Oil crisis

[Viro]

Originally Posted by Qion

If that's the truth, America's government's inadequacies are doing a damn good job at throttling positive market growth and making our lives ever so much more stressful.

You can thank your very aggressive environmental lobby for that. They have succeeded in lobbying for so many laws that make off shore oil exploration a very expensive venture for oil companies.

Then thank your spineless politicians. Look at all your presidential candidates. Up until April, none of them had a viable energy plan and none of them were in favor of exploring for more oil. Don't know what they stand for now since I've given up on following that race.

[bbloke]

In addition, you might be interested in the PDF of a US Department of Energy report from 2004.

Originally Posted by DoE report, page 7

Discoveries did peak before the 1970s as shown in Figure 6. This figure also shows that no major new field discoveries have been made in decades. Presently, world oil reserves are being depleted three times as fast as they are being discovered. Oil is being produced from past discoveries, but the reserves are not being fully replaced. Remaining oil reserves of individual oil companies must therefore continue to shrink. For example: “Royal Dutch/Shell Group, one of the world’s largest oil companies…failed for a third year to find as much oil as it pumped” (Ref. 16).

The disparity between increasing production and declining discoveries can only have one outcome: a practical supply limit will be reached and future supply to meet conventional oil demand will not be available. The question is when peak production will occur and what will be its ramifications. Whether
the peak occurs sooner or later is a matter of relative urgency, but does not alter a central conclusion; the United States needs to establish a supply base for its future energy needs using its significant oil shale, coal, and other energy resources.

Originally Posted by DoE report, page 7-8

In spite of projections for growth in non-OPEC supply, it appears that non-OPEC and non-Former Soviet Union Countries (non-FSU) have already peaked and are currently declining (Figure 7).

The production cycle of the countries shown in Figure 7, and the cumulative quantities produced reasonably follow Hubbert’s model (see Appendix A for a more in-depth discussion). Although there is no agreement about the date that world oil production will peak, forecasts presented by USGS geologist Thomas Magoon (Ref. 6), the OGJ, and others expect the peak will occur between 2003 and 2020 (the year the prediction was made follows the name). What is notable about these predictions is that none extend beyond the year 2020, suggesting that the world may be facing shortfalls much sooner than expected by the EIA.

...

World production has not yet peaked because output from Russia is growing and, at this point in time, OPEC has excess capacity. The United States and other oil consuming nations of the world are dependent on OPEC not only for imported oil, but also for data and information related to OPEC reserves. As a matter of policy, OPEC holds confidential the estimated oil reserves of the OPEC members.

...

Once OPEC’s excess productive capacity is gone and its oil production peaks, OPEC exports will begin an inexorable decline. At that point in time, the oil markets will shift from what has traditionally been a buyer’s market to a seller’s market. The production decline and shift of control to the sellers could produce escalating world oil prices.

After that report was published, there was news in 2005 that the world's second largest oil field, Burgan in Kuwait, was past its peak and production was to be scaled back.

I'm not saying the sky is falling, just that we need to be careful about complacency and we should be planning ahead.

[Qion]

Thanks for taking the time to post those excerpts, bbloke.

I by no means dismiss that we should be working hard towards cleaner energy sources; in fact, I've been pushing for it since before the current green movement. I just dislike the reasons we change; I believe we should improve (see: Evolve) with time, regardless of how it's impacting our economy. That way, it wouldn't take getting poor to innovate.

I really liked Wired issue 16.06's cover. I think it exemplifies the fact that our current issues are too important to be left in the hands of environmentalists.

[Rhisiart]

I watched Channel 4's Dispatches programme last night. It covered the rising cost of food.

Five reasons were put forward:

1. Increase in oil means transporting food products from producer to seller is more expensive.

2. China and India are eating more meat (and why shouldn't they?), which means more grain is needed to feed livestock.

3. The growth in biofuel technology means more crops are used for fuel rather than food (in fact not an efficient way to create fuel, as it costs $100 to produce £110 worth of fuel).

4, Greedy superstores keeping prices artificially high, whilst trying to lure us with some occasional cheap offers.

and the worst culprit.....

5. Hedge fund speculators gambling on food prices, which in fact may account for up to 30% of current food price increases.

My point?

Again poor management. Crap organisation of food production and marketing - not shortage of food.

[bbloke]

Thanks, Qion. I'm happy to hear the excerpts were of interest.

It's worth people remembering that these quotes come from the US Department of Energy (DOE) and it references the US Geological Survey (USGS), so this isn't scaremongering in the press for a nice headline. Personally speaking, I don't believe we have over 200 years of oil ahead of us, especially at current levels of consumption or (as expected) at an increased rate of consumption.

As an aside, you can have some fun playing with BP's energy charting tool (requires Java) and you can also get more information with their Statistical Review of World Energy each year.

People tend to associate oil with fuel. Cars, planes, that sort of thing. It's easy to forget just how ubiquitous our usage of oil is! In addition to a range of fuels, oil is used in plastics (i.e. virtually everything around us these days!), solvents, fertilizers (back to food again...), pesticides, lubricants, waxes, and medicines, to name but a few! Installing a wind farm here or there will not remove our dependence just yet.

I can certainly believe that "management" plays a large role in influencing oil prices, especially when it comes to speculators. There will be all sorts of other factors to consider too. The politics of oil never makes things smooth, and I'd be reluctant to place the blame squarely on oil producing nations alone, as "we" have quite a bit to do with it too. As one example, if you look back, you'll see the price of oil spike when the Iranian Revolution took place. While the history of this is complex, it is worth remembering that the West made itself rather unpopular when it effectively replaced Iran's elected government with the Shah due to worries about the control of Iran's oil (ironically, later on). But I digress!

While I do not doubt the financial and political issues involved, there is one major difference between food and oil: oil is not renewable. It is a limited resource, it cannot be re-grown in the way crops can. As the oil becomes more scarce, or the quality becomes worse and more processing is required, we can expect prices to continue to increase.

[snoWPrincess]

The soaring oil prices are affecting the costs of everything from food to gas. There are also significant issues on local and global environmental impact. While there are many issues, we need to look at our next leader and determine which will have the best course of action going forward…..I recently watch the two video in Pollclash about this issue, Obama and McCain talk about this…

[Rhisiart]

Originally Posted by snoWPrincess

The soaring oil prices are affecting the costs of everything from food to gas. There are also significant issues on local and global environmental impact. While there are many issues, we need to look at our next leader and determine which will have the best course of action going forward…..I recently watch the two video in Pollclash about this issue, Obama and McCain talk about this…

As a liberal/democratic type of fella, I'd be inclined to vote for Obama (if I was American that is). But McCain is quite different from Dubya, so even if Americans did vote for him, they may at least live to regret it.

[ElDiabloConCaca]

Originally Posted by snoWPrincess

There are also significant issues on local and global environmental impact.

Wait just a darn minute here... you mean that we can't even accurately predict the weather, but now we're controlling it?!

I say that human-caused global warming and environmental impact is a bunch of hogwash!

[/tongue-in-cheek]