This comment is a choice example of how ideologues drape themselves in (what they call) science. Whether he was right or wrong, no fair person could read that Wikipedia bio and come away thinking that Thomas Gold was a "crank".
If there is radioactive material buried in the earth (there is), and there are geological structures that trap it (there are), then there will be underground deposits of helium (specifically Helium-4).
Other than the fact that the same rocks trapping helium can also trap natural gas, though, there is absolutely no further relation between the two. Why would there be? Helium is also found with deposits of radon gas, where no methane is present. BFD.
But it is made in big quantities by radioactive decay of elements inside the Earth. Whereupon most of it diffuses outward and escapes into space -- helium is a tiny, inert molecule which diffuses relatively easily even through many "solid" rocks. The only place it tends to pile up on the earth is inside relatively impermeable underground rock formations: The same ones that trap natural gas, and that often trap oil as well. That's the reason why helium and natural gas tend to be found together.
All of which is easily read at:
The first such oil crisis occurred in the 1859. Before the first U.S. oil well was drilled in Pennsylvania in 1859, petroleum supplies were limited to crude oil that oozed to the surface. An 1859 advertisement for Kier’s Rock Oil advised consumers to “hurry, before this wonderful product is depleted from Nature’s laboratory.”
In 1874, the state geologist of Pennsylvania, the United States leading oil-producing state and the location of the world's first commercial oil well, estimated that only enough oil remained to keep the nation’s kerosene lamps burning for four years.
Seven such "peak oil" shortage scares occurred before 1950.
These periodic "peak oil" crises lead to short-term spikes in the spot prices for crude.
As a consequence, the capital markets flood the oil and gas business with capital to develop high-cost reserves that had been considered uneconomic. The vast inflows of capital into the Athabasca oil sands in Canada are an example of this.
If this "peak oil crisis" coincides with an era of cheap capital, the inflows of capital into industries that are perceived to be either compliments (oil sands, oil shale) and/or substitutes for crude oil (wind, solar, biofuels) can be extremely large.
Inevitably, this overallocation of capital leads to: (1) vast new discoveries of hydrocarbons, and (2) the invention of new technologies to economically develop those reserves.
Because the oil and gas industry is opaque in terms of information flows, it takes several years for news of these developments to recycle back into the capital markets.
In point of fact it was not until 2007-2008 that news began to percolate about the vast shale gas discoveries in the United States -- even though the first such monster wells had been drilled in 2000-2001.
States such as Pennsylvania, where oil and gas records are not made publicly available for a 5-year "grace" period, exacerbate this problem. In contrast, most states post updates on new oil and gas wells on a daily basis.
New investments in oil and gas technology can even turn around mature basins that had been considered to be past their peak production.
For example, according to the United States EIA (see here: http://www.eia.doe.gov/steo and here: http://www.eia.doe.gov/emeu/steo/pub/gifs/Fig12.gif), U.S. crude oil production increased this year to 5.24 million BOE (barrels of oil equivalent) per day -- the first annual increase since 1991.
The net effect is that supply vastly overshoots demand. There is a delayed recognition that the increase in the industry-average R/P ratio (the ratio of reserves-in-the-ground to production-per-year) no longer justifies continued investment.
As a result, crude oil prices crash. Those ventures into higher-cost technologies that had been launched with the presumption of hindsight that a new era of permanently higher oil prices had dawned, are deemed uneconomic. Examples include: oil sands, oil shale, photovoltaic utility-scale power plants, biofuels, wind energy.
Capital flees the market.
As the global economy continues to grow and capital remains unallocated to E&P of hydrocarbons (Exploration and production), the industry-average R/P ratio begins to slowly contract. New technologies that could be used to discover and produce untapped hydrocarbon reserves (Methane Hydrates, in the US Gulf of Mexico, for instance) remain undeveloped.
The energy industry refocuses on decreasing costs, instead of increasing supply.
After another 25 years, the cycle repeats.
(There are of-course short-term supply shocks that can occur for geopolitical reasons, such as wars, climate change legislation, nationalization of mineral rights, armed piracy on ocean shipping lanes, etc...)
In view of this history, presupposing a impeding permanent shortfall in global hydrocarbon supplies is akin to prognosticating the end-of-the road for Moore's Law and a subsequent end to the IT industry.
