The End of the Peak Oil Theory

Last week I got caught up in a show from a few years ago called "Mega Disasters: Oil Apocalypse" on The History Channel, spelling out the doom our economy was facing as oil production declined over the next 100 years. Domestic production was already declining, and we had no plan B. Stock up on canned soup and ammo while you still can!

If you haven't noticed, the oil apocalypse has been delayed -- again -- and the doomsday predictors are undoubtedly eating crow while they concoct another mega disaster. "Peak oil," the theory that oil production will soon hit a peak and begin declining, sending the world into an economic disaster, failed to live up to its hype again.

It's amazing how fast perceptions of our energy future can change. One day prevailing wisdom tells us that energy costs are going to rise uncontrollably as oil production declines and new energy sources fail to live up to their promise. The next, our problems are solved, and our reliance on foreign oil appears to be evaporating before our eyes.

The oil scare that never goes away
We've been hearing about peak oil for years, and even some of the brightest minds in energy think the theory has some validity. But, like any other apocalypse, it never quite seems to unfold as the predictions assert. There are just too many factors that peak oil prognosticators can't account for in their bold predictions, so they always get them wrong.

Innovation trumps conventional wisdom
One of the problems with peak oil predictions is that they have so little imagination. They don't consider the impact of new drilling techniques that open new oil fields to massive amounts of production. A decade ago, shale drilling wasn't a well-known technique outside of the industry, much less a major contributor to our oil production. Today, Kodiak Oil & Gas (NYSE: KOG  ) , Continental Resources, and Whiting Petroleum have turned the desolate North Dakota prairie into an energy bonanza by unlocking shale oil there.

Offshore drilling has also grown by leaps and bounds. Drillers like SeaDrill (NYSE: SDRL  ) , Transocean (NYSE: RIG  ) , and Noble are building ultra-deepwater rigs as fast as they can to unlock new fields off the coasts of Brazil, Angola, and other parts of the world that were once out of our reach.

Then there are Canadian oil sands, which hold the second-largest oil reserves in the world, behind Saudi Arabia. These developments alone unlocked enough oil to delay peak oil for a few more years at least.

Evidence that these innovations have turned peak oil on its head is undeniable. According to Bentek Energy, North American oil production will top a 40-year-old peak by 2016. The U.S. Energy Information Administration predicts that by 2020, U.S. oil production alone will grow another 20% to 6.7 million barrels per day. Even OPEC's surplus oil production capacity is expected to increase from 2.55 million barrels per day in 2011 to 3.92 million barrels per day by the end of 2013.

It's hard to see how oil production could fall in the short term. And longer-term peak oil theorists have even more problems on their hands.

Alternatives make a peak irrelevant
For the last century there were very few alternatives to the black gold that flowed freely from wells around the world. Today the dynamic is slowly changing, squashing the fear that peak oil once garnered. If diesel fuel gets too expensive, now truckers have an alternative in liquefied or compressed natural gas. Westport Innovations (Nasdaq: WPRT  ) provides the technology to make the engines possible, and Clean Energy Fuels (Nasdaq: CLNE  ) is quickly building a national natural gas highway to make fueling possible.

On the consumer side, manufacturers are releasing not only natural gas vehicles but electric vehicles, as well. Electric vehicles may not be for everyone, but as fellow Fool Alex Planes points out, the adoption rate has been even faster than that of hybrids a decade ago. These alternatives will play a roll in curbing demand for oil.

To top it off, new fuel efficiency standards that call for average fuel economy of 54.5 mpg are going to make vehicles even less dependent on oil and gas over the next two decades.

Putting peak oil to rest
In 10 years oil will no doubt play a major role in our energy picture, but the grasp it had a decade ago is slowly fading. Alternatives, efficiency, and new drilling techniques make the once frightful concept of peak oil nearly irrelevant. This isn't to suggest that prices will suddenly fall, only that a pending economic collapse because of a decline in oil production can be shelved for the time being.

Looking out beyond the next decade, it's hard to see how energy sources like solar, natural gas, wind, and even biofuels couldn't slowly replace our current addiction to oil. Sorry, peak oil theorists, this Fool is putting your predictions of doom to rest.

