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Why has oil scarcity stopped being a topic of discussion?


feargach

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Egypt's in trouble at the moment, and they actually have oil. Egypt calls in favours as credit crunch hits key imports

At the moment, we (as in western Europe) are in an unprecedented energy predicament. Many people refer to this predicament as "peak oil" as a sort of shorthand. Unfortunately, this is a little misleading. We know that global oil production will peak at some point, probably in a decade or so when Saudi Arabia's oil fields have depleted seriously. But the precise date of the peak is not all that economically relevant to us.

What matters is the cost of that oil to the consumer. Cost has leapt, and this is because of our increasing reliance on "tight oil", oil trapped in difficult-to-extract geologocal formations. Since about 1900, the growth of the industrialised world has been dependent on non-tight oil. Oil that you get from a big trapped pool under the ground. Saudi oil is mostly non-tight. With non-tight oil you just inject a tube into the ground and oil just gushes out. That's a pretty cheap way to get oil. You can sell it at $30 a barrel at a profit.

But tight oil, that needs a fracking process, or an oil-sands steaming process, needs much, much higher prices to be profitable.

This is causing all hell to break loose in Europe and the USA. Both regions depend a lot on oil to transport their populace from home to workplace. In China, the populace cycles and oil is chiefly used for the purposes of manufacturing and delivering goods. As a result, the west is close to recession while China is growing gangbusters. Here's just one example, with Chinese businessmen buying more cars than Europeans. Bear in mind that for over 75% of Chinese people, the cheapest car on the market costs more than 3 years wages. Yet they're still buying that many:

http://www.spiegel.de/international/business/china-overtakes-sluggish-europe-in-2012-car-sales-a-875567.html

This problem refuses to go away, but to judge by the posting online, you'd imagine the problems of expensive oil had evaporated.

As you can see from the following link, they haven't:

The Oil Drum | Our Energy Predicament in Charts
 
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B

birthday

Egypt's in trouble at the moment, and they actually have oil. Egypt calls in favours as credit crunch hits key imports

At the moment, we (as in western Europe) are in an unprecedented energy predicament. Many people refer to this predicament as "peak oil" as a sort of shorthand. Unfortunately, this is a little misleading. We know that global oil production will peak at some point, probably in a decade or so when Saudi Arabia's oil fields have depleted seriously. But the precise date of the peak is not all that economically relevant to us.

What matters is the cost of that oil to the consumer. Cost has leapt, and this is because of our increasing reliance on "tight oil", oil trapped in difficult-to-extract geologocal formations. Since about 1900, the growth of the industrialised world has been dependent on non-tight oil. Oil that you get from a big trapped pool under the ground. Saudi oil is mostly non-tight. With non-tight oil you just inject a tube into the ground and oil just gushes out. That's a pretty cheap way to get oil. You can sell it at $30 a barrel at a profit.

But tight oil, that needs a fracking process, or an oil-sands steaming process, needs much, much higher prices to be profitable.

This is causing all hell to break loose in Europe and the USA. Both regions depend a lot on oil to transport their populace from home to workplace. In China, the populace cycles and oil is chiefly used for the purposes of manufacturing and delivering goods. As a result, the west is close to recession while China is growing gangbusters.

This problem refuses to go away, but to judge by the posting online, you'd imagine the problems of expensive oil had evaporated.

As you can see from the following link, they haven't:

The Oil Drum | Our Energy Predicament in Charts
Interesting food for thought. I suppose other events have come to the fore but this issue is a real one and will hit all
of humanity sooner or later.
As a species we seem unable to think beyond the next year or two- I believe this has worsened in the materialist world.

I despise the traditional left and right on this issue. The right go into outright denial whereas the left seem to just ignore it and think that by borrowing our creating new money all our problems will go away.


Off the top of my head it is obvious that if we could slow population growth we might delay the onset and give ourselves (humanity, that is) more time to plan. However, few in power seem to have much interest.Try raising it with economists (most) and they just look as if you have taken awat their toys.

