Whistleblower Claims IEA Is Downplaying Peak Oil 720
Yesterday the Guardian ran a story based on two anonymous sources inside the International Energy Agency who claimed that the agency had distorted key figures on oil reserves. "The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the [IEA] who claims it has been deliberately
underplaying a looming shortage for fear of triggering panic buying. The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves." Today the IEA released its annual energy outlook and rejected the whistleblowers'
charges. The Guardian has an editorial claiming that the economic establishment is too fearful to come clean on the reality of oil suppplies, and makes an analogy with the (marginalized, demonized) economists who warned of a coming economic collapse in 2007.
peak oil clarification (Score:4, Informative)
World population is continually increasing, China and India are rapidly industrializing so demand for oil is going up and up, but the flow rate isn't. This is why we had $147/barrel oil a few years ago, not speculators. It's all supply and demand, but in this case the supply is limited. No amount oil shale or tar sands or deepwater deposits will do us much good because we can't achieve the same flow rate with these deposits as the traditional ones.
Re:Dont believe it. (Score:5, Informative)
Certainly the Saudi's will get much richer, but 'Big Oil' business is mostly a middleman these days. They make a good profit, but the vast bulk of the cost is for the crude from producers.
Re:Not a good argument (Score:3, Informative)
an analogy with the (marginalized, demonized) economists who warned of a coming economic collapse in 2007.
Great. This argument boils down to "Someone who we were told was wrong turned out to be right. Therefore, this other person who we are told is wrong (and by extension everyone who we are told is wrong) must also be right." I have no idea whether or not these whistleblowers are correct or not, but this "argument" by analogy is worse than useless, because it encourages fuzzy thinking.
Except I can't remember any economists who were demonized for pointing out problems with the economy in 2007. I can remember lots of news articles about economists talking about how bad things were.
Aren't "known reserves" all fucked up? (Score:4, Informative)
I'm pretty sure OPEC allocates allowed production levels by each country's "known reserves", giving the rulers of those countries all kinds of incentive to exaggerate their reserves.
The medieval Saudi despots and thugs like Hugo Chavez want to grab all the money they can while THEY'RE alive.
Re:If True, Fascinatingly Bizarre Logic (Score:3, Informative)
...or through coups or wars in oil producing countries.
Re:If True, Fascinatingly Bizarre Logic (Score:5, Informative)
You are thinking only in economic terms. At some point there is an absolute economic limit when you are using as much energy to extract and process the oil as the energy you actually get out of it.
So, there are reserves that are "unattainable" because it is not energetically sane to extract, and they will never be economically feasible no matter the price.
Keep in mind that already now extracting only 50% of the oil of a reservoir is not considered that bad (and that's secondary recovery already, when you flush with water to get more oil out).
Re:If True, Fascinatingly Bizarre Logic (Score:5, Informative)
Here is what you probably don't know: Ronald Reagan stopped funding research on coal to liquids and extraction from oil shale by abolishing the Synthetic Liquid Fuels Program in the 80s.
$50/bbl? (Score:3, Informative)
Where did you get that figure? I keep track of this daily:
http://www.bloomberg.com/energy/ [bloomberg.com]
We've been flirting with $80/bbl for quite some time.
Re:If True, Fascinatingly Bizarre Logic (Score:3, Informative)
So, mandates, high taxes, and bans on exploration and new extraction will be the norm
Which is stupid. I understand the "it's ugly" and "it ruins the environment" concerns, and perhaps those should be addressed... but to decide, as a politician, that (1) the free market giving incentive to companies to innovate/invent/investigate/[insert cool word that starts with i here] and (2) that various shales are inaccessible (and never WILL be accessible) and then force, through the things you mentioned, companies NOT to investigate and try to do it with their own money ...
Well, at least, American companies. Who knows what non-American/non-European companies or governments will do.
One of the cool words to insert there is Ignore. In the free market, you do well by maximizing your short term returns while ignoring the delayed costs and consequences of your actions. Many people look no farther ahead than next year, some don't look past the next quarter, very few are able much less willing to look at something that is decades or centuries in coming. This same type of thing happened in America once before. A seemingly valuable natural resource was being over taxed and everyone ignored the possibility that it was being exhausted and could come to an end. This partially caused the dust bowl and led to the near collapse of the global free market economy and the deaths of millions.
To trust the free market economy is to trust that peoples are not greedy ignorant bastards who would sell their children for a widescreen tv. I don't have that kind of faith. Of course I don't have the faith that the government is any more capable either. I am a pessimist, at best.
Re:Bah! (Score:2, Informative)
To the corporations in charge? Yes.
