Thursday, July 08, 2010

Peak oil panic is still bunk

From the Peak Oil Debunked site:

I first began writing on peak oil 6 years ago, in the summer of 2004. Matt Savinar was predicting imminent TEOTWAWKI, and telling folks to run for the hills. Now, 6 years later, I can go out on the street, and nothing whatsoever has changed since 2004. The streets are still clogged with cars going on mindless journeys. People are sleeping in their cars with the engine running to power the air-conditioning. Oil is at $75 and it's not going anywhere. Food prices and availability are completely normal. Plastic Hello Kitty paraphernalia is as plentiful and cheap as ever. Peak oil continues to be a ridiculously over-hyped non-event, just like I always predicted. I thumb my nose at it with impunity. LOL.

The Oil Drum doesn't even bother with new posts anymore. Just recycled versions of the same old "oil spill" post, flopping over and over like a flat tire, wump wump wump. Quite a comedown from the heady days of A Nosedive Toward the Desert in 2007. Yup, peak oil is yesterday's party. The IEA is yawning and predicting oversupply of oil until 2015. Lucky us. Five more years of "topics for discussion" from Gail the Actuary Source. Matt Simmons' ongoing nervous breakdown continues to blossom in fascinating ways. Last week he predicted a mass evacuation of gulf states: "We're going to have to evacuate the gulf states," said Matt Simmons, founder of Simmons and Co., an oil investment firm and, since the April 20 blowout, the unflagging source of end-of-the-world predictions. "Can you imagine evacuating 20 million people?...This story is 80 times worse than I thought." Yah, that's some funny stuff. I think Matt Simmons is about 80 times more mentally unstable than I thought...

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37 Comments:

At 6:05 PM, Anonymous To-Zar said...

Hilarious timing Rob. Peak oil is already here if you define it as referring to cheap and readily available oil. Alberta tar sands and deepwater drilling in the gulf will last for a long time - you're quite correct about that. But what's the cost?

 
At 7:30 PM, Blogger Rob Anderson said...

The Arco station at Fell and Divisadero isn't pumping sand. Where's the shortage?

 
At 7:01 AM, Blogger Lex said...

Isn't funny how the bike people *love* the idea of Peak Oil. It's almost a religious icon with them. Their equivalent of the Easter Bunny or the Great Pumpkin.

They go out in their backyards at midnight, hold hands and wish really really hard in the hope that Peak Oil will appear and validate all their crackpot ideas. Is there somthing about riding a bicycle that impairs logical thinking?

Here's the thing - for the bike people Peak Oil is a proxy for "cars are going away." Which might be true if you also believe that cars will always run on gasoline.

Of course in the real world technology continues to advance. People are working on cars that run on batteries, fuel cells, natural gas. Prius anyone? I'm sure there are some technologies that I'm leaving out.

Yes, oil is a finite resource although the Peak Oil cult always underestimates the amount still in the ground. In the meantime the combination of technological advances and economic incentives will create alternate means of powering cars.

You want a good laugh? Read Streetsblog whenever a mention of electric cars comes up. They go ballistic because as electric cars become more practical it becomes obvious that their religious belief in the power of Peak Oil is a delusion.

There is no Great Pumpkin.

 
At 7:04 AM, Blogger Lex said...

[Hey Rob - could you change the first words of my post from "Isn't funny" to "Isn't it funny"?

Thanks.]

 
At 9:44 AM, Anonymous Anonymous said...

"You want a good laugh? Read Streetsblog whenever a mention of electric cars comes up. They go ballistic because as electric cars become more practical it becomes obvious that their religious belief in the power of Peak Oil is a delusion."

If you were paying attention the past week, the East Coast has been in a little bit of a mess because of a heat wave that was stressing the electrical grid because people were needing to run their AC just to stay cool enough to live.

Imagine that same grid now trying to power millions of cars.

 
At 11:54 AM, Anonymous To-Zar said...

Rob - I said Peak oil should be defined as the peak of cheap and readily available oil - not oil in general. Do you not know what the tar sands are? Do you really have no idea what the costs of oil are? Have you been asleap through this BP disaster and the wars in Iraq?

Bring on electric cars, that's fine with me, but you're nuts if you think peak oil is a myth.

 
At 12:11 PM, Blogger Lex said...

"If you were paying attention the past week, the East Coast has been in a little bit of a mess because of a heat wave that was stressing the electrical grid because people were needing to run their AC just to stay cool enough to live."

Classic bike think. A stressed electrical grid in 2010 means that electric cars will never be adopted.

First, peak electric usage occurs during the day. The cars will be charged at night, reducing the demand on the grid.

