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Good to the Last Drop

Umbra Fisk, Grist (environmental advice column)
Dear Umbra,

I have recently been alerted to what many people term “peak oil.” I don’t know how to characterize my feelings regarding this subject. Obsession might be a good term. I feel that I need to prepare. What do you think? Is “peak oil” another Y2K?

A: Who cares if it’s another Y2K? Prepare away, my friend. You have nothing to lose and everything to gain.

…I think to have a worthy, scientist-type opinion about peak oil, one needs to do quite a bit of reading about global oil supply, global oil politics, geophysics, and the like. I just can’t summon the passion you feel and do all that reading, because my obsession cancels out your obsession. My obsession, of course, is global climate change.

…But I’d like to argue that you should go ahead and prepare for peak oil’s imminence, in whatever ways you can. I’ll just have to imagine what you already have in mind, but let’s say it includes de-emphasizing your car; reworking your home heating, cooling, kitchen, and electrical systems; divesting of oil-related stocks; getting your home garden up to speed; building up food networks in your local community — things like that. None of these actions would harm you in any way should oil not skyrocket in price, and, save for using coal, all would certainly benefit the global climate.

If your obsession were slightly different — let’s say you thought cats were the answer to our fuel problems — I would do more thorough research for you and dissuade you. But this obsession seems a good one — so go for it, spread the word, and we’ll all be happy to come to you when you turn out to be right and ready
(4 Dec 2006)

A Debate on the Substance and Timing of the Peak of Oil Production and Consumption, Part I

Jeffrey J. Brown (westexas), The Oil Drum
World Net Oil Export Capacity is Now Declining Because of Involuntary Reductions in Production and/or Because of Increases in Domestic Consumption in Major Oil Exporting Countries

Robert Rapier suggested that we debate this topic, and I agreed. In reality, there are only shades of gray difference between us regarding the timing of Peak Oil and Peak Exports. I believe that the crisis has hit, while Robert believes that the worst won’t be upon us until some time shortly after 2010. Robert will file his rejoinder about a week from today.

In any case, in a guest post on The Oil Drum (TOD) in January 2006, I predicted, based on graphs primarily done by Khebab that the world would see declining net oil exports this year.
(4 Dec 2006)
The opening salvo in what promises to be a tightly-argued debate between two of the big guns at The Oil Drum. -BA

PayPal’s Thiel Scores 230 Percent Gain With Soros-Style Fund

Deepak Gopinath, Bloomberg
One morning in 1998, at Hobee’s coffee shop, near Stanford University, a young money manager named Peter Thiel decided to gamble on an Internet startup.

Thiel ended up investing $240,000 in the company, which eventually became PayPal Inc., the giant of online payments. Thiel ran PayPal, took it public and, in 2002, sold it to EBay Inc. for $1.5 billion. Thiel, then 34, walked off with $60 million.

…a few weeks after selling PayPal, Thiel set out to beat the bubble a second time. He opened a hedge fund firm called Clarium Capital Management LLC in his three-bedroom apartment at the Four Seasons.

Since then, Thiel, now 39, has emerged as one of the most successful hedge fund managers in the country. He’s parlayed an initial $10 million fund into a firm with $2.1 billion in assets under management — and more than tripled investors’ money.

As of Oct. 31, Clarium, now tucked away in futuristic, glass-walled offices near the Golden Gate Bridge, had returned a cumulative 230.4 percent.

… Thiel has wagered all of his clients’ money on his conviction that aftershocks from the go-go ’90s will jar the U.S. His vision of the future isn’t pretty. The housing bubble will collapse and economic growth will stall, he says. An oil shock will add to the pain.

… Rather than dart in and out of markets, like many hedge fund managers, Thiel has made three broad bets and plans to let them ride. All reflect his big-picture economic view.

One is that the price of 30-year U.S. Treasury bonds will rise as the U.S. economy slows and deflation sets in. Another is that the dollar will strengthen against the euro as investors scale back investments in emerging markets funded by borrowing dollars. And the third is that energy stocks will keep climbing along with the price of crude as world oil production reaches its zenith.

…Thiel is a proponent of a geologic theory known as peak oil, which holds that global oil production is now at or near its apex. Among his picks was Calgary-based EnCana Corp., which wrings oil from the tar sands of Canada. EnCana stock rose 54 percent in 2005.
(4 Dec 2006)

‘Mad Max’ co-author on peak oil

James McCausland, Courier Mail
…A couple of years [after the OPEC oil embargo of 1973], George Miller conceived the scenario for Mad Max. Max (a very young Mel Gibson) was the antihero out on roads that had become battlefields where the prize was fuel. Society had corroded as a result of the reduction of supply and the rule of law deteriorated into chaos…

George and I wrote the script based on the thesis that people would do almost anything to keep vehicles moving and the assumption that nations would not consider the huge costs of providing infrastructure for alternative energy until it was too late.

Sure, it contained a large element of geeks’ own adventures; but at its core was a sizeable kernel of truth. That kernel has taken root, and it’s called peak oil.
(4 Dec 2006)
Author James McCausland was a co-author of the screenplay for Mad Max.

(The original article at the Courier Mail site seems to have its text slightly jumbled.)

Planning for oil’s end

Stephen Beaven, Portland Oregonian
After a Portland group persuades the city to create a task force, scenarios of crises emerge
The prophets of gloom meet every Wednesday in a church basement to plan for the end of oil as we know it.

Seated in folding chairs under fluorescent lights, the members of Portland Peak Oil share tips about switching to propane, planting vegetable gardens and harvesting fruit and nuts from local trees in case the food supply goes south along with affordable gasoline.

Thanks to their lobbying, the city of Portland is planning, too. In fact, Portland is one of only a handful of cities confronting head-on the predictions of a looming oil shortage and ballooning gas prices.

A task force that city commissioners created in May at the urging of Portland Peak Oil is nearly finished with a report aimed at helping Portland ease its addiction to oil.

The task force is looking at three oil shortage scenarios, according to a preliminary report released last week. The primary focus is a long-term, manageable transition in which prices rise at a gradual pace. The committee also is looking at a sudden disruption that causes an emergency and a shortage that results in a societal collapse.

…In Portland, advocates for conservation say the city must make changes now for a less painful transition from a car-dependent economy to a model that relies less on oil. They’re not talking about Armageddon. But their vision of the future is enough to make you buy bus tickets, bake bread and can some pickles.

“Our entire cultural system, including food, is based on the assumption that we will always have inexpensive and plentiful fossil fuel,” said Pam Leitch, a founding member of Portland Peak Oil.

“If the peak oil theory is correct, that assumption will no longer be valid and we’ll have to change much of what we do.”
(4 Dec 2006)
It’s nice to see the active Portland Peak Oil group get some publicity. -BA