More on the lack of peak oil

Yesterday we explored the lack of peak oil.

I also found an interesting recent article on the topic at Real Clear Politics.

In a chilling 2010 column, Paul Krugman declared: “peak oil has arrived.”

So it’s really not surprising that the national average for a gallon of gas has fallen to $2.77 this week – in 10 states it was under $2.60 – and analysts predict we’re going to dip below the two-dollar mark soon. U.S. oil is down to $75 a barrel, a drop of more than $30 from the 52-week high.

Meanwhile, the Institute for Energy Research estimates that we have enough natural gas in the U.S. to meet electricity needs for around 575 years at current fuel demand and to fuel homes heated by natural gas for 857 years or so – because we have more gas than Russia, Iran, Qatar and Saudi Arabia combined.

With prices returning to ordinary levels and a few centuries’ worth of fossil fuels on tap, this is a good time to remind ourselves that nearly every warning the left has peddled about an impending energy crisis over the past 30 to 40 years has turned out to be wrong. And none of them are more wrong than the Malthusian idea that says we’re running out of oil.

Each time there’s a temporary spike in gas prices, science-centric liberals allow themselves a purely ideological indulgence, claiming – as Krugman, Paul Ehrlich, John Holdren and countless others have – that we’re rapidly approaching a point when producers will hit the maximum rate of extraction of petroleum. Peak oil. With emerging demand, fossil fuels will become prohibitive. And unless we have our in solar panels in order, Armageddon is near.  

In a 2005 New York Times Magazine piece, ominously titled “The Breaking Point,” Peter Maass warned: “Few people imagined a time when supply would dry up because of demand alone. But a steady surge in demand in recent years — led by China’s emergence as a voracious importer of oil — has changed that.” I can remember sitting through a number of editorial board meetings during the 2000s watching peak oil cranks pull out charts that, with pinpoint accuracy, predicted exactly when this tragedy would hit – even as enormous new deposits were being discovered and advancements in productivity were debunking those claims in real time.

And while everything is “finite” in a galactic sense, there has never been any consensus as to when oil, gas and coal will hit peak production. Probably because we’re never going to run out of any of them. Julian Simon is still right, and spikes in oil’s price only create more innovation and better productivity:

“The reason that the cost of energy has declined in the long run is the fundamental process of 1) increased demand due to the growth of population and income, which raises prices and hence constitutes opportunity to entrepreneurs and inventors; 2) the search for new ways of supplying the demand for energy; 3) the eventual discovery of methods which leave us better off than if the original problem had not appeared.”

The doomsayers are almost invariably wrong.

We also had some commenters suggest electric cars are going to be our saviour…I will research that next, and the sources of energy needed to put the electricity into the cars. I’ll go out on a limb here and suggest it cannot be done without a vast increase in production of electricity using cola or oil fired powerplants….and that NZ generation capacity is non-existent to support it. With the RMA making it almost impossible to build new dams it makes it very problematic to build extra capacity for even 10% of our vehicles to cut over.

Meanwhile ministers of little brain like Simon Bridges wax lyrical that there are 250 electric cars in New Zealand, forgetting that there were 181,404 new car registrations last year. Making his 250 stink electric cars a pathetic number.

 

– Real Clear Politics

 


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  • rangitoto

    Well for NZ the Manapouri scheme could be diverted to electric cars if Tiwai pt closes down. My favoured solution is to raise lake Taupo by 15 meters by putting a dam and power plant at the exit of the Waikato river. As a nod to the enviro whiners I could get one of these to drive:

    http://www.google.co.nz/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FMcLaren_P1&ei=1JWHVMDoKtbV8gXUgoLACg&bvm=bv.81449611,d.dGc&psig=AFQjCNFRWwikQEi8ShJp-Vzh9wf9tiX4gA&ust=1418258259464591

  • Tony Norriss

    Oil is down to around US $63 per barrel now. Of course, we also need to take into account the fact that the NZ dollar has fallen approx 13% from its highs. Having said that, oil has dropped around 30% or more.

    I doubt that the world will ever run out of oil. After all, the stone age didn’t end for a lack of stones.

