How oil scarcity will affect the future from a scientific perspective

[Nepthu]

What does everyone speculate will happen when the production of oil peaks and/or the demand for oil begins to far outstrip the supply? (speculating from a scientific perspective when possible)

Some questions to stimulate discussion:
Will the markets crash? Will we go back to an agrarian type of existence when it runs out? Do you think oil supply will not run out? How will play out? Will the poorer countries get hit the hardest first? Will there be another 'great depression'? Will alternative energy sources be put into place that will 'save us'? When will oil production peak?

[arahant]

My prophesies:

Oil is going to last a VERY long time. Prices will increase over the next 100 years, to the point where alternative energy becomes the rule. In 100 years, the mix will be 30% FF's, 40% nuclear, 20% solar, and 10% other.

The only supply shocks will come from disruptions to major suppliers like Saudi Arabia, and these will become less of a threat the higher the prices become. There is more oil in the CO rockies than in saudi arabia...as soon as the price gets high enough, we'll start to see it being extracted.

No conceivable way is that there will be a substantial energy crisis in the foreseeable future.

[WillMagic]

Answering your questions one at a time:

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Will the markets crash?

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Maybe, but if they do oil won't be the primary factor.

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Will we go back to an agrarian type of existence when it runs out?

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Almost certainly no, but god help us if we do.

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Do you think oil supply will not run out?

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I don't think it will run out....

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How will play out?

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...because as long as there is a market prices will adjust to supply. So rather than running out it will just get more and more expensive, to the point where creating/facilitating an alternative will be immensely profitable. If you ever wondered why there aren't many alternatives to oil right now, the answer is simple; oil is cheap. When it gets more expensive alternatives will be viable. Also, with increasing oil prices comes a demand for increased efficiency, so you'll see more hybrids and smart appliances.

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Will the poorer countries get hit the hardest first?

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Of course they will.

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Will there be another 'great depression'?

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Again, maybe, but oil won't be the major cause.

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Will alternative energy sources be put into place that will 'save us'?

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Yes. There will be just too much money to be made for alternatives not to spring up.

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When will oil production peak?

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Who knows?

[paperjam]

[ QUOTE ]
My prophesies:

Oil is going to last a VERY long time. Prices will increase over the next 100 years, to the point where alternative energy becomes the rule. In 100 years, the mix will be 30% FF's, 40% nuclear, 20% solar, and 10% other.

The only supply shocks will come from disruptions to major suppliers like Saudi Arabia, and these will become less of a threat the higher the prices become. There is more oil in the CO rockies than in saudi arabia...as soon as the price gets high enough, we'll start to see it being extracted.

No conceivable way is that there will be a substantial energy crisis in the foreseeable future.

[/ QUOTE ]

In 100 years there will be no oil remaining to be extracted out of the earth. Cars won't be hybrid, they'll be completely electric.

But do you really think the world will make it another 100 years?

[Magic_Man]

Another question I always wonder about - what's going to happen to airplanes? We have electric/hybrid cars already, but airplanes are entirely dependent on fuel. Is someone working on a top-secret all-electric plane? What's the deal?

~MagicMan

[tolbiny]

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Cars won't be hybrid, they'll be completely electric

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In 100 years there will be no oil remaining to be extracted out of the earth.

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Of course there will. Once the alternatives become cheaper there will be less reason to extract oil, and only the countries actually sitting on the oil will be using it (as it will remain very cheap still for them. it will be very hard to invision a scenario in the next 100 years where the last barrels are squeezed out, if they are it will bode very badly for us

[Girchuck]

Prices of which alternative sources of energy currently available do not depend on oil prices?

[RetiredAt22]

More Oil in the CO rockies than saudi arabia???

hahahahah ok, so the major oil companies, who are touted as having the smartest management operations in the world are going to get their oil from half a world away, when the largest field is only 500 miles away from their HQ in texas?

your crazy. the largest oil fields are in the middle east. the only other possibility for bigger fields are unfound fields at the bottom of the ocean.

