News & Analysis
Peak Oil Bites the Dust?
What peak oil? Why an oil glut is ahead ... In May, less than a month after the blowout of the Deepwater Horizon oil rig in the Gulf of Mexico, a key milestone was achieved with little notice: Total U.S. supplies of petroleum and products refined from it (including the Strategic Petroleum Reserve) surpassed 1.8 billion barrels, reaching the highest level in the last 20 years. Since then the total has continued to edge upward, hitting 1.87 billion barrels in the week ended August 27, according to the Energy Information Administration. Despite the Iraq War and the resulting production disruptions, despite the moratorium on drilling in the Gulf, despite turmoil in Nigeria and ongoing cross-border transshipment quarrels in Central Asia and the multiple, repeated declarations that "peak oil" has arrived and supplies will inevitably dwindle, the United States has more petroleum on hand today than it has had since at least the beginning of the first Gulf War. – CNN
Dominant Social Theme: Please do not peer to closely at the man behind the curtain.
Free-Market Analysis: Here at The Daily Bell we continue to cheerfully cover the degeneration of the elite's dominant social themes. (See other story in today's Bell.) The 21st century's truth telling via the Internet and the endless ravel of the financial crisis has proven increasingly lethal to the attempts of various fear-based promotions in our view. As we continually monitor the waxing and waning of these promotional schemes (that is all we try to do, in fact), we are astonished by their growing lack of effectiveness.
Many are well aware of the foundering of the global warming meme, but the rationale for the Afghan war is in deep trouble along with the promotional arguments (narratives) that accompany it. Similarly, central banking is not held in high esteem, though it is one of the most important of the elite's promotions; and in our view the Federal Reserve's credibility especially has been badly tarnished. It is increasingly difficult in fact for the elite to argue that the command-and-control "capitalism" of modern regulatory democracy is in any way effective or even necessary.
One would think that questions about 9/11 would have subsided by now but in fact the questions only continue to grow on the Internet and show no signs of subsiding. The Tea Party movement in America has undermined the legitimacy of the two-party duopoly and people are actively seeking out (shudder) libertarian solutions.
The Keynesian meme that was supposed to provide intellectual cover for financial authoritarianism increasingly gives way to Misesian, individual Human Action. The European Union seems to be degenerating and now there is this – intimations of mortality for an especially pernicious promotion: Peak Oil. Here is the conclusion of the article excerpted above:
More than anything, though, the looming oil surplus calls into question the concept of peak oil, at least in the near future, along with the whole science of forecasting future oil supplies. Adam Brandt, a professor at Stanford's Department of Energy Resources Engineering, released a study last month examining the various models that have been used to predict the future of world oil supplies. "Data do not support assertions that any one model type is most useful for forecasting future oil production," Brandt concludes. "In fact, evidence suggests that existing models have fared poorly in predicting global oil production." (- CNN)
In fact, as we have long pointed out the entire premise of Peak Oil was flawed. It was rooted in the Malthusian pre-neo-classical perspective that trends (once observed) were not to be affected by the perceptions of those who composed them. In other words, according to Thomas Malthus, if one observed that population would eventually exceed the food supply, people themselves were assumed, like potted plants, to acquiesce to the trend without taking further action. They were supposed to starve, passively, along with their families.
Eventually, the classical perception of economics was superseded by neo-classical economics with the Austrian school's magnificent perception of marginal utility – the idea that prices were variable especially at the margin and only the market itself could determine these values. Marginal utility along with Adam Smith's concept of the Invisible Hand underpin (excuse the pun) the modern economic revolution started by the Austrians and sublimely expressed in Ludwig von Mises' opus Human Action.
Mises postulated that the progress of nations was actually the progress of individuals. There is nothing accomplished by the ritualistic recitations of group think. There is only the spontaneous Hayakian cooperation of individuals pursuing their own enlightened self-interest. Given these sentiments expressed so eloquently in the past 50 years, there are hardly any words in our admittedly sparse vocabularies to describe the condescension and ignorance of the Peak Oil meme.
