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Peak oil - Aug 25

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Many more articles are available through the Energy Bulletin homepage


Sydney Morning Herald profiles Heinberg

Original: "When oil dries up"
Nick Galvin, Sydney Morning Herald
Oil is close to running out, and chaos will follow, according to a US expert.
----
Richard Heinberg is an unlikely latter-day Jeremiah. The contrast between this quietly spoken Californian college professor and accomplished classical violinist and his explosive message couldn't be more marked.

Heinberg, who is embarking on an Australia-wide speaking tour, is a leading proponent of the "peak oil" theory.

Peak oil is shorthand for the premise that the amount of oil left for us to use has "peaked" (or is just about to peak). Once worldwide production begins to fall and with no corresponding decrease in demand, oil prices will skyrocket, leading to widespread chaos.

How bad will it be? If Heinberg is to be believed, the impending dislocation caused by the end of the oil era will be about as bad as it gets.

From global resource wars as oil-dependent economies battle for control of remaining resources to widespread famine caused by the slowdown in oil-dependent agribusiness, the picture he paints is nothing short of cataclysmic.

Reactions to his predictions vary. "I've got some pretty virulent hate mail," he says. "But I have to say I've got mostly thanks from people for alerting them to this. I'm a little surprised because the message is so dire that when people first encounter the information it is a bit traumatic. Some people have to go through a period of psychological adjustment. Maybe they are better off not knowing, I don't know."

...If we are to gently surf the downward slope of Hubbert's bell curve rather than precipitously tumble off the edge, Heinberg says, it will take a social transformation of no lesser magnitude than the industrial revolution. "I don't think we are going back to exactly how people lived 200 years ago but we are going to need lots more human labour in agriculture and that means the middle class is going to start shrinking."

...Manufacturing will again become a local business in the post-oil era as the interdependencies of global trade are unwound. International trade will continue but it will be restricted to luxuries and exotic items. People will work and shop close to home and even grow some food in their own backyards - just as many of our parents did.

"I think that's going to be good for people and good for communities," Heinberg says. "If the transition is accomplished in a co-ordinated way it's going to mean more jobs and more satisfying jobs for people.

"If you look at the end of the process it's not hard to paint a fairly attractive picture. The problem is how we get there - very few communities are planning for this transition. [But] if we just let market forces rule, the result is going to be economic, political and social chaos in the intervening period."

..."If I had a bet on what the state of the world would be in 50 years I think I'd say it's not going to be a very happy place but the more we do the better off we will be," he says. "I think it's more important to be making whatever positive changes we can than just wailing and gnashing our teeth and bemoaning our collective fate."

Richard Heinberg is speaking at NSW Parliament House on Tuesday and at Ku-ring-gai Town Hall on Thursday. The Oil Depletion Protocol (New Society Publishers) is available from Astam Books.
(26 Aug 2006)
Related: Adelaide Now has a short peak oil article, Oil crisis by 2010, with quotes from Chris Skrebowski and the Australian ASPO.


Depletion estimates and the CGES

Heading Out, The Oil Drum
Courtesy of Dave and Matt Simmons I learned that the Center for Global Energy Studies (CGES) has just released a report on Oil's Depletion Rate (pdf file). Since this is the basic concern that underlies a considerable portion of the current debate about Peak Oil, and figures being quoted for depletion vary from 2% to 14%, depending on which field, and which period one is discussing, I looked for some enlightenment in their conclusions.

I learned, to begin with that

Although it seems straightforward, depletion as a concept is not easy to pin down. The very use of the word "depletion" in this context - synonymous as it is with exhaustion - implies that oil resources are being run down and that one day they will dwindle into insignificance. Oil resources may well become insignificant in the years to come, but it is not certain whether this will be due to their physical exhaustion or to the world moving away from oil and towards another source of energy.

Unfortunately, this suggests, as does the tone of much of the article that follows, that being concerned about oil supplies, largely from the point of the reserve available, is a pointless worry. I say unfortunately because this cornucopian view of the world of oil glosses over the changing situation in the world and conceals some of the assumptions that it makes, by hiding them within the overbounding simplification of its argument.

