Peak Oil Stress Centered in Southeast

Based on drive time to work and income it appears that the focus of peak oil stress is centered in the drill-baby-drill geography of the Southeast.

The Reality of Our Oil Demand

Another gem from Gregor Macdonald:

Here in United States we like to outsource the extraction of our oil supply to anyone but ourselves. We don’t particularly want to see the results of our own demand for liquid fuels, the pull from our 300 million vehicles and our four million miles of highways. We’d prefer that someone else–preferably far away–despoil their own landscape. And we’ve done quite a good job over the past several decades to make sure that’s happened, as the amount of oil we’ve had to import from the Mideast, from Africa, from Mexico and Canada has skyrocketed. This background is helpful in framing the BP well blowout in 5000 feet of Gulf deepwater. The reality of our oil demand has now touched home. In fact, it’s washing up on our coastline.

DOD and Peak Oil

This is the Energy Summary from the DOD’s 2010 Joint Operating Environment Report.  The possible supply crunch circa 2012 would be the equivalent of shutting down Saudi Arabia.

Energy Summary
To generate the energy required worldwide by the 2030s would require us to find an additional 1.4 MBD every year until then.

During the next twenty-five years, coal, oil, and natural gas will remain indispensable to meet energy requirements. The discovery rate for new petroleum and gas fields over the past two decades (with the possible exception of Brazil) provides little reason for optimism that future efforts will find major new fields.

At present, investment in oil production is only beginning to pick up, with the result that production could reach a prolonged plateau. By 2030, the world will require production of 118 MBD, but energy producers may only be producing 100 MBD unless there are major changes in current investment and drilling capacity.

By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD. {Equivalent to the output of Saudi Arabia}

Energy production and distribution infrastructure must see significant new investment if energy demand is to be satisfied at a cost compatible with economic growth and prosperity. Efficient hybrid, electric, and flex-fuel vehicles will likely dominate light-duty vehicle sales by 2035 and much of the growth in gasoline demand may be met through increases in biofuels production.

Renewed interest in nuclear power and green energy sources such as solar power, wind, or geothermal may blunt rising prices for fossil fuels should business interest become actual investment. However, capital costs in some power-generation and distribution sectors are also rising, reflecting global demand for alternative energy sources and hindering their ability to compete effectively with relatively cheap fossil fuels.

Fossil fuels will very likely remain the predominant energy source going forward.

2011 Decline in World Oil Production?

The U.S. Department of Energy admits that “a chance exists that we may experience a decline” of world liquid fuels production between 2011 and 2015 “if the investment is not there”, according to an exclusive interview with Glen Sweetnam, main official expert on oil market in the Obama administration.

U.S. no Longer Controls the Price of Oil

More from Gregor on Peak Oil and the EIA and other U.S. analysts stuck hopelessly in the past.

IEA Predicts End of Cheap Oil

More confirmation of Peak Oil (see bold highlights) from the IEA (formerly in the denial camp).

Mar 09, 2010 (Dow Jones Commodities News Select via Comtex) — By Tom Barkley

from DOW JONES NEWSWIRE

WASHINGTON (Dow Jones)–The chief economist of the International Energy Agency said predicted Tuesday that the “era of cheap energy is over,” with oil supply unlikely to keep up with demand.

Fatih Birol told the National Association for Business Economics that China will be the main driver of global oil demand, which he sees increasing by about 1.5 million barrels a day this year.

China will account for a third of that gain, with the rest split by Middle Eastern oil producers and other developing countries.

However, he predicted that demand from the major industrialized countries comprising the Organization for Economic Cooperation and Development has peaked.

“They are not anymore the drivers of oil demand, unlike in the past,” he said.

Birol said he has “serious worries” about whether future supply can meet demand.

With investment down and production declining, even if global demand remains around 85 million barrels a day by 2030, about 45 million barrels a day worth of new oil would have to be found to compensate for falling output at existing fields, he said.

The Paris-based IEA is the energy watchdog for the major industrialized nations.

-By Tom Barkley, Dow Jones Newswires; 202-862-9275; tom.barkley@dowjones.com

(END) Dow Jones Newswires

03-09-10 1457ET

Peak Oil goes Mainstream

Bank of America and Barclays Capital, two leading oil traders, have told clients to brace for crude above $100 (£64) a barrel by next year, before it pushes relentlessly higher over the decade. This is a stark contrast from recessions in the 1980s and 1990s, when it took years to work off excess drilling capacity built in the boom.

When the Bank of America and Barclay’s on board, Peak Oil has gone mainstream.  more

Will $120/barrel Oil be the New Normal?

According to gregor.us 60% of the world’s oil supply is derived from non-OPEC sources and the non-OPEC world of oil peaked in 2004.   Non-OPEC supply post 2004 was NOT responsive to the run up in crude prices.  Gregor predicts the “new normal” for oil prices post recession will be in the order of $120/barrel.

Peak Oil, Poverty, and Suburbia

Great post by Gregor on nexus between peak oil, poverty, and the American suburb.

By 2008, suburbs were home to the largest and fastest-growing poor population in the country. Between 2000 and 2008, suburbs in the country’s largest metro areas saw their poor population grow by 25 percent—almost five times faster than primary cities and well ahead of the growth seen in smaller metro areas and non-metropolitan communities. As a result, by 2008 large suburbs were home to 1.5 million more poor than their primary cities and housed almost one-third of the nation’s poor overall.

Peak Oil – Peak Globalization

Jeff Rubin, the former Chief Economist of CIBC World Markets and the author of Why Your World Is About To Get A Whole Lot Smaller explains why the return of triple digit oil prices will spell the end of globalization and a new economy anchored in relocalization.