Insight and inspiration in turbulent times.
Brent crude surged to $104 this week as anti-government protests spread to Libya and Bahrain, prompting a violent reaction from the authorities in both countries. 24 protesters are reported killed in Libya, and in Bahrain 4 have been killed and hundreds injured. Unlike Libya, Bahrain is not a significant oil producer, but there are fears that instability there could spread to its neighbour Saudi Arabia…
We often hear statements suggesting that by ramping up shale gas production, the US can raise total natural gas production and solve many of its energy problems, including adding quite a number of natural gas vehicles, and replacing a large share of coal fired electricity generation. While there is the possibility that shale gas will allow US natural gas supplies to increase for a few years (or even 10 or 15 years), natural gas is only about one-fourth of US fossil fuel use, so it would be very difficult to ramp it up enough to meet all of these needs.
Colin Barr at Fortune Magazine has some interesting discussion of the WTI-Brent spread (this is the difference in prices between the basic spot price of West Texas blend oil in Cushing Oklahoma, and the price of the Brent contract in Europe). “How do you get $4 gas when oil is just $85? The answer starts with some unprecedented behavior in global oil markets, where the benchmark European oil standard, known as Brent crude, is trading at a $20-a-barrel premium to the U.S. benchmark, the West Texas Intermediate futures contract that trades on Nymex. The two typically trade within a few dollars of one another.”
History repeats itself: food riots are breaking out across the poorer nations, the Middle East is in turmoil and Brent crude has passed the $100 mark – 2011 is opening just like 2008 did.
A midweek roundup of peak oil news, including:
-Developments this week
-Budget struggles in Washington
Increasing the energy efficiency allows us to pay a higher price per unit energy. This enables higher ultimate production of fossil fuels with their associated CO2 emission to the atmosphere.
Even as I write this, Wendell Berry and other courageous people have emerged victorious after protesting to the governor of Kentucky about mountaintop removal. The governor wouldn’t speak to them, so they staged a sit-in in his office, risking arrest, until he did meet them. I should have been with him. I don’t have the courage or the patience. My way of protest is sneakier. I just fire up the wood stove.
Current discussions of renewable energy resources often fixate on finding replacements for the highly concentrated fossil fuels and abundant electricity that plays so large a role in contemporary lifestyles in the industrial world. The forms of energy that are actually required to maintain a comfortable human life, by contrast, are food and relatively diffuse heat for cooking, water heating and space heating, and these latter are much easier for individuals to provide for themselves using renewable resources. Moving away from dependence on concentrated energy, however, requires certain adjustments — one of which involves facility with a caulk gun.
The 2008 crude oil price, $147 per barrel, shattered the global economy. The “invisible hand” of economics became the invisible fist, pounding down world economic growth to match the limitations of crude oil production.—Kenneth Deffeyes (petroleum geologist). An excerpt from Chapter 3 of Richard Heinberg’s upcoming book The End of Growth.
A weekly roundup of peak oil news, including:
-Oil and the Global Economy
-The IEA’s Oil Market Report
-China worries the IEA
-Oil and economic growth
-Briefs
The price of oil is once again daily in the news. The Western Europe benchmark Brent crude has hovered near $100 / barrel for much of the last month, and the IEA is again warning of the burden of oil consumption. Is this a harbinger of things to come, or a mere statistical blip in a market that is “well supplied”? How will events play out in oil markets in the coming year or two?
When big-thinkers at companies with the most skin in the energy game are behind closed doors and they discuss how the world really looks going forward, do they say that there are bumps in the road but that things will be fine, just fine, as they suggest publicly? Three years ago, we got a glimpse into the room when Royal Dutch/Shell issued a scenario forecasting the world in 2020. Based on current economic and energy-use patterns around the world, Shell said that energy supplies will be so tight that they will tip the world into a full-blown crisis in which governments will force their populations to reduce driving, use less electricity, and pay an extremely steep increase for what they do consume. Today, Shell returned with an update. If the world does not change how it uses energy, its scenario will hold true.
