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Peak Oil

End-time for USA upon oil collapse
A scenario for a sustainable future

Jan Lundberg, Culture Change Letter #100
I have held for some years that the United States of America will not endure for long. Primarily considering the implications of “peak oil,” let us explore key unforgiving trends, dispassionately, so as to arrive at a truthful and hopefully constructive vision for the future. Most scenarios reflect wishful thinking or influence from the mass media, academia and industrial interests. Rather than predictions such as the promise of a technologically green consumer society — a popular preference — a clear analysis must include all the main elements however unpalatable. To create a better world we must first deal with hard reality.
(18 June 2005)
Grim outlook, perhaps the grimmest yet from Jan Lundberg. Also just published is his How to save the world: 21 things you can do. The Culture Change website has been re-designed and relocated to a new URL. Recommended by ldcdnd and will. -BA

Reducing Japan’s Dependence on Oil

Bill Totten, Nihonkai Shimbun and Osaka Nichinichi Shimbun
(I’ve written a weekly column for two Japanese newspapers for the past three years. My colleague, Patrick Heaton, translated this one from the Japanese original.)

As regular readers of this Weblog are aware, for some time I have been warning of the approaching end to the age of plentiful, cheap oil. I am now in the process of studying how to use organic agricultural methods in order to plant my own vegetable garden. My interest in this subject was stimulated by a book I read entitled ‘One Straw Revolution’ by Fukuoka Masanori. The book jolted me into reviewing my lifestyle and values.

…it is folly on Japan’s part to believe the United States would share energy resources with Japan when those resources become scarce. Before oil supplies drastically decrease, what Japan, a country with no resources, should do is strive to tap Japanese technical knowledge and begin a movement toward a sustainable society that does not destroy the planet’s ecological system. Individuals and the state should employ policies that reduce reliance on oil as much as possible.

As someone who manages a computer software company, I am beginning this effort on a personal level by starting my own vegetable garden. It is a modest effort but I hope someday many individuals and other organizations will be able to produce agricultural products through methods that do not destroy the environment, and can provide such products to their employees. It may sound only like a dream, but as a businessman looking at this issue from an international perspective, I believe this is the right track and that now is the time to begin efforts in this direction.
(9 June 2005)
Recommended by ldcdnd. Fukuoka Masanori is a key figure in sustainable agriculture. As one example, he influenced the development of permaculture. See 1995 Interview and 1982 Interview. -BA

Oil ‘peak’ not seen coming any time soon
Supply will outpace demand through at least 2020, report suggests
Associated Press via MSNBC
WASHINGTON – Global oil production is not likely to peak anytime soon, contrary to talk that has helped propel prices close to $60 a barrel, although lower prices may still be a few years away, a prominent energy consultancy said Tuesday.

Cambridge Energy Research Associates said that, instead of a crest being reached sometime this decade, an inflection point in world oil output will occur sometime beyond 2020, after which production will plateau for several more decades.

…Lawrence J. Goldstein, president of PIRA Energy Group in New York, said he was present when Simmons met with Saudi officials to gather information for his book and that he remains an “agnostic” when it comes to the peak oil debate.

It isn’t entirely clear, Goldstein said, whether today’s tight global supply reflects a geologic limit that is being reached or if it merely signifies that the industry hasn’t made the necessary investments to keep up with rising demand.

“The truth is, I don’t know whether we’re resource-constrained or effort-constrained, and neither does anybody else,” he said.
(21 June 2005)
Next to the article on MSNBC is a link to a video interview on oil supply with AG Edwards Director of Futures Research Bill O’Grady.

Prof. Goose at The Oil Drum has a scathing post on this article: Gee, All Sorts of Pollyannas Out This Week…. Although the headline and lead paragraphs are pollyanish, the rest of the article is more balanced. I wonder if the Associated Press editors did some rewriting to make the article sound more optimistic? Traditionally headlines are written by editors rather than reporters… and as one media mogul said (can’t remember the name) — I don’t care who writes the stories, just let me write the headlines!

