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Ford Exec: Oil Production is Peaking
Green Car Congress
In a keynote address to the Society of Automotive Engineers’ “Global Leadership Conference at The Greenbrier,” Mark Fields, Ford executive vice president and president of the Americas, noted that the auto industry faces seven specific and serious challenges, one of them being that oil production is peaking.
The SAE Greenbrier conference, first held in 1950, is an annual event attended by automakers, suppliers and business leaders.
The auto industry events of the past week [e.g., Delphi’s bankruptcy] prove that the roadmaps our companies followed for 100 years are no longer valid. Business models have changed. Consumers and markets have changed. We have to change, too. From now on, only those automakers and supplier companies that find new ways to work together—and strike down some new, uncharted paths—are going to survive.
—Mark Fields
Fields said the auto industry faces seven specific and serious challenges:
* Globalization is bringing more competition to the US.
* The balance of power in the industry has shifted with China and India emerging as top markets.
* Market dynamics are changing, causing intense competition in every part of the market.
* Customers are becoming even more demanding.
* Customers’ views of their automobiles are changing faster than ever, with cars increasingly becoming an expression of who people are rather than mere transportation
* Legislative pressure is increasing
* Oil production is peaking, and concern for the environment is growing.
(16 October 2005)
Impacts of Peak Oil Addressed by Experts at Denver Conference
Association for the Study of Peak Oil (ASPO-USA), ENN
DENVER — The Association for the Study of Peak Oil (ASPO-USA) has announced that the first conference of its kind is taking place in Denver addressing the impacts of an imminent peak in world oil production. The Denver World Oil Conference – Beyond Oil: Intelligent Response to Peak Oil Impacts, will feature worldwide oil and energy experts and political leaders who will convey important facts about the world’s past, current and future oil supply, the fundamentals driving peak oil, the status of alternative fuels, the economic risks of peak oil, demand reduction strategies, national security and foreign policy issues, and policy options at municipal levels.
This high-level conference is expected to draw an audience of more than 300 attendees from the public and private sector, including the media, businesses and the financial and investment community. Conference hosts include ASPO-USA, the City & County of Denver, the Community Office of Resource Efficiency (CORE) in Aspen, and the Wirth Chair in Environmental and Community Development Policy at the University of Colorado at Denver.
(18 October 2005)
The World at $100 A Barrel
Alex Nosal, Seoul Times
Two years ago in May of 2002, a group of international petroleum specialists met at Uppsala University in Sweden for a two-day conference to discuss the world’s oil supplies. The result was a consensus that global supplies of crude oil will peak as early as 2010 (or earlier) and then start to decline, ushering in an era of soaring energy prices and economic upheaval.
This stands in stark contrast to the projections given by a U.S. government study done two years earlier, which predicted that the peak date would not occur until 2036. Dr. Colin Campbell, author of “The Coming Oil Crisis,” and a retired geologist who helped organize the conference, explained this discrepancy by pointing out that oil companies prefer not to talk about it for fear of upsetting their investors.
The dispute centers on the precise timing of what is variously described as “peak oil” or “the big rollover”? the predicted date when existing oil production, together with new discoveries of crude, can no longer replenish the world’s reserves as quickly as consuming countries are depleting them.
…The absence of air travel will devastate many island economies. South Korea, which is not technically an island, but politically is, would be particularly hard hit. Japan, the Caribbean, Australia, England, The Philippines and other water bound areas would lose tourists except for the most diehard who had the time and money to take long, ocean voyages to reach these geographically challenged outposts.
Mr. Alex Nosal, who serves as travel editor/writer for The Seoul Times, is a resident of Korea since 1996….
(19 October 2005)
The logo on the Seoul Times website says: “serving all foreigners interested in Korea.”
When the oil runs out
We have to look beyond oil for energy security
Nitin Desai, Business Standard (India)
…An immediate word of caution is in order. Oil prices are notoriously difficult to forecast. In the first quarter of 1999, crude prices were down to around $11 a barrel. Thereafter they have risen sharply in every year except 2001 and 2002. Despite this, each year analysts have predicted a fall.
We have to accept that oil prices are prone to supply shocks and are very unpredictable. Given the sheer size of the oil sector, the range of macro shocks can be large. Thus the difference between an oil price of, say, $30 per barrel and $60 per barrel translates into a terms of trade loss of some 2.5 per cent of GDP for India. This is by no means small and is a major challenge for macroeconomic management even with an energy policy that allows markets to function.
Of course it could be worse with an energy policy that is unwilling to face the consequences of cost increases. India, for instance, faces this now, with controlled prices calibrated to an oil price of around $45 per barrel.
Getting prices right is always desirable. But oil security is better looked at as an issue about quantity uncertainties rather than price uncertainties, about availability rather than the cost of oil. One could measure it in terms of four factors—the role of oil in the domestic energy mix, the dependence on imports, the diversity of foreign supply sources, and the alternatives available if there is supply disruption.
The role of oil in the domestic energy mix has increased in the 1990s mainly because of the rapid growth in vehicle population. Oil consumption has grown by about 6 per cent per year since 1989-90 as against the growth rate of 4.3 per cent per year for coal, which is the other principal energy source. These growth rates are not particularly worrisome.
However, import dependence has increased sharply. Crude production has stagnated at around 650,000 barrels per day since 1989-90, when the import dependence ratio dipped to its lowest level.
As a consequence, crude imports have risen at 11.6 per cent per year since then and we now import around 1.8 million barrels per day, which, at prevailing prices, costs more than $100 million per day. Our supply sources are limited and we have few fall-back options if there is any serious supply disruption.
