408. KJELL ALEKLETT: 0.5% PER ANNUM POST-PEAK DECLINE
A few weeks ago Kjell Aleklett, President of ASPO International, visited Australia and gave a presentation which included his forecast for oil production in 2030:
Professor Aleklett addressed the NSW electric car task force and the Federal Government's Bureau of Infrastructure, Transport and Regional Economics yesterday. He had earlier warned a Senate committee that the International Energy Agency had wildly overestimated oil production, lulling nations such as Australia into a false sense of security.A fall of 11% to 76mbd means that Aleklett is using a figure of roughly 85.4mbd for the current production level. (In other words, he is using the term "oil" to mean liquids in this context.)Rather than oil production rising by 20 per cent to 101.5 million barrels a day in 2030, he says production is likely to fall 11 per cent, to just 76 million barrels a day.Source
Running the numbers, we find that Aleklett is predicting a post-peak liquids decline rate of 0.5% per year. He is predicting that liquids production 21 years from now will be roughly 90% of what it is today (76/85.4 = 89%). This rate of decline is extremely mild and easy to cope with. Indeed a decline of 11% in liquids fuel production is substantially less than the 14% decline which occurred over the course of only 4 years in the early 1980s (a time I like to call The Big Glitch).
For reference, here is Aleklett's forecast from P. 40 of the pdf of his presentation (available here, click to enlarge):
Aleklett also foresees a mild decline rate for conventional crude (i.e., C&C, not including non-conventional, NGL etc.) The most recent production figure for conventional crude (EIA, March 2009) was 72 mbd. So Aleklett forecasts that conventional crude 21 years from now will be 77% of what it is today. That translates into an annual decline rate of 1.3% -- again, very mild.These facts show that Kjell Aleklett, President of ASPO international, is basically in agreement with my own well-known prediction from Dec. 2007:
JD's Prediction: World C&C production will decline at an average annual rate of 1% for 15 years after the world C&C peak.
Don't let doomers pull your leg. They love to talk about extremely high post-peak decline rates, but the top people, like Kjell Aleklett, don't buy it. For more information on the principle of slow decline, please see:
317. STRONG ARGUMENT FOR A SLOW DECLINE and
323. LARGE BLOCKS PLATEAU FOR DECADES
by JD
posted by JD @ 1:33 AM
46 comments
46 Comments:
Well, not mentioned is how much of that oil, or how much natural gas or coal, will be used in the production of that oil.
I mean, say I have a job earning $1,000, I could get another job across town earning $1,100, I'm earning more, right? Well no, I have to spend $200 on transport to the second job, only $50 on the first job. But if you just look at my total income...
Anyway, it's my hope that production will be lower than that in 2030. That's because,
(a) I would rather that demand dropped production than physical factors, that's less painful
(b) burning stuff is bad for the climate, and
(c) most of the stuff we burn comes from countries with dictatorial regimes who use the money we give them to oppress their people and fund terrorists who want to kill us
Peak oil is like peak heroin. However much we can produce and burn is always going to be more than we should produce and burn.
JD, I’m not quite sure how you can call your post Peak Oil Debunked and at the same time acknowledge a decline.
A declining flow rate and an increasing population, especially with a belief touted by capatialist countries of 'equalising' standards of living, seems a recipe for conflict.
Just how do you envision that the world leaders are going to regulate this conundrum, pulling straws?
I agree that doomers assumptions should be challenged, but I think you should challenge your own assumptions about how the human population gets along in an increasingly damaged ecological system and declining non-renewable resources.
I don’t know exactly what the future holds, but I do know that people have got used to entitlement about what they’ve got and I can’t see how or why people are going to give that up easily in a peaceful way.
At some point any population hits it limits, could you read William Catton’s book and comment on why you think he has it so wrong.
I've touched on this topic on my blog several times (here, here). I've noted non-OPEC crude production apparently peaked in 2004, and is currently down a rough 1 mbpd from its record of 42-ish mbpd. This amounts to a rough annual depletion-rate of less than 1% - not exactly a disaster. And to exert extra bravado, this is with Cantarell and the North Sea dragging things down.
It's safe to say that oil speculators, not peak oil, will prove to be the true thorn in the future.
Although they are both stalwart practitioners, scenarios by Aleklett & Campbell since Nov/2008must be viewed with extreme skepticism. In reconciling both their models for consideration & inclusion in our Peak Oil Depletion Scenarios presentation, we have found both gentlemen are fudging known figures to promote their not-so-secret agendas.
It can be seen in the last few ASPO-Campbell newsletter tables that he has revised his past, present & future NGL flows to show 5-mbd instead of the commonly accepted 8-mbd rate. The "real" 8-mbd rate can be seen in all his pre-November pdf newsletters.
Similarly, Aleklett has footnoted the table on pg 40 to reveal that he did a PhotoShop job on the IEA chart to reduce NGL to 14.9-mbd from their 19.8-mbd forecast. The real 2030 IEA target for All Liquids is 108-mbd, not the 101.5-mbd that he asserts.
The rationalization by both is that NGL has 25% lower BTU content.
The Campbell-ASPO Depletion Model had been a participant in our showcase chart since the virgin graph in 2004. This smoke & mirrors campaign caused me to downgrade Colin's projection to Tier-2 in March 2009...
Five years of email contact with him have broken off at his end as he refuses to discuss and/or defend his new methodology.
With respect to Kjell's epiphany wrt to softer decline rates, it has foundation in his recent realization (via A R Brandt 2007) that production weighted Underlying Decline Rate Observed is only 1.9%/year.
