Of these, two – lubrication and aviation – are much higher value than other uses that account for the bulk of oil use – in particular, land transportation. Consequently, we can be pretty confident that the commercial aviation industry will continue to secure the oil it needs to serve its growing customer base.

Lubrication is certainly high on the ‘value list’ of oil, but I don’t think aviation is anywhere close to the top. Ahead of jet fuel, I’d put food production (pesticides / fertiliser / agricultural equipment), food distribution (road transport isn’t just private cars), home heating, detergents, solvents, pharmaceuticals, high value plastic products (from computers to watertight films to paint to tyres to syringes and so on and on).

On top of that is the fact that the military consumption of crude oil products is huge (the US military is the single largest consumer of oil products on the planet).

So I figure there’ll be plenty of people and organisations ahead of the aviation industry in the queue. Furthermore, with regards to the private car, I suspect that — left to market forces — most people will sacrifice air travel to retain the use of their car for a while longer. People living in the communter belts will continue to drive to work even if it means cancelling their weekend break in Barcelona.

And ultimately, as oil prices rise, the notion of “cheap flights” begins to disappear and it’s the cheap flights that have created the massive expansion in aviation. As I’ve said elsewhere, I don’t think the aviation industry will disappear completely; it will merely see a radical reduction in size as air travel once again becomes a luxury. So when you talk of a “growing customer base”, I think you’ve got it completely wrong.

Car owners may eventually have to look elsewhere for their energy supplies, but then energy density is less of an issue when you don’t have to lift the fuel itself into the air.

My own view is that private car usage will become a luxury soon after air travel. I don’t believe there is an adequate substitute for oil (on the scale we consume it), and don’t envision one being developed in the next ten years or so — which is my estimate for the timescale we’re looking at; in the sense that peak oil will have become clearly manifest by that point and people will be openly talking about being in the midst of “an energy crisis” or “an oil crisis”.

In fact, I believe we’ll hit that point by 2015. I’ve been predicting that date for the past 12 years or so, but always with a 5 year margin of error (given the complexity and sheer scale of the issue — the current financial crisis probably put the oil crisis back by a bit, but America’s military adventures probably brought it forward… there’s a hell of a lot of variables, so 2015 +/- 5 years is a reasonable estimate).

Of these, two – lubrication and aviation – are much higher value than other uses that account for the bulk of oil use – in particular, land transportation. Consequently, we can be pretty confident that the commercial aviation industry will continue to secure the oil it needs to serve its growing customer base.

Car owners may eventually have to look elsewhere for their energy supplies, but then energy density is less of an issue when you don’t have to lift the fuel itself into the air.

I do have Agent of Evolution on my ‘To Read’ list though.

Part three of the article I referred to in my response to Neil contains some of my thoughts on the likely free market response to peak oil.

Summary: it won’t work and the failure will be disastrous.

People have indeed been predicting the end of oil for a long time. However, it wasn’t until the 1950s that they were doing so with a demonstrably correct methodology. The notion that incorrect past predictions of an event or process automatically invalidate all future predictions is logically incoherent.

If we both get into a car and start driving, I can predict that we will run out of fuel after 10 miles. If we pass the 11 mile mark without running out, and you turn to me and claim this demonstrates that we will never run out, you are not making a valid point.

I recently wrote a three part article on peak oil which provides a very brief summary of some of what I’ve learnt after researching the subject for almost 15 years. You can find Part One, here, if you are interested (subsequent parts link on from there). It covers most of what you’ve said in your comment, but I’ll respond to the individual points anyway.

1) I will pay a million euro for an authentic unicorn horn. This statement demonstrates how obviously ridiclous is the claim that demand generates supply. In reality the market can only meet a demand under a set of specific conditions; most obvious of which is that the product or service being demanded actually exists.

2) “We have an enormous amount of tar and shale”. This is true. However, a cursory examination of the subject demonstrates that they cannot compensate for the decline in conventional oil, and moreover there are some very serious problems with their use. I suggest reading A Crash Program Scenario for the Canadian Oil Sands Industry (a peer-reviewed study carried out by Uppsala University) which concludes…

Unfortunately, while the theoretical future oil supply from the oil sands is huge, the potential ability for the Canadian oil sands industry to meet expectations of bridging a future oil supply gap is not based on reality. Even if a Canadian crash program were immediately implemented it may only barely offset the combined declining conventional crude oil production in Canada and the North Sea. The more long-term oil sands production scenario outlined in this report, does not even manage to compensate for the decline by 2030. [...]