Oil will be around as long as the oil companies can make a profit. they have the power in government and they can cut down any attempt at switching over to nuclear or solar/wind at any time. we already have the technology to create a world that works the same without any fossil fuels at all. we just dont have the ethics or moral fiber to foreget about "show me the money" and think about the future. that may be the reasonw why this question was posed earlier:

"Do you really think the world will see another 100 years"

my view....the world will... humans will not, mice maybe."

[arahant]

[ QUOTE ]
More Oil in the CO rockies than saudi arabia???

hahahahah ok, so the major oil companies, who are touted as having the smartest management operations in the world are going to get their oil from half a world away, when the largest field is only 500 miles away from their HQ in texas?

your crazy. the largest oil fields are in the middle east. the only other possibility for bigger fields are unfound fields at the bottom of the ocean.

Oil will be around as long as the oil companies can make a profit. they have the power in government and they can cut down any attempt at switching over to nuclear or solar/wind at any time. we already have the technology to create a world that works the same without any fossil fuels at all. we just dont have the ethics or moral fiber to foreget about "show me the money" and think about the future. that may be the reasonw why this question was posed earlier:

"Do you really think the world will see another 100 years"

my view....the world will... humans will not, mice maybe."

[/ QUOTE ]

"[W]ith crude oil above $66 a barrel at the close of trading [on Sept. 20], oil shale is a promising alternative to crude. The Green River shale deposits in Colorado, Utah and Wyoming are estimated to contain 1.5 trillion to 1.8 trillion barrels of oil, and while not all of it can be recovered, half that amount is nearly triple the proven oil reserves of Saudi Arabia." - Rocky Mountain News

Strictly speaking, oil shale needs to be refined, but the end product is oil.

You can find estimates independently if you know how to use a search engine. The question is, why would you bother to disagree with me so arrogantly, when you could easily have spent the time looking it up and learned something?

[madnak]

Most of the oil is definitely not in the Middle East. I imagine the smart management operations are well aware of vast oil fields right in their own backyard. It's just that they've actually considered the cost of tapping those deposits so they also know it wouldn't be economical.

[Silent A]

[ QUOTE ]
"[W]ith crude oil above $66 a barrel at the close of trading [on Sept. 20], oil shale is a promising alternative to crude. The Green River shale deposits in Colorado, Utah and Wyoming are estimated to contain 1.5 trillion to 1.8 trillion barrels of oil, and while not all of it can be recovered, half that amount is nearly triple the proven oil reserves of Saudi Arabia." - Rocky Mountain News

Strictly speaking, oil shale needs to be refined, but the end product is oil.

[/ QUOTE ]

Oil Shales pretty much prove that the world will almost certainly never run out of oil (especially when you consider that he US deposits are not the only oil shales out there). Of course, they're a bitch to process and make the Oil Sands here in Alberta look like a giant gas tank.

From what I understand, it'll probably take the current equivalent of $100/barrel oil and a lot of capital investment plus a few decades to get it going at a significant rate (I'm sure our Oil Sands will be used as a general outline of what would need to be done).

Conventional sources, however, are almost completely tapped and there is no way that any significant easy to access fields are out there waiting to be found.

Our main hope to avoid an economic catastrophy is that no one tries to do something stupid like artificially keep the price of oil down. It's vital that we let it ramp up now (and over the next few decades) so that alternatives have the time to step in when the time comes. We also need to aid research and development of alternatives now if we want to minimize the risk of a future oil shock.

Another problem will be what to do with all the countries who want to develop without access to a cheap, highly flexible, and (relative to coal at least) clean energy source like oil.

[Girchuck]

Ok, so if oil prices go up some more, wouldn't it also push up the cost of development of these unconventional sources which need a lot of energy for processing?
Do you see the alternative energy sources as independent of the oil economy?

[Silent A]

The idea is that as oil prices go up, other sources become viable and people become more interested in research into new sources.

Note: by "new sources" and "alternatives" I mean things like oil shales (new oil sources), wind/tidal power (new energy sources), and electric cars (products that traditionally used oil but would now use other sources).

