(Note: Commentaries do not necessarily represent the ASPO-USA position.)

Everyone in the Peak Oil Community knows the danger of making predictions. As the poet Burns framed it, “The best-laid schemes o’Mice an’ Men / Gang aft agley.” What gang aft agley more often than our energy and environmental situation these days? Trying to call the future is a challenging project. But ASPO-USA and Peak Oil Review have combined to pull together predictions about what we can expect in 2011 from a wide range of thinkers, writers, scholars and experts, who graciously agreed to risk being wrong so that you can have the inside scoop!

I believe that oil prices in the US will average $88-92 a barrel in 2011 but may climb toward $100 by the end of the year, while natural gas prices in the US will average $4.00-4.25 in 2011 but may climb toward $5.00 by the end of the year. I believe that much of the “shale gale” euphoria will begin to unravel in 2011 and there may be some important distress situations or even bankruptcies that will underscore the risk of these ventures. I suspect that the rush to “liquids-rich” gas plays in the US will be exposed as low-resource potential ventures rather than another Saudi Arabia of crude oil. I imagine that the miracle of Chinese growth will begin to show some weakness in 2011 as state-directed economics becomes unstable. The PBC has been artificially keeping inflation low by buying dollars and creating bonds to keep the money supply low. The loans for big infrastructure projects will not uniformly perform. This cannot last. True inflation is higher than revealed and, when it is known, will show the vulnerability of the economy because the rural sector is not sharing prosperity with the urban sector. Sovereign debt problems in Europe will continue to create instability in the global economy. The EU concept is flawed because a single currency does not allow weak economies to devalue their currency.

–Arthur Berman, petroleum geologist and board member of ASPO-USA

I expect 2011 will be a year of recession and increasing layoffs. It may start off reasonably well, but then an attempted price rise of oil to, say, $120 barrel, will prove to be too much for most economies. There will be countries and smaller political subdivisions (state, city) that take steps to restructure their debt with longer maturities. All of this will drive interest rates up, and make credit harder to find. The recession will worsen as credit contraction ensues. Governments will scramble to try to keep each other and banks from failing. In some cases they will be successful; in other cases they will not be.

Gail Tverberg, actuary and writer, is editor of The Oil Drum.

The US will fail to produce a meaningful energy policy even as energy is increasingly understood by the people as a key input, the cost of which threatens to cripple family economies. As federal and political solutions fail further, the economy continues to limp along, with more and more folks out of work, causing severe local and state cutbacks and even state and municipal bankruptcies. And this gets to the crux of the cultural shift that I see. Increasingly unemployed people will hobble social services, exposing a culture in clear decline with no plan to address it. The federal government and centralized business will have less and less relevance. In response, the unemployed and underemployed “underclass” will either take re-localization to the next level, getting very creative and energized as they craft compelling and imaginative yet practical local solutions including bartering, more local currencies, more mass transit and carpooling usage, organic community building, more food production, and simpler local living. But the will has to be there even as we feel exhausted and unsure and resources are limited.

— Lindsay Curren is editor of Transition Voice, the magazine covering peak oil, climate change, economic crisis and the Transition movement response.

I’ll now venture to name 2011 The Year of the Stone that Grinds the Family Jewels. Well, either that, or, as my writing partner Stoneleigh phrases it: The Year of The Margin Call. We can extend and pretend only so long. We can hand over only so many years of the people’s future earnings to the banks. That is, before someone becomes suspicious of what we do. The realization that there is simply no way we can pay down our debts, whether we’re in Ireland, California or Japan, will dawn in 2011, no matter what stories are spun in capital cities and TV studios. It’s high time to get out of the way of the wave that’s-a-gonna-be-a-comin’, and no, timing the market is NOT the main concern, even as finance types would have you believe it is. It’s getting out of the way of the wave that should be your main concern.

— Ilargi, The Automatic Earth

We predict (with relatively little certainty assigned to it) that there will continue to be (for a while) a mild economic recovery, which will increase the demand for oil, and thus require the increased use of higher-priced oil. This will eventually require that 10 percent or so of the US GDP will go to the price of energy, which, as in the past, will lead to an economic downturn which will lead, in time, into the same cycle again. While we are not sure of the details of timing or prices we think that Jean Laherrere’s and Colin Campbell’s concept of the “undulating plateau” will continue to describe the US (and European) economies for the forseeable future – at least until serious peak oil and declining EROI kicks in.

