Has Peak Oil already happened?
New analysis pegs 2006 as highpoint of conventional crude production
The year 2006 may be remembered for civil strife in Iraq, the nuclear weapon testing threat by North Korea, and the genocide in Darfur, but now it appears that another world event was occurring at the same time—without headlines, but with far-reaching consequence for all nations.
That’s the year that the world’s conventional oil production likely reached its peak, the International Energy Agency (IEA) in Vienna, Austria, said Tuesday.
According to the 25-year forecast in the IEA's latest annual World Energy Outlook, the most likely scenario is for crude oil production to stay on a plateau at about 68 to 69 million barrels per day.
In this scenario, crude oil production "never regains its all-time peak of 70 million barrels per day reached in 2006," said IEA’s World Energy Outlook 2010.
http://news.nationalgeographic.com/news/energy/2010/11/101109-peak-oil-iea-world-energy-outlook/
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I'm not sure what to think of this. What are the social and/or economic implications if we've already passed the Peak Oil apex?
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Last edited Thu Dec 22, 2011, 04:17 PM - Edit history (1)
The 800-pound Peak Oil gorilla, though, is net exports. These can decline faster than actual oil production, and have the potential to drop to zero within the next few decades. That means that the international oil market could go completely dry, putting oil-importing nations at an enormous disadvantage. See http://en.wikipedia.org/wiki/Export_Land_Model for more information.
The social and economic implications depend on too many factors to make predictions possible. Some of those factors are:
How fast will both production and exports decline?
How will oil importers react as market supplies start to shrink? E.g. policies including sectoral rationing, resource wars, mercantilism etc.
How fast can transportation be electrified?
Will renewable liquid fuels be widely adopted and what will the consequences be?
How vulnerable is the global economy to rising oil prices, especially in the face of the ongoing financial catastrophe?
The opinions about the outcome range from the extreme fast-crash scenario popularized by people like Jay Hansen and Richard Duncan (http://dieoff.org/dieoffindex.html), through the slower "Catabolic Collapse" foreseen by John Michael Greer (http://thearchdruidreport.blogspot.com/2011/01/onset-of-catabolic-collapse.html) to the view held by the renewable energy devotees that we will develop renewables fast enough to avoid a crash.
I used to be in the fast-crash camp, but I now tend more toward Greer's view. I expect to see a cyclic descent into a permanent ever-deepening global depression - a stair-step descent driven by a combination of peak oil, climate change, economic/financial instability and global food supply problems. The social problems of such a development could obviously be enormous.
If you trust OPEC, then peak oil will happen around 2030
If you trust the Seven Sisters that ran ran OPEC's oil fields before the 1970s, then it is around 2010.
If you believe the Seven Sisters had reasons to over-estimate their oil reserved in those same fields, then 2005.
No one trusts OPEC's reserve numbers, all of them went up drastically in the 1980s for the simple reason OPEC set a member's export quota based on their oil reserves. For that reason every OPEC member had a reason to push up the numbers.
Thus more people trust the data the Seven Sisters had on those same fields, but the Seven Sisters had a problem, in the 1930s Mexico took over Mexican oil fields and only offered to pay what the Oil Companies were claiming was the value of their oil fields. Under normal accounting rules, any asset is kept at the "Lower of Cost or Market" (I know the banks are ignoring this rule right now, but we are talking the 1950s, 1960s and 1970s when SEC actually enforced the law as to following the "Lower of Cost or Market"
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Iran, did the same thing in 1954, just before we over threw the Government and made the Shah an absolute dictator of Iran.
Thus the Seven Sisters had great incentive to over-state the value of their assets, just in case another country did what Mexico and Iran had done. The Stock Market, and Anti-Trust Department of the Department of Justice and the SEC would NOT have liked such over-statements (We are talking about the 1960s) but I see all of them accepting it as a cost of doing business overseas.
Thus do you believe that the Seven Sisters were more afraid of a takeover of their overseas oil fields OR more afraid of the SEC, the Anti-trust section of the Department of Justice and Stock Market own regulations? If you believe the seven sisters were more afraid of the US Regulators, then they numbers are correct and peak should occur within a couple years of 2010. On the other hand if you believe Wall Street was more afraid of having to sell those same fields for the value of those fields as reported on their books, then those books value were over-stated and Peak Oil occurred around 2005.
Those are the Theories, and it looks more and more like not only is OPEC lying, so had the Seven Sisters.