The cat is starting to come out of the bag.  See this latest Globe and Mail article.

Apparently advances in new drilling technologies are starting to kick in and momentum is growing as CAPP has predicted the first increases in Canadian conventional oil production after decades of decline.

North Dakota Bakken is also starting to have a visible contribution to American oil production as well…

This is from some of the most mature and developed hydrocarbon basins in the world. For better or worse, one has to salute the resourcefulness of professionals / businesses and stable regulatory frameworks that has allowed this innovation to occur.

Perhaps the peak of oil will just be an ever-undulating plateau?

Let’s hope so.  If civilization has enough energy, it at least has the potential to confront and overcome  it’s challenges.

A very illuminating chart borrowed from Early Warning blog.

It puts recent rises in crop prices into a long term perspective.  Over the last 100 years civilization has done a pretty good job at meeting it’s own agricultural needs.

As Stuart Staniford at Early Warning points out: long term declining prices in food crops has probably led to relative underinvestment in production over time…. meaning it is likely that the capacity exists to produce more should price trends make it more economic.

The world’s not a perfect place, but the sky’s not falling in yet either… at least in terms of food production.

The dramatic change in Natural Gas Reserves and production forecasts in N. America over the last few years due to horizontal drilling and fracturing of  ”Shale/Tight” gas zones,  has got me thinking more seriously about the possibility that a similar phenomenon could be possible with oil… maybe even world oil?

The most well known play is the the Bakken shale oil play in N. Dakota, where there has been significant success and steadily increasing oil production from a zone that was not so long ago considered of no value.  And, in the Albertan energy industry where I am most familiar, most small and large oil companies these days are exploring formerly ‘tight’  oil reservoirs … and a good deal of them are having success.  New light oil is flowing out of the ground again, but for a change the plays are often more laterally extensive and thicker.

Our hydrocarbon basins in N. America are extremely mature relative to the rest of the world, but the technical expertise, infrastructure, and economics exist here to support the to development of these more difficult to produce reserves.  Of course, economics and the EROI (energy return on investment) will ultimately define how successful these plays will be, but there will be offset somewhat by increasing technical expertise, growing experience, and continued drilling technology progress.

It’s far too soon to tell if this could have an impact on peak oil theory, but I’m going to go out on a limb now and regard it as distinct a possibility. Many of the world’s oil producing basins are far less developed than N. America’s, and if this trend of initial success were one day applied on a global scale… who knows?

For a very illuminating and more sobering assessment of the challenges concerning these plays check out this post at  ”our finite world” blog.

Here’s a interesting blog post from Paul Krugman on commodity prices and inflation.

Food for thought

Economic growth is starting to return in the developed world, but debt level’s are still bloated and de-leveraging  is barely under way.  Markets are responding positively, but dangers lurk.

Sovereign debt problems are blossoming across Europe due to excesses generated in part by the inherent instabilities of a shared currency among so many diverse economies.  Austerity measures and financial loans from economically stronger European Union members appear to be putting off the problem until a future date, but for how long and at what cost will the weaker nations suffer for the sake of a greater European community?

This slow burning crisis that started on Wall Street two years ago will severely test the resolve of the European Union.  Once  one nation decides the cost of leaving the Euro behind is going to be less than the cost of austerity and de-leveraging, the Euro is done.  For a region with such a fractious ethnic and political history, it would be reckless to assume cooperation will prevail.

The stakes are massive for all involved, and possible disintegration will not be officially/publicly contemplated.   If the Euro unravels it will be sudden and without much warning.

Ride the market higher for now, but keep your stops in place… social unrest in Europe may be the catalyst.

“How can it happen that both order and disorder are constantly increasing with time?… life is a conspicuous example of example of a process involving an intimate mixture of order and disorder.”

“The simplest way in which order can arise out of disorder as the universe evolves is by the process of phase transition.  A phase transition is an abrupt change change in the physical or chemical properties of matter, usually caused by heating or cooling… The transition from warm humid arid to cold dry air plus snowflakes is a spectacular example of an order-disorder transition.”

“At all stages in the evolution of the universe we see order-disorder transitions with the same two characteristic features, first the sudden appearance of structures that did not exist before, and second the physical separation of newborn structures into different regions of space.”

“The transition from dead to living was a phase transition of a new type.  It was a transition from disorder to order in which the ordered phase acquired the ability to perpetuate itself after the conditions that caused it to appear had changed… The diversification of new forms of life on the earth is in many respects similar to the diversification of new types of celestial objects - galaxies and dust clouds an stars and planets – in the universe as it was before life appeared…the evolution of life may be seen as a continuation of the evolution of the universe… Both in the nonliving universe and on the living earth, evolution alternates between long periods of stability and short periods of rapid change.”

- Freeman Dyson, A Many Colored Glass – 2007

Some of my own thoughts on the subject.

Draw, or should I say re-draw, your own conclusions…

A classic video about perspective and scale.  Some interesting observations are made along the animated journey.

I poached this insightful bit from a recent post at Infectious Greed:

Thoughtful new musing out from Michael Mauboussin of Legg Mason on “untangling skill & luck”. It contains gems like this:

There’s a simple and elegant test of whether there is skill in an activity: ask whether you can lose on purpose. If you can’t lose on purpose, or if it’s really hard, luck likely dominates that activity. If it’s easy to lose on purpose, skill is more important.

“I make my own leap, I claim that information IS such constraints that enable a diversity of organized processes to occur, and the simple “semantics” of the contraint is the process it enables.  (Once we get to life and natural selection, the semantics will become the coordinated specific diversity of organized processes enabling life to propagate and improve by natural selection.  The “semantics” broadens out to be the biological function of a given constraint enabled organized process.

Next, step: Where to asymmetric crystals and other things come from? By breaking symmetries. The universe started highly symmetric. So for assymetries to arise, those initial symmetries must have been, and even today, continue to be broken.

I want next to show that broken symmetries, absolutely natural in physics, biology, economics, cultural evolution, can arise spontaneously, and become new sources of free energy by which work can be done. But work per unit time is power hence a first step to Chaisson’s increasing power density per gram universe over time.

I consider (again, see earlier blogs) two simple cases:

1. Consider a hollow metal sphere containing an ideal gas in free space, a closed thermodynamic system. It can do no work.  It is symmetric in the density distribution of the gas, except for square root N fluctuations, where N is the number of gas particles. Now (magically) partition the sphere with a rubber membrane into two half spheres. The symmetry is now BROKEN. But also, by chance, thanks to the square root N fluctuations, the pressure on one side of the sphere will be higher than on the other side, so will push into the less dense half of the membrane partitioned sphere. “Work”, good old fashioned physical work, has been done on the membrane and the gas in the newly compressed half of the membrane partitioned sphere. So: breaking a symmetry imposed a constraint, the membrane, which became a boundary condition, which enabled work to be done.  All of these seem to go together: break a symmetry, by human hand, or spontaneously, as below, and a constraint comes into existence, becomes an embodied boundary condition that enables work to be done.”

-Stuart Kauffman (full text here)