Peak Oil - Supply data doesn't lie

[Goggen]

08/26/09 Hong Kong, China
Despite the ‘demand destruction’ hype, it is interesting to note that during this severe global recession, worldwide oil usage has dropped by a minuscule 2.7%. So, what will happen when the world comes out of this recession? Who will rise up to the challenge and meet our insatiable thirst for energy? These are critical questions not many are willing to ask.
According to the US Department of Energy, liquid fuel demand in the developed nations peaked in August 2005 at 41.89 million barrels per day. Since then, it has plunged by 3.6 million barrels per day to 38.27 million barrels per day. However, you may want to note that despite these tough economic conditions, consumption has been extremely resilient in the emerging world. For instance, demand in the developing countries peaked in October 2008 at 46.33 million barrels per day and it is down by only 0.36 million barrels per day! I am amazed that the worst global recession in decades has barely managed to shrink energy demand in the developing world. Whilst this is wonderful news for the energy investor, it is a terrible sign for society.
At present, our world is using up roughly 84 million barrels of liquid fuels per day and for the moment at least, there is sufficient supply to meet demand (Figure 1). However, when economic activity picks up, it won’t take much for demand to zip right past supply. Remember, it is much easier to increase usage, but it takes a long time to ramp up production. So, unless this is a permanent global recession (which I doubt), it is inevitable that the price of oil will go up significantly over the medium to long-term.

Figure 1: Supply and demand – balanced for now

http://farm3.static.flickr.com/2569/3859068875_88c895eec5.jpg

Source: www.yardeni.com (http://www.yardeni.com)
On the supply side of the equation, let me be clear. If I was asked to pick the biggest threat to a sustainable economic recovery, Peak Oil would top that list. Remember, Peak Oil doesn’t mean that we are running out of oil reserves, crude will be around for decades. However, ‘Peak Oil’ does imply that we are dangerously close to peak global oil production. ‘Peak Oil’ also means that rather than experiencing a burst in oil supplies as many expect, from here onwards, we will witness sharp declines in global flow rates. In a nutshell, the era of cheap energy is over and the price of crude oil will rocket higher over the coming decade.
Now, many skeptics will argue that if Peak Oil was real, the price of oil wouldn’t have dropped to roughly US$30 per barrel in last autumn’s stunning crash. Valid point; but let us not forget that the spectacular plunge occurred at a time when global economic activity virtually came to a standstill. Let us also keep in mind that last autumn’s crash in asset prices was caused by a total freeze in credit and the associated asset liquidation. Whilst I agree that the final action in crude oil’s parabolic blow-off last July smacked of speculation, I can assure you that speculation alone couldn’t have created a multi-year boom whereby the price of crude oil went up by almost 1500%! As you can see from Figure 1 above, supply clearly fell short of demand between 2005 and 2008, and this is why we had a magnificent bull-market in crude oil.
Make no mistake, global demand for liquid fuels will rise again – and if my homework is correct, supply won’t be able to keep up. If you ignore the noise and review hard data, you will observe that the vast majority of the world’s most prolific oil provinces are now past peak production and in a state of permanent depletion. According to the BP Statistical Review of World Energy, out of the 54 oil producing nations and regions in the world, only 14 are still increasing production. Alarmingly, 30 oil producing nations and regions are definitely past their peak output and the remaining 10 appear to have modestly declining production rates. Put another way, when weighted by production, Peak Oil is already a grim reality in 61% of the oil producing world!
Still not convinced about Peak Oil? Then review Figure 2, which charts the expected combined flow rates for crude oil, lease condensates and Canadian Oil Sands. As you can see from the grey shaded area, production is about to decline by roughly 5 million barrels per day by 2012.
Figure 2: Has crude oil production peaked?

