Have you heard about the theory of peak oil?

I first read about this in a Washington Post op-ed about reducing greenhouse gas emissions that was published in 1998. The author said you didn't need to do anything because oil consumption would peak in 2005 and it would be downhill from there.

It's more or less a theory of when (versus if). Exxon-Mobil says decades, Chevron Texaco says 2011 +/- 4 years, T Boone Pickens said it happened on the 23rd of November 2005. I heard Mr Pickens talk about it on NPR last November when he announced it, and didn't think much about it at the time.

Yet, after thinking about this for the last 9 months or so, there is a major problem in that a collision of sorts may be about to happen. That collision is that as oil production could be peaking, while the demand is continuing to increase. So the problems will begin very soon after the peak. There doesn't seem to be any realistic replacement for oil since even with gas at $3.10 a gallon, it's still a generally cheap energy source, it's so flexible in use, easy to transport, and is used in so many areas including fertilizers and pesticides. It fuels the agriculture industry and created suburbia.

There are very few products in existence that can triple in price in a short period of time and have no decrease in demand. Economics teach us that as prices increase, demand decreases. But that's not happening with oil.

I'm not in anyway trying to sound like I know anything about this, but I think the time has come to begin conservation efforts in earnest, for manufacturers to make efficient products, and everyone to replace those ancient incandescent lamps with compact fluorescent lamps. Because if we don't prepare for this inevitability, then things might be very grim.

Below are two links that discuss this theory. The second one I read last March, and got me thinking about this problem.

• Dr Ali Samsam Bakhtiari, senior advisor for the National Iranian Oil Company, addresses the Australian Senate Committee.
• Copy of Maryland Congressman Roscoe Bartlett's February 8 Special Order speech about peak oil.

As I said, I know nothing about oil. One thing that amazes me is how much there is in the world. There is so much that I have a hard time understanding how it was produced by some microscopic microbe. There had to be some incredible number of those microbes if oil came from them.

The Russians have a theory that oil is a naturally occurring product produced deep in the earth and that we'll never run out. That theory is call abiotic oil. But has anyone heard of old oil fields refilling themselves?

On a different note, I was talking to my dental hygienist about this (believe it or not you can talk with hands in your mouth and she said that her uncle in Texas has oil wells that the government won't let them pump, and that she has other relatives in Oklahoma that aren't allowed to pump their oil. She thought that the government was trying to save the oil for later.

Similarly, in the late 70's, early 80's, the Japanese bought huge amounts of coal from the US, and buried it for later use.

More links on Peak Oil can be here.

I'm no expert in this field - and I will be the first to tell you that - BUT - this oil thing is for the birds.

We have plenty of oil right here in our own country but we are forbidden from drilling for it.

Every state has their own "recipe" (for lack of the appropriate word) for the gasoline that is to be sold in their state. Don't ask me why they do that - it makes no sense to me. (sure I'm blonde!)

So the gas suppliers have to do this for one state, that for another, and something else for another.

And of course - BP wants to jump on the band wagon and make the profits that Exxon is making - so let's all of a sudden find fault with the Alaskan pipeline - adding insult to injury.

Now where I live - they are going to start making ETHANOL! Corn fuel. Whoopee!!! They tried this crap (forgive my French) back in the 80's and it wrecked my engine!!!! I actually had to get rid of my car. So what are they doing now - making ethanol AGAIN. All of a sudden the car manufacturers are able to immediately come up with car engines that are gasoline and/or ethanol friendly. That was pretty darn fast. Now what was it that they were holding back and not telling us????? What's next - a world corn shortage??? Cripe - we'll be paying $20.00 for a dozen ears of corn! Or is our governement going to regulate that too???

What was the name of that movie with Mel Gibson and Tina Turner?? Was it Thunderdome - pig poop for energy???

Let's see what happens after they have all their fun with this ethanol thing and how bad the cars suffer from gasoline and ethanol. Should be interesting for those states that don't have to sell ethanol and people travel from one state to the other.

And you hear about these guys that recycle McDonald's french fry grease for fuel.

I honestly feel that our government wants all oil prices beyond our control so that they can start to all of a sudden start to refine our own oil. And we can pay $8.50 a gallon (not including all the taxes on the gasoline) and make them richer.

And there is something quite fishy about these car manufacturers - they seem to know too much before the public does. SUV's sucked up more gas and they kept making them and Hummers, etc. Now this.

Just makes ya wonder!

But like I said - I'm no expert at all..............

The short take on those the documents I linked to on peak oil theory are:

• There hasn't been a major oil discovery in 20 years. The oil we're burning now was found between 1930 and 1985.
• Up until the last couple years, discoveries of small oil fields exceeded demand. But in the last few years, the world oil demand has surpassed new discoveries.
• There is a belief that the OPEC nations increased their reserves during the late 1980's and early 1990's without any additional discoveries because the sales quotas were tied to reserves.
• Demand for oil is increasing at 2% a year.

