of consumption (determined by price) helps determine peak oil. For example, if the US was to develop a EV that ended up replacing the ICE in the next ten years, what would happen, gasoline consumption would drop to nothing. Not using the oil at the rate we do now would cause Peak oil to be a 1,000 years from now.
What I'm getting at is the peak of something is not as simple as how much of it is out there, it's tied into price, rate of consumption, being replaced by something better, politics...
Deron.
Deron, I followed your link in a prior comment and the MAXIMUM US production shown on the North America post is about 9M barrels/day. Perhaps you need to look again. In any case, that plot also only includes data from 1980 forward. Try this one. You can clearly see the peak in ~1970. The smaller peak in 1980 was primarily due to the development of technologies that enabled oil extraction to happen faster.
As for ANWR, the EIA study on this topic indicates that the reference case for ANWR development only cuts U.S. imports from 54% of consumption to 51% consumption in 2030 (which is only 2 years after the projected PEAK in oil production from ANWR). A far cry from "10% of yearly needs".
Other numbers you throw out are equally as problematical, such as the quote that the stock market fell 40% on Black Tuesday. Actually, it fell about 13%. The 40% number is from the whole month. Even then, the worse for the stock market took a few years to develop. I could go on, but it really isn't worth it to fact-check everything you say.
Your claims about "peak oil" completely misunderstands the basic argument... peak oil occurs when we can no longer maintain or increase oil production, period. Consumption has nothing to do with it. Once we hit that point, we can't push it further out in the future... all we can do is reduce our consumption. Bottom line is, we can do it gently or painfully. There are some powerful established interests that would prefer that we burn through oil until we have no choice but to move to something else. But our alternatives need massive infrastructure, which needs to start being developed and put into place now-- otherwise, the transition will be painful.
Deron,
It's all good! buy a hummer now! Oil is back down to 95 a barrel so this whole thing must have been a conspiracy between all the people in all of countries that trade oil in the OPEN market. Everyone is in on it man! The oil fairy in the center of the planet is real dammit! All of the folks here who think oil spiking up 60 dollars in a couple months and zig zagging erratically is all good, please buy a hummer. I really am amused when I see them at the pump paying 150 to fill up.
I seriously hope someone bombs a refinery over in ghawar, that's about the only thing that can happen for tough guys admit there might be a problem. We live the way we do because the saudi's allow it.
Curious, ever hear of the rachet effect, deron?
While our foreign purchased oil has increased as a percentage of our total, it has been diversified away from the middle east. We are getting more of our oil from Canada, Mexico, South America, South-West Pacific, and Africa than we did before.
A few years back we were getting much more oil from the middle east, and now that portion is down around 20%.
My nightmare scenario is Iran gives a truck-nuke to Hezbollah and they bomb Israel. Oil flow from the middle east would come to a sudden halt, with no certain time for it to re-start.
I was glad to see that the US military established a 50% bio-fuel spec for JP-5, but over the next few years, the US military runs on oil-based fuel.
Hummvees and 6WD 2-1/2 ton trucks are diesel, but can run on JP-5. helicopters, tanks, small ships, and of course cargo jets and fighter jets have turbine engines that use JP-5 (similar to kerosene, or thin diesel)
If a hurricane cuts off 5% of our refinery fuel output and it results in fuel auction prices going to $4.50/gal, what would a 20% shortage do? Not only that, but a 20% reduction when there is also a sudden increase in the amount of fuel the military needs?
Fuel would be rationed. It happened in WWII, and it can happen again. Trucks carrying food from farms to cities would get priority allotments, also the Police and the National Guard would get fuel.
Fuel available for the public? I'm guessing about 65% of todays volume.
Russia traded some cold-war era diesel electric submarines to Iran for oil contracts a while back. They are noisy when charging the batteries through the snorkel, but when running on the battery they are very quiet. They can be used to lay mines in the Persian gulf. Even if we sink a couple, their existence can keep tankers out of the gulf.
Russian military personnel who haven't been paid in years are living well now in Iran as technical advisors. Before Hitler invaded Poland (the official start of WWII) he forced Austria into an alliance, he "took" the Rhine from France, and he "took" western Czechoslovakia. Recently Russia went into Georgia with tanks, he may soon control the majority of oil and natural gas going to Europe.
Buy more E-bikes before the big rush...
spinningmagnets, what you've done is lay out various aspects of the resource wars where the powers-that-be are grabbing control of the remaining oil. I think the powers-that-be know the truth about the future availability of oil, but they're not allowing the corporate controlled media to tell us the story openly enough that the peasants will be alarmed.
In the podcast I linked here:
http://visforvoltage.org/forum/4826-radio-ecoshock-building-madness-constructing-climate-change
the guy talked about how in WWII there was a crash course of switching the population back to mass transit and fewer cars. I suppose it could be done again but clearly the powers-that-be are preventing such a switch from taking place.
