Saturday, November 13, 2010

Missing the point?

The National Geographic Daily News blog cites a new International Energy Agency report that pins 2006 as the year in which oil production rates attained a pace that will not be again matched. Or, in other words, 2006 was the year of “Peak Oil.” That projection is just one scenario of several looked at by IEA, but in their view this scenario is the most likely outcome.

The Daily News blogger admits that the “peak” is not expected to be followed by significant declines – rather, IEA projects a leveling out of conventional oil production at levels just below 2006′s peak for at least the next 25 years and minor increases in unconventional oil production and minor increases in natural gas liquids production. In short, the IEA’s report more resembles CERA’s undulating plateau story than peak anything. Yet we are told the “age of cheap oil is over” and the consequences of relying on on natural gas liquids and unconventional fuels are “stark.”

A more reasonable characterization of IEA’s most likely scenario is that it estimates oil production will remain steady for the foreseeable future at around the level attained in 2006. Scary? Rioting in the Streets? Stark?

The author of this piece fails to address the fact that  if oil availability plateaus while demand increases (exponentially)  prices will increase until nobody can afford it.
Since everything, and I mean everything, depends on oil to get manufactured and delivered to whomever needs it, as oil prices rise so will everything else. Run-away inflation.

In other words, the author fails to appreciate the exponential function.

It is a well known fact that the United States has been importing Oil since the 1970's because the home oil production cannot meet the rising demand. According to 2009 yearly average, the U.S. Crude Oil consumption is around 21 million barrels a day and home production is only around 5 million. Why are things escalating so fast? Why are resources running out at such speed? We will try to answer these questions on this article. There is no simple answer but it is all pretty much related to one single concept: exponential growth.

United States Oil Consumption and Reserves: A matter of exponential growth and finite resources

And of course this youtube video which I have watched a gazillion times.

At the current pace of research and development, global oil will run out 90 years before replacement technologies are ready, says a new University of California, Davis, study based on stock market expectations
New forecast warns oil will run dry before substitutes roll out

HT The Climate Post: Climate scientists: It’s war

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