OIL DRUM INSIGHTS ON $100 OIL

From The Oil Drum: "The $100 a barrel price is a sign that times will never be the same again…The world is entering a new era, where the supply of energy will come to dominate the political landscape in a way that is currently not recognized by any of the leading candidates."

From Nate Hagens, editor of The Oil Drum: “I really don't think that people understand the magnitude of the energy lottery that we won 150 years ago or so. One barrel of oil has the amount of joules, or energy, of up to 25,000 hours of human labor. And at 40 hours a week, that's 12.5 years of labor for one barrel of oil. And the average American uses 25 barrels. That's 300 years of labor from an energy slave, just from the oil. At $20 per hour, that's $500,000 per barrel, but it's selling for under $100…”

The Oil Drum: $100 a Barrel Quickens the Beat
Marianne Lavelle, January 7, 2008 (Beyond the Barrel via U.S. News and World Report)

WHO
Nate Hagens, editor, The Oil Drum: Hagens worked at Salomon Brothers, Lehman Brothers, and ran a hedge fund before leaving for the University of Vermont to get a Ph.D. in natural resources.



U.S. News & World Report joins other major publications that have recognized the coming of Peak Oil.

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WHAT
The Oil Drum is a website dedicated to the discussion of “Peak Oil.” Hagens was interviewed on the occasion of oil prices reaching $100/barrel.

WHEN
- The Oil Drum averages 40,000 page views/day and traffic goes up and down with the price of oil.
- Hagens: “Two years ago we said, ‘You can't wait until $100 oil to start doing something.’ Now that warning obviously has to change to something else.”

WHERE
The Oil Drum “…is where geologists, physicists, and even social scientists post detailed charts and graphs and analyses on a world running out of oil. Here, you can read a technical paper on the state of depletion of Saudi Arabia's Ghawar, the world's largest oil field, or read periodic statistical updates on the status of worldwide production and how that has squared with the predictions….”

WHY
- The website was started by 2 professors who met at an energy conference.
- The goal is “…an empirical discussion based on facts, based on research, based on referenced literature…” and “… a grass-roots, community-based discussion”
- There are now 4 editors and 24 contributors, all volunteers, the majority with PH.D.’s.
- The website’s critique of oil industry and government data has had a widespread impact.
- The website is known and admired for bringing subjects as diverse as geology, neuroscience and evolutionary biology to bear on the discussion of oil supply and demand.

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QUOTES
- Hagens: “I think the main problem underpinning our system is the belief in infinite resources and substitutes for those resources.”
- Hagens: “…as recently as 1998, the EIA had their supply estimates published based on the demand estimates…I mean, think about that. This is what we think 20 years from now supply will be because that matches up with our demand!”
- Hagens: “Cambridge Energy Research Associates—they're very famous, but they've been extremely wrong…They don't focus on what can actually be recovered at an economic and an energetic profit…on the flow rate…Think of a can of Coca-Cola. You can drink that with a straw, no problem. But if you had a swimming pool and a straw, it doesn't matter that you've got all that water in the swimming pool, you can only get out as much as your straw can suck out at one time. That is a big problem right now. In the face of peak oil, even if there is enough oil to meet future demand—which I don't think there is—what matters is how fast can we get it out to productive society.”
- Hagens: “We get E-mails from people who have left or changed their jobs to better prepare for a world of high energy prices. Some people have downsized, or moved to the country and tried to grow some of their own food. Cities like Portland [Ore.] are scaling up renewable energy and creating local task forces on how the city's going to deal with the oil and gas situation.”