Fossil Fuels

Oil shocks in a global perspective: are they really that bad?

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We find that the impact of higher oil prices on oil-importing economies is generally small: a 25 percent increase in oil prices typically causes GDP to fall by about half of one percent or less. While cross-country differences in impact are found to depend mainly on the relative size of oil imports, we also show that oil price shocks are not always costly for oil-importing countries: although higher oil prices increase the import bill, there are partly offsetting increases in external receipts.

… The finding that the negative impact of higher oil prices has generally been quite small does not mean that the effect can be ignored. Some countries have clearly been negatively affected by high oil prices. Moreover, our results do not rule out more adverse effects from a future shock that is driven largely by lower oil supply than the more demand-driven increases in oil prices that have been the norm in the last two decades. In terms of policy lessons, our findings suggest that efforts to reduce dependence on oil could help reduce the exposure to oil price shocks and hence costs associated with macroeconomic volatility. At the same time, given a certain level of oil imports, developing economic linkages to oil exporters could also work as a natural shock absorber. [extracts only]

Complete English translation of German military analysis of peak oil now available

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Last week the Bundeswehr posted an English version (112 pgs) of their extraordinary analysis of peak oil. The original German document (125 pgs) was approved for public release last November, yet neither the complete German version nor the partial English translation has attracted interest from mainstream media. Now that a complete translation is available, it is hoped that media throughout the English-speaking world will see the Bundeswehr study for what it is: a comprehensive, realistic analysis of one of the most formidable challenges of this century, the (potentially imminent) peaking of global oil production.

Recovering lost knowledge about exhaustion of the Earth’s resources (such as Peak Oil)

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One of the saddest aspects of the Internet is that it so often fails to make us smarter. In a mutant version of Gresham’s Law, loud amateurs too-often drown out the voices of experts. Here we an excerpt from a 1975 book that tells us more about Peak Oil than a typical dozen posts on most peak oil websites. [Excerpt from Sir Ronald Prain’s classic “Copper: the anatomy of an Industry”]

Review: Life Without Oil by Steve Hallett With John Wright

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“Imagining a world without oil” describes in stark detail what might happen if one day the world decided to decommission all its oil tankers, rigs, pipelines and strategic reserves. The authors, environmental scientist Steve Hallett and journalist John Wright, expect that we’d initially see sky-high prices and long lines at pumps. After a few weeks, fuel wouldn’t be had at any price and even first-world citizens would struggle to stay fed and out of the elements. This is no Hollywood doomsday scenario—it’s a levelheaded extrapolation from current trends in the fast deteriorating world energy situation. [An essay prefiguring the book originally appeared in The Washington Post.]

At the American Journal of Public Health, experts examine the risks posed by peak petroleum

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The September issue of the American Journal of Public Health is now available online featuring 8 studies and articles by an interdisciplinary set of experts, each examining the health risks posed by peak petroleum and what can be done to mitigate and protect against the onset of a major spike in energy prices.

Commentary: When technical feasibility doesn’t matter

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One of the hardest concepts for many Americans to absorb is this – that technical feasibility rests on a complex bed of other feasibilities and never stands alone. Thus, simply observing that it is technically possible to, say, create zero impact cities or to run our cars on corn waste does not usefully tell us whether we are going to do so or not. This historical reality stands in stark contrast to the perceptions that many of us have, which is that technology operates as a kind of vending machine into which one puts quarters and gets inevitable results.