Charles A. Hall and David J. Murphy. Professors Hall and Murphy teach and research energy issues at SUNY-ESF in Syracuse, New York.

It looks to me as if the coal/power shortage in China is continuing to spread and will get much worse in the next two months. Beijing’s only possible short-term response is to import as much more energy in the form of oil, coal, and natural gas as they can, thus driving the oil prices above $100 a barrel in the next few months. The Wall Street consensus that China’s oil imports will fall to a 6 percent increase this year seems much too low when you factor in the need to grow at 8-10 percent, replenish stocks, build a strategic reserve, and cope with the growing coal shortage. The likelihood that we will see another 2008 type oil price spike in the next six months seems to be growing every day.

— Tom Whipple is editor of Peak Oil Review.

Not only have American social networks become sadly deteriorated, but so have the skills needed to support them: the fundamental ability to build and maintain the healthy long-term relationships that are critical for community success. Just like planting a garden or cooking from scratch, these skills have to be learned and practiced, and they have to work well in order for coalescing community groups to stay together rather than fall apart. In 2011, community facilitators will increase their focus on helping groups of people simply learn how to get along.

— Christine Patton is co-chair of Transition OKC and author of the Peak Oil Hausfrau Blog.

Solar: Solar manufacturer shipments more than doubled from 2009 to 2010. I predict that world production of solar energy systems will double again this coming year. A quarter of the growth will come from PV (photovoltaics) and the balance of growth will come from large solar thermal electric projects being installed in the US southwest and other parts of the world. Oil: As a consequence of the drilling moratorium imposed by the Gulf of Mexico Deepwater Horizon disaster, the USA will experience oil shortages in 2011 or 2012. (A steady supply from the Gulf has been dependent on new wells filling in as production from older wells declines.) Thoughts of seeking satisfaction of market demand from sources more remote than the Gulf must take into account the longer trip time that would be required for oil tankers. Lacking excess capacity, the global tanker fleet is unlikely to be able to respond, even if other oil suppliers (Africa, Middle East) could be imagined to increase their production.

— Ron Swenson, ASPO-USA Board of Directors

I’m looking at two things for 2011. 1) If the WikiLeaks phenomenon grows, we will see the release of documents that confirm what we have been saying about energy shortfalls, corporate domination of governments, and foreign policies aimed at control of resources. 2) There will be continued government cutbacks in pensions and social services in industrialized countries, such as the US, UK, Ireland, Spain and Greece. In France this year, millions demonstrated and went on strike. Popular protests such as these could change the political landscape.

— Bart Anderson, teacher, journalist and technical writer, is co-editor of Energy Bulletin and active in Transition Palo Alto.

I hate making predictions. The world situation is so complex now with demand and supply factors going all directions short-term, so that even if we know the long-term trend (depletion and decline) it’s really hard to make a meaningful one-year forecast. Okay, so, that said, here’s a shot in the dark: Asia-Pacific coal prices will rise at least 20 percent from their current level during 2011.

Richard Heinberg, author of The Party’s Over, Blackout and Peak Everything

No matter what specific years that one picks as the starting and ending points, the period from the late Nineties to the end of this decade was characterized by a double-digit average long-term rate of increase in average annual oil prices. For example, from 1998 to 2008 the average rate of increase in US spot crude oil prices was about 20 percent per year. However, what I find interesting is the progression in three year-over-year annual price declines in the 1997 to 2009 time period: down to $14 in 1998, down to $26 in 2001 and down to $62 in 2009. Note that each successive year-over-year price decline was to a level that was about twice the level reached during the prior decline. If this pattern holds, the next year-over-year price decline would bring us down to an average annual oil price of about $120, in the context of a long-term average double-digit rate of increase in annual oil prices, which is what we are seeing in 2010, versus 2009.

Jeffrey J. Brown, independent petroleum geologist

Rob Hopkins’s application of Alexander’s -A Pattern Language‖ to Transition Town initiatives will be accepted as a coherent way to organize and disseminate the emerging insights from the many small experiments being conducted. As an -open source‖ framework, this language will grow organically. Far-reaching ideas (e.g., sacredness as an essential and central feature of all community transitions, Brownlee, 7 Nov 2010), once tested and found true and useful, become new patterns for practitioners to consider for adoption in their community.

