Click on the headline (link) for the full text.
Many more articles are available through the Energy Bulletin homepage
The 30 greatest conspiracy theories: 20. The peak oil conspiracy
H. E. Hunt, Telegraph
Peak oil (a theory in itself) is the supposed peak of oil production during and after which demand for oil outstrips supply sending prices through the roof. The peak oil conspiracy theorists believe that peak oil is a fraud concocted by the oil industries to increase prices amid concerns about future supplies. The oil industry is aware of vast reserves of untapped oil, but does not utilise them in order to maintain the illusion of scarcity, they claim.
(19 November 2008)
What a delightful surprise – I had thought the Telegraph was going to claim that peak oil was a conspiracy theory. But no! It’s the ANTI-peak oil theory that they have pegged as a conspriacy theory. Right on, UK Telegraph! -BA
Kunstler and Darley: Two Views of a Post-Oil Future (video)
Janaia Donaldson, Peak Moment via Global Public Media
From the ASPO-USA 2008 conference: two long-standing peak oil awakeners: author James Howard Kunstler (The Long Emergency) and Post Carbon Institute Founder and President, Julian Darley. Darley, founder of Post Carbon Institute, is big on sharing: Sharing ideas to quickly inform a public largely unaware of peak oil. Sharing cars as a quick way individuals can get fuel usage down. He notes the “Re” in Relocalization means positive actions we can revive from the past to enable the powerdown transition.
Kunstler describes his recent novel World Made by Hand, a richly textured life in a post-oil agrarian community where electricity and phone are rarely working, and people must of necessity rely on each other. He compares America’s current financial and political “fiesta of dishonesty” with the 1850s, which preceded the “last great U.S. convulsion.”
(30 October 2008)
Some fresh thinking in these interviews. -BA
Objectivity of the International Energy Agency (IEA)
Gail Tverberg, The Oil Drum
The latest in the IEA WEO 2008 series of articles from The Oil Drum – analyzing the recently released IEA report.
Who is the International Energy Agency? According to its website:
The International Energy Agency (IEA) acts as energy policy advisor to 28 member countries in their effort to ensure reliable, affordable and clean energy for their citizens. Founded during the oil crisis of 1973-74, the IEA’s initial role was to co-ordinate measures in times of oil supply emergencies. As energy markets have changed, so has the IEA. Its mandate has broadened to incorporate the “Three E’s” of balanced energy policy making: energy security, economic development and environmental protection. Current work focuses on climate change policies, market reform, energy technology collaboration and outreach to the rest of the world, especially major consumers and producers of energy like China, India, Russia and the OPEC countries.
With a staff of around 190, mainly energy experts and statisticians from its 28 member countries, the IEA conducts a broad programme of energy research, data compilation, publications and public dissemination of the latest energy policy analysis and recommendations on good practices.
If the IEA acts as policy advisor, it is clearly involved in many matters of political importance. One question a person might ask is whether the IEA is able to separate its political role from its data analysis role. Is there an energy policy Chinese Wall? Also, there are many other tugs on anyone who provides forecasts to others (consistency with past forecasts, explainable changes due to outside causes, forecasts in line with what the clients want).
Given these issues, one might ask whether the IEA can really be expected to be objective. Is there any auditor looking over the IEA’s shoulder? Is there any other outside independent agency looking out for the accuracy of the forecasts?
… Conclusions
Given the current structure and objectives of the IEA, it seems like it would be very difficult for the IEA to be 100% objective, especially in making forecasts where there is a high degree of uncertainty. The objectives of IEA, and of its more-or-less parent OECD, are not consistent with declining energy availability, and declining growth. So in this context, Mssrs. Tanaka and Birol have considerable challenges.
The voting and funding structure are heavily weighted to the US and Japan. If either of them object to a particular view, it would seem more than possible to have this view not approved, or at least watered down. Also, with the complex governance structure, it would seem as though getting anything passed which potentially is in conflict with the views of some of the member nations would be an issue.
