CBC: Your Basic Petroleum Depletion Story (a Story You're Likely Going to be Seeing a Lot More of Soon)
Posted by Prof. Goose on March 24, 2007 - 1:28pm in The Oil Drum: Canada
Topic: Supply/Production
Posted by Prof. Goose on March 24, 2007 - 1:28pm in The Oil Drum: Canada
Topic: Supply/Production
spread it around people! digg, reddit, linkfarms.
Two comments, obvious to most TODders:
1. It's a hundred years up, but not a hundred years down, because of lower population and consumption on the way up.
2. It (the effects) won't necessarily be gradual once the race is on, once it (peak or pst-peak) becomes commonly accepted.
But, of course, we only saw snippets.
But, consumption per capita was much more wasteful on the way up. And, we already know that populations in many of the countries that are high oil users can fall. ie. Japan and Western Europe.
In Canada, a substantial effort is made to keep immigration high in order to offset what would be a decline.
In addition, birthrates in places like Mexico, Iran, and China have fallen massively in recent times.
Do you have your "jump to conclusions" mat handy?
(1) Provide some evidence that consumption of oil per capita has decreased over time. We need more than claims and not just an individual case-study (use the world as the unit of analysis).
(2) If your claim IS correct (based on historical data), how can you compare that information to not-yet-happened-data (i.e. non-existent)? You cannot assume trends in data will continue (this is a fundamental flaw of all deterministic approaches).
(3) You provide several countries who have declined in per capita oil consumption (though lack corroborating data). But we already know that per capita oil consumption in the world's single-greatest consumer of energy has remained relatively flat for 24 years. See the following:
For the US, per capita yearly oil consumption has stayed steady between 24-26 barrels of oil per year from 1982-2006. How does this real-life counterfactual impact the world's per capita oil consumption over time? And what happens when you control for periphery countries who experienced rapid population growth, but still could not afford oil? You have to realize that oil consumption has been conducted by the wealthy nations of the world, and their per capita consumption has not variated in recent history. For these wealthy consumers, oil consumption has been a function of population (not technology or whatever Ecological Modernization theory (i.e. nuanced cornucopian) BS you're trying to peddle).
It's also important to keep in mind that for the US and the EU, total energy consumption and total population have remained incredibly linear for the last 25 years as well (see York 2006). If the EU's population is supposed to remain flat, but the US is projected to increase by over 120 million people in the next 40 years, what will happen to our overall energy consumption?
(4) Birth rates don't matter that much in the short-term (you are mistakenly trying to describe growth rates, not total population); it's the shape and dynamics of the demographic pyramid for each country that matters in the near term. That's why each country you mentioned (Mexico, Iran, and China) are projected to increase (projections be damned!--see #2 above) their populations for at least 25 more years.
My view is that per capita consumption is substantially a function of price as your graph helps show. Price is higher on the downslope = less consumption per capita. Short-term there are inelasticities, but consumption is responsive to price medium term. eg. Last year the OECD consumed less than the year before.
I agree total population is going to grow over the next few decades but mostly among low energy users. But I don't see massive consumption growth following from that. Again it comes down to price and the resulting conservation.
So what about total energy? I'm in the early plateau camp.
That's not what my graph shows at all. It demonstrates that regardless of price, per capita consumption has remained relatively unchanged for the past 24 years in the United States. In other words, it demonstrates a tendency towards relatively inelastic demand at the individual consumer level over a 24 year period. In the short term, price is incredibly elastic and demand is relatively inelastic (same trend as long-term).
A "high" energy user--the US--is projected to jump from 300 million to 420 million in the next 30 years. If historical consumption remained linear, that would require an additional 8.2 million barrels a day production. I also see India and China increasing their oil consumption at double-digit yearly rates.
I'm having a hard time figuring you out--are you willfully manipulative or just struggling with the information?
Prices have been low the last 24 years (except just recently), you have to go back further to get the picture.
All those new high energy users are going to be conservationists like you wouldn't believe! :-)
Prices have not been low in the last 24 years--they hit their historical peaks during this period. You need to check your data. Be sure to control for inflation. Be sure the data is from a reliable source:
BP Anual Statistical Review, 2006
US Inflation Rate Conversion Factors
?
