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Tag: investments

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U.S. crude oil production is falling because investments into shale oil production dried up as the price of crude oil fell below $60/bbl. Companies aren’t interested in putting new capital to work, and because these oil fields deplete, that means crude production is falling. Why is that significant? Because most of the world’s new oil production in the past 6 years has come from U.S. shale oil fields. It is hard to overstate the global importance of the new crude supply that came online in the U.S. since 2008

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As a lead-in to discussing the main theme of this series: the role System Justification plays in the climate change/peak oil denial strategy, it would be useful to provide a brief summary of some of the more pressing and critical facts suggesting an issue or two in Fossil Fuel Production Land….

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The painful truth is that with a decline in oil production in the years to come—coupled with increased demand once/if it does in fact increase again—as we’d like to think [hope?], with the realities of reduced investment and research in alternatives tossed into the mix, we’re rendering any prospects for growth and improved well-being nothing but delusional aspirations.

When will there be a pause in denial and the flow of misleading half-truths so that all of us can begin the complex, years-in-the-making processes of adaptation to a world where fossil fuels are not the immediately available source of energy?

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It’s just not that difficult to understand. But if your interests depend on a narrative contradicted by facts and reality, then telling only part of the story to unsuspecting others is the way to go….

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A moment’s pause to consider the practical realities of billions of others looking to improve their lifestyles on any scale by which we measure our own progress and achievements should realize immediately that a finite set of ever-more-challenging-to-acquire energy supplies needed to power those advances can only be spread so thin.

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There are—almost always—at least two sides to any story of significance and potential impact upon others. The greater the impact and potential for a range of outcomes, the more certain one can be that there are more than a handful of factors, considerations, and perspectives to be accounted for if the issue at hand is to be both understood and resolved effectively.

Ignoring the “other side” of the issue may be effective if one prefers their narrative to remain unchallenged and to provide reassurance to fellow believers, but beyond that, it’s hard to understand what the benefit might be to those seeking information if what’s shared is inaccurate or purposely incomplete.

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I suggested at the outset of this series that I did not want it to turn into yet another exercise in mocking those who do not accept the implications of peak oil. A legitimate argument could be made that I’ve failed in that objective.

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We will have to transition to a post-fossil-fuel economy eventually, either out of wisdom or chaos [1]

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The truths, unpleasant though they may be, are the truths: inexpensive, readily available oil is slowly but surely becoming less readily available, more expensive, and harder to come by. Current conditions [ultra-low prices; curtailed/canceled oil production and exploration projects; over-supply; declining investments; high debt] only highlight that the problems of maintaining an adequate, affordable, accessible supply of fossil fuel needed to power modern society aren’t going away.

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While all the buzz surrounds oil prices, the global demand side remains on solid footing: up. Supplying 33% of all energy, oil is the world’s primary fuel. Oil is so important that global demand is ever-growing: 67 million b/d in 1990, 77 million b/d in 2000, and 91 million b/d in 2014. I’ll never understand the animosity of some Westerners toward critical fuels that they depend on everyday, making their lives easier in ways their great grandparents only dreamed of. [1]

Animosity” directed to fossil fuels? Has a nice right-wing playbook buzz to it, but those of us concerned with facts have an annoying habit of insisting that all of them be considered, and that consequences must also find a place at the table where overly-broad statements otherwise prefer being alone. And how exactly does one direct animus toward an energy source which has indeed made it possible for society to enjoy a magnificent history of progress and innovation?

Perhaps that’s not really the object of animus—real or imagined … ya think?

Lower prices lead to decreased investments and efforts by oil producers, which lead to reduced production of fossil fuel resources already more difficult to access and extract….The cumulative effect is that the wondrous increases in demand and the truthful expression that those needs can only be met [so far] by fossil fuels will collide with those other truthful realities as well. It’s difficult to make the math work when dealing with a finite resource and ever-increasing demand.

No legitimate proponent of the need to consider our energy supply challenges [let alone climate change] disputes the awesome numbers bandied about when discussing worldwide resource totals. But true to form, we can’t help ourselves; we just have to go and mention the fact that resources underground or under water are not nearly the same as fuel in hand for our use.

The more difficult, expensive, and challenging production becomes under present-day circumstances, the less relevant those resource totals become. And when that issue comes into play, ever-increasing demands are confronted with the harsh realities that we can no longer just dredge up whatever need when we need it at our preferred prices and for as long as desire.

The same oil industry cheerleader offering up the quote above also added this:

Thanks to derivatives gasoline and diesel fuel, the ongoing dominance of oil in the rapidly expanding vehicle market just now reaching into developing Asia is about as sure a thing as we have in our energy/environment discussion today. If there’s ever going to be common ground between fossil fuel companies, liberals, conservatives, environmental groups, Al Gore, and the Koch bros, the anti-oil crowd HAS to get over that fact.

We already know about oil’s dominance in modern society, so we don’t actually have to “get over” anything. What the anti-fact crowd has to get over is the policy of ignoring facts and reality and recognize that their boasts about oil’s prevalence and the impressive factoid that 3 billion oil-dependent cars on the road in another quarter of a century or so are in the process of contributing a big piece to the mother of all energy supply problems.

Technology and ingenuity—alone or in combination—are not new sources of energy. Earth has what it has in terms of finite resources.

Instead of leading the cheers for the legitimately wonderful ways fossil fuels have served mankind and how dependent we still remain on those same finite resources with all of the attendant modern-day production challenges we’re now confronting, perhaps some of that exuberance and ingenuity might be directed to paving the way for the inevitability that diminishing supply and increasing demand cannot be reconciled except at great and enduring cost.

And while couching all of this as now a “moral issue” has a nice ring to it, it doesn’t add much to intelligent planning and preparation. What’s immoral is to continue to mask the unpleasant realities of supply and production with Happy Talk ideology contributing nothing to the long-term well-being of all of us so that the few benefit at the expense of the many.

~ My [wife’s] Photo: New York City at night – 05.02.12

 

* I invite you to enjoy my two new books [here and here], and to view my other writings at richardturcotte.com
 

 

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Peak Oil Matters is dedicated to informing others about the significance and impact of Peak Oil—while adding observations about politics, ideology, transportation, and smart growth.

 

Sources:

[1] http://www.forbes.com/sites/judeclemente/2015/04/19/three-reasons-oil-will-continue-to-run-the-world/; Three Reasons Oil Will Continue to Run the World by Jude Clemente – 04.19.15