Click on the headline (link) for the full text.

Many more articles are available through the Energy Bulletin homepage

Peak Oil

ASPO Newsletter 56 (August 2005)

Dr Colin Campbell, ASPO Ireland
Each month, ASPO releases a newsletter which follows the latest peak oil related news and developments. The newsletter is written by Dr Colin Campbell of ASPO Ireland. You can browse the full archive or download PDF copies of the newsletters.

You can download the newsletter as a PDF above, or browse the articles within the newsletter below.

Articles In ASPO Newsletter 56 (August 2005)

We also have a full archive of all ASPO newsletters.
(1 August 2005)

Oil Supplies and the “Infallible” Goddess of the Marketplace

Kurt Cobb, Resource Insights
It is unfortunate that the debate over when and whether world oil production will peak has taken on the character of a grudge match. Underlying the debate is a grudge against those who believe the marketplace cannot solve all of our problems, especially problems which stem from resource depletion.

On one side are a group of retired petroleum geologists and academics including Colin Campbell, Jean LaHerrere and Kenneth Deffeyes who have provided extensive research on world peak oil production and its timing. On the other side are prominent energy consultants such as Michael Lynch and Daniel Yergin (Cambridge Energy Research Associates) who claim that energy supplies are ample and that any energy transition is far away and will be smooth.

Campbell, LaHerrere and Deffeyes have little to gain from their prognostications. Their concern about oil depletion has been a decades long one, and they are all retired now. Lynch and Yergin are active consultants who make their livelihood projecting energy supply and prices. To be fair, some who are sounding the alarm about peak oil are consultants and investment bankers and managers. The most prominent among them is Matthew Simmons who insists that it would actually be better for his business if he didn’t ruffle so many feathers with his outspoken warnings. Both sides then have every incentive to get their forecasts right.

Is it really just a case of bulls and bears espousing their opinions about the direction of the petroleum markets? Or does the disagreement stem from something more basic? I think the answer can be found, in part, in Yergin’s paean to free-market ideology, “Commanding Heights.” The book traces the transition away from government control of the world’s economies to the laissez-faire ideology of today. There is no doubt where Yergin stands. Peak oil critics such as Yergin and Lynch believe the marketplace can solve all the world’s ills. What they do not explain is why, with their preferred free-market ideology now ascendant practically everywhere, the marketplace is only making global warming, soil erosion, deforestation, and water depletion worse. They glide around all questions of ecological damage and focus on economic growth alone. They are cornucopians who cannot fathom the possibility of limits to growth.
(1 August 2005)

Clusterf*ck Nation Chronicle

James Howard Kunstler, Clusterf*ck Nation Chronicle
We begin this ominous month with the curious case of Daniel Yergin, who won the Pulitizer for his 1992 epic history of the oil industry, The Prize, later turned into a PBS megadocumentary. Since his big score, Yergin has set up a public relations firm called Cambridge Energy Research Associates (CERA) which, in the spirit of the PR profession, seems to have become the main disinformation organ for its clients, the major oil companies.

In a piece published in yesterday’s Washington Post, Yergin takes the position that there is no problem with the global oil supply. Over the next five years, he says, both OPEC and non-OPEC producers will come up with an extra 16 million barrels a day, taking the world from its current 85 m/b/d to 101 m/b/d in 2010. This will happen, he says, because of “new technology” used to exploit unconventional sources of oil such as tar sands, ultra-deep-water developments, and natural gas liquids.

More than a few elements of Yergin’s pitch are shifty. The slyest one is that he does not mention that unconventional oil tends to be very uncheap, and since it is cheap oil that enables America’s “non-negotiable” easy motoring way of life, and the debt-fueled suburban sprawl-building economy that has evolved to serve it, there may indeed be a problem further along in the pipeline, so to speak.
(1 August 2005)
The subject of Kunstler’s wrath is this article by Daniel Yergin:
It’s Not the End Of the Oil Age

Press release for the CERA report
Critical analysis of the CERTA report from Financial Sense Online.

