While discussing the concept of 'Peak Oil' at work today, I offered that it made no sense to to invest in an expensive high mileage car (for example) in order to 'save oil'. Any oil you saved would just be used by someone else at today's low price and - in the meantime - you would put yourself at a competetive disadvantage by paying more for energy than you needed to.
The other person offered that this was an example of the "tragedy of the commons" since everyone was incentivized to use the oil and no one was incentivized to conserve it. Although I couldn't argue that it certainly looked the same, I always thought that the "commons" argument pointed to a problem with property rights - that common ownership was at the root of these sorts of problems. However, it doesn't look like oil supplies - in general - suffer from a common ownership problem.
So I'm confused with how to classify the whole situation, is it:
1) An example of the "commons" tragedy? But does that imply that "commons" is more than just property rights? or that oil supplies have ownership issues?
2) An example of something else with similar consequences? perhaps some sort of game theory?
3) A problem with the argument as a whole? (by assuming peak oil is true, am I putting some false constraint on the issue?)
Any help appreciated - even a link somewhere - I'm not sure if this is a "commons" issue or not.
This is not just a discussion for geology. Peak Oil is an interesting concept, but as with any resource, the key rationing device is the price. Conservation of oil can and will be dictated by the price alone. What seems very strange to me is that oil continues to be exclusively denominated by it's price relative to the US dollar. There are many countries throughout the world that have suggested oil be denominated relative to another currency.
What's also very interesting is that other forms of energy are denominated relative to a barrel of oil equivalent (BOE) and our friends at the IRS define BOE in terms of joules (J). But why does the IRS determine this and not a convention held by the market or at least the Department of Weights and Measures? The problem with defining oil in terms of joules is that it assumes the conversion rate of oil is constant and that there's no possibility for efficiency gains. Efficiency gains in the burn rate of oil would effectively increase the amount of oil by increasing the energy derived from converting it to another form of energy.
Peak Oil could be a construct of this thinking that the energy derived from oil is constant. But it is certainly not. So why does the government hold it constant?
Two theories:
(1) the government creates the Peak Oil myth to declare the supply of oil will run out in the short-run. Many DOE estimates over the past century have declared we will run out of oil, only to have to push the estimate back with new discoveries. Efficiency gains are like new oil finds. But the myth helps to drive the push for government interefernce in the energy markets: conservation efforts, taxes, and "investments" in back-end (consumer) efficiency technologies.
(2) the Peak Oil myth is a way of controlling the means of production. Declaring that if we running out of oil justifies the capture of land to prevent from being used for E&P operations. Preventing E&P limits the supply and increases the price of oil and the inputs costs to other production. Preventing input costs from falling prevents the efficency gains throughout the rest of the economy and the corresponding fall in wholesale prices (their dreaded deflationary event in Keynesianism).
Peak Oil is a Myth
Ask any proponent of the Peak Oil Theory what the exact amount of fossil fuels the earth contains. Without knowing this amount no rational claim of Peak Oil can be made and it is thus a Myth as currently proposed.
The only entity preventing further exploration and extraction of fossil fuels is the state and the only entity negatively effecting the actual cost of fossil fuels is the state through taxes and regulations. Only the state can cause shortages of resources and any energy "crisis". In a pure free energy market all land would be available for energy production at a free market price, thus availability would be limited by cost, technology and of course actual supply. Say a hypothetical obtainable limit to our demand was reached in actual supply, long before this was reached prices of fossil fuels would rise, once fossil fuel prices rose above what other competing free market energy sources were, these cheaper energy sources would be adopted on their own. All without government intervention. The government was not needed to switch away from horses to cars. But we have no such scenario since the state is artificially creating supply shortages by restricting land access through regulations. The state is also artificially increasing energy costs above free market rates with taxes and regulations. In essence the state is creating a Peak Oil scenario to benefit the green lobby. But no such thing exists even with known reserves:
Myth: The World is Running Out of Oil (5min)
