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Peak oil - Apr 15

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Peak Oil and Senegal

Chris Vernon, The Oil Drum
For whom is peak oil the most critical, the developed world of America, Europe and similar or the developing world of sub-Saharan Africa? Clearly the West’s oil consumption, both absolute and per capita is far greater than Africa’s but how will peak oil affect oil availability in the two areas and what will the impact be?

I recently spent a week in Senegal, the most westerly African country. Here I’ll share some observations from Senegal with comparisons made to the UK.

...Senegal is a poor country with all per capita metrics of conventional wealth far lower than western standards however the many Senegalese I met seemed, outwardly at least to be very happy people. There are certainly more smiles on the street in Dakar than in London. This does raise the question of whether conventional economic metrics tell the whole story, clearly they don’t but in absence of any standard “wellbeing” or “happiness” index they are all we have.

Oil consumption is extremely low at 0.9 barrels per capita per year. This is some 10 times less than the UK. Not only is the absolute usage significantly less but also the distribution of usage is different. Oil is almost exclusively used for transport in the UK, there being little alternative, most other potential uses of oil have been substituted.

In Senegal 37% of the nation's oil supply is used in electricity generation which in turn represents approximately 76% of the nations electricity supply. As noted above, all of Senegal's oil is imported.

... Conclusion
The sorry truth of the situation is that poor countries with little or no fossil fuel resources of their own often rely on imported oil for electricity generation. If peak oil results in substantial and prolonged price hikes, demand destruction from these poor countries is the obvious result. However this won’t only result in the reduced transportation services we typically associate with oil shortages but more critically will result in reduced electricity availability effecting communications, refrigeration, lighting etc. services that are perhaps more important than internal combustion engine transportation, especially in a country with only 0.02 cars per capita anyway.
(13 April 2007)


"Crude Awakening" Tuesday on Sundance Channel

michael, ecorazzi
Guess what? It’s not boring. Far from it. After hearing that The Sundance Channel was embarking on a three hour block of green-themed programming, many wondered what would keep viewers glued to the screen for that long. After all, isn’t America Idol on?

The good news is, much like other eco-related projects, THE GREEN is a polished, entertaining, and - dare I say - educational piece of television. I’ve managed to consume a few selections from the premiere this coming Tuesday at 9pm [April 17]. The first was a 90-minute documentary entitled A Crude Awakening. This is a wonderfully well-done introduction to the subject of Peak Oil. Whether it happens in 10 years or 50, oil is a finite substance that will one day be as rare as gold. THE GREEN takes you on a history of the oil boom, its role in shaping our society, and its future in potentially destroying it. Most memorable are the scenes in which the documentary explores oil-boom towns across the world that are now abandoned, eerie landscapes. Once rich and prosperous, the social wealth and people disappeared as soon as nature had nothing left to give. We’re facing a dangerous precipice today if attention is not paid to developing alternative fuels and energy to petroleum. I give praise to the film’s producers for stumbling upon some incredible footage; including rare film of Marion King Hubbert, father of the Peak Oil theory. Props go out to Matt Savinar from lifeaftertheoilcrash for delivering some great dialogue as well.
(15 April 2007)
Glad to see the documentary getting air time and good publicity. Please, though, no more articles, films or books with the title: "Crude Awakening." (See next entry)

More by on the film by michael at Groovy Green. -BA


Crude awakening: Oil production threat in Nigeria: triggering a global meltdown?

Sebastian Junger, Observer
For decades, the oil-rich delta of the Niger river has been plundered by western companies and rampant political corruption. But now a small group of ruthless Ijaw tribesmen are threatening to sabotage production unless their demands for compensation are met. Sebastian Junger heads into the secretive mangrove swamps to meet the waterborne warriors who are prepared to trigger a global meltdown
----
On 23 June 2005 a group of high-ranking US government officials convened in a ballroom of the Four Seasons Hotel in Washington, DC, to respond to a simulated crisis in the global oil supply. The event was called Oil ShockWave, and among those seated beneath a wall-sized map of the world were two former heads of the CIA, the president of the Council on Foreign Relations and a member of the Joint Chiefs of Staff. The scenario they were handed was this: civil conflict breaks out in northern Nigeria - an area rife with Islamic militancy and religious violence - and the Nigerian army is forced to intervene. The situation deteriorates, and international oil companies decide to end operations in the oil-rich Niger river delta, resulting in a loss of 800,000 barrels a day on the world market. Concurrently, in this scenario, a cold wave sweeping across the northern hemisphere boosts global demand by 800,000 barrels a day. Because global oil production is already functioning at close to maximum capacity (around 84m barrels a day), small disruptions in supply shudder through the system very quickly. A net defi cit of almost 2m barrels a day is a signifi cant shock to the market, and the price of a barrel of oil rapidly rises above $80. Any other disruption - a terrorist attack in Saudi Arabia, for example - would spike prices through the roof.

