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Y2K versus Peak Oil
The Back Slope Blog
…Peak oil is a problem that represents not one problem due to occur at a set date, but a complex of interacting factors likely to influence our lives for the foreseeable future.
The problem may appear to be; how do we replace oil with alternatives? But the real question is; how are we going to deal with the transition to a lower quality energy resource?
This is the point that I think makes technological optimists so
infuriating in the eyes of those that have seriously looked at the
nature of energy resources. It seems a simple enough concept but it is in fact very poorly understood. So I’m going to have a go at explaining it.
The most crucial characteristic of any energy resource is its energy
profit ratio, or energy returned on energy invested, hereafter shortened to EROEI…
(3 August 2005)
Peak Oil Jobs No.3 The eBay Seller
Roland Watson, New Era Investor [Blog]
Ask somebody about pawnbrokers and they may think you were talking about dodgy dealers in sex movies. Ask them again about eBay and the look of familiarity will become apparent. …
So, what is the Peak Oil prognosis for these differing dealers in second hand goods? Is that career as an eBay seller guaranteed or will that depression-era symbol of the brass balls be making a comeback to a street corner near you?
There are several things you could say about Peak Oil and the flow of second hand goods. The long term economic contraction it causes will lead to a decrease in the quantity of their competitor – brand new goods. That will be because income will not have increased in line with the higher cost of producing and transporting such items.
So, does economic privation increase demand for second-hand goods? The answer is a qualified yes because it depends what is in demand. Essential items in second-hand condition will see demand increase but items related to discretionary spending will vary. …
(4 July 2005)
US Govt Sponsored Peak Oil Report Draws Disturbing Conclusions
Michael J. DesLauriers, Resource Investor
TORONTO — A 67-page report released earlier this year on the subject of Peak Oil and sponsored by the U.S. Department of Energy drew several conclusions:
1. World Oil Peaking is Going to Happen
2. Oil Peaking Could Cost the U.S. Economy Dearly
3. Oil Peaking Presents a Unique Challenge (“it will be abrupt and revolutionary”)
4. The Problem is Liquid Fuels (growth in demand mainly from transportation sector)
5. Mitigation Efforts Will Require Substantial Time
6. Both Supply and Demand Will Require Attention
7. It Is a Matter of Risk Management (mitigating action must come before the peak)
8. Government Intervention Will be Required
9. Economic Upheaval is Not Inevitable (“given enough lead-time, the problems are soluble with existing technologies.”)
10. More Information is Needed. …
The study envisions three scenarios for dealing with a peak oil reality: scenario one involves action not taken until peaking occurs, and scenarios two and three deal with action taken ten and twenty years prior thereto. The conclusions follow:
* Waiting until world oil production peaks before taking crash program action leaves the world with a significant liquid fuel deficit for more than two decades.
* Initiating a mitigation crash program 10 years before world oil peaking helps considerably but still leaves a liquid fuels shortfall roughly a decade after the time that oil would have peaked.
* Initiating a mitigation crash program 20 years before peaking appears to offer the possibility of avoiding a world liquid fuels shortfall for the forecast period. …
If peak oil is not upon us already, the chances of minimizing future damage are fair and it is certainly encouraging to know that government authorities are taking the threat seriously. Any way you slice it however, the economy and the consumer are unlikely to escape unscathed through the transition period into other energy sources as the world comes to grips with a new evolving paradigm in satisfying its needs for energy consumption.
(29 July 2005)
A useful summary of the Hirsch report and some valuable commentary, though readers should make their own call on whether, “…government authorities are taking the threat seriously”. -LJ
Uncle Sam’s asleep at the wheel
Sean Brodrick, The Daily Reckoning
There is a three-way race for global energy resources going on right now between China, India and the United States. Uncle Sam was the early odds-on favorite. Unfortunately, he fell asleep at the starting gate, seemingly unaware that the other two contenders are planning to run rings around him.
The good news is you can protect your portfolio from a potential energy emergency. You can even profit handsomely. More on that in a minute. First, here are some uncomfortable facts. …
This is all bad enough, surely bad enough for a potential oil supply/demand squeeze in its own right. And yeah, we’ve seen an energy crisis before, and we got through that one just fine, right? But here’s what makes it different this time: China and India. …
There is other unexploited oil in the world. Unfortunately, a lot of it is in countries that are off-limits to U.S. oil companies. Because their governments are run by genocidal tyrants, our government prohibits U.S. companies from going there. For example, lobbying by human rights groups has forced one Western oil firm after another to pull out of the Sudan. …
( July 2005)
Peak purists would argue that ‘what makes it different this time’ is not China and India but the reaching of the physical and geological limit of oil extraction. Previous energy crises (1973-74, 79) have been political and temporary, and even if India, China and OPEC had never existed we would inevitably still reach a peak in oil extraction.-LJ
Nicaragua Trapped in Energy Crisis
Staff, Prensa Latina via Inside CostaRica.com
Managua – The Nicaraguan Congress has declared an energy emergency throughout the country as long as the energy crisis caused by the increase in oil prices in the international lasts.
According to a decree put into effect in Managua, the state of emergency will last until barrels of oil reach 45 US dollars. The currently price is about 60 US dollars.
The new resolution also includes control of hydrocarbon supplies, and also establishes provisional control of oil derivativesprices.
In addition, public transport will be reorganized to reduce fuel consumption, electric plants will be exempted from oil taxes, and the government is considering subsidising energy consumers.
(28 July 2005)
In land of bicycle, car boom brings freedom of open road
Amelia Newcomb, Christian Science Monitor
…The car has long been a potent symbol of “having arrived,” packing a triple threat of purchasing power, style, and convenience. And, not surprisingly, it holds special allure in a country where until recently the bicycle was king and mobility was limited. That blossoming love affair with wheels is likely to make China the largest car market in the world within about a decade.
