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Peak Oil

November 25th, 2005

I’m talking today at a Brisbane Institute forum on oil and whether it’s running out. 12:30 at the Hilton. I’ll try to post my presentation soon.

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  1. wilful
    November 25th, 2005 at 08:35 | #1

    Well is it???

  2. November 25th, 2005 at 09:59 | #2

    No one is saying that it will run out in the short term. We will however face dwindling supplies as our rate of discovery of new oil is dropping. There is also no reliable data on Middle East oil as there is no independant audit of reserves – only what the Saudi’s etc tell us what they have.

  3. November 25th, 2005 at 10:59 | #3

    It’s probably well behind the eight-ball for many of you who are familiar with the peak oil issue, but Catalyst had an introduction to the topic this week.

    Personally, I remain unconvinced by the more alarmist claims, for the simple reason that if we get desperate we can convert coal into liquid fuels (as South Africa has done for decades). Yes, the investment required to do so would be massive, but if there’s equally massive profits to be made supplying a fuel-starved world I’m pretty confident the market can do so.

    The environmental implications of this process (which is far more greenhouse-intensive than petroleum-based fuels) I leave to the reader to contemplate. *That* scenario is the one I’m more worried about.

  4. Seeker
    November 25th, 2005 at 11:06 | #4

    Scientific American (July 2005) has a major article on CO2 capture and storage.

  5. Terje Petersen
    November 25th, 2005 at 11:17 | #5

    Rechargable hybrid electric cars. Solar Towers. Ethanole. Photovoltaics.

    All these leads me to believe that we will transition without too much fuss as and when oil steadily becomes scarse.

  6. Terje Petersen
    November 25th, 2005 at 11:17 | #6

    Did I mention uranium?

  7. November 25th, 2005 at 11:28 | #7

    Terje, solar towers and photovoltaics are essentially irrelevant to Peak Oil. We have no shortage of coal or uranium to generate electricity with.

    I support the use of nuclear power to reduce greenhouse emissions, but to claim it has anything much to do with solving the problem of peak oil is an unfortunate distortion that nuclear advocates sometimes indulge in.

    Ethanol from sugar is a useful minor adjunct to petroleum. Ethanol from grain crops is a conjob and an excuse to pump subsidies to farmers. Either way, you couldn’t make enough of the stuff to substantially replace oil without starving a significant fraction of the developing world.

  8. November 25th, 2005 at 11:49 | #8

    Robert – How can you say that we can just convert coal to oil? Apart from the environmental aspect there is not enough suitable coal to really make a difference. Also the rate of conversion is too slow for demand.

    Nuclear power will not solve our peak oil problems as you say however it will not solve our electricity problems either. There are far too many issues that need to be solved. Also Uranium though it seems limitless now is a finite resources as well.

    Why do we keep pinning our future on finite resources?

    Terge – Transition will not happen overnight. If we started now we could perhaps have alternatives in place in time however that is not going to happen. A 5 to 10 year lead time will be needed and what will we do in the meantime? Sustaining the current rate of oil production with technology pumping the maximum of oil out of tired fields could result in a plateau of oil production followed by a very steep decline. In this case we will not have time, as while we are in the the plateau all major players in the business will all be saying “there is plenty of oil” as they are now. We cannot transition without our fossil fuel economy being largely intact. A steep decline in oil supply could lead to a collapse that makes transition impossible.

  9. November 25th, 2005 at 12:16 | #9

    The problem is of course that so many of the energy solutions to oil require oil…

    Robert, the notion that western grain production feeds the third world is just as much a con job as the notion of ethanol from grain. Western grain exports flood third world markets and outcompete local producers, deprive the developing world of first world grain and developing world agriculture will increase.

    The problem occurs of course when first world ethanol production provides a better price than developing world mouths. A bit like Ethiopian soy bean production.

  10. Will De Vere
    November 25th, 2005 at 12:16 | #10

    I strongly agree with Ender.Whether or not we have reached ‘Peak Oil’ – and the Catalyst program on the subject was quite good – it seems that too many people are complacent about the potential of alternatives to oil. Simply listing alternative energy sources – ethanol, biofuels, hydrogen, nuclear power etc – will not magick them into place on the scale required to provide a real alternative to ubiquitous petroleum: a vast scale.

    The very great transitions from one dominant source to another – from wood to coal, from coal to oil – have taken at least fifty years. I’ve always loathed the global oil economy – it’s literally toxic – but I’m quite sure that if oil production were to begin declining in the next few years, we would not have enough alternative fuels available to avoid a serious economic crisis. Currently, There Is No Alternative.

  11. JohnM
    November 25th, 2005 at 13:41 | #11

    These discussions often seem to proceed without any consideration of the most obvious response to a shrinking supply of oil – using less of it. If 70% of global oil consumption is used in transport, ceasing wasteful practices such as shipping foodstuffs around the world (for example, most of our garlic comes from China) and encouraging people to buy smaller cars (for example, phasing out motors larger than 2 litres for small passenger vehicles) would have a huge impact on our consumption levels. Unfortunately there’s still plenty of cash to be made burning the oil while it lasts.

  12. Terje
    November 25th, 2005 at 13:45 | #12


    The transition to hybrid electrics is already under way. The transition to rechargable hybrid electrics is just beginning. Both of these will over time have a significant impact on oil usage.

    Photovoltaics may still be peripheral however Solar Towers (ie http://www.enviromission.com.au) look very promising to me. Uranium offers an almost endless source of energy, however neither of these offer a portable power source in the way that petrol does. For that we will need to turn to vanadium batteries or hydrogen or ethanol or some such thing.

    If Oil runs out next Wednesday then the transition will indeed be painful. However if oil prices rise steadily over a few decades (so that in real terms they hit say US$300 a barrel in about 2040) then I think we will have little trouble moving to other means of transport etc.

    Whether these other means have a lower ecological footprint is another matter.


  13. November 25th, 2005 at 13:59 | #13

    Terje and JohnM – the main problem is convincing people that there is a problem. Why should cars over 2 litres be phased out if there is plenty of oil? The response I get to these suggestion is “Why should I have to give up my V8 just because some lefty greenie says the oil is running out” Right now the Prius, and I drive one regularly, is dismissed by my workmates as not having enough power and they would never buy one.

    This is why I maintain that there will be nothing done and the price of oil will be maintained artificially low until we drop off the cliff.

    BTW Uranium is not endless at all. There is a finite amount of it unless we re-process it however, this opens another bucket of worms – do we really want heaps of weapons grade plutonium circulating around the place.

  14. JohnM
    November 25th, 2005 at 14:11 | #14


    The pessimist in me agrees with you when you talk about the “cliff”. Perhaps price signals for fresh fruit, vegetables, meat, milk and other basic necessities will convince the public at large that a crisis looms, whereas the surging price of petrol seems to have failed.

    Another problem is that the main source of information for the vast majority of people both here and elsewhere in the first world is TV news, newspapers and magazines. All of these media forms are advertising driven, and the advertisements are for products made from monoculture crops grown with hydrocarbon fertilisers, cars with over-sized engines and energy-hungry features like electric windows and DVD players, holidays overseas on oil-guzzling planes, etc etc. Obviously these adverstisers don’t want to see a heartfelt plea to use less energy opposite their advertisements, nor even a discussion of the possibility of economic contraction. Contrast this with the discussion on public radio, where one can hear environmentalists on a weekly basis discuss, with either weariness or a tone of panic, both the possibility of an oil peak and the necessity for emitting less CO2.

    I am guilty of mixing two issues here, but the possibility of a peak in oil production is not the only reason we should stop using so much oil. I am reminded of a cartoon with a CEO addressing the room: “We find ourselves poised at the brink of an environmental catastrophy. On the other hand, there are unparalled opportunities for profit”. Given that the juntas weilding power both here and in the US, and to a large degree the rest of the first world are basically the legislative arm of big business, the cliff production option looks more and more like the realistic future scenario.

  15. wilful
    November 25th, 2005 at 14:22 | #15

    I for one look forward to the good Professor’s presentation. Will beat the alternative that I declined to attend, a debate featuring Andrew Bolt on “the University far left and public life” at RMIT, also at 12.30.

