Non-OPEC production has likely peaked, oil output could fall by 30 million bpd by 2015 5

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1. 

   Russ Posted 12:49 am
   10 Feb 2009

   State of the PeakSo whereas the IEA was projecting the need for 6 Arabias by 2030 to culminate at 106mpd all-liquids (4 to replace depletion at existing fields and 2 to meet rising demand), Merrill has moved up the g6 figure to 12 years from now, 2021? Thatfs something.
   It definitely looks like wefve been on the gbumpy plateauh since 2005, and that the all-time acute Peak for conventional crude was July of 08 at c. 75mpd (while the all-liquids Peak seems stalled at 86-87mpd).
   The consensus seems to be that the result of the financial crisis will be that the plateau will bump along somewhat longer at a somewhat lower level than it would otherwise have, but that once descent sets in itfll be more precipitous.
   The most unexpected thing about all this is that everyone expected that descent would set in first and provoke the big economic crisis. Instead the bubble burst first and dictated the Peak.
   So it turned out to be an above-ground factor after all. Go figurec
   Still, what was the proximate cause of the mortgage crisis? What started the defaults landsliding? To whatever extent it was a combination of higher fuel prices slamming commuters, higher food prices (driven by agrofuel mandates) hitting consumers, and higher interest rates (affected by these higher commodity prices) triggering ARM hikes, all three of these clobbering financially tenuous houseowners at once, to whatever extent that was it, it was in a way nervous energy markets which lie at the root of it.
   Peak Oilfs ways can be sneaky.

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2. 

   archigeek Posted 1:22 am
   10 Feb 2009

   Um...The financial crises were triggered at least somewhat, if not largely so, by the credit default swaps and collateralized debt obligations, many of which were repackaged and resold mortgages. They were sold, resold, and resold again, each time gaining "value" in the dervative marketplace, itself a shadow market which has, for the most part, remained entirely unregulated. People default on their mortgages when the ARM readjusts, the derivatives get "called", and it's discovered that there is no real value in these products, soooo...we have banks and insurance cos. holding these--whoops!--now valueless products, and we get what we have now. The Four Big Banks are insolvent, though noone wants to say that. Except Nouriel Roubini. "So long, it's been good to know ya'..."
   
   The mellotron is your friend.

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3. 

   Colin Wright Posted 3:28 am
   10 Feb 2009

   Will the economy recover...ever?Archigeek, remember the credit default swaps were being called in just at crude oil began its plunge. So there is probably a connection between the rapid fall in oil prices and the freezing up of the economy (admittedly already on very shaky grounds). This is from a Matt Simmons slideshow (pdf):Only clear fact: Crude oil fell 74% in 12 weeks (Sept 22nd-Dec 22nd).
   
   Credit default swap index soared as crude oil plunged.
   
   Credit freeze began when oil collapsed.
   
   This had to hurt traders ability to own oil contracts.
   
   If any traders ever had to liquidate contracts, this would cause oil prices to temporarily fall.
   
   
   The best solution that I can see to the banking crisis is nationalization. There seems to be a tight (and unexplored) relationship between economic growth and petroleum use (see the graph here). If we have passed peak oil, we could well be past peak GDP. This is very bad news for the current banking system, which depends on future growth to have their loans repaid. Which is why I think economists ought to be rethinking (and not tweaking) our current financial system.

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4. 

   Jon Rynn Posted 4:26 am
   10 Feb 2009

   oil prices popped the bubbleif I remember my John Kenneth Galbraith correctly, there is always something in retrospect that pops a bubble, but what pops it is somewhat random, because eventually something will.  In this case, I think a case can be made that oil prices made people hesitant to buy McMansions that were a gazillion miles away from anything.  Once those prices started declining, everybody freaked, because McMansions in the middle of nowhere were supposed to keep going up in price.
   Now we are in a situation where once the global economy gets going, it'll bump back into oil price rises and deflate, like a balloon -- or maybe deflate, as in deflation, as in depression.  So we could be in for a very bumpy, very low growth ride until homo automobilus figures out that oil is a bad idea.  then, ironically, there might be a boom as we move away decisively from oil, but this will take a while to play out.

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5. 

   cjwirth Posted 11:03 am
   10 Feb 2009

   Peak Oil is a catastropheIndependent studies indicate that global crude oil production will now decline from 74 million barrels per day to 60 million barrels per day by 2015. Merrill Lynch and Matthew Simmons indicate the this could be worse with little investment in oil production.
   In any case, demand will increase. Oil supplies will be even tighter for the U.S. As oil producing nations consume more and more oil domestically they will export less and less. Because demand is high in China, India, the Middle East, and other oil producing nations, once global oil production begins to decline, demand will always be higher than supply. And since the U.S. represents one fourth of global oil demand, whatever oil we conserve will be consumed elsewhere. Thus, conservation in the U.S. will not slow oil depletion rates significantly.
   Alternatives will not even begin to fill the gap. There is no plan nor capital for a so-called electric economy. And most alternatives yield electric power, but we need liquid fuels for tractors/combines, 18 wheel trucks, trains, ships, and mining equipment. The independent scientists of the Energy Watch Group conclude in a 2007 report titled: "Peak Oil Could Trigger Meltdown of Society:"
   "By 2020, and even more by 2030, global oil supply will be dramatically lower. This will create a supply gap which can hardly be closed by growing contributions from other fossil, nuclear or alternative energy sources in this time frame."
   With increasing costs for gasoline and diesel, along with declining taxes and declining gasoline tax revenues, states and local governments will eventually have to cut staff and curtail highway maintenance. Eventually, gasoline stations will close, and state and local highway workers won't be able to get to work. We are facing the collapse of the highways that depend on diesel and gasoline powered trucks for bridge maintenance, culvert cleaning to avoid road washouts, snow plowing, and roadbed and surface repair. When the highways fail, so will the power grid, as highways carry the parts, large transformers, steel for pylons, and high tension cables from great distances. With the highways out, there will be no food coming from far away, and without the power grid virtually nothing modern works, including home heating, pumping of gasoline and diesel, airports, communications, and automated building systems.
   Documented here:
   
   http://www.peakoilassociates.com/POAnalysis.html
   
   http://survivingpeakoil.blogspot.com/
   
   cjwirth http://www.peakoilassociates.com

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