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Yorkshire Miner wrote:

So if PO is a reality, why are oil producers - who employ thousands of people to research every single aspect of the energy market - actually increasing capacity?

Dear Trick,

the answer is quiet simple, Peak oil is about the whole market not the individual players that make up the market. Firm A can increase production by 1 Billion barrels a year but it will not affect the supple in a positive way if all the other firms production falls by 2 billion barrels a year total supply goes down.

The theory of peak oil was worked out by an American geologist called Marion King Hubbert in I think 1956, he used it to predict that American oil production would peak in 1970, he was right on the button and all the frantic drilling in the following years made no difference Americas oil production even when they found the massive oil field in Alaska and production began to rise never succeeded the total output from 1970. May I humble suggest that you read up on Peak Oil and factor it into your thinking, it is going to be very important in understanding what happens in the future. This is a good place to start.

http://rpc.blogrolling.com/redirect.php?r=fb415...

Deep regards

yorkshire Miner

Thanks YM, I am familiar with the theory. As mentioned by others above, global production volume is driven not just by availablity of the resource. Producers rarely run at 100% capacity even where supply is plentiful.

There are lots of reasons why PO is too simlistic and in my opinion has not happened yet. I personally do not believe that the min-2008 peak in production in was anything at all to do with actual reserves running out. If anything, it was an effort to bring the value down by oversupply. A value that was hyper-inflated by a greedy market at the top of a boom. As we saw, no-one was actually using the extra oil, and down fell the value by over $100 / barrel.

Take the PO definition of "easy" oil. We have not had "easy" since the original US oil rush days where you could put a straw into the ground and out it came. Over the decades there have been vast upstream improvements which have improved both the quality and the quantity of the product. Increases in market value and the closure of older fields have made it cost effective (i.e. "easy") to start exploiting oil sands, deep sea wells, etc - opening up vast reserves for the future.

This will continue to happen until a viable alternative is found, even if it means using biomass or other fossil fuels.

This is why I do not believe we have seen global PO. When demand outstrips supply even with everyone running at 100% capacity, when even the oil beneath the North Pole has been sucked dry, when the biomass farmers are running at full capacity, and there is no coal left to convert... then and only then will we be looking at "PO" in the rear view.

It is more likely that demand will slowly drop as viable alternatives come onto the market, such as full-range, quick charge EVs; new biomass for plastics, paints, lubricants; etc, etc.

A high oil value promotes alternatives and so in this respect can only be a good thing.