Gail Tverberg's Contributions

The new book, Drilling Down, is not simply the story of the Gulf oil spill (although it does tell this story, quite well). Tainter and Patzek use the story of Gulf oil spill as the background for discussing the energy-complexity spiral, and its relationship to this accident.

The EIA is placing too much emphasis on what demand would be, if the price were low enough. In fact, oil, natural gas, and coal are all getting more difficult (and expensive) to extract. Prices will need to be much higher than today to cover the cost of extraction plus taxes countries choose to levy on energy extraction.

If by success, we mean “sell lots of vehicles” the answer is probably “no” unless the price comes down a lot–say 50% from today’s prices, so that price is in line with what common people can afford.

We often hear statements suggesting that by ramping up shale gas production, the US can raise total natural gas production and solve many of its energy problems, including adding quite a number of natural gas vehicles, and replacing a large share of coal fired electricity generation.

People wonder what has been happening recently, with wildly gyrating financial markets and government debt problems. It seems to me that we are bumping up against an economic growth ceiling, brought on by a limited supply of cheap oil. As a result, we appear to be headed back into recession.

Most people assume that the mismatch between US federal government revenue and expenses will go away, with enough time. All that is needed is a little “patch” now, and some more time, in order for the mismatch to disappear.

While oil supply has been roughly level since 2005, neither increasing or decreasing, there is disagreement regarding what the future will hold. In this paper, we consider the scenario in which (1) world oil supply fails to increase, and (2) emerging economies continue to grow rapidly, creating a shortage of oil that acts as a bottleneck for economic growth for OECD countries.