That'll help, but... on a percentage basis, the greatest demand growth is within the oil producing countries themselves. Are they likely to cut supplies (and associated subsidies) to their own citizens?

You haven't been to Beijing recently.

China is building highways and something is going to be on them.

RayOnTheFarm,

No, the government simply needs to let $10 gas happen and the problem will solve itself.

Gotta keep in mind that production capacity isn't static. It's already damned hard to bring enough new sources online to replace the old stuff that's quickly fading.

If simply maintaining production is proving difficult at $100+, it will be damned impossible at anything less -- the incentive just won't be there.

OT
Bank of America, UBS AG, Wachovia Corp. and at least four dozen other firms that sold $330 billion of securities with rates set through periodic bidding are thwarting attempts to create a secondary market that would allow investors to access their cash, according to investors. Dealers claim they are saving customers from needless losses on securities they marketed as similar to cash-like instruments.

Following is a chart of largest issuers of outstanding municipal auction-rate securities, 2000-2007.

1. Citigroup, $39.73 billion *
2. UBS, $31.50 billion
3. Morgan Stanley, $20.13 billion
4. Goldman Sachs, $17.80 billion
5. JP Morgan, $15.72 billion
6. Bear Stearns, $12.61 billion
7. Merrill Lynch, $12.37 billion
8. Bank of America, $11.03 billion
9. RBC Dain Rauscher, $10.25 billion
10. Lehman Brothers, $9.74 billion

no soup for you!

Mock Turtle:

my bet is hydrogen

And where does the energy come from to produce the hydrogen?

Here's a possibility:

• Distributed power via solar panels on home sized at some margin above what the household's usage requires.
• Instead of excess power only being fed back into grid for offset/monetization, also have capability to run that extra current through a wire in a H2O tank for electrolysis.
• Capture H2 into storage tank that is pressure regulated that shuts off this channel once H2 reaches certain amount/pressure. (Don't want too much H2 sitting around the house.)
• H2 produced and stored up during daylight hours is then used to switch house over to fuel cell for power at night.
• If H2 fuel cell cars are feasible, then some of this H2 is used as your transportation fuel as well.
• Basically a regenerating, closed loop system for one's own power needs.

HOWEVER - there are a number of assumptions here to actually give it a shot at working:

Sunlight hours, available roofspace, utility structures and incentives, etc, and of course the money to do all this.

But seems like it could be viable.

Beef I have with fuel cell cars:

A fuel cell car is basically just an electric car with all the extra hardware for the H2. In other words (and going back to my initial "how do we produce H2 in the first place"), if we use electricity to produce H2 to then use in a fuel cell to... produce electricity for vehicle(!) that seems like an inefficient and roundabout way.

Why not just have electric vehicles that you directly power whether that electricity is coming from rooftop panels, the grid, or the (home) fuel cell?

Fuel cells running what are essentially electric vehicles - why mess around with a middle man?

H2 is a storage medium, not a fuel source.

What say other CRers? Especially you smart engineering types?

ac, barely, dryfly - ain't one of you guys an engineer?

Doc,

America already does reprocessing, and a bigger facility is being built in Tennesse for that purpose. We however only have a handful of nuclear units (out of our 103 operating) which can even use the reprocessed fuel.

But when you come right down to it, the amount of fuel in nuclear weapons that can be reprocessed is minimal compared to the amount we use on a yearly basis.

My '84 dodge colt got 40+ mpg. A five note would fill up the tank and get me 200+ miles...

I'm pretty sure that it is a heck of a lot easier to conserve the damn gasoline than it is to build a hydrogen infrastructure, convert corn into ethanol, or do any of the other crap that everyone is talking about...

I'm just thinking... people in Asia aren't going to perceive it as "the government has cut subsidies." What people will think is, "the government has raised prices again, as if we weren't already squeezed by the growing prices of rice, wheat, meat and other foodstuffs!" And in India at least the resentment could bring the government down, and the next one might be keen on restoring the subsidies... And China of course doesn't have that problem so it won't cut subsidies at all, until the whole world overheats like a steam engine with the valve fixed. And what then, back to 1929?