MarketWatch covered the same CERA report, but with a more pronounced bias than AP: “Cambridge Energy Research Associates on Tuesday did its part to debunk the view that capacity won’t be adequate to meet demand…” Lisa Sanders, the reporter, did not research alternate views, did not put the report into context with background information, nor did she look into the background of CERA. There seems to be little more in her article than in the press release from CERA. You can do better than this, MarketWatch!

For good journalism, apparently, you have to look to the blogs and discussion boards. The folks had a thread dissecting the story and putting it into context .



Australians in “paradise of fools” on oil

AAP, The Age
Australia is living in a “paradise of fools” if it believes the nation has enough oil reserves of its own, an industry leader says. Barry Jones, executive director of the Australian Petroleum Production and Exploration Association, today said concerns over Australia’s falling oil supplies were being glossed over.

Oil prices last night hit a new high of $US59.37 a barrel, with concerns it may push through the $US60 mark in coming weeks. For the past three decades, Australia’s oil production has remained above 80 per cent of domestic consumption needs. Mr Jones said debate about Australia’s energy supplies had focused on the ability of the nation to export products such as coal and uranium, and the interaction between energy policy and greenhouse gas emissions.

He said there has been little focus on the most pressing issue – the security of Australia’s oil supplies.
(21 June 2005)

Oil prices’ relentless rise

Ron Scherer, Christian Science Monitor
Hovering near $60 a barrel, [oil prices] may hit consumer spending and ripple through economy.
NEW YORK – The price of oil is close to topping the psychological pivot point of $60 a barrel.

The latest run-up in prices comes at the beginning of the summer driving season, when Americans are starting to map out their vacations and load the SUV for a trip to the beach. Higher gasoline prices – now back on the rise – mean consumers may cut back on other purchases, from ice cream to iPods.

Moreover, the surge in energy prices is hitting the economy at a critical moment – the Federal Reserve’s interest-rate hikes are finally starting to bite. The combination of higher rates and higher oil prices could mean a slower economy in 2006.
(21 June 2005)
The article discusses the impact on the trucking industry, interviewing several truckers.

OPEC’s symbolic move

The Economist
In confirmation that OPEC’s raising of its production quotas last week was largely symbolic, oil prices have raced towards $60 a barrel. With supplies tight, and new production and refining capacity slow to come online, prices are likely to stay high in the short term. But consumers aren’t cutting back on their spending as a result. Expensive oil may not be the harbinger of doom that economists once thought
(20 June 2005)

Oil’s Rally May Only End When High Prices Slow Demand Growth, CGES Says

Alejandro Barbajosa, Bloomberg
Oil prices may only fall from record levels as high energy costs slow demand growth, because producers lack the capacity to increase output, the Centre for Global Energy Studies said.

Crude oil in New York today reached a record $59.23 a barrel. OPEC, the source of about 40 percent of the world’s oil, is pumping almost as much as it can and U.S. refiners are operating close to capacity to supply consumers with enough fuel.

“With no obvious supply-side constraint on oil price rises, only a collapse in demand growth can offer the necessary downward pressure” to lower prices, the London-based CGES said in an e- mailed monthly report today. The Centre, founded and chaired by Sheikh Ahmad Zaki Yamani, Saudi Arabia’s former oil minister, “believes that high oil prices are finally starting to have an impact on oil demand growth.”
(20 June 2005)
Suggested by ldcdnd.

Pickens says oil sands are no panacea

Jeffrey Jones, Reuters
Huge development costs and a tight labor supply will prevent unconventional oil supplies, like Canada’s oil sands, from making up for declines in conventional world oil output, veteran energy investor Boone Pickens said on Tuesday.
(21 June 2005)
Related stories from Reuters about Pickens: Pickens sees $3 gasoline within 12 month and Boone Pickens sees crude oil market testing $60.

Studying the oil market

Kevin Drum, Political Animal in Washington Montly
Oil prices continued their recent climb this week, reaching a new high of $58 per barrel on Friday. What’s causing this increase? Here are some of the explanations on offer…

So: the problem is that OPEC can’t increase production; refineries can’t increase production; there’s no spare capacity; instability in Nigeria is causing panic; summer driving demand will be high; hedge funds are roiling the market; inventories are down; and fear of hurricane season is making everyone nervous.