So rising oil prices mean more alternative sources become available and more research means these alternatives become cheaper too. Also, higher prices encourage conservation. Eventually, one hopes, the alternatives can replace oil or at least reduce our reliance on it such that it buys us even more time.

The problem is that there is currently no conceivable energy source (or combination of sources) that can replace oil any time soon (even with tonnes of research). It's going to take time and people are going to have to be motivated (morally AND economically). The best way to do this is to let oil prices rise and recognize that this is a good thing in the long run. No belly aching about gas prices! It's still dirt cheap.

If anything, I'd argue that oil is currently underpriced if only because its environmental impact is not accounted for.

[BigBuffet]

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Another question I always wonder about - what's going to happen to airplanes? MagicMan

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Airbus is currently working on a clean coal-burning aircraft.

[BigBuffet]

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Airbus is currently working on a clean coal-burning aircraft.

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I was kidding when I wrote that, but I found this link tonight liquid coal for airplanes (http://news.yahoo.com/s/nm/20061217/bs_nm/coal_fuel_dc)

[suppasonic]

We will have to come up for an alternative plastic. That will be the toughest part. We can always shift to ethanol or solar or wind and live less comfortably, but our entire matierals industry is based on plastics.

[Girchuck]

Why would other sources become more viable if their price is coupled to oil price? If oil price goes up, the price of these sources goes up as well. Oil shales need a lot of energy to produce. Energy prices are tightly coupled to oil prices.
Wind or tidal generation might not be so tightly coupled (although one still would need energy to produce and ship the turbines, or build the power generators) but they have potential to produce only a small percentage of our energy needs. When world-wide oil production declines, it will continue to decline every year with some depletion percentage. The later it declines, and the optimists believe that the growth in oil production from all sources conventional and non-nonventional will continue for 25 years, the bigger is the absolute value of the depletion percentage that the alternatives have to cover.

[arahant]

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Why would other sources become more viable if their price is coupled to oil price? If oil price goes up, the price of these sources goes up as well. Oil shales need a lot of energy to produce.

[/ QUOTE ]
Because a large portion of the costs of production are fixed (primarily technology development, but also exploration, legal costs, etc.). The variable cost of the energy required for extraction (for any source) is a tiny portion of the price of energy.

[suppasonic]

Well, we dont have to worry about energy that powers houses, business -- grounded locations. We can power these via alternate sources like natural gas, nuclear, wind, hydro-electric, and solar. The only problem are the non-grounded sources, namely, planes, trains, and automobiles. The interesting impact will be on the farming industry.

Is the amount of ethanol needed to power a tractor more or less than the ethanol that will be produced?

[arahant]

[ QUOTE ]
Well, we dont have to worry about energy that powers houses, business -- grounded locations. We can power these via alternate sources like natural gas, nuclear, wind, hydro-electric, and solar. The only problem are the non-grounded sources, namely, planes, trains, and automobiles. The interesting impact will be on the farming industry.

Is the amount of ethanol needed to power a tractor more or less than the ethanol that will be produced?

[/ QUOTE ]

That was a good question. According to This (http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2005/06/27/MNG1VDF6EM1.DTL), it's much more. (not the tractor by itself, but the entire production cost in energy)

[BreakfastBurrito]

http://www.oilendgame.com/

Download the entire thing for free.

Abstract
This independent, peer-reviewed synthesis for American business and military leaders charts a roadmap for getting the United States completely, attractively, and profitably off oil. Our strategy integrates four technological ways to displace oil: using oil twice as efficiently, then substituting biofuels, saved natural gas, and, optionally, hydrogen. Fully applying today's best efficiency technologies in a doubled-GDP 2025 economy would save half the projected U.S. oil use at half its forecast cost per barrel. Non-oil substitutes for the remaining consumption would also cost less than oil. These comparisons conservatively assign zero value to avoiding oil's many "externalized" costs, including the costs incurred by military insecurity, rivalry with developing countries, pollution, and depletion. The vehicle improvements and other savings required needn't be as fast as those achieved after the 1979 oil shock.

