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Energy Bulletin has a transcript of a speech by James Schlesinger at the recent ASPO USA conference - The peak oil debate is over.

May I start with a bromide: a resource which is finite is not inexhaustible. If you think that over, it should not be a revelation. That was a bromide… some people think a keynote should never rise above a bromide….

Some five years ago in Italy I concluded a talk by saying that like the inhabitants of Pompeii, who ignored the neighboring volcano, Vesuvius, until it detonated, the world ignores the possibility of peak oil at its peril.

Two years ago in addressing ASPO in Cork, Ireland, I argued that the peakists had won the intellectual argument, except for some minor details about precise timing, but that by and large everyone recognized that there were limits on our capacity to increase the production of crude oil as we have steadily since World War Two.

[I also argued] that peakists were no longer a beleaguered minority, that they had won, and that consequently they should be gracious in victory.

There’s an old spiritual that is relevant here. The walls of those who doubted the peak seemed to be impregnable. Nonetheless, you marched around the walls seven times and then blew the trumpets and the walls of Jericho came tumbling down.

But acceptance by knowledgeable people is not enough. The political order should respond. Nonetheless, our willingness, let alone our ability, to do anything serious about the impending inability to increase oil output is still a long way off.

The political order responds to what the public believes today, not to what it may come to believe tomorrow. It is also resistant to any action that inflicts pain or sacrifice on those who vote. The payoff in politics comes from reassurance, perhaps precluded by a rhetorical challenge.

Still, the challenge is clear in both logic and in the evidence. Let me start briefly with the logic,

If something cannot be sustained, it will eventually not be sustained… ultimately it will shrink.

Secondly, you cannot produce oil unless you first discover it (a contribution by Colin Campbell).

Third, a resource that is finite cannot continually have its production increased.

What is the evidence?

First, we remain heavily dependent on super-giant and giant oilfields discovered in the 50s and 60s of the last century… I might add, of the last millennium. Only rarely in recent decades have discoveries equaled production. Mostly, it’s been one barrel discovered for every three barrels produced.

Second, old super-giants like Burgan in Kuwait and [Cantarell] in Mexico have gone into decline earlier than had been anticipated… and going into decline have been Alaska, the North Sea, western Siberia and the like.

Third, while it is not yet “Twilight in the Desert” (as you may have read) still we are well into the afternoon, even in Saudi Arabia. Even the Ghawar oilfield is increasingly hard to sustain.

Fourth, in 2004 we experienced our first demand-driven price spike, as opposed to the previous price spikes driven by supply interruptions. We still operate at about the level of production capacity of 2004.

Next, given projected decline curves running from 4 to 6 percent, and the projected increase in demand during the next quarter century, we shall require the new capacity equivalence of five Saudi Arabias.

Even the International Energy Agency, which previously had been sanguine, now suggests that we can no longer increase production of conventional oil in the course of this decade.

Note that it is conventional oil: that is all that Hubbert talked about. Somewhat disingenuously, the debate has been turned on him by talking about fuel liquids in general, throwing in tar sands, heavy oil, coal liquids, oil shale and so on.

But clearly, large conventional oil production is increasingly no longer part of the future unless there is a technological breakthrough, which Mr. Gilbert talked about just a few moments ago, raising the ultimate recovery rate from existing fields, which at this moment we cannot expect.

Of course, there are uncertainties which make timing predictions with regard to the peak risky. Iraq, which has been held back for a variety of reasons, may come along as one of those five new needed Saudi Arabias.

Offshore Brazil and offshore oil elsewhere are promising. Shale gas, which is apparently coming in abundance (but is not, of course, oil) may somewhat alleviate the pressures on liquid fuels.

But in general we must expect to get along without what has been our critical energy source in expanding the world’s economy for more than half a century.

Can the political order face up to the challenge? There is no reason for optimism.

We are likely to see pseudo-solutions, misleading alternatives and sheer sloganeering: “energy independence,” “getting off foreign oil” and the like. All of that sheer sloganeering we have seen to this point.

The political order (which abhors political risk) tends to rely on the Biblical prescription, “Sufficient unto the day is the evil thereof.”

The Long Now has a post noting that the Long Bet about peak travel in the US has been won by Glen Raphael, who bet that there would be more passenger miles travelled in 2010 than there were in 2005 - Long Bet on Peak Travel.

The challenger - me - appears to have won the bet. But it was a real squeaker! The total was roughly 3 trillion miles for both years and there was a period of decline (associated with war and financial crash) in between that gave me a scare but 2010 finished slightly ahead.

http://www.fhwa.dot.gov/ohim/tvtw/10dectvt/page2.cfm (the december 2010 report) gives total vehicle miles traveled for the year as:

2005: 2,989,395
2010: 2,999,634

So 2010 was more, but it was very very close. See also this press release:

http://www.dot.gov/affairs/2011/fhwa0311.html

"Nation’s Highway Traffic Reaches Highest Level Since 2007"

The ABCs "Science Show" has a segment on peak oil featuring Jeremy Leggett, Fatih Birol and Chris Skrebowski - Peak oil: just around the corner.

Oil supplies are rapidly dwindling and demand is increasing leading analysts to warn of an impending oil crunch. The global oil supply has lost the equivalent of the volume of the North Sea oil reserve in 15 months. By 2014, supply is expected to fall short of demand. Other factors could bring that forward. Fatih Birol says the age of cheap oil is over and we all need to prepare ourselves for higher oil prices. Further he says no government is prepared for what lies ahead. Jeremy Leggett describes the oil crunch, when global supply fails to meet demand.

