Peak Oil Headlines - 27 June, 2005
Click on the headline (link) for the full text.
Many more articles are available through the Energy Bulletin homepage
Michael Klare on a Saudi Oil Bombshell
Michael Klare, TomDispatch
...Well, hold your hats, folks. Below Michael Klare, an expert on "resource wars" and the author of the indispensable Blood and Oil: The Dangers and Consequences of America's Growing Petroleum Dependency, discusses a new bombshell book by oil industry insider Matthew Simmons, and his unsettling news that everything you've heard about those inexhaustible supplies of Saudi oil, which are supposed to keep the world floating for decades, simply isn't so. This is real news and absorbing its implications is no small matter.
(26 June 2005)
Introduced by Tom Engelhardt of the Nation Institute. Also posted at Znet: The Impending Decline of Saudi Oil Output by Michael T. Klare and Saudi Oil Bombshell by Tom Engelhardt.
The Politics of Survival
Kurt Cobb, Resource Insights
...What we are witnessing is the collapse of the politics of left and right and the replacement of those politics with what I call the politics of survival. Those who come to understand the gravity of our energy situation quickly abandon their previous political views and instead focus pragmatically on how we can make a successful energy transition. They do so because they know the cost of failure is too high a price to pay for ideology. In the politics of survival ideology counts for almost nothing. Pragmatic plans count for everything.
(26 June 2005)
Jimmy Carter on the Energy Crisis-February 1 1977 (AUDIO, VIDEO, TRANSCRIPT)
President Jimmy Carter, Global Public MediaThe first of several Presidential Fireside Chats held by Jimmy Carter focused heavily on Energy. In this talk, President Carter stated unequivocally that America faced an energy problem which called for a longe-range comprehensive plan and introduced his Energy Policy Initiative which focused on conservation.
(1 Feb 1977)
Fossil fuels' demise oversold
Boring fact is oil not soon tapped out
Scott W. Tinker, Houston Chronicle
As the U.S. Senate debates the national energy policy, many are aware of the hype surrounding this academic construct. A Web search of "peak oil" turns up an array of experts who believe that a pending peak in world oil production will soon lead to global economic collapse.
(25 June 2005)
Your homework assignment for tonight is to identify all the logical flaws and omissions in this article by the Texas state geologist. Some clues: EROEI on unconventional oil source and effect on global warming from increased use of fossil fuels. -BA
James Howard Kunstler, Cluserfuck Nation
The east coast is a steambath, the Dow Jones is tanking, oil has crossed the $60 barrier, and Don Rumsfeld says the Iraq insurgency could run for twelve years.
Taking these things in reverse order -- why twelve years? Why not forever? Actually, twelve years might as well be forever. What Rummy seems to be saying to the US public is: better be prepared to keep Fort Apache going indefinitely. The part he left out was. . . "if you want to keep making that eighty-mile round trip commute from Cherokee County to Peachtree Street."
(27 June 2005)
Satirist drives home critique of SUV culture
Paul Grondahl, New York Times via Salt Lake Tribune
Americans' love of and dependence on gas-guzzlers points to a looming crisis, the author ----------
SARATOGA SPRINGS, N.Y. - On a bookshelf in his living room, above a row of books by his favorite author, Tom McGuane, Jim Kunstler has placed a sticker that reads: ''Me & My SUV. Consuming your future to feed my ego.'
...This time, Kunstler, a satirist and comic novelist, isn't kidding. The tone of his new book is urgent, as the subtitle suggests: ''Surviving the End of the Oil Age, Climate Change, and Other Converging Catastrophes of the 21st Century.'' The book has been among the Top 100 best-sellers on Amazon.com and quickly went into a third printing.
(25 June 2005)
At least the cultural reporters on the NY Times are waking up to Peak Oil. The business and political reporters are still asleep at the switch. -BA
Final Thoughts on Kunstler's The Long Emergency
Jeff McIntire-Strasburg, sustainablog
I finished The Long Emergency yesterday, and had planned to post my thoughts last night, but 1) life got in the way, and 2) I really felt like I needed to take a few hours (at the very least) to digest. Despite some of my reservations and criticims that I've already expressed, I do think that The Long Emergency is an important, necessary book.
(24 June 2005)
Bad Peak Oil Jobs No.2: The Real Estate Agent
Roland Watson, New Era Investor
...But these things go in cycles, right? Yes, there appears to be a cycle in the construction industry called the Kuznets cycle which runs about every 16 years or so. The previous bust was in the early 1970s and we certainly are due another almighty bang now. But if calculations are correct, another housing peak may be due in the decade of the 2020s and real estate agents will once again be dancing barefoot through the daffodils singing "We're in the money!". Yes?
