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Peak Oil

Outcome Grim at Oil War Game
Former Officials Fail to Prevent Recession in Mock Energy Crisis

John Mintz, Washington Post
The United States would be all but powerless to protect the American economy in the face of a catastrophic disruption of oil markets, high-level participants in a war game concluded yesterday.

The exercise, called “Oil Shockwave” and played out in a Washington hotel ballroom, had real-life former top U.S. officials taking on the role of members of the president’s Cabinet convening to respond to escalating energy crises, culminating in $5.32-a-gallon gasoline and a world wobbling into recession.

“The American people are going to pay a terrible price for not having had an energy strategy,” said former CIA director Robert M. Gates, who took on the role of national security adviser. Stepping out of character, he added that “the scenarios portrayed were absolutely not alarmist; they’re realistic.”

The exercise began with ethnic unrest in Nigeria, leading to the collapse of the oil industry in that west African nation. Then al Qaeda launched crippling attacks on key energy facilities in Valdez, Alaska, and Saudi Arabia.

But the war game’s participants — including former CIA director R. James Woolsey, former Marine Corps commandant Gen. P.X. Kelley and former EPA administrator Carol Browner, soon realized the U.S. government had few options in the short term to prevent an economic crash in this country and worldwide.
(24 June 2005)
Related articles: Simulated Oil Crisis Raises Eyebrows at Fox News, press release and Global oil supply disruption exercise scheduled at Continuity Central. Since the groups conducting the exercise have been pushing the importance of an energy policy for national security, I suspect the outcome was no surprise. -BA

NOPEC, no strike and `no peak oil`
Oilcast #12
In this Oilcast Dani Gomez looks at predictions by the Cambridge Energy Research Associates. They reject ‘peak oil’ theory, but as Dani has found out, their forecasts have been wrong in the past. Who is right? Are ‘peak oilers’ mistaken?

Plus, a look at current price volatility, CINOOC’s bid for Unocal (as we predicted) no strike in Norway (as we predicted) and NOPEC in the US Senate, can it really become law?
(23 June 2005)

Bodman: Era of Easily Accessible Oil is Ending

Mike Millikin, Green Car Congress
In remarks today to the National Petroleum Council, Energy Secretary Samuel Bodman noted the standard points about increasing global demand for oil contributing to the price situation, but also touched on the difficulties faced on the supply side.

We believe that the days of easily accessible oil are coming to a close. That is already the case for the lower 48 in the United States. Increasingly, the global oil demand will have to be met by developing petroleum resources that involve serious technical, and often political, challenges.

That is, in essence, an acknowledgement of the imminence of the conditions of global peak oil production.
(22 June 2005)
Recommended by Dave Roberts in a Gristmill blog entry.

Is it goodbye to cheap oil forever?

Larry Elliott and Ashley Seager, The Guardian
Ballooning demand and insecurity of supply are pushing prices to $60 a barrel, and this time Opec may not be able to help
It was a question of when not if for oil traders yesterday as the price of a barrel of crude threatened to burst through the $60 a barrel barrier for the first time.

News last night that the North Sea Forties oil field had been shut because of technical problems pushed an already jittery market that has jumped 11% in the last week alone, to a new record high of $59.55 for US light crude. Although BP, which operates the pipeline to the field, said the problems would be fixed by today, dealers are jumpy about any supply disruption in the face of strong global demand and in spite of promises of further output from the Opec producers’ cartel.
(22 June 2005)

Volcanoes, Oil, and Prophets

Shepherd Bliss, Dissident Voices
I live under what may be the most active volcano in the world — Kilauea on the Big Island of Hawai’i. While watching lava cascade down its mountain peak, I consider the predicted peak in world oil production and the damage it could do. Its destruction could be far worse on human communities than that of a mighty volcano’s eruption, impacting not only a local area but civilization itself. We live today under the volcanic threat of peak oil, yet most people remain in denial about the potential dangers.

If what Kunstler, Heinberg, Diamond and others are saying is accurate, it will create major changes in the way we all live. Early American’s responded promptly to Paul Revere’s alarm, survived, and prospered. The people of Noah’s time, however, continued their destructive ways and perished. The choice is ours.

