Sources of my 2015 prediction for oil problems

Ross Scott

Ross Scott

Staff member
About a year ago on the blog I said that I think we might be facing major oil problems starting by about 2015. If anyone's wondering where I came up with that prediction, here are my sources:

Article 1 (The Guardian)

Article 2 (MSNBC)

So in one article, that's The Guardian giving a report about how the US Joint Forces are saying there's a potential for a big problem by 2015. In the other report, it's MSNBC stating that Kuwaiti scientists applied 47 different models to predict that oil will be peaking by 2014. I don't see either group as having a real agenda to create some sort of oil scare. In the case of Kuwait I think the reverse would be true.

But even if you don't believe that, you can always look at the existing data yourself (this graph needs to be updated though):

Source is from the IEA from November 2009

I don't put much stock in the future predictions, but you can see from the past data that we've been more or less plateauing since 2005. This hasn't really happened before in global oil production, it's more or less gone up ever since we've started drilling. To me, this says that it's likely to start going down after a while if we're plateauing right now.

Also more recently I found this, although this has been suspected for a long time:

http://www.guardian.co.uk/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaks

Anyway, I thought I'd throw this out there so people don't think I'm completely crazy saying we're probably going to be in trouble by 2015. You can interpret the data how you will.

 
it might seem grim but alternative energy options are around the corner, but really when it comes down to it, there is nothing you can do about oil depletion and worrying isn't going to do anything.

 
We saw the first hit in 2008, when the price went to 150 dollars per gallon. Fortunately, it went down quickly and we saw 'only' the greatest depression we have seen in history. In recent months, we have seen unrests in Libya and already seeing the price going up pretty neatly. (http://www.oil-price.net/)

Now, as I believe(but not 100% sure), there will be unrest in Saudi-Arabia(the 'day of rage' etc, overally in middle of march), the biggest exporter of oil. We will see some party going on over the world very soon

There will be no quick fix and we will see very obvious points that we can't live without oil. After this, I would predict quite big conversion to other energy usage. That is, how much our governments(and money) can permit our doings

Edit: @pwnsftw. The alternative energy has been always around the corner. Its just the system is not 'in favor' of the usages in this. You see... dependancy - big money - profit. And profit is the number one priority for companies. Everything else is second. I read that in the first page of the ''fundamentals of economy'' in big letters, so thats not my words

 
it might seem grim but alternative energy options are around the corner, but really when it comes down to it, there is nothing you can do about oil depletion and worrying isn't going to do anything.
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I agree that there's nothing any of us can really do about it, but information on the topic can help you make better decisions about your own life.
We saw the first hit in 2008, when the price went to 150 dollars per gallon. Fortunately, it went down quickly and we saw 'only' the greatest depression we have seen in history. In recent months, we have seen unrests in Libya and already seeing the price going up pretty neatly. (http://www.oil-price.net/)Now, as I believe(but not 100% sure), there will be unrest in Saudi-Arabia(the 'day of rage' etc, overally in middle of march), the biggest exporter of oil. We will see some party going on over the world very soon

There will be no quick fix and we will see very obvious points that we can't live without oil. After this, I would predict quite big conversion to other energy usage. That is, how much our governments(and money) can permit our doings
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I'm not sure if the recession can be attributed solely to the oil price hike, though it was probably a contributing factor. In the United States at least, we really did have a clown show going with the housing bubble that probably had more to do with that. I do think that the recession is the only reason that oil prices came back down after the 2008 hike however.
 
What many people do not seem to understand when judging this stuff is simple arithmetic. When there is a steady increase in demand in order to supply the increased demand you always need to find bigger and bigger oil reserves to keep the supply in check. Even a tiny percentage of increase each time factor can have massive effects over longer period of time. I have seen people that for some weird reason calculate based on current demand and pretend it will stay the same for the rest of time.

Watch all 8 parts of this, it is a very powerful lecture. I wish this guy had been my math teacher in high school.