http://farm4.static.flickr.com/3486/3859074551_fba0f597ab.jpg
Source: The Oil Drum
Ironically, Figure 2 also plots the optimistic (almost laughable) forecast made by the International Energy Agency (IEA) in its “World Energy Outlook 2008”. Interestingly, in last year’s “World Energy Outlook”, the IEA stated that in order to fulfill its optimistic projections, the world had to install 64 million barrels per day of new supply by 2030 or the equivalent of six times the Saudi Arabian output! Furthermore, the IEA declared that the energy industry had to invest hundreds of billions of dollars every year to achieve this favorable outcome.
Now, I can understand that the IEA is a government-funded agency so it has to paint a rosy picture, but it is ominous that the energy watchdog failed to mention where this surplus oil would come from!
Well, I guess you get the idea. Global crude oil production has probably peaked, new discoveries have dried up and there is a shortage of capital for investment purposes. Apart from these factors, if you believe the energy optimists, all is well in the energy industry and the price of oil is about to drop to zero!
After years of extensive research, I have no doubt in my mind that unless global demand stays weak forever, we will see supply shortages in the not too distant future. And before that occurs, the price of crude oil will stage an explosive rally. Accordingly, I suggest that all my readers allocate a large proportion of their investment portfolio to upstream energy companies and to businesses in the energy services sector.
Finally, in the energy complex, the price of natural gas is still scraping along its recent crash low and this is a fantastic long-term investment opportunity. As we approach winter in the Northern Hemisphere and heating demand picks up, we are likely to see a big rally in the price of natural gas. So, investors may want to allocate capital to this unbelievably inexpensive commodity.
Regards,
Puru Saxena
for The Daily Reckoning


http://dailyreckoning.com/peak-oil-supply-data-doesnt-lie/

[Goggen]

*shameless bump

[XShipRider]

When I see Hummers and large SUVs with one occupant, the driver, during rush hour I figure people just don't give a damn.

Relatively cheap, reliable and wide availability is the only answer. Until that happens people will not change daily use habits.

[hskywalker]

Doesn't BP just find a giant oil reserve in america?
I also read at price $40, banks have rented ships to store oil so they can sell it later, until there are no ships avaluable.

As for different kind of research, I think there are too many interests involved. Those want expensive oil, those want cheap oil, those long oil, those short oil..

[Goggen]

When I see Hummers and large SUVs with one occupant, the driver, during rush hour I figure people just don't give a damn.

Relatively cheap, reliable and wide availability is the only answer. Until that happens people will not change daily use habits.


In other words, people won't make significant changes until it's too late :roll:

[Kit]

In other words, people won't make significant changes until it's too late :roll:

Welcome to the human race.

Of course it's not just cars. Almost all synthetic products have oil involved.

[Goggen]

Welcome to the human race.

Of course it's not just cars. Almost all synthetic products have oil involved.


Not to mention the agricultural products. Oil is essential if we want to maintain our current crop yield, if we don't find a substitute soon there's no way in hell we can sustain 7 billion ppl. The scary thing is that people in general doesn't seem to appreciate or realise how important oil is. Modern civilization wouldn't have been possible without it. I have a feeling that the most popular job in the future will be farmer :)

[Breerman]

"Peak Oil" never take into account the massive reserves of tar sands... Canada has the second largest oil reserves in the world.

[RIPTIDE]

"Peak Oil" never take into account the massive reserves of tar sands... Canada has the second largest oil reserves in the world.
Aye... but the cost is substantial to refine it.

[Fat Lazy American]

Doesn't BP just find a giant oil reserve in america?..

Also they found a giant oil reserve in North Africa, and it only cost them one terrorist!

[Chiptox]

Aye... but the cost is substantial to refine it.
Last year when oil was near $150/barrel it was cost efficient to do so. Ditto oil shale which the US has a lot of (2 trillion recoverable barrels versus the 1.7 recoverable in the Athabasca tar sands).

The oil is heavier and isn't good for making gasoline but is an excellent source of heavy fuel oils (diesel, kerosene, jet fuel, etc) that make the world go 'round.