  16. Ian Gould
    November 25th, 2005 at 14:26 | #16

    >Robert, the notion that western grain production feeds the third world is just as much a con job as the notion of ethanol from grain. Western grain exports flood third world markets and outcompete local producers, deprive the developing world of first world grain and developing world agriculture will increase.

    Additionally it should be noted that the principal importers of western grain tend to be middle income countries (such as Egypt and Iraq) and not the least-developed countries.

  17. Ian Gould
    November 25th, 2005 at 14:37 | #17

    The combination of plug-in hybrids and bio-deisel (a much more energy-efficient fuel to make than ethanol) could significantly reduce developed world demand for oil for passenger transport.

    This leaves three much more intractable problems:

    1. fuel demand in the developing world where the additional up-front cost for hybrids will be much harder to afford;

    2. road freight, road freight prices are likely to rise very significantly if hybrid technology is introduced, especially since it’s likely to be difficult to store and discharge sufficent power to meet the power needs of larger trucks with current battery technology;

    3. air transport – there’s currently no realistic alternative to av-gas except, possibly, biodeisel. If airlines are forced to shift to biodeisel we can firstly expect a protracted period while the operational and safety issues are worked out and secondly a major increase in airfares.

  18. Will De Vere
    November 25th, 2005 at 14:52 | #18

    For our cities, the best way to reduce oil consumption (and pollution) will be massive investment in public transport. Set aside some highway space for massive and numerous trains and trams. Most private commuter travel could be undertaken with glorified electric golf carts. Computerising and automating all cars (hands off driving) would also reduce fuel consumption and the accident rate.

    For air travel, we might at last see a return to the age of airships for cargo and people.

    Eventually, of course, the world economy will be founded on hydrogen and solar energy, but it will be a long time coming.

  19. Roberto
    November 25th, 2005 at 15:03 | #19

    Peak Oil? Must be the pointy end of the oil debate.

  20. Homer Paxton
    November 25th, 2005 at 15:12 | #20

    you can only examine this debate through a hubbert telescope!

    Whaleoil went peak in the nineteenth century!

  21. JohnM
    November 25th, 2005 at 15:27 | #21

    Haw Haw. When will you replace your oil-based puns with hydrogen-based ones?

  22. November 25th, 2005 at 16:38 | #22

    Ian – I do share your thoughts that plug in hybrids, battery electric cars and bio-diesel in combination will certainly help however I am not confident that these measures will be implemented in time. It also has to combined with a smart electricity grid where the PHEVs and BEVS are storage nodes in the grid.

    Peak Oil for us is bad enough – spare a thought for those people in the third world. If you have no firewood becuase most trees within walking distance have been used then the only way to cook food and boil water is with kerosene etc. For these people high oil prices could well be a death sentence not just an inconvenience as there income is so low they do not have extra money for higher fuel costs.

  23. November 25th, 2005 at 17:15 | #23

    I’ve been following “peak oil” off and on for more than a year now, taking in books by David Goodstein and Kenneth Deffeyes along the way.
    I refer everyone to an interesting debate in this month’s Prospect magazine:

    The debaters are Jeremy Leggett (physicist(?), ex-Greenpeace, and author of the recently-published “Half Gone”), and David Jenkins (formerly of BP). With all due respect to Prof. Q., asking “When will we run out?” is to ask the wrong question. As peak oil theorists are fond of arguing, reserve to production (R/P) ratios can be used to predict that oil will last a long time, but give too optimistic a picture. The better question is: when does supply begin to run behind demand? This determines when the seller’s market arrives. If the peak of world oil production is indeed as close as 2008 (some have even put it at 2004 or 2005), then there may not be enough time to effect a smooth transition to alternative energy sources. We are then in for a rough ride. We should all remember that the oil price rises of 1973 and 1978 preceded major worldwide economic downturns.

    Incidentally, did anyone see the article by Charles Krauthammer on oil, reproduced in the Fin. Rev. opinion pages a couple of weeks back? Krauthammer is a prize chump but this article perhaps contained a grain of sense in his suggestion that continuing high oil prices might benefit us by spurring the search for alternatives. (I was less taken with his suggestion that plundering Alaska for oil is also part of the solution for the US consumer.)

  24. Terje
    November 25th, 2005 at 17:37 | #24

    QUOTE: We are then in for a rough ride. We should all remember that the oil price rises of 1973 and 1978 preceded major worldwide economic downturns.

    RESPONSE: The oil crisis of the 1970s was in fact a US monetary crisis that triggered a global monetary crisis. Gold shot upwards at least 12 months before gold but nobody complained of a gold shortage. The problem was excessive printing of US dollars. Once the arabs noticed that their US treasury bonds were falling in value they figured that Oil left in the ground was a better investment for the future than bonds that were being debased by inflation. The problem then became a real shortage as Oil was diverted to become a store of wealth in the Arab nations rather than a source of fuel in the west.

    The following chart shows two prices normalised so they equal 100 in the base year. The prices are:-

    BLUE = US$ price of OIL
    RED = US$ price of GOLD


    Note the stability of the oil price during the Brenton Woods gold standard (ie green region on graph). That was a time when we had price stability in COMMODITIES and not just in CONSUMER goods. Then came the epoch of screwy monetary policy.

  25. Terje
    November 25th, 2005 at 17:41 | #25

    While I am showing off charts the following is interesting. Australia has approximated a gold standard better than nearly any other nation over the last decade.


  26. Harry Clarke
    November 25th, 2005 at 20:20 | #26

    I’ll be interested in your post as following this issue and have not a clue on future course of prices. A spate of literature suggesting peak oil upon us and other experts saying oil abundant for another 50 years at least.

    The end of fossil fuels wrongly predicted on so many occasions — recall Jevons on coal. Another false alarm or a really new environment. And will it matter much anyway.

    One interesting sign — car makings pushing electric-powered vehicles and Shell diversifying into other energy sources.

    Will Prof JQ stick his neck out?

  27. November 25th, 2005 at 22:32 | #27

    The only reason our European civilisation has appeared to have been more advanced than Aboriginal Australian society is that we have exploited solar energy, which over at least tens of millions of years has been turned by biological and geological processes into a such highly convenient and concentrated forms as in petroleum natural gas and coal.

    Our supposedly intelligent species has stupidly burnt around half of what rightly belongs to all future generations of humankind in little more than one hundred years.

  28. Terje Petersen
    November 25th, 2005 at 22:35 | #28

    QUOTE: what rightly belongs to all future generations

    RESPONSE: A dubious claim.

  29. Seeker
    November 25th, 2005 at 22:48 | #29

    Terje. Like Ender says, uranium only offers long term energy if we use fast breeder reactors, which unfortunately produce plutonium by the bucket load. Bad, bad outcome. Especially in the day and age of global terrorism.

    If we start using electric cars in large numbers (and I hope we do soon), then solar towers and various other forms of large scale clean electricity generation may supply a substantial fraction of our transport energy, especially for short local runs less than 100 klms a day.

    Ian Gould, I agree about air travel. Unless there is a major breakthrough in new liquid fuels then the era of cheap bulk air transport is over, and we go back to sailing ships and lighter than aircraft, like Will De Vere said. I can’t see biodiesel ever producing the obscene quantities needed for air transport. Furthermore, I am not even sure that it is a viable fuel for aircraft.

  30. Steve Munn
    November 26th, 2005 at 03:08 | #30

    I note that Catalyst showed a brief visual of a bus that uses a hydrogen fuel cell during last Thursday’s story on Peak Oil. I think this technology shows a lot of promise.

    Nevertheless, I think we are in for the “mother of all oil shocks” in our lifetimes, whether that be 5 years or 10 years. Once Peak Oil is in site, speculation and hoarding alone should send oil prices through the roof. My advice- convert your car to LPG now!

  31. November 26th, 2005 at 13:16 | #31

    Terje, I would have thought what I wrote was self-evident and morally indisputable. So, could you please elaborate a little more what you meant by “a dubious claim”?