Peer review protocol has required him to notate this recent study in all Uppsala releases. In effect, McPeaksters that engage in formal papers have been banned from quoting their silly 8% & 9% UDRO rates out of context.
Even so, I suspect politics will trump geology. By that I mean, what will the governments of such thug states as Venezuela, Mexico, Nigeria, Libya, Iran, Iraq, Russia, Saudi Arabia et al do in future decades?
They are not free states, but they may improve. Or get worse.
Saudi Arabia has huge heavy oil and undersea desposits they have not even bothered with yet.
Meanwhile how big will Brazil get? Venezuela has a trillion barrels locked up in the Orinoco.
Then we have a huge, growig, long-term glut of natural gas shaping up. Oil production may slow, as motor vehicles convert to NG.
My own back-of-the-envelope predicton of consumer behavior is that when lithium batteries get about twice as good as they are now, we will see battery cars become commercially successful, even in the USA.
In short, the Oil Era will end with a whimper, not a bang. And likely bring with it cleaner urban air, as a side bennie.
My guess, Freddy, is that people stop speaking with you because of how you insult them by calling them names ('McPeaksters' etc.) and impugning their motives.
You've always been cordial to me (and I to you), but I give you that as a possible reason for why Mr. Campbell no longer communicates with you. Who wants to speak with someone who seems to use every opportunity to ridicule?
Your actions remind me of the people in this video as they speak to Peter Schiff:
http://www.youtube.com/watch?v=2I0QN-FYkpw
Best regards,
André Angelantoni
www.PostPeakLiving.com
"My guess, Freddy, is that people stop speaking with you because of how you insult them by calling them names ('McPeaksters' etc.) and impugning their motives."
My guess, Freddy, is that they stop talking to you because you keep proving them wrong. Over and over and over...
DoctorJJ
"It's safe to say that oil speculators, not peak oil, will prove to be the true thorn in the future."
It's safe to say anything when no one's holding you accountable for your gratuitous predictions. If the 'debunkers' have a plan to rid the world of speculation, please share it with us. Otherwise, acknowledge that speculation is an inescapable reality, and that speculators express the wisdom of the crowd. Peak production is not now, nor will it ever be just a simple function of geology. You cannot wish away fear, speculation, nationalism and greed, and these elements have just as much to do with the date of PO as mere geology.
HDT
Steve,
The title of the blog isn't a very interesting topic to debate. Suffice to say that everyone -- and I mean EVERYONE, doomers and cornucopians alike -- concedes that oil will peak and decline. So it really shouldn't be shocking that I too accept peak oil. The point of this blog is to cut through some of the outlandish doomer hype and agendas which have attached themselves to the basic notion of peak oil.
If you want the short version of my point of view, I would suggest: Peakers and debunkers: What's the difference?
Although it's true that population will inevitably hit a limit, I disagree with Catton's notion of die-off because:
A) We are perfectly capable of feeding even twice the current population with today's agriculture systems (at a somewhat lower level of diet). We aren't in any kind of genuine overshoot. Die-off due to lack of food is caused by social structures, not physical constraints.
B) Yes, our food systems are dependent on oil and fossil fuels, but there are still very large supplies of FF remaining -- enough to drive the world's food system for a hundred years or more.
C) This means we have quite a bit of time to transition the food system to other practices and sources of energy. For example, nitrogen fertilizer can be produced with hydro, solar or nuclear, and grain can be transported long-range by electric train.
D) The idea that we are running out of energy is far from self-evident. The electrical demand of the entire earth can be met with a concentrating solar facility taking up about 1/100th of the prime solar real estate of the planet. There's a lot of energy out there, and we have the technology to tap it, today.
E) Finally, I think Catton's idea is defeatist and counterproductive. If you educate people to believe that the future is a mass grave, they're not going to bother trying to protect the environment or conserve energy etc. Why bother if we're all going to be dead?
On one point, you are correct JD: "die-off due to lack of food is caused by social structures, not physical constraints" but on another, there is much to dispute ("we aren't in any kind of genuine overshoot.") For instance, fossil water especially is going to be a big problem and we are, in my view, definitely in overshoot when it comes to greenhouse gas emissions. There are plenty of other areas, like fishing and soil mining to argue over, too.
In any case, human beings have reliably acted poorly when confronted with ecological limits, perceived or otherwise. They tend to hoard and go to war and their fear takes over causing them to act in a very uncollaborative way. One might find exceptions from time to time but that has been the rule for most of our history, as far as I can tell.
I've always assumed that it was evolution that programmed us to act this way to ensure the survival of the individual human even at the expense of others. So far it has worked reasonably well since there seems to be a lot of us now.
So although I think it's perfectly valid for people to keep working toward getting all 6.8 billion of us to work together to share the shrinking pie, I also think it's perfectly valid to take the view that we will act as we have in the past and to prepare accordingly.
Each person has to make this decision on their own and then let events play out. Personally, I think it's possible to have small groups of people organize to improve their lot. "Community level" might be too large, at this point.
I've done extensive community work and it has proved impossible to get local politicians to see the problems and take action before they get out of hand. Many, many other local community activists report the same thing.
So it's fine if JD says it's possible, but the people in the field are finding it devilishly difficult to do and we would truly appreciate it if someone would show us how they were successful in all but a token way in having local (or any other level) of government take action while there are plenty of resources to prepare.
In my experience with local government, we are going to continue to use our market-based system as currently designed until people are too poor to purchase food, just like during the Great Depression.
Further, we will continue to allow our infrastructure to degrade and instead spend hideous amounts of money on the military (see the U.S. Infrastructure Report Card for more on our infrastructure problems).