Despite Popular Belief, The World is Not Running Out of Oil, Scientist Says (Science Daily)It’s a myth that the world’s oil is running out (The Times, UK)Myth: The World is Running Out of Oil (ABC News)No Evidence of Precipitous Fall on Horizon for World Oil Production (Cambridge Energy Research Associates)Oil: Never Cry Wolf—Why the Petroleum Age Is Far from over (Science)Oil, Oil Everywhere... (The Wall Street Journal)The World Has Plenty of Oil (The Wall Street Journal)
Reserves:- 1.3 Trillion barrels of 'proven' oil reserves exist worldwide (EIA)- 1.8 to 6 Trillion barrels of oil are estimated in the U.S. Oil-Shale Reserves (DOE)- 986 Billion barrels of oil are estimated using Coal-to-liquids (CTL) conversion of U.S. Coal Reserves (DOE)- 173 to 315 Billion (1.7-2.5 Trillion potential) barrels of oil are estimated in the Oil Sands of Alberta, Canada (Alberta Department of Energy)- 100 Billion barrels of heavy oil are estimated in the U.S. (DOE)- 90 Billion barrels of oil are estimated in the Arctic (USGS)- 89 Billion barrels of immobile oil are estimated recoverable using CO2 injection in the U.S. (DOE)- 86 Billion barrels of oil are estimated in the U.S. Outer Continental Shelf (MMS)- 60 to 80 Billion barrels of oil are estimated in U.S. Tar Sands (DOE)- 32 Billion barrels of oil are estimated in ANWR, NPRA and the Central North Slope in Alaska (USGS)- 31.4 Billion barrels of oil are estimated in the East Greenland Rift Basins Province (USGS)- 7.3 Billion barrels of oil are estimated in the West Greenland–East Canada Province (USGS)- 4.3 Billion (167 Billion potential) barrels of oil are estimated in the U.S. Bakken shale formation in North Dakota and Montana (USGS)- 3.65 Billion barrels of oil are estimated in the U.S. Devonian-Mississippian Bakken Formation (USGS)- 1.6 Billion barrels of oil are estimated in the U.S. Eastern Great Basin Province (USGS)- 1.3 Billion barrels of oil are estimated in the U.S. Permian Basin Province (USGS)- 1.1 Billion barrels of oil are estimated in the U.S. Powder River Basin Province (USGS)- 990 Million barrels of oil are estimated in the U.S. Portion of the Michigan Basin (USGS)- 393 Million barrels of oil are estimated in the U.S. San Joaquin Basin Province of California (USGS)- 214 Million barrels of oil are estimated in the U.S. Illinois Basin (USGS)- 172 Million barrels of oil are estimated in the U.S. Yukon Flats of East-Central Alaska (USGS)- 131 Million barrels of oil are estimated in the U.S. Southwestern Wyoming Province (USGS)- 109 Million barrels of oil are estimated in the U.S. Montana Thrust Belt Province (USGS)- 104 Million barrels of oil are estimated in the U.S. Denver Basin Province (USGS)- 98.5 Million barrels of oil are estimated in the U.S. Bend Arch-Fort Worth Basin Province (USGS)- 94 Million barrels of oil are estimated in the U.S. Hanna, Laramie, Shirley Basins Province (USGS)For Comparison:- 260 Billion barrels of oil are estimated in Saudi Arabia (EIA)- 80 Billion barrels of oil are estimated in Venezuela (EIA)
"Anarchism misunderstands the real nature of man. It would be practicable only in a world of angels and saints" - Ludwig von Mises
malgratloprekindle:I've heard that (can't remember my source) that if we got the rate to about 40% up from 35%, it would be the same as adding 6 Saudi Arabias to the Market in terms of oil.
I am no fan of the New York Times but they have an excellent article on this...
Oil Innovations Pump New Life Into Old Wells (The New York Times)
"Within the last decade, technology advances have made it possible to unlock more oil from old fields, and, at the same time, higher oil prices have made it economical for companies to go after reserves that are harder to reach. With plenty of oil still left in familiar locations, forecasts that the world’s reserves are drying out have given way to predictions that more oil can be found than ever before."
These responses are painful to read. I feel like there is some kind of misguided Austrian critique trying to prove liberals wrong, but it's losing the true answer in the process.
Peak Oil should be treated like a rational discussion on global warming. Rather than say it's not real, scientist are liars, etc, etc. So what if we hit peak oil? Was there a problem when we hit peak horse and buggy? As the price of oil rises, extraction increases, and the use of alternatives increase. To quote the amount of total reserves in the world as some kind of roundabout justification to disprove peak oil is grasping at straws. The use of oil has been flat for 4 years, and the amount that can be pulled out of each field per day has been rapidly declining. Ever smaller, deeper, and more expensive fields are being discovered and tapped just to keep pace with losses. It's entirely likely that our use of oil will be lower in 10 years. Who cares?
As a more interesting scientific exercise it's important to point out that Oil is actually captured solar energy, and is also a renewable rescource. As a species we are only accessing the most easily used form of solar energy. Wind/Tidal power is most likely the next easiest source to use, and eventually Solar. By the time we've been able to capture the entire sun's output striking earth we will be far beyond this planet, and using energy sources far more compact and powerful than Oil (fusion as an example).