    Terje, regarding your optimisim for a smooth transition to an economy, which is not based on fossil fuel, which you say will be brought about by a gradual rise in petroeleum prices, I suggest you read “Domino Effect and Interdependencies”. (It was originally at http://www.powerswitch.org.uk/portal/index.php?option=content&task=view&id=452&Itemid=2.
    but it’s been ‘hacked’ by a cretin who goes by the name of ’00_Zeus_00′, so I have put my own copy on my own web site.) The article shows how, because of the way in which almost every aspect of our modern economy is so dependant upon the supply of cheap petroleum, a sudden rise in its price, perhaps triggered by a natural disaster similar to Hurricane Katrina could set off a chain reaction leading not only to the collapse of our global economy, but also of our civilisation.

    If you say it can’t happen, it already has, many times, as Ronald Wright has shown in “A Brief History of Progress” (2004) and as Jared Diamond has also shown in “Collapse” (2005). Civiizations have grown beyond the capacity of their natural environments to support them and have collapsed catastrophically as a result. These civilisations have included the Sumerians, the Mayans, Angkor Wat, the Easter Islanders, the Norse Greenlanders etc. The essential difference between them, and our globalised civilisation, is that we have discovered fossil fuel and have used it to extend the limits of nature way beyond the limits that those civilisations had reached, but there are still limits and we may have already gone beyond them.

    If our globalised civilisation does collapse, the consequences hardly bear thinking about.

    Steve Munn, LPG is also a finite resource. Cars running on LPG may run a few years longer, than cars running on petroleum, but world supplies of natural gas will peak soon soon after world supplies of petroleum peak.

    After that we will have to rely on either expensive polluting technology for the conversion of coal to liquid with all the problems of additional green house gas emissions or renewable energy forms.

    In the latter case it will be much harder to harness from the relative trickle of energy which the sun provides to the earth, the same amounts of solar energy that have been packaged for us by nature into coal, gas and petroleum over tens of millions of years.

    As Ross McCluney wrote in an essay “Renewable Energy Limits” on page 174 of the excellent “The Final Energy Crisis” 2005 , edited by Andrew McKillop and Sheila Newman.

    It is clear that attempts to solarize the world economy are fated to run into serious obstacles, unless population and per capita energy consumption are drastically reduced. A major commitment to solar energy is likely to transform landscapes and seashores, brining forth many new environmental problems, while demanding very large capital spending.

    Ultimately, we need to know if technology not based on fossil fuels is bootstrappable. Just about any renewable energy infrastructure, which is built today – solar panels, dams, wind turbines – has been built using fossil fuel.

    When fossil fuel runs out, will it be possible to use the relative trickle of energy which comes from wind turbines and solar panels to mine and fabricate the raw materials necessary to build more solar panels and more wind turbines? I have a lot of trouble imagining how this could be done.

    It is inevitable that in time our wind turbines will wear out and our solar energy panels will degrade, after which it may not be possible to build more.

    In the long term we will have no alternative but to drastically reduce our energy consumption. We would be well advised to start preparing for this now.

    Another excellent resource in which these sorts of questions are thrashed out by many very well-informed, and often very well qualified people, is the “Running on Empty, Oz” (roeoz> mailng list. It can be found at :

  32. November 26th, 2005 at 13:21 | #32

    Whoops! The link to the article “Domino Effect and Interdependencies” was somehow not posted last time. Here it is :


  33. Seeker
    November 26th, 2005 at 18:30 | #33

    James Sinnamon

    Modern, mass-produced solar panels and windmills, and the very large custom built windmills already produce far more energy over their lifetime than is consumed in their construction. (Given proper installation and use, of course.)

    The real issue here is will we have enough non-hydrocarbon based generation online in time for decline in hydrocarbon based generation.

  34. peterd
    November 27th, 2005 at 13:35 | #34

    Terje, I deliberately did not write that the oil price rises of the 1970s caused the recessions (in the sense that they were the sole cause). I wrote that recession followed the price increases. (“The two energy crises of the 1970s were followed by the worst recessions since the 1930s”: Paul Krugman, ‘The Return of Depression Economics’, Penguin, 2000, p.7). Formulating things this way allows for the possibility of other causative factors at work. According to Stuart Holland, in ‘The Global Economy’ (Weidenfeld, 1987): “…the results of the original OPEC price increase were complex rather than simple.” Moreover, “…while inflation rose from an average of 5% to over 12% in the industrial market economies between 1972 and the end of 1974, in large part because of OPEC price increases, it had fallen again to below 7% at the end of 1978”. Some of the OPEC countries that benefited from the price increases were able to recycle the profits back into western economies either directly through shares in companies or through the Eurodollar markets. Herman van der Wee, in his compendious survey of the world economy (‘Prosperity and Upheaval, The World Economy 1945-80’), summarised matters thus: “The OPEC cartel reacted [to the downward price movement for oil and gas] in Nov. 1973 with a dramatic increase in oil prices as a countermeasure against the general inflation trend and the depreciation of the dollar. The impact of the rise in oil prices on the world economy was heavy. The shock wave quickly aggravated the recession which had already been set in motion at the beginning of 1973 by restrictive national economic policies.”
    I think it is clear enough that the oil prices increase were, at the minimum, a necessary condition for the recession that followed.

  35. Terje Petersen
    November 27th, 2005 at 15:15 | #35

    I blame Nixon more than the Arabs. I suppose that is my main point.

  36. November 27th, 2005 at 16:46 | #36

    “The only reason our European civilisation has appeared to have been more advanced than Aboriginal Australian society is that we have exploited solar energy, which over at least tens of millions of years has been turned by biological and geological processes into a such highly convenient and concentrated forms as in petroleum natural gas and coal.”

    That is quite ridiculous. European society in Greece and Rome was far advanced beyond Aboriginal society in 19th century Australia, 2-3000 years before the industrial revolution.

  37. November 27th, 2005 at 16:49 | #37

    And the real reason European society was more advanced had nothing to do with oil and everything to do with horses, cattle and agriculture. Australia’s native fauna and flora has very little in the way of species suitable for anything other than subsistence hunting and gathering.

    After 200+ years of white settlement in Australia, the macadamia nut is the only native species that have been found suitable for commercial production, and nuts are not a suitable staple diet for humans.

  38. November 27th, 2005 at 18:05 | #38

    Alternative liquid fuels like coal to liquids and gas to liquids have serious volume and time constraints which reduce their ability to replace declining oil production on the scale which may well be needed. The Hirsch report (for US DOE , Feb 2005, “Peaking of World Oil Production: Impacts, Mitigation and Risk Management” http://www.cge.uevora.pt/aspo2005/abscom/Oil_Peaking_NETL.pdf ) suggests that “Crash programmes”, the size of the Manhattan project, are needed to be started 1-2 decades before the peak. Yes, alternatives are technically possible, but not at all likely on the scale and timeframes needed if global oil production declines soon (as is happening for Greater Burgan, the world’s second biggest oilfield). A 5% decline in production from existing fields needs an additional 4Mbbl/day from new fields (each year) or alternatives just to keep production at current levels. This is a big ask.

    Prof Aleklett’s Peak Oil presentation (the longer one delivered at UWA) is available at ASPO-Australia.org.au. We organised his Australia tour, so we are interested in feedback on how the various events went. ASPO-Australia was formally launched by Prof Aleklett last Monday, at a news conference held at the RAC(WA) media room. We are a network of people working at a professional level on the probability and impacts of Peak Oil, and on possible mitigation and adaptation strategies for Australia.

    Suggestions, advice and volunteers for ASPO-Australia will be very welcome indeed. There is a lot to do, even if we have 1-2 decades before the peak. If it comes in 5 years, we need to do even more, and sooner. We are also keen to hear from people who have good evidence for a later peak, as there are many scenarios and forecasts and no-one should be too dogmatic about any one prediction. Perhaps someone can run a book on when it will happen. I think the even money is now on a peak between 2010 and 2015, with lower probabilities of a peak before and after that date. I think 2035 is about 100:1 against, in bookies’ terms a rank outsider, but others will differ.

