Peak oil (2) – May 24

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Many more articles are available through the Energy Bulletin homepage

$135 and rising … has cheap oil gone for ever?
Larry Elliott,, Guardian
… Although oil ended yesterday at $132 a barrel, forecasts that crude could soon be changing hands for $150 or even $200 also conjured up images of what life might be like once the cheap oil that has been crucial to the development of modern industrial societies, and is used for everything from food packaging to tourism, runs out.

For the past 10 years or more, the leaders of the G8 countries have concentrated on the problems of the developing world when they gather for their annual summer summit. This year Brown wants oil to be at the top of the agenda and, with every other member apart from oil rich Russia feeling the pinch, he is unlikely to face much opposition. Oil prices are more than six times higher than they were in early 2002, and it took only a fourfold increase in 1973 and 1974 to bring the west’s long postwar boom to a shuddering halt. This is the fourth time that oil prices have soared in the past 35 years; on the previous three occasions dearer energy has meant recession.

Graham Turner, of London-based consultancy GFC Economics, said: “Oil prices are on a moon-shoot, with peak oil and a global shortage taking centre stage. Many of the concerns about long term supplies are valid and it is impossible to know how far prices will climb in the coming weeks and months. …”
(24 May 2008)

Ken Deffeyes On Radio 4BC
Big Gav, The Oil Drum: Australia/New Zealand
Long time peak oil analyst Ken Deffeyes (former Shell Oil geologist and current professor Emeritus at Princeton University) was interviewed on Brisbane radio station 4BC today – click here to listen.

Kenneth Deffeyes, former Shell Oil geologist and Professor Emeritus at Princeton University, claims crude oil is too valuable to be burned as a fuel.

ASPO Australia’s Ian Dunlop will be interviewed on the “Open House” radio program on Sunday at 8pm – see here for a local station.
(23 May 2008)

Living with costly crude
Leader, Guardian
… Faced with oil’s rise, politicians can choose between two responses: the first is to muddle through, on the grounds that what goes up must come down eventually; the other is to change policies, and the assumptions that underpin them. Muddling through is the easier path (at least initially), so unsurprisingly it is the one that most politicians take. What are its hallmarks? To cut taxes on petrol and to carry on transport planning as usual. Sure enough, the government came under more pressure to do just that yesterday, with backbench MPs urging it not to raise fuel duty any further. Given the battered condition of this government, it is more than likely to take that advice and hold off this autumn’s rise. That though would be a regressive step for an administration that boasts of issuing the world’s first climate change bill; petrol duty is still the most effective green tax Britain has. In any case, if the price of oil is discouraging petrol consumption, on what serious intellectual grounds can the government justify a policy reversal that will only encourage fossil fuel pollution?

Fuel duty aside, the muddle-through brigade argue that the oil market is in the middle of a speculative bubble that must pop soon.
(23 May 2008)

Soaring prices are a warning that we need to change
Leader, UK Independent
… there is no way of knowing whether we have reached that inevitable moment of “peak oil”, when supplies start their long decline, before final exhaustion. Some analysts are forecasting that the price will come down quite sharply over the coming months as oil producers such as Azerbaijan and Sudan increase the productivity to take advantage of high global prices. This may well be the case. But it is nevertheless clear that the economic fundamentals of the world economy (the resurgence of China and India in particular) point to an era of sustained higher energy prices.

This is not the end of the world. In fact, it is the medicine we need to help us kick our economic dependence on fossil fuels. The oil shocks of the 1970s helped to persuade the motor industry to develop more fuel-economic vehicles. There was a drive across the world for energy conservation. Two subsequent decades of historically cheap oil undid much of that progress.

Yet we can do it again. The example of the remote Alaskan capital, Juneau, which has managed to cut energy consumption by an astonishing 30 per cent after being cut off from the local grid earlier this year, shows what can be achieved if the will is there. At a time when fossil-fuel induced climate change is the pre-eminent threat to human societies, a high oil price can help us travel to where we need to be.
(23 May 2008)
Related from the Independent: Oil supplies: Running on empty?.

“Global Oil Supply” report from EWG
‘Peak Oil ist jetzt’ (PDF)
Energy Watch Group

Fallende Fördermengen heizen Ölpreise an

• Überschreiten des weltweiten Ölfördermaximums ist Hauptursache des Ölpreisanstiegs

• Erdölvermeidungsstrategien sollten Vorrang haben. Eine Senkung von Energiesteuern würde dagegen die Erdölverknappung beschleunigen

Berlin, 21. Mai 2008 – Die aktuellen Entwicklungen der globalen Ölmärkte bestätigen die Kernaussagen der von Experten der Energy Watch Group vorgestellten Erdöl-Studie, einer umfassenden Analyse von Daten zur weltweiten Erdölförderung.

„Peak Oil ist jetzt. Die weltweite Ölförderung hat mit großer Wahrscheinlichkeit das Fördermaximum bereits überschritten und wird weiter zurückgehen. Dies ist die Hauptursache des steigenden Ölpreises. Die Hoffnung auf das Platzen einer angeblichen Spekulationsblase ist vergeblich“, erklärt Dr. Werner Zittel, als Mitautor der von der Ludwig Bölkow Systemtechnik GmbH verfassten Studie auf einer Pressekonferenz der Energy Watch Group in Berlin. Bis zum Jahr 2030 könnte die weltweite Ölförderung auf die Hälfte zurückgehen. Wegen des zunehmenden Verbrauchs in den wenigen verbleibenden Erdöl exportierenden Staaten selbst, bedeutet dies, dass die auf dem Weltmarkt verfügbaren Ölmengen noch schneller abnehmen werden als die Förderung“, so Zittel.

Dr. Josef Auer von der als eher konservativ bekannten Deutschen Bank Research stellt klar: „Wagt man einen längerfristigen Blick auf die Energieversorgung, liegt zumindest was das Erdöl betrifft die Zukunft schon hinter uns. Deshalb ist das Szenario vom Ende der fossilen Kohlenwasserstoffe kein Horrorgemälde pessimistischer Weltuntergangspropheten, sondern eine in den kommenden Jahren und Jahrzehnten ernst zu nehmende Verknappungsperspektive. Vorausschauende Politiker, Unternehmenslenker und Ökonomen sollten sich jetzt auf diese Zeit vorbereiten, um die Übergänge möglichst effektiv gestalten zu können.“
(21 May 2008)
Download the report (German)
Statements from the May 21 press conference (German)

Thanks to Astrid Schneider, who recently conducted a ground-breaking interview with Dr. Fatih Birol, Chief Economist of the International Energy Agency. An official English version is due to be published soon.
Original interview in German is at Internationale Politik.
PDF version with graphs
-BA