In mid 1960s, oil became the world’s largest energy source in absolute terms after nearly 100 years with about 7% annual growth. Old King Coal finally had to step down from the throne and leave it to Oil as the new supreme sovereign of the global energy system.

Political tensions surrounding Israel resulted in the six-day war in 1967. Continued disagreement around Israel and the Arab-Israeli tensions lead to a new war in 1973.

OPEC declared an oil embargo "in response to theU.S. decision to re-supply the Israeli military". The embargo had immediate effect and OPEC forced the oil companies to increase payments drastically. Consequently, the price of oil had quadrupled by 1974 to nearly US$12 per barrel.

To make matters worse, the 1970s were also the time when many OPEC members completely nationalized their oil industries, such as Kuwait in 1975 or Venezuela in 1976.
Control over oil had definitively shifted from the major oil companies to the producing countries and OPEC.  

Meanwhile, domestic oil production in the USA reached a maximum in 1970 and started to decline, as had been predicted by Hubbert (1956).

Oil prices continued to be high during the entire decade. A second oil crisis occurred in 1979 in the wake of the Iranian Revolution when ayatollah Khomeini became the new leader. This event resulted in a severe disruption of the Iranian oil sector with drastic reductions of production capacity and suspended export.

Everything culminated with the Iraqi invasion of Iran, which nearly stopped Iranian oil production completely and severely hampered Iraqi production as well.

These two oil crises had a profound influence on both the USA and Europe as they faced both real and perceived shortages of oil. Nuclear energy and new energy sources were developed as the awareness of the oil dependence seeped into public awareness. The growth of oil consumption slowed, and was even reversed for a period. Economic growth also stagnated as oil prices climbed.

Although these two major oil crises did have significant repercussions, they eventually receded and the dark rivers continued to flow with seemingly equal strength once again. Or were these events a small prelude to an even bigger challenge?


As the situation slowly calmed down after 1980, prices would eventually return to their previous low levels. This was an outcome of slowing industrial economies and a stabilization of supply and demand.

Two opposing views emerged, where one stated that the oil glut was temporary and the other that excess supply was permanent.


The new millennium unveiled the peaking of several countries around the year 2000, including Mexico, Australia, India, Yemen, and even the OPEC member Indonesia.

Meanwhile, global oil consumption continued to increase.
Oil production in the North Sea is another example of how the dark flows started to diminish and were unable to keep pace with rising demand. The UK peaked in 1999, Norway in 2001 and Denmark in 2004.

From mid 2004, the entire world oil production reached a plateau as it became increasing difficult to offset the decline in existing production with new additions. Oil prices started to rise and reached an all time high of nearly 150 dollars/barrel in July 2008. However, both the entire world economy and the oil price collapsed in the aftermath as the world plunged into financial turmoil. The fuel price spike of 2008 may have played a considerable role in the economic crisis.

While more and more of the conventional oil producers reached the onset of decline in the last 20 years, producers also turned their attention to unconventional hydrocarbons in their attempts to keep the dark rivers flowing.

Canadian tar sands, heavy oils, or deepwater regions rose in importance after the 1980s and are currently vital in planning.
The increasing challenge of sustaining continued growth of oil extraction recently became even more apparent, when a deepwater drilling rig in the Gulf of Mexico triggered the largest environmental disaster in the US history in an attempt to locate new oilfields for the petroleum-craving world.

Concerns about the anthropogenic impact on global climate became an increasingly important factor for planners and policy makers. The environmental issues relating to fossil fuels made it increasingly clear that the negative impacts from continued utilization were a challenge.

In the background of all this, coal became the fastest growing energy source of all. This is chiefly powered by the rise of China and India and their coal-powered economies.

The peak in the US, Indonesian, and the UK oil production, North Sea as well as many individual giant oilfields shows that peaking and the arrival of a maximum oil production also are well established phenomena in history.