The BP table gives 1980 as the peak for prices. That's more than 24 years ago.
But if your point is that once prices began to fall, there were no further decreases in per capita consumption even though prices were still rather high for a while, I'll grant you that. The expectation of rising prices was gone and so was the incentive to conserve.
100 years or 100 days... either way I've got my new peak oil truck ready:
Now that's funny!! Thanks for making my morning.
It would be great to enter something like this in a parade as a PR gimmick.
The Hummer goes Organic, General Motors' new "strap-in" hybrid-SUV concept car.
"This one we're going to put into production (because Toyota had foresight and bought up the worlds lithium-ion battery supply.)"
Not a bad piece, but of course, the scenarios are fast and furious given what we don't know about the downside decline, which, even in the worst case ASPO scenarios is already being moved forward and upward....the downside will be much more complex than is often given-as a somewhat simple, "ithe production is dropping, run for the hills!"......which makes me point up the "people will flee the suburbs in droves" line.....we're talking about a middle age and aged population with hundreds of thousands of dollars of equity in the property they own.....us old geezers can't flee fast even if we wanted (it'd look like a herd of turtles on the march!) and where the helll we gonna' flee too?
Wouldn't it make more sense to begin re-working the suburban home and local transportation and food systems to be hugely more energy efficient than dwell in the fantasy that we will be able to just run to somewhere else?
Right now, we can't even get people to install solar hot water heaters in the sun belt, so they obviously are very afraid yet, are they?
Roger Conner
Remember, we are only one cubic mile from freedom
Right now, we can't even get people to install solar hot water heaters in the sun belt, so they obviously are very afraid yet, are they?
My view is that those who start doing such things believe in technological fixes.
I think that it would be more useful to build a home that can sustain itself - passive solar heating. I can survive without hot water but I need food in my belly and a warm (at least cool) house to live in.
Anyways - energy is so cheap that the return on investment for "green" upgrades is so far in the future that nobody will consider them and I believe that this is yet again the receding horizon problem. This has been the case for decades and will continue to be so. As energy costs go up so will my taxes and insurance and repair costs.
The breaking point will hit those who can't afford to stay in a house all - at least during the rollercoaster after we know that PO is in the rear view mirror. The wild card is what happens to the jobs.
Right now I'm with a group looking at co-housing aka intentional housing such as Ithaca Eco village. What scares the @#$#@$ out of me is that even though I'm financially sound I'd be jumping into this with people who will need a mortage and a few families defaulting will make the whole thing insolvent.
So how much does one worry about PO and the amazing decline of savings in the USA, the USA debt and deficit, default rates and the money pit / transfer (from the middle class to the wealthy) that is the occupation of Iraq?
It can't keep on keeping on!
It's a lot easier just to roll over, pull the covers up and forget about PO and just keep on keeping on than it is to think about this!
"I think that it would be more useful to build a home that can sustain itself"
Then I would suggest the following. Dig a large level area the size of your pad into a sloping hillside. Form it up with a 12" concrete forms and pour the walls. Lay your plumbing and then pour the pad. Leave only the front open. Cover the top with earth. Put in one flue for a wood heater. Place the cold air return right over the top of the woodheater(in the ceiling). Plan for one room to not be heated and serve as a 'root cellar' for storage of supplies,firearms,etc. The airhandler will distribute the heat from the woodheater and the backup electric or gas HVAC system is there until TSHTF.
You now have a home you can live in with or without heat or cooling. Its highly defensible and very economical to build and weather proof(tornadoes,earthquakes,etc).
As I was building my loghome on the identical foundation as above my neighbor came over and did exactly what I described above except that he has a storage space above instead of an earth covered top.
He can heat it easily. Its extremely comfortable. It fits well with the environment. It was not too costly to build.
I doubt many are going to go this way since they wish to have others ohhh and ahhhh over their visible lifestyles and tend to place them in plain view. I live way back up near the woods away from the plain view and not prone to being ripped off so easily. Ifen you wish to sneak up on me you have to outfox my dogs. Dogs don't do well near roadways either. You need to build with a view to the future and all possibilities.
As you said...'easier to roll over and pull the covers up(and over your head).
