Profit from the Peak: The End of Oil and the Greatest Investment Event of the Century

>> Friday, October 16, 2009

This is the fifth book on peak oil I've gone through in the past two years. The previous ones: The Coming Economic Collapse, The Party's Over, Twilight in the Desert and The Last Hours of Ancient Sunlight. Needless to say, it repeats a lot of information that I had already read before, particularly when you add in being a reader of The Oil Drum.

I'm not reading anymore books on this topic until I find something that doesn't rehash what I've already read before. It took me two months to get through this book, too long given that I could have read something else much more quickly. But I am glad I read it because it gives some excellent stock recommendations along with explanations of those companies backgrounds. It is what sets it apart from other peak oil books I've read. (The Coming Economic Collapse does have stock recommendations as well; however, the ones in Profit from the Peak are geared much more to renewable energy, which is what I prefer.)

I was glad to read that they not only talked about peak oil, but also peak coal, gas and uranium. Something I find lost on most people who still doubt peak oil.

In terms of world coal consumption, China uses 36 percent, the United States 10 percent, and India 7 percent.

In terms of coal production, China is the largest producer, and will hit its peak "within the next 5 to 15 years, followed by a steep decline." The United States is the second-largest producer at 30 percent, and will likely peak between 2020 and 2030. (p. 113)
China's coal peaking first is something I always find a bit ironic since so many are worried about the effects of pollution given that China is churning out coal-fired electricity plants at a rate of at least one a week. You have to have the coal to burn before you can pollute with it.

Of course, I also love the joke about shale oil: "Shale oil—fuel of the future, and always will be." (p. 119) All those people going gaga over the Bakken Formation are chasing a white elephant. They even detail what I like to call "The Total Recall Project" in southwestern Colorado by Shell.
An electrical element is buried in the ground to heat the rock to 600 to 700 degrees Fahrenheit for three to four years and cook the kerogen. But that would open the possibility of having the liquid hydrocarbons leak into the surrounding water table, so to prevent that, the engineers are sinking chillers around the perimeter of the area to create a "freeze wall" around the heated kerogen. (p. 131)
If you've seen Total Recall, you'll remember that at the end on Mars some rods were sunk into the ground to produce oxygen. Relatively speaking, it's the same strategy minus the nifty "freeze wall." You just need a power plant larger than what exists currently in all of Colorado to power it. And all the possible water within a hundred or two hundred-mile radius, which should be a snap given southwestern Colorado's parched climate! Oil shale = white elephant. The authors politely stated (on page 132) that "[a]t this point in development, we cannot recommend any investment angles on oil shale." Hint, hint...

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