Dr. Shepherd Bliss teaches at the University of Hawai’i at Hilo, writes for the Hawai’i Island Journal, and has contributed to 18 books on diverse subjects.
(24 June 2005)

Goodbye to oil

Tom Halsted, Gloucester Daily Times
…How well will we cope with the end of a resource we have made so essential to our lives? Anthropologists who look at the experiences of bygone island cultures — Easter Island, the Norsemen in Greenland, modern-day Haiti — describe societies that do not make intelligent decisions about how to live with growing scarcity. They cut down all their trees, eat all their livestock, fight one another rather than cooperate. Will this be our fate as well?
Tom Halsted is a Gloucester Daily Times columnist who lives in Lanesville.
(24 June 2005)

The Peak Oil Crisis, Part 8: Has It Started?

Tom Whipple FCNP
Earlier this week oil prices surged to an all time high thus raising the question: “Has the crisis begun?”
Before examining the current situation, it might be useful to define what constitutes the “peak oil crisis.” The quick answer is, the crisis begins when worldwide demand for oil outstrips supply on a more or less permanent basis. This will lead to significantly higher gasoline prices (many dollars per gallon) and all sorts of very bad things happening to the U.S. and other economies.
We will only know peak oil has been reached some years after it happens by noting that worldwide oil production is indeed on the decline, and, shows no prospects of ever reversing the situation. As the world will only achieve peak oil once, nobody really knows what the actual peak will look like: gradual, flat, bumpy, or steep.
(23-29 June 2005)


Exxon says N. America gas production has peaked

After weak prices in the 1990s due to oversupply, natural gas production in North America will probably continue to decline unless there is another big discovery, Exxon Mobil Corp.’s (XOM.N: Quote, Profile, Research) chief executive said on Tuesday.

“Gas production has peaked in North America,” Chief Executive Lee Raymond told reporters at the Reuters Energy
(21 June 2005)

Politics and Economics

$18bn bid by Chinese for Unocal has US worried
Congressmen tell Bush deal could have disastrous effect on security

Jonathan Watts in Beijing and David Teather in New York, The Guardian

China yesterday made its most aggressive move yet to challenge US dominance of the global energy market with an $18.5bn (£10.1bn) bid by state-run firm Cnooc for the American petrochemical company, Unocal.

The takeover attempt – by far the most ambitious in a recent wave of overseas deals by Chinese corporations – is likely to raise political hackles in Washington where senior policymakers are increasingly expressing concern about the rising power of the world’s most populous nation.

…Although it is offering a considerable premium, the Chinese firm, which is 100% state owned, would gain strategically important oil and gas fields, mostly in South-East Asia and the Caspian Sea region. Cnooc said the deal would more than double its production and increase reserves by nearly 80%.

…Last month, Sinopec, China’s second biggest oil firm, agreed to buy a 40% stake in an oil sands project in Canada for $83m. In February CNPC, the country’s leading energy company, signed a deal with Brazil’s state oil firm Petrobras on refining, pipelines and exploration and oil production projects. In January, CNPC signed a deal to exploit more than a dozen oil and gas wells at Zumano in eastern Venezuela.

While many of these have been at over market prices, China’s industrial planners clearly believe that they are necessary investments to ensure future supplies for the world’s fastest expanding economy. Less than 15 years ago, China was a net exporter of oil. But demand has grown so fast that it has overtaken Japan as the world’s second biggest importer of crude after the US.

This has contributed to a steep rise in world oil prices, which recently hit a record $60 a barrel. It has also pushed China into closer relationships with politically controversial oil-exporting states, such as Sudan, Iran, Burma and Kazakhstan, and a bitter rivalry with Japan over an oil pipeline from Russia and gas fields in the East China Sea. China has also been acquiring some of the best known names in American capitalism. Lenovo acquired the personal computer business of IBM at the end of last year while another of China’s leading companies, Haier Corporation, has made an offer for Maytag, the owner of Hoover.
(24 June 2005)
The Chinese bid for Unocal has had widespread play in the media. Among the many articles: Battle for Unocal all about proven reserves from MarketWatch and Capital Nearly Speechless on Big China Bid in the NY Times.