The term “finite resource” is frequently used but few people seem to ponder what it actually means. When it comes to natural resources, one can argue that production limits are determined by the extraction and creation rates. If extraction of a resource is faster than replenishment rate the resource will be “finite” in the sense that it will eventually be exhausted or depleted.

For example, uranium is a finite resource since it is originates from the ashes of supernovas, requiring many millions or billions of years to accumulate commercially interesting concentrations.

The case of whaling in 19th century is an excellent illustration of a case where a resource has been extracted at a much faster rate than it could be replaced, making it finite. In a similar way, a forest can be “renewable” if the annual outtake is no more than the annual growth.

Bardi (2005) has shown that bell shaped behaviour are typical for fossil fuel and mineral extraction, but the curve is not necessarily symmetric. However, the appearance of one or several production peaks is natural and omnipresent.

Natural resources are vital in supporting the continued well-being of the world’s population. Such physical resource limitations, primarily the case of finite resources and as fossil fuels, affect the general growth pattern.



EROEI = Usable Energy Acquired
               Energy Expended
               
Coal and oil production require energy input to power machines, workers and other parts of the extraction process. For example, coal layers will at some point become too thin, located too deep, or containing too much non-combustible material to repay the energy investment needed for recovery of the coal. Likewise, oil production will become increasingly challenging.
Required energy investment is an as an underlying parameter that will be dominate over all other factors.
Hubbert (1982) wrote:
“There is a different and more fundamental cost that is independent of the monetary price. That is the energy cost of exploration and production. So long as oil is used as a source of energy, when the energy cost of recovering a barrel of oil becomes greater than the energy content of the oil, production will cease no matter what the monetary price may be”.

The energy return will put a limit on certain deposits and at some point it is no longer feasible to extract coal or oil as energy sources.


Today, over 80% of the world’s energy is derived from fossil fuels (IEA, 2010).

However, there have been a number of studies questioning the longevity of the world’s fossil fuel endowment and suggesting that extraction rates would one day reach a maximum and then begin to decline. The concept of resource depletion and exhaustion of the amounts available for production is by no means a new idea. It has been used by many scientists, mostly from the field of natural science, to highlight the intrinsic limitations in nature and the unsustainable exploitation of certain natural resources.

More recently, Rotty (1979) stated that one should be able to make a more accurate analysis than simply projecting continued exponential growth in attempting to estimate the energy supply and demand of the future.

However, perpetual growth is often held as a pious belief and fundamental assumption for certain economists. Naturally, perpetual growth cannot be used as an underlying assumption for non-renewable energy sources, such as fossil fuels. Even former technological and economic optimists are now seeing the end of an era with exponential growth.

This is hardly surprising, given the underlying arithmetic properties of growth and how quickly unreasonable values are reached for resource production and consumption even for modest growth rates (Bartlett, 1993; 1999; 2004).

Today, hundreds of scientific articles and studies have been performed regarding peak oil and the depletion of other fossil fuels. Combined with the environmental concerns and the suggested need to reduce greenhouse gas emissions from fossil fuel use, it is only reasonable to assume that fossil fuels will have a smaller place in the future global energy supply mix.

Concluding remarks

General findings

The present dominance of giant oilfields and their disappointing discovery trend, along with the relatively rapid decline rates together indicate that there are significant challenges for future oil production. Just offsetting the decline in existing production would require a new production capacity of something like 5 new Saudi-Arabia over the next 20 years.

UKERC (2009) summarized and evaluated many hundreds of studies on future oil supply and concluded that there is a significant risk that the world will experience a relatively imminent production peak.

Neither should coal be seen as an everlasting pillar in the global energy system. On a global scale, both coal reserves and production are focused in a few countries.

This essentially mimics the dominance of giant oilfields seen with petroleum. Depletion rate behaviour also tends to be similar to the patterns observed for oil, indicating that this is something to investigate further as a seemingly viable general approach to resource depletion problems.

Regarding future production of coal, the modelling indicates that production limitations may occur sooner than many anticipate. It appears that coal-derived fuels will be unable to bridge the gap due to diminishing oil supply.


