Insight and inspiration in turbulent times.
After 17 months in office, it now seems clear that the Obama administration is not going to confront the peak oil issue straight on, unless absolutely necessary. Like the Bush administration, the hope remains that gas prices will remain affordable and economy-disabling oil shortages will not develop until after the administration leaves office.
“If we refuse to take into account the full cost of our fossil fuel addiction—if we don’t factor in the environmental costs and national security costs and true economic costs—we will have missed our best chance to seize a clean energy future.”
–President Barack Obama, Carnegie Mellon University, June 2, 2010
President Obama triumphantly entered office with the popular promise of moving the United States to a cleaner energy basis, but his actions to date, along with those of the Congress, have promoted two types of dangerous energy developments: off-shore oil drilling and nuclear reactors. Nuclear expert Harvey Wasserman highlighted the dual dangers by noting, “As BP’s ghastly gusher assaults the Gulf of Mexico, a tornado has forced a shutdown of the Fermi 2 atomic reactor at the site of a 1966 melt-down that nearly irradiated the entire Great Lakes Region.”
Crude oil in the gulf yields good TV images, but BP and its contractors have untapped a geyser not only of oil, but of methane–more than 20 time as effective as CO2 at holding heat. The percentage of the gush that’s methane is roughly estimated at 40-50%, subject to verification.
With the BP Horizon Blowout, we may be hitting a turning point in belief systems, in more than one way:
• Can businesses really be expected to regulate themselves, with minimal oversight?
• Can technology solve all our problems?
• If there are technological solutions, can they be expected immediately?
• Can we really depend on the oil supply that everyone has told us is here?
But our cultural ignorance concerning basic energy numeracy, as well as an understanding of the economics of oil and energy allows otherwise intelligent and well-informed people to participate in outrage towards BP without reflecting for a moment on their own attitudes, habits, or behavior.
It is now 8 weeks since the Deepwater Horizon Explosion, and while BP claims to be capturing around 15,000 barrels of oil a day, there are still widely varying estimates of the amount of oil still escaping into the ocean. As public and political anger against the company increase, the knock on effects of the disaster for the company and the industry are growing.
A newly released report from Lloyds Insurance and Chatham House does an amazing job of putting the case for Transition to a business audience. It states that any business seeking to be successful in the future will need to be prepared for ‘dramatic changes in the energy sector’, and that energy dependency will become a key vulnerability. This is, in effect, the Hirsch Report for British business.
When press releases are made about new discoveries, ask yourself: “how much energy will be used to get that energy, or what will be the energy profit?”
-After the credit crisis – next it will be oil
-Lloyd’s predicts BP disaster will prove oil industry’s Three Mile Island
-Talk of Second Oil Spill in Gulf Grows Louder
Here’s the president on March 31st,announcing his plan to lift a longstanding moratorium on offshore drilling: “Given our energy needs, in order to sustain economic growth and produce jobs, and keep our businesses competitive, we are going to need to harness traditional sources of fuel even as we ramp up production of new sources of renewable, homegrown energy.”
Like it or hate it, the International Energy Outlook from the EIA is a touchstone for the energy industry and is treated as the authoritative government forecast in the press and in capital raising documents like prospectuses. It influences policy-makers, the media, public opinion and investors. What it says matters.
And what does it say?
That peak oil is all but on us.