More alarmist hoopla to get everone all hot and bothered for no good reason. *yawn*

[XShipRider]

In other words, people won't make significant changes until it's too late :roll:

Well, whale oil lamps only went away because of a better(?) alternative. Coal and wood lost out to oil as home heating mainstay. Alternatives have to be readily available, cheaper, distributable, etc., before people will adopt.

Though the "too late" comment may be prophetic.

[Breerman]

Aye... but the cost is substantial to refine it.
Sure but the costs are going down. I think it's around $25-30 today and the price for oil is around $75.

There are environmental concerns but I think Canada will make sure the companies do their part in cleaning up.

[Flagg]

I'd change it from "Peak Oil" to "Peak CHEAP Oil".

Poor fiscal/monetary policy combined with the maturation/decline of supergiant fields that have provided us the cheap to lift sweet/light crude being replaced with smaller, harder to reach, lower quality, more expensive to lift/secure/refine oil means we will be paying more for energy down the road...I believe a lot more.

We are not going to run out, but we don't have to run out to suffer na$ty consequences of both supply and demand volatility/shock.

Ask yourself why Qaddafi can get away with murder and still have his ass kissed by Tony Blair and Gordon Brown, and his son appears to have been issued an EU wide "get out of jail free" card.

[void]

"Peak Oil" never take into account the massive reserves of tar sands... Canada has the second largest oil reserves in the world.

One of the common misconceptions is that Peak Oil predicts the end of oil production. Peak Oil predicts the end of CHEAP oil, and make no mistake, the end of cheap oil would be felt by everyone since oil is such a fundamental part of almost every conceivable product (food, petrol, plastics, transport).

[Elbs]

One of the common misconceptions is that Peak Oil predicts the end of oil production. Peak Oil predicts the end of CHEAP oil, and make no mistake, the end of cheap oil would be felt by everyone since oil is such a fundamental part of almost every conceivable product (food, petrol, plastics, transport).

x2 very well put.

[void]

x2 very well put.

One scary thing I forgot to mention: most of the fertilisers and pesticides which make modern food production levels possible contain contain significant amounts of petro-chemicals.

[Elbs]

Yeah not to mention the millions that are employed in all of the industries that depend on petroleum products... jeez

[Breerman]

One of the common misconceptions is that Peak Oil predicts the end of oil production. Peak Oil predicts the end of CHEAP oil, and make no mistake, the end of cheap oil would be felt by everyone since oil is such a fundamental part of almost every conceivable product (food, petrol, plastics, transport).
Price is determined by supply and demand. If there is a huge resource that is not accounted for it will affect the supply side and hence price.

Canada has the second largest oil reserves and Peak Oil leaves the tar sands there and everywhere out of the equation.

[void]

Price is determined by supply and demand. If there is a huge resource that is not accounted for it will affect the supply side and hence price.

Canada has the second largest oil reserves and Peak Oil leaves the tar sands there and everywhere out of the equation.

The tar sands are ridiculously expensive to extract, both price and energy wise, they are far from the cheap oil the world has been enjoying for the last century. The reason it isnt considered in Peak Oil is because as I said before, Peak Oil deals with the end of cheap oil, which excludes tar sands.

Supply and demand have nothing to do with the price of the tar sands oil, technical difficulties and energy requirements are the reason for the high price.

[Breerman]

The tar sands are ridiculously expensive to extract, both price and energy wise, they are far from the cheap oil the world has been enjoying for the last century.
Not really. I would be happy if I could extract a commodity for $25/bbl and sell it for $75/bbl (and let's remember that oil prices were around $150/bbl last year). New technology keep the pressure on cost of production and In 15 years time it might be on the level with cost for offshore production.


The reason it isnt considered in Peak Oil is because as I said before, Peak Oil deals with the end of cheap oil, which excludes tar sands.
And like I said they exclude tar sands from the whole equation which means they are not taking into account some of the world's largest reserves.

