Episode-516- A New Look at Peak Oil

After yesterday’s interview with Chris Martenson I have been unable to get the concept of Peak Oil out of my head.  What I am reconnecting with mentally right now is how many people don’t have any idea what peak oil is all about.

Peak oil isn’t the end of oil it is only the point at which production reaches a peak and can’t continue to grow concurrently with demand.

Additionally most people are not aware of what oil really means to our economy beyond the obvious.  How oil effects coal extraction, wind power, making plastic, making medicine, transporting our food, etc.  Today’s show is more of just me chatting with our than a more conventionally hard outlined show.

I will give you some numbers and statistics but mostly I want to talk more about what peak oil really means even with out a cataclysmic no oil left doomsday type event.  Imagine just a 5% shortfall in oil demand, the effect on cost, service reduction, economic impact, etc.

You will also hear a short piece from a show I did originally on Sept. 5th 2008 and what has happened since that point with the Cantarell oil field in Mexico.

Resources for today’s Show…

Remember to comment, chime in and tell us your thoughts, this podcast is one man’s opinion, not a lecture or sermon. Also please enter our listener appreciation contest and help spread the word about our show. Also remember you can call in your questions and comments to 866-65-THINK and you might hear yourself on the air.

Photo Credit Above to Joshua Delaughter

17 Responses to Episode-516- A New Look at Peak Oil

  1. Every time I listen to you I understand things a bit more. This show is great! I have not understood Peak Oil so well before. Yesterday’s show was very good also.

  2. I appreciate what you are doing, but listening to your take on Peak Oil was painful. Peak oil is a ruse designed for control. Although you can turn garbage into oil, nature can not. Even if you spill oil on the ground it will be broken down biologically and the potential building blocks (organic) are more readily broken down. There is biotic coal, if you understand that it should scare the hell out of you. Oil is abiotic, created about 15 miles beneath the earths surface. The source of oil was first exposed in a Russian research study in 1898. Peak oil was invented by corporate insiders to control the prices. The oil reservoirs are along subsurface channels and find their way into reachable reserves over long periods. Many abandoned oil wells have already begun to refill and are being tapped again (in the Gulf). With the new deep drilling rigs we are able to tap oil closer to it’s source. This also carries the hazard of releasing it while it is still forming and includes some very hazardous gases (as in the spill). We have 3 major reserve fields in America that have been tapped and capped. These contain enough to keep us at present consumption rates for 2,000 tears and never import another gallon. The problem is that it would drive oil to about $16 per barrel. There are no available refineries in America to handle this and it is doubtful that there will be as long as “Special Interest Groups” rule our nation. Energy is the fountain of economy. If you loose it there would be a boom in freedom as well as entrepreneurship. We also have enough natural gas reserves to run the nation (renewable) and a new form of nuclear power that is 15 times more efficient (productive) than the present form and the resulting nuclear waste can be stored above ground and depleted in 50 years (at Lawrence Livermor). The Feds defunded the research and buried the documents because of it’s detriment to the trillions of dollars and draconian governments that are now in power. Just so you know.

  3. Les, I’m in the oil business and make my living from it. On abiotic oil this is my professional opinion, bs.

    Crude – The Incredible Journey of Oil
    http://www.abc.net.au/science/crude/

  4. Modern Survival

    @Doug I agree! @Les what he said and seriously I am not scared and peak oil isn’t being used to control anyone. Hell if peak oil is real and coming soon in a catastrophic way we don’t even need to worry about the real lie of Global Warming via carbon right? Hell if the oil is going to be gone soon no need to worry about much more CO2 which of course is nothing but what we exhale.

    Further if you listened you should of gotten my point, peak oil isn’t about no more oil it is about demand exceeding supply. If you don’t think a billion Chinese are going to do that, you are not paying attention.

    I truly encourage you to watch Chriss Martenson’s peice from The Crash Course on Peak Oil. I will be the first person to say governments and corporations lie to us all the time as do many so called environmentalists, but MATH doesn’t lie.

    Again this doesn’t scare me it is one more reason to be prepared for CHANGE, not the doom and gloom end.

  5. Jack, you talked about plastic being made from oil. Here’s another visual I give people, highways.

    Reads, tar and asphalt is less than 2% of a barrel of oil. So the next time you take a long driving trip try to imagine how many tanks of oil it took to pave that highway. There is 4 million miles of paved highways and streets in the US alone. As oil goes into decline where is the asphalt coming from to keep up roads? At least we recycle 80% of our asphalt. As asphalt supplies get scarce I expect paved country roads will get dug up and moved to higher volume roads.

    States, counties, and cities – today – are having a tough time financing road work. Just to maintain roads what will your taxes be in the future as oil prices climb through the roof? This stuff, these costs, are only in the next 5 years.

    I have a link on the US military’s take in its JOE 2010 report: http://oildepletiondebate.blogspot.com/2010/04/united-states-joint-forces-command-us.html

    I’ve had people tell me we’ll just go to concrete to pave roads. Cement is heated in a kiln to 2800 degrees. At 600 degrees less, the red hot lava flowing out of Kilauea is 2200 degrees. So every square inch of concrete used to build an interstate like I-35 used cement that was hotter than lava. What do you think the energy source was to cook that cement and then transport it to location? Fossil fuels.