The Malthusian idea that people will sit patiently "freezing in the dark" as Big Oil struggles unsuccessfully to cope with falling oil supplies was an obscene variant of past condescending interpretations of economics. It never made sense to us and we have stated it emphatically as opportunities have presented themselves. We have long pointed out that oil may indeed be abiotic, the result of natural processes deep below the earth's crust.
And we have also pointed out how Big Oil has funded Green environmental movements to ensure that much of the Western land-mass is now off-limits for drilling. The result is that drilling is done in third-world countries where the supply chain is extended and available for endless cost-elaborations and delivery-risk. It is also no coincidence in our view that off-shore drilling has become a popular alternative oil-drilling methodology.
It is not expensive to drill on land but to drill at sea and at depth is monumentally costly and dangerous. This sort of barrier-to-entry favors Big Oil considerably. Finally, all who wish to can go onto YouTube and see for themselves the various energy alternatives developed by clever entrepreneurs. Curiously these never seem to be reported on by the mainstream media, which is continually concerned with the false, fear-based promotion of "conservation" and reduced energy consumption.
Thus it is, we are delighted that the Peak Oil meme is now being questioned by such state media excrescences as CNN. We note once more as we have before that there is a growing trend in mainstream media to reset the boundaries of permissible conversation about the elite's various promotions. This is in line with our predictions that the elite itself will have to take "a step back" as the truth-telling of the Internet continually undermines long-running but increasingly unpersuasive themes.
There are many more non-elite than elite. If the many billions cannot be convincingly instructed that the current shape of society is predestined and necessary, then all the legislation in the world will not avail those who seek to dominate society through lies and wars. Once credibility has been mislaid, the law itself may be seen as increasingly illegitimate. And once this happens, the elite is exposed to a good deal of "blowback."
Conclusion: Promotions are most important to the elite, and the inability of the elite to convincingly implement them in the 21st century, if that is what is happening (and we argue this is so) has numerous ramifications from both an investment and real-world industrial standpoint. Most importantly, the larger generational, familial campaign of the elite to impose some sort of world governance is increasingly at risk. We have long predicted this and see no reason to revise our analysis. The crumbling of the monstrous, mainstream-media lie that is Peak Oil would be most gratifying.
Posted by Richard on 09/11/10 02:19 AM
Thankyou for referencing the above article.
Once again, the mainstream press has got it wrong. Unfortunately they've managed to con you into their game.
Peak Oil as a theory revolves around the production curves of oil fields as they are found. It has to do with how long it takes to explore, prove, develop, and deplete a new discovery. The original work was done concerning traditional oil fields located in the USA. To date, the theory has proven to be fairly reliable concerning most established fields around the world.
What Peak Oil does not address is the ability of new technology to access new reserves, overhaul existing wells, or increase throughput at established well heads. Also, it does not get involved in the relative costs of recovery. However, the same curvature is still expected to occur for each new find, regardless of the technology. In some cases, new technology may actualy increase the curve, resulting in a very sharp decline in the last days of a well.
Basicaly, when we look at costs, there is almost no oil being produced at 1960's costs, adjusted for inflation. Even if we were to open up certain land based deposits, they would still have a higher cost associated with them. Offshore wells cost somewhat more than land based ones, and deepwater wells cost even more. Some currently producing fields are not economical at todays prices. Some fields are being developed for future production, in anticipation of higher prices. Also, new experimental technology and techniqes are being pursued which will require even higher prices to be economical to use.
No, the world is not running out of oil any time soon. However, it has pretty much run out of cheap oil. So, there is no 'Peak Oil' crisis about to happen. It already has. The result is that we now have to pay a lot more for it. The problem is that most pundits have no idea of what exactly peak oil refers to. They fail to understand that total oil production can be increased even more, so long as the price is high enough to support the cost of production. Eventually we will have a true peak in global oil production, but that day is far off.
So where does this fit in with the elite memes? Simply, most people don't understand the oil industry at all. That makes it easy to scare them into thinking that the government needs more control to assure their cars will have gas in them. 'Create a problem, create panic, solve the problem, control the panic.' This abuse of a valid theoretical concept is typical of the BS that emenates from the halls of power.
