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April 10, 2006



I'm really not in the mood to read projections like this. But I'm wondering if he takes Enhanced Oil Recovery into account.


I was extremely unimpressed by that. The peak oil disciples are like a watch that is broken. It will show the correct time twice a day, but it is useless as a chronometer. Like the watch, the peak oil predictions will someday be true, but those guys are not credible as to when.

All in all, that tract reads like one of those pamphlets you get from the conspiracy theorists. It practically shouts "crackpot" when you read it.

Two points illustrate what I mean. Laherrere repeatedly makes the point that reserves data is politically driven and is unreliable. According to him, the reliable data is proprietary and expensive, (and presumably, he does not have it.) Yet, we are to accept his conclusions and reject the conclusions of the oil company execs, who presumable have access to all the proprietary info they want. I think Exxon has forgotten more about what is in the ground that this turkey will ever know.

Another point. He states that the reserve data is unreliable, but then makes conclusions about production vs. discovery in recent years. How does he make such conclusions based upon unreliable data? He does not appear to take into account that exploration and development budgets will vary over time depending on the price of oil. Since the last oil crises, prices have been in a slump until recently. Oil stayed below 20 for years and even dipped below 10 for a while. And that wasn't that long ago. During times when supply greatly outstrips demand and OPEC can hardly give the stuff away, there is no incentive for private or state owned companies to spend any money on exploration or development. The inevitable result of that is depressed "discoveries" for years afterward. Also, political instability and government ineptitude can depress exploration. Mexico, Libya, Iraq, Russia, Offshore and North Slope US, are just a few examples of many areas where political factors have depressed exploration. Laherrere doesn't seem to take any of that into account.

He also dismisses unconventional sources of liquids too quickly, just as he brushes off any effect of advanced technology. Basically, he is saying "lets project all negative trends into the future and ignore any positive ones to make a case for a conclusion I had before I started." That last point is my biggest problem with this pamphlet. He has started with a conclusion and gone looking for facts to support it. And it shows.


There's an illuminating article about oil exploration at MSNBC.


I think this is most relavent:

“For most of the ’80s and all of the ’90s and the first part of 2000s, the industry economically could not afford to make this type of investment,” said Richard Mason, publisher of The Land Rig Newsletter in Lubbock, Texas. “We’ve entered a new era here. This is the first major retooling effort in 30 years.”

Emphasis added. And that is very telling. I think of the 10-billion barrel discovery off of Mexico's coast just recently and wonder what else is out there.


Great points by dbe2200. I think the Claire Booth Luce quote is a classic powerful rhetorical line...If you disagree with me it's because you don't know squat! The only problem with the quote is historically it has proven itself wrong over and over again. Optimists tend to win. Finally, if reserve growth were really just a fantasy, oil would have been long since gone in the US.

Greg Morgan

The exact date of the "peak" is not important. An economic crisis will arrive when the demand in year 20xx exceeds the maximim production capacity in that year, even if production in the following year, or two or five, reaches new highs. For a time the supply v. demand may cycle back and forth, but the portable energy source crisis will hugely, negatively affect global economies unless supplemented by non- traditional petro-sources or alternative sources such as hydrogen, ethanol or synthetic manufactured hydrocarbons. Even then, the economic damage will be acute unless the alternatives are priced within a frame that is compatable with black gold.

The looming prospect of a critical dislocation in the market for portable (transportation)energy should be the proverbial "word to the wise" for a thoughtful world, without a demand to know the exact date the dislocation will occur. People buy life insurance, make out wills, plan their retirement fund assignments without knowing when they will die. The world needs to plan; the free market will react, but perhaps the reaction will come too late. The world needs to react in anticipation, rather than reaction.

As increasing petroleum demand approaches increasing, or even level supply, rising prices will at some point match the price of alternatives, opening the door for economically viable production development. But that development will take time, a lot of time, to come on-line. If petroleum supply begins to fall precipitously before the alternative supply comes on line, the crisis will hit. Perhaps the best thing that can happen is for petroleum prices to rise quickly and force the market to respond while postponing the peak. A very probable mechanism fro such rise is political instability, of which we seem to have more than adequate supply these days.


Greg, you have an uncritical faith in the ability of government to anticipate and correctly respond to a crisis that may occur at some point in the future. However, the history of government action in this regard leaves us with little evidence that they will get it right next time. The fundamental problem is that governments don't work that way. Governments don't analyze data objectively and make rational decisions. Governments respond to constituents. Your only hope for effective government action is to create a constituency that demands rational planning. Even that optimism assumes that your constituency gets it right. Constituencies themselves are rarely rational.

Let's not be in too big of a hurry to spend billions on subsidies on technologies that ultimately fail. The market is the only mechanism that has any history of success. We do have some real problems, I don't doubt. And the ultimate solutions will certainly come from those who were motivated by profit.

James Warner

You can check out my concept project I started back in 2002. If your a memeber of Myspace you can also see the newpaper clippings I recieved connecting to the Power Company and selling excess energy back to them in 2002. www.myspace.com/energyone
This is a plan that will work.
james the energy guy


Hi ,
the exact timing of the oil peak is'nt very exact or important ,
I make the bold , and safe , prediction that people will discuss for ever when it did occur
What is also safe to predict is that with an increasing human population , with rising standard of consumtion across newly emerging economies ,
the demand for energy will rise exponetially until a peak in oil ,gas and possibly coal and uranium 235 is reached this generation,
Those sources account for 90% of total energy production

There is no sizable substitute .

the world energy production will probably decrease at a rate of some % per year ,growth will go into reverse and the world will get into recession until a new balance is found at a level of population and standard of living a fraction of todays numbers .
How low is a conjecture , but a good starting figure would be a power usage and population equivalent to the 18th century
that's a decrease from 7.5 billions to 0.6 billion with a population made of 90% farmers with a couple of cities in the million mark , this would happen in a century or less , the stress would be extreme on governements , the only models I can think would be ressources conflicts with the strong stripping the weak bare , descent into anarchy or kmer rouge farming programms , the "pol pot option "

But then , maybe something will turn up ??

good luck all !


i want to quota this coz its very important
There is no sizable substitute .

the world energy production will probably decrease at a rate of some % per year ,growth will go into reverse and the world will get into recession until a new balance is found at a level of population and standard of living a fraction of todays numbers .

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