The present dominance and dependence on coal and oil along with natural gas will also make the issue of resource depletion strongly connected to energy security.
Globalization has been fuelled by cheap and abundant energy, traded as a commodity in a free market. Increasing conflict over scarce energy would undermine the very foundations of the world-wide social, economic, and political normalization processes that have been observed over the past few centuries.

The Lloyd's insurance market and the highly regarded Royal Institute of International Affairs (often better known as Chatham House) recently said that business is underestimating the catastrophic consequences of declining oil supply (Lloyds, 2010). An industry taskforce on peak oil and energy security, consisting of six UK companies, also concluded that peak oil was an urgent, clear, and present challenge (ITPOES, 2008; 2010). The US military also foresee a massive oil crunch is inevitable without massive expansion of production and refining capacity (JOE, 2010). By 2012, JOE (2010) claims that surplus oil production capacity could entirely disappear, and as early as
2015, the shortfall in oil output could reach nearly 10 Mb/d.

The depletion of North Sea oil (I, V) will greatly reduce European production capacity. In addition, countries previously dependent on Norwegian or Danish oil will be forced to rely on other suppliers that are generally less stable and located further away. OPEC will inherently rise in importance due to the fact that most of the worlds remaining oil is located within the Arab world (BP, 2010).

The US military also points out that the turmoil from the Great Depression in the 1930s spawned a number of totalitarian regimes that sought economic prosperity for their nations by ruthless conquest (JOE, 2010). Limited availability of fossil fuels will likely have huge effects on social and economic systems, no matter when the actual peak arrives (Czúcz et al.2010).

Curtis (2009) also concluded that increased oil prices and decreasing petroleum supply would alter trade flows and their geography. Consequently, proper understanding of how, when and where resource depletion will affect the world is essential for tackling these kind of issues and maintaining a working economy, peace, and security.

I has to ponder perceptions what did mankind do before oil?

Without oil? OMG will we die? Wood stoves and candle light? Horses ploughing fields?, Horses and carts for transportation?No heavy industries,no but more intense human input,harder labor!

At lest we wont have deaths on the roads,air we can breathe,Trees grown everywhere for the basics and much more!!!!

But I would say as the oil becomes scarce and the price of the stuff becomes so dear,will  then the alternates will find their markets.

Richard Heinberg: Documentary regarding the dwindeling supplies of oil and the rising demand for it.

Peak Everything

The Resource Pyramid

Geologists and others who routinely deal with mineral ores and fossil fuels commonly speak of a “resource pyramid”: the capstone represents the easily and cheaply extracted portion of the resource; the next layer is the portion of the resource base that can be extracted with more difficulty and expense, and with worse environmental impacts; while the remaining bulk of the pyramid represents resources unlikely to be extracted under any realistic pricing scenario. The optimist may assume that the entire pyramid will eventually be usable, but this is simply not realistic. We have built a society on the basis of cheap energy and materials. At some point, as we move down the layers of the resource pyramid, rising commodity prices and increasing environmental cleanup costs (think Deepwater Horizon) will undercut both demand for resources and economic activity in general. As that happens, we see not just higher prices, but more volatile prices.

This is exactly what happened with the oil price spike of 2008. Many commentators who understand the essence of the Peak Oil dilemma have tended to assume that, as petroleum and other resources become scarcer, commodity prices will simply escalate in a linear fashion. What we saw instead was a rapid rise in prices (driven by rising demand and falling supply, and then exacerbated by speculation) precipitating an economic crash, followed by collapsing oil prices and curtailed investment in oil exploration—which, in due course, will provoke another rapid price rise. The cycle begins again. Each time the cycle churns, it will likely have an even more devastating economic impact.