The CNN article calls into question the meme, but again fails to understand what peak oil is really all about. Instead, they have gone even further off track and confused the in-storage ability of the USA with oil production ability. 20 some years ago, there wasn't much of a reserve at all. Today, there are enormous reserve facilities to allow for fluctuations in delivery of crude, and seasonal consumption of differing products. Factor in the Strategic Reserve, and there is a major difference in the capability of the system to store petroleum products.
Up until recently, the USA was running short of refining capacity. (It is now almost impossible to build a new refinery with all the green tape.) With the downturn in the economy, its normal that purchases of refined products dropped off somewhat. Oil prices had been spiked by elites and wall street, so it makes sense for companies to want to take delivery of less expensive oil while they can. Refineries can give their best prices when running close to full capacity, and they make the most money at that point as well. Given a desire to fill up the tanks on the input side of the refineries, and best pricing to push it through the system, and lots of storage after its refined, why would any exec of an oil company hold back on producing more product? Once the US economy gets back to pre-08 levels, that glut will slowly decline. It may take another five years to get back to crises levels, but we will. But the crisis will be an inability to refine enough product to meet demand. Remember to thank your local greenies in advance.
This is way too long already for a 'feedback' so I'll quit while most readers are still awake...
DB " I'm going to try and dig up an expert or two for you to interview about what peak oil really is. The geology kind of expert that is...
Reply from The Daily Bell
So we are conned by CNN? This site is specifically set up to analyze the mainstream media memes of the elite, but nonetheless we have fallen for a CNN promotion? What have we fallen for? Wait, we think we know. You would make the case that CNN is anti-Peak Oil and really in the pocket of Big Oil. That is the "con" we have fallen for.
Well, you are welcome to your conclusions and good luck with them. But the distinctions you make are your own, not the literature's. Any cursory look at Internet definitions of Peak Oil includes increasing scarcity of oil. But as the meme fails, the instinct is to rewrite it to make it conform to reality. When we began covering this misbegotten meme, many Peak Oilers would claim that Peak Oil was "here" or right around the corner. Peak Oil, like peace-on-earth, always seems to recede into the future.
It is not just wrongheaded. It is also part of a larger authoritarian, even fascist concept developed by Peak Oil inventor and technocrat M. King Hubbert, who believed that a better society could be built by the application of technology run by wise scientists.
Here's an excerpt from an article on Peak Oil and Hubbert:
"In 1933, Hubbert and Howard Scott formed an organization called Technocracy, Inc. Technocracy is derived from the Greek words 'techne meaning skill and 'kratos, meaning rule. Thus, it is government by skilled engineers, scientists and technicians as opposed to elected officials. It was opposed to all other forms of government, including communism, socialism and fascism, all of which function with a price-based economy.
"As founders of the organization and political movement called Technocracy, Inc., Hubbert and Scott also co-authored Technocracy Study Course in 1934. This book serves as the 'bible of Technocracy and is the root document to which most all modern technocratic thinking can be traced.
"Technocracy postulated that only scientists and engineers were capable of running a complex, technology-based society. Because technology, they reasoned, changed the social nature of societies, previous methods of government and economy were made obsolete. They disdained politicians and bureaucrats, who they viewed as incompetent. By utilizing the scientific method and scientific management techniques, Technocrats hoped to squeeze the massive inefficiencies out of running a society, thereby providing more benefits for all members of society while consuming less resources."
Click to view link
You are welcome to believe in Peak Oil. On every level we want no part of this manipulative and false fear-based promotion.
Posted by G on 09/11/10 03:35 AM
I recognize that for many months oil has been at near-record inventory levels, levels which sould at other times sent crude into the teens in $US terms. I wonder, however, whether the crude inventories are being held by financial buyers who reckon that oil-to-gold ratios are below recent levels. What is better, holding oil somewhat above an inventory-corrected fair value, or holding cash with a marginal cost of production of zero (which may soon equate to its eventual value of zero)? What am I missing?
Reply from The Daily Bell
From our point of view all is going to plan - though probably the pushback to Peak Oil, and to power elite promotions generally has played a part in the current reconfiguration of the dialogue, if that is what's happening. The oil companies made record profits by pushing up oil prices and the power elite itself was able to justify a massive further legislative push for a "green" economy, including serial Middle Eastern wars. Now it may be time for the fear-based promotion to subside for a while just as it did after the 1970s. This is because if you keep pushing the meme, people will begin to get angry and start to investigate it. It's like a steroid program. You have to give the body politic time to recover before you start with the next round ...