I did an analysis on my county's water pipes (I was trained as a civil engineer) and we have to move quickly in the next decade or many areas of the county will have so many water pipe ruptures they effectively will not have running water. The pipes from the early 1900's are now rupturing (100 year life span and made of cast iron) and the pipes from after WWII are starting to fail (40 to 60 year lifespan). This sort of degradation is happening all over the U.S. in almost every major system upon which we rely.
The job in front of us is truly colossal.
Make your choice and we'll compare notes in ten years.
-André
www.PostPeakLiving.com
JD's last link points to Gail Tverberg's GROWING GAP chart. It is one of several silly wedge-type graphs that imply an overwhelming task ahead for the globe's oil producers. All of 'em have in common a 2008 start date.
Unfortunately, Underlying Decline did not start in 2008, or 2007, or even Chris Skrebowski's 2003 estimate. These graphs are purposeful hoaxes meant to prey on the uninformed.
Underlying Decline has been an industry phenomenom since 1970. It has averaged 2.8% over the last four decades and surges in 8-yr cycles. Producers have addressed this annual loss factor with 82-Gb of new capacity in that time span. Another 38-Gb was built to satisfy growing Demand.
But u will never see TOD, Peakoildotcom, Rubin or Simmons show the real graph with the GAP filled in from 1970 to 2007!
The TrendLines 17-model Avg indicates that post-peak decline will be 0.7%/yr after a 2028 peak. My own PS-2200 model forecasts a 2.1% decline rate after a 2048 peak. Time is on the side of forward thinkers like JD. Nuclear power generation is a must to address GHG issues.
Our Recession Meter projects that the current contraction ended April 2009. I look forward to many more monthly, quarterly and annual extraction records being set starting in 2011...
In relation to JD's point A, I saw on TV a little while back that we throw out 1/3 of our food just because it doesn't "look nice," such as people not buying a slightly misshapen apple. Such waste can be cut down on.
-Strangelove
"
In relation to JD's point A, I saw on TV a little while back that we throw out 1/3 of our food just because it doesn't "look nice," such as people not buying a slightly misshapen apple. Such waste can be cut down on."
yep, and how many people throw away leftovers from their fridge? how many people could commute with almost no cost and cut their gas bill in half?
so many inefficiences. the wasteful ways we have no are part cultural and also part a product of cheap oil prices.
we can change and adapt. the doomer message is that that will not happen. that is false.
"we can change and adapt. the doomer message is that that will not happen. that is false."
I certainly think that some areas of the world will change and adapt. But it will be a very different world we will all be living in ten years from now. And, in my view, many people will be so poor that they will not be able to afford to purchase food (this is already happening on a large scale here in the U.S.).
Other problems with our high-energy system as it declines:
* lost jobs means lost housing (already happening, housing density for occupied shelters is going up)
* lost jobs means no health insurance (the # of uninsured is also going up)
* sprawl and lack of adequate public transportation means people will have trouble getting to their minimum wage jobs — this will act as a gating factor. At what price of gasoline does it become not worth going to a minimum wage job?
etc. etc.
The way I describe it to people is by saying that right now 85% of the economy is formal, with the remainder informal and black market. The 85% will keep shrinking and the informal will grow so that the ratio is closer to those countries, say, in Africa.
In any case, if we keep the oil going to the farmers, we can all still eat -- but the government will have to do even more to distribute food by expanding the food stamp program, for instance.
Other parts of the world will not be so lucky, however, as they deal with riots, warlords and other difficulties that will make growing and distributing food equitably very difficult. Many people will see the loss of centralized government power as their chance to become a local thug and then demand resources and power. This too is quite common throughout our history.
It seems to me that law and order will be a prerequisite to get us all through this. If the hordes of unemployed, currently growing at 500,000 per month, start getting antsy, all bets are off.
-André
PostPeakLiving.com
In any case, if we keep the oil going to the farmers, we can all still eat...
It's interesting that you say that as a comment for this post in particular. Aleklett (President of ASPO) forecasts a drop in oil production of 11% over the next 21 years. That's considerably less than the 14% drop in the early 80s which occurred over only 4 years, and had a pretty marginal effect on the food system. What's your explanation for why an 11% drop over 21 years will be so much more devastating than a 14% drop over 4 years?
JD:
I don't have the audio for Kjell's latest talk, so I'm going to withhold specific comment on his points until I get it.
I will say, however, that I don't foresee a smooth ramp down on the other side at all. Every month we add 6 million people to the planet, so even flat oil production would cause a problem. But we would be lucky to have even flat production.
Here are some of the problems we are going to see on the other side of the peak, all have already started:
* hoarding (see the King of SA's comments about leaving new oil fields in the ground)
* net exports dropping dramatically (see Brown and Foucher's work)
* extremely expense oil, which will keep us in a perpetual depression and billions unemployed around the world as they adapt to the informal economy
* a major psychological shift from "anyone can get oil if they have the money" to "I can't let you buy that oil because then I can't buy it" — this will, in my view, cause major problems between countries and even within countries, just as water is doing now
* more wars over oil (I'm of the view that Iraq was an oil war)
* a failed medical system (in the U.S. -- that's already happening)
* loss of capital as the world economy shrinks, leading to major infrastructure failures (like the bridge in Minnesota but x1000 and in every system, including the oil and gas delivery system; you might have caught that Michigan is starting to depave roads because it's cheaper to put them back to gravel than repave them; some cities are looking at shutting down whole neighborhoods because it's too expensive to service the low density of people who live there now)
And so on. It's really not difficult to see because it's just an extension of trends that have already begun.
This is the world I'm preparing for and that I prepare people for. I understand that you think that it won't happen. As I said, we must each make our choice and I'll be happy to compare with you over a beer what actually happened in ten years.
