Insight and inspiration in turbulent times.
Consider the first 15 minutes after the Titanic hit the iceberg versus the last 15 minutes before the ship sank. In the first 15 minutes, only a handful of people knew that ship would sink, but that did not mean that the ship was not sinking. In the last 15 minutes, it was readily apparent to everyone that the ship was sinking, but by then it was far too late to try to get to a lifeboat.
Oil prices are going through the roof today, and gasoline prices at the pump will follow, as we get the first regime-rattling news in a major oil-producing state. What’s happening is that the sketchy news out of Libya makes the country look like it’s on fire – Col. Muammar Qaddafi may be spending his last days in power. And even though no oil supplies have been disrupted, traders are engaging in some casino behavior and bidding up prices to new two-year highs.
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…
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.
Several prominent organizations dealing with peak oil, have just launched a petition drive urging President Obama to mark the anniversary of the Gulf spill with a major speech to the American people on the subject of peak oil.
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.
Oil subsidies of nearly $40 billion will be on the block if Democrats have their way. And though the GOP and the industry claim cutting the handouts will cost American jobs, a former Shell CEO says that when prices are high enough, Big Oil doesn’t need help. What’s for sure is that, to have any hope of getting America prepared for peak oil, we’ll need an energy policy that stops encouraging people to use more of the oil that we’re already running out of.
Were the Egyptian people that bravely took to the streets to overthrow a tyrannical regime taking part in the world’s first peak oil revolution?
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.
Last year a German military report on peak oil was leaked: “Peak Oil: Implications of Resource Scarcity on Security.” Last month, the final report was officially released by the Future Analysis department of the Bundeswehr Transformation Center. It is available online in German. [Excerpt]