    Cap and tax: if C&T increases the cost of petroleum products then the cost to states, cities, and counties for asphalt will go up even more than a supply/demand shortfall.

  6. Modern Survival

    @Doug all good points. Again I don’t think we are running out of oil just cheap oil and that drives up the cost of everything you just mentioned.

  7. I was laughing so hard I choked on my cupcake at my desk; “Do their cars run on bee power?” Hahaha. Nice one mate. I’m trying to work out what kinds of emotional and mental preparedness would come in handy and having my sense of humour survive a disaster would be high on my list. It is too easy to ‘catastrophize’ (I think I made that word up) if we are not prepped and even when we are ‘ready’. Other emotional/psychological items to prep: mental resilience, uplifting philosophies(NOT The Secret and its ilk), music, poetry and of course Love.

    Loved what I have heard so far-I came here on Chris Martenson’s coat tails via a link on his site. As you said, listening to people who have a good idea of risk and preparedness(such as you and Chris) validates our feelings and ideas of what could be on the horizon. I thought I was going crazy for a while with how I have been bringing these issues up time and time again with friends and family. Thanks for being ‘crazy’ too.
    Be well.

  8. I’m a peak oil believer – first learned about the concept in 2002 and have done a lot of reading since then. The show provided a good summary overview of the issue.

    Had to comment on Les’s posting – if we all agree that oil is the fuel for the engine that is modern civilization, then what advantage does hiding “true reserves out there” offer to that small group of pinstripe suit wearing brainiacs meeting secretly in “the star chamber” somewhere? There are lots of conspiracy theorists who insist we have enormous reserves out west and enormous reserves in the gulf but that we are deliberately not drilling in order to drive prices up. This trend only discourages investment (as Jack pointed out) and slows down economic growth? I just don’t see how they benefit and why they’d engage in this behavior even if it were possible for a small secret group of people to orchestrate events on such a scale, which I do not believe is possible.

    The truth is painfully simple – the vast majority of people don’t want to recognize reality.

  9. @timfromohio, on that secret group shhhh. I’m not only an independent oil producer but I also have a black helicopter hidden in my back yard :p

  10. My tin foil hat has built in ear muffs, your chopper won’t bother me ….

  11. A sobering listen Jack. What worries me, is like you mentioned. Nations shutting off exports to meet local demand. Iran is close to that as well. The Saudis are not telling us the ratio of water to oil when they pump the stuff out. And all we need is not peak oil, but a blockage of the Strait of Hormuz to get things started, jeepers, even a ship sinking in that narrow passage would cause havoc.

  12. Jack, that was quite an eye-opener of a podcast. I had no idea of the scope of things. You have a great gift of putting things into simple logical pieces that even those of us who aren’t related to Einstein can easily digest. What I learned from listening to this podcast has put a new urgency in my preps.

    Thanks for the outstanding job you are doing for all of us!
    AZguy

  13. Steven Slaughter

    Jack,
    Good show on Peak Oil. I appreciate how much you emphasized that the supply/demand issue is really what it is all about. You alluded to it, but as another part of this, I think it would also be useful to mention to your listeners that the cost of extraction from a corporate financial investment POV is also critical. Oil companies have been happy as clams t pour huge resources into new drilling and extraction because their ROI was so massive. But as the oil becomes harder to extract, that ROI will (or, I assume, HAS) begun diminishing. It will not make financial sense for companies, or for investors, to continue exploration if they know that the cost of extraction will only garner a modest profit. And of course at some point, the actual cost of extraction, even from an oil consumption POV, will be a net loss. Nobody will burn 2 gallons of oil to extract 1.

    BTW, have you read James Howard Kunstler, or listened to his podcast. A good companion to your show. Keep up the good work.

    Steven

  14. Jack,

    I’m late to the show here but just wanted to mention something about your comment on Canada reducing it’s oil exports to the USA.

    According to NAFTA Canada isn’t allowed to reduce exports to the USA in order to increase domestic supply and getting rid of NAFTA would destroy our economy since over 80% of all our exports go to the USA.

  15. I’m an independent oil and gas producer and a peak oiler just to let you know where I’m coming from.

    Most people don’t understand the oil business, its dependency upon rock matrix physics and how those reserves est to production capacity affect available supplies.

    If you really want to read a good book on how oil is produced, that peak oil is here and how it’s going to affect you I highly recommend this month’s released book by Dr. Robert Hirsch titled
    The Impending World Energy Mess; What it is and What It means To You!

    The authors have done an excellent job of taking these complicated subjects making them easy to read and understand. At 240 pages it can read within a couple of days.

    Since the oil price crises is here and going to get much worse, it’s my opinion that every city council, every school board, and every government rep should have to read it. I think every should read it.

    The Joint Forces Command is at least paying attention
    http://oildepletiondebate.blogspot.com/2010/04/united-states-joint-forces-command-us.html

    Nobody is going to get out of this mess.