Peak Oil is a fact. It's just not going to kick in as fast as some like to think.


Supply and demand have nothing to do with the price of the tar sands oil, technical difficulties and energy requirements are the reason for the high price.
This part is so stupid that I won't comment on it.

[xav]

Yeah not to mention the millions that are employed in all of the industries that depend on petroleum products... jeez

Computer or tv screens/keyboards/laptop in wooden or aluminum casings anyone?

[void]

This part is so stupid that I won't comment on it.

What I meant is that supply and demand do not influence the relative price of oil extracted from traditional reserves and oil from tar sands. So if tar sands oil is 10x more expensive to extract than traditional oil, regardless of supply or demand this relationship will stay the same, barring technological advances.

Make sense now? Maybe in future you can think a little before labelling something as "stupid" outright.

[sheytanelkebir]

time to jack up the prices one notch (but low enough to keep the junkies hooked).

PIMPING the westies. aye.

[Ruski]

I bet OPEC and Russia are happy as hell right now, thinking about how they are going to spend their $ rofl
To be honest, this is not a huge surprise to anyone, i am sure everyone knew that oil prices would grow sooner or later..

[NavyTimes]

To be honest, this is not a huge surprise to anyone, i am sure everyone knew that oil prices would grow sooner or later..


Tbh, i dont think that is correct. Lots of people seem to belive oil is produced the same way that you tap water.

[HellToupee]

And like I said they exclude tar sands from the whole equation which means they are not taking into account some of the world's largest reserves.
.

Your not getting it, tar sands are very expensive and difficult to extract, while theres potentially alot of oil there its not something that can be extracted fast and cheap enough to keep pace with demand.

[Breerman]

Your not getting it, tar sands are very expensive and difficult to extract, while theres potentially alot of oil there its not something that can be extracted fast and cheap enough to keep pace with demand.
I presented the current approximate extraction costs which makes production costly but still highly profitable.

Are we running out of cheap oil? Yes. Is Peak Oil real? Yes, but we don't know when.

What I'm saying is that these people are taking reserves several times the size of Saudi Arabia's out of the equation all together. Maybe it will push things 5 years ahead, or 15, or 40. I don't know, the only thing I know is that it in some way will affect the supply side of any theory and as such it can't be dismissed.

[Kilgor]

Relatively cheap, reliable and wide availability is the only answer. Until that happens people will not change daily use habits.

Politicians and voters won't have a choice in the matter.

You'll see the difference between wont and can't very quickly

[HellToupee]

I presented the current approximate extraction costs which makes production costly but still highly profitable.

Are we running out of cheap oil? Yes. Is Peak Oil real? Yes, but we don't know when.

What I'm saying is that these people are taking reserves several times the size of Saudi Arabia's out of the equation all together. Maybe it will push things 5 years ahead, or 15, or 40. I don't know, the only thing I know is that it in some way will affect the supply side of any theory and as such it can't be dismissed.

Its not the size of the reserve that matters tho but how fast it can be extracted, supply is not about reserves its about production, while there is alot of potentially extractable oil in these reserves they cannot extract it in quantities like you can with conventional oil reserves.

[Soldat_Américain]

I live for the day my car is powered by hydrogen...obviously since electrolysis is an energy intensive procedure, we need to go green and I don't mean photosynthesis green.

[Breerman]

Its not the size of the reserve that matters tho but how fast it can be extracted, supply is not about reserves its about production, while there is alot of potentially extractable oil in these reserves they cannot extract it in quantities like you can with conventional oil reserves.
Production levels are highly debatable. A great production rate is theoretically possible but it will in the end come down to oil price, technology, and politics. One thing we know for sure is that neither you nor I can predict that.

[Kilgor]

I live for the day my car is powered by hydrogen...obviously since electrolysis is an energy intensive procedure, we need to go green and I don't mean photosynthesis green.

Hydrogen is a carrier of energy, not a source.

If we are converting hydrocarbons into to hydrogen its a dead issue.

