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Say Goodbye to Peak Oil
Richard Heinberg, Post Carbon Institute
Now that the world’s credit markets are suffering the equivalent of a cardiac arrest, one can confidently say that the peak in global oil production is behind us. With demand for oil declining (because of global recession), OPEC will want to constrain production. With investment capital disappearing in a deflationary bonfire, oil companies will have difficulty financing new projects (even if they have full governmental go-ahead to drill, baby, drill). Thus even though the peak might have been delayed for another year or five if the credit crunch hadn’t intervened, that time cushion is now effectively gone.
This is not to say that Peak Oil should no longer to be considered to be of importance. In the larger, longer view of things, the energy decline will be the determining factor in the fate of our civilization—not a money or credit crisis.
When the world finally begins to recover from its financial turmoil (and this could take a few years), and oil demand picks back up again, the economy will bump up against oil supply constraints and petroleum prices will skyrocket, undermining the economic recovery. …
We are in the Hirsch Report’s worst-case scenario—only it’s worse.
The only choice remaining for policy makers is whether to shift all of our collective societal efforts toward building new infrastructure for the low-energy future, or to try vainly just to prop up the credit markets, losing what will probably be the last opportunity to salvage industrial economies.
The amount of time left for dithering—if indeed there still is any—can perhaps be measured in only months.
The silver lining is this: Policy makers now are starting to realize that they must do something dramatic. …
(8 October 2008)
Meeting the Energy Challenge (Heinberg & Darley) (video and audio)
Richard Heinberg, author of Powerdown, makes plain the dire situation we’re in as declining oil supplies fail to meet demand. He notes there are no easy “supply side” solutions (like substitute fuels): we must reduce demand, initially through conservation and efficiency. Julian Darley, president of Post Carbon Institute observes that while personal action is very important, individuals can only do so much. A deeper response must come at the municipal level — to change infrastructures on how we heat, transport, and power our society. Sharing, he notes, can bring enormous energy reductions almost immediately: after all, two people rather than one in a car cuts energy use per person in half. Bottom line: Americans love rising to a challenge. And this IS a challenge! (www.postcarbon.org, www.richardheinberg.com)
(25 September 2008)
Oil Prices in 2009 – two views
Bill Paul, Energy Tech Stocks
Important News That Got Drowned Out by US Congressional Debate – Part 2: Oil Prices in 2009
With energy technology investors fixated the last two weeks on whether the U.S. Congress would extend tax credits for alternative energy projects – it did – a lot of important news, such as authoritative new oil price forecasts for 2009, got drowned out.
In the last two weeks two leading Wall Street investment banking firms made wildly different oil price forecasts which, given how oil prices impact alternative energy company stock prices, creates tremendous uncertainty for all energy investors on top of the uncertainty already being generated by the credit crisis.
If you believe Merrill Lynch, the average price of crude in 2009 will be $90 a barrel. If you believe Raymond James & Associates, the average price of crude will be $130 a barrel.
(9 October 2008)
US oil production at lowest level since 1946-gov’t
Reuters via Guardian
U.S. crude oil production this year is expected to fall below 5 million barrels per day for the first time since shortly after World War Two, the government’s top energy forecasting agency said on Tuesday.
The lower output is due to hurricanes Gustav and Ike, which at one point shut in almost all the 1.3 million barrels a day in oil production in the Gulf of Mexico, according to the U.S. Energy Information Administration.
About 45 percent of Gulf oil output is still offline weeks after the hurricanes struck.
(7 October 2008)