Posted by Gerard on 09/11/10 03:39 AM
Much as I enjoy the Daily Bell, I heartly disagree with you on peak Click to view linkom geologist working in the field,peak Oil is here..Pricing of Oil & energy (shale gas soon) are priced into the market about 6 months before retail pricing......Rethink your above conclusions 6 months from now.
Reply from The Daily Bell
How many times does the meme have to fail? We went through this in the 1970s and again in the 2000s. Even if Peak Oil does exist in some form, the conclusion that rationing and strict societal control of energy is necessary is a lie. We think the whole thing is a lie.
Posted by Nicole on 09/11/10 03:45 AM
Given how various geopolitical and regime uncertainty events and these very promotions you so eloquently talk about may yet have some strong effects on the prices at which energy is to be obtained, energy conservation/ efficiency is still a smart move for individuals and small businesses.
Currently already the measures to save an x amount of energy are cheaper to implement than it is to purchase or produce that same x amount of energy, regardless of which source/ fuel is used.
Though they may be rapidly degenerating, it looks to me like the global warming, peak oil, and similar memes will keep thrashing around for long enough before they run out of steam (forgive the bad pun) to manipulate end user energy prices through the roof.
In that case those who have set themselves up to be energy efficient and/or self-sufficient will save big, while everyone else will be driven to destitution.
I see a parallel here with fiat money vs. gold and silver, in which Big Mainstream Energy is like paper dollars,and decentralized, efficient energy production and usage is like the precious metals.
Just like one may prefer to end up holding a purse full of gold and silver coins, not a wad of toilet paper, what would you rather be hooked up to a few years from now, a "smart grid" at $5/kWh with engineered blackouts, or a super-efficient local system you have direct control over?
I hope I'm wrong about this scenario actually happening, and that the awakened part of the world reaches critical mass soon enough to send the PE reptiles cowering under a rock in the desert for a few thousand years at least.
But even then energy conservation is presently a winning proposition from a free-market economic perspective because it lowers costs. And thanks to the ever-creative and innovative human spirit, the conservation does not require any sacrifice of comfort or productivity from us.
Reply from The Daily Bell
Left to its own devices the free-market will produce sufficient energy for people's needs, and without societal rationing. This is denied by Green enthusiasts and Peak Oil proponents alike. Is oil increasingly scarce? Alternative energies will bring down the price of oil if the market is allowed to function. The idea that oil prices will "peak" and then stay at stratospheric levels is an economically illiterate one, given the vast size of the market and the available alternatives.
Posted by Richard on 09/11/10 04:13 AM
I am not a mouthpiece for the peak oil guys. I do believe in the concept of peak cheap oil, and that we are no longer going to have cheap oil. $50 oil is still not cheap. When it comes to the total global production, we may have seen the peak of conventional oil production. So what? Non-conventional resources are filling the void just fine. However, that doesn't excuse the articles upbeat interpretation of future oil availability.
"Part of that surplus comes from increased oil and gas production, particularly from ongoing production in the non-OPEC countries". Canada would be one of those countries, and some projects have been slowed down, even mothballed...
"(including the U.S., where a "shale gas boom" has created a natural-gas glut)." That is gas, not oil... Does your car run on natural gas?
"BP and China National Petroleum have signed a contract to jointly develop Rumaila." Guess where that oil is headed?
"Kazakhstan, home of the two largest oil finds in recent decades -- the super-giant Tengiz and Kashagan fields " is building more pipeline capacity heading east, to the vibrant markets of East Asia, rather than west" And where do you think the oil from there is going?
The article is simply too upbeat and optimistic. It makes the sheeple relax about where their oil is coming from, and in light of the BP incident, it helps to make sense of the stoppage of deep water drilling. That will help the elites control another sector of the oil economy.
As for Hubbert, he should have stuck to his rocks.
Click to view link
Click to view link -- some of your readers might like some background info...
