Thursday, September 3, 2009

On Vacation, Getting Ready for Grad School

Hola everyone,

I've been on vacation for the past several weeks for a much needed break from work, and for a final respite before grad school. I am very much looking forward to the challenge, education and opportunities that should present themselves over the next several years. However, considering the fact that I will be working while attending school, I would like to mention that while I'm not going away, I will regrettably have a lot less time for blogging.

That being said, I would like to cover some basic themes:

  • Peak oil will invariably occur someday, anybody with at least a few brain cells will concede this. However, the severity of decline rates is up to considerable dispute, and many - including Jean Laherrere, King Hubbert and Kjell Aleklett - have argued that peak oil will result in a slow decline in oil produciton, not a hard crash; and my work demonstrating non-OPEC crude's apparent peak in 2004, plus its snail-pace depletion rate (remember, non-OPEC crude represents a slight majority of global crude production) seems to offer strong support for this argument. Non-OPEC crude, even with drastic drops in Canterell and North Sea production, has been dipping at 1% annual depletion rates at worst; with this going rate, the world will be more than capable to adjust accordingly.

  • Oil's repeated price increases have more to do with manipulative speculation, not supply-and-demand fundamentals. Major banks buying and hording oil is a practice that started in 2004, just as oil began its price climb. As Philip K. Verleger Jr. said fairly recently, the ongoing oil glut: "is the largest and longest continuous glut of supply that I have seen in 30 years of following energy prices."

  • Disruptive technologies are not necessarily overrated. Sure, plenty of them are "flash in the pan" ideas that don't pan out; I personally expect many such works listed on my blog to fizzle out; and no, I'm not counting on fusion-powered hovercrafts anytime soon. However, breakthroughs do occur and they can change the world. Shale gas extraction is one such example: several years ago, the US was suppose to be heading off of a "natural gas cliff," with production going into a nose dive, thus forcing us to become dependent on imported gas overseas. Now thanks to "fraccing," the US has more natural gas than it knows what to do with - 100 years worth - and nations are taking note. Oil Drum writer and energy guru Robert Rapier, a talented individual whom I do respect, is vocal for his frequent skepticism of disruptive technologies; and yet he took nearly a year to finally admit shale gas would provide the US with ample gas supplies, stating that "we have enough natural gas available that civilization isn't going to end any time soon due to lack of energy supplies." Anyway, when one considers disruptive technologies, the difficulties of developing them, remember this: how many pilots had to die to break the sound barrier? While many such developments will fizzle, remember, it only takes one to have a major impact.

  • The peak oil community by in large has a porous, humiliating record of prophecies that's nearly as old as the oil industry is itself. Not much has changed with these goons; they refuse to learn from their mistakes. Ghwar Guzzler, Peakers' Hall of Shame, Peak Oil Debunked and Freddy Hutter's site, Trendlines, goes into into great detail exposing the hype, the far misses and repeated blunders of these goons. Somebody might say: "But Ken Deffeyes is a professor in geology, he has a successful record of assisting drilling companies finding natural gas." I will not dispute this; however, this doesn't help the fact the man has nine failed peak oil predictions to his name. Certain people, when contemplating the future, have a habit of falling for panic first without taking in smart consideration of rationalizing the details; and after all, it was computer geniuses with PhDs who warned us in the '90s of the imminent dangers of Y2K.

  • The peak oil community has a bad habit of greatly underestimating technology. As I've demonstrated on my blog before, the Oil Drum - vaunted haven of peak oil high priests - stooged badly denouncing the prospect of shale gas; here's Oil Drum writer Nate Hagens burying the prospect of gas a month before the Drum admitted their mistake.

And that's it in a nutshell. While the posting will be much more sparse, I'm defiantly not going away and hope you'll pop in from time to time. That being said, I'd like to close with this: the only thing peakers get correct is that oil will peak someday. As you well know, it's paltry beyond that; and that's my theory as to why the peakers are dead wrong, and why we'll shoot for the moon and beyond: judging from the peakers' current record, if they have this much trouble getting much right in the pre-peak world, they're not going to get much right in the post peak world either.


- Brewskie