-André
www.PostPeakLiving.com
"sprawl and lack of adequate public transportation means people will have trouble getting to their minimum wage jobs — this will act as a gating factor. At what price of gasoline does it become not worth going to a minimum wage job?"
You have no imagination. Here's the answer: When I was living in Europe in 2002 my wife and kids were in one city and I was offered a good paying job in another city. It was too far to commute (400 miles) and too costly to move everyone so they stayed and I commuted.
How did I do it if I couldn't afford the commute?
I traveled down on a sunday, stayed in cheap accomodation during the week and came back on a friday.
That is how people will afford to go to minimum wage jobs. They will live close to their work and abandon their untenable commute.
If only we use our imagination instead of defaulting to instinct we will be fine.
And in case I'm not clear: defaulting to instinct means we think we can solve a problem of a temporary bottleneck in resource infrastructure by moving back to the tribe.
Pardon me while I burst out laughing.
DB
And food technology marches on:
"Scientists Closer To Developing Salt-tolerant Crops
ScienceDaily (July 8, 2009) — An international team of scientists has developed salt-tolerant plants using a new type of genetic modification (GM), bringing salt-tolerant cereal crops a step closer to reality."
This ALONE will solve a bunch of problems.
Doomers have no faith in human ingenuity. As well as no imagination.
DB
They tend to hoard and go to war and their fear takes over causing them to act in a very uncollaborative way. One might find exceptions from time to time but that has been the rule for most of our history, as far as I can tell.
I find this assertion one of the most naive and simplistic among the doomer literature. The theory that resources are a primary cause of war and lack of resources will inevitably lead to more wars is far from proven. There are dozens of theories of why wars start, and really no one seems to have a definite explanation.
Even if there has been a historical trend, it is risky to project this into the future. While there may be more to gain, there is more to lose. The USA struggles with wage wars even where they initial get a lot of popular support - the body bag effect.
At to it causing more wars, the USA have been involved in armed conflict of one sort almost every year since WW2. Probably a lot of conflicts around the world are about resources - primarily land. We already have a pretty high conflict rate. We had two world wars last century, so if the trend continues we should have at least two this century. If PO doubles that, we might have four world wars this century? That's a lot of wars, I doubt we have the time or the money.
On inspection, it would appear that the prospect for wars in the future is little different from that of the past 100 years.
DB: I encourage you read more closely before posting.
My point was about minimum wage jobs. You responded with an example in which you were "offered a good paying job." A good paying job allowed you to execute your strategy. A minimum wage job does not permit that strategy.
BC: I'm expecting to see more conflict, similar to the riots that occurred last year over food and fuel. You are welcome to plan for whatever you wish. However, I think your assessment fails to take into account plenty of historical evidence, some of it recent and pertaining directly to fuel and food shortages:
http://en.wikipedia.org/wiki/2007–2008_world_food_price_crisis
And, to demonstrate that there is a history of unrest in the U.S., here is a list of incidents:
http://en.wikipedia.org/wiki/List_of_incidents_of_civil_unrest_in_the_United_States
aangel,
You, like other "peakniks," believe you have access to crystal balls that show you the future. You speak in definite language, e.g. "will happen."
* hoarding (see the King of SA's comments about leaving new oil fields in the ground)
1. Link to his "comments."
2. Leaving oil in the ground, as far as I'm aware, has nothing to do with "hoarding" and everything to do with return on investment. There is no point in developing oil reserves if you will not get a positive return on the investment, or if you believe you can get a larger return producing that oil later (due to higher prices down the road.)
* net exports dropping dramatically (see Brown and Foucher's work)
Link.
That said, have production scenarios followed Brown and Foucher since they wrote their work? What is the margin of error? Statistically, is their work "significant?" My experience with most oil production predictions is that they tend to be either overly optimistic or overly pessimistic, and few have any statistical skill. Instead of just saying "see x," show us how skillful their work was.
* extremely expense oil, which will keep us in a perpetual depression and billions unemployed around the world as they adapt to the informal economy
Billions? Based on what? What is to stop economies from moving to different sources of energy, other than a lack of imagination on the parts of some leaders?
* a major psychological shift from "anyone can get oil if they have the money" to "I can't let you buy that oil because then I can't buy it" — this will, in my view, cause major problems between countries and even within countries, just as water is doing now
Actually, water is a very different issue, and the comparison is poor at best. Water is, at least in the US, almost never physically scarce (except, perhaps, in the southwest.) Even in places where it is physically scare, water rarely, if ever, is even remotely close to being "priced" by any sort of market. The problem with water consumption is not that it's usually physically scarce, but that artificially low prices cause overconsumption and create artificial scarcity.
Oil, on the other hand, is priced by markets. Big difference. In any case, oil, unlike water, has substitutes. You can't water crops with anything else. You can, however, change infrastructure away from oil-based transportation.
* more wars over oil (I'm of the view that Iraq was an oil war)
To call Iraq an "oil war" is to oversimplify a great deal. Iraq was a war of ideas, a war of strategic interests, in some parts about oil, in some parts about bad intelligence, and in a lot of was an example of how ideological rigidness can lead to military clusterfucks. Just an "oil war?" No way.
* a failed medical system (in the U.S. -- that's already happening)
Yes. The US medical system is failing because of OIL. Not because of inefficiencies in the insurance market, or because of the rising actual cost of healthcare (due to more consumption of the good), but because of oil.
Makes sense.