Anonymous wrote,
"These were three of the last million barrel a day fields EVER FOUND....Do your damned due diligence. "

Alberta Energy: Oil Sands

The money quote:
"Annual oil sands production is growing steadily as the industry matures. Output of marketable oil sands production increased to 1.126 million barrels per day (bbl/d) in 2006."

I believe that theoildrum.com seems to have an axe to grind and an agenda. World seems to black and white from what I've read.

BTW, I'm an engineer. Not petrochemical, so I defer more intimate knowledge of the state of the industry to those guys.

At a given price point, even hydrogen would make sense. Do the energy density math in a sizing equation, and you'll see why petroleum fuels are so appealing. Kudos to Bob Mologna for pointing out the relevant point... We are talking about energy storage and conversion in reasonable size, efficency, and cost for personal transportation. If I had to bet, I would bet on a battery or similar storage technology being the winner. Then we can produce energy to store in the cars for use as needed.

Damn, strike "cars" and replace with "transportation vehicles" for more generality.

I don't think flying machines are coming for individuals per se, but I could conceive non-internal combustion propulsion for general aviation and other transportation that does not require jet-like speeds. Look at the performance of remote-controlled aircraft with LiPo cells. Not too much of a stretch to see electric GA workable with a similar technological advance.

The American lifestyle is not negotiable. If there is oil in the world, then it belongs to America. And if other people happen to live on top of it, then they may be permitted to help America get to it, but if they don't help, then America will fight them for it. And America needs that oil, to fight them for it.

I'm sure there's an NSA document that's first day presidential training that explain what happens if there's another OPEC embargo.

The irony is that the first sentence is basically the Democrat talking point; health care, education, etc. The rest of the paragraph is what the neo-cons can't say, so they dress it up in flowery "democracy" talk. Same reason damn that all US presidents prostrate themselves to Israel; we need them more than they need us. At least unless we really want WWIII.

Energy production is pretty easy. Most impediments are self-imposed. Coal could do it, but people remember smoky coal fired plants, so we don't get permission to build new clean ones. Instead we get "clean" natural gas fired plants. Nuclear works, and if we got serious about what to do with the waste, we could meet our needs that way. Nobody wants to invest even a portion of Iraq-war level funding on making these technologies work.

Consider this: The Iraqi entanglement burns 17 Billion U.S. pesos a month. A typical National Laboratory (LANL, LLNL,SNL, ANL) runs on somewhere around 1 billion of those same pesos a year. I'm guessing that a few years of a couple of national labs devoted 100% to either the clean coal plant design or the nuclear waste stream issue, and we could have a solution to deploy.

My 2 cents. Worth less each passing day, unless they are in the form of 2 pre-1982 coins, in which case, you might want to hold on to them

giocatoli -- Mexico's President Felipe Calderón is continuing Vincente Fox's privatization of PEMEX. Halliburton is directly involed. Personally, I somewhat suspect the couple billion in military aid coming from “Plan Mérida" may be part of the process.

If you're interested, see: The Push to Privatize PEMEX -- In These Times

o matter how cheap hydrogen gets as a fuel we will also need cheaper catalysts than the ones we have now. Gold and platinum are the only effective catalysts at the moment

Without getting into a religious war (I hope), I would add trapping CO2 as a self-imposed constraint. It's such a weak greenhouse gas that it should not be the non-starter that it is. Start pumping in water vapor into the atmosphere as the primary by-product, and anthropogenic global warming might actually become a serious issue.

There are efforts underway to use much lower-enriched fuels and even low level TRU as fuels in reactors that burn down to ash. These are woefully underfunded, but I suspect that there will be a more concerted effort employed to make use of the CO2 angle as a tool to convince the public to support nuclear.

Tom Stone writes:
Gee tj,no plague?

Bird Flu? Gawd, I hope not!!!

That would constitute some significant "demand destruction" though, wouldn't it?

"It will all start with higher prices and conservation."

