AuthorTopic: IMF: Do We Have a Peak Oil Problem?  (Read 1676 times)

Offline g

  • Golden Oxen
  • Contrarian
  • Master Chef
  • *
  • Posts: 12280
    • View Profile
IMF: Do We Have a Peak Oil Problem?
« on: November 14, 2012, 03:08:22 AM »

By Oil Price
Created 13 Nov 2012

Does the International Monetary Fund (IMF [1]) believe we have a peak oil [2] problem? The precise answer is that the IMF is currently studying how constraints in world oil supplies might affect economies around the world in two so-called working papers, "The Future of Oil: Geology versus Technology [3]" and "Oil and the World Economy: Some Possible Futures [4]."

We are admonished by the IMF that opinions expressed in working papers are "those of the author(s) and do not necessarily represent those of the IMF or IMF policy." But the fact that the organization has produced two papers on the subject this year gives some indication of how seriously it is taking the issue. One of the co-authors for both papers, Michael Kumhof, a senior researcher and deputy division chief for the fund, hasn't been keeping his concerns secret. In a presentation [5], he outlined his reasoning for why the price of oil would have to nearly double in real terms in order for oil production to increase the measly 0.9 percent per year projected by the U.S. Energy Information Administration between now and 2020.

Part of the problem is that we have already extracted the easy-to-get oil. Now comes the hard stuff: deepwater drilling, tar sands, arctic oil, and tight oil (often referred to erroneously as shale oil) which is produced by expensive hydraulic fracturing [6] or fracking, something that typically costs millions to perform on a single well.

The new model presented in "The Future of Oil" takes into account both geologic constraints and the effect of price changes on oil production. The model has proven much better at explaining trends in oil production and prices than conventional economic analysis which assumes no long-term geologic production constraints. Standard economic theory--in which oil supplies always increase in response to high prices--has been unable to explain the apparent [7] plateau in world oil production from 2005 onward in the face of record high oil prices.

Relevant Article: Oil is too Precious to be Used as Transportation Fuel [8]

http://feedproxy.google.com/~r/fso/~3/OgCPZk65lHM/imf-do-we-have-a-peak-oil-problem      :icon_study:

Offline Surly1

  • Master Chef
  • *****
  • Posts: 18654
    • View Profile
    • Doomstead Diner
Re: IMF: Do We Have a Peak Oil Problem?
« Reply #1 on: November 15, 2012, 02:10:28 PM »
Just posted on the DD FB page--

 Late to the party, but better late that never.And if you're keeping score at home, this is why we call it "Doomstead Diner."
Opponents in a long-running debate over when the world will run out of oil squared off Tuesday in a crowded room of scientists, reaching only one conclusion: The supply of fossil fuels is fixed and the world economy will eventually have to wean itself from oil.

The most dire and perhaps speculative forecast calls for global oil production to peak next year -- specifically on Thanksgiving.

Others say the end can't be accurately predicted, but that it is likely decades rather then centuries away, and that the consequences will be grave: huge inflation, global resource wars -- China vs. the United States was emphasized as a possibility -- and the end of civilization as we know it.

http://www.livescience.com/3754-oil-fuel-civilization.html

Other experts at the face-off, held here during a meeting of the American Geophysical Union, said there is nothing to worry about in the short term.

U.S. peaked already

The argument stretches back to a 1956 prediction by M. King Hubbert that oil production in the lower 48 U.S. states would peak in the early 1970s. He was right. The United States now imports nearly 60 percent of the oil it uses.

Kenneth Deffeyes, a Professor Emeritus at Princeton University, has taken Hubbert's logic a step further and predicts the world's oil production will top out late in 2005.

"It's Thanksgiving plus or minus three weeks," said Deffeyes, who grew up in the oil fields and was a researcher at Shell Oil for several years.

Deffeyes second book on the topic, "Beyond Oil: The View from Hubbert's Peak" (Hill and Wang) is due out in March. His crystal ball is full of complex formulas and, most scientists agree, numbers that are impossible to accurately pin down, such as the amount of oil in known fields and how much more will be found.

"This is not science," said Michael Lynch, a political scientist and energy consultant. "This is forecasting."

Lynch agrees there are problems with relying so heavily on oil, and he sees more price volatility ahead. But he argues that many smaller deposits will be found and they will add up to "a lot of oil" over time. He also faults the running-dry-soon predictions as being based not on geology, but on politics and economics: Oil production in various countries has flattened or fell at certain times for reasons having nothing to do with how much they could produce, Lynch says.

Further, Lynch contends, it is not possible to predict the discovery of new oil fields or the true size of existing in-ground reserves. He likens current oil forecasts to stock market prediction. Charts fit history well, he says, "but they're not predictive."

Alternatives?