Solutions and Sustainability

Solar derby
Schwarzenegger’s solar-roof plan could get sidelined by partisan squabbling

Amanda Griscom Little, Grist via
The Golden State could soon enact the most ambitious solar-energy initiative ever proposed in the U.S. — legislation intended to put photovoltaic panels on a million California rooftops. Unless, that is, the bill gets derailed by a behind-the-scenes political pissing match between Republican Gov. Arnold Schwarzenegger, who has thrown his prodigious weight behind the initiative, and the Democrats who control the state legislature.
(24 June 2005)

Early hybrid developer passes on; can we afford to let his ideas do the same?

Union of Concerned Scientists, via
Browsing the NY Times last Sunday, I stumbled on quite a story in the obituaries. There among the listings was one titled “Victor Wouk, 86, Dies; Built Early Hybrid Car”. Intrigued, I read further.

According to the Times, Wouk, after EPA accepted his proposal under the Clean Car Initiative, converted a 1972 Buick Skylark to a gas-electric hybrid, downsizing the standard V-8 and adding an electric motor for added power. The regenerative braking system wasn’t quite enough to fully recharge the batteries, so Wouk designed the vehicle to be plugged in to top off the batteries, probably making it the first plug-in hybrid car ever made. The vehicle achieved 30 mpg, reached 85 mph, and significantly reduced tailpipe emissions.
(24 June 2005)

Other Worlds, Real and Imagined
Conversation with Jamais Cascio

RU Sirius, NeoFiles
In a way, this story begins with (who else?) Stewart Brand. In 1968, he started The Whole Earth Catalogue, suggesting that rather than just bitching about “the system,” countercultural and other maverick types could take up tools and information and make life solutions happen for themselves. While the Whole Earth had the funky smell of the “back to the land” movement, Brand was always open to a wide variety of inputs and solutions. “High” technology was part of the Weltanschauung.

Some thirty years later, Jamais Cascio and Alex Steffen were working guest editing an edition of that very publication (now called Whole Earth Review) when they came upon an idea that they realized could only be realized on the web. The idea was to create an open source network for problem solving on a global scale —
(June 2005)
Treehugger says:

The very inspirational Jamais Cascio of WorldChanging has been interviewed by NeoFiles. He talks about tons and tons of interesting things, among others: The path that led him to where he is now, and future modifications to the site, memes and reframing, the importance of positive and solution-centered environmental coverage, open source software, leapfrogging, etc.

Zero Waste, Perpetual Food

James Cascio, WorldChanging
In natural systems, “waste” is a nearly unknown concept. What may be waste products for one species is nearly always food for another. The interconnection between the various organisms in an ecosystem means that, absent external disruption, environmental cycles can continue more-or-less indefinitely. That’s not the case with most agricultural or industrial methods, however; much of what we do makes waste, and waste is a sign of inefficiency.

Environmental engineer Dr. George Chan thought we could do better, and has for the past two decades been working (along with the Zero Emissions Research Initiative) on something he calls the Integrated Food and Waste Management System (IF&WMS), a method of layering different types of production together such that the waste output from one component feeds another. IFWMS has a goal of zero waste — and in its growing number of implementations, it comes pretty close.
(23 June 2005)

The Kaya Identity and the “Conservation Bomb”
Why efficiency and conservation are key

James Cascio, WorldChanging
Not a spy thriller, the Kaya Identity is the formula which projects the amount of atmospheric CO2 as a function of population, GDP per capita, watts per dollar, and CO2 per watt. It’s pretty straightforward: our carbon output depends on how much power we use, how efficiently we use it, and how “dirty” the production is.

…As this Real Climate article (from which I found the Kaya Identity calculator) suggests, getting to 17 terawatts of carbon-free power is staggeringly difficult. But that’s with the default value of an 1% annual average improvement in efficiency; this improvement is largely a side-effect of overall changes to technology. If we give greater attention to increasing efficiency, we can have enormous payoffs down the road.

Efficiency is a funny thing; over time, small improvements can have dramatic effects.

…An aggressive focus on improvements to efficiency amounting to an average of 3-4% annually over the century could mean a world where everyone can live well without risk to the climate. To say that the effect of improving the efficiency of use is dramatic is perhaps an understatement. Without it, avoiding disastrous greenhouse effects will be nearly impossible; with it, avoiding the worst-case scenarios is almost over-determined.

Efficiency is quite literally world-changing.
(23 June 2005)
Recommended by Dave Roberts in a Gristmill blog entry.