Reply from The Daily Bell
"As for Hubbert, he should have stuck to his rocks."
Richard, he invented the concept of Peak Oil!
Posted by George Sign on 09/11/10 04:29 AM
I think the plan has always been for the USA to use force to use the oil resources of other countries before finally "announcing" the massive oil deposits which have already been discovered under Alaska (the biggest oil field ever discovered). The Dollar will collapse making all of the "paper" held by the Chinese, Japanese and the Saudis worthless. A new Gold backed Dollar will be "announced" (could be FEB 2011 as it has already been printed).
All speculation of course!
Reply from The Daily Bell
There is little doubt some of the world at least is headed toward a gold-backed currency of some sort.
Posted by Justin on 09/11/10 04:52 AM
There's no doubt oil is of abiotic origin, it's just that the natural synthesis of oil from hydrocarbons within the earth is a Russian idea. First proposed by Mendeleev in 1877.
Reply from The Daily Bell
You mean it's not "fossil fuel?"
Posted by Justin on 09/11/10 05:46 AM
That it is not!
Posted by Andrew McKillop on 09/11/10 07:19 AM
This article shows a deliberate conflation or confusion of Peak Oil with peak diatribe and peak snake oil selling of the Climate Crisis type. Neither global warming or climate change are dire threats, but this does not mean Peak Oil is also a fake crisis.
My own cut on the implosion of political support to the climate change meme is here:
Click to view link
Like your more reasonable Feedback writers say, Peak Oil only means we ran out of cheap oil. The same for cheap uranium or even coal. This is nothing to do with final and total exhaustion of a mineral resource, the resource just falls back to the average crustal abundance (which doesn't apply to oil or natural gas), for example 4 parts per million for uranium. Producing the resource from reserves at such low crustal abundance is basically impossible.
To be sure, there is a lot more "stranded" gas than "associated" gas, separate and isolated natural gas reserves with little associated oil, and coal seam gas, plus shale and fracture gas. It is possible that a T Boone Pickens-style, "rational gas using economy" could or might be cranked up, to economise oil.
But this will not be cheap and easy " meaning time, investment and infrastructures and in the meantime oil stays non-cheap.
The so-called elite promotion of peak oil was never true in any case: the elite promotion is Abundant Oil Everywhere, especially under Saddam's castles or in Putin's backyard !
Reply from The Daily Bell
Free-market thinking tells us that in an unmanipulated energy economy, energy prices might well drift downward as technology improved extraction and substituted new forms of energy and generally made energy use more efficient.
Also you write that the elite dominant social theme was: "The elite promotion is Abundant Oil Everywhere, especially under Saddam's castles or in Putin's backyard!"
This flies in the face of everything we understand about elite promotions which tend to use fear-based memes to consolidate wealth and authority.
The Peak Oil promotion is evidently one of scarcity and government imposed "conservation." In fact, it was George Bush who helped concoct the modern variant of the Peak Oil promotion with his good friend Matthew Simmons, an energy M&A specialist based in Texas. Simmons later got an office down the hall from the oval office as we understand it. The Peak Oil strategy was concocted BEFORE Bush won the presidency. It was deliberately implemented thereafter.
Simmons, using old articles and out-of-date maps, went on a worldwide tour that apparently never stopped, preaching that oil was running out and prices would rise. George Bush invaded the Middle East twice which had the "incidental" effect of ensuring his friend's dire predictions were for the moment accurate.
Bloomberg's obit of Simmons can be seen here: "Matthew Simmons, Who Said Global Crude Production Has Peaked, Dies at 67"
Here's something from the article ...
Click to view link
'He was somebody that was very comfortable challenging conventional wisdom, someone that thought beyond the near term and was a very good analyst in terms of identifying big trends, said Dan Pickering, who worked at Simmons & Co. from 1996 to 2004 and is now co-president of the Tudor Pickering Holt & Co. investment bank in Houston.
On a tour of Saudi Arabia's oil industry in 2003, Simmons was inspired to estimate the world's largest oil reserves, and from research that included poring through neglected engineering data, determined that the country was close to or nearing peak output, Peter Maass wrote in his book, 'Crude World: The Violent Twilight of Oil.
