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Peak Oil - Mar 20

PEAK OIL

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Many more articles are available through the Energy Bulletin homepage


Quick review: CNN: "We Were Warned: Tomorrow's Oil Crisis"

David Delany, EnergyResources e-list
I just watched the Saturday 8:00 PM airing of "We were warned: tomorrow's oil crisis", on CNN. See schedule below for Sunday and Monday airings. The Saturday 4:00 PM airing did not happen.

It's a confused mish-mash. Worth watching though, for several reasons. E.g. to see the show avoiding mention of peak oil and the inexorable progressive decline of oil production that will follow it. You can bet your bippy that everyone involved in the production of the show knew a lot about peak oil. You can bet your bippy that several of their guests mentioned peak oil--Simmons at least. Several utterance of "peak oil" must have wound up on the cutting room floor. (Do they still have cutting room floors? Probably not.) By the way, they did an excellent job of making Simmons look like a nut.

It is interesting to ask oneself what constraint would have kept them from allowing the show to mention the one concept that would have given coherence and focus to the show, a concept almost certainly well known to the producers.
(19 March 2006)


The End Of Civilization

Dave Eriqat, Countercurrents.org
I had a mild epiphany the other day: it’s not President Bush who’s living in a fantasy world, it’s most of his critics who are. I’m no apologist for Bush – I neither like nor dislike him. He’s no more significant to me than a fly buzzing around outside my window. So permit me to explain my reasoning.

People look at Bush’s invasion of Iraq and see a miserable failure. But a failure to do what? Democratize Iraq? Eliminate Iraq’s WMD arsenal? Reduce global terrorism? If those were, in fact, the reasons for invading Iraq, then the invasion would have to be classified as a failure. But what if the real reason was to secure Iraq’s oil supplies, perhaps not for immediate use, and perhaps not even for use by the United States? Then the invasion of Iraq would have to be judged a success, a “mission accomplished,” so to speak.

Or take Bush’s seemingly irresponsible handling of the domestic economy. How can any sane person fail to understand that cutting revenue while increasing spending will produce deficits, and that those deficits cannot increase in perpetuity? Sooner or later that accumulated debt has got to have consequences. Bush appears to be acting as if there were no tomorrow. But what if there really were no tomorrow, financially speaking? In that case, the reckless economic policies of today would not only be irrelevant, but might actually be shrewd. I mean, if one knows that he is not going to have to pay back his debts tomorrow, then why not borrow money like crazy today? In fact, if civilization is coming to an end, then why not use all that borrowed money to stock up on guns and vital resources, such as oil?
(13 March 2006)
A long and deeply chilling vision of the post-peak world. I would recommend reading it, although some of the points may seem ungrounded to those not familiar with supporting literature. I'd also recommend reading Pat Murphy's The Peak Oil War: A World Peace Story for a more hopeful vision.

A similar theme to that of the above paragraphs appeared in a book review in the NY Times yesterday (19th March) in which history professor Alan Brinkley, reviewing a book by former Republican party strategist Keven Philips, writes:

The creation of a national-debt culture ... is most of all a product of the "financialization" of the American economy — the turn away from manufacturing and toward an economy based on moving and managing money, a trend encouraged, Phillips argues persuasively, by the preoccupation with oil and (somewhat less persuasively) with evangelical belief in the imminent rapture, which makes planning for the future unnecessary.

-AF


Malaysian Leader: Era of Cheap Oil Is Over

EILEEN NG, AP/Yahoo!
KUALA LUMPUR, Malaysia — Deputy Prime Minister Najib Razak has urged Malaysians to brace for further hikes in fuel prices, warning that the era of cheap oil was over.

Malaysia, a net oil importer, heavily subsidizes fuel prices but the growing subsidy bill has taken a toll on state budget.

The government on Feb. 28 sharply raised retail prices of gasoline, diesel and liquefied petroleum gas by as much as 23 percent. Despite the hike, Malaysia's fuel prices remain among the lowest in Southeast Asia.

Najib, who heads the Cabinet committee on fuel, warned late Wednesday that global oil prices — currently hovering at $63 a barrel — could surge to $100 a barrel due to tight supply and strong demand, especially from rising economic giants China and India.

The possibility of U.N. sanctions against Iran, the No. 2 producer within OPEC, for its nuclear ambitions will worsen the situation, he said, adding that some analysts had predicted oil prices to soar as high as $200 a barrel and this was not far-fetched.

"The cheap oil price era has ended. This is the reality that Malaysians and the world as a whole must accept. We can no longer hide from the fact that the price of oil would continue to rise," Najib was quoted as saying by the national Bernama news agency.
(16 March 2006)


Energy conservation moving up Pentagon's agenda

Defense Industry Daily
...The truth is that the military can't live without fuel, but every gallon of it is both a logistics burden and a financial burden. While some military items cannot realistically be converted, every conservation success or renewable energy conversion within the military's jurisdiction makes it more deployable to the field, and more self-sufficient once there. Now add the fact that diversified "green infrastructure" lowers vulnerability to the kind of "system disruption" attacks one sees in Iraq, and the military/ security benefits become compelling. That means the military will be willing to invest in these technologies even when the dollars and cents case alone may be in question. It's a trend that has already started... and it's about to pick up speed.

