Chris on Financial Sense: Preparing for Peak Oil

Chris' latest interview on Financial Sense is now available. It's a 23-minute podcast that can be listened to by clicking here or on the image below:

Chris and host Jim Puplava discuss the ramifications of Peak Oil on society - basically, essential systems we depend on will start malfunctioning - then dive deeper into specific steps individuals can take in preparation.

Three of Chris' key messages are prominent throughout the interview:

  1. When things begin to unravel, they will do so faster than people expect.
  2. Our governments have no Plan B for dealing with the arrival of Peak Oil.
  3. There are constructive, relatively low-cost steps that concerned individuals can take to position themselves intelligently for the impact of Peak Oil. And undertaking them now is vastly preferable than waiting until the crisis arrives.

For those just considering taking preparatory action, this interview should provide inducement to begin today. For those already underway, it should offer validation of the wisdom behind your efforts.

Thanks to Jim for another intelligent, rational discussion of this important topic, and for making Chris a regular guest on his respected Financial Sense Newshour program 

This is a companion discussion topic for the original entry at

Peak oil-not really.

interesting.  So I guess I been worrying about this peak oil stuff for nothing

Why don’t you put forth a cogent argument for why peak oil is not a problem or  is not occuring?  please explain to me how we will be able to offset depletion in the giant oil fields such Cantarell, the North Sea, or Ghawar (once it is officially depleting).  How are we going to deal with a vastly increased oil demand from the BRIC countries?  How are we going to convert a fleet of over 100 million vehicles to pure electric vehicles (especially when the metals required are rare themselves).  Where does a flat broke nation get the capital to make this conversion? 

The article you provided the link for did not provide any data?  Perhaps you’ve read the book.  Please back your argument by data and allay my fears


The arguments of Gorelick, I hope, have been badly taken out of context or misrepresented.  Otherwise he is clearly not talking about a subject with which he has much familiarity.
To begin, his statement in response to the question “Are we running out of oil?” (itself a horribly naive question that should have been corrected by him on the spot…peak oil is not about ‘running out’ it is about maximum flow rates) he responds:

“Regarding whether or not we are running out of oil, estimates of the world’s oil reserves have continually increased over the past 50 years, and global reserves are at an all-time high. From that perspective alone, the world is not running out of oil.”

Oops.  That’s a big whiff right there.  

Reserves and flow rates are entirely different concepts.  For instance the putative reserves in the North Dakota Bakken formation are very high, but the flow rates from that thin band of highly compressed rock will never be very high.  To confuse reserves with flow rates already has my alarm bells ringing.

There are many other pretty significant errors in the rest of the article, but I’ll pause here to point out another biggie:

As far as the timing goes, transitions in technology happen relatively quickly. At the turn of the last century, every major city in the U.S. depended tremendously on horses for transportation. The automobile rapidly replaced them in a matter of about two decades. So when a physical or technological substitute is found, it will rapidly take over. One rarely goes back to an older, less efficient product or technology.

Moving from horses to oil-based transportation is not the same thing as moving from oil to electricity-based transportation.   The first is an example of a technology transition (where the energy source is abundant and the capital investment in horses is very low) and the second would be an example of both an energy and a technology transition.

As Vaclav Smil has amply demonstrated again and again, energy transitions take decades and decades, typically 40 or more years and that’s when there’s been a new, exploitable energy source to move towards.  His claim that moving from oil to electricity is just an example of a technology transition (and not also an energy transition) displays a profound ignorance.  

I sincerely hope that quote from him above is somehow in error, because otherwise this guy’s ideas are not just poorly researched, they’re actually harming the conversation by removing some illumination from the room. 

I have a question in regards to your comments about perception and the oil crises in the 1970s.  You stated that long lines at the gas pump were not secondary to a true oil shortage, but secondary to motorists topping off their gas tanks, temporarily overwhelming the current capacity of the US oil infrastructure.  So what created the perception that there was a fuel shortage in the first place?  was it the anouncement of the oil embargo or was it the high gasoline prices?  And if high gas prices were the cause, then why did it  not lead us to topping off our gas tanks this time around?