No. If Peak Oil has its wicked way, real estate agents will be doomed to dance on thistles for the next few decades. It seems we have the unfortunate juxtaposition of two waves. One is the downwards phase of the property cycle and the other is the downslope of Hubbert's Peak. In physics, we were taught that when two waves met out of phase they would "destructively interfere" and cancel each other out. In our case, the two waves will be meeting in phase and "constructively interfering" to create a wave of greater amplitude.
In other words, bye, bye real estate for the next 30 years or so. The next scheduled top in property prices in the 2020s will be swallowed up like a sardine by the big barracuda of Peak Oil. After that in the 2030s there may be some buying opportunities.
(XX June 2005)
Roland Watson writes: "put another entry up for No.2 in my "bad career moves after peak oil". Mind you, I hope to put up some positive ones as well - once I can think of any."
What does "Peak Oil" mean to you? (AUDIO 2:27 min)
Mark Hertsgaard, MarketPlace
(24 June 2005)
A short but hard-hitting exposition of Peak Oil on one of the best business news programs (carried by National Public Radio in the US).
According to Mark's website, "Mark Hertsgaard is a San Francisco-based independent journalist and author. He currently writes as the environment correspondent for The Nation, and is the political correspondent for US satellite broadcaster, LinkTV." -BA
Oil at $100 a barrel will do more to save the planet than all the wind farms in the world
Hamish McRae, The Independent
...The first point to be clear about is that while there is an oil problem, there isn't really an energy problem, or at least not an immediate one. The left-hand graph above shows that while oil is the largest single source of primary energy, it supplies only about 40 per cent of the total. Mind you, add in gas and you have about 60 per cent. Coal is plentiful, although there are serious environmental concerns about its use.
The next point is that non-fossil fuels, of which nuclear and hydro are by far the most important, as you can see, are a tiny fraction of the total by comparison. That is not to say they should be disregarded; simply that they cannot help much.
The third point is that different parts of the world have a different balance in their energy supplies.
...The final point which seems to me to be glaringly obvious is that whatever happens to climate change as a result of using fossil fuels will be determined by the US, China, India and Russia, rather than by the EU.
...Consider a world where oil remains not just at its present levels but rises above $100 and shows every sign of staying there. If we want to increase our living standards we would start to ask whether we want to spend our money on energy or on something more agreeable. ...More than this, if economies are to go on delivering better standards of living, the only way to do so will be to become "greener" - to do the opposite of China, which is using more energy per unit of output, by increasing output without increasing energy use.
(26 June 2005)
The black stuff has world order over a barrel
Larry Elliott, The Guardian
Everyone knows oil will run out one day, but some industry experts predict the decline will start as soon as 2008
(27 June 2005)
Interview with Andrew McKillop (AUDIO)
Jim Puplava, Financial Sense Online
"The Final Energy Crisis" by Andrew McKillop and Sheila Newman.
This book explores the crisis in fossil fuels. Oil, gas and coal are precious resources that define modern life. Without them, mass-produced food and clothing, and international travel and cars, become rare or impossible. Yet our reliance on fossil fuels is responsible for massive environmental damage, and increasing economic and political instability.
Control over oil resources has been a major factor in several wars. The price of oil is also key to world economic stability. Yet our supply of oil is limited. As with other fossil fuels, the more we burn, the more damage we do - the number one cause behind global warming is the increase in carbon dioxide from burning fossil fuels. The international range of contributors to this book provide a truly global perspective on the dangers inherent in our over-consumption of oil, gas and coal.
They explore detailed evidence of the imminent acceleration of fossil fuel depletion and the limits of ‘sustainability.’ They outline the political background to the situation, not just among the world’s largest consumers of fossil fuel, the US and China, but also in Europe and the developing world. Considering our future economic survival, they include a detailed examination of France and Australia. Finally, they explore the extreme costs of alternatives such as nuclear power, and outline other possible lifestyles and methods.
Andrew McKillop is a writer and consultant on oil and energy economics. Since 1975 he has worked in energy, economic and scientific organizations in Europe, Asia, the Middle East, and North America. These include the Canada Science Council, the ILO, European Commission, Organization of Arab Petroleum Exporting Countries, the UN Economic and Social Commission for Asia and South Pacific, and the World Bank. He is a founding member of the Asian chapter of the International Association of Energy Economics. He has published widely in journals including the Ecologist, the New Scientist and Le Monde Diplomatique.
(25 June 2005)
Long interview. Energy Bulletin in its June 8 headlines ran item on McKillop's new book written with Sheila Newman.
Oil Painting By Numbers (short PDF)
Eric Sprott, Sprott Asset Management
...This time around we won’t bore you with the theories and hypotheses, and the whys and wherefores, of imminently declining global oil production.
