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U.S. Energy Department study concludes crude production will peak, requiring other energy forms
Editorial, Houston Chronicle
Last September, a Chronicle editorial warned that global oil production would peak in this decade or the next, and then inexorably decline. Given that likelihood, the United States would have to embark on a crash program to develop alternative energy sources or endure crippling increases in the price of energy.
Last week, a study performed for the U.S. Department of Energy concurred with the editorial’s conclusions.
The study, led by Robert Hirsch, warned that the world should be spending $1 trillion per year developing alternative energy sources – including tar sands, oil shale and gas liquefaction – to avoid having its economy crippled by oil shortages and the resulting chaos. The study recommends a 20-year lead time, so it might already be too late to prevent a crunch.
The report said the timing was uncertain. Hirsch predicted peak oil production could come in five years, almost certainly by 2020.
(23 Sept 2006)
Contributor LW writes:
This editorial was triggered by a conference last week in London at which NETL study co-author Robert L. Hirsch spoke. The NETL paper is online at the NETL website: Economic Impacts of U.S. Liquid Fuel Mitigation Options (PDF- July 8, 2006 ).
Cheap gas until the election?
Recent hype can’t disprove peak oil
Erik Curren, Augusta Free Press
…If there’s anything that scares industry more than global warming, it’s peak oil.
Fearing it would cut into their profits, the oil, coal, electric utility and auto industries have fought since the late ’80s to postpone real action on global warming. This year, with America finally poised to take real action to reduce carbon-dioxide pollution, industry seems to have lost this battle. Yet, companies can still find consolation in opportunities to profit from fighting global warming, whether through genuine but limited solutions like hybrid cars or bogus ones like so-called clean coal.
But with peak oil, there seems to be very little upside for many industries. If oil is both as central to our economy today and as hard to replace as peak-oil analysts say, then the whole international trade system could be threatened. Cheap goods from China would no longer be cheap. Food shipped from California to the East Coast could skyrocket. Wal-Mart prices could start to look like those on Rodeo Drive.
If peak oil ever caught on with the public as global warming has done this year with Al Gore’s film “An Inconvenient Truth” and Hurricane Katrina, then Americans would be left with an even more disturbing picture of the future.
Scientists have warned that we must stabilize our carbon emissions within a decade to avoid the worst effects of climate change.
But if we accept peak oil, then we’ll see we don’t have the luxury of even a decade to transition to a lifestyle that uses much less energy. If we stick with business as usual and keep burning oil as fast as we can pump it or ship it in, we can expect decades of oil wars like Iraq, increasingly volatile energy prices and a level of economic hardship not seen since the Great Depression, according to peak-oil adherents.
(25 Sept 2006)
Oil peaks, valleys, plateaus and plains
Stephen S. Poloz, London Free Press
The world oil market has been a constant source of frustration for economic forecasters of late. Have the laws of economics been rescinded? The short answer is no.
The basic facts are straightforward. After plunging to a valley of US$10 a barrel during the global financial crises of the late 1990s, oil recovered to average around $30 during much of the 2000-03 period, except for a brief downward blip in late 2001. Then in 2004, prices began a steady upward trek, passing $40, $50, $60 and then $70. The peak earlier this year was $78.
There was never a shortage of explanations for ever-rising prices. World economic growth was running at record levels in 2004-05. China and India emerged as major oil consumers, with their joint share of world consumption rising from five per cent to 11 per cent between 1990 and 2005. Add a series of supply disruptions in Venezuela, Nigeria, Russia, Iraq and the U.S., plus the ongoing geopolitical stresses in the Middle East and analysts had grounds for forecasts of $100 oil or higher.
In the background was also the so-called peak oil theory, which postulates that global productive capacity has peaked. Even the peak oil adherents, though, would agree that the main impetus for higher prices today is not a true shortage of oil, but a shortage of spare capacity that left the system vulnerable to temporary supply shocks.
…Accordingly, economic forces point to further declines in oil pricing in the next couple of years — a reasonable forecast would be for a long-term reference plain of $35-$45, although prices seem likely to fluctuate around the $50-$60 plateau for some time, while spare capacity is being rebuilt.
The bottom line? Forecasting the price of oil is still a risky business.