New discoveries don't change that - you'd need more new discoveries each year than the year before (which is the opposite of what is actually happening). Oil sands don't change that - they don't just require more capital, but also more energy to use - and energy is exactly what you're trying to produce after all. Eventually we'll have to expend the equivalent 1 barrel of oil to mine and refine 2 barrels worth of oil sands.
Peak oil doesn't mean no more oil tomorrow. Oil production may well continue for a century or more - it will just keep decreasing, not increasing. When this starts happening is a matter of debates, research and numbers. There are strong indications that we are seeing it happen right now:
(look at the source - these are not made-up numbers)
The phrase "Peak Oil" has become much more than a statement that at some point in time the human production of oil will. For example, one of the primary boosters of the phrase was the website "Dieoff.org" which anticipates the death of most people on the planet. And you've demonstrated this yourself by jumping to the Hubbert curve...
The thing about a Hubbert curve is that it is base on regional data. Production in various regions has, rather roughly, indeed expand exponentially and then gone down exponentially. But where this behavior has been roughly seen, the exponential decline has happened because the particular sources have been replaced by cheaper sources elsewhere. Since this cannot happen on a world scale, there is every reason to expect world-scale production on existing fields to go down gradually rather than exponentially. Further, as the GP notes, more oil is being discovered even into the declining range.
This relatively slow decline will provide some impetus for alternative energy sources - it already has to an extent.
The world has quite a few problems but approach that our "Peak Oil" friends use for framing these problems is not useful.
The cheapest and most efficient sources have already been found. They're in the middle east, and many of them have recently reached the point where production is declining despite all technical efforts. And those efforts to sustain a very high production rate from a diminishing source mean that the decline could indeed become quite steep.
As for new discoveries, the problem is that they, too, are declining (and have done so for over 2 decades).
The reason that is bad is the same reason that demand for oil is inelastic. The cost of not consuming oil is very high.
If you don't care about the environment, there are even easier solutions; processes for making gas out of coal have been around since before world war 2.
The real point here is not when we run out of oil, but rather when it becomes too inconvenient -- too costly in other words. Even with new finds, oil is becoming a more and more inconvenient source of energy. The reason it remains attractive is because of the infrastructure surrounding it's production, transport and use.
Why can't oil be made synthetically? Say by genetically engineering bacteria etc. That being the case I don't see any limit to oil production
Basically, synthetically-made oil only makes sense only if the process involves an efficient way to turn a widely-available but inferior form of energy into oil. Basically, that's bio-ethanol: already being done, but not feasible at the scale it would take to satisfy all current demand for oil-
The two problems I see are scale and unwillingness.
On the one hand, the conventional wisdom say that the natural oil was made over millions and millions of years. Even if we manage to find a way to speed up nature 1000x we are in the thousands and thousands of years to regenerate the whole global reserve. At present consumption rates, know reserves will last less than 50 years. This means we would be better off developing alternate energies, reducing consumption, and reserving oil exclusively for strategic uses only (you cannot fly a plane without fossil fuels, but you can make your chairs of wood instead of plastic).
The other issue I see, and I belive there is no solution at all, is unwillingness from the politicians and the society in general to acknowledge the problem and do what needs to be done. Every child learns in the school that oil is a non renewable resource... and what we do? We consume more and more of the stuff every year. It is depressing to see the huge amount of utter garbage that gets made and sold out of oil, frivolous stuff, junk that nobody really loves or cares about...
Markets are slow to transfer information to economic actors when conditions change drastically. Lack of political organized response, we are in for very interesting times in the decades to come.
But those reserves are growing not shrinking over time. In the 1950s there was only 10 years of known reserves. We need to start worrying when the known reserves start getting smaller, rather than growing over time.
> Markets are slow to transfer information to economic actors when conditions change drastically
Hardly. Prices rise and fall in minutes when there's new information.
Also if the 20th century has taught us anything it's that we need to keep politicans as far away from resource development as possible,
Rebuild an artificial oil reserve of the size of our original natural oil reserve (at the late 19th century levels... regardless of the reserve was known or not), is not an achievable goal for the 21st century. We dont have the time to do the R&D and we dont have the resources to implement the project in the scale needed. Can we do the stuff, I think yes; but un a much lower scale and only for strategic applications that cannot use any other form of less concentrated energy. The rest of society will have to due without or find an alternative solution.
