In 2009, more cars were sold in China than in the United States, something most analysts did not expect to see before 2018 or 2020, said Mr. Yergin. If China continues at its current pace, he said, it will be consuming more oil than the United States by the end of the decade.
The United States consumes about 19 million barrels-per-day now. China consumes about 8. The difference is 11. Thanks to the slowdown in energy consumption, OPEC producers now hold an estimated (highly unlikely given decline rates and overstated reserves) six million barrels a day of spare capacity, equal to roughly 7 percent of current demand, much of it in Saudi Arabia alone.
Here’s the deal. Once we run through the current spare capacity, the oil supply then and for the rest of your life is essentially a Zero Sum Game. If China uses more, someone else must use less.

zero-sum describes a situation in which a participant’s gain or loss is exactly balanced by the losses or gains of the other participant(s). If the total gains of the participants are added up, and the total losses are subtracted, they will sum to zero.

Saudi Arabia is gradually reducing crude oil exports to the US as it is pushing deeper into China and other fast-growing Asian markets. Exports to the US fell to 837,000 b/d in November, the lowest level in 21 years.

Bank of America and Barclays Capital, two leading oil traders, have told clients to brace for crude above $100 (£64) a barrel by next year, before it pushes relentlessly higher over the decade.

If they are right, (and based on simple mathematics they are) we can kiss goodbye to any recovery until things get really bad again, at which point the price will most likely drop again, and the talking heads will start talking about green shoots again, and the price will rise again.

Rinse and repeat.

Really who knows what will happen, but some or all of this future is hard to rule out as a likely possibility.

This is one part of an 8 part video which everyone should see. If you want to really understand it, your best bet is to start at the beginning here. You might find it boring to start with, but the information is invaluable. I watched it a few years back and just rediscovered it last night and the 2nd watch was even more rewarding.
Hat tip TAEC.

A new GoPro Just arrived from Amazon, along with 30cm of pow overnight on top of the rest. Cant wait to try this thing out.

Meanwhile, following up on the post a few down:

WSJ Reports, “The Next Crisis: Prepare for Peak Oil”
The Wall Street Journal today has an article about the work of Britain’s Industry Taskforce on Peak Oil and Energy Security that goes well beyond summarizing what the task force said in its report. The article starts out:

The Next Crisis: Prepare for Peak Oil

As Europe’s leaders gather in Brussels today, they have only one crisis in mind: the debts that threaten the stability of the European Union. They are unlikely to be in any mood to listen to warnings about a different crisis that is looming and that could cause massive disruption.

A shortage of oil could be a real problem for the world within a fairly short period of time.

From the oil drum…

In London this morning (10th February 2010) at the Royal Society, the UK industry task force on peak oil and energy security launched a new report warning of the dangers of the forthcoming oil crunch.

The report, titled “The Oil Crunch – a wake-up call for the UK economy”, finds that oil shortages, insecurity of supply and price volatility will destabilise economic, political and social activity within five years. (Note: It already has, but it is good to hear important companies finally acknowledging it)

Having assessed the systemic changes caused by the global economic recession, coupled with the projected growth from non-OECD countries, ITPOES predicts Peak Oil will occur within the next decade, potentially by 2015 at less than 95 million barrels per day. (In 2008, production levels were 85 million barrels per day.) The study finds that the recession has delayed the oil crunch by two years. This provides invaluable time to plan for a future which will see structural increases in oil prices coupled with shortages and increased market volatility.

Q: What is different in this analysis of peak oil – I’ve read hundreds?
A: This is the first time leading businesses have warned that a peak in cheap, easily available oil production is likely to hit by 2013, posing a grave risk to the UK and world economy. The warning comes from a broad spectrum of industry (Arup, Foster + Partners, Scottish and Southern Energy, Solarcentury, Stagecoach Group, Virgin Group).

Download the full report here.

Matt Simmons, in his most recent presentation at the ASPO conference published that “BEST CASE 2020, World Crude production would be 55mm to 60mm bpd” – that’s down from 73 million bpd. When the export land model comes into play, that doesnt leave much oil for anyone hoping to import it (almost everyone).

I got into a back and forth with a friend of mine who was saying we will likely find some more oil. Whilst it is quite possible, the likelihood of discovering any more (easily accessible and cost effective) super-giant oil fields is fairly remote after searching for so long.

Based on the graphic below from the oil megaprojects page, how many discoveries producing greater than 1 million barrels a day of oil have been found since the 70’s?

The answer is 0.