Get ready for return of the bad ’70s

James Breiner, Washington Business Journal
In 1973 we saw human behavior at its worst. The Arab oil embargo created panic. People feared that they wouldn’t be able to get their next gallon of gasoline, so they did what people do: They lined up at gasoline stations to get theirs.

Everyone was topping off their tanks. Fistfights broke out when people felt others had cut into the line. People with license plates ending in even numbers were supposed to go to the gas station only on even-numbered days, and the same with odd numbers. Highway speed limits were reduced to 55 mph everywhere from 75 and 70 in order to conserve fuel.

…For a while, we changed our behavior. We bought smaller European and Japanese cars. Gas-guzzling American-made land cruisers declined in popularity.

…The cost of energy became a factor in every business decision, from the types of windows installed in office buildings to the type of HVAC plant installed in a public building (it was a question of whether fuel oil, natural gas or electricity was the cheapest and most efficient way to get the job done).

After a while, though, people forgot. They built bigger houses farther and farther from where they worked, went to school and shopped. When was the last time you heard someone discuss the energy bills of a home they were thinking about buying? In the 1970s, this was on everyone’s mind.

…No one has turned off the spigot yet. We have an abundance of space, relatively cheap land and relatively cheap fuel. So we see no reason to change. I am not anxious to revisit the bad old 1970s. But I fear what will happen when someone turns off the spigot.
James Breiner is publisher of Baltimore Business Journal.
(29 July 2005)

Malaysia: Cut air-conditioner usage

New Straits Times
In the wake of rising fuel prices, Human Resources Minister Datuk Dr Fong Chan Onn has suggested that government offices reduce air-conditioner use to save energy.

Fong reckons this will have long-term benefits for everyone, and help the Government create an energy-saving culture. “We have to teach the public to consume energy more efficiently.”
(2 August 2005)

Politics and Economics

King Fahd of Saudi Arabia dies

King Fahd, Saudi Arabia’s ruler since 1982, has died at the age of 84. Saudi state television announced Crown Prince Abdullah, his half-brother, had been named as King Fahd’s successor.

King Fahd had been frail since suffering a debilitating stroke in 1995 and had delegated the running of the kingdom to Crown Prince Abdullah. Members of the royal family have pledged allegiance to Abdullah. An official ceremony confirming him as king is due to be held on Wednesday.

…King Fahd ascended the throne in 1982 after seven years as crown prince, making him absolute monarch of the world’s largest oil-producing country and home of Islam’s two holiest sites, the mosques at Mecca and Medina.
(1 August 2005)
Many related stories are available online.

Long-lived the kings
Monday August 1, 2005

Brian Whitaker, The Guardian
Brian Whitaker contemplates what the future holds for Saudi Arabia in the reign of King Abdullah and beyond
…At the ripe old age of 81, former Crown Prince Abdullah now takes over the throne – and with it control over 25% of the world’s known oil reserves.

Abdullah is regarded as a straightforward and pious man, traditional in many of his attitudes but not averse to gradual reform. As one of many sons (by 16 wives) of the first king, Abd al-Aziz, he was tutored by Islamic scholars in the royal court but also bundled off to the desert to live with the Bedouin and learn their rugged ways.

“I train my own children to walk barefoot, to rise two hours before dawn, to eat but little, to ride horses bareback,” his father was quoted as saying.

It was not until the discovery of abundant oil – the first exports were in 1938 – that the harsh ways of the desert began to be replaced by luxury and indolence. Today Prince Abdullah travels in a Rolls-Royce (registration 001) but has retained more of old values than many of his contemporaries.

…As a result of King Fahd’s long illness, Abdullah has already been in day-to-day charge of the kingdom for the best part of a decade. Now that he has formally taken over as monarch, it is doubtful how much difference this will make. His authority will be increased to some extent but key decisions tend to be made collectively by core members of the royal family – some of whom have progressive ideas and some of whom are extremely reactionary.