Increased oil production means opportunities for innovative companies in the industry. In our free report called "3 Stocks for $100 Oil," our analysts highlight three such companies that will flourish in the energy sector. Check it out by clicking here.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

The Motley Fool owns shares of Transocean and Noble. Motley Fool newsletter services have recommended buying shares of Westport Innovations. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On February 16, 2012, at 3:11 PM, cp757 wrote:

    Travis this is a very good article and I can see you have done your research. The man that came up with and created the Peak oil theory was M. King Hubbert, he created and first used the models behind peak oil in 1956 to accurately predict that United States oil production would peak between 1965 and 1970. The theory was a fact with the cost of oil on the rise the markets must change and as you say "there are just too many factors that peak oil prognosticators can't account for and this has turned peak oil on its head " The switch from diesel to liquefied or compressed natural gas is huge . T. Boone Pickens has been pounding the table about natural gasfor years but I think the government policies are what will move this sector,and that is coming. I thought your story brought the full picture to the investors.

  • Report this Comment On February 16, 2012, at 4:08 PM, TMFFlushDraw wrote:

    @cp757

    Thanks

    Travis

  • Report this Comment On February 16, 2012, at 4:36 PM, mikejw wrote:

    I think that oil will continue to be available but at what price remains the question. Eventually oil will price itself out of being our primary source of energy based on a high price alone as the cost of producing it will continue to increase. We have to go deeper and deeper and into more treacherous locations then we ever had to have had before.

    The price points alone will make alternative energy profitable (without government subsidies that is) and cheaper than oil. So in the end, economic forces will solve our dependence on oil.

    Just my opinion.

  • Report this Comment On February 16, 2012, at 4:40 PM, ThatGuyInTheBack wrote:

    Mr. Hoium,

    Semantically, your article boils down to "oil has never disappeared before" and "innovation will take care of it." You show no signs of having actually looked at the numbers.

    For a numerate explanation of oil depletion and what it implies, I suggest you purchase the book referenced on this site (http://en.wikipedia.org/wiki/Cubic_mile_of_oil).

    The high points. 30 billion barrels a year (160 exajoules) is the approximate amount of the world's yearly oil consumption. Actual recovery (vs. technically recoverable) rates usually bounce around between 45% and 75%. We have about 1.4 trillion barrels of proven (i.e. technically recoverable oil left) oil that's energetically and economically profitable, plus the possibility of a few hundred billion more barrels of low energy return, expensive oil from oil sands and deepwater drilling. Google up the numbers. They're out there. Break out the calculator. Production price, production rate and energy return are the relevant factors.

    Spoiler. We never run out of oil, but we're not going to be able to run a civilization, or feed 7 billion or more people every day, on renewables, or renewable plus nuclear. For that matter, a sufficiently low energy return on non-renewables almost guarantees a cascading supply chain failure from which we are unlikely to recover in my lifetime or yours.

    Perhaps someone will read your breezy little article and buy whatever is referenced in "3 stocks for $100 oil." The article itself, however, is a bit of a fail as a promotional piece.

  • Report this Comment On February 16, 2012, at 4:42 PM, DJDynamicNC wrote:

    I suppose what we're making here, then, is the replacement of peak oil supply with a prediction of peak oil demand.

  • Report this Comment On February 16, 2012, at 7:23 PM, Beery1 wrote:

    Erm... the oil apocalypse is here. Haven't you noticed - Brent Crude is at $118/bbl, there is unrest throughout the world. What, did you expect the Rapture, a nuclear winter or something? That's not how these things work. This is only the very start. Most people are as clueless as you - they don't even know it's happening yet. They think it's just a blip. They (and you) are about to get a wake-up call.

  • Report this Comment On February 16, 2012, at 9:31 PM, CactusCharlie wrote:

    If you don't understand the scale of the problem, then you probably won't believe in Peak Oil, or even Peak Cheap Oil. Depletion of the big old oilfields all over the globe is reducing the amount we can produce at the rate of about 3%/year. At 80 million barrels/day consumption, that means we have to find and bring on stream about 2.4 million barrels/day of new production just to keep up (sounds about like an Iran's worth, doesn't it?). To put that in perspective, that would be drilling and completing about 5,000 of those wonderful new 500 bbl.day North Dakota Bakken Shale wells each year. Don't kid yourself - we are nowhere near doing that, and those wells don't stay that good very long.