The ABC has an article pondering a peak in Chinese steel consumption and the impact on Australian iron ore miners - Peak steel could leave Australian iron ore miners in the lurch.

Theres a disturbing new phrase being uttered by bears in the resources game - "peak steel". And its a very different phenomenon to the "peak oil" theory, where supply dries up and energy prices soar.

Peak steel is all about too much supply, not enough demand and tumbling prices. While not conclusive proof, the recent fall in iron ore prices is showing there is a significant rebalancing of supply and demand going on. Since the start of the year spot prices are down more than 20 per cent. ...

In a recent report, the analyst team from brokers CLSA noted that "peak steel demand would be seen this decade rather than next." The CLSA research cited factors such as "the slowing pace of urbanisation and demographic trends which are going sharply into reverse."

Increasingly Chinese developers are reducing their land banks and building smaller apartments, with floor-space construction falling 27 per cent in the first three months this year. Overall, CLSA forecasts a 37 per cent decline in private property floor-space sales between 2013 and 2020.

CLSA says steel consumption in the property sector is likely to peak this year, and a similar scenario is developing in infrastructure. "We also forecast infrastructure steel consumption to peak this year, with steel demand from road and rail construction to decline," the analysts noted.

Reuters has a report on the latest IEA world energy outlook, which is starting to accept that the peak of crude oil production could have already occurred as a real possibility - IEA sees oil supply peak looming, ups price view. The Oil Drum has a summary of questionable assumptions an omissions - .

Global oil supplies will come close to a peak by 2035 when oil prices will exceed $200 a barrel, the International Energy Agency said on Tuesday, as China and other emerging economies drive demand higher.

The IEA, in its 2010 World Energy Outlook, said conventional crude oil output had already peaked and would flatten out in the next 10 years, boosting reliance on costlier and more polluting unconventional sources such as oil sands.

"Production in total does not peak before 2035, though it comes close to doing so," the IEA said in the executive summary of the report. That projection was according to the reports central case, the New Policies scenario.

The Paris-based IEA, which advises 28 industrialised countries, also raised its mid- and long-term oil price forecasts, despite slashing oil demand estimates by 2035, citing growing supply uncertainty.

Oil prices would rise even further if governments did not act to curb consumption, the IEAs chief economist and lead author of the report, Fatih Birol, told Reuters in an interview.

"The message is clear, the price will go up, especially if consuming countries do not make changes in the way they consume oil, especially in the transport sector," Birol said.

Oil hit $87.63 a barrel on Tuesday, the highest since October 2008, after hovering around $70-80 most of the year.

The world needed higher oil prices to change consuming habits substantially and spur investment as markets were becoming less sensitive to price changes, Birol said.

A key passage from page 125 of the report itself :

Public debate about the future of oil tends to focus on when conventional crude oil production is likely to peak and how quickly it will decline as resource depletion passes a certain point. Those who argue that an oil peak is imminent base their arguments largely on the indisputable fact that the resource base is finite. It is held that once we have depleted half of all the oil that can ever be recovered, technically and economically, production will enter a period of long-term decline.

What is often missing from the debate is the other side of the story — demand — and the key variable in the middle — price. How much capacity is available to produce oil at any given moment depends on past investment. Decisions by oil companies on how much and where to invest are influenced by a host of factors, but one of the most important is price (at least relative to cost). And price is ultimately the result of the balance between demand and supply (setting aside short-term fluctuations that may have as much to do with financial markets than with oil-market fundamentals). In short, if demand rises relative to supply capacity, prices typically rise, bringing forth more investment and an expansion of capacity, albeit usually with a lag of several years.

Another misconception is that the amount of recoverable oil is fixed. The amount of oil that was ever in the ground — oil originally in place, to use the industry term — certainly is a fixed quantity, but we have only a fairly vague notion of just how big that number is. But, critically, how much of that volume will eventually prove to be recoverable is also uncertain, as it depends on technology, which will certainly improve, and price, which is likely to rise: the higher the price, the more oil can be recovered profitably. An increase of just 1% in the average recovery factor at existing fields would add more than 80 billion barrels to recoverable resources (IEA, 2008). So, the chances are that the volume of resources that prove to be recoverable will be bigger than the mean estimate we use to project production, especially since that estimate does not include all areas of the world. Even if conventional crude oil
production does peak in the near future, resources of NGLs and unconventional oil are, in principle, large enough to keep total oil production rising for several decades.

Clearly, global oil production will peak one day. But that peak will be determined by factors on both the demand and supply sides. We project a peak before 2020 in the 450 Scenario. In the New Policies Scenario, production in total does not peak before 2035, though it comes close to doing so, conventional crude oil production in that scenario holding steady at 68-69 mb/d over the entire projection period and never attaining its all-time peak of 70 mb/d in 2006. In other words, if governments put in place the energy and climate policies to which they have committed themselves, as we assume in this scenario, then our analysis suggests that crude oil production has probably already peaked.

If governments act vigorously now to encourage more efficient use of oil and the development of alternatives, then demand for oil might begin to ease quite soon and we might see a fairly early peak in oil production. That peak would not be caused by any resource constraint. But if governments do nothing or little more than at present, then demand will continue to increase, the economic burden of oil use will grow, vulnerability to supply disruptions will increase and the global environment will suffer serious damage. The peak in oil production will come then not as an invited guest, but as the spectre at the feast.