The government and the petroleum industry in India have responded by bidding for stakes in oil concessions abroad. But unlike China, which entered the market aggressively when oil prices were low, we came in when prices were on the rise and attractive properties were not on offer.
…What are the prospects for long-term oil supply and demand? There are analysts who claim that world oil production is nearing its peak, which they expect will be reached in the 2010-15 period. They point out that in recent years the rate of consumption has outpaced the rate of new reserve discovery. There have been very few big discoveries in the past five years.
Others are less pessimistic and look to reserve upgrade and the use of oil sands, shales, and heavy oils, which today are known but not extensively exploited. But even these analysts see a peak by about 2035.
(19 October 2005)
The Virtues of Gas Guzzling:
Why I Don’t Believe in “Peak Oil”
Alex Cockburn, CounterPunch
Since I don’t believe in “peak oil” (the notion that world production is peaking and will soon slide, plunging the world into economic chaos) and regard oil “shortages” as contrivances by the oil companies and allied brokers and middlemen to run up the price, I fill my aging fleet of 50s and 60s era Chryslers with a light heart, although for longer trips these days I fill an 82 Mercedes 240D with diesel. True, diesel these days costs more than high-octane gasoline but the Mercedes gets 35 miles to the gallon, whereas the 59 Imperial ragtop and the 62 Belevedere wagon get around 18 mpg, which is still way ahead of the SUVs.
… And what of “peak oil”, the theory that oil is about to run out? Since we’re all supposed to be dying of avian flu in the near future, who cares since there’ll be no one around to work the pumps or even drive up to them? I don’t believe in any effective role of man-made CO2 in global warming, a natural cyclical trend. I think the mad rush to throw money at the pharmaceutical companies for an avian flu vaccine is ridiculous. And increasingly, I don’t believe we’re about to run out of oil. I hang my hat on the views of Dr.Thomas Gold (founding director of Cornell University Center for Radiophysics) as outlined in his 1999 book, The Deep Hot Biosphere.
Gold’s view, supported by many well qualified people, is that oil doesn’t come from dead dinosaurs and kindred organic matter.
(15 October 2005)
The essay is the second one down from the top of the original webpage. Cockburn, like many figures from the 60s, seems a little frayed about the edges nowadays. He’s impatient with analysis and science and eager to seize upon odd theories like abiotic oil. On the other hand, he’s never boring or predictable, always an entertaining read. His Counterpunch website has published several essays about Peak Oil, for example by Matthew Simmons and leftist Stan Goff. -BA
Rep. Bartlett’s energy talk to Congress Oct 17
Rep. Roscoe Bartlett, Congressional Record via personal website
Mr. BARTLETT of Maryland. Mr. Speaker, I have here an article that appeared on the front page of USA Today. It is above the fold. It is the center article. It says: Debate Brews: Has Oil Production Peaked?
The undeniable facts that spawned this article were noted by a number of the leading persons in our country several months ago, Boyden Gray, McFarland, James Woolsey, and a large number of retired four-star admirals and generals when they noted the facts that are on our first chart here: That we have in our country only 2 percent of the world’s reserves of oil; we have 8 percent of the world’s oil production. Just those two statistics together say something rather interesting. If we have only 2 percent of the oil reserves but are producing 8 percent of the world’s oil, that means we are really good at pumping oil, does it not? That means that we are pumping down our reserves four times faster than the rest of the world.
We represent only 5 percent of the population, they noted, and we consume 25 percent of the world’s oil and import about two-thirds of what we use. They wrote a letter to the President saying: Mr. President, the fact that we have only 2 percent of the reserves and use 25 percent of the world’s oil and import two-thirds of what we use is a very large national security risk. We really need to do something about that as a country.
Whether you believe, as this article points out, that oil has peaked–in just a moment, Mr. Speaker, we will note how this term came into existence–or whether you believe that we need to do something about energy because of this national security concern, what you are going to do is essentially the same thing, because what you need to do, if this is just a national security concern, is to free ourselves from the dependence on foreign oil.
…Mr. EHLERS. I thank the gentleman for yielding and I thank him for organizing this session.
I want to go very quickly through one item, and as we said we will continue later. I am a physicist. As a physicist, energy is tangible to me but to most people energy is intangible. You cannot touch it, see it, feel it, smell it or taste it. In other words, with our senses we cannot detect it. The only tangible aspect of energy for most people is the price at the gas pump and the utility bill at the end of the month.
But I have a wish and I wish it were true but my wish would be that energy would be purple. If energy would be purple it would be tangible. We could see it. And if you drive up to your house in the middle of the winter and saw the purple oozing through the walls and coming out in rivulets around the doors and windows where they are not sealed properly, you would say, oh, that is horrible. I am wasting all that energy. It is costing me money. So we would make sure that we would get the house sealed up.
… I am wearing a purple tie for a reason. First of all, I like it. But, secondly, its keeps reminding me if energy were purple, we would certainly change our energy use habits and we would do a much better job of conserving, as the gentleman from New York (Mr. Boehlert) observed earlier about conservation. That is very important.
And I have to tell everyone in this Chamber and all of my colleagues, there is no faster, cheaper way to increase our oil supply than to conserve what we use. Because we can get the use of more energy at lower cost by doing that than by any oil exploration scheme and refinery-building scheme or anything else you wish to do. It costs less to conserve energy than it does to produce more.
(17 October 2005)
Rep. Bartlett has many other interviews and speeches on Peak Oil, many of them available by searching on the Energy Bulletin website. The USA TODAY article to which Rep. Bartlett refers in his opening remarks is available online: “Debate brews: Has oil production peaked?”.