 
The problem is that we lack time,i gave up believing people will spend less resources (at least on our society and by free-will),population is growing too fast because it is already too big;i do believe researches on alternative energy sources could solve the oil problem,but those researches are not profitable (even through i dont believe we could achieve a life without oil before the oil peak even if we invest on those researches);im afraid the solution found in oil'well might be the only one that can be achieved on time.

I guess malthus was right,he just forgot to mention technology.

 
What many people do not seem to understand when judging this stuff is simple arithmetic. When there is a steady increase in demand in order to supply the increased demand you always need to find bigger and bigger oil reserves to keep the supply in check. Even a tiny percentage of increase each time factor can have massive effects over longer period of time. I have seen people that for some weird reason calculate based on current demand and pretend it will stay the same for the rest of time.
Watch all 8 parts of this, it is a very powerful lecture. I wish this guy had been my math teacher in high school.
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The guy who posted those videos has some good videos about climate change as well.

I think knowing about peak oil is more important not because you can change the course of oil depletion, but because you can prepare accordingly.

 
The problem is that we lack time,i gave up believing people will spend less resources (at least on our society and by free-will),population is growing too fast because it is already too big;i do believe researches on alternative energy sources could solve the oil problem,but those researches are not profitable (even through i dont believe we could achieve a life without oil before the oil peak even if we invest on those researches);im afraid the solution found in oil'well might be the only one that can be achieved on time.I guess malthus was right,he just forgot to mention technology.
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Time never has been an issue. If work had been invested in building, say, electric cars ten years ago, we could have had vehicles like the Chevy Volt five years ago. Even better and cheaper electric cars today.

Wherever our society goes, you have to consider capitalism. Everything capitalism. The only reason Chevy would have spent the research money in developing the Volt is because they deemed that revenue exceeded cost. They saw demand for the Volt rising. They wouldn't have done that ten years ago because even though the outcome was almost just as predictable (oil prices, running out, etc), it wasn't profitable then. Even now, there isn't that much going on in the way of electric vehicles. Major car manufacturers are still going to be producing gas-guzzling vehicles for years to come because they know people will buy them. Electric vehicle technology will just inch along.

We aren't going to see shit happen until gas prices start driving us to the poor house. Electric cars won't be produced until the gas prices force customers to buy them. Unless prices for electric cars drop, which I'm saying they won't because there is no incentive for corporations to produce them, by then it might just be too late. We'll have our Chevy Volts, but at $40,000, most of consumer America will leave their cars at home.

No portion of American society will switch to alternative energy until the cost of using oil outweighs the research costs, production costs, and switching costs of alternate energy.

 
I will be the first to admit that I am a pessimist, but I am also a realist. I don't believe it is worth freaking out over. Yes it is bad. Yes we need to do something. But does it mean that civilization is coming to an end? No. No one can predict the random discoveries of man kind, nor can they predict the random disasters. For example, no one believed we could reach the moon before well into the 21st century(please no moon conspiracy theorists), but we did it. Could anyone have expected disasters such as the Haitian earthquake? No. The point I am trying to make is this. Things are going to be bad at times, but things are also going to be good. While you are worrying about gasoline there are a million other good and bad things occuring around the world. Human civilization does not advance when things are easy, when we reach a precipice we spur ourselves to advance and change. Once again, I understand the problems we must face with losing oil, but I am also hopeful of the new world that will come from the ashes.

 
I don't think a few oil problems are going to wipe us out. We're a resiliant species.
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We've lasted this long; we've faced resource problems before. This is just on a much larger, global scale. I'm going to be optimistic and NOT think that the oil companies are slowing down development of renewable energy. Hopefully we'll get those hydrogen cars in production before gas goes up to 8 dollars a gallon. http://www.gocomics.com/calvinandhobbes/1993/04/28/ (I thought I could put the text in the link, but alas)

 
The problem is that we lack time,i gave up believing people will spend less resources (at least on our society and by free-will),population is growing too fast because it is already too big;i do believe researches on alternative energy sources could solve the oil problem,but those researches are not profitable (even through i dont believe we could achieve a life without oil before the oil peak even if we invest on those researches);im afraid the solution found in oil'well might be the only one that can be achieved on time.I guess malthus was right,he just forgot to mention technology.
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Time never has been an issue. If work had been invested in building, say, electric cars ten years ago, we could have had vehicles like the Chevy Volt five years ago. Even better and cheaper electric cars today.

