Oil's tipping point has passed

Commentary in Nature: Can economy bear what oil prices have in store?

Stop wrangling over global warming and instead reduce fossil-fuel use for the sake of the global economy.

That’s the message from two scientists, one from the University of Washington and one from the University of Oxford in the United Kingdom, who say in the current issue of the journal Nature (Jan. 26) that the economic pain of a flattening oil supply will trump the environment as a reason to curb the use of fossil fuels.

“Given our fossil-fuel dependent economies, this is more urgent and has a shorter time frame than global climate change,” says James W. Murray, UW professor of oceanography, who wrote the Nature commentary with David King, director of Oxford’s Smith School of Enterprise and the Environment.

The “tipping point” for oil supply appears to have occurred around 2005, says Murray, who compared world crude oil production with world prices going back to 1998. Before 2005, supply of regular crude oil was elastic and increased in response to price increases. Since then, production appears to have hit a wall at 75 million barrels per day in spite of price increases of 15 percent each year.

“As a result, prices swing wildly in response to small changes in demand,” the co-authors wrote.

The era of cheap oil is going away. If the threat of climate change was not enough to force us off fossil fuels, their depletion would unavoidably do so. And seems like the cheap oil peak was already here. From now on, it will only get more and more expensive.

The rich have killed everyone who won't buy oil through them and are now bumping up the price.

they did the same with the diamonds.

the shocking things is these people are also in charge!

Originally posted by Beavers
The rich have killed everyone who won't buy oil through them and are now bumping up the price.

they did the same with the diamonds.

the shocking things is these people are also in charge!

Funny you should bring up the diamond monopoly, it's an open secret they've got more than enough diamonds to flood the market, and the US has a strategic oil reserve; While the US could open up the oil reserve to the market it is probably going to keep it closed until things start to get really shaky concerning the economy, the small rumblings we see now aren't enough to shake the lid off.

There isn't really a high demand for diamonds, very much a novelty item now that industrial diamonds can be made cheaply. But Oil isn't a commodity like diamonds are in the market, the analogy only holds up to a first glance.

I do like that you brought up the concept of monopoly though.

Production peak is not necessary caused by the natural aviabillity of the resource, we have a lot of politics involved here too. However, I guess the natural peak will occur no longer than 2015 or maybe already happened around 2008..

1. Oil ABIOTIC* is. This means, in short, that it's everywhere, provided you dig it deep enough.

Sure TheBigPetroYankeeArabComplex still prefers to make bucks upon the old, common paradigm of a rare woot diggable only by those who can dig it. Heheh.

(*Despite western propaganda sliming all over the internetz. Dig it up. Deeply.)


2. Oil is only necessary to the US Way ov'Life. Cf 1.

3. The World will soon get rid of Oil.

a reply to: Maslo

Abiotic oil. Does that have something to do with Jerome Corsi's theory?

a reply to: RbotMurgolas

I liked the first one better.

edit- I liked the first two better.

[List of oil companies and their losses] The usual oil company response to a period of shrinking profits is to rein in new drilling, cut costs, and wait for prices to rise again. And recent months have seen a modest recovery in oil prices.

But a new report from the influential U.K. think tank Chatham House says the old playbook isn’t going to work this time. The problems go way beyond rock-bottom oil prices, and they are unlikely to vanish in a hoped-for recovery.
...
by outsourcing much of their activity to smaller service companies, the oil giants lost their technological edge. That’s why they came late to the shale gas revolution in North America, the report asserts, and grossly overpaid for assets when they did arrive.

The dim prospects are further darkened by the increasing urgency to reduce carbon emissions: oil companies may have on their books billions of barrels of reserves that will never be produced as the world shifts away from fossil fuels.
...
The Chatham House report offers two unappealing options for today’s oil majors: “managing a gentle decline by downsizing or risking a rapid collapse by trying to carry on business as usual.”

Of course, there is another option: the oil and gas companies could become energy companies, focusing on new technologies, decentralized energy systems, and providing clean energy.

Source: MIT Technology Review, May 16, 2016 - Big Oil Companies Have Already Become Dinosaurs

The article states that the technological edge oil companies used to have has disappeared as they outsourced to smaller, niche companies. The brain trust no longer resides in big oil to remain big oil. The by-line reads, A new report details how profound shifts in the global energy market have left the oil majors far behind.