Rep. Roscoe Bartlett [R-MD] is Chairman of the House Armed Services Committee's Projection Forces subcommittee. He has been talking about Peak Oil issues for about a year now, and recently discussed a September 2005 Army Corps of Engineers Report entitled "Energy Trends and Their Implications for U.S. Army Installations" in the House. Part of its conclusions section notes:...

On March 14, 2006, During a House Armed Services Committee hearing on the Quadrennial Defense Review (QDR), Rep. Bartlett was questioning Deputy Defense Secretary Gordon England, who said:

"We expect a guidance to come out in a week to deal with the energy situation and what steps we can take to address the issue." Though the QDR did not explicitly deal with the military's use of oil, Defense News reports England saying that "toward the end of the QDR, these concerns became an issue for all of us." Their report also notes a December 14, 2005 memo by Defense Secretary Donald Rumsfeld, which called on the Pentagon to create a centralized point in the Department to work on energy conservation.

The Pentagon is the single largest buyer of fuel in the United States, accounting for 1.7% of total national consumption.
(17 March 2006)
The key sentence:

the military will be willing to invest in these technologies even when the dollars and cents case alone may be in question.

Cantarell Peaks - Peak Oil is Now Official
Trevor Shaw, Raise the Hammer
A recent Kight Ridder article by Kevin Hall points out that world's number two oilfield, Mexico's supergiant Cantarell, has peaked.

Cantarell is second only to Saudia Arabia's Ghawar oilfield and has been pumping millions of barrels of light crude a day since 1976. According to Carlos Morales, production manager for Mexico's state owned oil company, Pemex, Cantarell's projected output will be 6 percent lower this year at 1.9 million barrels per day and down to 1.43 million barrels by 2008, the level of production in 2000.

A leaked internal memo from inside Pemex said water and gas were seeping into the massive offshore oil field. Cantarell is showing the signs of peaking.

Canterell's Output Levels
Year Output
1994 1.0 mb/d
2000 1.5 mb/d
2004 2.13 mb/d (Peak)
2005 2.0 mb/d
2006 1.9 mb/d (projected)
2008 1.43 mb/d (projected)

The Cantarell field accounts for 60 percent of Mexico's total production. To make up the decline of Cantarell, Pemex is spending billions to develop new fields such as Chicontepec. This will prove difficult for a company that lost $3.75 billion in 2005, during a time of record high crude prices.
(18 March 2006)


Opec warns of Russian oil export slowdown

Carola Hoyos, FT.com
A recently filed lawsuit against Yukos, once one of Russia’s biggest energy companies, is threatening to further slow the growth rate of oil exports from the world’s second largest producer, the Organisation of the Petroleum Exporting Countries warned on Friday.

Russia’s oil supply, much of which is consumed internally, is expected to average 9.6m barrels a day in 2006, about 11 per cent of the world’s total demand.

Until two years ago, Russia’s high production growth matched the surging demand from China. But Moscow’s campaign against Yukos, its icy stance towards investment by foreign energy companies, higher export taxes and ageing fields in bad need of new technology and better management have stalled the growth of Russia’s oil industry.

This year’s production growth is expected to be 2 per cent, compared with the double-digit growth Russia had until a few years ago.
(17 March 2006)

Aerotropolis: Peak Oil report crucial before planning approval group says
Eric McGuinness, The Hamilton Spectator
HAMILTON, ONTARIO - Leaders of a citizens' group fighting Hamilton's proposed 1,250-hectare aerotropolis industrial park are warning the city against going ahead without considering the possible impact of huge increases in the price of oil.

Michael Desnoyers, chair of Hamiltonians for Progressive Development (HPD), and co-chair Jack Santa-Barbara say they worry council will budget millions for the aerotropolis and approve an aerotropolis-based GRIDS development strategy without seeing a peak oil report commissioned last June.

GRIDS is the city's Growth Related Integrated Development Strategy, a process to determine where the future growth of Hamilton will take place over the next 30 or more years.
...
Council is slated to vote on the budget and GRIDS next month, but there is no word when consultant Richard Gilbert will produce a final report on the effects of global oil production reaching a peak and starting to decline.

There are reports that Gilbert warns oil prices will quadruple after production of conventional oil peaks, and some experts think we're already past the peak. His first draft was sent back for revisions, and a second was reportedly received eight days ago. Neither has been made public.

HPD says it fears Hamilton will pin all its job-creation hopes on airport-based business, then face a crisis when cargo and passenger traffic dwindles because of punishing fuel prices.

Desnoyers asked: "Will it change that much? I don't know. I haven't seen the report." But the letter he co-signed says Norway and Sweden plan to be independent of fossil fuels by 2020 and the U.S. House of Representatives has a peak oil caucus drafting laws to deal with the challenge.

"Peak oil is crucial," he said. "If we're going to hinge employment lands to the strength of the airport and the airport caves, then what happens?"
(18 March 2006)
I had to look it up to be sure but yes an aerotropolis is a city (or in this case an industrial park) based around an airport. Great to see Peak Oil being taken seriously in municipal planning. -AF

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