Three graphs that should make us worry. A lot.

[GliderGuider]

1. We hit Peak Oil six years ago:



2. Net oil exports (the volume of oil available on the world market) are declining as the plateau of production meets rising consumption in oil producing nations:



3. The cost of food is very (I mean VERY) closely tied to the price of oil:



Let the implications simmer for a minute...

[SoCalDem]

1. Now I am wondering why, in 1985 oil imports dipped so much

:shrug:

[GliderGuider]

2. World oil exports fell in the mid-80s due to the Iran/Iraq war (the "Tanker War") nt

[taught_me_patience]

3. But I thought supply has nothing to do with price? High prices are all trader's fault

At least according to many DUers...

[GliderGuider]

4. Yeah, well...

This is a political board, after all. Speculation can be regulated by politicians, but geology can't. When your only tool is a hammer, every problem looks like a nail (even if you're screwed).

[XemaSab]

10. Sometimes when your only tool is a hammer...

...every problem looks like a rock. :D

[GliderGuider]

13. Meaning, "There's a rocky road ahead, might as well get hammered"?

:evilgrin:

[XemaSab]

17. .

:beer:

[krispos42]

32. Note that in the first graph, the red axis starts significantly above "0"

The green axis starts at "0".

Also note that the green line starts marching steadily upwards right at the dawn of BushCo's post-9-11 universe, where it had been steady at about $20/bbl prior for most of a decade.

[Warpy]

5. The far right of the top graph is not there

Oil prices have held pretty steady at around the $106-112/bbl mark for well over a month, while production has remained steady. That speaks to a total disconnect between supply and demand thanks to Phil Gramm "improving" the commodities markets, something also reflected in the food price index spike in the bottom graph occurring far ahead of any oil price spikes.

That's what's scary, the manipulation of commodities markets by large investment banks. That's a large part of what is behind all the rebellion in the Middle East, as people can no longer afford adequate food.

The problem isn't running out of oil. The problem is having too much of it controlled by investment banks trying to squeeze out every penny we have.

The fact that they're doing the same thing to food and other commodities doesn't make me rest any easier.

[antigone382]

6. The problem is most definitely both.

Sure, traders are going to soak every last penny they can out of whatever they can. However, the undeniable fact is that oil is a finite resource, that we have not been treating it as such, and that, once it runs out, there is no combination of alternative energy sources that can fully make up the energy gap left behind. Over the last decade or so, we have seen a series of sharp recessions, punctuated by very weak growth that never gets us quite where we were before in terms of jobs and quality of life--that trend is going to continue, and it is going to worsen, as economic development in China and the other developing nations puts greater and greater pressure on a declining resource. My hope is that we will quickly wake up and adapt.

[demwing]

8. I do not have faith in human proactivity

An alternate energy resource will only be found (or revealed) when all the profit has been bled from the product. I only hope that I'm around to see it happen...

[NickB79]

30. Has production remained steady, though?

These two links make me question that claim.

http://www.energybulletin.net/stories/2011-04-15/saudi-arabia-did-not-make-libyan-oil

http://news.yahoo.com/s/nm/us_saudi_oil

[Warpy]

31. With minor fluctuations, yes.

Remember the $5.00 gas during Stupid's reign? There were stories of full oil barges sitting off Houston with no place to offload because all the storage tanks were full. Yet the spot market price had been bid up to $140/bbl by the investment banks and hedge funds.

That's the disconnect we're seeing now. Production isn't the problem, especially with people conserving again and riding mass transit or curtailing any driving they have to do to the absolutely necessary. There is plenty of oil out there. The problem is the disconnect between supply and demand courtesy of your eager beaver in the Italian suit playing the commodities.

It's not just oil, either. Commodities have been bid up beyond all reason across the board. A lot of the unrest in the Middle East has more to do with the skyrocketing cost of basic foodstuffs than long held grudges at bad rulers finally boiling over.

[Mojorabbit]

7. What would be your best guess

at when we reach the edge of the cliff. All illustrations I have seen have a pretty steep dropoff.