    • CheesyEarWax

      This is good for NZ economy and exporters. I wonder what Wussel has to say about controlling the high dollar.

      • Jas

        The value of the NZ dollar was always going to be driven by external factors and anything the Reserve Bank did other than printing truckloads of it was never really going to work.

    • island time

      Part of the reason for the fall in the crude price is because OPEC have decided not to reduce production. They are having a fight with the USA and by driving prices lower it makes the US owned shale fields less profitable.

  • Day Day

    The green spin is that renewables are replacing fossil fuels, hence the price has dropped on reduced demand for them. Baritone “guffaw”

  • what a surprise – another “world is ending” myth debunked

    electric cars are a have – not only are they going to require a heap more coal and resources to keep them going – but there is also the raw materials for the batteries and then the batteries have to be recycled (or dumped in a third world country while the greens berate them about their burning of fossil fuels)

    a reliable self generating fuel cell will be in the car of the future – personally im quite looking forward to that – the mad mullahs in the desert can be bombed back to the dark ages – if they didnt have oil – no one would care

    • Alright

      And the next myth to go? Global warming.

      • JustanObserver

        That’s already well gone …
        See, they are all sticking their heads in the sand because they don’t want to hear it.

        • Alright

          Good point…there is none as blind as those who can not see (because they have their heads buried).

          A bet: the climate will cool.

  • JustanObserver

    I would personally like to thank the ‘Screaming Left’ for Gouging their own eyes out and thorough Self-Flagellation in an attempt to validate their utter belief that the World is facing a Peak Oil CRISIS, requiring an immediate change to Horse & Cart Personal Transport and Wind-Powered Public Transport, not forgetting Wind-Farming as a thoroughly viable business venture for all current bovine & poultry oppressors. Candle wax making and Tofu production is only one moment away from a come-back.
    .
    Without their declaration of this CRISIS, I was likely to face additional costs to run my Big-Block Ford Falcon V8, now I am sure I will be able to even use it to go to the mail-box to save my feet.

  • cows4me

    Fear is a Liberals best friend. Convince enough that their demise is immanent and convince the same gullible this demise can be postponed by great dollops of money and the supposed supreme leadership skills of those crying wolf and presto you have leadership by and for loons.

    • stephen2d

      And don’t forget that all those decisions by the said leaders must be made from Bali, Bermuda or Lake Como and similar downtrodden places in the world where modest meetings and conferences are held. God forbid they use Skype or Webex to implement what they preach – nooo, only flying First Class can do these important decisions justice.

  • murrayirwin

    Electric cars will become the norm in the future. Not because there isn’t oil, not because electricity is cheaper, but because the electric motor is smaller, lighter, quieter and cheaper to make than a petrol/diesel engine, and they have the wonderful characteristic of producing peak torque at zero revs. As battery technology improves, electric cars will be preferred by more people by choice. A natural technology evolution. BMW predicts that they will only be producing electric cars in the somewhat distant future. In the more immediate future, most cars will be hybrid. Being a petrol head, slash my wrists.

    • MaryLou

      You mustn’t forget hydrogen! And Lockheeds’ fusion prototype, which will take a bit longer: http://www.reuters.com/article/2014/10/15/us-lockheed-fusion-idUSKCN0I41EM20141015

      I don’t see a lack of oil coming, but I do look forward to bringing to a close our total dependence on it.

      EDIT: And you can still be a petrol head – since these cars are almost soundless, you could record the sound of a good V8, and put speakers where the exhaust used to go! :)

      • All_on_Red

        Toyota and Honda have started production of their Hydrogen cars.
        Here’s Toyotas
        http://www.toyota.com/fuelcell/fcv.html

        • MaryLou

          Yep – posted about the Miraii yesterday – it’s a beautiful thing!

          • All_on_Red

            It’s been suggested that one of the ways forward is to have small hydrogen power stations powering each suburb. Isn’t technology grand!

          • MaryLou

            Was at a shopping centre in Auckland the other day – they already have a few re-charging points for electric cars. I don’t think for a second electric (or rather batteries as a storage device) is long-term the way to go, but I think the market will continue to grow for some time yet. Depending of course on hydrogen! That battle isn’t over yet… loving watching the whole thing play out.

