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No turning back
Martin Wolf, Financial Times via Business Spectator
Oil at $US200 a barrel: that was the warning from Goldman Sachs, published last week. The real price is already at an all-time high. At $US200 it would be twice as high as it was in any previous spike. Even so, it would be a mistake to focus in shock only on the short-term jump in prices. The bigger issues are longer term.
Here are three facts about oil: it is a finite resource; it drives the global transport system; and if emerging economies consumed oil as Europeans do, world consumption would jump by 150 per cent. What is happening today is an early warning of this stark reality.
… On balance, it is quite unlikely that aggregate demand for oil will collapse, as it did after the two previous price spikes, just as it is unlikely that massive net new oil supplies will come on stream in the near future. This does not mean that prices will remain as high as they are today for the indefinite future: such stability is improbable. But it means we should expect a sustained period of relatively high prices even if “peak oil” theorists are proved wrong. If proved right, this would be true in spades.
We are no longer living in an age of abundant resources. … The market is saying that we must use more wisely resources that have now become more valuable. The market is right.
(14 May 2008)
CNN Briefing: Oil
Matthew Knight, CNN
We rely on it to power our everyday lives, and it drives the economy worldwide, but oil faces an uncertain future in the 21st century. Black gold is increasingly expensive, environmentally damaging and, in the view of some experts, increasingly scarce.
… Will we ever run out of oil?
All of the world’s resources are finite so we will run out at some point. The big debate at the moment is about when oil production will peak — i.e. when half of oil stocks have been used and production begins to slow.
Texan born geophysicist Dr M. King Hubbert first came up with the peak oil theory — known as ‘Hubbert’s peak’ — in the 1950s, arguing that U.S. oil production would peak in the early 1970s. He was right. And since 1981, the world has been using more oil than it has been finding.
So how much oil is left?
OPEC states that there were oil reserves of 1.1 trillion barrels in 2006, of which they control over three quarters. They predict that current stocks will last 81 years if consumption remained at 2006 levels — 76 million barrels per day (mb/d).
But according to Professor Kjell Aleklett of Association for the Study of Peak Oil&Gas (ASPO International) peak oil is going to happen a lot sooner.
(13 May 2008)
EB contributor Tony writes:
Your quote from the piece by Matthew Knight, CNN, included some very strange arithmetic. It said “They [OPEC] predict that current stocks [1.1 trillion barrels] will last 81 years if consumption remained at 2006 levels — 76 million barrels per day” Now, a simple calculation shows that 76 mbpd for 81 years amounts to over 2.2 trillion barrels. So that remaining reserve would only last 40 years, at 2006 consumption levels. How did Matthew Knight let that one slip?
The truth and lies about world’s oil supply
Charles Cresson Wood. San Gabriel Valley Tribune
MYTHS about the current world oil situation and rapid fuel price increases are causing confusion for consumers, businesses and government policy makers. Unfortunately, many people don’t have ready access to alternative points of view. I strongly recommend that the reader do some research on the Internet to verify the truth of the following claims.
The first myth asserts we have plenty of oil, and that discussion of depleting supplies is not a serious matter.
Oil production in the United States actually peaked in 1971, and ever since we have been making up for shortfalls in domestic production by importing oil from other countries. But when the world oil production peaks, if it hasn’t already, there is no other location from which we can import oil to make up the difference. This situation is so serious that the US Department of Defense has categorized “peak oil” as a serious threat to the nation. Competition for depleting supplies has already been a major factor in several military actions around the world.
The second myth states that nothing much is going to change for decades, that people will continue to consume petroleum-based motor fuels the way they have been for the foreseeable future.
Even the oil majors such as Exxon-Mobil are having trouble finding more oil, and they admit it. A new report published by Exxon-Mobil, entitled The Outlook For Energy: A 2030 View, predicts a plateau in non-OPEC oil production in the next five years.
Charles Cresson Wood is a green management consultant with Post-Petroleum Transportation, based in Sausalito. His latest book is entitled “Kicking The Gasoline & Petro-Diesel Habit: A Business Manager’s Blueprint For Action.”
www.kickingthegasoline.com
(13 May 2008)
Glenn Beck interviews James Howard Kunstler
Glenn Beck, CNN
James Kunstler discusses his new book in which he describes what the world would be like without oil.
(13 May 2008)
The online segment is 6:27 minutes long. Beck seemed to be a courteous interviewer.
Discussion at The Oil Drum.
You and Yours get the End of the Age of Cheap Oil, Bigtime…
Rob Hopkins, Transition Culture
Things seem to be moving so fast these days. About 6 months ago, BBC Radio 4’s consumer affairs programme ‘You and Yours’ ran a piece about Transition Initiatives and peak oil where Jeremy Leggett debated peak oil with a ridiculous guy from Audacity.org, who basically argued that the free market will solve all ills and there is still loads of oil left. The presenters rather laughed off the peak oil discussion as though it was all rather alarmist and silly. How rapidly things have changed. Yesterday’s ‘Call You and Yours’ was devoted to high oil prices and how they are affecting the consumer, and it was powerful stuff (you can hear the programme for the next 6 days here).
… I tried to present the case that we could either choose to see this as a crisis or as an opportunity, and that although it asks difficult questions and won’t be easy, the questions will be a lot more difficult the longer we leave thinking about it, and we need to engage some creative thinking.
… The other guest who was in the studio with me (whose name I forget [Prof. Paul Stevens]) summed up at the end, saying that we had better get used to it as this is just the beginning, and that people ought to seek to conserve energy wherever possible. At the end, when the programme had gone off air, the presenter described the material the show had covered as “slit your wrists stuff”.
Conversely I, for one, found it terribly refreshing to find that one of the UK’s leading consumer affairs programmes actually took a whole show to explore the issue in such detail. It was extraordinary that all of the guests, despite coming from across industry, the media, academia, and community activism, all basically agreed that the age of cheap oil is over, that this is affecting all aspects of our lives and that this is happening very fast.
We are seeing, in the media blitz on Transition over the past couple of weeks, a sudden sense of urgency and panic, and an insight that Transition has become seen as pretty much the only source of creative thinking on solutions to oil depletion. One of the things we will need to master over the coming months is how to communicate the opportunities peak oil presents to people for whom the financial pressures are already very burdensome (such as those in rural areas who use home heating oil and need to drive a lot) in snappy and accessible ways. It may not be easy, but successful engagement depends on it.
Congratulations to You and Yours for so courageously, accessibly and imaginatively addressing this issue and for resisting the temptation to trivialise it or to downplay the scale of it. For You and Yours to so insightfully explore the implications of the end of the Oil Age is as powerful an indicator as you could wish for that we live in rapidly changing times and that the days when we didn’t need to worry about the price of oil are already a dim and distant memory.
(14 May 2008)
Program is available at BBC for a few days. Hopkins start at about 42:00. The last guest, whose name Rob forgot, was Professor Paul Stevens (bio?).
The entry is:
You and Yours (57 min)
Tuesday 13 May, 12:00 – 12:57
Consumer issues, with Liz Barclay and John Waite.
