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# Blog - peak oil

Lorenz Borsche has written a draft of a blog article, and I've put it on the Azimuth Wiki

I'm very busy for the next three days, since on Wednesday I'm supposed to give a talk about network theory in the economics department, and I also need to teach 3 classes by then.

So, I hope that as the rest of you read it and critique it here, you improve the formatting and English style. Right now there are dozens of improvements I'd make instantly if I had time.

Just so everyone knows, the general rules for formatting blog posts are here:

Also: it's not necessary that we all agree on what Lorenz says; peak oil is a controversial topic and we can expect to have different opinions amongst ourselves! However, if there are factual errors, things that are unclear, and so on, we should try to fix those. And of course we can have fun arguing, both here and on the blog.

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1.
edited January 2013

That way, when we publish the blog article and say

guest post by Lorenz Borsche

people can click and see who you are. For other examples of people's pages here, try:

Comment Source:By the way, Lorenz: please add some information about yourself to this page: * [[Lorenz Borsche]] That way, when we publish the blog article and say > _guest post by **[[Lorenz Borsche]]**_ people can click and see who you are. For other examples of people's pages here, try: * [[Members]]
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edited January 2013

Hi, here's an comment I meant to post last Friday in the comments on peak oil in the Lorenz Borsche thread, but didn't get around to. It's sort of outdated by the article:

# Old message

t's a complicated issue. (Incidentally, Azimuth has a geographically diverse membership. I'm actually in England (Peterborough/Cambridge to be precise), although there's interest in frakking in the UK.)

Firstly there's the key issue that oil and petrol/gasoline is important predominantly due to it's simple storage and high energy density for portable uses such as car transportation. So "peak oil" would definitely be less of an issue if those liquid hydrocarbons could be generated in other ways. However, I'm it's an issue where there's lots of distinctions that I don't know how to apply to the data. For instance, this oildrum post establishes that petro-geologists talk about

1. Oil resource which is all the oil that is present in some volume (if you were to expend as much time and unlimited energy to pulverise the region to get it for measurement). Note that most experts say that some resource will be energetically unprofitable to ever extract, so resources are vey much a loose upper bound.

2. Oil reserve which is the subset of the oil resource which can actually be economically be extracted. (This doesn't touch on issues of whether the energy used in extraction is greater than the energy in the oil, but that because the output is liquid hydrocarbons it's "worthwhile".)

In reading media, and even semi-technical reports, I often come across a number which either isn't indicated as a specific type or where I have no confidence the author is careful enough about things that I trust it to be the correct one.

That's not to say that "unconventional oil resserves are big enough to alleviate peak oil": at the moment I'm not confident I have read enough and sifted it carefully enough to have a reliable opinion.

I've had a quick look at the article. It looks like a good basis, and very throrough in terms of sources.of hydrocarbons. However, there's a couple of things that I'm not sure about:

1. After having made the distinction between reserves and resources, several of the estimates don't distinguish whether they're estimates of reserves and resources, and hteres some confusing stuff, eg, shale in Poland number comes from a report with resources in the title: I'm assuming the number is actually about reserves.

2. A lot of the technologies are relatively new (in the sense of only a decade or two old). One thing I keep reading on the oildrum is petrogeologists talking about how it's looking like the flow profiles of the newer "oil reserves" are different from the profiles for a traditional oil well, with in practice a much sharper drop off than the in initial predictions.(after all, if you were conservative with the initial predictions you'd never get funding to build the extraction site).

3. There's no mention of flow issues: there may trully be huge reserves, but are they in places where extraction speed is limited. If there's a peak due to the speed we can get the oil out even if there's plenty there, that's still a peak.

4. I'm not sure you can say that because your sources agree they're near the truth; you can certainly say all the sources you've found are consistent if they are. (Analogy: most of the financial world would have said things were going well 2 months before the financial crash; they were consistent but they didn't turn out to be right.)

5. I'd prefer it if it were emphasized even more that the "peak in brent at 40 dollars a barrel" is an example of a more useful, specific questoin. As it stands, it can be read as if that's the only alternative peak oil question to "will there be a peak due to reserves". There's other questions: due to effective money available will there be a peak in production in the near future (ie, we know where we could get 250 dollar a barrel oil, but we can't afford to do that so there's an effective peak).

I'll try to keep commenting on the article, but I don't know how much "concentrated internet access" I'll get in the next week.