            Cams’ right re Greens and hydro energy though, maybe these power plants you speak of or Lockheeds work will solve that problem

      • Pita

        For all you petrol heads: the new BMW active-hybrid sounds just like a V8

  • Michael

    I’m really keen to see the “…cola…fired powerplants”. Apparently we will need to import the nuts from Nigeria and parts of West Africa. The good news is that it is supposed to be good for short-term relief of fatigue, depression, chronic fatigue syndrome (CFS), melancholy, lack of normal muscle tone (atony), exhaustion, dysentery, a type of diarrhea called atonic diarrhea, weight loss, and migraine headaches. The waste smoke from the powerplant might well improve the well-being of those in the area. Might be good to convert the Huntly plant as a priority.

  • Alexander K

    Electric cars were more common early in the last (20th) century than they are now, but range and recharging are, as yet, still massive problems. Hybrid electric/something vehicles are complicated and require very expensive servicing as they age. Diesel power was going to be the bee’s knees a few years ago, but the emissions produced by small deisels are too environmenta dirty to use heavily for private cars or taxis in any large urban area and are currently falling out of favour very rapidly. Steam power, which utilises kerosine for heat and ordinary tap water for the steam, is actually viable, with modern flash boilers capable of going from cold to operative in under a minute, and the enormous torque of steam power makes it very practical for very heavy road transport – steam lorries, which pulled enormous loads on ‘road trains’, were not uncommon on NZ roads prior to and just after WW!.
    Petrol, which has a well-sorted and almost universal world-wide distribution network, will be very difficult to displace as it becomes even cheaper and and it’s price advantage will remove any impetus to improve the supply of electricity or other fuels. Electricity as a motive force will become even more uncompetitive.

  • Excitedly awaiting Whodunnit

    Oh i dont know if all electric cars are crap. Some electric drag cars are cool. Was a ford ute on tv last week that looked good. Of course as stated in the piece they need infrastructure to charge so are they really that much better than our current fleet of petrol guzzlers.

  • conwaycaptain

    STOP PRESS!!!!!!
    The Green Transport spokesman has said that any new ferries on the Cook Strait should be like sailing scows.
    They would need 500 and this would also give employment to Boat Builders and Sail makers and also members of the NZSU

    • I’ve always wanted to study the idea of electric boats for the cook strait run. Most are already electric propelled, but diesel powered. I want to know how big the batteries would need to be for that 3 hour run and how long they would take to charge on a vessel the size of the Kaitaki.

  • Even if we have to go all the way to Titan and scoop it up there will always be oil in our economy, the price we pay is what will determine if its worth while do so. The fact that the prices are currently low and using this to say that peak oil is a lie is like saying “I’ve just eaten the thickest juicist steak and mountains of vegetables, so that must mean world hunger is solved”.

    If you look at the discovery statistics for oil, we have “produced” more oil than we have “discovered” every year since 1981, (If you exclude the probes examining Titan). The feilds found nowadays are getting smaller and harder to produce and our definition of monster fields is getting smaller and smaller. This is only going to signal higher long term price forecasts.

    The USGS talks about recoverable deposits, and economists base all their figures on those numbers. But the USGS takes, without examining them OPEC numbers. OPEC numbers determine how much oil an exporting nation can produce, the higher your reserves, the more you can export, so it becomes a political process rather than a geological or logistics process. If you look at OPEC reserve numbers for each country, they have hardly changed in 40 years. Despite 40 years of production, they heve managed to find replacement fields every year to match their output? Garbage in, Garbage out? The only numbers the USGS is 100% certain of are those produced in the US, but even those need to be taken with a grain of salt, because the discovering company will get a commercial advantage from the discovery, and they will report a 50% number, meaning it has a 50% chance of containing more oil than that and 50% chance of less. Its only when the field is developed that a full estimate of capacity is released, long after the discovery has left the media.

