Hubbert's Peak. The oil crash.

[russ_watters]

That is not exactly what the article quotes Campbell as saying.

It's a paraphrase, not a quote, so I guess...yeah, you're right! But it is exactly what he meant.

For example...

1) The era of cheap oil has peaked, or is very close to peaking.

Yes, he says that - he actually believes it was 2005. But even that characterization "the era of cheap oil" is different from the more straightforward supply peak that peak oil used to be about.

2) The EROEI of known alternatives are not in the same ballpark (though maybe we will crack fusion, do something magical with nanotechnology, etc).

He doesn't mention that and in any case, I don't agree. Regular nuclear power is cheap precisely because it is high output for the input - and would be even a lot cheaper still if we didn't have fake political barriers. Regular nuclear power could provide for the vast majority of our energy needs, assuming a phase-in conversion of a large fraction of our cars to electric. The fusion and nanotechnology quip - that's just technobabble/non sequitur.

3) This is not a classic Economics 101 supply and demand equilbrium equation as we are talking about a finite resource and a supply inelasticity (with no easy substitutions, see 2).

What it means is that the doom and gloom scenario assumes/requires an extremely low price elasticity of supply and the evidence from the recent recession implies a more reasonable level of elasticity.

Will they move smoothly towards a power-down scenario where they kiss goodbye to the old consumerism that never really made them happy in the first place? (And I really hope that is the case, hence my warm feelings for Transition Towns, Oooby, Permaculture and other nascent social responses).

That's all non sequitur. It has nothing to do with energy. I have a nuclear power plant 5 miles from my house and am confident I'll always have the power I need to run my computer and big-screen home theater system. If a lack of oil means I have to buy an electric car in a few years, so be it. I'll be fine. You think that's "consumerism" and a bad thing? Fine, but it doesn't have any bearing here.

Economics 101 does not teach energy descent - how to run an economy smoothly in the reverse de-growth mode. I doubt you even get to study that in 401.

This "reverse de-growth mode" is the doom-and-gloom, collapse of civilization type scenario that is the essence of "Peak Oil" and is now what he is saying he doesn't believe will happen! You can't learn it in an economics class because it isn't economics, it's just fearmongering. But you can learn why it is just fearmongering by understanding elasticity in your econ 101 class.

I don't see this change of position to be a very good marketing strategy. The decrease in fearmongering will result in a decrease in demand for books on peak oil! Though perhaps the strategy works as a hedge against having to keep pushing back the date of peak oil.

 

[Office_Shredder]

Um...is that supposed to be facetious or was that just a poor choice of words?

I'm referring to beyond economic activity... you know, war.

 

[apeiron]

It's a paraphrase, not a quote, so I guess...yeah, you're right! But it is exactly what he meant.

I don't think you are accurately paraphrasing what is being said (but then the article is badly written and we could analyse its true meaning endlessly).

But it seems clear enough that Campbell is just saying that the run-up in oil prices by speculators was so sharp that it punctured the economy and led to the credit crunch - all the wild derivative bets unravelling. So this knocked consumption, and thus prices, on its heels again.

De-growth in other words. Every peak oiler indeed says this. And they say as economic activity takes off again, we will again be banging our heads on the ceiling.

At that point, we either need permanent degrowth or energy substitution. Coal and nuclear maybe some people's choice for "alternatives".

I happen to live around 5000 miles from the nearest nuclear power plant. That may colour my views too.

 

[apeiron]

What the U.S. Joint Forces Command’s Joint Operating Environment (JOE) 2010 thinks about peak oil...

Summary - The immediate issue is a lack of investment in production that will create oil shortage and price spikes (thus economic problems and international tensions) within a few years.

Longer term (next decade), not much prospect of the large new fields that will be needed to meet current growth in demand. Any production increases will have to be environmentally "dirty".

The big question is why aren't oil companies investing in more production? Is it just that they were so sensitive to the credit crunch that they were forced to shelve investment?

Or is it that they can see down the road and are asking why bother in pumping out what's left even faster when a more intelligent business strategy is to stick with current number of oil rigs and make more profit as prices rise?

Energy Summary

To generate the energy required worldwide by the 2030s would require us to find an additional 1.4 MBD every year until then.

During the next twenty-five years, coal, oil, and natural gas will remain indispensable to meet energy requirements. The discovery rate for new petroleum and gas fields over the past two decades (with the possible exception of Brazil) provides little reason for optimism that future efforts will find major new fields.

At present, investment in oil production is only beginning to pick up, with the result that production could reach a prolonged plateau. By 2030, the world will require production of 118 MBD, but energy producers may only be producing 100 MBD unless there are major changes in current investment and drilling capacity.

By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD.

http://www.peakoil.net/files/JOE2010.pdf