* loss of capital as the world economy shrinks, leading to major infrastructure failures (like the bridge in Minnesota but x1000 and in every system, including the oil and gas delivery system; you might have caught that Michigan is starting to depave roads because it's cheaper to put them back to gravel than repave them; some cities are looking at shutting down whole neighborhoods because it's too expensive to service the low density of people who live there now)
Holy shit, you are so wrong when it comes to Michigan that it's not even funny. Flint and Detroit were declining for years, maybe even decades. It was mismanagement at GM, Ford, and Chrysler that led to the decline of the labor markets there, and have lost tax revenue due to people leaving. It has little to do with energy prices and everything due to the fact that Flint has literally (LITERALLY) halved since its peak. Flint and Detroit are not declining because of energy, but BECAUSE PEOPLE HAVE LEFT.
Honestly, if you can't even be bothered to get your facts straight...
Everyone will kill and eat each other before switching to electric or natural gas vehicles! Those soccer moms will kill their friends' children before giving up their SUV. I'm going to eat my own spleen before I take a train!!!!!!
DOOOOOOOOOOOOOOOOOOOOOM!!!!!!!!!
-Strangelove
Andre,
I'm going to respond to some of your comments with a post instead of here in the comments, but just a few of quick points:
1) I take it you strongly disagree with Aleklett. This seems odd, considering the respect and status he enjoys in the PO community. And it's not only him. Laherrere and Colin Campbell are also on the record stating that the post-peak decline rate will be about 1% per year. I'm not sure why we should grant you more authority than the leading geologists and scientists in the field of peak oil. In fact, it seems as though you are trying to pack as much disaster into 10 years as you can. Are we really going to have thousands of bridges collapsing every year in 2020? While we're waging oil and water wars, with a collapsed hospital system? And oil prices are through the roof even though the economy has collapsed? All this in 2020? It seems to me that a lot of your predictions are mutually exclusive (like high oil prices and economic depression). Or somehow waging war, even though the country is bankrupt.
Nevertheless, I'll take your position at fact value. But I think it would be instructive if you gave us a ballpark forecast of liquids and oil production 10 years from now, taking into account all the factors you mention.
Roughly how far, in percent, do you believe oil and liquids production will have fallen in 10 years?
My forecast is well-known: I predict an average decline rate of 1% per year for 15 years after the peak date (for C&C). I made that prediction in Dec. 2007. I also predict that the average decline rate for liquids after its peak date will be <1% for 15 years.
2) I'd have to agree with DB about commuting to a low-wage job. There are many ways to massage that problem which you're not considering. For example, the person can ride a scooter. If you switch from a low-mileage car to a high-mileage scooter at $5 gas, you can save as much as $15 an hour while you're driving. That's better than the money you're making at the job. You can pay off the scooter in a few months, and after that it's all gravy. For that matter, why not just ride a bicycle, and save all the money you use on gas? The average commute in the US in 16 miles -- and that distance goes by very quickly on a decent bicycle.
Car pooling, scooters, bicycling, buses, crashing at work or a flop house, telecommuting, moving closer etc. etc. I don't see any scenario where people can't get to work anymore because gas costs too much. There's just too many ways to massage the problem.
"DB: I encourage you read more closely before posting.
My point was about minimum wage jobs. You responded with an example in which you were "offered a good paying job." A good paying job allowed you to execute your strategy. A minimum wage job does not permit that strategy."
You STILL have no imagination.
The market exists today to service low end accomodation in cities and will continue to exist in times of high fuel costs.
In the case of minimum wage workers who live less than 50 miles from work: They will CYCLE to their accomodation or stay with buddies or whatever.
Those who live further away will hitch to the city or move to the city.
You doomers have ZERO imagination and you honestly believe that it's you who will survive if hard times comes.
Your lack of imagination would see that you wouldn't.
But in any event, keep spreading the doom. It's entertaining if nothing else.
DB
For discussion purposes, here's some current comparative post-peak decline rates by the McPeaksters:
1.0 Husseini
1.3% Robelius
1.6% Leonard
1.7% Bauquis
1.7% Laherrere
2.3% EWG/LBST
2.7% Campbell
3.5% Koppelaar
3.5% Skrebowski
4.0% Hirsch
5.3% Rubin
7.2% Simmons
- as measured Peak to 10mbd threshold (All Liquids)
JD:
I keep telling you that I haven't looked at Kjell's latest work yet, so I'm not responding to him directly. When I get the audio to his talk, I'm happy to respond. You seem to be itching to talk about it, which is fine; send me an email when they post his talk and we'll discuss it.
As for all those things happening, yes I do believe they are all going to happen because we are at the end of the lifespan of very many pieces of our various systems. That's why the American Society of Civil Engineers is trying to raise the alarm. I've done some work in this area and they are not using hyperbole: the systems in the U.S. are falling apart from lack of maintenance. (Have you looked at the latest infrastructure report card yet?)
As for other non-infrastructure systems (like the healthcare system), some of your readers seem unaware of the connection between a healthy economy and healthcare and exactly how much health care is provided by the state. I am working with doctors who are watching the system falling apart with clinics closing across the country. The connection is quite simple:
Contracting economy --> less tax revenue --> less money for all systems, including the healthcare system
So when you have a growing and already-rich economy, it's possible to pay 13% of the GDP for healthcare and get away with it. The U.S. has done so for years. But when the economy contracts, faults in the system that could be tolerated before become deadly.
And the money to do much about these large problems is disappearing quickly. Renewable energy investment is down by half. The fleet turnover rate has risen to 27 years (up from 15) so even if there were all those wonderful electric and hydrogen cars we were promised (remember those?) it would take almost three decades to change the entire fleet. We don't have that time anymore. We started too late.
