Insight and inspiration in turbulent times.
This week saw riots on Britain’s streets and in world markets. The IEA monthly oil report referred to the oil market as a ‘big dipper ride’ as Brent oil dropped below $100 for the first time since early February, before regaining some of the losses later in the week. Pundits compared the turmoil with 2008, but in some ways it looks far worse…
An explosion of unrest and looting by young people that began in London and spread to other cities is a particular case of a global pattern with shared roots.
Let’s face it! The whole fossil fuel thing – widespread use of coal, oil, and natural gas could not have happened without technological advances. Without the steam engine, the coal age would have been limited to a handful of people living near surface coal seams and burning coal for heat and cooking, and perhaps a little metal smelting. All the rest of the industrial age – the internal combustion engine and nearly everything else grew out of some technological development coupled and the abundant energy from fossil fuels.
To get past the wall of potential financial-monetary collapse, governments would have to resort to extraordinary emergency measures. In the best instance, this would create time and space to begin coming up with long-term, infrastructural responses to declining energy supplies and climate change—responses involving the redesign of transport systems, power generation and transmission systems, food systems, and so on. Of course, there is no guarantee that time, once gained, will be well spent. Nevertheless, in principle the wall can be traversed.
Dmitry Orlov scares me. But it would be a shame if his fearsome reputation as a relentless doomer scared others off from reading the revised edition of his book that came out this year, Reinventing Collapse: the Soviet Experience and American Prospects. As a foreign-born analyst of the American scene, Orlov is as prescient as Alexis de Tocqueville. But Orlov, of course, is edgier, just like that other analyst of the American character: Gallagher. Yes, that Gallagher, the prop comic we loved in the 1980s for smashing watermelons on stage.
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There are signs that more GDP growth may not be in the cards, regardless whose economic remedy is chosen. In fact, the day may have arrived when GDP itself has outlived whatever usefulness it ever had…If the “recovery” was all smoke and mirrors, we’ve just run out of mirrors.
A newly-released report from the Canadian government reinforces the looming environmental impact of tar sands oil: As producers ramp up their activity, due in large part from a projected increase in demand from U.S. refineries, greenhouse gas emissions from Alberta’s tar sands could double by 2020 compared to 2010 levels.
A weekly roundup of peak oil news, including:
-Oil and the global economy
-Pakistan
-China
-Quote of the week
-Briefs
An eleventh hour political deal on the US debt crisis this week turned out to be just a stepping stone in the ongoing economic and fiscal crisis. By Thursday markets were plunging again on fears that Italy or Spain may default, and on the growing anticipation that the US may be returning to recession after Q1 GDP growth numbers were revised down from 1.9% to 0.4%.
Shale gas has become an important and permanent feature of U.S. energy supply. Daily production has increased from less than 1 billion cubic feet of gas per day (bcfd) in 2003, when the first modern horizontal drilling and fracture stimulation was used, to almost 20 bcfd by mid-2011. There are, however, two major concerns at the center of the shale gas revolution. Despite impressive production growth, it is not yet clear that these plays are commercial at current prices because of the high capital costs of land and drilling and completion. Reserves and economics depend on estimated ultimate recoveries based on hyperbolic, or increasingly flattening, decline profiles that predict decades of commercial production. With only a few years of production history in most of these plays, this model has not been shown to be correct, and may be overly optimistic.
A strong majority of Americans say it is likely that oil prices will triple in the coming five years and that such a tripling would be harmful both to the economy and to public health. Conservatives and those dismissive of climate change are among the most concerned by the threat of a major spike in oil prices, suggesting that a broad cross section of Americans may be ready to engage in dialogue about ways to manage the risks associated with peak petroleum.