Most people do not want to hear and from experience I have found it a very useful topic to bring up if you are tired and want some guests to go home. It clears them our rapidly!
I expect a wave of the usual loons to descend any minute to derail this thread!
 

Analyzer

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Maybe because it is bad for consumer confidence, and interferes with people increasing their debt levels....

The comatose suburban high octane consumer must not be awakened to what is really going on in the long term. Give him his remote control, his electronic circuses, and give his missus Dundrum shopping Centre. Give them loads of irrelevant information.

And don't give them relevant information.

Ireland is a heavy consumer of hydrocarbons. The lifestyle, the weekends away, the commute, etc... all have their effect. It is easier do nothing than reduce this any further.
 
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truthisfree

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Because we are fed up with climate change groups which look like a front for oil companies yada yada yada.....so much BS to be ploughed through that I like a lot of my peers are fed up with the debate....the world will keep on turning on dirty oil, coal, gas whatever....and the people who make money from it will make money.....
 

benroe

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Its because the American leadership has persuaded their people that they will soon be self sufficient in natural gas(fracking), and that this gas will last them for forty years, the fact that they have to destroy their environment seems to be ok with them.
Also the largest crude oil reserve outside of Saudi Arabia (tar sands in Canada) is being de-sludged again with no regard to the incredible environmental catastrophe that will cause.
 

seabhcan

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This is causing all hell to break loose in Europe and the USA. Both regions depend a lot on oil to transport their populace from home to workplace. In China, the populace cycles and oil is chiefly used for the purposes of manufacturing and delivering goods. As a result, the west is close to recession while China is growing gangbusters.
Er... thats not the reason China is growing and Europe is in recession.
 

feargach

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Pat Gill

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Why has oil scarcity stopped being a topic of discussion?


Good question feargach, the answer of course is that is hasn't stopped being a topic of discussion.

We have simply begun to discuss the many implications instead.

Higher electricity, gas and petrol prices, increasing numbers of people falling into fuel poverty, tens of thousands of pre pay gas and electricity meters being installed throughout the country and throughout the socio-economic strata.

The recent banking crisis in Cyprus managed to give us a perfect but temporary illustration of the problem of the peak oil dynamic, how you ask ?

Wealthy people with lots of money in the bank trying to fund their normal everyday life under the restriction of zero electronic transactions and daily €100 ATM withdrawals is a perfect illustration of the peak oil dynamic, just as there are lots of hydrocarbons still left in the earth, the wealthy Cypriots had lots of money in the bank but the easy methods of access no longer existed.

The actual production numbers for conventional crude oil clearly show that we reached a plateau in 2005, the vastly increased oil prices resultant from that event has enabled both higher production cost conventional along with the various forms of unconventional/synthetic oil to reach the market, but reduce the oil price and these new supplies will peter out, which will of course force higher prices, allowing more of the expensively produced oil ..........

Should this thread survive for a few days someone will be along to point out that EXXON are presently drilling four exploratory wells off the south west coast, at a cost of $160 million, in an effort to prove out the elusive scent of oil in the Porcubine Basin uncovered decades ago.

I promise to be gentle :lol:

Meanwhile the only oil refinery in Ireland will probably close later this year because it cannot make a profit despite our high priced petrol and diesel.

Happy Easter.
 

wombat

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Meanwhile the only oil refinery in Ireland will probably close later this year because it cannot make a profit despite our high priced petrol and diesel.

Happy Easter.

I hadn't heard that, I thought the various upgrades meant it was going to continue.
The reason that oil scarcity is not a topic of discussion is because there are more immediate problems. Anyone working in industry is well aware of energy costs. At present they are taking the elephant eating approach to energy costs - one bite at a time.:lol:
 

feargach

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The point about China (and India and Brazil) hoovering up most of the new oil from the new non-traditional sources (tar sands, fracking etc) stands.

I assume Pat's familiar with Gail Tverberg's work on this, but for the rest of you, I hope you get into her analysis.