Most states are bankrupt and are hanging on because of some stimulus money, and in many cases that's not enough (i.e. California). The same thing for individuals and their unbelievable debt levels...except that they are going bankrupt in droves or walking away from their unsecured debts or even their secured ones in the case of mortgages. When an economy shrinks, the ability to pay back the debt lessens dramatically and debt repayment doesn't get just a bit harder, it gets an order of magnitude harder, leading to more defaults.
I have no doubt that people will move to scooters and bicycles...what do you think I tell people in my classes to buy? I also tell them to get busy starting new businesses to take over from the loss of products from afar. But I also make sure they realize that there is a reasonable probability that our currency will collapse. The U.S. can get away with a great deal but I'm sure there is a point where foreigners get scared of our fiscal irresponsibility and dump the dollar or refuse to buy more debt, as what happened two weeks ago with the treasury sale that didn't go well.
As for decline rates, I'm currently happy enough with the IEA's assessment as a floor: four Saudi Arabias required in twenty years to maintain production (WEO 2008). That's about 45 mb/d or approx. 2.25 mb/d per annum or something like 2.7% per annum (again, as a minimum). Add on top the net export factor and the effective decline rate goes to up around 6%. Some of your commenters seem to be unaware of the net export problem, surely you are?
-André
www.PostPeakLiving.com
Thanks Andre,
I think you're getting different problems confused. Yes, the US is having some problems these days. But that has more to do with the US being populated and run by idiots than energy issues. Lots of places in the world are doing just fine. In fact, since the US hogs so much oil, making the US poorer is probably more of a solution than a problem.
How do you see China and Russia holding up in 2020? Will their bridges, health care systems and currencies be collapsing? Or will they be in fairly good shape, and laughing at the US?
Freddy: Thank you for that list of decline rates, although I respectfully request that you drop the pejorative language ("McPeaksters"). I understand that it is an ego boost to use that wording for you (since you get to feel superior to them when you use it) but it gets in the way of communication.
JD:
you're getting different problems confused.
I don't think I'm getting them confused at all. I'm seeing an entire system that has been built by cheap energy coming to an end. It takes a lot of energy to build the way the U.S. did with its sprawl. Services (water, sewage, transportation and electrical) had to be extended great distances to get to very few people. This was acceptable when the U.S. was the Saudi Arabia of oil (i.e. post WWII) but I think Kunstler is exactly correct when he says that this way of living has no future or when he says the U.S. post-WWII building boom was "the world's worst misallocation of resources."
One of your commenters apparently also thought that I was confused when I mentioned the situation in Michigan and how some cities were depaving and shrinking. In response, I assert that he doesn't get the bigger picture. The U.S. has built a sprawling living arrangement ("suburbs") made possible only because of cheap energy. It is, to me, completely untenable as the energy leaves the system. The millions of miles of roads and bridges, water pipes, sewage systems, electrical service, etc. take a lot of money and energy to maintain. As people experience the convulsions that come with contraction, they are going to wonder why their world is literally crumbling around them. Michigan is just the first place this is starting to happen.
Here is what is increasingly happening across the U.S.:
Pic
As for Russia and China, I am no expert on their systems, but I would guess that Russia has been built more compactly (from their socialist history and since not everyone had cars, Orlov seems to say this is the case) and as a major source of fossil fuels will likely be better off as the world economy contracts. Both Russia and China will suffer from hundreds of millions of unemployed and civil unrest. You have at least one commenter who thinks people won't riot as they get desperate when they lose their job and get hungry. I don't even know how to start to talk to that person...all evidence points to it and yet he/she thinks it's a stretch to assume that behavior. Do you? (See the links I posted on how people behaved from many different countries when they got hungry and angry in 2007-2008.)
You didn't respond to my question about the net export problem. Don't you think that is going to cause big problems for oil importing countries like the U.S., Europe, Japan and even China? I haven't read all your posts so I don't know if you address it. It seems like the elephant in the room to me. A low natural decline rate becomes a different animal when dealing with net exports.
-André
www.PostPeakLiving.com
HDT,
Last year's $100+ oil drive up was fueled through speculation; it's somewhat common knowledge that the recent rise has nothing to do with supply and demand fundamentals.
Oil demand has been anemic: OECD demand dropped 5 mbpd between 2005-2008, with more on the way; both the US and Japan have shown substantial drops, and the US, especially, is capable of losing more appetite.
"...the US, especially, is capable of losing more appetite."
Most ICU patients do lose their appetites. Wake up and smell the coffee. Oil is not just another commodity.
HDT
aangel,
I've done some work in this area and they are not using hyperbole: the systems in the U.S. are falling apart from lack of maintenance. (Have you looked at the latest infrastructure report card yet?)
Let's note one thing about the "report card:"
"Structural deficiencies are characterized by deteriorated conditions of significant bridge elements and reduced load carrying capacity. Functional obsolescence is a function of the geometrics of the bridge not meeting current design standards. Neither type of deficiency indicates that the bridge is unsafe.
Furthermore,
"Today, the government classifies about 25 percent of U.S. bridges as structurally deficient or functionally obsolete. A July 18, 1982, New York Times article headlined "Alarm Rise Over Decay in U.S. Public Works" cites government statistics that classify 45 percent of U.S. bridges deficient or obsolete."
Now, that sounds like an IMPROVEMENT to me, but maybe 25% is more than 45% in your world.
Now, I realize that bridges are just one area of infrastructure, but they are probably the most prominent in any case. And don't show a few pictures of sinkholes and claim that's a trend. It's not.
Also, "one commenter" has a name, and if you're going to get uppity about others politeness, then I suggest you at least call us by our names. I may have been a bit acerbic toward you, but I at least addressed you.