Ah yes. The "corporations". It's all their fault. If only the "corporations" would go away we could all love each other and live in a commune somewhere......
You do realize that the bulk of the cost of your gasoline is paid to the countries that the crude comes from and that "big oil" is only a middle man, right?
Re:If True, Fascinatingly Bizarre Logic (Score:5, Informative)
Yes, there's plenty of oil, and there always will be, because we'll end up leaving most of it in the ground.
Those oil shales you mentioned, and the Bakken oil formations a bit farther north, have more oil in them than all of Saudi Arabia, and might as well be on Alpha Centauri, for all the good it'll ever do us.
The problem is this. Regardless of what available technology you choose, the majority of this stuff is neither energy positive, nor economical to produce. It's in *shale.* You know, rock. It's not some nice big pool of spongy liquid you can put a straw in like the Ghawar fields in Saudi. You have to dig the rock, grind the rock, and *heat* the rock to get the oil out. Depending on how much oil is in the rock and how finely you ground it, you may, or more often not, get as much oil energy out of the rock as you put into it.
Which is why all those new finds so breathlessly reported by those with journalism degrees don't mean squat.
A deep water find that only yields sulfur-laden, heavy crude (i.e. tar) in multiple scattered reservoirs is NOT equivalent to some nice little civilized shallow well in porous rock that yields light sweet crude. The first is cheap to get, cheap to process, cheap to ship and it all can be done quickly. The latter is NOTHING like that. The latter is a decade from well to the tank in your car, if then.
Bottom line? Cheap oil is a thing of the past. Our expanding economy depended on an ever expanding supply of cheap, portable energy. That goes away when oil goes away. We will transition, no doubt, but a few, maybe more than a few will starve to death before we do and more than a few governments may fall.
Cheers!
Re:Bah! (Score:3, Informative)
There is more than one version of Godwin's law. You quoted a depreciated version that only applies to Usenet.
Re:Give it a rest, will you? (Score:1, Informative)
"So give your conspiracy theories a rest and please report some real news"
Except many conspiracies are in fact TRUE, just because a fringe group believes in strange things related to people working together "conspiring", does not mean they do not exist.
http://conspiraciesthatweretrue.blogspot.com/2007/01/list-of-proven-conspiracies-from.html [blogspot.com]
it's not about the size, it's about net energy... (Score:2, Informative)
(This is why I pay attention to the folks at The Oil Drum ( http://theoildrum.com/ [theoildrum.com] ) and Energy Bulletin ( http://energybulletin.net/ [energybulletin.net] ), they're well-intentioned academics/educators who are trying to get the world to live more smartly and sustainably...and the faster we do that, the better off we are going to be.)
Re:peak oil clarification (Score:4, Informative)
Oil is a strange good. The wealthiest economies are those which consume the most of it. Under present conditions, each unit of oil consumed generates wealth. It's extremely hard to argue that oil is not significantly underpriced, to the greater benefit of those who monopolize its consumption.
If the price of oil doubles or triples, the western world would grouse so loudly, the internet might collapse under the collective groan, but in other respects, life would go on. We'd finally have to rationalize our consumption, a project long overdue on any number of other grounds.
I have trouble grasping Chicken Little squawking out of one beak "we're running out of oil, we're all going to freeze" while simultaneously squawking out of the other beak "we've already burned too much, we're all going to roast". Even if the GHG scenario fails to unfold with the anticipated drama, there's still the issue that we are potentially damaging ocean chemistry and wiping out global shellfish ecosystems.
My own position is that we already have more carbon at hand than we can prudently burn and release into the atmosphere, so peak oil is mostly about traders hoping to pump and dump amid a global stock panic.
My sceptic says: I'll believe the world is suffering a major food shortage when nobody grows tobacco. I'll believe the world is suffering a major energy shortage when we can no longer afford to throw a cell phone away because it's so yesterday.
The Afterlife of Cellphones [nytimes.com]
Regardless, recyclers say that from their vantage point it's obvious that most phones are retired because of psychological, not technological, obsolescence. "There's some fashion driving all of this and, by its nature, fashion is not eternal," says Mark Donovan of M:Metrics, which tracks the wireless industry.
This is a dead giveaway that our society is not yet anywhere close to energy stress, as much as the masters of markets in chaos wish us to fear this.
Re:Bah! (Score:5, Informative)
Peak oil is not about "running out" of oil. Yes there's plenty under the ground of the Dakotas, but that's not the issue.