As to the original question. If it's impossible to overuse the rescource and prices are in place to limit it's consumption based upon the realistic price of extraction then there is no "tragedy of the commons."
It is important that you actually read the comments and not just claim to read them. No rational discussion about Peak Oil or Global Warming has gone on in the public sector and you are accussing us of not doing it? Unfortunately some scientists are liars. Just because you "believe" in something does not make it empirically proven. Talk about irony.
To make the claim of peak oil you need to establish to things:
1. What the exact amount of fossil fuels the earth contains.
2. How fossil fuels are made.
Neither can be answered. You also failed to account for the fact that we can make oil cost effectively out of garbage.
Thermal Depolymerization (Video) (7min)Anything Into Oil at $80 a Barrel (Discover Magazine)
Next you make the horse and buggy analogy which I already made. Quoting known reserves is to show empirical evidence of what we know we have which is much, much more than Peak Oil alarmists will admit. It is total Peak Oil alarmists myth that the reserves are rapibly declining. Again I posted this multiple times but you failed to read it.
Crop Circles in the Desert: The Strange Controversy Over Saudi Oil Production (PDF) (Michael C. Lynch, President of Strategic Energy and Economic Research)
Apparently you did not even read my post right before this one! Here is another quote from the NYT article:
"The Kern River oil field, discovered in 1899, was revived when Chevron engineers here started injecting high-pressured steam to pump out more oil. The field, whose production had slumped to 10,000 barrels a day in the 1960s, now has a daily output of 85,000 barrels. In Indonesia, Chevron has applied the same technology to the giant Duri oil field, discovered in 1941, boosting production there to more than 200,000 barrels a day, up from 65,000 barrels in the mid-1980s.And in Texas, Exxon Mobil expects to double the amount of oil it extracts from its Means field, which dates back to the 1930s."
I do not know what else to do if people continue to fail to read.
All alternative energy usage will be market driven. We do not use Wind and Solar because they are astronomically more expensive than our current sources of energy. Wind is only used at all due to government subsidies. Nuclear is a much more practical source of power generation than either wind or solar. But all three have a problem as a transportation fuel, which is why we will continue to use oil especially for a very long time.
You have set up unanswerable conditions, and because they can not be answered precisely you give that as evidence of Peak Oil being false.
I am wholly unconvinced by your videos. Many people make many fantastic claims about what materials and how much energy they can produce at what price.
Of course the increasing price of Oil will encourage new technologies to extract Oil. This is not inherently a convincing critique of Peak Oil. The point is that the price of oil will keep world economies and force improvements in efficiency so that the use of oil will never break previous levels. There is nothing else to it. No conspiracy, just observation that the yearly findings of new Oil fields peaked in the 60's and as with most resources the extraction peaks approximately 30-40 years later.
Even if we manage to make Oil out of trash it is still a confirmation of Peak Oil. Peak Oil will push the price of Oil high enough that making Oil out of trash is economically viable.
An article yesterday points out that oil fields a few years ago required one barrel of energy to extract 100 barrels of oil. Today it is closer to a 10:1 ratio. This will asymptotically approach 1, and most likely break it as using solar energy to remove oil for plastic and chemical production takes over it's previous usage as a primary source of energy.
In just the same way, Global Warming is happening. How rapidly it is happening and how responsible humans are is absolutely up for debate. It appears to me there is virtually no stopping it, and any misguided attempt at doing so would cause far more harm than good.
It is a logical impossibility to claim something is peaking or when if you cannot answer those two fundamental questions.
Just because you have not found something does not mean it does not exist. There are enormous sources of energy locked up in oil sands and shale, enough for a very long time.
Oil out of trash is economically viable at $80 a barrel and we have already reached that point it was just not sustained long enough for the capital investment in the technology to seem viable at this time.
The amount of energy needed to extract oil in oil equivalent energy is irrelevant. This is an old logical fallacy, what matters is the cost of the energy used vs. the cost of the energy extracted.
Thermodynamics and Money (Peter Huber, Ph.D. Mechanical Engineering, MIT)
You can use Natural Gas, Coal or Nuclear to extract oil and still be profitable. The reason? The superiority of oil as a transportation fuel.
Yes, you can read my post. Thanks for restating the obvious.
Sorry without knowing how much of something exists or how it is created, you cannot predict any sort of "Peak". The obvious is that it is a logical impossibility.
There will be a peak of natural oil eventually. The main threat is the state suppression of getting out of the ground whatever amount is left.
NateS:You have set up unanswerable conditions, and because they can not be answered precisely you give that as evidence of Peak Oil being false.