Airdale
Ummm, I've often wanted to do this but the cost/time to complete such a project discourages me... so the next best thing, I think, would be "converting" an existing home that is built of rock (about 12in thick) and building up earth around it, putting in skylights, solar water heating and solar pv. The house has a fireplace with a heat-o-later (sp?) that has two small fans on the bottom. It does a good job of drawing in cold air and pushing out warm at the top. The house is in central texas where the heat can be as bad as the north's cold.
Here on the Big Island, a lot of people have solar hot water, but they have an impetus: high electricity prices. When people start having to pay through the nose for something they've always taken for granted, they at least consider altering their behavior--especially when they realize it will NEVER GET ANY CHEAPER.
Thanks, PG - it sure is more visible up here than in the Drumbeat. Yes, those are Stuart's graphs. They really make the point visually (ie. they slope steeply in the right direction) and I figured everyone here would get a kick out of seeing them.
Regarding the symmetry of the 200-year spike graph I use, I contemplated whether the downslope should be even steeper. In the end I decided that a) we just don't know how the competing drivers of population growth, population die-off, demand growth, demand destruction and efficiency are going to play out against each other, so b) it didn't matter because even a symmetrical curve drives the point home like a 10-pound sledgehammer.
Actually, the video made me feel that Peak Oil wasn't a big deal. If I didn't know better , the video would leave me with a feeling that:
a) The problem is decades away (right there they would lose me).
b) By the time the problem arises, if it arises, "we" will have fixed it by then...
just my opinion
PS. Isn't Peak Oil a fact and not a theory?
just to get technical, the idea that petroleum supply will follow a certain distribution is a univariate hypothesis. :)
the problem becomes that all of the independent variables that are prior and causal to this are production-centered, so if you want to go bivariate (a true hypothesis), or multivariate (a true "theory" the level of which depends on the scope of the concepts involved...), you need to lay those out as well. At one point someone was working on a "concept map"/theory of the variables that are causal/prior to petroleum supply...I can't remember though.
oh as for your first part, I think this is exactly the approach/set of frames that the media will continue to present--get people thinking about the question itself, present the controversy between two sides, etc. It will be after that when folks will be better primed to think about and discuss these ideas.
It will be slow...so slow, until world events dictate otherwise.
It depends on what you are talking about. This is one of the communication problems of "Peak Oil". At the field and region level, the theory has been confirmed. The world is a separate level of analysis that has not yet been proven--and can't be until oil (and what type...) production either peaks or doesn't.
Note: I'm pretty sure it'll peak--but I can't create a projection when the true population = 1 and I don't have data for that single case.
Paul,
Perhaps you should take a box of Kleenex with you on that presentation. From the looks of a couple of those folks in your audience, they could use it. That's good. You're getting through.
I share the link to your site with friends (they are never grateful). My kids have seen your slides and reading list.
An aside... does your TDI have as good acceleration from 0-20 as the 540?
Well, the TDI sure has less tire-spin :-/ Actually, I've been really happy with the low-end grunt of the diesel, and the fact that I had it chipped takes care of whatever lingering testosterone is left over from my misspent youth.
BTW, since that was taped I've stopped using biodiesel. The biofuel article on my site make it clear why.
Good page on bio-fuels. I am against them, same reasons... with one exception. I think it might be useful for farmers to be able to make limited amounts of diesel. We will continue to need massive amounts of cereal grains and I don't see how draft animals or fellows like you and I swinging scythes are going to get the job done.
At this point the mention of the unmentionable words "Peak Oil" by the MSM is the most significant thing.
For the religion of growth and business as usual this is as terrifying as the ancient Jews uttering the terrible name of God. Personally I am getting the feeling that the MSM is doing the spade work to prepare us for the ultimate revelation that the peak is real and near.
I am sorry to repeat it but I think that the most likely near term scenario is as below and we should be preparing as suggested by Westexas, RR and many others here.
1- The immediate issue is economic recession rather than peak oil however an oil crisis may be the trigger of the recession. Knowing the likely starting date of the first significant recessionary episode is more critical than knowing the date of peak oil. PO will be seen from hindsight but the recession will be obvious. If the USA or its proxy attacks Iran then the price of oil will spike and the world economy will go into recession almost immediately. If this attack does not happen before the end of the summer of 2007 then it probably won’t happen for several years if ever.
