Insight and inspiration in turbulent times.
Oil is no longer a free good made available to the aging consumer heartlands, but a vital and hard-to-substitute commodity that is entirely nonrenewable at human timescales, and whose ultimate peak of production is looming ever closer.
The world is now losing more than a million barrels of oil a day to depletion – twice the rate of two years ago – according to a new analysis published this month in Petroleum Review.
Estimating how much oil a company owns thousands of feet underground is, at best, a slippery business.
Oil prices fell nearly a dollar to end just above $45 on Tuesday, in a third day of losses as a more optimistic Iraq export picture helped unwind some of the supply worries.
‘Never again,” the Texas oil baron and corporate raider T Boone Pickens announced this month, “will we pump more than 82m barrels.” As we are pumping 82m barrels of oil a day at the moment, what Pickens is saying is that global production has peaked. If he is right, then the oil geologist Kenneth Deffeyes, who announced to general ridicule last year that he was “99% confident” it would happen in 2004, has been vindicated. Rather more importantly, industrial civilisation is over.
Global stock markets may have something far more ominous to worry about than the recent spike in oil prices, with one economist seeing a ‘Black Monday’ scenario in the making.
China’s dramatic increase in energy consumption – coupled with political problems in the oil-producing countries of Iraq, Russia and Venezuela – could have dramatic negative effects on the U.S. and world economies.
While world supply of conventional oil looks set to peak, hydrogen has long been proposed as a solution. But in spite of billions of dollars now being spent on research, no one has yet found a simple, safe and cheap way to produce it.
Economic growth equals increased demand, increased demand results in resources (such as oil and natural gas) being depleted at quicker rate.
One hangover from the ultraliberal 1980s (during which the New Economy emerged from the wreck of ” Keynesian economics “) is the myth or pious belief in so-called ‘supply side solutions’. The myth itself, however, was built on the real world, realpolitik process of first destroying demand.
As oil prices rose, Russian President Vladimir Putin told President Bush on Monday that Russian oil companies are increasing oil production and exports and will continue to do so, the White House said.
The Association for the Study of Peak Oil feels that the current increase in crude oil prices is only a foretaste of worse to come.