Consistency with past reports is something that any forecasting agency would consider important. This, by itself, will tend to inhibit big changes in forecasts. When one couples this issue with other issues of importance–such as the perceived need to maintain growth, and a concern about not causing panic, there would seem to be considerable pressure to keep forecasts as close to those in the past as possible. We would note, however, that the IEA has taken steps to indicate that there is a problem, even when other agencies have sidestepped this issue. In fact, the headline projections from this report are indeed a large departure from the recent past.
There really aren’t other organizations, (other than previously mentioned), that are looking at the IEA report from a point of reasonableness of the forecasts compared to the indications of the underlying data. What would be the incentive? The Energy Information Agency could at least in theory, undertake this role, but it has at least an equally bad track record in forecasting. Theoretically, newspapers could be doing this, but they lack the staff and expertise to manage the technical details. This leaves The Oil Drum and the ASPO organizations as the only “watch dogs” of the supposed “watch dog” agency.
(19 November 2008)
The perils of cheap oil
Andrew Leonard, Salon
… On Sunday, “60 Minutes'” Steve Kroft asked President-elect Barack Obama if the astonishing drop in gas and oil prices made dealing with energy issues “less important.” Obama responded forcefully: “It makes it more important.” He observed that there is a cycle of “shock and trance” in American attitudes toward energy. When gas prices go up, there’s a “flurry” of activity, but when they go back down, well, never mind.
That’s exactly what I want to hear from my president, because the truth is that the current low gas and oil prices are engendering a false sense of security. We are being set up for an even more painful energy crisis in the very near future.
Support for this thesis comes from the recently released World Energy Outlook from the International Energy Agency. The rate of production decline in existing fields is accelerating, to the point “that by 2030 the world needs to find and produce 45 million [new] barrels of oil a day.”
You don’t have to be a believer in peak oil to recognize that developing that much new production will be a huge and expensive task. But at the moment, investment in new oil production capacity is getting hammered by the double whammy of low oil prices (which makes existing facilities offshore and in, for example, the Alberta oil sands, uneconomic) and the unforgiving credit environment, which is making it very hard to get the financing necessary to undertake new projects.
(18 November 2008)
Unsustainable Energy Trends
Byron King, Daily Reckoning
I’ve been getting a lot of calls and e-mails from people asking about the falling prices for oil in recent weeks. The immediate explanation is that world economic activity is decelerating. Demand is falling. OPEC announced cuts in output. But the markets still believe that economic decline will trump the ability of OPEC to prop up the price of oil. Enjoy it while it lasts.
Just over the horizon, things are about to become dicey. This week, the International Energy Agency (IEA) will release a new report on the future of world energy. In its World Energy Outlook, the IEA will state categorically that “Current global trends in energy supply and consumption are patently unsustainable.”
There’s not much wiggle room in that statement. According to the IEA, despite the recent fall in oil prices, the medium- and long-term outlooks for energy supply are grim. Conventional oil output is destined to decline. Demand will still grow, however, especially in the developing world. And the twain shall only meet by prices rising to clear the market. “It is,” as our Arab friends like to say, “written.”
The IEA performed a comprehensive study of 800 of the world’s largest oil fields. And it concluded that depletion in conventional oil fields is occurring at a rate in excess of 9% per year. (That’s an average. We see depletion rates in excess of 15% in Mexico’s Cantarell field, for example.) This means that absent large amounts of new drilling, new investment in enhanced recovery and new discoveries, the current worldwide oil output will decline by over 9% per year. And if it keeps going along this trend (there’s no reason why it won’t), the base of world oil output could conceivably dry up within seven-10 years.
Don’t get me wrong. The world won’t run out of oil in seven-10 years. That’s not how it works. It’s just that volumes of conventional oil are declining. The takeaway point is that the energy markets will tighten up, like a hangman’s noose around the collective neck of the oil-consuming world. We might not quite realize it, but when it comes to oil, we are all walking that long green mile.
Byron King currently serves as an attorney in Pittsburgh, Pennsylvania. He received his Juris Doctor from the University of Pittsburgh School of Law in 1981 and is a cum laude graduate of Harvard University. Byron is also co-editor of Outstanding Investments.
(19 November 2008)
Byron King has been a contributor to Energy Bulletin.