>Hardly. Prices rise and fall in minutes when there's new information.
That is precisely the problem! Variation within minutes does not produce a consistent strategy, it produces noise. We are guiding the future of ourselves and our children on sheer noise. Not an improvement over the shaman who reads the burned scraps of the dinner.
In peak oil circles, it is a widely held belief that 2005 is the year of Peak Oil (since global oil production has plateaued over the last 5 years or so). I do not believe it is the Peak Oil. I believe we are observing a peak oil, resulting from underinvestment from the Big Oil industry in the 90's, when it was so cheap to bother and they decided to "focus on developing existing reserves". Fortunately, you cannot just declare that you are now exploiting new reserves. It takes both material and human infrastructure that takes time to implement. Thus, demand exceeds supply and you see a barrel rise up to almost $150 USD. This triggers a catalyst to structural problems in finance sector and you end up in recession... unable to command the resources needed to upgrade your infrastructure.
So here's the interesting thing, our known reserves today are bigger than they were in the 19th century and paradoxically are getting bigger every year even though we are using more and more oil. Until this situation ends there's no need to waste resources developing an alternative energy source (assuming the sole reason for doing so is to mitigate running out of oil). We are essentially running into oil rather than out of it.
Higher oil prices automatically command resources and people to direct their attention to oil production. This is why we never run out of any resource, as soon as the price rises people move into the field (in order to get higher wages/returns) to solve the problem.
Yes, oil production will peak at some point is the too terribly distant future, but no, the pattern of decreased oil consumption won't be the same as the patter of increased oil consumption because the factors generating the decline won't be the same as the factors that generated rise.
I might be reading it wrong, but it seems to indicate that in 1991 7.4 million BOE were produced and in 2008 4,9 million BOE.
Is there perhaps a different source on that site that you can refer us to? Or are you factually incorrect?
U.S. oil output is benefiting from the addition of major deep-water fields, including BP's Thunder Horse, that are helping offset production declines onshore and in shallower Gulf waters. In many cases, these deep-water fields were discovered years ago but are only now coming on line, given the massive costs and technical challenges associated with them.
The combination of favorable factors should lift U.S. crude oil production to an average of 5.22 million barrels per day in 2009, up from 4.95 million barrels per day last year and the first annual increase since 1991, according to the U.S. Energy Information Administration.
1. Oil is not the only energy source. Sure, it is by far the best and most convenient source for transportation, but outside of transportation, almost all our power needs could be met by electricity. One can obtain electricity from many sources; Nuclear fission being the source I am most excited/hopeful about. Countries like France and Japan already meet almost all of their power needs with fission.
Also, many of the processes for extracting oil that are impractical if you use oil as the energy source to do the extraction, such as oil sands, become practical if you can use energy created by fission or coal or some other cheaper, more plentiful source.
2. oil demand is not inelastic. The automotive market of the last few years should make that clear. Sure, we'd all like giant luxury vehicles, but this is constrained by economics. Not only can we move from 12MPG SUVs to 50MPG compact hybrids, we can drive a lot less. Sure, I am going to drive to work every day; until it starts costing me more than I'm making, at which point I will obviously stop doing so. Oil demand is extremely elastic. I bet that when gas hits the equivalent of $10/gallon (meaning, in today's dollars) you will see the bottom 40-50% of the us population no longer driving.
Sure, I'm not going to be turning my servers off anytime soon, but that's mostly fission and coal, with some natural gas thrown in because California is weird and rich.
where I live, If I am willing to double commute time, I can use public transit. If you only make $10/hr, it doesn't take much of a price increase before taking the bus starts making sense.
I'm not saying it'll be pleasant (especially for the poor) I'm just saying that as the price of oil goes up, there will be less of it bought, if for no other reason than that there are many people who simply can not afford to pay much more than they are paying now. This effect dampens price spikes.