    The USGS also talk of Natural Gas, which is a bit of a red herring as Natural gas makes a poor transport fuel. Anyone who had a CNG car in the 80s will attest to that, low power, short range & big bulky tanks. That could be remedied with cars designed to run on it from the get go, supercharged engines, tweaked engine management and inbuilt tanks, but until those cars are a significant part of the road traffic comparing Natural Gas & Oil oil production is just trying to muddy the waters and economists fall for it everytime.

    Cam makes an excellent point regarding the future of electric cars in NZ, we simply do not have the installed generating capacity to charge a whole country of electric cars. Oh, we have resources to make it, but we will need to overhaul the resource management act to make it happen. Cams going to hate me for saying this, but we could probably do it with wind turbines alone without resorting to hydro or fossil fuel, we have the best wind power resource in the world here, and we have amply geothermal.

    • antred

      “Even if we have to go all the way to Titan and scoop it up there will
      always be oil in our economy, the price we pay is what will determine if
      its worth while do so.”

      Yeah, getting oil from a distant moon and expending several thousand times the energy you’d get out of burning that oil is definitely a very bright idea.

      • Thats just the point, you wouldn’t but you could technically do it if cost wasn’t a factor. Oil will have a part in our economy for ever and a day, it has been part of the economy since before the babylonians, but i think its days as our primary energy source for transport are numbered, it won’t last the 21st century. To keep increasing its production rate to meet our compounding transport needs is going to drive the price too high. But its use as a chemical feedstock will be needed for for a long long time to come, and that might make import from Titan economic, particularly if there is regular comerce out there.

  • John Williams

    EV adoption is not all about the price of petroleum. Car manufacturers are having to meet tougher emissions regulations each year. The targets for carbon dioxide emission are such that only by making a large percentage of hybrids and zero emissions cars will manufacturers be able to remain compliant.
    European regulations call for fleet average CO2 emissions of 95g/km by 2020. In comparison, the target in China is 119g/km and Japan’s is 117g/km by the same date, while the target in the US has been set at 102g/km by 2025.

  • Mountie

    Remember oil crisis (1967) and car less days. Now we have more oil than they knew about then 50 years on!

    • island time

      I think the carless days were in 1977 not 67. Is that the crisis that was engineered by the Oil Companies to ensure that the North Sea fields were profitable?

  • On oil and its extraction from the earth. With the caveat that I’m not a geologist, surprisingly.

    The deepest well we’ve managed to drill so far is 10,683 m,
    The crust of the earth is only about 3-5 miles (8 kilometers) thick under the oceans(oceanic crust) and about 25 miles (32 kilometers) thick under the continents

    It seems to me that we’ve just prodded out way into finding all the oil that might be in the bit between 10K and the 32-50K.

    Of course I’m probably way off beam with this, but I don’t think we found all the oil yet, or have the technology to extract it.

    • Kiwibabe

      Not sure about exact depths but basically you are right, likely plenty left.

    • antred

      Yes, now try to imagine the kind of prices that oil will need to be profitable. Also, what would the EROEI be? I’ve seen estimates that once the average EROEI of all your primary energy sources drops below a certain threshold (something like 10:1), running our highly complex and energy-hungry civilization is no longer possible.

  • Kiwibabe

    Cam, a developer of lithium battery getting close to production you could search is SolidEnergy founded by Dr Qichao Hu, R&D in conjunction with Donald Sadoway at MIT (Massachusetts). Report I have does not comment on power for charging batteries. Hoping to have in cars in second half of 2016, and eventually to get battery powered car costs down to $30k.
    Another lithium battery development in pages 76 & 78 of Economist mag Sept 13. Dr Yi Cui of Stanford University, $60 million in funding from Goggles chairman Eric Schmidt, company Amprius. This seems further off before commercialisation.
    Threat of electric cars another reason Saudis and OPEC keeping downward pressure on oil prices?

  • Kiwibabe

    Having gleefully upset some greeny mates by investing in fracking stocks I know just a little. Suffice to say whilst OPEC has pulled the rug out from fracking these new techniques are significantly prolonging use of fossil fuels, and also commercially scuppering alternatives for decades. Also from my laymans knowledge of geology there is likely to be plenty of untapped oil and gas in the earths crust, but costs of extraction beyond the very low Saudi costs are mostly very much higher than current barrel prices.

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