Buoyed by a vibrant economy, easier credit, and improving roads, consumers are snapping up autos in unprecedented numbers – clogging urban streets and exacerbating pollution in the process. But they’re also driving a social shift founded on that most capitalist of desires: the freedom to go where you want, when you want.
…In car terms, life really began in China around the millennium. Some 1.2 million cars rolled off the lots in 2002, a spike in demand of 30 to 40 percent. That figure jumped 70 percent in 2003, to about 2 million. Last year, Chinese bought 2.4 million cars, according to official figures, and growth is expected to be about 15 percent this year, with 10 percent becoming the annual norm by 2015.
…All this growth, of course, is taking a toll. China is already home to many of the world’s most polluted cities. Vehicle exhaust will account for 79 percent of total air pollution in China this year, according to official estimates. A national network of roads will allow goods to move more freely, but roads often become clogged as quickly as they’re constructed: Beijing, for example, has five heavily traveled ring roads around the city and is at work on a sixth.
…By 2020, the country is expected to have 130 million vehicles on the road, accounting for more than half of China’s oil consumption. China has made no secret of its push to secure access to global oil supplies, something that has sparked tensions with the US.
(3 August 2005)
‘Energy Bill makes bad energy outlook worse — national & homeland security threatened’: Cleanpeace.org
Press release, Cleanpeace via WorldWire.com
The energy bill Congress sent to the White House today guarantees America’s continued dangerous, dependence on Middle East oil. The U.S. holds between 2 and 3% of world oil reserves, the Persian Gulf nations hold 50% and the Middle East dominated OPEC cartel controls 61%. Middle East dictators have oil staying power; the U. S. and Western democracies do not.
“The bill subsidizes more rapid depletion of dwindling U.S. oil reserves. Subsidized oil production means faster oil depletion, an increasingly dangerous dependence on Middle East oil, the dictators who control it, and the terrorists who influence them” said author Roy McAlister, a Cleanpeace. org Co-President and a world authority on clean fuel production from wind, wave, biomass and solar energy.
America’s prosperity and security depend on adequate supplies of the cheap oil that powers the nation’s economy. Increasing dependence on Middle East oil supplies that can be disrupted by violence or political change at any time threatens both. …
McAlister continued, “Congress’ energy bill amounts to little more than a Big Oil boondoggle and a multi-billion dollar giveaway to giant energy corporations. It puts taxpayer money in the wrong place, at the wrong time and for the wrong reasons. It continues short-changing abundant solar resources and it fails to equalize subsidies and policy advantages between depletable energy and undepletable energy. The bill should be dubbed “The Great Mistake”
“By passing this bill, Congress sent a message to America’s friends and foes that the United States has surrendered its energy future to those who hold the oil when it needed to send a Declaration of Energy Independence and set an undepletable energy policy to back it up.” said Garrett
(29 July 2005)
“Cleanpeace.org is a non-profit corporation dedicated to social action for rapid replacement of depletable fossil and radioactive fuels with clean burning, Undepletable Hydrogen (Hydrogen produced from Undepletable Resources) …
The American Hydrogen Association is a non-profit (C-3) educational organization providing CleanPeace with the scienti-fic, technical information concerning rapid replacement of depletable fossil and radioactive fuels with abundant supplies of renewable (Undepletable) Hydrogen and new materials as part of its educational mandate.
American Hydrogen Association’s mission is to test and report scientificaally proven options for Civilization to overcome dependence upon burning over one million years’ of fossil accumulations each year. “
China sees 2005 crude oil demand up 6 pct
China’s demand for crude oil will rise about 6 percent from last year to 310 million tonnes (6.2 million barrels per day) in 2005, the government estimated in a new survey that underscores weak domestic consumption data.
Domestic crude production in the world’s second-largest oil consumer would only rise 3 percent to 180 million tonnes (3.6 million bpd), the China Securities Journal reported on Tuesday, quoting the Commerce Ministry’s survey. That will leave a shortfall of 130 million tonnes (2.6 million bpd), implying a 6 percent increase from last year’s average crude oil imports of 2.45 million bpd.
(2 August 2005)
Politics and Economics
Iran needs foreign firms to stop oil depletion
Staff, Daily Times (Pakistan)
BAHREGAN, Iran: Iran’s crude output capacity is depleting by up to 400,000 barrels per day each year, showing the need to overcome conservative objections to foreign investment, Iran’s oil minister said on Tuesday.
“Our fields are depleting by between 300,000 and 400,000 barrels a day each year,” Bijan Zanganeh told reporters in the southern Iranian town of Bahregan. “With heavy investment, there is capacity for one million barrels per day (bpd) to come from unfinished projects,” he added.
Zanganeh’s figures are in line with upstream analysts who say Iran’s biggest oilfields are losing between seven and eight percent of output each year. A 300,000 bpd figure would represent 7.5 percent of Iran’s four million bpd production. Iran is struggling to keep production static through oil projects developed by foreign firms. …
(5 July 2005)
Chap. 11 likely for Northwest, Delta airlines
Keith L. Alexander, Washington Post
Northwest and Delta Air Lines are likely to file for Chapter 11 bankruptcy protection in mid-September, a month before a new, more restrictive bankruptcy law goes into effect, bankruptcy experts and airline insiders say.(2 August 2005)
A few months ago, our logs showed that traffic from one of these airline’s servers to this website was greater than that of any other user for that month. Of particular interest seemed to be Zittel et al’s excellent critique of the international energy agencies, a sure sign that several people in that particular company have some skepticism of the official explanations of recent oil price increases.