    Regards, Bruce Robinson

  39. November 27th, 2005 at 19:14 | #39


    Plato wrote in the fourth century BC:

    “What now remains compared to what then existed is like the skeleton of a sick man, all the fat and soft earth having wasted way … Mountains which have nothing but food for bees … had trees not very long ago. [The land] was enriched by the yearly rains, which were not lost to it as now, by flowing from the bare land into the sea; but the soil was deep, and therein received the water, and kept in the loamy earth … feeding springs and streams running everywhere. Now only abandoned shrines remain to show where the springs once flowed.” (Quoted in “A short History of Progress”, 2005 by Ronald Wright, pp 87-88)

    Ronald Wright goes on to write:

    “It is no coincidence that Greek power and achievement began to wane about this time. Archaeology reveals a similar picture around the Mediterranean. Southern Italy and Sicily were well wooded until about 300 BC …”

    Ronald Wright shows that the degradation of the environment was a factor which caused the decline of the Roman civilisation as well as Greek civilisation.

    In “A Brief History of Progress”, as well as in Jared Diamond’s “Collapse”, there are many examples of more spectacular collapses of other civilisations, also supposedly more advanced than Australian aboriginal hunter gatherer societies : the Mayans, the Easter Islanders, the Norse Greenlanders, the ancient Angkor Wat civilisation, the ancient Sumerians etc.

    All of these societies destroyed the environments which were necessary to sustain them in stark contrast to Aboriginal stewardship of this continent for 40,000 years (perhaps disregarding the initial environmental destruction that Tim Flanney, in “The Future Eaters”, holds that Aboriginals caused when they first settled on this continent. )

    Given that our modern globalised society is in the process of destroying our planetary life support system, and has, in little more than one hundred years, stupidly burnt half the fossil fuel which took at least tens of millions of years for nature to create, it has yet to be conclusively demonstrated that our society is superior to Aboriginal society.

    The opposite would now seem to be the case.

  40. November 27th, 2005 at 19:29 | #40

    Seeker, what you say about solar panels and wind turbines producing more energy than it takes to build and maintain them is a topic of hot dispute on the “Running on Empty, Oz” maiiling list. (see http://groups.yahoo.com/group/roeoz/)

    If we are to be certain that they produce more energy than what they consume, we need to take into account all the costs of manufacture, erection, maintenance and decomissioning. We also need to account for the costs of creating and maintaining infrastructiure to distribute the energy. I would like to be as confident as you that when all energy inputs are properly accounted for, we are substantially ahead.
    If you can refer me to the figures upon which you base your conclusion, I would be grateful.

  41. November 27th, 2005 at 19:33 | #41

    James – REOZ while it is an interesting list does compose of a lot of people who are very pessimistic about the future and see no way that we can come through it. I butted heads with a lot of people there because my view is that there is a way forward however I share some of their pessimism as I do not think that the correct steps will be taken without a major crisis.

  42. Terje Petersen
    November 27th, 2005 at 21:37 | #42

    Bruce Robinson,

    Thanks for the article. It makes for compelling reading. In particular the notion that geology is more significant than price as a determinent of oil output.

    I note that hybrid electric vehicles (HEV) feature prominantly amoungst the potential demand mitigators. I would be interested in any “wedge” scenerios that look at plug-in hybrid electric vehicles (PHEV).



  43. November 27th, 2005 at 21:45 | #43

    Ender, I still think ROEOZ is a very good list to subscribe to in spite of the extreme pessimism of some of the contributors. Even the pessimistic contributors have a lot of useful knowledge.

    I can’t know whether or not this pessimism will be borne out by the course of events, but the only rational response, in my opinion, is to assume that there is hope.

  44. c8to
    November 28th, 2005 at 00:02 | #44

    “and we go back to sailing ships and lighter than aircraft, ”

    ahahahahahah…im willing to bet $1000 that sailing ships will never again be the major form of transport for humanity.

    oil, like wood and coal before it, will increasingly become a marginal source of energy

    the idea that in 500 or 1000 years time humanity will still be burning something for energy is ridiculous.

    nuclear fission or fusion will more than likely replace fossil fuels, maybe toward the end of my lifetime.

  45. c8to
    November 28th, 2005 at 00:04 | #45

    well coal is not exactly marginal now, but its not used in transport a la steam engines, and if it ran out (which it isnt going to do for a while) there is a lot of nuclear fuel for electricity generation.

  46. November 28th, 2005 at 00:43 | #46

    Plug-in hybrids (and other technological cargo-cultism)
    Hirsch’s paper for US DOE has the small wedge for more efficient vehicles, but he only considers technologies available commercially now. This would include petrol-powered hybrids, but not large-battery hybrids. The same logic applies, however, of long lead times, and very slow adoption. Half the cars being bought in Australia this week will still be on the road in 20 years time (on current trends: see BTRE (2002) Fuel Consumption by New Passenger Vehicles in Australia, Information Sheet 18 http://www.dotars.gov.au/btre/docs/is18/is18.htm ). Hence it will take a long time to change the vehicle fleet (it took 18 years to change from leaded to unleaded vehicles, for instance, even when it was a mandatory change that no leaded petrol new cars could be sold after 1 Jan 1986). We can not make hybrids or fuel cells mandatory, so it will take much much longer to change the fleet without enormous expense and disruption.

    That is, all these “technological fixes” that people propose are very likely to be too little and too late, due to the enormous inertia in the system, if peak oil comes within 5-10 years as seems probable.

    There is a good long article published in the New York Times on Sunday 21st August.
    The final sentence is
    “When a crisis comes — whether in a year or 2 or 10 — it will be all the more painful because we will have done little or nothing to prepare for it.”

    The final statement was published before Hurricane Katrina, and is all the more prescient after it.

    It would not be hard for economists (or anyone) to model the uptake of new vehicles and technologies, for instance a 5% pa improvement of new car fleet fuel consumption, and what (small) effect that would have on overall fuel consumption. The FBT means that most new cars are first bought by people who get their fuel paid. This means there is not a lot incentive for new car buyers to choose efficient cars. These cars then go out into the secondhand fleet for the rest of their working life. The wedge (of oil saved over time) for more efficient vehicles is small, and can be negative if people continue to drive more kms per person.

  47. Ian Gould
    November 28th, 2005 at 07:54 | #47

    >im willing to bet $1000 that sailing ships will never again be the major form of transport for humanity.

    Have you seen the prototype freight ship with an airfoil-shaped kite for propulsion?

  48. Terje
    November 28th, 2005 at 08:34 | #48

    QUOTE: Plug-in hybrids (and other technological cargo-cultism)
    Hirsch’s paper for US DOE has the small wedge for more efficient vehicles, but he only considers technologies available commercially now.

    RESPONSE: A valid point of demarcation for the purposes of analysis. If peak oil is real and imminent then it would seem that that implementing Kyoto is pretty irrelevant. If consumption is limited by output and the peak is coming soon then we don’t need to worry too much about capping CO2 output.

  49. Ian Gould
    November 28th, 2005 at 09:27 | #49


    1. Half or more of CO2 emissions come from burning coal and natural gas fro electrictiy generation;

    2. Much of the non-conventional oil locked up in tar sands and oil shale requries very large amounts of energy to produce – you effectively burn 2-3 (or more) barrels of oil for every barrel you produce.

    3. As several people have already noted, oil production (and use) will continue at near-current levels for probably a decade or mroe after we hit the peak.

  50. Terje
    November 28th, 2005 at 10:09 | #50


    1. Yes. However oil running out should mitigate to some extent.

    2. That sounds like a reason why oil from tar sands will never make it to market. So it would seem to be irrelevant to the CO2 discussion.

    3. Yes.


  51. November 28th, 2005 at 13:36 | #51

    Seeker, it’s quite possible to produce biodiesel on the scale needed to replace fossil fuel use, only in most countries (even the USA, but not Australia) that would displace food production too much (see Nassau Senior’s introductory remarks on machinery not affecting food availability in his classic work on “Wages”).