“The day was a long time in coming. For many months now, world oil production has remained essentially flat and world oil exports have fallen while world oil prices just climbed and climbed. Poor country after poor country was priced out of the market and world oil stockpiles started to melt. Yet as the world lurched towards the mother of all economic crises, the major media of the country led by Wall Street’s own Journal remained strangely silent.

From time to time they would report some good news such as “billions of barrels found 25,000 ft under the Gulf” or “steaming out sticky oil will save us.” However, they never got around to asking what is involved in extracting oil from deepwater wells or just where all that tar melting steam was coming from. Anyone who questioned that oil production could keep on growing for the foreseeable future was castigated as lunatic fringe.

This make believe world finally came crashing down on Monday when the Wall Street Journal published a front page story admitting there was a big, big problem with oil production just ahead. Now the flagship of economic journalism does not come to such a decision lightly. To admit that you have been dead wrong in ignoring the most important economic issue the world is likely to face in the next century certainly strains your journalistic credibility”.

Continue reading…

While Oil imports are down 10.4% this year from 2008, imports during the most recent 4 week period are down 19.3% when compared to the same 4 week period from last year.

Based on reading so many reports from geologists and theoildrum.com over the last 5 years I knew they were lying about the official figures, but the truth is out. Scary sh1t because the significance of this is daunting.

The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.

Now the “peak oil” theory is gaining support at the heart of the global energy establishment. “The IEA in 2005 was predicting oil supplies could rise as high as 120m barrels a day by 2030 although it was forced to reduce this gradually to 116m and then 105m last year,” said the IEA source, who was unwilling to be identified for fear of reprisals inside the industry. “The 120m figure always was nonsense but even today’s number is much higher than can be justified and the IEA knows this.

“Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources,” he added.

But as far back as 2004 there have been people making similar warnings. Colin Campbell, a former executive with Total of France told a conference: “If the real [oil reserve] figures were to come out there would be panic on the stock markets … in the end that would suit no one.”

Read the full article here……
And this publishd in Paris earlier today. IEA World Energy Outlook Executive Summary

As conventional oil production in countries not belonging to the Organization of the Petroleum Exporting Countries (OPEC) peaks around 2010, most of the increase in output would need to come from OPEC countries, which hold the bulk of remaining recoverable conventional oil resources…

They also posted this on their site today:
With respect to recent discussion about oil decline rates, we are exceptionally making available the respective chapter of last year’s WEO 2008. FIELD-BY-FIELD ANALYSIS OF OIL PRODUCTION.
Is decline accelerating?

Small write up and some insightful comments over on theoildrum.

Been reading and learning from Michael Ruppert for years.

Check him out reaching the mainstream in this Wall Street Journal interview,

“Money is useless without energy and money has no respect for power or ideology. We have to reconnect with the requirements that we’re living on a planet that’s falling apart. And we have to maintain some relationship that’s separate from the illusory power of money. Clearly, the power in this country is not in Washington, it’s in New York, with the Fed and with Wall Street. . . . Until you change the way money works, you change nothing. The current economic paradigm calls for infinite growth, from fractional reserve banking to compact interest. So Wall Street needs to somehow help us find an economy that works without requiring more and more consumption” (“Sounding an Alarm on Oil,” Nov. 4).

Nice write up here on it…

The theory goes something like this, once Saudi Arabian oil enters depletion, the worlds oil supply has peaked.
Scroll down on this page to the last row/column. Not an insignificant drop right? Are we starting to see the export land model in action? The decline in the overall volume of imported Oil into the U.S also continues to accelerate, with year over year imports down 9.6%.

We’re growing Silver beet – first attempt…

« Previous Next »

1 2 3 4 5 6 7

I was thinking about the post I put up on growth, and the effects of Peak Oil and overpopulation on food production and distribution, and came across this:

How far does an average piece of food travel before it goes in your mouth?

Apparently between 1,500 and 2,500 miles (2,500 and 4,000 kilometers) from farm to table. A new study by the Worldwatch Institute details the lengthy journeys that much of the nation’s food supply now takes, finding a growing separation between the sources and destinations of American food.

The distance that food travels has grown by as much as 25 percent, according to the report by the Worldwatch Institute, an environmental and social policy research institute based in Washington DC. The nation’s reliance on a complex network of food shipments leaves the United States vulnerable to supply disruptions, the group argues.

Read more

“The world is not a static thing, we all know it grows and contracts as the flow of life meanders”.

