Do you think that we have hit Peak Oil?

Seeing the number of threads on this subject today with the price of oil nearing $130 a barrel, I wanted to get a consensus of what people think. Has the world hit a peak in oil production? If we have reached a plateau, would you care to state your opinion on when you think world oil production will start to decline?

if it hasn't happened already, it will soon. I think demand is definitely outstripping supply right now. Time will tell. The signs don't look good.

Was supply grossly overestimated 8 years ago to be worthy of the price it saw then?

Is price currently correlated to supply, or futures markets speculation that is being used to hide money from the falling dollar?

In my opinion, supply exists, a lot of it is in places that will be very expensive to extract it. We need to get off of oil for many reasons. Rather than send huge platforms to the seabed or drill in the arctic, we should just get off the stuff.

But I don't think that current pricing has any connection whatsoever to peak oil. Oil pricing fluctuates now on potential Chinese demand, Nigerian pipeline issues, hurricane season, summer driving season, the dollar's strength, etc.

If something happened that would make the normal stock markets a more desirable place to be again, I'd bet serious money that the price of oil would fall $40.00 a barrel since so much of the inflated price is just the investors that are hiding there. Much like gold.

Was supply grossly overestimated 8 years ago to be worthy of the price it saw then?

Yes it was. There were a number of discoveries touting a future supply that just wasn't there. Two come to mind immediately, Kashagan in Kazakhstan and of course, the Caspian Sea, which we were hoping to build a pipeline to, but eight years ago, there was a pesky little government in Afghanistan called the Taliban blocking the way. The supply in both regions were found to be overestimated. Furthermore, Kashagan production has been delayed once again and may not come online until 2014.

Is price currently correlated to supply, or futures markets speculation that is being used to hide money from the falling dollar?

Both, actually. There's no doubt speculation occurs, as well as many of the other reasons you list for the price rise. But bringing up the picture of the oil market 8 years ago, you didn't have such wild fluctuations occur when a pipeline blew up or a hurricane hit. Supply does matter and we've been living in Flatland since 2005. Read this article, I believe it explains very well why flat world oil supply is the big factor:

http://www.energybulletin.net/44192.html

The oil industry is manipulating supply to drive profits up, and peak oil is their story to justify it. In 2000, the oil industry drove prices up and created rolling blackouts in California to give Bush an issue to use against Clinton. Enron was later exposed for its role in supply manipulation.

I don't know enough about peak oil numbers and science to know whether it's going to happen, is happening, or what, but I don't believe that oil prices now are the result of us reaching a peak and falling beyond it. We've been extracting oil for a century, using better techniques to get more oil from previously unreachable places. Under Clinton gas was just over a dollar a gallon. Even under the early days of Bush, it was under two dollars. This latest spike has come about too quickly for it to be the result of us reaching the top of a bell curve. The rise in prices and shortage of supply would be more gradual, taking place over decades, and even prolonged by new scientific advances. The back side of the bell curve would be more steep than the front, because of the increased and increasing need for oil, but even so, it would be more gradual than what we are seeing.

Peak oil may happen, and it may be happening now--I just haven't seen enough real science to know. But that's not what's behind the prices of oil now. Supply is being manipulated by people with corporate and political interests. They are driving prices up while the US president is unconcerned with preventing it. They are creating a fear that will cause people to let them drill in ANWR. They are trying to cover up tremendous blunders in Iraq, Iran, Saudi Arabia, and South America that has interrupted the commercial flow of oil. They are probably even trying to set us up for US military involvement in regions where we aren't stealing enough oil, or where the governments are less friendly--Iran, Africa, Venezuela, etc.

That's why I didn't like any of the choices. Peak oil is a logical assumption, and it makes sense to worry that it will happen, and that it is happening. It may be. But I have no idea whether that's a near future concern or some distant event, and I don't believe it's responsible for what's happening now. There are too many factors going into the world oil supply for our reaching the top of the bell curve to have such an immediate effect. Even if we reached it twenty years ago, the changes would be more gradual.

That's my theory. I wouldn't stake my life on it. Either way, I support breaking our dependence on oil.

