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Looking at the end of the age of oil and abundant energy
Jan Lundberg, Gristmill
As a petroleum industry analyst who gave up material security for a career as an activist against petroleum industry expansion, I’ve developed a unique understanding of the global peak in oil extraction. Questioning society’s energy needs has always been my tendency. But I gained further understanding of our culture by giving up affluence and many conveniences. This was an attempt to get closer to nature and live by my wits with the support of activists and my growing community of friends far and wide.
In 2004 I hit the road (the rails, usually) to spread the word about the plastic plague, petrocollapse, and the positive future that culture change will present. It was fitting that the nonprofit organization I founded in 1988, Fossil Fuels Policy Action, eventually became known as Culture Change. I was delighted to learn last year that geologist M. King Hubbert, who discovered peak oil, identified the fact that we do not have an energy crisis but a culture crisis:
Our culture is built on growth and that phase of human history is almost over and we are not prepared for it. Our biggest problem is not the end of our resources. That will be gradual. Our biggest problem is a cultural problem. We don’t know how to cope with it.
Hubbert and I served the opposite ends of the oil industry. My experience concerned the market, understanding supply and how to predict shortage or glut.
A guest essay by Jan Lundberg, who, in search of depaving opportunities, lives in San Francisco with no car. He founded Culturechange.org and organizes Petrocollapse Conferences. He can be reached via email. The essay may find its way into his forthcoming book.
(22 Sep 2006)
The gusher paradox
A new oil discovery is great for the drillers – but may be bad for us.
Andy Serwer, FORTUNE Magazine via CNN Money
The recent discovery of a massive oilfield under the Gulf of Mexico appears to be a godsend for our crude-hungry country. It’s not that simple, however. The new deep-water find is a pointed example of the way elevated oil and gas prices always seem to lead us to new technologies and, eventually, to renewed supplies. But one giant new gusher does nothing to get us off the gerbil wheel of ever more consumption creating ever more demand.
In case you missed it, in early September a consortium of Chevron (Charts), Devon Energy (Charts), and Norway’s Statoil announced it had struck oil at the Jack No. 2 well, some 170 miles southwest of New Orleans and 29,000 feet down through water and earth. Geologists estimate that the area contains anywhere from three billion to 15 billion barrels.
If the find comes in at the upper end of that range – and of course the oil whisperers believe that will be the case – it will be the largest U.S. oilfield. (Alaska’s Prudhoe Bay, where BP (Charts) recently had some pipeline problems, is currently the biggest, with some 12 billion barrels produced.) The deposits could increase U.S. reserves, now at about 29 billion barrels, by 50%. No wonder the strike added to the downward momentum on oil prices: Since peaking at $77 in mid-July, the cost of a barrel of crude has fallen below $64.
…I happen to be reading Matthew Simmons’s Twilight in the Desert, which describes how Saudi Arabia in particular and the world in general are running out of oil. This “peak theory” of oil (as in, the world has achieved peak production) would seem to be off base with the discovery of a 15 billion-barrel oilfield. And, as Nichols points out, oil alarmists have been sounding the same bell for decades.
But I’m not sure that we should be so quick to dismiss the peakists. At some point they will be right, and I believe it’s important to act as if they already are. Pursuing petroleum at any cost overseas, and even domestically, exposes us to all sorts of risk and merely makes it easier to avoid the tough steps that could reduce our dependence on oil.
So congrats to Larry Nichols and his partners. I hope they get 15 billion barrels out of the gulf and more. But I’ll be even more fired up when some engineer builds me an SUV that gets 100 miles to the gallon.
(21 Sep 2006)
Author Andy Serwer is a senior editor at Fortune Magazine.
