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November 20, 2006

Is Peak Oil Over?

An interesting question. The entire Peak Oil hypothesis would disappear if someone had a cheap method of refining oil shale into something useful.

Which at least one company is now claiming it does have. $17 a barrel for an oil substitute made from oil shale.

November 20, 2006 in Economics | Permalink


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Tracked on Nov 20, 2006 11:16:21 PM


But that would esentially be the burning of fossil fuels, right? Which would still be minging, right?

Tim adds: One problem at a time, eh? Peak Oil first, then climate change?

Posted by: Robert | Nov 20, 2006 2:10:23 PM

Surely there is still a finite supply of oil shale.

Posted by: Mark Adams | Nov 20, 2006 2:23:55 PM

One problem at a time, eh? Peak Oil first, then climate change?

I'm not talking about climate change. I'm talking about the fact that its minging!

Posted by: Robert | Nov 20, 2006 2:25:35 PM

The key technology which already exists is not only about producing crude oil from oil shale and oil sands (which is huge business in Canada and basically drives the economy of Calgary - Canada has oil reserves more than the whole Middle East if oil sands qualified under US stock exchange rules).

It is also about deriving refined oil products directly from coal. Sasol (the S.African co is big in this technology) and China and the US state of Montana (which sits on a gazillion tons of coal) are big customers. Google 'coal to oil' or 'coal to liquids' and see what you get.

The world is awash with hydrocarbons and crude oil will probably decline in relative importance. This is going to be very tough for green legislators though, as it means that we can keep burning oil or oil like substances for centuries. Also if coal based fuels and oil sands / shales are seriously developed then the relative geopolitical importance of the Middle East will decline.

Posted by: Patrick | Nov 20, 2006 2:28:43 PM

I think the Greens would still say that it is still finite and therefore we ought to conserve it.

Posted by: J | Nov 20, 2006 2:57:39 PM

Robert: "I'm not talking about climate change. I'm talking about the fact that its minging!"

But so are cyclists, so it all evens out in the end.

Does this story really surprise anyone? High oil prices incentivise the development of alternative sources of fuel. Who'd have thought?

Personally, I'm hoping that that all the money being spent on battery technology will finally produce an electric car competitive with conventional internal combustion engines - i.e. low price, high range, fast recharge. This is the true nightmare for the Saudis and would do more to modernise (maybe even democratise) the Middle East than a dozen Iraq fiascos.

About the only downside would be that it would make cyclists happy. Meh, can't have everything.

Posted by: MCrab | Nov 20, 2006 3:23:58 PM

Sure thing. I am a cyclist precisely because fuel for cars is too expensive for my modest monthly budget. Show me a battery powered car that doesn't cost me an arm and a leg (both of which I really need for my nefarious cycling anyway) and I'll buy it. The incentive is already there, no?

Posted by: Robert | Nov 20, 2006 4:09:22 PM

If you think that car fuel is expensive, how much do you think cycling fuel is?


Posted by: Kay Tie | Nov 20, 2006 4:48:49 PM

I cycled to work because it was quicker than using "public" transport.

Posted by: AntiCitizenOne | Nov 20, 2006 4:50:34 PM

Peak Oil as a hypothesis makes absolute sense a priori. The issue is, a) no one will be able to determine the shape of the peak until after the fact; and b) the consequences of oil peaking may bear no resemblance to the fantasies Peak Oilers like to entertain.

Posted by: Steve | Nov 20, 2006 9:43:04 PM

Does extracting oil from shale consume more energy than the energy released by burning the oil produced? I haven't made the time to check this, but doesn't the Peak Oil hypothesis depend on the assumption that extraction of oil from shale is unviable in energy terms? Just a thought.

Posted by: The jabberwock | Nov 20, 2006 10:36:30 PM

The oil thing is all very nice, but I betcha there'll be a lot more laughs in watching the neo-Nazis, ANSWERites, Gallowayans, and other kooks freak out over the prospect of the Jews cruelly, greedily, and perfidiously making energy more affordable. I've got five bucks here says at least one lefty type is going to observe that I. G. Farben did stuff with carbon compounds, and now the Jews are doing it too, which proves the Jews are Hitler!

(Shhh! Don't tell them the Jews are made out of carbon too!)

This is like Christmas in so many, many ways.

P.S. The process requires bitumen, a by-product of conventional oil refining. So it's partially dependent on conventional petroleum, until/unless they can work around that requirement.

Posted by: P. Froward | Nov 20, 2006 11:00:54 PM

Much as though it pains me to say this, the Middle East's oil reserves will ensure that the region remains as important as it is now until the youngest reader on here is well into retirement. Do the numbers and see for yourselves. The notion that the Middle East will lose its importance in the world due to new technology is fanciful, at least for the next 50-60 years or so.

Posted by: Tim Newman | Nov 20, 2006 11:30:23 PM

"Does extracting oil from shale consume more energy than the energy released by burning the oil produced?"

Seems unlikely. That would suggest that someone would spend more on the fuel used in production than what they'd be able to sell the fuel for. If you think that's a good idea, I've got some Farepak shares to sell you.

Posted by: Tim Almond | Nov 21, 2006 8:04:14 AM

How much natural gas does the process use?

Posted by: Alex | Nov 21, 2006 11:58:38 AM

Given oil at $14 a barrel for the forseeable future we can safely consider any CO2 emissions path as hopelessly optimistic. Anybody want to do climate projections for say 700ppm?

Reminds me of the Canadian company that wants to build a nuclear plant to extract oil from tar sands. Did they have how to maximize environmental damage brain storming session, or what?

Posted by: teme | Nov 21, 2006 1:08:06 PM

Given oil at $14 a barrel for the forseeable future...


Posted by: Tim Newman | Nov 21, 2006 10:18:26 PM

Re WTF: The tech promises cheap oil, Lambert used $17 a barrell, I think I got $14 from some other source. This would be good in many ways, but also very bad as far CO2 emissions are concerned.

Posted by: teme | Nov 22, 2006 7:00:43 AM