The media hologram shows countries in recession or achieving positive growth, depending on how the data has been massaged. Consumer confidence is often closely related to the particular position of any given state. As a result all governments claim their economies will return to positive growth in the “near” future. None would dare state that in fact the economies of the world have over extended themselves and the debt fueled growth of past decades will never been seen again, despite the likelihood of this as a stark reality of our future due to debt, Peak Oil and over population.

This September/October is setting up to be a very interesting period for the worlds economy.

Meanwhile, we should take faith from the fact that in the real world growth of some kind or other can always exist, even in the most improbable places…

Economic growth can either be positive or negative. Negative growth can also be referred to by saying that the economy is shrinking. Negative growth is associated with economic recession and economic depression.

Five major critical arguments raised against economic growth include:

Read more

I think it is very important to understand social inertia for the awesome force that it is. I have found that many people are almost genetically predisposed to not want to understand what I have been saying, and many others understand it on some level but refuse to act on it.

Back to what is actually happening right now. There seems to be a wide range of opinion on how to characterise it, from recession to depression to collapse. The press has recently been filled with stories about “green shoots” and the economists are discussing the exact timing of economic recovery. Mainstream opinion ranges from “later this year” to “sometime next year.” None of them dares to say that global economic growth might be finished for good, or that it will be over in “the not-too-distant future” — a vague term they seem to like a whole lot.

There does seem to be a consensus forming that last year’s financial crash was precipitated by the spike in oil prices last summer, when oil briefly touched $147/bbl. Why this should have happened seems rather obvious. Since most things in a fully developed, industrialised economy run on oil, it is not an optional purchase: for a given level of economic activity, a certain level of oil consumption is required, and so one simply pays the price for as long as access to credit is maintained, and after that suddenly it’s game over.

We continue to listen to economists because we love their lies. Yes, of course, the economy will recover later this year, maybe the next. Yes, as soon as the economy recovers, all these toxic assets will be valuable again. Yes, this is just a financial problem; we just need to shore up the financial system by injecting taxpayer funds. These are all lies, but they make us feel all right. They are lying, and we are buying every word of it.

Another brilliant talk from Dmitri Orlov that everyone needs to read..

Three years ago, David Fridley purchased two and a half acres of land in rural Sonoma County. He planted drought-resistant blue Zuni corn, fruit trees and basic vegetables while leaving a full acre of extant forest for firewood collection. Today, Fridley and several friends and family subsist almost entirely off this small plot of land, with the surplus going to public charity.

But Fridley is hardly a homegrown hippie who spends his leisure time gardening. He spent 12 years consulting for the oil industry in Asia. He is now a staff scientist at Lawrence Berkeley National Laboratory and a fellow of the Post Carbon Institute in Sebastopol, where members discuss the problems inherent to fossil-fuel dependency.

Fridley has his doubts about renewable energies, and he has grave doubts about the future of crude oil. In fact, he believes to a certainty that society is literally running out of gas and that, perhaps within years, the trucks will stop rolling into Safeway and the only reliable food available will be that grown in our backyards.

Fridley, like a few other thinkers, activists and pessimists, could talk all night about “peak oil.” This catch phrase describes a scenario, perhaps already unfurling, in which the easy days of oil-based society are over, a scenario in which global oil production has peaked and in which every barrel of crude oil drawn from the earth from that point forth is more difficult to extract than the barrel before it. According to peak oil theory, the time is approaching when the effort and cost of extraction will no longer be worth the oil itself, leaving us without the fuel to power our transportation, factories, farms, society and the very essence of our oil-dependent lives. Fridley believes the change will be very unpleasant for many people.

“If you are a typical American and have expectations of increasing income, cheap food, nondiscretionary spending, leisure time and vacations in Hawaii, then the change we expect soon could be what you would consider ‘doom,’” he says soberly, “because your life is going to fall apart.”

Read the full article here…

Fridley says too many Americans believe in solutions to all problems, but peak oil is a terrible anomaly among crises, he explains, because there is no solution. Fridley doesn’t even see any hope in solar, wind, water and other renewable energy sources. Even nuclear power creates only electricity, while crude oil is the basis for thousands of synthetic products.

“There is nothing that can replace oil and allow us to maintain life at the pace we’ve been living,” he says. “Crude oil is hundreds of millions of years of stored sunlight, and we’re using it all up in a few generations. It’s like living off of a savings account, whereas solar energy is like working and living off your daily wages.”

The sheer cost-efficiency of oil eclipses all supposed alternatives. Removed from the ground and burned, oil makes things move almost miraculously. A tank of gasoline in a sedan holds enough energy to equal approximately five years of one person’s rigorous manual labor.