ASPO-USA, the Association for the Study of Peak Oil & Gas, is having a conference in Sacramento. The Oil Drum has been posting daily summaries:

The next speaker was  Matt Simmons whom I have heard on numerous occasions, but who this time talked into a silence as intense as any I have heard. He scared the audience in a way I have not seen before, perhaps because we were all much more willing to believe this time, given his record from the past.

He noted at the beginning of his talk that there are 150 miles of unit trains leave Wyoming every day. (Ed note – a 1-mile unit train contains 110 rail cars of 100 tons of coal each.) He talked about the elements of risk that we have now forgotten how to apply. He noted that we have forgotten how savage a collapse can be, or how fast it can occur. (Enron unfolded in 7 days. The events of the last week showed how even faster collapse can come now). The delays in bringing oil production on line from the recent hurricanes will only underline this point.

As a result places are running out of gasoline (Ed note the two folk next to me at the table were from Atlanta and Tennessee and neither town had any gas stations left with fuel, as far as they knew). The South is going to have to cope with a growing shortage until more of the infrastructure comes back on line, and that may be weeks into the future. This will get worse if all motorists suddenly start topping up their tanks, since this will sensibly empty the floating reserve that is the volume moving through the system at the moment. This will, in turn, remove confidence in the system, which will make the situation worse. The heating oil situation for the North East is only going to get worse in this scenario. And there is no data on how close to a collapse we currently are. And the collapse could well be a disaster equivalent to that of Gustav/Ike squared.

He noted that contrary to the solutions for the financial world there is no insurance policy that can help with Peak Oil. The paradigm is changing and sadly the world is still Energy Illiterate.

He also commented, having talked with producers of the new gas wells being drilled in the various shale formations around the country, that this is close to, if not already at a point where the energy costs to sink the well are not returned by the gas recovered from it. Further in talking with Baker Hughes folk (the ones that track the wells that are drilled around the world), he found that those who thought depletion in old fields was less than 5% got no takers from his audience, 60% of the audience thought that depletion was between 6 and 8% and the remainder thought that it was in the range above 10%. (As noted earlier the assumed value is often taken as somewhere between 2 & 4% with TOD using around 4.5%). It was by far the most pessimistic that I have heard him give.

I haven't seen anything in the news about shortages being so widespread.