Wall Street Journal Declares Peak Oil No Longer a “Fringe” Idea

Realizing that it’s generally considered passé if not altogether wacky to talk about New York City transportation policy and politics in the context of global energy business, a Wall Street Journal story this morning confirms that global fossil fuel production appears to be hitting a plateau. In other words, Peak Oil is no longer a crazy idea and the faster that New York City can reduce its dependence on gas-guzzling cars and trucks, the better off we’ll likely be. From this morning’s paper:

A growing number of oil-industry chieftains are
endorsing an idea long deemed fringe: The world is approaching a
practical limit to the number of barrels of crude oil that can be
pumped every day.

Some predict that, despite the world’s fast-growing
thirst for oil, producers could hit that ceiling as soon as 2012. This
rough limit — which two senior industry officials recently pegged at
about 100 million barrels a day — is well short of global demand
projections over the next few decades. Current production is about 85
million barrels a day.

The world certainly won’t run out of oil any time
soon. And plenty of energy experts expect sky-high prices to hasten the
development of alternative fuels and improve energy efficiency. But
evidence is mounting that crude-oil production may plateau before those
innovations arrive on a large scale. That could set the stage for a
period marked by energy shortages, high prices and bare-knuckled
competition for fuel.

The outstanding Oil Drum blog also notes two related but extremely wonky studies by Stuart Staniford and Sam Foucher. The studies suggest that daily production from the world’s biggest oil fields are declining at a much faster rate than previously projected.

And, as he does every Monday morning, author James Howard Kunstler puts the issue into perspective; this week, following a trip to the outer reaches of New York state exurbia:

Of course, I am aware that my ability to venture easily into the
outlands of Washington County, New York, is not something that I can
take for granted much longer. A year or so from now, I may have to plan
ahead, even make sacrifices, to travel so distantly from where I live. In
the meantime, I wonder with the keenest curiosity what is going through
the minds of the people who dwell out there. Surely they’ve noticed
that gasoline is $3.25. One can easily imagine the granite countertop
in the kitchen where the bills are piling up, the frightening invoices
from Master Card and Discovery, along with dunning letters from the
company that "services" the mortgage. One can imagine the feelings of
despondency creeping up the veins of the household lord and his lady as
they contemplate the distress sale of their motorboat, jet skis,
snowmobiles, and RV — and the futility even of trying.

  • ddartley

    Fortunately, as many supposed “energy independence” people seem to know, burning fossil fuels that come from U.S. territory doesn’t hurt the environment at all. Only foreign fuel does that.

  • Larry Littlefield

    We are facing tough economic times, and who knows? Maybe frugal living, with family and friends substituted for market transactions, may come back into vogue.

    Just some of the latest news.

    http://www.msnbc.msn.com/id/21838083/

    and

    http://www.bloomberg.com/apps/news?pid=20601109&sid=aS8qyeqQhtXk&refer=home .

  • Adrian

    I think that many promoters of the “liveable city” are looking a upon the increase of oil prices with too much excitement and hope.

    When oil prices do increase to levels at which it is uneconomical for people to do their daily commute by car, there may be a period of time where people will say that we should move to areas close to the city or near to a public transport hub.

    However, a few years later, when the hydrogen fuel cell reaches mass market level, it will probably become cheaper than oil ever was to travel. And thus people may actually travel longer distances than they do now.

    The economic costs associated with introducing high density living throughout the world are too high. It will be technology that will save us and not these dramatic changes in life style.

    What is your take on this?

  • Mark Fleischmann

    Ade, if you look at hydrogen fuel cells a little more carefully, you’ll discover two things: (1) It’s an energy carrier, not an energy source. (2) Technology and energy are two different things. These are not original observations — read “The Long Emergency” by James Howard Kunstler. Walkable communities, biking, and public transport are the future.

  • “The economic costs associated with introducing high density living throughout the world are too high.”

    In the US, it is projected that two-thirds of the development that will be in place in 2050 has not yet been built. The economic cost of building this new development in high-density, transit-oriented developments will be much LOWER than the cost of building it in low-density, auto-oriented developments – not to mention the environmental costs.

    Outside of the US, most of the world’s cities already are relatively high density. No need for “introducing high density living throughout the world.”

  • We are looking at a Peak Oil catastrophe now. See this well-documented report, based on scientific and government studies: http://www.peakoilassociates.com/POAnalysis.html

  • Adrian

    Sorry, Charles. I fully agree that higher density living is much cheaper.