2- Canada is unlikely to go into recession before the USA however Ontario could lead us into recession if the big three auto companies decline significantly. The third quarter of 2006 showed a negative growth of .1% in Ontario. Two negative quarters in a row define a recession.
3- Peak oil will be fixed in volume but its impact hidden by economic down turn. The point of peak oil is that once it is reached (or caused by the initial recession) the world will never see another era of wealth and growth as was the last half of the 20th century. However most of us will have to deal with the chaos of the transition and decline. The end result will be left to our grand children and their children. Whatever human world results will be of their making, baring a nuclear war or climate change totally re-writing the rules as our last selfish gift to them.
4- “Exburbia” such as Dufferin County will begin to depopulate as commuter residents leave to find work or avoid an unaffordable commute. Abandoned houses and itinerant squatters will become very common in these areas.
5- The price of oil/gas will drop dramatically as there are dramatic demand drops caused by the recession. Even though there will then be adequate supplies to cover demand oil will remain priced out of common usage for the many of us destroyed by the recession. Technological development of alternate and efficient vehicle systems will be reduced to almost nothing. The only development might be in the area of mass transport, transit and railroad restoration as most of us will not be able to afford anything else.
6- The price drop will shelve most of the expensive E&P and enhanced recovery projects for years and they will never again be able to catch up production to (2006?) peak levels. The inability to raise capital will severely retard deep water and tar sands development. In the short term there will be plenty of more conventional oil to fill demand. However as the years pass declining production will accelerate, making attempts at economic recovery shallower and shorter.
From 1972 to 1981 there were three recessions, no doubt caused at least in part by the 9x increase in oil price. During the period there was never a yoy price decline; lower prices did not arrive until new supplies arrived from the north slope, north sea and siberia.
IMO we will never again see lower prices yoy.
But remember, there was also substantial inflation during that period when wages rose, too.
Inflation adjusted crude prices shows that 1978 was lower than 1977.
'72 was lower than '71, BTW.
http://inflationdata.com/inflation/Inflation_Rate/Historical_Oil_Prices_...
Right. And what do those inflation conversions say about the cost of 1977 oil in 2006 dollars? $45.04 a barrel.
How about 1978 oil? $42.15 a barrel.
How about 1980 oil? $87 a barrel.
How about 1998 oil? $15.71 a barrel.
How about 2005 oil? $54.52 a barrel.
That should say something about the price elasticity of oil under various supply conditions.
Why do you bring up "rising wages" during the 1977-78 years? Average inflation-controlled wages, and more importantly, 4 out of 5 of income earning American households, have experienced declining wages since 1975. Try this: Look up "United States of America" in the CIA World Fact Book and see what it says under "Economy".
It also means that you're trying to throw the wool over TOD readers' eyes by saying "Look! Inflation went up, oil prices have actually been going down, even during the supply constraints". That's not very nice. Stop misleading people. That's twice on this post you have provided confounding cornucopian information that is, without any question, factually inaccurate.
You mistake me here. My point is that even durings times of supply constraints, the real price of oil can remain flat and even fall slightly. i.e. Don't count on year over year increases.
To make the point that nominally incomes did not remain stagnant in the face of oil prices rises. ie. some of the impact of rising crude prices was offset by rising nominal incomes.
I'm no cornucopian, BTW. Just not a doomer.
Nominal dollars are not inflation controlled. That was the whole point of my post. REAL wages declined. Wages DID NOT rise. Real wages declined. And have been declining for 32 years (since 1975). The real wages were in decline while real oil prices were going up. The noose is tightened from both ends.
Check the accuracy of your oil prices (the link you supplied in the previous post)--they are way off. The easiest to use and semi-standardized propaganda resource for a lot of oil data is the BP Statistical Review.
The difference between real and nominal is clear to me.
I'm saying that there were some years during the period in question (the oil crisis years) where nominal wage increases outpaced the nominal rise in oil prices. Wages may not have been rising generally in real terms, but they did (some years) rise relative to oil and (more importantly) gasoline.
Let me see if I can find the data to back up that assertion! :-)
Well, another way of putting it is that during some years, it's likely that the real price of oil fell faster than real wages (1975 and 1978 for instance, using BP data).
