

The Imminent Crash Of Oil Supply: Be Afraid - malbs
http://www.countercurrents.org/arguimbau230410.htm

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javanix
_Look at this graph and be afraid. It does not come from Earth First. It does
not come from the Sierra Club. It was not drawn by Socialists or Nazis or
Osama Bin Laden or anyone from Goldman-Sachs. If you are a Republican Tea-
Partier, rest assured it does not come from a progressive Democrat. And vice
versa. It was drawn by the United States Department of Energy, and the United
States military's Joint Forces Command concurs with the overall picture._

I hate to break it to the authors, but just because something comes directly
from the government does not necessarily make it "correct" or even "free from
bias".

~~~
tokenadult
Here is a direct link to some of the governmental figures.

<http://www.eia.doe.gov/oiaf/ieo/liquid_fuels.html>

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mynameishere
The graph suggests strongly that in the worst case the price of oil will rise
in a slow and predictable fashion, readily allowing alternatives to be
introduced profitably, preventing the need for coercion.

~~~
aarontait
Unfortunately the graph doesn't take the geopolitics of the situation into
account. American oil reserves are long past their peak (about 40 years ago)
and we are largely dependent on foreign oil. If demand begins to outstrip
supply, what's stopping the Saudis from keeping their oil to themselves? Or
better yet, what's stopping them from selling it to China for a much higher
price than what American oil companies can bid.

~~~
ghshephard
Oil is fungible. As long as the product is sold into the market, it doesn't
matter who is purchasing/selling it. So, if Canada were to switch it's
contracts to China, then the people who were previously selling to China,
would then sell to the US.

The only possible concern would be an embargo, in which countries _refused_ to
sell to the US at any price. That would be problematic - but it isn't related
to Peak Oil and could occur at any time (and, in fact, has in the past) - see
<http://en.wikipedia.org/wiki/1973_oil_crisis>

~~~
david927
It's fungible until it becomes strategic.

~~~
jackowayed
No. It's always fungible. Crude oil is crude oil is crude oil.

Now, problems could still arise where many countries refuse to sell to us or
where China just buys a bunch of oil and starts a huge strategic petroleum
reserve that's mainly meant to give us more of a shortage (but that would get
expensive quickly, even for China.). But that has nothing to do with whether
oil is fungible.

Fungibility means that it makes no difference if Saudi Arabia decides they
won't sell to us and instead sells the 100B barrels/day that they would have
sold to us (made up number) to China, and because of that, China buys 100B
fewer barrels/day from Canada, who sells that 100B to us instead.

~~~
david927
_No. It's always fungible. Crude oil is crude oil is crude oil._

Well that’s what everyone thought up until the 1970’s, when America’s oil
fields went into rapid decline. Here’s how it went down:

US> Hello, Saudi Arabia? We would like oil.

SAUDI> No.

US> That's ok! As Jacko says, oil is fungible! Hello, UAE? Oil please.

UAE> No.

US> That's ok! As Jacko says, oil is fungible! Hello, Bahrain, Egypt, Iraq,
Kuwait?

> No.

US> Fungible! It's fungible! Hello, Libya, Qatar, Algeria, Syria, Tunisia?

> No.

And suddenly, there was oil panic. Because while oil is fungible, that's an
attribute of market dynamics. You have 18 suppliers? Great. Oil is fungible.
If one won't sell there are 17 more. But what happens if all 18 won't sell?

Without oil, some countries, like America and its military, can't function.
That makes it also strategic.

According your logic, the 1973 crisis wouldn't have happened. Yet it did. And
it could again. Oil is fungible until it's strategic. End of sentence.

------
idoh
Sort of interesting to see the peak oil meme spring up again and again for
over a decade and always be right around the corner.

Obviously at some point the production levels will gradually decline, but
people will either boost efficiency or substitute away from oil.

~~~
stretchwithme
Exactly. Prices rise when demand outstrips supply and people respond by
seeking alternatives and by doing more exploration.

We'll never truly run out of oil as long as there is a free market. It will
just keep getting more expensive.

The runup in oil prices that finally turned around in 2008 had nothing to do
with long term supply but was caused too much easy credit overheating the
economy.