  • Report this Comment On February 16, 2012, at 10:33 PM, cbarcus wrote:

    The Straw Man

    This article is based upon a fundamental misconception of the problem of Peak Oil, which is not terribly surprising as the theory is somewhat subtle and widely misperceived. It is not about "running out" but the peaking production of conventional petroleum sources, which very much appears to be the case. As the author freely admits, the alternative to conventional are these vast stores of tar sands, shale oil, and deepwater reserves- all which carry inherent higher costs in both production and emissions. If he had read the scientific literature on the subject, he would realize that this transition is both significant and very risky, not least because it is not at all clear that unconventional production growth can keep up with conventional production decline. So, we are inevitably faced with higher prices (a new plateau with lower EROEI), higher emissions, and a more shallow growth curve. Perhaps the author find this increased risk completely acceptable.

    The true sustainable alternative to this situation is synthetic fuels: NH3, CHx, and maybe H2, using a new generation of high-temperature low-cost reactors as the energy input. Implementing this alternative requires preparation, but most importantly, the foresight that such an approach is necessary if we are to maintain the level of existence we now enjoy.

    It should also be immediately apparent that our current energy system is far from adequate when one considers the prevalence of poverty around the globe. It is widely accepted within the scientific community that one of the most effective ways of reducing worldwide poverty is to make more energy available at a lower price. The well-to-do should make careful note of this relationship if they favor the social and economic stability which gives their assets the value they currently hold.

    How do we dramatically lower the cost of energy with nuclear? We need to pick the right technology. Look for features of inherent safety, high temperatures, low pressures, high efficiency, low maintenance, air-cooling, a cleaner fuel cycle, etc. so that the plants may be much smaller, encounter far less public opposition, and allow a steady development that will lead to major technological improvements. Reducing the construction time, insurance, and overall plant complexity has the potential to at least halve the cost of new plants. And we need to do that if we are going to build a lot of them. Current global energy consumption is on the order of 13 terawatts, with tens of terawatts of projected demand at lower costs. We've got to produce electricity, synthetic fuels (and other chemicals), and potable water. We need tens of thousands of plants.

    Ammonia should be the ubiquitous energy carrier of the future for the vast majority of transportation. Thorium should be the fuel. The reasons for these choices come down to energy density, technological feasibility, and simple economics.

  • Report this Comment On February 16, 2012, at 11:24 PM, dividendgrowth wrote:

    There is 'gold-rush' atmosphere in shale oil patches.

    NG price has already been trashed.

    It's only a matter of time before oil price follows the same course.

    Then it's game over for Iran's mullahs.

  • Report this Comment On February 16, 2012, at 11:36 PM, gregwietholter wrote:

    'Peak oil' exists, it just doesn't/didn't happen dramatically but instead it happens with a long drawn out price hike and geopolitical turmoil. It happens slowly where you have to drill miles under bodies of water (and ruin them) and turn oil sands into oil by expending almost as much energy to do so, by extracting oil from strange corrupt corners of the Earth or fighting wars (WMD's anyone??) to get long-term oil contracts. So your article is correct, we can easily extract more oil, it's practically limitless!! Oh yeah...you just didn't mention the small detail of the literal hell involved with getting at it.

  • Report this Comment On February 17, 2012, at 2:40 AM, GrahamMewburn7 wrote:

    the North sea oil field went into decline in 1999

    it is now producing 50% of what it produced 12 years ago

    California has 4 times as much shale oil as the Bakken

    the total amount of shale oil in US 48 states is

    23.94 BBO

    America uses almost 7 BBO Billion Barrels of Oil PA

    23.94 BBO is the amount of oil US uses in 3.5 years

    http://www.wealthdaily.com/articles/california-has-4x-the-oi...

    I can only asume you deliberately say untruths to stir people up

    I hope you are not so foolish to believe what you have published

    Gray

    Graham Mewburn

    Australia

  • Report this Comment On February 17, 2012, at 8:32 AM, ravenesque wrote:

    "From the standpoint of the oil industry obviously and I’ll talk a little later on about gas, but obviously for over a hundred years we as an industry have had to deal with the pesky problem that once you find oil and pump it out of the ground you’ve got to turn around and find more or go out of business. Producing oil is obviously a self-depleting activity. Every year you’ve got to find and develop reserves equal to your output just to stand still, just to stay even. This is true for companies as well in the broader economic sense as it is for the world. A new merged company like Exxon-Mobil will have to secure over a billion and a half barrels of new oil equivalent reserves every year just to replace existing production. It’s like making one hundred per cent interest discovery in another major field of some five hundred million barrels equivalent every four months or finding two Hibernias a year.