I am eye witness to this happening. The state of Alaska relies heavily upon oil taxes (most say too heavily) and they (the state) are in crunch mode. They want to raid the permanent fund (been wanting to do that for years) and expecting to get their way they do not cut state spending. They tried lowering taxes on oil companies to "encourage" investments and drilling and the companies pocketed it. Now the state wants to raise taxes again! (shakes head).

Meanwhile the oil producers are cutting jobs (lots of headlines in the paper over that). There were seven (?) producers sending oil through the Pipeline and now there are four. Even if a fusion device is turned on right now there will be years of production going on and teams studying how to decommission everything safely and environmentally.

The tipping point is behind and big oil has become dinosaurs.

Fifty million years ago, you walked upon the planet so
God of all that you could see, just a little bit like me
...
Hey mighty brontosaurus, don't you have a lesson for us?
Thought your rule would always last, we've learned our lessons in your past
You were built three stories high, they say would not hurt a fly.
...
They live in a museum, it's the only place you'll see 'em

Walking In Your Footsteps - The Police

The people giving the warning are idiots. We have enormous oil production capability still, and are sitting with drilling rigs parked and ready to roll.

Refining capacity has had a historical bottleneck, but that is 5 years from having the loop closed. In the meantime, refining capacity has improved and is improving daily.

Its not the economy we need to worry about. Its the planet. Im not a GW proponent. But I also think that the crap we spew into the atmosphere just isn't good for general lung function.

a reply to: bigfatfurrytexan

^^ This. Refineries are expensive to build and considered a much longer investment than an oil well.

The big players like ExxonMobile project their investments 50+ years out into the future. These huge giants play the long game and see the big picture. They don't just throw up refineries overnight when the oil prices are high, only to find that the refinery is useless and operating at a loss 2 years later.

It's all finely tuned...

a reply to: MystikMushroom

West Texas Sweet Crude only has 2 exit points currently:

- the long way over the road to Oklahoma or Houston
- new pipelines that are being built into the 2 above locations

We do have a few refineries out here (Huntsman and Alon come to mind) that handle stuff like jet fuel and asphalt, along with propane/butane, etc.

But they are currently building an i-27 extention south from Lubbock straight to I-10 (along what is currently US 87 and 83). When that is completed, the ability to extract oil/gas from West Texas and New Mexico will become exponentially greater. Along with all other commerce.

a reply to: bigfatfurrytexan

B...bb.bbbb...but, oil doom porn!

Because we all need a momento mori to keep us humble!

I just hope that when the fusion reactors come online we actually spend some time, money, and effort to clean up our mess. That island of plastic in the Pacific isn't going to do itself in. And energy should be cheap enough to spare some on scrubbing the air and picking up our trash (those lazy robots are not going to do it themselves!). Who knows, maybe those GE turbines running on supercritical CO2 will get their fuel from our wasteful use of hydrocarbons floating around in our atmosphere. We get electricity out of burnt fuel byproduct seems something awfully appropriate about that.

a reply to: TEOTWAWKIAIFF

Can you imagine a dystopian future where we have robots to labor for us, so we then turn our attention away from Narcisse's mirror to Gaia instead?

a reply to: bigfatfurrytexan

Topless chick and drinks with umbrellas in them on the beach is about as close as I can get!

Besides, the robots will form a union and start taking Mondays off during their 30 hour work week (that will be written into their contracts)!

originally posted by: bigfatfurrytexan
a reply to: TEOTWAWKIAIFF

Can you imagine a dystopian future where we have robots to labor for us, so we then turn our attention away from Narcisse's mirror to Gaia instead?

Aldous Huxley imagined it...

a reply to: TEOTWAWKIAIFF

a reply to: TEOTWAWKIAIFF
I can vouch that everything you're saying here is dead accurate.

I live in a major oilfeild town and see the people effected by this literally every day.

About a month and a half ago Saudia Arabia's leadership announced they would continue to pump as much oil as the market would accept. Such news should have caused the price of oil to continue to drop. Instead the market participants decided to completely ignore the bad news, and the price of oil has since risen from $35 to around $50. When markets go up in reaction to bad news, it is a very bullish sign.

every February the oil price goes back up due to refineries coming off heating oil back to highway gas.....and they do their revamp of the refinery then.....a little shut down there.....made a killin on Brent when it went down to 25 bucks.......posted all through December and January of such even.....Feb 8 is the market turn....

I'm a machinist in an oil field parts shop. I need more oil production. $$$$$$$$$$$$$$$