Peak Oil
The Peak Oil Crisis: Mid-Year 2005
Staff, Falls Church News Press (US)
As we enter the second half of the year, there is still no general recognition that a world-class crisis is about to take place. Optimism abounds.
In June General Motors, by offering “employee discounts,” managed to increase sales to the highest level in 19 years. A senior official of the Saudi Oil Company has been running around Washington with the message – “All is well.” Saudi Arabia will increase its production from the current 10 million barrels a day to 12 or 15 million or perhaps down the road, 25 million. Allegations that Saudi production is about to enter a steep decline are said to be simply not true. …
One development of note last week was Congressman Roscoe Bartlett (R Md. ) finally got in to tell President Bush about Peak Oil. According to Bartlett ‘s press release, he met with the President on June 29 at the White House for “an extensive discussion about peak oil- the end of cheap oil.” Bartlett declined to discuss or characterize any of his conservation with the President, but said he was happy about the meeting. Bartlett is the only member of Congress who has been speaking out regularly on the dangers the country is about to face from oil shortages. The White House does not appear to have taken official note of the meeting.
In another interesting development, Fidel Castro became the first head of state to speak out bluntly on the impending energy crisis. Speaking at the first PetroCaribe Energy Summit, Castro noted that within the decade oil would cost $100 per barrel, an amount no Caribbean country can afford. At the end of the summit, Venezuelan President Chavez announced a plan to sell oil at a 40 percent discount to Caribbean countries. …
(7-13 July 2005)
Oilcast #15: Bank Of Montreal – Saudi & Mexico fields “in decline”
Staff, Oilcast
In this Oilcast Adam Porter looks at new statements by the Bank Of Montreal’s Don Coxe who has taken his thoughts on a possible oil production peak to wider conclusions. Plus BP report on production, Petro Caribe comes into force, Russia clamps down on investment and prices once again near sixty dollars. But where will they go?
(6 July 2005)
Bush Urges Less Global Oil Use, as US Guzzles It
Reuters, Planet Ark
Speaking on Wednesday as the leaders of the major industrialized countries traveled to Scotland for a Group of Eight meeting, Bush said nations should develop alternative energy sources to oil and natural gas to help control global warming. …
Environmental groups said Bush is merely trying to repackage to an international audience an energy plan he pushed in the US Congress. “He’s trying to sell the same horse twice here,” said Dan Becker of the Sierra Club. …
“We have a multi-pronged strategy on fuel economy,” Jim Connaughton, head of the White House Council on Environmental Quality, said, pointing to a $4,000 proposed tax credit for consumers to buy fuel-efficient vehicles like hybrids.
“We can’t make progress faster than people’s ability to purchase a new vehicle,” Connaughton said. …
“The United States has not made new serious commitments to new transportation technologies that are likely to bear fruit in the next 10 or 15 years,” said David Goldwyn, an energy consultant.
(8 July 2005)
Merely Reuters version of previous news, but thought the second quote from Mr Connaughton was a priceless example thinking inside the box.
Oil and Economic Crash Possible This Winter
Rowan Wolf, Project for the Old American Century
The “oil crisis” may be much closer than most thought. It may be less than six months away. Matt Simmons, CEO of Simmons & Company International (an investment banking consultant firm to the energy industry) recently stated that Oil ‘will hit $100 by winter’.
A forty dollar a barrel rise in oil in six months could indeed shake the global economy. It could lead us into the war game scenario recently played out – Oil Shockwave. In that simulation, former US officials were presented with a scenario of escalating oil prices and global economic instability. What they determined was that there was virtually nothing that the United States could do to avert economic collapse. [See Oil Crash Would Crash the U.S.] …
This reflects a cost increase in gasoline of 42% in 2005 after an increase of after a 45% increase in 2004 and a 30% increase in 2003. For heating oil the figures are a 46.5% increase in 2005 after a 16% increase in 2003-2004. Since 2005 is not yet over, it seems likely that this year’s increases are going to be over 50%. Decreasing supply of sweet crude will drive prices up dramatically – perhaps even to $100 a barrel. …
I have a strong feeling that we are not looking at a gradual peak situation culminating in 2012 or 2020. It could very well hit this winter.