[HellToupee]

Production levels are highly debatable. A great production rate is theoretically possible but it will in the end come down to oil price, technology, and politics. One thing we know for sure is that neither you nor I can predict that.

Just as we could theoretically deploy enough solar panels to power the planet, realistically with known technology we just can't.

[Breerman]

Just as we could theoretically deploy enough solar panels to power the planet, realistically with known technology we just can't.
I won't spend any more time arguing when it's on this level.

[Red_Fern]

I still propose a piss-powered car with a charcoal filter on the exhaust to cut out the smell of it being burned as fuel. I'm being serious. Everyone goes, so why not?

I know kind of gross-ish... but all the same, it's definitely a renewable fuel source.

[Sashko]

I live for the day my car is powered by hydrogen...obviously since electrolysis is an energy intensive procedure, we need to go green and I don't mean photosynthesis green.



I'd kill for that bad boy:

http://www.edmunds.com/insideline/do/Drives/FirstDrives/articleId=117647

[Soldat_Américain]

I'd kill for that bad boy:

http://www.edmunds.com/insideline/do/Drives/FirstDrives/articleId=117647

Yeah that's pimpin! Look up GMs concept...the engine or motor thingy cn power a city block.

[Sashko]

Yeah that's pimpin! Look up GMs concept...the engine or motor thingy cn power a city block.


But it looks like an iPod.

And it's GM :|

[Soldat_Américain]

But it looks like an iPod.

And it's GM :|

GM should have put that puppy on the market when it had the chance, I would have made a run for one. All it needs is a nicer body.

[HellToupee]

I won't spend any more time arguing when it's on this level.

Level being reality?

[Goggen]

Washington admits peak-oil may come sooner rather than later


Expected to arrive much faster than previously believed
Each year, generally in May, the Energy Information Administration publishes a less-than-eagerly-anticipated tome called the International Energy Outlook, 250+ pages of mind-numbing text, charts, graphs, and tables.
No one reads it. The mainstream media ignore it.
It’s the product of the best prognosticators in the Department of Energy. Okay, that may be what puts most people off. But if you’re patient enough to dig into it, it will cough up some fascinating nuggets of information.
The present edition is no exception. The report refrains from spelling out the conclusion that seems most obvious from its data. However, confirming a trend begun just last year, the 2009 edition clearly reveals that the government has been forced to admit that Peak Oil is coming. Moreover, it’s expected to arrive much faster than was believed as recently as two years ago.
This represents a remarkable turnaround in the agency’s opinion. Up until 2008, they were predicting unbroken growth in world oil supplies for the next two decades. But in ’08 and ’09, the rosy picture turned decidedly un-rosier.
Before we look at the numbers, a couple of notes on terminology. The EIA makes its projections based on what its analysts call the “reference case,” i.e., average economic growth. It also provides estimates for better- and worse-case scenarios, but the reference case represents the best guesses they have.
Oil (as we generally think of it), upon which most of the world economy depends, is termed “conventional liquids,” i.e., the stuff that comes gushing up from under Saudi sands. “Unconventional liquids” – extra-heavy oil, bitumen, coal-to-liquids, gas-to-liquids, and biofuels – are also covered in the report, as we’ll see, but conventional is far and away the most important one at this moment in history.
With that in mind, by 2007 the IEO was in its final year of irrational exuberance, confidently predicting that world production of conventional liquids would be 107.5 million barrels/day (up from 81.9 in 2005). That dovetailed nicely with a forecast for world demand of 118 million b/d, with 10.5 million barrels of unconventional liquids taking up the slack.
By ’08, they had put the info into table form, and look what happened:
http://www.stockhouse.com/getfile/53b97245-ad0a-4e08-85df-1e605c2b2780/Casey-Chart-1-Aug-28.aspx