Here's one of her key points:

Globalization transfers consumption of limited oil supply from developed countries to developing countries.
If world oil supply isn’t growing by very much, and demand is growing rapidly in developing countries, oil to meet this rising demand must come from somewhere. The way this transfer takes place is through the mechanism of high oil prices. High oil prices are particularly a problem for major oil importing countries, such as the United States, many European countries, and Japan. Because oil is used in growing food and for commuting, a rise in oil price tends to lead to a cutback in discretionary spending, recession, and lower oil use in these countries.
You know the "cheap" Chinese-made clothes you're wearing? And the cheap Chinese computer you're reading this on (if you don't think it's cheap, have a look at what computers used to cost when they were manufactured in the West)?

Have a look at your commuting costs. That extra money you have to pay every time you fill up, compared to 15 years ago? It's gone to China (and India, and Brazil, but frankly I'm more offended by the non-democratic country benefiting from your suffering).

http://ourfiniteworld.com/2013/02/22/twelve-reasons-why-globalization-is-a-huge-problem/
 

Pat Gill

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I hadn't heard that, I thought the various upgrades meant it was going to continue.
The reason that oil scarcity is not a topic of discussion is because there are more immediate problems. Anyone working in industry is well aware of energy costs. At present they are taking the elephant eating approach to energy costs - one bite at a time.:lol:
The latest whisperings are that if Philips 66 don't find a buyer this year they will close it temporarily, temporarily closed refineries rarely reopen. Philips 66 are currently spending many billions upgrading their US refineries to enable these to be fed from the Canadian heavy oil / diluted bitumen sources.

http://www.politics.ie/forum/environment/207792-irelands-only-oil-refining-facility-risk.html
 

feargach

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The reason that oil scarcity is not a topic of discussion is because there are more immediate problems. Anyone working in industry is well aware of energy costs. At present they are taking the elephant eating approach to energy costs - one bite at a time.:lol:
I can buy that explanation, but somebody's got to take the long view, especially when the problem is right here, right now, not some long-distant issue.

There are major policy shifts that have to happen depending on where you expect oil scarcity to go.

If you think that oil scarcity is going to melt away, then the status quo is defensible.

If you think that oil scarcity is likely to stick around for a while, then Ireland has severe problems. We still have tens of thousands of families where the breadwinners need to drive 50 miles and more just to get to work.
 

wombat

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If you think that oil scarcity is likely to stick around for a while, then Ireland has severe problems. We still have tens of thousands of families where the breadwinners need to drive 50 miles and more just to get to work.
Its not so much a scarcity of oil as the rising cost of a finite resource that is the problem. Previously when oil prices rose, previously uneconomic fields became economic and the shortage was eased. What is different this time is that demand is continuing to rise so that when the new sources come on stream, the cost doesn't fall.
The chattering classes may not be concerned about oil price rises but those involved in industry are.
 

feargach

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Its not so much a scarcity of oil as the rising cost of a finite resource that is the problem.
You regard the two things as different? OK, I tend to view those things as essentially the same. No biggie.

Previously when oil prices rose, previously uneconomic fields became economic and the shortage was eased. What is different this time is that demand is continuing to rise so that when the new sources come on stream, the cost doesn't fall.
The chattering classes may not be concerned about oil price rises but those involved in industry are.
Well, exactly.

In a globalised world where the west has high labour costs and the average worker needs a car to get to work because people do not live within cycling distance of the workplace, it makes no business sense for manufacturing to take place in the West. It's inherently illogical to expect to be able to manufacture much competitively in the west.
 

feargach

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Peak oil has been doing the rounds for decades now. Like the greenhouse affect global warming climate change climate weirding is nothing but a silly scare.
Well peak conventional oil happened almost a decade ago. Peak cheap oil happened a long time ago.

How is this a "scare", exactly?

Oil is expensive. It has been expensive for a long time now and the real peak hasn't even happened yet.

It is a problem right this minute. The deniers' claim about climate change is that it has nothing to do with human activity.

I can't see what possible claim the oil scarcity deniers can possibly put forth. Sarah Palin said "drill, baby, drill!" and that's exactly what everyone did. Oil production is at or near all time highs, yet prices are still cripplingly high outside of China.

