Peak Oil – Aug 2

August 2, 2006

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Many more articles are available through the Energy Bulletin homepage


When chaos replaces oil

Kathy Webb, Hawkes Bay Today (NZ)
Peter Lloyd is preparing for a ghastly future. The world he foresees is one in which it will cost $700 or $1000 to fill the family car – if petrol is available for private use.

It will be a world in which the scarcity and expense of oil, widespread pollution, environmental ruin and climate change will bring down modern civilisation in terrible anarchy as countries go to war over oil, fresh water or arable land; as ordinary people try to adjust to living primitive lives without the medicines and technology that support their lives in the 21st century.

Dr Lloyd, an anaesthetist at the Hawke’s Bay Hospital, estimates about 80 percent of the world’s six billion people will die of hunger, disease or “slaughter on a scale never before seen in history”.

New Zealand will be one of the best places to be while all this unfolds, he says, because although it will take some refugees from Australia and the Pacific Islands, it is geographically too isolated to be invaded and over-run by hordes from Asia, Africa and Europe.

…He wants to see New Zealand promoting local production for local consumption, and every New Zealand house with at least solar water-heating, but preferably solar electricity generation as well.

He’s setting an example with an extensive solar-panel system on his roof. It sends surplus electricity into the national grid, while at other times, his household draws off the grid.

He’s installed a 25,000 litre rainwater tank in his backyard, planted a modest kitchen garden, sold his beloved fuel-guzzling Land Rover, and now rides a bike to work. Electric cars are the way of the future, he says.

…A leaked copy of a report prepared for the Ministry of Economic Development by applied economics company Covec Ltd indicates New Zealand’s government is looking ahead to some extent.

Entitled “Oil Demand Restraint Options for New Zealand,” the report discusses car-pooling, compressed working weeks, working from home, tyre-pressure checks, more fuel-efficient cars, cancelling some travel, car pooling, car-less days, and lowering the speed limit on the open road to 80km/h. It says that if the shortage of oil were greater than 25 percent of normal supply, and lasted for more than three months, rationing would have to be introduced, and ways found to prevent people hoarding petrol.
(2 Aug 2006)


On the other side of the oil ‘peak’

Jeremy Wakeford, Business Day (South Africa)
…The crux of the matter is whether new energy and transport investments can be undertaken before the peak of oil production is reached; after the peak, economic conditions will be far less conducive.

On the down slope of the Hubbert curve, the world faces an endless sequence of supply-side oil shocks, causing the oil price to fluctuate around an upward trend. This will fuel inflation and increase uncertainty. Central banks are primed to respond by raising interest rates, which will put a brake on global economic growth. If the oil price continues to rise gradually and monetary authorities tolerate higher inflation to allow prices to adjust, reflecting the increasing scarcity of fossil fuels, an economic meltdown may be avoided.

However, there is a strong likelihood of a sharp spike in the oil price, either when the peak is reached or when a critical mass of investors wakes up to the inevitability of the peak. This realisation could spark widespread panic, with potentially devastating effects on financial markets and the global economy. In 1979, a mere 4% reduction in the world oil supply led to a near trebling of the oil price, and the monetary policy response caused a severe international recession. Conservative estimates of the post-peak depletion rate are about 3% every year.

Certain sectors are particularly at risk to oil depletion. First, transport costs will rise dramatically, hitting commercial aviation and tourism especially hard. Second, oil scarcity will push up food costs and reduce output as modern agriculture is highly dependent on oil for tractors, transportation, and chemical fertilisers and pesticides. This may have serious food security implications, especially for food-importing countries. Third, the volume of manufacturing production will be hurt by rising energy prices, especially in the petrochemical, plastic and pharmaceutical sectors.
(2 Aug 2006)
Jeremy Wakeford is a lecturer at the University of Cape Town’s school of economics.


Peak experience: Heinberg and Room in San Francisco

Amanda Whitherell, SF Bay Guardian
Standing on the steps of City Hall, New College professor Richard Heinberg told a crowd of San Franciscans, “The 21st century will be the decline of fossil fuels.” This renowned expert on “peak oil” then headed inside to testify at a hearing convened by Sup. Ross Mirkarimi on the issue.

Chief among the myriad troubling facts and statistics was Heinberg’s prediction that world oil production will peak around 2010 or 2011. US production peaked in the 1970s, but that barely affected the country’s skyrocketing oil consumption patterns. Even the recent dollar per gallon jump in gasoline prices has yet to significantly slow the rapid approach of the inevitable end of the age of oil.

Contrasting his research with that of global warming, Heinberg said, “Peak oil is not a theory. It’s something we’ve been observing for 30 years.”

Because of unabated rises in population and oil demand, plus escalating conflict over what little petroleum reserves remain, the United States can expect a continued increase in price and decrease in the comfort and security that 100 years of cheap petroleum have allowed.

Heinberg has researched and authored three books on the subject of peak oil and appeared in all the liberal publications that were crying out about global warming before it was the hip new worry. He was invited to the city’s July 28 Local Agency Formation Commission meeting, where he presented the scary news and urged city officials to prepare.

David Room of Energy Preparedness, an Oakland firm that consults with businesses and municipalities on how to prepare for rising oil prices and potential shortages, also addressed the committee, agreeing with Heinberg’s timeline and urging the city to think in terms of disaster preparedness.
(2 Aug 2006)


Interview with Bryant Urstadt, author of recent Peak Oil article in Harper’s

Marc Strassman, Etopia News
The August, 2006, issue of Harper’s Magazine features as its cover story Imagine There’s No Oil-Scenes from a Liberal Apocalypse, by Bryant Urstadt, which includes a discussion of the “peak oil” phenomenon and provides coverage of a peaknik “meet-up” in New York City and a peak-oil convention in Yellow Springs, Ohio.

On Saturday, July 29, 2006, the The Peak Oil/Global Warming Channel, a joint venture of Etopia News and the Online Broadcasting Service (OBS), interviewed Mr. Urstadt by phone about his Imagine There’s No Oil-Scenes from a Liberal Apocalypse August, 2006, Harper’s Magazine cover story.

…Today, with permission from Harper’s Magazine, an image from that publication’s August, 2006, cover was combined with the previously-recorded July 29th audio interview with Bryant Urstadt to create a Flash 8 video file capable of being distributed using the innovative Brightcove video syndication platform.
(1 Aug 2006)
The site has other interviews about peak oil and global warming.


Tags: Fossil Fuels, Oil