Click on the headline (link) for the full text.
Many more articles are available through the Energy Bulletin homepage
End of oil heralds climate pain
David Strahan, BBC (Viewpoint)
Many people think that running out of oil, or “peak oil”, would be good for the climate. In his new book The Last Oil Shock, David Strahan begs to differ; he suggests it may bring catastrophe.
—-
It is becoming increasingly clear that global oil production will soon go into terminal decline, with potentially devastating economic consequences. Although the idea of peak oil has traditionally been ridiculed by the industry, now even some of the world’s most senior oilmen concede the case.
…But many environmentalists continue to resist the idea. Some seem to suspect that anybody who argues that oil production is set to fall must be a closet climate change denier with a secret agenda. It is quite possible to run out of oil and pollute the planet to destruction simultaneously.
Others, like Stephen Tindale of Greenpeace, instinctively distrust forecasts of an imminent peak, but wish fervently that it would come soon. “Let’s hope that the oil does run out”, he told me, “and that the world has to develop alternatives to oil seriously quickly, and from a climate point of view that would be an excellent outcome.”
Neither position could be more wrong.
It is mathematically impossible that peak oil will solve climate change. Although oil is the biggest single source of energy-related greenhouse gases, coal and gas combined are bigger still, and the expected growth in their emissions would overwhelm any reduction from oil.
…In fact peak oil could even make emissions worse if it drives us to exploit the wrong kinds of fuel.
…When oil production starts to fall, the economic impacts could well be devastating. When prices rise, will the political will to fight climate change wilt?
Soaring crude prices could tip the world into a depression deeper than that of the 1930s, and collapsing stock markets cripple our ability to finance the expensive clean energy infrastructure we need.
As the unemployment lines grow, the political will to tackle climate change may be sapped by the need to keep the lights burning as cheaply as possible. … Oil depletion is deadly serious in its own right, but it also has the capacity both to worsen emissions and destroy the wealth needed to fight global warming.
(28 March 2007)
Contributor Rod Campbell-Ross writes that author David Strahan “has come to the right conclusions and the article is a useful contribution to the debate.” He notes a few weak points however.
The intro to the article, written by a BBC editor (not author Strahan) perpetuates the familiar error that peak oil is the same as running out of oil: “Many people think that running out of oil, or “peak oil”, would be good for the climate.”
Secondly, the article’s emphasis on “the growth in CO2, despite declining oil production implies growth as usual.” At the least, the author should “have alluded to the risk that growth may stall and with it the growth in CO2.”
Pickens Tells CNBC: Fundamentals Pushing Up Oil, Not Politics (text and video)
CNBC
Texas energy investor Boone Pickens told CNBC that the recent spike in oil prices is due more to “fundamentals” than geopolitical tensions with Iran and that “you’re going to look at $70 oil pretty quick.”
The billionaire CEO of BP Capital said in an interview on “Squawk Box” that the current market is “very tight” because inventories have declined for seven straight weeks. He expects that will continue.
Thus, he rates the current market as being influenced by “90% fundamentals, but only 10% geopolitical.” That could change, however, if the situation with Iran’s seizure of 15 British sailors worsens and causes a blockage of the Straits of Hormuz, the waterway linking the Persian Gulf with the Indian Ocean.
“It’s got to be something awful big,” Pickens said. But if that happened, oil could go to “$100, easy.”
Political or natural disasters aside, Pickens’ projection for the next three to six months is “$75 before $55.”
(29 March 2007)
James Howard Kunstler: Remarks to the Commonwealth Club of California (audio and transcript)
Global Public Media
James Howard Kunstler, author of The Long Emergency, speaks to the Commonwealth Club of California about the American car culture and our illusions of maintaining it with alternative fuels. Note that the attached transcript contains additional remarks not available in the audio version.
(posted 29 March 2007)
Review: Crude Impact
Dennis Harvey, Variety
That road trip you were planning for 2057 might look a tad less likely after viewing “Crude Impact,” which sees disaster looming all too soon in the growing global demand for a shrinking oil supply — especially in the U.S., where consumption and native supply levels are most out of whack.
James Jandak Wood’s docu is playing scattered theatrical dates, but will probably prove most effective as a spur for education and activism on DVD.
Pic links the enormous world population growth in recent decades to the seemingly endless use and supply of oil, which is involved one way or another in “nearly every product we consume,” particularly food production. President Bush the First famously said this “American way of life is non-negotiable,” but Mother Nature may nullify the contract. ..
(26 Mar 2007)
Financial Intelligence: How Arbitrage Forensics Provide Insight into Saudi Knowledge
Jeff Vail, The Oil Drum
TOD editor Nate Haggins writes:
The following is from guest contributor Jeff Vail. Jeff is an intelligence analyst focusing on energy and infrastructure-related issues. He is a graduate of the US Air Force Academy and a former USAF Intelligence Officer. Jeff previously wrote on the The Oil Drum about the increasing violence in Nigeria.
He discusses an interesting phenomenon with respect to energy futures prices, that long dated futures are limited in how much they can go up (but not down) based on arbitrage principles. Because the price of distant oil futures quickly rise alongside spot market prices when spot markets are moved by short-term events, we can infer that major producers such as Saudi Arabia think that the future price of oil will be much higher than the price at which distant futures are currently trading. This provides further support to the theory that they don’t believe their own statements on their future production or on the future price band for crude oil.
There has been quite a bit written recently about what is “really” happening to Saudi oil production, as opposed to what the Saudis are telling us. Comparison of rig-count to oil production levels, or analysis of published seismic readings of water encroachment on a reservoir provide good insight, as Stuart Staniford has shown in several, recent, articles. This article is to suggest that additional, complementary information about Saudi oil production can be gleaned through forensic analysis of the related financial markets. Just as reservoir analysis is quite complex, this financial analysis will be fairly challenging-please bear with me, I will do my best to explain the financial principles at work in this analysis (and please don’t be offended if you already understand arbitrage!).
(29 March 2007)
Good golly, Ms Moly
Barry Sergeant, Mineweb
Like nickel and uranium, among others, molybdenum is up 1000% or so in the past five years. The metal, known in the trade and among specialist investors as “moly”, and mostly used in steel alloying for hardening and corrosion resistance, is now in a $12bn a year market, but is it still worth a punt?
This week sees the launch of a molybdenum Exchange Traded Fund (ETF) (Bloomberg: MBMOEUOX ), “Sprott Moly”, run by well-regarded Canadian fund manager Eric Sprott and his team. The objective is to invest up to C$150m in molybdenum equities (75% of the fund) and 25% in the metal itself. Sprott has arranged to buy “moly” from the largest pure play producer, Blue Pearl (BLE, C$12.06, with a C$1.25bn market capitalization).
The molybdenum market is currently running at around 400m pounds a year, and is said to be growing at a minimum of 4% annually. The metal’s subscribers describe it as the “energy” metal, given how much it’s used in the crude oil and gas business.
Sprott himself subscribes to the “peak oil” school of thought, which holds that global crude oil production is peaking, meaning more drilling for every new unit discovered. Sprott tells investors that a 5,000 foot oil well requires 50 tons of molybdenum-hardened steel to drill; a 15,000 foot well requires a magnificent 1,100 tons. Nearly 80% of all wells drilled today are deeper than 8,000 feet. ..
(28 Mar 2007)