Comment Source:Hi, here's an comment I meant to post last Friday in the comments on peak oil in the Lorenz Borsche thread, but didn't get around to. It's sort of outdated by the article: Old message =========== t's a complicated issue. (Incidentally, Azimuth has a geographically diverse membership. I'm actually in England (Peterborough/Cambridge to be precise), although there's interest in frakking in the UK.) Firstly there's the key issue that oil and petrol/gasoline is important predominantly due to it's simple storage and high energy density for portable uses such as car transportation. So "peak oil" would definitely be less of an issue if those liquid hydrocarbons could be generated in other ways. However, I'm it's an issue where there's lots of distinctions that I don't know how to apply to the data. For instance, [this oildrum post](http://www.theoildrum.com/node/9753#more) establishes that petro-geologists talk about 1. _Oil resource_ which is all the oil that is present in some volume (if you were to expend as much time and unlimited energy to pulverise the region to get it for measurement). Note that most experts say that some resource will be energetically unprofitable to ever extract, so resources are vey much a loose upper bound. 2. _Oil reserve_ which is the subset of the oil resource which can actually be economically be extracted. (This doesn't touch on issues of whether the energy used in extraction is greater than the energy in the oil, but that because the output is liquid hydrocarbons it's "worthwhile".) In reading media, and even semi-technical reports, I often come across a number which either isn't indicated as a specific type or where I have no confidence the author is careful enough about things that I trust it to be the correct one. That's not to say that "unconventional oil resserves are big enough to alleviate peak oil": at the moment I'm not confident I have read enough and sifted it carefully enough to have a reliable opinion. New comments on article ========= I've had a quick look at the article. It looks like a good basis, and very throrough in terms of sources.of hydrocarbons. However, there's a couple of things that I'm not sure about: 1. After having made the distinction between reserves and resources, several of the estimates don't distinguish whether they're estimates of reserves and resources, and hteres some confusing stuff, eg, shale in Poland number comes from a report with resources in the title: I'm assuming the number is actually about reserves. 2. A lot of the technologies are relatively new (in the sense of only a decade or two old). One thing I keep reading on the oildrum is petrogeologists talking about how it's looking like the flow profiles of the newer "oil reserves" are different from the profiles for a traditional oil well, with in practice a much sharper drop off than the in initial predictions.(after all, if you were conservative with the initial predictions you'd never get funding to build the extraction site). 3. There's no mention of flow issues: there may trully be huge reserves, but are they in places where extraction speed is limited. If there's a peak due to the speed we can get the oil out even if there's plenty there, that's still a peak. 4. I'm not sure you can say that because your sources agree they're near the truth; you can certainly say all the sources you've found are consistent if they are. (Analogy: most of the financial world would have said things were going well 2 months before the financial crash; they were consistent but they didn't turn out to be right.) 5. I'd prefer it if it were emphasized even more that the "peak in brent at 40 dollars a barrel" is an example of a more useful, specific questoin. As it stands, it can be read as if that's the only alternative peak oil question to "will there be a peak due to reserves". There's other questions: due to _effective money available_ will there be a peak in production in the near future (ie, we know where we could get 250 dollar a barrel oil, but we can't afford to do that so there's an effective peak). I'll try to keep commenting on the article, but I don't know how much "concentrated internet access" I'll get in the next week.
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3.

Another brief point is about the description of economic effects. I think there'll be a lot of sceptical comments about the assertion that steel, coal, etc, themselves are free. Firstly, it takes an energy cost if I'm using any machinery at all to extract anything, costs associated with other chemicals in "purifying" whatever I'm extracting, etc, even before secondly any charges/taxation human "landowners" or governments might want.

Even if one were to accept the proposition that only human labour counts, it seems to me that the claim there's no economic effect, a vast number more people will just end up being miners of clathrates, etc, is an economic effect: while I'll wholeheartedly agree that working in a souless office doing paperwork 9-5.30 is not pleasant, to my understanding its a lot more pleasant than it used to be when ancestors of mine were working in the coal mines. So if that were to happen, I'd say that was an economic threat, particularly since in such a world I'd probably spend much less money (eg, eating in restaurants, etc) in order to not have to work truly horrendous shifts, etc.

I thinik the assertion in the article as-is will draw much, much contrary comment.

Comment Source:Another brief point is about the description of economic effects. I think there'll be a lot of sceptical comments about the assertion that steel, coal, etc, themselves are free. Firstly, it takes an energy cost if I'm using any machinery at all to extract anything, costs associated with other chemicals in "purifying" whatever I'm extracting, etc, even before secondly any charges/taxation human "landowners" or governments might want. Even if one were to accept the proposition that only human labour counts, it seems to me that the claim there's no economic effect, a vast number more people will just end up being miners of clathrates, etc, is an economic effect: while I'll wholeheartedly agree that working in a souless office doing paperwork 9-5.30 is not pleasant, to my understanding its a lot more pleasant than it used to be when ancestors of mine were working in the coal mines. So if that were to happen, I'd say that was an economic threat, particularly since in such a world I'd probably spend much less money (eg, eating in restaurants, etc) in order to not have to work truly horrendous shifts, etc. I thinik the assertion in the article as-is will draw much, much contrary comment.
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4.
@John - many, many thanks for doing the publishing work. If you could spent just a little extra time: in some of the original 'tables' I extensively used the underscore to have the numbers lined up at the same column. As the editing programm obviously killed the hard CR/LFs, the tables are now paragraphs with runnng text and word wrap. It'd be easier to compare the given data if you could add those CR/LFs...