I agree with that completely. People will make decisions based on economics when the other non-quantifiable factors are overwhelmed (i.e. fashion, etc). I think the consumer still has some inertia to overcome. Remember that the spike in oil prices has not translated into new vehicles yet. Habits are just now changing. we see houses in the exurbs hit harder, and commuter traffic is down. If we believe GDP is still increasing and unemployment is still low, then we can believe that energy costs are having some effect on behavior in these two areas.

The answer to all of our energy problems:

Mr. Fusio - Futurepedia - The Back to the Future Wiki

China may have a lot of plans, but are there really enough fossil fuels to support another 1st world country ?

Most people don't realize how damn efficient oil is - and that's why it's used for everything. It's simply not replaceable now .

Lots of discussion as how to lower oil consumption with no reguard to the fact that almost everybody else has moved a long way in that direction already-- with US technology that is not available to you in the states. Here in Panama we have one of your plants that burn garbage to make electricity and it works great! We sell cars that cost less than $8,000, get 60+ mpg and over 45 mpg in traffic with air bags, air cond, etc., scooters that get 150mpg are under $800, and on, and on. No one here in his/her right mind even thinks of using anything but flouresent bulbs. Not having money goes a LONG ways to lowering demand and being willing to use what is currently available to lower costs, you will see some great changes soon-- when the money runs out. Of course, we have no winter here and that tends to help a lot.

Incessant_din,

Forget pennies. In 1964 it cost me .25 for a gallon of gas. Today with silver at about 17.50 that 1964 silver quarter is worth $4.375, a gallon of gas!

vtcodger wrote (in BTU/day):

"Kuwait 980
US 900
Canada 830
Australia 600
Japan/Italy/France 400
Macao 110"

So, basically, the US could cut about 1/3 of its usage pretty painlessly to reach the level of Australia. I'm choosing Australia from this list as a comparable country, geographically. Smaller countries should be compared to states. We could cut oil consumption pretty heavily if we chose to.

☺☺"Not having money goes a LONG ways to lowering demand and being willing to use what is currently available to lower costs, you will see some great changes soon-- when the money runs out."--InvestmentBanker | 06.08.08 - 10:08 am | #

I'm with you, investment banker.

When it comes to oil and natural gas usage, Americans will have to learn to make do on less. The majority of Americans are still deeply in denial. I love the way Timoth Garton Ash put it:

"If you want to know what London was like in 1905, come to Washington in 2005. Imperial gravitas and massive self-importance. That sense of being the centre of the world, and of needing to know what happens in every corner of the world because you might be called on - or at least feel called upon - to intervene there. Hyperpower. Top dog."

Russian President Dmitry Medvedev commented in a similar vein yesterday when he criticized the United States for "economic egotism," saying it has fueled global troubles.

Having been savaged in the previous thread, I will recap my position:

(1) Oil production is peaking partially because the countries which produce most of it are basket cases.
(2) Geologists can't find any more cheap oil elsewhere.
(3) Reason (2) may be the result of the fact that geology represents the dregs of academic hard sciences.

Sure, I could drop point (3), but frankly, it's too much fun. It also explains a lot of observed behavior in the petrochemical extraction industries, as well as (2), without having to read any academic nonsense. The geologists got PO'd about my theory (3), but that's exactly what (3) would predict.

The fact that some geologists think "Peak Oil" is a Big Idea is another example of the Deep Thinking going on in geological circles. Apparently some geologists thought production could increase forever [even though oil is allegedly the result of petrified dinosaur snot or algae or whatever nonsense they choose to believe and thus has a finite supply]. Then some other geologists pointed out that those geologists were idiots. This is more supporting evidence for (3), I'm afraid.

If oil/natgas production has peaked, that implies that demand will have peaked. That also means that oil/natgas production as a % of total energy production has peaked. So rather than whining about the implications of this obvious logic, the people who have received an adequate education in other fields of the hard sciences are busy looking into what those alternatives are (also consistent with point (3)).

The alternatives may be more expensive, but so freaking what? It's going to be very costly, and not just in dollar terms, being involved in the politics of a nuclear-armed middle east of the coming decades.

Thanks for the numbers, Rob. I confess it was an unfounded suspicion that we'd see numbers like that.

It's very easy to find out if 'peak oil' has actually been reached.