Same table, ’09:

http://www.stockhouse.com/getfile/b24e5ff2-c37b-4504-bfe1-d69a235d74c7/Casey-Chart-2-Aug-28.aspx
Projected production, as you can see, is suddenly shriveling up. From 107.5 million b/d of oil projected for 2030 in 2007, to 102.9 million b/d in 2008, to this year’s meager expectation for 93.1 million. That’s a drop of 13.4% in only two years, and posits production growth of only 11.6 million b/d (14.2%) from 2006 levels.
If that isn’t an admission that the era of Peak Oil is upon us, what is?
The report assumes that some of this stunning shortfall will be made up by development of unconventional liquids to the tune of 13.5 million b/d, including a jump of 5.9 million b/d in biofuels. At the same time, while conventional liquid production from non-OPEC nations is projected to grow only 7%, OPEC is expected to substantially increase its contribution, ramping up output by almost 25%. (All figures are for the period of 2006-2030.)
Does this seem optimistic? Well, it presupposes some heavy lifting on the part of OPEC, a dicey proposition in the best of times.
And it means creation of the infrastructure necessary to exploit extra-heavy oils, tar sands, shale, ultra-deep deposits and other un-conventionals, all of which require sophisticated technological know-how and face significant environmental challenges.
Biofuel production could more easily be elevated. But to reach the lofty level of nearly six million b/d would necessitate a huge diversion of cropland from food to energy, certain to be attended by a rise in food prices, not to mention potentially serious food shortages. The need for food being rather more primal than the need for gasoline, politicians are going to be reluctant to risk loosing angry mobs into the streets.
Even if all of these developments proceed flawlessly, though, we’ll still have to face a widening gap between production and consumption. Or will we?
As it turns out, we’re in luck! Or so the EIA would have us believe. Since, accompanying that falling supply is – you guessed it – declining demand. In 2007, the IEO anticipated world demand for all liquids of 118 million b/d in 2030. This year, that estimate shrank to 107 million b/d, right in line with production.
The important point to take away from the IEO’s analysis is that the world is facing a decline in liquid fuel production and the government, after years of straight-faced denial, is now admitting it.
Does this mean we’re going to run out of oil? No. But supply constrictions mean that the good old days of limitless, cheap oil are gone. And, though viable alternatives eventually will be developed, there’s no way of putting a timetable on that. In the interim, we’re going to have to pay up if we want to keep the family jalopy on the road.
How much? The IEO report’s reference case calls for $130/barrel oil in 2030, but that’s based on relatively modest demand increases from India, China, and other developing nations, and we find it very optimistic. It easily could be twice that.
Rising oil prices mean some belt-tightening, but they also offer investment opportunities, in both conventional and unconventional resource companies. In addition, power-generation alternatives such as solar, nuclear, and geothermal will be coming to the fore.

But discovering the right companies with sound fundamentals and the potential for handsome returns isn’t easy. Read our report how a math-prodigy-turned-multimillionaire finds those companies… and how you, too, can profit from his secret system. Click here to learn more (http://www.caseyresearch.com/crpmkt/crpSolo.php?id=152&ppref=SHS152ED0809A).



http://www.stockhouse.com/columnists/2009/aug/28/peak-oil-is-real,-washington-finally-admits

[Fat Lazy American]

Washington admits peak-oil may come sooner rather than later




http://www.stockhouse.com/columnists/2009/aug/28/peak-oil-is-real,-washington-finally-admits

This is all wrong. Estimates got lowered because of the economic disaster, not because the DOE suddenly realized their estimates of global reserves were too high.

If anything, these lower estimates, if correct, would push "peak oil" back further.

[Mastermind]

If we were really running out of oil, the prices at the pump would reflect that...8 bucks, ten bucks a gal.

If we were really running out of oil, the US States and Fed taxes on oil would be jumping.

If we were really running out of oil, the "Gorebots" would be tossing parties like N.O. Mardi Gras

If we were really running out of oil, the US and other industrialized nations would be turning on Nuclear Power Plants, backing electric vehicles, standing on their ears to get onto alternative fuels...