In January 2006, less than seven months after the first Oil ShockWave conference, several boatloads of heavily armed Ijaw militants overran a Shell oil facility in the Niger delta and seized four western oil workers. The militants called themselves the Movement for the Emancipation of the Niger Delta (or Mend) and said they were protesting at the environmental devastation caused by the oil industry, as well as the appalling conditions in which most delta inhabitants live. There are no schools, clinics or social services in most delta villages. There is no clean drinking water and virtually no paying jobs in delta villages. People eke out a living by fishing, while, all around them, oil wells owned by foreign companies pump billions of dollars' worth of oil a year. It was time, according to Mend, for this injustice to stop.

The immediate eff ect of the attack was a fall in Nigerian oil production of roughly 250,000 barrels a day and a temporary bump in world oil prices
(15 April 2007)
Contributor AC writes:
Wide-ranging report that pulls no punches by a journalist who travelled to "the heart of darkness" to meet the Nigerian rebels prepared to sabotage oil production in the delta. Excellent and detailed background information puts the gripping story fully in context.
For part 2 see observer.guardian.co.uk/magazine/story/0,,2055423,00.html

BA:
Great article, but the title "Crude Awakening" has been used dozens of times and is now officially declared a cliche. It joins other cliches, such as: "The Stone Age didn't end because they ran out of stones..."


When the lights go out: duelling books on peak oil

Larry Elliott, The Guardian
David Strahan and Duncan Clarke take opposing sides on the peak oil debate in The Last Oil Shock and The Battle for Barrels. Larry Elliott weighs up the evidence
----
The Last Oil Shock
by David Strahan
304pp, John Murray, £12.99

The Battle for Barrels
by Duncan Clarke
256pp, Profile Books, £20

Back in 1956, an American geophysicist called Marion King Hubbert came up with a startling prediction: that production of oil from the continental United States would peak within the next 10 to 15 years. Few paid any attention. This, after all, was the era when the car was king and king-sized; when James Dean was racing in the streets in Rebel Without a Cause and President Eisenhower was investing billions of dollars in the interstate network.

Yet Hubbert's prediction proved unerringly correct. Peak oil - as it was known - duly arrived right on cue in 1970, and since then the US has become more and more dependent on imported crude to meet growing demand for energy. There was, however, another dimension to Hubbert's analysis. The same model, he said, could be used to estimate when peak oil would arrive, not just for the US, but for the entire globe. That moment, he said, would come in about half a century; round about now, in other words.

Hubbert's many champions have used his work to construct a theory of just about everything. Peak oil explains why oil prices are so high; it explains why George Bush invaded Iraq and why there is a new scramble for Africa. As the world's oil wells start to run dry, there will be recession and war. After a century or more in which modern industrial societies have been built on seemingly unlimited supplies of oil, the lights are about to go off.

In The Last Oil Shock, David Strahan argues that we ignore the warnings at our peril. Modern industrial societies, he says, are dependent on oil, but over the past 50 years it has become evident that all the big fields have been discovered. Oil companies are busily exploring inhospitable parts of the globe and using the most up-to-date technologies to extract more crude from existing fields, but sooner or later we are going to have accept the inevitable: supply will be unable to keep up with demand.

Even worse, Strahan sees no possibility that alternatives to oil will be developed in time to prevent a full-scale economic crisis. The Last Oil Shock dismisses the idea that we can move seamlessly into an age of hydrogen-powered cars, biofuels and wind farms. Instead, we all need to be changing our lifestyles: buying smaller cars, driving less aggressively, taking our rucksacks to the shops to avoid using plastic carrier bags, spurning apples that have been shipped halfway round the world.

Duncan Clarke's The Battle for Barrels says we should take warnings of impending armageddon with a pinch of salt. The peak oil theorists take an overly deterministic view of the world, he argues, and far from being imminent, peak oil may be decades, perhaps even a century, ahead. His argument is that it is far too simplistic to extrapolate, with any degree of precision, when the world will reach the point of maximum oil production from Hubbert's 50-year-old study of the US.

Clarke, who has 25 years of experience in the oil exploration business, says the flaw in the peak oil argument is that it ignores the basic rules of economics: that when the price of something goes up, either supply increases or demand falls. It doesn't make financial sense to explore particularly inhospitable parts of the world when oil prices are $10 a barrel; but it is quite a different story when a barrel of crude is changing hands at $60 a barrel.

The evidence from the oil industry suggests that Clarke has a point. Following the two oil shocks of the 1970s, exploration activity was high in the first half of the 1980s, then fell sharply as oil prices tumbled, and carried on declining throughout the 1990s. According to the peak oil analysis, the decline in exploration is a function of geology; there's simply less oil to find. According to Clarke, it's a question of dollars and cents, and the doubling of the oil price since 2003 should lead to renewed activity. But, as Strahan points out, that presupposes the oil is there in the first place. Even adjusted for inflation, the price of crude is much higher now than it was 50 years ago, yet discoveries of new reserves have fallen sharply over the same period. Nor does technology seem to help that much; the US and the UK have some of the most advanced oil industries in the world, yet production in both countries is still in inexorable decline.