(July 2005)
Oil’s not well, so let’s find alternative
Ike Awgu, Ottawa Sun (Canada)
Anyone who’s young, particularly below the age of 30, should pay special attention to the content of this column. …
The sky is not falling, but bits of cloud are slowly beginning their descent. The crisis we face is not simply one of oil (despite the obvious increase in the price of gasoline we all see at the pumps) but quite literally a comprehensive shortage of energy. The shortage is merely most apparent and first evidenced, by our imminent depletion of cheap oil. …
Around the world, the diplomatic, economic and military strategists of nearly every nation obsess over one objective — maintaining access to a steady supply of energy. Oil or resource wars are an inevitable contingency of such strategizing.
To ward off this catastrophe, our governments and private industry must find a cheap and alternative source of transportation energy. Thankfully progress is being made, and almost monthly we hear new positive things about alternatives to fossil fuels. Our time to find these alternatives however, like our supply of oil, will eventually run out.
(7 July 2005)
Leadership on energy use ‘will curb high oil prices’
Carola Hoyos, Financial Times
High oil prices will continue to threaten global economic growth unless the Group of Eight industrialised countries take the lead in improving energy efficiency, Claude Mandil, chief executive of the International Energy Agency, said on Wednesday. …
Mr Mandil, who is a participant in the G8 summit at Gleneagles, Scotland, said that if asked he would raise the issue in a discussion about high oil prices and climate change. “I will certainly insist on energy efficiency, not because it is the main tool in solving the climate change issue, but because I am convinced that the sooner we start the better . . . It is available with prevailing technology,“ he said. “It is good for economic growth because many of the decisions are low cost or [cost saving] and it is extremely good for energy security.”
Mr Mandil’s comments come as Saudi Arabia, the world’s largest supplier of crude oil, has begun to warn consuming countries that the Organisation of the Petroleum Exporting Countries, the oil cartel, will not be able to meet the demand levels projected in the next 15 years.
But the IEA believes Opec would be able to meet projections if consuming countries adopted oil-saving policies, especially in the transport sector. …
Writing in a German newspaper, [German Chancellor] Schröder said that “experts say there is enough oil on the markets and that supply is totally adequate”. Bernd Pfaffenbach, the chancellor’s “sherpa” in negotiations ahead of the G8 meeting, said Germany would press G8 leaders to support a plan for a global oil database.
(6 July 2005)
Politics and economics
SCO wants date for US withdrawal from Central Asia
Staff, Daily Times (Pakistan)
ASTANA: The Shanghai Cooperation Organisation (SCO), an alliance grouping Russia, China and central Asian countries on Tuesday called for the US-led anti-terrorist coalition in Afghanistan to set a time frame for withdrawing its forces from member states. …
“As the active military phase in the anti-terror operation in Afghanistan is nearing completion, the SCO would like the coalition’s members to decide on the deadline for the use of the temporary infrastructure and for their military contingents’ presence in those countries,” the declaration continues. …
(8 July 2005)
Gas pipeline talks: Iran, Pakistan to invite India
Staff, New Dehli TV
Islamabad – Iran and Pakistan have decided to invite India to hold trilateral meetings of their oil ministers to speed up the implementation of the multi-billion dollar Iran-Pakistan-India (IPI) gas pipeline project.
Visiting Iranian Oil Minister Bijan Namdar Zanganeh and his Pakistani counterpart Amanullah Khan held detailed discussions here last night.
They have decided to hold trilateral meetings of oil ministers from India, Pakistan and Iran to gear up the implementation of the project. …(7 July, 2005)
Source: “New Delhi Television Ltd. (NDTV Ltd.), founded in 1988, is India’s first and largest private producer of news, current affairs and entertainment television.” – Homepage, see About Us.
Chinese rigs, crews arriving in western Colorado
Gary Harmon, The Daily Sentinel (US)
Some Chinese drill crew members already have arrived in western Colorado, preparing to start drilling for natural gas in the Piceance Basin.
An official with Denver-based Western Energy Advisors, which brokers arrangements for the Chinese crews and exploration and production companies, said he was unfamiliar with specific crews’ schedules, but that some crews and rigs could be expected to arrive in western Colorado now.
Several western Colorado residents on Wednesday reported seeing drill rigs arriving or being set up in the area.
Western Energy Advisors worked with federal agencies to arrange for visas for the Chinese crews, said Bill Croyle, a partner in Western Energy. …
(7 July 2005)
See also National Post article.