    For the world as a whole, oil companies are expected to keep finding and developing enough oil to offset our seventy one million plus barrel a day of oil depletion, but also to meet new demand. By some estimates there will be an average of two per cent annual growth in global oil demand over the years ahead along with conservatively a three per cent natural decline in production from existing reserves. That means by 2010 we will need on the order of an additional fifty million barrels a day. So where is the oil going to come from?

    Governments and the national oil companies are obviously controlling about ninety per cent of the assets. Oil remains fundamentally a government business. While many regions of the world offer great oil opportunities, the Middle East with two thirds of the world’s oil and the lowest cost, is still where the prize ultimately lies"

    - Dick Cheney, 1999

    http://michaelfury.wordpress.com/2011/05/10/sing-it-out/

  • Report this Comment On February 17, 2012, at 9:39 AM, TMFFlushDraw wrote:

    Thanks for all of the great comments everyone. I can't respond to everything but I'll point out a few observations.

    - Peak oil may have been built on the fact that conventional oil production will peak, but my article was built on the thesis that this is irrelevant because unconventional oil production now plays a major role in production and alternatives are coming online quickly. The broader point is, even if we reach peak oil it won't matter nearly as much as peak oil theorists originally thought.

    - The notion that there's no replacement for oil is the very inability to anticipate innovation that I think has proven the peak oil theory wrong. 20 years ago shale and ultra deepwater wasn't economically viable so it wasn't properly accounted for in the peak oil theory. Today these sources are viable and whether they're conventional or not, they should be accounted for in our oil supply since they've will continue to push supply to new highs. The same goes for gas, wind, solar, etc. Today they may play a small role in our energy picture but it is growing quickly and in 20 years these innovations will help make peak oil irrelevant.

    Until all of this plays out the debate will rage on.

    Travis Hoium

  • Report this Comment On February 17, 2012, at 11:21 AM, applegate888 wrote:

    That big ball of energy in the sky should be as important to americas energy future as the manhattan project was to end wwIII.

  • Report this Comment On February 17, 2012, at 11:40 AM, RobertHurst wrote:

    What the author is somehow missing: Conventional oil is declining at a fast rate while these unconventional sources ramp up. We need to replace something like 5 million barrels/day of production each year just to stay even.

    Increases in production of unconventional supplies are either just barely or not quite making up for the depletion of conventional oil fields. But if you ignore the entire depletion angle, everything looks great!

    Furthermore, unconventional oil is vastly more expensive to produce in terms of energy and money. So you have to produce more and more "barrels of oil" to get the same amount of energy. The cost goes up and up. So call it Peak Oil if you want, doesn't matter, the price is going up. Even old-school Peak Oil deniers like Daniel Yergin admit that "we're in a different world now." The era of cheap oil is over.

    Readers of this piece would do well to search out other sources and consider aspects of the story which were blatantly ignored by this author, especially if you're putting money on the line.

    Look at the trainwreck of conventional wisdom tust 9 years ago, by the notion that "technology" and "innovation" will save us from Peak Oil:

    http://industrializedcyclistnotes.com/2012/02/15/juuust-a-bi...

    The technology to extract shale oil and gas has been around for a long time. The author has it backwards -- that technology is not going to save us from Peak Oil. Peak Oil is precisely the reason why these production techniques have become viable.

  • Report this Comment On February 17, 2012, at 12:58 PM, tralition23 wrote:

    The disappointing thing in your argument is that you entirely ignore the externalities caused by oil—namely climate change, global conflict (aka war) and pollution. The costs of transforming the oil sands in Canada into usable oil are huge both environmentally and in terms of energy. The idea that with we'd be "rah rah" about the innovation that lets us continue to use artificially cheap narcotic oil is silly; we need to get real about this nasty habit rather than keep trying to get rich off it. My personal feeling is that your little mini essay is irresponsible for these reasons and those enumerated by my fellow fools.