The route we suggest for the transition beyond oil will expand customer choice and wealth, and will be led by business for profit. We propose novel public policies to accelerate this transition that are market-oriented without taxes and innovation-driven without mandates. A $180-billion investment over the next decade will yield $130-billion annual savings by 2025; revitalize the automotive, truck, aviation, and hydrocarbon industries; create a million jobs in both industrial and rural areas; rebalance trade; make the United States more secure, prosperous, equitable, and environmentally healthy; encourage other countries to get off oil too; and make the world more developed, fair, and peaceful.

[quinn132]

few small thoughts and facts.

Ok oil reserves are still huge. Currently we use about 1 barrel of oil to extract and refine 7 barrels. The majority of what we have left will take 1 barrell just to extract 2.
With this in mind prices are going to rocket.

Also major oil companys estimate their reserves. It is in their interest to tell the share holders that their reserves are huge. When in reality many declared reserves do not actually exist.

Forget cars and palnes. Farming is like mentioned one of the biggest problems. Yes the tractors use lots. fertilizers use more. Then transport of food is massive. The average distance a piece of food will travel onto a US citizens plate is 1,600 miles. For canada it is over double this. In relative terms, it takes 8 calories of oil to produce 1 calorie of food.

[quinn132]

if your intreseted search for "peak oil". The theroy is basically when production cant cope with supply. Many belive that we are pretty much at this peak. Oil companys deny this. But then again dont forget about those share holders. However can somebody please search to see why these same companys are no longer building refinerys. World oil supply is growing by around 5% per year and these refinerys are all at almost peak production.

I will tell you why these companys won't build more. Firstly they are hugely expensive. So when we reach peak oil and production goes down many will beome worth nothing more than scrap. So this for me is evidence beyond argument that the oil companys know that we are about to hit peak oil.

[arahant]

Lack of refineries has nothing to do with a belief that production has peaked. For one thing, even if production had peaked, it certainly wouldn't drop enough in the next 10-20 years to significantly change the NPV of any refinery project.

Lack of refinery construction is a result of the dramatic changes in the legal and political landscape over the last few decades.

[Girchuck]

[ QUOTE ]
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Why would other sources become more viable if their price is coupled to oil price? If oil price goes up, the price of these sources goes up as well. Oil shales need a lot of energy to produce.

[/ QUOTE ]
Because a large portion of the costs of production are fixed (primarily technology development, but also exploration, legal costs, etc.). The variable cost of the energy required for extraction (for any source) is a tiny portion of the price of energy.

[/ QUOTE ]

The costs of development you call fixed, are not actually fixed. Technology development requires scientists. But oil industry needs scientists too. Whoever can pay more tends to get the best, and make the fastest progress. If oil companies can pay large sums to scientists because of increased profits, the costs to develop alternative technology will rise. Exploration is only relevant for some of the alternative sources, and it has the same problem as technology development. Legal costs could concievably be an advantage for some alternatives, but a huge burden for others, like nuclear plants.
Most importantly, energy costs burned in construction and maintenance or extraction and refinement of any alternative energy source are not at all tiny.
The oil shales mentioned in this thread will require major energy investment to extract. Alberta tar sands production is already in need of nuclear reactor dedicated to producing steam with which the bitumen is cracked. Oil shales is a more difficult project.
I'll be more optimistic about ethanol, if I see an ethanol-powered ethanol production plant. So far they are powered by natural gas production of which is about to peak on this continent.
Nuclear reactors take years to build, and years to train the workforce, a crash nuclear program will increase the chance of accidents.
Solar could be increased, if the technology not coupled to silicon can be put online because the industry expects shortages of silicon wafers to begin in 2008.
Wind and tidal and geothermal are great in their limited niches, but require large initial investment which will not pay for itself for decades, and therefore probably ill-suited for any market condition, when long-term investment is discouraged. Speaking of which, how many recent long-term investments can you remember hearing about. Any new nuclear power plants being built right now? Any conservation program being implemented, perhaps? How expensive will the oil have to become for these things to begin?