Look at the price history-- there is no 25 or 30 year cycle of crude oil crashes beyond the gap from 1979 to the mid-2000's. We can all confirm this for ourselves here:
You can see that the price stayed within a factor of 2 of its average price (around $20 in 2009 currency) for roughly 100 years. Furthermore, before World War I, coal was our primary energy source-- less than 20% of our global energy usage came from oil before 1920. To say that the oil industry has had the same drivers as it's changed from being just a source of kerosene to the primary world energy source is inaccurate.
Incidentally I do agree that "presupposing a [sic] impeding [sic] permanent shortfall in global hydrocarbon supplies" is likely to be a poor idea, but not for the reasons you state. I think it's a bad idea because the actual history of oil has been so unpredictable, so acyclic.
But I don't think anyone thinks there's infinite amount of oil in the ground, so a peak of some sort, at some time is predicted by everyone serious, including the US Department of Energy.
Now, the Hulbert curve only has it's shape because decaying deposits are replaced by less expensive deposits elsewhere. So if there actually is a decline in total deposits, it's logical to expect the decline to no longer be exponential but more gradual. Indeed, a lot of the increased US production is coming from the increased price but it's still limited by the total amount in the ground at any price.
By the way, Moore's law has broken down for processor speeds. It hasn't broken for the other components but without increased speed, more transistors aren't necessarily instantly usable. This, again, won't lead to instant Armageddon but it's problem, Intel can see it's a problem and is working on improved parallel processing - but we know there are serious limits to this. Ironically, huge but not necessarily faster processor are what's needed to do massive simulations of the human brain. But these won't necessarily sell another round of Windows upgrades (at least not tell the simulations work convincingly...)
Anyway, let's not make hysterical doom-sayers lead us to act like there will be no problems in the future.
Inevitably? All we have to do is spend money and we will find more oil? Forever?
People who said there was enough oil for four years were wrong. People who say there is a finite amount of oil are right.
There is a difference - we are burning through a finite amount of oil at increasing rates, once it's run out that's it. Moore's Observation could stop tomorrow with Intel saying "we can't fit any more transistors into a chip" yet there would still be room for optimising the transistor layout and CPU internal design, the temperature of operation and resulting clock speeds, multiple CPU arrangements, and software and peripherals. The IT industry depends on computers being useful to businesses, not on them having more transistor density in a chip.
What are you arguing - that the use of remaining oil reserves is difficult to predict, that it's impossible to predict or that it's useless to predict?
High prices are a signal to society that we need more of something. If/when oil prices rise it automatically moves people into the energy business in order to solve the high oil price problem.
The late economist Julian Simon has a terrific book about these issues: http://en.wikipedia.org/wiki/The_Ultimate_Resource
See also the "Conservation of Resources" section here: http://mises.org/rothbard/newlibertywhole.asp#p242
Scientific much? It seems a very broad generalization that there will always be a way out, just because it was the case before.
It's about peak cheap oil.
There are indeed specific conditions under which merging occurs, but in geology they are extremely rare. If abiogenic oil theory were true, it would predict abundant oil in Washington state (close, but not too close, to vulcanism) and zero oil in Texas (where there are no volcanoes). The facts are, of course, otherwise. The amount of naturally-occurring abiogenic oil is quite possibly non-zero, but clearly accounts for at most a tiny fraction of all naturally-occurring oil.
Even if abiogenic oil theory were true, we would still be experiencing peak oil. Assuming it were true, the earth would have been producing all our current global oil reserves over the course of billions of years, and our current rate of extraction would be depleting the reserves faster than abiogenic production could refill them. (Two arguments why abiogenic oil must be slow, even if it's significant: one, the annual rate of carbonate rock subduction is not sufficient to sustain the current annual rate of oil extraction, even with 100% conversion; two, the oil produced would have to go somewhere, e.g. break to the surface and feed an ecosystem of oil-digesting bacteria, if it were being produced at such a rapid rate.)
If this theory pans out, and as he says that oil is distributed all over the world; it means that oil gets MUCH cheaper and unstable regions can go F@#$ themselves, we'll just drill somewhere else.
So I really wouldn't get my hopes up for extraterrestrial oil at all, sad as that may be. On the other hand, minerals and metals most certainly exist outside of Earth, so...?
I meant if there is petroleum oil in Mars or Venus, it makes the abiogenic petroleum oil more possible be universal resources.
If there is petroleum oil in Mars or Venus. It make the abiogenic petroleum oil more possible be universal.