  • Report this Comment On February 17, 2012, at 1:04 PM, zoblin wrote:

    That we find more oil each year is actually pretty irrelevant. On the other side, even the fact that the new oil is more costly to extract is somewhat irrelevant.

    Each year, since the mid '80s, the world has consumed more oil than it has discovered. Unless that changes we will run out. The estimates I've seen for this have always been between 2040 and 2065.

  • Report this Comment On February 17, 2012, at 1:10 PM, FoolishVintner wrote:

    Nothing in this article contradicts the basis premise of peak oil. It is a finite resource, and most of the major oil fields have already peaked. So it is a foregone conclusion. Technology has only temporarily postponed the inevitable.

    Oil may never completely "run out," but its increased scarcity and the cost of developing technologies to extract unconventional petroleum sources will make us wish we had embraced conservation and energy alternatives much more aggressively than we have.

  • Report this Comment On February 17, 2012, at 2:01 PM, ibuildthings wrote:

    I seriously dislike the usual political "panic into doing something stupid" crowd. Left-leaning politicians and their buddings in most media outlets are good at fanning flames of panic, but bad at fixing anything except their own reputations when they make a mess.

    An example is the Kyoto treaty, which was a recipe for wealth transfer, not a recipe for emissions control. It was rigged to force developed nations into buying carbon credits from non-developed nations, while excluding China and India from the list of developed nations. It was cheaper for mega-corps to pay off or relocate factories than it was to actually reduce their emissions. Money changes hands, the west loses jobs and cash, and the band plays on.

    Another example is ethanol. It takes more than a gallon of petroleum to produce a gallon of ethanol. On top of that, your mileage drops 10-15%. So you consume more ethanol to go the same distance. Where is the savings in money or pollution?

    In both cases, a legitimate concern (pollution and diminishing oil stock) was used by political people to panic us into doing something stupid, that other people profit from.

    This is not to say we have no worries about petroleum's issues. It is to say that we should not allow politicians to do our engineering for us. We see how well that has worked.

    The improved access to crude should be seen as a reprieve from what we thought was an immediate problem. We have the time to do the R&D to come up with a better plan.

  • Report this Comment On February 17, 2012, at 2:05 PM, FelixHoenikker wrote:

    I agree that peak oil theory overblown. But, why is gas so exepnsive lately? The I-rain-e-in theory is also getting pretty old.

  • Report this Comment On February 17, 2012, at 2:08 PM, ibuildthings wrote:

    It upsets me that solar is getting a black eye because of Solyndra. They MIGHT be some corruption there. They re-wrote the contracts to ensure that the well-connected investors got their money out of a failing enterprise. That's the scandal. It is NOT a scandal that the administration tried to fund some alternative energy companies. That was a good thing.

    But solar isn't ready yet. Need more R&D. Need other options too. And until then, keep drilling.

  • Report this Comment On February 17, 2012, at 2:57 PM, sbetzen wrote:

    I am actually a person that uses and invest on this site regularly, also a subscriber. I didn't just come here to trash this article.

    It is sad to see such a poorly conceived article on the front page of the fool website. This article started with a goal, to discredit peak oil. Then like bad propaganda created a straw-man through misunderstanding/misrepresenting a scientific concept. Then it discredited the creation of the author, which he claimed was peak oil theory.

    Peak oil theory came from observation of the facts on the ground... certainly the theory still stands, but the variables change. Concern over peak oil along with concerns over energy security, drove innovation to respond to these issues. This does not mean that the theory is wrong... it means that people can control some of the variables. Peak oil theory never stated that we can't change or that our decisions have no effect... in fact the proponents encouraged us to change. As you mentioned the oil industry also changed... because they saw the writing on the wall and wanted business to be better for longer. None of these changes disproves Peak oil Theory... they just change the input.

    In fairness it should be stated that people on the other side of this fake debate have misunderstood peak oil as much as you have. Some have contrived huge crashes and famine and doom. Most of them encourage action because they know human change is a variable... but some of them can be put in the same room as the 2012 folks. These are all just predictions, many of them misunderstand peak oil as much as your article insinuated you do.

    Peak oil is still a valid theory and a factor to consider when determining the viability of long term investments. The human response to peak oil is also worth considering.

    I hope to see more well thought out articles on the front page of the fool website.