What, exactly, is there that you can deny?
 

riven

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Some reasons

Fossil fuels drive the water and food industries. Price rises in energy affect these industries and these prices rises are usually dealth with with focus on the food prices. Very few people make that connection.
Fossil fuels also drive electricity prices becuase most electricity is made from them. Again these are dealt with focusing on electricity....
Fossil fuels also drive logigistics industries.....
Fossil fuels also drive metals.....

etc etc
The reason is people rarely get to know how much fossil fuels and oil drive in our current economic climate and that reducing there use probably requires people to change their lifestyles like limited driving and resource use etc.

The book 'project sunshine' is a pretty good reference for getting an overview of how difficult the transition from fossil fuels will be and how other transitions in the past (eg wood to coal) took and what was required to bring these about. Power plays would also be a good reference but it is American centric.

Project Sunshine: How Science Can Use the Sun to Fuel and Feed the World: Amazon.co.uk: Tony Ryan, Steve McKevitt: Books
Power Plays: Energy Options in the Age of Peak Oil: Amazon.co.uk: Robert Rapier: Books
 

hmmm

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Because peak hysteria has passed, and oil demand is peaking and likely to fall in the medium term.
Oil demand could peak within five years | Nick Butler
It was always the case that as oil became too expensive, humanity would seek out alternative sources of energy - which has turned out to be the case. What the doomsters always forget is that once a problem becomes expensive enough, we have always found a way to deal with it.
 

Pat Gill

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The point about China (and India and Brazil) hoovering up most of the new oil from the new non-traditional sources (tar sands, fracking etc) stands.

I assume Pat's familiar with Gail Tverberg's work on this, but for the rest of you, I hope you get into her analysis.

Here's one of her key points:



You know the "cheap" Chinese-made clothes you're wearing? And the cheap Chinese computer you're reading this on (if you don't think it's cheap, have a look at what computers used to cost when they were manufactured in the West)?

Have a look at your commuting costs. That extra money you have to pay every time you fill up, compared to 15 years ago? It's gone to China (and India, and Brazil, but frankly I'm more offended by the non-democratic country benefiting from your suffering).

Twelve Reasons Why Globalization is a Huge Problem | Our Finite World
feargach,

A suggestion to read Gail Tverberg should probably come with an over 18's rating for many people who will read this thread and although she and I have occasionally butted heads over some things I would certainly recommend to anyone running a business that they should read her work from time to time, many of the titans of US business already do so. Her work is primarily focused on the US but a smart reader can seperate the main points and relate them to any economy.

A paragraph from her latest article will be of interest to anyone wondering why both unemployment and domestic economies do not seem to be responding to their medications.

If the price of energy of the type a particular manufacturer or service provider uses increases (say gasoline or diesel or natural gas or electricity), that manufacturer or service provider in the short term has no choice but to pay the increased price, because there is no substitute for energy of the right type. If the manufacturer or service provider tries to pass these higher costs on to its customers, there is likely to be a cutback in demand, leading to a need for layoffs. Alternatively, with longer lead time, the company may be able to find a way around the problem of increased costs, by using more automation, or by outsourcing production to a country where costs are cheaper. Any of these responses leads to reduced US employment and recessionary impacts.
Now that simple explanation allows us to clearly see many of the problems which are about to slap us in the face if we are not light on our feet and by we I mean the Irish government both permanent and temporary, there are already signs that the permanent government have glimpsed the future and have begun to respond.

On a general note though, this problem is far too important for ideology whether political or otherwise to be allowed to get in the way of providing solutions. Our present energy supply infrastructure is very far from being democratic.
 

wombat

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On a general note though, this problem is far too important for ideology whether political or otherwise to be allowed to get in the way of providing solutions. Our present energy supply infrastructure is very far from being democratic.
I have yet to see any signs that politicians will have any role in solving our energy problems. There are other threads discussing windpower so we should probably keep this one confined to oil shortages. We may have to consider confining oil use to the one area where we have no practicable alternatives which is transport and specifically, air travel. Oil is an incredibly convertable source of energy, mainly because it is easy to handle.
 

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