crayz.org

All you need to know:

The world now consumes 31.8 billion barrels of oil per year. 1978 was the last year that this volume of oil was discovered and more recently discovery has been running at less than 10 billion barrels per year. It is an utterly forlorn hope that exploration and new discoveries may alleviate the current supply crisis....

We are now in the early stages of a full blown energy crisis that was predictable if not wholly avoidable. Politicians are awaking to the crisis now that escalating energy costs make its existence plain to see. It is highly unlikely that politicians will now grasp the gravity of the situation that the OECD and rest of the world faces and the responses will likely be ineffectual and too little too late.

The principal reason for current high oil price is the proximity of a peak in global oil production. Politicians must understand this and then grasp that natural gas and coal supplies will follow oil down by mid century. Reducing taxes on energy consumption right now is the wrong thing to do. Taxation structure needs to be adjusted to oblige energy producing companies to re-invest wind fall profits in alternative energy sources on a truly massive scale.

Energy efficiency should be the guiding beacon of all policy decisions and this must apply equally to energy production and energy consumption.

The car is already half-way off the cliff and we're still sitting around debating not just how hard but whether to even hit the brakes. It's mind-boggling and more than a little scary, and the population density and lack of any decent mass transportation in the U.S. makes us one of the most vulnerable first-world countries when the shit starts to really hit the fan. We need an Apollo program aimed at fixing this mess, and we need it five years ago

... but we're past peak oil

Or do you believe an organization which for decades tightly controlled the price of oil is now content to let it skyrocket to record highs while they sit by and do nothing? OPEC would raise production if there was any production left to raise. I'd say its pretty certain we're now well past peak oil. The last I recall we're still seeing very small increases in total liquids(which includes, ethanol, biofuels, etc). That's all just a shell game though unless someone can get a technology with a serious energy return on investment

Its going to be quite interesting to see how we deal with this. Worst case scenario is we go back to the stone age (not quite...), best case is someone pulls a magic energy pony out of their hat, because there is literally nothing out there right now that could ramp up energy production in time to meet what's likely to become a drastic shortage of oil. Read this if you'd like a sobering explanation of what I mean by "magic energy pony"

The Oil Drum with a good roundup of the latest news on spiking oil prices. Referenced in the comments, this article from WSJ is none-too-good:

The market got its first nudge when reports broke that the Bush administration planned to slap economic sanctions on two prime components of Iran's military, as well as several of the country's top state-owned banks. The steps marked a ratcheting up of pressure from Washington and deepened fears that the Bush administration may be set on a path toward outright conflict with Iran over its nuclear program.

Then came the comments from OPEC's Mr. El-Badri, suggesting that the cartel didn't plan to step up production to add supplies to the world market.

Traders next reacted to a report from Oil Movements, a British company that monitors oil-tanker traffic in an effort to get around the secrecy of major oil exporters such as Saudi Arabia and Kuwait. The company's weekly report, which went out in the morning, said OPEC shipments for the first 10 days of November appeared to be "well below the October equivalents."

The report estimated that October OPEC shipments were likely to be about 300,000 barrels a day more than their September level, "but early indications for next month are that there may be nothing more to come." The world consumes more than 80 million barrels of oil a day, but a minor disruption can have an outsize effect because the margin between supply and demand has narrowed in recent years....

Winter is typically when the world burns the most oil. But according to the International Energy Agency, the Paris-based energy watchdog for Western countries, stocks fell 33 million barrels, or 360,000 barrels a day, between July and September. That contrasts with an average third-quarter increase in stocks of 280,000 barrels a day during the past five years.

The agency in August said the amount of oil in tanks had fallen below the five-year average to about 54 days of consumption.

"We're in an extremely tight supply situation," said Ann-Louise Hittle, a Wood Mackenzie oil-market analyst. That, she said, was giving credence to "peak oil theory" and the idea that supply won't be able to meet growing demand.

The morons at the Economist have hit it rich – rich and stupid. The ever-excellent Oil Drum accurately thrashes their arguments, but I’d just like to take the opportunity to kick them while they’re down. You see, it was just 7 short years ago that the Economist was riding a slightly different wave of optimistic idiocy, at the time claiming that the world was awash in oil, which was about to hit $5/barrell and stay there

Who honestly believes this tripe?

$2.79 at 9AM $2.94 at 8PM

arrggghhh!!11

According to ToD, Peak Oil is here, which basically means we’re fucked. If this is true, it should take us anywhere from a few months to a couple years to realize it, at which point things will start going to shit. The times, they are a changin’

EROI, that is the important term. I got in an argument with a couple people at work today about the use of ethanol as a substitute for gasoline. The EROI quoted here(.8->1.8) is simply way too low to ever imagine ethanol being able to replace gasoline. Next?

If you hadn’t heard, Greenspan came out yesterday and all but confirmed that there’s a housing bubble, that it’s going to pop soon, and that the economic aftereffects will be harsh

So I figure after the bubble bursts, interest rates skyrocket and the economy collapses, it will be just about time to run out of oil and all die of avian flu…by the end of the decade we should be back to banging rocks together to make fire

:)

Update: I almost forgot to mention, we also have Hurricane Katrina, which is starting to track towards New Orleans. I already blogged about the destruction that would ensue from any direct hit. I hope the city has improved its defenses a bit since then

There’s a good oil blog to keep up with the news. Maybe this recent price shock will subside, but it increasingly seems to be the most dire predictions of “peak oil” doomsayers that are coming true. If they are correct, and the peak has already been hit…we’re screwed. This is far from being about filling up the tank in your SUV, either

I’ve kept up with much of the debate around oil production for the past few months, but never posted anything on it on here. The whole concept is still seen very much in a “conspiracy nut” type of way, but it sounds very real from most of what I’ve read. I don’t believe anyone who says they can predict an exact timeframe, but the general indicators appear to be unanimous and dire in their direction. To quote,

85 percent of all the oil ever discovered is now in production, and only half the total produced last year was replaced by new field discoveries. Annual consumption has now exceeded new discoveries every year since the early 1980s. Overall, worldwide oil discoveries have been declining steadily for the past 40 years.

Sky falling? No, perhaps not yet; but an umbrella wouldn’t be a bad idea