Stephen Poloz is vice-president and chief economist of Export Development Canada.
(25 Sept 2006)
Get ready for oil supplies to dwindle, experts warn
Scott Simpson, Vancouver Sun
Some observers predict a social and economic meltdown as severe as the Great Depression
Crude oil makes Kjell Aleklett think about wild strawberries.
Aleklett, a Swedish professor of physics, sees inescapable similarities between the steady depletion of the world’s most coveted energy source and the foraging habits of berry afficionados.
“In Sweden we have strawberry fields where you can go out and pick for yourself. If you go out there in the morning there is a possibility that you can pick a big volume of strawberries. But the first picker picks the big ones. The last one is left with the small ones. It’s very much the same thing when it comes to the production of gas and oil.
“The goodies, the big ones, have been picked. It’s true all over the world. Now we have to stick to the small ones. That means it’s harder to fill the basket.”
Aleklett made his comments during an interview in Vancouver, where he recently gave a speech on the future of global crude oil supply to the annual conference of the international Pulp and Paper Products Council.
…CIBC World Markets’ chief economist Jeffrey Rubin has been portraying peak oil as a foregone conclusion for a couple of years in the company’s provocative Occasional Report series.
Rubin thinks the peak year for cheap, conventional and easy-to-develop sources of crude oil was 2004, and that significant new additions to oil supply will come from unconventional sources such as the deep ocean and the oilsands — at a much higher average price than at any time in the past.
That suggests that current high oil prices — which may yet push the world into a recession — are the new norm.
..A scenario that is potentially more ominous for Canadians and Americans, who are the world’s largest per-capita consumers of oil, is a new paradigm in which 80 per cent of the world’s future supply is in the hands of nationalist-minded governments — rather than multinational oil companies who could finesse it back into the automobiles of North American motorists.
(23 Sep 2006)
Nicely done article about Hubbert and peak oil in a mainstream newspaper. -BA
Put crudely, petrol panic runs out of puff
Kevin Andrusiak, Glenda Korporaal, The Australian
TWO months ago, Australia was being told to brace for petrol prices of $2 a litre.
Israel was pummelling southern Lebanon, US motorists were draining fuel reserves, and oil traders were talking up the real chance a barrel of oil would soon be worth $US100.
What a difference a few months can make.
The doomsday scenarios of Peak Oil theory – that we have already found most of the oil available and are rapidly running out – gained fevered currency. That interest has since subsided and the theory itself has been dismissed by oil companies. “Peak oil predictions are not new,” ExxonMobil Australia chairman Mark Nolan said at the Asia Pacific Oil & Gas Conference last week. “They have been occurring, particularly at times of high prices, regularly since the 1920s.”..
“It is very much a good news situation for oil at the moment,” [CommSec economist Craig James] said. “There is an oversupply of oil in Asia at the moment and refiner margins have become negative. They are paying more for their oil than what they can get for their refined products.
“But it is going to be very hard to see petrol prices below $1 a litre. Oil prices would have to get to the mid-$US50s for that to happen. At $US60-$US65 a barrel it is both a fair price for consumers and producers.” ..
NRMA [National Roads and Motoring Association] president Alan Evans said the falling oil price was partly due to the US Government releasing millions of barrels of oil from its own stockpile into the open market. It is purely a policy to appease disgruntled American motorists, he argues: once the Congressional elections are over later this year, voters would take a back seat and back up will go the oil price.
“Petrol prices will go back up after November,” Mr Evans said.
(23 Sept 2006)
Mr Evans frankness the only light in this article, which counts as in depth coverage for News Ltd media in Australia. –LJ
James Howard Kunstler on relocalization and peak oil (transcript, video, audio)
Julian Darley, Global Public Media
The transcript of James Howard Kunstler’s June 2006 interview with Julian Darley on the topics of relocalization and peak oil is now online.
James Howard Kunstler, author of “The Long Emergency”, gives a presentation in Vancouver, Canada to the city planning commission- city staff and the general public were invited to attend. He discusses peak oil, global warming and relocalization, deconstructing some of the popular but unfeasible “alternatives”. He also sits down for an interview with Global Public Media’s Julian Darley for further thoughts on the current state of affairs.
(22 Sep 2006)