Click on the headline (link) for the full text.

Many more articles are available through the Energy Bulletin homepage.

Peak oil article in Portuguese newspaper Expresso

Jorge Nascimento Rodrigues, Expresso via The Oil Drum: Europe

Jorge Nascimento Rodrigues is perhaps the only journalist in Portugal aware of the issue of oil scarcity. During the past few years, I have had the opportunity to collaborate with him several times, bringing the Peak Oil message to a larger audience on an almost regular basis. Last weekend, the largest weekly newspaper in Portugal (and among the diaspora), Expresso, had another article in its Economy section, penned by Jorge with a few thoughts on present events and trends. Samuel Foucher kindly provided an updated version of one of his graphs to illustrate the article.

Below the fold you will find an English translation of this article.
This is an improved version of a log at the EuropeanTribune.
– TOD contributor Luis de Sousa

The alarm has sounded: the scarcity of oil will affect everyone, say analysts

‘Peak’ oil is no longer debatable. The projections for the year, the five-year period, or the decade when global oil production would start declining "are now a part of history", says Luís de Sousa, member of ASPO-Portugal and contributor to the blog "The Oil Drum", talking to the Expresso. "The period of peak is already being lived. Predicting it is no longer relevant", he adds.

According to this specialist, the vast majority of the important mathematical and accounting models of oil production used by entities independent from the oil industry all point to a similar time period when oil production reaches a maximum and begins to decline. This is a period of about a decade centred between 2008 and 2010, and the maximum oil produced is between 78 and 85 million barrels daily.

(28 September 2010)


Japan to drill for controversial ‘fire ice’

Michael Fitzpatrick, Guardian
Japan seeks to improve energy security by drilling for frozen methane but environmentalists fear a leak of the greenhouse gas, which is 21 times as damaging as carbon dioxide

In a bid to shore up its precarious energy security Japan is to start commercial test drilling for controversial frozen methane gas along its coast next year.

The gas is methane hydrate, a sherbet-like substance consisting of methane trapped in water ice – sometimes called "fire ice" or MH – that is locked deep underwater or under permafrost by the cold and under pressure 23 times that of normal atmosphere.
(27 September 2010)

The Effects of High and Volatile Oil Prices
Conseil d’analyse économique (CAE)
From the English-language summary:

1. A high and volatile oil price

Forecasting work carried out by a number of institutions shows how difficult it is to accurately predict trends in oil prices. The authors of this report do not carry out this forecasting exercise, but they share the same conclusions about the main features of oil price trends in the near and medium term: a rise in oil prices is inevitable, and will be accompanied by significant volatility. This expectation is based on detailed analysis of oil price determinants, their past variations and forecasts as to their future trends.

… 4. Recommendations for a supply adjustment policy

The guiding principle of all the recommendations put forward by the authors is relatively simple and clear: we should not seek to subsidise the use of more expensive oil; on the contrary, we should encourage and aid the necessary supply-side adjustments. This does not rule out personalised support for the hardest hit sectors and households –though this support must not discourage these adjustments, but should instead encourage and support them.

… For the authors, the fundamental axis of the policy is to reduce the French economy’s oil dependency. Efforts to replace oil with other energy sources must continue. Nuclear energy plays a considerable and original role in France. Greater use of gas is possible in certain sectors, and gas prices are likely to fall in relation to oil. Climate policy, which is evidently primarily justified by its environmental benefits, encourages technological developments and can considerably help reduce the French economy’s exposure to high and volatile oil prices. The authors recommend the implementation of a carbon tax scheme at a European level, which must be sufficiently high and consistent with the European carbon permit market.

To be effective, the taxation must extend to all sectors that consume energy and fuel, without exception. The authors also recommend stepping up the implementation of the so-called Grenelle environmental policies in France, which aim to reduce France’s dependency on fossil fuels. More generally, they call for a major reform of energy and environment-related taxation at a French and European level. Taxes should not unnecessarily influence energy choices at a time when switching energy sources is justified and they should closely reflect the social costs of greenhouse gas emissions. This implies, for example, reducing the difference between petrol and diesel taxes.