Sadly he is right. He has exposed the theory as a fairy tail. Don't be upset by it. He doesn't need to fabricate up a fairy tail to counter the argument of a fairy tail. The Peak oil theory seems to be nothing more then someone freaking out over a statistic. Besides, it should be far more obvious that any drop in oil discovery in the past century is not due to "Peak Oil" as a direct linear correlation in government regulation and involvement.
Poptech:Free-market economics makes fears of Peak Oil irrelevant unless of course the state intervenes.
I'm late in coming to this, but often discussing it else where. I don't think most people realize the import of the above statement. From estimates I've seen subsidies have taken the price of gas from 10-15 USD to its current price. Even allowing for the fact that no one really knows what the price 'would be' if no one was screwing with the industry, subsidies for roads and oil/gas more than anything else are laying the ground work of incentives to over invest in a petroleum based economy. That is oil based/dependent capital structure, everything from energy generation to synthetic fabrics and other materials to overly centralized production based on cheaper than otherwise land transportation costs. It is that over investment and subsequent loss of any fixed, unretrievable capital that's going to cause us harm, not the natural switch over from oil to alternatives which will happen as even the government loses power over the prices. Most people don't get that, the government is already Doing Something!, and as usual it's screwing us.
In fact if the above figure for what the real price of gas should be are correct, biodiesel, ethanol, and hell maybe even hydrogen all get kicked much closer to being economically viable/profitable, if not already there. I wouldn't be surprised if absent the government we would already be seeing wide adoption of ethanol and biodiesel in sectors where the switchfrom gas is easiest. Say like lawn mowers and such equipment, etc. Anything diesel based could be retrofit to accept biodiesel so long as adequate supply is there at the right price. Maybe even centralized power generation. I can only imagine what thermal depolymerization and the fuel/energy it can generate could be accomplishing if it didn't have to compete with subsidized oil and politically favored corn farmers/ethanol.
Idontknow: I am in agreement with Poptech that this is an assumption. Actually, I think it might be a non-sequitur too because yeah, for a given oil field or collection of oil fields that have been drilled for all they're worth, you get the bell shaped curve, but how does that mean "therefore" we will peak in oil production at some point?
Which goes to thermal depolymerization and abiotic theories. How much can be produced is not the same as how much exists, nor how much is economically usable/recoverable, nor how much is now and will be demanded in the future, etc., etc. Peak oil is based on assumptions galore. It assumed to know how much oil there is, how much oil is recoverable, how oil is produced, how much demand exists now and in the future, the viability of other forms of energy now and in the future, etc., etc., etc., etc. It's kind of like the Drake equation; perhaps technically true and accurate, but the factors you plug in are a matter of serious debate.
The price of a resource that is running out would not just constantly rise. The adoption of alternatives would counteract that and eventually the last drops would be virtually free.
Poptech: Peak Oil is a Myth Ask any proponent of the Peak Oil Theory what the exact amount of fossil fuels the earth contains. Without knowing this amount no rational claim of Peak Oil can be made and it is thus a Myth as currently proposed. The only entity preventing further exploration and extraction of fossil fuels is the state and the only entity negatively effecting the actual cost of fossil fuels is the state through taxes and regulations. Only the state can cause shortages of resources and any energy "crisis". In a pure free energy market all land would be available for energy production at a free market price, thus availability would be limited by cost, technology and of course actual supply. Say a hypothetical obtainable limit to our demand was reached in actual supply, long before this was reached prices of fossil fuels would rise, once fossil fuel prices rose above what other competing free market energy sources were, these cheaper energy sources would be adopted on their own. All without government intervention. The government was not needed to switch away from horses to cars. But we have no such scenario since the state is artificially creating supply shortages by restricting land access through regulations. The state is also artificially increasing energy costs above free market rates with taxes and regulations. In essence the state is creating a Peak Oil scenario to benefit the green lobby. But no such thing exists even with known reserves: Myth: The World is Running Out of Oil (5min) Despite Popular Belief, The World