[arahant]

[ QUOTE ]
[ QUOTE ]
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Why would other sources become more viable if their price is coupled to oil price? If oil price goes up, the price of these sources goes up as well. Oil shales need a lot of energy to produce.

[/ QUOTE ]
Because a large portion of the costs of production are fixed (primarily technology development, but also exploration, legal costs, etc.). The variable cost of the energy required for extraction (for any source) is a tiny portion of the price of energy.

[/ QUOTE ]

The costs of development you call fixed, are not actually fixed. Technology development requires scientists. But oil industry needs scientists too. Whoever can pay more tends to get the best, and make the fastest progress. If oil companies can pay large sums to scientists because of increased profits, the costs to develop alternative technology will rise. Exploration is only relevant for some of the alternative sources, and it has the same problem as technology development. Legal costs could concievably be an advantage for some alternatives, but a huge burden for others, like nuclear plants.
Most importantly, energy costs burned in construction and maintenance or extraction and refinement of any alternative energy source are not at all tiny.
The oil shales mentioned in this thread will require major energy investment to extract. Alberta tar sands production is already in need of nuclear reactor dedicated to producing steam with which the bitumen is cracked. Oil shales is a more difficult project.
I'll be more optimistic about ethanol, if I see an ethanol-powered ethanol production plant. So far they are powered by natural gas production of which is about to peak on this continent.
Nuclear reactors take years to build, and years to train the workforce, a crash nuclear program will increase the chance of accidents.
Solar could be increased, if the technology not coupled to silicon can be put online because the industry expects shortages of silicon wafers to begin in 2008.
Wind and tidal and geothermal are great in their limited niches, but require large initial investment which will not pay for itself for decades, and therefore probably ill-suited for any market condition, when long-term investment is discouraged. Speaking of which, how many recent long-term investments can you remember hearing about. Any new nuclear power plants being built right now? Any conservation program being implemented, perhaps? How expensive will the oil have to become for these things to begin?

[/ QUOTE ]

I would say that we are near the point where oil is expensive enough for nuclear already. Europeans, particularly the British, are currently building a number of new reactors. The US is more entrenched against them, but less for economic reasons than social and political ones.

The bigger problem with regard to the economics is that reactors have a MASSIVE fixed cost, so it's less the current price of oil than the future outlook. If investors knew for certain that oil would remain at $60+, we would see large scale investment.

What surprises me most is that I never see the global warming crowd (at least in the US) trying to push nuclear. It's clearly the best current alternative to fossil fuels. With one big push, we could dramatically reduce GG emissions.

Your point about the extraction energy of shales and tar is true now, but I consider the development of technology to reduce the current high marginal cost part of the fixed cost. Ultimately, we'll be using bacterial or chemical processes for the extraction, i'm sure. And my guess would be that any scientists employed by oil companies are working on precisely this problem. There is nothing exxon would like more than to be able to cheaply get at the oil in canada and the us.

[wacki]

[ QUOTE ]
"[W]ith crude oil above $66 a barrel at the close of trading [on Sept. 20], oil shale is a promising alternative to crude. The Green River shale deposits in Colorado, Utah and Wyoming are estimated to contain 1.5 trillion to 1.8 trillion barrels of oil, and while not all of it can be recovered, half that amount is nearly triple the proven oil reserves of Saudi Arabia." - Rocky Mountain News

Strictly speaking, oil shale needs to be refined, but the end product is oil.

You can find estimates independently if you know how to use a search engine. The question is, why would you bother to disagree with me so arrogantly, when you could easily have spent the time looking it up and learned something?

[/ QUOTE ]

This article completely ignores extraction rates. Even the most optimistic companies don't project tar sands to be a major player. They also ignore extraction rates with the lower tertiary gulf find. That "massive" find will have almost no effect on the world oil market. 300 kilo-barrels a day in a 100 million barrel a day market is a joke. I can't say when the peak/plateau will hit but a lot of the reasons the "don't worry" people use just aren't good reasons at all.