Wherever our society goes, you have to consider capitalism. Everything capitalism. The only reason Chevy would have spent the research money in developing the Volt is because they deemed that revenue exceeded cost. They saw demand for the Volt rising. They wouldn't have done that ten years ago because even though the outcome was almost just as predictable (oil prices, running out, etc), it wasn't profitable then. Even now, there isn't that much going on in the way of electric vehicles. Major car manufacturers are still going to be producing gas-guzzling vehicles for years to come because they know people will buy them. Electric vehicle technology will just inch along.

We aren't going to see shit happen until gas prices start driving us to the poor house. Electric cars won't be produced until the gas prices force customers to buy them. Unless prices for electric cars drop, which I'm saying they won't because there is no incentive for corporations to produce them, by then it might just be too late. We'll have our Chevy Volts, but at $40,000, most of consumer America will leave their cars at home.

No portion of American society will switch to alternative energy until the cost of using oil outweighs the research costs, production costs, and switching costs of alternate energy.
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Im not talking about what we could have done,what is done its done,im talking about how nowadays we can still fix this crap,everybody is talking about how after the shit hit the fan people will start caring about problems and will start giving up capitalism luxury,but will people do it? And if they do it,will we have enough time to fix the problem without major sacrifices?

 
Im not talking about what we could have done,what is done its done,im talking about how nowadays we can still fix this crap,everybody is talking about how after the shit hit the fan people will start caring about problems and will start giving up capitalism luxury,but will people do it? And if they do it,will we have enough time to fix the problem without major sacrifices?
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Naw, man. Capitalism will endure in some form or the other (If you ask me, it hopefully will go the way of current Scandanavian systems of socialism-capitalism, which is working out great).

I'm saying that if you are to predict the course of the future, it must be thought of in a capitalist's mind. All actions must be thought of with maximum revenue in mind. Scandanavian countries may go another way, with people allowing strong government regulation when necessary, but west Europe and American countries will be hit hard.

It isn't like the oil will suddenly disappear. We (I speak from the point of a United States commoner) will see gas prices spike to $5 a gallon and will flip shit. At that point the government will be subsidizing the shit out of oil companies (moreso than now), but society will finally get the picture that shit won't be good. By the $6 mark, people will be screaming at the automaker oligarchs to put electric vehicles on the road. Developing a line of vehicles takes time. Years. A year or two after gas hits $5, electric vehicles may hit the market in reasonable force, and will be gobbled up as fast as they leave the factory. The high demand for these electric vehicles will drive prices up, and it won't be for a long time that the American commoner will see their electric vehicle (I say $25,000 mark).

During that gap that I mentioned, the economy will hit a depression. I won't be the next Great Depression, but it'll affect the way we consume for a while. All consumer products across the board will rise in price thanks to expensive shipping costs (truck driving costs gas). Airline industries will lose customers quickly as they raise their prices to compensate for fuel.

That said, I make it sound pretty bad. It won't be nearly as bad as some of the stories out there. The last gallon of gas will not be burned by a battle tank (I won't even get into military consumption of fuel, thats beside the point). If you get anything out of what I'm babbling about, it's this: the western market economy will react sluggishly to rising oil costs, but it will seek the revenue-maximizing route and produce electric or alternate fuel vehicles and products before it leads to global destabilization. Aside from airlines, military and consumer vehicles, ships, and plastics, oil isn't much needed for anything else. Not anything that will threaten the stabilization of the economy with a sharp rise in price.

 
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