Peak oil is about when the consumption exceeds the discovery of new fields, which means the "warehouse" of oil is emptying out instead of filling. Initially nobody will notice, but soon they will and there will be a drive-up in prices due to the rapidly-dwindling reserve. It's similar to what has happened with Gamecube games. It's still possible to buy brand-new copies of, for example, Mario Sunshine but because no new copies are being made, the price has risen from $30 upto $80 (or more).
Rising scarcity resulted in rising prices, and the same will happen with oil in the very-near future (2011 or 2012). If you've got money to spare, buy oil stock NOW.
Re:wind (Score:2, Informative)
Right, and I'm sick of all those doctors with their fancy X-ray machines and diagnostic protocols making ridiculous statements about how my smoking 4 packs a day could cause me to get cancer or emphysema. Damn elitist eggheads and their terribly flawed assumptions, think they're so damn smart.
If menthol cigarettes were good enough for our Founding Fathers, by God they're good enough for me.
Missing the point (Score:5, Informative)
America, with 5% of the world's population, consumes about 25% of its resources. Reason? Single Use Zoning. The silly settlement pattern that puts housing neatly in one area, shopping in another, office space in another, and industry in another, and then forces people to drive between all these areas throughout the course of the day. Okay, it makes sense to zone off industry in certain cases where noise and pollution is an issue. But making it illegal to open a corner store in a residential area? No wonder so many journeys are made by car in the USA, bus journeys in that kind of sprawl take forever and mass transit gets a bad reputation (deservedly so). Induced traffic is another symptom of this problem - roads get wider, developers develop farther out to allow people to take advantage of the faster commute and lower property prices, roads get filled with cars belonging to these new commuters, and we're back to square one again with people demanding that the road gets widened even more!
As long as American settlement patterns are so screwed up, the problem will exist even if we aren't in a state of world peak oil. The problem is a hopeless addiction to petroleum that no magic wand nuclear power solution (mentioned by someone above) will be able to fix.
Re:wind (Score:4, Informative)
Uh...the IEA is saying that everything is fine and dandy and it's some random person in the IEA who is saying the sky is falling...not sure what you're driving at, I'm sure claiming things are fine as they are is a massive conspiracy to bring about a big scary bad world government.
Re:If True, Fascinatingly Bizarre Logic (Score:5, Informative)
I like to call it the "Reverse Cassandra Effect" (stole the term from Simon). People *love* to listen to doomsayers, far more than people who tell you that things are going to be fine. The doomsayer can have the flimsiest of evidence and the dissenter a solid case, but the very notion of doom itself seems to make the audience more receptive to what they have to say.
A classic example is the Simon-Ehrlich Wager [wikipedia.org]. Julian Simon, a libertarian-leaning business professor, bet Paul Ehrlich, a biologist who had published a series of books about imminent resource scarcity in the 1970s, that the inflation-adjusted price of five commodity metals -- of Ehrlich's choosing -- would average dropping over the course of the 1990s. Simon won -- bigtime. All five metals dropped in price, some by huge amounts. The aftermath? Despite Ehrlich's loss and his similar forecasts of huge famines, resource wars, etc all failing to materialize, Simon remained in relative obscurity, while Ehrlich received a MacArthur Foundation Genius Award for "greater public understanding of environmental problems" in his doom-preaching books.
And when I say this, note that I in general am *not* fond of libertarian ideals, and consider myself an environmentalist. But these doomer notions of secret imminent scarcity are just plain hokum.
Re:Give it a rest, will you? (Score:4, Informative)
Re:If True, Fascinatingly Bizarre Logic (Score:3, Informative)
Don't get too excited by the Green River shale solving all our problems - that stuff has to be stripped mined out, and then processed with water... a lot of water in drought prone areas... so your # barrels per day from the deposit is never going to be high enough to meet domestic needs.
Read up on the emerging disaster that is the Alberta Tar Sands project to get a good perspective on just how bad an idea it would be to attempt to process that crap.
Re:Bah! (Score:1, Informative)
Nothing like an anonymous unsubstantiated and false claim being marked "insightful."
Sorry dude. Not even close. Saudi Arabia has more than 12 times the proven reserves of the US [wikipedia.org], and 1.5 times as much as second place Canada.
Re:Bah! (Score:2, Informative)
I work on a large oil field that is located in barren tundra, and as a rough guesstimate I'd figure complying with environmental regulations accounts for about 1/4 of the cost to run the field, with taxes taking up another 1/4.