Raymond De Young, associate professor of environmental psychology and planning, University of Michigan

Washington DC, 15 December 2011: The blue-ribbon panel of economists tasked by the White House with finding the cause of this spring’s record-breaking spike in oil prices has just released its preliminary report. The panel, chaired by former Fed chairman Alan Greenspan, dismissed the suggestion that “peak oil” was responsible for the runup in prices, which briefly saw petroleum at $233 a barrel. The report states instead that speculation was to blame, and credited prompt action by the administration for the subsequent plunge in prices that brought prices back down to today’s price of $68 a barrel, a new low for the year. In other news, a White House spokesman angrily rejected claims that this summer’s stock market crash had anything to do with the price of oil, and insisted that it would have only a minor impact on the nation’s economy…

John Michael Greer, author of The Long Descent and The Ecotechnic Future

When the witches of Delaware attempt to cast their spell on big-ag ethanol subsidies, the wizards of ADM will exorcise the Tea Party from energy politics. Put another way, corporate America will turn momma grizzlies into teddy bears.

— Debbie Cook is president of the board of Post-Carbon Institute and former mayor of Huntington Beach, CA.

There is every reason to believe that we will see a food-price run-up similar to the one in 2008 in the coming year, making absolutely clear exactly how tightly food and energy prices are intertwined. Although the number of the world’s malnourished briefly fell below 1 billion this year, the number will rise again above it.

Sharon Astyk, ASPO-USA Board of Directors, author of Depletion and Abundance and Independence Days

To arrive at my most important predictions for 2011, I have attempted to be insanely optimistic and skip the usual peak-everything stuff. The Happy New Year of 2011 will see a thorough public discussion of what needs to be done to make the US a more resilient society and economy. The federal government and Congress will start working together on the development of a massive national electrified railroad system to transport goods and people. We will come off our high horse and stop hallucinating about building bullet-train tracks in a railroad system that is decidedly mid-twentieth century or earlier. Many cities across the US will embark on the crash investment in light rail and other alternatives to cars.

Subsidies for corn, soybean, wheat and rice will be repealed and replaced with a thoughtful program of developing a robust, distributed system to produce a wide variety of healthy whole foods for all. The administration and Congress will wake up to the fact that an unhealthy, obese and generally uneducated population will require an insanely expensive healthcare system that will fail if the root causes of poor health are not eliminated.

Our schools will hire science teachers who live the practice and theory of science, not merely the theory of teaching. Many families across the US will dump game stations, idiotic TV, and iPhones in exchange for conversations and books. Neighborhoods will again become centers of civic activity and common thinking. We will occasionally stop and talk to the homeless, instead of giving them a dollar or a dirty look. Economists will discover that the Earth is spherical and finite, not an infinite mathematical plane with infinitely substitutable resources. Those of us who have animals and children will pet both and smile. Republicans will occasionally talk to the rest of us, and we will respond with kindness.

Tad Patzek, chair of the Department of Petroleum and Geosystems Engineering, The University of Texas at Austin

Happy New Year from all of us at Peak Oil Review and ASPO-USA!

15 thoughts on “Predictions for 2011”

  1. Well, some pretty thoughtful prognostications. A few of my own:

    In principle, I agree with Art on prices, although they are in theory higher than the OECD can sustain even today. Or perhaps not. The next two months should tell.

    If the US and OECD countries establish “grip”, an ability to increase oil consumption in the face of rising oil prices, or if China can increase oil consumption faster than the OECD can shed it, then we may well be looking at a price spike in 2011, as Jeff Rubin has argued. I think it more likely that we will see a mini-crisis, with oil spiking to about $100, and the US economy showing the resulting strain. President Obama will retrace President Bush’s steps to Riyadh to entreat the Saudis to increase production, and the Saudis, with some spare capacity in hand, will comply. Thus, we experience a mini-spike in 2011, but no major spike, and hence no recession. That comes in 2012 or 2013, when the Saudis run out of spare capacity.

    The year ends with much consternation about oil prices, and the ASPO Conference sees record attendance.

  2. All these predictions about oil spiking more. The US government better listen to its people or we will see another recession deeper than before. I completely agree that it’s a major cause of the recession we’re supposedly getting out of now.