As regards oil price volatility, the authors recommend taking action at the source (reinforcing regulation of derivatives markets to limit speculation), rather than through taxation (such as the floating TIPP applied in the early 2000s or a modulated TIPP designed to offset oil price variations).
(9 juillet 2010)
256-page PDF in French. I understand (at least from Wikipedia) that the Conseil d’Analyse Économique is an advisory council for the French government and Prime Minister. Is this report significant for France? There is an English summary within the report from pages 247-254. -SO

ADDED this English translation several hours after first posting. -BA

Les effets d’un prix du pétrole élevé et volatil
Conseil d’analyse économique (CAE)
Avec un peu de recul, il apparaît que les prix du pétrole augmentent tendanciellement mais qu’ils restent à court terme soumis à une forte volatilité.
L’objet du rapport qui suit est triple :

  • analyser les principales causes de ces faits d’observation ;
  • en déterminer l’impact pour l’économie réelle (la croissance, l’emploi…) ;
  • en déduire un certain nombre de recommandations pour les politiques publiques.

Le prix du pétrole reste crucial pour la macroéconomie, pour les entreprises et les ménages. Autant le consensus est large lorsqu’il s’agit d’étudier les ressorts des prix pétroliers, d’évoquer leur « financiarisation » excessive avec l’essor des marchés dérivés, autant il se dissipe dès qu’il faut désigner clairement les responsabilités. Un exemple parmi d’autres : le baril à 150 dollars en juin-juillet 2008, était-ce dû pour l’essentiel à la spéculation et à l’activisme de certains « hedge funds », ou bien à des facteurs relevant de l’économie réelle ? Sans doute de l’interaction entre la finance et l’économie réelle, avec une grande difficulté à démêler, par exemple, le rôle des « fondamentaux » relatifs à l’offre et à la demande, du jeu des anticipations et de la psychologie des marchés.

L’autre volet de ce rapport concerne la mesure des effets des chocs pétroliers.

Des effets macroéconomiques somme toute limités, conséquence des changements structurels et de comportements intervenus à la suite des chocs pétroliers des années soixante-dix, ce qui contraste avec la persistance d’impacts sectoriels (illustrés par le secteur des transports) conséquents.

Au rang des recommandations, on notera des pistes touchant des facettes complémentaires du sujet, qu’il s’agisse de la pédagogie à faire
auprès des consommateurs et relative à l’augmentation tendancielle des prix du pétrole, de l’indispensable présence française dans des projets internationaux relatifs à l’énergie, de la stratégie de croissance verte et de développement durable ou des voies et moyens pour réduire la financiarisation des marchés pétroliers.

Ce rapport a été présenté à Madame Christine Lagarde, ministre de l’Économie, de l’Industrie et de l’Emploi, lors de la séance plénière du CAE du 9 juillet 2010. Il a bénéficié du concours efficace de Lionel Ragot, conseiller scientifique au CAE.

Christian de Boissieu
Président délégué du Conseil d’analyse économique
(9 juillet 2010)
256-page PDF. I understand (at least from Wikipedia) that the Conseil d’Analyse Économique is an advisory council for the French government and Prime Minister. Is this report significant for France? There is an English summary within the report from pages 247-254. -SO

World unprepared for "convergent crisis"

Homeland Security News Wire
Specialists in disaster response say that nations are almost completely unprepared for the likely emergence of so-called convergent crises with the potential to plunge markets and regions into prolonged turmoil; in these multi-faceted disasters, strains like a shrinking Arctic ice cap, theft of nuclear materials, oil or water shortages, or cyber crime would worsen tensions among nations over traditional issues such as trade, territory, and resources

Following the earthquakes in Haiti earlier in the year, and the floods in Pakistan more recently, aid experts began publicly to talk about a need to address a pressing issue: what should international bodies do when natural disasters strike in countries that are not only impoverished, but in which governments are corrupt, ineffective, and indifferent to the welfare of their own people.

The idea has been floated that the UN should create an international force of Green Helmets dedicated to rushing aid to poor countries in the aftermath of natural disasters.

… The need is urgent, said Chung Min Lee, Asian security specialist at the International Institute for Strategic Studies. “Imagine a period of just a few years in which you have a succession of crises involving some or all of the following: peak oil, water, resource competition, cyber failure, pandemics, nuclear terrorism. Crisis would flow into crisis,” he said.

“There could be massive social and economic disruptions and movements of population as crises spread from country to country. This would overwhelm many governments at their present level of preparedness.”
(29 September 2010)