@ David: Yes I do hope to stir up a little discussion of what 'costs' do mean. Let me give an example. One hundred years ago, 30% of the germans were employed in agricultur (i.e. food growing). Today it's only a mere 3%. Does food nowadays cost only 1/10th? Nope. People did spent about 25-30% of their wages on food in the old days, and that has come down to ca. 10% - so a factor of maybe 3 - not 10. Why? B/C agriculture is done making heavy use of energy and machines - for which other people, not being counted in 'working at agricultur' do have to be paid. So yes, if you pay for chemicals, you pay for the people cooking them up with machines they have to pay other people for etc.etc. Even invested money once has been 'labor' and nothing else. And the interest you pay on that is just adding to you bill - you pay people NOT working, but buying goods with that interest (like a splendid yacht - which again has to be manufactured by people).

Of course you are right, "that working in a souless office doing paperwork 9-5.30" is more convenient than to be a coal miner. There's a saying that not war but snugness ist the inventor of things. But for economics seen as a whole this doesn't count all to much. Another example for that: Studies tell us that the average speed of a car, taken everything into account like: time spent lookin for a parking lot, working for the money you spent on the car, the gas, the insurance and all the other costs, well, you end up with 15 km/h - the speed of a bicycle. You could work 7 hrs instead of 8 (earning 12,5% less) and use the extra 2 hours to drive with the bike wherever you have to - that's just an average calculation of course (interestingly in Germy every 7th workplace is cnnected to the automobile industry). The economy would't break down, it would function different but all in all just the same. Only your personal convenience would suffer (your health and the climate of course would benefit on that :-) - and that's why we're driving cars.

But actually, I would rather like to discuss the CO2 impact on different strategies replacing the oil (Brent/WTI at 50$a barrel as we know it today). We should do that today. And again @John: I’d prefer it if it were emphasized even more that the “peak in brent at 40 dollars a barrel” is an example of a more useful, specific questoin. As it stands, it can be read as if that’s the only alternative peak oil question to “will there be a peak due to reserves”. I wholeheartedly agree and this is why I put the question that way. We might discuss different levels like 40/70/100$ per barrel and make comparisons and predictions on the basis of that.

Cheerio, Lorenz
Comment Source:@John - many, many thanks for doing the publishing work. If you could spent just a little extra time: in some of the original 'tables' I extensively used the underscore to have the numbers lined up at the same column. As the editing programm obviously killed the hard CR/LFs, the tables are now paragraphs with runnng text and word wrap. It'd be easier to compare the given data if you could add those CR/LFs... @ David: Yes I do hope to stir up a little discussion of what 'costs' do mean. Let me give an example. One hundred years ago, 30% of the germans were employed in agricultur (i.e. food growing). Today it's only a mere 3%. Does food nowadays cost only 1/10th? Nope. People did spent about 25-30% of their wages on food in the old days, and that has come down to ca. 10% - so a factor of maybe 3 - not 10. Why? B/C agriculture is done making heavy use of energy and machines - for which other people, not being counted in 'working at agricultur' do have to be paid. So yes, if you pay for chemicals, you pay for the people cooking them up with machines they have to pay other people for etc.etc. Even invested money once has been 'labor' and nothing else. And the interest you pay on that is just adding to you bill - you pay people NOT working, but buying goods with that interest (like a splendid yacht - which again has to be manufactured by people). Of course you are right, "that working in a souless office doing paperwork 9-5.30" is more convenient than to be a coal miner. There's a saying that not war but snugness ist the inventor of things. But for economics seen as a whole this doesn't count all to much. Another example for that: Studies tell us that the average speed of a car, taken everything into account like: time spent lookin for a parking lot, working for the money you spent on the car, the gas, the insurance and all the other costs, well, you end up with 15 km/h - the speed of a bicycle. You could work 7 hrs instead of 8 (earning 12,5% less) and use the extra 2 hours to drive with the bike wherever you have to - that's just an average calculation of course (interestingly in Germy every 7th workplace is cnnected to the automobile industry). The economy would't break down, it would function different but all in all just the same. Only your *personal* convenience would suffer (your health and the climate of course would benefit on that :-) - and that's why we're driving cars. But actually, I would rather like to discuss the CO2 impact on different strategies replacing the oil (Brent/WTI at 50$a barrel as we know it today). We should do that today. And again @John: > I’d prefer it if it were emphasized even more that the > “peak in brent at 40 dollars a barrel” is an example of >a more useful, specific questoin. As it stands, it can be > read as if that’s the only alternative peak oil question > to “will there be a peak due to reserves”. I wholeheartedly agree and this is why I put the question that way. We might discuss different levels like 40/70/100$ per barrel and make comparisons and predictions on the basis of that. Cheerio, Lorenz
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5.

That last "@ John" is really "@ David".

I was hoping someone else could be coaxed into making those table look decent, because there are people here who know how and I'm quite busy. But of course I'll fix them - and lots of other things - before publishing the article on the blog.

Sorry to be terse, but I'll get back to this in a while...

Comment Source:That last "@ John" is really "@ David". I was hoping someone else could be coaxed into making those table look decent, because there are people here who know how and I'm quite busy. But of course I'll fix them - and lots of other things - before publishing the article on the blog. Sorry to be terse, but I'll get back to this in a while...