Let me explain a little what I mean by that, and to help I am going to use some of the numbers and arguments that Jean Laherrere presented at the Lisbon Peak Oil meeting, where he discussed the relationships between discoveries and production. To begin with the article looks at the issue from a global point of view, rather than on the basis of individual fields.
(25 Aug 2006)


DOE predicts gasoline shortages

Andy Lenderman, The New Mexican
Gasoline shortages and even higher prices loom, a new government report says, and it will take decades and trillions of dollars to replace American dependence on foreign oil.

The U.S. Department of Energy report directly addressed the concept of peak oil and how to deal with it. Peak oil means oil production is maximized and supply goes down from that point forward. Coupled with a surge in demand from countries like China and India, some energy experts say this could be a problem for America's economy.

"The world is consuming more oil than it is finding, and at some point within the next decade or two, world production of conventional oil will likely peak," the report says.

In Congress, U.S. Rep. Tom Udall, D-N.M., has co-founded the House Peak Oil Caucus aimed at tackling this issue. "I have a sense that the frustration is building, and whenever that happens, that's the opportunity to get something done," he said Thursday.

Udall said with gas at $3 a gallon, people are nervous and anxious about how they will meet their budgets.

The July report was written by Robert Hirsch of Science Applications International Corp., and Roger Bezdek and Robert Wendling of Management Information Services Inc., based in Washington, D.C.
(25 Aug 2006)
You can access the new report from Energy Analyses on the website of the National Energy Technology Laboratory (NETL). (Look towards the bottom of the page).


Peak Oil Passnotes: Peak Pipelines

Edward Tapamor, ResourceInvestor
PARIS -- The venerable and entertaining Matthew Simmons of Simmons International investment banking has managed to tweak the ear of the media once again this week. This time however it is not those nasty Saudi Arabians about which Simmons has written so much. Instead it is about pipelines.

Apparently because BP [NYSE:BP; LSE:BP] has had serious corrosion at its Prudhoe Bay North Slope Alaska operations we are heading for $300 crude. Not surprisingly he did not specify a time frame for that.

"The industry cut too many corners when prices were low. For 25 years, there was not a proper maintenance program. We backed ourselves into a system, rigs, pipelines and refineries, that rusted away. The anecdotal evidence is so widespread that it is undeniable. Until we had something as stunning as Prudhoe Bay, the industry was able to say that incidents were one-offs or that these allegations came from disgruntled employees," he said.

From this point Simmons concluded that the price of a barrel of crude will hit $300 due to it being "Pearl Harbor day" for the energy industry.

On the other hand we have the serious bear team out there. Whispers are circulating that the flood of speculative money, that people keep talking about, is about to turn into a drip. Then when the speculators exit the market, oil is going to crash back down through all its previous support levels to as low as $10.

They are both wrong. As wrong as Britney Spears' nude photo. As wrong as the invasion of Iraq. As wrong as Posh Spice's diet.
(25 Aug 2006)


Peak Oil prophecies
Rise of the eco-engineers

Haydn Bush, Chicago Journal
Lately, I've been freaking out over Peak Oil. For the uninitiated, Peak Oilers envision a fitful collapse of our hyper-industrial society, when crude oil passes its peak supply arc and slowly declines as a resource. As the supply of cheap energy sputters out of existence, Peak Oil adherents imagine resource wars, population die-offs, and eventually, an agrarian society surrounded by urban and suburban ruins.

Essentially, it's a progressive dystopia, mirroring the gloom and doom of the Christian Left Behind series of books. Until recently, it seemed like more an environmentalist, Luddite revenge fantasy than an accurate image of the near future, but with gas prices surging, it doesn't seem so far-fetched anymore.

...In the long run, the bike builders, electric car salesmen, and government bureaucrats are the ones with the power to save us from a Blade Runner future. Vice President Dick Cheney famously described conservation as a "personal virtue," but I think the long-term answers to energy use are going to be a result of a heavy dose of entrepreneurial invention-aided, hopefully, by government funding and regulations-with individual morality mixed in. If the Eco-Transportation Show is any indication, the human energy to tackle these problems is a renewable resource that already exists.
(23 Aug 2006)

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