What The Oil Drum Meant

Oil Supply and Demand to 2025

Monthly Oil Supply Update

Seven Years More Data in the Hubbert Model

Should The Last Few Years Have Updated Your Idea of Peak Oil?

US Air Travel Plateau

Crude and Condensate Reached New Highs in Jan

Farmers still Doing Great on Oil Plateau

Life on the Plateau

The New York Times had a piece over the weekend that looked at the political risks to the Obama administration due to rising gas prices:

Rising gasoline prices, trumpeted in foot-tall numbers on street corners across the country, are causing concern among advisers to President Obama that a budding sense of economic optimism could be undermined just as he heads into the general election.

White House officials are preparing for Republicans to use consumer angst about the cost of oil and gas to condemn his energy programs and buttress their argument that his economic policies are not working.

In a closed-door meeting last week, Speaker John A. Boehner instructed fellow Republicans to embrace the gas-pump anger they find among their constituents when they return to their districts for the Presidents’ Day recess.

“This debate is a debate we want to have,” Mr. Boehner told his conference on Wednesday, according to a Republican aide who was present. “It was reported this week that we’ll soon see $4-a-gallon gas prices. Maybe higher. Certainly, this summer will see the highest gas prices in years. Your constituents saw those reports, and they’ll be talking about it.”

Global Liquids Production reaching New Heights in October

Peak Oil for Economists

A few quick thoughts on Jim Hamilton's new magnum opus.  The paper is essentially a summation of Jim's current thinking on the evidence that peak oil is near enough to care about and that it's likely to be quite economically disruptive.  It is thoroughly researched, superbly argued, and very clearly written, as one would expect from this author.  I hope and expect that it will be quite influential in getting economists to take the whole subject more seriously.

In terms of the content, long-time readers of mine will probably find a limited amount they didn't already know and little to disagree with.  Six years ago, when I first began exploring and blogging about peak oil, Jim and I had some spirited debates on his blog as well as at The Oil Drum (see here for a flavor).  However, I like to think that we are both empirical and pragmatic and six years of additional data have been enough to cause our views to increasingly converge.

The one thing that I think is sad (though perhaps understandable) is that one will search the references in vain for names like Hubbert, Campbell, Laherrere, Hirsch, Hall, etc.  The argument is couched completely without reference to the line of thinkers about peak oil that stretches back over the last fifty years.  Given the enormous walls of incredibility that prevent diffusion of thought between academic disciplines, that is arguably necessary to make a persuasive case to macroeconomists.  However, from the standpoint of giving intellectual credit where it is due, it's unfortunate that it's not possible to recognize that a number of thinkers had earlier come to quite similar conclusions using their own methods (even where one might disagree with aspects of those methods - disagreements one is free to note).

Peak Supermajor was in 2005?

Per Capita Oil Consumption Around the World

Peak Oil Per Capita

Can we Grow the Economy Any More?

Kevin Drum had an interesting post yesterday in which he collected a list of theories for why it's difficult to grow the economy any more:

1. The basic Rogoff/Reinhart observation that financial collapses due to asset bubbles just take a long time to work through. Given the size of the 2008 collapse, historical evidence suggests that it's going to take five or six years to recover, and that's that.
2. The Tyler Cowen "Great Stagnation" hypothesis. We've picked through all the low-hanging economic fruit over the past century, and like it or not, we're now entering an extended period of low productivity growth because we're not inventing lots of cool new stuff.
3. The related (I think) investment drought hypothesis. Ben Bernanke famously ascribed the housing bubble partly to a "savings glut" from overseas, and the flip side of that is an investment drought. The reason financial assets became so popular is that, even with all that money sloshing around the system, there simply weren't very many high-quality investment opportunities available in firms that make real-world goods and services, and that hasn't changed.
4. The peak oil theory. Production of oil has pretty much maxed out, which means that every time the economy gets moving it will create a spike in oil prices, which will send the global economy back into recession. We're now in a continual oil-fueled boom/bust cycle that limits our long-term growth rate.
5. The Michael Mandel contention that increased consumption simply leaks out of the economy to China and other countries. Stimulating consumption in the U.S. just won't do much for the American economy if all those extra dollars mostly get spent on overseas goods and services.
6. Various structural explanations that suggest the United States has an increasing number of workers who flatly don't have the skills to do anything useful in the modern economy — a problem that was temporarily masked by the housing bubble and was only fully exposed when the economy collapsed. This takes various forms, both weak (workers can be retrained but it will take a while) and strong (forget it, they're simply useless).
7. The self-serving group of partisan hack theories: regulatory uncertainty is the real problem, taxes are too high, the EPA is strangling America, hyperinflation is just around the corner, markets are cowering in fear of future deficits, etc. etc.

Of these, I subscribe to versions of 1, 4, 5, and 6.  But let me comment first on the ones I don't agree with.

Peak Oil is not Synchronous

Question about the New York Times

There's another couple of pieces by Ian Urbina in the New York Times.  This is the guy last seen noting that there's a lot of radioactivity in some of the wastewater from shale gas drilling/fracking.  The new pieces report on a lot of internal skepticism at energy companies and regulators, respectively, about the economics of shale gas:

But the gas may not be as easy and cheap to extract from shale formations deep underground as the companies are saying, according to hundreds of industry e-mails and internal documents and an analysis of data from thousands of wells.

In the e-mails, energy executives, industry lawyers, state geologists and market analysts voice skepticism about lofty forecasts and question whether companies are intentionally, and even illegally, overstating the productivity of their wells and the size of their reserves. Many of these e-mails also suggest a view that is in stark contrast to more bullish public comments made by the industry, in much the same way that insiders have raised doubts about previous financial bubbles.

“Money is pouring in” from investors even though shale gas is “inherently unprofitable,” an analyst from PNC Wealth Management, an investment company, wrote to a contractor in a February e-mail. “Reminds you of dot-coms.”

“The word in the world of independents is that the shale plays are just giant Ponzi schemes and the economics just do not work,” an analyst from IHS Drilling Data, an energy research company, wrote in an e-mail on Aug. 28, 2009.

Life Expectancy Declines and Peak Oil Stress?

The US Crude Production Peak is not Symmetrical

Eurozone Oil Consumption