You would not believe how many people are employed as environmental watch-dogs. The gravel roads have to be a certain thickness (generally about 6 ft high) so that, when areas are eventually decommissioned and the permafrost underneath will not have been affected. Buildings are built up off the tundra so animals can walk under them, etc. Before can set foot on the site you must go through an 8-hour training seminar covering the basic rules and regulations. Anybody working in a position that they consider potentially hazardous to the environment. Everything must be reported, including things like spilling small amounts of motor oil onto a concrete shop floor (I'm talking over spill here, a few ounces at most). Does the company get dinged for every little thing? Not necessarily, but still time and effort must be taken to report every single little thing that happens.
One of the quickest ways to get fired is blatant disregard for the plethora of environmental rules, and even you are following the rules but have too many "accidents", you can get fired. It's too high a liability for the company.
You're also ignoring the permitting process - if the greenies have any influence in their LOCAL government, they can fairly easily block new permits for things like drilling and refining. Even if they don't have any influence in government, they can always file lawsuits and submit ethics complaints against officials who are just doign their job correctly. This can and does happen regularly in my state, one of the main reasons our oil field exists at all is because it has been here for decades, before the big green push.
I don't think these environmental protections are necessarily a bad thing, I think in some ways they go a bit too far but on the whole I believe we have a responsibility to protect our environment, so in general I think they are perfectly justifiable.
However, you'd have to be an unrealistic daydreamer to think these environmental protections do not have a significant impact on the viability of an oil field, and whether or not a company starting drilling operations in an area will be able to turn a profit.
Re:Bah! (Score:2, Informative)
Re:Bah! (Score:3, Informative)
The Japanese wupped the Chinese because China was backwards technologically. They tried to fight the world's best airplane (the A5M - predecessor to the Zero) with world war 1 biplanes. They were crushed. I don't think you can say the same about the U.S. military being backwards or easily defeated
And yes Americans will fight in hand-to-hand combat using their hunting rifles if that's what it takes. As Churchill said in the last war: "We shall fight in the fields and in the streets, we shall fight in the hills; we shall never surrender."
Re:Bah! (Score:5, Informative)
Actually those construction methods have nothing to do with any evil greenies impinging on some poor picked on corporation's profitable endeavors. Construction on top of permafrost presents unique challenges to the long term viability of any project be it roads or buildings. What you are describing are hard earned engineering techniques that were preceeded by many construction failures on Alaska's permafrost and have zilch to do with greenies or environmental protection.
Re:Bah! (Score:4, Informative)
A few notes, banks are not forced into lending to anyone, the CRA only applies to banks who sign up for FDIC coverage and even then only some banks fall under the CRA regulations. There are ways that banks can work around the CRA and guess what, they did.
http://www.mcclatchydc.com/251/story/53802.html [mcclatchydc.com]
"More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions."
"Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year."
"Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics."
"Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance"
"only commercial banks and thrifts must follow CRA rules. The investment banks don't, nor did the now-bankrupt non-bank lenders such as New Century Financial Corp. and Ameriquest that underwrote most of the subprime loans."
"private non-bank lenders enjoyed a regulatory gap, allowing them to be regulated by 50 different state banking supervisors instead of the federal government. And mortgage brokers, who also weren't subject to federal regulation or the CRA, originated most of the subprime loans."
GW Bush was calling for reforms until they arrived...
http://www.presidency.ucsb.edu/ws/index.php?pid=24851 [ucsb.edu]
Statement of Administration Policy: H.R. 1461 - Federal Housing Finance Reform Act of 2005
October 26, 2005 "H.R. 1461 fails to include key elements that are essential to protect the safety and soundness of the housing finance system and the broader financial system at large. As a result, the Administration opposes the bill. "
http://www.presidency.ucsb.edu/ws/index.php?pid=74353 [ucsb.edu]
Statement of Administration Policy: H.R. 1427 - Federal Housing Finance Reform Act of 2007
May 16, 2007 "Any efforts to weaken the existing portfolio language contained in H.R. 1427 will threaten the Administration's support for this bill. "
The house actually passed H.R. 1461 but was never cosidered by the Senate and McCain's support for S190 came only after the report of corruption and bad management of Fannie and Freddie came out. And then what did he do? Nada, the Senate let it slide.
There is plenty of blame to go around but this idea that some how the Democrats in concert with lower income earning U.S. citizens caused the current economic crisis is dumb founding idiocy.
Re:We will NEVER run out of OIL! (Score:1, Informative)
Imagine you're in a big room full of peanuts. And you open the shell, eat the nut, and throw the shell aside. Eventually, it will be harder and harder to find a peanut, because you'll be finding increasingly more peanut shells with no peanut inside.
So you won't run out of peanunts, true. You know what: you will still starve.
Re:Bah! (Score:3, Informative)
Your point was valid in the 1990s though.