    As it happens, biodiesel can be used for flight. The Germans had diesel powered flying boats in the 1930s, and the fuel is useable in gas turbines (though not as a direct replacement – it would need new engines).

  52. Razor
    November 28th, 2005 at 16:54 | #52

    This chicken little stuff is marvelous.

    New oil discoveries are being made all the time. Examples are the North-West of Australia, Mauritania, etc etc etc The Middle-east isn’t even close to being fully exploited. Improving exploration and recovery technologies are increasing the known resources.

    One of the major factors in the high oil price are lack of competition in the developed world where very few new oil refineries have been developed (none in the US for 25 years) – this restricts supply forcing the price up. The OPEC Cartel also artificially inflates the price. Add taxes on top of the normal prices and we see the reasons for the current high prices. It is not because we are running out.

    At the same time alternatives are being developed. The potential for Bio-diesel has yet to be reflected in the share prices of producers. This is because any rational analysis takes into the possibility of falls in the price of normal diesel. If we were running out there wouldn’t be the likelihood of falls in that price, reducing the risk of bio-diesel investments.

    I went down to the beach on the weekend. This was the first time after a wet winter and one of the coolest Springs on record (the Applecross Jacaranda Festival on the weekend wouldn’t have been much chop because the Jacarandas haven’t flowered because it has been too cold.) The sea level appears to be the same as when I was a kid. I went home disappointed that the Global Warming, sorry, climate change I keep reading about hasn’t warmed up the Leeuwin current. It was cold in the water.

  53. Ian Gould
    November 28th, 2005 at 17:19 | #53

    Yes Razor, God loves you and nothing bad will ever happen because you don’t want it.

  54. Razor
    November 28th, 2005 at 19:31 | #54

    Which God? Is She female and good looking?

  55. November 28th, 2005 at 23:33 | #55

    Razor – you are correct new oil discoveries are being made all the time however the rate of discovery is low and the fields found are small. The one you refer to is less that 50 000 barrels per day. Current world consumption is 83 million barrels per day.

    This is a quote form ASPO Australia site that summerises the situation

    “Dr Samsam Bakhtiari, of the National Iranian Oil Company, provided a pessimistic view of future oil supply decline and of its effects: –

    “Seen from a Middle Eastern perspective, the present global oil situation can be summarised within five major and inescapable trends:

    * The world’s super giant and giant oil fields are dying off;
    * There are no more major frontier regions left to explore besides the earth’s poles;
    * Production of non-conventional crude oil has been initiated at great costs — in Venezuela’s Orinoco belt, Canada’s Athabasca tar sands and ultra-deep waters;
    * Even OPEC’s oil production has its limits;
    * No major primary energy rival can possibly take over from oil and gas in the medium term.

    Adding up these five trends, one can envision a global oil crunch at the horizon — most probably within the present decade…..” “…It would take a number of miracles to thwart such a rational scenario. Now, a single miracle is always a possibility, but a series of simultaneous miracles is not — for there are limits even to God Almighty’s mercifulness”. (Samsam Bakhtiari, 2002)”

    Most recent discoveries just make up for depletion of major fields. Also modern technology allows us to deplete these resources faster that actually accelerates decline. Have a look at figures for the North Sea, exploited with the most modern technology and is depleting rapidly.

    BTW one spot check at a beach does not make a comprehensive survey of global temperatures.

  56. Razor
    November 29th, 2005 at 01:10 | #56

    Ender – you are happy to accept the word of people who’s best interest it is to have high oil prices and openly act as a cartel? OK, I’ve got some land in West Fremantle you might be interested – great ocean views.

    I’ve been going to the same beach for over 30 years. Obviously not a long enough sample?

  57. November 29th, 2005 at 09:57 | #57

    Razor – have a look yourself about discovery rates. The information is all there – you do not have to depend on people. The last supergiant field was discovered in 1965 and there have been no similar discoveries since. If you can tell me different then fine, we shoud be OK. The conditions for making oil existed mainly in 2 distinct times in the distant past when the supercontinent was splitting up. Practically all present oil discoveries are in these regions and oil is not usually found anywhere else. There is a good reason that the other areas of the Middle East are unexplored is that they are not areas that produce oil – just as no-one looks in central Australia for oil.

    30 years of of data is interesting however unless you have measured the tides over that 30 years with surveying instruments you would be very hard pressed to notice 3 or 4 cm of difference.

  58. Terje
    November 29th, 2005 at 10:25 | #58

    I thought that there was oil in Central Australia.

  59. November 29th, 2005 at 11:47 | #59

    Terge – Yes there is in a well mapped sedimentary basin that is a product of the initial oil producing conditions.
    On page 5 of this:
    is a map of Australia’s oil producing regions. I was wrong when I said that there was no point looking in central Australia for oil as as you correctly point out there are sedimentary rocks well into central Australia. However you will notice that outside this basin there is no oil. All the rest of Australia’s oil is around the coast.

  60. Homer Paxton
    November 29th, 2005 at 13:30 | #60

    for those interested two good papers to read are:
    One by Ugo Bardi which looks at the Whaling industry and its experience of peaking and implications for the oil industry and

    running out of and into Oil by David Greene, Janet Hopson and jia Lia.

    Sorry you will have to google them.

    My thoughts:

    Hubbertians are right on geology but wrong on the economics

  61. November 29th, 2005 at 13:35 | #61

    Homer – so Hubbert was right about the USA peaking in 1970?

  62. Razor
    November 29th, 2005 at 14:16 | #62

    By the way – I am putting my money where my mouth is on oil and global warming – picked up a brand new 5.7 litre V8 two weeks ago. Looks great with a baby seat, too!

  63. Homer Paxton
    November 29th, 2005 at 14:52 | #63

    Yes it did that is was Hubbert is so influential.
    His analysis was spot on!

  64. Andrew Reynolds
    November 29th, 2005 at 15:51 | #64

    This is a fascinating discussion – it looks so much like one we had on this site a few months ago.
    Yes, oil will run out one day – it is a finite resource. What will happen is simple – as it becomes more scarce the price will rise. More work will be done on discovering and developing alternatives – many of which are already under development. As the price continues to rise, more and more will switch to the alternatives. As with whale oil and everything else that at one stage we relied on for various things, by the time the last drop is produced it will be barely be noticed that it has gone and everyone will wonder what all the fuss was about.
    Move on.

  65. November 29th, 2005 at 16:32 | #65

    Andrew – yes but the alternatives cannot produce 83 million barrels per day nor the 93 million if we continue our demand rise as we are doing presently. Unless we stop using oil and remember a lot of oil use is for heating then we will not to sail on regardless.

    Whale oil is a special case because an acceptable alternative existed. To most people an electric car is not an acceptable alternative. It will take more that high prices to convince people that we should use less petrol. What do you say the the people that burn oil for heat? Remember natural gas is finite as well.

    The main problem is that people that think like you do is that you believe that alternatives can just simply substitute for oil with no modification to our lifestyles. Nothing is further from the truth. All alternatives involve less energy use and changes to our petrol head ways.

  66. Homer Paxton
    November 29th, 2005 at 17:38 | #66

    actually ender there wasn’t an alternative to whale oil until about thirty years after it had peaked.

  67. Ian Gould
    November 29th, 2005 at 17:39 | #67

    andrew: In addition to Ender’s comments, there are some specific characteristics of oil production which magnify the problem.

    As you may have read by now, oil fields tend to take years or decades to ramp up production – but then they delete very quickly. So it may seem reasoanble to assuem that a field which has been producing for 50 years and which is still increasing output has a reasonably long life ahead of it. In fact, it may be exhausting in little mote than a decade.

    This phenomena (“Hibbert’s Peak”) is well-documented and well-accepted for individual oil fields, the question is whether it will also exhibit on a global scale.

