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Candidate for Governor of Maine runs on peak oil platform
George Chappell, York Country Coast Star (Maine)
KENNEBUNK — Christopher F. Miller, a Democrat from Gray, is campaigning for governor on an all-inclusive energy platform.

“My campaign is about getting the state to prepare for oil running out,” said Miller in a recent interview at the Coast Star office. “The longer we wait to prepare for that — if we haven’t built those windmills, we’re not going to have any way to build them. What’s the price of fossil energy? How do you price something that’s running out?”

In new windmill technology, for example, the blades are so big and turn slowly that they no longer kill birds, an early objection to wind power.

“They can deal with much less wind and generate a lot more power,” he said.

The state has to be thinking about oil depletion now and working on it now, he stressed.

“The more energy efficient we can get now, the longer we have to network,” Miller said.
(2 March 2006, thanks to Leanan at peakoil.com)

Kunstler: we're past denial, now we're bargaining
Jim Kunstler, Clusterf*ck Nation
America commuted back into the unknown country of $3-plus gasoline and $75-plus oil (per barrel) last week, and President Bush revisted the Tomorrowland of hydrogen cars in the absence of any reality-based response to the global energy crunch that will change all the terms of America's "non-negotiable way of life."

Actually, we are negotiating, or bargaining, as Elizabeth Kubler-Ross once put it in describing the sequence of emotional reactions of humans facing certain death:

denial > bargaining > depression > acceptance

Events seem to have dragged us kicking and screaming beyond the sheer denial stage, since this is now the second time in six months that oil and gasoline prices have ratcheted wildly up. Something is happening, Mr. Jones, and now we want to talk our way out of it.

The main thread in this bargaining stage is the desperate wish to keep our motoring fiesta going by other means than oil. This fantasy exerts its power across the whole political spectrum, and evinces a fascinating poverty of imagination in the public and its leaders in every field: politics, business, science and the media. The right wing thinks we can still drill our way out of this, if only the nature freaks would allow them to. The "green" folks thinks that we can devote crops to the production of gasoline substitutes, even though a scarcity of fossil fuel-based fertilizers will sharply cut crop yields for human food. Nobody, it seems, can imagine an American life not centered on cars.

This is perhaps understandable when you consider the monumental previous investment in the infrastructures and equipment for motoring, which includes the nation's car-dependent suburban housing stock -- which in turn represents the average adult's main repository of personal wealth. If motoring becomes unaffordable, then what will be the value of my house twenty-eight miles upwind of Dallas (Atlanta, Minneapolis, Denver, Chicago, et cetera)? The anxiety is understandable.

But the problem is not going away.
(24 April 2006)

Peak oil and peak gold
Roland Watson, Free Market News
As someone who has kept track of the "Peak Oil" movement for a few years now, it comes as no surprise that oil prices have risen nearly six fold since they hit rock bottom in the late 1990s. Does this mean Peak Oil has already arrived? Not necessarily, but we note that a final peak in global oil production needs to be preceded by a continual decrease in excess crude oil production capacity. When capacity reaches zero, then Peak Oil arrives. That capacity has been dropping now for several years.

But what can that current debate about oil teach us about gold? Gold, like oil, has been continuously rising in price for five years. Admittedly, its performance has been poor compared to oil, but does this price mechanism also indicate the mining equivalent of reducing "excess spare capacity" and is it also a prelude to "Peak Gold"? My conclusions led me to believe that these two commodities are similar in terms of a Hubbert's Peak analysis and in terms of the effects of a peak in global production.

...Just like oil, the relatively few "giants" of gold production are being replaced by a host of smaller "minnows". Just like oil, gold explorers are finding less gold in lower grades of quality. In terms of oil, the gold Ghawars and Cantarells have long been discovered and exploited. It is now basically a mopping up operation at the edges of exploration.

It seems to me that Peak Gold may well have arrived. When Peak Oil arrives as well, then Peak Gold will be confirmed because increasingly higher energy costs will make many mines uneconomic and gold above ground will become far more expensive than gold shut in underground. Unless, of course, gold vaults into the thousands of dollars to offset energy costs!

This is what we call the "New Era" of investment. It is an era when hard assets will no longer be taken for granted and seen as cheap and easily accessible. They will become rarer and harder to extract and will remain so for decades to come.
(25 April 2006)

An Economist response, or is it a techie Sunday?
Heading Out, The Oil Drum
Oh, dear it looks as though I have to disagree with an economist again. But this time it is the magazine rather than an individual. As has been pointed out, and to an extent discussed in recent comments thanks to which I was able to read the initial article, the Economist came out with an article this past week that suggested that the current problems with the supply of oil are not really serious, or long-term.

There are several ways to address the issues of the article (you will have to wait a bit for discussion of the author's book since I only ordered it on Friday), but it appears to me that a primary criticism has to lie in the misunderstanding that the author appears to have about the role of technology and the slow speed with which things happen. I am not going to argue the point that there is still a lot of oil lying around. Yes there is, and even when we have depleted a field, we are leaving perhaps 60% or more of the original oil in place. And yes, given enough money and time we can even get that oil out.

Nor am I going to argue, at present about the longer-term existence of large volumes of oil. Rather, I would argue that the problem that we have is of getting an adequate supply of oil, each year, to meet the demand that there will be for the oil in that year. Under the current methods of production, and against an increasing level of demand it is becoming more difficult to produce enough oil to meet that demand. There are two major reasons for this, neither of which is properly recognized in the Economist article.

The first, and most critical issue, is the one that we call depletion. When an oilwell is first put into production, the oil flows into the well due to the pressure difference between the fluid in the rock, and the fluid in the well. If there is no difference in pressure, then no oil flows, (see Newton) and the greater the difference in pressure, then the higher the oil flow rate. As the oil flows out of the well, however, it reduces the pressure in the fluid. (Simple, crude experiment - get a bottle of soda water, shake it up and stand it in the sink. Open the top. The gas pressure will drive some of the water out of the bottle, but after a short while the pressures are equal and more than half the water is still in the bottle. )

This basic knowledge has been around for a long time, and it has been recognized that it gets harder to get the oil out, and that it flows more slowly, as the volume of oil that is left in the rock around the well goes down. (And generally a single well can only, realistically drain the rock out to a certain distance from its location). Historically that number has been considered to that the well will deplete (or reduce production) by about 5% every year, from its peak level.

But this has recently changed, and the change has both merits that the Economist understands, and pitfalls that they don't appear to have heard of.
(24 April 2006)
Excerpts from the Economist article posted at Energy Bulletin.

Updating oil price graphs
Stuart Staniford, The Oil Drum
Seems like an interesting time to update some oil price graphs again.

Last time I got around to covering it, on January 20th, it meant we were within a week and and a couple of bucks of topping out, before going into a $10 decline for a month. After that bottom, we started up into the rally that's been going on until now. My guess is it's starting to get ripe for for a correction again unless we really do bomb Iran.

I had predicted at the beginning of the year that prices in 2006 would be $65 ± $20 in the absence of a major oil shock. I'm sticking to my story for now.
(24 April 2006)