Finally it may be of interest to recapitulate that the International Energy Agency claims that 37 mb/d of unconventional oil must be produced by 2030. Canada has by far the largest unconventional oil reserves. By 2030, in a very optimistic scenario, Canada may produce 5 mb/d. Venezuela may perhaps achieve a production of 6 mb/d. Who will be the producers of the remaining 26 mb/d? It is obvious that the forecast presented by the IEA has no basis in reality.

The fact is; the production of oil from these sands cannot be done at anything like a rate fast enough to compensate for conventional oil decline. Beyond that, the ERoI of both sources (tar sands and shale) are far lower than that for crude oil. This objection, however, is greatly overshadowed by the problems of conversion. The process consumes vast quantities of fresh water and natural gas; both are themselves experiencing depletion. The process also produces huge quantities of toxic waste for which we have yet to develop a disposal solution.

I do not doubt that the tar sands industry will attempt to fill the gap left by declining crude supplies. Those who believe it will succeed, however, have not studied the subject in any depth.

3) Forgive me; but just as you cry “rubbish” at the notion of peak oil, let me cry “rubbish” at the notion of abiotic oil. Can you provide a figure for the quantity of abiotic oil commercially produced over the past 100 years? Let me save you the time. It’s zero. The Soviet claims to have found large deposits of the stuff have been thoroughly dismissed by modern petrogeology. The notion that large quantities of abiotic oil will suddenly be discovered is simply fantasy. The notion that it hasn’t been found yet because it’s “too deep” is also extremely suspect given what we know about the physical properties of oil and the depths, pressure-tolerances and temperatures at which it can form reservoirs.

Sorry, but abiotic oil as a solution to a peak in crude is utter nonsense. I suggest you spend a little time reading about the science of petroleum geology.

4) “By definition unlimited”. Again, that’s just a ridiculous statement. How can the production of anything be unlimited in a closed system such as the earth’s atmosphere? The requirements of algal growth are sunlight, carbon, water and a number of other elements. All of which exist in very definite finite amounts on this planet.

In reality, algae is just a trendy new form of biomass and it suffers from many of the same inherent limitations (the most obvious of which, given it’s significantly lower levels of embodied energy as compared with crude oil, is the sheer space required).

Like tar sands, market mechanisms will drive a large expansion of the biomass industry. And just like tar sands, this will prove utterly disastrous from an ecological perspective while at the same time failing to compensate for crude oil decline.

5) Yes, oil is an energy storage medium, but it isn’t “simply” an energy storage medium. It is one that was created millions of years ago requiring no effort from ourselves. Until recently it could be accessed with little or no energy expenditure and in truly enormous quantities. This makes it very different from almost every other energy storage medium you care to mention (with the exception of natural gas; itself expected to peak within the next decade and a half).

Rather than repeat myself on the nuclear power issue, let me just point you to Part Two of that aforementioned article. And highlight the fact that while uranium has the potential to generate a lot of electricity, it is (a) not going to come on-stream fast enough, (b) not a solution to our liquid fuels problem, and (c) not a substitute for the mind-boggling vast number of products (from plastics to paints to pesticides) we currently derive from crude oil.

I have no doubt that you could “keep going”, but I’m not sure there’s much point. You don’t seem to appreciate the science of petroleum geology nor the ecological effects of allowing market mechanisms to deal with peak oil. Furthermore, like most poeple, you appear blissfully unaware of just how uniquely valuable crude oil truly is and the level to which our civilisation depends upon it.

OK I said 4. I could probably keep going if required.

You might like that one. I read it last summer and enjoyed it.
http://bit.ly/97u3xm

People will not choose an energy system for running their car/heating their home/flying a plane that costs them more money.

As soon as that 3% – 6% reduction per year starts there will be a major shift in capital investment. Far greater than anything a Govt can muster.

The technology in ground source heat pumps, solar etc will fly ahead at a speed you can only dream of. As soon as it becomes cheaper to heat your house or light your bulbs with another energy source you will see a huge change. Only capitalism can deliver this and only markets can respond to the huge demand for this energy that will be unleashed when the price point reaches tipping point.