It just aint happening...

[HellToupee]

Peak oil is not about running out of oil, its the point where production peaks.

Why would they do things like increase taxes on oil? When oil price was rising govts were easing taxes on oil. There is heavy investment on alternative fuels biofuels etc, its just its very hard to find a viable alternative to energy you simply pump out of the ground.

[Gman992]

Oh God...not this peak oil theory again....they said this during the 1950s, during the 1960s, the 1970s, the 1980s, the 1990s,...are you guys catching on?

[HellToupee]

Oh God...not this peak oil theory again....they said this during the 1950s, during the 1960s, the 1970s, the 1980s, the 1990s,...are you guys catching on?

Uhh they were applying the theory to individual countries oil production, many countries like the USA have had their oil production peak and go into decline as was predicted.

[Jobu]

Uhh they were applying the theory to individual countries oil production, many countries like the USA have had their oil production peak and go into decline as was predicted.

Not for lack of supply.

We simply decided to stop drilling. The day may come when we have to start again.

[void]

Not for lack of supply.

We simply decided to stop drilling. The day may come when we have to start again.

The simple fact is that easily accessible oil (well, all oil for that matter) is a finite resource, and oil demand has been growing exponentially over the last 100 years. So logically speaking there will be a point where oil production of easily accessible oil will peak. Given the emerging massive markets of China and India, which have up to now not consumed much oil per capita, this may come to pass in the near future.

This isnt a question of if, but when. This is the only point which is up for debate. But even if this point comes only in 20 years time say, that still means we must start doing something NOW, because reducing our reliance on cheap oil will take all of those 20 available years, if not more.

[Goggen]

If we were really running out of oil, the prices at the pump would reflect that...8 bucks, ten bucks a gal.

If we were really running out of oil, the US States and Fed taxes on oil would be jumping.

If we were really running out of oil, the "Gorebots" would be tossing parties like N.O. Mardi Gras

If we were really running out of oil, the US and other industrialized nations would be turning on Nuclear Power Plants, backing electric vehicles, standing on their ears to get onto alternative fuels...

It just aint happening...

As others have stated before, peak oil is not about running out of oil it's about the disappearance of cheap oil and the massive implications it has for modern civilization. A lot of people seem to think that having access to cheap oil is some kind of inalienable right, we've been living with oil for so long that the fact that it is a finite resource becomes hard to accept. And at the moment there is no alternative fuels or combination of alternative fuels which could replace our dependency on fossile fuels. Our whole distribution network would have to be changed. The successful or failed transition from fossile fuels to some other form of energy will be a major point in the history of mankind even if the prospects look pretty bleak.

For example, 40 of the worlds 54 oil-producing are already past peak production. But demand for oil is higher than ever.

http://i805.photobucket.com/albums/yy340/Smeggen/olja3.jpg

[Mastermind]

Peak oil is not about running out of oil, its the point where production peaks.

Why would they do things like increase taxes on oil? When oil price was rising govts were easing taxes on oil. There is heavy investment on alternative fuels biofuels etc, its just its very hard to find a viable alternative to energy you simply pump out of the ground.
When sales fall off, the largest tax base in the nation falls off...that is the taxes on energy. California literally destroyed the electric vehicle concept solely on the sudden realization, if people can just plug their car into the outlet in their garage...what happens to the TAX BASE we get from gasoline sales??? Almost overnight, the much touted electric car was jerked off the showroom floors and sent to the crushers.

In this current gas sales crisis, the feds and the states have been trying to figure out how they can increase taxes...the latest excuse was from congress critters enthused about making gasoline so expensive, (and much hated by the greenies who vastly support all things liberal)the SUVs would be forced to the scrap heap...

"If we raise taxes on gas, it will just show how much we are trying to prevent Global Warming...see, Al Gore? See how much we love the planet?"

They would have had a field day if it had not been for the accompaniment of the dastardly financial meltdown.