    However, what I meant to say is that the cost associated with people from low density locations changing to high density locations is high. And thus there is will be a need to cater for those already in low density areas.Thus, it will still be possible to live in lower density areas because of these new cleaner and cheaper technologies.

    But, I think that many in the higher density “liveable cities” advocacy, such as Berlin (one of my favourite cities), are looking a upon increasing oil prices, saying that this is the end of low density living, and I think that this is wrong.

  • Adrian

    IGNORE ABOVE, GRAMMATICAL ERRORS

    Sorry, Charles. I fully agree that higher density living is much cheaper.

    However, what I meant to say is that the cost associated with people from low density locations changing to high density locations is high. And thus there will be a need to cater for those already in low density areas. This will be achieved by newer cleaner and cheaper technologies. As a consequence it will still be possible to live in lower density areas.

    But, I think that many in the higher density “liveable cities” advocacy groups, Berlin being an example of such a city, are looking a upon increasing oil prices, saying that this is the end of low density living, and I think that this is wrong.

  • Jason A

    Considering the very scary and very real scenarios that could play out in a Peak Oil future, it’s maddening that even New York City can not place sensible restrictions on personal automobile travel.

    If our petro-intensive system of farming collapses, will Lew Fidler’s constituents eat their SUVs?

  • fred schumacher

    Prior to fossil fuels, most humans lived in low density settings. It is cheap, fast transportation that makes high density possible.

    Humans are a generalist species that prefers extensive utilization of resources over intensive. It is no accident there is only one vertical city in the U.S. Humans do not prefer to live that way.

    Today’s sprawling metropoli not only disperse population, they also disperse jobs and services. With the present state of low job security, people travel in all directions (i.e., rush hour is now isotropic) to work, since they cannot plan on living long-term near their work. Urban services, however, no matter where you live, tend to be nearby. With the decline of small market towns, rural populations, on the other hand, now have longer distances to go for services.

    The main immediate task is increasing efficiency of energy use. Finding alternate fuels is secondary. We are at Peak Oil not End Oil. The $200 billion we spend per year on the Iraq War would go a very long way toward efficiency improvement. We must immediately re-orient our priorities.

    Peak Oil and Global Warming are social problems; however, we have been focusing primarily on individual choices for solving them (for example, using flourescent lightbulbs or buying a fuel efficient car). Social problems need social solutions.

  • Ian Turner

    Schumacher:

    Fossil fuels have and continue to enable the global urbanization trend that has been happening for the last 100+ years. But it’s not because of fast transportation, it’s because of improved agricultural efficiencies. Hundreds of years ago, most people lived on a farm, because farm productivity was so low that such was the only way to feed the people.

    Today, many poor countries remain fairly rural with low farm productivity, even though relatively fast public transportation (usually in the form of buses) is available and priced at an accessible level. These countries are becoming almost universally more urban, but the change is driven by urban jobs and low food prices, and not by the mere existence of transportation.

ALSO ON STREETSBLOG

Romney Energy Plan: More Drilling, More Oil Dependence

|
Republican presidential candidate Mitt Romney unveiled his energy plan today [PDF]. The idea is to break our addiction to foreign oil — by increasing our addiction to domestic oil. If by “domestic” we mean Canada, Mexico, and the U.S. Essentially, the plan is to go bananas on oil drilling. States would have the right to […]

How Cutting Back on Driving Helps the Economy

|
Cross-posted from City Observatory As Americans drive less and spend less on fuel, they have about $150 billion annually to spend in other ways. There are two kinds of economics: macroeconomics, which deals in big national and global quantities, like gross domestic product, and microeconomics, which focuses on a smaller scale, like how the prices […]

Joe Lieberman: Did Someone Say “High Gas Prices”?

|
How obsessed is Washington with gas prices? Acting on a Streetsblog post from last week, a reader wrote Connecticut Senator Joe Lieberman urging him to support legislation that would bolster funding for Amtrak. In response, Lieberman’s office sent a long, long form letter outlining the many ways the senator is — you guessed it — […]

Bloomberg on Oil Dependence: Punditry or Policy?

|
The Daily News reports that Mayor Bloomberg made his first public statements about U.S. oil dependency on his radio show last week: This constant dependence on oil is something that leaves this country vulnerable every day. Two reasons. One, what happens if it gets cut off overseas? We’re never going to have enough capacity domestically. […]