Second, what makes you think the electric grid will never be expanded? If there's a need, it will.

And third, my post also mentioned hybrid cars and fuel cell cars which don't use the grid at all. More then likely there will be a mix of cars using various forms of energy.

Technology doesn't stand still. We're not going to go back to the 19th century when everybody rode bikes or horses.

Really, this is like debating with fundamentalists who think the sun revolves around the earth.

 
At 1:32 PM, Blogger Rob Anderson said...

No one---not even the debunker, who wrote this post, not me---claims that oil won't run out some day, just that that day doesn't seem to be anytime soon, contrary to the doomers. Define your terms: are you saying that either that peak has already occurred,that oil production is on the cusp of the peak, or that it will occur shortly? If that's what you're saying, it doesn't seem to be true, and you can put your bike back in the basement.

 
At 5:58 PM, Anonymous To-Zar said...

What I'm saying Rob, is that however you define "peak oil", the era of cheap and readily available oil HAS ALREADY PASSED. We are on a downward slope where the cost of oil is on a steep upward trajectory. That cost is not just financial but societal, political, military, and environmental.

We are way past the point where we need to start dealing seriously with it. As far as I'm concerned that's the best definition of peak oil.

 
At 6:51 PM, Blogger Rob Anderson said...

The price per barrel has been steady at around $70 for quite a while. Where's the big supply crunch? Your definition is pretty elastic, since most everyone agrees that we need to cut our dependence on oil. Yes, of course we're paying a high price for oil, but American society is still functioning at a pretty high level on oil and coal.

 
At 9:12 PM, Anonymous Anonymous said...

Peak oil is about the production peak. it's not about 'running out'.

 
At 8:54 AM, Blogger Rob Anderson said...

So what's the problem? The guy at Peak Oil Debunked has pointed out how nutty the doomsters have been for years, with their predictions of how grass is going to grow in the streets once we run out of oil, which, they claimed, is going to happen soon enough to destroy our way of life. It hasn't happened, and it doesn't look like it's going to happen soon. So why are we supposed to be concerned about something called "peak oil"?

 
At 2:21 PM, Blogger eugene koontz said...

Rob,
why has the price of gasoline quadrupled in the period 1993-2008?

 
At 2:36 PM, Blogger Rob Anderson said...

Who knows and who cares? Do you really think it's due to an actual shortage of oil?

 
At 4:58 PM, Blogger eugene koontz said...

Yeah, who cares; by the way,
here's a chart showing gas prices from 1990-2010
derived from DOE data.

 
At 5:43 PM, Anonymous Anonymous said...

"The price per barrel has been steady at around $70 for quite a while."

At a time when housing values are plummeting and stocks are 30-40% off their values from 2 years ago. Any commodity that is holding its value in a deflationary environment - is increasing in price.

Economics is so pesky.

 
At 6:17 PM, Blogger Rob Anderson said...

So what? The whole point of the Peak Oil argument is that we're going to run out of oil soon, which is going to have disastrous social consequences, not that oil prices actually reflect supply. Are you arguing that the higher price accurately reflects the actual supply of oil left to be extracted?

 
At 8:53 PM, Anonymous Anonymous said...

Oil prices function as supply/demand just like anything. The oil companies will sell it for as much as they can get - period. The margins are extremely high, otherwise they wouldn't be spending the money to do things like drill the deep wells.

The problem being is that companies like BP are not factoring in the risk related costs of "What if we screw up and have to pay for a gigantic cleanup". This in large part in that 1) They can afford it and 2) They figure they can get away with not paying - Exxon did a good job of underpaying for the Valdez spill.

Worst case, BP can just go bankrupt. Even though Tony Hayward will lose every penny of his stock value - his current wealth outside BP stock means he won't really be sweating it.

Given this, the government should be regulating the shit out of drilling. That would raise costs dearly and the oil companies would complain bitterly. But it would

1) Prevent some of the calamities like we have going on now.

2) Force consumers to pay for the risk, rather than socializing the costs on the taxpayers (and primarily those most closely affected by the spill - those in Louisiana). This would bring prices more in line with real costs, allowing oil companies to make realistic decisions on the actual economic viability of operations like deep drilling and tar sands.

The upside to this - if oil gets more expensive, than things like Teslas become more attractive. If they sell more, then more money is invested in the design. Right now, it's more a feel good thing because it's really a money loser for the consumer vs. just buying a nifty Porsche and filling it with cheap gasoline.

It's not so much a shortage - but that people will have less money to buy gas at current prices if we have to throw 100 billion tax dollars at the Gulf. Even if BP pays, they'll pass through the costs as best they can.

 
At 6:09 PM, Blogger eugene koontz said...