The same will happen with natural gas as conventional gas grows scarce and the industry is forced to rely on quickly depleting and expensive-to-produce shale gas; and the same will happen with copper, uranium, indium, and rare-earth elements. Meanwhile, we will puzzle over the fact that the economy just doesn’t seem to work the way it once did. Instead of having plenty of energy with which to mine gold from seawater, we will find we don’t have enough cheap fuel to keep the airline industry aloft. Alternative non-fossil energy sources will come on line, but not quickly enough to keep up with the depletion of oil, coal, and gas. Prices of energy and raw materials will gyrate giddily, but the actual amounts consumed will be dropping. In general, labor costs will be falling and raw materials prices rising—the exact reverse of what occurred during the 20th century; but the adjustments will be anything but gradual.

It will take most folks a while to realize the simple fact that conventional economic growth is over. Done. Dead. Extinct.

The End of Growth—and What Comes After
The economic crash of 2008 is commonly perceived as another in a long series of recessions, from which a recovery will inevitably ensue. Recessions always end with recovery; of course this one will as well—or so we are told.

Yet now the situation is different. With oil production peaking, climate changing, and fresh water, soil, fish, and minerals depleting at alarming rates, the computer-based scenarios of the 1972 Limits to Growth study seem thoroughly and frighteningly confirmed. Decades of expansion fueled by consumption and debt are ending; the time has come to pay bills, tighten belts, and prepare for a future of economic downsizing.

Contemplating the end of growth—not as a theoretical possibility, but as a fait accompli, forced upon us by circumstances largely of our own making—is of course a bit depressing. The 20th century was one long expansionary surge interrupted by a couple of nasty World Wars and a Depression. At the beginning of that century world population stood at a little over 1.5 billion; by century’s end, it was 6 billion. In the industrialized West, per capita GDP grew from an average of $5000 to nearly $30,000 (in inflation-adjusted terms). We all came to believe that “progress” would go on like this more or less forever.

But while we were planning for utopia, we were in fact setting the stage for collapse. We were depleting our planet’s usable resources and altering the composition of Earth’s atmosphere. And we were building a global financial regime built on the expectation of perpetually expanding consumption and debt, a regime that could not function in a condition of stasis or contraction without generating billowing crises of default, insolvency, and foreclosure.

So, instead of being characterized by a continuation of the upward trajectory we have all grown accustomed to, the 21st century is destined to be one long downward glide punctuated by moments of financial, political, and geopolitical panic. And in retrospect, we’ll all probably eventually agree that our descent began in 2008.

We really have reached Peak Everything . . . but we’ve barely had a chance to enjoy the view; how brief was our moment at the apex! From here on, it’s going to be a bumpy downward roller-coaster ride.

What’s the Point?
It doesn’t have to end that way.

If we understand the nature of the limits we are confronting, it is still possible to back our way out of the population-resources cul de sac humanity has entered.
Link -
http://richardheinberg.com/220-peak-everything
==============
There are choices, business as usual or start thinking outside the square!

lerche007 wrote on Sep 12^th, 2010 at 6:03pm:




Perhaps those alternatives haven't yet got thru to the "status quo" crowd?
===================



Utilities across the country are

building dozens of old-style coal plants

that will cement the industry's standing as the largest industrial source of climate-changing gases for years to come.

An Associated Press examination of U.S. Department of Energy records and information provided by utilities and trade groups shows that more than 30 traditional coal plants have been built since 2008 or are under construction.

The construction wave stretches from Arizona to Illinois and South Carolina to Washington, and comes despite growing public wariness over the high environmental and social costs of fossil fuels, demonstrated by tragic mine disasters in West Virginia, the Gulf oil spill and wars in the Middle East.

The expansion, the industry's largest in two decades, represents an acknowledgment that highly touted "clean coal" technology is still a long way from becoming a reality and underscores a renewed confidence among utilities that proposals to regulate carbon emissions will fail. The Senate in July scrapped the leading bill to curb carbon emissions after opposition from Republicans and coal-state Democrats.

"Building a coal-fired power plant today is betting that we are not going to put a serious financial cost on emitting carbon dioxide," said Severin Borenstein, director of the Energy Institute at the University of California at Berkeley.

Federal officials have long struggled to balance coal's hidden costs against its more conspicuous role in providing half the nation's electricity.