A couple months ago I read the World Energy Outlook published in 2007 by the International Energy Agency. Well, I only read the summary, I couldn't bring myself to spend the $500 or whatever it would take to get the real report. The summary was very alarming especially as that summary didn't really openly acknowledge peak oil issues.
http://www.7gen.com/website/energy-policy/23996-world-energy-outlook-2007-edition
http://www.iea.org/textbase/speech/2007/birol_us_senate.pdf
http://www.worldenergyoutlook.org/2007.asp
http://www.iea.org/Textbase/speech/speechesresults.asp?SPEAKER_ID=516
http://www.iea.org/textbase/press/pressdetail.asp?PRESS_REL_ID=239
http://www.7gen.com/blog/20080623/24508-podcast
"Oil supply is increasingly dominated by a small number of major producers, most of them in the Middle East" -- While it may be true that the U.S. has diversified its oil direct supply, the oil prices are set in a (semi-)open market by (semi-)open market forces. Economics 101 says if supply doesn't meet demand then price goes up. So if the middle east oil were to be interrupted then supply goes down and global prices goes up.
I just recorded a podcast yesterday which ended with a related thought. It's clear the people we live among are willing to be asleep lulled by the celebrity scandalitis or football scores or hair styles or whatever nonsense the corporate controlled media broadcasts to keep peoples eyes off the real problems. It's clear that it takes a really large crisis to get a wake-up call through the obfuscation. The question is with the peak oil is, once the crisis point is reached and the oil production enters the declining phase of oil availability, will there be enough time to switch to an alternative. It will take a decade or more to field in significant quantity technology sufficient to replace what oil does for us today. But we may not have that decade or more. And the obfuscation and foot dragging and resistance by the powers-that-be is keeping us from making a controlled switch from oil to other resources which have long term viability.
Oil demand grows by 1.3% per year through 2030 in the Reference Scenario, reaching 116 million barrels per day (mb/d) in 2030 – up from 84 mb/d in 2005. The 'reference scenario' IIRC is a steady state in supply, and ignores the oil peak which is likely to occur before 2030. By the reference scenario they're talking about a large %age increase in oil production over the next 25 yrs. I understand that the oil producers are already running at full steam. The energy outlook paper discusses the level of investment required to get to those higher production levels, and outlines several ways that it might not happen -- such as the producer countries being unwilling to increase production, or the credit markets don't have enough money to fund the infrastructure, or wars interfere with production and delivery. They especially focused on how the oil is concentrated in countries which are not friendly to the West. What they didn't discuss was if the situation is that it's simply impossible to increase production because the world oil peak has been reached and production is in an inevitable decline.
My nightmare scenario is Iran gives a truck-nuke to Hezbollah and they bomb Israel. I think you've been listening to too much neocon faux news propoganda. That's the story THEY want us to believe for their insane plan to invade Iran to succeed.
My nightmare scenario is the Mad Max movies.
http://en.wikipedia.org/wiki/Peak_oil
- David Herron, The Long Tail Pipe, davidherron.com, 7gen.com, What is Reiki
TheSnark
I did look again, it does show 13 million barrels a day, took a look at other graphs and they do show like 9.5 million a day, so I got a bad graph.
ANWR, yeah I blew that one, production is supposed to reach 200,000 B/D for 30 years, we are using a little less then 20 million B/D right now. I should have said 1% in stead of 10%. I still could be right though, no one knows how much oil we will be using in 10 to 20 years. I for one, think we will all be driving EV's in the not to distant future.
As far as Black Tuesday, I can pick apart your statements too. "On Monday, October 28, more investors decided to get out of the market, and the slide continued with a record loss in the Dow for the day of 13%" You said it fell 13% on BT when it actually fell 13% on Monday.
As far as peak oil, consumption has everything to do with it. If we are not using any oil, we do not need to pump it out of the ground, therefore there is no peak. The thing that causes the peak is using it up faster then we can get it out of the ground. If our consumption drops the peak moves out into the future, if it consumption goes up the peak moves closer to the present.
Also the powerful established interest that you talk about, is us. The people that consume the oil. We have to take responsibility for our actions. Only when people acknowledge that we are the ones using the oil to make our life easier and we are the ones that control how much oil we use can we finally get away from our "addiction to oil". There are plenty of alternatives out there, people just choose not to use them.
Deron.
Bruce_Wayne
What???
Deron.
As for wanting higher gas prices, I think that is a terrible thing to wish on other people. Not all of us have the ability or the disposable income to weather high gas prices. There are plenty of people barely making it, trying to raise families, people on fixed incomes, have low paying jobs...
And it was a good thing for the economy to go into the crapper from higher gas prices?
Deron.