Oil prices

Crude oil prices have risen from under $25 to over $130 a barrel (click images to enlarge). Gasoline prices are headed for $5 a gallon. Is it Peak Oil, speculators, the weak dollar, OPEC, or what?

The lower chart (source, PDF, page 6), by Roger H. Bezdek, co-author of the 2005 "Hirsch Report", shows the impact of demand exceeding supply. Are we there now?

I'll update this post with analyses on different sides.

Peak Oil introduction

The critical topic of Peak Oil deserves its extensive coverage in multiple books (right; click to enlarge) and websites. A good start is oil geologist and Princeton University Professor Emeritus Kenneth Deffeyes' beginning to Beyond Oil:

The supply of oil in the ground is not infinite. Someday, annual world crude oil production has to reach a peak and start to decline. It is my opinion that the peak will occur in late 2005 or in the first few months of 2006.

Based on oil geology, the peak occurs when around half of total recoverable oil has been produced. Not that we're "out of oil", but that production will inexorably fall after the peak.

This chart, data from ASPO (the Association for the Study of Peak Oil&Gas) founder Colin Campbell, summarizes where we likely are.

But won't oil companies keep finding more oil fields, especially with new technology?

No, the biggest fields were discoverd decades ago and are running down faster than new discoveries can replace them. Matthew Simmons' Twilight in the Desert summarizes numerous technical reports to conclude even Saudi Arabia's production may have peaked.

As an example, this chart from The Oil Drum's Gail Tverberg documents the United States' 1970 oil peak was never exceeded despite all of Alaska's new production. Proposed drilling in ANWR (Arctic National Wildlife Refuge) would do far less.

That's the very short version of Peak Oil. Energy Bulletin's Peak Oil Primer and the books above are good next steps. Richard Heinberg and James Howard Kunstler provide extensive background on Peak Oil, oil alternatives, and potential futures. I regularly check Energy Bulletin, Gristmill, and Robert Rapier's blog for Peak Oil and energy news. ASPO-USA will hold its 4th annual national conference in Sacramento this year, September 21-23. I'll be there.

So begins a thread that will focus on what does Los Angeles do post-Peak Oil.