Likewise, analyst Bill Fisher of the University of Texas at Austin sees plenty of oil over the next few decades. Fisher sees no reason to panic. He expects the world to gradually transition to an economy based on natural gas during the first half of this century, then to a hydrogen economy before 2100. He pointed out that estimates of oil reserves tend to grow over time, no matter who does the guessing.

The debate got more complex at this point.

Caltech physicist David Goodstein sees little hope for hydrogen, which he said requires fossil fuels in order to extract. And natural gas, like oil and coal and shale (another proposed alternative) are all finite, Goodstein argues.

"The oil will run out," he said. "The only question is when."

Goodstein puts little stock in nuclear fusion, which for decades has been proposed as the cousin of fission with unlimited potential. "Fusion and shale oil are the energy sources of the future, and they always will be," he quipped. Solar energy shows promise, he said, but "we haven't figured out how to use it."

So Goodstein takes a pragmatic approach. It doesn't matter so much when we run out, he argues, but what we do about it.

Global trap

Goodstein, author of the book "Out of Gas: The End of the Age of Oil" (W.W. Norton & Company) sees a looming world crisis that could fuel war and bring society to its knees.

"We have created a trap for ourselves," Goodstein said.

The United States has so far avoided serious consequences from the trap by relying on imports. The country uses about 7 billion of the 30 billion barrels of oil produced annually around the globe. And it makes us rich. Oil consumption equals standard of living, experts agree.

Meanwhile, other countries are beginning to clamor for oil at unprecedented rates, and therein lies the recipe for potential disaster.

China uses a comparatively modest 1.5 billion barrels a year (perhaps 2.4 billion this year) according to some estimates. India consumes less. Both countries' economies are becoming increasingly dependent on oil, however. China's consumption is expected to grow 7.5 percent per year, and India's 5.5 percent, according to the Institute for the Analysis of Global Security.

By 2060, oil production will have to triple just to meet global population growth and maintain current standards of living, said Stanford University geophysicist Amos Nur.

Yet China's own production has been flat since the 1980s and it now imports 40 percent of what it needs.

'When do we panic?'

"What matters in the short term is, when do we panic?" Nur said. "In my opinion, the point of panic has already taken place."

It's a behind-the-scenes sort of panic. The two largest economies on Earth -- China and the United States -- have already incorporated the finite nature of oil into their national security policies, Nur argues, citing policy statements from both governments reflecting the need to secure stability in oil-producing countries and a free flow of the resource. The war in Iraq, a country second only to politically unstable Saudi Arabia in oil reserves, is another clue, he said.

"There is a huge conflict that might be emerging," Nur said.

Some of the fine points of the various presentations were argued, even resulting in one shouting match over how much oil is in Saudi Arabia. But none of the roughly 500 scientists in the room voiced disagreement with Nur's view of the potential for war.

If the world is sliding toward global conflict over oil, the skids may be pretty well greased, politically speaking.

Governments do not have the political will to prepare for the end of oil, says Goodstein, the Caltech physicist.

"Civilization as we know it will come to an end sometime this century, when the fuel runs out," Goodstein said, adding that "I certainly hope my prediction is wrong."

"...reprehensible lying communist..."

Offline Petty Tyrant

  • Cannot be Saved
  • Sous Chef
  • *
  • Posts: 4573
    • View Profile
Re: IMF: Do We Have a Peak Oil Problem?
« Reply #2 on: November 15, 2012, 05:41:35 PM »
It seems there they are making their predictions long before 2005, I think we have more up to date predictions now.
ELEVATE YOUR GAME

Offline WHD

  • Administrator
  • Sous Chef
  • *****
  • Posts: 3177
    • View Profile
Re: IMF: Do We Have a Peak Oil Problem?
« Reply #3 on: November 15, 2012, 06:01:13 PM »
Quote
Late to the party, but better late that never

I see a continued cluelessness about the connection between fuel extraction and fiat currency. They all assume were going to go into the arctic and Greenland, just like we did everywhere else but Antarctica. They don't anticipate global geopolitical mayhem seriously enough. Debt repudiation, etc. Climate Change. If money isn't flowing, neither is oil. The question for me isn't how much more can we extract, how are we going to undo the mess we've made without making the earth uninhabitable? Even if we, by some miracle, got a free ride en masse off this planet, would it be honorable to leave it this way?

Offline monsta666

  • Global Moderator
  • Sous Chef
  • *****
  • Posts: 1547
    • View Profile
Re: IMF: Do We Have a Peak Oil Problem?
« Reply #4 on: November 15, 2012, 06:45:02 PM »
Quote
Late to the party, but better late that never

I see a continued cluelessness about the connection between fuel extraction and fiat currency. They all assume were going to go into the arctic and Greenland, just like we did everywhere else but Antarctica. They don't anticipate global geopolitical mayhem seriously enough. Debt repudiation, etc. Climate Change. If money isn't flowing, neither is oil. The question for me isn't how much more can we extract, how are we going to undo the mess we've made without making the earth uninhabitable? Even if we, by some miracle, got a free ride en masse off this planet, would it be honorable to leave it this way?