"In 2000, the oil industry drove prices up and created rolling blackouts in California to give Bush an issue to use against Clinton. Enron was later exposed for its role in supply manipulation."

This might be a pedantic distinction, but I don't consider the "oil industry" to be responsible for what happened in California in 2000. Specifically, I don't consider Enron to have been part of the oil industry.

To me, the oil industry is made up of the people who explore for, drill for, pump, transport, refine, process, and sell oil and oil products. It is a dirty sweaty business that is focused on getting a physical product out of the ground and to factories and consumers.

Enron might have started as an energy company, but they morphed into some sort of demonic investment company that was focused purely on buying and selling energy that existed only on paper. To me, the evil of Enron isn't the evil of the oil industry, but is instead the evil of the financial industry.

What Enron did with energy that so shocked everybody in 2000, became standard practice in the mortgage and financial industry by 2005.

But there are a number of points you make that don't add up for me:

The oil industry is manipulating supply to drive profits up, and peak oil is their story to justify it.

I have yet to hear any oil company CEO use Peak Oil as a justification for why prices are so high. Why is it, if indeed it is their story to justify their high profits, that when Congress grilled Exxon/Mobil, Chevron, Conoco-Phillips, BP & Shell CEOs, none of them offered Peak Oil as the reason?

http://www.forbes.com/2005/11/09/raymond-exxon-senate-cx_gl_1109autofacescan05.html

Quite to the contrary, both Exxon/Mobil and Shell have spent millions of dollars on campaigns denying Peak Oil.

They are creating a fear that will cause people to let them drill in ANWR.

You really need to read up on what Peak Oil advocates are saying. Nobody who publicly addresses the immediacy of Peak Oil has ever advocated drilling in ANWR as a means of alleviating the situation. There is a Peak Oil Caucus in Congress comprised of both Republicans and Democrats. Their leader, Roscoe Bartlett, has publicly stated on multiple occasions his opposition to drilling in ANWR. And he's a conservative Republican.

Even if we reached it twenty years ago, the changes would be more gradual.

I'm not sure how gradual a change you're expecting. When supply remains flat, as it has been since 2005, http://www.energybulletin.net/44192.html prices rise as demand outstrips it. What happens then when supply declines? Look at what happened in 1973 and 1979. The supply shortfalls then were around 5%, but the price increase was in the neighborhood of 400%. http://en.wikipedia.org/wiki/1979_energy_crisis And that was from a politically motivated shortfall. Peak Oil may be exacerbated by political events & corporate malfeasance, but it cannot be alleviated since it is an intrinsically geological event. These primers might provide a better understanding.

http://www.energybulletin.net/primer.php
http://www.lifeaftertheoilcrash.net/Index.html

Basically what happens is that supply, PER DAY, is flat, while demand continues to increase, because of this, sharp spikes in prices over a very short period of time are expected, and so far that is what is happening. Indeed, gradual increases in prices was never predicted by people who studied peak oil, outside of the most optimistic "undulating plateau" people.

Also, this isn't an immediate event, indeed, this sharp rise in prices we've been seeing over the past few months means that the peak was probably reached a couple of years ago or so. So let's assume we are at peak now(as evidence suggests), that means that the downward slope is going to start sometime in the near future, probably within the next few years, that means even sharper increases in prices(from 5 dollars per barrel to 10-20 dollars per barrel within weeks). This will occur until such time that it simply isn't economical to pump the oil out of the ground, probably within 10 years, if that. Then the pumps stop, and are abandoned.

Then again, I'm just fishing for guesses, educated or not. Nobody really knows if we've hit peak until it's in the rearview mirror. Some guesses are better than others though:

The late Dr. M. King Hubbert, geophysicist, is well known as a world authority on the estimation of energy resources and on the prediction of their patterns of discovery and depletion.