  68. Andrew Reynolds
    November 29th, 2005 at 18:11 | #68

    Ian & Ender,
    I used whale oil as an example because it was a simple one. There have been plenty of other resources either exhausted or nearly exhausted in the past and there will be in the future. The chicken little approach to management of problems has been proved wrong time and time again. I am aware of Hibbert’s Peak, and it is based on good science. I am also aware that the Saudis may not have all the oil they claim. Even on th emost pessimistic assumptions we still have more than a decade to deal with this. Yes, a change over to whichever alternative is eventually generally adopted will be expensive, but I would hazard a guess that it will be less expensive that the taxes we currently pay on our fuel. It may even benefit the environment.
    There are plenty of problems out there that we can be getting upset about. This is not one of them.

  69. Homer Paxton
    November 29th, 2005 at 18:48 | #69

    Wrong Andrew, on the most pessismistic assumptions, Campbell, we have already hit it!

  70. Andrew Reynolds
    November 29th, 2005 at 19:26 | #70

    We may have hit Hibbert’s peak globally, we may not have. If we do run out of oil recoverable at reasonable cost any time soon we will have plenty of advance warning, caused by a real (not like the current supply chain induced) rise in prices. That will begin the transition process. I say again that this has happened plenty of times before; it is happening with other commodities now and it will happen with others in the future.
    There is nothing unique in oil or gas or coal that will identify them as outside the general case that depletion leads to price increase, price increase leads to substitution, substitution leads to irrelevance for the nearly exhausted commodity.
    As I said at the end of the last thread on this: by the time the last barrel of oil is pumped in however long from now that is we will not notice that oil has run out. It may be the subject of one of those ‘Did you know’ articles in whatever passes for a newspaper at that point in the future.

  71. Ian Gould
    November 29th, 2005 at 20:34 | #71

    “I am aware of Hibbert’s Peak, and it is based on good science. I am also aware that the Saudis may not have all the oil they claim. Even on th emost pessimistic assumptions we still have more than a decade to deal with this. Yes, a change over to whichever alternative is eventually generally adopted will be expensive, but I would hazard a guess that it will be less expensive that the taxes we currently pay on our fuel. It may even benefit the environment.”

    Yes but NOW is the time to begin to ddress the problem. WE probably have 15-20 years before the situation becoems critical but it will take a good part of that time to develop the solutions

  72. Andrew Reynolds
    November 29th, 2005 at 21:00 | #72

    Plenty of options exist. Solar and its derivatives (wind, wave, tidal etc) all have good chances and, with some serious work, could answer the problem. If a more immediate need is there, nuclear is already there. For cars, hydrogen is a suitable energy storage mechanism in the medium term and batteries or hybrids will work now. There is no major crisis, nor will there be.
    The important thing now is not to panic and start forcing solutions – let the market signals work their way through and sort it out. It has worked in the past and will in the future.

  73. November 29th, 2005 at 21:05 | #73

    While I agree with all ov yu I think with peak oil we should adopt a wait and see approach. In the meantime, before there iz enything to see, we should each make individual sacrifices for environmental benefifts. Think lean, efficient, discipline and default environmentalism.

    The same goes for potable water. Peak water, he he he he that is funny.

  74. November 29th, 2005 at 21:55 | #74

    Andrew, it’s “Hubbert’s Peak” not “Hibbert’s Peak”.

    Andrew Reynolds wote : “Plenty of options exist. … Solar and its derivatives (wind, wave, tidal etc) all have good chances and, with some serious work, could answer the problem. ”

    You have ignored the point I made earlier about the massive environmental problems that would be caused if renewables were to be used on a scale that woud be necessary to completely replace fossil fuel powered stations.

    Andrew Reynolds wote : “For cars, hydrogen is a suitable energy storage mechanism in the medium term and batteries or hybrids will work now.”

    Currently there are 750 milion cars in the world. There exists enough platinum and palladium in the world, both currently necessary for hydrogen fuel cells, for about 10 million cars. (I learnt this from Andrew McNamara, Labor member of the Queensland Parliament, who made thatt famous speech about Peak Oil in February this year (http://energybulletin.net/4654.html), at a meeting about Peak Oil in Montville, Queensland on 4 November (see http://www.globalpublicmedia.com/lectures/577))

    Andrew Reynolds wote : “There is no major crisis, nor will there be.”

    As I wrote earlier, many seemingly advanced civilsations have collapsed before when they have degraded the environments and depleted the natural resources necessary to sustain them. What makes you so sure that this won’t happen to ours?

  75. Andrew Reynolds
    November 29th, 2005 at 22:16 | #75

    You have completely ignored the point I made that we should let the market work it out.
    In answer to your first point, nuclear may be the solution – there may be another. On the second, current technology demands palladium and platinum. Future technology may not. For example, until just over 30 years ago, computing required expensive valves – it now needs silicon and is much faster and better. Sixty years ago it was pen and paper.
    If a government attempts to impose a solution then it may well choose a solution that looks good at the time, but has some of the problems you identified. Looking to a government imposed solution will almost always lead the wrong way.
    The ‘other’ (read previous) civilisations uniformly collapsed when their systems could not cope with a challenge. A system based on the use of all of our brains rather than on the use of one brain (our government) is much more likely to cope with change than the systems that preceeded us. Our system has coped with these sorts of challenges before and will do so in the future.
    Malthus was wrong, is wrong and always will be wrong provided we do not attempt to solve the problem by diktat.

  76. peterd
    November 29th, 2005 at 22:24 | #76

    Abdrew Reynolds wrote:
    “There is nothing unique in oil or gas or coal that will identify them as outside the general case that depletion leads to price increase, price increase leads to substitution, substitution leads to irrelevance for the nearly exhausted commodity.”
    So, Andrew, what are we going to do for all the products that are made from oil? (Plastics, drugs, solvents……)

  77. peterd
    November 29th, 2005 at 22:47 | #77

    Andrew Reynolds wrote:
    You have completely ignored the point I made that we should let the market work it out.”

    Andrew, your faith in the power of markets to solve all energy problems is touching. However, you ignore the fact that governments have generally considered energy too important a matter to be left entirely to markets. Had the US government been persuaded of the overwhelming efficacy of markets to solve problems of demand and supply, of consumers and producers, it would have opened the US to unlimited supplies of cheap mid-east oil from the 1950s. It did not do so, preferring instead to protect domestic producers from the cheaper imported oil. Domestic producers benefitted while consumers paid. This did not even satisfy the stated aim of conserving oil for emergencies. (If this had been the priority, of course the home-grown stuff would have been left in the ground and the cheaper Arab stuff would have been pumped.) The oil industry is dominated by cartels (OPEC, the Seven Sisters). Production quotas have been set for decades (the Texas Railroad Commission). Here’s a thought: if oil supplies do indeed become squeezed, perhaps governments will come under increasing domestic pressure to “save” doemstic oil from the markets. (“Our oil for us!”)

  78. Andrew Reynolds
    November 29th, 2005 at 22:47 | #78

    I do not know – my chemistry knowledge did not go past year 12. In the meium term there is lots of coal – that could be a solution. We may find that the cellulose based compounds can do it. The point is, which you have either missed or ignored, that anyone saying that ‘this is the solution’ is almost certainly wrong. Let the accumulated wisdom of all the people alive and economically active sort it out. That is what markets do.

  79. November 29th, 2005 at 22:56 | #79


    (Funny, I don’t remember mentioning either ‘big government’ or Malthus, not that I am particularly against either of them.)

    I think Ronald Wright hit the nail right on the head when he wrote on pages 126 and 127 of “A Brief History of Progress” :

    “After the Second World War, a consensus emerged to deal with the roots of violence by creating international institutions and democratically managed forms of capitalism based on Keynesian economics and America’s New Deal. This policy, although far from perfect, succeeded in Europe, Japan, and some parts of the Third World. (Remember when we spoke, not of a ‘war on terror’ but of a ‘war on want’?)

    “To undermine this (post-war) consensus and return to archaic political patterns is to walk back into the bloody past. Yet that is what the New Right has achieved since the late 1970’s, rewrapping old ideas as new and using them to transfer power from elected governments to unelected corporations – a project sold as ‘tax-cutting’ and ‘deregulation’ by the right’s courtiers in the media … The conceit of laissez-faire economics – that if you let the horses guzzle enough oats, something will go through to the sparrows – has been tried many times and has failed many times, leaving ruin and social wreckage.”