~~~
wanderr
/We'll never truly run out of oil as long is there is a free market/

That is a completely absurd statement. Oil is a finite resource that cannot be
reused (at least when it is used for its main purpose). By definition it
/must/ run out someday. We can hope to keep pushing that date back, but not
forever.

~~~
erikpukinskis
<http://en.wikipedia.org/wiki/Asymptote>

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Sukotto
The crude traders don't seem that worried. Look at light sweet
[http://www.cmegroup.com/trading/energy/crude-oil/light-
sweet...](http://www.cmegroup.com/trading/energy/crude-oil/light-sweet-
crude.html) or Brent [http://www.cmegroup.com/trading/energy/crude-oil/brent-
crude...](http://www.cmegroup.com/trading/energy/crude-oil/brent-crude-oil-
last-day.html) If they seriously though there was going to be a major shortage
in the moderately near future (5~10 years) the December prices for 2012~2018
would be higher.

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brc
I would be a lot more supportive of this kind of thinking if it hadn't been
going on for more than 40 years.

Obviously there is a finite supply of oil, and it will start to run low sooner
or later. But I would question any forecaster's ability to make pinpoint
accurate judgements on this, given that so many have tried over the last 40
years, and so many have gotten it wrong.

In general, I think that it is very dangerous to pivot thinking around a
particular data point or graph. It ascribes a lot of importance to a set of
data, that, in summary view looks very concrete and real, but might be made up
of a lot of layers of uncertainty and plain old guesswork. I'm not suggesting
that this graph is necessarily wrong, but you'd have to be pretty idealistic
to believe any simplified piece of information about something has chaotic and
complicated as all of the conventional and unconvential oil still in the
ground, and able to be extracted, with timeframes and technologies thrown in.
There's not even any uncertainty bars in the information.

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davidmathers
I've decided to start flagging all posts with headlines that promote social
fear.

A nice side effect: they're usually written by ignorant people for ignorant
people and aren't worth reading.

~~~
brazzy
I see one person wallowing in ignorance here, and it's not the author of the
article or the one who posted it...

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whyme
Same old story. Same old BS. I've heard it for over ten years.

1\. Oil companies have a variety of categories for reporting reserves. 15+
years ago companies used to regularly report liberal reserve numbers for the
sake of stock price boosting. Since then the regulators have pushed companies
to be conservative in their "findings". The historical shift makes it look
worse than it is -which doesn't look bad to me (33 years of known resources is
so much frikin oil).... There are so many companies sitting on thousands of
drill opportunities and they simply don't have the upfront capital or even
people to work on them.

2\. Even if CONVENTIONAL Oil is harder to find there's plenty of Natural Gas
and Non-Conventional resources to move towards without it being a big deal.
This is how the market works - when the price of oil is too high due to supply
constraints then technology/infrastructure will shift. This seems fairly
normal to me - certainly not a panic situation. And quite frankly it's great
for our economy to make these shifts - more jobs, new jobs.

3\. > " _Although there are large deposits of "unconventional" oil such as the
Canadian tar sands, most are making only slow progress at development and
consume as much or more energy in their production as they can generate._ "

What a load of Malarky. There's absolutely no truth to this what so ever.
Canadian Oil Sands are the most poorly understood commodity on the market. It
doesn't consume more energy to produce - there's no substance in the article
for me to even bother counter stating (and all the environmental concerns,
relatively speaking, are just completely unfounded).

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incosta
These predictions come since as long ago as 30 or 40 years ago (check 'The End
of Oil' on Amazon: in 2004 when this book was printed, the 'end of oil' was
predicted (once again) to happen... in just few years! Did it?) The thing is
every time such prediction is made, new and new oil fields are discovered,
technology of oil extraction improved and these folks have to revise their
forecast again. Don't be scared:) It's all printed by folks who want to
speculate on oil prices.

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ajscherer
What good is being afraid going to do?

~~~
steve19
Exactly. If the Department of Energy were truly worried about running out of
oil they would be investing in nuclear power stations and a overhaul of the
power grid to prepare for the day that we all have to plug our cars into the
grid.

~~~
jerf
I was thinking the same thing when the author was hypothesizing about carbon
credits being a secret scheme to prepare us for peak oil; if our government
really was preparing us for this and really had our best interests at heart
there's many other things they would be doing. Telling us, for one. ("Keep
things secret so people don't panic" applies to acute crises, not gradual
crises perceivable decades in advance. If indeed it applies at all.)

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justinph
So, basically we should be looking at ways to reduce our dependency on oil? If
I buy a car today, I should buy one that gets really good mileage, because oil
is going to be more expensive in the future?

<sarcasm>This is just total news to me. </sarcasm>

~~~
crpatino
Not at all. You do not reduce your oil dependency by buying a car with good
mileage. You'd rather keep your gas guzzler and find a telecommuting job. Then
you take the money you saved from the car loan, and stop buying shit made in
china (by finding properly priced local substitutes). That's pretty much it.

Oh, yes... and forget about that vacation across Europe. Cheap air travel is
going to be an early casualty in this ride. :>

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steve19
Sigh. We have been hearing for decades that we have only a decade left.

~~~
lowkey
Not exactly, We have been hearing for A decade that global peak oil was
coming. The original Peak Oil Theory reference a peak in US oil production
which we hit somewhere around the 1970's - just as was predicted. (I guess you
are hoping if we ignore the problem long enough maybe it will go away?)

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hotmind
I think this will happen sooner rather than later, but man oh man is this
going to ruin people's day.

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jfi
This has the potential to cripple the economy and society (see Mad Max). There
is a great book that discusses Peak Oil and the potential crash we are facing
called "The Long Emergency" for anyone interested. I really hope we attempt to
hedge this looming problem proactively instead of waiting until we have gone
off the edge of the cliff. This has been discussed over and over for the past
30ish years though (if not longer) and many consider it a non-problem, but it
is worth planning for and diversifying away from oil, be very very bad if we
got this one wrong.

