Tuesday, July 31, 2007

Have we entered the downslope?

Over at The Oil Drum recently, Ace, one of their contributors, made the following comment:

"According to IEA, current Peak Oil (total liquids) is potentially 86.13 mbd on Jul 2006. One year later, production in Jun 2007 was 84.3 mbd, which is a drop of 1.83 mbd or just over 2%/yr. This is a bigger drop than I have forecast! I hope that Jun 2007 was just an unusual month."

This is a shocking observation! While the world twiddles its collective thumbs, while the dark recesses of the human brain scream that what is happening cannot be happening, here we have this odd little fact sticking out at us.

Ace again raised this issue near the bottom of the July 30th Drumbeat section. It was again met with either raw silence or incredulity from those that saw it. Hopefully Ace will be posting more soon on his bottom up analysis which now points to peak liquids as possibly having passed by already.

This is fairly serious because if the decline rate now, at the very beginning of the downslope is 2% when it is supposed to be at its mildest, just how bad is it going to get? If 2005 was peak C&C, and if 2006 was peak liquids, and if 2% is the current decline rate at the start of the downslope, then all bets are off people. The peak decline rate may soar into the double digits somewhere, perhaps 10% to even 20%. Right now it's all a rather large crapshoot but the preliminary data do not support the happy faced crowd at all.

This fall is looking more and more like a period of initial shock and awe as nature may begin to assert real limits against a rapacious humanity. And if that happens, there is no telling what reactions will be like around the world. The race may be on for the remaining global resources and that race will not be a free market race at all. Instead it will be a military race with all that this implies.

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