Peak oil

Low oil prices are a problem too

January 12, 2019

In recent years, we have heard a great deal about the possibility of Peak Oil, including high oil prices. If the issue we are facing is really prices that are too low for producers, then there seems to be the possibility of a different limits issue, called Collapse. Many early economies seem to have collapsed as they reached resource limits. Collapse seems to be characterized by growing wealth disparity, inadequate wages for non-elite workers, failing governments, debt defaults, resource wars, and epidemics. Eventually, population associated with collapsed economies may fall very low or completely disappear. As Collapse approaches, commodity prices seem to be low, rather than high.

~ Gail Tverberg from, https://ourfiniteworld.com/2018/11/28/low-oil-prices-an-indication-of-major-problems-ahead/

The idea that there may no price where a buyer and seller can agree is patently obvious, right?

Suppose you can only afford to spend $1 on some thing you absolutely need, but I need $100 to cover the cost of producing the thing. No amount of haggling over price will solve this problem. The solution is to add some debt; you borrow some money and buy the thing at some price we can agree on.

What happens if you cannot take on more debt? You need the thing, you cannot afford the price, and you cannot leverage future payment (aka, debt) to purchase the thing…

What happens as more of the world can no longer afford to purchase oil at the price needed by the oil producers?

What happens as more of the world runs out of debt?

…and if you think running out of debt is not possible, please go read more of Gail’s writing.

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The Great Depression was an energy crisis

January 10, 2018

When I put together a chart of per capita energy consumption since 1820 for a post back in 2012, there was a strange “flat spot” in the period between 1920 and 1940. When we look at the underlying data, we see that coal production was starting to decline in some of the major coal producing parts of the world at that time. From the point of view of people living at the time, the situation might have looked very much like peak energy consumption, at least on a per capita basis.

~ Gail Tverberg from, https://ourfiniteworld.com/2017/12/19/the-depression-of-the-1930s-was-an-energy-crisis/

One of my rules-of-thumb is to thoroughly read everything written my Gail Tverberg.

Years ago, I found a web site called The Oil Drum which was a collecton of superlative thinkers all writing about things related to petroleum. Actually, it still IS a superlative collection, because they’ve left it up as-is to be an archive.

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Our oil predicament

May 11, 2015

A person might think that oil prices would be fairly stable. Prices would set themselves at a level that would be high enough for the majority of producers, so that in total producers would provide enough–but not too much–oil for the world economy. The prices would be fairly affordable for consumers. And economies around the world would grow robustly with these oil supplies, plus other energy supplies. Unfortunately, it doesn’t seem to work that way recently. Let me explain at least a few of the issues involved.

~ Gail Tverberg from, http://ourfiniteworld.com/2014/10/22/eight-pieces-of-our-oil-price-predicament/

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Stumbling Blocks

January 2, 2014

The story of oil limits is one that crosses many disciplines. It is not an easy one to understand. Most of those who are writing about peak oil come from hard sciences such as geology, chemistry, and engineering. The following are several stumbling blocks to figuring out the full story that I have encountered. Needless to say, not all of those writing about peak oil have been tripped up by these issues, but it makes it difficult to understand the “real” story.

~ Gail Tverberg from, http://ourfiniteworld.com/2013/08/13/stumbling-blocks-to-figuring-out-the-real-oil-limits-story/

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