Is it Peak Oil? Moment of truth is here...

[JackRiddler]

I'm among those convinced peak oil will happen and that it's a function of physical reality, but are we there yet? Saudi Arabia has announced in a big way and confident way that they can and want to bring the price down by increasing output. A few peak oil theorists like Matthew Simmons say S.A. has peaked and cannot actually do that. We will find out in the next few weeks. If S.A. has the reserves and the capacity, and is serious about its pronouncements and wants to maintain credibility, then they must deliver and price will drop back to the $100 level for now. If not, expect the speculation to drive it up to $200 by the end of the year, demand growth or not.

Meanwhile... Iran. Why? Madness.

[Jeff]

Robert Hirsch a few days ago on CNBC.

I think pessimism is the new realism.

[ninakat]

Whatever the Saudis do is not going to change the world supply/demand problem, certainly not beyond the short term.

Discussion at The Oil Drum here:

Saudi Arabia to Produce More Oil

[vigilant]

I don't think the Saudis alone can do much with the price of oil. If oil goes down and they take credit for it, I think it will be false credit. At best I think all they could do is cause a short term blip on the radar. This latest increase in ouput was a token gesture and can't signifigantly change the price of oil.

[ninakat]

The Oil Drum now has an excellent analysis just posted this evening.

Saudis announce oil production increases... again... and again... and again...

~snip~

So we see that the Saudis seem to be regularly announcing or promising production increases to supply the market - and yet always seem to have production around 9.5 mb/d after such increases...

And it's no wonder: that's where their production has been for the past several years (graph from a 2006 Econobrowser post)

~see graph at link above~

If you're wondering how it's possible to announce increases every other year, and still produce the same, it's simple: there are (more discreet) production decreases along the way.

[erosoplier]

Robert Hirsch a few days ago on CNBC.

Who cares what the future holds so long as there are hot (and exceptionally intelligent, I hasten to add) chicks delivering news of it to us?!

Hubba hubba!! [/grn]

* *

And on another note, I'm detecting a push for a law change to allow offshore drilling, if a series of two is any pattern. Or maybe this is just the "opinion shaping" stage of the process. Just last week that mad loud guy (on msnbc, I think) was railing against the "elitist shortsightedness" of the current rules, and Bob Hirsch is doing the same here, but in a level-headed, pragmatic, mature-minded, it's-time-you-handled-some-small-portion-of-the-truth kind of way.

Whether you like your "cold hard facts" delivered hysterically, or in a level-headed manner, they've got both angles covered. But the bottom line with this is we'd already know about it - they'd already be drilling it out of the ground - if there were significant market-shifting quantities of oil to be found where current rules prohibit drilling. So this may just be something to keep people distracted, squabbling with each other, while other events unfold.

And the Saudi announcement may only be intended to reinforce the otherwise complacent attitude which prevails.

Complacent squabblers.

Does that sound like us at all?

[chlamor]

We are past peak oil.

[chiggerbit]

Seems pretty simple to me: The amount of oil being "produced" is peaking, plateauing, or even beginning to go down, the amount being demanded is going up.

[Procyon]

I agree with chlamor.

In some ways it doesn't really matter whether or not we are at Peak Oil as much as whether we are seeing the evidence of peaks in other indices of economic and human activity, directly related to the fact of rapidly increasing cost of energy.

Such as airlines going down the tubes, cutting routes, parking planes. Such as food supplies diminishing. Such as petrol-stations closing (Exxon-Mobil announced this recently). Such as the eerie atmosphere of expectation that something momentous is imminent, and that governments are not in control; they are procrastinating / denying / deceiving.

I think we need to look towards strengthening authority within ourselves and locally, rather than looking to governments to take the lead. We are all implicated in this, and we must all put up with our part of the price of changing to a more sustainable model of living on this planet.

Procyon

[ninakat]

I think we need to look towards strengthening authority within ourselves and locally, rather than looking to governments to take the lead. We are all implicated in this, and we must all put up with our part of the price of changing to a more sustainable model of living on this planet.

Absolutely spot on. No more saviors and father figures please. Look where that has gotten us, shirking off responsibility and trusting authority without question.

Welcome to the board Procyon.

[stickdog99]

I don't believe it. Short-term, there is plenty of oil if only Iraq, Iran and Venezuela were to ramp up production.

The hedge fund elites needed to create another speculation bubble after their real estate rip off collapsed and commodities, especially oil, were the most attractive short-term prospect.

[JackRiddler]

stickdog:

Short term, you're right about Iraq, Venezuela and Iran. And no doubt many others coming on line fast as they can to take advantage of the price.

But if S.A. can't deliver on its specific promise then either it shooting its credibility or implicitly at peak - that would set all other actors behaving as though S.A. has peaked, with attendant consequences. S.A. is the biggest reserve, no doubt about it.


procyon:

welcome!

[stickdog99]

The question is definitely very important. But the answer will remain elusive until Saudi production decreases consistently.

[Perelandra]

The question is definitely very important. But the answer will remain elusive until Saudi production decreases consistently.

Whoa! That scares me, but you're right.

[wintler2]

Its post-peak for conventional crude oil, probably not yet peak for all oil liquids but it can't be far off. We are IMHO post-peak for net energy (the energy 'profit' from all our energy reserve extraction & delivery), and thats the civilisation-scale meth'd-up gorrilla in the room that will drag us kicking and screaming into more-sustainable behaviours. Oil peak is significant, but its not the whole story: that must include the loss of embodied energy via spp extinctions, soil loss, demise of languages, human skills loss, etc.

Over-emphasis of oil problem risks increasing the destruction of other resources by decreasing their relative value, prime e.g. the devaluing of US coastline implicit in allowing new drilling, e.g. the devaluing of food for poor implicit in buying ethanol in fuel.

..I think pessimism is the new realism.

True, but only cos we've been living in a fabricated Happy Land, one where other usually darker skinned and/or female people joyfully slog to get us our latte/oil/sugar/timber/soy at bargain basement prices and from some infinite supply, and where our effluent vanishes as fast as we produce it.

Reality has come knocking and inevitably looks hard and scary from here in the i'm-too-cool-to-break-a-sweat-working world, but disengagement from reality has made us easily fooled, slaves to power, and collaborators in appalling violence. I suspect energy descent might be the saving of our species, but am horribly uncertain as to whether thats a good thing for Life as a whole.