Look for data and stats regarding worldwide consumption, it would have peaked too.

Now I wonder who's in charge of the statistics and whether it is accurate. But that's another matter.

Israel is a scam - I do not trust anything they promote.

World will be much better, if US nukes them some day.

un autre canadien avec popcorn | 06.08.08 - 12:31 pm |

"Who do we need your country's protection from anyway, pray tell."

Wow. Ummmmm......us, or rather US.

Rob Dawg,

Interesting stats. Looks like if we got rid of one state, we could get rid of a lot of our energy problems... ;^)

I would imagine if you contribute auxilia to the imperial army, you do it to please the empire and thus serve your own interests. Why did you think they died?

I think if you went to Iraq you have been victimized by a cruel joke, regardless of which nation you came from, and that's doubly true for the Iraqis, poor devils.

We refused to go to Iraq. We went instead to Afghanistan and were economically punished for that decision. Remember that place. The Taliban, Osama, remember.

From us, for starters. Finlandizing is about becoming agreeable with the person who could knock your block off. They in return enjoy the depth of security your territory provides. It's not really about feelings or intentions, it's about gravity. Finland was hardly an enthusiastic SSR.

No but seriously, practically speaking, without the jingoism, there is no army big enough on this planet to effectively invade and annex this country. The same is true for the US and all large established countries. One would have to nuke all of the population centres to smoking ruins for it to be possible. Your example of Finlandization is a specious one as Finland is a tiny country with a tiny population and even then not invading it was as much of a realization on the USSR's part that it would be in for a very long, very costly guerilla war a la Chechnya or Afghanistan if they did.

For all I know, the frosty heroes of the Canadian north are a mighty new power on the rise. In that case, you will inherit the costs of empire and good luck with them.

Perhaps a mighty new oil power but empire, hardly, we don't have the pretense. Why would you complain about the costs of empire anyway, they are self imposed.

Otherwise, don't mistake our incapacity for your own capability.

Really, while you may know something about your own incapacity what on earth do you really know about our capability.

As I said above, I do not think you will enjoy the lapse of the American Hegemony as much as you think you will. But what would little Heidi know?

Straw man, when did I say this?

Your country's jingoistic, flag wrapping, greed driven, ignorant, self indulgent, manifest destiny entitlement wacko nonsense has sowed the seeds of your destruction both moral and economic as well as threaten the economic health of the world. Why would I be happy about this, my country does eighty percent of its trade with you guys.

This is typical. American poster responds to perceived slight from Canadian by threatening to invade the country. Always it's the same, "You owe us because you're not warmongers like we are", and "you owe us because we provide you protection" from fictitious enemies.

What a joke.

Again, you're an idiot.

The US already invaded Canada, in August 1812.
Unfortunately, we lost, though the British did capture Detroit, briefly.
Is it too late to return Detroit?

Is it too late to return Detroit?

If you do invade, make sure you take Toronto

Hey if we take back Detroit then the Stanley cup will be back in Canada where it rightfully belongs.

We should do a trade.

What's driving oil prices right now is diesel, not gasoline. It's easier to kill gasoline demand than diesel demand, because the diesel is being used to produce electricity (in the face of shortages of natural gas), to desalinate water, to run fishing boats, and to ship food and goods around, and there are no easy alternatives at hand or easy ways to cut back.

rent_to_own@13:24:

I'll go you one better.

Something a lot of oil bubbleheads don't seem to get is that what eventually happens to crude prices has little bearing on our day-to-day lives.

Even if there is a bubble, which is not impossible, by the time the run is over the (wrenching) changes will be wrought- demand destruction is neat self-fulfilling prophecy.

You don't need to worry about whether you're going to be able to fill up your SUV for $25 again because even if you could, it will have been turned into tin cans (or tanks) by then.

Either way, flat tax or cap and trade, if Chindia doesn't want to play, just assign a carbon emissions content value on imported products and tax them as they come across the border.

I agree with you in principle, but so far, China and India have given us the royal FU. On numerous occasions, China has threatened the nuclear option of unloading a trillion dollars of reserves if we tried to renegotiate trade agreements.