The price per barrel has been steady at around $70 for quite a while.

Where do you get that from? They look pretty unsteady to me, and trending upward, although at $50 most recently.

 
At 7:17 PM, Blogger Rob Anderson said...

So is grass getting ready to grow in our streets or is it already growing? Is Life as We Know It now going down the drain or what, exactly? Oil prices always more or less fluctuate. Are you saying that they are going to continue going up from now on?

 
At 9:40 AM, Anonymous mikesonn said...

http://www.nydailynews.com/opinions/2010/07/11/2010-07-11_we_are_a_nation_of_oiloholics_instead_of_ranting_at_oil_companies_pols_lets_look.html

Peak Oil is about the fact that cheap, easy to get oil isn't as easily found anymore. Oil won't ever disappear, but it use to take 1 barrel of oil to retrieve 100 barrels, now it takes 1 to get 11. That doesn't sound like every promising rates of return.

Also, why advocate for the wasting of oil for personal transportation trips that could easily be done on foot, transit, or bike? The more people doing those 3 things will keep oil cheaper for those that need to drive.

 
At 10:43 AM, Anonymous Anonymous said...

If it costs increasingly more to produce, it can only go up in price, in inflation adjusted dollars. If we get the deflation that is predicted, it might actually go down in price, but not as fast as purchasing power.

 
At 10:54 AM, Blogger Rob Anderson said...

I don't advocate any such thing. All I advocate is not screwing up city traffic by taking away street parking and traffic lanes on busy streets to make bike lanes for a small, obnoxious minority in SF.

 
At 11:29 AM, Anonymous mikesonn said...

Rob, what you say and what you do are two separate things. And until you realize that, there really isn't a point in trying to discuss anything with you.

 
At 4:02 PM, Blogger Rob Anderson said...

Yes, it's so distressing to you fanatics when I ask for some evidence of your claims. It's best that you stick to Streetsblog or BikeNopa, where everyone agrees with your religion.

 
At 11:26 PM, Anonymous Anonymous said...

You can start by changing 'running out of oil' to 'being able to produce less' and you'll have a better understanding of the concept.

I'm not sure you're really getting it so far, based on what you've written here.

 
At 1:00 PM, Blogger Rob Anderson said...

I'm still not sure what your point is, but mine is this: oil is not going to run out anytime soon, and the price so far is just high enough to make conservation and alternative sources of energy increasingly cost-effective. So what's the problem? The point the guy at Peak Oil Debunked is making is that some of the peak oil doomsters have been predicting social collapse for years, but it still hasn't happened.

 
At 4:01 PM, Anonymous mikesonn said...

Rob, I doubt that I am the problem. When you can't have a decent conversation with ANYONE then maybe the way you handle yourself is at issue. You can't label everyone a "bike crazy" just because they disagree with you.

I'm working hard to make MUNI better everyday. I'm working hard to make it safer to walk our streets. And it just happens that dedicated bus lanes and slowing traffic in a lot of the city is what is going to bring those two things about.

And in regards to Peak Oil - Peak Oil is about the volatility that will occur when cheap and easily accessible oil is no longer readily available. It is not that oil will be gone and never to be seen again. Oil will be around for a very very long time, it just won't be as cheap to get.

I did give you a stat. It use to take 1 barrel of oil to extract 100 barrels. It now takes 1 barrel to extract 11 barrels. That is pretty damning to the future of cheap energy.

And when it comes to electric cars - do you really think it is feasible to switch the entire auto fleet of the world over in even 30 years time? And what will power those electric cars? Coal? Natural gas?

Also, cities all over the country are going bankrupt supporting suburban sprawl. The pavement, water lines, sewer lines, and electrical lines are not cheap to lay out for each new, far-flung development. Then add in the cost of police to patrol and fire dept to be on call. Then maintenance of the infrastructure. Busing kids to school.

Sidenote, blogger has my word verification as "comie" - Rob, you win. Ha.

 
At 5:36 PM, Blogger Rob Anderson said...

"Rob, I doubt that I am the problem. When you can't have a decent conversation with ANYONE then maybe the way you handle yourself is at issue. You can't label everyone a 'bike crazy' just because they disagree with you."

What are you talking about? Isn't this a "decent conversation"?

You work for Muni, so tell me why is it okay for the Bicycle Plan to delay Muni lines on city streets? Yes, I know: the "transit first" definition in the city charter includes bicycles. Still, tough to justify hindering a system that already has serious ontime problems on behalf of a small minority of cyclists.

 
At 10:25 PM, Anonymous mikesonn said...

