The Oil Drum staff agrees that 2008 was the year the world reached peak oil.
Question: could the drop in world oil output be attributed to falling demand because of the price collapse and recession? Why pull more oil out of the ground to put on the market if demand has dropped? Am I missing something?
Don't get me wrong, I believe in peak oil, but I'm not sure that it explains the 2008 decline. I get people who come up to me from time to time to say, "What happened to your peak oil, ha-ha? Gas is $2 a gallon again." Yeah, say I, but we had to have a massive recession to make that happen. When we recover, watch what happens.
[H/T: Andrew Sullivan]
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Julie makes some good points above, but I think it's a bit of an exaggeration to say that supply and demand had nothing to do with $150 oil last year. Sure, regulation of markets was lax and corrupt over the last decade or so, but speculation serves a legitimate purpose, even if it can be abused.
When oil was at record highs last year, the US was sucking down oil products at a record pace. The US military alone was using more oil than several small countries. So demand was clearly there. With the feckless Bush administration drawing to a close and Iraq, Afghanistan, Pakistan nowhere near a resolution, there were legitimate fears that there could be big trouble in the Persian Gulf - The Supply - and that alone was enough to fuel wild speculation on oil.
If we were indeed awash in centuries' worth of cheap oil as the peak oil deniers would have us believe, or if electric vehicle nirvana was just around the corner, we wouldn't be seeing the oil price volatility we see now. And we wouldn't be bailing out the US auto makers.
Rod, I'd say that some of this is absolutely due to the collapse in demand - but it is worth remembering that oil was only "cheap" in 2008 for a few months - prices peaked in July, and remained very high by recent standards until September, while OPEC didn't make its first cuts until October if I'm remembering correctly (I'm away from my desk and it is possible I'm wrong here). That's not a lot of time in the life of a peak - I remember Matt Simmons noting that even a new North Sea find would only put off the world oil peak by a matter of a few months. So yes, it could be, but I'd think it not super likely.
Sharon
For certain, global crude oil production peaked in 2008.
Global crude oil production had been rising briskly until 2004, then plateaued for four years. Because oil producers were extracting at maximum effort to profit from high oil prices, this plateau is a clear indication of Peak Oil.
Then in July and August of 2008, WHILE OIL PRICES WERE STILL VERY HIGH, global crude oil production fell nearly one million barrels per day, clear evidence of Peak Oil (See Rembrandt Koppelaar, Editor of "Oil Watch Monthly," page 1). Peak Oil is now.
http://survivingpeakoil.blogspot.com/2008/12/top-story-of-year-global-oil-production.html
Lord save us from the flat-earthers & peak oilers.
Yes, demand is down. Due partly because near $4/gal gas finally hit the price sensitivity of a lot of Americans back in JUL2008. Due partly to the recession.
FTR, we have as much oil as we'll need for a century+ in the Colorado oil shale & Canadian tar sands. When oil moves up above $100/bbl in the future, these will come online (if not artificially barred by gov't action).
As was mentioned above, if we are near a "peak" oil, it is more accurately named, "Peak of the most easily extractable" oil.
@jfruser,
Colorado oil shale will not yield oil, and Canadian tar sands will max out at 3 million barrels per day, which is peanuts. Documented here: http://www.peakoilassociates.com/POAnalysis.html
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