In other words, no one has a clue what’s really going on, so they’re just tossing out every possible explanation they can think of. This is actually less unusual than you might think, since one of the peculiar little secrets of the oil industry is that no one actually knows what drives prices up or down. However, it seems to have reached pathological proportion in the past few weeks, and that’s not a positive sign.

For what it’s worth, I’ve ranked these explanations based on my guess of their importance. Basic supply problems (#1 and #2) are most important; razor thin spare capacity and related fears of sudden disruptions (#3 and #4) are next; and concerns about summer driving, winter hurricanes, inventory levels, and hedge funds are mostly just random noise.
(18 June 2005)
Nice round-up on mainstream commentary about the jump in oil prices. Recommended by Big Gav at Peak Energy.

A Flicker Away From a Blackout
Canadian Engineers Say Rare Glitch Suggests Ongoing Threat to Power Grid

Doug Struck, Washington Post
TORONTO — At 4:15 p.m. on May 27, the lights flickered across Ontario.

Subway cars in Toronto rolled to a stop while safety signals were reset. Pizza oven doors flew open on the ground floor of the city’s landmark CN Tower. Cement and steel plants paused while machinery was restarted. Tens of thousands of computers automatically shut down and rebooted.

Hydro One, the Toronto-based electric utility, quickly issued a press statement seeking to reassure the public that the utility’s “equipment protection worked as designed to isolate the fault.”

In fact, the situation was much more tenuous. The power blip involved an extremely rare, still unexplained failure of two protection systems, according to internal documents of the utility, reports to oversight agencies and eight engineers. The eight are part of a group that has been on strike since June 6. By their accounts, the failure brought the region’s power grid to the verge of a blackout like the one that struck on Aug. 14, 2003, plunging 50 million people in the United States and Canada into darkness.
(21 June 2005)

Politics and Economics

Mixing oil, gas and politics

The Economist
The Russian government is tightening its grip on the country’s lucrative oil and gas industry. After wresting a key Yukos subsidiary from its former owners, it has struck a deal to take control of Gazprom, Russia’s gas monopoly. Sibneft, another big independent oil producer, could be next in line for renationalisation. Should the wider, energy-hungry world worry?
(20 June 2005)

The United Nations Strategy as a Resolution of the Iraq Crisis

Juan Cole, Informed Comment
…A US withdrawal without a United Nations replacement would risk throwing Iraq into civil war. Such a civil war, moreover, would very likely not remain restricted in its effects only to Iraqi soil. A civil war in Iraq would certainly lead to even more sabotage of petroleum production, reducing Iraq’s production from the current 1.5 million barrels a day to virtually nothing. If a civil war broke out that drew in Iran, the unrest could spread to Iran’s oil-rich Khuzistan province, which has a substantial Arab population, and which has seen political violence in recent months. The instability could also spread to Saudi Arabia’s Eastern Province, which is traditionally Shiite but dominated since 1913 by the anti-Shiite Wahhabis.

If the petroleum production of Iraq, Iran and Saudi Arabia was put offline by a vast regional conflict that involved substantial terrorism and sabotage, the price of oil would skyrocket. Only 80 million barrels of petroleum are typically produced daily in the world. Much of that is consumed by the producing country. What is special about the countries of the Gulf is that they have relatively small populations and little industry, and therefore export a great deal of their petroleum. Saudi Arabia produces 9 million barrels a day, and can do 11 in a pinch. Iran produces 4 million. Iraq could produce 3 million on a good day without sabotage. If nearly 20 percent of the world’s petroleum supply became unavailable, and given ever increasing demand in China and India and political instability in Venezuela and Nigeria, the price could rise so high that it would throw the world into a Second Great Depression.