One of your commenters apparently also thought that I was confused when I mentioned the situation in Michigan and how some cities were depaving and shrinking. In response, I assert that he doesn't get the bigger picture. The U.S. has built a sprawling living arrangement ("suburbs") made possible only because of cheap energy. It is, to me, completely untenable as the energy leaves the system. The millions of miles of roads and bridges, water pipes, sewage systems, electrical service, etc. take a lot of money and energy to maintain. As people experience the convulsions that come with contraction, they are going to wonder why their world is literally crumbling around them. Michigan is just the first place this is starting to happen.
Again, you are making an a priori argument with Michigan. Michigan is failing, sure. But New York, a huge city that covers more area than either Detroit or Flint, is not contracting. LA is also not going the same route as Flint or Detroit. It is not sprawl alone that killed Michigan, but a lack of work and a reason for the city to exist. Don't try to make Detroit into a "peak oil story" when it clearly is not one.
Suburbia are not exclusive to the US and it is a myth that they depend on cars and cheap gas. Most large cities in the world sprawl across vast areas and people commute one way or another to their jobs.
For instance, I live in London (hardly a third world place) and most people commute everyday on trains/underground/buses into the city, from their homes 10,25,50 miles away. My impression is in the US they just lack the infrastructure and car culture is entrenched. However building these transport systems is hardly anything new, hi tech or challenging. Why someone would think that there will be civil war and widespread disease instead of a comparably minor change in the way people move and their attitudes, is something I cannot understand.
Regarding the relationship between economic crisis and peak oil, the problem is there is no evidence whatsoever of this connection. People like aangel will say the economy crumbles because of resource limits, EROEI etc but actually there have been similar recession/depression times in the past (1930s being still much worse than the current one) which obviously were not linked to resource depletion etc.
On the issue of health care, the US has bad figures compared to other developed countries but I understand that is mainly because of the poor coverage (ie, system works very well for a large number of people but very poorly for a substantial portion of the population; on average it produces worse healthcare than European systems). To me this is only a result of choices- here in Europe we prefer to pay higher taxes and entitle (virtually) everybody to decent health care. The US prefers to have lower taxes and also spend the money differently (for example spending hundreds of billions in Iraq). The difference in health statistics (which by the way is marginal when compared to developing countries) is then the result of political choices, and nothing to do with oil.
-petronomics
To me this is only a result of choices- here in Europe we prefer to pay higher taxes and entitle (virtually) everybody to decent health care.
It's the same in Japan, where I live. I'm on the national health plan like everyone else. It's a one-payer system -- very simple and reasonably priced. I love it. In fact, every time I go to the hospital here, it's like Star Trek -- extremely futuristic, clean and well-managed. So I agree that the health care problems in the US are caused by other factors, like the fact that the US is run by incompetents etc.
Petronomics, what you're mentioning is one of my key frustrations (as an Australian) when reading the posts of doomers - they seem to have an almost exclusively Americentric world view.
A quick note to doomers - America is not the only country in the world. Nor is it the model upon which every country is based. Nor (increasingly) is it the centre of the world, its superpower status notwithstanding.
Making broad assumptions about the fate of the entire world using only America as an example is asinine. Aangel, you've been particularly guilty of this habit in this thread, but HDT and the other regular doomers that post here do it as well.
Yeah, but when someone doesn't eat pork, they can eat chicken. If pork runs low, they don't just starve to death.
-Strangelove
Sam:
I'm in contact with people from your country as well as Europe and they assure me that your societies are as dependent on oil as the US is (plus I've been to Australia and Europe). I'm a Canadian living in the U.S. and I think Canada will have similar troubles to the U.S.
Ari: My apologies for not calling you by name. I was trying to write quickly and didn't look up your name.
As for your point about Detroit, of course I realize its story of decay started much sooner than now. However, since I view the world economic contraction in major part (but not wholly) due to the expensive oil leading up to July 2008 and the subsequent credit contraction that it helped create, I think that the reduced business activity and loss of tax revenue everywhere is a peak oil story. That's more or less the point of peak oil: it means peak economy and contraction is a necessary consequence of it.
Regarding health care, that's a big topic I don't really want to dive into. I'm satisfied to say that the bloated system as it exists now in the U.S. will not survive the decline of oil. And yes I clearly realize the system was a mess before peak oil; I came from a well-run and less expensive system that always took good care of me so I know the difference.
Regarding the bridges, I am also aware of their categorization system; there are still plenty of bridges that fail every year and I assert there will be more. Personally, I am as concerned about the water and sewer systems. The slide I included showed that we are approaching the end of the 100 year and the 40-60 year lifespan water pipes and other systems are similarly old. I completely stand by my comment that if we continue to do nothing, the U.S. infrastructure will start failing on a vast scale. On that score, the ASCE seems to agree; if you don't like that assessment, go talk to them about it.
Petronomics:
You wrote Regarding the relationship between economic crisis and peak oil, the problem is there is no evidence whatsoever of this connection.
Well, that's a very interesting position to take.
Each $10 increase in a barrel of oil takes approximately $70 billion out of the U.S. economy or $280 billion out of the world economy that would otherwise go to wages and other productive activities instead of simply going toward purchasing the energy. If you can't see the link between peak oil and the world economy, I'm not sure my suggestion will help but I nonetheless recommend reading any number of papers on the topic:
* Mitigation of Maximum World Oil Production:Shortage Scenarios, Hirsch, 2008
* Delays Will Tighten Global Oil Markets, CIBC World Markets, Rubin, 2008
* The Macroeconomics of Oil Shocks, Philadelphia Fed, Sill, 2007
* Accounting For Growth: The Role Of Physical Work, INSEAD, Ayres and Warr, 2004
* Causes and Consequences of the Oil Shock of 2007–08, Hamilton, 2009
I think we've covered about as much ground as I'm personally interested in. As I've said, everyone must make their own choice. We can compare notes in ten years. If the economy is vibrant, unemployment is less than 50% (U6), roughly the same number of people around the world are happy, healthy, well-fed and not rioting, I will gladly purchase everyone on this blog a beer at the my local pub.