    Bottom line is that a small majority are getting extremely rich why most of us suffer at the pump. That brings up my question of why don’t we see more about what we can do to lower prices instead of the media reporting on how they keep rising. Duh, it’s pretty obvious.

  3. As oil supplies continue to decline into the new year the price will continue to rise. Recent history is set to repeat. Once we cross the $100 barrel threshold the flood gates will be opened with $120 very likely and $147 (again) not out of the question. This can only have dire consequences for the US and other western economies (again). Maybe then we can get the kind of public and government response necessary for effective change.

  4. Jean Laherrere had a 2006 study which says non conventional fuels will compensate for low cost oil over a rather long period of time. This seems reasonable given current pricing structures and fiscal monetary FED support measures and consistent with current DOE studies.

  5. The prime minister of Iraq recently said that he would like to see Iraq eventually exporting 12 million barrels of oil per day. Will it happen within 6 years, my target date for the start of the peak oil economic collapse? Who knows, but if it did, it could flatten the peak by quite a bit. That could push back the collapse into the 2020’s. I won’t be around to see that.
    It will be interesting to see how much oil is in the central Asian ‘stan’ countries. They cover a big area. Brazil will be capable of producing a LOT of oil starting around 2020. But by 2020, many large existing fields will be all but dry. It will take more energy to get the remaining oil out of them, than the oil you get out will yield. Burning 2 gallons of diesel to get 1 gallon of crude oil out of the ground isn’t a very good financial investment.
    John Hoffmeister, former president of Shell Oil, warned again today that gasoline could hit $5 a gallon in 2012. I think that will cause another recession in late 2012, or certainly in 2013. It won’t be the oil shortage that will get us first. It will be the massive job losses caused by the decrease in aggregate demand, that will result from the disposable income reduction caused by the much higher gasoline price. But maybe Steve Jobs will perfect teleportation to and from work before that happens. Happy New Year!!!

  6. Gasoline prices are bound to increase until August 2011. I think it could go as high as $5 per gallon and come down to $3.50 for the new low. It only came down because we were in a recession and now that things are looking up for us, well oil came rise for a while. It also is due to devaluing the dollar and demand for oil and gasoline. Countries like China and India are needing more gasoline for their citizens which means more demand. But also the deficit commission suggested a 15 cent tax on gasoline, which could cause gas to increase too. It is bad on the recovering economy from the recession, but Arabs don’t care if we can afford the prices for gasoline. We can walk if we can’t afford it, ride a bus, buy a scooter that get 100 mpg, buy an electric car, ect.. So it is our choice if we wish to complain or do something different to wait out high prices.

  7. I would only note the oil price for the past 3 months has been $80/bbl or higher. This 3 consecutive month period of oil at $80/bbl or higher hasn’t been seen since late 2007 and 2008.

  8. 2011 wil see the start of repercussions stemming from the unequal distribution of numerous “natural resources” about the planet. Multiple schemes to compensate for this lopsided distribution will be hatched by single governments and consortiums of the same all to no avail. The distribution problems are meerley a facet of the fact that there just to many of us on this planet. This too shall be resolved, but not in a nice way. Like the old add stated “you can pay me now or you can pay me later”, but you will pay. 2011 will see the begining of this process.

    RJS Independant Geologist

  9. We can not create more supplies of gas and oil. They are in decline. The price of gasoline is four times more than it was in the ’60s. What saved us then was the increase in gas mileage of the average car which today is about two to three times better. We can further improve our mileage with hybrid cars to as high as nearly 60 MPG.

    The answer is to push the American car buyer to purchase smaller, more fuel efficient cars. In 2006 Ford built an attractive sports car, the Ford Reflex, that was reported to get 65 MPG. It was a two-seater with a child seat in the back. The car got good reviews, but where is? Look at the cars that go by on the street and count the number of people in the car. About 70% have only the drive or the driver and one passenger. Yet, what are the “Big Three” selling us – 6 passenger, four door ugly cars!

    If your web site wants to solve the oil problem go to Ford and ask why they did not produce the FORD Reflex!

    Also, we need a gas tax today of 10 cents a gallon that is collected and then given as a price refund on the purchase of fuel efficient cars that get better than 30 MPG. The refund should be a graduated amount from 30 to 60 MPG. Please research this to determine how successful it would be to decrease fuel use in the USA. Then report it in your next publication.

    If you want to move people to fuel efficiency you have to go through their pocketbook.

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