The whole point of my original post was to question blanket statements about what occurred year over year during those years.
ADDENDUM (March 25): for real average earnings data see here (table B-47):
http://www.gpoaccess.gov/eop/tables07.html
From 1974 to 1975, real average hourly earnings (total private) contracted by 3.1%. real price of crude (using BP data), fell by 8.7%
From 1977 to 1978, earnings contracted by only .2 % but crude fell 6.4%.
Real wages (according to this series) rose in '76 and '77.
You can't just pick out one year that fits your hypothesis and ignore the larger trends. Average wages are bad metrics of wages in a capitalist economy. If the top 20% of income earners are pulling in record wages, but the bottom 80% is stagnant, the average wage still rises. Breaking wages into to quintiles is a good way to illustrate this. See below:
Real Household Income by Quintile, Average Household Income, and GDP in the United States, 1984-2005
This data is from the Consumer Expenditure division of the Bureau of Labor Statistics. Notice how the top 20% experienced significant wage increases during this period and everyone else remained stagnant (with a slight increase for the 60-80% earners in the past couple years)? The yellow line is the average household income during this time--it stays above the actual earnings of more than 60% of the US population due to the divide between the wealthy and working class. Relative changes in real average wages and real oil prices don't mean that much to real people--their real wages were really stagnating. You can also track the (self-reported) energy expenditures of Americans using the same data set, which would give you a better idea of the impact of oil prices and wages on consumption patterns.
Most people do not realize how little American households actually earn--it should be apparent that the "average" wage that gets tossed around is a bad descriptor of the reality most of us face.
Great graph. It would be great to see the same for 2 decades prior!
My point was not about larger trends. (No disagreement there) It was about the situation year over year. Which was the phrase the original poster used.
I don't think I have a hypothesis. What I'm claiming is right there in the BP data (and in the wage data).
I'm no friend of capitalism, BTW. Although perhaps more likely to say we are stuck with it. There's no neo-con cheerleading going on.
My main point was that it is wrong to count on recessions to lower oil prices. From 1972-81 oil went up 9x in nominal terms, and, nominally, never fell; this was the trend. To my knowledge nothing else, certainly including wages or cars, went up 9x. Inflation was indeed running rampant - I was working through the period - but the primary cause was oil itself; the recession hiccups neither changed or modified the trend.
Crude seems to have been flat to falling during the recession years even in nominal terms. (BP data)
But, as you point out, the trend was up as was the trend for real GDP. i.e. The recessions were hiccups as you say.
So, I take it post-peak you are projecting (along with rising oil prices) continued real GDP growth with recessionary hiccups?
You are probably correct, but the issue of price wont be a big one because most of us won't be able to afford either cheap or expensive energy. IMO the issue of oil production peak will be totally irrelevant in our lives. There won't be a shortage in the short term because demand will fall well below available production capacity. However we will be too busy trying to survive wherever we are.
I think you left out a few important factors.
If the government collapses, and without a steady income of taxes , it surely will and there goes Social Security and Medical Services and the rest of our law enforcement.
And if the economy collapses then there will be ZERO oil products being shipped to this country. Without the static workforce most all services and products will not exist.Hey, no commodities to trade nor workerbees to pollenate the hives(trading , hedgefunds and other smarmy shit).
At this point total chaos will start to reign. It will be survival of the fittest once more and with a vengeance as nature kicks in with a mighty rush.
The dieoff will occur and on the other side of that , depending on who wins-white hats or black hats- will decide what becomes of us eventually. Good or bad. Many will perish. The slacker youth will go first as their tattoo parlors dry up and they have nothing else to sustain them. The ones on life sustaining meds (viagra and so forth) will go next. Yuppies next as they never learned to walk. The lawyers will die like flies , as well they should. yada yada yada......
Its all a house of cards. When it tumbles there is nothing to stop it.
Ohhhhh...just walk to town for food and put up some PE panels? But who will collect the garbage or do your nails then?
Airdale--I see it no other way. Unless its martial law and we become serfs to the state BUT we own far to many weapons to see that as possible. The soldiers aren't apt to stick around just for the hell of it since they have families as well. The politicos will be bunkered down and incapable of doing much else.