I wish you fought this hard to keep private autos out of bus only lanes. This city has a system in bus only lanes that aren't enforced and you could add signal priority and service times would greatly increase. Maybe some stop consolidation and toss in POP systems to decrease dwell times and you'd see more improvement.

Instead you continue to take everyone with an opposing view, block them out, and yell "BIKE!" at them over and over til they just toss their hands up and walk away.

 
At 10:42 PM, Blogger Rob Anderson said...

I asked you about why it's okay for the Bicycle Plan to delay Muni lines in our transit first city, and you change the subject.

Anything you can do to make Muni run better is okay with me. I don't own a car and walk or take Muni wherever I go in SF. Muni, not bikes, is the only serious alternative to driving for most people in SF, which is why the city's obsession with implementing the Bicycle Plan regardless of its impacts on city traffic is misguided.

 
At 9:05 AM, Blogger Rob Anderson said...

Your reference to "bus only" lanes is intriguing. On which city streets is this even possible? One of your colleagues, Mike Sallaberry came up to my Divisadero neighborhood a few years ago with a proposal for a "bus only" lane for Diviz, but it was unanimously rejected at a community meeting, since people didn't think allowing the #24 line to speed through the neighborhood was such a good idea. Sallaberry is also on record okaying slowing Muni with bike lanes. Maybe all you bike guys are in the wrong organization and should be in the Bicycle Coalition, a quasi-city agency funded largely by city taxpayers.

 
At 10:14 AM, Anonymous mikesonn said...

Sounds like they were against it because the didn't want to lose parking. Also, the buses only lanes provide transit a way to travel down a street without being stuck in grid lock. That doesn't mean the bus will be speeding through the neighborhood, it means it will be able to get to the stop in one clean motion and not miss several light cycles at every intersection. Take Stockton St thru Chinatown for example.

And I don't know why you keep accusing me of being some bike nut. Where have I ranted that bikes are the only mode of transit? I had nothing to do with the bike plan. I would have liked to see the city scrap it 3 yrs ago and go with a piece by piece approach.

And what organization are you accusing me of being part of that I need to switch to the SFBC. Also, I'm not a member of SFBC.

I have failed to find a solution to speed up transit from you. I've been following you for some time, so maybe you started off with some solutions, but the last year plus has seen none.

 
At 12:07 PM, Blogger Rob Anderson said...

I don't know what will speed up Muni, but I do know what will slow it down: the Bicycle Plan. Good to hear your discreet criticism of it. Sallaberry's plan for Diviz would have had the #24 whipping along in its own lane during commute hours. And, yes, parking is an issue on Diviz, especially for the new, high-end restaurants that are trying to make it in the neighborhood. Unlike, say, the Ninth and Irving area, this neighborhood doesn't have any parking lots. Simply making the #24 run faster through the neighborhood wasn't very appealing to anyone.

 
At 9:29 PM, Anonymous Johnny said...

What do you think of the writings of JD, author of the blog you quoted, "Peak Oil Debunked," on cars?

"45. CARS ARE A VIRUS"

http://peakoildebunked.blogspot.com/2005/08/45-cars-are-virus.html

"The virus ("the car") infects the "cells" (cities) of its host ("the earth") and packs the cells with copies of itself."

"In the end, the host dies because it wastes all its resources replicating the virus."

JD lives in Osaka, Japan. He loves bikes and transit, and does not own a car. If you read his blog, you'll see a consistent anti-car (not just pro-bikes and transit, but *really* anti-car) theme.

"156. BICYCLES IN JAPAN"

http://peakoildebunked.blogspot.com/2005/11/156-bicycles-in-japan.html

 
At 9:19 AM, Blogger Rob Anderson said...

I don't care what he thinks about cars. His most useful work is probably his anti-peak oil, anti-doomer writing. I haven't owned a car in more than 20 years, by the way. I get around very well on foot or riding Muni. But cars, trucks, and buses are here to stay, and rightly so. Mobility, personal and commercial, is vital to our economy. The feedback I get from bike zealots often is based on the assumption that somehow, sometime soon our fossil fuel economy is going to implode. In fact we seem to be begining the transition away from fossil fuels now, with fuel prices high enough to encourage conservation and develop alternatives while remaining more or less affordable. Many of the bike people seem to think that we're going to be forced into a dystopian---they would call it a utopia---wherein millions of people would be forced to take up cycling. I don't believe that's remotely possible.

Most of all, I think it's nuts to redesign city streets on behalf of that crackpot assumption.

 
At 3:44 PM, Anonymous Kerry said...

It's not just the cars that need oil. There's about 800000 products that need it, including our food.

And it takes years to get an alternative source of food happening other than what's available at the supermarket.

 

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