'He built his own energy firm and, having done that successfully, used his knowledge of the industry to challenge one of its biggest accepted truths -- that there are nearly unlimited quantities of oil in the world, Maass said today in an e-mail. ...
In May 2008, Goldman Sachs Group Inc. analysts said crude might rise to between $150 and $200 a barrel on increased demand from developing countries that supply could fail to match. Simmons said July 16 of that year that oil was more likely to hit $200 per barrel than drop to $50 over the next six months.
Posted by Michael McKay on 09/11/10 07:49 AM
For more information re abiotic oil and the science behind it please read 'The Deep Hot Biosphere' by Thomas Gold.
Click to view link
Posted by Weeble on 09/11/10 07:56 AM
Great article, but I think that the PE foghorn is not being wrestled away by CNN or anyone else. My thoughts are, that like the Austerity meme, mainstream media is being allowed to spout these heinous anti-establishment theories for a very good reason.
If markets are "bad" and need to be regulated, or governments are "wasteful" and need to be reigned in, or "Peak Oil" is a scam and needs to re-thought, think about the PE "ship" pulling alongside the "truth" ship.
All it needs is a little more fodder, and the cannon will be ready to be loaded with a brand new black ball for the final cannonball shot into a false PE conclusion; World Government; the all-seeing Fatherly "eye" to watch over these childish, greedy, wasteful "sovereign" governments. As with all fear based promotions, they have an overall intention.
Nicole said something very telling that I feel you may have misinterpreted. He or she stated, I feel, an awesome synopsis. Nicole did not say that prices would remain high but the fictitious "sine wave" of pricing would generate PE profit, as well as other alternatives being inadvertently created by individuals. You should check that post out again; a jewel of a post. Saving on energy costs is causing the realization of new energy ideas, but these ideas will not be available to the masses or the slimy grip of the PE*. As you succinctly continue to mention, Human Action always trumps engineered action.
As the PE castle wall gets built ever higher, we just develop more ways to circumvent their silliness and cut ever larger arrow slits in their own sandcastle walls. But the arrow slits are for shooting arrows inside.
As their ship pulls alongside ours, we should not be lulled into thinking they are finally "getting it", but that their ship is fast approaching their own gorgeous castle on the coast.
They will get ready to shoot, but will realize our ship was a ghost ship a little too late. Their cannonball, filled with World domination explosives, will shoot right through our ghost ship, and blast a huge hole in the castle they have so carefully built, and we will all rush in and finally see the horrors contained in that castle. Greed.
* I will post this separately, as my posts crash when they are too large
Posted by Chris F on 09/11/10 08:01 AM
The premise that the world will run out of food and that people will passively die of starvation is just more propaganda. The US has the land and weather to grow enough food to feed the world seven times over. The Federal Government food policy is creating food scarcity, not to mention the five or six Big Agriculture conglomerates. Anyone else besides me noticing how many monopolies we have in the US?
Posted by RF on 09/11/10 08:05 AM
Most adult Americans don't realize EWurope has never had "cheap oil- gasoline". In the early 70's when I lived there a gallon-( 4 liters) was already in a 4.00 dollar range- 50 cents in USA."No driving" sundays was a feasable answer to a problem. Cultural adaptation,public transport , bycycles, broomfiets,mopeds,walking, and a willingness to use the already "green" nature in reguards to use.Industrial oil use in the USA is less, where personal use has skyrocketed- creating the fear, something the power elite can manipulate.
Perhaps the older generations were more practical by nature, current generations are more dependant,less willing to do for themselves and would prefer to be manipulated as such,as thier overuse creates the illusion of sucess in thier eyes. The airlines industry uses great amount of oil daily, , now everyone can join the " jet set" is a marketing dream.
Recreational travel to far away places , is as mainstream as SUV's..When the Horizon leak began there were predictions of 10.00 dollars a gallon, what happened, they fooled everyone, it is lowest in two years.the internet has become a great educational tool, but also a great manipulator, it promotes the mainstream media at levels never before achieved. Most little people realize they are being used for money making in the oil use, but are willing to trade at almost any cost for the freedoms ,the trapping of sucess,it provides.