He was probably the best known geophysicist in the world to the general public because of his startling prediction, first made public in 1949, that the fossil fuel era would be of very short duration. "Energy from Fossil Fuels, Science"

His prediction in 1956 that U.S.oil production would peak in about 1970 and decline thereafter was scoffed at then but his analysis has since proved to be remarkably accurate. See Nuclear Energy and the Fossil Fuels by M. King Hubbert, Chief Consultant (General Geology), Exploration and Production Research Division, Shell Development Company, Publication Number 95, Houston, Texas, June 1956, Presented before the Spring Meeting of the Southern District, American Petroleum Institute, Plaza Hotel, San Antonio, Texas, March 7-8-9, 1956.

http://www.hubbertpeak.com/Hubbert/

and just having run off the edge of the plateau.

But at SOME point it will run out, and the human race is run by
arrogant, selfish imbeciles if it doesn't start preparing for that
like yesterday, especially at today's rate of consumption and
population growth.

*In 1965, my grandfather, noting LBJ's "war on poverty" and the perils
of the "population explosion," commented that he wanted to start the
"War on Puberty" to rein in the "copulation explosion." As usual,
Washington didn't listen.........

I'm honestly not sure if we have hit it or if this is just another part of the cycle, but I think we're at the very least seeing the start.

what really bothers me is not the transportation issues- all that takes to fix is some strong national leadership to shift us back to public rail and buses.

what bothers me is the price of heating oil.

Distillates
by Tom Whipple

The evidence is mounting that the US might just encounter the first real crisis of the oil depletion age before the year is out. The crisis at first will be one of spiraling prices for diesel and heating oil that will cause considerable economic havoc, and then there may be actual shortages right here in the United States. Within the last three weeks the wholesale price of heating oil has moved up by nearly 70 cents a gallon and no end is in sight. Many observers are noting that what they call “a tight market for distillates” –- the industry’s term for diesel and heating oil – is the main factor driving up the price of crude and consequently gasoline.

The reasons for this surge in distillate prices are easy to understand. Conventional oil production, from which distillates are made, has been flat for the last three years while demand from Asia and the Middle East has been increasing rapidly. The trend into higher-mileage diesel-powered cars in Europe and other places, which has been underway for many years, is having a major impact on the demand for diesel. In some European countries, diesels now account for over 70 percent of new car registrations.

http://www.energybulletin.net/44435.html

from what I've read there appears to be an emerging consensus that '05 was it.

Even if it was true, it's really a red herring in the context of world oil production peaking. Obviously, oil can't abiotically reproduce at a rate to match global human consumption, so debating the origins of oil is really a moot point. Is there a whole glut of untapped oil in our mantle? Another moot point. Abiotic oil advocates never seem to take EROEI into account. How much oil is in the ground is ultimately irrelevant; how much oil can be produced is the real question in terms of the economic ramifications of Peak Oil.

and have been on the plateau until just recently and have just ran off the cliff.

I know the US hit Peak Oil in 1970. Is that what you're referring to? I have yet to see any study that shows the world hit peak in the 70's. Do you have any more detailed info on this claim?

Interesting coincidence, I believe Saudi Arabia hit what was considered an artificial peak around that time. They claim they will surpass that in 2009 by expanding their capacity to 12.5 million bpd. We'll see.

as I understand it, the US started importing around the 1970s and we were getting ready to hit worldwide peak oil soon- but the oil embargo crisis put a hold on the problem, and scientists predicted we would not see it again... for another 30 years.
http://www.endofsuburbia.com/

it's a mini-era, not an instant.

very good movie on peak oil and the larger impact
http://www.endofsuburbia.com/

I think it's misguided to think in terms of a "geological peak" versus some other kind of peak (and it leads to too many stupid arguments). Peak will always and necessarily be a result of combined geologic and economic factors.

And when people estimate recoverable reserves, the estimate is based on combined geological and economic factors, which is why the HL model works.

Obviously there is a lot of oil in the ground, even though it is a finite amount.

And obviously we could pump more of it at any given time if we were willing to throw every last dollar in the world at it to create a higher peak.

The effective peak happened a couple of years ago, because it was the end of the easy, most versatile, most economically-produced stuff. As it takes more energy to get and refine the current stuff, we are in effect getting less even if we technically produce more.

President Chimp and his band of criminals know this.

Now we will invade Iran to get their oil. But like junkie who is running around looking for a fix in all of the wrong places, it won't do any good. No damn good at all.