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Post Carbon Cities
Daniel Lerch, American Planning Association
Oil production could peak by 2012. What does that mean for your community?
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… Many communities in the U.S. have launched climate change mitigation plans over the last decade, and interest in local energy planning has recently risen to levels not seen since the oil crises of the 1970s. Nevertheless, few jurisdictions have truly addressed the long-term ramifications of the 21st century’s energy and climate challenges. Like households and businesses across the country, local governments still largely assume that markets and higher level agencies will eventually find ways to stabilize both energy prices and carbon emissions.
In fact, global climate change and global oil depletion together pose threats much greater than larger storm surges and higher fuel prices. They are enormous and complex system problems that ultimately threaten our modern global industrial economy. Planners and local leaders alone can’t solve these system problems, but they can prepare their communities for the challenges to come.
The ramifications of global warming for planning practice have been widely discussed (see the August/September 2007 issue of Planning for a series of articles on the matter), but global oil depletion is much less well understood. Fortunately, some cities are already doing something about it.
A new energy era
A few years ago, the oil giant Chevron started an unusual ad campaign with messages like “The era of easy oil is over.” Around the same time, BP rebranded itself with a modernized sunflower-like logo and the new tagline “Beyond Petroleum.” These and other oil companies are responding to fundamental shifts in global oil supply and demand (not to mention shifts in public relations). The less-developed world — led by China and India — is quickly building an appetite for oil, pushing demand and competition to new heights. At the same time, the flow of oil to the global market has started to hit serious geological, economic, and political constraints, resulting in energy shortages in some parts of the world and higher prices just about everywhere.
The key factor driving these changes is “peak oil,” the coming maximum point of global oil production.
Daniel Lerch is the author of Post Carbon Cities: Planning for Energy and Climate Uncertainty (Post Carbon Press, 2007), the first major guidebook on peak oil for local government officials and staff. Lerch is a program director of Post Carbon Institute
(December 2008 issue)
UPDATE (Dec 13)
Now on the Post Carbon website as well.
Goldman Sachs predicts fall in oil prices to $45 a barrel
Julia Kollewe, Guardian
Goldman Sachs has slashed its forecast for crude oil prices to just $45 a barrel next year as demand wanes – in a sharp U-turn from its prediction of a spike to $200 made earlier this year.
In May, the investment bank’s energy equity team led by Arjun Murti made headlines when it predicted oil could rise to $150 to $200 a barrel within two years. Oil prices peaked at $147 a barrel in July and have fallen sharply since then as a rapidly deepening global economic downturn reduced demand for energy.
The team, which also made waves in 2005 by calling crude’s rise to $100, cut its 2009 forecast to an average price of $45 a barrel. The analysts also think prices will bottom out early next year and that a shift from “demand destruction” to “supply destruction” will reignite the oil rally before long.
Murti’s team predicted a return to positive demand growth and shrinking non-Opec supply would lift prices to $70 a barrel by 2010 and to $105 by 2012.
(12 December 2008)
As China economy brakes, oil demand goes in reverse
Jim Bai, Reuters
China’s once insatiable appetite for oil has choked.
An abrupt economic slowdown has corroded the machinery of China’s economy, while stubbornly high fuel prices have forced drivers off the road. Crude imports are falling, fuel exports have resumed and once flat-out refiners are shutting down.
Demand from the world’s second biggest consumer of oil after the United States, one of the main catalysts that launched oil’s rally six years ago, likely contracted for the first time in three years last month, data due next week is expected to show.
Analysts say that is not an anomaly.
(12 December 2008)
Energy giants trim spending plans for 2009
Tyeler Hamilton, The Star
Alberta’s oil balloon continued to deflate yesterday after Canadian petroleum giants EnCana Corp. and Petro-Canada squeezed more than $3 billion from their 2009 capital spending plans, citing the need to stay flexible during uncertain economic times.
The capital deferrals are in effect a wait-and-see strategy at a time of unprecedented volatility in the price of oil, which jumped 10 per cent yesterday to $47.98 (U.S.) a barrel on the New York Mercantile Exchange.
Crude prices are up about 19 per cent since last week but still down two-thirds from their mid-July high of $147.27. Industry players are being forced to absorb the shock of this market whiplash.
(12 December 2008)