Posted by Weeble on 09/11/10 08:07 AM
With respect to self-generation of electricity...
In Ontario, Canada, the new Electricity Act addresses self-generation. I was told that it is illegal to produce electrical energy, but not sell it back to the grid. I have not found that little snippet, but what I did find was even more interesting.
Click to view link
Registration of self-generating users
85.4 (1) Every self-generating user shall register with the Minister of Finance in accordance with the prescribed requirements and shall maintain his, her or its registration. 2000, c. 42, s. 26.
(2) Every self-generating user shall do the following:
1. Remit, in accordance with the regulations, the debt retirement charge payable by the self-generating user.
2. Keep the prescribed records
As with all government drivel, it continues unabated, ending with fines for non-compliance. We have a "debt retirement charge" and other front end fees that are payable before a single kWh has been sent down the wire. Approximately $80 of a $200 bill from what I remember. Try to cancel your account and you will have a knock at your front door. Nice. I guess the only way around that is to not pay the bill and get cut-off.
Posted by Michael on 09/11/10 09:42 AM
Please read 'The Deep Hot Biosphere' by Thomas Gold for a thorough presentation of why oil and gas are produced abiotically within the earth.
Posted by Bionic Mosquito on 09/11/10 10:15 AM
Go back 200 years, or 2000, and tell someone you meet that by the year 2010 the world will be populated by well almost 7 billion people. Try this for the inhabitant of Paris or New York City 200 hundred years ago, and compare the population of their city then vs. now.
Your historic host could not fathom in what manner the modern population could be fed, clothed, etc. Even more so, your historic host could not fathom the technologies and means by which man in the future would transport himself, heat his home, etc.
The danger to mankind is not from a supposed lack of resources necessary to survive and thrive (for example, "peak oil"), but from the manipulation of price signals from the market (only possible by government interference) that would otherwise cause people to search for the best answers. The danger is that the best communication tool known to man " prices, freely discovered " is purposely distorted, thus hindering the human action that would always strive for (and find) solutions.
On the one hand, many complain that man's greed is the problem, while missing on the other hand how man's greed is the solution. If the market determines that oil cannot be found, or the price cannot be afforded, the market will find a solution. But only if the market is allowed to communicate in a reasonably free way: through prices, freely discovered.
Reply from The Daily Bell
Excellent, thank you.
Posted by Weeble on 09/11/10 10:26 AM
That was very well put, Bionic Mosquito.
Posted by Rmp on 09/11/10 10:27 AM
Perhaps the only part of "peak oil" that makes sense it in how fast it's removed from the ground. Thomas Gold makes a very compelling case for oil being abiotic and primordial, and the barrier to entry makes a lot of sense too. What doesn't make sense to me is IF PO theory has been around and now accepted by the governing class, why work so hard to open up China, India et-al these last few decades, ironically ones which included and advanced the peak oil fear based promotion? Kinda like hastening your own demise. That has never made any sense to me. Why work so hard to create another multi billion consumer laced market? Oh well, make hay while the sun shines I guess.
Posted by John Danforth on 09/11/10 10:36 AM
Excellent article, and a well-defended premise, in my view.
One small (maybe not-so-small) quibble, if you'll allow me:
To re-start the argument over definitions, we should examine what the terms "energy" and "alternative energy" mean in the context of the concept of "fuel". Please bear with me as I wander away from the dictionary definition of "fuel", to describe it in thermodynamic terms as, "something you can extract energy from that gives back more energy than it takes to get it and transform it into a useful form".
Going from that concept, then the quality of a fuel can be expressed as the energy return on energy investment. Which transfers directly and easily to the cost in money terms of a fuel (in a free market). An example of this would be the difference between coal and firewood.
It happens logically that the more concentrated a fuel is (assuming it is stable enough to be safe), the better the energy return on investment is. It also happens that the sun is the source of practically all of our fuels, with rare exceptions. It is these rare exceptions that typically provide the densest and most efficient fuels, such as coal, oil, natural gas, and nuclear power. These may be 'stored sun energy' or otherwise, but the main issue is that you don't have to wait around for the energy to be collected and transformed.