  80. peterd
    November 29th, 2005 at 22:56 | #80

    whether there are substitutes for oil for the production of plastics, drugs, etc. is something I need to research further.
    Until then, all I’ll say is that I am not convinced of the ability of markets alone to respond sufficiently fast, and without support from governments (with taxpayers footing the bill). They didn’t respond fast in 1the 970s (though the price rises then were probably quicker than what we’ll face, even with the worst peak oil scenarios). After all, did “the markets” develop nuclear energy? Not the concept, surely.

  81. November 29th, 2005 at 22:57 | #81

    Andrew – “You have completely ignored the point I made that we should let the market work it out.”

    What will you eat while the 20 year lead time between action on alternatives and results. Your fuel cell cars are 20 years away even by the best estimates. Without action now the alternatives simply will not be ready in time. What you interpret as chicken little stuff is simply a desire to start changing NOW before the crisis is upon us.

    However you notion that we can just carry on business as usual is fanciful at best and fatal as worst. We need to make major changes to accomodate the fact that all the alternatives have lower energy return than oil. That is basic physics which no matter how you try economics and the ‘market’ cannot get around. We have built this edifice on the high and easy energy return of oil. It is not sustainable with a lower energy return.

    While it is true that we used valves 50 years ago the designers of Colosuss , the first computer used to decode German codes, did not delay the design of this computer because they were hoping for better technology. They just went ahead and did it without pinning their faith in new technologies. We have the solutions now however they are not acceptable, deemed to expensive or contrary to corporate interests. However for some uses heating there is no subsitute but another finite resource.

    “There is nothing unique in oil or gas or coal that will identify them as outside the general case that depletion leads to price increase, price increase leads to substitution, substitution leads to irrelevance for the nearly exhausted commodity.”

    And here you are dead wrong and is the basis of why you are so wrong in your thinking. Oil, gas and coal are all totally unique in their energy return ratio. There is no substitute that has a similar one. Why do you think we use them – because we like the color of them? We use them for one reason only and that is that they are high energy density, compact, easily stored, cheap and versatile energy resources. They are totally unique. The problem is that we view them as just another thing to use and this is where the problem lies.

  82. peterd
    November 29th, 2005 at 23:01 | #82

    Razor wrote:
    “Looks great with a baby seat, too!”
    Congrats, Razor, you’ve gone against the trend. A true individualist. Who’s the baby seat for?

  83. Andrew Reynolds
    November 30th, 2005 at 01:30 | #83

    Hmm, three large posts. Difficult to approach, except in order.
    The whole set of arguments above are Malthusian in nature. Have a look. Most of them are also targetting some form of government action; otherwise, what is this argument about?
    Keynesian economics and the New Deal style packages lasted until it was clearly demonstrated that they could not explain stagflation in the 1970’s. They coped well while there were no real economic constraints, as in economies devastated by war. Fortunately, wars on that scale are infrequent and will hopefully not be repeated.
    Wright may have ‘hit the nail on the head’ but I am not sure it was the right nail. In fact, I am sure it was not.
    Governments will only be able to ‘guide’ the market where they have more wisdom than the sum of the governed. It may happen one day, but it has not happened yet. Governments only get it right when it is blindingly obvious even to the simple minded. Even then they mostly fail.
    “The Market” would not have come up with nuclear power – at least not yet – it is a lot more expensive (after capital costs) and far more risky than almost any other method of generation. As for the concept, name a government that has come up with any concept, other than a silly one, and you win tonight’s star prize. Individuals come up with concepts. The same or other individuals then make them work. Others then buy the resulting products. That is a market.
    Just noticed your other comments to me. My response would be clear – you cannot blame a market for not functioning correctly when the government stops it doing so. The US government in the 1950’s was following some silly policies – I do not see how a market can be blamed for that.
    They are not ‘my’ fuel cell cars. I am not claiming that any of the current technologies are the way to go. It may be every one of them, it may be none of them, the point is that no-one, least of all a government, should be tooling around trying to mandate one of the solutions.
    Of course they did not delay the introduction of valve computers. All I was trying to say was that technology moves on, pushed by profit incentives and price signals, a good outcome was achieved. Corporations, like all businesses, stand or fall on their ability to change and adapt.
    Are you being deliberately obtuse on the energy return ratio? At the moment there is not substitute. 50 years ago there was no substitute for bakelite. Before telephony there was not substitute for hiring someone to deliver messages (other than walking them around yourself). 50,000 years ago there was no substitute for hunting and gathering. Battery technology is making great leaps. Fuel cells could fix it too. Fusion power could help. There may be large reserves of oil as yet undetected. The point is that no one knows; so trying to run around as chicken little did is senseless. Make sure the price signals are allowed to get through and the problem will be solved. There is no magic, voodoo or other difficulty here.
    If you want to make a difference, get out there and help the technology you think will do it. I will work with my favoured solution and may the best one win. The result will be better for everyone.
    If I have one question to ask before you critisise me it is this – what is your proposed solution? All I can see above is a lot of people speaking about how terrible the problem is. No solutions.

  84. November 30th, 2005 at 05:01 | #84

    Andrew Reynolds, we’re truly going around in circles, again. To every new fact which contradicts a previous assertion made by you, you simply respond that market signals will fix everything without the people as a whole needing to make any conscious decisions about the direction of their society. (No time to finish, now.)

  85. Terje Petersen
    November 30th, 2005 at 06:55 | #85

    Market signals are conscious decisions. And in any case some of my best thinking is done when I am asleep

  86. Terje Petersen
    November 30th, 2005 at 06:56 | #86

    I presume that James thinks that voting is more conscious than pricing.

  87. Ian Gould
    November 30th, 2005 at 08:24 | #87

    “Plenty of options exist. Solar and its derivatives (wind, wave, tidal etc) all have good chances and, with some serious work, could answer the problem. If a more immediate need is there, nuclear is already there.”

    Nuclear is hardly an “immediate” option. The technology may be mature but it typically takes ten years or more from the decision to build a nuclear plant to power generation.

    soem of that is due to regulatory delays but it is a very lare, complex task. If we attempted a massive increase in nuclear power – say to double it’s contribution to world electricity production – we’d probably need MORE than ten years lead tiem because there simply aren’t sufficent nuclear engineers and technicans in the world to design, construct and operate them.

    Hell, I’m not sure if there’s sufficient universities that teach the required subjects.

  88. Will De Vere
    November 30th, 2005 at 09:15 | #88

    The question of whether oil reserves are about to ‘peak’ and whether we should start to worry is obviously a very contentious one. If the Peak Panic People are on to something, the least we can do is start modelling scenarios for a world facing a genuine oil crisis, in the same way that the Pentagon used to model life in the suburbs after a variety of nuclear wars: good, bad, ugly, terminal.

    How quickly can we introduce proper alternatives? What industries would make it through? How would rationing work? How many 4WD Crapwagens should be forcibly disabled by the Petrol Police without compensation?

    We might look at the kind of measures that were only resorted to in wartime. After the 1973-74 oil crisis, the American Bureau of Engraving and Printing produced an enormous stockpile of ration books for gas, which are presumably still languishing in warehouses.

    Whatever crystal ball the rock-oil afficionados are gazing into, a few million dollars worth of imaginative modelling might save us endless queuing and panic in 2015.

  89. November 30th, 2005 at 09:47 | #89

    Andrew – “Are you being deliberately obtuse on the energy return ratio? At the moment there is not substitute.”

    No I am not. The energy return or EROI is a fixed physical quantity that relates to the resource in question. Consider the situation now assuming a 20:1 EROI of oil. We now expend one unit of energy to leverage 20 units of energy that goes to do work. We make things and drive around etc. All these activities have an energy requirement of 1 unit. Consider now that we have only a resource that has a 5:1 EROI. If we are to continue the present activites that requires 20 units of energy we now have to expend 4 units of energy to obtain the energy to power the same amount of work that 1 unit of oil sustained. The problem is that where is that extra 3 units of energy to come from? Either we find the extra energy or we have to scale back our activities to a level that 5 units of energy can sustain or find ways to make 5 units do the same job. This is the EROI problem in a nutshell. We have constructed this economy based on a high EROI resource. There is nothing similar that combines oil’s versatility and energy density.

