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Peak Oil for Policymakers
(12-minute video)
Julian Darley and Richard Heinberg, Global Public Media
Post Carbon Institute’s Julian Darley and Richard Heinberg present the facts and relevance of peak oil for local policymakers. What is peak oil? What’s the evidence? Why don’t we just drill for more? How does this relate to climate change? And what can policymakers do in the face of these daunting challenges?
(1 June 2008)
A low-key, quietly fervent presentation of the basics of peak oil. =BA

World crude production has peaked: Pickens

Jasmin Melvin and Missy Ryan, Reuters
World crude oil production has topped out at 85 million barrels per day even as demand keeps climbing, helping to drive a stunning surge in prices, billionaire oil investor T. Boone Pickens said on Tuesday.

“I do believe you have peaked out at 85 million barrels a day globally,” Pickens, who heads BP Capital hedge fund with more than $4 billion under management, said during testimony to the Senate Energy and Natural Resources Committee.
(17 June 2008)

Rudd in the hot seat … about peak oil

Kerry O’Brien, Australian Broadcasting Corporation (ABC)
Kerry O’Brien interviews Prime Minister Kevin Rudd.

… KERRY O’BRIEN, PRESENTER: The Prime Minister joins me now from our Canberra studio.

Kevin Rudd, if we can start with oil. You and Brendan Nelson are both arguing over very small savings at the bowser, although his small savings are bigger than your small savings, that’s if you have savings in the end.

But isn’t it time to look Australians in the eye and tell them the news is only going to get worse on oil?

It may get better in the short term, there may be moments where the price drops a little, but in the medium to long term, it’s going to get worse and that there’s nothing significant that you can do about it. Now isn’t that the case?

KEVIN RUDD, PRIME MINISTER: Kerry, on global oil prices, no one that I can speak to, either within the Government, that is the Treasury who are looking at the long range forecasting here, or abroad, can give you any confidence about where global oil prices will be in three, six, nine, 12 months time.

It is a very murky future that we face. What we do know for a fact is that right now we have the greatest global oil shock in 30 years. We know for a fact that prices are up 400 per cent since the Iraq war, 100 per cent in the last 12 months alone. It’s led to protests and riots in the UK, Spain, France, as well as Indonesia and our own region and South Korea.

So this is a massive shock to the global economy. It’s happening across all economies at present. What we need to do is frame an intelligent, long term response to this, and Australia as of when we took over Government did not have a long term energy strategy, a fuel strategy.

We’re working on that, six months into office, and we hope to have something to produce later in the year on that score. Dealing with the long term channel, as well as being mindful of the impact on people’s hip pocket now.

KERRY O’BRIEN: Well, you talk about it being murky and that you don’t really know where it’s going to be, but there is a growing and very credible body of advice that with the odd slot going down slightly, that it’s simply in the long term going to be going up and up and up.

Richard Heinberg is a highly respected world expert on the oil crisis and when the world reaches the price where known oil reserves reach their peak and irreversibly decline, he says, over the long term, nowhere for oil prices to go but up.

Now, in that context, isn’t it just faintly ludicrous to be arguing over whether you can save a cent a litre here or there?

KEVIN RUDD: But Kerry, that’s why my responses to many of these questions in parliaments in recent weeks have been framed in terms of one, global oil supply, what can be done to boost investment in those countries which are the principal oil exporters? There’s a problem there. Two, on the demand side. Global initiatives on energy efficiencies and the huge great push countries of China and India? Three, what do you do in terms of energy efficiency in economies like our own? That goes to the whole regime of fuel efficient cars, in particular. Four, what do you do in terms of an alternative fuel strategy? And five, what do you do in terms of public transport, in order to make it accessible, particularly in our metro areas?

This is a long term strategy as well as dealing with the immediate hip pocket impact on motorists who are feeling it right now.
(16 June 2008)
Contributor Stuart McCarthy writes:
This is the first time that the Prime Minister has been directly taken to task on the subject of peak oil by a television presenter. Richard Heinberg has been interviewed several occasions on the same program and it was pleasing to hear his expertise cited above the ‘business as usual’ noise of mainstream economists.

There is no oil market anymore

Jerome a Paris, European Tribune
As part of the steady drip, drip, drip of information to prepare the world for the shock announcement they are to make in november that we’re running out of oil, Fatih Birol is giving an interview to Foreign Policy where he repeats a number of things we’ve been discussing here endlessly: that demand in growing, but that the West is irrelevant in that respect, that supply is constrained, that major oil fields are declining, and that the Western oil companies are running out of oil.

But I’d like to focus on just one point here:

FP: Why aren’t more new supplies coming online, given the current high prices?

FB: The bulk of the oil has in the past been produced by the international oil companies, so-called Big Oil. But their existing reserves are declining in what they have under ownership. They have no access to new reserves, the bulk of which are in Middle East countries. In most of these countries, only the national oil company can, by law, invest. So, even though the international oil companies may have the capital and the technology, they don’t have access to the reserves. Therefore, the bulk of the growth in the future needs to come from the national oil companies, and perhaps price will no longer be the main determinant when they make their [production] decisions, because for many countries, oil is their only natural endowment. And those countries legitimately value and want to leave their one and only natural endowment for future generations.

He is essentially saying that market forces are playing a very small role on one side of the equation: supply will not respond to higher prices. Which means that demand will have to bear the burden of balancing the market. Which in turn means that if you rely only on market mechanisms, prices will need to go high enough to cause demand destruction through pain and economic dislocation.

The only conclusion to reach is that we must act on demand levels without relying only on price mechanisms – policy should explicitly target demand reduction in every possible way, including mandatorily if requires.

In fact, an indirect market mechanism might do the trick: allocate a steadily shrinking number of barrels of oil to each citizen each year, and let them use them or trade them for oil products.
(16 June 2008)

“Get Used To High Oil Prices” says Loughborough MP

J. Milton, Loughborough News (UK)
Loughborough MP Andy Reed today warned that the recent spike in Oil prices may be here to stay and we need to get used to it.

The Loughborough MP said:

“Instead of hoping for a fall in oil prices and therefore a fall in petrol prices at the pumps we should be using this reality check to finally start to plan for our post oil world.

“At times like this it is too easy to try to be popular by reassuring people that things will be alright. The truth is that oil is a finite resource and there is increasing demand across the globe. As we have seen in recent weeks not even the most powerful countries individually have any control over oil prices.

“We should use this opportunity to move Britain away from its reliance on oil and petrol. It will take a couple of decades so we need to start sooner rather than later. Sticking our heads in the sand is not an option”
(17 June 2008)