By contrast, methods to obtain fuel from sun, wind, firewood, and animal power are low-density solar power and therefore relatively costly. In order to get useful energy from them you need to capture the energy over a very wide area or wait a long time to store it up, or both. Because of the cost, energy and/or money-wise, these sources only make sense where they make sense--in places where the cost is still worth it. The cost is worth it where low-cost, denser fuels are not available, or where subjective value might apply (as when one doesn't want to be dependent on central authorities' distribution control).
It can be shown that your access to energy equates to the degree of freedom you enjoy, and that your direct and indirect consumption of energy equates directly to your standard of living. It's not just travel that makes life better, more fundamentally it's the fact that your lifestyle has been brought out of the mud by the availability of metal and the tools and conveniences made from it. And heat to prevent freezing, without having to devote a huge portion of your daily life gathering fuel to survive. Imagine trying to survive a week in nature without metal of any kind.
This goes to the point made by the Daily Bell, that various schemes and concoctions take advantage of widespread ignorance about energy and fuel in order to squeeze the public and rule over them. Primarily, these schemes only survive by virtue of the appalling magnitude with which people take the basic products of cheap, abundant fuel for granted. Most of those who unwittingly buy into these schemes couldn't survive a week without metal or running water and a constant supply of energy-dense food delivered to their corner store.
The point of this long rant is that these pernicious energy scams that aim to force you through various stratagems into low-density energy are a direct threat to your very existence. The degree to which they succeed is the degree to which your own standard of living will fall, whether you think it is noble or not. If you don't want to study thermodynamics to examine these memes, you can judge the value of any proposition easily: Will it raise your cost of living? (By this standard conservation makes sense if it gains more than it costs in time and money, instead of the case where you are sacrificing your standard of living to save fuel for someone else to use.)
So, with that, here is my challenge to the Daily Bell: My premise is that there is no such thing as Alternative Energy. There is only Energy. And we get it through fuel, which is Stored Energy. How it gets stored and in what form is paramount. I challenge you to provide links to any Youtube videos that show a single source of 'Alternative Energy' that makes sense economically and through reproducible results.
I maintain that even in our over-regulated world, whoever comes up with a new inexpensive fuel source should be able to parlay that knowledge into wealth, despite the conspiratorial claims. At the very least, someone who thought their technology were being repressed could 'leak' the secret to the world easily, in the same manner as PGP was. Such a gift would be a boon to mankind, as was the discovery and development of all current high-density fuels.
Final note: In today's local paper, there is an article about a local community college getting a $1.5 million grant support work on 'electrification' of automobiles. The picture shows a professor and student peering at what appears to be an electrolysis demonstrator, the caption saying they are working on cracking water to hydrogen and oxygen as part of the Hydrogen Fuel Cell Technology class. The joke is that hydrogen is not a fuel (by my definition above). It is an energy carrier like electricity (it needs to be generated by real fuel). It wastes energy to use hydrogen for motive power, whether by fuel cell or otherwise. And, as noted before, cracking water is likely the most wasteful means of generating hydrogen that there is. I expect that the pre-requisites for the 11 classes offered on the subject must be NOT taking physics or chemistry first. Here is where the rubber meets the road: millions of dollars extorted from the productive to pour down rat-holes whose primary purpose is perpetuation of the meme in the minds of the ignorant, and using the educational system to do it.
Reply from The Daily Bell
"My premise is that there is no such thing as Alternative Energy."
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Posted by George on 09/11/10 10:43 AM
I've read several articles about oil coming back in old abandoned wells which makes sense really. The earth is still a big ball of heat in the core and it makes sense that its going to cook bio-matter continuously converting it into oil. That oil is going to bubble up to the surface eventually and will refill those old abandoned wells. If this is all true, we will never run out of oil.
The controlling elite can't let that happen for then they would lose their control over us. If you think about, the oil industry got nationalized a long time ago. The government controls where they drill and for how long they can. If that's not government control, then what is? It has become much clearer now what our progressive masters have been doing all along since the internet has pulled back the curtain on them. I think its a matter of time now before their house of lies and deceit will fall down around them... I hope it happens within my life time so I can say "HA HAAA.." lol..