China threatens 'nuclear option' of dollar sales - Telegraph

Maybe, they'll be more receptive to Obama then Bush, but me thinks that if they still refuse to float the yuan, they're not going to agree to the carbon tariff. Additionally, from my limited recollection of the WTO treaty, you can't selective tariff signatory countries that have favored nation status.

But that's why we have Congress, to screw everything up.

"I don't really see anything wrong with the Republic's core virtues liberty, brotherhood and equality. If you do, I think you should be educated or crushed,"

Are you trying to be funny, or have you had a few drinks? Either believe in the brotherhood of man or we will crush you? You sound like Ghenghis Khan impersonating a neocon.
Please, this is Canada you're threatening. The best neighbor any country ever had, and no, they are not our lackeys, just friends and neighbors, with their own interests and worldview.

un autre canadien avec popcorn -
'If you do invade, make sure you take Toronto. We don't want it. More than likely you just want Alberta though. '

In Halifax in the mid-1980s, a couple of Canadian paratroopers said their view of Canada splitting was something along the lines of 'good riddance to Quebec, Ontario will remain Canadian, Alberta joins the U.S., BC goes communist, and the Maritimes go broke.' And like most people, they ignored the big empty spaces - what happens to Winnipeg or Saskatoon just doesn't interest anyone that much, I guess. Admittedly, Toronto was a somewhat different city in the 1980s, so I don't know what they would say now.

Scooby -
'Something a lot of oil bubbleheads don't seem to get is that what eventually happens to crude prices has little bearing on our day-to-day lives.

Even if there is a bubble, which is not impossible, by the time the run is over the (wrenching) changes will be wrought....'

Which is exactly the point - the last time the world economy seemed to be turning towards less oil consumption (read mainly higher efficiency, and in France and Japan, massive nuclear power programs), the large amounts of production brought online, using mega-fields discovered in the previous couple of decades, with project lead times also measured in 5-10 year timeframe, was sufficient to essentially block such a shift. This leaves aside the parallel and fascinating question of whether the period of maximum Saudi oil production in the early to mid-1980s was a Cold War ploy to destroy a major economic pillar of the Soviet Union. Oil is a very complex subject, after all, and not a place where binary thinking is useful.

The fall and rise and now looming (or just arrived) fall of Russian oil production in the 1990s and first decade of 2000, was much like that of Romania, arguably the first major oil producer, which is a classic case of a double peak, using technology in the 1970s to exceed its previous production totals of the 1920s. Renewed Russian oil production with decreased Russian domestic demand also played the role of the North Sea and North Slope during the last time that the low oil price worldview reigned.

But this time round, the large undeveloped fields are lacking. Leaving aside the question of technology (a lot of oil is still in the ground, after all - we simply have no idea how to physically get it into a pipeline - as seen in Romania's case above), there is not going to be a huge flood of oil in the wings to again crush any attempts to develop alternatives. Which means that those countries relying on cheap oil to fuel their economies are likely to be looking at the bottom of the barrel much sooner than was expected.

This leaves aside the export land model, as some people aren't looking at an empty barrel, they are surrounded by full barrels, which are increasingly seen as better burned at home than sent to some other country.

Price is a surprisingly poor measure of oil - I prefer the quantity coming out of the pipeline. And leaving aside some elegant new formulations of what oil is (for example, if you dig it up, then create syncrude, it is 'oil' - which would have been a joke to a Texas oilman of the 20th century), the amount of oil being produced, and its energy content, has remained essentially flat for several years. The market is a human creation - it still doesn't actually change reality, merely our perception of it. And the reality is, traditional oil production isn't increasing in any significant way (after all, over 3 million barrels a day of new production must be found, every year, just to keep up with depletion), even after price increases which would seem to be sending an unmistakable market signal to oil producers - sell more oil. And for whatever reason, they aren't. In the case of countries like the UK, or Norway, or Romania, or the U.S., it is because their production peaked in the last years and decades. The world is finite, as is the amount of oil which can be pumped - and these days, more people want more oil than can be produced, much less found to replace what has been pumped.