Peak Oil Is Suddenly Upon Us
bloomberg.com
bloomberg.com
That's not what peak oil means. Peak oil is exactly the opposite: when demand for cheap oil outstrips supply.
In this article they're talking about there being more supply than demand: exactly the opposite of peak oil.
But, yeah, I guess if they redefine peak oil to mean what they want it to mean, they have a point.
Update:
I've thought about it some more, and I realized that what they describe is peak oil. It's not that the definition of peak oil has changed, but what counts as "cheap" has changed.
So there are really two ways to achieve peak oil.
The first way is for the definition of "cheap oil" to stay the same, but the supply of oil at that price level to permanently drop below the demand for oil at that price level.
The second way is for the definition of "cheap oil" to drop while supply at the previous price level stays the same.
The fact that "cheap oil" may be redefined shows that "peak oil" is a flexible concept, not something etched in stone.
When the price at which oil seems "cheap" rises, then the supply could still be there, and when that price falls then it's no surprise there's not as much of it any more.
Or maybe I'm confused again? What do you think?
"We don't need as much oil anymore because of a worldwide pandemic" is certainly an interesting development but we don't just get to call it "peak oil" so that people who were wrong 15 years ago can suddenly feel vindicated.
"It is often confused with oil depletion; however, whereas depletion refers to a period of falling reserves and supply, peak oil refers to the point of maximum production."
And while it may not be 15 years ago, some of earliest edits to Peak Oil on Wikipedia from 2007 state:
>the core of peak oil theory: peak oil does not mean that we will run out of oil, or even that we will cease to make major oil discoveries, but rather that we will be unable to maintain current levels of oil production.
https://en.wikipedia.org/w/index.php?title=Peak_oil&diff=992...
If you agree with pc86, this is what the problem is: "It is often confused with oil depletion; however, whereas depletion refers to a period of falling reserves and supply, peak oil refers to the point of maximum production."
We need to come to an agreement on the word peak oil? I'd rather use a written source, like the Wikipedia article mentioned way up this thread.
What is instead happening is that demand for oil has peaked before supply for oil has peaked. This is the completely opposite situation as the scenario envisioned by Peak Oil. All of those plans you would have been making for Peak Oil are now useless, especially if you are an oil supplier.
Demand for oil at the old price level peaked, but I bet if you sold oil for 1/10th or 1/100th of the price, there'd be plenty of demand for it.
So what's really changed is the price that people were willing to pay for oil. The demand is still high, but the price people are willing to pay for it is lower than before.
Supply and demand curves describe the supply and demand at given prices.
We thought the number of units of oil supplied was going to eventually permanently fall primarily from the supply curve shifting up and to the left.
But then the fracking revolution happened, and it looked like maybe introduction of artificial measures to shift the supply curve upwards (carbon taxes) might be required-- to purposely reach peak oil.
But now we have this situation where instead the demand curve has shifted rightwards instead... Permanently? Temporarily? Who knows.
No
> "Peak oil is the year when the maximum rate of extraction of petroleum is reached, after which it is expected to enter terminal decline."
The maximum rate possible, was not reached. There has been a voluntary reduction in rate. This is not in dispute.
The graph suggests a terminal decline in demand, for which you could say there is some form of an expectation (for the most optimistic? viewer), but the prefix condition was not met. Peak oil is not an statement about economics, but about practical conditions that have an economic effect. Re-interpretations withstanding, as mentioned, history has an inherent possibility of increased production in the future which also fails both conditions.
There is no coherent interpretation that fits, at this time.
History will tell if this was really the "maximum rate" that humanity ever reached. As it will the terminal part of the decline. And maybe this was a local maximum. The article seems to want to predict that this was the global maximum. For now we can't prove either. Even if someone else in another article (like has happened before) predicts peak oil because there are no more known deposits to tap, it doesn't mean it's a global max. New deposits have been found after and were tapped while others hadn't run out yet and it turned out to be a local max.
Why we reached the max is left open though. Maybe we reached the max now because this is the point at which demand never goes back up to previous levels, who knows. Still meats the definition.
Edited for spelling.
"Peak Oil" theory is about running out of oil supply. With all the fracking oil sources now available to tap in the US at relatively short notice, the world of oil is very different now. OPEC used to be able to control supply, demand was inelastic, and thus they could control the price. Fracking is expensive, but you can produce a huge amount of oil by just spending more $/barrel to get it out of the ground. A lot of the oil is owned privately in west Texas and will be available for extraction for the foreseeable future. For the first time since the 1970's(maybe earlier/never?) oil pricing will closely follow classic supply and demand curves.
Another interesting thing is that the US is now producing more oil than it is consuming. It will probably be a net exporter going forward. This changes the realpolitik view of the Middle East. The US could definitely get the hell out of there militarily and just keep a lookout for nuclear weapons production projects (or even just leave that to the Israelis who we already massively support). This is a huge deal that I don't see discussed at all.
Physics has hard limits and the rate of crude accumulating naturally is far below extraction. Besides the oceans have enough acidity and mercury already, they certainly don't need more.
Edit: there not they're
A major reason of the ability for the US to do this is energy self sufficiency.
https://www.amazon.com/dp/0062913689/ref=cm_sw_r_cp_awdb_imm...
In fact the US is “net” self sufficient: the same issues (plus differing grades and the geography of shipping) cause the US to simultaneously import and export. Driving actual imports to zero would be more expensive.
Finally, fracking appears to “spoil” the wells: cheaper and faster but in the end you get less of the reserve than you could more conventionally. I say “appears” as this analysis has only surfaced recently (though I believe the big frackers knew this already)
This is incorrect. The oil that comes from fracking wells are stuck in the rocks because they have poor porosity. Conventionally this oil is not extractable on human timescales (less than millions of years).
I welcome citations to the contrary to update my geologic knowledge (PhD in Earth Science, 2010)
The military presence to protect oil supplies is not just to protect US supplies. Even before self sufficiency, the US did not import much oil from the middle east - 5x more came from Canada than all the Persian Gulf for example: https://www.eia.gov/tools/faqs/faq.php?id=727
The reason is to protect world supplies, not just US supplies. A cutoff in gulf supplies would have a huge impact on world oil prices and hence economies, and would also impact US oil prices since oil is a (mostly) fungible commodity. So there are still self-interest reasons to maintain a presence even if the country is self sufficient in oil.
The term “peak oil” didn’t always refer to demand. It started with the premise that the world’s supply of crude was finite. Eventually no matter how hard drillers tried, they wouldn’t be able to pull more oil out of the ground. A transportation crisis would ensue.
The peak oil hypothesis dominated economic thinking for decades. But it turned out that with fracking, deep-water drilling, and oil sands, there’s a lot more oil than we once thought. More recently, the idea of a demand-driven peak took hold. Petrostates fear it, environmentalists pray for it.
This is false. The hypothesis was not that there was a hard limit on rate of extraction, but that the economics of extraction would result int a production peak due to what was economically profitably extractable. Demand was always a part of the consideration, though the original papers and predictions didn't so much consider decreasing demand due to new alternatives.
On the other hand, a sentence that could be fixed by appending "in an economically feasible matter" to the end of it does not seem like a significant problem in a brief comment about what the term "peak oil" used to mean in an article that is all about a newer usage of it.
No, we haven't reached "peak oil" unless you redefine it differently than it's mostly been defined for decades.