[wacki]

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The problem is that there is currently no conceivable energy source (or combination of sources) that can replace oil any time soon (even with tonnes of research).

[/ QUOTE ]

This is flat out wrong. There are at least 4 very promising battery techs that can make oil a slow, expensive, and cumbersome tech. Yes they are a ways off but they show a lot of promise. There are also several chemical based techs that are promising as well. Research is being neglected or cut.

The signal to noise ratio in this thread is depressing.

[wacki]

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We will have to come up for an alternative plastic. That will be the toughest part.

[/ QUOTE ]

No, it won't.

Everyone really needs to read this:
http://tinyurl.com/y7mg2x

Seriously, where is everyone getting their news?


quin:

[ QUOTE ]
if your intreseted search for "peak oil". The theroy is basically when production cant cope with supply. Many belive that we are pretty much at this peak. Oil companys deny this.

[/ QUOTE ]

This is not true. Connoco, Shell, BP and Chevron all say the peak is dangerously near.
http://www.willyoujoinus.com/

From chevron:

The 20th century was marked by rapid growth and an increase in prosperity throughout the world.1 But the past pales in comparison to the pace at which the 21st century is advancing.2 Populations are increasing, economies are developing, and the world is consuming energy faster than ever before.3

By 2020, some experts predict the world's energy consumption will be 40% higher than it is today.4 Efficiency, improvements, and conservation are part of the solution, but will not, in themselves, meet the need for more energy.5

Not the most optimistic words from an oil company.

Everyone needs to read Robert Rapiers blog or check out the oildrum. The real danger is what people are calling "peak lite" where demand outstrips supply.

arahant,

[ QUOTE ]

What surprises me most is that I never see the global warming crowd (at least in the US) trying to push nuclear. It's clearly the best current alternative to fossil fuels. With one big push, we could dramatically reduce GG emissions.

[/ QUOTE ]

The problem is breeder reactors. Right now fuel is safe to use but expanding nuclear means taking terrible risks with fuels that are extremely easy to build a nuclear bomb with. Not even the nuclear people want to expand nuclear.

[ QUOTE ]
In 100 years, the mix will be 30% FF's, 40% nuclear, 20% solar, and 10% other.

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If we are still using 30% FF's in 100 years there will be a lot of very sick people on this planet.

[Torgeir23]

Haven't read the other replies yet so sorry if I am just repeating

Given the proper incentives, mankind is very creative and can easily find new sources of energy. Right now the price of oil is relatively cheap and therefore not much research into alternative energy sources is undertaken.

If the price were to rise to, say, $150 per barrel, research into alternative energy would become more profitable and we would therefore find new sources of energy.

So as long as we have efficient markets, I do not believe the world would face a major energy crisis. Oil prices could rise for short periods of time and put more pressure on the world economy than during this summer. but would eventually lead to discoveries of new energy sources which would make the world a lot less reliant of oil.

[Silent A]

[ QUOTE ]
[ QUOTE ]
The problem is that there is currently no conceivable energy source (or combination of sources) that can replace oil any time soon (even with tonnes of research).

[/ QUOTE ]

This is flat out wrong. There are at least 4 very promising battery techs that can make oil a slow, expensive, and cumbersome tech. Yes they are a ways off but they show a lot of promise. There are also several chemical based techs that are promising as well. Research is being neglected or cut.

The signal to noise ratio in this thread is depressing.

[/ QUOTE ]

Perhaps I worded that a bit too strongly (or, worded it in such a way that it was easy for you to take it the wrong way).

When I said "replace" I meant it literally, including all the existing infrastructure that gives oil such a big head start.

I hope you agree with me that it's going to take, time, commitment, and a lot of money to make oil obsolete (which I think should be one of our primary goals for the 21st century).

My main point was supposed to be that if we hit an oil supply wall, the adjustment to an electric battery economy is going to be very painful.