is Not Running Out of Oil, Scientist Says (Science Daily)It’s a myth that the world’s oil is running out (The Times, UK)Myth: The World is Running Out of Oil (ABC News)No Evidence of Precipitous Fall on Horizon for World Oil Production (Cambridge Energy Research Associates)Oil: Never Cry Wolf—Why the Petroleum Age Is Far from over (Science)Oil, Oil Everywhere... (The Wall Street Journal)The World Has Plenty of Oil (The Wall Street Journal) Reserves:- 1.3 Trillion barrels of 'proven' oil reserves exist worldwide (EIA)- 1.8 to 6 Trillion barrels of oil are estimated in the U.S. Oil-Shale Reserves (DOE)- 986 Billion barrels of oil are estimated using Coal-to-liquids (CTL) conversion of U.S. Coal Reserves (DOE)- 173 to 315 Billion (1.7-2.5 Trillion potential) barrels of oil are estimated in the Oil Sands of Alberta, Canada (Alberta Department of Energy)- 100 Billion barrels of heavy oil are estimated in the U.S. (DOE)- 90 Billion barrels of oil are estimated in the Arctic (USGS)- 89 Billion barrels of immobile oil are estimated recoverable using CO2 injection in the U.S. (DOE)- 86 Billion barrels of oil are estimated in the U.S. Outer Continental Shelf (MMS)- 60 to 80 Billion barrels of oil are estimated in U.S. Tar Sands (DOE)- 32 Billion barrels of oil are estimated in ANWR, NPRA and the Central North Slope in Alaska (USGS)- 31.4 Billion barrels of oil are estimated in the East Greenland Rift Basins Province (USGS)- 7.3 Billion barrels of oil are estimated in the West Greenland–East Canada Province (USGS)- 4.3 Billion (167 Billion potential) barrels of oil are estimated in the U.S. Bakken shale formation in North Dakota and Montana (USGS)- 3.65 Billion barrels of oil are estimated in the U.S. Devonian-Mississippian Bakken Formation (USGS)- 1.6 Billion barrels of oil are estimated in the U.S. Eastern Great Basin Province (USGS)- 1.3 Billion barrels of oil are estimated in the U.S. Permian Basin Province (USGS)- 1.1 Billion barrels of oil are estimated in the U.S. Powder River Basin Province (USGS)- 990 Million barrels of oil are estimated in the U.S. Portion of the Michigan Basin (USGS)- 393 Million barrels of oil are estimated in the U.S. San Joaquin Basin Province of California (USGS)- 214 Million barrels of oil are estimated in the U.S. Illinois Basin (USGS)- 172 Million barrels of oil are estimated in the U.S. Yukon Flats of East-Central Alaska (USGS)- 131 Million barrels of oil are estimated in the U.S. Southwestern Wyoming Province (USGS)- 109 Million barrels of oil are estimated in the U.S. Montana Thrust Belt Province (USGS)- 104 Million barrels of oil are estimated in the U.S. Denver Basin Province (USGS)- 98.5 Million barrels of oil are estimated in the U.S. Bend Arch-Fort Worth Basin Province (USGS)- 94 Million barrels of oil are estimated in the U.S. Hanna, Laramie, Shirley Basins Province (USGS)For Comparison:- 260 Billion barrels of oil are estimated in Saudi Arabia (EIA)- 80 Billion barrels of oil are estimated in Venezuela (EIA)
How are those articles legit at all? They seem pretty biased, and have little sources cited, and are from one organization. Not to mention, they hardly all qualify as a research article which has not been peer reviewed.
Democracy for Breakfast:How are those articles legit at all? They seem pretty biased, and have little sources cited, and are from one organization. Not to mention, they hardly all qualify as a research article which has not been peer reviewed.
Peer-Reviewed:
Oil: Never Cry Wolf—Why the Petroleum Age Is Far from over (Science, Vol. 304, No. 5674)
Research:
Despite Popular Belief, The World is Not Running Out of Oil, Scientist Says (University of Washington)
No Evidence of Precipitous Fall on Horizon for World Oil Production (Cambridge Energy Research Associates)
Easier to find oil (Royal Institute of Technology, Sweden)
Hydrocarbons in Deep Earth? (Carnegie Institution)
New Evidence Supports 19th-Century Idea On Formation Of Oil And Gas (American Chemical Society)
Haaah actually I'm a petroleum engineer. I was discussing peak oil today in the context of primary recovery in reservoir engineering.In a reservoir, production increases quickly to some peak level and then begins exponential decline (its exp^(-time factor), so exponential doesn't mean "really fast". Wells can also undergo hyperbolic decline). But basically you produce a lot all at the beginning and then rate bleeds off. Some gas reservoirs level off at 200mcf/day and just stay that way for decades.Anyway, so obviously peak oil graphs are not representative of just one big reservoir, but the point is that production is skewed towards later in the well's life. So when we see peak oil, its because a majority of the world's fields are peaking themselves, and will not decline at the same rate they grew. Also, the decline period of wells is exponential, so the decline of the sum of wells has to be exponential. For those of you who are more sight oriented, here is a normal dist curve:
Here is a typical exponential decline curve. I'd say these reserves are on about 8% decline, which is a little faster than average.