Hoping for a technological solution, the Obama administration devoted $3.4 billion in stimulus spending to foster "clean-coal" plants that can capture and store greenhouse gases. Yet new investments in traditional coal plants total at least 10 times that amount — more than $35 billion.

Utilities say they are clinging to coal because its abundance makes it cheaper than natural gas or nuclear power and more reliable than intermittent power sources such as wind and solar. Still, the price of coal plants is rising and consumers in some areas served by the new facilities will see their electricity bill rise by up to 30 percent.

1) DOE spokesman John Grasser acknowledged the new plants represent a missed chance to rein in carbon emissions. But he said more opportunities would arise as electricity consumption increases.

2) Experts say the widespread application of carbon-neutralizing technologies for coal plants remains at least 15 to 20 years away.
Link -
http://seattletimes.nwsource.com/html/businesstechnology/2012834766_newcoalplant...
==================
1) It seems that the DOE is also into -
redilble

R

eliable
bundant
aradpxes

 This US surge back into old Coal & the China surge in Coal Production & the building of Coal fired power stations confirms the clear intent of these two Global Economic powerhouses (pun intended), is to maintain the status quo.    

2) That said, Peak Energy is here now, we just don't have the luxury of having time on our side, we need to take action now on Renewable Energy , not back old Coal for another 20 years!

Economics and security of global supply of coal

Globally, coal, with its gasification technologies, appeared in the early 19th century. The discovery of petroleum and gas and 100 years of declining prices, however, has hindered the demand for coal-based synthetic fuel conversion.

Nevertheless, due to the larger known resources and reserves of coal, compared to crude oil and gas globally, and the current trend of higher world oil and gas prices, coal will continue to hold promise.

The growing need for electricity in China and India will drive global demand, even when, due to carbon tax, coal demand in Europe will decline.

At this moment, China is installing two to three new coal-fired power plants per week with capacities of 500 to 600 MW per plant, and has plans to continue at that pace for at least the next decade.
US demand for coal will also increase significantly, but will mainly drive increased coal production in the United States.

Coal has the advantages of the least cost and a great abundance.

The abundant coal resources are distributed in regions of the world other than the Persian Gulf, the unstable region that contains the largest reserves of crude oil and gas.

The US, China and India have immense coal reserves.

The need to use electricity to replace some of the energy lost due to the decline of oil and natural gas will put yet more upward pressure on the global demand for coal.

As the global demand continuously grows, so does the global supply. Statistics say that the global coal production will substantially increase over the next 10 to 15 years, mainly driven by Australia, China, former Soviet Union countries, such as Russia, Ukraine, Kazakhstan, and South Africa.

However, this stable growth — and only up to a certain period after that — will likely be compatible with the world policy scenario, in which coal production is constrained by climate policy measures. MIT projects a window of 50 to 75 years, world coal production will then reach a plateau and will eventually decline thereafter.

However, in the absence of a technological breakthrough, coal, in significant quantities, will remain indispensable.

Our dependency on coal for decades ahead is indispensable. Worse, this is likely to involve a massive increase in low-grade coal production, as more than half of our reserves are low-grade — possessing a high water but low calorie content and higher ash disposal — producing more CO2 per ton of coal.

What is needed is a Project Apollo for coal — sizeable and global coordinated efforts to acquire clean coal knowledge, without which we are doomed to stall.
Link -
http://www.thejakartapost.com/news/2010/09/14/economics-and-security-global-supp...
==============

Well, one thing is for sure, a great big Technology breakthru is needed and it is needed urgently!

But if its just more of the same old, same old, then yes, we are doomed to stall.

A couple of abservations -
1) I just can not see clean coal, it would be a waste of time & resources, which could be better used elsewhere.
2) Yes, you did read correctly, it said "China is installing two to three new coal-fired power plants per week, but I can not see that pace continuing for another decade.
3) Yes, lower grade Coal, will lead to more CO2, which will accelerate Climate Change.