  • Report this Comment On February 17, 2012, at 3:11 PM, sheldonross wrote:

    I too will fail at comprehension and misinterpret this article as saying peak oil never existed!

    And I'll ignore your clarifying comment...

    Travis you really should write better articles

    :)

  • Report this Comment On February 17, 2012, at 3:20 PM, jlre2 wrote:

    Most persons do not understand the need of the by-products of hydrocarbons, oil in other words.

    Without the nitrogen in the prill form our corn production would be cut in half. We would have to go back to the days of crop rotation. That is planting crops such as red Clover which is a legume plant that over-produces Nitrogen that can be found on its roots. However it is noreadilyly available to Corn, Red clover must first be sowed they crop harvested plowded under that deteriorates and is natural Nitrogen.Yields would back down to 100 bu per acre and we simply will be buying corn from another nation.

    About 500 by-products are made from oil. one is plastics, which the medical profession uses oil in many uses. gasoline and oil for our cars we think about, but food come first.

    jlre2

  • Report this Comment On February 17, 2012, at 4:09 PM, ejclason2 wrote:

    Peak (conventional) oil does not mean that we will run out of energy production. What it does mean is that energy cost (after inflation) will gradually increase.

    The Saudis can pump oil out of the ground for less than $10 a barrel. Yet the price we pay for oil is over $100. Why, because the new ways to produce oil and alternative energy cost more. If peak (conventional) oil didn't exist, the price of oil would be alot cheaper.

    -The people who say 'the sky falling, we're going to run out of energy' are wrong.

    -The people who say 'oil will always be plentiful and cheap' are also wrong.

    We are not going to run out of oil or energy anytime soon. But oil and energy will, over the long run, increase in price faster than inflation.

  • Report this Comment On February 18, 2012, at 2:42 PM, charon478 wrote:

    Look around you. If you are living in a modern, western society then everything -- and I mean EVERYTHING -- has been made possible by oil. The clothes you’re wearing, the furniture you're sitting on, the building you’re in, even the food you eat every day… all possible because of oil.

    Oil is a finite resource. Demand will eventually outstrip supply. Consider that human population is increasing exponentially which is driving demand to increase exponentially (gotta love that consumerism we're exporting!!). Supply of conventional oil is decreasing. We picked the low hanging fruits first. Now all that is left are the hard-to-reach, expensive-to-get-at sources. We will never technically run out of oil, the last bit of it just won’t be economically worth taking out of the ground.

    No alternative energy source that we have discovered will EVER replace the energy density of oil. Sure we can transition (and should!!) but it will be a drastic change in our standard of living. We will have to transition to a more locally resilient economy. Also, solar, wind, nuclear, etc. can never replace the petroleum by-products that are so essential to our way of life.

    Add in to all of this that our monetary system, being fractional reserve and based on the creation of ever increasing amounts of debt, is driving an insatiable demand for the use of more resources.

    Big Government will never solve any of this. The status quo is too entrenched and to actually admit the root of the problem would be political suicide.

    We need to solve this at a grass-roots level and become locally resilient; self sufficiency on an individual and local scale. Dialogue within our communities is needed now. We can plan our energy descent and avert much widespread suffering, or we can ignore the problem and witness a truly catastrophic disaster.

    Look up "The End of Growth" and "The Crash Course". Educate yourself now.

  • Report this Comment On February 18, 2012, at 5:16 PM, Beery1 wrote:

    "...my article was built on the thesis that this is irrelevant because unconventional oil production now plays a major role in production and alternatives are coming online quickly."

    But the point you miss is that, as others have said, they are not coming online quickly enough and they never will. Right now, they are unable to keep pace with demand, and conventional oil has merely flattened - it's not even in decline yet! By 2015, I suggest we'll really see the problem a lot more clearly and at that point, articles like this will seem very naive indeed - perhaps treacherously so.

    Unconventional oil is difficult to extract and expensive to get to market - and a lot of it is not there in the quantities we need it. Sure, production of unconventional liquid fuels is ramping up, but at a certain point, production of unconventional oil has limits - and those limits are well below what we need them to be in order for them to be a substitute for conventional oil.