Rather, we will merely be connecting the dots (painting by numbers if you will) on a canvas of interesting data points that have come to light recently. Truth be told, the dynamics in the oil market are changing so rapidly that it is a topic worthy of frequent visitation. The problem, as we see it, is one of mathematics – the numbers just aren’t adding up. Global oil demand is expected to increase by 1.8 million barrels per day this year (according to the IEA), and yet everywhere we look we see evidence that production is falling short of expectations. Countries that were supposed to grow production and be the “saviours” (Russia, Mexico, and perhaps even Saudi Arabia) are showing signs of peaking production, and countries that are already in decline are declining more rapidly that expected (U.K., Norway, and Indonesia). More and more experts (executives of oilfield services companies like Schlumberger and Baker Hughes for example) are now saying publicly that the average decline rate of the world’s oil wells is 8%! – a shockingly high hurdle to overcome with new production.
(20 June 2005)
Investment analyst covers recent PO developments in 3-1/2 pages.
Crude Oil Rises to Record Amid Concern Output Won't Meet Demand
Angela Macdonald-Smith, Bloomberg
Crude oil rose to a record in New York on concern that oil producers and refiners will strain to boost output to meet surging demand for fuel.
Iran, and other OPEC countries, are pumping oil at ``the highest possible level'' and can't increase production to meet rising global consumption, Iranian Central Bank Governor Ebrahim Sheibany said yesterday.
``The rally is being demand-driven, running up against capacity constraints,'' said Tobin Gorey, an economist at Commonwealth Bank of Australia in Sydney. ``It won't take many supply disruptions for things to get quite tight, quite quickly.''
(27 June 2005)
Prospect of crude at $65 a barrel looms large
Kevin Morrison, Financial Times
Crude oil futures touched $60 again yesterday as growth in global demand continued to outpace supply, adding to concerns about a supply squeeze from well-head to pump.
Oil traders said the next stop could be $65 a barrel, and a fall back below $50 looked increasingly unlikely before the year-end.
(25 June 2005)
Bubble burst anxiety plagues oil
$70 a possibility, but price moves seen unstable: analysts
Myra P. Saefong, MarketWatch
SAN FRANCISCO (MarketWatch) -- Oil futures' climb to record highs isn't over yet and $70-a-barrel crude can't be ruled out, but anxiety over the inflated price has analysts and traders worried the bubble may burst.
Prices for the August contract hit a high of $60.95 a barrel during the New York session Monday. That's the highest price the front-month contract has ever seen. See Futures Movers.
"If all things stay as they are, or if there is any major disruption or refinery shutdown ... you could see crude oil trading in the low $70s by the end of the year," said Kevin Kerr, president of Kerr Trading International.
(27 June 2005)
Oil prices will peak, but the questions are when and at what point
Editorial, Vancouver Sun
But fundamental facts on the ground weigh in favour of a drop in oil prices instead. Gold may be the ultimate store of value, but oil is the engine of the world economy. As its price rises so too does the cost of goods and services.
The price of oil will eventually reach a point at which consumption declines, demand weakens, supply increases and the price falls. We just don't know what that point is and when we'll get there.
...Naturally, there is another school of thought. Contrarians argue that the industrialization of China and India will drive demand for oil and other commodities for years to come. China's economy is growing by 9.5 per cent a year and its demand for oil is expanding at a similar rate. Hedge fund manager Philip Richards of RAB Special Situations LP says he sees no way production can meet estimates that global oil demand will climb from 85 million barrels a day to 125 million barrels in 15 to 20 years. Some analysts believe all the world's big oil reserves have been found, that the earth has been totally tapped out of recoverable fossil fuels. [Ed: Which analysts? The editorial hasn't understood the concept of peak oil production.]
...This doomsday scenario ignores the stimulative effect high oil prices have on exploration, technological advances that accelerate its discovery and exploitation, and the potential impact of conservation.
(27 June 2005)
The usual response - new discoveries, new technology, and "we've heard it before." And touting demand destruction as if it were something to look forward to. Please, someone send a letter to the Sun, telling them to read more than the CERA (Cambridge Energy Research Associates) report! -BA
In Support of Alaskan Tourism
Heading out, The Oil Drum
..These are the incremental realities that are going to get us up towards $80 oil, but without developing a new enemy that can be immediately pointed to and used as a whipping boy to shift attention from the failures, or to prepare us for this approaching cold shower. Nor does this reality give the dramatic focus that a movie requires to educate the public to a problem. Yet, when our mundane realities evolve, we will be at the same price for oil that would have occurred with the dramatic events of fiction. The only snag being, of course, that we don’t have their freedom to find a perfect solution within the final fifteen minutes before the next commercial break.
There is, however, some glimmer to lower despair, in that the major oil companies seem to have accepted that a project justification figure for new projects based on $25 oil, has passed. With an assumed new floor price (which might be assumed to be around $50) then a number of projects that used to be uneconomic now become valuable.
(27 June 2005)
Discussion of oil prices, plus comments on HO's trip to Alaska.
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