There's not a lot of love lost between the two camps. Strahan says Clarke and, indeed, the whole of the mainstream global oil industry is in class-one denial about the looming energy crisis. Clarke's view is that the peak oilers are using a flawed methodology to come up with unfounded and alarmist conclusions. There's clearly a market out there for both books: an internet search for "peak oil" comes up with more than six million hits.

Of the two books, Strahan's is definitely the better read. The Battle for Barrels is barely 250 pages long, but it's tough going, giving the impression of being a much shorter academic paper expanded to book length. There is far too much repetition and score-settling, and, unless you happen to work in the oil industry or be obsessed with peak oil, the excessive use of acronyms makes it impossible to read without one finger permanently wedged in the glossary at the back. The writing is leaden and all too frequently lapses into management-speak. Referring to the debate about the size of global oil reserves, for example, Clarke says: "Here it is pertinent to note that peak oil forecasters do not enjoy an undiluted view of the state or corporate portfolios that contain these internal and hidden assessments which their models logically require." Presumably that sentence means something; it is by no means clear what.

Although it will win no prizes for the limpidity of its prose, The Battle for Barrels is a useful corrective to Strahan's argument that the end is nigh. In the end, of course, the peak oil lobby will be proved right. Oil is a finite resource, and once the last drops are squeezed from the Middle East, once the Canadian tar sands have been exploited and the frozen wastes of the Antarctic have been sucked dry, the world will have to find another source of energy. What's really at issue is when that moment will be.
(14 April 2007)
Also see the favorable review by Ugo Bardi of ASPO-Italia.

The article at the Guardian site seems to be truncated (corrupted?) and is not currently viewable. Until the Guardian staff fix it, here is the complete version. -BA


Nate Hagens of The Oil Drum

Jason Bradford, The Reality Report via GPM
What are the common misconceptions about energy supplies? Nate Hagens is a former Wall Street investments manager and has an MBA from University of Chicago. He is completing his doctoral studies at the University of Vermont’s Gund Institute for Ecological Economics. Nate is also a contributor for The Oil Drum, an online source for news, analysis and discussions about energy and our future.

Jason Bradford hosts The Reality Report, broadcast on KZYX&Z in Mendocino County, CA.
(14 April 2007)


Blowing Green Smoke

James Howard Kunstler, Clusterf*ck Nation
Tom Friedman, celebrated New York Times columnist and author of The World is Flat, riffed on (or around) the issues of climate change and energy in that newspaper's Sunday Magazine this week ("The Power of Green"), and managed, in the process, to misunderstand just about every implication these conjoined problems present. Friedman's specious thinking is symptomatic of exactly what is wrong with our public discussion of these matters generally, and their presentation in mainstream media in particular.

I'm fond of saying that if America could harness the power it it wastes blowing smoke up its own ass, we could magically escape our energy-and-climate-change predicament. I say this repeatedly to counter the increasing volume of lies we tell ourselves in order to maintain the illusion that we can continue living the way we do. Like so many other commentators suffering from cranial-rectosis, Friedman believes that we can keep on running our Happy Motoring utopia if we just switch fuels.

Friedman gives no indication that he understands the fundamentals of the global oil situation.
(15 April 2007)
Contributor Dr. Larry Hughes writes:
An insightful review of Friedman's "The Power of Green", highlighting the shortsightedness of attempting to maintain America's "Happy Motoring" culture.


Energy Outlooks: The Decline & Fall of Practically Everything

Dale Allen Pfeiffer, Mountain Sentinel
In this short paper, we will attempt an overview of our energy outlook, globally, and in particular with regard to North America. We will concentrate on major reserve energy sources - that is, energy sources of which the Earth has major stockpiles that are readily accessible. We will focus on these energy sources and ignore other various alternatives and renewable sources for the very simple reason that it is these resources which will dominate the energy market for the foreseeable future.

Certainly, there is a lot of talk about renewable energy sources (wind, sun, tide, geothermal, etc.), and various other energy schemes such as hydrogen fuel cells, methane hydrates, and - the alternative de jour - biofuels. Yet, when you take a hard, close look at these various alternatives and the amount of energy we currently consume, you find that at best none of these alternatives will ever replace more than a fraction of our current energy usage.

...While we certainly should expand our usage of renewable resources, we cannot realistically expect them to replace hydrocarbons. So long as our consumption remains at anything near its current level, we will be dependent upon oil and natural gas for the majority of our energy needs, along with coal. And so we will focus on these three energy sources for the remainder of this article.

...Conclusion

By 2030 all three of the major fossil fuels that supply the vast majority of our energy needs will be in decline. Oil leads the way, with conventional oil already peaking in 2005, and nonconventional oil peaking by 2011 at the latest - possibly as early as 2007. Natural gas in North America is also currently in decline, as is coal in terms of energy production. World coal production will follow by 2025 at the latest. And world natural gas production will probably peak by 2030.

All three of these declines are likely to reinforce each other and complicate the difficulties of each.... The only solution is to decrease consumption and relocalize.
(13 April 2007)
Also posted at Global Researcher.

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