    The real problem here is that overly optimistic articles like yours are preventing people from correctly assessing the situation. You may be wealthy and secure enough to weather the initial upheavals of a post-peak world, but many are not, and the more we delay, the more the majority of people will be hurt by inaction. And trust me, in 15-20 years when things get bad, as is now pretty inevitable, folks on the cornucopian side of the equation had better hope that the mob don't come looking for them, 'cos in a future where the damage of Peak Oil has not been mitigated, whatever government we have at that point is not going to step in to bail out the folks who helped to blind us to the truth. If anything, government will be quite happy to throw those folks to the dogs.

  • Report this Comment On February 18, 2012, at 9:23 PM, Mobius007 wrote:

    IEA sees decline in Saudi oil output

    Published: Feb. 15, 2012 at 8:54 AM

    “The International Energy Agency lowered its estimate of Saudi Arabia's oil output from 12 million barrels per day from January to 11.88 million bpd in its latest February report.

    IEA Senior Analyst Diane Munro told the Financial Times that the February assessment reflects a natural decline in Saudi Arabian oil fields. That rate is estimated at around 3.5 percent per year.

    As the kingdom pumps more money into production, however, natural declines should slow, she said.

    "We are reviewing our estimate of Saudi's natural depletion as Saudi Aramco appears to be bringing in more rigs and that should help to stem the natural decline," Munro was quoted as saying.

    Riyadh had said it could make up for the loss of any Iranian crude on the international market.”

    http://www.upi.com/Business_News/Energy-Resources/2012/02/15...

    Hopefully you prepared for what is coming, since time has run out.

  • Report this Comment On February 22, 2012, at 7:44 PM, Marnic235 wrote:

    Travis, have you ever heard of something called EROEI? If not, look it up. What a sad piece. I actually thought the Motley Fool was better than this.

  • Report this Comment On February 24, 2012, at 6:35 PM, dgeist0 wrote:

    This is one of the stupidest essays I've ever read. The peak oil theory is a statement of the obvious, and it has been proven hundreds of times on the scale of individual fields and countries' production. Peak oil says nothing about apocalypse, duh. The real theory, which the author is unaware of, is again being proved: it is harder (e.g. pushing into deeper water, horizontal drilling) to get less petroleum at greater price every year.

  • Report this Comment On February 25, 2012, at 1:31 PM, ThatGuyInTheBack wrote:

    Travis, as an engineer, aren't you a little embarrassed by this article? It's something I would expect from an innumerate liberal arts major bleating about replacing oil with renewables, not a mechanical engineer with at least some math background.

  • Report this Comment On February 28, 2012, at 1:23 AM, decebalvs wrote:

    The interesting comments and pointers make up for the imbecility of the article itself.

  • Report this Comment On February 28, 2012, at 1:27 AM, xxPat wrote:

    The numerous disconnects from the facts in this piece are fairly well debunked in the following free video about peak oil investing: http://www.eriktownsend.com/video-1-peak-oil-explained-for-i... Note particularly the section on "whatabouts" which debunks the myth that alternatives or technology solve the problem.

    There have been some pretty compelling (albeit misinformed) anti-Peak Oil articles in the press in the last few weeks. With so many good examples to copy, it's hard to see how this article got published being this bad.

    xPat

  • Report this Comment On March 01, 2012, at 3:27 AM, guitarbuddy wrote:

    I'm glad to see so many reasoned, knowledgeable responses to yet another "Peak Oil is bunk" article. To those comments I'd like to add the following:

    The 2008 price-per-barrel spike was predicted by Peak Oil proponents as the inevitable result of peak production, said to have occurred in 2005. Wild price fluctuation was also predicted and has continued to occur. This led to a global financial meltdown, the effects of which are still occurring, also predicted. Adjusted for inflation The price-per-barrel increased over 800% from 1998 to 2008, and was only slightly lower for 2011 than 2008.

    Deepwater oil and shale oil have been known about for many decades, and indeed deepwater wells have been in use for quite some time. The reason they weren't as exploited earlier is because they are expensive, dangerous, and enormously environmentally destructive (BP Horizon, anyone?). That has not changed, but what has changed is the same with any resource addiction, one's standards go down when supplies become tight. What we're witnessing is like the end of a fancy party that began with champagne and top shelf liquor and ended with the dregs in beer cans and spody-ody.

    And don't forget, oil is currently selling at $10 to $27 HIGHER than the 2008 price averaged out for that year. If our current production is so gung ho why is it so expensive?

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