It is one reason why I remain firmly in the doomer camp. The connection between fuel extraction and the economy while intuitively obvious is a concept that remains elusive to most government and economic bodies. If they cannot acknowledge this what hope is there of them ever finding a solution? I think part of the silence may lie in that fact there is no solution only negative outcomes.

As for the dismal of geopolitical/economic mayhem I think the lack of talk is a combination of self censorship, normal censorship and normalcy bias. Many of these renowned institutions have reputations to maintain and holding extreme fringe views will adversely effect their social standing so socially/economic palatable conclusions must be given to maintain good relations and appear reputable to the general public who still, for the most part, widely believe in the current paradigm. This need to maintain a certain acceptable narrative is strong even before we consider the monied interests who pay such institutions to tow the party line. Then there is just the natural tendency of people projecting what happened in the recent past well into enternity. Examples of this can be seen in real estate prices before the crash, the growth of China and more recent the fracking revolution. Extrapolating recent trends into the distant future is a nasty habit people make and it will trip people yet again.

I do think we will burn as much as we can, as fast as we can so long as the world economy holds if things go into collapse then it becomes more unpredictable because while there will be less oil consumption there will be more consumption of other substitutes which may have equally dire consequences on the environment. Is it better to burn all the forests and animals quickly or to burn oil? That is the question I sometimes wonder about. I do not think there will be a serious attempt to undo the damage made certainly not when we are in collapse mode.

Offline g

  • Golden Oxen
  • Contrarian
  • Master Chef
  • *
  • Posts: 12280
    • View Profile
Re: IMF: Do We Have a Peak Oil Problem? :A Shift in the Global Energy Balance
« Reply #5 on: November 29, 2012, 03:17:38 AM »
Another gent that is certain we are swimming in oil!  :icon_scratch: :icon_scratch:


A Shift in the Global Energy Balance
By JR Nyquist
Created 29 Nov 2012

Big changes are already underway in the global energy sector. And some of these changes are contrary to previous expectations. What we now realize, once again, is that capitalism works. Capitalism has always solved our most basic problems. Even now it is solving our energy problem.

Four years ago Russia was the rising powerhouse of global energy production. Marshall I. Goldman’s 2008 book on Russia was titled Petrostate: Putin, Power and the New Russia [1]. As Goldman explained, “Russia … finds itself in a newly assertive, even dominant, international position. Its emergence as a new super energy power overlaps with the weakening of the United States as we have squandered our … resources in Iraq.” But Russia’s energy sector has always been a state-manipulated behemoth with serious problems of its own.

Some in Russia are worried about declining Russian production and rising North American energy production, along with rising American energy efficiency. In a Nov. 21 Moscow Times piece titled “What the U.S. Oil Revolution Means for Russia” [2] Chris Weafer wrote, “The expected growth in U.S. oil and gas supply is the most serious concern for Russia and other leading energy exporters.” According to Weafer, the U.S. demand for imported oil is already falling, and is expected to fall to 10 million barrels per day by the end of next year. He also sites a report of the International Energy Agency, World Energy Outlook 2012 [3].

In a recap of the report on the International Energy Agency Website [4], we read: “The global energy map is changing in a dramatic fashion….” According to IEA Executive Director Maria van der Hoeven, “North America is at the forefront of a sweeping transformation in oil and gas production that will affect all regions of the world….” The World Energy Outlook report “finds that the extraordinary growth in oil and natural gas output in the United States will mean a sea-change in global energy flows.”

According to the IEA report, the United States will become “nearly self-sufficient in energy” by 2020, and will become a net exporter of natural gas. Even more surprising, North America will emerge as a net oil exporter, “accelerating [a] switch in direction of international oil trade, with almost 90% of Middle Eastern oil exports being drawn to Asia by 2035.”

The question may be asked: Are these projections part of some bizarre fantasy?

http://feedproxy.google.com/~r/fso/~3/TUCMnbbPf8M/a-shift-in-the-global-energy-balance  :icon_study: :icon_scratch:

 

Related Topics

  Subject / Started by Replies Last post
1 Replies
5939 Views
Last post August 07, 2013, 11:48:42 PM
by RE
1 Replies
1386 Views
Last post September 21, 2015, 06:11:46 AM
by MKing
0 Replies
599 Views
Last post June 22, 2016, 10:54:43 PM
by Guest Blogger