ODAC newsletter – Apr 1

The oil price firmed to around $117 this week as evidence emerged of the impact of the Libyan crisis on the oil supply. Bloomberg reported that OPEC oil output dropped in March as Saudi Arabia failed to make up the loss in production from Libya. Reuters reported that Saudi has unexpectedly called on oil companies to expand its drill count by 30%. It is not clear whether this is in an attempt to add further spare capacity, or whether the kingdom is struggling to raise production.

Fukushima and the future of nuclear power

While nuclear power does return net energy and while it may be true that public opposition to nuclear power will fall, it probably won’t matter – because no society in an energy decline, with declining fossil fuel resources, can afford to front-load a decade or two decades of energy in fossil fuels into a plant.

What President Obama should have said regarding energy policy

“I am afraid we have not been entirely open and honest about the situation in the past, but I want to make a change, and talk about the real energy situation, and start making plans for a lower-energy world. In the not too distant future–probably within the next 20 to 50 years, but perhaps as soon as the next 10 years, we will need to go back to using just the energy resources that we receive each day to sustain this world. This will require a very different type of society than we have today.”

Energy efficiency to the rescue

At the same time, it’s important to have a realistic understanding of efficiency’s limits. Boosting energy efficiency requires investment, and investments in energy efficiency eventually reach a point of diminishing returns. Just as there are limits to resources, there are also limits to efficiency. Efficiency can save money and lead to the development of new businesses and industries. But the potential for both savings and economic development is finite.