So no more big price drops over time, just occasional dips against a regular rise.
Then the price of oil collapsed.
Was I humbled? Of course not! The collapse of the world economy and a certain amount of speculation played themselves out, but the price is rising nicely now. We should be back up to $120 a barrel by the summer of 2010 -- unless the oil price rises send us down into recession.
What happens then? I assumed we'd just switch to coal and melt Greenland, but maybe I was too optimistic. It happens, even to me.
The problem, as outlined in an article that predicts Peak Hydrocarbon Production by 2020, is EROEI ....
Walrus Magazine Energy Crisis 2009: An Inconvenient TalkPresumably new technologies will improve EROEIs enough to truly bake the earth, but the article is worth a read. If peak hydrocarbon output is really only 11 years away then it's within the planning horizon of energy investors and national militaries.
... Energy return on energy invested, which geologists refer to interchangeably as EROEI or EROI. Canada’s exploration treadmill. Reserves-to-production ratios.
You pick one at random, fixate on it. The historical EROEI for conventional oil is 100:1... Invest a barrel’s worth of energy drilling and refining in a spot like Ghawar, then and forever the largest single crude oil deposit on the planet, and you used to get 100 barrels of energy-dense, easily transported fuel in return. These days, conventional EROEI for such places is closer to 25:1.
The EROEI on more recent “new conventional” deposits, which Dave cites mostly by their discovery and extraction methods (“deepwater oil, horizontal wells, 3-D seismic”) is also around 25:1. In Alberta’s tar sands, the surface-mined bitumen comes to market at an EROEI of 6:1. “In situ” bitumen — sludge buried too far under the boreal forest floor to excavate, which comprises the lion’s share of the most breathless estimates of Canada’s energy superpower–scale oil production — rings in at 3:1. Corn ethanol, that darling of America’s farm states, is somewhere between 1.3:1 and 0.75:1. Shale oil, another unconventional source held by its boosters to be capable of indefinitely extending the age of oil, has never been converted into fuel at a net energy profit, at least as far as Dave has been able to ascertain....
So we should start hearing more about it pretty soon.
Personally, I've no predictions on PHP (peak hydrocarbon production) -- just "peak light sweet".