Peak oil refers to production, meaning once we reach peak, we will never be able to extract more from currently known means. Oil is funny. There is plenty of oil, but much of it is too difficult to harvest from an economic standpoint. That's what makes shale oil techniques such a breakthrough. It's economically easier to get to what was once not.

From Wiki.

Peak oil, an event based on M. King Hubbert's theory, is the point in time when the maximum rate of extraction of petroleum is reached, after which it is expected to enter terminal decline.

https://en.wikipedia.org/wiki/Peak_oil

It's also worth noting that "too difficult to harvest from an economic standpoint" is a moving target. If prices go up, oil which was not possible to extract profitably can become profitable. That means that "running out of oil" won't happen absent some crazy government intervention, since as supplies dwindle, prices will go up, and new oil will become profitable to produce.

This is worrying in terms of climate change because "difficult to harvest" usually means "energy-intensive to harvest." For example, tar sands require expending around 20-30% of their energy content to extract them in usable form, which means that CO2 emissions from burning that oil are effectively 20-30% higher.

If peak demand means we'll be able to leave the most difficult oil in the ground, that's excellent news.

>It's also worth noting that "too difficult to harvest from an economic standpoint" is a moving target.

Good note. Oil is fairly inelastic. I would say terminal velocity on that would be just before it costs the same amount of energy to extract energy. That can be converted to dollars just as well. That's a good thing about renewable and alternate energy, it erodes that inelasticity so when terminal velocity hits, we aren't all breeding horses again.

It is a good thing on the long run but 3-4 trillion debt is tied up in fossile fuel economy. If that transition happens too fast thsts not a good thing.

Not good only for a small subset of people on global scale, good for the rest of humankind and future generations.

$3-4 trillion debt effect the entire humankind. Where are you going to get the money to fix the climate issues if the entire economy collapses?

Debt balances with assets across humanity - that number doesn't mean we owe $3trn to aliens.

Some of the $3trn shows up as assets in pension funds and SWFs, but much of it is hiding in the balance sheets of oligarchs and middle eastern monarchs.

Not if the value of those assets declines, as when technology advances obsolete those assets.

Very interesting. Do you have a source for this?

The idea is that carbon fuel dependent industries, which is a lot of industries and infrastructure, have issued vast amounts of debt to fund investment and medium to long term expansion and operations. If the transition to e.g. electric vehicles and solar power generation happens rapidly many of those investments will become massive liabilities and the debt will go bad. This would also lead to a crash in oil prices, so only the cheapest producers would be viable, leaving the rest sitting there on huge oil production infrastructure rusting away, with even more bad debt it will never be able to repay.

I'm not sure how likely/unlikely this is, but that's the theory.

https://www.theguardian.com/environment/2014/mar/06/could-fo...

This does frighten me. It seems that a great example of one of the many risks of this kind of problem is Donald Trump or the like.

You're arguing that the problem with Donald Trump is that he's too green and/or too into creative destruction, and will cause the oil industry to implode?

Hm.

No, I think the implication is that if oil workers lose their jobs, while Trump promises to "make oil great again" (he's certainly threatened to cut funding for green energy), oil workers might vote for Trump.

There is a very high likelihood that this has already happened, and the voting will follow in the next day or so.

I meant only that when the structure of the economy changes to quickly, reactions like Donald Trump occur. If the US had been better about integrating all the people employed by manufacturing into the "new" economy I don't think they'd be so desperate for the kind change they think Donald Trump represents.

You can't really have one without the other, can you?

I think production peak oil implies prices will rise as the market adjusts, while demand peak oil implies the opposite.

No, it implies the exact same thing - prices will rise as the market adjusts (and "economies of scale" start to crack).

That's not how the economics of mineral resources work. The marginal cost is increasing with volume, because the resources become harder and harder to find. Economies of scale only operate on the scale of individual extraction operations, which individually are vastly smaller than the overall market. That is, if demand goes down, it will not be that the same extraction operations are run at half speed, losing economies of scale. Instead, the most expensive such operations will simply never be started, and the price will fall to reflect the new cheaper marginal cost.