    The way forward is first a massive energy efficiency drive. This makes industry do more with less energy. With lower EROI power sources we cannot afford to waste as much as we do. Second is to redesign the power grid to incorporate mostly renewable power with PHEVs and BEVs as smart storage nodes in the power grid and incorporating household and industry local power generation. Thirdly is the realisation that perhaps a continually growing market economy is not sustainable and we may have to change to a different system.

    None of these options is particularly palatable to our global western market economies and I doubt that this will happen. I think that it will take a crisis.

  90. Andrew Reynolds
    November 30th, 2005 at 11:34 | #90

    I agree with you – there is nothing currently – but that may be because we have had no need of one.
    The problem you have identified could be solved in any one of several ways – the one you have suggested is probably the best given current technology. The others would be to increase the total amount of energy available – nuclear (either fission or fusion if the tokamaks work) or any of the other options identified above. We could also work on ways to improve the ERIO of our existing processes. I think that the widespread availability of fossil fuels has meant that we had no need of alternatives, so we did not use or develop them. As the fossil fuels exhaust (pardon the pun) over whatever number of decades we have left the price will rise, the substitutes will attract attention, get developed and the problem will be solved. I repeat, we, as a species, have been through this many times before and there is no reason to expect that this time will be different.

  91. November 30th, 2005 at 12:10 | #91

    I have the same problems with your reply to me that James has identified. When I point out that governments have intervened to allocate (for example) oil and affect the distribution of income between producers and consumers, you say: “leave it to the market”. They intervened precisely to solve problems of distribution of income that the market, by itself, was unable to solve. This is why governments intervene. BTW, I did not claim that “governments invent concepts”. All I suggest is that governments provide resources (money, through research grants) to allow individuals (or research groups) to come up with concepts. Governments will probably have to provide much or even most of the extra funding required to develop alternatives to fossil fuels.

  92. Will De Vere
    November 30th, 2005 at 12:13 | #92

    Wasn’t this whole debate originally about the immediate future of oil rather than fossil fuels generally? I’m quite prepared to believe that our coal will last forever (if we can continue to tolerate using the stuff). In fact, there is so much coal, gas, sunlight and uranium that the wondrous new dawn of fusion power – a technology that I was last starry-eyed about when I was 17 – might never be needed or economical. Fusion reactors will be astronomically expensive (not a pun) and probably as temperamental as prima donnas: solar cells are already here.

    The long-term energy future probably isn’t worth worrying about: ‘Peak oil’ is.

  93. November 30th, 2005 at 12:27 | #93

    Andrew – you are correct in all these things however ALL of them require 20 year lead times. If we started today you could expect the new energy sources to be available in 15 years time. This is not counting the investment required. How do you convince people to invest money in new energy sources when in the words of most people in power there is plenty of oil for the forseeable future?

    You can improve the EROI of some resources however most are limited by basic physics and only incremental improvements are possible. Fusion has been 50 years away for the last 50 years so I do not hold much hope there.

    “As the fossil fuels exhaust (pardon the pun) over whatever number of decades we have left the price will rise, the substitutes will attract attention, get developed and the problem will be solved.”
    This is not correct becaust the substitutes do not have the same EROI that oil has no matter what the price of oil.

    “I repeat, we, as a species, have been through this many times before and there is no reason to expect that this time will be different.”

    When? Civilisations have collapsed before becuase of the same reasons. As a species we will survive but the survival of global market economies is not assured. And we have NEVER been in this situation before. Fossil fuels have allowed our population to grow to unprecedented levels in all history. There has never been a time when so many people are using so much of the Earths limited resources. You are TOTALLY WRONG to say that this has happened before.

  94. November 30th, 2005 at 12:58 | #94

    Andrew – “The others would be to increase the total amount of energy available – nuclear (either fission or fusion if the tokamaks work) or any of the other options identified above.”
    (I pressed submit prematurely.)

    The problem with this statement is that it ignores the FORM that the current energy takes. Oil derivatives are versatile, energy dense liquids that our current infrastructure is adapted to. The half-life of the current transport fleet is approx 10 years so it would require 20 years or more to replace the current oil based infrastructure with one that can use the energies forms that you mention.

    Left to market forces there could be a gap of 10 years or more when oil becomes scarce and expensive and when the alternatives come on stream in any numbers. Whithout starting early and aggressively by recognising that Peak Oil is a monumental problem that will affect us in our lifetimes there will be a limbo time that our civilisation may not survive very well.

  95. Andrew Reynolds
    November 30th, 2005 at 13:45 | #95

    That calculation assumes that the current oil remaining figure is correct – an assumption that has proved wrong time and again. 30 years ago we only had 30 years of oil left. We now have about 30 (plus or minus) years left.
    In any case, all that may need to be replaced is the engines driving that fleet, or the fuel delivery method, not the entire fleet itself. If the fleet is to be retired, then a half life of 10 years means that delivery would drop by 25% in 5 years, and 50% in 10 years, materially increasing the life of the oil left. Within 20 years, capacity would be down to at most 25% of current.
    There remains no need to panic and I have not seen anything yet that would justify strong government action.
    We have been in this situation before – many times. An original foundation of the chinese state was the vast forests they had. None left now – they solved the problem of a lack of trees by switching to cooking with woks. India had the same problem – they switched to cow dung and made the cow sacred. In Europe, at the dawn of the industrial revolution they found that animals could not supply enough power – ergo the swich to charcoal. Once the trees became too valuable they found coal to be a good substitute.
    If you want further examples I could bore you for hours with them, but I do not think that would have a point.
    The problem with government action is that it then means that government has to pick the winners – something they have a miserable track record of.

  96. November 30th, 2005 at 14:24 | #96

    Andrew – the oil figures are more likely to be optimistic as Middle East oil reserves have been exagerated for years. It is not a trivial problem to replace engines or the fuel. It is simplistic to say the delivery will drop 25% – who does not get deliveries? You?

    I did not say we should panic – just put in place changes before they are really necessary to avoid a gap.

    We have NEVER been in this situation. All the other time there was a fraction of present population. There are more people alive today than have ever lived in history. When the people that you mention needed to switch there was a more or equally energy dense substitute waiting for them. The situation facing us is totally unique in that our substitutes are less energy dense that what we are using now. I defy you to give an example where a civilisation switched from a very high EROI resource to a low EROI resource and survived intact.

  97. Andrew Reynolds
    November 30th, 2005 at 15:56 | #97

    How do you suggest we put the changes in place?

  98. Razor
    November 30th, 2005 at 16:20 | #98

    peterd – the baby seat is for the Razorette.

    Ender – when the supply of oil drops and the price rises i may consider switching the cars over to LPG. We have got shed loads of the stuff up North.

  99. November 30th, 2005 at 16:26 | #99

    Andrew – given a sane human race we should all realise the problem and work collectively together for a brighter cleaner future.

    This however I do not think will happen. I believe some sort of measures will be put in place after a major crisis of some sort.

    Unfortunately I think we will follow the path of market forces shaping the future until we come to the edge of the cliff. Oil resources will be pushed to their limit and substitutes found to prop up the status quo for as long as possible. Then we will fall off the cliff.

    The major problem is that unlike yourself, as you seem to be a person that will listen, there are millions of influential people that will not. As Mr Bush famously put “The American Way of Life is not Negotiable” Most of the measures I and others advocate can be seen by narrow minded people as attacks on their living standards and way of life and will be resisted to the end. That is why I think that it will take a crisis of some sort. “Why should I give up my 4WD just because some long haired greenie says the oil is running out and the Earth is warming” – that sort of thing. It will take a crisis or disaster.

    However ASPO Australia will still continue to advocate change and who knows someone might listen and act.

  100. Andrew Reynolds
    November 30th, 2005 at 19:10 | #100

    What do you think market forces are other than the collective efforts and intelligence of all with the effort’s worth being communicated by the price mechanism? That is what a market is and what I have been arguing for.

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