Peak Oil Theory of Value
Byron King, Whiskey & Gunpowder
What prompts me to this discussion is a recent comment by the chief executive officer of ExxonMobil Australia concerning Peak Oil. The setting was the 7:30 Report of the Australian Broadcasting Corp. (ABC) on Sept. 14, 2006. ABC reporter Mike Sexton was relating comments by ExxonMobil Australia’s CEO Mark Nolan. Here is some of the transcript:
Q: The Peak Oil theory suggests at one point the world will have used more than half the oil and future demand will outstrip supply, leading to dramatic changes to our society. But big oil isn’t buying it.
Nolan: These Peak Oil theories have been around since the 1920s, particularly in times of high oil prices. Our view is that the world has abundant energy resources and that there is no Peak Oil theory of value.”
Exxon’s Mr. Nolan did not amplify this last comment. He simply threw out the bald assertion that “there is no Peak Oil theory of value.” In later comments, Mr. Nolan explained the Exxon “view” that “the world has abundant energy resources.”
…So is it fair to say, as did Exxon’s Mr. Nolan, that “there is no Peak Oil theory of value”? Is he saying that Peak Oil brings nothing of substance to the table? What is the value of Peak Oil? Is it intrinsic? Is it subjective? Does it have a cost-of-production attached to it? Is there some useful way to fit the Peak Oil concept into all of these value systems? At the end of the day, what is it worth to be able to predict, or at least to know and understand, that the world’s capacity to extract conventional petroleum is about to go into irreversible decline? What is it worth to be forewarned? And thus forewarned, can the mass consciousness of nations and vast populations process such a form of information and turn it to advantage?
…In the foregoing respects, the concept of Peak Oil may well be among the most valuable theories that has ever been developed in the human mind. Peak Oil is about mankind’s relationship with its energy supply. An understanding of Peak Oil is a key to mankind understanding how to survive into the future. That seems to me like a perfectly useful “theory of value.”
(21 Sep 2006)
Salt is essential to our existence. Bloody wars have been fought over it, civilizations have risen and fallen because of its availability, and our own civilization depends on it every bit as much as oil.
Salt is obtained from two sources: Using seawater from our current oceans and mining halite deposits from ancient oceans. According to the Salt Institute, world salt production was 208 million tons in 2004, a figure that increases every year. In the context of our industrial civilization, there is an unlimited amount of salt – even far from the oceans, underground salt is staggeringly plentiful.
But consider salt availability after Peak Oil. If you live near the ocean, you can obtain salt using any of the dozens of ancient techniques – until rising sea levels erase suitable areas for salt flats. In the past, those living away from the coasts had certain options: they could obtain salt from animals that had consumed salt from subsurface deposits; they could obtain the salt directly from those deposits; or they could trade with those who harvested it from the far-away oceans – options that are in serious jeopardy post-Peak Oil.
Just as with oil, as our demand for salt grew we extracted the easy deposits first before moving on to the deeper (and harder to obtain) sources. Without heavy machinery, there are few accessible significant salt deposits inland.
(22 Sep 2006)
Contributor PeakEngineer writes: “I became concerned with the availability of salt post-Peak Oil while researching essential items for sustainable living. ‘Peak Salt’ could become a real concern, particularly when you take population into account.”
Interview with Steve Andrews about ASPO-USA conference
Marc Strassman, Etopia Media
75-minute audio interview with ASPO-USA co-founder Steve Andrews about the ASPO-USA 2006 Boston World Oil Conference, “Time for Action: A Midnight Ride for Peak Oil,” scheduled for October 26-27, 2006, in Boston, Massachusetts, go to:
(21 Sep 2006)
ASPO-USA conference Oct 25-7; deal on rooms
ASPO-USA announces our second “Dialogue with the Experts,” a high-level conference to discuss impacts of and responses to a peak in world oil production.
Dates: Thursday, October 26 and Friday, October 27, 2006 (plus pre- and post-conference events)
Location: Boston University; Boston, Massachusetts
UPDATE: Limited time availability – rooms at special discount rate of $99 at Comfort Inn, 900 Morrissey Blvd, Boston MA 02122
See www.aspo-usa.com/fall2006/AreaHotels.cfm .
(21 Sep 2006)