The real question for the future is how – and when – power will be transferred to a younger generation.

…The prospect over the next few years is a series of comparatively short reigns by elderly monarchs which may hamper much-needed progress towards reform.

Once the old men have finally gone, it will be difficult to decide who should take over. With hundreds of grandsons of Abd al-Aziz and no clear succession order, there are concerns about possible a struggle for the throne.
(1 August 2005)

US Energy Bill

Appetite for destruction
Our voracious oil consumption corrupts mideast policy

Cynthia Tucker, Universal Press Syndicate via WorkingForChange
After weeks of wearying hours, tedious research, fist-pounding debates and nerve-racking compromise, Congress passed historic legislation last week that promises to put the nation on the track to energy independence by the year 2050. OK, just kidding. Our Congress? Of course, it did no such thing.
(1 August 2005)

Energy Bill Raises Fears About Pollution, Fraud
Critics Point to Perks for Industry

Michael Grunwald and Juliet Eilperin, Washington Post
Last month’s Supreme Court decision expanding the power of local governments to seize private homes sparked a bipartisan backlash in Congress. The House overwhelmingly passed a resolution declaring “grave disapproval,” and some of Capitol Hill’s staunchest liberals and conservatives agreed to push for stricter limits on eminent-domain powers.

But that rarely seen consensus on property rights quickly melted away in the fine print of the energy bill that Congress passed yesterday. The bill gave the federal government new eminent-domain powers to clear paths for power lines — a long-standing demand of the nation’s electric utilities. The utilities said they were being thwarted by not-in-my-back-yard opposition, so the politicians came to their rescue.

The provision was just one example of how the energy bill, touted as a way to reduce dependence on foreign oil or moderate gasoline prices, has been turned into a piñata of perks for energy industries. “Every industry gets their own little program,” said Myron Ebell of the free-market Competitive Enterprise Institute. “There’s pork in there for everybody.”

The bill exempts oil and gas industries from some clean-water laws, streamlines permits for oil wells and power lines on public lands, and helps the hydropower industry appeal environmental restrictions. One obscure provision would repeal a Depression-era law that has prevented consolidation of public utilities, potentially transforming the nation’s electricity markets.
(30 July 2005)

Democrats and the energy bill

Dave Roberts, Gristmill
I’ve written about negative reactions to the energy bill from mainstream green groups, the Apollo Alliance, newspaper editorial boards, and libertarians. I’m sure I could find more — denunciations of the special-interest-giveaway fest are thick on the ground. What about the converse, though: Who is reacting positively to this bill? Who will defend it?

The industries that directly benefit from the manifold subsidies and tax breaks, of course (see, e.g., the Nuclear Energy Institute). And the majority Republicans, who receive copious contributions from those industries and who will no doubt receive credit for “getting things done” (see, e.g., Domenici). But who else?

Well, how about that other party … what’s the name again? Demo-something? Why did enough Dems support this bill to get it through? And are they happy about it? I investigate. Right off the bat, heartbreak: Barack Obama of Illinois voted for this turkey
(1 August 2005)

Energy bill criticized as lacking new policy

Lawrence M. O’Rourke, Sacramento Bee
WASHINGTON – After four years of negotiations, Congress’ final approval Friday of a federal energy law stopped short of President Bush’s original goal: creating a comprehensive energy policy for the nation that cuts back oil imports.

The measure, one of the centerpieces of the president’s agenda since he entered the White House in 2001, will provide billions of dollars in subsidies to oil and gas companies to search out and develop new sources.
(30 July 2005)

An energy policy about half right

Editorial, Seattle Times
THE new U.S. energy bill is an achievement – in compromise. It should not be hailed as a solution to the nation’s complex energy and pollution woes.

At best, the bill passed last week is barely a start – and it contains some protections for the Northwest power system. At worst, it misses the chance to commit more fully to conservation and reducing U.S. dependence on foreign oil.
(1 August 2005)