[GliderGuider]

12. I expect TSTHTF sometime late this year or early next year.

It won't just be a "Peak Oil" crisis, though. There are too many other factors in play. It will probably look like an economic crisis to people in industrialized countries, while to those in "developing" nations it will look like a food sovereignty crisis. The Japanese earthquake/tsunami/meltdown has already started the ball rolling downhill.

To see why I think the final breakdown could start late this year, read GEAB N°54 - Global systemic crisis: Autumn 2011. GEAB has been consistently accurate about the unfolding of the crisis.

[demwing]

9. Where do the projections for decline in exports come from?

I don't see a link anywhere...What's your source?

[GliderGuider]

11. The graphs are from a couple of articles I wrote earlier in the year

The export projections are illustrative rather than predictive.

The original articles are on my web site:

Connecting the Dots: Food, Fossil Fuel and Population
The Oil-Fired, Grain-Fed Global Food Crisis
Is Peak Population Almost Here?

[demwing]

14. Is there any reason you see a cumulative 1% decline

beginning in 2011, when the last several years have been relatively stable?

[GliderGuider]

15. Because the decline started in 2008.

I don't think the downslope will look anything like the nice smooth curves I plotted. It will probably be bumpy and much steeper overall.

To get an idea of why I'm so worried about net exports, read the background on the "Export Land Model":

http://en.wikipedia.org/wiki/Export_Land_Model
http://www.energybulletin.net/node/35271
http://www.azimuthproject.org/azimuth/show/Export+land+model

I am much more worried about the net oil export crisis than I am about Peak Oil itself. Anyone living in an industrialized nation that is a net oil importer ought to know about it. that includes the USA and all of Europe, for starters.

There is a certain amount of tea-leaf-reading in my position, but I've been glued to the topic of Peak Oil for the last half dozen years and the bad news has never let me down.

[antigone382]

16. kick n/t

[DainBramaged]

18. If we are to believe these charts, why is there an excess of refinery capacity to demand?

And why are so many refineries for sale?

[GliderGuider]

20. These graphs speak only to the supply side of the equation

World oil consumption fell by 2.6% in 2009 due to the weak economy. A refinery that is for sale is not necessarily dark. Refinery capacity and the demand for finished product will vary from country to country.

The important thing to keep our eye on from a global perspective is world crude oil supply. Over a 5-year sliding window, world GDP tracks the oil supply with a 93.3% correlation (GDP data from Maddison, oil data from BP Statistical Review, 1965 to 2008).

[DainBramaged]

22. Not being in the industry, and seeing supply overall

In the next 25 years as I pass on, I'll start the cycle all over again.

[L0oniX]

19. Only Ceiling Cat can save us now.

[DainBramaged]

21. +1,000,000

[HolyCity2012]

23. THE END OF SUBURBIA:

Oil Depletion and the Collapse of The American Dream

"We're literally stuck up a cul-de-sac in a cement SUV without a fill-up"
- James Howard Kunstler

http://www.endofsuburbia.com/previews.htm

[NYC_SKP]

24. OilPoster dot org.... Your graphs are right. Oil is sooooo, twentieth century...

---

And hey, if you're a teacher they'll send you a free poster.

Much Bigger image of the poster is Here: http://www.oilposter.org/



The scariest part to me is hard to see, it's the yellow line.

Find the yellow line, note how it departs significantly AWAY from the available energy graph.

:scared:

[joshcryer]

25. Kick.

[Terry in Austin]

26. Kick.

[BlueIris]

27. Kick. nt

[FreeJoe]

28. I'm not that scared

If I really thought that oil was going to become scarce relative to the demand for it, I'd buy future contracts for oil. I can buy oil for delivery in June of 2019 for about $103/bbl.

[Terry in Austin]

29. A betting man, I see

So the market bookies are telling you that there will be enough?

That's one method of researching the question, I suppose, but it might be smart to back it up with a couple of others. Spreading your bets, so to speak.

B-)