Best,
André
With respect Andre, both the McPeakster & McDoomer camps bring to the discussion a cornucopia of armageddon scenarios that are merely the fantasies of amateur futurists.
Take your example of the rising price of crude: it is a pittance in the realm of a $65 Trillion global economy; and $16 Trillion in exports.
Your statements are in general disengenuous of the forecasting ability of the many ardent experts in a myriad of federal departments.
I'd luv to see your advocates make these silly statements under the media scrutiny of a senate committee hearing. They'd be laffed out of the room.
As an alternative, send your Unemployment Rate projections to the Congressional Budget Office. They forecast out to 2082 presently. Then post their reply for us.
When MK Hubbert was doodling with his peers in 1956, his world production peak forecast was only 34mbd. But upon being invited to the Senate Hearing some years later, his chart read 110mbd. Funny how the bright lights of pending due diligence brings out the best in people...
Congress & MSMedia know all too well that McPeaksters come to the table after crying wolf for 20 consecutive years. Campbell said All Liquids peak was 66mbd in 1989. After 20 such failed declarations, pessimists only change in methodology was to consider bottom-up tallies.
And we know where that got them: perennial upward revisions due to the inherant flaw of limited visible horizons.
Last month the EIA IEO was released. It forecasts wind & solar will supply only 2% of primary power generation in 2030. Your camp has no perception of the scope of fossil fuel contribution over the coming decades.
Coal, gas & oil will be around for two hundred years. The peaks won't be in your lifetime. And the subsequent declines will be manageable. If i am wrong, there are economic arctic and offshore methane hydrate reserves that exceed all three of the above together.
What happened here? This is a blog to promote an idea, one of the few published counter-ideas in the peak oil world, and this last week it has fallen to what feels like a bunch of 5 years olds calling each other names on the school playground.
Aandre, what are you trying to do here? This blog has been around for years and yet you wait until this week to make it your personal mission to debunk it through your comments? Why? Trolling here will not earn you more business and you will not succeed in Debunking JD's work with what mostly amounts to circular logic. If people want to read your work they will go to their site they don't come here for it.
JD, why are you playing into this? You've done so much better with trolls over the last few years yet this guy seems to be getting to you.
I've written a number of blogs over the years and trolls are trolls no matter the subject.
For the record I am writing this neither in support, nor opposition to the views presented. I merely wish to see the trolling and name calling stop so we can get back to the real comments and questions.
(laughing)
Your faith in government forecasters is refreshing, Freddy.
Instead of a beer, instead I will buy you a margarita, but in your home town, surrounded by palm trees and other tropical flora and fauna as we continue to heat the earth from the endless supply of fossil fuels you see us burning.
Unless, of course, you don't think climate change is a problem, either....
HDT,
Well, if non-OPEC's 1 mbpd decline of crude since 2005 is cause for alarm, then by all means, load up on survival books from Savinar's site, pick a lot of land in Upper Peninsula Michigan, dig a little hobbit home in the hill, and brittle out your bones by age 50 enduring cold climate and an occasional skinny chicken that makes KFC's birds look like plump feastin'.
Meanwhile, for those who actually pay attention to the news, we'll glimpse at OECD's decline of over 5 mbpd since 2005 (that includes China, kid), and hit the snooze button on sustainable living.
aangel,
Considering how wrong McPeakers - Simmons, Deffeys, Ruppert, Savinar, Mobjectivist, Orlov, Richard Duncan, and all peak processors since the late 19th century - have been wrong in the pre-peak world, it seems safe to say they won’t be right about much in the post-peak world either.
aangel,
If you don't believe the government forecasters, who is to be believed then?
It seems to me that you're engaging in an ad hominem fallacy without giving any reason why we shouldn't believe the government figures. That's not really a good way to approach things.
You're the one pulling legs. The entire global economy is based on GDP growth. If we dont have that growth, we WILL eventually succumb to an all-out political crisis. War follows shortly from there, then we get massive gyrations in oil production. It is possible that oil production will increase by as much as 20% during our ride downwards. But by now means will it be a slow and steady %/yr decline.
At any rate, the decline is bound to be worse than 0.5 or 1% per year for the US. The US is doing all the wrong things, and its people are still totally under the mind control of the banker oligarchs. Who needs growth anyway, when we will have food stamps, FEMA camps, and a steady parade of Michael Jacksons to faun over? 10 years from now, America's population could diminish by 30 million, and the sheeple will be so mindwashed that most will never think to wonder if something is going wrong. And the ones who do will be vilified. Tell me you do not see how something like this can happen. The 3rd Reich was just a warmup. Misunderestimate the power of occult forces at your own peril.
"Unless, of course, you don't think climate change is a problem, either...."
Freddy does believe in climate change.
I, however, do NOT. I don't want to totally highjack this thread, but much of the AGW propaganda is structured like that of peak oil. Weak, manipulated or misconstrued studies and data buried within a mix of sensationalism and rhetoric which seems more like religious fundamentalism than science.
Decreasing our use of fossil fuels and lowering emissions and pollution would certainly be a good thing in almost anyone's worldview, but don't believe the hype about AGW.
DoctorJJ
JD,
When are you predicting the actual peak to occur, or do you believe we are past it?
--ZZ--
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