We're already past the peak?
2007-10-24 - Brian Hicks
"They talked like $50 was going to be difficult, and $60 and $70. We went through those like a knife through hot butter.'' - Boone Pickens, October 19, 2007
After an 8-year absence, I've returned to the lower bowel of humanity. And I can accurately report that nothing has changed -- it still stinks!
I'm talking about New Orleans.
I'm currently attending the New Orleans Conference (formerly the Blanchard Conference).
The NO Conference is kinda like an orgy for doom and gloomers and pessimists who see a bubble in every asset class, including art. So of course being a Peak Oiler, I fit right in.
Energy was one of hottest topics of the show. And for good reason.
A few days ago, Boone Pickens declared...
"The world hit peak oil last year [2006]"
And about the time that Boone was telling it like it is... the German-based Energy Watch Group released a shocking report that also said oil peaked in 2006... and, get this... oil production will now fall by 7% a year.
What?!?
That means, that next year... oil production will decline by 5.9 million barrels per day!!!
Even for a realist like me, I was shocked by that number.
But I have to say that I don't know how accurate the report. And I hope they're wrong, because if it's true - heck even if it's half true - we're screwed. We're screwed 3 ways to Wednesday.
Here's what the British paper The Guardian had to say about the German report...
The results are in contrast to projections from the International Energy Agency, which says there is little reason to worry about oil supplies at the moment.
However, the EWG study relies more on actual oil production data which, it says, are more reliable than estimates of reserves still in the ground. The group says official industry estimates put global reserves at about 1.255 gigabarrels - equivalent to 42 years' supply at current consumption rates. But it thinks the figure is only about two thirds of that.
Global oil production is currently about 81m barrels a day - EWG expects that to fall to 39m by 2030. It also predicts significant falls in gas, coal and uranium production as those energy sources are used up.
Britain's oil production peaked in 1999 and has already dropped by half to about 1.6 million barrels a day.
The report presents a bleak view of the future unless a radically different approach is adopted. It quotes the British energy economist David Fleming as saying: "Anticipated supply shortages could lead easily to disturbing scenes of mass unrest as witnessed in Burma this month. For government, industry and the wider public, just muddling through is not an option any more as this situation could spin out of control and turn into a complete meltdown of society."
The report's author, Joerg Schindler, comes to a similar conclusion. "The world is at the beginning of a structural change of its economic system. This change will be triggered by declining fossil fuel supplies and will influence almost all aspects of our daily life."
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