Left, right: Iran and Venezuela in lockstep
M K Bhadrakumar, Asia Times
Among the world leaders felicitating Iran’s president-elect, Mahmud Ahmadinejad, one head of state conspicuously set aside protocol norms – President Hugo Chavez of Venezuela. Though Ahmadinejad will only be formally sworn in on August 4 – and a congratulatory message through diplomatic channels at this stage was all that was required – Chavez telephoned Ahmadinejad. …
Oil is the trump card for both Chavez and Ahmadinejad. Chavez is an unabashed admirer of the slogan “oil belongs to the people” – a clarion call first sounded by Mohammed Mossadegh in Iran in 1951. …
The call that Chavez put through, across many thousand leagues and several time zones, to Tehran was a stark reminder that the US’s quarrel with Iran began 50 years ago with Mossadeq’s rise to power in 1950, and the “Bolivarian” challenge that he posed. For Washington, what a successful Iran means to the geopolitics of the Gulf and the Middle East is a profound issue. After all, it took hardly any time for South America, a region utterly used to Washington’s bullying, to start to rebel. …
(8 July 2005)
Comprehensive and calm review of the history and forces driving Iran and Venezuela’s leaders together, refreshingly free of demonisation or accolade.
Hu Jintao makes further advances in Kazakhstan
Marat Yermukanov, Eurasia Daily Monitor (US)
In an interview with the Kazinform news agency before his trip to Kazakhstan, President Hu cited energy cooperation as the key element in the partnership between the two countries (Kazakhstanskaya pravda, July 2). A lavish exhibition of Chinese consumer goods that some 120 manufacturers from 14 provinces staged in Almaty on July 4 demonstrated economic ties and was lauded as a success. …
Nazarbayev and President Hu reaffirmed that construction of the Atasu-Alashankou oil pipeline from western Kazakhstan to China would be completed in December 2005. …
Far more alarming than the expanding Chinese commodities trade is the demographic threat posed by accelerated development of China’s Xinjiang Uighur Autonomous Region. …
Former Ambassador of Kazakhstan to China Murat Auezov has suggested that Beijing sees Nazarbayev’s Central Asian integration concept as a lesser evil than a “color revolution” in the region. But even integrated Central Asian states are not likely to effectively resist Chinese economic and cultural expansion without forging an alliance with India (Turkistan, June 30).
During the SCO summit in Astana, Hu Jintao said that the Central Asian states should determine their policies without outside interference. China will try to use the Shanghai six, now strengthened by new observer states India, Pakistan, and Iran, to the best advantage in his advance into Central Asia.
(7 July 2005)
The Euarasia Daily Monitor is a publication of the Jamestown Foundation.
Asian govts face protests as oil subsidies cut while prices hit records
Staff, AFX News Limited/Forbes
Governments across Asia are facing political turmoil as they try to relieve pressure on budgets by cutting fuel subsidies or raising prices at the pump while surging crude prices continue to break records.
From Pakistan to Vietnam to Indonesia, governments grapple with the impact of soaring oil prices, and economists have warned the levels could keep rising. …
The Philippines, although mentioned along with Indonesia as facing the risk of not cutting subsidies, already deregulated the oil industry in the late 1990s and has since stopped providing subsidies, allowing oil companies to pass on higher prices directly to consumers.
‘The downside is that you could get riots that cause political instability, which is what happened to (former president) Megawati Sukarnoputri (in 2003) and she had to roll back the prices. …
(7 July 2005)
Good roundup of the costs of fuel subsidies for nearly a dozen SE Asian countries.
As oil prices rise, shrugs at the gas pump
Kris Axtman, Christian Science Monitor
There is no new war sending crude prices soaring, no major governmental instability threatening to disrupt world supplies, no dominant “fear factor” to rattle nervous energy traders.
The fact that the price of a barrel of light sweet crude has doubled from $30 to near $60 in less than two years is largely about demand, experts say. …
That underscores what Mr. Lenard is hearing from gas-station owners, who say they are selling the same amount of fuel, if not more, as prices increase. “People don’t drive because they want to,” he says. “They drive because they have to. And there is very little in the way of driving less that people can do.” …
“So it’s hard for people to get excited about it,” says David Stewart, a professor of marketing and consumer psychology at the University of Southern California. “I, for one, am not going to go out of my way to save 10 cents a gallon.”
That may change, however, if people are shown standing in line for fuel, as they were during the oil embargo.
“Right now, there is just not that sense of urgency,” Professor Stewart says.
(6 July 2005)