Facts I see that support this:

• Car manufacturers are building cars the run on E85 (85% ethanol/15% gasoline).
• No country seems to be able to supply the additional oil needed to stabilize the current market.
• Most non-OPEC oil fields are in declining production.

Facts the make this look like another Enron manipulation:

• The Alaskan Oil Issue from BP. Like they wouldn't have been watching for that.
• Peak oil has been discussed for 100 years and has never happened.

Facts the worry me:

• Exxon-Mobile quoting the US Geological Survey as experts in their ads against peak oil theory. Exxon Mobile is the expert.
• Chevron-Texaco supports the belief.
• A conservative Maryland Congressman has a presentation on this. I know who this guy is and he's not a ecological fellow.
• The Iranian Advisers presentation to the Australian Senate was pretty stark. He mentions a major bird flu epidemic might be a good thing.
• There is no realistic replacement for oil.
• George Bush made a statement in April about nuclear power plants being a renewable source of energy. But he's talking about breeder reactors that have never been built before and are still theoretical. And he's an oil man.
• George Bush mentioned switch grass in the state of the union message as a source for making ethanol.
• We're currently using 25% of the US corn harvest to produce 1 million gallons of ethanol a day. The US is using 25 million barrels of oil a day. 20 gallons of gasoline and 7 gallons of diesel fuel comes from every barrel of oil. That's 25 million * 27 = 675,000,000 gallons of liquid transportation fuel used everyday in the US. If we used 100% of the corn crop to make ethanol, that would amount to 4 million gallons a day (a drop in the ocean). Don't forget about the compounding of demand. Next year we'll need 25.5 MBD, and then 26.1, 26.7, etc.

In case anyone is wondering how oil can be at $78.00 a barrel and gas retailing at $3.10 (when you get 27 gallons of usable fuel out of a barrel), it's because no-one buys oil at the market price. Those are paper barrels. Real oil is traded on long term contracts at fixed prices.

Mamma - I'm with you on the current situation, and that has nothing to do with this. All I'm really trying to say here is that energy has been really cheap for a long time and we should value it more than we have done in the past.


Crazy politicians here in Maryland and Electric Deregulation
Electricity costs are sky rocketing here in Maryland, and the politicians that passed the rules that removed regulation of electric rates are scrambling because it's an election year. Who but the politicians would think that the power companies would want to reduce prices?

So now the deferral period is over, and the power companies have done all of their buying and selling of assets so they can't be re-regulated. And what, let's see a raise of hand of those of you that believe the electric utility wants to sell power for less? I don't see any hands, come on, someone out there must think that competition of a heavily regulated industry will reduce costs? Nope prices at rising and the power companies jump on the excuse that oil prices are high, they need to charge more. How lucky for them that oil prices are high. But um, most of the electricity in Maryland is generate from coal, and we get billed a separate fuel surcharge to adjust for such fluctuations in the oil or coal market anyway.

So what do the politicians do with a rate increase pending of 80%? Do they admit the fault? Do they seek low cost long term contracts? No. Instead they come up with a financing plan that delays the increase, until when? After the election. And who is paying the financing fee? The state? Of course not. The utility customers will pay it. So besides being hit by an 80% increase in fees, they'll need to pay 4% interest on the first six months increase over several years. What an absolute mess.

So, if you were a politician in Maryland and you saw this mess would you consider sticking the electric utilities with additional costs to clean the air at this time? Raise you hands. I can't see you. Yes, we'd stick them hard and increase their costs because we know that will mean lower electricity costs. Right? I'm fairly environmental and wouldn't even consider that this year or next.

You have to love politics.

OldBay!
I feel your pain on the electric rate hell you discussed and crummy elected officials passing the buck. Boy am I glad I don't live in Maryland.

Don't know what to make of the peak oil thing. First I've heard of it.

Oldbay!

Yeah, really makes you wonder who is charge. My husband told me this morning that BP has a worldwide reputation for cutting corners. Apparently they built a pipeline in Trinidad over coral reefs (how pathetic is that) and the abrasion to the pipes would cause leaks. Did they replace the pipe??? Heck, no, they just watch for oil on top of the water and then put a bandaid on the boo-boo. And I guess you heard about their plant explosion here in the Houston area

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yeah, they had been warned numerous times about the problems by their own people but didn't bother to address them. Hence, new widows and fatherless children.

Now, what really makes me mad is that last week our Sunday paper had an accounting sheet of what all these CEO's of oil companies made in bonuses, stock options, etc., recently due to the surge in oil revenues

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OMG it's unbelievable!!!!!! Those guys had little to do with their company's increased earnings

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it was market conditions. We need to get our priorities straight in certain areas. Ok, I'll step down now.