The old dream of James Schlesinger and Henry Kissinger that the United States could in such an emergency simply occupy and secure the Saudi oil fields has been shown to be a dangerous fantasy. Petroleum is produced in a human security environment. Where the political structures are felt by a substantial portion of the population to be illegitimate, they can and will simply sabotage the petroleum pipelines and refineries.
(20 June 2005)
Juan Cole is Professor of History at the University of Michigan. His blog is sub-titled: “Thoughts on the Middle East, History, and Religion.” His in-depth commentary is required reading for making sense of the Middle East. Politically his viewpoint is liberal-left. Article submitted by LD. -BA

New Apollo Energy Act: Inslee and his ambitious energy measure

Bill Virgin, Seattle Post-Intelligencer
Certainly New Apollo is ambitious if by no other measures than length and complexity — not to mention cost. It incorporates everything from loan guarantees for clean-energy (wind, biomass, geothermal, ocean wave, solar, photovoltaic, minimal-emission coal and increased hydroelectric production at existing dams) to billions for research to tax credits for more fuel-efficient cars and planes to caps on greenhouse gases to tax incentives on the sale of alternative fuels.

Some may be inclined to look at New Apollo and endorse its backers’ vision of legislation that will address vexing national security, economic and environmental questions, seize the initiative in making the United States a center of energy-efficiency technology — and create jobs to boot.

Skeptics may be inclined to look at New Apollo and think, “oh great, another bloated piece of pork-barrel legislation that will produce a hideously expensive boondoggle for taxpayers.”y
(21 June 2005)


Blair told: act now on climate
G8 countdown Poll shows public fears on global warming

Julian Glover, John Vidal and Andrew Clark, The Guardian
Tony Blair will arrive at next month’s G8 summit with a powerful mandate from voters to confront George Bush over global warming, according to a Guardian/ICM poll published today.

An overwhelming 83% of voters want the prime minister to challenge the US president on the issue amid record public acceptance that climate change is a reality.

But voters have still to be convinced that they must make personal sacrifices to tackle it. Although 40% of those questioned say existing levels of climate change are a threat and a further 49% believe it will be a threat to future generations, most admit they have done little or nothing to change their behaviour.
(21 June 2005)
The original article has more interesting poll results on UK attitudes towards energy and climate change. The Guardian ran an editorial on the subject: The message hits home

Scientists critical of Bush on climate change

Polly Curtis, Guardian
British scientists today condemned the Bush administration for apparently attempting to undermine efforts to tackle climate change by challenging scientific evidence of the impact of global warming ahead of the G8 summit.
(21 June 2005)

Solutions and Sustainability

Biogas Bonanza for Third World Development

Dr. Mae-Wan Ho, Institute of Science in Society ISIS)
Biogas, a by-product of farmyard waste-treatment, has emerged as a major boon for Third World countries, bringing health, social, environmental, and financial benefits

The United Nations Development Programme (UNDP) 1997 Report, Energy After Rio: Prospects and Challenges [1] identified community biogas plants as one of the most useful decentralized sources of energy supply. Unlike the centralized energy supply technologies, such as power plants based on hydroelectricity, coal, oil or natural gas, that have hitherto been the only choices open to rural communities, biogas plants do not require big capital to set up, and do not pose environmental problems that excite public opposition. Instead, in most cases, they offer solutions to existing environmental problems, and many unexpected benefits besides.
(20 June 2005)

Sunshine-propelled craft is set to sail into space

Guy Gugliotta, Washington Post via Seattle Times
The idea occurred to German astronomer Johannes Kepler in the 17th century when he detected a comet flying across the night sky trailing what looked like a plume of fire. If space had so much wind, why not build ships to sail the heavens?

Indeed. Today, barring delay or mishap, a U.S. filmmaker, an international association of space buffs and Russian aerospace organizations will use a leftover Soviet ballistic missile to put the first “solar sail” into orbit.

This unusual device, which looks like a 6,500-square-foot flower with eight triangular, mirrorlike petals, does not use wind, as Kepler predicted. Instead, it is to show that sunlight’s gentle push might one day enable a spacecraft to reach speeds far greater than anything achieved by a mere rocket. Deployed, the petals are about 1 ½ times the size of a basketball court.
(21 June 2005)