5 Years Later .... 2008 - 2013

Five years after my last post it seams nothing in the land of energy has changed. Peak oil seems to be as dead or even 'deader' than ever. But wait ... what about 94$ a barrel today? What about fracking? Fracking? What is that? Well, the world did change since 2008. Fracking is something that has been started to compensate the decline of conventional crude oil and gas production.

In my eyes, peak oil is everywhere today. And how bad can it be? The national debt ceiling has been reached several times in the last years, and no end is in sight. 16 trillion dollars national debt, about 115% of GDP. Well, is the high debt maybe consequence of peak oil? Our money we used to put into the economy now goes into gasoline expenses and all other expenses related to crude oil, and much of that money goes straight to oil exporting countries.

Well, but that will change now with fracking. Fracking is a technology used in the US to produce oil and gas from US soil, in the US for the US. Fracking will ease the effects of peak oil on America, which is good for the American economy. Let's not mention some areas that are environmentally badly affected by fracking.

Now, I wil watch energy supply developments more closely again to make my personal investment decisions even more well-rounded.  This blog is still and again a viable source of daily refreshed and refreshing worldwide news about all sorts of energy related issues.

Happy reading!

Ingemar

Resource Depletion Theory

The Resource Depletion Theory claims that every non-renewable resource and every renewable resource coming from a finite storage place can be exhausted only by following the depletion curve. In the picture to below you can see how production levels for three real-life examples follow a bell shaped curve.

This theory has been first announced by M.K. Hubbert in 1956 for oil and other commodities, and it is known today as "peak oil theory". However, this theory has been confirmed through the oil production of many oil fields worldwide but is still denied by many scientists and economic leaders today.

The "Resource Depletion Theory" is a broader more simplified approach of that same concept of M.K. Hubbert. Studying the diagrams above should reveal to the reader that the concept of depleting resources is universal and a simple matter of mathematics and common sense.

The President Says OPEC can't increase Oil Production!

In other words: the president says OPEC has hit Peak Oil Production!

 

Watch the video with the president's quote:

 

http://abcnews.go.com/Video/playerIndex?id=4140859

Confused about Peak Oil? READ THIS!

I have never read such a clear assessment of the situation related to peak oil. Thanks Mr. Payne.

 

Mr. Payne is an "upstream oil and gas professional with over 25 years of experience. Past Chairman, Houston Chapter of the American Petroleum Institute (API). Member of American Society of Mechanical Engineers (ASME), Society of Petroleum Engineers (SPE), American Solar Energy Society (ASES)."

 

Please read his article on the EnergyBulletin: http://www.energybulletin.net/39308.html

Peak Oil Presentation on Bainbridge Island, WA

In 2005, Rick Bunch talked about the adaption for Peak Oil in Bainbridge .









When will there be any further local activities on Bainbridge to increase community and peak oil awareness?

Crude Oil Production and Economic Growth

There is no great dispute over the fact that crude oil production and economic growth are interrelated.

However, awareness of this fact and its consequences are not well accepted in public. The two graphs above (Source) illustrate exactly this correlation from the early 70's up until today. The dire consequences when world crude oil production declines are the main concern of peak oilers today. Most people underestimate the effect on global economic growth and the consequences of a shrinking economy called depression or economic collapse. What it means for people is job loss, financial hardship, in many cases loss of housing, unacceptable increase of crime, ... In other words, third world conditions.

Whereas recession is a mild economic slowdown for about 2 years, a depression is a severe decline in economic activity. Economic conditions in a depression are characterized by falling prices, reduced purchasing power, an excess of supply over demand, rising unemployment, accumulating inventories, deflation, plant contraction, public fear and caution, and a general decrease in business activity. (compare reference on anwers.com.) Interestingly, in a depression prices are falling and supply outstrips demand. How would a depression scenario triggered by peak oil look like? Why would supply suddenly be higher than demand after crude oil shortages make economic growth harder and harder?

While recessions are part of a normal business cycle, depressions occur when the economy does not recover from a recession. When demand does not pick up anymore after a recession because infrastructure and market mechanisms were damaged too much by the declining economy, supply does not reach the consumer anymore and the business system is not functional anymore. This scenario did happen during the Great Depression in the 1930's. A similar scenario might happen when crude oil supply will strangle economic growth and damage existing economic mechanisms like transportation systems, trading platforms or communication systems.

The only way to prevent this economic meltdown is to invest in alternative energy supply systems and market systems which are independent from crude oil supply.

Peak Oil Investment Tip: 'Invest in People'

Alan Wartes, the hydrocarbon man has written a to do list for the live after peak oil. But his article about investment in the era of peak oil is quite interesting.